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City of Marshall Marshall, Minnesota
For the Year Ended December 31, 2016
Annual Financial Report
CITY OF MARSHALL MARSHALL, MINNESOTA
ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED DECEMBER 31, 2016
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CITY OF MARSHALL, MINNESOTA ANNUAL FINANCIAL REPORT
TABLE OF CONTENTS FOR THE YEAR ENDED DECEMBER 31, 2016
Page No. INTRODUCTORY SECTION Principal City Officials 7 FINANCIAL SECTION Independent Auditor's Report 11 Management’s Discussion and Analysis 15 Basic Financial Statements Government-wide Financial Statements Statement of Net Position 28 Statement of Activities 30 Fund Financial Statements Governmental Funds Balance Sheet 34 Reconciliation of the Balance Sheet to the Statement of Net Position 37 Statement of Revenues, Expenditures and Changes in Fund Balances 38 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances to the Statement of Activities 41 Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual General, Tax Increment Financing and Sales/Lodging Tax Funds 42 Proprietary Funds Statements of Net Position 44 Statements of Revenues, Expenses and Changes in Net Position 46 Statements of Cash Flows 48 Fiduciary Funds Statement of Fiduciary Net Position 52 Statement of Changes in Fiduciary Net Position 53 Notes to the Financial Statements 55 Required Supplementary Information Schedule of Employer’s Funding Progress for Retiree Health Plan 106 Schedule of Employer’s Share of Public Employees Retirement Association Net Pension Liability -
General Employees Retirement Fund 107 Schedule of Employer’s Public Employees Retirement Association Contributions - General Employees Retirement Fund 108 Schedule of Employer’s Share of Public Employees Retirement Association Net Pension Liability - Public Employees Police and Fire Fund 109 Schedule of Employer’s Public Employees Retirement Association Contributions - Public Employees Police and Fire Fund 109 Schedule Employer’s Fire Relief Association Contributions 109 Schedule of Changes in the Fire Relief Association’s Net Pension Liability (Asset) and Related Ratios 110
Combining and Individual Fund Financial Statements and Schedules Nonmajor Governmental Funds Combining Balance Sheet 112 Combining Statement of Revenues, Expenditures and Changes in Fund Balances 113 Nonmajor Special Revenue Funds Combining Balance Sheet 114 Combining Statement of Revenues, Expenditures and Changes in Fund Balances 116 Schedules of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Small Cities Development Program Fund 118 Community Education Drivers Training Fund 119 Emergency Response and Industrial Training Center Fund 120 ASC Arena Fund 121
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CITY OF MARSHALL, MINNESOTA ANNUAL FINANCIAL REPORT
TABLE OF CONTENTS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2016
Page No. Combining and Individual Fund Financial Statements and Schedules - Continued Nonmajor Capital Projects Funds Combining Balance Sheet 122 Combining Statement of Revenues, Expenditures and Changes in Fund Balances 126 General Fund Comparative Balance Sheets 131 Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual 133 Debt Service Funds Combining Balance Sheet 140 Combining Schedule of Revenues, Expenditures and Changes in Fund Balances 144 Economic Development Authority Funds Combining Balance Sheet 148 Combining Schedule of Revenues, Expenditures and Changes in Fund Balances/Net Position 149 Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Economic Development Authority Fund 150 EDA Parkway Housing Fund 151 Marshall-Lyon County Library Funds Combining Balance Sheet 152 Reconciliation of the Balance Sheet to the Statement of Net Position 153 Combining Schedule of Revenues, Expenditures and Changes in Fund Balances/Net Position 154 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances to the Statement of Activities 155 Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual 156 Summary Financial Report Revenues and Expenditures for General Operations - Governmental Funds 157 OTHER REQUIRED REPORTS Independent Auditor’s Report on Minnesota Legal Compliance 161 Independent Auditor’s Report in Internal Control Over Financial Reporting and On Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 162 Schedule of Findings and Responses 164
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INTRODUCTORY SECTION
CITY OF MARSHALL MARSHALL, MINNESOTA
FOR THE YEAR ENDED DECEMBER 31, 2016
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CITY OF MARSHALL, MINNESOTA
PRINCIPAL CITY OFFICIALS
FOR THE YEAR ENDED DECEMBER 31, 2016
Name Title Term Expires
Robert Byrnes Mayor 01/12/21
John DeCramer Council Member, Ward 1 01/07/19
Glenn Bayerkohler Council Member, Ward 1 01/12/21
Steven Meister Council Member, Ward 2 01/12/21
David Sturrock Council Member, Ward 2 01/07/19
Craig Schafer Council Member, Ward 3 01/07/19
James Lozinski Council Member, Ward 3 01/12/21
Nicholas Johnson City Administrator
Glenn Olson City Engineer/Director of Public Works
Brad Roos Utilities General Manager
Thomas Meulebroeck Finance Director (1/1-8/31/16)
Karla Drown Finance Director (9/1-12/31/16)
Jane DeVries City Clerk
David Parsons Assessor
Michelle Leininger Library Director
Rob Yant Director of Public Safety/Civil Defense Director
Dennis Simpson City Attorney
Scott VanDerMillen Community Services Director
Marc Klaith Fire Chief
Dean Coudron Public Works Superintendent
Bob VanMoer Wastewater Treatment Superintendent
Scott VanMoer Liquor Store Manager
Mark Farrell Housing Commission Director
Barbara Lipinski Adult Community Center Coordinator
Alex Peterson Media Communications Specialist
Nicholas Johnson Housing Authority Director
Nicholas Johnson Economic Development Authority Executive Director
Abdo, Eick & Meyers, LLP Auditor
ELECTED
APPOINTED
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FINANCIAL SECTION
CITY OF MARSHALL MARSHALL, MINNESOTA
FOR THE YEAR ENDED DECEMBER 31, 2016
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INDEPENDENT AUDITOR'S REPORT Honorable Mayor and City Council City of Marshall, Minnesota Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, the discretely presented component units, each major fund and the aggregate remaining fund information of the City of Marshall, Minnesota (the City), as of and for the year ended December 31, 2016, and the related notes to the financial statements, which collectively comprise the City’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 following discretely presented component units: Marshall Municipal Utilities and the Marshall Housing Commission. Those financial statements were audited by other auditors whose reports have been furnished to us, and our opinion, insofar as it relates to the amounts included for the discretely presented component units mentioned above, is based solely on the reports 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 of material misstatement. 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 City’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 City’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, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, the discretely presented component units, each major fund and the aggregate remaining fund information of the City as of December 31, 2016, and the respective changes in financial position and cash flows, where applicable, thereof and the budgetary comparisons for the General fund and Tax Increment Financing and Sales/Lodging Tax special revenue funds for the year then ended in accordance with accounting principles generally accepted in the United States of America.
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Other Matters Report on Summarized Comparative Information We have previously audited the City's 2015 financial statements, and we expressed unmodified opinions on the respective financial statements of the governmental activities, the business-type activities, the discretely presented component units, each major fund and the aggregate remaining fund information in our report dated June 20, 2016. In our opinion, the summarized comparative information presented herein for the respective proprietary fund financial statements as of and for the year ended December 31, 2015, is consistent, in all material respects, with the audited financial statements from which it has been derived. Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Management’s Discussion and Analysis starting on page 15 and the Schedules of Employer’s Share of the Net Pension Liability, the Schedule of Changes in Net Pension Liability (Asset) and Related Ratios, the Schedules of Employer’s Contributions and the Schedule of Funding Progress for Retiree Health Plan starting on page 106 be presented to supplement the basic financial statements. Such information, although not a 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. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The introductory section and combining and individual fund financial statements and schedules are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual fund financial statements and schedules are the responsibility of management and were derived from and relate 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 combining and individual fund financial statements and schedules are fairly stated in all material respects in relation to the basic financial statements as a whole. The introductory 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 June 27, 2017, on our consideration of the City’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 the City’s internal control over financial reporting and compliance.
ABDO, EICK & MEYERS, LLP Mankato, Minnesota June 27, 2017
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Management’s Discussion and Analysis
As management of the City of Marshall, Minnesota, (the City), we offer readers of the City’s financial statements this narrative
overview and analysis of the financial activities of the City for the fiscal year ended December 31, 2016.
Financial Highlights
The assets and deferred outflows of resources of the City exceeded its liabilities and deferred inflows of resources at the close
of the most recent fiscal year by $110,928,044 (net position). Of this amount, $13,486,533 (unrestricted net position) may be
used to meet the City’s ongoing obligations to citizens and creditors.
The City’s total net position increased by $4,007,105, compared to an increase of $5,142,394 in the previous year. Of this
increase, business-type activities (enterprise funds) had an increase of $968,980 and governmental activities had an increase
of $3,038,125. The major factor in the change in governmental activities was due to an overall decrease in governmental
expenses of $131,189, while revenues continued to exceed expenses. Additionally, capital grants and contributions totaled
$5,824,870 for the year. The major factor in the change in business-type activities was due to an overall increase of $687,603
in revenues while expenses decreased by $183,799.
As of the close of the current fiscal year, the City’s governmental funds reported combined ending fund balances of
$29,267,052, an increase of $207,158 in comparison with the prior year. Approximately 38.5 percent of this total amount,
$11,255,233, is available for spending at the City’s discretion, but has been assigned for specific purposes. A balance of
$3,958,448 exists in unassigned fund balance at year end, which is available for spending at the City’s discretion. The
remainder of fund balance is classified in accordance with GASB Statement No. 54 as follows: 1) nonspendable - $131,276;
2) restricted - $16,620,484; committed - $1,260,059; and 4) assigned - $7,296,785.
Overview of the Financial Statements
This discussion and analysis is intended to serve as an introduction to the City’s basic financial statements. The City’s basic financial
statements comprise three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the
financial statements. This report also contains other supplemental information in addition to the basic financial statements themselves.
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The financial statements also include notes that explain some of the information in the financial statements and provide more detailed
data. The statements are followed by a section of combining and individual fund financial statements and schedules that further
explains and supports the information in the financial statements. Figure 1 show how the required parts of this annual report are
arranged and relate to one another. In addition to these required elements, we have included a section with combining and individual
fund financial statements and schedules that provide details about nonmajor governmental funds, which are added together and
presented in single columns in the basic financial statements.
Figure 1
Required Components of the
City’s Annual Financial Report
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
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Figure 2 summarizes the major features of the City’s financial statements, including the portion of the City government they cover and
the types of information they contain. The remainder of this overview section of management’s discussion and analysis explains the
structure and contents of each of the statements.
Figure 2
Major Features of the Government-wide and Fund Financial Statements
Fund Financial Statements
Government-wide
Statements
Governmental Funds Proprietary Funds
Scope Entire City government
(except fiduciary funds) and
the City’s component units
The activities of the City that
are not proprietary or
fiduciary, such as police, fire
and parks
Activities the City operates
similar to private businesses,
such as the water and sewer
system
Required financial
statements Statement of Net
Position
Statement of Activities
Balance Sheet
Statement of Revenues,
Expenditures, and
Changes in Fund
Balances
Statement of Net Position
Statement of Revenues,
Expenses and Changes in
Net Position
Statement of Cash Flows
Accounting basis and
measurement focus
Accrual accounting and
economic resources focus
Modified accrual accounting
and current financial
resources focus
Accrual accounting and
economic resources focus
Type of asset/liability
information
All assets and liabilities, both
financial and capital, and
short-term and long-term
Only assets expected to be
used up and liabilities that
come due during the year or
soon thereafter; no capital
assets included
All assets and liabilities, both
financial and capital, and
short-term and long-term
Type of deferred
outflows/inflows of
resources information
All deferred
outflows/inflows of
resources, regardless of
when cash is received or
paid.
Only deferred outflows of
resources expected to be
used up and deferred inflows
of resources that come due
during the year or soon
thereafter; no capital assets
included
All deferred
outflows/inflows of
resources, regardless of
when cash is received or paid
Type of inflow/out flow
information
All revenues and expenses
during 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
Government-wide financial statements. The government-wide financial statements are designed to provide readers with a broad
overview of the City’s finances, in a manner similar to a private-sector business.
The statement of net position presents information on all of the City’s assets and deferred outflows of resources and liabilities and
deferred inflows of resources, with the difference reported as net position. Over time, increases or decreases in net position may serve
as a useful indicator of whether the financial position of the City is improving or deteriorating.
The statement of activities presents information showing how the City’s net position changed during the most recent fiscal year. All
changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of
related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in
future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave).
Both of the government-wide financial statements distinguish functions of the City that are principally supported by taxes and
intergovernmental revenue (governmental activities) from other functions that are intended to recover all or a significant portion of
their costs through user fees and charges (business-type activities). The governmental activities of the City include general
government, public safety, public works, culture and recreation, economic development, airport and interest on long-term debt. The
business-type activities of the City include wastewater treatment, surface water management, and a municipal liquor store operation.
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The government-wide financial statements include not only the City itself (known as the primary government), but also a legally
separate Marshall Housing Commission, Marshall Municipal Utilities, Economic Development Authority and Marshall-Lyon County
Library, all for which the City is financially accountable. Financial information for these component units are reported separately
from the financial information presented for the primary government itself.
The government-wide financial statements can be found starting on page 28 of this report.
Fund financial statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been
segregated for specific activities or objectives. The City, like other State and local governments, uses fund accounting to ensure and
demonstrate compliance with finance-related legal requirements. All of the funds of the City can be divided into three categories:
governmental funds, proprietary funds and fiduciary funds.
Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities
in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund
financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources
available at the end of the fiscal year. Such information may be useful in evaluating a government’s near-term financing
requirements.
Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the
information presented for governmental funds with similar information presented for governmental activities in the government-wide
financial statements. By doing so, readers may better understand the long-term impact by the government’s near-term financing
decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures and changes in
fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.
The City maintains 60 individual governmental funds, 24 of which are Debt Service funds, which are considered one fund for
reporting purposes. Information is presented separately in the governmental fund balance sheet and in the governmental fund
statement of revenues, expenditures and changes in fund balances for the General fund, the Tax Increment Financing fund, the
Sales/Lodging Tax fund, the Debt Service fund and the 2013 Amateur Sports Center fund, all of which are considered to be major
funds. Data from the other nonmajor governmental funds are combined into a single, aggregated presentation. Individual fund data
for each of these nonmajor governmental funds is provided in the form of combining statements or schedules elsewhere in this report.
The City adopts an annual appropriated budget for its General fund and certain special revenue funds. Budgetary comparison
statements have been provided for the General fund and the Tax Increment Financing and Sales/Lodging Tax special revenue funds to
demonstrate compliance with these budgets.
The basic governmental fund financial statements can be found starting on page 34 of this report.
Proprietary funds. The City maintains one type of proprietary fund. Enterprise funds are used to report the same functions presented
as business-type activities in the government-wide financial statements. The City uses enterprise funds to account for its electric,
water, wastewater treatment, surface water and liquor store operations. The electric and water operations are accounted for in the
Public Utilities Commission (PUC).
Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The
proprietary fund financial statements provide separate information for each of the enterprise funds which are considered to be major
funds of the City.
The basic proprietary fund financial statements can be found starting on page 44 of this report.
Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of parties outside the City. Fiduciary funds
are not reflected in the government-wide financial statements because the resources of those funds are not available to support the
City’s own programs. The accounting used for fiduciary funds is much like that used for proprietary funds.
The basic fiduciary fund financial statements can be found starting on page 52 of this report.
Notes to financial statements. The notes provide additional information that is essential to a full understanding of the data provided
in the government-wide and fund financial statements. The notes to the financial statements can be found starting on page 55 of this
report.
Required supplementary information. In addition to the basic financial statements and accompanying notes, this report also presents
certain required supplementary information concerning the City of Marshall’s share of net pension liabilities for defined benefit plans
and schedules of contributions. The required supplementary information can be found on page 106 of this report.
Other information. The combining statements referred to earlier in connection with nonmajor governmental funds are presented
following the notes to financial statements. Combining and individual fund financial statements and schedules can be found starting
on page 112 of this report.
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Government-wide Financial Analysis
As noted earlier, net position may serve over time as a useful indicator of a government’s financial position. In the case of the City,
assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $110,928,044 at the close of the
most recent fiscal year.
A large portion of the City’s net position (61.9 percent) reflects its investment in capital assets (e.g., land, buildings, machinery and
equipment); less any related debt used to acquire those assets that are still outstanding. The City uses these capital assets to provide
services to citizens; consequently, these assets are not available for future spending. Although the City’s investment in its capital
assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other
sources, since the capital assets themselves cannot be used to liquidate these liabilities.
City of Marshall’s Summary of Net Position
Restated Increase Increase
2016 2015 (Decrease) 2016 2015 (Decrease)
Current and
other assets 41,498,479$ 43,647,668$ (2,149,189)$ 15,908,151$ 10,380,443$ 5,527,708$
Capital assets 86,642,247 79,880,023 6,762,224 35,251,234 36,497,542 (1,246,308)
Total assets 128,140,726 123,527,691 4,613,035 51,159,385 46,877,985 4,281,400
Deferred outflows of resources 5,738,676 1,029,781 4,708,895 437,208 103,786 333,422
Long-term liabilities
outstanding 47,198,394 39,701,382 7,497,012 23,480,144 19,813,841 3,666,303
Other liabilities 1,860,089 3,210,420 (1,350,331) 560,948 545,555 15,393
Total liabilities 49,058,483 42,911,802 6,146,681 24,041,092 20,359,396 3,681,696
Deferred inflows of resources 1,288,788 1,151,664 137,124 159,588 195,442 (35,854)
Net position
Net investment
in capital assets 50,776,283 46,960,876 3,815,407 17,930,020 18,530,949 (600,929)
Restricted 26,557,610 27,530,542 (972,932) 2,177,598 2,143,830 33,768
Unrestricted 6,198,238 6,002,588 195,650 7,288,295 5,752,154 1,536,141
Total net position 83,532,131$ 80,494,006$ 3,038,125$ 27,395,913$ 26,426,933$ 968,980$
Governmental Activities Business-type Activities
An additional portion of the City’s net position (25.9 percent) represents resources that are subject to external restrictions on how they
may be used. The remaining balance of unrestricted net position (12.2 percent) may be used to meet the City’s ongoing obligations to
citizens and creditors.
At the end of the current fiscal year, the City is able to report positive balances in all three categories of net position, both for the City
as a whole, as well as for its separate governmental and business-type activities.
There was an increase of $968,980 in net position reported in connection with the City’s business-type activities. This increase was a
result of the following funds and profits: Municipal Liquor Store ($148,401), Surface Water Management ($88,659) and Wastewater
Treatment ($731,920). The Municipal Liquor fund’s gross profit percentage is currently at 25.3 percent, higher than 22.6 percent in
2015.
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Governmental activities. Governmental activities increased the City’s net position by $3,038,125. Key elements of this increase are
described above and summarized as follows:
City of Marshall’s Changes in Net Position
Increase Increase
2016 2015 (Decrease) 2016 2015 (Decrease)
Revenues
Program revenues
Charges for services 2,819,429$ 2,637,362$ 182,067$ 10,677,805$ 9,930,992$ 746,813$
Operating grants and
contributions 887,293 634,582 252,711 - - -
Capital grants and contributions 5,824,870 8,407,284 (2,582,414) - 51,517 (51,517)
General revenues
Property taxes/tax increments 5,650,238 5,329,389 320,849 (27) 450 (477)
Franchise fees and other taxes 2,582,132 2,632,535 (50,403) - - -
Grants and contributions not
restricted to specific programs 3,301,154 3,302,667 (1,513) - - -
Unrestricted
investment earnings 83,690 316,084 (232,394) 27,469 41,335 (13,866)
Other 32,079 58,862 (26,783) 6,650 - 6,650
Total revenues 21,180,885 23,318,765 (2,137,880) 10,711,897 10,024,294 687,603
Expenses
General government 2,466,128 2,303,296 162,832 - - -
Public safety 4,718,817 4,116,959 601,858 - - -
Public works 5,693,687 5,619,558 74,129 - - -
Culture and recreation 2,441,035 3,514,153 (1,073,118) - - -
Economic development 334,059 199,377 134,682 - - -
Airport 1,708,644 1,792,370 (83,726) - - -
Interest on long-term debt 1,092,452 1,040,298 52,154 - - -
Wastewater treatment - - - 4,389,438 4,883,874 (494,436)
Surface water management - - - 913,354 832,416 80,938
Municipal liquor store - - - 4,128,063 3,898,364 229,699
Total expenses 18,454,822 18,586,011 (131,189) 9,430,855 9,614,654 (183,799)
Change in net position
before transfers 2,726,063 4,732,754 (2,006,691) 1,281,042 409,640 871,402
Transfers 312,062 1,020,632 (708,570) (312,062) (1,020,632) 708,570
Change in net position 3,038,125 5,753,386 (2,715,261) 968,980 (610,992) 1,579,972
Net position, January 1 as restated (Note 10) 80,494,006 74,740,620 5,753,386 26,426,933 27,037,925 (610,992)
Net position - December 31 83,532,131$ 80,494,006$ 3,038,125$ 27,395,913$ 26,426,933$ 968,980$
Business-type ActivitiesGovernmental Activities
Property tax levies increased by $273,237 or (5.1 percent) during the year.
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The following graphs depict various governmental activities and show the revenues and expenses directly related to those activities.
Expenses and Program Revenues - Governmental Activities
$-
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
General
government
Public safety Public works Culture and
recreation
Economic
development
Airport Interest on
long-term debt
Expenses Program Revenues
Revenues by Source - Governmental Activities
Charges for
services
13.2%
Operating grants
and contributions
4.2%
Capital grants
and contributions
27.5%Unrestricted
grants and
contributions
15.6%
Property taxes/tax
increments
26.7%
Other taxes
12.2%
Unrestricted
investment
earnings
0.4%
Other
0.2%
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Business-type activities. Business-type activities increased the City’s net position by $968,980. Key elements of this increase are as follows:
• Overall gross profit for increased by $481,805 in the business-type funds while operating expenses increased by $87,590.
• Transfers out decreased by $1,191,081 in current year.
Expenses and Program Revenues - Business-type Activities
$-
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
Wastewater Treatment Surface Water Management Municipal Liquor Store
Expenses Program Revenues
Revenues by Source - Business-type Activities
Charges for services99.6%
Unrestricted investment earnings
0.3%
Other0.1%
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Financial Analysis of the City’s Funds As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Governmental funds. The focus of the City’s governmental funds is to provide information on near-term inflows, outflows and balances of spendable resources. Such information is useful in assessing the City’s financing requirements. In particular, unassigned fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year. The General fund is the chief operating fund of the City. At the end of the current year, the fund balance of the General fund was $6,866,113. As a measure of the General fund’s liquidity, it may be useful to compare both unassigned fund balance and total fund balance to total fund expenditures. Unassigned fund balance represents 50.5 percent of fund expenditures, while total fund balance also represents 62.3 percent of that same amount. The fund balance of the City’s General fund decreased by $66,359 during the current fiscal year. The key factor in this decrease was a decrease in revenues of $259,321 an increase in expenditures of $417,894, which were offset by other financing sources of $333,607. The Tax Increment Financing fund has a total fund balance of $4,396,400. The net increase in fund balance during the current year in this fund was $31,985. The key factors in this increase relate to a decrease in transfers out. Prior year had a series of transfers totaling $1,259,708 to capital projects funds for capital improvements. Current year only had a total of $354,478 in transfers out. The Sales/Lodging Tax fund has a total fund balance of $1,605,768. The net decrease in fund balance during the current year was $54,808. The decrease was mainly due to transfers out exceeding sales and lodging tax collections for the year. The Debt Service fund has a total fund balance of $5,051,876, all of which is restricted for the payment of debt service. The net decrease in fund balance during the current year in the Debt Service fund was $114,988. Major factors in this decrease were due to a decrease in tax and special assessment revenues. The 2013 Amateur Sports Center fund has a total fund balance of $2,513,127. The net decrease in fund balance during the current year in this fund was $396,069 mainly due to spending down bond proceeds and grants related to the project. Proprietary funds. The City’s proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail. Unrestricted net position of the enterprise funds at the end of the year amounted to $7,288,295. The total increase in net position for the funds was $968,980. Other factors concerning the finances of this fund have already been addressed in the discussion of the City’s business-type activities. General Fund Budgetary Highlights The City’s General fund budget had no amendments during the year. The budget called for a decrease in fund balance of $25,000. Budget expectations exceeded actual revenues by $98,350 and the expenditure budget was overspent by $50,444. Other financing sources (uses) exceeded expectations by $6,547. The net result was a decrease to the General fund balance of $66,359 in 2016.
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Capital Asset and Debt Administration Capital assets. The City’s investment in capital assets for its governmental and business type activities as of December 31, 2016 amounts to $121,893,481 (net of accumulated depreciation). This investment in capital assets includes land, structures, improvements, machinery and equipment, park facilities, roads, highways and bridges. The total increase in the City’s investment in capital assets for the current fiscal year was 4.7 percent (a 8.5 percent increase for governmental activities and a 3.4 percent decrease for business-type activities). Some of the major capital asset events during the current fiscal year included the following: Governmental Activities Construction in progress includes the incomplete 2014, 2015 and 2016 Public Improvements and the Amateur Sports Center. The purchase of video boards and a new body for the 361 tanker. Business-type Activities Completion of the 2015 utility improvement project. The purchase of blue storage tanks, mixers, hatchets and controls in the Wastewater Treatment fund. Additional information on the City’s capital assets can be found in Note 3C starting on page 71 of this report.
City of Marshall’s Capital Assets (net of depreciation)
Increase Increase2016 2015 (Decrease) 2016 2015 (Decrease)
Land 7,101,262$ 7,025,765$ 75,497$ 512,872$ 753,240$ (240,368)$ Construction
in progress 32,714,340 26,292,946 6,421,394 876,326 911,760 (35,434) Buildings 5,252,561 5,565,892 (313,331) 2,399,364 2,449,273 (49,909) Improvements
other than buildings 11,041,765 12,026,714 (984,949) 9,969,296 10,812,432 (843,136) Systems and
infrastructure 25,960,982 25,727,799 233,183 20,613,431 20,720,695 (107,264) Equipment and
machinery 4,571,337 3,240,907 1,330,430 879,945 850,142 29,803
Total 86,642,247$ 79,880,023$ 6,762,224$ 35,251,234$ 36,497,542$ (1,246,308)$
Governmental Activities Business-type Activities
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Long-term debt. At the end of the current fiscal year, the City had total bonded debt outstanding of $52,240,000. Of this amount, $3,305,000 is general obligation debt, $1,130,000 is tax increment debt, $2,810,000 is tax abatement debt, $26,395,000 is general obligation improvement debt and $18,600,000 is revenue debt. While all of the City’s bonds have revenue streams, they are all backed by the full faith and credit of the City.
City of Marshall’s Outstanding Debt
Increase Increase2016 2015 (Decrease) 2016 2015 (Decrease)
General obligationbonds 3,305,000$ 2,780,000$ 525,000$ -$ -$ -$
G.O. tax incrementbonds 1,130,000 1,220,000 (90,000) - - -
G.O. tax abatementbonds 2,810,000 - 2,810,000 - - -
G.O. specialassessment bonds 26,395,000 27,640,000 (1,245,000) - - -
G.O. revenue bonds - - - 18,600,000 15,265,000 3,335,000 Contract for deed 188,009 277,897 (89,888) - - -
Total 33,828,009$ 31,917,897$ 1,910,112$ 18,600,000$ 15,265,000$ 3,335,000$
Governmental Activities Business-type Activities
The City’s total debt increased $5,245,112, or 11.1 percent during the current fiscal year. Long-term debt of $10,000,000 was issued during the year and $4,754,888 was retired during the year. Minnesota statutes limit the amount of net general obligation debt a City may issue up to 3 percent of the market value of taxable property within the City. Net debt is debt payable solely from ad valorem taxes. The current debt limitation for the City is $25,561,493, which is significantly in excess of the City’s outstanding general obligation debt of $3,305,000. The City of Marshall maintains an AA bond rating on its general obligation bonds from Standard and Poor’s. Marshall Municipal Utilities has also received an A rating from Standard and Poor’s. Additional information on the City’s long-term debt can be found in Note 3E starting on page 78 of this report. Economic Factors and Next Year’s Budgets and Rates
• The unemployment rate for Lyon County is currently 4.0 percent, which is an increase from a rate of 3.7 percent a year ago. This compares favorably to the State’s average unemployment rate of 4.1 percent and the national average rate of 4.5 percent.
• Property valuations within the City remain relatively stable.
• Inflationary trends in the region compare favorably to national indices.
All of these factors were considered in preparing the City’s budget for the 2017 fiscal year. Property taxes will increase by 5.1 percent from 2016 to 2017. Requests for Information This financial report is designed to provide a general overview of the City’s finances for all those with an interest in the City’s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Finance Director, City of Marshall, 344 West Main Street, Marshall, Minnesota 56258.
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GOVERNMENT-WIDE FINANCIAL STATEMENTS
CITY OF MARSHALL MARSHALL, MINNESOTA
FOR THE YEAR ENDED DECEMBER 31, 2016
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CITY OF MARSHALL, MINNESOTA
STATEMENT OF NET POSITION
DECEMBER 31, 2016
Governmental Business-type
Activities Activities Total
ASSETS
Cash and temporary investments 29,785,925$ 6,887,803$ 36,673,728$
Escrowed funds - 3,735,586 3,735,586
Restricted assets - 3,818,484 3,818,484
Receivables
Interest - - -
Delinquent taxes 75,450 217 75,667
Accounts 188,646 555,202 743,848
Notes/leases 32,317 - 32,317
Special assessments 10,769,664 4,491 10,774,155
Intergovernmental 554,126 - 554,126
Due from component units/primary government 317,073 - 317,073
Internal balances (355,998) 355,998 -
Inventories - 507,935 507,935
Prepaid items 131,276 42,435 173,711
Land held for resale - - -
Capital assets
Nondepreciable 39,815,602 1,389,198 41,204,800
Depreciable, net of accumulated depreciation 46,826,645 33,862,036 80,688,681
TOTAL ASSETS 128,140,726 51,159,385 179,300,111
DEFERRED OUTFLOWS OF RESOURCES
Deferred pension resources 5,738,676 437,208 6,175,884
LIABILITIES
Accounts payable 517,403 267,056 784,459
Contracts payable 656,755 - 656,755
Due to other governments 4 24,484 24,488
Due to component units/primary government - - -
Accrued interest payable 473,776 248,835 722,611
Accrued salaries payable 127,350 20,573 147,923
Deposits payable - - -
Unearned revenue 84,801 - 84,801
Noncurrent liabilities
Due within one year 3,301,726 5,666,085 8,967,811
Due in more than one year 43,896,668 17,814,059 61,710,727
TOTAL LIABILITIES 49,058,483 24,041,092 73,099,575
DEFERRED INFLOWS OF RESOURCES
Deferred pension resources 1,288,788 159,588 1,448,376
NET POSITION
Net investment in capital assets 50,776,283 17,930,020 68,706,303
Restricted for
Debt service 15,006,648 2,177,598 17,184,246
City celebrations 19,064 - 19,064
Economic development 2,019,566 - 2,019,566
Tax increment financing 4,396,400 - 4,396,400
Capital projects 5,115,932 - 5,115,932
Unrestricted 6,198,238 7,288,295 13,486,533
TOTAL NET POSITION 83,532,131$ 27,395,913$ 110,928,044$
Primary Government
The notes to the financial statements are in integral part of this statement.
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Marshall Marshall Economic
Municipal Housing Development Marshall-Lyon
Utilities Commission Authority County Library
26,248,324$ 436,196$ 1,649,073$ 432,930$
- - - -
6,591,213 28,262 - -
153,228 - - -
- - 1,885 9,589
5,043,944 7,726 250 10,000
24,568 - 665,069 -
- - - -
133,712 - 784 4,035
- - - -
- - - -
693,836 1,100 - -
133,724 11,669 - -
- - 1,311,852 -
1,125,602 514,965 - -
67,163,589 2,800,752 7,591 6,400,195
107,311,740 3,800,670 3,636,504 6,856,749
1,594,841 - - 209,966
3,317,974 12,124 43,563 16,172
- - - -
858,786 7,559 - -
- - 317,073 -
586,292 - - 7,724
185,964 6,939 - 9,186
84,091 24,316 - -
- 3,946 - 9,672
3,660,000 22,254 - 79,497
36,788,109 49,388 63,742 1,294,592
45,481,216 126,526 424,378 1,416,843
450,781 - - 76,641
32,859,191 3,315,717 7,591 5,705,823
6,591,213 - - 111,812
- - - -
- - 1,271,214 -
- - - -
- - - -
23,524,180 358,427 1,933,321 (244,404)
62,974,584$ 3,674,144$ 3,212,126$ 5,573,231$
Component Units
The notes to the financial statements are in integral part of this statement.
