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HomeMy WebLinkAbout2021 Annual Comprehensive Financial ReportCITY GOALS: 2021 Annual Comprehensive Financial Report City Of Edina, Minnesota For The Fiscal Year Ended December 31, 2021 Strong Foundation Better TogetherReliable ServiceLivable City CITY OF EDINA, MINNESOTA ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED DECEMBER 31, 2021 Prepared by: Department of Finance Alisha McAndrews – Finance Director Andrea Rich – Assistant Finance Director Pa Thao – Accounting and Auditing Coordinator CITY OF EDINA, MINNESOTA TABLE OF CONTENTS YEAR ENDED DECEMBER 31, 2021 INTRODUCTORY SECTION Letter of Transmittal 1 GFOA Certificate of Achievement 4 Organization 5 Organization Chart 6 FINANCIAL SECTION Independent Auditors’ Report 7 Management’s Discussion and Analysis 11 Basic Financial Statements Government-Wide Financial Statements Statement of Net Position 23 Statement of Activities 24 Fund Financial Statements Balance Sheet – Governmental Funds 25 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position 26 Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds 27 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities 28 Statement of Net Position – Proprietary Funds 29 Statement of Revenues, Expenses, and Changes in Fund Net Position – Proprietary Funds 30 Statement of Cash Flows – Proprietary Funds 31 Statement of Fiduciary Net Position and Statement of Changes in Fiduciary Net Position – Custodial Funds 33 Notes to Financial Statements 34 Required Supplementary Information Budgetary Comparison Schedules Budgetary Comparison Schedule – General Fund 73 Budgetary Comparison Schedule – Housing and Redevelopment Authority (HRA) Fund 77 CITY OF EDINA, MINNESOTA TABLE OF CONTENTS (CONTINUED) YEAR ENDED DECEMBER 31, 2021 Other Postemployment Benefits Plan Schedule of Changes in the City’s Total OPEB Liability and Related Ratios 78 Defined Benefit Pension Plans GERF/PEPFF Retirement Funds 79 GERF Schedule of City’s and Nonemployer Proportionate Share of Net Pension Liability and Schedule of City Contributions 79 PEPFF Schedule of City’s Proportionate Share of Net Pension Liability and Schedule of City Contributions 80 Notes to Required Supplementary Information 81 Combining and Individual Fund Financial Statements and Schedules Combining Balance Sheet – Nonmajor Governmental Funds 89 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances – Nonmajor Governmental Funds 90 Special Revenue Fund – Community Development Block Grant Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual 91 Special Revenue Fund – Police Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual 92 Special Revenue Fund – Braemar Memorial Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual 93 Special Revenue Fund – Pedestrian and Cyclist Safety Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual 94 Special Revenue Fund – Arts and Culture Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual 95 Special Revenue Fund – Conservation and Sustainability Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual 96 Major Governmental Fund – Debt Service Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual 97 CITY OF EDINA, MINNESOTA TABLE OF CONTENTS (CONTINUED) YEAR ENDED DECEMBER 31, 2021 Major Governmental Fund – Construction Capital Projects Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual 98 Combining Statement of Net Position – Nonmajor Proprietary Funds 99 Combining Statement of Revenues, Expenses, and Changes in Fund Net Position – Nonmajor Proprietary Funds 100 Combining Statement of Cash Flows – Nonmajor Proprietary Funds 101 Combining Balance Sheet and Statement of Changes in Assets and Liabilities – Custodial Funds 102 Supplementary Financial Information 103 Tax Capacity, Tax Levies, and Tax Capacity Rates 103 Combining Schedule of Bonded Indebtedness 104 Schedule of Balance Sheet Accounts – Tax Increment Financing Districts 106 Schedule of Revenues, Expenditures, and Changes in Fund Balances – Tax Increment Financing Districts 107 STATISTICAL SECTION (UNAUDITED) Financial Trends Net Position by Component 108 Changes in Net Position 110 Fund Balances of Governmental Funds 112 Changes in Fund Balances of Governmental Funds 114 Revenue Capacity 116 Assessed Value, Actual Value, and Tax Capacity of Taxable Property 116 Direct and Overlapping Tax Capacity Rates 117 Principal Property Taxpayers 118 Property Tax Levies and Collections 119 Debt Capacity 120 Ratios of Outstanding Debt by Type 120 Ratios of General Bonded Debt Outstanding 121 Direct and Overlapping Governmental Activities Debt 122 Legal Debt Margin Information 123 CITY OF EDINA, MINNESOTA TABLE OF CONTENTS (CONTINUED) YEAR ENDED DECEMBER 31, 2021 Pledged Revenue Coverage 124 Demographic and Economic Information 125 Demographic and Economic Statistics 125 Principal Employers 126 Operating Information Full-Time Equivalent City Government Employees by Function 127 Operating Indicators by Function 128 Capital Asset Statistics by Function 129 (1) May 25, 2022 To the Honorable Mayor, City Council, and Citizens of the City of Edina (City): Minnesota statutes require that every city publish within six months of the close of each fiscal year a complete set of audited financial statements. This report is published to fulfill that requirement for the fiscal year ended December 31, 2021. Management assumes full responsibility for the completeness and reliability of all of the information presented in this report, based upon a comprehensive framework of internal control that it has established for this purpose. Because the cost of internal control should not exceed anticipated benefits, the objective is to provide reasonable rather than absolute assurance that the financial statements are free from material misstatement. CliftonLarsonAllen, LLP, a firm of licensed certified public accountants, has issued an unmodified (clean) opinion on the City’s financial statements for the year ended December 31, 2021. The independent auditors’ report is located at the front of the financial section of this report. Management’s Discussion and Analysis (MD&A) immediately follows the independent auditors’ report and provides a narrative introduction, overview, and analysis of the basic financial statements. The MD&A complements this letter of transmittal and should be read in conjunction with it. Profile of the City The City, incorporated in 1888, is a fully developed first-ring suburb of Minneapolis. The City currently occupies a land area of 16 square miles and serves a population of 53,494. Currently, 98% of the City is developed with 55.5% of the land attributed to residential uses, 13.1% to roadways, and 11.8% supporting the park and open spaces. The remainder of the land is used for commercial, industrial, and public/semi-public uses. The City is empowered to levy a property tax on both real and personal property located within its boundaries. The City has operated under the Council-Manager form of government since 1955. Policy-making and legislative authority are vested in a City Council (Council) consisting of the Mayor and four other members, all elected on a nonpartisan basis. The Council is responsible, among other things, for passing ordinances, adopting the budget, appointing committees, and hiring the City Manager. The City Manager is responsible for carrying out the policies and ordinances of the Council, for overseeing the day-to-day operations of the city government, and for appointing the heads of the various departments. Council members serve four-year terms, with two Council members elected every two years. The Mayor also serves a four-year term. The Council and Mayor are elected at large. The City provides a full range of services, including police, fire and emergency medical services; the construction and maintenance of highways, streets, and other infrastructure; water and sewer services and recreational and cultural activities and events. The Council is required to adopt a final budget by no later than the close of the previous fiscal year. The annual budget serves as the foundation for the City’s financial planning and control. The budget is prepared by fund, function (e.g., public safety), and department (e.g., police). Department heads may use resources within a department as they see fit. The City Manager may authorize transfers of budgeted amounts between departments. (2) Local Economy The City currently enjoys a favorable economic environment and local indicators point to continued stability. The region, while noted for a strong retail sector, enjoyed considerable re-development in recent years. The re- development consisted of varied manufacturing, medical and high-tech base that adds to the relative stability of the unemployment rate. Major industries with headquarters or divisions within the government’s boundaries or in close proximity include medical services, retail operations and banking services. Edina is home to over 50,000 jobs that are expected to remain stable over the coming years. The City has become known for its quality residential housing stock and attractive neighborhoods. To date, approximately 98% of the available housing stock is in place. Although the emphasis has changed over the years from exclusively single-family housing to a more balanced mix of housing types, the City’s concern for overall quality in residential development remains a top priority. The City enjoys a AAA bond rating and a Aaa bond rating from Standard and Poor’s and Moody’s, respectively. Long-Term Financial Planning The Metropolitan Council requires all cities in the seven-county metropolitan area to have a Comprehensive Plan and state law requires cities to update their plans every 10 years. The last plan was adopted in 2020. The Comprehensive Plan guides development and redevelopment and addresses changes likely to occur due to various social and market forces. The City continues to focus on quality-of-life improvements throughout Edina. These efforts cover a broad array of areas including protecting and improving the environment, revitalization of parks and public areas, expanding recreational opportunities, addressing race and equity disparities, and increasing communication between City representatives and the public. The City is working closely with state government, federal government and neighboring communities to improve the area’s state and county transportation network, which includes upgraded highways and well-placed pathways. Funding for most of the transportation improvements will need to come from state, county, and federal sources, with some minor portion supported by the local taxpayers. Relevant Financial Policies The City has adopted a set of financial management policies that focus on long-term financial planning. Policies cover areas such as cash and investments, the operating budget, revenue, fund balance, capital outlay, and debt management. Assignments for fund balances and compensated absences are all calculated as specified in the policies. In addition, the City has $18,003,259 unassigned fund balance in the general fund. This amount is $2,485,884 above the goal range identified in the policy. Major Initiatives The City is continually working to update our aging infrastructure. Our annually adopted six-year Capital Improvement Plan includes spending and financing projections for these projects. (3) Awards and Acknowledgements The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Edina for its annual comprehensive financial report for the fiscal year ended December 31, 2021. This was the eleventh consecutive year that the government has achieved this prestigious award. To be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized annual comprehensive financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current annual comprehensive financial report continues to meet the Certificate of Achievement Program’s requirements and we are submitting it to the GFOA to determine its eligibility for another certificate. The preparation of this report would not have been possible without the dedicated services of the Finance Department staff. We would like to express our appreciation to all members of the department who assisted and contributed to the preparation of this report. Credit also must be given to the Mayor and the City Council for their unfailing support for maintaining the highest standards of professionalism in the management of the City’s finances. Respectfully submitted, Alisha McAndrews, Finance Director Andrea Rich Assistant Finance Director Pa Thao Accounting and Auditing Coordinator (4) CITY OF EDINA, MINNESOTA ORGANIZATION DECEMBER 31, 2021 (5) Term Expires Mayor: James Hovland December 31, 2024 Council Members: Carolyn Jackson December 31, 2024 James Pierce December 31, 2024 Kevin Staunton December 31, 2022 Ron Anderson December 31, 2022 City Manager: Scott Neal Appointed Finance Director/Treasurer: Alisha McAndrews Appointed City Clerk: Sharon Allison Appointed (6) CLA is an independent member of Nexia International, a leading, global network of independent accounting and consulting firms. See nexia.com/member-firm-disclaimer for details. CliftonLarsonAllen LLP CLAconnect.com (7) INDEPENDENT AUDITORS’ REPORT City Council and Management City of Edina, Minnesota Report on the Financial Statements Opinions We have audited the accompanying financial statements of the governmental activities, the business- type activities, each major fund, and the aggregate remaining fund information of the City of Edina, as of and for the year ended December 31, 2021, and the related notes to the financial statements, which collectively comprise the City of Edina‘s basic financial statements as listed in the table of contents. 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, each major fund, and the aggregate remaining fund information of the City of Edina, as of December 31, 2021, and the respective changes in financial position, and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Basis for Opinions We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City of Edina and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for 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. In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City of Edina‘s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter. City Council and Management City of Edina, Minnesota (8) Auditors’ Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements. In performing an audit in accordance with GAAS and Government Auditing Standards, we: • Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. • Obtain an understanding of internal control relevant to the audit 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 of Edina‘s internal control. Accordingly, no such opinion is expressed. • Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. • Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the City of Edina‘s ability to continue as a going concern for a reasonable period of time. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit. City Council and Management City of Edina, Minnesota (9) Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, budgetary comparison information, Other Postemployment Benefits Plan Schedule of Changes in the City’s Total OPEB Liability and Related Rations, and Defined Benefit Pension Plans Schedules be presented to supplement the basic financial statements. Such information is the responsibility of management and, 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 GAAS, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Supplementary Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of Edina‘s basic financial statements. The combining and individual fund financial statements and schedules, Tax Capacity, Tax Levies, and Tax Capacity Rates information, Combining Schedule of Bonded Indebtedness, and Tax Increment Financing District Schedules are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The 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 GAAS. In our opinion, the combining and individual fund financial statements and schedules, Tax Capacity, Tax Levies, and Tax Capacity Rates information, Combining Schedule of Bonded Indebtedness, and Tax Increment Financing District Schedules, are fairly stated, in all material respects, in relation to the basic financial statements as a whole. Other Information Management is responsible for the other information included in the annual report. The other information comprises the introductory and statistical sections but does not include the basic financial statements and our auditors’ report thereon. Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon. In connection with our audit of the basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report. City Council and Management City of Edina, Minnesota (10) Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated May 26, 2022May 25, 2022, on our consideration of the City of Edina’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 solely 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 effectiveness of the City of Edina’s 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 City of Edina’s internal control over financial reporting and compliance. CliftonLarsonAllen LLP Minneapolis, Minnesota May 25, 2022 (This page left blank intentionally.) CITY OF EDINA, MINNESOTA MANAGEMENT’S DISCUSSION AND ANALYSIS YEAR ENDED DECEMBER 31, 2021 (11) As management of the City of Edina (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, 2021. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal, which precedes this report. 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 $328,779,614 (net position). Of this amount, $47,562,839 (unrestricted net position) may be used to meet the City’s ongoing obligations to citizens and creditors in accordance with the City’s fund designations and fiscal policies. • The City’s total net position increased by $19,697,950 from the prior year. Of that total, $14,734,012 is the increase in Governmental Activities net position and $4,963,938 is the increase in Business-Type Activities net position. • At the close of the 2021 fiscal year, the City’s governmental funds reported combined ending fund balances of $103,341,648, an increase of $19,924,967 from the prior year. The increase can be attributed to increases in the Debt Service, Construction, and Housing and Redevelopment Authority (HRA) funds. o General obligation bonds, series 2021A was issued in 2021 in the amount of $13,025,000. o $3,795,000 General Obligation Bonds, Series 2021B, was issued to refund general obligations series 2013A, with the refunding not occurring until 2022. o $2,210,000 General Obligation Recreational Revenue Bonds, Series 2021C, was issued to refund series 2012C bonds, with the refunding not occurring until 2022. o The HRA Fund balance increased $14,751,365 from tax increment collections, affordable housing fees collected, the 2021A bond issuance for public improvement projects in the Grandview 2 TIF district, and the sale of the 4100 West 76th Street property. • At the end of the current fiscal year, unassigned fund balance for the general fund was $18,003,259, or 37% of total general fund expenditures. • The City’s total bonded debt increased by $2,875,000 during the current fiscal year, from $107,433,000 at the end of 2020 due to the debt issuance mentioned above. 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 supplementary information in addition to the basic financial statements. 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, deferred outflows of resources, liabilities, and deferred inflows of resources, with the difference between them 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. CITY OF EDINA, MINNESOTA MANAGEMENT’S DISCUSSION AND ANALYSIS YEAR ENDED DECEMBER 31, 2021 (12) 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 revenues (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, and parks. The business-type activities of the City include water, sewer, stormwater, recycling, liquor, aquatic center, golf course, arena, and community activity centers. 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 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 financial 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 statement. By doing so, readers may better understand the long-term impact of the City’s near-term financial decisions. Both the governmental fund balance sheet and governmental fund statement of revenues, expenditures, and change in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The City maintains four individual major governmental funds. 