Stearns County Minnesota Mission Statement: Provide Exceptional Public Services to Assure a Safe, Healthy, Vibrant County for All Longest Covered Bridge in Minnesota - Lake Wobegon Trail Located in Holdingford, MN Annual Financial Report For The Fiscal Year Ended December 31, 2016
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
Stearns County Minnesota
Mission Statement: Provide Exceptional Public Services to Assure a Safe, Healthy, Vibrant County for All
Longest Covered Bridge in Minnesota - Lake Wobegon Trail
Located in Holdingford, MN
Annual Financial Report For The Fiscal Year Ended December 31, 2016
• Established: 1855 • Form of Government: Board of Commissioners – Administrator • Area: 1,390 Square Miles • County Seat: St. Cloud • Number of Townships: 34 • Number of Cities: 31
Stearns County Minnesota
Annual Financial Report For The Fiscal Year Ended December 31, 2016
Randy Schreifels, Auditor/Treasurer
Prepared by: Finance Division of the Auditor‐Treasurer’s Office Issued September 2017
Government-Wide Financial Statements Statement of Net Position Exhibit 1 18 Statement of Activities Exhibit 2 19 Fund Financial Statements Governmental Funds Balance Sheet Exhibit 3 20 Reconciliation of Governmental Funds Balance Sheet to the Statement of Net Position--Governmental Activities
Exhibit 4
21
Statement of Revenues, Expenditures, and Changes in Fund Balances Exhibit 5 22 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities--Governmental Activities
Exhibit 6
23 Proprietary Funds Statement of Net Position Exhibit 7 24 Statement of Revenues, Expenses, and Changes in Fund Net Position Exhibit 8 25 Statement of Cash Flows Exhibit 9 26 Fiduciary Fund Statement of Fiduciary Net Position Exhibit 10 27 Notes to the Financial Statements 29 REQUIRED SUPPLEMENTARY INFORMATION Budgetary Comparison Schedules General Fund Exhibit A-1 104 Road and Bridge Special Revenue Fund Exhibit A-2 106 Human Services Special Revenue Fund Exhibit A-3 107 Schedule of Funding Progress - Other Postemployment Benefits Exhibit A-4 108 Schedule of Proportionate Share of Net Pension Liability - PERA General
Employees Retirement Plan Exhibit A-5
109 Schedule of Contributions - PERA General Employees Retirement Plan Exhibit A-6 110 Schedule of Proportionate Share of Net Pension Liability - PERA Public
Employees Police and Fire Plan Exhibit A-7
111 Schedule of Contributions - PERA Public Employees Police and Fire Plan Exhibit A-8 111 Schedule of Proportionate Share of Net Pension Liability - PERA Public
Employees Correctional Plan Exhibit A-9
112 Schedule of Contributions - PERA Public Employees Correctional Plan Exhibit A-10 112 Notes to the Required Supplementary Information 113 SUPPLEMENTARY INFORMATION Combining and Individual Fund Financial Statements Budgetary Comparison Schedule - Debt Service Fund Exhibit B-1 118 Nonmajor Governmental Funds 119 Combining Balance Sheet Exhibit C-1 120 Combining Statement of Revenues, Expenditures, and Changes Exhibit C-2 121
STEARNS COUNTY ST. CLOUD, MINNESOTA
TABLE OF CONTENTS
Reference Page
FINANCIAL SECTION
SUPPLEMENTARY INFORMATION (Continued)
Budgetary Comparison Schedules
County Building Special Revenue Fund Exhibit C-3
122
County Park Special Revenue Fund Exhibit C-4 123 Law Library Special Revenue Fund Exhibit C-5
124
Solid Waste Special Revenue Fund Exhibit C-6 125 Economic Development Special Revenue Fund Exhibit C-7 126 Internal Service Funds 127 Combining Statement of Fund Net Position Exhibit D-1 128 Combining Statement of Revenues, Expenses, and Changes in Fund Net Position
Exhibit D-2
129
Combining Statement of Cash Flows Exhibit D-3 130 Agency Fund 131 Statement of Changes in Assets and Liabilities Exhibit E-1 132 Other Exhibits and Schedules Balance Sheet - by Ditch - Ditch Special Revenue Fund Exhibit F-1 134 Schedule of Intergovernmental Revenue Exhibit F-2 135 Schedule of Expenditures of Federal Awards Exhibit F-3 136 Notes to the Schedule of Expenditures of Federal Awards 139 STATISTICAL SECTION Table of Contents and Schedule Descriptions Financial Trends
142
Net Position by Component Schedule 1 143 Changes in Net Position Schedule 2 144 Fund Balances, Governmental Funds Schedule 3 145 Changes in Fund Balances, Government Funds Revenue Capacity
Schedule 4 147
Net Tax Capacity and Taxable Market Value of Taxable Property Schedule 5 149 Direct and Overlapping Property Tax Rates Schedule 6 150 Principal Property Taxpayers Schedule 7 156 Property Tax Levies and Collections – Stearns County Portion Schedule 8 157 Property Tax Levies and Collections – Overlapping Governments Schedule 9 158 Debt Capacity Ratio of Annual Debt Service Expenditures for General Bonded Debt to Total General Expenditures
Schedule 10
159
Ratios of Net General Obligation Bonded Debt Outstanding Computation of Underlying, Overlapping, and Direct Debt
Schedule 11 Schedule 12
160 161
Legal Debt Margin Information Schedule 13 162
INTRODUCTORY SECTION
STEARNS COUNTY
ST. CLOUD, MINNESOTA
ORGANIZATION SCHEDULE
2016
*Chair
Term of Office
Office Name From To
Commissioners
1st District DeWayne Mareck March 2006 January 2019
2nd District Mark Bromenschenkel January 2011 January 2017
3rd District Jeff Mergen January 2011 January 2021
4th District Leigh Lenzmeier January 1992 January 2021
5th District Steve Notch* February 2014 January 2019
Officers
Elected
Attorney Janelle Kendall January 2003 January 2019
Auditor-Treasurer Randy Schreifels January 1999 January 2019
County Recorder/Registrar of
Titles Diane Grundhoefer January 2003 January 2019
Sheriff John Sanner January 2003 January 2019
Appointed
Administrator Mike Williams Indefinite
Agriculture Inspector Robert Dunning Indefinite
Assessor Jeff Johnson November 2014 January 2021
Building Facilities Pete Reuter Indefinite
Emergency Management Erin Hausauer Indefinite
Environmental Service Chelle Benson Indefinite
Extension (State Regional) Sarah Chur Indefinite
Highway Engineer Jodi Teich May 2012 May 2021
Human Resources Jennifer Thorsten Indefinite
Human Services Administrator Mark Sizer Indefinite
Information Services George McClure Indefinite
Medical Examiner (Contracted)
Parks Peter Theismann Indefinite
Veterans Service Officer Corey Vaske August 2015 August 2019
Board of County Commissioners Stearns County St. Cloud, Minnesota Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of Stearns County, Minnesota, as of and for the year ended December 31, 2016, including the Housing and Redevelopment Authority (HRA) of Stearns County as of and for the year ended June 30, 2016, and the related notes to the financial statements, which collectively comprise the County’s basic financial statements, as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the financial statements of the HRA of Stearns County, the discretely presented component unit. Those statements were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for the HRA of Stearns County, is based solely on the report of the other auditors. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
3
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the County’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the County’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, based on our audit and the report of the other auditors, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of Stearns County as of December 31, 2016, including the HRA of Stearns County as of June 30, 2016, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Management’s Discussion and Analysis and Required Supplementary Information as listed in the table of contents be presented to supplement the basic financial statements. Such information, although not part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Supplementary and Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise Stearns County’s basic financial statements. The supplementary information and statistical section as listed in the table of contents are presented for purposes of additional analysis and are not a required part of the basic financial statements.
4
The supplementary information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated, in all material respects, in relation to the basic financial statements as a whole. The statistical section has not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on it. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated September 11, 2017, on our consideration of Stearns County’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Stearns County’s internal control over financial reporting and compliance. It does not include the HRA of Stearns County, which was audited by other auditors.
REBECCA OTTO GREG HIERLINGER, CPA STATE AUDITOR DEPUTY STATE AUDITOR September 11, 2017
5
MANAGEMENT’S DISCUSSION AND ANALYSIS
6
(Unaudited)
STEARNS COUNTY
ST. CLOUD, MINNESOTA
MANAGEMENT’S DISCUSSION AND ANALYSIS
DECEMBER 31, 2016
This section of Stearns County’s annual financial report presents an overview and analysis of the
County’s financial performance during the fiscal year that ended on December 31, 2016.
FINANCIAL HIGHLIGHTS
The assets and deferred outflows of resources of Stearns County exceeded its liabilities and
deferred inflows of resources by $341,033,571 (net position). Of this amount, $6,206,458
represents unrestricted net position that may be used to meet the County’s ongoing obligations
to citizens and creditors.
The County’s total net position increased by $6,867,448, or about 2.1 percent, over the prior
year.
As of the close of the fiscal year, Stearns County’s governmental funds reported combined
ending fund balances of $82,677,131. Of this amount, $65,744,177, or approximately
79.5 percent, is available for spending at the County’s discretion.
At the end of the year, the total fund balance for the General Fund increased by $376,695 to
$33,248,475. The General Fund’s unassigned fund balance increased to $31,807,409. This is
approximately 59.1 percent of total General Fund expenditures during the year. The assigned
fund balance at year-end was $4,965.
Stearns County’s total bonded debt decreased by $6,255,000 (25.6 percent) during the current
fiscal year. In 2016, the County issued Capital Improvement Bonds for $2,575,000 and paid
$8,830,000 of bond principal.
OVERVIEW OF THE FINANCIAL STATEMENTS
The financial section of the annual report consists of four parts--Independent Auditor’s Report;
required supplementary information, which includes the Management’s Discussion and Analysis
(MD&A) (this section); the basic financial statements; and supplementary information. The basic
financial statements include two kinds of statements that present different views of the County.
7
(Unaudited)
The first two statements are government-wide financial statements which provide both short-
term and long-term information about the County’s overall financial status.
The remaining statements are fund financial statements which focus on individual parts of the
County, reporting the County’s operations in more detail than the government-wide statements.
The governmental funds statements tell how basic services, such as general government,
human services, and highways and streets, were financed in the short-term as well as what
remains for future spending.
The proprietary fund statements offer short-term and long-term financial information about
activities the County operates like a business.
Fiduciary fund statements provide information about the financial relationships in which the
County acts solely as a trustee or agent for the benefit of others to whom the resources belong.
The financial statements also include notes that explain some of the information in the statements
and provide more detailed data.
Figure A-1 shows how the various parts of this annual report are arranged and related to one
another.
Figure A-1
Annual Report Format
Management’s
Discussion
and
Analysis
Basic
Financial
Statements
Required
Supplementary
Information
Government-Wide
Financial
Statements
Fund
Financial
Statements
Notes
to the
Financial
Statements
Summary Detail
8
(Unaudited)
Figure A-2 summarizes the major features of the County’s financial statements, including the
portion of the County’s activities they cover and the types of information they contain. The
remainder of this overview section of the MD&A highlights the structure and content of each of
the statements.
Figure A-2
Major Features of the County’s Government-Wide and Fund Financial Statements
Government-Wide
Governmental Funds
Proprietary Funds
Fiduciary Funds
Scope Entire County
government (except
fiduciary funds) and
the County’s
component unit
The activities of the
County that are not
proprietary or
fiduciary
Activities the
County operates
similar to private
business
Instances in which the
County is the trustee
or agent for someone
else’s resources
Required financial
statements
Statement of net
position and statement
of activities
Balance sheet and
statement of
revenues,
expenditures, and
changes in fund
balance
Statement of net
position; statement
of revenues,
expenses, and
changes in net
position; and
statement
of cash flows
Statement of
fiduciary net position
Accounting basis and
measurement focus
Full accrual accounting
and economic
resources focus
Modified accrual
accounting and
current financial
resources focus
Full accrual
accounting
and economic
resources focus
Full accrual
accounting
and economic
resources focus
Type of asset/liability
information
All assets, deferred
outflows of resources,
liabilities, and deferred
inflows of resources,
both financial and
capital, short-term and
long-term
Only assets and
deferred outflows of
resources expected to
be used up and
liabilities and
deferred inflows of
resources that come
due during the year or
soon thereafter, no
capital assets
included.
All assets, deferred
outflows of
resources, liabilities,
and deferred inflows
of resources, both
financial and capital,
short-term and
long-term
All assets, deferred
outflows of resources,
liabilities, and
deferred inflows of
resources, both
short-term and
long-term; agency
funds do not currently
contain capital assets,
although they can
Type of
inflow/outflow
information
All revenues and
expenses during the
year, regardless of
when cash is received
or paid
Revenues for which
cash is received
during or soon after
the end of the year;
expenditures when
goods or services
have been received
and payment is due
during the year or
soon thereafter
All revenues and
expenses during the
year, regardless of
when cash is
received or paid
All revenues and
expenses during the
year, regardless of
when cash is received
or paid
Government-Wide Statements
The government-wide statements report information about the County as a whole using accounting
methods similar to those used by private-sector companies. The statement of net position includes
all of the County’s assets and liabilities. All of the current year’s revenues and expenses are
accounted for in the statement of activities regardless of when cash is received or paid.
9
(Unaudited)
The two government-wide statements report the County’s net position and how it has changed.
Net position--the difference between the County’s assets, deferred outflows of resources, and
liabilities, and deferred inflows of resources--is one way to measure the County’s financial health
or position. All of the current year’s revenues and expenses are accounted for in the statement of
activities regardless of when cash is received or paid.
Over time, increases or decreases in the County’s net position is an indicator of whether its
financial position is improving or deteriorating, respectively.
To assess the overall health of the County, additional nonfinancial factors such as changes in
the County’s property tax base and the condition of County buildings and other facilities need
to be considered.
In the government-wide financial statements, the County’s activities are reported as governmental
activities:
Governmental activities - The County’s basic services are included here. Property taxes and
state aids finance most of these activities.
Fund Financial Statements
The fund financial statements provide more detailed information about the County’s funds--
focusing on its most significant or “major” funds--not the County as a whole. Funds are accounting
devices the County uses to keep track of specific sources of funding and spending on particular
programs.
Some funds are required by state law and by bond covenants.
The County establishes other funds to control and manage money for particular purposes (for
example, repaying its long-term debts) or to show that it is properly using certain revenues (for
example, federal grants).
The County has three kinds of funds:
Governmental funds - The County’s basic services are included in governmental funds, which
generally focus on (1) how cash and other financial assets that can readily be converted to cash
flow in and out, and (2) the balances left at year-end that are available for spending.
Consequently, the governmental funds statements provide a detailed short-term view that helps
to determine whether there are more or fewer financial resources that can be spent in the near
future to finance the County’s programs. Because this information does not encompass the
additional long-term focus of the government-wide statements, both the governmental fund
balance sheet and the governmental fund statement of revenues, expenditures, and changes in
fund balances provide a reconciliation to explain the relationship (or differences) between
them.
10
(Unaudited)
Proprietary funds - The County maintains one type of proprietary fund. Internal service funds
are an accounting device used to accumulate and allocate costs internally among Stearns
County’s various functions. Stearns County uses internal service funds to account for its
information services improvements and self-insurance. These services benefit governmental
functions and have been allocated to governmental activities in the government-wide financial
statements.
Fiduciary funds - The County is the fiscal agent, or fiduciary, for assets that belong to others.
The County is responsible for ensuring that the assets reported in these funds are used only for
their intended purposes and by those to whom the assets belong. All of the County’s fiduciary
activities are reported in a separate statement of fiduciary net position. We exclude these
activities from the government-wide financial statements because the County cannot use these
assets to finance its operations.
FINANCIAL ANALYSIS OF THE COUNTY AS A WHOLE
Net Position
The County’s net position was $341,033,571 on December 31, 2016. (See Table A-1.)
Table A-1
Net Position
Assets
Current and Other Assets $ 103,904,021 $ 105,142,415
Capital Assets 333,469,185 323,629,728
Total Assets $ 437,373,206 $ 428,772,143
Deferred Outflows of Resources $ 45,783,515 $ 7,251,019
Liabilities
Current and Other Liabilities $ 21,934,061 $ 11,472,165
Long-Term Liabilities 108,029,052 81,339,612
Total Liabilities $ 129,963,113 $ 92,811,777
Deferred Inflows of Resources $ 12,160,037 $ 9,045,262
Net Position
Net Investment in Capital Assets $ 320,373,613 $ 309,536,902
Restricted 14,453,500 18,967,102
Unrestricted 6,206,458 5,662,119
Total Net Position as reported $ 341,033,571 $ 334,166,123
Governmental Activities
2016 2015
11
(Unaudited)
Changes in Net Position
The government-wide total revenues were $146,143,151 for the year ended December 31, 2016.
Property taxes and intergovernmental revenues accounted for 89.2 percent of total revenue for the
year. (See Table A-2.)
Table A-2
Changes in Net Position
Revenues
Program Revenues
Fees, charges, fines, and other $ 12,534,587 $ 12,588,339
Operating grants and contributions 41,732,703 40,611,750
Capital grants and contributions 8,124,275 3,663,646
General revenues
Property taxes 71,531,373 70,069,436
Wheelage tax 1,442,299 1,451,740
Unrestricted grants and contributions 8,932,359 8,677,970
Total $ 18,796,310 $ 25,174,316 $ (6,378,006) -25.34%
2016 2015 Increase/(Decrease)
15
(Unaudited)
ECONOMIC FACTORS AND NEXT YEAR’S BUDGET
The County is dependent on the State of Minnesota for a significant portion of its revenue. The
State has continued to generate surpluses in recent years and thereby the likelihood of revenues
being reduced by the State in the near future is less.
The County’s unemployment rate continues to hover around 3.6%. This percentage is slightly
better than both the state and national unemployment rates which were around 3.9% and 4.9%
respectively.
