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Home My WebLink About9A 2017 Annual Financial Report and Management Letter PresentationCITY OF PRIOR LAKE AUDIT REPORT YEAR ENDED DECEMBER 31, 2017 James H. Eichten, CPA Opinion on Financial Statements ▪Financial statements are fairly presented in accordance with accounting principles generally accepted in the United States of America Testing of Internal Controls and Compliance ▪Internal controls over financial reporting ▪Compliance with laws and regulations related to financial reporting State Laws and Regulations ▪Compliance with Minnesota laws and regulations Single Audit of Federal Awards ▪Not required for calendar 2017 AUDITOR’S ROLE Audit Summary ▪Planned scope and timing of audit ▪Audit opinions and findings MANAGEMENT REPORT Financial Report ▪Unmodified or Clean O pinion Internal Controls Over Financial Reporting ▪No Findings Legal Compliance Audit Findings ▪No Findings AUDIT OPINIONS AND FINDINGS Audit Summary Governmental Funds Overview MANAGEMENT REPORT (CONT.) MANAGEMENT REPORT (CONT.) $– $500,000,000 $1,000,000,000 $1,500,000,000 $2,000,000,000 $2,500,000,000 $3,000,000,000 $3,500,000,000 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Taxable Market Value MANAGEMENT REPORT (CONT.) Tax Rates 2015 2016 2015 2016 2015 2016 2017 Average tax rate City 46.9 46.5 43.4 43.0 32.0 32.0 32.7 County 44.7 44.1 42.9 42.3 36.6 36.2 35.9 School 27.1 27.5 28.3 28.6 32.7 32.9 30.6 Special taxing 6.9 6.9 8.8 8.7 7.3 7.2 7.8 Total 125.6 125.0 123.4 122.6 108.6 108.3 107.0 Rates Expressed as a Percentage of Net Tax Capacity Metro Area Seven-CountyAll Cities State-Wide Prior Lake City of MANAGEMENT REPORT (CONT.) Year 2015 2016 2017 Population 2,500–10,000 10,000–20,000 20,000–100,000 25,049 25,356 26,053 Property taxes 460$ 432$ 455$ 414$ 438$ 442$ Tax increments 26 26 42 19 20 20 Franchise and other taxes 35 43 45 24 26 24 Special assessments 59 44 59 46 34 57 Licenses and permits 35 33 42 23 30 31 Intergovernmental revenues 313 275 152 115 65 65 Charges for services 110 92 103 100 132 202 Other 91 57 54 34 24 30 Total revenue 1,129$ 1,002$ 952$ 775$ 769$ 871$ December 31, 2016 City of Prior LakeState-Wide Governmental Funds Revenue per Capita With State-Wide Averages by Population Class MANAGEMENT REPORT (CONT.) Year 2015 2016 2017 Population 2,500–10,000 10,000–20,000 20,000–100,000 25,049 25,356 26,053 Current 145$ 114$ 97$ 105$ 100$ 105$ 263 250 273 192 200 205 126 123 95 83 74 69 93 109 95 67 63 64 74 77 91 7 6 4 701 673 651 454 443 447 Capital outlay and construction 381 370 301 567 312 451 Debt service 196 163 115 128 150 153 48 38 34 59 54 50 244 201 149 187 204 203 Total expenditures 1,326$ 1,244$ 1,101$ 1,208$ 959$ 1,101$ General government Governmental Funds Expenditures per Capita With State-Wide Averages by Population Class December 31, 2016 City of Prior LakeState-Wide Interest and fiscal charges Public safety Streets and highways Culture and recreation All other Principal MANAGEMENT REPORT (CONT.) Increase 2017 2016 (Decrease) Fund balances of governmental funds Total by classification Restricted 3,696,266$ 10,474,448$ (6,778,182)$ Assigned 11,833,265 9,755,914 2,077,351 Unassigned 6,621,659 6,634,264 (12,605) Total – governmental funds 22,151,190$ 26,864,626$ (4,713,436)$ Total by fund General 6,840,928$ 6,684,920$ 156,008$ Debt Service 2,659,324 9,407,774 (6,748,450) Construction 2,324,549 3,326,863 (1,002,314) Special revenue nonmajor funds 2,842,255 2,206,027 636,228 Capital projects nonmajor funds 7,484,134 5,239,042 2,245,092 Total – governmental funds 22,151,190$ 26,864,626$ (4,713,436)$ Governmental Funds Change in Fund Balance Fund Balance as of December 31, MANAGEMENT REPORT (CONT.) 2013 2014 2015 2016 2017 Fund Balance $6,431,258 $5,776,647 $6,124,751 $6,684,920 $6,840,928 Cash and Inv (Net of Borrowing)$7,635,527 $6,622,398 $6,902,926 $7,211,301 $8,306,654 Expend and Transfers Out $12,273,534 $13,007,098 $12,343,815 $12,417,787 $13,208,933 $– $2,000,000 $4,000,000 $6,000,000 $8,000,000 $10,000,000 $12,000,000 $14,000,000 General Fund Financial Position Year Ended December 31, MANAGEMENT REPORT (CONT.) Taxes Licenses and Permits Intergovernmental Charges for Services Fines and Forfeits All Other 2013 $7,714,967 $766,834 $1,514,185 $1,165,190 $137,529 $92,025 2014 $7,958,467 $580,112 $1,626,194 $1,047,397 $127,225 $531,330 2015 $8,692,425 $587,464 $1,573,865 $1,048,564 $1,390 $425,561 2016 $8,886,211 $751,824 $1,581,752 $1,132,504 $4,743 $248,153 2017 $8,779,030 $820,433 $1,657,988 $1,346,676 $2,250 $324,924 $– $1,500,000 $3,000,000 $4,500,000 $6,000,000 $7,500,000 $9,000,000 General Fund Revenue by Source Year Ended December 31, MANAGEMENT REPORT (CONT.) General Government Public Safety Public Works Culture and Recreation All Other 2013 $2,677,900 $4,630,971 $1,905,280 $1,660,103 $199,210 2014 $2,813,759 $4,732,024 $1,874,422 $1,751,005 $744,233 2015 $2,568,472 $4,821,150 $2,078,309 $1,600,071 $239,568 2016 $2,531,266 $5,034,978 $1,875,534 $1,593,975 $222,808 2017 $2,741,278 $5,239,456 $1,798,918 $1,677,597 $115,563 $– $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 General Fund Expenditures by Function Year Ended December 31, MANAGEMENT REPORT (CONT.) Audit Summary Governmental Funds Overview Enterprise Funds Overview MANAGEMENT REPORT (CONT.) Increase 2017 2016 (Decrease) Net position of enterprise funds Total by classification Investment in capital assets 56,639,547$ 51,075,358$ 5,564,189$ Unrestricted 3,877,883 4,309,353 (431,470) Total – enterprise funds 60,517,430$ 55,384,711$ 5,132,719$ Total by fund Water 34,849,695$ 32,804,990$ 2,044,705$ Sewer 23,575,411 20,723,278 2,852,133 Water Quality 2,092,324 1,856,443 235,881 Total – enterprise funds 60,517,430$ 55,384,711$ 5,132,719$ Enterprise Funds Change in Financial Position Net Position as of December 31, MANAGEMENT REPORT (CONT.) 2013 2014 2015 2016 2017 Oper Revenue $3,246,774 $3,051,682 $3,390,052 $3,674,099 $3,793,719 Oper Expenses $2,188,545 $2,297,197 $2,347,154 $2,493,541 $2,621,448 Oper Income (Loss)$1,058,229 $754,485 $1,042,898 $1,180,558 $1,172,271 Inc Before Depr $1,989,540 $1,390,162 $1,700,029 $1,870,854 $1,909,903 $– $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000 $3,500,000 $4,000,000 Water Enterprise Fund Year Ended December 31, MANAGEMENT REPORT (CONT.) 2013 2014 2015 2016 2017 Oper Revenue $2,453,432 $2,369,423 $2,432,925 $2,741,578 $3,090,773 Oper Expenses $2,345,167 $2,447,618 $2,468,932 $2,635,304 $2,771,143 Oper Income (Loss)$108,265 $(78,195)$(36,007)$106,274 $319,630 Inc Before Depr $477,077 $300,076 $371,068 $530,299 $789,288 $(250,000) $250,000 $750,000 $1,250,000 $1,750,000 $2,250,000 $2,750,000 $3,250,000 Sewer Enterprise Fund Year Ended December 31, MANAGEMENT REPORT (CONT.) 2013 2014 2015 2016 2017 Oper Revenue $702,529 $843,292 $865,244 $920,128 $925,988 Oper Expenses $532,508 $638,570 $560,820 $598,972 $633,557 Oper Income (Loss)$170,021 $204,722 $304,424 $321,156 $292,431 Inc Before Depr $222,912 $265,678 $396,392 $427,648 $402,799 $– $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 $700,000 $800,000 $900,000 $1,000,000 Water Quality Enterprise Fund Year Ended December 31, Audit Summary Governmental Funds Overview Enterprise Funds Overview Legislative Updates Accounting and Auditing Updates MANAGEMENT REPORT (CONT.) Clean Opinion on Financial Statements No Findings Reported Overall Improved Financial Results Continued Ongoing Assessment of Financial Projections and Results Including General, Other Operational and Enterprise Fund Activities SUMMARY