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, Housing and Redevelopment Authority fund, debt service fund, and the construction fund. Data from the other governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these nonmajor governmental funds are provided in the form of combining statements elsewhere in this report. The City adopts an annual appropriated budget for all governmental and proprietary funds. A budgetary comparison statement has been provided for all governmental funds to demonstrate compliance with these budgets. CITY OF EDINA, MINNESOTA MANAGEMENT’S DISCUSSION AND ANALYSIS YEAR ENDED DECEMBER 31, 2021 (13) Proprietary funds. The City maintains five major enterprise funds and four internal service funds. Enterprise funds are used to report the same functions presented as business-type activities in the governmental-wide financial statements. The City’s major enterprise funds are used to account for its utility, liquor, aquatic center, golf, and arena operations. Data from the other enterprise funds are combined into a single, aggregated presentation. Individual fund data for each of these nonmajor enterprise funds are provided in the form of combining statements elsewhere in this report. Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. Internal service funds. Internal service funds are used as an accounting device to accumulate and allocate costs internally among the City’s various functions. The City utilizes four internal service funds to account for insurance and risk management activities, equipment operations, IT services, and facilities management. These services have been allocated proportionately to governmental and business-type activities in the government-wide financial statements. Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of parties outside the government. 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. Notes to the 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. Other information. The combining and individual fund financial statements and schedules referred to earlier in connection with nonmajor governmental and enterprise funds, as well as internal service funds, are presented immediately following the required supplementary information. Supplementary financial information and the statistical section are the final two items presented. 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 $328,779,614 at the close of the most recent fiscal year. CITY OF EDINA, MINNESOTA MANAGEMENT’S DISCUSSION AND ANALYSIS YEAR ENDED DECEMBER 31, 2021 (14) The largest portion of the City’s net position ($203,729,416 or 62%) reflects its investment in capital assets (e.g., land, buildings, machinery, and equipment) less any related debt used to acquire those assets that is still outstanding. The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City’s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. City of Edina’s Net Position 2021 2020 2021 2020 2021 2020 Assets: Current and Other Assets 141,851,857$ 117,350,841$ 45,767,891$ 46,835,488$ 187,619,748$ 164,186,329$ Capital Assets 177,099,202 175,520,050 130,894,190 129,507,070 307,993,392 305,027,120 Total Assets 318,951,059$ 292,870,891$ 176,662,081$ 176,342,558$ 495,613,140$ 469,213,449$ Deferred Outflows of Resources: OPEB Plan Deferments $ 436,242 $ 366,225 $ 40,254 $ 32,475 $ 476,496 $ 398,700 Pension Plan Deferments 19,205,795 7,629,878 2,855,311 458,037 22,061,106 8,087,915 Total Deferred Outflows of Resources $ 19,642,037 $ 7,996,103 $ 2,895,565 $ 490,512 $ 22,537,602 $ 8,486,615 Liabilities: Long-Term Liabilities Outstanding 82,895,114$ 82,251,250$ 41,449,445$ 50,204,303$ 124,344,558$ 132,455,553$ Other Liabilities 21,461,665 14,969,188 14,023,300 10,722,053 35,484,966 25,691,241 Total Liabilities 104,356,779$ 97,220,438$ 55,472,745$ 60,926,356$ 159,829,524$ 158,146,794$ Deferred Inflows of Resources: OPEB Plan Deferments 1,491,449$ 1,681,591$ 155,666$ 176,792$ 1,647,115$ 1,858,383$ Pension Plan Deferments 24,419,341 8,373,450 3,475,148 239,773 27,894,489 8,613,223 Total Deferred Inflows of Resources 25,910,790$ 10,055,041$ 3,630,814$ 416,565$ 29,541,604$ 10,471,606$ Net Position: Net Investment in Capital Assets 116,754,295$ 117,052,475$ 86,975,121$ 81,135,647$ 203,729,416$ 198,188,122$ Restricted 76,262,266 60,063,244 1,225,093 1,268,479 77,487,359 61,331,723 Unrestricted 15,308,966 16,475,796 32,253,873 33,086,023 47,562,839 49,561,819 Total Net Position 208,325,527$ 193,591,515$ 120,454,087$ 115,490,149$ 328,779,614$ 309,081,664$ Governmental Activities Business-Type Activities Total A portion of the City’s net position ($77,487,359) represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net position ($47,562,839) 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 of the categories of net position reported, both for the government as a whole, as well as for its separate governmental and business-type activities. The same situation held true for the prior fiscal year. There was a decrease of $1,998,980 in unrestricted net position. This was mainly due a transfer of unrestricted general fund balance to the construction fund. The increases in deferred outflows of resources and deferred inflows of resources relate to the changes in the City’s share of state pension plan amounts while the decrease in long-term liabilities is primarily attributable to regular scheduled payments on the City’s outstanding bonds, partially offset by newly issued debt. CITY OF EDINA, MINNESOTA MANAGEMENT’S DISCUSSION AND ANALYSIS YEAR ENDED DECEMBER 31, 2021 (15) As shown below, the City’s net position increased by $19,697,950 during the current fiscal year. Factors contributing to this change are discussed in the next two sections. City of Edina’s Changes in Net Position 2021 2020 2021 2020 2021 2020 Revenues: Program Revenues: Charges for Services 13,529,378$ 15,333,404$ 52,785,310$ 45,003,860$ 66,314,688$ 60,337,264$ Operating Grants and Contributions 2,721,724 7,626,236 404,419 47,780 3,126,143 7,674,016 Capital Grants and Contributions 4,030,108 7,318,687 - 396,103 4,030,108 7,714,790 General Revenues: Property Taxes 41,826,967 39,545,279 - - 41,826,967 39,545,279 Other Taxes 11,403,292 9,532,524 - - 11,403,292 9,532,524 Gain on Disposal of Assets 101,404 - - 7,359 101,404 7,359 Unrestricted Investment Earnings (372,080) 1,835,870 (141,650) 945,580 (513,730) 2,781,450 Total Revenues 73,240,793 81,192,000 53,048,079 46,400,682 126,288,872 127,592,682 Expenses: General Government 14,844,785 11,698,533 - - 14,844,785 11,698,533 Public Safety 24,288,956 27,058,719 - - 24,288,956 27,058,719 Public Works 11,497,445 16,117,060 - - 11,497,445 16,117,060 Parks 7,365,756 6,798,866 - - 7,365,756 6,798,866 Interest on Long-Term Debt 1,282,299 1,561,462 - - 1,282,299 1,561,462 Water - - 9,094,274 9,592,913 9,094,274 9,592,913 Sewer - - 7,690,708 7,641,660 7,690,708 7,641,660 Stormwater - - 3,146,475 3,424,049 3,146,475 3,424,049 Recycling - - 1,956,546 1,392,003 1,956,546 1,392,003 Liquor - - 13,435,305 11,500,971 13,435,305 11,500,971 Aquatic Center - - 1,052,346 386,026 1,052,346 386,026 Golf Course - - 4,822,338 4,257,484 4,822,338 4,257,484 Arena - - 2,882,067 2,876,897 2,882,067 2,876,897 Community Activity Centers - - 3,231,622 3,412,784 3,231,622 3,412,784 Total Expenses 59,279,241 63,234,640 47,311,681 44,484,787 106,590,922 107,719,427 Increase in Net Position Before Transfers 13,961,552 17,957,360 5,736,398 1,915,895 19,697,950 19,873,255 Transfers 772,460 283,836 (772,460) (283,836) - - Change in Net Position 14,734,012 18,241,196 4,963,938 1,632,059 19,697,950 19,873,255 Net Position - January 1 193,591,515 175,350,319 115,490,149 113,858,090 309,081,664 289,208,409 Net Position - December 31 208,325,527$ 193,591,515$ 120,454,087$ 115,490,149$ 328,779,614$ 309,081,664$ Governmental Activities Business-Type Activities Total GOVERNMENTAL ACTIVITIES Governmental activities increased the City’s net position by $14,734,012, accounting for 75% of the total growth in net position. Key elements of the increase are as follows. • Property taxes increased by $2,281,688 as the result of an increased general operating levy that provides funding to continue existing service levels. • Other taxes increased by $1,870,768 due to an increase in tax increment collections from the Southdale 2, Pentagon Park, and Grandview 2 tax increment financing districts. • Investment earnings decreased by $2,207,950, or -120%, in 2021 due to unrealized losses. CITY OF EDINA, MINNESOTA MANAGEMENT’S DISCUSSION AND ANALYSIS YEAR ENDED DECEMBER 31, 2021 (16) Below are specific graphs which provide comparisons of the governmental activities revenues and expenses: Charges for services 22% Operating grants and contributions 4% Capital grants and contributions 2%Property taxes57% Other taxes15% Other0% Revenues by Source -Governmental Activities - 5 10 15 20 25 General government Public safety Public works Parks Interest on long-term debt Millions Expenses and Program Revenues -Governmental Activities expenses program revenue CITY OF EDINA, MINNESOTA MANAGEMENT’S DISCUSSION AND ANALYSIS YEAR ENDED DECEMBER 31, 2021 (17) BUSINESS-TYPE ACTIVITIES Business-type activities increased net position by $4,963,938, accounting for 25% of the City’s growth in net position. Key elements of the current year increase are as follows: • The utility fund had income before contributions and transfers of $5,938,870 for 2021. This additional equity is used to maintain and invest in the utility infrastructure according to the City’s CIP and utility rate study. • The liquor fund had income before contributions and transfers of $780,499 for 2021. This income is used to subsidize operations at other enterprise facilities. • The golf course had an income before contributions and transfers of $429,146. • The other enterprise funds had a loss before contributions and transfers of $1,723,897 in total. These enterprises had operating expenses that exceeded revenues. Charges for services 99% Capital grants and contributions 1% Unrestricted investment earnings 0% Revenues by Source -Business-type Activities - 2 4 6 8 10 12 14 16 Water Sewer Storm Recycling Liquor Aquatic Golf Arena Community Millions Expenses and Program Revenues -Business-type Activities expenses program revenue CITY OF EDINA, MINNESOTA MANAGEMENT’S DISCUSSION AND ANALYSIS YEAR ENDED DECEMBER 31, 2021 (18) 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. At the end of the current fiscal year, the City’s governmental funds reported combined ending fund balances of $103,341,648, an increase of $19,924,967 in comparison with the prior year. Approximately 17% of this total amount ($18,003,259) constitutes unassigned fund balance. The remainder of the fund balance is 1) restricted by external creditors, grantors, laws, or regulations ($53,775,730), or 2) assigned by internal constraints ($31,405,792), or 3) nonspendable in the form of prepaid items ($156,867). The general fund is the chief operating fund of the City. At the end of the current fiscal year, unassigned fund balance of the general fund was $18,003,259. As a measure of the general fund’s liquidity, unassigned fund balance represents 37% of total general fund expenditures. The fund balance of the City’s general fund decreased by $3,469,572 during the current fiscal year. Key factors related to this increase include: • Total general fund expenditures exceeded budget by $288,632, but revenues were $957,695 over budget. This is due to an increase in licenses and permits as well as intergovernmental revenue related to federal response and recovery funding for COVID-19. • The general fund transferred $4,503,106 of 2020 surplus primarily to the construction fund for capital projects. The Housing and Redevelopment Authority fund balance increased by $14,751,365 in the current fiscal year due to higher than anticipated tax increment collections, less spent on capital outlay than anticipated, and bonds issued. The debt service fund has a total fund balance of $11,178,492, all of which is restricted for the payment of debt service. The net increase in fund balance during the current year in the debt service fund was $1,451,186. Fund balance increased as the result of a $2,955,444 transfer in from the construction fund to pay debt service. This transfer is made annually with the amount varying slightly depending on available resources. The construction fund balance increased by $6,202,184 in 2021 due to transfers in of $4,710,306 primarily from the general fund as well as bonds issued. CITY OF EDINA, MINNESOTA MANAGEMENT’S DISCUSSION AND ANALYSIS YEAR ENDED DECEMBER 31, 2021 (19) 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 utility fund at the end of the year amounted to $28,521,154. The total growth in net position from current year operations was $5,188,539. Operating revenues in the utilities fund increased by 7.5% while expenses increased by 2.6% in 2021. The revenue increase was due to an increase in the water, sewer, and storm rates as well as connection fees in 2021. Expenses increased because of higher depreciation expenses related to infrastructure projects completed in recent years and higher personal services expenses for operating the utility system. The City invested $9,819,247 in utility fund capital assets during 2021, a 117% increase from 2020. Unrestricted net position of the liquor fund at the end of the year amounted to $1,850,907. Total net position decreased by $65,345. The liquor fund continues to transfer profits back into other City funds, including the general fund, construction, arena, and art center funds. The liquor fund made transfers totaling $850,000 to these other funds in 2021. The transfers out were greater than operating income of $793,453 in 2021, leading to the reduction in net position in the liquor fund in 2021. Unrestricted net position of the aquatic center fund at the end of the year amounted to $1,005,283, which is a 31% increase over 2020. The Aquatic Center was closed for all of 2020 due to COVID-19, resulting in no revenue and minimal expenses. Unrestricted net position of the golf course fund at the end of the year amounted to a deficit of ($430,403), an improvement of $618,018 from the prior year. Operating income for the golf course fund was $549,017 in 2021, compared to a loss of ($81,394) in 2020, a sign of improving profitability. Unrestricted net position of the arena fund at the end of the year amounted to a deficit of ($47,349), a decrease in the deficit by $143,570 from the prior year. Revenues increased by $710,932 over 2020 while expenses increased by $37,094. The operating loss for the arena was ($499,008) for 2021 compared to ($1,172,846) for 2020, during which the arena was largely impacted by COVID-19. GENERAL FUND BUDGETARY HIGHLIGHTS During the year, revenues were $957,695 more than budget, as the continued commercial and residential redevelopment of the City increased our licenses and permits, which exceeded budget by $828,711, and surpluses in state and federal aid of $811,179 over budget. These increases offset deficits in fines and forfeits and tax revenues, which together came in ($683,614) under budget. During the year, expenditures were over budget by $288,632. Public safety and general government were over budget by $663,596, which was offset by Public Works and Parks coming in under budget by $401,640. CITY OF EDINA, MINNESOTA MANAGEMENT’S DISCUSSION AND ANALYSIS YEAR ENDED DECEMBER 31, 2021 (20) 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, 2021, amounted to $307,993,392 (net of accumulated depreciation). This investment in capital assets included land, land improvements, intangible assets such as easements, infrastructure assets (roads, bridges, sidewalks, and similar items), buildings, vehicles, equipment, parks, and construction in progress. The total increase in the City’s investment in capital assets for the current fiscal year was 1%. Major capital asset events during the current fiscal year included the following: • A variety of utility infrastructure improvements, including water main, sanitary and storm sewer, construction in progress as of the close of the fiscal year reached $12,562,430 in the utility fund. • The City spent $358,167 on a dehumidifier for the South Rink at Braemar Arena. • A variety of street construction, sidewalk and park projects; construction in progress as of the close of the fiscal year reached $9,042,909 (PIR + PACS). • The City has a number of public improvements underway in the Grandview district including rehabilitation of the Wooddale Ave Bridge and the Grandview Pedestrian Bridge, and parking and road improvements in the district. The construction in process cost was $2,730,354. City of Edina’s Capital Assets (Net of Depreciation) 2021 2020 2021 2020 2021 2020 Land and Land Improvements 27,965,567$ 30,114,062$ 10,295,102$ 10,552,207$ 38,260,669$ 40,666,269$ Easements 253,000 253,000 35,600 35,600 288,600 288,600 Buildings and Structures 34,130,177 35,375,635 15,516,491 17,449,027 49,646,668 52,824,662 Machinery and Equipment 10,364,447 10,429,312.00 5,914,574 5,676,069 16,279,021 16,105,381 Infrastructure 81,127,850 83,180,690 86,425,752 89,475,819 167,553,602 172,656,509 Parks 10,767,120 9,475,486 - - 10,767,120 9,475,486 Construction in Progress 12,491,041 6,691,865 12,706,671 6,318,348 25,197,712 13,010,213 Total 177,099,202$ 175,520,050$ 130,894,190$ 129,507,070$ 307,993,392$ 305,027,120$ Governmental Activities Business-Type Activities Total Additional information on the City’s capital assets can be found in Note 3. Long-term debt. At the end of the current fiscal year, the City had total bonded long-term debt outstanding of $110,308,000, an increase of $2,875,000 from 2020. $17,735,000 is for general obligation improvement debt that is supported by property tax levies and special assessments. $27,740,000 is for permanent improvement revolving (PIR) bonds, which finance the City’s street reconstruction program. This amount increased from 2020 due to newly issued debt. Also outstanding is $13,970,000 HRA public project revenue bonds which financed two gymnasiums, the new public works facility, sports dome, outdoor rink at the arena, and improvements to Pamela Park. This amount decreased from 2020 due to regularly scheduled principal payments. CITY OF EDINA, MINNESOTA MANAGEMENT’S DISCUSSION AND ANALYSIS YEAR ENDED DECEMBER 31, 2021 (21) There is a total of $43,318,000 in revenue bonds for improvements to the enterprise funds. This amount decreased $5,619,000 during the year due to regularly debt service payments. City of Edina’s Outstanding Debt 2021 2020 2021 2020 2021 2020 General Obligation Bonds 17,735,000$ 17,725,000$ -$ -$ 17,735,000$ 17,725,000$ Public Improvement Bonds 27,740,000 24,526,000 - - 27,740,000 24,526,000 Public Project Revenue Bonds 13,970,000 16,245,000 - - 13,970,000 16,245,000 Tax Increment Financing Bonds 7,545,000 - - - 7,545,000 - Revenue Bonds - - 43,318,000 48,937,000 43,318,000 48,937,000 Total 66,990,000$ 58,496,000$ 43,318,000$ 48,937,000$ 110,308,000$ 107,433,000$ Governmental Activities Business-Type Activities Total The City maintains an Aaa rating from Moody’s and an AAA rating from Standard & Poor’s. State statutes limit the amount of general obligation debt a Minnesota city may issue up to 3% of total Estimated Market Value. The current debt limitation for the City is $400,330,728. Only $31,705,000 of the City’s outstanding debt is counted within the statutory limitation. Additional information on the City’s long-term debt can be found in Note 4. ECONOMIC FACTORS AND NEXT YEAR’S BUDGET The City strives to provide an uncommonly high quality of life for our residents and businesses and the relatively healthy local economy helps to make this goal a reality. The unemployment rate in Edina has remained under 4% (not seasonally adjusted) since mid-2013, which is below the state and national levels. The City is home to Southdale Center, the nation’s first fully enclosed climate-controlled regional shopping mall, Fairview Southdale hospital, as well as several corporate headquarters. In addition to its healthy economy, Edina is known for excellent public schools, as the Edina school system has been consistently selected as one of the best in the country. Ninety-eight percent of students graduate, with eighty-nine percent pursuing some sort of post-secondary education. CITY OF EDINA, MINNESOTA MANAGEMENT’S DISCUSSION AND ANALYSIS YEAR ENDED DECEMBER 31, 2021 (22) Property values in Edina decreased for several years from 2009-2012 and have risen each year since. Estimated market value of real estate increased 3.6% for taxes payable in 2021 (market value in 2020). -4.0% -2.