The Stearns County Board of Commissioners approved a budget of $137,038,103 for 2017 and a
property tax levy of $74,003,595. The approved amounts resulted in a 3.5% increase to the budget
and a 3.5% increase to the property tax levy versus those respective items in 2016.
CONTACTING THE COUNTY’S FINANCIAL MANAGEMENT
This financial report is designed to provide our citizens, taxpayers, customers, investors, and
creditors with a general overview of the County’s finances and to demonstrate the County’s
accountability for the money it receives. If you have questions about this report, or need additional
financial information, contact Jim Stegura, Financial Manager, at 320-656-3914, or Randy
Schreifels, County Auditor-Treasurer, at 320-656-3901.
16
BASIC FINANCIAL STATEMENTS
17
STEARNS COUNTYST. CLOUD, MINNESOTA
EXHIBIT 1STATEMENT OF NET POSITIONGOVERNMENTAL ACTIVITIES
DECEMBER 31, 2016Component
Unit
GovernmentalActivities
Assets
Cash and pooled investments $ 88,706,753 $ 1,201,224 Cash with fiscal agents 5,051 - Petty cash and change funds 12,710 - Departmental cash 6,864 - Taxes receivable delinquent 1,214,304 272,694 Special assessments receivable Delinquent 62,578 - Noncurrent 2,760,003 - Accounts receivable - net 242,366 55,050 Accrued interest receivable 177,858 - Loans receivable 2,559,823 576,581 Due from other governments 6,808,538 - Inventories 1,345,350 - Prepaid items 1,823 12,485 Assets held for resale - 117,800 Capital assets Non-depreciable 42,501,654 597,794 Depreciable - net of accumulated depreciation 290,967,531 3,276,328
Total Assets $ 437,373,206 $ 6,109,956
Deferred Outflows of Resources
Deferred pension outflows $ 45,783,515 $ -
Liabilities
Accounts payable $ 3,901,860 $ 70,111 Salaries payable 3,832,164 31,688 Contracts payable 828,579 - Due to other governments 2,479,626 - Accrued interest payable 56,118 14,893 Unearned revenue 418,926 8,012 Noncurrent liabilities Due within one year 10,416,788 178,779 Due in more than one year 16,421,405 2,057,726 Net pension liability 87,385,807 - Net OPEB payable 4,221,840 -
Total Liabilities $ 129,963,113 $ 2,361,209
Deferred Inflows of Resources
Advance from other governments $ 2,430,800 $ - Deferred pension inflows 9,729,237 -
Total Deferred Inflows of Resources $ 12,160,037 $ -
Net Position
Net investment in capital assets $ 320,373,613 $ 1,698,482 Restricted for General government 696,396 - Public safety 320,153 - Highway and streets 268,622 - Sanitation 5,086,448 - Conservation of natural resources 747,816 - Economic development 1,986,892 - Debt service 5,347,173 24,227 Future projects - 737,740 Unrestricted 6,206,458 1,288,298
Total Net Position $ 341,033,571 $ 3,748,747
PrimaryGovernment Housing and
Redevelopment Authorityof Stearns County
The notes to the financial statements are an intergral part of this statement
18
EXHIBIT 2
Component Unit
Functions/Programs
Primary government Governmental activities General government $ 25,056,099 $ 4,896,477 $ 590,540 $ - $ (19,569,082) Public safety 36,436,493 1,482,339 4,230,394 - (30,723,760) Highways and streets 18,293,761 198,340 12,508,427 8,124,275 2,537,281 Sanitation 610,991 383,196 658,566 - 430,771 Human services 41,361,303 1,368,033 18,344,614 - (21,648,656) Health 3,751,928 364,931 2,649,490 - (737,507) Culture and recreation 4,295,748 241,922 1,612,129 - (2,441,697) Conservation of natural resources 8,414,603 3,595,560 1,138,543 - (3,680,500) Economic development 334,536 3,789 - - (330,747) Interest 720,241 - - - (720,241)
Total Primary Government $ 139,275,703 $ 12,534,587 $ 41,732,703 $ 8,124,275 $ (76,884,138)
Component unit Housing and Redevelopment Authority of Stearns County $ 2,098,410 $ 554,191 $ 1,193,340 $ 14,541 $ (336,338)
General Revenues Property taxes $ 71,531,373 $ 400,253 Tax increments - 45,978 Gravel taxes 66,136 - Wheelage tax 1,442,299 - Payments in lieu of tax 253,016 - Grants and contributions not restricted to specific programs 8,932,359 6,778 Unrestricted investment earnings 1,288,560 4,864 Gain on sale of capital assets 237,843 -
Total general revenues $ 83,751,586 $ 457,873
Change in net position $ 6,867,448 $ 121,535
Net Position - Beginning 334,166,123 3,627,212
Net Position - Ending $ 341,033,571 $ 3,748,747
Grants andContributions
STEARNS COUNTYST. CLOUD, MINNESOTA
STATEMENT OF ACTIVITIESFOR THE YEAR ENDED DECEMBER 31, 2016
Primary Government Housing andOperating CapitalProgram Revenues
Expenses Fines, and OtherFees, Charges, Grants and
Contributions ActivitiesGovernmental
Net (Expense) Revenue and Changes in Net Position
Redevelopment Authorityof Stearns County
The notes to the financial statements are an integral part of this statement 19
EXHIBIT 3
Road and Human Debt Capital NonmajorGeneral Bridge Services Service Projects Funds Total
Assets
Cash and pooled investments $ 37,596,368 $ 12,407,470 $ 15,878,731 $ 5,456,863 $ 6,252,192 $ 10,065,590 $ 87,657,214
Total Fund Balances $ 33,248,475 $ 10,150,684 $ 15,651,603 $ 5,403,291 $ 9,244,450 $ 8,978,628 $ 82,677,131
Total Liabilities, Deferred Inflows of
Resources, and Fund Balances $ 39,168,980 $ 15,230,483 $ 19,891,657 $ 8,151,670 $ 9,669,335 $ 10,880,870 $ 102,992,995
BALANCE SHEET
STEARNS COUNTYST. CLOUD, MINNESOTA
GOVERNMENTAL FUNDS
DECEMBER 31, 2016
The notes to the financial statements are an integral part of this statement.
20
EXHIBIT 4
Fund balances - total governmental funds (Exhibit 3) $ 82,677,131
Amounts reported for governmental activities in the statement of net position are different because:
Capital assets, net of accumulated depreciation, used in governmental activities are not financial resources and, therefore, are not reported in the governmental funds. 333,469,185
Deferred outflows resulting from pension obligations are not available resources and, therefore, are not reported in governmental funds. 45,783,515
Revenues in the statement of activities that do not provide current financial resources are not reported in the governmental funds. 6,513,562
Internal service funds are used to account for the County's self-insurance activities and to charge improvements for information services to the individual funds. The assets and liabilities of the internal service funds are included in governmental activities in the statement of net position. 821,373
Long-term liabilities are not due and payable in the current period and, therefore, are not reported in the governmental funds.
Bonds payable - net of premium $ (18,796,310) Compensated absences (8,041,883) Net pension liability (87,385,807) Net other postemployment benefits liability (4,221,840) (118,445,840)
Accrued interest payable is not due and payable in the current period and, therefore, is not reported in the governmental funds. (56,118)
Deferred inflows resulting from pension obligations are not due and payable in the current period and, therefore, are not reported in government funds. (9,729,237)
Net Position of Governmental Activities (Exhibit 1) $ 341,033,571
DECEMBER 31, 2016TO THE STATEMENT OF NET POSITION--GOVERNMENTAL ACTIVITIES
RECONCILIATION OF GOVERNMENTAL FUNDS BALANCE SHEET
STEARNS COUNTYST. CLOUD, MINNESOTA
The notes to the financial statements are an integral part of this statement.
21
EXHIBIT 5
Road and Human Debt Capital Nonmajor
General Bridge Services Service Projects Funds Total
Net Change in Fund Balances $ 376,695 $ 5,498,223 $ 243,939 $ (5,616,476) $ (4,214,763) $ 1,209,967 $ (2,502,415)
Fund Balances - January 1 32,871,780 4,652,461 15,407,664 11,019,767 13,459,213 7,768,661 85,179,546
Fund Balances - December 31 $ 33,248,475 $ 10,150,684 $ 15,651,603 $ 5,403,291 $ 9,244,450 $ 8,978,628 $ 82,677,131
STEARNS COUNTY
ST. CLOUD, MINNESOTA
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED DECEMBER 31, 2016
The notes to the financial statements are an integral part of this statement.
22
STEARNS COUNTYST. CLOUD, MINNESOTA
EXHIBIT 6
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES--GOVERNMENTAL ACTIVITIES
FOR THE YEAR ENDED DECEMBER 31, 2016
Net change in fund balances - total governmental funds (Exhibit 5) $ (2,502,415)
Amounts reported for governmental activities in the statement of activities are different because:
In the funds, under the modified accrual basis, receivables not available for expenditure are deferred. In the statement of activities, those revenues are recognized when earned. The adjustment to revenue between the fund statements and the statement of activities is the increase or decrease in unavailable revenue.
Unavailable revenue - December 31 $ 6,513,562 Unavailable revenue - January 1 (4,301,981) 2,211,581
Governmental funds report capital outlay as expenditures. However, in the statement of activities, the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense.
Expenditures for general capital assets and infrastructure $ 19,701,008 Current year depreciation (9,861,551) 9,839,457
The issuance of long-term debt provides current financial resources to governmental funds, while the repayment of principal of long-term debt consumes current financial resources of governmental funds. Neither transaction, however, has any effect on net position. Also, the governmental funds report the effect of bond premiums and discounts when debt is first issued; whereas, these amounts are deferred and amortized in the statement of activities.
Debt issuedBonds and premiums $ (2,623,047)
Principal repaymentsGeneral obligation bonds 8,305,000 Revenue bonds 525,000
Current year amortization of premiums 171,053 6,378,006
Some expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds.
Change in accrued interest payable $ 25,100 Change in compensated absences (55,846) Change in net pension liability (43,089,346) Change in deferred pension outflows 38,532,496 Change in deferred pension inflows (4,178,544) Change in other postemployment benefits liability (339,042) (9,105,182)
Internal service funds are used to account for the County's self-insurance activities and to charge improvements for information services to the individual funds. The increase or decrease in net position of the internal service funds is reported in the government-wide statement of activities. 46,001
Change in Net Position of Governmental Activities (Exhibit 2) $ 6,867,448
The notes to the financial statements are an integral part of this statement.
23
STEARNS COUNTYST. CLOUD, MINNESOTA
EXHIBIT 7
STATEMENT OF NET POSITIONPROPRIETARY FUNDS
DECEMBER 31, 2016
Assets
Current assets Cash and pooled investments $ 1,049,539 Accounts receivable 7,830
Total Assets $ 1,057,369
Liabilities
Current liabilities Accounts payable $ 218,400 Advance from other funds 17,596
Total Liabilities $ 235,996
Net Position
Unrestricted $ 821,373
GovernmentalActivitiesInternal
Service Funds
The notes to the financial statements are an integral part of this statement.
24
STEARNS COUNTYST. CLOUD, MINNESOTA
EXHIBIT 8
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITIONPROPRIETARY FUNDS
FOR THE YEAR ENDED DECEMBER 31, 2016
Operating Revenues Charges for services $ 1,712,004 Miscellaneous 31,013
Total Operating Revenues $ 1,743,017
Operating Expenses Cost of services 1,697,016
Change in Net Position $ 46,001
Net Position - January 1 775,372
Net Position - December 31 $ 821,373
GovernmentalActivities
Service FundsInternal
The notes to the financial statements are an integral part of this statement.
25
STEARNS COUNTY
ST. CLOUD, MINNESOTA
EXHIBIT 9
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FOR THE YEAR ENDED DECEMBER 31, 2016
Increase (Decrease) in Cash and Cash Equivalents
Cash Flows from Operating Activities
Receipts from internal services provided $ 1,737,809
Payments to suppliers (1,876,629)
Net Increase (Decrease) in Cash and Cash
Equivalents $ (138,820)
Cash and Cash Equivalents at January 1 1,188,359
Cash and Cash Equivalents at December 31 $ 1,049,539
Reconciliation of Operating Income (Loss) to Net
Cash Provided by (Used in) Operating Activities
Net operating income (loss) $ 46,001
Adjustments to reconcile operating income
(loss) to net cash provided by (used in)
operating activities
(Increase) decrease in accounts receivable $ (5,208)
Increase (decrease) in accounts payable (197,209)
Increase (decrease) in advance from other funds 17,596
Total adjustments $ (184,821)
Net Cash Provided by (Used in) Operating
Activities $ (138,820)
Service Funds
Internal
Governmental
Activities
The notes to the financial statements are an integral part of this statement.
26
STEARNS COUNTY
ST. CLOUD, MINNESOTA
EXHIBIT 10
STATEMENT OF FIDUCIARY NET POSITION
FIDUCIARY FUND
DECEMBER 31, 2016
Agency Fund
Assets
Cash and pooled investments $ 3,669,980
Due from other governments 469,112
Total Assets $ 4,139,092
Liabilities
Accounts payable $ 113,014
Due to other governments 4,026,078
Total Liabilities $ 4,139,092
The notes to the financial statements are an integral part of this statement.
27
This page was left blank intentionally.
28
STEARNS COUNTY ST. CLOUD, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS AS OF AND FOR THE YEAR ENDED DECEMBER 31, 2016
1. Summary of Significant Accounting Policies The County’s financial statements are prepared in accordance with accounting principles
generally accepted in the United States of America (GAAP). The Governmental Accounting Standards Board (GASB) is responsible for establishing GAAP for state and local governments through its pronouncements (statements and interpretations). The more significant accounting policies established in GAAP and used by the County are discussed below.
A. Financial Reporting Entity
Stearns County was established February 23, 1854, and is an organized county having the powers, duties, and privileges granted counties by Minn. Stat. ch. 373. As required by accounting principles generally accepted in the United States of America, these financial statements present Stearns County and its component unit for which the County is financially accountable. The County is governed by a five-member Board of Commissioners elected from districts within the County. The Board is organized with a chair and vice chair elected at the annual meeting in January of each year. Blended Component Unit Blended component units are entities which are legally separate from the County, but are so intertwined that they are, in substance, the same as the County. They are reported as part of the primary government. The Stearns County Regional Rail Authority is governed by a five-member board consisting of three Stearns County Commissioners and two St. Cloud City Council members, and has the power to levy taxes, issue bonds, and enter into contracts. The Authority was established for the preservation and improvement of local rail service. Although it is legally separate from the County, the activity of the Regional Rail Authority is included in the Stearns County reporting entity as the Regional Rail Authority Special Revenue Fund because the Stearns County Board of Commissioners has operational responsibility for the Authority. Separate financial statements are not available for the Stearns County Regional Rail Authority.
29
STEARNS COUNTY ST. CLOUD, MINNESOTA
1. Summary of Significant Accounting Policies
A. Financial Reporting Entity (Continued)
Discrete Component Unit
The Housing and Redevelopment Authority (HRA) of Stearns County is a component
unit of Stearns County and is reported in a separate column in the County’s government-wide financial statements to emphasize that the HRA is legally separate from Stearns County. The HRA operates as a local governmental unit for the purpose of providing housing and redevelopment services to Stearns County. The governing body consists of a five-member Board of Commissioners appointed by the Stearns County Board of Commissioners to serve five-year terms. The financial statements included are as of and for the year ended June 30, 2016.
The complete financial statements of the HRA of Stearns County can be obtained by
writing to the Housing and Redevelopment Authority of Stearns County, 401 West Wind Court, P. O. Box 484, Cold Spring, Minnesota 56320.
Joint Ventures and Jointly-Governed Organizations
The County participates in joint ventures described in Note 4.C. The County also participates in jointly-governed organizations described in Note 4.D.
B. Basic Financial Statements 1. Government-Wide Statements The government-wide financial statements (the statement of net position and the
statement of activities) display information about the primary government and its component unit. These statements include the financial activities of the overall County government, except for fiduciary activities. Eliminations have been made to minimize the double counting of internal activities. Governmental activities, which normally are supported by taxes and intergovernmental revenue, are reported separately from business-type activities, which rely to a significant extent on fees and charges to external parties for support.
30
STEARNS COUNTY ST. CLOUD, MINNESOTA
1. Summary of Significant Accounting Policies B. Basic Financial Statements 1. Government-Wide Statements (Continued) In the government-wide statement of net position, the governmental activities
column is presented on a consolidated basis by column and is reported on a full accrual, economic resource basis, which recognizes all long-term assets and receivables as well as long-term debt and obligations. The County’s net position is reported in three parts: (1) net investment in capital assets; (2) restricted net position; and (3) unrestricted net position. The County first utilizes restricted resources to finance qualifying activities.
The statement of activities demonstrates the degree to which the direct expenses of each function of the County’s governmental activities are offset by program revenues. Direct expenses are those clearly identifiable with a specific function or activity. Program revenues include: (1) fees, fines, and charges paid by the recipients of goods, services, or privileges provided by a given function or activity; and (2) grants and contributions restricted to meeting the operational or capital requirements of a particular function or activity. Revenues not classified as program revenues, including all taxes, are presented as general revenues.
2. Fund Financial Statements
The fund financial statements provide information about the County’s funds, including its fiduciary funds and blended component unit. Separate statements for each fund category--governmental, proprietary, and fiduciary--are presented. The emphasis of governmental and proprietary fund financial statements is on major individual governmental funds, with each displayed as separate columns in the fund financial statements. All remaining governmental funds are aggregated and reported as nonmajor funds.
31
STEARNS COUNTY ST. CLOUD, MINNESOTA
1. Summary of Significant Accounting Policies B. Basic Financial Statements 2. Fund Financial Statements (Continued)
Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. Operating expenses for internal service fund activities may include cost of services and administrative expenses. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses.
