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9.b Presentation by Schlenner Wenner & Co on the 2018 audited Financial StatementsSCHLENNER WENNELR&CO. 1 CERTIFIED PUBLIC ACCOUNTANTS & BUSINESS CONSULTANTS City of Scandia, Minnesota Presentation of the Audited Financial Statements December 31, 2018 Working with People, Not Just Numb3rs SCHLENNER WENNELR&CO. CERTIFIED PUBLIC ACCOUNTANTS & BUSINESS CONSULTANTS Audit Process - Mq !Vcrlent Records ❑ We are expressing Inquiryunmodified (clean) L— your City's financial an opinion on statements www.swcocpas.cor„ SCHLENNER WENNELR&CO. CERTIFIED PUBLIC ACCOUNTANTS & BUSINESS CONSULTANTS Audit Results Accounting Policies Alternative Treatments Unusual Transactions No Concerns of net pension asset/liability balances for aension plans www.swcocpas.com SCHLENNER WENNELR&CO. CERTIFIED PUBLIC ACCOUNTANTS & BUSINESS CONSULTANTS Audit Results (Continued) ❑ We have a positive working relationship with the City's management and personnel. www.swcocpas.com SCHLENNER WENNELR&CO. CERTIFIED PUBLIC ACCOUNTANTS & BUSINESS CONSULTANTS Audit Adjustments ❑ No significant / material audit adjustments recorded. ❑ Uncorrected misstatements relate to the understatement of current year interest expense, resulting from the prior year prepaid expense balance being understated. F� www.swcocpas.com SCHLENNER WENNELR&CO. CERTIFIED PUBLIC ACCOUNTANTS & BUSINESS CONSULTANTS Internal Controls — Material Weakness Council T ❑ Your City has a lack of proper segregation of duties, which is very common for a City of your size. City Administrator Clerk / Treasurer www.swcocpas.com SCHLENNER WENNELR&CO. CERTIFIED PUBLIC ACCOUNTANTS & BUSINESS CONSULTANTS Minnesota Legal Compliance No Noncompliance Identified www.swcocpas.com SCHLENNER WENNELR&CO. CERTIFIED PUBLIC ACCOUNTANTS & BUSINESS CONSULTANTS Financial Highlights General Fund — Revenues and Expenditures $2,500,000 $2,250,000 ■ Revenues ■ Expenditures ❑ Revenues have consistently $2,000,000 _ exceeded expenditures $1,750,000 2015 2016 ❑ Revenues exceeded budget, $1,500,000 2018 Budget Revenues primarily due to increased $1,250,000 $ 1,843,887 $ 2,154,155 $ licenses, permits, and fees $ 1,653,930 Expenditures 1,648,722 and intergovernmental $1,000,000 1,687,775 1,517,919 1,752,410 Other Uses (300,000) (356,522) revenues. $750,000 (423,500) (423,500) Change in Fund Balance $500,000 30,697 25,241 9 ❑ Expenditures were below (71,793) (521,980) Fund Balance budget, most notably in the $250,000 $ 1,771,828 $ 1,715,008 $ areas of public works and $ fire expenditures 2014 2015 2016 2017 A11111111 I I =1 2018 2018 Budget ■ Revenues ■ Expenditures Fund Balance 2014 2015 2016 2017 2018 2018 Budget Revenues $ 2,070,197 $ 1,944,186 $ 1,843,887 $ 2,154,155 $ 1,869,626 $ 1,653,930 Expenditures 1,648,722 1,556,967 1,470,922 1,687,775 1,517,919 1,752,410 Other Uses (300,000) (356,522) (347,724) (523,200) (423,500) (423,500) Change in Fund Balance 121,475 30,697 25,241 (56,820) (71,793) (521,980) Fund Balance $ 1,715,890 $ 1,746,587 $ 1,771,828 $ 1,715,008 $ 1,643,215 $ - A11111111 I I =1 M • SCHLENNER WENNELR&CO. CERTIFIED PUBLIC ACCOUNTANTS & BUSINESS CONSULTANTS Financial Highlights General Fund — Percent of Expenditures in Unassigned Fund Balance 105 v 100 95 Ln LL v� .2� v 90 v� xv `U c 85 v — am 80 O LL c 75 j Ua aJ CL 70 - 2014 2015 Year 2014 \ 2015 2016 ......... _ 2017 2018 2016 85.4 98.2 99.9 93.2 93.0 ❑ city policy is to maintain a minimum unassigned general fund balance equal to 50% to 65% of the total annual General Fund 2017 2018 operating expenditures www.swcocpas.com SCHLENNER WENNELR&CO. CERTIFIED PUBLIC ACCOUNTANTS & BUSINESS CONSULTANTS Financial Highlights General Fund —Cash Trend Analysis $1,900,000 $1,850,000 $1,800,000 $1,750,000 $1,700,000 $1,650,000 $1,600,000 2014 2015 2016 2017 2018 --4--General www.SwCOCpas.COm SCHLENNER WENNELR&CO. CERTIFIED PUBLIC ACCOUNTANTS & BUSINESS CONSULTANTS Financial Highlights Remaining Governmental Funds —Revenues and Expenditures $5,000,000 $4,500,000 $4,000,000 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 S - Capital Improvement Local Road Improvement ■ Revenues ■ Expenditures Fund Balance IiiiiiiiiiiiiiiM Nonmajor Governmental ❑ Increase in the Local Road Improvement fund expenditures is due to activity on the 2018 Street