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Market Value and Tax Capacity Annual Changes Tax Capacity Market Value The City collects property taxes based on tax capacity, which roughly equals estimated market value multiplied by class rates for different types of parcels (commercial, residential, etc.). Class rates are set by state statute. Tax capacity for real estate increased 4.3% in 2020 for taxes payable in 2021 and remained positive for the eighth consecutive year. All these factors above were considered in preparing the City’s budget for the 2022 fiscal year. The City’s adopted 2022 budget includes a property tax levy of $45,367,336 for all funds, an increase of 7.97% from the 2021 levy, with the increase being attributed to the introduction of the street reconstruction levy, which will eventually replace special assessments for road reconstruction. The increased levies are also for the City’s equipment replacement expenditures, HRA operating expenditures, and general operating levy. REQUESTS FOR INFORMATION This financial report is designed to provide a general overview of the City’s finances for all those with an interest in the government’s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Office of the Finance Director, 4801 West 50th Street, Edina, Minnesota 55424. The City’s Annual Comprehensive Financial Report can also be found on the internet at www.edinamn.gov. (This page left blank intentionally.) CITY OF EDINA, MINNESOTA STATEMENT OF NET POSITION DECEMBER 31, 2021 See accompanying Notes to Financial Statements. (23) Governmental Business-Type Activities Activities Total ASSETS Current Assets: Cash and Investments 100,089,655$ 33,460,157$ 133,549,812$ Restricted Cash and Investments 4,956,194 2,356,943 7,313,137 Accrued Interest 298,010 145,272 443,282 Accounts Receivable, Net 1,726,992 6,964,546 8,691,538 Special Assessments Receivable 20,434,060 340,519 20,774,579 Internal balances (441,302) 441,302 - Due from Other Governments 3,901,726 3,070 3,904,796 Prepaid Items 786,343 10,251 796,594 Inventory - 2,045,831 2,045,831 Total Current Assets 131,751,678 45,767,891 177,519,569 Noncurrent Assets: Investment in Joint Powers Agreement 1,770,353 - 1,770,353 Loans Receivable 8,329,826 - 8,329,826 Nondepreciable Capital Assets 34,149,124 13,481,042 47,630,166 Depreciable Capital Assets (Net)142,950,078 117,413,148 260,363,226 Total Noncurrent Assets 187,199,381 130,894,190 318,093,571 Total Assets 318,951,059 176,662,081 495,613,140 DEFERRED OUTFLOWS OF RESOURCES OPEB Plan Deferments 436,242 40,254 476,496 Defined Benefit Pension Plans 19,205,795 2,855,311 22,061,106 Total Deferred Outflows of Resources 19,642,037 2,895,565 22,537,602 LIABILITIES Current Liabilities: Accounts Payable 3,277,740 2,696,568 5,974,308 Salaries Payable 1,741,535 361,937 2,103,472 Accrued Interest Payable 866,740 580,636 1,447,376 Contracts Payable 287,676 302,145 589,821 Due to Other Governments 23,684 211,819 235,503 Deposits Payable 1,328,565 - 1,328,565 Unearned Revenue 2,773,489 479,123 3,252,612 Compensated Absences Payable 1,917,236 353,072 2,270,309 Bonds Payable 9,245,000 9,038,000 18,283,000 Total Current Liabilities 21,461,665 14,023,300 35,484,966 Noncurrent Liabilities: Total OPEB Liability 2,316,690 201,561 2,518,251 Net Pension Liability 15,244,614 3,782,408 19,027,022 Compensated Absences Payable 2,875,855 529,609 3,405,463 Bonds and Loans Payable, Net 62,457,955 36,935,867 99,393,822 Total Noncurrent Liabilities 82,895,114 41,449,445 124,344,558 Total Liabilities 104,356,779 55,472,745 159,829,524 DEFERRED INFLOWS OF RESOURCES OPEB Plan Deferments 1,491,449 155,666 1,647,115 Defined Benefit Pension Plans 24,419,341 3,475,148 27,894,489 Total Deferred Inflows of Resources 25,910,790 3,630,814 29,541,604 NET POSITION Net Investment in Capital Assets 116,754,295 86,975,121 203,729,416 Restricted for Tax Increments 35,195,113 - 35,195,113 Restricted for Affordable Housing 3,741,466 - 3,741,466 Restricted for Debt Service 12,302,516 1,225,093 13,527,609 Restricted for Highway Construction 2,857,594 - 2,857,594 Restricted for Capital Projects 18,491,384 - 18,491,384 Restricted for Parkland Dedication 58,086 - 58,086 Restricted for Police 762,008 - 762,008 Restricted for Braemar Golf Donations 131,145 - 131,145 Restricted for Pedestrian and Cyclist Improvements 423,591 - 423,591 Restricted for Conservation and Sustainability Initiatives 2,299,363 - 2,299,363 Unrestricted 15,308,966 32,253,873 47,562,839 Total Net Position 208,325,527$ 120,454,087$ 328,779,614$ Primary Government CITY OF EDINA, MINNESOTA STATEMENT OF ACTIVITIES YEAR ENDED DECEMBER 31, 2021 See accompanying Notes to Financial Statements. (24) Operating Capital Charges for Grants and Grants and Governmental Business-Type Expenses Services Contributions Contributions Activities Activities Total Functions/Programs Primary Government: Governmental Activities: General Government 14,844,785$ 2,207,889$ 414,927$ -$ (12,221,969)$ -$ (12,221,969)$ Public Safety 24,288,956 9,970,031 2,248,479 - (12,070,446) - (12,070,446) Public Works 11,497,445 566,143 5,738 4,030,108 (6,895,456) - (6,895,456) Parks 7,365,756 785,315 52,580 - (6,527,861) - (6,527,861) Interest on Long-Term Debt 1,282,299 - - - (1,282,299) - (1,282,299) Total Government Activities 59,279,241 13,529,378 2,721,724 4,030,108 (38,998,031) - (38,998,031) Business-Type Activities: Water 9,094,274 10,302,974 - - - 1,208,700 1,208,700 Sewer 7,690,708 10,732,193 - - - 3,041,485 3,041,485 Stormwater 3,146,475 5,207,295 - - - 2,060,820 2,060,820 Recycling 1,956,546 1,447,226 384,268 - - (125,052) (125,052) Liquor 13,435,305 14,280,055 - - - 844,750 844,750 Aquatic Center 1,052,346 1,071,692 - - - 19,346 19,346 Golf Course 4,822,338 5,290,109 - - - 467,771 467,771 Arena 2,882,067 2,347,678 - - - (534,389) (534,389) Community Activity Centers 3,231,622 2,106,088 20,151 - - (1,105,383) (1,105,383) Total Business-Type Activities 47,311,681 52,785,310 404,419 - - 5,878,048 5,878,048 Total Primary Government 106,590,922$ 66,314,688$ 3,126,143$ 4,030,108$ (38,998,031) 5,878,048 (33,119,983) General Revenues: Property Taxes 41,826,967 - 41,826,967 Tax Increment Collections 8,295,756 - 8,295,756 Franchise Taxes 3,090,322 - 3,090,322 Lodging Taxes 17,214 - 17,214 Unrestricted Investment Earnings (372,080) (141,650) (513,730) Gain on Disposal of Capital Assets 101,404 - 101,404 Transfers - Internal Activities 772,460 (772,460) - Total General Revenues and Transfers 53,732,043 (914,110) 52,817,933 Change in Net Position 14,734,012 4,963,938 19,697,950 Net Position - Beginning 193,591,515 115,490,149 309,081,664 Net Position - Ending 208,325,527$ 120,454,087$ 328,779,614$ Net (Expense) Revenue and Changes in Net PositionProgram Revenues CITY OF EDINA, MINNESOTA BALANCE SHEET GOVERNMENTAL FUNDS DECEMBER 31, 2021 See accompanying Notes to Financial Statements. (25) Housing and Nonmajor Total Redevelopment Debt Governmental Governmental General Authority Service Construction Funds Funds ASSETS Cash and Investments 28,584,240$ 31,739,553$ 6,194,280$ 26,584,091$ 3,139,323$ 96,241,487$ Restricted Cash and Investments - - 4,956,194 - - 4,956,194 Accrued Interest 94,811 81,229 - 114,038 7,932 298,010 Accounts Receivable 669,689 98,597 - 65,313 545,257 1,378,856 Taxes Receivable 267,435 - 25,667 28,747 - 321,849 Special Assessments Receivable - - 1,965,575 18,468,485 - 20,434,060 Due from Other Governments 952,414 12,284 27,990 2,890,078 18,860 3,901,626 Prepaid items 85,083 - - 58,250 13,534 156,867 Loans Receivable - 8,329,826 - - - 8,329,826 Total Assets 30,653,672$ 40,261,489$ 13,169,706$ 48,209,002$ 3,724,906$ 136,018,775$ LIABILITIES Accounts Payable 862,532$ 1,249,331$ 450$ 799,263$ 83,593$ 2,995,169$ Salaries Payable 1,646,107 6,618 - 5,631 4,462 1,662,818 Contracts Payable - 52,201 - 214,731 20,744 287,676 Due to Other Governments 18,762 - - 3,470 - 22,232 Deposits Payable 1,324,805 3,760 - - - 1,328,565 Unearned Revenue 2,760,489 13,000 - - - 2,773,489 Total Liabilities 6,612,695 1,324,910 450 1,023,095 108,799 9,069,949 DEFERRED INFLOWS OF RESOURCES Unavailable Revenue - Taxes 267,436 - 25,667 28,747 - 321,850 Unavailable Revenue - Special Assessments - - 1,965,097 18,462,637 - 20,427,734 Unavailable Revenue - Other - - - 2,857,594 - 2,857,594 Total Deferred Inflows of Resources 267,436 - 1,990,764 21,348,978 - 23,607,178 FUND BALANCE Nonspendable 85,083 - - 58,250 13,534 156,867 Restricted 58,086 38,936,579 11,178,492 - 3,602,573 53,775,730 Assigned 5,627,113 - - 25,778,679 - 31,405,792 Unassigned 18,003,259 - - - - 18,003,259 Total Fund Balance 23,773,541 38,936,579 11,178,492 25,836,929 3,616,107 103,341,648 Total Liabilities, Deferred Inflows of Resources, and Fund Balances 30,653,672$ 40,261,489$ 13,169,706$ 48,209,002$ 3,724,906$ 136,018,775$ CITY OF EDINA, MINNESOTA RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION DECEMBER 31, 2021 See accompanying Notes to Financial Statements. (26) Total Fund Balances - Governmental Funds 103,341,648$ Amounts reported for governmental activities in the Statement of Net Position are different because: Capital assets are included in net position, but are excluded from fund balances because they do not represent financial resources. Cost of Capital Assets 335,035,671 Accumulated Depreciation (157,936,469) Long-term liabilities are included in net position, but are excluded from fund balances until due and payable. Debt issuance premiums and discounts are excluded from net position until amortized, but are included in fund balances upon issuance as other financing sources and uses. Bonds Payable (66,990,000) Loans Payable (750,000) Premium on Bonds (3,962,955) Compensated Absences Payable (4,793,091) Total OPEB Liability (2,316,690) Net Pension Liability (15,244,614) Accrued interest payable on long-term debt is included in net position, but is excluded from fund balances until due and payable.(866,740) Investment in joint powers agreement are not available to pay for current period expenditures, and therefore, are not reported in the funds.1,770,353 The recognition of certain revenues and expenditures differ between the full accrual governmental activities financial statements and the modified accrual governmental fund financial statements. Deferred Outflows - OPEB 436,242 Deferred Outflows - Pension 19,205,795 Deferred Inflows - OPEB (1,491,449) Deferred Inflows - Pension (24,419,341) Deferred Inflows - Property Taxes 321,850 Deferred Inflows - Special Assessments 20,427,734 Deferred Inflows - Other 2,857,594 Internal service funds are used by management to charge the costs of certain activities to individual funds. The assets and liabilities of the internal service fund are included in the governmental activities in the statement of net position.3,699,989 Total Net Position - Governmental Activities 208,325,527$ CITY OF EDINA, MINNESOTA STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE GOVERNMENTAL FUNDS YEAR ENDED DECEMBER 31, 2021 See accompanying Notes to Financial Statements. (27) Housing and Nonmajor Total Redevelopment Debt Governmental Governmental General Authority Service Construction Funds Funds REVENUES General Property Taxes 33,827,443$ 230,166$ 3,632,895$ 4,105,959$ -$ 41,796,463$ Tax Increment Collections - 8,295,756 - - - 8,295,756 Franchise Taxes 824,286 - - 86,100 2,179,936 3,090,322 Lodging Tax 17,214 - - - - 17,214 Special Assessments - - 191,646 3,939,057 - 4,130,703 License and Permits 6,008,225 - - 69,221 - 6,077,446 Intergovernmental 2,564,397 - - 606,825 150,000 3,321,222 Charges for Services 5,536,786 228,216 - 215,256 - 5,980,258 Fines and Forfeitures 460,914 - - - - 460,914 Investment Income (Loss)(151,907) (98,804) - (110,770) (10,599) (372,080) Rental of Property 491,579 - - - - 491,579 Other Revenues 186,591 300,000 - 12,425 205,542 704,558 Total Revenues 49,765,528 8,955,334 3,824,541 8,924,073 2,524,879 73,994,355 EXPENDITURES Current: General Government 8,825,723 2,872,302 - 388,796 150,000 12,236,821 Public Safety 25,527,556 - - 52,884 113,815 25,694,255 Public Works 8,878,567 - - 1,379,305 460,206 10,718,078 Parks 5,916,078 - - 1,034 450 5,917,562 Capital Outlay: General Government - 2,672,078 - 144,659 - 2,816,737 Public Safety - - - 519,458 - 519,458 Public Works - - - 7,510,434 741,709 8,252,143 Parks 26,676 - - 435,761 - 462,437 Community Development - 152,717 - - - 152,717 Debt Service: Bond Principal - - 8,326,000 - - 8,326,000 Interest and Fiscal Charges - - 1,892,346 - - 1,892,346 Total Expenditures 49,174,600 5,697,097 10,218,346 10,432,331 1,466,180 76,988,554 REVENUES OVER (UNDER) EXPENDITURES 590,928 3,258,237 (6,393,805) (1,508,258) 1,058,699 (2,994,199) OTHER FINANCING SOURCES (USES) Transfers In 442,606 300,000 2,955,444 4,710,306 - 8,408,356 Transfers Out (4,503,106) - - (3,067,655) (68,895) (7,639,656) Sale of Capital Assets - 2,900,000 - 100,821 - 3,000,821 Bonds Issued - 7,545,000 4,085,343 5,189,657 - 16,820,000 Premium on Bonds Issued - 748,128 804,204 777,313 - 2,329,645 Total Other Financing Sources (Uses)(4,060,500) 11,493,128 7,844,991 7,710,442 (68,895) 22,919,166 NET INCREASE (DECREASE) IN FUND BALANCE (3,469,572) 14,751,365 1,451,186 6,202,184 989,804 19,924,967 Fund Balance - January 1 27,243,113 24,185,214 9,727,306 19,634,745 2,626,303 83,416,681 FUND BALANCE - DECEMBER 31 23,773,541$ 38,936,579$ 11,178,492$ 25,836,929$ 3,616,107$ 103,341,648$ CITY OF EDINA, MINNESOTA RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES YEAR ENDED DECEMBER 31, 2021 See accompanying Notes to Financial Statements. (28) Total Net Change in Fund Balances - Governmental Funds 19,924,967$ Amounts reported for governmental activities in the Statement of Activities are different because: Capital assets are recorded in net position and the cost is allocated over their estimated useful lives as depreciation expense. However, fund balances are reduced for the full cost of capital outlays at the time of purchase. Capital Outlays 11,670,235 Depreciation Expense (7,191,666) A gain or loss on the disposal of capital assets, including the difference between the carrying value and any related sale proceeds, is included in the change in net position. However, only the sale proceeds and insurance recoveries are included in the change in fund balances. Proceeds from the Sale of Capital Assets (3,000,821) Gain (Loss) on the Sale of Capital Assets 101,404 Revenues in the statement of activities that do not provide current financial resources (property tax special assessment, and other unavailable receivables) are not reported as revenues in the funds.(808,224) The amount of debt issued, principal as well as any issuance premiums or discounts, are reported in the governmental funds as a source of financing. Debt obligations are not revenues in the Statement of Activities, but rather constitute long-term liabilities.(19,149,645) Repayment of long-term debt does not affect the change in net position. However, it reduces fund balances.8,326,000 Interest on long-term debt is included in the change in net position as it accrues, regardless of when payment is due. However, they are only included in the change in fund balances when due.(100,325) Debt issuance premiums and discounts are included in the change in net position as they are amortized over the life of the debt. Amortization for the current year is included in interest expense on the Statement of Activities. 710,372 Pension and Other Postemployment Benefit (OPEB) expenditures in the governmental funds are measured by current year employer contributions. Pension and OPEB expenses on the Statement of Activities are measured by the change in the net pension liability/total OPEB liability and the related deferred inflows and outflows of resources. Pension 3,358,226 OPEB (36,381) In the governmental funds, compensated absences expenditures are measured by the amount of financial resources used (amounts actually paid). In the Statement of Activities, however, compensated absences expenses are measured by the amounts earned during the year. Compensated Absences (185,418) Internal service funds are used by management to charge the costs of certain activities to individual funds. The change in net position of the internal service funds is included in the governmental activities in the Statement of Activities.1,115,288 Change in Net Position - Governmental Activities 14,734,012$ CITY OF EDINA, MINNESOTA STATEMENT OF NET POSITION PROPRIETARY FUNDS DECEMBER 31, 2021 See accompanying Notes to Financial Statements. (29) Governmental Activities Nonmajor Total Internal Aquatic Golf Enterprise Enterprise Service Utilities Liquor Center Course Arena Funds Funds Funds ASSETS Current Assets: Cash and Investments 24,913,241$ 2,512,175$ 2,239,912$ 1,026,830$ 558,186$ 2,209,813$ 33,460,157$ 3,848,168$ Restricted Cash and Investments - - - 590,491 1,766,452 - 2,356,943 - Interest Receivable 103,230 9,590 10,065 4,257 1,572 16,558 145,272 - Accounts Receivable, Net 6,721,714 442 - 15,891 177,516 48,983 6,964,546 26,287 Special Assessments Receivable 340,519 - - - - - 340,519 - Due from Other Governments - - - - - 3,070 3,070 100 Prepaid Expenses - 8,548 - 1,703 - - 10,251 629,476 Inventory 20,087 1,947,020 - 78,724 - - 2,045,831 - Total Current Assets 32,098,791 4,477,775 2,249,977 1,717,896 2,503,726 2,278,424 45,326,589 4,504,031 Noncurrent Assets: Net Capital Assets 103,226,545 1,609,048 1,412,332 10,419,977 6,802,429 7,423,859 130,894,190 - Total Assets 135,325,336 6,086,823 3,662,309 12,137,873 9,306,155 9,702,283 176,220,779 4,504,031 DEFERRED OUTFLOWS OF RESOURCES OPEB Deferred Outflows 9,909 10,189 - 6,605 5,551 8,000 40,254 - Pension Deferred Outflows 851,801 663,716 4,282 489,334 297,255 548,923 2,855,311 - Total Deferred Outflows of Resources 861,710 673,905 4,282 495,939 302,806 556,923 2,895,565 - LIABILITIES Current Liabilities: Accounts Payable 1,381,498 863,575 1,340 78,609 122,441 249,105 2,696,568 282,571 Salaries Payable 103,841 87,475 2,742 61,425 41,886 64,568 361,937 78,717 Accrued Interest Payable 429,997 - 8,917 111,712 30,010 - 580,636 - Contracts Payable 302,145 - - - - - 302,145 - Due to Other Governments 11,133 171,290 - 15,597 6,260 7,539 211,819 1,452 Unearned Revenue - 181,770 - 266,661 10,851 19,841 479,123 - Compensated Absences Payable 104,579 92,002 - 80,051 31,680 44,760 353,072 - Bonds Payable - Current 5,757,000 - 80,000 1,165,000 2,036,000 - 9,038,000 - Total Current Liabilities 8,090,193 1,396,112 92,999 1,779,055 2,279,128 385,813 14,023,300 362,740 Noncurrent Liabilities: Total OPEB Liability 43,446 42,980 - 51,131 17,722 46,282 201,561 - Net Pension Liability 1,128,376 879,220 5,672 648,217 393,771 727,152 3,782,408 - Compensated Absences Payable 156,868 138,004 - 120,077 47,519 67,141 529,609 - Bonds Payable, Net of Unamortized Discounts and Premiums 25,976,032 - 494,281 7,579,097 2,886,457 - 36,935,867 - Total Noncurrent Liabilities 27,304,722 1,060,204 499,953 8,398,522 3,345,469 840,575 41,449,445 - Total Liabilities 35,394,915 2,456,316 592,952 10,177,577 5,624,597 1,226,388 55,472,745 362,740 DEFERRED INFLOWS OF RESOURCES OPEB Deferred Inflows 42,896 36,661 - 24,706 23,506 27,897 155,666 - Pension Deferred Inflows 1,036,713 807,796 5,212 595,561 361,783 668,083 3,475,148 - Total Deferred Inflows of Resources 1,079,609 844,457 5,212 620,267 385,289 695,980 3,630,814 - Total Liabilities and Deferred Inflows of Resources 36,474,524 3,300,773 598,164 10,797,844 6,009,886 1,922,368 59,103,559 362,740 NET POSITION Net Investment in Capital Assets 71,191,368 1,609,048 838,051 2,266,371 3,646,424 7,423,859 86,975,121 - Restricted for Edina Law Debt - - 1,225,093 - - - 1,225,093 - Unrestricted 28,521,154 1,850,907 1,005,283 (430,403) (47,349) 912,979 31,812,571 4,141,291 Total Net Position 99,712,522$ 3,459,955$ 3,068,427$ 1,835,968$ 3,599,075$ 8,336,838$ 120,012,785$ 4,141,291$ 441,302 Net position of business-type activities 120,454,087$ Business-Type Activities - Enterprise Funds Explanation of different between Proprietary Funds Statement of Revenue, Expenses, and Changes in Fund Net Position and the Statement of Activities: The City uses internal service funds to charge the cost of its risk management, equipment operations, IT, and facilities management to individual funds. This amount represents the total income that has been allocated back to the business-type activities in the government- wide Statement of Activities that is attributable to the City's business-type activities each year: CITY OF EDINA, MINNESOTA STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION PROPRIETARY FUNDS YEAR ENDED DECEMBER 31, 2021 See accompanying Notes to Financial Statements. (30) Governmental Activities Nonmajor Total Internal Aquatic Golf Enterprise Enterprise Service Utilities Liquor Center Course Arena Funds Funds Funds OPERATING REVENUES Sales - Liquor -$ 14,116,427$ -$ 98$ -$ -$ 14,116,525$ -$ Sales - Retail - 196,805 6,736 309,799 26,101 6,845 546,286 - Sales - Utilities 26,335,795 - - - - - 26,335,795 - Sales - Concessions - - 155,701 52 175,297 24,551 355,601 - Memberships - - 371,891 201,499 - 77,902 651,292 - Admissions - - 468,839 1,170,367 23,500 262,290 1,924,996 - Lodging Tax - - - - - 3,090 3,090 - Building