The County reports the following major governmental funds:
The General Fund is the County’s primary operating fund. It accounts for all financial resources of the general government, except those accounted for in another fund. The Road and Bridge Special Revenue Fund is used to account for revenues and expenditures of the County Highway Department, which is responsible for the construction and maintenance of roads, bridges, and other projects affecting County roadways. The Human Services Special Revenue Fund is used to account for economic assistance and community social services programs. The Debt Service Fund is used to account for the accumulation of resources for, and the payment of, principal, interest, and related costs of general long-term debt. The Capital Projects Fund is used to account for the financial resources to be used for capital acquisition, construction, or improvement of capital facilities.
32
STEARNS COUNTY ST. CLOUD, MINNESOTA
1. Summary of Significant Accounting Policies B. Basic Financial Statements 2. Fund Financial Statements (Continued) Additionally, the County reports the following fund types:
The Internal Service Funds account for information service projects and health insurance premiums and payments. The Agency Fund is custodial in nature and does not present results of operations or have a measurement focus. This fund accounts for assets that the County holds for others in an agent capacity.
C. Measurement Focus and Basis of Accounting
The government-wide, proprietary, and fiduciary fund financial statements are reported using the economic resources measurement focus and the full accrual basis of accounting. Revenues are recorded when earned, and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.
Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Stearns County considers all revenues as available if collected within 60 days after the end of the current period. Property and other taxes, licenses, and interest are all considered susceptible to accrual.
Expenditures are recorded when the related fund liability is incurred, except for principal and interest on long-term debt, compensated absences, and claims and judgments, which are recognized as expenditures to the extent that they have matured. Issuances of long-term debt and acquisitions under capital leases are reported as other financing sources.
33
STEARNS COUNTY ST. CLOUD, MINNESOTA
1. Summary of Significant Accounting Policies C. Measurement Focus and Basis of Accounting (Continued)
When both restricted and unrestricted resources are available for use, it is the County’s policy to use restricted resources first and then unrestricted resources as needed.
D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position or Equity
1. Deposits and Investments
The cash balances of substantially all funds are pooled and invested by the County Auditor-Treasurer for the purpose of increasing earnings through investment activities. Pooled and fund investments are reported at their fair value at December 31, 2016, based on market prices. Pursuant to Minn. Stat. § 385.07, investment earnings on cash and pooled investments are credited to the General Fund. Other funds received investment earnings based on other state statutes, grant agreements, contracts, and bond covenants. Pooled investment earnings for 2016 were $1,103,342. Cash and cash equivalents are identified only for the purpose of the statement of cash flows for the proprietary funds. Pooled investments, which have the characteristics of demand deposits, are considered to be cash and cash equivalents on the statement of cash flows. Stearns County invests in an external investment pool, the Minnesota Association of Governments Investing for Counties (MAGIC) Fund, which is created under a joint powers agreement pursuant to Minn. Stat. § 471.59. The investment in the pool is measured at the net asset value per share provided by the pool.
2. Receivables and Payables
Activity between funds representative of lending/borrowing arrangements outstanding at the end of the fiscal year is referred to as either “due to/from other funds” (the current portion of interfund loans) or “advances to/from other funds” (the noncurrent portion of interfund loans). All other outstanding balances between funds are reported as “due to/from other funds.” No allowance for uncollectible accounts receivable have been provided because such amounts are not expected to be material.
34
STEARNS COUNTY ST. CLOUD, MINNESOTA
1. Summary of Significant Accounting Policies
D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position or Equity
2. Receivables and Payables (Continued) Advances between funds, as reported in the fund financial statements, are offset by a nonspendable fund balance account in applicable governmental funds to indicate they are not available for appropriation and are not expendable available financial resources.
Property taxes are levied as of January 1 on property values assessed as of the
same date. The tax levy notice is mailed in March with the first half payment due May 15 and the second half payment due October 15. Unpaid taxes at December 31 become liens on the respective property and are classified in the financial statements as delinquent taxes receivable.
Taxes receivable consist of uncollected taxes payable in the years 2010 through
2016. Taxes receivable are offset by unavailable revenue for the amount not collectible within 60 days of December 31 to indicate they are not available to pay current expenditures. No provision has been made for an estimated uncollectible amount.
Special assessments receivable consist of delinquent special assessments payable in
the years 2010 through 2016 and noncurrent special assessments payable in 2017 and after. No provision has been made for an estimated uncollectible amount. The receivable includes special assessments on solid waste fees, drainage systems, septic loans and ditches.
Loans receivable consist of economic development loans made to private
enterprises and agreements with the City of Sartell for a joint road project and the North Fork Watershed District for project funding of ditch systems.
35
STEARNS COUNTY ST. CLOUD, MINNESOTA
1. Summary of Significant Accounting Policies
D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position or Equity (Continued)
3. Inventories and Prepaid Items
All inventories are valued at cost using the first-in/first-out method. The inventory
in the General Fund consists primarily of technology projects not completed at the end of the year. The inventory in the Road and Bridge Special Revenue Fund consists of expendable supplies held for consumption. The cost of the inventory is recorded as an expenditure at the time individual items are purchased. At fiscal year-end the cost of the inventory is adjusted to the consumption method.
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements. Reported inventories and prepaid items are equally offset by nonspendable fund balance to indicate that they do not constitute available spendable resources.
4. Capital Assets
Capital assets, including property, plant, equipment, and infrastructure assets (for example, roads, bridges, and similar items) are reported in the government-wide financial statements. The County defines capital assets as assets with an initial, individual cost of more than $5,000 and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at acquisition value.
The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets’ lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed.
Property, plant, and equipment of the County are depreciated using the
straight-line method over the following estimated useful lives:
Assets Years Buildings and improvements 20 - 50 Office furniture and equipment 5 - 10 Machinery and automotive equipment 3 - 12 Infrastructure 50 - 75 Software 5 - 10
36
STEARNS COUNTY ST. CLOUD, MINNESOTA
1. Summary of Significant Accounting Policies
D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position or Equity (Continued)
5. Compensated Absences
The liability for compensated absences reported in the financial statements consists of unpaid, accumulated annual paid time off (PTO) balances. The liability has been calculated using the vesting method, in which leave amounts for both employees who currently are eligible to receive termination payments and other employees who are expected to become eligible in the future to receive such payments upon termination are included. Compensated absences are accrued when incurred in the government-wide financial statements. A liability for these amounts is reported in the governmental funds only if they have matured, for example, as a result of employee resignations and retirements. The current portion consists of an amount based on a trend analysis of current usage of PTO. The noncurrent portion consists of the remaining amount of PTO.
6. Deferred Outflows/Inflows of Resources and Unearned Revenue
In addition to assets, the statement of financial position reports a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. Currently, the County has one item, deferred pension outflows, which qualifies for reporting in this category. These outflows arise only under the full accrual basis of accounting and consist of pension plan contributions paid subsequent to the measurement date, differences between expected and actual pension plan economic experiences, changes in actuarial assumptions, the differences between projected and actual earnings on pension plan investments and, pension plan changes in proportionate share and, accordingly, are reported only in the statement of net position. In addition to liabilities, the statement of financial position reports a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to future period(s) and so will not be recognized as an inflow of resources (revenue or reduction of expense) until that time.
37
STEARNS COUNTY ST. CLOUD, MINNESOTA
1. Summary of Significant Accounting Policies
D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position or Equity 6. Deferred Outflows/Inflows of Resources and Unearned Revenue (Continued)
Currently, the County has three such items that qualify for reporting in this category. The first item, unavailable revenue, arises only under the modified accrual basis of accounting; the second item, advance from other governments, arises under both the modified accrual and the full accrual basis of accounting; the third item, deferred pension inflows arises only under the full accrual basis of accounting. Unavailable revenue and the advance from other governments are reported in the governmental funds balance sheet, while only the advance from other governments and deferred pension inflows are reported in the government-wide statement of net position. Unavailable revenues are deferred and recognized as revenues in the period they become available. The governmental funds report unavailable revenue from the following sources: property taxes; special assessments; loans receivable; and, intergovernmental grants and reimbursements. Advances are recognized as revenue when the timing requirements have been met. Deferred pension inflows consist of differences between expected and actual pension plan economic experience and also pension plan changes in proportionate share. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available.
Governmental funds and government-wide financial statements report unearned revenue in connection with resources that have been received, but not yet earned.
7. Pension Plan
For purposes of measuring the net pension liability, deferred outflows/inflows of
resources, and pension expense, information about the fiduciary net position of the Public Employees Retirement Association (PERA) and additions to/deductions from PERA’s fiduciary net position have been determined on the same basis as they are reported by PERA, except that PERA’s fiscal year-end is June 30. For this purpose, plan contributions are recognized as of employer payroll paid dates and benefit payments and refunds are recognized when due and payable in accordance with the benefit terms. Plan investments are reported at fair value. The net pension liability is liquidated primarily by the General Fund and the Road and Bridge and Human Services Special Revenue Funds.
38
STEARNS COUNTY ST. CLOUD, MINNESOTA
1. Summary of Significant Accounting Policies D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position or Equity
(Continued) 8. Long-Term Obligations
In the government-wide financial statements, long-term debt and other long-term
obligations are reported as liabilities in the governmental activities statement of net position. Bond premiums and discounts are deferred and amortized over the life of the bonds using the straight-line method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are expensed in the year the debt was issued.
In the fund financial statements, governmental fund types recognize bond
premiums and discounts, as well as bond issuance costs, during the current period. The face amount of the debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources, while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.
9. Classification of Net Position
Net position in the government-wide financial statements is classified in the following categories:
Net investment in capital assets - the amount of net position representing capital assets, net of accumulated depreciation, and reduced by outstanding debt attributed to the acquisition, construction, or improvement of the assets.
Restricted net position - the amount of net position for which external restrictions have been imposed by creditors, grantors, contributors, or laws or regulations of other governments and restrictions imposed by law through constitutional provisions or enabling legislation. Unrestricted net position - the amount of net position that does not meet the definition of restricted or net investment in capital assets.
39
STEARNS COUNTY ST. CLOUD, MINNESOTA
1. Summary of Significant Accounting Policies D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position or Equity
(Continued)
10. Classification of Fund Balances
Fund balance is divided into five classifications based primarily on the extent to which the County is bound to observe constraints imposed upon the use of the resources reported in the governmental funds.
Fund balance classifications are as follows:
Nonspendable - amounts that cannot be spent because they are not in spendable form, or are legally or contractually required to be maintained intact. The “not in spendable form” criterion includes items that are not expected to be converted to cash.
Restricted - amounts in which constraints placed on the use of resources are
either externally imposed by creditors (such as through debt covenants), grantors, contributors, or laws or regulations of other governments or are imposed by law through constitutional provisions or enabling legislation.
Committed - amounts that can be used only for the specific purposes imposed by formal action of the Board of Commissioners. Those committed amounts cannot be used for any other purpose unless the Board removes or changes the specified use by taking the same type of action it employed to previously commit those amounts.
Assigned - amounts the County intends to use for specific purposes that do not meet the criteria to be classified as restricted or committed. In governmental funds other than the General Fund, assigned fund balance represents the remaining amount not restricted or committed. The County Board has adopted a fund balance policy that delegates authority to assign fund balance to the County Auditor/Treasurer. Unassigned - is the residual classification for the General Fund and includes all spendable amounts not contained in the other fund balance classifications. In other governmental funds, the unassigned classification is used only to report a deficit balance resulting from overspending for specific purposes for which amounts had been restricted, committed, or assigned. Further detail on fund balance classifications is available in Note 3.D.
40
STEARNS COUNTY ST. CLOUD, MINNESOTA
1. Summary of Significant Accounting Policies D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position or Equity 10. Classification of Fund Balances (Continued)
The County applies restricted resources first when expenditures are incurred for purposes for which either restricted or unrestricted (committed, assigned, and unassigned) amounts are available. Similarly, within unrestricted fund balance amounts, committed amounts are reduced first followed by assigned, and then unassigned amounts when expenditures are incurred for purposes for which amounts in any of the restricted fund balance classifications could be used. The County has adopted a minimum fund balance policy for the General Fund. The County is to maintain a yearly unassigned fund balance in the General Fund of 35 to 50 percent of the current year’s General Fund total operating expenditures.
11. Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, deferred outflows of resources, liabilities and deferred inflows of resources; and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
41
STEARNS COUNTY ST. CLOUD, MINNESOTA
2. Stewardship, Compliance, and Accountability
A. Excess of Expenditures Over Budget
The legal level of budgetary control (i.e. the level at which expenditures may not legally exceed appropriations) is the fund level. The following nonmajor special revenue fund and major debt service fund had expenditures in excess of budget for the year ended December 31, 2016. These overages were seen as necessary and were funded by greater than anticipated revenues and existing fund balance.
Major Fund
Debt Service $ 12,213,809 $ 9,427,240 $ 2,786,569
Nonmajor Funds
County Park 1,229,526 1,019,536 209,990
Law Library 205,110 197,159 7,951
Expenditures Final Budget Excess
B. Tax Abatements The County entered into a tax abatement agreement with the City of St Cloud on August 22, 2006, under Minnesota Statutes 469.1812 to 469.1815. The tax abatement will be effective for 11 years, commencing in 2016 and ending in 2026. The estimated amount of the abatement shall be $79,000 per year, for an estimated total of $869,000. The abatement is conditional on the City constructing a public parking facility. The annual amount of the ad valorem real estate tax imposed by the County on the development property that will be abated shall be $79,000, provided the amount of the ad valorem real estate tax imposed by the County on the development property is sufficient for the County to retain the County base amount of such taxes on the development property. The County base amount is defined as $3,400 resulting in an abatement to the City of St Cloud in the amount of $58,353 for 2016.
Tax Abatements - Pay-as-You-Go Tax Increment The County is subject to tax abatements granted by Cities within the County pursuant to Minnesota Statutes 469.174 to 469.1794 (Tax Increment Financing) through a pay‐as‐you‐go note program. Tax increment financing (TIF) can be used to encourage private development, redevelopment, renovation and renewal, growth in low‐to‐moderate‐income housing, and economic development within a City. TIF captures the increase in tax capacity and property taxes (of all taxing jurisdictions, including the County) from development or redevelopment to provide funding for the related project.
The pay‐as‐you‐go note provides for payment to the developer of a percentage of all tax increment received. The payment reimburses the developer for certain public improvements. During 2016, there were 52 pay–as–you–go TIF Districts within the County. The tax increment taxes collected during 2016 totaled $1,930,701. The County’s portion of the captured tax capacity and related property taxes was approximately 39%. In the case of the County, TIF agreements of other local governments have resulted in reductions of the County property tax revenues for the year ended December 31, 2016 as shown below:
Tax Abatement Program
Number of Pay-As-You-Go
TIFTaxes
Abated Impact to
Stearns County
Albany City 4 $ 101,509 $ 40,432 Avon City 2 398,089 118,962Belgrade City 1 3,774 1,341Cold Spring City 4 213,701 86,400Elrosa City 2 9,832 5,713Freeport City 1 2,932 1,019Holdingford City 3 33,925 9,939Kimball City 1 2,588 775Lake Henry City 1 22,788 9,307Meire Grove City 1 7,804 3,784Melrose City 5 141,310 51,461Paynesville City 4 89,096 40,556Richmond City 2 25,879 8,601Sartell City 3 157,001 63,514Sauk Centre City 2 35,298 15,546St Augusta City 2 185,000 90,715St Cloud City 9 350,004 141,810St Joseph City 2 51,481 20,498St Martin City 2 34,821 11,423Stearns County HRA 1 63,869 32,131
Total 52 $ 1,930,701 $ 753,927
43
STEARNS COUNTY ST. CLOUD, MINNESOTA
3. Detailed Notes on All Funds
A. Assets
1. Deposits and Investments Reconciliation of the County’s total cash and investments to the basic financial statements follows:
Government-wide statement of net position
Governmental activities
Cash and pooled investments $ 88,706,753
Cash with fiscal agents 5,051
Petty cash and change funds 12,710
Departmental cash 6,864
Statement of fiduciary net position
Fiduciary funds
Cash and pooled investments 3,669,980
Total Cash and Investments $ 92,401,358
44
STEARNS COUNTY ST. CLOUD, MINNESOTA
3. Detailed Notes on All Funds
A. Assets
1. Deposits and Investments (Continued)
a. Deposits
The County is authorized by Minn. Stat. §§ 118A.02 and 118A.04 to designate a depository for public funds and to invest in certificates of deposit. The County is required by Minn. Stat. § 118A.03 to protect deposits with insurance, surety bond, or collateral. The market value of collateral pledged shall be at least ten percent more than the amount on deposit at the close of the financial institution’s banking day, not covered by insurance or bonds. Authorized collateral includes treasury bills, notes and bonds; issues of U.S. government agencies; general obligations rated “A” or better and revenue obligations rated “AA” or better; irrevocable standby letters of credit issued by the Federal Home Loan Bank; and certificates of deposit. Minnesota statutes require that securities pledged as collateral be held in safekeeping in a restricted account at the Federal Reserve Bank or in an account at a trust department of a commercial bank or other financial institution that is not owned or controlled by the financial institution furnishing the collateral.
Custodial Credit Risk Custodial credit risk for deposits is the risk that, in the event of a financial institution failure, the County’s deposits may not be returned to it. The County’s policy is to minimize custodial risk for its deposits by monitoring the collateral balances on a daily basis and obtaining monthly updates on the par and market value of collateral pledged from financial institutions. As of December 31, 2016, the County’s deposits were not exposed to custodial credit risk.
45
STEARNS COUNTY ST. CLOUD, MINNESOTA
3. Detailed Notes on All Funds
A. Assets
1. Deposits and Investments (Continued)
b. Investments
The County may invest in the following types of investments as authorized by Minn. Stat. §§ 118A.04 and 118A.05:
(1) securities which are direct obligations or are guaranteed or insured
issues of the United States, its agencies, its instrumentalities, or organizations created by an act of Congress, except mortgage-backed securities defined as “high risk” by Minn. Stat. § 118A.04, subd. 6;
(2) mutual funds through shares of registered investment companies
provided the mutual fund receives certain ratings depending on its investments;
(3) general obligations of the State of Minnesota and its municipalities, and
in certain state agency and local obligations of Minnesota and other states provided such obligations have certain specified bond ratings by a national bond rating service;
(4) bankers’ acceptances of United States banks;
(5) commercial paper issued by United States corporations or their
Canadian subsidiaries that is rated in the highest quality category by two nationally recognized rating agencies and matures in 270 days or less; and
(6) with certain restrictions, in repurchase agreements, securities lending
agreements, joint powers investment trusts, and guaranteed investment contracts.
