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IV-7CITY OF ELK RIVER MANAGEMENT'S DISCUSSION AND ANALYSIS YEAR ENDED DECEMBER 31, 2019 Proprietary funds. The City of Elk River's proprietary funds provide the same type of information found in the government-wide statements, but in more detail. Unrestricted net position in the respective proprietary funds are Municipal Liquor -$4,732,801, Sewer -$5.261,879, Garbage -$348,539, Storm Water -$691,640, Electric -$9,617,103, and Water -$7,005,033. The Sewer fund net position decreased $360,871 due to budgeted transfers for administrative expenses and pension related adjustments and the Storm Water fund net position decreased $489,401 due mainly to storm water maintenance projects completed every other year. All other proprietary funds had increases in net position. General Fund Budgetary Highlights There was no difference between the original budget and the final budget for the General fund. Key factors are as follows: • Total revenue collections were 101% of budget. Intergovernmental revenues were $46,988 over budget, investment earnings were $123,481 over budget, refund and reimbursements were $94,635 over budget, and miscellaneous revenues were $49,439 over budget. These were partially offset by charges for services ending the year $56,403 under budget. • Expenditures were under budget by $398,697. Public safety expenditures were $296,120 under budget mainly due to employee wages and benefits under budget as a result of personnel vacancies. Public works expenditure were $56, 158 under budget primarily due to savings related to contractual services for street maintenance and utilities expenditures ending the year lower than budgeted. Capital Asset and Debt Administration Capita! Assets. The City of Elk River's investment in capital assets for its governmental and business type activities as of December 31, 2019, amounts to $220,993,445 (net of accumulated depreciation). This investment in capital assets includes land, buildings, improvements, equipment and infrastructure. The total increase in the City of Elk River's investment in capital assets for the current year was $8,618,024 or 4%. Major capital asset events during the current fiscal year included the following: • $11.7 million in additions to construction in progress related to the multi-purpose facility. • $907,000 in additions to construction in progress for the YAC 2019 project. • $349,000 in public safety equipment. • $577,000 in public works equipment. • Completion of the $2.3 million 2019 street project. • Depreciation expense totaling $11,393,320. Land Construction in Progress ln1angible-Buildings Other lmprovementa Infrastructure Equipment Total Capital A-Lau: Accumulated Depredation Total Capital-. Net CITY OF ELK RIVER MANAGEMENT'S DISCUSSION AND ANALYSIS YEAR ENDED DECEMBER 31, 2019 Governmental Activities Business-Te Activitiee 2019 2018 2019 2018 $ 40,948,181 $ 40,927,833 $ 1,843,9n $ 1,843,m 12,883,985 1,011,708 487,470 24,114,139 23,279,955 44,997,927 45,048,097 27,372,848 27,345,592 B,551,n1 8,551,n1 71,116,985 70,437,858 130,508,501 129,022,079 14,298,489 13,849,140 11,825,358 11.~300 190,801,318 176,820,499 198,474,329 193,297,363 (84,986,178) !82,245,9491 !81,318.0241 (75,498,4921 $ 105,835,140 $ 94,574,550 $ 115,156,308 $ 117,800,871 Total 2019 ~ $ 42,790,158 $ 42,771,810 13,895,893 487,470 24,114,139 23,279,955 72,370,575 72,393,879 8,551.n1 8,557,771 201,823,488 199,459,937 25,923,825 25,187,440 387,275,847 370, 117,862 !186,282,202) !157,742.441) $ 220,993,445 $ 212,375,421 Long-term debt. At the end of the current fiscal year, the City had total long-term debt outstanding of $97,558,123, an increase of $32,889,126 from 2018. General obligation improvement bonds ($15,965,000) were issued to finance the construction of a library, a recreation facility, a public safety/city hall facility, a public works facility, and improvement projects within the City. General obligation revenue bonds ($42,310,000) were used to finance certain recreational facility improvements, park improvements, trail improvements, dredging of Lake Orono, and sewer and water systems. Revenue bonds ($19,825,000) were used to finance electric system improvements. Governmental Activities Buslness-Tll?! Activities Total 2019 2016 2019 2018 2019 2018 General Obligation Bonds $ 15,985,000 $ 17,280,000 $ $ $ 15,985,000 ~.ooo General Obligation Revenue Bonds 32,715,000 9,595,000 10,355,000 42,310,000 10,355,000 Revenue Bonds 19,825,000 20,685,000 19,825,000 20,685,000 Issuance Premium 3,511,113 352,018 818,038 870,338 4,329,149 1,222,352 Total Bonds Payable, Net 52,191,113 17,832,018 30,238,038 31,910,338 82,429,149 49,542,352 Notes Payable 619,692 820,808 619,692 820,608 Compensated Abaences 1,807,804 1,579,987 491,365 504,447 2,098,989 2,084,414 Net Pension Liability 7,541,740 7,477,029 3,816,162 3,727,513 11,357,902 11,204,542 Other Postemployment Beneffls 740,405 813,033 312,008 204,048 1,052,411 1,017,081 Total Outstanding Debt $ 62,080,862 $ 27,502,045 $ 35,477,261 $ 37,186,952 $ 97,558,123 $ 64,668,997 Additional long-term debt in the amount of $619,692 is for notes payable, $2,098,969 is for compensated absences, $11,357,902 is for the City's net pension liability, and $1,052,411 is for the City's total other postemployment benefits liability. The City maintains a bond rating of AA+ from Standard & Poor's for general obligation debt. State statutes limit the amount of general obligation debt a Minnesota City may issue to 3% of total Estimated Taxable Market Value. The current debt limitation for the City of Elk River is $71,232,177. $11,548,268 of the City's net outstanding debt is counted within the statutory limitation. Additional information on the City of Elk River's long-term debt can be found in Note 7 starting on page 54 of this report. 155
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