Rental - - 66,651 155,334 1,934,360 664,956 2,821,301 - Rental of Equipment - - - 381,616 2,144 108,923 492,683 - Greens Fees - - - 2,109,267 - 269,667 2,378,934 - Other Fees 1,327,798 - (94) 1,056,652 185,668 673,215 3,243,239 7,421,090 Total Operating Revenues 27,663,593 14,313,232 1,069,724 5,384,684 2,347,070 2,091,439 52,869,742 7,421,090 OPERATING EXPENSES Cost of Sales and Services - 10,353,194 60,370 235,073 67,517 10,704 10,726,858 - Personal Services 2,812,860 1,988,809 382,375 2,271,801 990,205 1,228,326 9,674,376 2,153,814 Contractual Services 10,671,011 686,621 232,907 694,017 843,938 842,903 13,971,397 2,706,930 Commodities 1,148,518 57,600 75,914 497,948 73,955 212,558 2,066,493 1,137,038 Internal Services 1,387,265 312,725 44,281 242,329 212,718 369,447 2,568,765 - Depreciation 5,931,178 120,830 283,470 894,499 657,745 667,524 8,555,246 - Total Operating Expenses 21,950,832 13,519,779 1,079,317 4,835,667 2,846,078 3,331,462 47,563,135 5,997,782 OPERATING INCOME (LOSS)5,712,761 793,453 (9,593) 549,017 (499,008) (1,240,023) 5,306,607 1,423,308 NONOPERATING REVENUES (EXPENSES) Intergovernmental 384,268 - - - - - 384,268 - Investment Income (100,528) (13,299) (10,212) (6,229) (1,186) (10,196) (141,650) - Donations - - - - - 3,602 3,602 - Interest and Fiscal Charges (1,048,696) - (21,667) (269,713) (73,226) - (1,413,302) - Amortization of Bond Premiums (Discounts)964,536 - 27,803 156,071 12,623 - 1,161,033 - Gain (Loss) on Sale of Capital Assets 17,437 - - - - - 17,437 - Miscellaneous 9,092 345 15,164 - 608 81,414 106,623 - Total Nonoperating Revenues (Expenses)226,109 (12,954) 11,088 (119,871) (61,181) 74,820 118,011 - INCOME (LOSS) BEFORE TRANSFERS 5,938,870 780,499 1,495 429,146 (560,189) (1,165,203) 5,424,618 1,423,308 TRANSFERS Transfers In - 4,156 17,269 53,364 340,605 412,477 827,871 3,760 Transfers Out (750,331) (850,000) - - - - (1,600,331) - Total Transfers (750,331) (845,844) 17,269 53,364 340,605 412,477 (772,460) 3,760 CHANGE IN NET POSITION 5,188,539 (65,345) 18,764 482,510 (219,584) (752,726) 4,652,158 1,427,068 Net Position - January 1 94,523,983 3,525,300 3,049,663 1,353,458 3,818,659 9,089,564 115,360,627 2,714,223 NET POSITION - DECEMBER 31 99,712,522$ 3,459,955$ 3,068,427$ 1,835,968$ 3,599,075$ 8,336,838$ 120,012,785$ 4,141,291$ 311,780 Change in net position of business-type activities 4,963,938$ Business-Type Activities - Enterprise Funds Explanation of different between Proprietary Funds Statement of Revenue, Expenses, and Changes in Fund Net Position and the Statement of Activities: The City uses internal service funds to charge the cost of its risk management, equipment operations, IT, and facilities management to individual funds. This amount represents the income that has been allocated back to the business-type activities in the government-wide Statement of Activities that is attributable to the City's business-type activities: CITY OF EDINA, MINNESOTA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS YEAR ENDED DECEMBER 31, 2021 See accompanying Notes to Financial Statements. (31) Governmental Activities Nonmajor Total Internal Aquatic Golf Enterprise Enterprise Service Utilities Liquor Center Course Arena Funds Funds Funds CASH FLOWS FROM OPERATING ACTIVITIES Receipts from Customers and Users 26,903,783$ 14,391,252$ 1,084,888$ 5,445,033$ 2,337,468$ 2,148,491$ 52,310,915$ -$ Receipts from City Funds - - - - - - - 7,430,013 Payment to Suppliers (11,719,872) (11,054,066) (412,631) (1,589,371) (1,110,101) (1,218,012) (27,104,053) (3,546,320) Payment to Employees (2,517,122) (2,062,603) (374,617) (2,118,260) (973,104) (1,692,729) (9,738,435) (2,152,905) Net Cash Provided (Used) by Operating Activities 12,666,789 1,274,583 297,640 1,737,402 254,263 (762,250) 15,468,427 1,730,788 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfer from Other Funds - 4,156 17,269 53,364 340,605 412,477 827,871 3,760 Transfer to Other Funds (750,331) (850,000) - - - - (1,600,331) - Net Cash Provided (Used) by Noncapital Financing Activities (750,331) (845,844) 17,269 53,364 340,605 412,477 (772,460) 3,760 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES State Grant 405,642 - - - - - 405,642 - Proceeds from Capital Debt - - - 601,624 1,800,054 - 2,401,678 - Acquisition of Capital Assets (9,819,247) (64,684) (346) (49,053) (51,570) (167,138) (10,152,038) - Proceeds from Disposals of Capital Assets 17,436 - - - - - 17,436 - Principal Paid on Bonds (6,920,000) - (80,000) (565,000) (264,000) - (7,829,000) - Interest and Fiscal Charges Paid on Bonds (1,143,996) - (23,000) (277,734) (75,988) - (1,520,718) - Net Cash Provided (Used) by Capital and Related Financing Activities (17,460,165) (64,684) (103,346) (290,163) 1,408,496 (167,138) (16,677,000) - CASH FLOWS FROM INVESTING ACTIVITIES Interest Received 65,648 30,652 23,536 14,374 2,781 23,500 160,491 - Purchase of Investments - - - (590,489) (1,766,446) - (2,356,935) - Sale of Investments 1,730,384 - - - - - 1,730,384 - Net Cash Flows Provided (Used) by Investing Activities 1,796,032 30,652 23,536 (576,115) (1,763,665) 23,500 (466,060) - NET INCREASE (DECREASE) IN CASH (3,747,675) 394,707 235,099 924,488 239,699 (493,411) (2,447,093) 1,734,548 Cash - January 1 25,508,981 2,127,298 2,001,603 107,925 316,644 2,674,111 32,736,562 2,113,620 CASH - DECEMBER 31 21,761,306$ 2,522,005$ 2,236,702$ 1,032,413$ 556,343$ 2,180,700$ 30,289,469$ 3,848,168$ CASH AND INVESTMENTS PRESENTED IN THE STATEMENT OF NET POSITION Cash 21,761,306$ 2,522,005$ 2,236,702$ 1,032,413$ 556,343$ 2,180,700$ 30,289,469$ 3,848,168$ Investments 3,151,935 (9,830) 3,210 (5,583) 1,843 29,113 3,170,688 - Total Cash and Investments 24,913,241$ 2,512,175$ 2,239,912$ 1,026,830$ 558,186$ 2,209,813$ 33,460,157$ 3,848,168$ Business-Type Activities - Enterprise Funds CITY OF EDINA, MINNESOTA STATEMENT OF CASH FLOWS (CONTINUED) PROPRIETARY FUNDS YEAR ENDED DECEMBER 31, 2021 See accompanying Notes to Financial Statements. (32) Governmental Activities Risk Nonmajor Total Management Aquatic Golf Enterprise Enterprise Internal Utilities Liquor Center Course Arena Funds Funds Service Fund RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES Operating Income (Loss) 5,712,761$ 793,453$ (9,593)$ 549,017$ (499,008)$ (1,240,023)$ 5,306,607$ 1,423,308$ Adjustments to Reconcile Operating Income (Loss) to Net Cash Provided (Used) by Operating Activities: Depreciation 5,931,178 120,830 283,470 894,499 657,745 667,524 8,555,246 - Miscellaneous Income 9,092 345 15,164 - 608 85,016 110,225 - (Increase) Decrease in: Accounts Receivable (735,383) 219 - (13,122) (16,515) (14,090) (778,891) (7,303) Special Assessments Receivable (33,519) - - - - - (33,519) - Due from Other Governments - - - - - (3,070) (3,070) 16,226 Inventory (3,801) (481,066) - 24,353 - 3,447 (457,067) - Prepaid Expenses 1,598 14,903 - (816) - - 15,685 172,914 Deferred Outflows of Resources (743,379) (554,905) (4,282) (427,323) (251,039) (424,125) (2,405,053) - Increase (Decrease) in: Accounts Payable 1,486,233 817,242 841 44,957 84,124 206,723 2,640,120 124,606 Salaries Payable 5,402 10,462 1,156 7,596 9,183 4,659 38,458 909 Due to Other Governments 2,892 4,995 - 11,502 3,903 7,430 30,722 128 Unearned Revenue - 77,456 - 73,471 6,305 (10,804) 146,428 - Total OPEB Liability 9,061 7,413 - 4,942 4,942 6,590 32,948 - Net Pension Liability (31,625) (280,781) 5,672 (14,640) (103,372) (598,563) (1,023,309) - Compensated Absences 83,252 (1,150) - 23,646 23,577 (50,677) 78,648 - Deferred Inflows of Resources 973,027 745,167 5,212 559,320 333,810 597,713 3,214,249 - Total Adjustments 6,954,028 481,130 307,233 1,188,385 753,271 477,773 10,161,820 307,480 Net Cash Provided (Used) by Operating Activities 12,666,789$ 1,274,583$ 297,640$ 1,737,402$ 254,263$ (762,250)$ 15,468,427$ 1,730,788$ NONCASH INVESTING ACTIVITIES Increase in Fair Value of Investments (240,630)$ (44,766)$ (34,374)$ (20,992)$ (4,062)$ (34,321)$ (379,145)$ -$ NONCASH CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition of Capital Assets with Contracts Payable 302,145$ -$ -$ -$ -$ -$ 302,145$ -$ Capital Assets Contributed (to) from Other Funds -$ -$ -$ -$ -$ -$ -$ -$ Business-Type Activities - Enterprise Funds CITY OF EDINA, MINNESOTA STATEMENT OF FIDUCIARY NET POSITION AND STATEMENT OF CHANGES IN FIDICUARIY NET POSITION CUSTODIAL FUNDS DECEMBER 31, 2021 See accompanying Notes to Financial Statements. (33) Custodial Funds Cash and Investments 342,719$ Accounts Receivable 17,585 Total Assets 360,304 Accounts Payable 124,406 Salaries Payable 17,913 Due to Other Governmental Units 12,037 Unearned Revenue 5,163 Total Liabilities 159,519 Restricted for Organizations and Other Governments 200,785$ Collections on Behalf of Others 1,662,677$ Payments on Behalf of Others 2,074,559 Net Increase (Decrease) in Fiduciary Net Position (411,882) Net Position - Beginning 612,667 Net Position - Ending 200,785$ ASSETS LIABILITIES ADDITIONS DEDUCTIONS NET POSITION CITY OF EDINA, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2021 (34) NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The City of Edina (the City) was incorporated in 1888 and operates under the state of Minnesota Statutory Plan B form of government. The governing body consists of a five- member City Council elected by voters of the City. The financial statements of the City have been prepared in conformity with accounting principles generally accepted in the United States of America as applied to governmental units by the Governmental Accounting Standards Board (GASB). The following is a summary of significant accounting policies. A. Financial Reporting Entity The City’s financial reporting entity consists of (a) the primary government, (b) organizations for which the primary government is financially accountable, and (c) other organizations for which the nature and significance of their relationship with the primary government are such that exclusion would cause the reporting entity’s financial statements to be misleading or incomplete. The primary government is financially accountable for the component unit if it appoints a voting majority of the component unit’s governing body and is able to impose its will on the component unit or there is a potential for the component unit to provide specific financial benefits to, or impose specific financial burdens on, the primary government. As required by accounting principles generally accepted in the United States of America, the financial statements of the reporting entity include those of the City of Edina (the primary government) and its component units. The component unit discussed below is included in the City’s reporting entity because of the significance of its operational or financial relationships with the City. Component Unit In conformity with accounting principles generally accepted in the United States of America, the financial statements of the component unit have been included in the financial reporting entity as a blended component unit. The Housing and Redevelopment Authority (HRA) is an entity legally separate from the City. However, for financial reporting purposes, the HRA is reported as if it were part of the City’s operations for two reasons. First, the HRA’s governing body is substantively the same as the governing body of the City. Specifically, the HRA board consists of five members, all of which are City Council members. Second, management of the City has operational responsibility for the HRA. Specifically, sales of bonds or other obligations of the HRA are approved by the City Council; the HRA follows the budget process for City departments in accordance with City policy; the annual HRA budget is approved by City Council; the HRA submits its plan for development and redevelopment to the City Council for approval; lastly, the administrative structure and management practices and policies of the HRA are approved by the City Council. The activity of the HRA is reported in the Special Revenue Funds. Separate financial statements are not prepared for the HRA. CITY OF EDINA, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2021 (35) NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 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 City. 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. The statement of activities demonstrates the degree to which the direct expenses of a given function or business-type activity are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or business-type activity. 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 business-type activity and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or business type activity. Taxes and other items not 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. Aggregated information for the remaining nonmajor governmental and enterprise funds is reported in a single column in the fund financial statements. 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 fund and fiduciary fund financial statements. The City’s only fiduciary fund type, custodial funds, are custodial in nature and do not have a measurement focus. 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 all revenues, except reimbursement grants, 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, other postemployment benefits (OPEB), net pension liabilities, and claims and judgments are recorded only when payment is due. CITY OF EDINA, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2021 (36) NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued) Property taxes, special assessments, intergovernmental revenues, charges for services 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. The City reports the following major governmental funds: The general fund is the government’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 special revenue Housing and Redevelopment Authority fund is used to account for revenues from several sources (property taxes, bond proceeds, investment earnings, etc.) that are restricted for housing and redevelopment. The debt service fund accounts for the payment of principal and interest on General Obligation, Permanent Improvement Revolving, Public Project Revenue Bonds, and Edina Emerald Energy Program Bonds. The capital projects construction fund accounts for the various special assessment and state aid projects throughout the City. This fund also provides financing for capital improvements as restricted in the City’s capital improvement budget. The City reports the following major proprietary funds: The utilities fund accounts for the provision of water, sewer, storm, and recycling services to the City’s residents. The liquor fund accounts for the operation of the City’s three liquor stores. The aquatic center fund accounts for the operation of the City’s aquatic center. The golf course fund accounts for the operation of the City’s two golf courses and a golf dome. The arena fund accounts for the operation of the City’s ice arena. CITY OF EDINA, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2021 (37) NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued) Additionally, the City reports the following fund types: Internal service funds – the risk management, equipment operations, information technology, and facilities management internal service funds account for costs of insurance and risk management programs, equipment operations, IT services, and facilities management across all municipal departments. Internal service funds operate in a manner similar to enterprise funds; however, it provides services primarily to other departments within the City. Custodial funds – the police seizure, Public Safety Training Facility, and Minnesota Task Force 1 funds account for fees collected for other government agencies. As a general rule the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are transactions that would be treated as revenues, expenditures or expenses if they involved external organizations, such as buying goods and services or payments in lieu of taxes, are similarly treated when they involve other funds of the City of Edina. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. Amounts reported as program revenues include 1) charges to customers or applicants for goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes. 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 internal service fund are charges to customers for sales and services. Operating expenses for the enterprise funds and internal service fund 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. Aggregated information for the internal service funds is reported in a single column in the proprietary fund financial statements. These services have been allocated proportionately to governmental and business-type activities in the government-wide financial statements. The cost of these services is reported in the appropriate functional activity. Depreciation expense is included in the direct expenses of each function. Interest on long-term debt is considered an indirect expense and is reported separately on the statement of activities. CITY OF EDINA, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2021 (38) NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) D. Cash and Investments Cash and Investments The cash balances of the City and its component unit are pooled and invested for the purpose of increasing earnings through investment activities. The pool’s investments are reported at fair value at year-end, except for investments in external investment pools, which are stated at amortized cost. The City has the ability and intent to hold its investments to maturity. The individual funds’ portions of the pool’s fair value are presented as “Cash and investments.” Earnings from such investments are allocated to the respective funds on the basis of applicable cash balance participation by each fund. The City provides temporary advances to funds that have insufficient cash and investment balances by means of an advance from another fund shown as interfund receivables in the advancing fund, and an interfund payable in the fund with the deficit, until adequate resources are received. These interfund balances are eliminated on the government-wide financial statements. The City categorizes its fair value measurements within the fair value hierarchy established by accounting principles generally accepted in the United States of America. 