Custodial Credit Risk
The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty to a transaction, a government will not be able to recover the value of investment or collateral securities in the possession of an outside party.
46
STEARNS COUNTY ST. CLOUD, MINNESOTA
3. Detailed Notes on All Funds
A. Assets
1. Deposits and Investments
b. Investments
Custodial Credit Risk (Continued)
The County’s policy is that all investment securities purchased by the County shall be held in safekeeping by a third-party institution designated by the County. At December 31, 2016, $13,377,997 of the County’s investments were exposed to custodial risk not because they were not in safekeeping by a third-party institution designated by the County but rather because of GASB standards and their definition as to what constitutes custodial risk. Concentration of Credit Risk The concentration of credit risk is the risk of loss that may be caused by the County’s investment in a single issuer. The County’s policy is to minimize concentration of credit risk by diversifying the investment portfolio so that the impact of potential losses from any one type of security or issuer will be minimized. Interest Rate Risk Interest rate risk is the risk that changes in the market interest rates will adversely affect the fair value of an investment. The County’s policy is to minimize its exposure to interest rate risk by: (1) structuring its investment portfolio so that securities mature to meet cash requirements for ongoing operations, thereby avoiding the need to sell securities in the open market; and (2) investing operating funds primarily in shorter-term securities, liquid asset funds, money market mutual funds, or similar investment pools and limiting the average maturity in accordance with the County’s cash requirements. Credit Risk Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization.
It is the County’s policy to invest in instruments which are guaranteed or direct issues of the United States or rated in the highest quality category by at least two nationally recognized rating agencies.
47
STEARNS COUNTY ST. CLOUD, MINNESOTA
3. Detailed Notes on All Funds
A. Assets
1. Deposits and Investments (Continued)
The following table presents the County’s deposit and investment balances at December 31, 2016, and information relating to potential investment risk:
Concentration Interest Rate
Risk Risk
Credit Rating Over 5 Percent Maturity
Investment Type Rating Agency Of Portfolio Date
Federal Farm Credit Bank AAA S&P 1 - 3 years $ 2,971,900
Federal Farm Credit Bank AAA S&P 4 - 6 years 985,400
Total Federal Farm Credit Bank $ 3,957,300
Federal Home Loan Bank AAA S&P 4 - 6 years $ 6,784,782
Federal Home Loan Mortgage Corporation AAA S&P 1 - 3 years $ 1,997,483
Federal Home Loan Mortgage Corporation AAA S&P 4 - 6 years 13,074,947
Total Federal Home Loan Mortgage Corporation 16.82% $ 15,072,430
Federal National Mortgage Association AAA S&P 8.55% 4 - 6 years $ 7,665,675
Government National Mortgage Association AAA S&P 11 - 15 years $ 7,266
Total U.S. Government Agency Securities $ 33,487,453
Municipals A1/P1/F1 S&P 1 - 3 years $ 1,717,558
Municipals A1/P1/F1 S&P 4 - 6 years 1,320,883
Municipals A1/P1/F1 S&P 7 - 10 years 1,512,872
Municipals A1/P1/F1 S&P 11 - 15 years 460,575
Total Municipals 5.59% $ 5,011,888
Commercial Paper 15.61% $ 13,989,177
Negotiable Certificates of Deposit N/A N/A < 1 year $ 1,337,796
Negotiable Certificates of Deposit N/A N/A 1 - 3 years 12,403,542
Negotiable Certificates of Deposit N/A N/A 4 - 6 years 5,973,638
Total Negotiable Certificates of Deposit 22.00% $ 19,714,976
MAGIC Fund 16.02% $ 14,358,453
Money Market Funds $ 3,065,416
Total Investments $ 89,627,363
Deposits and Non-Negotiable Certificates of Deposit $ 2,754,421
Petty Cash and Change Funds 12,710
Departmental Cash 6,864
Total Deposits and Investments $ 92,401,358
N/A - Not ApplicableS&P - Standards and Poor’s
Credit Risk Carrying
(Fair)
Value
48
STEARNS COUNTY ST. CLOUD, MINNESOTA
3. Detailed Notes on All Funds
A. Assets
1. Deposits and Investments (Continued) Fair Value of Investments
The County measures and records its investments using fair value measurement guidelines established by accounting principles generally accepted in the United State of America. These guidelines recognize a three-tiered fair value hierarchy, as follows: Level 1: Quoted prices for identical investments in active markets Level 2: Observable inputs other than quoted market prices Level 3: Unobservable inputs At December 31, 2016, the County had the following recurring fair value measurements:
Debt securities U.S. Government agency securities $ 33,487,453 $ - $ 33,487,453 $ -
Municipal securities 5,011,888 - 5,011,888 -
Commercial paper 13,989,177 - 13,989,177 -
Negotiable certificates of deposit 19,714,976 - 19,714,976 -
Total investments by fair value hierarchy $ 72,203,494 $ - $ 72,203,494 $ -
Investments measured at the net asset value (NAV)
MAGIC Fund $ 14,358,453 Money market 3,065,416
Total investments measured at the NAV $ 17,423,869
Total investments $ 89,627,363
Investments by fair value level
December 31, 2016
Fair Value Measurements Using
Quoted Prices in Active Markets
for Identical Assets (Level 1)
Significant Other Observable Inputs
(Level 2)
Significant Unobservable
Inputs (Level 3)
49
STEARNS COUNTY ST. CLOUD, MINNESOTA
3. Detailed Notes on All Funds
A. Assets
1. Deposits and Investments Fair Value of Investments (Continued)
Debt and equity securities classified in Level 2 are valued using the following approaches: • U.S. government agency securities, municipal securities, and commercial
paper are valued using a market approach by utilizing quoted prices for identical securities in markets that are not active;
• Negotiable Certificates of Deposit are valued using matrix pricing based on
the securities’ relationship to benchmark quoted prices. MAGIC is a local government investment pool which is quoted at a net asset value (NAV). The County invests in this pool for the purpose of the joint investment of the County’s money with those of other counties to enhance the investment earnings accruing to each member. MAGIC Portfolio is valued using amortized cost. Shares of the MAGIC Portfolio are available to be redeemed upon proper notice without restrictions under normal operating conditions. There are no limits to the number of redemptions that can be made as long as the County has a sufficient number of shares to meet their redemption request. The Fund’s Board of Trustees can suspend the right of withdrawal or postpone the date of payment if the Trustees determine that there is an emergency that makes the sale of a Portfolio’s securities or determination of its net asset value not reasonably practical. The County invests in money market funds for the benefit of liquid investments that can be readily re-invested. Money market funds held by the County seek a constant net asset value (NAV) of $1.00 per share.
50
STEARNS COUNTY ST. CLOUD, MINNESOTA
3. Detailed Notes on All Funds
A. Assets (Continued)
2. Receivables Property Taxes and Special Assessments Property taxes and special assessments which remain unpaid at December 31 are delinquent. No allowance for uncollectible taxes/assessments has been provided because such amounts are not expected to be material.
Loans Receivable Economic development loans were made to private enterprises under the County’s economic development loan program. The County entered into an agreement with the North Fork Watershed District whereby the County would loan them funds for various ditch maintenance projects until a bond is to be issued by the County for the Watershed District. When the bonds are issued, the Watershed is to repay the loan with interest. The County entered into an agreement with the City of Sartell to fund a road project. The loan is to be repaid over the course of five years with interest.
A summary of loans receivable outstanding at December 31, 2016, are as follows:
Depreciation expense was charged to functions/programs of the primary government as follows:
Governmental Activities
General government $ 1,025,875
Public safety 1,340,362
Highways and streets, including depreciation of infrastructure assets 6,963,166
Human services 237,974
Culture and recreation 201,013
Conservation of natural resources 93,161
Total Depreciation Expense - Governmental Activities $ 9,861,551
B. Interfund Receivables, Payables, and Transfers The composition of interfund balances as of December 31, 2016, was as follows: 1. Advance From/To Other Funds
Receivable Fund Payable Fund
General Fund Debt Service Fund $ 55,590Solid Waste Fund General Fund 73,157General Fund Information Services Improvements
Internal Service Fund 17,596
$ 146,343
Amount
Total Advance From/To Other Funds
The General Fund advanced funds to the Debt Service Fund for the Cedar Island Bridge project. The advance will be repaid with special assessments. The Solid Waste Special Revenue Fund advanced funds to the General Fund to finance various septic system updates for individuals. The advance will be repaid through the collection of special assessments. The General Fund advanced funds to the Information Services Improvements Internal Service Fund to finance various technology projects. The advance will be repaid as projects are completed.
53
STEARNS COUNTY ST. CLOUD, MINNESOTA
3. Detailed Notes on All Funds
B. Interfund Receivables, Payables, and Transfers (Continued)
2. Interfund Transfers Interfund transfers for the year ended December 31, 2016, consisted of the following:
Description
Transfers to General Fund from
Road and Bridge Fund $ 133,869 Salaries adjustment
Human Services Fund 1,553,450 Salaries adjustment
Total Transfers to General Fund $ 1,687,319
Transfers to Road and Bridge Fund from
General Fund $ 86,627 Salaries adjustment
General Fund 48,428 Information services chargeback
Capital Projects Fund 2,632,702 Road projects
Total Transfers to Road and Bridge Fund $ 2,767,757
Transfers to Human Services Fund from
General Fund $ 1,190,239 Salaries adjustment
General Fund 663,413 Information services chargeback
Total Transfers to Human Services Fund $ 1,853,652
Transfers to County Park Fund from
General Fund $ 11,295 Salaries adjustment
General Fund 9,564 Information services chargeback
Total Transfers to County Park Fund $ 20,859
Transfers to County Building Fund from
General Fund $ 8,000 Building upgrades
Total Interfund Transfers $ 6,337,587
Transfers In
54
STEARNS COUNTY ST. CLOUD, MINNESOTA
3. Detailed Notes on All Funds (Continued) C. Liabilities and Deferred Inflows of Resources 1. Payables
Payables at December 31, 2016, were as follows:
Accounts $ 3,901,860
Salaries 3,832,164
Contracts 828,579
Due to other governments 2,479,626
Accrued interest 56,118
Total Payables $ 11,098,347
GovernmentalActivities
2. Unearned Revenues/Deferred Inflows of Resources Unearned revenues and deferred inflows of resources consist of unavailable
revenue arising from taxes receivable, state and federal grants, installment loans and other items that are not collected soon enough after year-end to pay liabilities of the current year as well as state and federal grants and state allotment advances that have been receivable but not yet earned. Unearned revenues and deferred inflows of resources at December 31, 2016, are summarized on the next page by fund:
55
STEARNS COUNTY ST. CLOUD, MINNESOTA
3. Detailed Notes on All Funds C. Liabilities and Deferred Inflows of Resources
2. Unearned Revenues/Deferred Inflows of Resources (Continued)
3. Paid Time Off
County employees are granted paid time off, in varying amounts, depending on union/non-union status and length of service. The County pays unused accumulated paid time off to employees upon termination based on two different severance plans. Unvested paid time off valued at $3,054,263 at December 31, 2016, is available to employees in the event of an absence but is not paid to them at termination.
3. Detailed Notes on All Funds C. Liabilities and Deferred Inflows of Resources (Continued)
5. Debt Service Requirements Debt service requirements at December 31, 2016, were as follows:
2017 $ 1,930,000 $ 230,774
2018 1,975,000 188,710
2019 2,015,000 145,209
2020 2,090,000 88,391
2021 130,000 51,308
2022 - 2026 835,000 199,431
2027 - 2031 735,000 105,625
2032 - 2035 470,000 28,042
Total $ 10,180,000 $ 1,037,490
2017 $ 945,000 $ 171,950
2018 970,000 143,600
2019 1,000,000 114,500
2020 1,030,000 84,500
2021 1,340,000 75,600
Total $ 5,285,000 $ 590,150
2017 $ 670,000 $ 55,014
2018 685,000 39,061
2019 710,000 22,639
2020 605,000 7,096
Total $ 2,670,000 $ 123,810
General Obligation Revenue Bonds
Principal Interest
Year Ending December 31
Year Ending December 31
Year Ending December 31
General Obligation Bonds and Notes
Principal Interest
General Obligation Refunding Bonds
Principal Interest
58
STEARNS COUNTY ST. CLOUD, MINNESOTA
3. Detailed Notes on All Funds C. Liabilities and Deferred Inflows of Resources
5. Debt Service Requirements (Continued)
General Obligation Refunding Bond
On December 15, 2014, the County issued $5,285,000 General Obligation Capital Improvement Crossover Refunding Bonds, Series 2014A to refund $5,490,000 of outstanding General Obligation Capital Improvement Bonds, Series 2008A. The refunded bonds were called on December 1, 2016. Remaining annual payments on the Crossover Refunding Bonds are due through December 1, 2022.
Recovery Zone Economic Development Bonds (RZEDBs)
As part of the American Recovery and Reinvestment Act of 2009 (ARRA), Stearns County issued $1,665,000 of Recovery Zone Economic Development Bonds (RZEDBs) which were issued to finance capital improvements under an approved capital improvement plan. The Series 2010B bonds are direct pay tax credit RZEDBs, in which the County will receive a payment from the federal government equal to 45 percent of the amount of interest payable on each interest payment date. However, pursuant to the requirements of the Balanced Budget and Emergency Deficit Control Act of 1985 which took place March 1, 2013, sequestration reduction rates were applied which reduced the Federal Subsidy to a lesser percentage as reflected below.
The County has complied with all requirements of ARRA to be eligible for the RZEDB interest credit. The Series 2010B bonds were issued as taxable obligations which the County will elect to irrevocably designate as qualified RZEDBs. The entire County has been designated as a recovery zone pursuant to a resolution adopted by the Board of Commissioners of the County on November 24, 2009.
59
STEARNS COUNTY ST. CLOUD, MINNESOTA
3. Detailed Notes on All Funds C. Liabilities and Deferred Inflows of Resources
5. Debt Service Requirements Recovery Zone Economic Development Bonds (RZEDBs) (Continued) Taking into consideration the above RZEDB interest credit, as of December 31, 2016, the County’s net annual debt service requirements to amortize all taxable general obligation bonds outstanding, including interest of $116,529 on the governmental activities debt is as follows:
From time to time, the County has issued revenue bonds and notes to provide financial assistance to private sector or governmental entities for the acquisition and construction of facilities and equipment deemed to be in the public interest. These bonds and notes are secured by the property financed and are payable solely from revenue derived from the loan agreements. Upon repayment of the bonds, ownership of the acquired facilities or equipment transfers to the private sector or governmental entity served by the bond issuance. The County is not obligated in any manner for repayment of the bonds or notes. Accordingly, they are not reported as a liability in the accompanying financial statements. As of December 31, 2016, there is one such issue outstanding with an aggregate principal amount payable of $434,475.
60
STEARNS COUNTY ST. CLOUD, MINNESOTA
3. Detailed Notes on All Funds C. Liabilities and Deferred Inflows of Resources (Continued)
6. Changes in Long-Term Liabilities Long-term liability activity for the year ended December 31, 2016, was as follows:
The bonds payable are liquidated by the Debt Service Fund. The compensated absences liability is primarily liquidated by the General Fund and the Road and Bridge and Human Services Special Revenue Funds.
7. Operating Leases
The County currently has eight operating leases. The County made operating lease payments totaling $111,298 in 2016. The following is a schedule of future minimum operating lease payments:
Pursuant to Minn. Stat. § 471.61, subd. 2a, the County provides postemployment health care and dental benefits for eligible retired employees, spouses, and dependents through a single-employer defined benefit plan.
Qualified retirees are eligible to receive a postemployment benefit that reduces the monthly premium of the health care insurance coverage provided under Minn. Stat. § 471.61, subd. 2b, by $10 per month for each year of consecutive County service up to a maximum of 20 years of consecutive County service for a period of 24 months immediately upon retirement. In order to qualify for this benefit, retirees must meet the following criteria: (1) 12 or more consecutive years of County service, and (2) meets Public Employees Retirement Association of Minnesota (PERA) requirements for retirement benefits.
Retirees that receive health care benefits from subsequent employment are no longer
eligible for this benefit. Also, retirees must take any available Medicare benefits. The benefit terminates upon the death of the retiree.
In addition, the County provides benefits for other retirees and spouses of retirees as
required by Minn. Stat. § 471.61, subd. 2b. These benefits include access to the same health care and dental insurance coverage provided by the County to active employees.
The benefits are administered by the County Board of Commissioners and can be amended through its personnel manual and labor contracts. A separate benefits plan report is not issued. The activity of the plan is reported in the government-wide financial statements.
Participants Participants of the plan consisted of the following at January 1, 2015, the date of the
most recent actuarial valuation:
Active employees 861 Retired employees 23 Spouses of retirees 6 Total Plan Participants 890
64
STEARNS COUNTY ST. CLOUD, MINNESOTA
3. Detailed Notes on All Funds E. Other Postemployment Benefits (OPEB) (Continued) Funding Policy The contribution requirements of plan members and the County are established and
may be amended by the Stearns County Board of Commissioners. The County finances the plan on a “pay-as-you-go” basis. During 2016, the County expended $265,211 for these benefits.
For those qualified retirees that meet the criteria for a full medical insurance benefit, the
County contributes 100 percent of the benefit cost. All other retirees and their spouses contribute 100 percent of the premium cost for medical and dental insurance. Since the premium is a blended rate determined on the entire active and retiree population, the retirees receive an implicit rate subsidy.