Improvement Project ❑ Other sources in the Local Road Improvement fund consist of bond proceeds for the 2018 Street Improvement Project www.swcocpas.com Capital Local Road Nonmajor Improvement Improvement Governmental Revenues $ 45,383 $ 744,776 $ 233,012 Expenditures 124,689 4,749,612 426,216 Other Sources 303,500 3,912,959 115,986 Change in Fund Balance 224,194 (91,877) (77,218) Fund Balance $ 627,796 $ 1,363,159 $ 447,193 ❑ Increase in the Local Road Improvement fund expenditures is due to activity on the 2018 Street Improvement Project ❑ Other sources in the Local Road Improvement fund consist of bond proceeds for the 2018 Street Improvement Project www.swcocpas.com SCHLENNER WENNELR&CO. CERTIFIED PUBLIC ACCOUNTANTS & BUSINESS CONSULTANTS Financial Highlights Significant Capital Project/Reserve Funds — Cash Trend Analysis $1,800,000 $1,600,000 $1,400,000 --m--Capital Improvement $1,200,000 $1,000,000 Local Road $800,000 Improvement $600,000 $400,000 Nonmajor Govern mental $200,000 13 2014 2015 2016 2017 2018 www.SwCOCpas.COm SCHLENNER WENNELR&CO. CERTIFIED PUBLIC ACCOUNTANTS & BUSINESS CONSULTANTS Financial Highlights 201 Sewer Enterprise Fund —Historical Trends Change In Net Position $ (39,034) $ (26,085) $ (28,053) $ (13,634) $ (11,374) Ending Net Position $ 932,026 $ 892,727 $ 864,676 $ 851,042 $ 839,668 A11111111 =111 �& M 1 11 • $140,000 $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $(20,000) $(40,000) $(60,000) 2014 2015 2016 2017 2018 Operating Revenues —0— Operating Expenses --G— Change In Net Position 2014 2015 2016 2017 2018 Operating Revenues $ 68,356 $ 68,030 $ 72,103 $ 86,418 $ 85,518 Operating Expenses 113,098 101,179 110,202 101,976 98,411 Operating Income (Loss) (44,742) (33,149) (38,099) (15,558) (12,893) Nonoperating Revenues & Transfers In 5,708 7,064 10,046 1,924 1,519 Change In Net Position $ (39,034) $ (26,085) $ (28,053) $ (13,634) $ (11,374) Ending Net Position $ 932,026 $ 892,727 $ 864,676 $ 851,042 $ 839,668 A11111111 =111 �& M 1 11 • SCHLENNER WENNELR&CO. CERTIFIED PUBLIC ACCOUNTANTS & BUSINESS CONSULTANTS Financial Highlights Uptown Sewer Enterprise Fund —Historical Trends $25,000 $20,000 \ $15,000 $10,000 $5,000 $(5,000) 2014 2015 2016 2017 2018 --0-- Operating Revenues --G-- Operating Expenses --0-- Change In Net Position 2014 2015 2016 2017 2018 Operating Revenues Operating Expenses Operating Income (Loss) Nonoperating Revenues & Transfers In Change In Net Position $ 17,831 $ 18,183 $ 19,117 $ 17,371 $ 21,347 17,953 16,821 21,779 17,185 17,405 (122) 1,362 (2,662) 186 3,942 - - 44 38 97 $ (122) $ 1,362 $ (2,618) $ 224 $ 4,039 Ending Net Position $ 166,189 $ 163,572 $ 160,954 $ 161,178 $ 165,217 M1 11 • SCHLENNER WENNELR&CO. CERTIFIED PUBLIC ACCOUNTANTS & BUSINESS CONSULTANTS Financial Highlights Business -Type Funds —Cash Trend Analysis $180,000 $160,000 $140,000 $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $ -01 2014 2015 2016 2017 2018 --4-- 201 Sewer Uptown Sewer www.SwCOCpas.COm SCHLENNER WENNELR&CO. CERTIFIED PUBLIC ACCOUNTANTS & BUSINESS CONSULTANTS Financial Highlights Total Government -Wide Assets 2018 2017 2016 An A 2015 2014 $- $2,o00,000 $4,o00,000 $6,000,000 $8,000,000 $10,o00,000 $12,0p0 000 $14,000,000 $16,0p0 000 2014 2015 2016 2017 2018 ■ Current Assets $3,611,334 $3,395,837 $3,533,339 $4,461,374 $4,686,545 ■ Capital/Noncurrent $9,941,582 $10,586,689 $11,055,760 $10,949,054 $15,459,071 vww.SWCOCpa$.com SCHLENNER WENNELR&CO. CERTIFIED PUBLIC ACCOUNTANTS & BUSINESS CONSULTANTS Financial Highlights Total Government -Wide Liabilities 2018 2017 2016 2015 2014 $- $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 2014 2015 2016 2017 2018 ■ Current Liabilities $164,502 $170,265 $247,620 $220,409 $480,594 ■ Debt/Noncurrent $1,059,387 $766,300 $601,701 $671,755 $4,441,483 Net Pension Liability $- $305,769 $462,812 $338,349 $316,213 A11111111 I I M, M • SCHLENNER WENNELR&CO. CERTIFIED PUBLIC ACCOUNTANTS & BUSINESS CONSULTANTS Financial Highlights Long -Term Debt Outstanding $5,000,000 $4,500,000 $4,000,000 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 2014 2015 2016 2017 2018 tGovernmental Funds www.swcocpas.com SCHLENNER WENNELR&CO. CERTIFIED PUBLIC ACCOUNTANTS & BUSINESS CONSULTANTS Jon Archer, CPA Partner Ph. 320-251-0286 marcher _swcocpas.com www.swcocpas.com