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CITY OF MARSHALL, MINNESOTA
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED DECEMBER 31, 2016
Operating Capital
Charges for Grants and Grants and
Expenses Services Contributions Contributions
Primary government
Governmental activities
General government 2,466,128$ 141,861$ -$ -$
Public safety 4,718,817 293,206 689,190 1,015,243
Public works 5,693,687 1,403,708 33,190 470,706
Culture and recreation 2,441,035 787,639 52,151 4,320,400
Economic development 334,059 29,682 - 18,521
Airport 1,708,644 163,333 112,762 -
Interest on long-term debt 1,092,452 - - -
Total governmental activities 18,454,822 2,819,429 887,293 5,824,870
Business-type activities
Wastewater treatment 4,389,438 5,122,659 - -
Surface water management 913,354 1,005,404 - -
Municipal liquor store 4,128,063 4,549,742 - -
Total business-type activities 9,430,855 10,677,805 - -
Total primary government 27,885,677$ 13,497,234$ 887,293$ 5,824,870$
Component units
Marshall Municipal Utilities - Water 5,517,918$ 6,232,115$ -$ 2,265$
Marshall Municipal Utilities - Electric 48,866,841 50,194,273 - -
Marshall Housing Commission 926,487 378,996 288,973 149,251
Economic Development Authority 192,648 16,313 - -
Marshall-Lyon County Library 1,127,696 16,304 277,852 -
Total component units 56,631,590$ 56,838,001$ 566,825$ 151,516$
General revenues
Property taxes, levied for general purposes
Property taxes, levied for special purposes
Property taxes, levied for debt service
Tax increments
Sales tax
Lodging taxes
Franchise taxes
Grants and contributions not restricted to specific programs
Unrestricted investment earnings
Gain on sale of capital assets
Other revenues
Transfers
Total general revenues and transfers
Change in net position
Net position, January 1 as restated (Note 10)
Net position, December 31
Functions/Programs
Program Revenues
The notes to the financial statements are in integral part of this statement.
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Marshall Marshall Economic
Governmental Business-type Municipal Housing Development Marshall-Lyon
Activities Activities Total Utilities Commission Authority County Library
(2,324,267)$ (2,324,267)$
(2,721,178) (2,721,178)
(3,786,083) (3,786,083)
2,719,155 2,719,155
(285,856) (285,856)
(1,432,549) (1,432,549)
(1,092,452) (1,092,452)
(8,923,230) (8,923,230)
- 733,221$ 733,221
- 92,050 92,050
- 421,679 421,679
- 1,246,950 1,246,950
(8,923,230) 1,246,950 (7,676,280)
716,462$ -$ -$ -$
1,327,432 - - -
- (109,267) - -
- - (176,335) -
- - - (833,540)
2,043,894 (109,267) (176,335) (833,540)
3,988,586 - 3,988,586 - - - -
- - - - - 122,707 581,409
1,022,097 (27) 1,022,070 - - - 47,001
639,555 - 639,555 - - - -
1,921,835 - 1,921,835 - - - -
243,780 - 243,780 - - - -
416,517 - 416,517 - - - -
3,301,154 - 3,301,154 - - - -
83,690 27,469 111,159 298,450 2,973 3,860 37,289
31,585 6,650 38,235 - - 66,414 250
494 - 494 558,431 1,483 - -
312,062 (312,062) - - - - -
11,961,355 (277,970) 11,683,385 856,881 4,456 192,981 665,949
3,038,125 968,980 4,007,105 2,900,775 (104,811) 16,646 (167,591)
80,494,006 26,426,933 106,920,939 60,073,809 3,778,955 3,195,480 5,740,822
83,532,131$ 27,395,913$ 110,928,044$ 62,974,584$ 3,674,144$ 3,212,126$ 5,573,231$
Component Units
Net (Expense) Revenue and Changes in Net Position
Primary Government
The notes to the financial statements are in integral part of this statement.
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FUND FINANCIAL STATEMENTS
CITY OF MARSHALL MARSHALL, MINNESOTA
FOR THE YEAR ENDED DECEMBER 31, 2016
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CITY OF MARSHALL, MINNESOTA
BALANCE SHEET
GOVERNMENTAL FUNDS
DECEMBER 31, 2016
101 230 256
Tax
Increment Sales / Lodging
General Financing Tax
ASSETS
Cash and temporary investments 6,442,640$ 4,077,203$ 1,262,576$
Receivables
Delinquent taxes 55,700 - -
Accounts 116,627 - 4,162
Notes/leases - - -
Special assessments 15,387 - -
Intergovernmental 164,633 6,874 339,030
Due from other funds 529,975 - -
Due from component units - 317,073 -
Prepaid items 107,140 - -
TOTAL ASSETS 7,432,102$ 4,401,150$ 1,605,768$
LIABILITIES
Accounts payable 285,728$ 4,750$ -$
Contracts payable - - -
Due to other funds - - -
Due to other governments 4 - -
Accrued salaries payable 124,369 - -
Unearned revenue 84,801 - -
TOTAL LIABILITIES 494,902 4,750 -
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - taxes 55,700 - -
Unavailable revenue - special assessments 15,387 - -
TOTAL DEFERRED INFLOWS OF RESOURCES 71,087 - -
FUND BALANCES
Nonspendable
Prepaid items 107,140 - -
Restricted for
Debt service - - -
City celebrations - - -
Economic development - - -
Tax increment financing - 4,396,400 -
Capital projects - - 1,605,768
Committed for
Economic development - - -
Capital projects - - -
Assigned for
Insurance reserve 69,684 - -
OPEB liability 259,716 - -
Operating expenditure contingency 777,443 - -
Cable franchise tax - PEG 33,563 - -
Forfeiture program - Police department 23,013 - -
Wellness program 9,016 - -
Unallocated health insurance premium 19,661 - -
Capital projects - - -
Drivers education - - -
ASC Arena - - -
Economic development - - -
Park improvements - - -
Unassigned 5,566,877 - -
TOTAL FUND BALANCES 6,866,113 4,396,400 1,605,768
TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND
FUND BALANCES 7,432,102$ 4,401,150$ 1,605,768$
The notes to the financial statements are in integral part of this statement.
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CITY OF MARSHALL, MINNESOTA
BALANCE SHEET
GOVERNMENTAL FUNDS
DECEMBER 31, 2016
300s 456
2013 Other
Sales / Lodging Debt Amateur Governmental
Service Sports Center Funds Totals
5,048,742$ 2,786,099$ 10,168,665$ 29,785,925$
15,228 - 4,522 75,450
- - 67,857 188,646
- - 32,317 32,317
10,413,320 - 340,957 10,769,664
13,367 - 30,222 554,126
- - - 529,975
- - - 317,073
- - 24,136 131,276
15,490,657$ 2,786,099$ 10,668,676$ 42,384,452$
10,233$ 2,235$ 214,457$ 517,403$
- 270,737 386,018 656,755
- - 885,973 885,973
- - - 4
- - 2,981 127,350
- - - 84,801
10,233 272,972 1,489,429 2,272,286
15,228 - 4,522 75,450
10,413,320 - 340,957 10,769,664
10,428,548 - 345,479 10,845,114
- 24,136 131,276
5,051,876 - - 5,051,876
- - 19,064 19,064
- - 2,019,566 2,019,566
- - - 4,396,400
- 1,580,476 1,947,334 5,133,578
- - 61,773 61,773
- 897,557 300,729 1,198,286
- - - 69,684
- - - 259,716
- - - 777,443
- - - 33,563
- - - 23,013
- - - 9,016
- - - 19,661
- 35,094 5,884,477 5,919,571
- - 59,231 59,231
- - 11,022 11,022
- - 98,330 98,330
- - 16,535 16,535
- - (1,608,429) 3,958,448
5,051,876 2,513,127 8,833,768 29,267,052
15,490,657$ 2,786,099$ 10,668,676$ 42,384,452$
The notes to the financial statements are in integral part of this statement.
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CITY OF MARSHALL, MINNESOTA
RECONCILIATION OF THE BALANCE SHEET
TO THE STATEMENT OF NET POSITION
GOVERNMENTAL FUNDS
DECEMBER 31, 2016
Amounts reported for governmental activities in the statement
of net position are different because
Total fund balances - governmental funds 29,267,052$
Capital assets used in governmental activities are not financial
resources and therefore are not reported as assets in the funds. 86,642,247
Long-term liabilities, including bonds payable, are not due and payable in the
current period and therefore are not reported as liabilities in the funds.
Long-term liabilities at year-end consist of
Compensated absences payable (1,059,585)
Other postemployment benefits obligation (208,772)
Pension liability (10,046,427)
Notes payable (188,009)
Bonds payable (33,640,000)
Unamortized bond premiums (2,063,842)
Unamortized bond discounts 8,241
Long-term assets are not available to pay current-period expenditures and, therefore,
are unavailable in the funds.
Delinquent property taxes receivable 75,450
Special assessments receivable 10,769,664
Governmental funds to not report long-term amounts related to pensions.
Deferred outflows of pension resources 5,738,676
Deferred inflows of pension resources (1,288,788)
Governmental funds do not report a liability for accrued interest until
due and payable. (473,776)
Total net position - governmental activities 83,532,131$
The notes to the financial statements are in integral part of this statement.
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CITY OF MARSHALL, MINNESOTA
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED DECEMBER 31, 2016
101 230 256
Tax Increment Sales / Lodging
General Financing Tax
REVENUES
Taxes 4,173,354$ 639,555$ 2,003,095$
Special assessments 1,348 - -
Licenses and permits 335,339 - -
Intergovernmental 3,127,653 - -
Charges for services 1,827,557 - -
Fines and forfeits 87,644 - -
Investment earnings 20,388 5,844 452
Miscellaneous 1,043,845 - -
TOTAL REVENUES 10,617,128 645,399 2,003,547
EXPENDITURES
Current
General government 2,430,864 - -
Public safety 3,348,578 - -
Public works 3,031,072 - -
Culture and recreation 1,642,196 - -
Economic development - 210,318 -
Airport 558,772 - -
Capital outlay
General government - - -
Public safety 5,596 - -
Public works 16 - -
Culture and recreation - - -
Economic development - 48,618 -
Airport - - -
Debt service
Principal - - -
Interest and other - - -
Bond issuance costs - - -
TOTAL EXPENDITURES 11,017,094 258,936 -
EXCESS (DEFICIENCY) OF REVENUES OVER
(UNDER) EXPENDITURES (399,966) 386,463 2,003,547
OTHER FINANCING SOURCES (USES)
Sale of capital assets 31,585 - -
Transfers in 302,022 - -
Bonds issued - - -
Premium on bonds issued - - -
Transfers out - (354,478) (2,058,355)
TOTAL OTHER FINANCING SOURCES (USES) 333,607 (354,478) (2,058,355)
NET CHANGE IN FUND BALANCES (66,359) 31,985 (54,808)
FUND BALANCES, JANUARY 1 6,932,472 4,364,415 1,660,576
FUND BALANCES, DECEMBER 31 6,866,113$ 4,396,400$ 1,605,768$
The notes to the financial statements are in integral part of this statement.
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CITY OF MARSHALL, MINNESOTA
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED DECEMBER 31, 2016
300s 456
2013 Other
Debt Amateur Governmental
Service Sports Center Funds Totals
1,010,018$ -$ 371,086$ 8,197,108$
1,192,552 - 10,480 1,204,380
- - - 335,339
- 4,298,000 1,406,190 8,831,843
- - 183,055 2,010,612
- - - 87,644
6,428 2,356 48,222 83,690
- 47,465 653,543 1,744,853
2,208,998 4,347,821 2,672,576 22,495,469
- - - 2,430,864
- - 124,183 3,472,761
- - 799,740 3,830,812
- - 477,949 2,120,145
60,499 - 14,624 285,441
- - - 558,772
- - 78,668 78,668
- - 718,504 724,100
- - 2,630,561 2,630,577
- 4,841,447 2,389,449 7,230,896
- 54,945 103,563
- - 200 200
3,015,000 - 89,888 3,104,888
1,118,333 - 7,668 1,126,001
- - 115,731 115,731
4,193,832 4,841,447 7,502,110 27,813,419
(1,984,834) (493,626) (4,829,534) (5,317,950)
- - - 31,585
1,869,846 97,557 602,305 2,871,730
- - 5,015,000 5,015,000
- - 166,461 166,461
- - (146,835) (2,559,668)
1,869,846 97,557 5,636,931 5,525,108
(114,988) (396,069) 807,397 207,158
5,166,864 2,909,196 8,026,371 29,059,894
5,051,876$ 2,513,127$ 8,833,768$ 29,267,052$
The notes to the financial statements are in integral part of this statement.
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CITY OF MARSHALL, MINNESOTA
RECONCILIATION OF THE STATEMENT OF
REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
TO THE STATEMENT OF ACTIVITIES
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED DECEMBER 31, 2016
Amounts reported for governmental activities in the statement
of activities are different because
Net change in fund balances - governmental funds 207,158$
Governmental funds report capital outlay as expenditures. However, in the statement of
activities the cost of those assets is allocated over the estimated useful lives and reported
as depreciation expense.
Capital outlay 10,965,446
Depreciation expense (4,198,962)
The net effect of various miscellaneous transactions involving capital assets (i.e., sales and trade-ins) is
to decrease net position.
Book value of disposed of capital assets (4,260)
The issuance of long-term debt provides current financial resources to governmental funds, while
the repayment of principal of long-term debt consumes the current financial resources of governmental
funds. Neither transaction, however, has any effect on net position. Also, governmental funds report
the effect of premiums, discounts and similar items when debt is first issued, whereas these amounts
are deferred and amortized in the statement of activities.
Bonds issued (5,015,000)
Principal repayments 3,104,888
Bond premiums issued, net of amortization 625
Bond discounts amortization (2,989)
Interest on long-term debt in the statement of activities differs from the amount reported in the
governmental fund because interest is recognized as an expenditure in the funds when it is due,
and thus requires the use of current financial resources. In the statement of activities, however,
interest expense is recognized as the interest accrues, regardless of when it is due. (14,817)
Long-term pension activity is not reported in governmental funds.
Pension expense (1,147,396)
Direct aid contributions 28,801
Certain revenues are recognized as soon as they are earned. Under the modified accrual
basis of accounting certain revenues cannot be recognized until they are available
to liquidate liabilities of the current period.
Property taxes 35,262
Special assessments (1,026,461)
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.
Compensated absences 127,757
Other postemployment benefits costs (21,927)
Change in net position - governmental activities 3,038,125$
The notes to the financial statements are in integral part of this statement.
-41-
CITY OF MARSHALL, MINNESOTA
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
GENERAL, TAX INCREMENT FINANCING AND SALES/LODGING TAX FUNDS
FOR THE YEAR ENDED DECEMBER 31, 2016
Actual Variance with
Original Final Amounts Final Budget
REVENUES
Taxes 4,240,860$ 4,240,860$ 4,173,354$ (67,506)$
Licenses and permits 309,975 309,975 335,339 25,364
Special assessments - - 1,348 1,348
Intergovernmental 3,000,313 3,000,313 3,127,653 127,340
Charges for services 1,946,637 1,946,637 1,827,557 (119,080)
Fines and forfeits 116,400 116,400 87,644 (28,756)
Investment earnings 15,000 15,000 20,388 5,388
Miscellaneous 1,086,293 1,086,293 1,043,845 (42,448)
TOTAL REVENUES 10,715,478 10,715,478 10,617,128 (98,350)
EXPENDITURES
Current
General government 2,481,799 2,481,799 2,430,864 50,935
Public safety 3,465,050 3,465,050 3,348,578 116,472
Public works 3,022,077 3,022,077 3,031,072 (8,995)
Culture and recreation 1,645,991 1,645,991 1,642,196 3,795
Economic development - - - -
Airport 452,621 452,621 558,772 (106,151)
Capital outlay
Public safety - - 5,596 (5,596)
Public works - - 16 (16)
Economic development - - - -
TOTAL EXPENDITURES 11,067,538 11,067,538 11,017,094 50,444
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (352,060) (352,060) (399,966) (47,906)
OTHER FINANCING SOURCES (USES)
Sale of capital assets 25,000 25,000 31,585 6,585
Transfers in 302,060 302,060 302,022 (38)
Transfers out - - - -
TOTAL OTHER FINANCING SOURCES (USES) 327,060 327,060 333,607 6,547
NET CHANGE IN FUND BALANCES (25,000) (25,000) (66,359) (41,359)
FUND BALANCES, JANUARY 1 6,932,472 6,932,472 6,932,472 -
FUND BALANCES, DECEMBER 31 6,907,472$ 6,907,472$ 6,866,113$ (41,359)$
General
Budgeted Amounts
The notes to the financial statements are in integral part of this statement.
-42-
Actual Variance with Actual Variance with
Original Final Amounts Final Budget Original Final Amounts Final Budget
632,400$ 632,400$ 639,555$ 7,155$ 2,028,534$ 2,028,534$ 2,003,095$ (25,439)$
- - - - - - - -
- - - - - - - -
- - - - - - - -
- - - - - - - -
- - - - - - - -
5,000 5,000 5,844 844 350 350 452 102
- - - - - - - -
637,400 637,400 645,399 7,999 2,028,884 2,028,884 2,003,547 (25,337)
- - - - - - - -
- - - - - - - -
- - - - - - - -
- - - - - - - -
20,366 20,366 210,318 (189,952) - - - -
- - - - - - - -
- - - - - - - -
- - - - - - - -
- - 48,618 (48,618) - - - -
20,366 20,366 258,936 (238,570) - - - -
617,034 617,034 386,463 (230,571) 2,028,884 2,028,884 2,003,547 (25,337)
- - - - - - - -
- - - - - - - -
(365,214) (365,214) (354,478) 10,736 (1,758,620) (1,758,620) (2,058,355) (299,735)
(365,214) (365,214) (354,478) 10,736 (1,758,620) (1,758,620) (2,058,355) (299,735)
251,820 251,820 31,985 (219,835) 270,264 270,264 (54,808) (325,072)
4,364,415 4,364,415 4,364,415 - 1,660,576 1,660,576 1,660,576 -
4,616,235$ 4,616,235$ 4,396,400$ (219,835)$ 1,930,840$ 1,930,840$ 1,605,768$ (325,072)$
Tax Increment Financing
Budgeted Amounts
Sales/Lodging Tax
Budgeted Amounts
The notes to the financial statements are in integral part of this statement.
-43-
CITY OF MARSHALL, MINNESOTA
STATEMENTS OF NET POSITION
PROPRIETARY FUNDS
DECEMBER 31, 2016 AND 2015
2016 2015 2016 2015
ASSETS
CURRENT ASSETS
Cash and temporary investments 3,749,940$ 3,527,927$ 1,865,418$ 1,829,311$
Escrowed funds 3,735,586 - - -
Restricted assets
Cash and temporary investments 3,642,466 2,644,664 - -
Delinquent taxes - - - -
Receivables
Accounts 466,433 686,777 - 669
Special assessments - - - -
Intergovernmental - - - -
Due from other funds 20,998 20,998 - -
Inventories - - 507,935 404,483
Prepaid items 31,550 31,790 8,313 7,400
TOTAL CURRENT ASSETS 11,646,973 6,912,156 2,381,666 2,241,863
NONCURRENT ASSETS
Capital assets, at cost
Land 199,134 199,134 48,603 288,971
Construction in progress 197,611 911,760 - -
Buildings 168,472 134,952 2,359,862 2,558,892
Improvements other than buildings 28,001,430 28,001,430 115,019 68,227
Systems and infrastructure 20,326,853 19,415,092 - -
Equipment and machinery 2,566,178 2,444,314 167,916 161,531
Less accumulated depreciation (28,778,349) (27,208,840) (101,659) (214,772)
TOTAL NONCURRENT ASSETS 22,681,329 23,897,842 2,589,741 2,862,849
TOTAL ASSETS 34,328,302 30,809,998 4,971,407 5,104,712
DEFERRED OUTFLOWS OF RESOURCES
Deferred pension resources 334,923 79,502 102,285 24,284
LIABILITIES
CURRENT LIABILITIES
Accounts payable 104,250 42,299 160,535 77,463
Contracts payable - - - 135,052
Due to other governments 524 - 23,960 56,071
Accrued interest payable 209,084 186,680 6,489 6,709
Accrued salaries payable 15,340 10,941 5,233 3,871
Compensated absences payable 51,497 49,064 19,588 18,768
Bonds payable - current portion 5,119,500 1,366,500 195,000 195,000
TOTAL CURRENT LIABILITIES 5,500,195 1,655,484 410,805 492,934
LONG-TERM LIABILITIES
Compensated absences payable 169,488 166,130 66,574 63,431
Other postemployment benefit obligation 42,550 38,999 8,394 7,471
Pension liability 929,009 674,302 283,718 205,966
Bonds payable - noncurrent portion 10,756,635 11,793,697 2,760,000 2,955,000
TOTAL NONCURRENT LIABILITIES 11,897,682 12,673,128 3,118,686 3,231,868
TOTAL LIABILITIES 17,397,877 14,328,612 3,529,491 3,724,802
DEFERRED INFLOWS OF RESOURCES
Deferred pension resources 122,252 149,712 37,336 45,730
NET POSITION
Net investment in capital assets 10,435,194 10,737,645 183,342 335,966
Restricted for debt service 1,988,263 1,990,691 - -
Unrestricted 4,719,639 3,682,840 1,323,523 1,022,498
TOTAL NET POSITION 17,143,096$ 16,411,176$ 1,506,865$ 1,358,464$
Business-type Activities - Enterprise Funds
Municipal
Liquor Store
602 609
Wastewater
Treatment
The notes to the financial statements are in integral part of this statement.
-44-
2016 2015 2016 2015 2016 2015
21,746$ 21,746$ 1,250,699$ 553,894$ 6,887,803$ 5,932,878$
- - - - 3,735,586 -
- - 176,018 140,939 3,818,484 2,785,603
- - 217 244 217 244
- - 88,769 167,947 555,202 855,393
- - 4,491 3,349 4,491 3,349
- - - 38 - 38
- - 335,000 335,000 355,998 355,998
- - - - 507,935 404,483
- - 2,572 3,267 42,435 42,457
21,746 21,746 1,857,766 1,204,678 15,908,151 10,380,443
- - 265,135 265,135 512,872 753,240
- - 678,715 - 876,326 911,760
- - - - 2,528,334 2,693,844
- - - - 28,116,449 28,069,657
- - 14,658,381 14,658,381 34,985,234 34,073,473
- - 247,036 247,036 2,981,130 2,852,881
- - (5,869,103) (5,433,701) (34,749,111) (32,857,313)
- - 9,980,164 9,736,851 35,251,234 36,497,542
21,746 21,746 11,837,930 10,941,529 51,159,385 46,877,985
- - - - 437,208 103,786
- - 2,271 1,781 267,056 121,543
- - - - - 135,052
- - - - 24,484 56,071
- - 33,262 24,688 248,835 218,077
- - - - 20,573 14,812
- - - - 71,085 67,832
- - 280,500 283,500 5,595,000 1,845,000
- - 316,033 309,969 6,227,033 2,458,387
- - - - 236,062 229,561
- - - - 50,944 46,470
- - - - 1,212,727 880,268
- - 2,797,691 1,996,013 16,314,326 16,744,710
- - 2,797,691 1,996,013 17,814,059 17,901,009
- - 3,113,724 2,305,982 24,041,092 20,359,396
- - - - 159,588 195,442
- - 7,311,484 7,457,338 17,930,020 18,530,949
- - 189,335 153,139 2,177,598 2,143,830
21,746 21,746 1,223,387 1,025,070 7,288,295 5,752,154
21,746$ 21,746$ 8,724,206$ 8,635,547$ 27,395,913$ 26,426,933$
Business-type Activities - Enterprise Funds
Parkway
Townhomes Totals
630620
Surface Water
Management
The notes to the financial statements are in integral part of this statement.
-45-
CITY OF MARSHALL, MINNESOTA
STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
PROPRIETARY FUNDS
FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015
2016 2015 2016 2015
OPERATING REVENUES
Charges for services 5,086,831$ 4,855,739$ -$ -$
Sales - - 4,548,623 4,027,419
Cost of sales - - (3,398,451) (3,119,194)
TOTAL OPERATING REVENUES/GROSS PROFIT 5,086,831 4,855,739 1,150,172 908,225
OPERATING EXPENSES
Salaries and benefits 1,056,664 1,136,021 323,729 331,627
Supplies 278,649 166,160 11,219 26,309
Repairs and maintenance 161,173 252,942 4,114 2,270
Other services and charges 447,538 409,626 165,132 260,615
Insurance 14,032 30,449 7,657 8,158
Utilities 322,951 309,718 31,090 26,356
Depreciation 1,597,256 1,523,591 91,964 11,739
TOTAL OPERATING EXPENSES 3,878,263 3,828,507 634,905 667,074
OPERATING INCOME (LOSS) 1,208,568 1,027,232 515,267 241,151
NONOPERATING REVENUES (EXPENSES)
Property taxes - - - -
Special assessments - - - -
Other income 3,617 - 1,104 -
Investment earnings (loss) 29,119 37,305 1,714 3,237
Refunds and reimbursements 25,759 43,230 15 1,394
Rents 6,452 6,452 - -
Gain (loss) on disposal of assets 6,650 1,840 (14,424) 408
Bond (discount) premium amortization 4,529 277 - -
Bond issuance costs (68,168) (18,385) - (39,959)
Interest and other expense (447,536) (434,707) (80,283) (72,545)
TOTAL NONOPERATING
REVENUES (EXPENSES) (439,578) (363,988) (91,874) (107,465)
INCOME (LOSS) BEFORE CONTRIBUTIONS
AND TRANSFERS 768,990 663,244 423,393 133,686
CAPITAL CONTRIBUTIONS FROM OTHER FUNDS - 135,525 - -
CAPITAL CONTRIBUTIONS FROM (TO) COMPONENT UNIT - (604,392) - -
TRANSFERS IN - - - -
TRANSFERS OUT (37,070) (653,944) (274,992) (324,996)
CHANGE IN NET POSITION 731,920 (459,567) 148,401 (191,310)
NET POSITION, JANUARY 1 16,411,176 16,870,743 1,358,464 1,549,774
NET POSITION, DECEMBER 31 17,143,096$ 16,411,176$ 1,506,865$ 1,358,464$
Business-type Activities - Enterprise Funds
602
Treatment
609
Liquor Store
Wastewater Municipal
The notes to the financial statements are in integral part of this statement.
-46-
2016 2015 2016 2015 2016 2015
-$ -$ 1,001,246$ 992,480$ 6,088,077$ 5,848,219$
- - - - 4,548,623 4,027,419
- - - - (3,398,451) (3,119,194)
- - 1,001,246 992,480 7,238,249 6,756,444
- - - - 1,380,393 1,467,648
- - 17,267 14,402 307,135 206,871
- - 91,142 - 256,429 255,212
- - 304,365 311,206 917,035 981,447
- - - - 21,689 38,607
- - - - 354,041 336,074
- - 435,402 452,565 2,124,622 1,987,895
- - 848,176 778,173 5,361,344 5,273,754
- - 153,070 214,307 1,876,905 1,482,690
- - (27) 450 (27) 450
- - 4,158 - 4,158 -
- - - - 4,721 -
- - (3,364) 793 27,469 41,335
- - - 4,278 25,774 48,902
- - - - 6,452 6,452
- - - - (7,774) 2,248
- - 6,048 7,678 10,577 7,955
- - (4,278) - (72,446) (58,344)
- - (66,948) (61,921) (594,767) (569,173)
- - (64,411) (48,722) (595,863) (520,175)
- - 88,659 165,585 1,281,042 962,515
- - - 26,982 - 162,507
- - - 51,517 - (552,875)
- - - 320,004 - 320,004
- - - (524,203) (312,062) (1,503,143)
- - 88,659 39,885 968,980 (610,992)
21,746 21,746 8,635,547 8,595,662 26,426,933 27,037,925
21,746$ 21,746$ 8,724,206$ 8,635,547$ 27,395,913$ 26,426,933$
620 630
Business-type Activities - Enterprise Funds
Management TotalsTownhomes
Parkway Surface Water
The notes to the financial statements are in integral part of this statement.
-47-
CITY OF MARSHALL, MINNESOTA
STATEMENTS OF CASH FLOWS - CONTINUED ON THE FOLLOWING PAGES
PROPRIETARY FUNDS
FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015
2016 2015 2016 2015
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers 5,307,175$ 4,835,099$ 4,549,292$ 4,025,802$
Payments to suppliers and vendors (1,161,628) (741,428) (3,671,067) (3,365,034)
Payments to and on behalf of employees (1,071,097) (1,140,084) (326,124) (319,266)
Other receipts 35,828 49,682 1,119 1,802
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES 3,110,278 3,003,269 553,220 343,304
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
Transfers from other funds - - - -
Transfers to other funds (37,070) (653,944) (274,992) (324,996)
(Increase) decrease in due from other funds - 176 - -
Increase (decrease) in due to other funds - (50) - (176)
NET CASH PROVIDED (USED) BY NONCAPITAL
FINANCING ACTIVITIES (37,070) (653,818) (274,992) (325,172)
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Acquisition of capital assets (380,743) (1,571,151) (209,568) (2,219,015)
Proceeds from sales of capital assets 6,650 12,913 241,236 -
Proceeds from bonds issued, net of discounts/premiums issued 4,086,967 930,911 - 3,240,000
Principal paid on long-term debt (1,366,500) (1,192,500) (195,000) (90,000)
Interest paid on long-term debt (425,132) (441,291) (80,503) (65,836)
Bond issuance costs (68,168) (18,385) - (39,959)
Property taxes received - - - -
Special assessments received - - - -
NET CASH PROVIDED (USED) BY CAPITAL AND
RELATED FINANCING ACTIVITIES 1,853,074 (2,279,503) (243,835) 825,190
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received (paid) on cash and investments 29,119 37,305 1,714 3,237
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 4,955,401 107,253 36,107 846,559
CASH AND CASH EQUIVALENTS, JANUARY 1 6,172,591 6,065,338 1,829,311 982,752
CASH AND CASH EQUIVALENTS, DECEMBER 31 11,127,992$ 6,172,591$ 1,865,418$ 1,829,311$
RECONCILIATION OF CASH AND
CASH EQUIVALENTS
TO THE STATEMENT OF NET POSITION
Cash and cash equivalents 3,749,940$ 3,527,927$ 1,865,418$ 1,829,311$
Escrowed funds 3,735,586 - - -
Restricted cash and cash equivalents 3,642,466 2,644,664 - -
TOTAL CASH AND CASH EQUIVALENTS 11,127,992$ 6,172,591$ 1,865,418$ 1,829,311$
Treatment Liquor Store
Wastewater Municipal
602
Business-type Activities - Enterprise Funds
609
The notes to the financial statements are in integral part of this statement.