Annual OPEB Cost and Net OPEB Obligation The County’s annual OPEB cost is calculated based on the annual required contribution
(ARC) of the employer, an amount actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal costs each year and amortize any unfunded actuarial accrued liabilities (or funding excess) over a period not to exceed 30 years. The following table shows the components of the County’s OPEB cost for 2016, the amount actuarially contributed to the plan, and changes in the County’s net OPEB obligation.
ARC $ 669,123 Interest on net OPEB obligation 155,312 Adjustment to ARC (220,182) Annual OPEB cost $ 604,253 Contributions during the year (265,211) Increase in net OPEB obligation $ 339,042 Net OPEB Obligation - Beginning of Year 3,882,798 Net OPEB Obligation - End of Year $ 4,221,840
65
STEARNS COUNTY ST. CLOUD, MINNESOTA
3. Detailed Notes on All Funds E. Other Postemployment Benefits (OPEB) Annual OPEB Cost and Net OPEB Obligation (Continued)
The County’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for 2011, 2012, 2013, 2014, 2015 and 2016 were as follows:
Fiscal
Year Ended Annual
OPEB Cost Employer
Contribution Percentage
Contributed Net OPEB
Obligation
December 31, 2011 $ 706,564 $ 234,615 33.21% $ 2,468,697 December 31, 2012 697,371 311,082 44.61 2,854,986 December 31, 2013 515,025 181,834 35.31 3,188,177 December 31, 2014 506,785 215,449 42.51 3,479,513 December 31, 2015 596,935 193,650 32.44 3,882,798 December 31, 2016 604,253 265,211 43.89 4,221,840
The net OPEB obligation is primarily liquidated by the General Fund and the Road and Bridge and Human Services Special Revenue Funds.
Funded Status and Funding Progress As of January 1, 2015, the most recent actuarial valuation date, the County currently has no assets that have been irrevocably deposited in a trust for future health benefits. Therefore, the actuarial value of plan assets is zero.
Actuarial accrued liability (AAL) $ 4,920,339 Actuarial value of plan assets - Unfunded Actuarial Accrued Liability (UAAL) $ 4,920,339
Funded ratio (actuarial value of plan assets/AAL) 0.0% Covered payroll (active plan members) $ 51,326,900 UAAL as a percentage of covered payroll 9.59%
66
STEARNS COUNTY ST. CLOUD, MINNESOTA
3. Detailed Notes on All Funds E. Other Postemployment Benefits (OPEB)
Funded Status and Funding Progress (Continued) Actuarial valuations of an ongoing plan involve estimates of value of reported amounts
and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the health care cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The Schedule of Funding Progress - Other Postemployment Benefits, presented as required supplementary information following the notes to the financial statements, presents multi-year trend information that shows whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. Actuarial Methods and Assumptions Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques designed to reduce short-term volatility in actuarial accrued liabilities and the actuarial value of plan assets, consistent with the long-term perspective of the calculations. In the January 1, 2015, actuarial valuation, the projected unit credit actuarial cost method was used. The actuarial assumptions include a 4.0 percent investment rate of return and an annual health care cost trend rate of 7.25 percent initially, reduced by decrements to an ultimate rate of 5.0 percent after 9 years. The actuarial value of plan assets was set equal to the market value of assets. The UAAL is being amortized over 30 years on a closed group basis. The remaining amortization period at December 31, 2016, was 21 years.
F. Contract Commitments
The Road and Bridge Special Revenue Fund entered into several contract commitments for road projects which have not been completed as of December 31, 2016, totaling $212,000.
67
STEARNS COUNTY ST. CLOUD, MINNESOTA
3. Detailed Notes on All Funds (Continued) G. Pension Plans
1. Defined Benefit Pension Plans
a. Plan Description
All full-time and certain part-time employees of Stearns County are covered by defined benefit pension plans administered by the Public Employees Retirement Association of Minnesota (PERA). PERA administers the General Employees Retirement Plan, the Public Employees Police and Fire Plan, and the Local Government Correctional Service Retirement Plan (the Public Employees Correctional Plan), which are cost-sharing, multiple-employer retirement plans. These plans are established and administered in accordance with Minn. Stat. chs. 353 and 356. PERA’s defined benefit pension plans are tax qualified plans under Section 401(a) of the Internal Revenue Code. General Employees Retirement Plan (accounted for in the General Employees Fund) has multiple benefit structures with members belonging to the Coordinated Plan, the Basic Plan, or the Minneapolis Employees Retirement Fund. Coordinated Plan members are covered by Social Security and Basic Plan and Minneapolis Employees Retirement Fund members are not. The Basic Plan was closed to new members in 1967. The Minneapolis Employees Retirement Fund was closed to new members during 1978 and merged into the General Employees Retirement Plan in 2015. All new members must participate in the Coordinated Plan, for which benefits vest after five years of credited service. Police officers, firefighters, and peace officers who qualify for membership by statute are covered by the Public Employees Police and Fire Plan (accounted for in the Police and Fire Fund). For members first hired after June 30, 2010, but before July 1, 2014, benefits vest on a graduated schedule starting with 50 percent after 5 years and increasing 10 percent for each year of service until fully vested after 10 years. Benefits for members first hired after June 30, 2014, vest on a prorated basis from 50 percent after 10 years and increasing 5 percent for each year of service until fully vested after 20 years. Local government employees of a county-administered facility who are responsible for the direct security, custody, and control of the county correctional facility and its inmates are covered by the Public Employees Correctional Plan (accounted for in the Correctional Fund). For members hired after June 30, 2010, benefits vest on a graduated schedule starting with 50 percent after 5 years and increasing 10 percent for each year of service until fully vested after 10 years.
68
STEARNS COUNTY ST. CLOUD, MINNESOTA
3. Detailed Notes on All Funds G. Pension Plans
1. Defined Benefit Pension Plans (Continued)
b. Benefits Provided PERA provides retirement benefits as well as disability benefits to members and benefits to survivors upon death of eligible members. Benefit provisions are established by state statute and can be modified only by the state legislature. Benefit increases are provided to benefit recipients each January. Increases are related to the funding ratio of the plan. Benefit recipients receive a future annual 1.0 percent post-retirement benefit increase. If the funding ratio reaches 90 percent for two consecutive years, the benefit increase will revert to 2.5 percent. If, after reverting to a 2.5 percent benefit increase, the funding ratio declines to less than 80 percent for one year or less than 85 percent for two consecutive years, the benefit increase will decrease to 1.0 percent. The benefit provisions stated in the following paragraph of this section are current provisions and apply to active plan participants. Vested, terminated employees who are entitled to benefits but are not yet receiving them are bound by the provisions in effect at the time they last terminated their public service. Benefits are based on a member’s highest average salary for any five successive years of allowable service, age, and years of credit at termination of service. Two methods are used to compute benefits for General Employees Retirement Plan Coordinated and Basic Plan members. Members hired prior to July 1, 1989, receive the higher of a step-rate benefit accrual formula (Method 1) or a level accrual formula (Method 2). Under Method 1, the annuity accrual rate for a Basic Plan member is 2.2 percent of average salary for each of the first ten years of service and 2.7 percent for each remaining year. The annuity accrual rate for a Coordinated Plan member is 1.2 percent of average salary for each of the first ten years of service and 1.7 percent for each remaining year. Under Method 2, the annuity accrual rate is 2.7 percent of average salary for Basic Plan members and 1.7 percent for Coordinated Plan members for each year of service. Only Method 2 is used for members hired after June 30, 1989. Minneapolis Employees Retirement Fund members have an annuity accrual rate of 2.0 percent of average salary for each of the first ten years of service and 2.5 percent for each remaining year. For Public Employees Police and Fire Plan members, the annuity accrual rate is 3.0 percent of average salary for each year of service. For Public Employees Correctional Plan members, the annuity accrual rate is 1.9 percent of average salary for each year of service.
69
STEARNS COUNTY ST. CLOUD, MINNESOTA
3. Detailed Notes on All Funds G. Pension Plans
1. Defined Benefit Pension Plans
b. Benefits Provided (Continued)
For General Employees Retirement Plan members hired prior to July 1, 1989, a full annuity is available when age plus years of service equal 90, and normal retirement age is 65. For members hired on or after July 1, 1989, normal retirement age is the age for unreduced Social Security benefits capped at 66. For Public Employees Police and Fire Plan and Public Employees Correctional Plan members, normal retirement age is 55, and for members who were hired prior to July 1, 1989, a full annuity is available when age plus years of service equal 90. Disability benefits are available for vested members and are based on years of service and average high-five salary.
c. Contributions
Pension benefits are funded from member and employer contributions and income from the investment of fund assets. Rates for employer and employee contributions are set by Minn. Stat. ch. 353. These statutes are established and amended by the state legislature. General Employees Retirement Plan Basic members, Coordinated members, and Minneapolis Employees Retirement Fund members were required to contribute 9.10 percent, 6.50 percent, and 9.75 percent, respectively, of their annual covered salary in 2016. Public Employees Police and Fire Plan members were required to contribute 10.80 percent of their annual covered salary in 2016. Public Employees Correctional Plan members were required to contribute 5.83 percent of their annual covered salary in 2016. In 2016, the County was required to contribute the following percentages of annual covered salary:
General Employees Retirement Plan Basic Plan members 11.78% Coordinated Plan members 7.50 Minneapolis Employees Retirement Fund members 9.75 Public Employees Police and Fire Plan 16.20 Public Employees Correctional Plan 8.75
The employee and employer contribution rates did not change from the previous year.
70
STEARNS COUNTY ST. CLOUD, MINNESOTA
3. Detailed Notes on All Funds G. Pension Plans
1. Defined Benefit Pension Plans
c. Contributions (Continued)
The County’s contributions for the year ended December 31, 2016, to the pension plans were:
General Employees Retirement Plan $ 3,362,833 Public Employees Police and Fire Plan 757,145 Public Employees Correctional Plan 442,888
The contributions are equal to the contractually required contributions as set by state statute.
d. Pension Costs
General Employees Retirement Plan At December 31, 2016, the County reported a liability of $58,357,887 for its proportionate share of the General Employees Retirement Plan’s net pension liability. The net pension liability was measured as of June 30, 2016, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The County’s proportion of the net pension liability was based on the County’s contributions received by PERA during the measurement period for employer payroll paid dates from July 1, 2015, through June 30, 2016, relative to the total employer contributions received from all of PERA’s participating employers. At June 30, 2016, the County’s proportion was .7187 percent. It was .7356 percent measured as of June 30, 2015. The County recognized pension expense of $7,529,938 for its proportionate share of the General Employees Retirement Plan’s pension expense. The County also recognized $227,257 as revenue, which results in a reduction of the net pension liability, for its proportionate share of the State of Minnesota’s contribution to the General Employees Retirement Plan, which qualifies as a special funding situation. Legislation requires the State of Minnesota to contribute $6 million to the General Employees Retirement Plan each year, starting September 15, 2015, through September 15, 2031.
71
STEARNS COUNTY ST. CLOUD, MINNESOTA
3. Detailed Notes on All Funds G. Pension Plans
1. Defined Benefit Pension Plans
d. Pension Costs General Employees Retirement Plan (Continued)
County’s proportionate share of the net pension liability
$
58,357,887
State of Minnesota’s proportionate share of the net pension liability associated with the County
762,166
Total $ 59,120,053
The County reported its proportionate share of the General Employees Retirement Plan’s deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:
Deferred
Outflows of Resources
Deferred Inflows of Resources
Differences between expected and actual economic experience
$
-
$
4,770,169
Changes in actuarial assumptions 11,426,527 - Difference between projected and actual investment earnings
11,138,799
-
Changes in proportion - 2,361,027 Contributions paid to PERA subsequent to the measurement date
1,688,390
-
Total
$
24,253,716
$
7,131,196
The $1,688,390 reported as deferred outflows of resources related to pensions resulting from contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31, 2017. Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows:
72
STEARNS COUNTY ST. CLOUD, MINNESOTA
3. Detailed Notes on All Funds G. Pension Plans
1. Defined Benefit Pension Plans
d. Pension Costs General Employees Retirement Plan (Continued)
At December 31, 2016, the County reported a liability of $19,383,630 for its proportionate share of the Public Employees Police and Fire Plan’s net pension liability. The net pension liability was measured as of June 30, 2016, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The County’s proportion of the net pension liability was based on the County’s contributions received by PERA during the measurement period for employer payroll paid dates from July 1, 2015, through June 30, 2016, relative to the total employer contributions received from all of PERA’s participating employers. At June 30, 2016, the County’s proportion was .4830 percent. It was .5060 percent measured as of June 30, 2015. The County recognized pension expense of $3,319,702 for its proportionate share of the Public Employees Police and Fire Plan’s pension expense. The County also recognized $43,470 as revenue, which results in a reduction of the net pension liability, for its proportionate share of the State of Minnesota’s on-behalf contribution to the Public Employees Police and Fire Plan. Legislation requires the State of Minnesota to contribute $9 million to the Police and Fire Plan each year, starting in fiscal year 2014, until the plan is 90 percent funded.
73
STEARNS COUNTY ST. CLOUD, MINNESOTA
3. Detailed Notes on All Funds G. Pension Plans
1. Defined Benefit Pension Plans
d. Pension Costs
Public Employees Police and Fire Plan (Continued)
The County reported its proportionate share of the Public Employees Police and Fire Plan’s deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:
Deferred
Outflows of Resources
Deferred Inflows of Resources
Differences between expected and actual economic experience
$
-
$
2,257,574
Changes in actuarial assumptions 10,667,659 - Difference between projected and actual investment earnings
2,992,229
-
Changes in proportion 14,401 217,778 Contributions paid to PERA subsequent to the measurement date
389,074
-
Total
$
14,063,363
$
2,475,352
The $389,074 reported as deferred outflows of resources related to pensions resulting from contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31, 2017. Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows:
At December 31, 2016, the County reported a liability of $9,644,290 for its proportionate share of the Public Employees Correctional Plan’s net pension liability. The net pension liability was measured as of June 30, 2016, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The County’s proportion of the net pension liability was based on the County’s contributions received by PERA during the measurement period for employer payroll paid dates from July 1, 2015, through June 30, 2016, relative to the total employer contributions received from all of PERA’s participating employers. At June 30, 2016, the County’s proportion was 2.64 percent. It was 2.73 percent measured as of June 30, 2015. The County recognized pension expense of $2,719,346 for its proportionate share of the Public Employees Correctional Plan’s pension expense. The County reported its proportionate share of the Public Employees Correctional Plan’s deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:
Deferred
Outflows of Resources
Deferred Inflows of Resources
Differences between expected and actual economic experience
$
7,550
$
107,726
Changes in actuarial assumptions 6,144,574 - Difference between projected and actual investment earnings
1,092,267
-
Changes in proportion - 14,963 Contributions paid to PERA subsequent to the measurement date
222,045
-
Total
$
7,466,436
$
122,689
75
STEARNS COUNTY ST. CLOUD, MINNESOTA
3. Detailed Notes on All Funds G. Pension Plans
1. Defined Benefit Pension Plans
d. Pension Costs
Public Employees Correctional Plan (Continued)
The $222,045 reported as deferred outflows of resources related to pensions resulting from contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31, 2017. Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows:
The total pension expense for all plans recognized by the County for the year ended December 31, 2016, was $13,568,986.
e. Actuarial Assumptions
The total pension liability in the June 30, 2016, actuarial valuation was determined using the individual entry-age normal actuarial cost method and the following additional actuarial assumptions:
Inflation 2.50 percent per year Active member payroll growth 3.25 percent per year Investment rate of return 7.50 percent
76
STEARNS COUNTY ST. CLOUD, MINNESOTA
3. Detailed Notes on All Funds G. Pension Plans
1. Defined Benefit Pension Plans e. Actuarial Assumptions (Continued)
Salary increases were based on a service-related table. Mortality rates for active members, retirees, survivors, and disabilitants in the General Employees Retirement Plan were based on RP-2014 tables, while mortality rates for Public Employees Police and Fire Plan and Public Employees Correctional Plan were based on RP-2000 tables for males or females, as appropriate, with slight adjustments. For the General Employees Retirement Plan and the Public Employees Police and Fire Plan, cost of living benefit increases for retirees are assumed to be 1.0 percent. Cost of living benefit increases for retirees are assumed to be 2.5 percent for the Public Employees Correctional Plan. Actuarial assumptions used in the June 30, 2016, valuation were based on the results of actuarial experience studies. The experience study in the General Employees Retirement Plan was for the period 2008 through 2015. The experience study for the Public Employees Police and Fire Plan was for the period 2004 through 2009. The experience study for the Public Employees Correctional Plan was for the period 2006 through 2011. On August 16, 2016, an updated experience study was done for PERA’s Public Employees Police and Fire Plan for the period 2011 through 2015, which would result in a larger pension liability. However, PERA will implement the changes in assumptions for its June 30, 2017, estimate of pension liability. The long-term expected rate of return on pension plan investments is 7.5 percent. The State Board of Investment, which manages the investments of PERA, prepares an analysis of the reasonableness of the long-term expected rate of return on a regular basis using a building-block method in which best-estimate ranges of expected future rates of return are developed for each major asset class. These ranges are combined to produce an expected long-term rate of return by weighting the expected future rates of return by the target asset allocation percentages. The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table:
77
STEARNS COUNTY ST. CLOUD, MINNESOTA
3. Detailed Notes on All Funds G. Pension Plans
1. Defined Benefit Pension Plans e. Actuarial Assumptions (Continued)
Asset Class
Target Allocation
Long-Term Expected Real Rate of Return
Domestic stocks 45% 5.50% International stocks 15 6.00 Bonds 18 1.45 Alternative assets 20 6.40 Cash 2 0.50
f. Discount Rate
The discount rate used to measure the total pension liability was 7.50 percent in 2016, a reduction of the 7.90 percent used in 2015. The projection of cash flows used to determine the discount rate assumed that employee and employer contributions will be made at the rate specified in statute. Based on that assumption, the fiduciary net position of the General Employees Retirement Plan was projected to be available to make all projected future benefit payments of current active and inactive employees. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. In the Public Employees Police and Fire Plan and the Public Employees Correctional Plan, the fiduciary net position was projected to be available to make all projected future benefit payments of current plan members through June 30, 2056, and June 30, 2058, respectively. Beginning in fiscal years ended June 30, 2057, for the Police and Fire Plan and June 30, 2059, for the Public Employees Correctional Plan, when projected benefit payments exceed the Plans’ projected fiduciary net position, benefit payments were discounted at the municipal bond rate of 2.85 percent based on an index of 20-year general obligation bonds with an average AA credit rating at the measurement date. An equivalent single discount rate of 5.60 percent for the Public Employees Police and Fire Plan and 5.31 percent for the Public Employees Correctional Plan was determined that produced approximately the same present value of the projected benefits when applied to all years of projected benefits as the present value of projected benefits using 7.50 percent applied to all years of projected benefits through the point of asset depletion and 2.85 percent thereafter.
