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8.a Audit Results Summary
Presentation of the Audited Financial Statements December 31, 2019 Working with People, Not Just Numb3rs Audit Process ❑We are expressing an unmodified (clean) opinion on your City’s financial statements Client Records Inquiry Analytical Procedures Detail Testing Opinion Audit Results No Concerns Accounting Policies Unusual Transactions Alternative Treatments Calculation of net pension asset/liability and related balances for pension plans Significant Estimates: Audit Results (Continued) None Issues Difficulties Disagreements Consultations ❑We have a positive working relationship with the City’s management and personnel. Audit Results (Continued) Audit Adjustments •We proposed several audit adjustments that were material to the financial statements –primarily related to the adjustment of several accrual accounts Internal Controls •Material weakness for limited segregation of duties •Significant Deficiency for financial statements prepared by SW&Co Minnesota Legal Compliance •No noncompliance was found as a result of our procedures Financial Highlights General Fund –Revenues and Expenditures ❑Revenues have consistently exceeded expenditures, excluding transfers out to other funds ❑Revenues exceeded budget, primarily due to increased property and gravel taxes and investment earnings. ❑Expenditures were below budget, most notably in the areas of public works and parks and recreation expenditures $- $250,000 $500,000 $750,000 $1,000,000 $1,250,000 $1,500,000 $1,750,000 $2,000,000 $2,250,000 $2,500,000 2015 2016 2017 2018 2019 2019 Budget Revenues Expenditures Fund Balance 2015 2016 2017 2018 2019 2019 Budget Revenues 1,944,186$ 1,843,887$ 2,154,155$ 1,869,626$ 1,743,179$ 1,641,592$ Expenditures 1,556,967 1,470,922 1,687,775 1,517,919 1,674,408 1,696,600 Other Uses (356,522) (347,724) (523,200) (423,500) (444,962) (441,962) Change in Fund Balance 30,697 25,241 (56,820) (71,793) (376,191) (496,970) Fund Balance 1,746,587$ 1,771,828$ 1,715,008$ 1,643,215$ 1,267,024$ -$ Financial Highlights General Fund –Percent of Expenditures in Unassigned Fund Balance ❑City policy is to maintain a minimum unassigned general fund balance equal to 50% to 65% of the total annual General Fund operating expenditures Year % 2015 98.2 2016 99.9 2017 93.2 2018 93.0 2019 74.2 70 73 75 78 80 83 85 88 90 93 95 98 100 103 105 108 2015 2016 2017 2018 2019Percent of Budgeted Expenditures in Unassigned Fund Balance -General Fund Financial Highlights General Fund –Cash Trend Analysis $0 $250,000 $500,000 $750,000 $1,000,000 $1,250,000 $1,500,000 $1,750,000 $2,000,000 $2,250,000 2015 2016 2017 2018 2019 General Financial Highlights General Fund –Detailed Revenue Analysis Taxes Franchise Fees Licenses, Permits, and Fees Intergovernmental Charges for Services Fines Investment Income Miscellaneous 2018 $1,358,056 $7,989 $300,274 $105,857 $59,962 $9,517 $12,560 $15,411 2019 $1,409,921 $6,613 $150,876 $67,105 $66,979 $7,831 $21,631 $12,223 2019 Final Budget $1,361,092 $3,000 $132,600 $59,200 $63,200 $10,000 $5,000 $7,500 $- $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 $700,000 $800,000 $900,000 $1,000,000 $1,100,000 $1,200,000 $1,300,000 $1,400,000 $1,500,000 Financial Highlights General Fund –Detailed Expenditure Analysis General Government Public Safety Public Works Parks and Recreation Capital Outlay 2018 $521,457 $361,381 $517,139 $107,916 $10,026 2019 $514,691 $408,622 $624,818 $120,523 $5,754 2019 Final Budget $502,700 $397,000 $659,000 $131,900 $6,000 $- $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 $400,000 $450,000 $500,000 $550,000 $600,000 $650,000 $700,000 $750,000 Financial Highlights Remaining Governmental Funds –Revenues and Expenditures ❑Increase in the Debt Service fund expenditures is due to the first payment of GO 2018A bond principle issued for 2018 Street Improvement Project ❑Other sources in the Capital Improvement fund consist of operating transfers from various funds for future capital purchases Capital Improvement Local Road Improvement Debt Service Nonmajor Governmental Revenues 109,270$ 376,759$ 466,152$ 81,642$ Expenditures 173,914 87,818 472,943 130,701 Other Sources 550,602 - - 37,500 Change in Fund Balance 485,958 288,941 (6,791) (11,559) Fund Balance 1,113,754$ 1,652,100$ 32,170$ 396,673$ $- $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000 $1,400,000 $1,600,000 $1,800,000 Capital Improvement Local Road Improvement Debt Service Nonmajor Governmental Revenues Expenditures Fund Balance Financial Highlights Significant Capital Project/Reserve Funds –Cash Trend Analysis $0 $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000 $1,400,000 $1,600,000 $1,800,000 2015 2016 2017 2018 2019 Capital Improvement Local Road Improvement Debt Service Nonmajor Governmental Financial Highlights 201 Sewer Enterprise Fund –Historical Trends $(40,000) $(20,000) $- $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 $140,000 2015 2016 2017 2018 2019 Operating Revenues Operating Expenses Change In Net Position 2015 2016 2017 2018 2019 Operating Revenues 68,030$ 72,103$ 86,418$ 85,518$ 81,238$ Operating Expenses 101,179 110,202 101,976 98,411 118,015 Operating Income (Loss)(33,149) (38,099) (15,558) (12,893) (36,777) Nonoperating Revenues & Transfers In 7,064 10,046 1,924 1,519 8,085 Change In Net Position (26,085)$ (28,053)$ (13,634)$ (11,374)$ (28,692)$ Ending Net Position 892,729$ 864,676$ 851,042$ 839,668$ 810,976$ Financial Highlights Uptown Sewer Enterprise Fund –Historical Trends $(5,000) $- $5,000 $10,000 $15,000 $20,000 $25,000 2015 2016 2017 2018 2019 Operating Revenues Operating Expenses Change In Net Position 2015 2016 2017 2018 2019 Operating Revenues 18,183$ 19,117$ 17,371$ 21,347$ 20,535$ Operating Expenses 16,821 21,779 17,185 17,405 14,180 Operating Income (Loss)1,362 (2,662) 186 3,942 6,355 Nonoperating Revenues & Transfers In - 44 38 97 11 Nonoperating Expenses & Transfers Out - - - - 2,640 Change In Net Position 1,362$ (2,618)$ 224$ 4,039$ 3,726$ Ending Net Position 163,572$ 160,954$ 161,178$ 165,217$ 168,943$ Financial Highlights Business-Type Funds –Cash Trend Analysis $- $15,000 $30,000 $45,000 $60,000 $75,000 $90,000 $105,000 $120,000 2015 2016 2017 2018 2018 201 Sewer Uptown Sewer Financial Highlights Total Government-Wide Assets 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 Current Assets $3,395,837 $3,533,339 $4,461,374 $4,686,545 $4,858,856 Capital/Noncurrent $10,586,689 $11,055,760 $10,949,054 $15,459,071 $15,019,220 $- $750,000 $1,500,000 $2,250,000 $3,000,000 $3,750,000 $4,500,000 $5,250,000 $6,000,000 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 Current Liabilities $170,265 $247,620 $220,409 $480,594 $214,110 Debt/Noncurrent $766,300 $601,701 $671,755 $4,441,483 $4,139,249 Net Pension Liability $305,769 $462,812 $338,349 $316,213 $309,611 Financial Highlights Total Government-Wide Liabilities Financial Highlights Long-Term Debt Outstanding $- $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000 $3,500,000 $4,000,000 $4,500,000 $5,000,000 2015 2016 2017 2018 2019 Governmental Funds Jon Archer, CPA Partner Ph. 320-251-0286 jarcher@swcocpas.com