-48-
2016 2015 2016 2015 2016 2015
-$ -$ 1,079,282$ 990,204$ 10,935,749$ 9,851,105$
- - (411,589) (326,084) (5,244,284) (4,432,546)
- - - - (1,397,221) (1,459,350)
- - - 4,278 36,947 55,762
- - 667,693 668,398 4,331,191 4,014,971
- - - 320,004 - 320,004
- - - (524,203) (312,062) (1,503,143)
- - - - - 176
- - - (10,008) - (10,234)
- - - (214,207) (312,062) (1,193,197)
- - (678,715) (175,183) (1,269,026) (3,965,349)
- - - - 247,886 12,913
- - 1,088,226 - 5,175,193 4,170,911
- - (283,500) (462,500) (1,845,000) (1,745,000)
- - (58,374) (67,220) (564,009) (574,347)
- - (4,278) - (72,446) (58,344)
- - 38 1,160 38 1,160
- - 4,158 - 4,158 -
- - 67,555 (703,743) 1,676,794 (2,158,056)
- - (3,364) 793 27,469 41,335
- - 731,884 (248,759) 5,723,392 705,053
21,746 21,746 694,833 943,592 8,718,481 8,013,428
21,746$ 21,746$ 1,426,717$ 694,833$ 14,441,873$ 8,718,481$
21,746$ 21,746$ 1,250,699$ 553,894$ 6,887,803$ 5,932,878$
- - - - 3,735,586 -
- - 176,018 140,939 3,818,484 2,785,603
21,746$ 21,746$ 1,426,717$ 694,833$ 14,441,873$ 8,718,481$
Business-type Activities - Enterprise Funds
630
Management Totals Townhomes
Parkway
620
Surface Water
The notes to the financial statements are in integral part of this statement.
-49-
CITY OF MARSHALL, MINNESOTA
STATEMENTS OF CASH FLOWS - CONTINUED
PROPRIETARY FUNDS
FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015
2016 2015 2016 2015
RECONCILIATION OF OPERATING INCOME (LOSS) TO NET
CASH PROVIDED (USED) BY OPERATING ACTIVITIES
Operating income (loss) 1,208,568$ 1,027,232$ 515,267$ 241,151$
Adjustments to reconcile operating income (loss) to net cash
provided (used) by operating activities
Other income related to operations 35,828 49,682 1,119 1,802
Depreciation 1,597,256 1,523,591 91,964 11,739
Infrastructure not capitalized - 419,474 - -
(Increase) decrease in assets
Accounts receivable 220,344 (22,631) 669 (1,617)
Special assessments receivable - - - -
Due from other governments - 1,859 - -
Due from component units - 132 - -
Inventories - - (103,452) 44,176
Prepaid items 240 2,491 (913) 12
(Increase) decrease in deferred outflows of resources
Deferred pension resources (255,421) 22,087 (78,001) 5,998
Increase (decrease) in liabilities
Accounts payable 61,951 5,502 83,072 20,679
Due to other governments 524 - (32,111) 13,001
Accrued salaries payable 4,399 (29,238) 1,362 (8,753)
Other postemployment benefit obligation 3,551 4,124 923 1,072
Pension liability 254,707 36,020 77,752 15,706
Compensated absences payable 5,791 (14,305) 3,963 4,016
Increase (decrease) in deferred inflows of resources
Deferred pension resources (27,460) (22,751) (8,394) (5,678)
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES 3,110,278$ 3,003,269$ 553,220$ 343,304$
NONCASH INVESTING, CAPITAL AND FINANCING ACTIVITIES
Infrastructure not capitalized -$ 419,474$ -$ -$
Book value of disposed/traded of capital assets 12,045 11,073 255,660 -
Capital assets acquired on account - - - 135,052
Capital assets contributed from (to) other funds - 135,525 - -
Capital assets contributed from (to) component unit - (604,392) - -
Amortization of bond (premium) discount (4,529) (277) - -
Treatment Liquor Store
609
Wastewater Municipal
602
Business-type Activities - Enterprise Funds
The notes to the financial statements are in integral part of this statement.
-50-
2016 2015 2016 2015 2016 2015
-$ -$ 153,070$ 214,307$ 1,876,905$ 1,482,690$
- - - 4,278 36,947 55,762
- - 435,402 452,565 2,124,622 1,987,895
- - - - - 419,474
- - 79,178 (6,619) 300,191 (30,867)
- - (1,142) 4,343 (1,142) 4,343
- - - - - 1,859
- - - - - 132
- - - - (103,452) 44,176
- - 695 (90) 22 2,413
- - - - (333,422) 28,085
- - 490 (386) 145,513 25,795
- - - - (31,587) 13,001
- - - - 5,761 (37,991)
- - - - 4,474 5,196
- - - - 332,459 51,726
- - - - 9,754 (10,289)
- - - - (35,854) (28,429)
-$ -$ 667,693$ 668,398$ 4,331,191$ 4,014,971$
-$ -$ -$ -$ -$ 419,474$
- - - - 267,705 11,073
- - - - - 135,052
- - - 26,982 - 162,507
- - - 51,517 - (552,875)
- - (6,048) (7,678) (10,577) (7,955)
Management Totals
Surface Water
Business-type Activities - Enterprise Funds
Parkway
630620
Townhomes
The notes to the financial statements are in integral part of this statement.
-51-
CITY OF MARSHALL, MINNESOTA
STATEMENT OF FIDUCIARY NET POSITION
FIDUCIARY FUNDS
DECEMBER 31, 2016
Private
Purpose
Trust Fund
ASSETS
Cash and temporary investments 16,024$
NET POSITION
Net position held in trust for future use 16,024$
The notes to the financial statements are in integral part of this statement.
-52-
CITY OF MARSHALL, MINNESOTA
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
FIDUCIARY FUNDS
FOR THE YEAR ENDED DECEMBER 31, 2016
Private
Purpose
Trust Fund
ADDITIONS
Investment earnings 11$
Miscellaneous
Contributions and donations 2,000
TOTAL ADDITIONS 2,011
SUBTRACTIONS
Scholarships (1,500)
CHANGES IN NET POSITION 511
NET POSITION, JANUARY 1 15,513
NET POSITION, DECEMBER 31 16,024$
The notes to the financial statements are in integral part of this statement.
-53-
THIS PAGE IS LEFT BLANK
INTENTIONALLY
-54-
CITY OF MARSHALL, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2016
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Reporting entity
The City of Marshall (the City) was incorporated February 20, 1901 under the provisions of Minnesota Laws of 1870.
The City operates under a Mayor-Council form of government with a full-time City Administrator and provides the
following services as authorized by it charter, which was adopted in 1969 as provided by Minnesota statutes, chapter
410: public safety (police and fire), highways and streets, culture and recreation, public library, public improvements,
planning and zoning and general administrative services. The City also owns a municipal airport and municipal liquor
store. The City also operates public electric, water and wastewater treatment and surface water utilities. The electric and
water utilities are presented as a discretely presented component unit.
The City is governed by an elected mayor and a six-member Council. The Council exercises legislative authority and
determines all matters of policy. The Council appoints personnel responsible for the proper administration of all affairs
relating to the City. The City has considered all potential units for which it is financially accountable, and other
organizations for which the nature and significance of their relationship with the City are such that exclusion would
cause the City’s financial statements to be misleading or incomplete. The Governmental Accounting Standards Board
(GASB) has set forth criteria to be considered in determining financial accountability. These criteria include appointing
a voting majority of an organization’s governing body, and (1) the ability of the primary government to impose its will
on that organization or (2) the potential for the organization to provide specific benefits to, or impose specific financial
burdens on the primary government. Blended component units, although legally separate entities are in substance, part
of the City’s operations and so data from these units are combined with data of the primary government. The blended
component unit has a December 31 year end. Each discretely presented component unit is reported in a separate column
in the combined financial statements to emphasize it is legally separate from the City.
Blended component units. The Housing and Redevelopment Authority (HRA) serves all the citizens of the City and is
governed by City appointed boards. The HRA was created pursuant to Minnesota statutes 469.090 through 469.108 to
carry out housing development and redevelopment within the City in accordance with policies established by the
Council. The HRA may not exercise any of the powers enumerated by the authorizing statutes without prior approval of
the Council. Separate financial statements are not issued.
Discretely presented component units. The Economic Development Authority (EDA) serves all the citizens of the City
and is governed by City appointed boards. The EDA was created pursuant to Minnesota statutes 469.090 through
469.108 to carry out economic and industrial development and redevelopment within the City in accordance with
policies established by the Council. The seven-member board consists of two Council members and four other City
Council approved members along with the City Administrator who is the executive director. The EDA may not exercise
any of the powers enumerated by the authorizing statutes without prior approval of the Council. The EDA is reported as
two discretely presented special revenue funds (Economic Development Authority and EDA Parkway Housing).
Separate financial statements are not issued.
The Marshall Municipal Utilities (the Utilities) meets the criteria to be included as a discrete presentation. The members
of the governing board of the Utilities are appointed by the Mayor and approved by the City Council. The Utilities
makes monthly payments to the City “in lieu of taxes” in accordance with an agreement between itself and the City.
Therefore, there is a financial benefit to the City. Complete financial statements for the Utilities may be obtained from
the Utilities Business Office at 113 South Fourth Street, Marshall, Minnesota.
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CITY OF MARSHALL, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2016
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
The Marshall Housing Commission (the Commission) of the City of Marshall meets the criteria to be included as a
discrete presentation. The members of the governing board of the Commission are appointed by the Mayor and
approved by the City Council. Although the City does not have the authority to approve or modify the Commission’s
operational and capital budgets, the tax rates established by the Commission and bonded debt must be approved by the
City Council. Complete financial statements for the Commission may be obtained from the Marshall Housing
Commission at 202 North First Street, Marshall, Minnesota.
The Marshall-Lyon County Public Library meets the criteria to be included as a discrete presentation. The Library is a
joint venture between the City and Lyon County. The City appoints six members and the County appoints three
members of the governing board of the Library. The City does have the authority to approve or modify the Library’s
operational and capital budgets and any bonded debt must be approved by the City Council. The City provides a
material portion of the Library’s annual operating budget. The Library, whose year-end is December 31, is a discretely
presented component unit (with special revenue, debt service and capital projects funds) of the City. Separate financial
statements have not been prepared.
Related organization. The Marshall Fire Department Relief Association is organized as a non-profit organization,
legally separate from the City, by its members to provide pension and other benefits to such members in accordance
with Minnesota statutes. Its board of directors is appointed by the membership of the Association and not by the City
Council and the Association issues its own set of financial statements. All funding is conducted in accordance with
applicable Minnesota statutes, whereby state aids flow to the Association, tax levies are determined by the Association,
and are only reviewed by the City and the Association pays benefits directly to its members. The Association may
certify tax levies to Lyon County directly if the City does not carry out this function. Because the Association is
fiscally independent of the City, the financial statements of the Association have not been included within the City’s
reporting entity. The City’s portion of the costs of the Association’s pension benefits is included in the General fund
under public safety.
B. Government-wide and fund financial statements
The government-wide financial statements (i.e., the statement of net position and the statement of activities) report
information on all of the nonfiduciary activities of the primary government and its component units. Governmental
activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from
business-type activities, which rely to a significant extent on fees and charges for support. Likewise, the primary
government is reported separately from certain legally separate component units for which the primary government is
financially accountable.
The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is offset
by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment.
Amounts reported as program revenues include 1) charges to customers or applicants who purchase, use, or directly
benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that
are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other
items not properly included among program revenues are reported instead as general revenues.
Separate financial statements are provided for governmental funds, proprietary funds and fiduciary funds, even though
the latter are excluded from the government-wide financial statements. Major individual governmental funds and major
individual enterprise funds are reported as separate columns in the fund financial statements.
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CITY OF MARSHALL, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2016
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
C. Measurement focus, basis of accounting, and financial statement presentation
The government-wide financial statements are reported using the economic resources measurement focus and the
accrual basis of accounting, as are the proprietary and fiduciary fund financial statements. 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.
Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to
pay liabilities of the current period. For this purpose, the City considers revenues to be available if they are collected
within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred,
as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated
absences and claims and judgments, are recorded only when payment is due.
Property taxes, franchise taxes, licenses, and interest associated with the current fiscal period are all considered to be
susceptible to accrual and so have been recognized as revenues of the current fiscal period. Only the portion of special
assessments receivable due within the current fiscal period is considered to be susceptible to accrual as revenue of the
current period. All other revenue items are considered to be measurable and available only when cash is received by
the City.
Revenue resulting from exchange transactions, in which each party gives and receives essentially equal value, is
recorded on the accrual basis when the exchange takes place. On a modified accrual basis, revenue is recorded in the
year in which the resources are measurable and become available.
Non-exchange transactions, in which the City receives value without directly giving equal value in return, include
property taxes, grants, entitlement and donations. On an accrual basis, revenue from property taxes is recognized in the
year for which the tax is levied. Revenue from grants, entitlements and donations is recognized in the year in which all
eligibility requirements have been satisfied. Eligibility requirements include timing requirements, which specify the
year when the resources are required to be used or the year when use is first permitted, matching requirements, in which
the City must provide local resources to be used for a specified purpose, and expenditure requirements, in which the
resources are provided to the City on a reimbursement basis. On a modified accrual basis, revenue from non-exchange
transactions must also be available before it can be recognized.
Unearned revenue arises when assets are recognized before revenue recognition criteria have been satisfied. Grants and
entitlements received before eligibility requirements are met are also recorded as unearned revenue.
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 certain reported amounts and
disclosures. Accordingly, actual results could differ from those estimates.
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CITY OF MARSHALL, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2016
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
The City reports the following major governmental funds:
The General fund is the City’s primary operating fund. It accounts for all financial resources of the general
government, except those required to be accounted for in another fund.
The Tax Increment Financing fund is used to account for the collection of tax increment and payment of related
expenditures for all of the City tax increment financing districts.
The Sales / Lodging Tax fund is used to account for sales and lodging tax received by the City to be used for future
capital projects.
The Debt Service fund accounts for the resources accumulated and payments made for principal and interest on
long-term general obligation debt of governmental funds.
The 2013 Amateur Sports Center fund is used to account for construction of the amateur sports complex.
The City reports the following major proprietary funds:
The Wastewater Treatment fund is used to account for the operation, maintenance, and capital improvements of the
City’s wastewater treatment activities.
The Municipal Liquor fund is used to account for the operation of the City’s off-sale municipal liquor store.
The Parkway Townhomes fund was used to account for rental activities before the townhomes were sold.
The Surface Water Management fund is used to account for the operation, maintenance, and capital improvements
of the City’s storm water collection activities.
Additionally, the City reports the following fund type:
The Private-Purpose Trust fund is used to account for resources legally held in trust. All resources of the fund,
including any earnings on invested resources, may be used to support activities of the Trust. There is no
requirement that any portion of these resources is preserved as capital.
Enterprise funds are used to account for those operations that are financed and operated in a manner similar to private
business or where the Council has decided that the determination of revenues earned, costs incurred and/or net income
is necessary for management accountability.
As a general rule the effect of interfund activity has been eliminated from government-wide financial statements.
Exceptions to this general rule are payments in lieu of taxes and charges between the City’s water and electric functions
and various other functions of the City. Elimination of these charges would distort the direct costs and program
revenues reported for the various functions concerned.
Proprietary funds distinguish operating revenues and expenses from nonoperating 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. The principal operating revenues of the City’s enterprise funds and of the City’s
internal service funds are charges to customers for sales and services. The City also recognizes as operating revenue the
portion of tap fees intended to recover the cost of connecting new customers to the system. Operating expenses for
enterprise funds and internal service funds include the cost of sales and services, administrative expenses, and
depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating
revenues and expenses.
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CITY OF MARSHALL, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2016
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED When both restricted and unrestricted resources are available for use, it is the City’s policy to use restricted resources first, then unrestricted resources as they are needed.
Component units The Marshall Economic Development Authority and the Marshall-Lyon County Public Library have adopted the modified accrual basis of accounting and the Marshall Housing Commission, and the Marshall Public Utilities have adopted the accrual basis of accounting. The Marshall Housing Commission has a fiscal year end of September 30. Therefore, the data included for this component unit is as of that date in the statement of net position and for the year then ended in the statement of activities.
D. Assets, deferred outflows of resources, liabilities, deferred inflows of resources and net position/fund balance Deposits and investments
The City’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. Certain restricted assets are included in cash and cash equivalents. The proprietary funds’ portion in the government-wide cash and temporary investments pool is considered to be cash and cash equivalents for purposes of the statements of cash flows.
Cash balances from all funds are pooled and invested, to the extent available, in certificates of deposit and other
authorized investments.
The City may invest idle funds as authorized by Minnesota statutes, as follows:
1. Direct obligations or obligations guaranteed by the United States or its agencies.
2. Shares of investment companies registered under the Federal Investment Company Act of 1940 and received the highest credit rating, rated in one of the two highest rating categories by a statistical rating agency, and have a final maturity of thirteen months or less.
3. General obligations of a state or local government with taxing powers rated “A” or better; revenue obligations
rated “AA” or better.
4. General obligations of the Minnesota Housing Finance Agency rated “A” or better.
5. Obligation of a school district with an original maturity not exceeding 13 months and (i) rated in the highest category by a national bond rating service or (ii) enrolled in the credit enhancement program pursuant to statute section 126C.55.
6. Bankers’ acceptances of United States banks eligible for purchase by the Federal Reserve System.
7. Commercial paper issued by United States banks corporations or their Canadian subsidiaries, of highest quality
category by at least two nationally recognized rating agencies, and maturing in 270 days or less.
8. Repurchase or reverse repurchase agreements and securities lending agreements with financial institutions qualified as a “depository” by the government entity, with banks that are members of the Federal Reserve System with capitalization exceeding $10,000,000, a primary reporting dealer in U.S. government securities to the Federal Reserve Bank of New York, or certain Minnesota securities broker-dealers.
9. Guaranteed investment contracts (GIC's) issued or guaranteed by a United States commercial bank, a domestic branch of a foreign bank, a United States insurance company, or its Canadian subsidiary, whose similar debt obligations were rated in one of the top two rating categories by a nationally recognized rating agency.
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CITY OF MARSHALL, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2016
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
Broker money market funds operate in accordance with appropriate state laws and regulations. The reported value of
the pool is the same as the fair value of the shares.
The City and its component units categorizes its fair value measurements within the fair value hierarchy established by
generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value
of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other
observable inputs; Level 3 inputs are significant unobservable inputs.
The City has the following recurring fair value measurements as of December 31, 2016:
US Government Securities of $3,694,436 are valued using quoted market prices (Level 1 inputs)
US Treasury Notes of $1,498,349 are valued using quoted market prices (Level 1 inputs)
Mortgage backed securities of $2,308,750 are valued using a matrix pricing model (Level 2 inputs)
Municipal bonds of $3,107,760 are valued using a matrix pricing model (Level 2 inputs)
The Municipal Utilities discretely presented component unit has the following recurring fair value measurements as
of December 31, 2016:
US Treasury Notes of $9,954,108 are valued using quoted market prices (Level 2 inputs)
Federal Agency Bonds and Notes of $8,265,560 are valued using a matrix pricing model (Level 2 inputs)
Federal Mortgage Pools of $1,246,048 are valued using a matrix pricing model (Level 2 inputs)
Mortgage Backed Securities of $126,004 are valued using a matrix pricing model (Level 2 inputs)
Municipal Bonds of $8,565,720 are valued using a matrix pricing model (Level 2 inputs)
Property taxes
The City Council annually adopts a tax levy and certifies it to the County in December for collection the following year.
The County is responsible for collecting all property taxes for the City. These taxes attach an enforceable lien on
taxable property within the City on January 1 and are payable by the property owners in two installments in May and
October. The taxes are collected by the County Treasurer and tax settlements are made to the City during January, June
and November each year.
Delinquent taxes receivable include the past six years' uncollected taxes. Delinquent taxes have been offset by a
deferred inflow of resources for delinquent taxes not received within 60 days after year end in the governmental fund
financial statements.
Accounts receivable
Accounts receivable include amounts billed for services provided before year end. Unbilled utility enterprise fund
receivables are also included for services provided in 2016. All trade receivables are shown net of an allowance for
uncollectible accounts. No substantial losses are anticipated from present receivable balances. The other utility funds
do not record an allowance because uncollected bills may be certified to the County for collection.
Component units
The Marshall Public Utilities grants credit to its customers, which is mainly unsecured in the course of its operations. A
portion of customer receivables is secured by deposits based on prior payment history of individual accounts. Monthly
sewer rental charges are included in the customer’s billings and transferred to the City when collected. No allowance
for doubtful accounts has been recorded as management deems all receivables to be collectible.
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CITY OF MARSHALL, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2016
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
Special assessments
Special assessments represent the financing for public improvements paid for by benefiting property owners. These
assessments are recorded as receivables when assessment rolls are provided to the County. Special assessments are
recognized as revenue when they are received in cash or within 60 days after year end. All governmental special
assessments receivable are offset by a deferred inflow of resources in the fund financial statements.
Interfund receivables and payables
Transactions between funds that are representative of lending/borrowing arrangements outstanding at the end of the
fiscal year are referred to as either “interfund receivables/payables” (i.e., the current portion of interfund loans) or
“advances to/from other funds” (i.e., the non-current portion of interfund loans). All other outstanding balances
between funds are reported as “due to/from other funds” in the fun financial statements. Any residual balances
outstanding between the governmental activities and business-type activities are reported in the government-wide
financial statements as “internal balances.”
Advances between funds and component unit, as reported in the fund financial statements, are offset by a fund balance
nonspendable account in applicable governmental funds to indicate that they are not available for appropriation and are
not expendable available financial resources.
Inventories and prepaid items
The inventories of the Municipal Liquor Store fund are stated at the lower of cost or market on the first-in, first-out
(FIFO) method. The cost of inventory is recorded as expenditure at the time inventory is purchased in the
governmental funds and as an expense when consumed in the proprietary fund types.
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items or
unearned charges in both government-wide and fund financial statements.
Component units
The material and supply inventory of the Marshall Municipal Utilities is stated at average cost which approximates
actual cost.
Land held for resale
Land held for resale is valued at the lower of cost or market.
Restricted assets
The Wastewater Treatment fund, Surface Water Management fund and the Marshall Municipal Utilities fund
(component unit) have classified resources consisting of cash and investments and delinquent taxes receivable as
restricted assets on the balance sheet. These amounts have been set aside for debt service payments and capital
improvements.
Capital assets
Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, bridges, sidewalks, and
similar items), are reported in the applicable governmental or business-type activities columns in the government-wide
financial statements. Capital assets are defined by the City as assets with an initial, individual cost of more than $5,000
(amount not rounded) and an estimated useful life in excess of one year. The City reports infrastructure assets on a
network and subsystem basis. Accordingly, the amounts spent for the construction or acquisition of infrastructure
assets are capitalized and reported in the government-wide financial statements.
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CITY OF MARSHALL, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2016
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
In the case of initial capitalization of general infrastructure assets (i.e., those reported by governmental activities) the
City chose to include items dating back prior to June 30, 1980. The City had already accounted for its prior
infrastructure at historical cost for the initial reporting of these assets. As the City constructs or acquires capital assets
each period, including infrastructure assets, they are capitalized and reported at historical cost. The reported value
excludes normal maintenance and repairs which are essentially amounts spent in relation to capital assets that do not
increase the capacity or efficiency of the item or extend its useful life beyond the original estimate. In the case of
donations the City values these capital assets at the estimated acquisition value of the item at the date of its donation.
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.
Property, plant and equipment of the primary government, as well as the component units, are depreciated using the
straight-line method over the following estimated useful lives:
Assets Years
Land improvements 5 - 25
Buildings and improvements 20 - 50
Infrastructure 10 - 50
Machinery and equipment 3 - 20
Vehicles 3 - 30
Component units
The Marshall Municipal Utilities uses the straight-line composite group method for depreciation based on estimated
useful lives of the various classes of property. The provision is 3.56 percent of the average balance of depreciable
property in service at December 31, 2016.
The Marshall Economic Development Authority provides depreciation based on the estimated useful lives of individual
assets. The straight-line method of depreciation is used.
The Marshall-Lyon County Library provides depreciation based on historical cost or estimated historical cost. The
straight-line method of depreciation is used over the estimated useful lives of individual assets. Library books are
depreciated using group depreciation by collections. The Library uses a capitalization threshold of $15,000 for library
book collections and $1,000 for all other capital assets.
Deferred outflows of resources
In addition to assets, the statement of net position will sometimes report 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. The City has only one item that qualifies for reporting in this category. Accordingly,
the item, deferred pension resources, is reported only in the statements of net position. This item results from actuarial
calculations and current year pension contributions made subsequent to the measurement date.
Compensated absences
It is the City's policy to permit employees to accumulate earned but unused vacation and sick pay benefits. All vacation
and sick pay is accrued when incurred in the government-wide and proprietary fund financial statements. A liability for
these amounts is reported in governmental funds only if they have matured, for example, as a result of employee
resignations and retirements. For the most part, the General fund is typically used to liquidate governmental
compensated absences payable.
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CITY OF MARSHALL, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2016
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
Postemployment benefits other than pensions
Under Minnesota statute 471.61, subdivision 2b., public employers must allow retirees and their dependents to continue
coverage indefinitely in an employer-sponsored health care plan, under the following conditions: 1) Retirees must be
receiving (or eligible to receive) an annuity from a Minnesota public pension plan, 2) Coverage must continue in group
plan until age 65, and retirees must pay no more than the group premium, and 3) Retirees may obtain dependent
coverage immediately before retirement. All premiums are funded on a pay-as-you-go basis. The liability was
actuarially determined, in accordance with GASB Statement 45, at January 1, 2014.
Severance plan
Employees with at least 20 years of service are eligible for retirement payments based upon their years of service. An
eligible individual will receive an amount equal to one month’s salary plus an additional 3 percent annual salary each
year in excess of twenty years to a maximum of 150 percent of the monthly salary. As of December 31, 2016, the City
has recorded estimated future costs under this plan of $302,908.
Accrued vacation and sick leave - City of Marshall
Vacation is earned and credited to an employee’s record after each bi-weekly pay period according to years of service at
the following rates:
Hours per
Years of Service Years of Service Maximum Accrual
0 to 5 years 80 hours (10 days) 160 hours
5 to 10 years 120 hours (15 days) 240 hours
10 to 15 years 144 hours (18 days) 288 hours
15 to 20 years 160 hours (20 days) 320 hours
20+ years 200 hours (25 days) 400 hours
Sick leave is an authorized absence from work with pay, granted to eligible full-time and ¾-time employees. Sick leave
is a privilege, not a right. Employees are to use this paid leave only when they are unable to work for medical reasons
and/or under the conditions explained below. Employees are required to exhaust their sick leave balance prior to
approval of an unpaid medical leave of absence. Sick leave does not accrue during an unpaid leave of absence.
Full-time employees will earn sick leave at the rate of one (1) day or 8 hours for each month of service and can
accumulate up to 120 days or 960 hours at this rate. Beyond 120 days or 960 hours, sick leave will continue to
accumulate at a rate of ½ day or 4 hours for each month of service.
If at any time the accumulation drops below 120 days or 960 hours the employee will then accumulate one (1) day or 8
hours for each month of service up to 120 days or 960 hour and then continue accumulating ½ day or 4 hours for each
month of service.
When an employee reaches 120 days or 960 hours or more of accumulated sick leave and the employee utilizes sick
leave time, it shall first be withdrawn from the 960 hour portion and not from the accumulated sick leave.
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CITY OF MARSHALL, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2016
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
Accrued vacation and sick leave - Marshall Municipal Utilities
All full time employees accrue vacation time between 10 to 25 days per year based on years of service to 25 years when
an additional 1 day may accrue for each 5 years of service thereafter. Employees may accumulate up to 20 days (160
hours) by December 31st of each year to be used in the following year. Up to 10 days of accrued vacation pay in excess
of the 20 day maximum accrual will be deposited in the Health Care Savings Plan on an annual basis. Upon
termination 100 percent of the accrued vacation pay will be deposited into the Health Care Savings Plan.
Under the employee sick leave plan each employee is allowed to accumulate sick leave up to a minimum of 140 days.
Thereafter, when the maximum hours have been reached, any unused sick leave will be deposited into the employee’s
Health Care Savings Plan on an annual basis. The accumulated leave is remitted to the employee or placed in the
Health Care Savings Plan at the Commission’s discretion upon retirement or death at a rate of 50 percent after 5 years
of service, 75 percent after 10 years and 100 percent after 15 years or more of service.
Sick leave benefits are recorded as a liability in the period earned by the employee.
Pensions
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. Investments are reported at fair value.
For purposes of measuring the net pension liability (asset), deferred outflows of resources and deferred inflows of
resources related to pensions, and pension expense, information about the fiduciary net position of the defined benefit
plan administered by Marshall Fire Relief Association and additions to and deductions from the plan’s fiduciary net
position have been determined on the same basis as they are reported by the plan. Investments are reported at fair
value.
Long-term obligations
In the government-wide financial statements, and proprietary fund types in the fund financial statements, long-term debt
and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type
activities, or proprietary fund type 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 reported as an expense in the period incurred.
In the fund financial statements, governmental fund types recognized bond premiums and discounts, as well as bond
issuance costs, during the current period. The face amount of 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.
Deferred inflows of resources
In addition to liabilities, the statement of net position and fund financial statements will sometimes report 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 a future period(s) and so will not be recognized as an inflow of
resources (revenue) until that time. The government has only one type of item, which arises only under a modified
accrual basis of accounting, which qualifies as needing to be reported in this category. Accordingly, the item,
unavailable revenue, is reported only in the governmental funds balance sheet. The governmental funds report
unavailable revenues from two sources: taxes and special assessments. These amounts are deferred and recognized as
an inflow of resources in the period that the amounts become available.
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CITY OF MARSHALL, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2016
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
The City has an additional item which qualifies for reporting in this category. The item, deferred pension resources, is
reported only in the statements of net position and results from actuarial calculations.
Fund balance
In the fund financial statements, fund balance is divided into five classifications based primarily on the extent to which
the City is bound to observe constraints imposed upon the use of resources reported in the governmental funds. These
classifications are defined as follows:
Nonspendable - Amounts that cannot be spent because they are not in spendable form, such as prepaid items.
Restricted - Amounts related to externally imposed constraints established by creditors, grantors or contributors; or
constraints imposed by state statutory provisions.
Committed - Amounts constrained for specific purposes that are internally imposed by formal action (resolution) of
the City Council (the Council), which is the City’s highest level of decision-making authority. Committed amounts
cannot be used for any other purpose unless the Council modifies or rescinds the commitment by resolution.
Assigned - Amounts constrained for specific purposes that are internally imposed. In governmental funds other
than the General fund, assigned fund balance represents all remaining amounts that are not classified as
nonspendable and are neither restricted nor committed. In the General fund, assigned amounts represent intended
uses established by the Council itself or by an official to which the governing body delegates the authority. The
Council has adopted a fund balance policy which delegates the authority to assign amounts for specific purposes to
the Finance Director.
Unassigned - The residual classification for the General fund and also negative residual amounts in other funds.
The City considers restricted amounts to be spent first when both restricted and unrestricted fund balance is available.
Additionally, the City would first use committed, then assigned, and lastly unassigned amounts of unrestricted fund
balance when expenditures are made.
The City has formally adopted a fund balance policy for the General fund. The City’s policy is to maintain a minimum
unrestricted fund balance of 50 percent of budgeted operating expenditures for cash-flow timing needs.
Net position
Net position represents the difference between assets and deferred outflows of resources and liabilities and deferred
inflows of resources. Net position is displayed in three components:
a. Net investment in capital assets - Consists of capital assets, net of accumulated depreciation reduced by any
outstanding debt attributable to acquire capital assets.
b. Restricted net position - Consists of net position restricted when there are limitations imposed on their use
through external restrictions imposed by creditors, grantors, laws or regulations of other governments.
c. Unrestricted net position - All other net position that does not meet the definition of “restricted” or “net
investment in capital assets”.
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CITY OF MARSHALL, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2016 Note 2: STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY A. Budgetary information Prior to September 1, the City Administrator submits to the City Council a proposed operating budget for the fiscal year
commencing the following January 1. The operating budget includes proposed expenditures and the means of financing them. The City Council adopts the proposed budget as amended and adjusted by the Council and certifies the proposed property tax levy to the County Auditor according to Minnesota statutes.
On or before December 28, the final budget is legally enacted by Council resolution and the final property tax levy
certified to the County Auditor. Management is authorized to transfer budgeted amounts between departments within any fund; however, any revisions
that alter the total expenditures of any fund must be approved by the City Council. Reported budget amounts are as originally adopted or amended by the City Council.