78
STEARNS COUNTY ST. CLOUD, MINNESOTA
3. Detailed Notes on All Funds G. Pension Plans
1. Defined Benefit Pension Plans (Continued)
g. Changes in Actuarial Assumptions The following changes in actuarial assumptions occurred in 2016:
General Employees Retirement Plan
• The assumed post-retirement benefit increase rate was changed from
1.00 percent per year through 2035 and 2.50 percent per year thereafter, to 1.00 percent for all future years.
• The assumed investment rate was changed from 7.90 percent to 7.50
percent. The single discount rate was also changed from 7.90 percent to 7.50 percent.
• Other assumptions were changed pursuant to the experience study dated
June 30, 2015. The assumed payroll growth and inflation were decreased by 0.25 percent. Payroll growth was reduced from 3.50 percent to 3.25 percent. Inflation was reduced from 2.75 percent to 2.50 percent.
Public Employees Police and Fire Plan
• The assumed post-retirement benefit increase rate was changed from
1.00 percent per year through 2037 and 2.50 percent per year thereafter, to 1.00 percent for all future years.
• The assumed investment rate was changed from 7.90 percent to 7.50
percent. The single discount rate was changed from 7.90 percent to 5.60 percent.
• The assumed payroll growth and inflation were decreased by 0.25
percent. Payroll growth was reduced from 3.50 percent to 3.25 percent. Inflation was reduced from 2.75 percent to 2.50 percent.
79
STEARNS COUNTY ST. CLOUD, MINNESOTA
3. Detailed Notes on All Funds G. Pension Plans
1. Defined Benefit Pension Plans
g. Changes in Actuarial Assumptions (Continued)
Public Employees Correctional Plan
• The assumed investment rate was changed from 7.90 percent to 7.50
percent. The single discount rate was changed from 7.90 percent to 5.31 percent.
• The assumed payroll growth and inflation were decreased by 0.25 percent. Payroll growth was reduced from 3.50 percent to 3.25 percent. Inflation was reduced from 2.75 percent to 2.50 percent.
h. Pension Liability Sensitivity
The following presents the County’s proportionate share of the net pension liability calculated using the discount rate disclosed in the preceding paragraph, as well as what the County’s proportionate share of the net pension liability would be if it were calculated using a discount rate 1.0 percentage point lower or 1.0 percentage point higher than the current discount rate:
Proportionate Share of the General Employees Public Employees Public Employees Retirement Plan Police and Fire Plan Correctional Plan Discount Net Pension Discount Net Pension Discount Net Pension Rate Liability Rate Liability Rate Liability 1% Decrease 6.50% $ 82,885,461 4.60% $ 27,134,510 4.31% $ 14,521,320 Current 7.50 58,357,887 5.60 19,383,630 5.31 9,644,290 1% Increase 8.50 38,153,814 6.60 13,050,573 6.31 5,836,829
i. Pension Plan Fiduciary Net Position
Detailed information about the pension plan’s fiduciary net position is available in a separately issued PERA financial report that includes financial statements and required supplementary information. That report may be obtained on the internet at www.mnpera.org; by writing to PERA at 60 Empire Drive, Suite 200, St. Paul, Minnesota 55103-2088; or by calling 651-296-7460 or 1-800-652-9026.
80
STEARNS COUNTY ST. CLOUD, MINNESOTA
3. Detailed Notes on All Funds G. Pension Plans (Continued) 2. Defined Contribution Plan
Four employees of Stearns County are covered by the Public Employees Defined Contribution Plan, a multiple-employer deferred compensation plan administered by PERA. The plan is established and administered in accordance with Minn. Stat. ch. 353D, which may be amended by the state legislature. The plan is a tax qualified plan under Section 401(a) of the Internal Revenue Code, and all contributions by or on behalf of employees are tax deferred until time of withdrawal. Plan benefits depend solely on amounts contributed to the plan plus investment earnings, less administrative expenses. For those qualified personnel who elect to participate, Minn. Stat. § 353D.03 specifies plan provisions, including the employee and employer contribution rates. An eligible elected official who decides to participate contributes 5.00 percent of salary, which is matched by the employer. Employee and employer contributions are combined and used to purchase shares in one or more of the seven accounts of the Minnesota Supplemental Investment Fund. For administering the plan, PERA receives 2.00 percent of employer contributions and 0.25 percent of the assets in each member account annually. Total contributions by dollar amount and percentage of covered payroll made by Stearns County during the year ended December 31, 2016, were:
4. Summary of Significant Contingencies and Other Items A. Risk Management
The County is exposed to various risks of loss related to torts; theft of, damage to, or destruction of assets; errors or omissions; injuries to employees; or natural disasters. The County has entered into a joint powers agreement with other Minnesota counties to form the Minnesota Counties Intergovernmental Trust (MCIT). The County is a member of both the MCIT Workers’ Compensation and Property and Casualty Divisions. The County is self-insured for its health benefits plan. The County purchases commercial insurance for other risks of loss. There were no significant reductions in insurance from the previous year or settlements in excess of insurance for any of the past three years. The Workers’ Compensation Division of MCIT is self-sustaining based on the contributions charged, so that total contributions plus compounded earnings on these contributions will equal the amount needed to satisfy claims liabilities and other expenses. MCIT participates in the Workers’ Compensation Reinsurance Association with coverage at $500,000 per claim in 2016 and 2017. Should the MCIT Workers’ Compensation Division liabilities exceed assets, MCIT may assess the County in a method and amount to be determined by MCIT.
The Property and Casualty Division of MCIT is self-sustaining and the County pays an
annual premium to cover current and future losses. The MCIT carries reinsurance for its property lines to protect against catastrophic losses. Should the MCIT Property and Casualty Division liabilities exceed assets, MCIT may assess the County in a method and amount to be determined by MCIT.
In December, 2014, the County contracted with Medica to administer health benefits
plans for its employees for calendar year 2016. The County sets annual premiums for the plans based on the recommendation of the plan administrators and accumulates premiums collected from all participating funds in the General Fund.
Claims against the Medica Plans are processed within two to three business days after
receipt from Medica. At the beginning of each month, the County remits to Medica the monthly fees for the administrative charges and stop loss coverages. Changes in the balances of claims liabilities for the past two years are:
2016 2015 Unpaid claims - January 1 $ 1,672,500 $ 1,378,000 Current year claims 7,565,449 6,984,662 Claim payments (7,390,249) (6,690,162) Unpaid Claims - December 31 $ 1,847,700 $ 1,672,500
82
STEARNS COUNTY ST. CLOUD, MINNESOTA
4. Summary of Significant Contingencies and Other Items (Continued)
B. Contingent Liabilities The County is a defendant in various lawsuits. Although the outcome of these lawsuits
is not presently determinable, in the opinion of the County Attorney, the resolution of these matters will not have a material adverse effect on the financial condition of the government.
C. Joint Ventures Stearns-Benton Employment and Training Council The Stearns-Benton Employment and Training Council was created for the purpose of
undertaking, implementing, and maintaining the programs established under the Job Training Partnership Act of 1982 and other federal and state laws and regulations governing the establishment and implementation of programs within areas governed by Stearns and Benton Counties. The Council is an organized joint venture having the duties, powers, and privileges granted joint powers by Minn. Stat. § 471.59. The Council is governed by a Joint Powers Board and a Workforce Development Council. The Joint Powers Board is composed of two Commissioners each from Stearns and Benton Counties and one Workforce Development Council member. The Workforce Development Council is composed of 25 members from local business, industry, agriculture, labor organizations, public or private education, and community service groups. Included in the Joint Powers Board’s duties and powers is the authority to approve the Council’s budget and enter into any necessary contracts or leases. The County did not contribute to the Council during 2016.
Complete financial statements of the Stearns-Benton Employment and Training Council can be obtained by writing to the administrative offices at the Minnesota Workforce Center at 1540 Northway Drive, St. Cloud, Minnesota 56303.
Northstar Corridor Development Authority Stearns County entered into a joint powers agreement with 24 counties, regional rail
authorities, cities, and townships along the Northstar Corridor to create the Northstar Corridor Development Authority (NCDA), in May 1997.
The joint powers board consists of one elected official each from the member
governmental units. The NCDA was created to develop the Northstar commuter rail project from St. Cloud, Minnesota to Minneapolis, Minnesota. Grant monies, member county contributions, and the regional railroad authorities’ agreement to allocate the initial contributions of capital has provided funding for the NCDA. Members pay annual dues to NCDA. In 2016, Stearns County paid dues of $98,010 to the NCDA.
83
STEARNS COUNTY ST. CLOUD, MINNESOTA
4. Summary of Significant Contingencies and Other Items
C. Joint Ventures Northstar Corridor Development Authority (Continued)
The NCDA Board has the authority to make all administrative decisions regarding the Northstar Commuter Rail. The NCDA does not have the authority to levy taxes nor issue bonds. The NCDA does have the authority to enter into contracts and acquire, hold, and dispose of real and personal property. Upon termination of the joint powers agreement, NCDA has the authority to dispose of any property.
The joint powers agreement does not authorize the NCDA to operate or finance the
operations of the Northstar commuter rail. Sherburne County, in an agency capacity, reports the cash transactions of the NCDA in an agency fund on its financial statements. Current financial statements are available from: Sherburne County Auditor/Treasurer’s Office 13880 Business Center Dr. NW Elk River, Minnesota 55330
Central Minnesota Emergency Medical Services Region The Central Minnesota Emergency Medical Services Region was established in 2001,
under Minn. Stat. § 471.59, to improve access, delivery, and effectiveness of the emergency medical services system; promote systematic and cost-effective delivery of services; and identify and address system need within the member counties. The member counties are Benton, Cass, Crow Wing, Kanabec, Mille Lacs, Morrison, Pine, Sherburne, Stearns, Todd, Wadena, and Wright. The Region established a Board comprising of one Commissioner from each member county. The Region’s Board has financial responsibility, and Stearns County is the fiscal agent.
Complete financial information can be obtained from:
Ms. Marion Larson, Regional EMS Coordinator Central Minnesota Emergency Medical Services Region Stearns County Administration Center P.O. Box 1107 St. Cloud, Minnesota 56302
.
84
STEARNS COUNTY ST. CLOUD, MINNESOTA
4. Summary of Significant Contingencies and Other Items
C. Joint Ventures (Continued)
Central Minnesota Emergency Services Board The Central Minnesota Regional Radio Board was established in 2007, under the authority conferred upon the member parties by Minn. Stat. §§ 471.59 and 403.39. As of June 1, 2011, the Central Minnesota Regional Radio Board changed its name to the Central Minnesota Emergency Services Board. Members include the City of St. Cloud and the counties of Benton, Big Stone, Douglas, Grant, Kandiyohi, Meeker, Mille Lacs, Morrison, Otter Tail, Pope, Sherburne, Stearns, Stevens, Swift, Todd, Traverse, Wadena, Wilkin, and Wright. The purpose of the Central Minnesota Emergency Services Board is to provide for regional administration of enhancements to the Statewide Public Safety Radio and Communication System (ARMER) owned and operated by the State of Minnesota. The Central Minnesota Emergency Services Board is composed of one Commissioner of each county appointed by their respective County Board and one City Council member from each city appointed by their respective City Council, as provided in the Central Minnesota Emergency Services Board’s by-laws. In the event of dissolution of the Central Minnesota Emergency Services Board, all property, assets, and funds of the Board shall be distributed to the parties of the agreement upon termination in direct proportion to their participation and contribution. Any city or county that has withdrawn from the agreement prior to termination of the Board shall share in the distribution of property, assets, and funds of the Board only to the extent they shared in the original expense. The Central Minnesota Emergency Services Board has no long-term debt. Financing is provided by the appropriations from member parties and by state and federal grants. During 2016, Stearns County contributed $8,245 to the Joint Powers Board.
Complete financial information can be obtained from: Central Minnesota Emergency Services Board City of St. Cloud Office of the Mayor City Hall 400 Second Street South St. Cloud, Minnesota 56303
85
STEARNS COUNTY ST. CLOUD, MINNESOTA
4. Summary of Significant Contingencies and Other Items
C. Joint Ventures (Continued)
Central Minnesota Violent Offender Task Force
The Counties of Benton, Morrison, Sherburne, Stearns, and Todd, and the cities of
Little Falls, St. Cloud, St. Joseph, Sartell, Sauk Rapids, and Waite Park, have entered into a joint powers agreement to investigate, identify, and disrupt illegal drug and gang activity through multi-jurisdictional investigations in Central Minnesota.
The Stearns County Sheriff’s Office is the fiscal agent for the Central Minnesota
Violent Offender Task Force. Members provide officers to the Task Force in lieu of appropriations. Stearns County provided no cash funding to this organization during 2016.
Control of the Task Force is vested in a Board of Directors. The members of the board
shall be the Sheriff of each member county, a County Attorney from a member party as the legal advisor to the Task Force, the Chief of Police for the Little Falls Police Department, the Chief of Police for the City of St. Cloud, and one representative from among the Chiefs of Police of St. Joseph, Sartell, Sauk Rapids, and Waite Park, who shall be selected annually by a majority vote of the Chiefs of Police.
Separate financial information for the Task Force can be obtained from:
St. Cloud Police Department 101 - 11th Avenue North P.O. Box 1616 St. Cloud, Minnesota 56303
86
STEARNS COUNTY ST. CLOUD, MINNESOTA
4. Summary of Significant Contingencies and Other Items
C. Joint Ventures (Continued)
Crow River Joint Powers Agreements In April 1999, Stearns County entered into a joint powers agreement with Carver,
Hennepin, Kandiyohi, McLeod, Meeker, Pope, Renville, Sibley, and Wright Counties creating the Crow River Joint Powers Agreement. The Agreement is authorized by Minn. Stat. §§ 103B.311 and 103B.315. The Prairie County Resource Conservation and Development Council is the fiscal agent for this Joint Powers Agreement.
The Board of Directors meets at least two times per year, or more often if needed, at the location to be set by the chair of the Joint Powers Board. The purpose of this Agreement is the joint exercise of powers by the member counties to promote the orderly water quality improvement and management of the Crow River Watershed through information sharing, education, coordination, and related support to the member counties by assisting in the implementation and goal achievement of comprehensive water plans.
The governing board is composed of one Board member from each of the participating
counties. Stearns County contributed $2,129 to the Joint Powers Board during 2016. Current financial statements are not available.
Great River Regional Library On September 25, 1969, the Great River Regional Library was formed under a joint
powers agreement, creating a regional public library system with Benton, Morrison, Stearns, and Wright counties. It has expanded to include library services in Sherburne and Todd counties.
The Board of Directors consists of 15 people, representing all six of the member
counties. During 2016, Stearns County contributed $2,283,872 to the Great River Regional Library.
Separate financial information can be obtained from: Great River Regional library 1300 W. Germain Street St. Cloud, Minnesota 56301
87
STEARNS COUNTY ST. CLOUD, MINNESOTA
4. Summary of Significant Contingencies and Other Items
C. Joint Ventures (Continued)
Stearns County Family Services Collaborative The Stearns County Family Services Collaborative was established in March 2001
between Stearns County, all school districts in Stearns County, Reach-Up/Head Start and Tri-Cap for the purpose of designing and implementing an integrated service delivery system for children and families to address physical and mental health, educational and family-related needs.
The Board consists of 12 people, one from each school district in Stearns County (10),
one from the Stearns County Human Services Board and one from Stearns County as an entity. Financing is provided by state proceeds and Stearns County serves as the fiscal agent. Current financial statements are not available.
St. Cloud Area Planning Organization The St. Cloud Area Planning Organization was created to keep governmental units and
the general public informed and advised on all matters relative to the transportation planning, programming, and funding. The Council is an organized joint venture between Benton, Sherburne, and Stearns Counties; St. Augusta, St. Cloud, St. Joseph, Sartell, Sauk Rapids, and Waite Park cities; Haven and Le Sauk townships, the Central Minnesota Transportation Alliance; and the St. Cloud Metro Bus, having the duties, powers, and privileges granted joint powers by Minn. Stat. §471.59. During 2016, the County contributed $19,155 to the St. Cloud Area Planning Organization.
The joint venture is governed by the Policy Board, which is comprised of 11 local government member jurisdictions, as well as representatives from the Central Minnesota Transportation Alliance and St. Cloud Metro Bus. The Policy Board is responsible for adopting regional transportation plans, projects and policies. The Policy Board consists of 43 voting members, 36 of which are elected officials from cities, counties, and townships.