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. Debt securities classified in Level 2 of the fair value hierarchy are valued using evaluations based on various market and industry inputs. See Note 2 for the City’s recurring fair value measurements as of the current year-end. Restricted Cash and Investments Restricted cash and investments represent bond proceeds held for specific purposes. Earnings on these investments are allocated directly to these funds. Cash Equivalents For the purposes of the statement of cash flows, the City considers all highly liquid debt instruments with an original maturity from the time of purchase by the City of three months or less to be cash equivalents. The proprietary funds’ portion in the government- wide cash and investment management pool is considered to be cash equivalent. CITY OF EDINA, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2021 (39) NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) E. Receivables and Payables During the course of operations, numerous transactions occur between individual funds for goods provided or services rendered. Short-term interfund loans are classified as “due to/from other funds.” All short-term interfund receivables and payables at December 31, 2021 are planned to be eliminated in 2022. Any residual balances outstanding between the governmental activities and business-type activities are reported in the government- wide financial statements as “internal balances.” Property taxes and special assessments receivables have been reported net of estimated uncollectible accounts. Because utility bills are considered liens on property, no estimated uncollectible amounts are established. Uncollectible amounts are not material for other receivables and have not been reported. F. Revenue Recognition 1. Property Tax Revenue Recognition The City Council annually adopts a tax levy and certifies it to the County in December (levy/assessment date) of each year for collection in the following year. The County is responsible for billing and collecting all property taxes for itself, the City, the local School District, and other taxing authorities. Such taxes become a lien on January 1 and are recorded as receivables by the City at that date. Real property taxes are payable (by property owners) on May 15 and October 15 of each calendar year. Personal property taxes are payable by taxpayers on February 28 and June 30 of each year. These taxes are collected by the County and remitted to the City on or before July 7 and December 2 of the same year. Delinquent collections for November and December are received the following January. The City has no ability to enforce payment of property taxes by property owners. The County possesses this authority. Government-Wide Financial Statements The City recognizes property tax revenue in the period for which the taxes were levied. Uncollectible property taxes are not material and have not been reported. Governmental Fund Financial Statements The City recognizes property tax revenue when it becomes both measurable and available to finance expenditures of the current period. In practice, current and delinquent taxes and state credits received by the City in July, December, and January are recognized as revenue for the current year. Taxes collected by the County by December 31 (remitted to the City the following January) and taxes and credits not received at the year-end are classified as delinquent and due from County taxes receivable. The portion of delinquent taxes not collected by the City in January are fully offset by deferred inflows of resources because they are not available to finance current expenditures. CITY OF EDINA, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2021 (40) NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) F. Revenue Recognition (Continued) 2. Special Assessment Revenue Recognition Special assessments are levied against benefited properties for the cost or a portion of the cost of special assessment improvement projects in accordance with state statutes. These assessments are collectible by the City over a term of years usually consistent with the term of the related bond issue. Collection of annual installments (including interest) is handled by the County Auditor in the same manner as property taxes. Property owners are allowed to (and often do) prepay future installments without interest or prepayment penalties. Once a special assessment roll is adopted, the amount attributed to each parcel is a lien upon that property until full payment is made or the amount is determined to be excessive by the City Council or court action. If special assessments are allowed to go delinquent, the property is subject to tax forfeit sale. Pursuant to state statutes, a property shall be subject to a tax forfeit sale after three years unless it is homesteaded, agricultural, or seasonal recreational land in which event the property is subject to such sale after five years. Government-Wide Financial Statements The City recognizes special assessment revenue in the period that the assessment roll was adopted by the City Council. Uncollectible special assessments are not material and have not been reported. Governmental Fund Financial Statements Revenue from special assessments is recognized by the City when it becomes measurable and available to finance expenditures of the current fiscal period. In practice, current and delinquent special assessments received by the City are recognized as revenue for the current year. Special assessments that are collected by the County by December 31 (remitted to the City the following January) are also recognized as revenue for the current year. All remaining delinquent, deferred, and special deferred assessments receivable in governmental funds are completely offset by deferred inflows of resources. The following is a breakdown of special assessments receivable at December 31, 2021: Enterprise Funds Debt Service Construction Utilities Special Assessments Receivable: Delinquent 478$ 40,457$ 29,424$ Deferred 1,965,097 18,428,028 311,095 Total 1,965,575$ 18,468,485$ 340,519$ Governmental Funds CITY OF EDINA, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2021 (41) NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) G. Inventories and Prepaid Items Inventories of the proprietary funds are stated at cost and are recorded as expenses when consumed rather than when purchased. All inventories use the first-in/first-out (FIFO) method. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements and are recorded as expenditures or expenses when consumed. H. Capital Assets Capital assets, which include property, buildings, improvements, equipment, parks, infrastructure assets (roads, bridges, sidewalks, and similar items), and intangible assets such as easements, are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assets are also reported in the proprietary fund financial statements but not in the governmental fund financial statements. Capital assets are defined by the government as assets with an initial, individual cost of more than $10,000 (amount not rounded) and an estimated useful life in excess of three years. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated acquisition value at the date of donation. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. Infrastructure assets include all of the City’s assets since inception. Property, plant, and equipment of the primary government are depreciated using the straight-line method over the following estimated useful lives: Assets Life Golf Course 10 to 35 Years Land Improvements 15 to 50 Years Building and Structures 15 to 40 Years Furniture and Office Equipment 5 to 10 Years Vehicles and Equipment 3 to 20 Years Parks 5 to 100 Years Utility Infrastructure 20 to 50 Years Capital assets that are not depreciated include land, easements, and construction in progress. CITY OF EDINA, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2021 (42) NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) I. Compensated Absences It is the City’s policy to permit employees to accumulate earned but unused vacation and sick pay benefits. All vacation 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. In accordance with the provisions of accounting principles generally accepted in the United States of America no liability is recorded for nonvesting accumulating rights to receive sick pay benefits. However, a liability is recognized in the government-wide and proprietary fund financial statements for that portion of accumulating sick leave benefits that is vested as severance pay. According to City policy, vested sick leave benefits are liquidated into a health care savings plan upon separation. J. State-Wide Pension Plans 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 the PERA’s fiduciary net position have been determined on the same basis as they are reported by the PERA except that the 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. Pension liabilities are liquidated by various governmental funds based on where the corresponding employees’ salaries are allocated. K. 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 bond using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued plus any premium received is reported as other financing sources. 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. CITY OF EDINA, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2021 (43) NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) L. Deferred Outflows/Inflows of Resources In addition to assets, the statement of financial 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 assets 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 two items which qualifies for reporting in this category. Deferred outflows of resources related to pensions and OPEB are reported in the government-wide and enterprise funds statement of net position. These deferred outflows result from differences between expected and actual experience, changes of assumptions, differences between projected and actual investment earnings, changes in proportion, and contributions to the plan subsequent to the measurement date and before the end of the reporting period. These amounts are deferred and amortized as required under pension and OPEB standards. In addition to liabilities, statements of financial position or balance sheets will sometimes report a separate section for deferred inflows of resources. This separate financial statement element represents an acquisition of net assets that applies to future periods and so will not be recognized as an inflow of resources (revenue) until that time. The City has three items which qualify for reporting in this category. Unavailable revenue is reported only in the governmental funds balance sheet. The governmental funds report unavailable revenue from two sources: property taxes and special assessments. These amounts are deferred and recognized as an inflow of resources in the period the amounts become available. Deferred inflows of resources related to pensions and OPEB are reported in the government-wide and enterprise fund statement of net position. These deferred inflows result from differences between expected and actual experience, changes of assumptions, and the difference between projected and actual investment earnings. These amounts are deferred and amortized as required under pension and OPEB standards. M. Interfund Transactions Interfund services provided and used are accounted for as revenues, expenditures, or expenses. Transactions that constitute reimbursements to a fund for expenditures/ expenses initially made from it that are properly applicable to another fund, are recorded as expenditures/expenses in the reimbursing fund and as reductions of expenditures/expenses in the fund that is reimbursed. Interfund loans are reported as an interfund loan receivable or payable which offsets the movement of cash between funds. All other interfund transactions are reported as transfers and are eliminated to the extent possible on the government-wide statements. CITY OF EDINA, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2021 (44) NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) N. Fund Balance Classification In the fund financial statements, governmental funds report fund balance in classifications that disclose constraints for which amounts in those funds can be spent. These classifications are as follows: • Nonspendable – Consists of amounts that are not in spendable form, such as prepaid items, inventory, and other long-term assets. • Restricted – Consists of amounts related to externally imposed constraints established by creditors, grantors, or contributors; or constraints imposed by state statutory provisions. • Committed – Consists of internally imposed constraints that are established by resolution of the City Council. Those committed amounts cannot be used for any other purpose unless the City Council removes or changes the specified use by taking the same type of action it employed to previously commit those amounts. • Assigned – Consists of internally imposed constraints. These constraints consist of amounts intended to be used by the City for specific purposes but do not meet the criteria to be classified as restricted or committed. In the general fund, assigned amounts represent intended uses established by the City Council. In the fund balance policy, authority to assign amounts for specific purposes is limited to the City Council. • Unassigned – The residual classification for the general fund which also reflects negative residual amounts in other funds. When both restricted and unrestricted resources are available for use, it is the City’s policy to first use restricted resources, and then use unrestricted resources as they are needed. When committed, assigned, or unassigned resources are available for use, it is the City’s policy to use resources in the following order: 1) committed, 2) assigned, and 3) unassigned. O. Net Position In the government-wide and proprietary fund financial statements, net position represents the difference between assets, deferred outflows of resources, liabilities, and deferred inflows of resources. Net position is displayed in three components: • Net Investment in Capital Assets – Consists of capital assets, net of accumulated depreciation, reduced by the outstanding balance of any long-term debt used to build or acquire the capital assets. • Restricted Net Position – Consists of net position restricted when there are limitations imposed on their use through external restrictions imposed by creditors, grantors, or laws or regulations of other governments. CITY OF EDINA, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2021 (45) NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) O. Net Position (Continued) • Unrestricted Net Position – All other net position that do not meet the definition of “restricted” or “net investment in capital assets.” When both restricted and unrestricted resources are available for use, it is the City’s policy to first use restricted resources, and then use unrestricted resources as they are needed. P. Use of Estimates The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates that affect amounts reported in the financial statements during the reporting period. Actual results could differ from such estimates. NOTE 2 CASH AND INVESTMENTS A. Components of Cash and Investments Cash and investments at year-end consist of the following: Deposits (1,838,594)$ Cash on hand 36,050 Investments 143,008,212 Total 141,205,668$ Cash and investments are presented in the financial statements as follows: Cash and Investments - Statement of Net Position 133,549,812$ Restricted Cash and Investments - Statement of Net Position 7,313,137 Cash and Investments - Statement of Fiduciary Net Position 342,719 Total 141,205,668$ The City had restricted investments of $7,313,137 as of December 31, 2021 that represents unspent bond proceeds to be used for bond refunding payments in 2022. B. Deposits In accordance with applicable Minnesota Statutes, the City maintains deposits at depository banks authorized by the City Council, including checking accounts, savings accounts, and certificates of deposit. CITY OF EDINA, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2021 (46) NOTE 2 CASH AND INVESTMENTS POLICIES (CONTINUED) B. Deposits (Continued) The following is considered the most significant risk associated with deposits: Custodial Credit Risk – In the case of deposits, this is the risk that in the event of a bank failure, the City’s deposits may be lost. Minnesota Statutes require that all deposits be protected by federal deposit insurance, corporate surety bond, or collateral. The market value of collateral pledged must equal 110% of the deposits not covered by federal deposit insurance or corporate surety bonds. Authorized collateral includes treasury bills, notes, and bonds; issues of U.S. government agencies; general obligations rated “A” or better; revenue obligations rated “AA” or better; irrevocable standard letters of credit issued by the Federal Home Loan Bank; and certificates of deposit. Minnesota Statutes require that securities pledged as collateral be held in safekeeping in a restricted account at the Federal Reserve Bank or in an account at a trust department of a commercial bank or other financial institution that is not owned or controlled by the financial institution furnishing the collateral. The City’s investment policy does not contain further restrictions on the types of collateral required. At year-end, the carrying amount of the City’s deposits was ($1,838,594) while the balance on the bank records was $657,623. At December 31, 2021, all of the City’s deposits were properly collateralized in accordance with state statutes. C. Investments The City has the following investments at year-end: Fair Value Measurements Investment Rating Agency Using < 1 1 to 5 6 to 10 > 10 Total U.S. Treasuries N/A N/A Level 1 -$ 16,904,363$ 7,495,384$ -$ 24,399,747$ Negotiable CDs N/R N/R Level 2 2,732,073 3,802,216 - - 6,534,289 SBA Notes AA+S&P Level 1 - 81,813 363,578 - 445,391 FHLB AA+S&P Level 2 76,019 467,069 - - 543,088 FHLMC AA+S&P Level 2 - 18,983 182,678 1,498,496 1,700,157 FNMA AA+S&P Level 2 - 1,822,974 869,067 8,171,656 10,863,697 FFCB AA+S&P Level 2 - 17,857 - - 17,857 Municipal Bonds AA- to AAA S&P Level 2 22,439,081 20,368,500 881,770 - 43,689,351 Corporate Bonds AA+S&P Level 2 - 986,210 - - 986,210 Subtotal 25,247,173$ 44,469,985$ 9,792,477$ 9,670,152$ Money Market*53,065,274 4M Fund*763,151 Total investments 143,008,212$ N/A - Not Applicable N/R - Not Rated * - The City's money market investments do not have maturities Interest Risk - Credit Risk Maturity Duration in Years CITY OF EDINA, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2021 (47) NOTE 2 CASH AND INVESTMENTS POLICIES (CONTINUED) C. Investments (Continued) The Minnesota Municipal Money Market Fund (4M Fund) is regulated by Minnesota Statutes and the board of directors of the League of Minnesota Cities. The 4M Fund is an external investment pool not registered with the Securities Exchange Commission (SEC) that follows the same regulatory rules of the SEC. The City’s investment in the 4M Fund is measured at amortized cost which approximates fair value. The fair value of its position in the pool is the same as the value of the pool shares. The fund does not have any limitations or restrictions on participant withdrawals. Investments are subject to various risks, the following of which are considered the most significant: Custodial Credit Risk – For investments, this is the risk that in the event of a failure of the counterparty to an investment transaction (typically a broker-dealer) the City would not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The City’s investment policy specifically addresses custodial credit risk, requiring the City to limit its exposure by purchasing insured or registered investments, or by the control of who holds the securities. Credit Risk – This is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. Minnesota Statutes limit the City’s investments to direct obligations or obligations guaranteed by the United States or its agencies; shares of investment companies registered under the Federal Investment Company Act of 1940 that receive the highest credit rating, are rated in one of the two highest rating categories by a statistical rating agency, and all of the investments have a final maturity of thirteen months or less; general obligations rated “AA” or better; general obligations of the Minnesota Housing Finance Agency rated “A” or better; bankers’ acceptances of United States banks eligible for purchase by the Federal Reserve System; commercial paper issued by United States corporations or their Canadian subsidiaries, rated of the highest quality category by at least two nationally recognized rating agencies, and maturing in 270 days or less; Guaranteed Investment Contracts guaranteed by a United States commercial bank, domestic branch of a foreign bank, or a United States insurance company, and with a credit quality in one of the top two highest categories; 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 $10,000,000, that are a primary reporting dealer in U.S. government securities to the Federal Reserve Bank of New York, or certain Minnesota securities broker-dealers. The City’s investment policies specifically address credit risk, further limiting the City’s exposure to credit risk by requiring that all state and local government obligations to be rated “AA” or better by a national rating agency. Concentration Risk – This is the risk associated with investing a significant portion of the City’s investment (considered 5% or more) in the securities of a single issuer, excluding U.S. guaranteed investments (such as Treasuries), investment pools, and mutual funds. The City’s investment policies specifically address the City’s desire to limit concentration risk, but do not set specific guidelines for measurement of this risk. At year-end, the City’s investments include 12.18% in securities issued by FNMA. CITY OF EDINA, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2021 (48) NOTE 2 CASH AND INVESTMENTS POLICIES (CONTINUED) C. Investments (Continued) Interest Rate Risk – This is the risk of potential variability in the fair value of fixed rate investment resulting in changes in interest rates (the longer the period for which an interest rate is fixed, the greater the risk). The City’s investment policies specifically address the City’s desire to limit interest rate risk, but do not set specific guidelines for measurement of this risk. NOTE 3 CAPITAL ASSETS Capital asset activity for the year ended December 31, 2021 is as follows: Beginning Ending Balance Increases Decreases Balance Governmental Activities: Capital Assets Not Being Depreciated: Land 24,298,526$ -$ (2,893,443)$ 21,405,083$ Easements 253,000 - - 253,000 Construction in Progress 6,691,865 9,803,421 (4,004,245) 12,491,041 Total Capital Assets Not Being Depreciated 31,243,391 9,803,421 (6,897,688) 34,149,124 Capital Assets Being Depreciated: Land Improvements 26,121,978 1,267,588 - 27,389,566 Buildings and Structures 64,210,041 453,471 - 64,663,512 Furniture and Office Equipment 3,937,521 136,831 (23,385) 4,050,967 Vehicles and Equipment 21,429,509 1,718,422 (791,417) 22,356,514 Infrastructure 156,222,111 - - 156,222,111 Parks 23,909,130 2,294,747 - 26,203,877 Total Capital Assets Being Depreciated 295,830,290 5,871,059 (814,802) 300,886,547 Less Accumulated Depreciation for: Land Improvements (20,306,442) (522,640) - (20,829,082) Buildings and Structures (29,112,739) (1,746,052) - (30,858,791) Furniture and Office Equipment (3,659,188) (89,708) 23,385 (3,725,511) Vehicles and Equipment (11,000,197) (1,777,313) 785,443 (11,992,067) Infrastructure (73,041,421) (2,052,840) - (75,094,261) Parks (14,433,644) (1,003,113) - (15,436,757) Total Accumulated Depreciation (151,553,631) (7,191,666) 808,828 (157,936,469) Total Capital Assets Being Depreciated, Net 144,276,659 (1,320,607) (5,974) 142,950,078 Governmental Activities Capital Assets, Net 175,520,050$ 8,482,814$ (6,903,662)$ 177,099,202$ CITY OF EDINA, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2021 (49) NOTE 3 CAPITAL ASSETS (CONTINUED) Beginning Ending Balance Increases Decreases Balance Business-Type Activities: Capital Assets Not Being Depreciated: Land 285,341$ -$ -$ 285,341$ Easements 35,600 - - 35,600 Construction in Progress 6,318,348 9,407,009 (2,565,256) 13,160,101 Total Capital Assets Not Being Depreciated 6,639,289 9,407,009 (2,565,256) 13,481,042 Capital Assets Being Depreciated: Land Improvements and Golf Course 15,689,326 33,389 - 15,722,715 Buildings and Structures 39,120,897 108,457 - 39,229,354 Furniture and Office Equipment 140,448 - - 140,448 Vehicles and Equipment 14,006,550 579,038 (19,890) 14,565,698 Utility Infrastructure 156,666,203 2,379,729 - 159,045,932 Lease Property Capital Lease 430,614 - - 430,614 Total Capital Assets Being Depreciated 226,054,038 3,100,613 (19,890) 229,134,761 Less Accumulated Depreciation for: Land Improvements and Golf Course (5,422,460) (706,954) - (6,129,414) Buildings and Structures (21,671,870) (1,624,533) - (23,296,403) Furniture and Office Equipment (140,448) - - (140,448) Vehicles and Equipment (8,330,481) (793,963) 19,890 (9,104,554) Utility infrastructure (67,190,384) (5,429,796) - (72,620,180) Lease Property Capital Lease (430,614) - - (430,614) Total Accumulated Depreciation (103,186,257) (8,555,246) 19,890 (111,721,613) Total Capital Assets Being Depreciated, Net 122,867,781 (5,454,633) - 117,413,148 Business-Type Activities Capital Assets, Net 129,507,070$ 3,952,376$ (2,565,256)$ 130,894,190$ Depreciation expense was charged to functions/programs of the primary government as follows: Governmental Activities: General Government 190,093$ Public Safety 1,591,894 Public Works 3,728,298 Parks 1,681,381 Total Depreciation Expense - Governmental Activities 7,191,666$ Business-Type Activities: Utilities 5,931,178$ Liquor 120,830 Aquatic Center 283,470 Golf Course 894,499 Arena 657,745 Art Center 5,892 Edinborough Park 100,562 Centennial Lakes 37,144 Sports Dome 523,926 Total Depreciation Expense - Business-Type Activities 8,555,246$ CITY OF EDINA, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2021 (50) NOTE 3 CAPITAL ASSETS (CONTINUED) Construction Commitments At December 31, 2021, the City had construction project contracts in progress. The commitments related to the remaining contract balances are summarized as follows: Contract Remaining Project #Project Description Amount Commitment ENG21-1 Creek Knoll A&B 2,904,014$ 99,330$ ENG21-2 Melody Lake A/B, Grandview A, Birchcrest C 10,536,643 1,164,632 ENG21-6 Eden Ave & Brookside 4,204,575 3,387,276 ENG21-12 Highlands Park Trail Improvements 124,196 8,300 ENG21-13 Townes Road Sump Drain 41,159 41,159 ENG21026 GV Pedestrian Bridge 1,857,023 1,630,295 Total 6,330,992$ Commitments above that are significant to the applicable fund include the Eden Ave & Brookside Project in the HRA fund, the Grandview Pedestrian Bridge in the HRA fund, and the Melody Lake A/B, Grandview A, and Birchcrest C project in the PIR Construction fund and the Utilities fund. NOTE 4 LONG-TERM DEBT The City has five types of bonded debt outstanding at December 31, 2021: general obligation bonds, permanent improvement revolving bonds, tax increment financing bonds, public project revenue bonds, and G.O. revenue bonds. The first type is payable from general property taxes. The second type is payable primarily from special assessments with any deficiency to be provided for by general property taxes. The third type is payable from future tax increment payments received. The fourth type is payable solely from annual appropriation lease payments received from the City of Edina pursuant to a lease between the Edina Housing and Redevelopment Authority and the City. The fifth type is payable primarily from enterprise revenue with any deficiency to be provided for by general property taxes. The reporting entity’s long-term debt is segregated between the amounts to be repaid from governmental activities and amounts to be repaid from business-type activities. CITY OF EDINA, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2021 (51) NOTE 4 LONG-TERM DEBT (CONTINUED) Governmental Activities As of December 31, 2021, the governmental long-term bonded debt of the financial reporting entity consisted of the following: Final Interest Issue Maturity Original Payable Rates Date Date Issue 12/31/2021 General Obligation Bonds: General Obligation - Capital Improvement Plan, 2013A - Refunding 3.00-3.50%10/10/2013 2/1/2030 5,710,000$ 3,330,000$ General Obligation, 2016A - Refunding 2.00-3.00%7/6/2016 2/1/2028 3,635,000 2,440,000 General Obligation, 2017C - Refunding 2.05-400%12/14/2017 2/1/2029 8,955,000 6,900,000 General Obligation Equipment Certificate, 2019A 3.00-5.00%6/13/2019 2/1/2036 2,805,000 2,550,000 General Obligation, 2021B - Refunding 5.00%12/16/2021 2/1/2030 2,515,000 2,515,000 Total General Obligation Bonds 23,620,000 17,735,000 Permanent Improvement Revolving (PIR) Bonds: Permanent Improvement Revolving, 2010B 2.00-3.00%11/18/2010 2/1/2022 2,305,000 255,000 Permanent Improvement Revolving, 2011A 2.00-3.00%10/27/2011 2/1/2023 3,320,000 730,000 Permanent Improvement Revolving, 2013A 3.00-3.50%10/10/2013 2/1/2030 2,555,000 1,665,000 Permanent Improvement Revolving, 2015A 2.00-4.00%7/9/2015 2/1/2032 6,545,000 5,075,000 Permanent Improvement Revolving, 2015A - Parking 2.00-4.00%7/9/2015 2/1/2036 2,495,000 2,005,000 Permanent Improvement Revolving, 2016A 2.00-3.00%7/6/2016 2/1/2033 3,940,000 3,275,000 Permanent Improvement Revolving, 2017A 3.00-4.00%6/29/2017 2/1/2034 1,995,000 1,790,000 Permanent Improvement Revolving, 2018A 3.00-4.00%6/27/2018 2/1/2035 2,210,000 2,095,000 Permanent Improvement Revolving, 2019A 3.00-4.00%6/13/2019 2/1/2036 2,195,000 2,195,000 Permanent Improvement Revolving, 2020A 2.00-4.00%6/25/2020 2/1/2037 390,000 390,000 Permanent Improvement Revolving, 2020B 1.09%12/30/2020 2/1/2029 1,601,000 1,505,000 Permanent Improvement Revolving, 2021A 2.00-4.00%6/24/2021 2/1/2043 5,480,000 5,480,000 Permanent Improvement Revolving, 2021B 5.00%12/16/2021 2/1/2030 1,280,000 1,280,000 Total PIR Bonds 38,301,000 27,740,000 Tax Increment Financing Bonds Tax Increment Financing, 2021A 2.00-4.00%6/24/2021 2/1/2043 7,545,000 7,545,000 Public Project Revenue Bonds: Public Project Revenue, 2014A 2.00-3.625%7/15/2014 2/1/2035 16,155,000 12,240,000 Public Project Revenue, 2015A - Refunding 2.50-3.00%7/9/2015 5/1/2026 3,490,000 1,730,000 Total Public Project Revenue Bonds 19,645,000 13,970,000 Total Bonded Indebtedness - Governmental Activities 89,111,000$ 66,990,000$ CITY OF EDINA, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2021 (52) NOTE 4 LONG-TERM DEBT (CONTINUED) Business-Type Activities Final Interest Issue Maturity Original Payable Rates Date Date Issue 12/31/2021 Revenue Bonds: Recreational Facility Bonds, Series 2012C 2.00-3.00%11/15/2012 2/1/2033 2,100,000$ 1,905,000$ Recreational Facility Bonds, Series 2013B 3.00-3.45%10/10/2013 2/1/2029 1,125,000 665,000 Recreational Facility Bonds, Series 2015B 2.00-325%7/9/2015 2/1/2031 2,140,000 1,520,000 Recreational Facility Bonds, Series 2017B 3.00-4.00%6/29/2017 2/1/2033 7,425,000 6,085,000 Recreational Facility Bonds, Series 2017D - Refunding 2.00%12/20/2017 2/1/2030 1,640,000 1,204,000 Recreational Facility Bonds, Series 2021C - Refunding 2.00-3.00%12/16/2021 2/1/2033 2,210,000 2,210,000 Utility Revenue Bonds, Series 2011A 2.00-3.00%10/27/2011 2/1/2022 11,230,000 1,255,000 Utility Revenue Bonds, Series 2014A 2.00-3.00%7/15/2014 2/1/2024 5,680,000 1,830,000 Utility Revenue Bonds, Series 2015A 2.00-4.00%7/9/2015 2/1/2025 5,235,000 2,230,000 Utility Revenue Bonds, Series 2016A 2.00-3.00%7/6/2016 2/1/2027 8,775,000 5,560,000 Utility Revenue Bonds, Series 2017A 3.00-4.00%6/29/2017 2/1/2028 6,595,000 4,880,000 Utility Revenue Bonds, Series 2018A 3.00-4.00%6/27/2018 2/1/2029 3,305,000 2,730,000 Utility Revenue Bonds, Series 2019A 3.00-4.00%6/13/2019 2/1/2036 5,815,000 5,350,000 Utility Revenue Bonds, Series 2020A 2.00-4.00%6/25/2020 2/1/2031 4,830,000 4,830,000 Utility Revenue Bonds, Series 2020B - Refunding 1.09%12/30/2020 2/1/2023 1,414,000 1,064,000 Total Bonded Indebtedness - Business- Type Activities 75,229,000$ 43,318,000$ Annual debt service requirements to maturity for the City’s bonds are as follows: Year Ending December 31,Principal Interest Principal Interest Principal Interest 2022 4,670,000$ 950,081$ 3,535,000$ 1,056,763$ 1,040,000$ 428,269$ 2023 1,480,000 457,775 1,817,000 759,789 1,070,000 400,194 2024 1,560,000 396,475 1,794,000 696,461 1,100,000 367,644 2025 1,850,000 328,200 1,840,000 634,136 1,135,000 335,006 2026 1,930,000 252,575 1,898,000 572,901 1,170,000 302,244 2027-2031 6,245,000 361,302 9,766,000 1,874,337 4,390,000 1,092,761 2032-2036 - - 6,170,000 491,516 4,065,000 298,488 2037-2041 - - 920,000 18,200 - - 2042-2043 - - - - - - Total 17,735,000$ 2,746,408$ 27,740,000$ 6,104,103$ 13,970,000$ 3,224,606$ Governmental Activities Obligation Bonds Revolving Bonds Revenue Bonds General Public Improvement Public Project Year Ending December 31,Principal Interest Principal Interest 2022 -$ 245,092$ 9,038,000$ 1,665,280$ 2023 250,000 217,250 5,231,000 1,088,467 2024 260,000 207,050 5,042,000 907,581 2025 270,000 196,450 4,584,000 737,581 2026 280,000 185,450 4,147,000 584,475 2027-2031 1,570,000 747,250 13,846,000 1,102,452 2032-2036 1,875,000 447,625 1,430,000 39,825 2037-2041 2,130,000 199,300 - - 2042-2043 910,000 18,300 - - Total 7,545,000$ 2,463,767$ 43,318,000$ 6,125,661$ Governmental Activities Tax Increment Financing Bonds Business-Type Activities Revenue Bonds CITY OF EDINA, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2021 (53) NOTE 4 LONG-TERM DEBT (CONTINUED) Change in Long-Term Liabilities Long-term liability activity for the year ended December 31, 2021 was as follows: Beginning Ending Due Within Balance Additions Reductions Balance One Year Governmental Activities: Bonds Payable: General Obligation 17,725,000$ 2,515,000$ (2,505,000)$ 17,735,000$ 4,670,000$ PIR 24,526,000 6,760,000 (3,546,000) 27,740,000 3,535,000 Public Project Revenue 16,245,000 - (2,275,000) 13,970,000 1,040,000 Tax Increment Financing - 7,545,000 - 7,545,000 - Less Deferred Amounts: Premiums on Bonds 2,343,682 2,329,645 (710,372) 3,962,955 - Total Bonds Payable 60,839,682 19,149,645 (9,036,372) 70,952,955 9,245,000 Loans Payable 750,000 - - 750,000 - Compensated Absences 4,607,673 2,011,381 1,825,963 4,793,091 1,917,237 Governmental Activity Long-Term Liabilities 66,197,355$ 21,161,026$ (7,210,409)$ 76,496,046$ 11,162,237$ Business-Type Activities: Bonds Payable: General Obligation Revenue Bonds 48,937,000$ 2,210,000$ (7,829,000)$ 43,318,000$ 9,038,000$ Less Deferred Amounts: Premiums on Bonds 3,625,222 191,678 (1,161,033) 2,655,867 - Total Bonds Payable 52,562,222 2,401,678 (8,990,033) 45,973,867 9,038,000 Compensated Absences 804,033 360,644 281,996 882,681 353,072 Business-Type Activity Long-Term Liabilities 53,366,255$ 2,762,322$ (8,708,037)$ 46,856,548$ 9,391,072$ For governmental activities, compensated absences are generally liquidated by the general fund. On June 24, 2021, the City issued $5,480,000 of General Obligation PIR Bonds and $7,545,000 of General Obligation TIF Bonds, Series 2021A. The proceeds of these bonds are being used to finance various assessable public improvements and the construction of public improvements within the Grandview 2 Tax Increment Financing District in the City. The bonds include coupon rates of 2.00-4.00%, with a final maturity date of February 1, 2038 for the PIR portion of the bonds and February 1, 2043 for the TIF portion of the bonds. On December 14, 2021, the City issued $2,515,000 of General Obligation Refunding Bonds and $1,280,000 of General Obligation PIR Refunding Bonds, Series 2021B, to advance refund, in 2022, the 2023 through 2030 maturities of the City’s outstanding 2013A bonds. The bonds include coupon rates of 5.0%, with a final maturity date of February 1, 2030. On December 14, 2021, the City issued $2,210,000 of General Obligation Recreational Revenue Refunding Bonds, Series 2021C, to advance refund, in 2022, the 2023 through 2033 maturities of the City’s outstanding 2012C bonds. The bonds include coupon rates of 2.00-4.00%, with a final maturity date of February 1, 2029 for the golf course portion and February 1, 2033 for the ice arena portion. CITY OF EDINA, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2021 (54) NOTE 4 LONG-TERM DEBT (CONTINUED) On February 1, 2021, the City used proceeds from the 2020B General Obligation Refunding Bonds to call the 2012A General Obligation PIR and Utility Revenue bonds. The refunding resulted in a cash flow savings of $156,914 and a net present value savings of $138,558. Revenue Pledged Future revenue pledged for the payment of long-term debt is as follows: Percent of Remaining Principal Pledged Total Debt Terms of Principal and Interest Revenue Bond Issue Use of Proceeds Type Service Pledge and Interest Paid Received 2012C Recreational Facility Bonds Arena Improvements Arena 100 %2013-2033 1,928,972$ 184,969$ 2,347,070$ 2013B Recreational Facility Bonds Golf Dome Improvements Golf 100 2014-2029 675,583 97,290 5,384,684 2015B Recreational Facility Bonds Golf Course Improvements Golf 100 2016-2031 1,765,759 177,544 5,384,684 2017B Recreational Facility Bonds Golf Course Improvements Golf 100 2018-2033 6,767,050 567,900 5,384,684 2017B Recreational Facility Bonds Pool Improvements Pool 100 2018-2027 601,900 103,000 1,069,724 2017D Recreational Facility Bonds Arena Improvements Arena 100 2018-2030 1,315,280 155,020 2,347,070 2021C Recreational Facility Bonds Arena Improvements Arena 100 2023-2033 1,927,400 - 2,347,070 2021C Recreational Facility Bonds Golf Dome Improvements Golf 100 2023-2033 620,163 - 5,384,684 2011A Utility Revenue Bonds Utility Infrastructure Utility 100 2012-2022 1,273,825 1,270,875 27,663,593 2014A Utility Revenue Bonds Utility Infrastructure Utility 100 2014-2024 1,910,425 637,650 27,663,593 2015A Utility Revenue Bonds Utility Infrastructure Utility 100 2016-2025 2,391,950 603,450 27,663,593 2016A Utility Revenue Bonds Utility Infrastructure Utility 100 2017-2027 5,980,131 997,683 27,663,593 2017A Utility Revenue Bonds Utility Infrastructure Utility 100 2018-2028 5,501,250 786,800 27,663,593 2018A Utility Revenue Bonds Utility Infrastructure Utility 100 2019-2029 3,119,325 386,600 27,663,593 2019A Utility Revenue Bonds Utility Infrastructure Utility 100 2020-2036 6,634,375 744,125 27,663,593 2020A Utility Revenue Bonds Utility Infrastructure Utility 100 2021-2031 5,576,050 176,550 27,663,593 2020B Utility Revenue Bonds Utility Infrastructure Utility 100 2021-2023 1,075,624 359,034 27,663,593 Revenue Pledged Current Year NOTE 5 LEGAL DEBT MARGIN The City is subject to a statutory limitation by the state of Minnesota for bonded indebtedness payable principally from property taxes. The City of Edina’s legal debt margin for 2021 is computed as follows: December 31, 2021 Market Value (After Fiscal Disparities)13,344,357,600$ Debt Limit (3% of Market Value)400,330,728$ Amount of Debt Applicable to Debt Limit: Total Bonded Debt 110,308,000$ Less: Public Improvement Revolving Bonds (27,740,000) Tax Increment Financing Bonds (7,545,000) Revenue Bonds (43,318,000) Total Debt Applicable to Debt Limit 31,705,000$ Legal Debt Margin 368,625,728$ CITY OF EDINA, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2021 (55) NOTE 6 DEFINED BENEFIT PENSION PLANS – STATEWIDE The City participates in various pension plans, with total pension expense for the year ended December 31, 2021 of $125,177. The components of pension expense are noted in the following plan summaries: 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 (IRC). 1. General Employees Retirement Plan All full-time and certain part-time employees of the City are covered by the General Employees Plan. General Employees Plan members belong to the Coordinated Plan. Coordinated Plan members are covered by Social Security. 2. Public Employees Police and Fire Plan The Police and Fire Plan, 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 Police and Fire Plan also covers police officers and firefighters belonging to local relief associations 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 state statute and can only be modified by the state legislature. 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. 1. General Employees Plan Benefits General Employees Plan 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 Plan members. Members hired prior to July 1, 1989, receive the higher of Method 1 or Method 2 formulas. Only Method 2 is used for members hired after June 30, 1989. Under Method 1, the accrual rate for Coordinated members is 1.2% for each of the first 10 years of service and 1.7% for each additional year. Under Method 2, the accrual rate for Coordinated members is 1.7% for all years 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. CITY OF EDINA, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2021 (56) NOTE 6 DEFINED BENEFIT PENSION PLANS – STATEWIDE (CONTINUED) B. Benefits Provided (Continued) 1. General Employees Plan Benefits (Continued) Benefit increases are provided to benefit recipients each January. The postretirement increase is equal to 50% of the cost-of-living adjustment (COLA) announced by the SSA, with a minimum increase of at least 1% and a maximum of 1.5%. Recipients that have been receiving the annuity or benefit for at least a full year as of the June 30 before the effective date of the increase will receive the full increase. Recipients receiving the annuity or benefit for at least one month but less than a full year as of the June 30 before the effective date of the increase will receive a reduced prorated increase. For members retiring on January 1, 2024, or later, the increase will be delayed until normal retirement age (age 65 if hired prior to July 1, 1989, or age 66 for individuals hired on or after July 1, 1989). Members retiring under Rule of 90 are exempt from the delay to normal retirement. 2. Police and Fire Plan Benefits Benefits for Police and Fire Plan members first hired after June 30, 2010, but before July 1, 2014, vest on a prorated basis from 50% after five years up to 100% after ten years of credited service. Benefits for Police and Fire Plan members first hired after June 30, 2014, vest on a prorated basis from 50% after ten years up to 100% after twenty years of credited service. The annuity accrual rate is 3% of average salary for each year of service. For Police and Fire Plan 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. Benefit increases are provided to benefit recipients each January. The postretirement increase is fixed at 1%. Recipients that have been receiving the annuity or benefit for at least 36 months as of the June 30 before the effective date of the increase will receive the full increase. Recipients receiving the annuity or benefit for at least 25 months but less than 36 months as of the June 30 before the effective date of the increase will receive a reduced prorated increase. CITY OF EDINA, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2021 (57) NOTE 6 DEFINED BENEFIT PENSION PLANS – STATEWIDE (CONTINUED) C. Contributions Minnesota Statutes, Chapter 353 sets the rates for employer and employee contributions. Contribution rates can only be modified by the state legislature. 1. General Employees Fund Contributions Coordinated Plan members were required to contribute 6.50% of their annual covered salary in fiscal year 2021 and the City was required to contribute 7.50% for Coordinated Plan members. The City’s contributions to the General Employees Fund for the year ended December 31, 2021, were $1,607,199. The City’s contributions were equal to the required contributions as set by state statute. 