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CITY OF ELK RIVER
<br /> MANAGEMENT'S DISCUSSION AND ANALYSIS
<br /> ENDED DECEMBER 31, 2016
<br /> Long-term debt. At the end of the current fiscal year, the City had total long-term debt outstanding of
<br /> $81,906,740, an increase of $16,533,306 from 2015. General obligation improvement bonds
<br /> ($29,530,000) were issued to finance the construction of a library, a recreation facility, a public
<br /> safety/city hall facility, a public works facility, and improvement projects within the City. General
<br /> obligation revenue bonds ($11,830,000) were used to finance sewer and water systems. Revenue
<br /> bonds ($11,955,000) were used to finance electric system improvements.
<br /> Governmental Activities Business-Type Activities Total
<br /> 2016 2015 2016 2015 2016 2015
<br /> General Obligation Bonds $ 29,530,000 $ 33,220,000 $ - $ - $ 29,530,000 $ 33,220,000
<br /> General Obligation Revenue Bonds - - 11,830,000 12,535,000 11,830,000 12,535,000
<br /> Revenue Bonds - - 11,955,000 2,985,000 11,955,000 2,985,000
<br /> Issuance Premium 443,384 494,456 536,331 65,234 979,715 559,690
<br /> Total Bonds Payable, Net 29,973,384 33,714,456 24,321,331 15,585,234 54,294,715 49,299,690
<br /> Contracts for Deed - 1,410,000 - - - 1,410,000
<br /> Notes Payable - - 1,214,076 1,408,368 1,214,076 1,408,368
<br /> Compensated Absences 1,494,429 1,466,238 475,132 424,758 1,969,561 1,890,996
<br /> Net Pension Liability 18,541,368 7,589,597 5,321,616 3,277,492 23,862,984 10,867,089
<br /> Other Postemployment Benefits 426,720 376,943 138,683 120,348 565,403 497,291
<br /> Total Outstanding Debt $ 50,435,901 $ 44,557,234 $ 31,470,838 $ 20,816,200 $ 81,906,739 $ 65,373,434
<br /> Additional long-term debt in the amount of $1,214,076 is for notes payable, $1,969,561 is for
<br /> compensated absences, $23,862,985 is for net pension liability, and $565,403 is for other
<br /> postemployment benefits obligations.
<br /> The City maintains a bond rating of AA+ from Standard & Poor's for general obligation debt.
<br /> State statutes limit the amount of general obligation debt a Minnesota City may issue to 3% of total
<br /> Estimated Taxable Market Value. The current debt limitation for the City of Elk River is $59,362,917.
<br /> $15,146,053 of the City's net outstanding debt is counted within the statutory limitation
<br /> Additional information on the City of Elk River's long-term debt can be found in Note 7 starting on page
<br /> 55 of this report.
<br /> Economic Factors and Next Year's Budget
<br /> The City of Elk River estimates that the demand for City services will begin to grow at increased levels
<br /> as compared to the prior years due to the improved economy and recent building activity. This was
<br /> taken into consideration in preparation of the City's 2017 budget. The property tax levy is set annually
<br /> and is adjusted as necessary to fund the cost of providing services to our citizens and customers.
<br /> Charges for services are evaluated each year and adjusted if warranted. The City expects to keep the
<br /> tax levy consistent in upcoming years.
<br /> Requests for Information
<br /> This financial report is designed to provide a general overview of the City of Elk River's finances for all
<br /> those with an interest in the City's finances. Questions concerning any of the information provided in
<br /> this report or requests for additional financial information should be addressed to City of Elk River, Attn:
<br /> Finance Director, 13065 Orono Pkwy, Elk River, Minnesota 55330 or by calling 763-635-1000.
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