Complete financial statements can be obtained from:
St. Cloud Area Planning Organization 1040 County Road #4 St. Cloud, Minnesota 56303
88
STEARNS COUNTY ST. CLOUD, MINNESOTA
4. Summary of Significant Contingencies and Other Items (Continued)
D. Jointly-Governed Organizations
Tri-County Solid Waste Management Commission
The Tri-County Solid Waste Management Commission was established in July 1983 by a joint powers agreement among Benton, Sherburne, and Stearns Counties to conduct a solid waste management program on behalf of the participating counties. The Commission is an organized joint venture having the duties, powers, and privileges granted joint powers by Minn. Stat. § 471.59. The Commission is governed by a Board of Directors. Each member county is entitled to no less than two and no more than four of its own County Commissioners on the Board. Population of the member counties determines how many of their commissioners sit on the Board. The Board of Directors is currently composed of eight members: four County Commissioners from Stearns County and two each from Benton and Sherburne Counties. Each county’s proportionate share of the net operating costs is based on the usage of the household hazardous waste facility and the solid waste picked up in each county. During 2016, the County expended $105,296 to the Tri-County Solid Waste Management Commission. The Commission will remain in existence as long as two or more counties remain as parties to the agreement. Upon dissolution of the Commission, there will be an accounting to determine assets and liabilities. The assets of the Commission will be liquidated and, after payment of liabilities, the proceeds will be distributed to the member counties in the ratio that the total contributions made by each of them bears to the sum total of contributions made by all. Separate financial information can be obtained from: Tri-County Solid Waste Management Commission 3601 5th Street South Waite Park, Minnesota 56387
Central Minnesota Immunization Connection
The Central Minnesota Immunization Connection Joint Powers Board promotes an implementation and maintenance of a regional immunization information system to ensure age-appropriate immunizations through complete and accurate records. All funding comes from state grants. Current financial statements are not available.
89
STEARNS COUNTY ST. CLOUD, MINNESOTA
4. Summary of Significant Contingencies and Other Items
D. Jointly-Governed Organizations (Continued)
Region Four – West Central Minnesota Homeland Security Emergency Management Organization The Region Four – West Central Minnesota Homeland Security Emergency Management Organization (WCMHSEM) was established to provide for regional coordination of planning, training, purchase of equipment, and allocating emergency services and staff in order to better respond to emergencies and natural or other disasters within the WCMHSEM region. Control is vested in the Board, which is composed of representatives appointed by each Board of County Commissioners. Stearns County’s responsibility does not extend beyond making this appointment. Minnesota Counties Computer Cooperative (MCCC) Under Minnesota Joint Powers Law, Minn. Stat. § 471.59, Minnesota counties have created MCCC to jointly provide for the establishment, operation, and maintenance of data processing systems, facilities, and management information systems. During the year, Stearns County expended $131,281 to the MCCC. Minnesota Criminal Justice Data Communications Network The Minnesota Criminal Justice Data Communications Network Joint Powers Agreement exists to create access for the County Sheriff and County Attorney to systems and tools available from the State of Minnesota, Department of Public Safety, and the Bureau of Criminal Apprehension to carry out criminal justice. During 2016, the County made no payments to the joint powers.
90
STEARNS COUNTY ST. CLOUD, MINNESOTA
5. Housing and Redevelopment Authority of Stearns County
A. Summary of Significant Accounting Policies Reporting Entity
The Housing and Redevelopment Authority (HRA) of Stearns County is a component unit of Stearns County and is reported in a separate column in the County’s financial statements to emphasize that the HRA is a legally separate entity from Stearns County. The HRA operates as a public agency created by Stearns County under the Minnesota Housing and Redevelopment Authority Act of 1947. The primary purpose is to provide housing and redevelopment services to the County. The governing body consists of a five-member Board of Commissioners appointed by the Stearns County Board of Commissioners to serve five-year terms. The financial statements included are as of and for the year ended June 30, 2016.
Deposits and Investments
The HRA’s cash and cash equivalents are considered to be cash on hand, demand deposits, and short-term investments with original maturities of three months or less from the date of acquisition.
Cash balances from all funds are pooled and invested, to the extent available, in
certificates of deposit and other authorized investments. Earnings from such investments are allocated on the basis of applicable participation by each of the funds.
91
STEARNS COUNTY ST. CLOUD, MINNESOTA
5. Housing and Redevelopment Authority of Stearns County A. Summary of Significant Accounting Policies Deposits and Investments (Continued) Minnesota statutes authorize the HRA to invest, with certain restrictions, in obligations
of the U.S. Treasury, general obligations of the State of Minnesota or any of its municipalities, banker’s acceptances, commercial paper, repurchase or reverse repurchase agreements, shares of investment companies registered under the Federal Investment Company Act of 1940 and whose only investments are obligations guaranteed by the United States or its agencies, and guaranteed investment contracts.
Investments are stated at fair value. It is the policy of the HRA to invest funds in US Department of Housing and Urban Development (HUD)-approved securities; there are no further restrictions then those set forth by HUD.
Property Taxes
The HRA annually adopts a levy and certifies it to the County for collection. The
County is responsible for collecting all property taxes for the HRA. Real property taxes are paid by taxpayers of the County in two equal installments on May 15 and October 15. The County provides tax settlements to the HRA four times per year - in January, June, July, and December.
Prepaid Items Certain payments to vendors reflect costs applicable to future accounting periods and
are recorded as prepaid items. Capital Assets Capital assets are defined by the HRA as assets with an initial, individual cost of more
than $1,000 and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at acquisition value.
The costs of normal maintenance and repairs that do not add to the value of the asset or
materially extend assets’ lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business-type activities is included as part of the capitalized value of the assets constructed.
92
STEARNS COUNTY ST. CLOUD, MINNESOTA
5. Housing and Redevelopment Authority of Stearns County
A. Summary of Significant Accounting Policies Capital Assets (Continued)
Property, plant and equipment of the HRA are depreciated using the straight-line method over the following estimated useful lives:
Assets Years
Buildings and structures 40 Improvements other than buildings 10 Furniture and equipment Computer equipment and software
10 - 30 3
Compensated Absences It is the HRA’s policy to permit certain employees to accumulate paid time off (PTO).
After an employee has successfully completed probation, an employee who leaves the employment of the HRA in good standing shall be compensated for previously credited unused PTO at the current rate of pay up to a limited amount, based on years of service. A liability of $60,865 represents accrued PTO unused at year end and is recognized as expense in the year it is earned. The General Fund is typically used to liquidate governmental compensated absences payable.
Long-Term Obligations Long-term debt and other long-term obligations are reported as liabilities. The
recognition of bond premiums and discounts are delayed and amortized over the life of the bonds using the straight-line method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are reported as an expense in the period incurred.
B. Detailed Notes
Deposits and Investments
Custodial credit risk for deposits and investments is the risk that in the event of a bank failure, the HRA’s deposits and investments may not be returned or the HRA will not be able to recover collateral securities in the possession of an outside party. In accordance with Minnesota statutes, and as authorized by the HRA, the HRA maintains deposits at depository banks, all of which are members of the Federal Reserve System.
93
STEARNS COUNTY ST. CLOUD, MINNESOTA
5. Housing and Redevelopment Authority of Stearns County
B. Detailed Notes Deposits and Investments (Continued)
Minnesota statutes require that all HRA deposits be protected by insurance, surety bond, or collateral. The market value of collateral pledged must equal 110 percent of the deposits not covered by insurance or bonds. Minnesota statutes require that all collateral shall be placed in safekeeping in a restricted account at a Federal Reserve Bank, or in an account at a trust department of a commercial bank or other financial institution not owned or controlled by the financial institution furnishing the collateral. The selection should be approved by the governing body. At year-end, the HRA’s carrying amount of deposits was $1,201,224 and the bank balance was $1,227,425. Of the bank balance, $687,031 was covered by Federal depository insurance and the remaining $540,394 was sufficiently covered by pledged collateral at 110 percent held by the HRA’s agent in the HRA’s name.
Custodial Credit Risk - Investments
In accordance with the HRA’s investment policy, the investment officer shall structure all investments, deposits, and repurchase agreements so that the custodial risk is categorized as either insured or registered, or securities held by the HRA or its agent in the HRA’s name, or uninsured and unregistered, with securities held by the counterparty’s trust department or agent in the HRA’s name. All investments are placed in safekeeping at financial institutions. Concentration of Credit Risk
The HRA’s investment policy does not address concentration of credit risk; however, the HRA diversifies its investment portfolio to eliminate the risk of loss resulting from overconcentration of assets in a specific maturity, a specific issuer, or a specific class of securities. The maturities selected shall provide for stability of income and reasonable liquidity.
Interest Rate Risk Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment.
94
STEARNS COUNTY ST. CLOUD, MINNESOTA
5. Housing and Redevelopment Authority of Stearns County
B. Detailed Notes (Continued)
Credit Risk
Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. Ratings are provided by various credit rating agencies and indicate associated credit risk. Minnesota statutes and HRA investment policy limit the HRA’s investments to those authorized by Minnesota statute.
Loans Receivable The following is a summary of loans receivable at June 30, 2016:
DEED $ 1,687,761 Minnesota Department of Health 10,000 Minnesota Department of Health 2 30,500 Minnesota Department of Health 3 15,860 Less: allowance for forgivable loans (1,167,540) Total Loans Receivable $ 576,581
Loans are receivable from property owners that have been provided rehabilitation assistance. A portion of these loans are forgivable based on the number of years the owner lives in the rehabilitated property. The forgivable portions of the loans are offset by an allowance account.
Capital Assets Capital asset activity for the year ended June 30, 2016 was as follows:
Beginning Balance
Increase
Decrease
Ending Balance
Governmental Activities Capital assets not depreciated Land $ 24,379 $ - $ - $ 24,379 Capital assets depreciated Buildings $ 491,599 $ - $ - $ 491,599 Machinery and equipment 51,676 - - 51,676 Total capital assets depreciated $ 543,275 $ - $ - $ 543,275 Less: accumulated depreciation for Buildings $ 122,900 $ 12,290 $ - $ 135,190 Machinery and equipment 48,963 1,068 - 50,031 Total accumulated depreciation $ 171,863 $ 13,358 $ - $ 185,221 Total capital assets depreciated, net $ 371,412 $ (13,358) $ - $ 358,054 Governmental Activities Capital Assets, Net $ 395,791 $ (13,358) $ - $ 382,433
95
STEARNS COUNTY ST. CLOUD, MINNESOTA
5. Housing and Redevelopment Authority of Stearns County
B. Detailed Notes
Capital Assets (Continued)
Beginning Balance
Increase
Decrease
Ending Balance
Business-type Activities Capital assets not depreciated Land $ 573,415 $ - $ - $ 573,415 Capital assets depreciated Land improvements $ 127,155 $ - $ - $ 127,155 Buildings 4,428,295 - - 4,428,295 Machinery and equipment 229,646 - - 229,646 Total capital assets depreciated $ 4,785,096 $ - $ - $ 4,785,096 Less: accumulated depreciation for Land improvements $ 78,893 $ 3,420 $ - $ 82,313 Buildings 1,510,282 113,318 - 1,623,600 Machinery and equipment 153,470 7,439 - 160,909 Total accumulated depreciation $ 1,742,645 $ 124,177 $ - $ 1,866,822 Total capital assets depreciated, net $ 3,042,451 $ (124,177) $ - $ 2,918,274 Business-Type Activities Capital Assets, Net $ 3,615,866 $ (124,177) $ - $ 3,491,689
Depreciation expense was charged to functions/programs of the HRA as follows:
Governmental Activities Housing and economic development $ 13,358 Business-type Activities Public Housing $ 45,045 Rental Properties 60,890 Section 8 Housing 1,009 The Bell 17,233 Total Depreciation Expense - Business-Type Activities
$
124,177
96
STEARNS COUNTY ST. CLOUD, MINNESOTA
5. Housing and Redevelopment Authority of Stearns County
B. Detailed Notes (Continued)
Long-Term Debt 1. Housing Development Bonds
The following bonds were issued to finance the construction of rental buildings and will be repaid from rental income.
Authorized and
Issued Interest
Rate (%) Issue
Date Maturity
Date Balance at
Year-End Housing Development Refunding Bonds, Series 2014A $ 1,420,000 0.75 - 3.25 12/10/14 02/01/31 $ 1,340,000
2. Loans
The following loans are through the State’s Economic Development and Housing Challenge Program used in the production of housing.
On October 1, 1998, the HRA adopted a defined contribution plan for all employees working at least 20 hours per week for at least 5 months out of the year. The employer contributes 7.5 percent annually of the employee’s base rate of pay to the plan. Participating employees shall vest in employer contributions at the rate of 50 percent for each full year of continuous employment. For the years ended June 30, 2016, 2015 and 2014, employer contributions totaled $31,437, $29,875, and $30,576, respectively. The plan does not issue a stand-alone financial report.
98
STEARNS COUNTY ST. CLOUD, MINNESOTA
5. Housing and Redevelopment Authority of Stearns County (Continued)
D. Other Information
Risk Management The HRA is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters for which the HRA carries insurance through the Minnesota Counties Intergovernmental Trust. The HRA retains risk for the deductible portions of the insurance. The amount of these deductibles is considered immaterial to the financial statements. There were no significant reductions in insurance from the previous year or settlements in excess of insurance for any of the past three years. Liabilities are reported when it is probable that a loss has occurred and the amount of the loss can be reasonably estimated. Liabilities, if any, include an amount for claims that have been incurred but not reported (IBNRs). The HRA’s management is not aware of any incurred but not reported claims. Joint Powers Agreement A Joint Powers Agreement has been entered into between the Housing and Redevelopment Authorities of Carver County, Northwest Minnesota Multi-County, Olmsted County, the City of St. Cloud, Scott County, Southeastern Minnesota Multi-County, and Stearns County (the Members) pursuant to Minn. Stat. § 471.59 and chapter 462C. The purpose of this agreement is to preserve the quality of life in these jurisdictions through the maintenance provision and preservation of adequate housing stock, to encourage new housing construction, and to provide affordable housing to persons of low and moderate income. The Members have obtained allocations of tax-exempt bonding authority to be used for issuance of qualified mortgage bonds and have previously issued certain single-family mortgage revenue refunding bonds, which they have determined to refund. The bonds shall be special limited obligations of the Members, payable solely from proceeds, revenues, and other amounts pledged thereto, and more fully described in, the indenture. The bonds and interest thereon shall neither constitute nor give rise to indebtedness; pecuniary liability; general or moral obligation; or a pledge of the faith or loan of credit of the Members, the State, or any other political subdivision thereof.
99
STEARNS COUNTY ST. CLOUD, MINNESOTA
5. Housing and Redevelopment Authority of Stearns County
D. Other Information (Continued) Conduit Debt Obligations
The HRA has issued Industrial Development Notes and Public Project Revenue Bonds to finance construction of industrial and commercial facilities deemed to be in the public interest. The bonds are secured by the property financed and shall not constitute debt for which the full faith and credit or taxing powers of the HRA will be pledged. Neither the HRA nor any political subdivision thereof is obligated in any manner for repayment of the bonds. Accordingly, the bonds are not reported as liabilities in the accompanying financial statements.
As of June 30, 2016, there were bonds outstanding with an aggregate principal payable
of $786,424. E. Commitment
On June 18, 2007, the HRA entered into a development agreement with the City of Belgrade, MN for the construction of a project. The HRA has an obligation to the City for a portion of the bond payments, for bonds issued to finance the project. If tax increment revenue received by the City is insufficient to cover the principal and interest amounts for the applicable period, the HRA is required to pay the City a portion of the net deficiency. As of June 30, 2016, the HRA has a possible remaining principal obligation of $100,000 plus interest at a rate of 4.050 - 4.175 percent. The final payment on the bonds is March 1, 2026.
100
STEARNS COUNTY ST. CLOUD, MINNESOTA
5. Housing and Redevelopment Authority of Stearns County (Continued) F. Capital Grant Program
The HRA receives capital grant funds from HUD. The following schedule reconciles the grant with the current activity:
Grant Year MN46P17250115 MN46P17250116 Total Funds approved $ 26,184 $ 26,613 $ 52,797 Funds expended 26,184 - 26,184 Excess of funds approved $ - $ 26,613 $ 26,613
Funds advanced $ 26,184 $ - $ 26,184
2016 Revenue $ 26,184 $ - $ 26,184
G. Subsequent Event
In July 2015, the HRA was approved by HUD to complete a RAD conversion. This RAD conversion will allow the HRA to convert projects funded under the Public Housing program to projects funded under the Section 8 program. The RAD conversion process is expected to be finalized in October of 2016. In August 2016, the HRA closed on the sale of the Bell property and operation of the Bell will discontinue in fiscal year 2017.
101
This page was left blank intentionally.
102
REQUIRED SUPPLEMENTARY INFORMATION
103
STEARNS COUNTYST. CLOUD, MINNESOTA
EXHIBIT A-1
BUDGETARY COMPARISON SCHEDULEGENERAL FUND
FOR THE YEAR ENDED DECEMBER 31, 2016
Budgeted Amounts Actual Variance withOriginal Final Amounts Final Budget
Revenues Taxes $ 33,936,632 $ 33,492,862 $ 33,622,730 $ 129,868 Special assessments - - 13,537 13,537 Licenses and permits 649,200 649,200 877,417 228,217 Intergovernmental 10,737,032 11,158,188 11,748,000 589,812 Charges for services 4,451,924 4,541,424 4,641,446 100,022 Fines and forfeits 33,000 33,000 83,322 50,322 Gifts and contributions 2,500 12,500 11,570 (930) Investment income 925,000 925,000 1,103,342 178,342 Miscellaneous 2,046,900 2,390,365 2,412,104 21,739
Total Revenues $ 52,782,188 $ 53,202,539 $ 54,513,468 $ 1,310,929
Expenditures Current General government Commissioners $ 451,702 $ 467,467 $ 458,588 $ 8,879 Courts 310,000 310,000 375,823 (65,823) County administration 990,880 985,031 1,045,781 (60,750) Auditor-Treasurer 5,333,588 5,420,762 5,471,894 (51,132) Assessor 1,564,070 1,563,476 1,551,822 11,654 Purchasing 310,855 314,401 314,890 (489) Information services 1,818,235 283,961 44,628 239,333 Graphical information systems 366,525 334,270 298,275 35,995 Human resources 993,598 1,025,735 1,020,136 5,599 Attorney 6,381,074 6,627,803 6,839,647 (211,844) Recorder 1,251,762 1,269,221 1,479,998 (210,777) Maintenance 2,308,912 2,091,365 2,213,225 (121,860) Veterans service officer 356,770 365,815 374,634 (8,819) Sexual assault victims 35,000 35,000 82,948 (47,948) Other general government (215,604) 718,347 641,332 77,015
Total general government $ 22,257,367 $ 21,812,654 $ 22,213,621 $ (400,967)
Public safety Sheriff $ 11,016,619 $ 11,074,024 $ 10,966,780 $ 107,244 Boat and water safety 52,187 52,187 45,471 6,716 Coroner 301,260 301,260 308,595 (7,335) E-911 system 250,000 250,000 170,790 79,210 County jail 10,867,347 10,761,908 11,045,739 (283,831) Civil defense 319,251 324,005 643,388 (319,383)
Total public safety $ 22,806,664 $ 22,763,384 $ 23,180,763 $ (417,379)
The notes to the required supplementary information are an integral part of this schedule.