The City has legally adopted budgets for the General fund and certain special revenue funds. Expenditures may not
legally exceed budgeted appropriations at the total fund level. Monitoring of budgets is maintained at the expenditure category level (i.e., personal services, supplies, charges for services, and capital outlay) within each program. All amounts over budget have been approved by the City Council through the disbursement process. The City is not legally required to adopt an annual budget for the Capital Projects and Debt Service funds. Project-length financial plans are adopted for the Capital Projects funds. Formal budgetary integration is not employed for Debt Service funds because effective budgetary control is alternatively achieved through general obligation bond indenture provisions.
Budgets for the General and certain special revenue funds are adopted on a basis consistent with generally accepted
accounting principles (GAAP). Budgeted amounts are as originally adopted, or as amended by the City Council. There were no amendments to the 2016 budget.
B. Excess of expenditures over appropriations For the year ended December 31, 2016 expenditures exceeded appropriations in the following funds:
Excess ofExpenditures
OverBudget Actual Appropriations
Special revenueTax Increment Financing 20,366$ 258,936$ 238,570$ Endowment Avera / WMMC - 36,835 36,835 Small Cities Development Program - 351 351 Community Education Drivers Training 57,000 74,885 17,885
Fund
The excess of expenditures over appropriations were funded by actual revenues in excess of budget and available fund balance.
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CITY OF MARSHALL, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2016
Note 2: STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY - CONTINUED
C. Deficit fund equity
The following funds had fund equity deficits at December 31, 2016:
Amount
Capital Projects
Trunk Highway 23 Pedestrian Bridge 47,685$
2007 Public Improvements 94,017
2008 Public Improvements 90,488
2013 Public Improvements 96,592
2014 Public Improvements 406,613
2015 Public Improvements 150,570
2017 Public Improvements 93,133
SMSAC Ball Parks 627,654
Fund
The City intends to fund these deficits through future tax levies, grants, transfers from other funds and various other
sources.
Note 3: DETAILED NOTES ON ALL FUNDS
A. Deposits and investments
Deposits
Custodial credit risk for deposits and investments is the risk that in the event of a bank failure, the City’s deposits and
investments may not be returned or the City 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 Council, the City maintains deposits at
those depository banks, all of which are members of the Federal Reserve System.
Minnesota statutes require that all City 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, bonds, or irrevocable standby
letters of credit from Federal Home Loan Banks.
Authorized collateral in lieu of a corporate surety bond includes:
United States government Treasury bills, Treasury notes, Treasury bonds;
Issues of United States government agencies and instrumentalities as quoted by a recognized industry
quotation service available to the government entity;
General obligation securities of any state or local government with taxing powers which is rated “A” or better
by a national bond rating service, or revenue obligation securities of any state or local government with taxing
powers which is rated “AA” or better by a national bond rating service;
General obligation securities of a local government with taxing powers may be pledged as collateral against
funds deposited by that same local government entity;
Irrevocable standby letters of credit issued by Federal Home Loan Banks to a municipality accompanied by
written evidence that the bank’s public debt is rated “AA” or better by Moody’s Investors Service, Inc., or
Standard & Poor’s Corporation; and
Time deposits that are fully insured by any federal agency.
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CITY OF MARSHALL, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2016
Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED
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 that is not owned or
controlled by the financial institution furnishing the collateral. The selection should be approved by the City.
At year end, the City’s carrying amount of deposits was $35,365,898 (including fiduciary deposits of $16,024) and the
bank balance was $36,168,492. The bank balance was covered by federal depository insurance of $769,525 and
securities pledge by the financial institution’s trust department in the City’s name in the amount of $35,398,967. The
above balances include the primary government and the Economic Development Authority and Marshall-Lyon County
Library discreetly presented component unties deposits.
At year end, the Municipal Utilities discretely presented component unit’s carrying amount of deposits was $667,784
and the bank balance was $667,784. The bank balance was covered by federal depository insurance of $250,000 and
securities held by the pledging financial institution’s trust department of $417,784.
At year end, the Housing Commission discretely presented component unit’s carrying amount of deposits was $464,458
and the bank balance was $477,199. The bank balance was covered by federal depository insurance of $250,000 and
securities held by the pledging financial institution’s trust department of $227,199.
Investments
As of December 31, 2016, the City had the following investments that are insured or registered, or securities held by the
City or it’s agent in the City’s name:
Credit Segmented
Quality/ Time
Ratings (1) Distribution (2) Amount Level 1 Level 2
Pooled investments at ammortized costs
Broker Money Market Funds N/A less than 6 months 347,327$
Non-pooled investments at fair value
Governmental Agency Security N/A less than 6 months 3,694,436 3,694,436$ -$
U. S. Treasury Notes N/A less than 6 months 250,285 250,285 -
U. S. Treasury Notes N/A 1 to 3 years 726,290 726,290 -
U. S. Treasury Notes N/A more than 3 years 521,774 521,774 -
Mortgage Backed Securities N/A 6 months to 1 year 425,360 - 425,360
Mortgage Backed Securities N/A 1 to 3 years 1,170,675 - 1,170,675
Mortgage Backed Securities N/A more than 3 years 712,715 - 712,715
Muncipal Bonds N/A less than 6 months 250,050 - 250,050
Muncipal Bonds N/A 6 months to 1 year 458,153 - 458,153
Muncipal Bonds N/A 1 to 3 years 1,274,521 - 1,274,521
Muncipal Bonds N/A more than 3 years 1,125,036 - 1,125,036
Total investments 10,956,622$ 5,192,785$ 5,416,510$
Primary Government
Types of Investments
Fair Value
Measurement Using
(1) Ratings are provided by various credit rating agencies where applicable to indicate associated credit risk. (2) Interest rate risk is disclosed using the segmented time distribution method.
N/A Indicates not applicable or available.
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CITY OF MARSHALL, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2016
Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED
The Municipal Utilities discretely presented component unit has the following investments at December 31, 2016:
Credit Segmented
Quality/ Time
Ratings (1) Distribution (2) Amount Level 1 Level 2
Pooled investments at ammortized costs
Broker Money Market Funds N/A less than 1 year 4,013,213$
Non-pooled investments at fair value
U. S. Treasury Notes N/A less than 1 year 734,758 -$ 734,758$
U. S. Treasury Notes N/A 1 to 5 years 7,302,087 - 7,302,087
U. S. Treasury Notes N/A more than 5 years 1,917,263 - 1,917,263
Federal Agency Bonds and Notes N/A less than 1 year 200,294 - 200,294
Federal Agency Bonds and Notes N/A 1 to 5 years 6,040,322 - 6,040,322
Federal Agency Bonds and Notes N/A more than 5 years 2,024,944 - 2,024,944
Federal Agency Mortgage Pools N/A 1 to 5 years 24,468 - 24,468
Federal Agency Mortgage Pools N/A more than 5 years 1,221,580 - 1,221,580
Mortgage Backed Securities N/A more than 5 years 126,004 - 126,004
Municipal Bonds A- to AAA less than 1 year 1,222,174 - 1,222,174
Municipal Bonds A- to AAA 1 to 5 years 6,659,646 - 6,659,646
Municipal Bonds A- to AAA more than 5 years 683,900 - 683,900
Total investments 32,170,653$ -$ 28,157,440$
Fair Value
Measurement Using
Types of Investments
Component Unit: Municipal Utilities
(1) Ratings are provided by various credit rating agencies where applicable to indicate associated credit risk.
(2) Interest rate risk is disclosed using the segmented time distribution method.
N/A Indicates not applicable or available.
The investments of the City are subject to the following risks:
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 where applicable, indicate associated
credit risk. Minnesota statutes limit the City’s investments.
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 that are in the possession of an outside party. The City typically limits its exposure by purchasing
insured or registered investments.
Concentration of Credit Risk. The concentration of credit risk is the risk of loss attributed to the magnitude of
a government's investment in a single issuer. The City places no limit on the amount that may be invested in
any one issuer.
Interest Rate Risk. The interest rate risk is the risk that changes in interest rates will adversely affect the fair
value of an investment. The City manages its exposure to declines in fair values by limiting the maturity of its
investment portfolio.
Cash on hand
Cash in the possession of the City, consisting of petty cash and change funds totals $2,700 for the primary government
and $1,705 for component units.
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CITY OF MARSHALL, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2016
Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED
Cash and investments summary
Cash and investments as shown on the statement of net position for the City, including component units, follows:
Primary Municipal Housing Economic
Government Utilities Commission Development
Deposits 33,268,476$ 667,784$ 464,458$ 1,649,073$
Cash on hand 2,700 1,100 - -
Investments 10,956,622 32,170,653 - -
Total 44,227,798$ 32,839,537$ 464,458$ 1,649,073$
Cash and temporary investments 36,673,728$ 26,248,324$ 436,196$ 1,649,073$
Escrowed funds 3,735,586 - - -
Restricted assets 3,818,484 6,591,213 28,262 -
Total 44,227,798$ 32,839,537$ 464,458$ 1,649,073$
Component Units
Component
Units
Marshall-Lyon Fiduciary
County Library Funds Total
Deposits 432,325$ 16,024$ 36,498,140$
Cash on hand 605 - 4,405
Investments - - 43,127,275
Total 432,930$ 16,024$ 79,629,820$
Cash and temporary investments 432,930$ 16,024$ 65,456,275$
Escrowed funds - - 3,735,586
Restricted assets - - 10,437,959
Total 432,930$ 16,024$ 79,629,820$
Investment in joint ventures - component units
PrairieNet WAN provides shared costs, infrastructure and expertise in the field of technology and telecommunications
for MMU, the City of Marshall and Marshall Public Schools. MMU acts as a fiscal agent for this organization whose
activities to date include certain computer network equipment, computer consulting and organizational costs. These
joint costs have been passed on to the respective members and are included in the member’s financial statements.
MMU’s ongoing financial responsibility for this organization is limited to those activities in which it chooses to
participate. MMU has no equity interest in this joint venture.
B. Notes/leases receivable
The EDA has made various loans to local businesses which are payable to the City with variable payments and interest
rates. The balance on these notes as of December 31, 2016 is $431,356. Loans were also made by the EDA Parkway
Housing fund, the balance of which is $233,713 as of December 31, 2016. The portion of the Small Cities
Development Program which is required to be repaid only if the borrower sells the property within 7 years of the date of
the loan is $32,317 as of December 31, 2016, net of an allowance of $283,193. MMU has issued a loan for Energy
Efficiency that has a balance of $24,568 as of December 31, 2016.
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CITY OF MARSHALL, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2016
Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED
C. Capital assets
Primary government
Capital asset activity for the year ended December 31, 2016 was as follows:
Beginning Ending
Balance Increases Decreases Balance
Governmental activities
Capital assets not being depreciated
Land 7,025,765$ 75,497$ -$ 7,101,262$
Construction in progress 26,292,946 8,703,511 (2,282,117) 32,714,340
Total capital assets
being depreciated 33,318,711 8,779,008 (2,282,117) 39,815,602
Capital assets being depreciated
Buildings 13,993,613 85,587 - 14,079,200
Improvements other than buildings 24,479,974 105,414 - 24,585,388
Infrastructure 50,722,624 2,282,117 - 53,004,741
Equipment and machinery 8,294,371 1,995,437 (287,205) 10,002,603
Total capital assets
being depreciated 97,490,582 4,468,555 (287,205) 101,671,932
Less accumulated depreciation for
Buildings (8,427,721) (398,918) - (8,826,639)
Improvements other than buildings (12,453,260) (1,090,363) - (13,543,623)
Infrastructure (24,994,825) (2,048,934) - (27,043,759)
Equipment and machinery (5,053,464) (660,747) 282,945 (5,431,266)
Total accumulated depreciation (50,929,270) (4,198,962) 282,945 (54,845,287)
Total capital assets
being depreciated, net 46,561,312 269,593 (4,260) 46,826,645
Governmental activities
capital assets, net 79,880,023$ 9,048,601$ (2,286,377)$ 86,642,247$
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CITY OF MARSHALL, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2016
Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED
Beginning Ending
Balance Increases Decreases Balance
Business-type activities
Capital assets not being depreciated
Land 753,240$ -$ (240,368)$ 512,872$
Construction in progress 911,760 876,327 (911,761) 876,326
Total capital assets not
being depreciated 1,665,000 876,327 (1,152,129) 1,389,198
Capital assets being depreciated
Buildings 2,693,844 33,520 (199,030) 2,528,334
Improvements other than buildings 28,069,657 54,378 (7,586) 28,116,449
Infrastructure 34,073,473 911,761 - 34,985,234
Equipment and machinery 2,852,881 181,794 (53,545) 2,981,130
Total capital assets
being depreciated 67,689,855 1,181,453 (260,161) 68,611,147
Less accumulated depreciation for
Buildings (244,571) (68,137) 183,738 (128,970)
Improvements other than buildings (17,257,225) (897,514) 7,586 (18,147,153)
Infrastructure (13,352,778) (1,019,025) - (14,371,803)
Equipment and machinery (2,002,739) (139,946) 41,500 (2,101,185)
Total accumulated depreciation (32,857,313) (2,124,622) 232,824 (34,749,111)
Total capital assets
being depreciated, net 34,832,542 (943,169) (27,337) 33,862,036
Business-type activities
capital assets, net 36,497,542$ (66,842)$ (1,179,466)$ 35,251,234$
Governmental activities
General government 35,011$
Public safety 406,913
Public works 2,285,372
Culture and recreation 324,787
Airport 1,146,879
Total depreciation expense - governmental activities 4,198,962$
Business-type activities
Wastewater treatment 1,597,256$
Surface water management 435,402
Municipal liquor store 91,964
Total depreciation expense - business-type activities 2,124,622$
-72-
CITY OF MARSHALL, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2016
Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED
Construction commitments
The City has active projects as of December 31, 2016. At year end the City’s commitments with contractors are as
follows:
Remaining
Spent-to-Date Commitment
Saratoga / Hwy 23 Pedestrian Overpass 4,661,395$ 268,755$
North "A" Street / East Redwood Street 2,309,629 255,065
Independent Park Sediment Removal / East Lyon / East Main Sidewalk 1,840,169 291,678
Ballpark Pump Station 2,906,214 269,681
Amateur Sports Center 14,122,549 190,013
Total 25,839,956$ 1,275,192$
Project
The special assessment portion of the commitment for residential street construction is being financed by special
assessment bonds that will be repaid by the benefiting property owners.
Discretely Presented Component Units
Capital asset activity for the Marshall Municipal Utilities for the year ended December 31, 2016 was as follows:
Beginning Ending
Balance Increases Decreases Balance
Capital assets not being depreciated
Construction in progress 1,352,029$ 2,034,880$ (2,261,307)$ 1,125,602$
Capital assets being depreciated
Electric production plant 2,820,515 3,158 - 2,823,673
Electric transmission line 16,404,370 - - 16,404,370
Electric distribution system 52,756,664 1,811,302 (150,084) 54,417,882
Transportation and general 8,437,282 251,897 (71,703) 8,617,476
Water utility 53,381,173 624,922 (67,842) 53,938,253
Total capital assets being depreciated 133,800,004 2,691,279 (289,629) 136,201,654
Less accumulated depreciation for
Electric production plant (2,482,345) (52,555) - (2,534,900)
Electric transmission line (8,447,466) (521,665) - (8,969,131)
Electric distribution system (20,417,240) (2,153,265) 150,084 (22,420,421)
Transportation and general (6,190,396) (448,158) 71,703 (6,566,851)
Water utility (26,956,175) (1,658,429) 67,842 (28,546,762)
Total accumulated depreciation (64,493,622) (4,834,072) 289,629 (69,038,065)
Total capital assets
being depreciated, net 69,306,382 (2,142,793) - 67,163,589
Capital assets, net 70,658,411$ (107,913)$ (2,261,307)$ 68,289,191$
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CITY OF MARSHALL, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2016
Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED
Depreciation expense was charged to functions/programs of the Marshall Municipal Utilities as follows:
Business-type activities
Marshall Municipal Utilities - Water 1,750,369$
Marshall Municipal Utilities - Electric 3,083,703
Total 4,834,072$
Capital asset activity for the Marshall Housing Commission for the year ended September 30, 2016 was as follows:
Beginning Ending
Balance Increases Decreases Balance
Capital assets not being depreciated
Land 514,965$ -$ -$ 514,965$
Construction in progress 144,849 - (144,849) -
Total capital assets
not being depreciated 659,814 - (144,849) 514,965
Capital assets being depreciated
Buildings 7,682,946 302,724 - 7,985,670
Equipment and machinery 169,447 11,849 (4,272) 177,024
Total capital assets being depreciated 7,852,393 314,573 (4,272) 8,162,694
Less accumulated depreciation (5,107,900) (257,523) 3,481 (5,361,942)
Total capital assets
being depreciated, net 2,744,493 57,050 (791) 2,800,752
Capital assets, net 3,404,307$ 57,050$ (145,640)$ 3,315,717$
Depreciation expense was charged to functions/programs of the Marshall Housing Commission as follows:
Business-type activities
Marshall Housing Commission 257,523$
-74-
CITY OF MARSHALL, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2016
Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED
Capital asset activity for the Economic Development Authority for the year ended December 31, 2016 was as follows:
Beginning Ending
Balance Increases Decreases Balance
Capital assets being depreciated
Land improvements 12,920$ -$ -$ 12,920$
Less accumulated depreciation for
Land improvements (4,683) (646) - (5,329)
Capital assets, net 8,237$ (646)$ -$ 7,591$
Depreciation expense was charged to functions/programs of the EDA as follows:
Governmental activities
Economic Development Authority 646$
Capital asset activity for the Marshall-Lyon County Library for the year ended December 31, 2016 was as follows:
Beginning Ending
Balance Increases Decreases Balance
Capital assets being depreciated
Buildings and improvements 6,409,339$ -$ -$ 6,409,339$
Equipment and machinery 564,598 23,303 - 587,901
Library books 1,094,627 67,933 - 1,162,560
Total capital assets being depreciated 8,068,564 91,236 - 8,159,800
Less accumulated depreciation for
Buildings and improvements (355,376) (160,234) - (515,610)
Equipment and machinery (196,680) (45,136) - (241,816)
Library books (935,843) (66,336) - (1,002,179)
Total accumulated depreciation (1,487,899) (271,706) - (1,759,605)
Capital assets, net 6,580,665$ (180,470)$ -$ 6,400,195$
Depreciation expense was charged to functions/programs of the Library as follows:
Governmental activities
Marshall-Lyon County Library 271,706$
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CITY OF MARSHALL, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2016
Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED
D. Interfund receivables, payables and transfers
Due from/to other funds:
Individual fund interfund receivables and payables balances at year end were as follows:
Amount
General 2014 Public Improvement 2,488$
Nonmajor governmental 527,487
Enterprise
Wastewater Treatment Nonmajor governmental 20,998
Surface Water Management Nonmajor governmental 335,000
Total 885,973$
Receivable Fund Payable Fund
The outstanding balances between funds result mainly from the time lag between the dates that (1) interfund goods and
services are provided or reimbursable expenditures occur, (2) transactions are recorded in the accounting system, and
(3) payments between funds are made. The majority of the interfund balances represent temporary funding for various
projects. The remaining balance represents monthly and year-end charges to other funds.
Amounts due from/to component unit/primary government representing capital improvements and monthly and year-
end charges to other funds are as follows:
Amount
Primary government Component unit
Tax Increment Financing Economic Development Authority 317,073$
Receivable Entity/Fund Payable Entity/Fund
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CITY OF MARSHALL, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2016
Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED
Interfund transfers:
Interfund transfers for the year ended December 31, 2016 were as follows:
2013
Amateur Nonmajor
General Debt Service Sports Center Governmental Total
Transfers out
Tax Increment Financing -$ 354,478$ -$ -$ 354,478$
Sales/Lodging Tax - 1,478,298 - 580,057 2,058,355
Nonmajor governmental 27,030 - 97,557 22,248 146,835
Wastewater Treatment enterprise - 37,070 - - 37,070
Municipal Liquor Store enterprise 274,992 - - - 274,992
Total transfers out 302,022$ 1,869,846$ 97,557$ 602,305$ 2,871,730$
Fund
Transfers in
During the year, transfers are used to 1) move revenues from the fund with collection authorization to the Debt Service
fund as debt service principal and interest payments become due, 2) move restricted amounts from borrowings to the
Debt Service fund to establish mandatory reserve accounts, 3) move unrestricted revenues to finance various programs
that the government must account for in other funds in accordance with budgetary authorizations, including amounts
provided as subsidies or matching funds for various grant programs. For the year ended December 31, 2016, the City
made the following one-time transfers:
Transfer from the Tax Increment Financing fund ($354,478) to the Debt Services fund for the TIF collected for
debt services account.
Transfer from a nonmajor capital project fund to a nonmajor special revenues fund ($22,173) to transfer local
share.
Transfer from a nonmajor special revenues fund to a nonmajor capital project fund ($75) to close the fund.
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CITY OF MARSHALL, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2016
Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED
E. Long-term debt
Governmental activity debt
General obligation bonds
The City issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities.
General obligation bonds have been issued for both general government and proprietary activities. These bonds are
reported in the proprietary funds if they are expected to be repaid from proprietary fund revenues. In addition, general
obligation bonds have been issued to refund both general obligation and revenue bonds.
General obligation bonds are direct obligations and pledge the full faith and credit of the government. General
obligation bonds currently outstanding are as follows:
These bonds were issued for capital equipment purchases. The debt is a general obligation of the City and will be
retired through ad valorem tax levies.
Balance
Authorized Issue Maturity at
and Issued Date Date Year End
G.O. Equipment
Certificates of 2008C 645,000$ 2.40 - 4.10 % 12/01/08 02/01/18 165,000$
G.O. Equipment
Certificates of 2012A 85,000 2.00 06/01/12 02/01/18 40,000
G.O. Equipment
Certificates of 2013A 860,000 2.00 - 3.00 08/01/13 02/01/23 685,000
G.O. Bonds of 2015A 1,710,000 2.00 - 3.00 01/01/15 02/01/31 1,710,000
G.O. Bonds of 2016B 705,000 2.00 06/23/16 02/01/25 705,000
Total General Obligation Bonds 3,305,000$
Interest
Description Rate
The annual debt service requirements to maturity for general obligation bonds are as follows:
Year Ending
December 31, Principal Interest Total
2017 295,000$ 79,000$ 374,000$
2018 435,000 68,480 503,480
2019 340,000 59,838 399,838
2020 340,000 52,919 392,919
2021 350,000 45,650 395,650
2022 - 2026 910,000 141,400 1,051,400
2027 - 2031 635,000 48,675 683,675
Total 3,305,000$ 495,962$ 3,800,962$
General Obligation Bonds
Governmental Activities
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CITY OF MARSHALL, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2016
Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED
General obligation tax increment bonds
These bonds were issued for development and redevelopment projects. The additional tax revenue resulting from
increased tax capacity of the redeveloped properties is used to retire the related debt.
Balance
Authorized Issue Maturity at
and Issued Date Date Year End
G.O. Tax Increment
Revenues Bonds of 2011A 1,265,000$ 0.70 - 2.70 % 09/15/11 02/01/23 1,130,000$
Interest
Description Rate
The annual debt service requirements to maturity for general obligation tax increment bonds are as follows:
Year Ending
December 31, Principal Interest Total
2017 145,000$ 22,833$ 167,833$
2018 155,000 20,650 175,650
2019 160,000 17,810 177,810
2020 160,000 14,490 174,490
2021 165,000 10,873 175,873
2022 - 2023 345,000 9,212 354,212
Total 1,130,000$ 95,868$ 1,225,868$
Governmental Activities
G.O. Tax Increment Bonds
General obligation tax abatement bonds
These bonds were issued to finance public infrastructure improvements. They will be retired from tax abatement
revenues and tax levies.
Balance
Authorized Issue Maturity at
and Issued Date Date Year End
G.O. Tax Abatement
Bonds of 2016C 2,810,000$ 2.00 - 3.00 % 06/23/16 02/01/37 2,810,000$
Interest
Description Rate
The annual debt service requirements to maturity for general obligation tax abatement bonds are as follows:
Year Ending
December 31, Principal Interest Total
2017 -$ 76,283$ 76,283$
2018 115,000 67,850 182,850
2019 115,000 65,550 180,550
2020 120,000 63,200 183,200
2021 120,000 60,800 180,800
2022 - 2026 645,000 266,250 911,250
2027 - 2031 710,000 195,775 905,775
2032 - 2036 810,000 88,050 898,050
2037 175,000 2,625 177,625
Total 2,810,000$ 886,383$ 3,696,383$
Governmental Activities
G.O. Tax Abatement Bonds
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CITY OF MARSHALL, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2016
Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED
General obligation special assessment bonds
These bonds were issued to finance various improvements and will be repaid primarily from special assessments levied on the properties benefiting from the improvements. Some issues, however, are partly financed by ad valorem tax levies.
BalanceAuthorized Issue Maturity atand Issued Date Date Year End
G.O. Utility Revenue andImprovement Bonds of 2007C - Improvement 4,390,000$ 4.00 - 4.10 % 07/01/07 02/01/18 305,000$
G.O. Utility Revenue andImprovement Bonds of 2008B - Improvement 1,950,000 3.50 - 4.20 12/01/08 02/01/19 535,000
G.O. Utility Revenue andImprovement Bonds of 2009A - Improvement 1,860,000 2.00 - 4.00 11/15/09 02/01/20 725,000
G.O. Utility Revenue andImprovement Bonds of 2010B - Improvement 3,295,000 1.50 - 2.75 09/15/10 02/01/21 1,555,000
G.O. Improvement Bonds of 2011B 1,510,000 0.50 - 4.00 10/01/11 02/01/27 1,065,000
G.O. Improvement Bonds of 2012A 2,550,000 2.00 - 2.55 06/01/12 02/01/28 1,735,000
G.O. Improvement Bonds of 2013A 2,785,000 2.00 - 3.00 08/01/13 02/01/25 2,395,000
G.O. Improvement Bonds of 2014B 15,735,000 3.13 - 5.00 07/23/14 02/01/28 13,810,000
G.O. Improvement Bonds of 2014C 1,955,000 2.00 - 3.00 07/23/14 02/01/26 1,875,000
G.O. Improvement Bonds of 2015B 895,000 3.00 - 4.00 07/22/15 02/01/24 895,000
G.O. Improvement Bonds of 2016B 1,500,000 2.00 06/23/16 02/01/25 1,500,000
Total General Obligation Improvement Bonds 26,395,000$
InterestDescription Rate
The annual debt service requirements to maturity for general obligation special assessment bonds are as follows:
Year EndingDecember 31, Principal Interest Total
2017 2,710,000$ 891,507$ 3,601,507$ 2018 2,915,000 794,720 3,709,720 2019 2,775,000 699,717 3,474,717 2020 2,665,000 607,593 3,272,593 2021 2,490,000 518,651 3,008,651
2022 - 2026 9,765,000 1,350,484 11,115,484 2027 - 2028 3,075,000 93,931 3,168,931
Total 26,395,000$ 4,956,603$ 31,351,603$
Governmental ActivitiesG.O. Special Assessment Bonds
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CITY OF MARSHALL, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2016
Note 3: DETAILED NOTES ON AND ALL FUNDS - CONTINUED
Contract for deed payable
The contract for deed was issued to purchase land for the SMASC Ball Parks and will be repaid primarily from property tax levies.
BalanceAuthorized Issue Maturity atand Issued Date Date Year End
Contract for deed 448,696$ 3.00 % 07/01/13 08/01/18 188,009$
InterestDescription Rate
The annual debt service requirements to maturity for contract for deed payable are as follows:
Year EndingDecember 31, Principal Interest Total
2017 92,605$ 4,951$ 97,556$ 2018 95,404 2,152 97,556
Total 188,009$ 7,103$ 195,112$
Contract for DeedGovernmental Activities
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CITY OF MARSHALL, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2016
Note 3: DETAILED NOTES ON AND ALL FUNDS - CONTINUED
Business-type activity debt
General obligation revenue bonds
These bonds were issued to finance capital improvements to the storm water system and wastewater treatment facility.
These bonds will be retired from net revenue of these enterprise funds.
Balance
Authorized Issue Maturity at
and Issued Date Date Year End
G.O. Utility and Improvement
Bonds of 2006B 5,920,000$ 4.00 - 4.375 % 08/01/06 02/01/17 3,945,000$
G.O. Storm Refunding
Bonds of 2006C 885,000 4.00 12/15/06 02/01/15 1,820,000
G.O. Utility and Improvement
Bonds of 2007C - Sewer 2,692,000 4.00 - 4.10 07/01/07 02/01/18 543,000
G.O. Utility and Improvement
Bonds of 2007C - Storm 258,000 4.00 - 4.10 07/01/07 02/01/18 52,000
G.O. Utility and Improvement
Bonds of 2009A - Sewer 265,000 2.00 - 4.00 11/15/09 02/01/20 115,000
G.O. Utility and Improvement
Bonds of 2009A - Storm 425,000 2.00 - 4.00 11/15/09 02/01/20 185,000
G.O. Utility Revenue and
Improvement Bonds
of 2010B - Wastewater 1,400,000 1.50 - 2.75 09/15/10 02/01/21 735,000
G.O. Utility Revenue and
Improvement Bonds
of 2010B - Storm 1,365,000 1.50 - 2.75 09/15/10 02/01/21 730,000
G.O. Utility and Improvement
Bonds of 2011A - Storm 925,000 0.50 - 4.00 09/15/11 02/01/27 715,000
G.O. Utility and Improvement
Bonds of 2011A - Wastewater 960,000 0.50 - 4.00 09/15/11 02/01/27 745,000
G.O. Utility and Improvement
Bonds of 2011B - Storm 335,000 0.50 - 4.00 10/01/11 02/01/27 260,000
G.O. Utility and Improvement
Bonds of 2011B - Wastewater 205,000 0.50 - 4.00 10/01/11 02/01/27 165,000
G.O. Utility and Improvement
Bonds of 2012A - Wastewater 1,775,000 2.00 - 2.55 06/01/12 02/01/28 1,455,000
G.O. Utility and Improvement
Bonds of 2014C - Wastewater 1,420,000 2.00 - 3.00 07/23/14 02/01/25 1,290,000
G.O. Utility and Improvement
Bonds of 2015B - Wastewater 860,000 3.00 - 4.00 07/22/15 02/01/24 860,000
G.O. Utility and Improvement
Bonds of 2016B - Wastewater 305,553 2.00 06/23/16 02/01/25 305,553
G.O. Utility and Improvement
Bonds of 2016B - Storm 1,049,447 2.00 06/23/16 02/01/25 1,049,447
G.O. Utility refunding
Bonds of 2016D - Wastewater 3,630,000 2.00 06/23/16 02/01/27 3,630,000
Total G.O. Revenue Bonds 18,600,000$
Interest
Description Rate
-82-
CITY OF MARSHALL, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2016
Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED
The annual debt service requirements to maturity for general obligation revenue bonds are as follows:
Year Ending
December 31, Principal Interest Total
2017 5,400,000$ 465,401$ 5,865,401$
2018 1,995,000 321,483 2,316,483
2019 1,720,000 271,359 1,991,359
2020 1,790,000 224,292 2,014,292
2021 1,755,000 176,577 1,931,577
2022 - 2026 5,060,000 421,080 5,481,080
2027 - 2028 880,000 15,059 895,059
Total 18,600,000$ 1,895,251$ 20,495,251$
G.O. Revenue Bonds
Business-type Activities
Revenue bonds
These bonds were issued to finance capital improvements to the municipal liquor store. These bonds will be retired
from net revenue of this enterprise fund.
Balance
Authorized Issue Maturity at
Description and Issued Date Date Year End
Lease Revenue Bond of 2015 3,240,000$ 1.05 - 3.10 % 02/10/15 12/01/29 2,955,000$
Interest
Rate
The annual debt service requirements to maturity for revenue bonds are as follows:
Year Ending
December 31, Principal Interest Total
2017 195,000$ 77,870$ 272,870$
2018 200,000 74,653 274,653
2019 205,000 70,853 275,853
2020 210,000 66,547 276,547
2021 215,000 61,822 276,822
2022 - 2026 1,155,000 222,200 1,377,200
2027 - 2029 775,000 48,515 823,515
Total 2,955,000$ 622,460$ 3,577,460$
Revenue Bonds
Business-type Activities
Annual revenues from charges for services, principal and interest payments, and percentage of revenue required to
cover principal and interest payments are as follows:
Wastewater Surface Water
Revenue 5,086,831$ 1,001,246$
Principal and interest 1,791,632 341,874
Percent of revenue 35.22% 34.14%
-83-
CITY OF MARSHALL, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2016
Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED
Changes in long-term liabilities
Long-term liability activity for the year ended December 31, 2016 was as follows:
Beginning Ending Due Within
Balance Increases Decreases Balance One Year
Governmental activities
Bonds payable
General obligation bonds 2,780,000$ 705,000$ (180,000)$ 3,305,000$ 295,000$
General obligation
tax increment bonds 1,220,000 - (90,000) 1,130,000 145,000
General obligation
tax abatement bonds - 2,810,000 - 2,810,000 -
General obligation
improvement bonds 27,640,000 1,500,000 (2,745,000) 26,395,000 2,710,000
Unamortized bond premium 2,064,467 166,461 (167,086) 2,063,842 -
Unamortized bond discount (11,230) - 2,989 (8,241) -
Total bonds payable 33,693,237 5,181,461 (3,179,097) 35,695,601 3,150,000
Contract for deed 277,897 - (89,888) 188,009 92,605
Pension liability
GERF 2,509,817 1,662,527 (218,865) 3,953,479 -
PEPFF 1,749,800 4,475,775 (245,946) 5,979,629 -
FRA 96,444 16,875 - 113,319 -
Other postemployment
benefits obligation 186,845 39,902 (17,975) 208,772 -
Compensated absences
payable 1,187,342 352,379 (480,136) 1,059,585 59,121
Governmental activity
long-term liabilities 39,701,382$ 11,728,919$ (4,231,907)$ 47,198,394$ 3,301,726$
Business-type activities
Bonds payable
General obligation
revenue bonds 15,265,000$ 4,985,000$ (1,650,000)$ 18,600,000$ 5,400,000$
Revenue bonds 3,150,000 - (195,000) 2,955,000 195,000
Unamortized bond premium 227,072 190,193 (17,740) 399,525 -
Unamortized bond discount (52,362) - 7,163 (45,199) -
Total bonds payable 18,589,710 5,175,193 (1,855,577) 21,909,326 5,595,000
Pension liability
GERF 880,268 534,057 (201,598) 1,212,727 -
Other postemployment
benefits obligation 46,470 8,944 (4,470) 50,944 -
Compensated absences
payable 297,393 107,372 (97,618) 307,147 71,085
Business-type activity
long-term liabilities 19,813,841$ 5,825,566$ (2,159,263)$ 23,480,144$ 5,666,085$
-84-
CITY OF MARSHALL, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2016
Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED Conduit debt obligations
The City has issued conduit debt to provide financial assistance to private-sector entities for the acquisition and construction of industrial and commercial facilities deemed to be in the public interest. The bonds are secured by the property financed and are payable solely from payments received on the underlying mortgage or lease. Upon repayment of the bonds, ownership of the acquired facilities transfers to the private-sector entity served by the bond issuance. Neither the City or the State, nor any political subdivisions thereof is obligated in any manner for repayment of the bonds. Accordingly, the bonds are not reported as liabilities in the accompanying financial statements.
At December 31, 2016 the following conduit debt existed:
• $5,600,000 Student Housing Revenue note, Series 2005, with an outstanding balance of $3,773,633.
Crossover refunding
On June 23, 2016 the City issued $3,630,000 of General Obligation Utility Revenue Crossover Refunding Bonds, Series 2016D. The bonds issued will crossover refund the 2006B General Obligation Utility and Improvement Bonds, Series 2006B. The proceeds of the bonds were deposited in an escrow account and will be used to pay issuance costs and to purchase government obligations. The government obligations will bear interest rates that will provide sufficient funds to refund the old bonds. The 2006B bond will be refunded on February 1, 2017. The escrow account will also provide debt service payments on the new bond until the crossover dates. The old bonds are not considered defeased until the crossover dates, and therefore will not be removed as liabilities. As a result of the crossover refunding issue, the City will save $522,630 in debt service payments and achieve an economic gain (the present value of the difference between the old and the new debt service) of $487,605.
Component unit debt activity
Revenue bonds
These bonds were issued to finance capital improvements to the Marshall Municipal Utilities. These bonds will be
retired from net revenue of this enterprise fund.
BalanceAuthorized Issue Maturity atand Issued Date Date Year End
Utility Revenue Bonds,Series 2008 7,000,000$ 3.92 % 04/17/08 07/01/23 3,775,000$ Series 2009 5,000,000 3.69 04/28/09 07/01/24 2,995,000 Series 2010 6,635,000 2.80 11/18/10 07/01/25 4,290,000 Series 2011 4,290,000 2.79 11/10/11 07/01/22 3,030,000 Series 2012 Refunding 2,320,000 1.28 06/01/12 07/01/19 1,055,000 Series 2012 5,500,000 2.31 06/01/12 07/01/27 4,180,000 Series 2013 6,355,000 3.14 12/18/13 07/01/28 5,200,000 Series 2014 4,025,000 3.04 04/24/14 07/01/29 3,595,000 Series 2016 7,310,000 1.51 04/21/16 07/01/23 7,310,000
Total Revenue Bonds 35,430,000$
InterestDescription Rate
-85-
CITY OF MARSHALL, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2016
Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED
The annual debt service requirements to maturity for revenue bonds are as follows:
Year Ending
December 31, Principal Interest Total
2017 3,660,000$ 1,142,433$ 4,802,433$
2018 3,795,000 1,008,257 4,803,257
2019 3,890,000 904,894 4,794,894
2020 4,070,000 796,962 4,866,962
2021 4,205,000 676,497 4,881,497
2022 - 2026 13,390,000 1,627,795 15,017,795
2027 - 2029 2,420,000 137,304 2,557,304
Total 35,430,000$ 6,294,142$ 41,724,142$
Revenue Bonds
Marshall Municipal Utilities
Component Unit Activities
Notes payable
Various obligations were issued by the EDA for purchase of land held for resale and infrastructure improvements
thereon. These contracts are general obligations of the City and will be retired through sales of land in the EDA -
Parkway Housing special revenue fund.
Balance
Authorized Issue Maturity at
and Issued Date Date Year End
Bremer Bank 63,742$ - % 01/29/07 01/29/29 63,742$
Interest
RateDescription
The annual debt service requirements to maturity for notes payable are as follows:
Year Ending
December 31, Principal Interest Total
2029 63,742$ -$ 63,742$
Notes Payable
Economic Development Authority
Component Unit Activities
General obligation bonds
These bonds were issued for capital improvements of the library. The debt is a general obligation of the City and will
be retired through ad valorem tax levies and pledges and cash contributions.
Balance
Authorized Issue Maturity at
and Issued Date Date Year End
G.O. Capital
Improvement of 2010A 1,150,000$ 2.00 - 3.30 % 9/15/2010 02/01/26 685,000$
Interest
Description Rate
-86-
CITY OF MARSHALL, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2016
Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED The annual debt service requirements to maturity for general obligation bonds are as follows:
Year EndingJune 30, Principal Interest Total
2017 60,000$ 17,938$ 77,938$ 2018 60,000 16,738 76,738 2019 65,000 15,406 80,406 2020 65,000 13,895 78,895 2021 65,000 12,270 77,270
2021 - 2026 370,000 30,223 400,223
Total 685,000$ 106,470$ 791,470$
General Obligation BondsMarshall-Lyon County Library
Component Unit Activities
Changes in long-term liabilities Long-term liability activity for the component units for the year ended December 31, 2016 was as follows:
Beginning Ending Due WithinComponent unit activities Balance Increases Decreases Balance One YearMarshall Municipal Utilities
Revenue bonds 39,790,000$ 7,310,000$ (11,670,000)$ 35,430,000$ 3,660,000$ Accrued transmission reserve 28,291 552,462 - 580,753 - Compensated absences
payable 599,540 41,880 - 641,420 - Other postemployment
benefits obligation 101,527 33,803 (21,514) 113,816 - Pension liability
GERF 2,477,244 1,915,144 (559,982) 3,832,406 - Unamortized bond discount (275,751) - 125,465 (150,286) -
Component unitlong-term liabilities 42,720,851$ 9,853,289$ (12,126,031)$ 40,448,109$ 3,660,000$
Economic Development Authority
Notes payable 63,742$ -$ -$ 63,742$ -$
Marshall-Lyon County LibraryBonds payable
General obligation bonds 780,000$ -$ (95,000)$ 685,000$ 60,000$ Unamortized bond premium 10,309 - (937) 9,372 -
Total bonds payable 790,309 - (95,937) 694,372 60,000 Pension liability
GERF 393,154 238,525 (49,276) 582,403 - Compensated absences
payable 92,318 36,353 (56,460) 72,211 19,497 Other postemployment
benefits obligation 23,212 3,499 (1,608) 25,103 - Component unit
long-term liabilities 1,298,993$ 278,377$ (203,281)$ 1,374,089$ 79,497$
Marshall Housing CommissionCompensated absences
payable 61,946$ 9,696$ -$ 71,642$ 22,254$
-87-
CITY OF MARSHALL, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2016
Note 4: DEFINED BENEFIT PENSION PLAN - STATEWIDE
A. Plan description
The City participates in the following cost-sharing multiple-employer defined benefit pension plans administered by the
Public Employees Retirement Association of Minnesota (PERA). PERA’s defined benefit pension plans are established
and administered in accordance with Minnesota statutes, chapters 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 Fund (GERF)
All full-time and certain part-time employees of the City, are covered by the General Employees Retirement Fund
(GERF). GERF members belong to either the Coordinated Plan or the Basic Plan. Coordinated Plan members are
covered by Social Security and Basic Plan members are not. The Basic Plan was closed to new members in 1967. All
new members must participate in the Coordinated Plan.
Public Employees Police and Fire Fund (PEPFF)
The PEPFF, originally established for police officers and firefighters not covered by a local relief association, now
covers all police officers and firefighters hired since 1980. Effective July 1, 1999, the PEPFF also covers police
officers and firefighters belonging to a local relief association that elected to merge with and transfer assets and
administration to PERA.
B. Benefits provided
PERA provides retirement, disability and death benefits. Benefit provisions are established by Minnesota statute and
can only be modified by the state legislature.
Benefit increases are provided to benefit recipients each January. Increases are related to the funding ratio of the plan.
Members in plans that are at least 90 percent funded for two consecutive years are given 2.5 percent increases.
Members in plans that have not exceeded 90 percent funded, or have fallen below 80 percent, are given 1 percent
increases.
The benefit provisions stated in the following paragraphs of this section are current provisions and apply to active plan
participants. Vested, terminated employees who are entitled to benefits but are not receiving them yet are bound by the
provisions in effect at the time they last terminated their public service.
GERF benefits
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 PERA's Coordinated and Basic
Plan members. The retiring member receives 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 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. For 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.
-88-
CITY OF MARSHALL, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2016
Note 4: DEFINED BENEFIT PENSION PLANS - STATEWIDE - CONTINUED
PEPFF benefits
Benefits for the PEPFF members first hired after June 30, 2010, but before July 1, 2014, vest on a prorated basis from
50 percent after five years up to 100 percent after ten years of credited service. Benefits for PEPFF members first hired
after June 30, 2014 vest on a prorated basis from 50 percent after ten years up to 100 percent after twenty years of
credited service. The annuity accrual rate is 3 percent of average salary for each year of service.
For PEPFF members who were first hired prior to July 1, 1989, a full annuity is available when age plus years of
service equal at least 90.
C. Contributions
Minnesota statutes chapter 353 sets the rates for employer and employee contributions. Contribution rates can only be
modified by the state legislature.
GERF contributions
Basic Plan members and Coordinated Plan members were required to contribute 9.10 percent and 6.50 percent,
respectively, of their annual covered salary in calendar year 2016. The City was required to contribute 11.78 percent of
pay for Basic Plan members and 7.50 percent for Coordinated Plan members in calendar year 2016. The City’s
contributions to the GERF for the years ending December 31, 2016, 2015 and 2014 were $303,513, $304,612 and
$308,035, respectively. The Marshall Municipal Utilities contributions to the GERF for the years ending December 31,
2016, 2015 and 2014 were $223,004, $223,792, and $199,740, respectively. The Marshall-Lyon County Library’s
contributions to the GERF for the years ending December 31, 2016, 2015 and 2014 were $35,525, $32,851, and
$33,155, respectively. The City’s and discretely presented component units’ contributions were equal to the
contractually required contributions for each year as set by Minnesota statute.
PEPFF contributions
Plan members were required to contribute 10.8 percent of their annual covered salary in calendar year 2016. The City
was required to contribute 16.20 percent of pay for PEPFF members in calendar year 2016. The City’s contributions to
the PEPFF for the years ending December 31, 2016, 2015 and 2014 were $229,508, $240,560 and $210,126,
respectively. The City’s contributions were equal to the contractually required contributions for each year as set by
Minnesota statute.
D. Pension costs
GERF pension costs - Primary Government and Marshall - Lyon County Library
At December 31, 2016, the City reported a liability of $5,166,206 for its proportionate share of the GERF’s net pension
liability of which the Marshall-Lyon County Library’s portion was calculated at $582,403. 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 City’s proportion of the net pension liability was based on the City’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 City’s proportionate share was 0.071 percent which was a decrease of 0.0002 percent from its
proportion measured as of June 30, 2015. The Marshal-Lyon County Library’s proportionate share was calculated at
.0072 percent at June 30, 2016 which was a decrease of .0003 percent from its proportion measured as of June 30, 2015.
For the year ended December 31, 2016, the City recognized pension expense of $606,113 for its proportionate share of
GERF’s pension expense.
-89-
CITY OF MARSHALL, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2016
Note 4: DEFINED BENEFIT PENSION PLANS - STATEWIDE - CONTINUED
At December 31, 2016 the City reported its proportionate share of GERF’s deferred outflows of resources and deferred
inflows of resources, and its contributions subsequent to the measurement date, from the following sources:
Deferred Deferred Deferred Deferred
Outflows Inflows Outflows Inflows
of Resources of Resources of Resources of Resources
Differences between expected and
actual experience 16,794$ 410,580$ 1,893$ 46,280$
Changes in actuarial assumptions 1,111,515 - 125,288 -
Net difference between projected and
actual earnings on plan investments 568,080 - 64,061 -
Changes in proportion - 269,263 - 30,361
Contributions to GERF subsequent
to the measurement date 166,113 - 18,724 -
Total 1,862,502$ 679,843$ 209,966$ 76,641$
Primary Government Component Unit - Library
Deferred outflows of resources totaling $184,837 related to pensions resulting from the City’s contributions to GERF
subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended
December 31, 2017. Other amounts reported as deferred outflows and inflows of resources related to GERF pensions
will be recognized in pension expense as follows:
Primary Component Unit -
Government Library
2017 239,378$ 26,982$
2018 117,744 13,272
2019 472,828 53,296
2020 186,596 21,051
GERF pension costs - Marshall Municipal Utilities
At December 31, 2016, MMU reported a liability of $3,832,406 for its proportionate share of the GERF’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. MMU’s proportion of the net pension
liability was based on MMU’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, MMU’s proportionate share was 0.0472 percent which was a 1.30
percent decrease from its proportion measured as of June 30, 2015.
For the year ended December 31, 2016, MMU recognized pension expense of $263,327 for its proportionate share of
GERF’s pension expense.
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CITY OF MARSHALL, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2016
Note 4: DEFINED BENEFIT PENSION PLANS - STATEWIDE - CONTINUED
At December 31, 2016, MMU reported its proportionate share of GERF’s deferred outflows of resources and deferred
inflows of resources, and its contributions subsequent to the measurement date, from the following sources:
Deferred Deferred
Outflows Inflows
of Resources of Resources
Differences between expected and
actual experience -$ 312,371$
Changes in actuarial assumptions 750,389 -
Net difference between projected and
actual earnings on plan investments 729,615 -
Changes in proportion - 138,410
Contributions to GERF subsequent
to the measurement date 114,837 -
Total 1,594,841$ 450,781$
Component Unit - Municipal Utilities
Deferred outflows of resources totaling $114,837 related to pensions resulting from MMU’s contributions to GERF
subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended
December 31, 2017. Other amounts reported as deferred outflows and inflows of resources related to GERF pensions
will be recognized in pension expense as follows:
Component Unit -
Municipal Utilities
2017 263,870$
2018 263,870
2019 363,050
2020 138,433
PEPFF pension costs
At December 31, 2016, the City reported a liability of $5,979,629 for its proportionate share of the PEPFF’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 City’s proportion of the net pension
liability was based on the City’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 City’s proportionate share was 0.149 percent which was a
0.005 percent decrease from its proportion measured as of June 30, 2015.
For the year ended December 31, 2016, the City recognized pension expense of $911,905 for its proportionate share of
PEPFF’s pension expense. The City also recognized $13,410 for the year ended December 31, 2016 as pension expense
(and an offsetting reduction of net pension liability) for its proportionate share of the State of Minnesota’s on-behalf
contributions to the plan. Legislation passed in 2013 required the State of Minnesota to begin contributing $9 million to
the PEPFF each year, starting in fiscal year 2014.
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CITY OF MARSHALL, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2016 Note 4: DEFINED BENEFIT PENSION PLANS - STATEWIDE - CONTINUED
At December 31, 2016 the City reported its proportionate share of PEPFF’s deferred outflows of resources and deferred inflows of resources, and its contributions subsequent to the measurement date, from the following sources:
Deferred DeferredOutflows Inflows
of Resources of ResourcesDifferences between expected and
actual experience 1,322$ 677,359$ Changes in actuarial assumptions 3,531,678 - Net difference between projected and
actual earnings on plan investments 509,089 - Changes in proportion 26,829 54,378 Contributions to PEPFF subsequent
to the measurement date 122,804 -
Total 4,191,722$ 731,737$
Deferred outflows of resources totaling $122,804 related to pensions resulting from the City’s contributions to PEPFF subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31, 2017. Other amounts reported as deferred outflows and inflows of resources related to PEPFF pensions will be recognized in pension expense as follows:
633,113$ 633,113 838,291 678,633 554,031
20172018201920202021
E. Actuarial assumptions The total pension liability in the June 30, 2016 actuarial valuation was determined using the following actuarial assumptions: Inflation 2.50% per yearActive member payroll growth 3.25% per yearInvestment rate of return 7.50%
Salary increases were based on a service-related table. Mortality rates for active members, retirees, survivors and disabilitants were based on RP-2014 tables for the GERF and RP-2000 tables for the PEPFF for males or females, as appropriate, with slight adjustments. Cost of living benefit increases for retirees are assumed to be: 1 percent per year for all future years for the GERF and PEPFF. Actuarial assumptions used in the June 30, 2016 valuation were based on the results of actuarial experience studies. The most recent four-year experience study in the GERF was completed in 2015. The experience study for PEPFF was for the period July 1, 2004 through June 30, 2009.
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CITY OF MARSHALL, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2016
Note 4: DEFINED BENEFIT PENSION PLANS - STATEWIDE - CONTINUED
The following changes in actuarial assumptions occurred in 2016:
GERF
The assumed post-retirement benefit increase rate was changed from 1.0 percent per year through 2035 and 2.5
percent per year thereafter to 1.0 percent per year for all future years.
The assumed investment return was changed from 7.9 percent to 7.5 percent. The single discount rate was
changed from 7.9 percent to 7.5 percent.
Other assumptions were changed pursuant to the experience study dated June 30, 2015. The assumed future
salary increases, payroll growth and inflation were decreased by 0.25 percent to 3.25 percent for payroll
growth and 2.50 percent for inflation.
PEPFF
The assumed post-retirement benefit increase rate was changed from 1.0 percent per year through 2037 and 2.5
percent per year thereafter to 1.0 percent per year for all future years.
The assumed investment return was changed from 7.9 percent to 7.5 percent. The single discount rate was
changed from 7.9 percent to 5.6 percent.
The assumed future salary increases, payroll growth and inflation were decreased by 0.25 percent to 3.25 percent
for payroll growth and 2.50 percent for inflation.
The State Board of Investment, which manages the investments of PERA, prepares an analysis of the reasonableness on
a regular basis of the long-term expected rate of return 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 geometric real rates of return for each major asset class are
summarized in the following table:
Asset Class
Domestic stocks 45.00 % 5.50 %
International stocks 15.00 6.00
Bonds 18.00 1.45
Alternative assets 20.00 6.40
Cash 2.00 0.50
Total 100.00 %
Target Expected Real
Allocation Rate of Return
Long-term
F. Discount rate
The discount rate used to measure the total pension liability was 7.50 percent, a reduction from the 7.90 percent used in
2015. The projection of cash flows used to determine the discount rate assumed that contributions from plan members
and employers will be made at rates set in Minnesota statutes. Based on these assumptions, the fiduciary net position of
the GERF was projected to be available to make all projected future benefit payments of current plan member.
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.
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CITY OF MARSHALL, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2016
Note 4: DEFINED BENEFIT PENSION PLANS - STATEWIDE - CONTINUED
In the PEPFF, the fiduciary net position was projected to be available to make all projected future benefit payments of
current plan members through June 30, 2056. Beginning in fiscal year ended June 30, 2057 for the PEPFF, when
projected benefit payments exceed the funds’ 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 PEPFF was determined that
produced approximately the same present value of 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 after.
G. Pension liability sensitivity
The following presents the City’s proportionate share of the net pension liability for all plans it participates in,
calculated using the discount rate disclosed in the preceding paragraph, as well as what the City’s proportionate share of
the net pension liability would be if it were calculated using a discount rate 1 percentage point lower or 1 percentage
point higher than the current discount rate:
1 Percent 1 Percent
Decrease (6.50%) Current (7.50%) Increase (8.50%)
GERF
Primary Government 7,337,641$ 5,166,206$ 3,377,660$
Component Unit - Library 827,087 582,403 380,724
Component Unit - Municipal Utilities 5,443,152 3,832,406 2,505,589
1 Percent 1 Percent
Decrease (4.60%) Current (5.60%) Increase (6.60%)
PEPFF
Primary Government 8,370,687$ 5,979,629$ 4,025,953$
City/Component Unit Proportionate Share of NPL
City Proportionate Share of NPL
H. Pension plan fiduciary net position
Detailed information about each 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.
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CITY OF MARSHALL, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2016
Note 5: DEFINED CONTRIBUTION PLAN
There are 5 City Council members covered by the Public Employees Defined Contribution Plan (PEDCP), a multiple-
employer deferred compensation plan administered by PERA. The PEDCP 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.
Minnesota statutes, chapter 353d.03, specifies plan provisions, including the employee and employer contribution rates for
those qualified personnel who elect to participate. An eligible elected official who decides to participate contributes 5
percent of salary which is matched by the elected official's employer. Employer and employee 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 percent of employer contributions and twenty-five hundredths of 1 percent (.0025)
of the assets in each member's account annually.
The City’s contributions to the PEDCP for the years ended December 31, 2016, 2015 and 2014 were $1,599, $1,552 and
$1,695, respectively. The City’s contributions were equal to the contractually required contributions for each year as set by
Minnesota statute.
Employee Employer Employee Employer Required Rate
1,599$ 1,599$ 5.00% 5.00% 5.00%
Contribution Amount
Percentage of
Covered Payroll
Note 6: DEFINED BENEFIT PENSION PLAN - FIRE RELIEF ASSOCIATION
A. Plan description
All members of the Marshall Fire Department (the Department) are covered by a defined benefit plan administered by
the Marshall Volunteer Firefighters Relief Association (the Association). As of December 31, 2016, the plan covered 48
active firefighters and 11 vested terminated fire fighters whose pension benefits are deferred. The plan is a single
employer retirement plan and is established and administered in accordance with Minnesota statute, chapter 69.
The Association maintains a separate Special fund to accumulate assets to fund the retirement benefits earned by the
Department’s membership. Funding for the Association is derived from an insurance premium tax in accordance with
the Volunteer Firefighter’s Relief Association Financing Guidelines Act of 1971 (chapter 261 as amended by chapter
509 of Minnesota statutes 1980). Funds are also derived from investment income.
B. Benefits provided
A fire fighter who completes at least 20 years as an active member of the Department is entitled, after age 50, to a full
service pension upon retirement.
The bylaws of the Association also provide for an early vested service pension for a retiring member who has
completed fewer than 20 years of service. The reduced pension, available to members with 10 years of service, shall be
equal to 60 percent of the pension as prescribed by the bylaws. This percentage increases 4 percent per year so that at
20 years of service, the full amount prescribed is paid. Members who retire at or after age 50 with 10 years of credited
service are entitled to an annual retirement benefit, payable monthly for life, in an amount equal to the applicable
vesting percentage times $5,500 per year of service.
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CITY OF MARSHALL, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2016
Note 6: DEFINED BENEFIT PENSION PLAN - FIRE RELIEF ASSOCIATION - CONTINUED C. Contributions
Minnesota statutes, chapters 424 and 424A authorize pension benefits for volunteer fire relief associations. The plan is funded by fire state aid, investment earnings and, if necessary, employer contributions as specified in Minnesota statutes and voluntary City contributions (if applicable). The State of Minnesota contributed $102,664 in fire state aid to the plan on behalf of the City Fire Department for the year ended December 31, 2015, which was recorded as a revenue. Required employer contributions are calculated annually based on statutory provisions. The City’s statutorily-required contributions to the plan for the year ended December 31, 2016 were $102,664. The City’s contributions were equal to the required contributions as set by state statute. In addition, the City made voluntary contributions of $21,502 to the plan. The firefighter has no obligation to contribute to the plan.
D. Pension costs
At December 31, 2016, the City reported a net pension liability (asset) of $113,319 for the plan. The net pension
liability (asset) was measured as of December 31, 2016. The total pension liability used to calculate the net pension liability (asset) in accordance with GASB 68 was determined by Van Iwaarden Associates applying an actuarial formula to specific census data certified by the Department as of December 31, 2016. For the year ended December 31, 2016, the City recognized pension expense of $172,315.
At December 31, 2016, the City reported deferred outflows of resources and its contributions subsequent to the
measurement date, related to pension from the following sources:
Deferred DeferredOutflows Inflows
of Resources of Resources
Changes in actuarial assumptions 25,501$ 36,796$ Net difference between projected and
actual earnings on plan investments 96,159 -
Total 121,660$ 36,796$
There were no deferred outflows of resources related to State aid received subsequent to the measurement date will be recognized for its impact on the net pension liability in the year ended December 31, 2016. Other amounts reported as deferred outflows and inflows of resources related to the plan will be recognized in pension expense as follows: 2017 33,789$ 2018 33,789 2019 33,789 2020 (18,760) 2021 (189) Thereafter 2,446
E. Actuarial assumptions The total pension liability at December 31, 2016 was determined using the entry age normal actuarial cost method and the following actuarial assumptions:
Discount rate 6.75%Expected long-term rate of return on assets 6.75%Investment rate of return 8.40%20 year municipal bond yield 3.78%Inflation rate 2.75%
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CITY OF MARSHALL, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2016
Note 6: DEFINED BENEFIT PENSION PLAN - FIRE RELIEF ASSOCIATION - CONTINUED
There were no changes in actuarial assumptions in 2016.
Retirement eligibility at the later of age 50 or after completion of 20 years of service, if a member is both age 50 and
has completed 10 years of service, but not 20 years of service, the lump sum pension will be reduced by 4 percent for
each year of service less than 20 years.
The 6 percent long-term expected rate of return on pension plan investments was determined using a building-block
method in which best estimates for expected future real rates of return (expected returns, net of inflation) were
developed for each asset class using the plan’s target investment allocation along with long-term return expectations by
asset class. Inflation expectations were applied to derive the nominal rate of return for the portfolio.
The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in
the following table:
Asset Class
Equities 60.00 % 5.58 %
Fixed income 25.00 2.27
Real estate and alternatives 5.00 4.44
Cash and equivalents 10.00 0.84
Total 100.00 %
Long-term
Target Expected Real
Allocation Rate of Return
F. Discount rate
The discount rate used to measure the total pension liability was 6.75 percent. The projection of cash flows used to
determine the discount rate assumed that contributions to the plan will be made as specified in statute. Based on that
assumption and considering the funding ratio of the plan, the fiduciary net position was projected to be available to
make all projected future benefit payments of current active and inactive members. 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.
G. Pension liability sensitivity
The following presents the City’s net pension liability (asset) for the plan, calculated using the discount rate disclosed in
the preceding paragraph, as well as what the City’s net pension liability (asset) would be if it were calculated using a
discount rate 1 percent lower or 1 percent higher than the current discount rate:
1 Percent 1 Percent
Decrease (5.75%) Current (6.75%) Increase (7.75%)
Defined benefit plan 168,619$ 113,319$ 60,092$
H. Pension plan fiduciary net position
For financial reporting purposes, the Association’s financial statements are not included with the City’s financial
statements because the Association is not a component unit of the City. The financial statements of the Association may
be obtained at the City’s offices.
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CITY OF MARSHALL, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2016
Note 7: RETIREMENT PLAN - HOUSING COMMISSION (Component Unit)
Component unit pension information
Qualified employees of the Marshall Housing Commission (the Commission), a discrete component unit of the City,
belong to the Housing Renewal and Local Agency Retirement Plan, which is a defined contribution retirement plan.
The retirement plan is a national plan with local or regional housing authorities and commissions, urban renewal
agencies and other organizations eligible to participate. Required contributions were made by the Commission to the
Housing Renewal and Local Agency Retirement Plan. The Commission’s pension contributions for the years ending
December 31, 2016, 2015 and 2014 were $15,346, $16,131 and $14,876, respectively.
Detailed information concerning the Commission’s pension plan is presented in its publicly available annual report for
the year ended September 30, 2016. That report may be obtained by contacting the Commission.
Note 8: OTHER INFORMATION
A. Risk management
The City 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 City carries insurance. The City obtains insurance
through participation in the League of Minnesota Cities Insurance Trust (LMCIT) which is a risk sharing pool with
approximately 800 other governmental units. The City pays an annual premium to LMCIT for its workers
compensation, property and casualty insurance. The LMCIT is self-sustaining through member premiums and will
reinsure for claims above a prescribed dollar amount for each insurance event. Settled claims have not exceeded the
City’s coverage in any of the past three fiscal 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
City’s management is not aware of any incurred but not reported claims.
B. Commitments and contingencies
Grants
Amounts received or receivable from Federal and State agencies are subject to agency audit and adjustment. Any
disallowed claims, including amounts already collected, may constitute a liability of the applicable funds. The amount,
if any, of funds which may be disallowed by the agencies cannot be determined at this time although the City expects
such amounts, if any, to be immaterial. The financial assistance received is subject to an audit pursuant to the Uniform
Guidance or audits by the grantor agency.
Claims and litigation
In connection with the normal conduct of its affairs, the City is involved in various claims, litigations and judgments. It
is expected that the final settlement of these matters will not materially affect the financial statements of the City. No
liability or provision for loss has been recorded in the December 31, 2016 financial statements in relation to any of
these matters.
Tax increment districts
The City’s tax increment districts are subject to review by the State of Minnesota Office of the State Auditor (OSA).
Any disallowed claims or misuse of tax increments could become a liability of the applicable fund. Management has
indicated that they are not aware of any instances of noncompliance which would have a material effect on the financial
statements.
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CITY OF MARSHALL, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2016
Note 8: OTHER INFORMATION - CONTINUED
Component units
MMU has contracted for the delivery of a fixed amount of power with the Western Area Power Administration
(WAPA), which is a part of the US Department of Energy, through December 31, 2050.
MMU has contracted with Missouri River Energy Services (MRES) for the purchase of any power required by MMU,
not supplied by WAPA or HCPD, through January 1, 2046.
MMU has contracted to sell the capacity of its generation plant to MRES through May 31, 2029.
MMU has entered an agreement with the City of Marshall in support of industrial land development. This agreement
calls for MMU to pay one half of the acquisition and development costs of approved projects through a payment in lieu
of taxes capped at $500,000 per year. Proceeds from subsequent sales of development projects will be divided equally
between MMU and the City of Marshall with MMU’s portion deducted from the payment in lieu of taxes.
MMU has contracted with Missouri Basin Municipal Power Agency dba Missouri River Energy Services (MRES) for
Transmission Service (the TSA). The agreement dated February 1, 2011 runs through December 31, 2019, with
continuation provisions. Among other things, the TSA provides for MRES to pay the Xcel Energy monthly
transmission costs and then bill MMU for the cost of transmission on the MRES monthly power invoice.