104
STEARNS COUNTYST. CLOUD, MINNESOTA
EXHIBIT A-1
BUDGETARY COMPARISON SCHEDULEGENERAL FUND
FOR THE YEAR ENDED DECEMBER 31, 2016
Budgeted Amounts Actual Variance withOriginal Final Amounts Final Budget
(Continued)
Expenditures Current (Continued) Culture and recreation Historical society $ 590,000 $ 590,000 $ 590,000 $ - County library 2,283,872 2,283,872 2,283,872 -
Total culture and recreation $ 2,873,872 $ 2,873,872 $ 2,873,872 $ -
Conservation of natural resources County extension $ 416,097 $ 426,779 $ 413,792 $ 12,987 Soil and water conservation 1,030,000 1,030,000 1,030,000 - Agricultural society 20,000 20,000 20,000 - Environmental services 3,719,015 3,858,384 3,919,479 (61,095)
Total conservation of natural resources $ 5,185,112 $ 5,335,163 $ 5,383,271 $ (48,108)
Economic development Community development $ 82,173 $ 182,173 $ 180,045 $ 2,128
Total Expenditures $ 53,205,188 $ 52,967,246 $ 53,831,572 $ (864,326)
Excess of Revenues Over (Under) Expenditures $ (423,000) $ 235,293 $ 681,896 $ 446,603
Other Financing Sources (Uses) Transfers in $ - $ 1,687,319 $ 1,687,319 $ - Transfers out - (2,017,566) (2,017,566) - Proceeds from sale of capital assets 23,000 23,000 25,046 2,046
Total Other Financing Sources (Uses) $ 23,000 $ (307,247) $ (305,201) $ 2,046
Net Change in Fund Balance $ (400,000) $ (71,954) $ 376,695 $ 448,649
Fund Balance - January 1 32,871,780 32,871,780 32,871,780 -
Fund Balance - December 31 $ 32,471,780 $ 32,799,826 $ 33,248,475 $ 448,649
The notes to the required supplementary information are an integral part of this schedule.
Proportionate Liability andShare of theNet Pension
LiabilityRelated
Share of the
This schedule is intended to show information for ten years. Additional years will be displayed as they become available.The measurement date for each year is June 30.
(a)
Percentageof Covered
0.7356%
(b) (a + b)
Associatedwith Stearns
County
Net PensionLiability(Asset)
of the Net
Employer'sProportionate
Employer's
130.85%0.7187%
Payroll(a/c)(Asset)
LiabilityPension
(Asset)
ProportionateShare of theNet Pension
Liability Covered
The notes to the required supplementary information are an integral part of this schedule.
109
STEARNS COUNTYST CLOUD, MINNESOTA
SCHEDULE OF CONTRIBUTIONSPERA GENERAL EMPLOYEES RETIREMENT PLAN
This schedule is intended to show information for ten years. Additional years will be displayed as they become available.The County's year-end is December 31.
ActualContributions Actualin Relation to Contributions
Statutorily Statutorily Contribution as a PercentageRequired Required (Deficiency) Covered of Covered
This schedule is intended to show information for ten years. Additional years will be displayed as they become available.The County's year-end is December 31.
0.506% 124.15
ActualContributions in Relation to
Employer's
STEARNS COUNTYST CLOUD, MINNESOTA
SCHEDULE OF PROPORTIONATE SHARE OF NET PENSION LIABILITYPERA PUBLIC EMPLOYEES POLICE AND FIRE PLAN
DECEMBER 31, 2016
of the NetProportionEmployer's
0.483%
RequiredStatutorily
This schedule is intended to show information for ten years. Additional years will be displayed as they become available.The measurement date for each year is June 30.
Covered Payroll(a/b)(b)
PayrollCovered
STEARNS COUNTYST CLOUD, MINNESOTA
416.74%
Liability(Asset)
(a)(Asset)LiabilityPension
ProportionateShare of theNet Pension
Liability (Asset)as a Percentage of
Employer'sProportionateShare of theNet Pension
Contributions(a)
SCHEDULE OF CONTRIBUTIONSPERA PUBLIC EMPLOYEES POLICE AND FIRE PLAN
DECEMBER 31, 2016
(b) (b - a)Excess
(Deficiency)Contribution Statutorily
RequiredContributions
CoveredPayroll
(c)
The notes to the required supplementary information are an integral part of these schedules.
111
STEARNS COUNTYST CLOUD, MINNESOTA
EXHIBIT A-9
SCHEDULE OF PROPORTIONATE SHARE OF NET PENSION LIABILITYPERA PUBLIC EMPLOYEES CORRECTIONAL PLAN
This schedule is intended to show information for ten years. Additional years will be displayed as they become available.
Proportionate
This schedule is intended to show information for ten years. Additional years will be displayed as they become available.The County's year-end is December 31.
Employer'sProportionof the NetPensionLiability(Asset)
2.640%
(a)(Asset)
LiabilityNet Pension
RequiredContributions
Share of the
CoveredPayroll
The measurement date for each year is June 30.
Share of the
2.730% 96.95
The notes to the required supplementary information are an integral part of these schedules.
112
STEARNS COUNTY
ST. CLOUD, MINNESOTA
NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2016
1. Budgetary Information
Budget Policies
Annual budgets are adopted on a basis consistent with generally accepted accounting
principles for the General Fund, certain special revenue funds, and the Debt Service Fund.
All annual appropriations lapse at fiscal year-end unless specifically carried over to the
next budget year by Board action.
Budgets can be amended or modified during the year only by the County Board, County
Auditor-Treasurer, or Financial Manager. All transfers of budgeted amounts within
departments (except capital outlay) can be made by the County Auditor-Treasurer or the
Financial Manager. Capital outlay changes or additions require County Board approval.
Additional appropriations would be allowed only to the extent that resources are currently
available or attainable to cover expenditures. The legal level of budgetary control (the
level at which expenditures may not legally exceed appropriations) is the fund level.
Encumbrances
Encumbrance accounting, under which commitments for the expenditure of monies are
recorded in order to reserve that portion of the applicable appropriation, is used in the
governmental funds. Encumbrances lapse at year-end and are rebudgeted the following
year.
2. Excess of Expenditures Over Budget
The following major governmental funds had expenditures in excess of budget for the year
ended December 31, 2016:
Expenditures
Actual Final Budget Excess
General Fund $ 53,831,572 $ 52,967,246 $ 864,326
Road and Bridge Special Revenue Fund 27,503,976 27,224,776 279,200
113
STEARNS COUNTY
ST. CLOUD, MINNESOTA
NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2016
3. Other Postemployment Benefits Funded Status
Stearns County implemented the requirements of Governmental Accounting Standards
Board Statement No. 45, Accounting and Financial Reporting by Employers for
Postemployment Benefits Other Than Pensions, for the fiscal year ended December 31,
2008. Since the County has not irrevocably deposited funds in a trust for future health
benefits, the actuarial value of the assets is zero.
See Note 3.E. in the notes to the financial statements for additional information regarding
the County’s other postemployment benefits.
4. Changes in Significant Plan Provisions, Actuarial Methods, and Assumptions
The following changes were reflected in the valuation performed on behalf of the Public
Employees Retirement Association for the year ended June 30, 2016:
General Employees Retirement Plan
The assumed post-retirement benefit increase rate was changed from 1.00 percent per
year through 2035 and 2.50 percent per year thereafter, to 1.00 percent for all future
years.
The assumed investment rate was changed from 7.90 percent to 7.50 percent. The
single discount rate was also changed from 7.90 percent to 7.50 percent.
Other assumptions were changed pursuant to the experience study dated June 30,
2015. The assumed payroll growth and inflation were decreased by 0.25 percent.
Payroll growth was reduced from 3.50 percent to 3.25 percent. Inflation was reduced
from 2.75 percent to 2.50 percent.
114
STEARNS COUNTY
ST. CLOUD, MINNESOTA
NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2016
4. Changes in Significant Plan Provisions, Actuarial Methods, and Assumptions
(Continued)
Public Employees Police and Fire Plan
The assumed post-retirement benefit increase rate was changed from 1.00 percent per
year through 2037 and 2.50 percent per year thereafter, to 1.00 percent for all future
years.
The assumed investment rate was changed from 7.90 percent to 7.50 percent. The
single discount rate was changed from 7.90 percent to 5.60 percent.
The assumed payroll growth and inflation were decreased by 0.25 percent. Payroll
growth was reduced from 3.50 percent to 3.25 percent. Inflation was reduced from
2.75 percent to 2.50 percent.
Public Employees Correctional Plan
The assumed investment rate was changed from 7.90 percent to 7.50 percent. The
single discount rate was changed from 7.90 percent to 5.31 percent.
The assumed payroll growth and inflation were decreased by 0.25 percent. Payroll
growth was reduced from 3.50 percent to 3.25 percent. Inflation was reduced from
2.75 percent to 2.50 percent.
115
SUPPLEMENTARY INFORMATION
116
COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS
117
STEARNS COUNTYST. CLOUD, MINNESOTA
EXHIBIT B-1
BUDGETARY COMPARISON SCHEDULEDEBT SERVICE FUND
FOR THE YEAR ENDED DECEMBER 31, 2016
Budgeted Amounts Actual Variance withOriginal Final Amounts Final Budget
Total Revenues $ 3,740,240 $ 3,740,240 $ 3,974,286 $ 234,046
Expenditures Current General government Other general government $ 5,150 $ 5,150 $ 17,425 $ (12,275) Conservation of natural resources Other conservation of natural resources - - 2,621,043 (2,621,043) Debt service Principal 3,220,000 8,710,000 8,830,000 (120,000) Interest 540,090 712,090 745,341 (33,251)
Total Expenditures $ 3,765,240 $ 9,427,240 $ 12,213,809 $ (2,786,569)
Excess of Revenues Over (Under) Expenditures $ (25,000) $ (5,687,000) $ (8,239,523) $ (2,552,523)
Other Financing Sources (Uses) Bond issued $ - $ - $ 2,575,000 $ 2,575,000 Premium on bonds - - 48,047 48,047
Total Other Financing Sources (Uses) $ - $ - $ 2,623,047 $ 2,623,047
Net Change in Fund Balance $ (25,000) $ (5,687,000) $ (5,616,476) $ 70,524
Fund Balance - January 1 11,019,767 11,019,767 11,019,767 -
Fund Balance - December 31 $ 10,994,767 $ 5,332,767 $ 5,403,291 $ 70,524
118
STEARNS COUNTY ST. CLOUD, MINNESOTA
NONMAJOR GOVERNMENTAL FUNDS SPECIAL REVENUE FUNDS The special revenue funds are used to account for the proceeds of specific revenue sources that are legally or administratively restricted to expenditures for specified purposes.
County Building - to account for funds being accumulated for future building construction and capital acquisition. Financing is provided primarily by an annual property tax levy. County Park - to account for the operations of the County’s park system. Financing is provided primarily by an annual property tax levy and state grants. Law Library - to account for funds used to maintain the law library. Financing is provided by the assessment of fees according to state statute. Solid Waste - to account for revenues and expenditures related to County-wide solid waste management. Financing is provided by a County-wide solid waste management fee. Economic Development - to account for the revenues and expenditures associated with economic development loans issued to the business community to spur growth. Financing is provided by repayments of loans originally financed by intergovernmental revenues. Ditch - to account for the costs for maintaining County ditches. Financing is provided by special assessments against the benefited property owners. Regional Rail Authority - to account for the revenues and expenditures related to the preservation of rail right-of-ways for alternative modes of transportation. The Regional Rail Authority is governed by a five-member board and has independent taxing authority. Miscellaneous - to account for gravel tax, missing heirs, forfeited tax sale, and other activities.
119
EXHIBIT C-1
County County Law Solid Economic
Building Park Library Waste Development Ditch Authority
Total Operating Revenues $ 600,000 $ 1,143,017 $ 1,743,017
Operating Expenses Cost of services 659,153 1,037,863 1,697,016
Change in Net Position $ (59,153) $ 105,154 $ 46,001
Net Position - January 1 139,300 636,072 775,372
Net Position - December 31 $ 80,147 $ 741,226 $ 821,373
Governmental Activities
ServicesTotal
Information
Self-InsuranceImprovements
129
STEARNS COUNTYST. CLOUD, MINNESOTA
EXHIBIT D-3
COMBINING STATEMENT OF CASH FLOWSINTERNAL SERVICE FUNDS
FOR THE YEAR ENDED DECEMBER 31, 2016Increase (Decrease) in Cash and Cash Equivalents
Cash Flows from Operating Activities Receipts from internal services provided $ 600,000 $ 1,137,809 $ 1,737,809 Payments to suppliers (730,982) (1,145,647) (1,876,629)
Net Increase (Decrease) in Cash and Cash Equivalents $ (130,982) $ (7,838) $ (138,820)
Cash and Cash Equivalents at January 1 235,986 952,373 1,188,359
Cash and Cash Equivalents at December 31 $ 105,004 $ 944,535 $ 1,049,539
Reconciliation of Operating Income (Loss) to Net Cash Provided by (Used in) Operating Activities Net operating income (loss) $ (59,153) $ 105,154 $ 46,001
Adjustments to reconcile operating income (loss) to net cash provided by (used in) operating activities (Increase) decrease in accounts receivable $ - $ (5,208) $ (5,208) Increase (decrease) in accounts payable (89,425) (107,784) (197,209) Increase (decrease) in advance from other funds 17,596 - 17,596
Total adjustments $ (71,829) $ (112,992) $ (184,821)
Net Cash Provided by (Used in) Operating Activities $ (130,982) $ (7,838) $ (138,820)
ServicesImprovements Self-Insurance Total
InformationGovernmental Activities
130
STEARNS COUNTY
ST. CLOUD, MINNESOTA
AGENCY FUND
Agency Fund - to account for assets held by the County as an agent for other governmental units,
individuals, private organizations, or other funds.
131
STEARNS COUNTYST. CLOUD, MINNESOTA
EXHIBIT E-1
STATEMENT OF CHANGES IN ASSETS AND LIABILITIESAGENCY FUND
FOR THE YEAR ENDED DECEMBER 31, 2016
Balance BalanceJanuary 1 Additions Deductions December 31
Assets
Cash and pooled investments $ 5,331,260 $ 289,294,898 $ 290,956,178 $ 3,669,980 Due from other governments 75,292 469,727 75,907 469,112
Total Assets $ 5,406,552 $ 289,764,625 $ 291,032,085 $ 4,139,092
Liabilities
Accounts payable $ 116,633 $ 3,734,880 $ 3,738,499 $ 113,014 Due to other governments 5,289,919 411,261,788 412,525,629 4,026,078
Total Liabilities $ 5,406,552 $ 414,996,668 $ 416,264,128 $ 4,139,092
Federal revenue recognized for previous year expenditures
Highway Planning and Construction (1,688,800)
Expenditures Per Schedule of Expenditures of Federal Awards 12,548,849$
140
This page was left blank intentionally.
141
STATISTICAL SECTION
SCHEDULE DESCRIPTIONS
Financial Trends: How the County’s financial performance and well-being have changed over time.
• Net Position by Component Schedule 1 Page 143 • Changes in Net Position Schedule 2 Page 144 • Fund Balances, Governmental Funds Schedule 3 Page 145 • Changes in Fund Balances, Governmental Funds Schedule 4 Page 147
Revenue Capacity: Assesses the County’s most significant revenue source, the property tax.
• Net Tax Capacity and Taxable Market Value of Taxable Property Schedule 5 Page 149 • Direct and Overlapping Property Tax Rates Schedule 6 Page 150 • Principal Property Taxpayers Schedule 7 Page 156 • Property Tax Levies and Collections – Stearns County Portion Schedule 8 Page 157 • Property Tax Levies and Collections – Overlapping Governments Schedule 9 Page 158
Debt Capacity: Assesses the affordability of the County’s current levels of outstanding debt and the County’s ability to issue additional debt in the future.
• Ratios of Annual Debt Service Expenditures for General Bonded Debt to Total General Expenditures Schedule 10 Page 159
• Ratios of Net General Obligation Bonded Debt Outstanding Schedule 11 Page 160 • Computation of Underlying, Overlapping, and Direct Debt Schedule 12 Page 161 • Legal Debt Margin Information Schedule 13 Page 162
Changes in Net PositionGovernment Activities 7,272$ 12,260$ 17,326$ 16,072$ 31,495$ 13,820$ 9,826$ 23,976$ 13,511$ 6,866$ Business-Type Activities - - 1 - 1 2 (5) - - - Total Primary Government 7,272$ 12,260$ 17,327$ 16,072$ 31,496$ 13,822$ 9,821$ 23,976$ 13,511$ 6,866$
(a) Net revenue (expense) is the difference between the expenses and program revenues of a function or program. It indicates the degree to which a function orprogram is supported with its own fees and program-specific grants versus its reliance upon funding from taxes and other government revenues. Numbers inparentheses indicate that expenses were greater than program revenues and therefore general revenues were needed to finance that function or program. Numbers without parentheses mean that program revenues were more than sufficient to cover expenses.
Data Source: Stearns County Auditor-Treasurer's OfficeNote: Numbers may differ from the financial statements due to rounding.
(2) Through 2007, the debt limit was 2%. In 2008, the Minnesota Statute was changed to increase the limit allowed from 2% to 3%. Statute Reference 475.53.
STEARNS COUNTY
Legal Debt Margin Information
Last Ten Fiscal Years(accrual basis of accounting)