C. Major customers
MMU has two major customers who individually account for more than 10 percent revenue in 2016 and 2015.
Revenue generated from these customers was $31,484,026 and $33,020,978 for 2016 and 2015, respectively. These
amounts represent 61 percent and 60 percent of total revenue for 2016 and 2015, respectively.
D. Joint venture
PrairieNet WAN provides shared costs, infrastructure and expertise in the field of technology and telecommunications
for MMU, the City of Marshall, Lyon County, and Marshall Public Schools. MMU acts as a fiscal agent for this
organization whose activities to date include certain computer network equipment, computer consulting, and
organizational costs. These joint costs have been passed on to the respective members and are included in the
member’s financial statements. MMU’s ongoing financial responsibility for this organization is limited to those
activities in which it chooses to participate. Since PrairieNet WAN owns no resources and has no equity the participants
to the PrairieNet WAN has no equity interest in joint venture.
E. Dark fiber agreement
Members of PrairieNet WAN are able to use dark fiber owned by MMU through negotiation of dark fiber agreements
or through a month to month dark fiber fee as established by the MMU Commission. Dark Fiber made available to
participating PrairieNet WAN members shall be “lit up” by the member so acquiring the use of the dark fiber, is at their
cost. With prior approval of MMU, a member using dark fiber may work with another public body through which the
member does joint work. Example of this would include Southwest Minnesota State University working through
Marshall Public Schools (MPS) fiber capacity or the State of Minnesota working through the Lyon County fiber
capacity. MMU has one dark fiber agreement with MPS that runs through June 1, 2024 in which MPS pays MMU
$1,500 per month.
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CITY OF MARSHALL, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2016
Note 8: OTHER INFORMATION - CONTINUED
F. Legal debt margin
The City’s statutory debt limit is 3 percent of the estimated taxable market value of real and personal property located
in the City. The taxable market value was $852,049,763 at December 31, 2016 for a limit of $25,561,493. The City
currently has $3,305,000 general obligation debt subject to the limit, leaving $22,256,493 as a debt margin. Debt
financed partially or entirely by special assessments, tax increment or operations of enterprise funds are excluded from
this computation by statute.
G. Postemployment benefits other than pensions
Plan description. The City, including the discretely presented component units, administers a single-employer defined
benefit healthcare plan (“the Retiree Health Plan”). The plan provides lifetime healthcare insurance for eligible retirees
and their spouses through the City’s group health insurance plan, which covers both active and retired members. Benefit
provisions are established through negotiations between the City and the union representing employees and are
renegotiated each three-year bargaining period. The Retiree Health Plan does not issue a publicly available financial
report.
Funding policy. Contribution requirements also are negotiated between the City and union representatives. The City
does not contribute to the cost of current-year premiums for eligible retired plan members and their spouses. For fiscal
year 2016, the City contributed $45,567 to the plan.
Annual OPEB Cost and Net OPEB Obligation. The City’s annual other postemployment benefit (OPEB) cost
(expense) is calculated based on the annual required contribution of the employer (ARC), an amount actuarially
determined in accordance with the parameters of GASB Statement 45. The ARC represents a level of funding that, if
paid on an ongoing basis, is projected to cover normal cost each year and to amortize any unfunded actuarial liabilities
(or funding excess) over a period not to exceed thirty years. The following table shows the components of the City’s
annual OPEB cost for the year, the amount actually contributed to the plan, and changes in the City’s net OPEB
obligation to the Retiree Health Plan.
Marshall Marshall- Lyon
Primary Municipal County
Government Utilities Library Total
Annual required contribution 53,115$ 35,613$ 3,804$ 92,532$
Interest on net OPEB obligation 9,575 4,061 686 14,322
Adjustment to annual
required contribution (13,844) (5,871) (991) (20,706)
Annual OPEB cost (expense) 48,846 33,803 3,499 86,148
Contributions made (22,445) (21,514) (1,608) (45,567)
Increase in net OPEB obligation 26,401 12,289 1,891 40,581
Net OPEB obligation -
beginning of year 233,315 101,527 23,212 358,054
NET OPEB obligation -
end of year 259,716$ 113,816$ 25,103$ 398,635$
Component
Units
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CITY OF MARSHALL, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2016
Note 8: OTHER INFORMATION - CONTINUED
The City’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation
for fiscal year 2016 and the preceding two fiscal years were as follows:
Primary Government
Year Annual Net OPEB
Ending OPEB Cost Obligation
12/31/16 48,846$ 46.0 % 259,716$
12/31/15 47,655 35.7 233,315
12/31/14 46,682 32.6 202,651
Component Unit - Marshall Municipal Utilities
Year Annual Net OPEB
Ending OPEB Cost Obligation
12/31/16 33,803$ 63.6 % 113,816$
12/31/15 33,709 68.2 101,527
12/31/14 33,948 91.8 90,795
Component Unit - Marshall - Lyon County Library
Year Annual Net OPEB
Ending OPEB Cost Obligation
12/31/16 3,499$ 46.0 % 25,103$
12/31/15 3,667 33.2 23,212
12/31/14 3,587 30.4 20,762
Total - Reporting Entity
Year Annual Net OPEB
Ending OPEB Cost Obligation
12/31/16 86,148$ 52.9 % 398,635$
12/31/15 85,031 48.4 358,054
12/31/14 84,217 56.4 314,208
Annual OPEB
Contributed
Three Year Trend Information
Percentage
Annual OPEB
Contributed
Three Year Trend Information
Percentage
Three Year Trend Information
Percentage
Annual OPEB
Contributed
Three Year Trend Information
Percentage
Annual OPEB
Contributed
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CITY OF MARSHALL, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2016
Note 8: OTHER INFORMATION - CONTINUED Funded Status and Funding Progress. As of December 31, 2014, the City’s share of the actuarial accrued liability for benefits was $466,104, which was not funded. The City’s share of covered payroll (annual payroll of active employees covered by the plan) was $6,216,558, and the ratio of the unfunded actuarial accrued liability to the covered payroll was 7.5 percent. As of December 31, 2014, the MMU’s share of the actuarial accrued liability for benefits was $393,546, which was not funded. The MMU’s share of covered payroll (annual payroll of active employees covered by the plan) was $2,651,177, and the ratio of the unfunded actuarial accrued liability to the covered payroll was 14.8 percent. Actuarial valuations of an ongoing plan involve estimates of the 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 healthcare 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, presented as required supplementary information following the notes to the financial statements, presents multi-year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. 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 methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. For the City, in the January 1, 2014 actuarial valuation, the projected unit credit actuarial cost method was used. The actuarial assumptions included a 4 percent investment rate of return and an annual healthcare cost trend rate of 7.5 percent initially, reduced incrementally to an ultimate rate of 5 percent after 5 years. The actuarial value of assets was not determined as the City has not advance-funded its obligation. The plan’s unfunded actuarial accrued liability was amortized as a level dollar amount over an open basis of thirty years. The following simplifying assumptions were made:
Retirement age for active employees - Based on the historical average retirement age for the covered group, active plan members were assumed to retire at age 65, or at the first subsequent year in which the member would qualify for benefits. Marital status - Marital status of members at the calculation date was assumed to continue throughout retirement. Mortality - Life expectancies were based on mortality tables from the National Center for Health Statistics. The 2000 United States Life Tables for Males and for Females were used. Turnover - Non-group-specific age-based turnover data from GASB Statement 45 were used as the basis for assigning active members a probability of remaining employed until the assumed retirement age and for developing an expected future working lifetime assumption for purposes of allocating to periods the present value of total benefits to be paid. Healthcare cost trend rate - The expected rate of increase in healthcare insurance premiums was based on projections of the Office of the Actuary at the Centers for Medicare & Medicaid Services. The annual increase in health benefits is 7.5 percent for 2014 which reflects actual 2014 premium renewal experience. The medical trend rates beginning in 2014 are 7.5 percent decreasing 0.5 percent annually to an ultimate level of 5.0 percent. Health insurance premiums - 2014 health insurance premiums for retirees were used as the basis for calculation of the present value of total benefits to be paid.
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CITY OF MARSHALL, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2016
Note 8: OTHER INFORMATION - CONTINUED Inflation rate - The expected long-term inflation assumption of 4.0 percent was used based on an intermediate growth scenario. Actuarial method - Projected unit credit with 30-year amortization of the unfunded liability. Payroll growth rate - The expected long-term payroll growth rate was assumed to be 4.0 percent. Based on the historical and expected returns of the City’s short-term investment portfolio, a discount rate of 4.0 percent was used. In addition, a simplified version of the entry age actuarial cost method was used. The unfunded actuarial accrued liability is being amortized as a level percentage of projected payroll on the projected unit credit basis. The remaining amortization period at December 31, 2016 was 30 years.
H. Concentrations The City receives a significant amount of its annual General fund revenues from the State of Minnesota from the Local Government Aid (LGA) program. The amount received in 2016 was $2,427,970 for LGA. This accounted for 23 percent of General fund revenues.
I. Transactions between the primary government and its component unit MMU remits an annually negotiated payment to the City of Marshall General fund in lieu of taxes. This fee is calculated on a formula based on preceding years KWH sales increased by an amount in support of industrial land development ($30,839 in the year ended December 31, 2016). Payments under this agreement are $840,349 for the year ended December 31, 2016.
Note 9: SUBSEQUENT EVENT
The City issued a General Obligation bond on June 5, 2017 for $1,290,000. This bond was issued for the construction of the culture and recreation and street improvements.
Note 10: PRIOR PERIOD RESTATEMENT
The City restated its governmental activities construction in progress account as of January 1, 2016 which was understated by $1,237,422.
The Marshall-Lyon County Library discretely presented component unit restated its equipment and machinery capital asset account as of January 1, 2016 which was understated by $57,867.
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INTENTIONALLY
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REQUIRED SUPPLEMENTARY INFORMATION
CITY OF MARSHALL
MARSHALL, MINNESOTA
FOR THE YEAR ENDED DECEMBER 31, 2016
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CITY OF MARSHALL, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2016
Schedule of funding progress for the retiree health plan
Primary Government
Unfunded
Actuarial UAAL as a
Actuarial Actuarial Actuarial Accrued Percentage
Valuation Value of Accrued Liability Covered of Covered
Date Assets (a) Liability (UAAL) (b-a) Payroll (c) Payroll ((b-a)/c)
1/1/14 -$ 466,104$ 466,104$ - % 6,216,558$ 7.5 %
1/1/11 - 424,248 424,248 - 4,453,566 9.5
1/1/08 - 341,026 341,026 - 3,649,109 9.3
Component Unit - Marshall Municipal Utilities
Unfunded
Actuarial UAAL as a
Actuarial Actuarial Actuarial Accrued Percentage
Valuation Value of Accrued Liability Covered of Covered
Date Assets (a) Liability (UAAL) (b-a) Payroll (c) Payroll ((b-a)/c)
1/1/14 -$ 393,546$ 393,546$ - % 2,651,177$ 14.8 %
1/1/11 - 349,191 349,191 - 2,407,762 14.5
1/1/08 - 156,507 156,507 - 2,399,285 6.5
Component Unit - Marshall Housing Commission
Unfunded
Actuarial UAAL as a
Actuarial Actuarial Actuarial Accrued Percentage
Valuation Value of Accrued Liability Covered of Covered
Date Assets (a) Liability (UAAL) (b-a) Payroll (c) Payroll ((b-a)/c)
1/1/14 -$ -$ -$ - % -$ - %
1/1/11 - - - - - -
1/1/08 - 13,454 13,454 - 154,598 8.7
Required Supplementary Information
Funded
Ratio (a/b)
Ratio (a/b)
Required Supplementary Information
Funded
Ratio (a/b)
Required Supplementary Information
Funded
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CITY OF MARSHALL, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION - CONTINUED
FOR THE YEAR ENDED DECEMBER 31, 2016
Schedule of funding progress for the retiree health plan Component Unit - Marshall - Lyon County Library
UnfundedActuarial UAAL as a
Actuarial Actuarial Actuarial Accrued PercentageValuation Value of Accrued Liability Covered of Covered
Date Assets (a) Liability (UAAL) (b-a) Payroll (c) Payroll ((b-a)/c)
1/1/14 -$ 31,151$ 31,151$ - % 477,107$ 6.5 %1/1/11 - 32,370 32,370 - 428,735 7.6 1/1/08 - 45,134 45,134 - 433,042 10.4
Total - Reporting Entity
UnfundedActuarial UAAL as a
Actuarial Actuarial Actuarial Accrued PercentageValuation Value of Accrued Liability Covered of Covered
Date Assets (a) Liability (UAAL) (b-a) Payroll (c) Payroll ((b-a)/c)
1/1/14 -$ 890,801$ 890,801$ - % 9,344,842$ 9.5 %1/1/11 - 805,809 805,809 - 7,290,063 11.1 1/1/08 - 556,121 556,121 - 6,636,034 8.4
Required Supplementary Information
FundedRatio (a/b)
Required Supplementary Information
FundedRatio (a/b)
Schedule of City’s share of PERA net pension liability - General Employees Retirement Fund
State'sProportionate
City's Share ofProportionate the Net Pension
Share of Liability City'sFiscal the Net Pension Associated with CoveredYear Liability the City Total Payroll
Ending (a) (b) (a+b) (c)
06/30/16 0.0708 % 5,748,609$ 75,053$ 5,823,662$ 4,394,194$ 130.8 % 68.9 %06/30/15 0.0730 3,783,239 - 3,783,239 4,221,213 89.6 78.2
Required Supplementary InformationCity's
ProportionateShare of theNet Pension
Plan FiduciaryCity's
Liability as aNet Position
Proportion ofPercentage of
as a PercentageCoveredthe Net Pension Payroll of the Total
Liability (a/c) Pension Liability
Note: Schedule is intended to show 10-year trend. Additional years will be reported as they become available.
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CITY OF MARSHALL, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION - CONTINUED
FOR THE YEAR ENDED DECEMBER 31, 2016 Schedule of City’s PERA contributions - General Employees Retirement Fund
Contributions inRelation to the
Statutorily Statutorily Contribution City'sRequired Required Deficiency Covered
Year Contribution Contribution (Excess) PayrollEnding (a) (b) (a-b) (c)
12/31/16 339,038$ 339,038$ -$ 4,520,504$ 7.5 %12/31/15 337,463 337,463 - 4,499,507 7.5
(b/c)
Required Supplementary Information
Contributions asa Percentage ofCovered Payroll
Note: Schedule is intended to show 10-year trend. Additional years will be reported as they become available. Schedule of Municipal Utilities’ share of PERA net pension liability - General Employees Retirement Fund
State'sProportionate
Share ofthe Net Pension
Proportionate LiabilityShare of Associated with
Fiscal the Net Pension the Component CoveredYear Liability Unit Total Payroll
Ending (a) (b) (a+b) (c)
06/30/16 0.0472 % 3,832,406$ 14,919$ 3,847,325$ 2,973,391$ 128.9 % 68.9 %06/30/15 0.0478 2,477,244 - 2,477,244 2,809,961 88.2 78.2
the Net Pension Payroll of the TotalLiability (a/c) Pension Liability
Component Unit's Percentage of Net PositionProportion of Covered as a Percentage
Component Unit'sLiability as a Plan Fiduciary
Component Unit's
Required Supplementary InformationComponent Unit's
ProportionateShare of theNet Pension
Note: Schedule is intended to show 10-year trend. Additional years will be reported as they become available. Schedule of Municipal Utilities’ PERA contributions - General Employees Retirement Fund
Contributions inRelation to the Component
Statutorily Statutorily Contribution Unit'sRequired Required Deficiency Covered
Year Contribution Contribution (Excess) PayrollEnding (a) (b) (a-b) (c)
12/31/16 223,004$ 223,004$ -$ 2,973,391$ 7.5 %12/31/15 207,341 207,341 - 2,809,961 7.5
(b/c)
Required Supplementary Information
Contributions asa Percentage ofCovered Payroll
Note: Schedule is intended to show 10-year trend. Additional years will be reported as they become available.
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CITY OF MARSHALL, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION - CONTINUED
FOR THE YEAR ENDED DECEMBER 31, 2016
Schedule of employer’s share of PERA net pension liability - Public Employees Police and Fire Fund
State's
Proportionate
City's Share of
Proportionate the Net Pension
Share of Liability City's
Fiscal the Net Pension Associated with Covered
Year Liability the City Total Payroll
Ending (a) (b) (a+b) (c)
06/30/16 0.1490 % 5,979,629$ -$ 5,979,629$ 1,433,849$ 417.0 % 63.9 %
06/30/15 0.1540 1,749,800 - 1,749,800 1,367,414 128.0 86.6
Liability ((a+b)/c) Pension Liability
Proportion of Covered as a Percentage
the Net Pension Payroll of the Total
Liability as a Plan Fiduciary
City's Percentage of Net Position
Required Supplementary Information
City's
Proportionate
Share of the
Net Pension
Note: Schedule is intended to show 10-year trend. Additional years will be reported as they become available.
Schedule of employer’s PERA contributions - Public Employees Police and Fire Fund
Contributions in
Relation to the
Statutorily Statutorily Contribution City's
Required Required Deficiency Covered
Year Contribution Contribution (Excess) Payroll
Ending (a) (b) (a-b) (c)
12/31/16 229,508$ 229,508$ -$ 1,416,719$ 16.2 %
12/31/15 240,460 240,460 - 1,484,321 16.2
(b/c)
Required Supplementary Information
Contributions as
a Percentage of
Covered Payroll
Note: Schedule is intended to show 10-year trend. Additional years will be reported as they become available.
Schedule Employer’s Fire Relief Association Contributions
Actuarial Actual Contribution
Determined Contributions Deficiency
Year Contribution Paid (Excess)
Ending (a) (b) (a-b)
12/31/16 124,166$ 124,166$ -$
12/31/15 103,127 103,127 -
12/31/14 173,399 173,399 -
Required Supplementary Information
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CITY OF MARSHALL, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION - CONTINUED
FOR THE YEAR ENDED DECEMBER 31, 2016
Schedule of changes in the Fire Relief Association’s net pension liability (asset) and related ratios
2016 2015
(Fire Relief Report (Fire Relief Report
Date 2015) Date 2014)
Total pension liability
Service cost 151,873$ 128,480$
Interest 206,225 203,955
Changes of benefit terms 88,384 59,012
Differences between expected and actual experience - -
Changes of assumptions (44,795) 34,723
Benefit payments, including refunds of employee contributions (45,890) (254,609)
Net change in total pension liability 355,797 171,561
Total pension liability - January 1 3,308,148 3,136,587
Total pension liability - December 31 (a) 3,663,945$ 3,308,148$
Plan fiduciary net position
Contributions - employer 124,166 103,127
Contributions - state - -
Net investment income 269,176 (45,718)
Benefit payments, including refunds of employee contributions (45,890) (254,609)
Administrative expense (8,530) (11,275)
Other - -
Net change in plan fiduciary net position 338,922 (208,475)
Plan fiduciary net position - January 1 3,211,704 3,420,179
Plan fiduciary net position - December 31 (b) 3,550,626$ 3,211,704$
Fire Relief's net pension liability (asset) - December 31 (a-b) 113,319$ 96,444$
Plan fiduciary net position as a percentage
of the total pension liability (b/a) 96.91% 97.08%
Covered-employee payroll N/A N/A
Fire Relief's net pension liability (asset) as a percentage
of covered-employee payroll N/A N/A
Notes to Schedule:
Benefit changes. There were no benefit changes during 2016.
Changes of assumptions. There were no changes in assumptions in 2016.
Note: Schedule is intended to show 10-year trend. Additional years will be reported as they become
available.
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COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES
CITY OF MARSHALL
MARSHALL, MINNESOTA
FOR THE YEAR ENDED DECEMBER 31, 2016
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CITY OF MARSHALL, MINNESOTA
NONMAJOR GOVERNMENTAL FUNDS
COMBINING BALANCE SHEET
DECEMBER 31, 2016
Nonmajor Nonmajor
Special Capital
Revenue Projects Total
ASSETS
Cash and temporary investments 2,268,395$ 7,900,270$ 10,168,665$
Receivables
Delinquent taxes - 4,522 4,522
Accounts 23,377 44,480 67,857
Notes/leases 32,317 - 32,317
Special assessments - 340,957 340,957
Intergovernmental 22,022 8,200 30,222
Prepaid items 24,136 - 24,136
TOTAL ASSETS 2,370,247$ 8,298,429$ 10,668,676$
LIABILITIES
Accounts payable 59,286$ 155,171$ 214,457$
Contracts payable - 386,018 386,018
Due to other funds - 885,973 885,973
Accrued salaries payable 2,981 - 2,981
TOTAL LIABILITIES 62,267 1,427,162 1,489,429
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - taxes - 4,522 4,522
Unavailable revenue - special assessments - 340,957 340,957
TOTAL DEFERRED INFLOWS OF RESOURCES - 345,479 345,479
FUND BALANCES
Nonspendable for
Prepaid items 24,136 - 24,136
Restricted for
City celebrations 19,064 - 19,064
Economic development 2,019,566 - 2,019,566
Capital projects - 1,947,334 1,947,334
Committed for
Economic development 61,773 - 61,773
Capital projects - 300,729 300,729
Assigned for
Economic development 98,330 - 98,330
Capital projects - 5,884,477 5,884,477
Drivers education 59,231 - 59,231
ASC Arena 11,022 - 11,022
Park improvements 16,535 - 16,535
Unassigned (1,677) (1,606,752) (1,608,429)
TOTAL FUND BALANCES 2,307,980 6,525,788 8,833,768
TOTAL LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES 2,370,247$ 8,298,429$ 10,668,676$
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CITY OF MARSHALL, MINNESOTA
NONMAJOR GOVERNMENTAL FUNDS
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
FOR THE YEAR ENDED DECEMBER 31, 2016
Nonmajor Nonmajor
Special Capital
Revenue Projects Total
REVENUES
Taxes -$ 371,086$ 371,086$
Intergovernmental 300,000 1,106,190 1,406,190
Charges for services 183,055 - 183,055
Special assessments - 10,480 10,480
Investment earnings 41,722 6,500 48,222
Miscellaneous 48,635 604,908 653,543
TOTAL REVENUES 573,412 2,099,164 2,672,576
EXPENDITURES
Current
Public safety 102,975 21,208 124,183
Public works - 799,740 799,740
Culture and recreation 456,566 21,383 477,949
Economic development 374 14,250 14,624
Capital outlay
General government - 78,668 78,668
Public safety 9,301 709,203 718,504
Public works - 2,630,561 2,630,561
Culture and recreation 44,070 2,345,379 2,389,449
Economic development - 54,945 54,945
Airport - 200 200
Debt service
Principal - 89,888 89,888
Interest and other - 7,668 7,668
Bond issuance costs - 115,731 115,731
TOTAL EXPENDITURES 613,286 6,888,824 7,502,110
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (39,874) (4,789,660) (4,829,534)
OTHER FINANCING SOURCES (USES)
Transfers in 602,305 - 602,305
Bonds issued - 5,015,000 5,015,000
Premium on bonds issued - 166,461 166,461
Transfers out (22,173) (124,662) (146,835)
TOTAL OTHER FINANCING SOURCES (USES) 580,132 5,056,799 5,636,931
NET CHANGE IN FUND BALANCES 540,258 267,139 807,397
FUND BALANCES, JANUARY 1 1,767,722 6,258,649 8,026,371
FUND BALANCES, DECEMBER 31 2,307,980$ 6,525,788$ 8,833,768$
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CITY OF MARSHALL, MINNESOTA
NONMAJOR SPECIAL REVENUE FUNDS
COMBINING BALANCE SHEET
DECEMBER 31, 2016
215 220 223 240
Small Program Community
Cities Income Education
Marshall Development SCDP - Drivers
Celebrations Program Local Training
ASSETS
Cash and temporary investments 19,064$ 2,123$ 78,574$ 83,428$
Receivables
Accounts - - - 630
Notes/leases - 32,317 - -
Intergovernmental - - - -
Prepaid items - - - -
TOTAL ASSETS 19,064$ 34,440$ 78,574$ 84,058$
LIABILITIES
Accounts payable -$ -$ -$ 24,827$
Accrued salaries payable - - - -
TOTAL LIABILITIES - - - 24,827
FUND BALANCES
Nonspendable for
Prepaid items - - - -
Restricted for
City celebrations 19,064 - - -
Economic development - - 56,401 -
Committed for
Economic development - - - -
Assigned for
Economic development - 34,440 22,173 -
Driver education - - - 59,231
ASC Arena - - - -
Park improvements - - - -
Unassigned - - - -
TOTAL FUND BALANCES 19,064 34,440 78,574 59,231
TOTAL LIABILITIES AND FUND BALANCES 19,064$ 34,440$ 78,574$ 84,058$
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257 258 270 280 801
Emergency
Response and Endowment Park and
ASC Ball Industrial Avera / Recreation
Park ASC Arena Training Center WMMC Donations Total
-$ 2,016$ -$ 2,066,655$ 16,535$ 2,268,395$
- 21,772 975 - - 23,377
- - - - - 32,317
- 22,022 - - - 22,022
- 17,736 6,400 - - 24,136
-$ 63,546$ 7,375$ 2,066,655$ 16,535$ 2,370,247$
-$ 31,807$ 2,652$ -$ -$ 59,286$
- 2,981 - - - 2,981
- 34,788 2,652 - - 62,267
- 17,736 6,400 - - 24,136
- - - - - 19,064
- - - 1,963,165 - 2,019,566
- - - 61,773 - 61,773
- - - 41,717 - 98,330
- - - - - 59,231
- 11,022 - - - 11,022
- - - - 16,535 16,535
- - (1,677) - - (1,677)
- 28,758 4,723 2,066,655 16,535 2,307,980
-$ 63,546$ 7,375$ 2,066,655$ 16,535$ 2,370,247$
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CITY OF MARSHALL, MINNESOTA
NONMAJOR SPECIAL REVENUE FUNDS
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
FOR THE YEAR ENDED DECEMBER 31, 2016
215 220 223 240
Small Program Community
Cities Income Education
Marshall Development SCDP - Drivers
Celebrations Program Local Training
REVENUES
Intergovernmental
State grants -$ -$ -$ -$
Charges for services - - - 73,601
Investment earnings - - - -
Miscellaneous
Rents - - - -
Contributions and donations - - - - Refunds and reimbursements - - - -
Loan payments received - 367 - -
TOTAL REVENUES - 367 - 73,601
EXPENDITURES
Current
Public safety - - - -
Culture and recreation - - - 74,885
Economic development - 351 23 -
Capital outlay
Public safety - - - -
Culture and recreation - - - -
TOTAL EXPENDITURES - 351 23 74,885
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES - 16 (23) (1,284)
OTHER FINANCING SOURCES (USES)
Transfers in - - 22,173 -
Transfers out - (22,173) - -
TOTAL OTHER FINANCING SOURCES (USES) - (22,173) 22,173 -
NET CHANGE IN FUND BALANCES - (22,157) 22,150 (1,284)
FUND BALANCES, JANUARY 1 19,064 56,597 56,424 60,515
FUND BALANCES, DECEMBER 31 19,064$ 34,440$ 78,574$ 59,231$
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CITY OF MARSHALL, MINNESOTA
NONMAJOR SPECIAL REVENUE FUNDS
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
FOR THE YEAR ENDED DECEMBER 31, 2016
257 258 270 280 801
Emergency
Response and Endowment Park and
ASC Ball Industrial Avera / Recreation
Park ASC Arena Training Center WMMC Donations Total
-$ -$ 300,000$ -$ -$ 300,000$
- 109,454 - - - 183,055
- - - 41,717 5 41,722
- - 18,700 - - 18,700
- 6,895 - - - 6,895 - 22,673 - - - 22,673
- - - - - 367
- 139,022 318,700 41,717 5 573,412
- - 102,975 - - 102,975
- 344,846 - 36,835 - 456,566
- - - - - 374
- - 9,301 - - 9,301
- 44,070 - - - 44,070
- 388,916 112,276 36,835 - 613,286
- (249,894) 206,424 4,882 5 (39,874)
75 301,288 278,769 - - 602,305
- - - - - (22,173)
75 301,288 278,769 - - 580,132
75 51,394 485,193 4,882 5 540,258
(75) (22,636) (480,470) 2,061,773 16,530 1,767,722
-$ 28,758$ 4,723$ 2,066,655$ 16,535$ 2,307,980$
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CITY OF MARSHALL, MINNESOTA
SMALL CITIES DEVELOPMENT PROGRAM FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
FOR THE YEAR ENDED DECEMBER 31, 2016
With Comparative Actual Amounts for the Year Ended December 31, 2015
2015
Actual Variance with Actual
Original Final Amounts Final Budget Amounts
REVENUES
Investment earnings -$ -$ -$ -$ 581$
Miscellaneous
Refunds and reimbursements - - - - 12,865
Loan payments received 10,000 10,000 367 (9,633) -
TOTAL REVENUES 10,000 10,000 367 (9,633) 13,446
EXPENDITURES
Current
Economic development
Other services and charges - - 351 (351) 539
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 10,000 10,000 16 (9,984) 12,907
OTHER FINANCING USES
Transfers out (10,000) (10,000) (22,173) (12,173) (11,541)
NET CHANGE IN FUND BALANCES - - (22,157) (22,157) 1,366
FUND BALANCES, JANUARY 1 56,597 56,597 56,597 - 55,231
FUND BALANCES, DECEMBER 31 56,597$ 56,597$ 34,440$ (22,157)$ 56,597$
2016
Budgeted Amounts
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CITY OF MARSHALL, MINNESOTA
COMMUNITY EDUCATION DRIVERS TRAINING FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
FOR THE YEAR ENDED DECEMBER 31, 2016
With Comparative Actual Amounts for the Year Ended December 31, 2015
2015
Actual Variance with Actual
Original Final Amounts Final Budget Amounts
REVENUES
Charges for services 68,000$ 68,000$ 73,601$ 5,601$ 59,073$
EXPENDITURES
Current
Culture and recreation
Supplies - - 13,097 (13,097) 93
Other services and charges 57,000 57,000 61,788 (4,788) 51,741
TOTAL EXPENDITURES 57,000 57,000 74,885 (17,885) 51,834
NET CHANGE IN FUND BALANCES 11,000 11,000 (1,284) (12,284) 7,239
FUND BALANCES, JANUARY 1 60,515 60,515 60,515 - 53,276
FUND BALANCES, DECEMBER 31 71,515$ 71,515$ 59,231$ (12,284)$ 60,515$
2016
Budgeted Amounts
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CITY OF MARSHALL, MINNESOTA
EMERGENCY RESPONSE AND INDUSTRIAL TRAINING CENTER FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
FOR THE YEAR ENDED DECEMBER 31, 2016
With Comparative Actual Amounts for the Year Ended December 31, 2015
2015
Actual Variance with Actual
Original Final Amounts Final Budget Amounts
REVENUES
Intergovernmental
State aids -$ -$ 300,000$ 300,000$ -$
Miscellaneous
Rents 20,500 20,500 18,700 (1,800) 16,460
TOTAL REVENUES 20,500 20,500 318,700 298,200 16,460
EXPENDITURES
Current
Public safety
Supplies 8,500 8,500 10,820 (2,320) 14,637
Other services and charges 84,250 84,250 92,155 (7,905) 72,612
Total current 92,750 92,750 102,975 (10,225) 87,249
Capital outlay
Public safety 54,900 54,900 9,301 45,599 82,284
TOTAL EXPENDITURES 147,650 147,650 112,276 35,374 169,533
DEFICIENCY OF REVENUES
UNDER EXPENDITURES (127,150) (127,150) 206,424 333,574 (153,073)
OTHER FINANCING SOURCES
Transfers in 127,150 127,150 278,769 151,619 76,200
NET CHANGE IN FUND BALANCES - - 485,193 485,193 (76,873)
FUND BALANCES,
JANUARY 1 (480,470) (480,470) (480,470) - (403,597)
FUND BALANCES,
DECEMBER 31 (480,470)$ (480,470)$ 4,723$ 485,193$ (480,470)$
2016
Budgeted Amounts
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CITY OF MARSHALL, MINNESOTA
ASC ARENA FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
FOR THE YEAR ENDED DECEMBER 31, 2016
With Comparative Actual Amounts for the Year Ended December 31, 2015
2015
Actual Variance with Actual
Original Final Amounts Final Budget Amounts
REVENUES
Charges for services 192,561$ 192,561$ 109,454$ (83,107)$ -$
Miscellaneous
Contributions and donations - - 6,895 6,895 -
Refunds and reimbursements - - 22,673 22,673 -
TOTAL REVENUES 192,561 192,561 139,022 (53,539) -
EXPENDITURES
Current
Culture and recreation
Personal services 160,733 160,733 101,992 58,741 -
Supplies 48,749 48,749 106,422 (57,673) -
Other services and charges 271,775 271,775 136,432 135,343 124,636
Total current 481,257 481,257 344,846 136,411 124,636
Capital outlay
Culture and recreation 9,924 9,924 44,070 (34,146) -
TOTAL EXPENDITURES 491,181 491,181 388,916 102,265 124,636
EXCESS OF REVENUES
OVER EXPENDITURES (298,620) (298,620) (249,894) 48,726 (124,636)
OTHER FINANCING SOURCES (USES)
Transfers in 298,620 298,620 301,288 2,668 102,000
NET CHANGE IN FUND BALANCES - - 51,394 51,394 (22,636)
FUND BALANCES, JANUARY 1 (22,636) (22,636) (22,636) - -
FUND BALANCES, DECEMBER 31 275,984$ 275,984$ 28,758$ (247,226)$ (22,636)$
2016
Budgeted Amounts
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CITY OF MARSHALL, MINNESOTA CITY OF MARSHALL, MINNESOTA
NONMAJOR CAPITAL PROJECTS FUNDS NONMAJOR CAPITAL PROJECTS FUNDS
COMBINING BALANCE SHEET - CONTINUED ON THE FOLLOWING PAGES COMBINING BALANCE SHEET - CONTINUED
DECEMBER 31, 2016 DECEMBER 31, 2016
103 260 275 401 413 423 428
Marshall Industrial SMASC Liberty
Municipal Industrial Park Capital Ball Park Saratoga/
State Aid Park Development Equipment Parks Improvements Highway 23
ASSETS
Cash and temporary investments 507,237$ 2,159,799$ 85,879$ 1,100,738$ (528,352)$ 23,836$ 801,548$
Receivables
Delinquent taxes - - - 4,496 - - -
Accounts - 30,839 - 12,923 678 40 -
Special assessments
Noncurrent 5,759 - 2,370 - - - -
Intergovernmental 5,947 - - 2,253 - - -
TOTAL ASSETS 518,943$ 2,190,638$ 88,249$ 1,120,410$ (527,674)$ 23,876$ 801,548$
LIABILITIES
Accounts payable -$ 125$ -$ -$ 74,730$ -$ 620$
Contracts payable - - - - 25,250 - 95,131
Due to other funds - - - - - - 4,762
TOTAL LIABILITIES - 125 - - 99,980 - 100,513
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - taxes - - - 4,496 - - -
Unavailable revenue - special assessments 5,759 - 2,370 - - - -
TOTAL DEFERRED INFLOWS OF RESOURCES 5,759 - 2,370 4,496 - - -
FUND BALANCES
Restricted for
Capital projects - - - - - - 701,035
Committed for
Capital projects - - - 165,729 - - -
Assigned for
Capital projects 513,184 2,190,513 85,879 950,185 - 23,876 -
Unassigned - - - - (627,654) - -
TOTAL FUND BALANCES 513,184 2,190,513 85,879 1,115,914 (627,654) 23,876 701,035
TOTAL LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES 518,943$ 2,190,638$ 88,249$ 1,120,410$ (527,674)$ 23,876$ 801,548$
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CITY OF MARSHALL, MINNESOTA
NONMAJOR CAPITAL PROJECTS FUNDS
COMBINING BALANCE SHEET - CONTINUED
DECEMBER 31, 2016
450 452 453 454 455 457 458 459 460 461
Trunk
Highway 23 2013 2013 2014 2015 East Wind 2016
Pedestrian 2011 Public 2011 2012 Public Merit Public Public Public Star Street Public
Bridge Improvements Improvements Improvements Center Improvements Improvements Improvements Project Improvements
-$ 201,181$ 402,791$ 222,184$ 987,928$ (96,258)$ (404,125)$ 199,098$ 18,786$ 487,444$
- - - - - - - - - -
- - - - - - - - - -
- - - - - - - - - -
- - - - - - - - - -
-$ 201,181$ 402,791$ 222,184$ 987,928$ (96,258)$ (404,125)$ 199,098$ 18,786$ 487,444$
47,685$ -$ -$ -$ -$ -$ -$ 1,160$ -$ 30,278$
- - - - - - - 140,557 - 125,080
- - 335,000 - - 334 2,488 207,951 - 314,440
47,685 - 335,000 - - 334 2,488 349,668 - 469,798
- - - - - - - - - -
- - - - - - - - - -
- - - - - - - - - -
- - - 168,291 832,558 - - - - 17,646
- - - - 135,000 - - - - -
- 201,181 67,791 53,893 20,370 - - - 18,786 -
(47,685) - - - - (96,592) (406,613) (150,570) - -
(47,685) 201,181 67,791 222,184 987,928 (96,592) (406,613) (150,570) 18,786 17,646
-$ 201,181$ 402,791$ 222,184$ 987,928$ (96,258)$ (404,125)$ 199,098$ 18,786$ 487,444$
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INTENTIONALLY
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CITY OF MARSHALL, MINNESOTA
NONMAJOR CAPITAL PROJECTS FUNDS
COMBINING BALANCE SHEET - CONTINUED
DECEMBER 31, 2016
462 495 496 497 498 499
2017 Public 2008 2009
Public Improvement 2007 Public Public Public 2010 Public
Improvements Revolving Improvements Improvements Improvements Improvements Total
ASSETS
Cash and temporary investments (93,133)$ 815,530$ (94,017)$ (90,488)$ 88,306$ 1,104,358$ 7,900,270$
Receivables
Delinquent taxes - 26 - - - - 4,522
Accounts - - - - - - 44,480
Special assessments
Noncurrent - 332,828 - - - - 340,957
Intergovernmental - - - - - - 8,200
TOTAL ASSETS (93,133)$ 1,148,384$ (94,017)$ (90,488)$ 88,306$ 1,104,358$ 8,298,429$
LIABILITIES
Accounts payable -$ 573$ -$ -$ -$ -$ 155,171$
Contracts payable - - - - - - 386,018
Due to other funds - 20,998 - - - - 885,973
TOTAL LIABILITIES - 21,571 - - - - 1,427,162
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - taxes - 26 - - - - 4,522
Unavailable revenue - special assessments - 332,828 - - - - 340,957
TOTAL DEFERRED INFLOWS OF RESOURCES - 332,854 - - - - 345,479
FUND BALANCES
Restricted for
Capital projects - - - - 30,926 196,878 1,947,334
Committed for
Capital projects - - - - - - 300,729
Assigned for
Capital projects - 793,959 - - 57,380 907,480 5,884,477
Unassigned (93,133) - (94,017) (90,488) - - (1,606,752)
TOTAL FUND BALANCES (93,133) 793,959 (94,017) (90,488) 88,306 1,104,358 6,525,788
TOTAL LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES (93,133)$ 1,148,384$ (94,017)$ (90,488)$ 88,306$ 1,104,358$ 8,298,429$
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CITY OF MARSHALL, MINNESOTA CITY OF MARSHALL, MINNESOTA
NONMAJOR CAPITAL PROJECTS FUNDS NONMAJOR CAPITAL PROJECTS FUNDS
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - CONTINUED ON FOLLOWING PAGES COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - CONTINUED
FOR THE YEAR ENDED DECEMBER 31, 2016 FOR THE YEAR ENDED DECEMBER 31, 2016
103 260 275 401 413 423 428
Marshall Industrial SMASC Liberty
Municipal Industrial Park Capital Ball Park Saratoga/
State Aid Park Development Equipment Parks Improvements Highway 23
REVENUES
Property taxes -$ -$ -$ 344,577$ -$ -$ -$
Franchise taxes - - - 20,901 - - -
Intergovernmental
State grants 14,760 - - - - - 91,430
Special assessments - - - - - - -
Investment earnings 654 1,830 - 270 996 - -
Miscellaneous
Rents - 29,315 - - - - -
Contributions and donations - 18,521 - 15,243 - 22,400 -
Refunds and reimbursements - - - - 44,468 - -
TOTAL REVENUES 15,414 49,666 - 380,991 45,464 22,400 91,430
EXPENDITURES
Current
Economic development - 14,250 - - - - -
Public safety - - - - - - -
Public works 1,125 - - - - - 65,230
Culture and recreation - - - - 10,540 34 -
Capital outlay
General government - - - 78,668 - - -
Economic development - 54,945 - - - - -
Public safety - - - 434,769 - - -
Public works 4,937 - - 231,494 - - 179,442
Culture and recreation - - - 101,447 2,040,763 - -
Airport - - - 200 - - -
Debt service
Principal - - - - 89,888 -
Interest and other - - - - 7,668 - -
Bond issuance costs - - - 2,891 72,887 - -
TOTAL EXPENDITURES 6,062 69,195 - 849,469 2,221,746 34 244,672
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 9,352 (19,529) - (468,478) (2,176,282) 22,366 (153,242)
OTHER FINANCING SOURCES (USES)
Bonds issued - - - 705,000 2,810,000 - -
Premium on bonds issued - - - 23,791 87,328 - -
Transfers out (27,030) - - - (97,632) - -
TOTAL OTHER FINANCING SOURCES (USES) (27,030) - - 728,791 2,799,696 - -
NET CHANGE IN FUND BALANCES (17,678) (19,529) - 260,313 623,414 22,366 (153,242)
FUND BALANCES, JANUARY 1 530,862 2,210,042 85,879 855,601 (1,251,068) 1,510 854,277
FUND BALANCES, DECEMBER 31 513,184$ 2,190,513$ 85,879$ 1,115,914$ (627,654)$ 23,876$ 701,035$
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CITY OF MARSHALL, MINNESOTA
NONMAJOR CAPITAL PROJECTS FUNDS
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - CONTINUED
FOR THE YEAR ENDED DECEMBER 31, 2016
450 452 453 454 455 457 458 459 460 461
Trunk
Highway 23 2013 2013 2014 2015 East Wind 2016
Pedestrian 2011 Public 2011 2012 Public Merit Public Public Public Star Street Public
Bridge Improvements Improvements Improvements Center Improvements Improvements Improvements Project Improvements
-$ -$ -$ -$ -$ -$ -$ -$ -$ -$
- - - - - - - - - -
- - - - 1,000,000 - - - - -
- - - - - - - - - -
- - - 3 251 - - 272 - -
- - - - - - - - - -
- - - - - - - 383,771 - 76,961
- - - - - - - - - -
- - - 3 1,000,251 - - 384,043 - 76,961
- - - - - - - - -
- - - - 21,208 - - - -
- - - - - 1,517 4,082 210,599 209 383,241
- - - - - - - - - 10,809
- - - - - - - - - -
- - - - - - - - - -
- - - - 274,434 - - - - -
47,685 - 599 - - 2,269 15,675 1,322,262 (17,730) 826,730
- - - - - - - - - 203,169
- - - - - - - - - -
- - - - - - - - -
- - - - - - - - - -
- - - - - - - - - 39,953
47,685 - 599 - 295,642 3,786 19,757 1,532,861 (17,521) 1,463,902
(47,685) - (599) 3 704,609 (3,786) (19,757) (1,148,818) 17,521 (1,386,941)
- - - - - - - 150,755 - 1,349,245
- - - - - - - - - 55,342
- - - - - - - - - -
- - - - - - - 150,755 - 1,404,587
(47,685) - (599) 3 704,609 (3,786) (19,757) (998,063) 17,521 17,646
- 201,181 68,390 222,181 283,319 (92,806) (386,856) 847,493 1,265 -
(47,685)$ 201,181$ 67,791$ 222,184$ 987,928$ (96,592)$ (406,613)$ (150,570)$ 18,786$ 17,646$
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INTENTIONALLY
-128-
CITY OF MARSHALL, MINNESOTA
NONMAJOR CAPITAL PROJECTS FUNDS
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - CONTINUED
FOR THE YEAR ENDED DECEMBER 31, 2016
462 495 496 497 498 499
2017 Public 2008 2009
Public Improvement 2007 Public Public Public 2010 Public
Improvements Improvements Revolving Improvements Improvements Improvements Improvements Total
REVENUES
Property taxes -$ 5,608$ -$ -$ -$ -$ 350,185$
Franchise taxes - - - - - - 20,901
Intergovernmental
State grants - - - - - - 1,106,190
Special assessments - 10,480 - - - - 10,480
Investment earnings - 1,244 - - - 980 6,500
Miscellaneous
Rents - - - - - - 29,315
Contributions and donations - - - - - - 516,896
Refunds and reimbursements - 14,229 - - - - 58,697
TOTAL REVENUES - 31,561 - - - 980 2,099,164
EXPENDITURES
Current
Economic development - - - - - - 14,250
Public safety - - - - - - 21,208
Public works 93,133 40,604 - - - - 799,740
Culture and recreation - - - - - - 21,383
Capital outlay
General government - - - - - - 78,668
Economic development - - - - - - 54,945
Public safety - - - - - - 709,203
Public works - 17,004 194 - - - 2,630,561
Culture and recreation - - - - - - 2,345,379
Airport - - - - - - 200
Debt service
Principal - - - - - - 89,888
Interest and other - - - - - - 7,668
Bond issuance costs - - - - - - 115,731
TOTAL EXPENDITURES 93,133 57,608 194 - - - 6,888,824
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (93,133) (26,047) (194) - - 980 (4,789,660)
OTHER FINANCING SOURCES (USES)
Bonds issued - - - - - - 5,015,000
Premium on bonds issued - - - - - - 166,461
Transfers out - - - - - - (124,662)
TOTAL OTHER FINANCING SOURCES (USES) - - - - - - 5,056,799
NET CHANGE IN FUND BALANCES (93,133) (26,047) (194) - - 980 267,139
FUND BALANCES, JANUARY 1 - 820,006 (93,823) (90,488) 88,306 1,103,378 6,258,649
FUND BALANCES, DECEMBER 31 (93,133)$ 793,959$ (94,017)$ (90,488)$ 88,306$ 1,104,358$ 6,525,788$
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INTENTIONALLY
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CITY OF MARSHALL, MINNESOTA
GENERAL FUND
COMPARATIVE BALANCE SHEETS
DECEMBER 31, 2016 AND 2015
2016 2015
ASSETS
Cash and temporary investments 6,442,640$ 6,129,569$
Receivables
Delinquent taxes 55,700 31,340
Accounts 116,627 173,237
Special assessments 15,387 9,982
Intergovernmental 164,633 323,812
Due from other funds 529,975 570,489
Due from component unit - 149,696
Inventories - 996
Prepaid items 107,140 -
TOTAL ASSETS 7,432,102$ 7,389,121$
LIABILITIES
Accounts payable 285,728$ 238,942$
Accrued salaries payable 124,369 94,908
Due to other governments 4 35
Due to other funds - 15,768
Unearned revenue 84,801 65,674
TOTAL LIABILITIES 494,902 415,327
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - taxes 55,700 31,340
Unavailable revenue - special assessments 15,387 9,982
TOTAL DEFERRED INFLOWS OF RESOURCES 71,087 41,322
FUND BALANCES
Nonspendable for
Inventories - 996
Due from component unit - 149,696
Prepaid items 107,140 -
Assigned for
Insurance reserve 69,684 118,145
Parkland development - 16,914
OPEB liability 259,716 233,315
Operating expenditure contingency 777,443 892,142
Cable franchise tax - PEG 33,563 -
Forfeiture program - Police department 23,013 -
Wellness program 9,016 -
Unallocated health insurance premium 19,661 -
Unassigned 5,566,877 5,521,264
TOTAL FUND BALANCES 6,866,113 6,932,472
TOTAL LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES 7,432,102$ 7,389,121$
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INTENTIONALLY
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CITY OF MARSHALL, MINNESOTA
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL - CONTINUED ON THE FOLLOWING PAGES
FOR THE YEAR ENDED DECEMBER 31, 2016
With Comparative Actual Amounts for the Year Ended December 31, 2015
2015
Actual Variance with Actual
Original Final Amounts Final Budget Amounts
REVENUES
Taxes
Property taxes 3,575,860$ 3,575,860$ 3,615,218$ 39,358$ 3,727,517$
Lodging tax 180,000 180,000 162,520 (17,480) 176,194
Franchise fees 485,000 485,000 395,616 (89,384) 448,415
Total taxes 4,240,860 4,240,860 4,173,354 (67,506) 4,352,126
Special assessments - - 1,348 1,348 -
Licenses and permits
Business 62,100 62,100 70,742 8,642 76,636
Nonbusiness 247,875 247,875 264,597 16,722 308,819
Total licenses and permits 309,975 309,975 335,339 25,364 385,455
Intergovernmental
Federal
Other Federal aid 4,080 4,080 136,666 132,586 90,770
State
Local government aid 2,427,970 2,427,970 2,427,970 - 2,421,872
Property tax credits and aids - - 149 149 161
Airport grants 76,256 76,256 112,762 36,506 104,470
Other State aids 415,879 415,879 416,479 600 429,959
Total State 2,920,105 2,920,105 2,957,360 37,255 2,956,462
Local
Other local grants 76,128 76,128 33,627 (42,501) 82,714
Total intergovernmental 3,000,313 3,000,313 3,127,653 127,340 3,129,946
Charges for services
General government 79,307 79,307 80,485 1,178 77,029
Public safety 68,665 68,665 73,493 4,828 61,153
Streets and highways 1,262,415 1,262,415 1,084,048 (178,367) 1,010,962
Culture and recreation 417,750 417,750 466,059 48,309 455,696
Miscellaneous 118,500 118,500 123,472 4,972 121,135
Total charges for services 1,946,637 1,946,637 1,827,557 (119,080) 1,725,975
Fines and forfeits 116,400 116,400 87,644 (28,756) 125,900
Investment earnings 15,000 15,000 20,388 5,388 12,324
Miscellaneous
Contributions and donations 848,225 848,225 857,020 8,795 874,043
Refunds and reimbursements 238,068 238,068 186,825 (51,243) 270,680
Total miscellaneous 1,086,293 1,086,293 1,043,845 (42,448) 1,144,723
TOTAL REVENUES 10,715,478 10,715,478 10,617,128 (98,350) 10,876,449
2016
Budgeted Amounts
-133-
CITY OF MARSHALL, MINNESOTA
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
With Comparative Actual Amounts for the Year Ended December 31, 2015
2015
Actual Variance with Actual
Original Final Amounts Final Budget Amounts
EXPENDITURES
Current
General government
Other general government
Personal services 48,892$ 48,892$ 48,613$ 279$ 47,283$
Supplies 19,500 19,500 35,521 (16,021) 19,977
Other services and charges 104,683 104,683 95,331 9,352 94,560
Total other general government 173,075 173,075 179,465 (6,390) 161,820
Cable commission
Personal services 88,101 88,101 86,845 1,256 51,897
Supplies 17,300 17,300 16,451 849 13,940
Other services and charges 13,388 13,388 12,090 1,298 23,549
Total cable commission 118,789 118,789 115,386 3,403 89,386
Administration
Personal services 350,111 350,111 342,347 7,764 341,186
Supplies 1,400 1,400 2,917 (1,517) 1,482
Other services and charges 15,717 15,717 27,899 (12,182) 10,354
Total administration 367,228 367,228 373,163 (5,935) 353,022
Finance Director/Clerk/Treasurer
Personal services 489,572 489,572 530,024 (40,452) 371,360
Supplies 6,000 6,000 6,617 (617) 3,678
Other services and charges 24,037 24,037 20,159 3,878 25,607
Total Finance Director/
Clerk/Treasurer 519,609 519,609 556,800 (37,191) 400,645
Appraising and assessing
Personal services 291,775 291,775 286,898 4,877 277,970
Supplies 5,350 5,350 1,255 4,095 3,973
Other services and charges 16,749 16,749 13,656 3,093 13,570
Total appraising and assessing 313,874 313,874 301,809 12,065 295,513
Legal
Supplies 2,500 2,500 429 2,071 571
Other services and charges 119,372 119,372 118,572 800 114,454
Total legal 121,872 121,872 119,001 2,871 115,025
2016
BUDGET AND ACTUAL - CONTINUED ON THE FOLLOWING PAGES
FOR THE YEAR ENDED DECEMBER 31, 2016
Budgeted Amounts
-134-
CITY OF MARSHALL, MINNESOTA
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL - CONTINUED
FOR THE YEAR ENDED DECEMBER 31, 2016
With Comparative Actual Amounts for the Year Ended December 31, 2015
2015
Actual Variance with Actual
Original Final Amounts Final Budget Amounts
EXPENDITURES - CONTINUED
Current - Continued
Community development
Supplies -$ -$ 360$ (360)$ -$
Other services and charges 171,204 171,204 176,840 (5,636) 163,970
Total community development 171,204 171,204 177,200 (5,996) 163,970
Municipal building
Personal services 186,527 186,527 189,656 (3,129) 180,377
Supplies 21,750 21,750 19,490 2,260 17,107
Other services and charges 72,711 72,711 65,783 6,928 66,102
Total municipal building 280,988 280,988 274,929 6,059 263,586
Safety committee
Supplies 1,200 1,200 1,031 169 263
Other services and charges 13,222 13,222 20,296 (7,074) 3,351
Total safety committee 14,422 14,422 21,327 (6,905) 3,614
Data processing
Supplies 29,625 29,625 5,582 24,043 8,449
Other services and charges 160,200 160,200 109,001 51,199 193,827
Total data processing 189,825 189,825 114,583 75,242 202,276
Duplication
Supplies 3,500 3,500 6,224 (2,724) 1,738
Other services and supplies 13,027 13,027 12,343 684 10,061
Total duplication 16,527 16,527 18,567 (2,040) 11,799
Motor pool
Supplies 4,750 4,750 3,026 1,724 3,999
Other services and supplies 1,035 1,035 4,979 (3,944) 869
Total motor pool 5,785 5,785 8,005 (2,220) 4,868
Transit operation
Other services and charges 29,600 29,600 22,240 7,360 14,400
Adult community center
Personal services 113,573 113,573 115,663 (2,090) 110,924
Supplies 18,921 18,921 15,866 3,055 17,225
Other services and charges 26,507 26,507 16,860 9,647 25,525
Total adult community center 159,001 159,001 148,389 10,612 153,674
Total general government 2,481,799 2,481,799 2,430,864 50,935 2,233,598
2016
Budgeted Amounts
-135-
CITY OF MARSHALL, MINNESOTA
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL - CONTINUED
FOR THE YEAR ENDED DECEMBER 31, 2016
With Comparative Actual Amounts for the Year Ended December 31, 2015
2015
Actual Variance with Actual
Original Final Amounts Final Budget Amounts
EXPENDITURES - CONTINUED
Current - Continued
Public safety
Police
Personal services 2,334,447$ 2,334,447$ 2,300,492$ 33,955$ 2,271,179$
Supplies 133,950 133,950 93,121 40,829 126,576
Other services and charges 282,136 282,136 249,147 32,989 206,679
Total police 2,750,533 2,750,533 2,642,760 107,773 2,604,434
Chemical assessment
Personal services 23,500 23,500 30,059 (6,559) 25,891
Supplies 13,947 13,947 6,652 7,295 14,643
Other services and charges 17,534 17,534 14,376 3,158 17,478
Total chemical assessment 54,981 54,981 51,087 3,894 58,012
Fire
Personal services 204,488 204,488 200,322 4,166 190,924
Supplies 96,481 96,481 94,020 2,461 110,323
Other services and charges 325,186 325,186 322,818 2,368 296,593
Total fire 626,155 626,155 617,160 8,995 597,840
Emergency management
Supplies 3,000 3,000 21 2,979 6,102
Other services and charges 7,321 7,321 6,210 1,111 6,675
Total emergency management 10,321 10,321 6,231 4,090 12,777
Animal control
Personal services 9,729 9,729 22,378 (12,649) 22,060
Supplies 1,850 1,850 1,955 (105) 2,285
Other services and charges 11,481 11,481 7,007 4,474 11,683
Total animal control 23,060 23,060 31,340 (8,280) 36,028
Total public safety 3,465,050 3,465,050 3,348,578 116,472 3,309,091
Public works
Street maintenance
Personal services 80,263 80,263 69,456 10,807 80,867
Supplies 20,420 20,420 23,012 (2,592) 14,572
Other services and charges 281,846 281,846 281,830 16 281,908
Total street maintenance 382,529 382,529 374,298 8,231 377,347
2016
Budgeted Amounts
-136-
CITY OF MARSHALL, MINNESOTA
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL - CONTINUED
FOR THE YEAR ENDED DECEMBER 31, 2016
With Comparative Actual Amounts for the Year Ended December 31, 2015
2015
Actual Variance with Actual
Original Final Amounts Final Budget Amounts
EXPENDITURES - CONTINUED
Current - Continued
Public works
Engineering
Personal services 743,826$ 743,826$ 706,641$ 37,185$ 698,372$
Supplies 20,550 20,550 12,060 8,490 16,796
Other services and charges 35,075 35,075 37,320 (2,245) 48,894
Total engineering 799,451 799,451 756,021 43,430 764,062
Building inspection and zoning
Personal services 368,837 368,837 374,613 (5,776) 361,603
Supplies 8,300 8,300 7,318 982 6,842
Other services and charges 33,854 33,854 28,533 5,321 39,571
Total building inspection and zoning 410,991 410,991 410,464 527 408,016
Street administration
Personal services 729,571 729,571 765,059 (35,488) 691,816
Supplies 623,550 623,550 660,739 (37,189) 703,893
Other services and charges 75,985 75,985 64,491 11,494 45,897
Total street administration 1,429,106 1,429,106 1,490,289 (61,183) 1,441,606
Total public works 3,022,077 3,022,077 3,031,072 (8,995) 2,991,031
Culture and recreation
Park maintenance and development
Personal services 318,493 318,493 328,238 (9,745) 292,928
Supplies 157,700 157,700 134,650 23,050 132,425
Other services 83,988 83,988 66,485 17,503 68,661
Total parks and recreation 560,181 560,181 529,373 30,808 494,014
Aquatic center
Personal services 112,978 112,978 107,131 5,847 100,148
Supplies 65,200 65,200 60,198 5,002 64,529
Other services and charges 58,063 58,063 42,270 15,793 54,399
Total aquatic center 236,241 236,241 209,599 26,642 219,076
Municipal band
Personal services 10,579 10,579 9,510 1,069 8,147
Supplies 800 800 147 653 3,224
Other services and charges 194 194 88 106 130
Total municipal band 11,573 11,573 9,745 1,828 11,501
2016
Budgeted Amounts
-137-
CITY OF MARSHALL, MINNESOTA
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL - CONTINUED
FOR THE YEAR ENDED DECEMBER 31, 2016
With Comparative Actual Amounts for the Year Ended December 31, 2015
2015
Actual Variance with Actual
Original Final Amounts Final Budget Amounts
EXPENDITURES - CONTINUED
Current - Continued
Culture and recreation - continued
Ice arena
Supplies -$ -$ -$ -$ 10$
Other services and charges 25,053 25,053 25,020 33 50,242
Total ice arena 25,053 25,053 25,020 33 50,252
Community services administration
Personal services 300,796 300,796 357,649 (56,853) 286,269
Supplies 4,429 4,429 7,967 (3,538) 1,732
Other services and charges 47,857 47,857 60,663 (12,806) 41,663
Total community services
administration 353,082 353,082 426,279 (73,197) 329,664
Youth development
Personal services 27,943 27,943 14,862 13,081 12,106
Supplies 2,000 2,000 980 1,020 1,272
Other services and charges 10,557 10,557 8,563 1,994 8,526
Total youth development 40,500 40,500 24,405 16,095 21,904
Community services - general
Personal services 1,118 1,118 990 128 826
Supplies 14,750 14,750 14,843 (93) 11,502
Total community services - general 15,868 15,868 15,833 35 12,328
Summer education
Personal services 59,185 59,185 62,430 (3,245) 50,381
Supplies 2,400 2,400 3,100 (700) 2,473
Other services and charges 3,095 3,095 4,660 (1,565) 2,388
Total summer education 64,680 64,680 70,190 (5,510) 55,242
Fall education
Personal services 47,807 47,807 42,381 5,426 46,327
Supplies 10,750 10,750 5,179 5,571 8,699
Other services and charges 4,870 4,870 8,441 (3,571) 5,628
Total fall education 63,427 63,427 56,001 7,426 60,654
Winter education
Personal services 52,479 52,479 50,395 2,084 55,745
Supplies 3,300 3,300 1,331 1,969 2,261
Other services and charges 7,220 7,220 3,383 3,837 5,671
Total winter education 62,999 62,999 55,109 7,890 63,677
Summer recreation
Personal services 61,062 61,062 66,339 (5,277) 54,721
Supplies 25,000 25,000 22,644 2,356 20,619
Other services and charges 9,120 9,120 8,209 911 10,625
Total summer recreation 95,182 95,182 97,192 (2,010) 85,965
Budgeted Amounts
2016
-138-
CITY OF MARSHALL, MINNESOTA
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL - CONTINUED
FOR THE YEAR ENDED DECEMBER 31, 2016
With Comparative Actual Amounts for the Year Ended December 31, 2015
2015
Actual Variance with Actual
Original Final Amounts Final Budget Amounts
EXPENDITURES - CONTINUED
Current - Continued
Fall recreation
Personal services 44,297$ 44,297$ 46,953$ (2,656)$ 44,051$
Supplies 6,000 6,000 7,941 (1,941) 6,451
Other services and charges 570 570 675 (105) 1,231
Total fall recreation 50,867 50,867 55,569 (4,702) 51,733
Winter recreation
Personal services 46,532 46,532 53,119 (6,587) 48,779
Supplies 5,000 5,000 7,250 (2,250) 6,455
Other services and charges 14,806 14,806 7,512 7,294 14,550
Total winter recreation 66,338 66,338 67,881 (1,543) 69,784
Total culture and recreation 1,645,991 1,645,991 1,642,196 3,795 1,525,794
Airport
Personal services 176,944 176,944 196,619 (19,675) 199,673
Supplies 72,850 72,850 73,690 (840) 81,603
Other services and charges 202,827 202,827 288,463 (85,636) 258,410
Total airport 452,621 452,621 558,772 (106,151) 539,686
Total current 11,067,538 11,067,538 11,011,482 56,056 10,599,200
Capital outlay
Public safety - - 5,596 (5,596) -
Public works - - 16 (16) -
Total capital outlay - - 5,612 (5,612) -
TOTAL EXPENDITURES 11,067,538 11,067,538 11,017,094 50,444 10,599,200
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (352,060) (352,060) (399,966) (47,906) 277,249
OTHER FINANCING SOURCES (USES)
Sale of capital assets 25,000 25,000 31,585 6,585 34,574
Transfers in 302,060 302,060 302,022 (38) 355,027
Transfers out - - - - (379,084)
TOTAL OTHER FINANCING
SOURCES (USES) 327,060 327,060 333,607 6,547 10,517
NET CHANGE IN FUND BALANCES (25,000) (25,000) (66,359) (41,359) 287,766
FUND BALANCES, JANUARY 1 6,932,472 6,932,472 6,932,472 - 6,644,706
FUND BALANCES, DECEMBER 31 6,907,472$ 6,907,472$ 6,866,113$ (41,359)$ 6,932,472$
Budgeted Amounts
2016
-139-
317 322 323 324 325 326 359
2015
2008 G.O. 2014B Public
Equipment MERIT / TIF 1-12 TIF 2-4 2015A TIF 4-1 Improvement
Certificates SMASC Bend Rite Schwan's Bond Heritage Point Bonds
ASSETS
Cash and temporary investments 84,124$ 32,265$ -$ -$ 48,602$ -$ 115,242$
Receivables
Taxes 1,371 - - - 667 - 271
Special assessments
Delinquent - - - - - - 508
Noncurrent - - - - - - 142,342
Intergovernmental 588 - - - 334 - 1,431
TOTAL ASSETS 86,083$ 32,265$ -$ -$ 49,603$ -$ 259,794$
LIABILITIES
Accounts payable 200$ 200$ -$ -$ 502$ -$ 102$
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - taxes 1,371 - - - 667 - 271
Unavailable revenue - special assessments - - - - - - 142,850
TOTAL DEFERRED INFLOWS OF RESOURCES 1,371 - - - 667 - 143,121
FUND BALANCES
Restricted for
Debt service 84,512 32,065 - - 48,434 - 116,571
TOTAL LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES 86,083$ 32,265$ -$ -$ 49,603$ -$ 259,794$
CITY OF MARSHALL, MINNESOTA
DEBT SERVICE FUNDS
COMBINING BALANCE SHEET - CONTINUED ON THE FOLLOWING PAGES
DECEMBER 31, 2016
-140-
CITY OF MARSHALL, MINNESOTA
DEBT SERVICE FUNDS
COMBINING BALANCE SHEET- CONTINUED
DECEMBER 31, 2016
360 361 363 364 365 366 367 368 369 370 371
2006B G.O. 2007 2008 2009 2010 2011
2016B G.O. 2002A 2005A G.O. Utility and Public Public Public Public Public 2011A G.O. 2012A G.O.
Various Revenue Tax Various Improvement Improvement Improvement Improvement Improvement Improvement Tax Increment Tax Increment
Purpose Bonds Increment Bonds Purpose Bonds Bonds Bonds Bonds Bonds Bonds Bonds Bonds Bonds
71,069$ 118,021$ 518,737$ 32,071$ 621,101$ 403,751$ 925,417$ 256,397$ 107,921$ 191,759$ 451,702$
502 151 114 58 195 514 638 578 1,334 57 2,030
- - 492 - 1,629 249 405 4,558 878 - 4,683
177,655 - 696 55,814 41,436 495,156 375,584 1,065,630 134,828 5,269,556 1,420,513
251 - 65 - 190 185 1,591 200 886 2 2,891
249,477$ 118,172$ 520,104$ 87,943$ 664,551$ 899,855$ 1,303,635$ 1,327,363$ 245,847$ 5,461,374$ 1,881,819$
124$ -$ -$ 23$ 66$ 650$ 146$ 559$ 3,697$ 3,180$ 120$
502 151 114 58 195 514 638 578 1,334 57 2,030
177,655 - 1,188 55,814 43,065 495,405 375,989 1,070,188 135,706 5,269,556 1,425,196
178,157 151 1,302 55,872 43,260 495,919 376,627 1,070,766 137,040 5,269,613 1,427,226
71,196 118,021 518,802 32,048 621,225 403,286 926,862 256,038 105,110 188,581 454,473
249,477$ 118,172$ 520,104$ 87,943$ 664,551$ 899,855$ 1,303,635$ 1,327,363$ 245,847$ 5,461,374$ 1,881,819$
-141-
THIS PAGE IS LEFT BLANK
INTENTIONALLY
-142-
CITY OF MARSHALL, MINNESOTA
DEBT SERVICE FUNDS
COMBINING BALANCE SHEET- CONTINUED
DECEMBER 31, 2016
372 373 374 376 378 396
2013 2014 2004C G.O.
Public Public 2016 2000B Tax Increment
Improvement Improvement 23 Pedestrian Tax Abatement Improvement Refunding
Bonds Bonds Bridge Bonds Bonds Bonds Totals
ASSETS
Cash and temporary investments 601,130$ 380,267$ 69,372$ -$ 834$ 18,960$ 5,048,742$
Receivables
Taxes 3,073 2,337 1,289 - 49 - 15,228
Special assessments
Delinquent 1,621 449 - - - - 15,472
Noncurrent 824,099 389,057 - - 5,482 - 10,397,848
Intergovernmental 1,879 2,249 625 - - - 13,367
TOTAL ASSETS 1,431,802$ 774,359$ 71,286$ -$ 6,365$ 18,960$ 15,490,657$
LIABILITIES
Accounts payable 200$ 116$ 148$ 200$ -$ -$ 10,233$
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - taxes 3,073 2,337 1,289 - 49 - 15,228
Unavailable revenue - special assessments 825,720 389,506 - - 5,482 - 10,413,320
TOTAL DEFERRED INFLOWS OF RESOURCES 828,793 391,843 1,289 - 5,531 - 10,428,548
FUND BALANCES
Restricted for
Debt service 602,809 382,400 69,849 (200) 834 18,960 5,051,876
TOTAL LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES 1,431,802$ 774,359$ 71,286$ -$ 6,365$ 18,960$ 15,490,657$
-143-
317 322 323 324 325 326 359 360
2015
2008 G.O. 2014B Public 2016B G.O.
Equipment MERIT / TIF 1-12 TIF 2-4 2015A TIF 4-1 Improvement Various
Certificates SMASC Bend Rite Schwan's Bond Heritage Point Bonds Purpose Bonds
REVENUES
Taxes
Property taxes 92,168$ -$ -$ -$ 52,922$ -$ 16,450$ 39,776$
Special assessments - - - - - - 29,977 31,545
Investment earnings 9 12 - - - - 70 -
TOTAL REVENUES 92,177 12 - - 52,922 - 46,497 71,321
EXPENDITURES
Current
Economic development - - - - - 60,499 - -
Debt service
Principal 75,000 830,000 - - - - - -
Interest and other 8,996 631,334 7,760 16,044 10,779 - 30,220 125
TOTAL EXPENDITURES 83,996 1,461,334 7,760 16,044 10,779 60,499 30,220 125
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 8,181 (1,461,322) (7,760) (16,044) 42,143 (60,499) 16,277 71,196
OTHER FINANCING SOURCES
Transfers in - 1,478,298 7,760 16,044 - 60,499 - -
NET CHANGE IN FUND BALANCES 8,181 16,976 - - 42,143 - 16,277 71,196
FUND BALANCES, JANUARY 1 76,331 15,089 - - 6,291 - 100,294 -
FUND BALANCES, DECEMBER 31 84,512$ 32,065$ -$ -$ 48,434$ -$ 116,571$ 71,196$
CITY OF MARSHALL, MINNESOTA
DEBT SERVICE FUNDS
COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - CONTINUED ON THE FOLLOWING PAGES
FOR THE YEAR ENDED DECEMBER 31, 2016
-144-
CITY OF MARSHALL, MINNESOTA
DEBT SERVICE FUNDS
COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - CONTINUED
FOR THE YEAR ENDED DECEMBER 31, 2016
361 363 364 365 366 367 368 369 370 371
2006B G.O. 2007 2008 2009 2010 2011
2002A 2005A G.O. Utility and Public Public Public Public Public 2011A G.O. 2012A G.O.
Revenue Tax Various Improvement Improvement Improvement Improvement Improvement Improvement Tax Increment Tax Increment
Purpose Bonds Increment Bonds Purpose Bonds Bonds Bonds Bonds Bonds Bonds Bonds Bonds Bonds
21$ 68$ 36$ 116$ 29,102$ 41,213$ 31,527$ 92,601$ 183$ 142,211$
- 2,459 - 33,962 161,567 111,419 204,529 38,331 6,729 345,788
188 789 53 951 346 1,187 108 23 1,919 28
209 3,316 89 35,029 191,015 153,819 236,164 130,955 8,831 488,027
- - - - - - - - - -
- 335,000 - 150,000 185,000 190,000 330,000 110,000 90,000 275,000
- 10,165 3,666 16,249 26,998 29,532 41,671 32,236 27,950 40,820
- 345,165 3,666 166,249 211,998 219,532 371,671 142,236 117,950 315,820
209 (341,849) (3,577) (131,220) (20,983) (65,713) (135,507) (11,281) (109,119) 172,207
- - - - 37,070 - - - 270,175 -
209 (341,849) (3,577) (131,220) 16,087 (65,713) (135,507) (11,281) 161,056 172,207
117,812 860,651 35,625 752,445 387,199 992,575 391,545 116,391 27,525 282,266
118,021$ 518,802$ 32,048$ 621,225$ 403,286$ 926,862$ 256,038$ 105,110$ 188,581$ 454,473$
-145-
THIS PAGE IS LEFT BLANK
INTENTIONALLY
-146-
CITY OF MARSHALL, MINNESOTA
DEBT SERVICE FUNDS
COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - CONTINUED
FOR THE YEAR ENDED DECEMBER 31, 2016
372 373 374 376 378 396
2013 2014 2004C G.O.
Public Public 2016 2000B Tax Increment
Improvement Improvement 23 Pedestrian Tax Abatement Improvement Refunding
Bonds Bonds Bridge Bonds Bonds Bonds Totals
REVENUES
Taxes
Property taxes 197,248$ 175,736$ 98,591$ -$ 49$ -$ 1,010,018$
Special assessments 144,849 81,397 - - - - 1,192,552
Investment earnings 489 223 - - - 33 6,428
TOTAL REVENUES 342,586 257,356 98,591 - 49 33 2,208,998
EXPENDITURES
Current
Economic development - - - - - - 60,499
Debt service
Principal 365,000 80,000 - - - - 3,015,000
Interest and other 80,387 45,775 33,854 200 23,236 336 1,118,333
TOTAL EXPENDITURES 445,387 125,775 33,854 200 23,236 336 4,193,832
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (102,801) 131,581 64,737 (200) (23,187) (303) (1,984,834)
OTHER FINANCING SOURCES
Transfers in - - - - - - 1,869,846
NET CHANGE IN FUND BALANCES (102,801) 131,581 64,737 (200) (23,187) (303) (114,988)
FUND BALANCES, JANUARY 1 705,610 250,819 5,112 - 24,021 19,263 5,166,864
FUND BALANCES, DECEMBER 31 602,809$ 382,400$ 69,849$ (200)$ 834$ 18,960$ 5,051,876$
-147-
CITY OF MARSHALL, MINNESOTA
ECONOMIC DEVELOPMENT AUTHORITY FUNDS
COMBINING BALANCE SHEET
DECEMBER 31, 2016
204/208 205/206/207/209 212 213
Economic EDA Parkway
Development Housing State EDA Federal EDA
Authority Fund CRIF CRIF Total
ASSETS
Cash and temporary investments 695,751$ 113,464$ 315,946$ 523,912$ 1,649,073$
Receivables
Delinquent taxes 1,885 - - - 1,885
Accounts 250 - 250
Notes/leases - 233,713 - 431,356 665,069
Intergovernmental 784 - - - 784
Land held for resale - 1,311,852 - - 1,311,852
TOTAL ASSETS 698,670$ 1,659,029$ 315,946$ 955,268$ 3,628,913$
LIABILITIES
Accounts payable 565$ 42,998$ -$ -$ 43,563$
Due to primary government - 317,073 - - 317,073
TOTAL LIABILITIES 565 360,071 - - 360,636
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - taxes 1,885 - - - 1,885
FUND BALANCES
Nonspendable
Land held for resale - 1,311,852 - - 1,311,852
Restricted for
Economic development - - 315,946 955,268 1,271,214
Assigned for
Economic development 696,220 - - - 696,220
Unassigned - (12,894) - - (12,894)
TOTAL FUND BALANCES 696,220 1,298,958 315,946 955,268 3,266,392
TOTAL LIABILITIES, DEFERRED INFLOWS
OF RESOURCES AND FUND BALANCES 698,670$ 1,659,029$ 315,946$ 955,268$ 3,628,913$
Amounts reported for EDA activities in the statement
of net position are different because
Total fund balances - EDA funds 3,266,392$
Capital assets used in EDA activities are not financial
resources and therefore are not reported as assets in the funds. 7,591
Long-term liabilities, including bonds payable, are not due and payable in the
current period and therefore are not reported as liabilities in the funds.
Long-term liabilities at year-end consist of
Notes payable (63,742)
Long-term assets are not available to pay current-period expenditures and, therefore,
are unavailable in the funds.
Delinquent property taxes receivable 1,885
Total net position - EDA activities 3,212,126$
-148-
CITY OF MARSHALL, MINNESOTA
ECONOMIC DEVELOPMENT AUTHORITY FUNDS
COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES/NET POSITION
FOR THE YEAR ENDED DECEMBER 31, 2016
204/208 205/206/207/209 212 213
Economic
Development EDA Parkway State EDA Federal EDA
Authority Housing CRIF CRIF Total
REVENUES
Taxes
Property taxes 121,059$ -$ -$ -$ 121,059$
Investment earnings 661 556 - 2,643 3,860
Miscellaneous
Rents - 12,563 - - 12,563 Refunds and reimbursements 3,750 - - - 3,750
TOTAL REVENUES 125,470 13,119 - 2,643 141,232
EXPENDITURES
Current
Economic development 141,901 1,030 25,764 71 168,766
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (16,431) 12,089 (25,764) 2,572 (27,534)
OTHER FINANCING SOURCES
Sale of capital assets - 66,414 - - 66,414
NET CHANGE IN FUND BALANCES (16,431) 78,503 (25,764) 2,572 38,880
FUND BALANCES, JANUARY 1 712,651 1,220,455 341,710 952,696 3,227,512
FUND BALANCES, DECEMBER 31 696,220$ 1,298,958$ 315,946$ 955,268$ 3,266,392$
Amounts reported for EDA activities in the statement
of activities are different because
Net change in fund balances - EDA funds 38,880$
EDA funds report capital outlay as expenditures. However, in the statement of
activities the cost of those assets is allocated over the estimated useful lives and reported
as depreciation expense.
Depreciation expense (646)
Delinquent property taxes receivable will be collected this year, but are not available soon
enough to pay for the current period's expenditures, and therefore are unavailable in the funds.
Property taxes 1,648
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 EDA funds.
Write-off of housing loans (23,236)
Change in net position - EDA activities 16,646$
-149-
CITY OF MARSHALL, MINNESOTA
ECONOMIC DEVELOPMENT AUTHORITY FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
FOR THE YEAR ENDED DECEMBER 31, 2016
With Comparative Actual Amounts for the Year Ended December 31, 2015
2015
Actual Variance with Actual
Original Final Amounts Final Budget Amounts
REVENUES
Taxes
Property taxes 119,677$ 119,677$ 121,059$ 1,382$ 120,220$
Investment earnings - - 661 661 763
Miscellaneous
Refunds and reimbursements 3,500 3,500 3,750 250 3,750
TOTAL REVENUES 123,177 123,177 125,470 2,293 124,733
EXPENDITURES
Current
Economic development
Supplies 1,500 1,500 4,237 (2,737) 8,536
Other services and charges 128,301 128,301 137,664 (9,363) 127,221
TOTAL EXPENDITURES 129,801 129,801 141,901 (12,100) 135,757
NET CHANGE IN FUND BALANCES (6,624) (6,624) (16,431) (9,807) (11,024)
FUND BALANCES, JANUARY 1 712,651 712,651 712,651 - 723,675
FUND BALANCES, DECEMBER 31 706,027$ 706,027$ 696,220$ (9,807)$ 712,651$
2016
Budgeted Amounts
-150-
CITY OF MARSHALL, MINNESOTA
EDA PARKWAY HOUSING FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
FOR THE YEAR ENDED DECEMBER 31, 2016
With Comparative Actual Amounts for the Year Ended December 31, 2015
2015
Actual Variance with Actual
Original Final Amounts Final Budget Amounts
REVENUES
Investment earnings -$ -$ 556$ 556$ 562$
Miscellaneous
Rents - - 12,563 12,563 12,563
TOTAL REVENUES - - 13,119 13,119 13,125
EXPENDITURES
Current
Economic development
Other services and charges 256 256 1,030 (774) 5,790
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (256) (256) 12,089 12,345 7,335
OTHER FINANCING SOURCES
Sale of capital assets - - 66,414 66,414 87,500
NET CHANGE IN FUND BALANCES (256) (256) 78,503 78,759 94,835
FUND BALANCES, JANUARY 1 1,220,455 1,220,455 1,220,455 - 1,125,620
FUND BALANCES, DECEMBER 31 1,220,199$ 1,220,199$ 1,298,958$ 78,759$ 1,220,455$
2016
Budgeted Amounts
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CITY OF MARSHALL, MINNESOTA
MARSHALL-LYON COUNTY LIBRARY FUNDS
COMBINING BALANCE SHEET
DECEMBER 31, 2016
211 321
Marshall - Lyon
Marshall - Lyon County Library
County Library Debt Totals
ASSETS
Cash and temporary investments 314,213$ 118,717$ 432,930$
Receivables
Delinquent taxes 8,869 720 9,589
Accounts 10,000 - 10,000
Intergovernmental 3,736 299 4,035
TOTAL ASSETS 336,818$ 119,736$ 456,554$
LIABILITIES
Accounts payable 15,972$ 200$ 16,172$
Accrued salaries payable 9,186 - 9,186
Unearned revenue 9,672 - 9,672
TOTAL LIABILITIES 34,830 200 35,030
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - taxes 8,869 720 9,589
FUND BALANCES
Restricted for
Debt service - 118,816 118,816
Assigned for
Unearned revenue 23,667 - 23,667
Compensated absences 72,211 - 72,211
OPEB liability 19,035 - 19,035
Emergency/unanticipated 50,000 - 50,000
Unassigned 128,206 - 128,206
TOTAL FUND BALANCES 293,119 118,816 411,935
TOTAL LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES 336,818$ 119,736$ 456,554$
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CITY OF MARSHALL, MINNESOTA
MARSHALL-LYON COUNTY LIBRARY FUNDS
DECEMBER 31, 2016
Amounts reported for governmental activities in the
statement of net position are different because
Total fund balances from above 411,935$
Capital assets used in governmental activities are
not financial resources and therefore are not
reported as assets in the funds. 6,400,195
Long-term liabilities, including bonds payable, are
not due and payable in the current period and
therefore are not reported as liabilities in the funds.
Long-term liabilities at year-end consist of
Other postemployment benefits obligation (25,103)
Bonds payable (685,000)
Unamortized bond premiums (9,372)
Compensated absences payable (72,211)
Pension liability (582,403)
Long-term assets are not available to pay current-period expenditures and,
therefore, are unavailable in the funds.
Delinquent property taxes receivable 9,589
Governmental funds to not report long-term amounts related to pensions.
Deferred outflows of pension resources 209,966
Deferred inflows of pension resources (76,641)
Governmental funds to not report a liability for
accrued interest until due and payable. (7,724)
Total net position 5,573,231$
RECONCILIATION OF THE BALANCE SHEET TO THE STATEMENT OF NET POSITION
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211 321
Marshall - Lyon
Marshall - Lyon County Library
County Library Debt Totals
REVENUES
Taxes
Property taxes 576,949$ 47,001$ 623,950$
Intergovernmental
City of Marshall - 36,835 36,835
Lyon County 251,102 - 251,102
Fines and fees 13,584 - 13,584
Investment earnings 361 93 454
Miscellaneous
Contributions and donations 26,774 - 26,774
TOTAL REVENUES 868,770 83,929 952,699
EXPENDITURES
Current
Culture and recreation 887,863 - 887,863
Capital outlay
Culture and recreation 41,714 - 41,714
Debt service
Principal - 95,000 95,000
Interest and other - 20,339 20,339
TOTAL EXPENDITURES 929,577 115,339 1,044,916
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (60,807) (31,410) (92,217)
OTHER FINANCING SOURCES (USES)
Sale of capital assets 679 - 679
NET CHANGE IN FUND BALANCES (60,128) (31,410) (91,538)
FUND BALANCES, JANUARY 1 353,247 150,226 503,473
FUND BALANCES, DECEMBER 31 293,119$ 118,816$ 411,935$
CITY OF MARSHALL, MINNESOTA
FOR THE YEAR ENDED DECEMBER 31, 2016
COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND
MARSHALL-LYON COUNTY LIBRARY FUNDS
CHANGES IN FUND BALANCES/NET POSITION
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CITY OF MARSHALL, MINNESOTA
MARSHALL - LYON COUNTY LIBRARY FUNDS
FOR THE YEAR ENDED DECEMBER 31, 2016
Amounts reported for governmental activities in the
statement of activities are different because
Net change in fund balances from previous page (91,538)$
Governmental funds report capital outlay as expenditures. However, in the statement of
activities the cost of those assets is allocated over the estimated useful lives and reported
as depreciation expense.
Capital outlay 91,236
Depreciation (271,706)
The issuance of long-term debt provides current financial resources to governmental funds, while
the repayment of principal of long-term debt consumes the current financial resources of governmental
funds. Neither transaction, however, has any effect on net position. Also, governmental funds report
the effect of premiums, discounts and similar items when debt is first issued, whereas these amounts
are deferred and amortized in the statement of activities.
Principal repayments 95,000
Premium amortization 937
Interest on long-term debt in the statement of activities differs from the amount reported in the
governmental fund because interest is recognized as an expenditure in the funds when it is due,
and thus requires the use of current financial resources. In the statement of activities, however,
interest expense is recognized as the interest accrues, regardless of when it is due. 792
Long-term pension activity is not reported in governmental funds.
Pension expense (17,255)
Direct aid contributions 2,267
Certain revenues are recognized as soon as they are earned. Under the modified accrual
basis of accounting certain revenues cannot be recognized until they are available
to liquidate liabilities of the current period.
Property taxes 4,460
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.
Other postemployment benefits cost (1,891)
Compensated absences 20,107
Change in net position - governmental activities (167,591)$
AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES
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CITY OF MARSHALL, MINNESOTA
MARSHALL - LYON COUNTY LIBRARY FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
FOR THE YEAR ENDED DECEMBER 31, 2016
With Comparative Actual Amounts for the Year Ended December 31, 2015
2015
Actual Variance with Actual
Original Final Amounts Final Budget Amounts
REVENUES
Taxes
Property taxes 570,655$ 570,655$ 576,949$ 6,294$ 555,748$
Intergovernmental
Lyon County 251,125 251,125 251,102 (23) 245,000
Fines and fees 20,300 20,300 13,584 (6,716) 14,899
Investment earnings 100 100 361 261 362
Miscellaneous
Contributions and donations 3,900 3,900 26,774 22,874 10,893
TOTAL REVENUES 846,080 846,080 868,770 22,690 826,902
EXPENDITURES
Current
Culture and recreation
Salaries 489,513 489,513 492,764 (3,251) 470,039
Insurance and pension 167,873 167,873 146,386 21,487 142,704
Supplies 10,746 10,746 26,369 (15,623) 9,336
Telephone 2,000 2,000 1,793 207 1,544
Postage 500 500 690 (190) 601
Travel, conferences, and workshops 1,500 1,500 5,679 (4,179) 3,782
Professional services 4,335 4,335 17,175 (12,840) 11,389
Repairs and maintenance 35,000 35,000 33,961 1,039 25,587
Books and periodicals 58,174 58,174 60,449 (2,275) 45,377
AV materials and circulation supplies 6,850 6,850 7,695 (845) 3,546
Utilities and refuse hauling 53,198 53,198 42,783 10,415 44,832
Vehicle maintenance 750 750 316 434 388
Insurance and bonds 8,073 8,073 3,012 5,061 3,704
Other services and charges 6,900 6,900 36,957 (30,057) 22,357
Expenditures of donations - - 11,834 (11,834) 10,491
Total current 845,412 845,412 887,863 (42,451) 795,677
Capital outlay
Library 21,380 21,380 41,714 (20,334) -
TOTAL EXPENDITURES 866,792 866,792 929,577 (62,785) 795,677
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (20,712) (20,712) (60,807) (40,095) 31,225
OTHER FINANCING SOURCES
Sale of capital assets - - 679 679 -
Transfers in - - - - 8,000
TOTAL OTHER FINANCING
SOURCES - - 679 679 8,000
NET CHANGE IN FUND BALANCES (20,712) (20,712) (60,128) (39,416) 39,225
FUND BALANCES, JANUARY 1 353,247 353,247 353,247 - 314,022
FUND BALANCES, DECEMBER 31 332,535$ 332,535$ 293,119$ (39,416)$ 353,247$
2016
Budgeted Amounts
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CITY OF MARSHALL, MINNESOTA
SUMMARY FINANCIAL REPORT
REVENUES AND EXPENDITURES FOR GENERAL OPERATIONS
GOVERNMENTAL FUNDS
FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015
2016 2015
REVENUES
Taxes 8,197,108$ 7,953,897$ 3.06 %
Special assessments 1,204,380 905,751 32.97
Licenses and permits 335,339 385,455 (13.00)
Intergovernmental 8,831,843 8,742,823 1.02
Charges for services 2,010,612 1,785,048 12.64
Fines and forfeits 87,644 125,900 (30.39)
Investment earnings 83,690 316,084 (73.52)
Miscellaneous 1,744,853 4,048,491 (56.90)
TOTAL REVENUES 22,495,469$ 24,263,449$ (7.29) %
Per Capita 1,631$ 1,769$ (7.78) %
EXPENDITURES
Current
General government 2,430,864$ 2,233,598$ 8.83 %
Public safety 3,472,761 3,469,035 0.11
Public works 3,830,812 2,992,477 28.01
Culture and recreation 2,120,145 2,599,815 (18.45)
Economic development 285,441 199,377 43.17
Airport 558,772 539,686 3.54
Capital outlay
General government 78,668 12,235 542.98
Public safety 724,100 4,626,108 (84.35)
Public works 2,630,577 8,791,594 (70.08)
Culture and recreation 7,230,896 12,931,521 (44.08)
Economic development 103,563 - 100.00
Airport 200 - 100.00
Debt service
Principal 3,104,888 3,692,251 (15.91)
Interest and other charges 1,126,001 1,177,068 (4.34)
Bond issuance costs 115,731 61,194 89.12
TOTAL EXPENDITURES 27,813,419$ 43,325,959$ (35.80) %
Per Capita 2,016$ 3,158$ (36.15) %
Total Long-term Indebtedness 33,828,009$ 31,917,897$ 5.98 %
Per Capita 2,453 2,327 5.42
General Fund Balance - December 31 6,866,113$ 6,932,472$ (0.96)
Per Capita 498 505 (1.49)
The purpose of this report is to provide a summary of financial information concerning the City of Marshall to interested
citizens. The complete financial statements may be examined at City Hall, 344 West Main Street. Questions
about this report should be directed to Karla Drown, Finance Director at (507)537-6763.
(Decrease)
Increase
Percent
Total
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THIS PAGE IS LEFT BLANK
INTENTIONALLY
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OTHER REQUIRED REPORTS
CITY OF MARSHALL MARSHALL, MINNESOTA
FOR THE YEAR ENDED DECEMBER 31, 2016
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THIS PAGE IS LEFT BLANK
INTENTIONALLY
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INDEPENDENT AUDITOR’S REPORT ON MINNESOTA LEGAL COMPLIANCE
Honorable Mayor and City Council City of Marshall, Minnesota We have audited, in accordance with auditing standards generally accepted in the United States of America, the financial statements of the governmental activities, the business-type activities, the discretely presented component units, each major fund and the aggregate remaining fund information of the City of Marshall, Minnesota (the City) as of and for the year ended December 31, 2016, and the related notes to the financial statements, and have issued our report thereon dated June 27, 2017. The Minnesota Legal Compliance Audit Guide for Cities, promulgated by the State Auditor pursuant to Minnesota Statute §6.65, contains seven categories of compliance to be tested: contracting and bidding, deposits and investments, conflicts of interest, public indebtedness, claims and disbursements, miscellaneous provisions, and tax increment financing. Our audit considered all of the listed categories. In connection with our audit, nothing came to our attention that caused us to believe that the City failed to comply with the provisions of the Minnesota Legal Compliance Audit Guide for Cities. However, our audit was not directed primarily toward obtaining knowledge of such noncompliance. Accordingly, had we performed additional procedures, other matters may have come to our attention regarding the City’s noncompliance with the above referenced provisions. The purpose of this report is solely to describe the scope of our testing of compliance and the results of that testing, and not to provide an opinion on compliance. Accordingly, this communication is not suitable for any other purpose.
ABDO, EICK & MEYERS, LLP Mankato, Minnesota June 27, 2017
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INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON
COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN
ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Honorable Mayor and City Council City of Marshall, Minnesota We have audited, in accordance with the 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, the financial statements of the governmental activities, the business-type activities, the discretely presented component units, each major fund and the aggregate remaining fund information of the City of Marshall, Minnesota (the City), as of and for the year ended December 31, 2016, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated June 27, 2017. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the City's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control. Our consideration of internal control was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified However, as described in the accompanying Schedule of Findings and Responses, we identified a certain deficiency in internal control that we consider to be a material weakness and a deficiency that we consider to be a significant deficiency. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. We consider the deficiency described in the accompanying Schedule of Findings and Responses as item 2016-002 to be a material weakness. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. We consider the deficiency described in the accompanying Schedule of Findings and Responses as item 2016-001 to be a significant deficiency.
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Compliance and Other Matters As part of obtaining reasonable assurance about whether the City's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. The City’s Responses to Findings The City’s responses to the findings identified in our audit are described in the accompanying Schedule of Findings and Responses. The City’s responses were not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on them. Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
ABDO, EICK & MEYERS, LLP Mankato, Minnesota June 27, 2017
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CITY OF MARSHALL, MINNESOTA
SCHEDULE OF FINDINGS AND RESPONSES
FOR THE YEAR ENDED DECEMBER 31, 2016
Finding Description
2016-001 Financial report preparation
Condition: As in prior years, the auditor was requested to draft the audited financial statements and related
footnote disclosures as part of our regular audit services. Auditing standards require auditors to
communicate this situation to the Council as an internal control deficiency. Ultimately, it is
management’s responsibility to provide for the preparation of your statements and footnotes,
and the responsibility of the auditor to determine the fairness of presentation of those
statements. From a practical standpoint we do both for you at the same time in connection with
our audit. This is not unusual for us to do with organizations of your size. However, based on
auditing standards, it is our responsibility to inform you that this deficiency could result in a
material misstatement to the financial statements that could have been prevented or detected by
your management. Essentially, the auditors cannot be part of your internal control process.
Criteria: Internal controls should be in place to provide reasonable assurance over financial reporting.
Cause: From a practical standpoint we do both for you at the same time in connection with our audit.
This is not unusual for us to do with organization of your size.
Effect: The effectiveness of the internal control system relies on enforcement by management. The
effect of deficiencies in internal controls can result in undetected errors in financial reporting.
Recommendation: It is your responsibility to make the ultimate decision to accept this degree of risk associated
with this condition because of cost or other considerations. As in prior years, the auditor has
instructed management to review a draft of the auditor prepared financials in detail for their
accuracy; we have answered any questions they might have, and have encouraged research of
any accounting guidance in connection with the adequacy and appropriateness of classification
of disclosure in your statements. We are satisfied that the appropriate steps have been taken to
provide you with the completed financial statements. While the City is reviewing the financial
statements we recommend a disclosure checklist is utilized to ensure all required disclosures are
presented and the City should agree its financial software to the numbers reported in the
financial statements.
Management response:
For now, the City’s management accepts the degree of risk associated with this condition and thoroughly reviews a
draft of the financial statements.
Updated progress from prior year:
There is no change in this finding.
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CITY OF MARSHALL, MINNESOTA
SCHEDULE OF FINDINGS AND RESPONSES - CONTINUED
FOR THE YEAR ENDED DECEMBER 31, 2016
Finding Description
2016-002 Material audit and accounting adjustments
Condition: During our audit, adjustments were needed to record numerous accounting and audit
adjustments, including some material. The material adjustments were to adjust cash, special
assessments, inventory, prepaids, capital assets and debt activity.
Criteria: The financial statements are the responsibility of the City's management.
Cause: City staff has prepared a year-end trial balance that does not reflect all necessary accounting
entries.
Effect: This indicates that it would be likely that a misstatement may occur and not be detected by the
City’s system of internal control. The audit firm cannot serve as a compensating control over
this deficiency.
Recommendation: We recommend that management review each journal entry, obtain an understanding of why the
entry was necessary and modify current procedures to ensure that future corrections are not
needed.
Management response:
Management will review and gain an understanding of the audit adjustments in order to reduce the number of entries
necessary for future audits.
Updated progress from prior year:
The City will continue trying to improve in preparing a year-end trial balance in the upcoming years.
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