2. Police and Fire Fund Contributions Police and Fire Plan members were required to contribute 11.80% of their annual covered salary in fiscal year 2021 and the City was required to contribute 17.70% for Police and Fire Plan members. The City’s contributions to the Police and Fire Fund for the year ended December 31, 2021, were $1,850,353. The City’s contributions were equal to the required contributions as set by state statute. D. Pension Costs 1. General Employees Fund Pension Costs At December 31, 2021, the City reported a liability of $12,320,807 for its proportionate share of the General Employees Fund’s net pension liability. The City’s net pension liability reflected a reduction due to the state of Minnesota’s contribution of $16 million. The state of Minnesota is considered a non-employer contributing entity and the state’s contribution meets the definition of a special funding situation. The state of Minnesota’s proportionate share of the net pension liability associated with the City totaled $379,625. The net pension liability was measured as of June 30, 2021, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The City’s proportionate share of the net pension liability was based on the City’s contributions received by PERA during the measurement period for employer payroll paid dates from July 1, 2020 through June 30, 2021, relative to the total employer contributions received from all of PERA’s participating employers. The City’s proportionate share was 0.2911% at the end of the measurement period and 0.2764% for the beginning of the period. CITY OF EDINA, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2021 (58) NOTE 6 DEFINED BENEFIT PENSION PLANS – STATEWIDE (CONTINUED) D. Pension Costs (Continued) 1. General Employees Fund Pension Costs (Continued) City's Proportionate Share of the Net Pension Liability 12,320,807$ State of Minnesota's Proportionate Share of the Net Pension Liability Associated with the City 379,625 Total 12,700,432$ For the year ended December 31, 2021, the City recognized pension expense of $263,367 for its proportionate share of the General Employees Plan’s pension expense. In addition, the City recognized an additional $30,631 as pension expense (and grant revenue) for its proportionate share of the state of Minnesota’s contribution of $16 million to the General Employees Fund. At December 31, 2021, the City reported its proportionate share of the General Employees Plan’s deferred outflows of resources and deferred inflows of resources, related to pensions from the following sources: Deferred Deferred Outflows Inflows of Resources of Resources Differences Between Expected and Actual Economic Experience 75,690$ 377,051$ Changes in Actuarial Assumptions 7,522,829 272,544 Differences Between Projected and Actual Investment Earnings - 10,670,339 Changes in Proportion 908,716 - Contributions Paid to the PERA Subsequent to the Measurement Date 793,641 - Total 9,300,876$ 11,319,934$ $793,641 reported as deferred outflows of resources related to pensions resulting from city contributions subsequent to the measurement date that will be recognized as a reduction of the net pension liability in the year ended December 31, 2022. Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows: Pension Expense Year Ending December 31,Amount 2021 (176,470)$ 2022 148,326 2023 126,687 2024 (2,911,242) CITY OF EDINA, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2021 (59) NOTE 6 DEFINED BENEFIT PENSION PLANS – STATEWIDE (CONTINUED) D. Pension Costs (Continued) 2. Police and Fire Fund Pension Costs At December 31, 2021, the City reported a liability of $6,706,215 for its proportionate share of the Police and Fire Fund’s net pension liability. The net pension liability was measured as of June 30, 2021, 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 proportionate share 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, 2020 through June 30, 2021, relative to the total employer contributions received from all of PERA’s participating employers. The City’s proportionate share was 0.8688% at the end of the measurement period and 0.8704% for the beginning of the period. The state of Minnesota contributed $18 million to the Police and Fire Fund in the plan fiscal year ended June 30, 2021. The contribution consisted of $9 million in direct state aid that does meet the definition of a special funding situation and $9 million in supplemental state aid that does not meet the definition of a special funding situation. The $9 million direct state was paid on October 1, 2020. Thereafter, by October 1 of each year, the state will pay $9 million to the Police and Fire Fund until full funding is reached or July 1, 2048, whichever is earlier. The $9 million in supplemental state aid will continue until the fund is 90% funded, or until the State Patrol Plan (administered by the Minnesota State Retirement System) is 90% funded, whichever occurs later. Strong asset returns for the fiscal year ended 2021 will accelerate the phasing out of these state contributions, although we do not anticipate them to be phased out during the fiscal year ending 2022. The state of Minnesota is included as a non-employer contributing entity in the Police and Fire Retirement Plan Schedule of Employer Allocations and Schedule of Pension Amounts by Employer, Current Reporting Period Only (pension allocation schedules) for the $9 million in direct state aid. Police and Fire Plan employers need to recognize their proportionate share of the state of Minnesota’s pension expense (and grant revenue) under GASB 68 special funding situation accounting and financial reporting requirements. For the year ended June 30, 2021, the City recognized pension expense of ($301,922) for its proportionate share of the Police and Fire Plan’s pension expense. The City recognized $78,192 as grant revenue for its proportionate share of the state of Minnesota’s pension expense for the contribution of $9 million to the Police and Fire Fund. CITY OF EDINA, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2021 (60) NOTE 6 DEFINED BENEFIT PENSION PLANS – STATEWIDE (CONTINUED) D. Pension Costs (Continued) 2. Police and Fire Plan Pension Costs (Continued) The state of Minnesota is not included as a non-employer contributing entity in the Police and Fire Pension Plan pension allocation schedules for the $9 million in supplemental state aid. The City recognized $54,909 for the year ended December 31, 2021 as revenue and an offsetting reduction of net pension liability for its proportionate share of the state of Minnesota’s on-behalf contributions to the Police and Fire Fund. City's Proportionate Share of the Net Pension Liability 6,706,215$ State of Minnesota's Proportionate Share of the Net Pension Liability Associated with the City 301,506 Total 7,007,721$ At December 31, 2021, the City reported its proportionate share of the Police and Fire Plan’s deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Deferred Outflows Inflows of Resources of Resources Differences Between Expected and Actual Economic Experience 1,288,006$ -$ Changes in Actuarial Assumptions 9,856,384 3,684,650 Differences Between Projected and Actual Investment Earnings - 12,813,878 Changes in Proportion 680,209 76,027 Contributions Paid to the PERA Subsequent to the Measurement Date 935,631 - Total 12,760,230$ 16,574,555$ $935,631 reported as deferred outflows of resources related to pensions resulting from city contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31, 2022. Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows: Pension Expense Year Ending December 31,Amount 2021 (4,314,923)$ 2022 (674,968) 2023 (648,020) 2024 (1,265,367) 2025 2,153,322 CITY OF EDINA, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2021 (61) NOTE 6 DEFINED BENEFIT PENSION PLANS – STATEWIDE (CONTINUED) E. Long-Term Expected Return on Investment 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: Long-Term Target Expected Real Asset Class Allocation Rate of Return Domestic Equity 33.5 %5.10 % International Equity 16.5 %5.30 Fixed Income 25.0 %0.75 Private Markets 25.0 %5.90 F. Actuarial Assumptions The total pension liability in the June 30, 2021, actuarial valuation was determined using an individual entry-age normal actuarial cost method. The long-term rate of return on pension plan investments used in the determination of the total liability is 6.5%. This assumption is based on a review of inflation and investments return assumptions from a number of national investment consulting firms. The review provided a range of return investment return rates deemed to be reasonable by the actuary. An investment return of 6.5% was deemed to be within that range of reasonableness for financial reporting purposes. Inflation is assumed to be 2.25% for the General Employees Plan and 2.25% for the Police and Fire Plan. Benefit increases after retirement are assumed to be 1.25% for the General Employees Plan. The Police and Fire Plan benefit increase is fixed at 1% per year and that increase was used in the valuation. Salary growth assumptions in the General Employees Plan range in annual increments from 10.25% after one year of service to 3.0% after 29 years of service and 6.0% per year thereafter. In the Police and Fire Plan, salary growth assumptions range from 11.75% after one year of service to 3.0% after 24 years of service. Mortality rates for the General Employees Plan are based on the Pub-2010 General Employee Mortality Table. Mortality rates for the Police and Fire Plan are based on the Pub-2010 Public Safety Employee Mortality tables. The tables are adjusted slightly to fit PERA’s experience. CITY OF EDINA, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2021 (62) NOTE 6 DEFINED BENEFIT PENSION PLANS – STATEWIDE (CONTINUED) F. Actuarial Assumptions (Continued) Actuarial assumptions for the General Employees Plan are reviewed every four years. The most recent four-year experience study for the General Employees Plan was completed in 2019. The assumption changes were adopted by the Board and became effective with the July 1, 2020 actuarial valuation. The most recent four-year experience studies for the Police and Fire were completed in 2020 were adopted by the Board and became effective with the July 1, 2021 actuarial valuation. The following changes in actuarial assumptions and plan provisions occurred in 2021: General Employees Fund Changes in Actuarial Assumptions: • The investment return and single discount rates were changed from 7.50% to 6.50%, for financial reporting purposes. • The mortality improvement scale was changed from Scale MP-2019 to Scale MP-2020. Police and Fire Fund Changes in Actuarial Assumptions: • The investment return and single discount rates were changed from 7.50% to 6.50%, for financial reporting purposes. • The inflation assumption was changed from 2.50% to 2.25%. • The payroll growth assumption was changed from 3.25% to 3.00%. • The base mortality table for healthy annuitants and employees was changed from the RP-2014 table to the Pub-2010 Public Safety Mortality table. The mortality improvement scale was changed from MP-2019 to MN-2020. • The base mortality table for disabled annuitants was changed from the RP-2014 healthy annuitant mortality table (with future mortality improvement according to Scale MP-2019) to the Pub-2010 Public Safety disabled annuitant mortality table (with future mortality improvement according to Scale MP-2020). • Assumed rates of salary increase were modified as recommended in the July 14, 2020 experience study. The overall impact is a decrease in gross salary increase rates. • Assumed rates of retirement were changed as recommended in the July 14, 2020 experience study. The changes result in slightly more unreduced retirements and fewer assumed early retirements. • Assumed rates of withdrawal were changed from select and ultimate rates to service-based rates. The changes result in more assumed terminations. • Assumed rates of disability were increased for ages 25-44 and decreased for ages over 49. Overall, proposed rates result in more projected disabilities. • Assumed percent married for active female members was changed from 60% to 70%. Minor changes to form of payment assumptions were applied. CITY OF EDINA, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2021 (63) NOTE 6 DEFINED BENEFIT PENSION PLANS – STATEWIDE (CONTINUED) G. Discount Rate The discount rate used to measure the total pension liability in 2021 was 6.5%. 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 positions of the General Employees Fund, the Police and Fire Fund, and the Correctional Fund were projected to be available to make all projected future benefit payments of current plan 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. H. 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 1.0 percentage point lower or 1.0 percentage point higher than the current discount rate: 1% Decrease in 1% Increase in Discount Rate Discount Rate Discount Rate (5.5%)(6.5%)(7.5%) The City’s Proportionate Share of the GERF Net Pension Liability 25,242,986$ 12,320,807$ 1,717,370$ The City’s Proportionate Share of the PEPFF Net Pension Liability 21,291,100$ 6,706,215$ (5,249,776)$ I. 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 PERA website at www.mnpera.org. J. Public Employees Defined Contribution Plan (DCP) Board members of the City are covered by the DCP, a multiemployer deferred compensation plan administered by PERA. The DCP is a tax qualified plan under Section 401(a) of the IRC 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 5.0% of salary which is matched by the elected official’s employer. For ambulance service personnel, employer contributions are determined by the employer, and for salaried employees must be a fixed percentage of salary. CITY OF EDINA, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2021 (64) NOTE 6 DEFINED BENEFIT PENSION PLANS – STATEWIDE (CONTINUED) J. Public Employees Defined Contribution Plan (DCP) (Continued) Employer contributions for volunteer personnel may be a unit value for each call or period of alert duty. Employees who are paid for their services may elect to make member contributions in an amount not to exceed the employer share. 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 2.0% of employer contributions and twenty-five hundredths of 1.0% (0.0025) of the assets in each member’s account annually. Total contributions made by the City during fiscal year 2021 were: Required Employee Employer Employee Employer Rate 2,523$ 2,523$ 5 %5 %5 % Contribution Amount Percentage of Covered Payroll NOTE 7 MULTIEMPLOYER DEFINED BENEFIT PENSION PLAN City employees belonging to International Union of Operating Engineers (IUOE) are participants in a multiemployer defined benefit pension plan Central Pension Fund of the International Union of Operating Engineers and Participating Employers (CRF) administered by the board of trustees of the Central Pension Fund. The plan is a cost-sharing pension plan that is not a state or local governmental pension plan, is used to provide defined benefit pensions both to employers that are not state or local governmental employers, and has no predominant state or local government employer. The plan issues a publicly available financial report located on their website at www.cpfiuoe.org. The City has 56 employees who are covered by the pension plan. The plan provides benefits such as monthly retirement income, special and early retirement benefits, postretirement surviving spouse benefits, and disability benefits. The CPF is a supplemental Pension Fund authorized by Minnesota Statutes, 356.24, subdivision 1(9). The CPF Plan of Benefits and the Agreement and Declaration of Trust will serve as the governing documents. The City’s contributions to the plan are pursuant to a collective bargaining agreement with the IUOE which expired December 31, 2021. The required contribution rate is $0.75 per hour, which is applied to all compensated hours, and capped at $5,000 per year. Total employer contributions for the year ended December 31, 2021 were $115,544. With regard to withdrawal from the pension plan, the parties agree that the amount that would otherwise be paid in salary or wages will be contributed instead to the CPF as pretax employer contributions. CITY OF EDINA, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2021 (65) NOTE 8 OTHER POSTEMPLOYMENT BENEFITS (OPEB) PLAN A. Plan Description The City provides postemployment insurance benefits to certain eligible employees through its OPEB Plan, a single-employer defined benefit plan administered by the City. All postemployment benefits are based on contractual agreements with employee groups. Eligibility for these benefits is based on years of service and/or minimum age requirements. These contractual agreements do not include any specific contribution or funding requirements. The plan does not issue a publicly available financial report. No plan assets are accumulated in a trust that meets the criteria in paragraph 4 of GASB Statement No. 75. B. Benefits Provided All retirees of the City upon retirement have the option under state law to continue their medical insurance coverage through the City from the time of retirement until the employee reaches the age of eligibility for Medicare. For members of all employee groups, the retiree must pay the full premium to continue coverage for medical and dental insurance. The City is legally required to include any retirees for whom it provides health insurance coverage in the same insurance pool as its active employees, whether the premiums are paid by the City or the retiree. Consequently, participating retirees are considered to receive a secondary benefit known as an “implicit rate subsidy.” This benefit relates to the assumption that the retiree is receiving a more favorable premium rate than they would otherwise be able to obtain if purchasing insurance on their own, due to being included in the same pool with the City’s younger and statistically healthier active employees. For police officers and firefighters disabled in the line-of-duty, Minnesota Statutes require the City to continue payment of the employer’s contribution toward health coverage for the police officer or firefighter and their spouse, if the spouse was covered at the time of disability, until age 65. C. Contributions The required contribution is based on projected pay-as-you-go financing requirements, with additional amounts to prefund benefits as determined periodically by the City. The City’s current year required pay-as-you-go contributions to finance the benefits described in the previous section totaled $148,000. Total OPEB liability will be paid by the general fund and enterprise funds. D. Membership Membership in the plan consisted of the following as of the latest actuarial valuation: Retirees and Beneficiaries Receiving Benefits 22 Active Plan Members 301 Total Members 323 CITY OF EDINA, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2021 (66) NOTE 8 OTHER POSTEMPLOYMENT BENEFITS (OPEB) PLAN (CONTINUED) E. Total OPEB Liability of the City The City’s total OPEB liability was determined by an actuarial valuation with a valuation date of January 1, 2020. Liabilities in this report were rolled forward to the measurement date of December 31, 2021. F. Actuarial Assumptions The total OPEB liability was determined by an actuarial valuation as of January 1, 2020, using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified. Discount Rate 2.74% 20-Year Municipal Bond Yield 2.74% Salary Increases 3.25% Medical Trend Rate 7.33% grading to 5.00% by 2028 The actuarial assumptions used in the latest valuation were based on those used to value pension liabilities for Minnesota city employees. The state pension plans base their assumptions on periodic experience studies. Economic assumptions are based on input from a variety of published sources of historical and projected future financial data. Each assumption was reviewed for reasonableness with the source information as well as for consistency with the other economic assumptions. Since the plan is not funded by an irrevocable trust, the discount rate is equal to the 20- year municipal bond yield rate of 2.74%, which was set by considering published rate information for 20-year high quality, tax exempt, general obligation municipal bonds as of the measurement date. The City discount rate used in the prior measurement date was 4.09%. Mortality rates were based on the RP-2014 mortality tables adjusted for white collar and mortality improvements using projection scale MP-2018, from a base year of 2014 for GERF members and MP-2018, from a base year of 2006 for PEPFF members. Future retirees electing coverage is assumed to 55%. Married future retirees electing spouse coverage is assumed to range from 40% to 60% based on classification of employee. CITY OF EDINA, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2021 (67) NOTE 8 OTHER POSTEMPLOYMENT BENEFITS (OPEB) PLAN (CONTINUED) G. Changes in the Total OPEB Liability Total OPEB Liability Beginning Balance 2,188,763$ Changes for the Year: Service Cost 239,792 Interest 65,302 Difference between expected and actual experience 9,714 Changes of Assumptions 105,246 Benefit Payments (90,566) Total Net Changes 329,488 Ending Balance 2,518,251$ Assumption changes since the prior measurement date include the following: • The discount rate was changed from 4.09% to 2.47%. • The payroll growth rate changed from 3.50% to 3.25% H. Total OPEB Liability Sensitivity to Discount and Health Care Cost Trend Rate Changes The following presents the total OPEB liability of the City, as well as what the City’s total OPEB liability would be if it were calculated using a discount rate that is 1 percentage point lower or 1 percentage point higher than the current discount rate: 1% Decrease in 1% Increase in Discount Rate Discount Rate Discount Rate OPEB Discount Rate 1.74 %2.74 %3.74 % Total OPEB Liability 2,708,547$ 2,518,251$ 2,334,374$ The following presents the total OPEB liability of the City, as well as what the City’s total OPEB liability would be if it were calculated using healthcare cost trend rates that are 1 percentage point lower or 1 percentage point higher than the current healthcare cost trend rates: 1% Decrease in 1% Increase in Medical Trend Medical Trend Medical Trend Rate Rate Rate OPEB Medical Trend Rate 6.67% decreasing to 4.00% over 10 years 7.67% decreasing to 5.00% over 10 years 8.67% decreasing to 6.00% over 10 years Total OPEB Liability 2,179,298$ 2,518,251$ 2,929,082$ CITY OF EDINA, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2021 (68) NOTE 8 OTHER POSTEMPLOYMENT BENEFITS (OPEB) PLAN (CONTINUED) I. OPEB Expense and Related Deferred Outflows of Resources and Deferred Inflows of Resources For the current year ended, the City recognized OPEB expense of $135,989. As of year- end, the City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources: Deferred Deferred Outflows Inflows of Resources of Resources Difference between expected 8,735$ 1,524,688$ and actual experience Changes of Assumptions 314,761 122,427 City Contributions Subsequent to the Measurement Date 153,000 - Total 476,496$ 1,647,115$ A total of $153,000 reported as deferred outflows of resources related to OPEB resulting from city contributions subsequent to the measurement date will be recognized as a reduction of the total OPEB liability in the year ending December 31, 2022. Other amounts reported as deferred outflows and inflows of resources related to the plan will be recognized in pension expense as follows: OPEB Expense Year Ended December 31,Amount 2022 (169,105)$ 2023 (169,105) 2024 (169,105) 2025 (169,105) 2026 (169,105) Thereafter (478,094) CITY OF EDINA, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2021 (69) NOTE 9 RECEIVABLES, PAYABLES, AND TRANSFERS Housing and Internal Redevelopment Debt Aquatic Nonmajor Service General Authority Service Construction Liquor Center Golf Course Arena Enterprise Funds Total Transfer Out: General Fund:-$ 300,000$ -$ 4,203,106$ -$ -$ -$ -$ -$ -$ 4,503,106$ Construction Fund 112,211 - 2,955,444 - - - - - - - 3,067,655 Nonmajor Governmental 68,895 - - - - - - - - - 68,895 Utilities Fund 211,500 - - 357,200 4,156 17,269 53,364 40,605 62,477 3,760 750,331 Liquor Fund 50,000 - - 150,000 - - - 300,000 350,000 850,000 Total 442,606$ 300,000$ 2,955,444$ 4,710,306$ 4,156$ 17,269$ 53,364$ 340,605$ 412,477$ 3,760$ 9,239,987$ Transfers In Interfund transfers allow the City to allocate financial resources to the funds that receive benefit from services provided by another fund. Some of the City’s interfund transfers fall under that category. Nonroutine transfers include the following: 1. The liquor fund transferred $300,000, $250,000, $100,000, and $50,000 to the arena fund, art center fund, Centennial Lakes fund, and general fund, respectively. 2. The utilities fund and liquor fund transferred $357,200 and $150,000 to the construction fund to fund the capital improvement program, as planned in the 2021 budget. 3. The construction fund transferred $2,955,444 of PIR assessment revenue to the debt service fund for related debt payments. 4. The general fund transferred $300,000 and $4,203,106 to the HRA fund (rental assistance) and construction fund (capital funding). 5. The utilities fund transferred a total of $393,131 to the general fund, other enterprise funds, and internal service funds to offset the cost of internal utilities. 6. Nonmajor governmental funds and the construction fund transferred $68,895 to close the arts & culture fund and $112,211 to assist with various costs. NOTE 10 TAX INCREMENT DISTRICTS The Housing Redevelopment Authority and City of Edina are the administering authorities for the following Tax Increment Districts: District number 1211 (Pentagon Park Increment Financing District) is an economic development district established in 2014 pursuant to Minnesota Statutes with a termination date of 2043. District number 1212 (Grandview 2 Increment Financing District) is an economic development district established in 2016 pursuant to Minnesota Statutes with a termination date of 2045. District number 1214 (66 West Increment Financing District) is an economic development district established in 2016 pursuant to Minnesota Statutes with a termination date of 2045. CITY OF EDINA, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2021 (70) NOTE 10 TAX INCREMENT DISTRICTS (CONTINUED) District number 1215 (50th and France 2) is an economic development district established in 2017 pursuant to Minnesota Statutes with a termination date of 2045. District number 1216 (44th and France 2) is a renewal and renovation development district established in 2019 pursuant to Minnesota Statutes with a termination date of 2036. District number 1217 (West 76th Street) is a housing district established in 2019 pursuant to Minnesota Statutes with a termination date of 2042. District number 1218 (72nd and France) is a housing district established in 2019 pursuant to Minnesota Statutes with a termination date of 2043. District number 1219 (Amundson Ave) is an affordable housing district established in 2019 pursuant to Minnesota Statutes with a termination date of 2042. The following table reflects values as of December 31, 2021: TIF #1211 TIF #1212 TIF #1214 TIF #1215 TIF #1216 TIF #1217 TIF #1218 TIF #1219 Total Original Tax Capacity 691,608$ 39,890$ 15,315$ 57,986$ 29,735$ 42,886$ 217,506$ 16,948$ 1,111,874$ Current Tax Capacity 1,495,764 597,528 30,494 497,500 237,130 38,100 217,506 38,275 3,152,297 Fiscal Disparities 558,089 28,460 - 78,013 10,793 - 81,154 - 756,509 Tax Capacity Change 246,067 529,178 15,179 361,501 196,602 (4,786) (81,154) 21,327 1,283,914 Retained Captured Tax Capacity 246,067$ 529,178$ 15,179$ 361,501$ 196,602$ (4,786)$ (81,154)$ 21,327$ 1,283,914$ NOTE 11 CONTINGENCIES 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. Workers’ compensation insurance was provided through the League of Minnesota Cities Insurance Trust. There is a $50,000 deductible per occurrence and $150,000 in aggregate. The City has an annual deposit premium that is subject to adjustment based on the actual audited payroll. A package policy; including property, general liability, and automobile coverage, is provided through the League of Minnesota Cities Insurance Trust. Under this policy, the City pays an annual premium and had a $75,000 per occurrence deductible and is subject to an annual aggregate deductible of $150,000, with a $1,000,000 per occurrence maximum. Liquor liability coverage is provided through the League of Minnesota Cities Insurance Trust. The City pays an annual premium for this coverage and has a $1,000,000 annual maximum. Settlement claims have not exceeded insurance coverage for each of the past three years. There were no significant decreases in insurance coverage during 2021. CITY OF EDINA, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2021 (71) NOTE 11 CONTINGENCIES (CONTINUED) B. Litigation The City attorney has indicated that existing and pending lawsuits, claims and other actions in which the City is a defendant are either covered by insurance; of an immaterial amount; or, in the judgment of the City attorney, remotely recoverable by plaintiffs. C. Federal and State Funds The City receives financial assistance from federal and state governmental agencies in the form of grants. The disbursement of funds received under these programs generally requires compliance with the terms and conditions specified in the grant agreements and is subject to audit by the grantor agencies. Any disallowed claims resulting from such audits could become a liability of the applicable fund. However, in the opinion of management, any such disallowed claims will not have a material effect on any of the financial statements of the individual fund types included herein or on the overall financial position of the City at December 31, 2021. D. 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 is not aware of any instances of noncompliance which would have a material effect on the financial statements. NOTE 12 CONDUIT DEBT OBLIGATION As of December 31, 2021, the City of Edina had four series of Housing and Health Care Revenue Bonds, with an aggregate principal amount payable of $27,340,000. The bonds are payable solely from revenues of the respective organizations and do not constitute an indebtedness of the City and are not a charge against its general credit or taxing power. Accordingly, the bonds are not reported as liabilities in the accompanying financial statements. NOTE 13 JOINT VENTURE The City is a participant with the City of Bloomington, the City of Eden Prairie, and the Metropolitan Airport Commission in a joint venture to construct and operate a facility to be used for the training of law enforcement officers and firefighters. The South Metro Public Safety Training Facility Association (PSTF) is governed by a board consisting of one representative from each Member. On dissolution of the Association, the Facility shall revert to the City of Edina, and all remaining assets shall be divided among the members based on the Cost Sharing Formula. In accordance with the joint venture agreement, each member of the association will share in the cost of the construction and operation based on the Cost Sharing Formula. The City’s equity interest in the capital assets of the PSTF was $1,770,353. Complete financial statements for PSTF can be obtained from the City of Edina, 4801 West 50th Street, Edina, Minnesota 55424. CITY OF EDINA, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2021 (72) NOTE 14 RELATED PARTY TRANSACTIONS The City pays an annual membership fee to the South Metro Public Safety Training Facility as part of the joint venture agreement. The membership fee is paid by the Police and Fire departments and is based on a Cost Sharing Formula. For the year ended December 31, 2021, the City paid a total of $71,104 in membership fees to the PSTF, equal to 19.0% of membership fees collected for the year. NOTE 15 FUND BALANCES A. Classifications At December 31, 2021, a summary of the City’s governmental fund balance classifications are as follows: General HRA Debt Service Construction Nonmajor Fund Fund Fund Fund Funds Total Nonspendable:85,083$ -$ -$ 58,250$ 13,534$ 156,867$ Restricted: Park Dedication 58,086 - - - - 58,086 Tax Increments - 35,195,113 - - - 35,195,113 Affordable Housing - 3,741,466 - - - 3,741,466 Debt Service - - 11,178,492 - - 11,178,492 Pedestrian and Cyclist Improvements - - - - 423,591 423,591 Forfeitures - - - - 748,474 748,474 Donations - - - - 131,145 131,145 Conservation and Sustainability Initiatives - - - - 2,299,363 2,299,363 Total Restricted 58,086 38,936,579 11,178,492 - 3,602,573 53,775,730 Assigned Compensated Absences 1,853,100 - - - - 1,853,100 Budget Stabilization 3,589,331 - - - - 3,589,331 Building Security 184,383 - - - - 184,383 Public Health Grant 299 - - - - 299 Special Projects - - - 1,645,118 - 1,645,118 Equipment - - - 3,383,712 - 3,383,712 PIR - - - 6,712,739 - 6,712,739 Construction - - - 14,037,110 - 14,037,110 Total Assigned 5,627,113 - - 25,778,679 - 31,405,792 Unassigned 18,003,259 - - - - 18,003,259 Total Fund Balance 23,773,541$ 38,936,579$ 11,178,492$ 25,836,929$ 3,616,107$ 103,341,648$ B. Unassigned Fund Balance Policy The City Council has formally adopted a fund balance policy regarding the desired range for unassigned fund balance for the general fund. The policy establishes a goal for unassigned general fund balance of 42% – 47% of the subsequent year’s budgeted property tax revenue. As of December 31, 2021, the City has $18,003,259 of unassigned fund balance in the general fund, or 48.77% of 2022 budgeted property tax revenue. This amount is $2,485,884 above the minimum goal identified in the policy. C. Deficit Fund Equity The following funds had a deficit fund balance/net position at December 31, 2021: Nonmajor Proprietary Funds: Art Center (46,431)$ CITY OF EDINA, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION BUDGETARY COMPARISON SCHEDULE – GENERAL FUND YEAR ENDED DECEMBER 31, 2021 See accompanying Notes to Required Supplementary Information. (73) 2021 Actual Variance with Original Final Amounts Final Budget REVENUES Taxes: General Property Taxes 33,986,471$ 33,986,471$ 33,827,443$ (159,028)$ Franchise Taxes 850,000 850,000 824,286 (25,714) Lodging Tax 27,000 27,000 17,214 (9,786) Total Taxes 34,863,471 34,863,471 34,668,943 (194,528) Licenses and Permits 5,179,514 5,179,514 6,008,225 828,711 Intergovernmental: Federal 416,657 416,657 735,937 319,280 State: Municipal State Aid 195,000 195,000 195,000 - Other 142,500 142,500 436,436 293,936 State Aid - Police 430,000 430,000 491,802 61,802 State Aid - Fire 450,000 450,000 504,511 54,511 Health Programs 119,061 119,061 200,711 81,650 Total Intergovernmental 1,753,218 1,753,218 2,564,397 811,179 Charges for Services: Administration 19,750 19,750 228,652 208,902 Communications and Technology 101,827 101,827 75,421 (26,406) Finance 1,203,839 1,203,839 1,204,237 398 Engineering 230,400 230,400 145,012 (85,388) Police 680,150 680,150 729,076 48,926 Fire 2,491,800 2,491,800 2,376,583 (115,217) Parks and Recreation 555,637 555,637 642,713 87,076 Community Development 151,527 151,527 135,092 (16,435) Total Charges for Services 5,434,930 5,434,930 5,536,786 101,856 Fines and Forfeits 950,000 950,000 460,914 (489,086) Miscellaneous: Investment Income 150,000 150,000 (151,907) (301,907) Rental of Property 458,800 458,800 491,579 32,779 Other 17,900 17,900 186,591 168,691 Total Miscellaneous 626,700 626,700 526,263 (100,437) Total Revenues 48,807,833 48,807,833 49,765,528 957,695 Budgeted Amounts CITY OF EDINA, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION BUDGETARY COMPARISON SCHEDULE – GENERAL FUND (CONTINUED) YEAR ENDED DECEMBER 31, 2021 See accompanying Notes to Required Supplementary Information. (74) 2021 Actual Variance with Original Final Amounts Final Budget EXPENDITURES Current: General Government: Administration: Personal Services 1,214,062$ 1,214,062$ 1,272,871$ 58,809$ Contractual Services 900,559 900,559 871,022 (29,537) Commodities 90,300 90,300 85,277 (5,023) Internal Services 151,020 151,020 151,020 - Total Administration 2,355,941 2,355,941 2,380,190 24,249 Communications: Personal Services 937,637 937,637 932,752 (4,885) Contractual Services 232,700 232,700 282,618 49,918 Commodities 124,500 124,500 22,015 (102,485) Internal Services 109,572 109,572 109,572 - Total Communications 1,404,409 1,404,409 1,346,957 (57,452) Human Resources: Personal Services 940,985 940,985 1,462,653 521,668 Contractual Services 290,900 290,900 208,521 (82,379) Commodities 27,800 27,800 10,344 (17,456) Internal Services 57,600 57,600 57,600 - Total Human Resources 1,317,285 1,317,285 1,739,118 421,833 Finance: Personal Services 799,711 799,711 867,746 68,035 Contractual Services 340,250 340,250 508,599 168,349 Commodities 15,500 15,500 7,288 (8,212) Internal Services 65,076 65,076 65,076 - Total Finance 1,220,537 1,220,537 1,448,709 228,172 Community Development: Personal Services 1,566,246 1,566,246 1,561,800 (4,446) Contractual Services 318,600 318,600 204,238 (114,362) Commodities 8,500 8,500 1,167 (7,333) Internal Services 143,544 143,544 143,544 - Total Community Development 2,036,890 2,036,890 1,910,749 (126,141) Total General Government 8,335,062 8,335,062 8,825,723 490,661 Public Safety: Police: Personal Services 10,967,916 10,967,916 10,995,161 27,245 Contractual Services 955,070 955,070 919,300 (35,770) Commodities 112,040 112,040 240,608 128,568 Internal Services 1,504,296 1,504,296 1,504,296 - Total Police 13,539,322 13,539,322 13,659,365 120,043 Fire: Personal Services 8,666,732 8,666,732 8,917,737 251,005 Contractual Services 851,210 851,210 823,485 (27,725) Commodities 405,993 405,993 271,581 (134,412) Internal Services 718,908 718,908 718,908 - Total Fire 10,642,843 10,642,843 10,731,711 88,868 Budgeted Amounts CITY OF EDINA, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION BUDGETARY COMPARISON SCHEDULE – GENERAL FUND (CONTINUED) YEAR ENDED DECEMBER 31, 2021 See accompanying Notes to Required Supplementary Information. (75) 2021 Actual Variance with Original Final Amounts Final Budget Budgeted Amounts EXPENDITURES (CONTINUED) Current (Continued): Public Safety (Continued): Public Health: Personal Services 659,191$ 659,191$ 665,391$ 6,200$ Contractual Services 452,533 452,533 413,002 (39,531) Commodities 9,000 9,000 6,355 (2,645) Internal Services 51,732 51,732 51,732 - Total Public Health 1,172,456 1,172,456 1,136,480 (35,976) Total Public Safety 25,354,621 25,354,621 25,527,556 172,935 Public Works: Public Works: Personal Services 3,188,240 3,188,240 2,934,040 (254,200) Contractual Services 666,200 666,200 493,470 (172,730) Commodities 1,263,500 1,263,500 1,048,123 (215,377) Internal Services 1,219,032 1,219,032 1,219,233 201 Total Public Works 6,336,972 6,336,972 5,694,866 (642,106) Engineering: Personal Services 1,595,127 1,595,127 2,032,474 437,347 Contractual Services 783,350 783,350 826,654 43,304 Commodities 126,400 126,400 105,105 (21,295) Internal Services 219,468 219,468 219,468 - Total Engineering 2,724,345 2,724,345 3,183,701 459,356 Total Public Works 9,061,317 9,061,317 8,878,567 (182,750) Parks: Parks and Recreation: Personal Services 3,763,500 3,763,500 3,479,462 (284,038) Contractual Services 1,356,245 1,356,245 1,508,250 152,005 Commodities 404,975 404,975 317,990 (86,985) Internal Services 610,248 610,248 610,376 128 Total Parks and Recreation 6,134,968 6,134,968 5,916,078 (218,890) Total Parks 6,134,968 6,134,968 5,916,078 (218,890) Capital Outlay: Parks - - 26,676 26,676 Total Expenditures 48,885,968 48,885,968 49,174,600 288,632 CITY OF EDINA, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION BUDGETARY COMPARISON SCHEDULE – GENERAL FUND (CONTINUED) YEAR ENDED DECEMBER 31, 2021 See accompanying Notes to Required Supplementary Information. (76) 2021 Actual Variance with Original Final Amounts Final Budget Budgeted Amounts REVENUES OVER (UNDER) EXPENDITURES (78,135)$ (78,135)$ 590,928$ 669,063$ OTHER FINANCING SOURCES (USES) Transfers In 50,000 50,000 442,606 392,606 Transfers Out - - (4,503,106) (4,503,106) Total Financing Sources (Uses)50,000 50,000 (4,060,500) (4,110,500) NET INCREASE (DECREASE) IN FUND BALANCE (28,135)$ (28,135)$ (3,469,572) (3,441,437)$ Fund Balance - January 1 27,243,113 FUND BALANCE - DECEMBER 31 23,773,541$ CITY OF EDINA, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION BUDGETARY COMPARISON SCHEDULE HOUSING AND REDEVELOPMENT AUTHORITY (HRA) FUND YEAR ENDED DECEMBER 31, 2021 See accompanying Notes to Required Supplementary Information. (77) 2021 Actual Variance with Original Final Amounts Final Budget REVENUES General Property Taxes 230,400$ 230,400$ 230,166$ (234)$ Tax increment Collections 7,969,700 7,969,700 8,295,756 326,056 Investment Income 227,058 227,058 (98,804) (325,862) Charges for Services 2,000 2,000 228,216 226,216 Other Revenues 16,000 16,000 300,000 284,000 Total Revenues 8,445,158 8,445,158 8,955,334 510,176 EXPENDITURES Current: Personal Services 220,353 220,353 169,215 (51,138) Contractual Services 1,333,000 1,333,000 2,702,469 1,369,469 Commodities 2,500 2,500 618 (1,882) Capital Outlay 4,710,000 4,710,000 2,824,795 (1,885,205) Debt Service: Interest and Fiscal Charges 8,000 8,000 - (8,000) Total Expenditures 6,273,853 6,273,853 5,697,097 (576,756) REVENUES OVER (UNDER) EXPENDITURES 2,171,305 2,171,305 3,258,237 1,086,932 OTHER FINANCING SOURCES (USES) Transfers In - - 300,000 300,000 Bonds Issued - - 7,545,000 7,545,000 Premium on Bonds Issued - - 748,128 748,128 Total Other Financing Sources (Uses)- - 11,493,128 11,493,128 NET INCREASE (DECREASE) IN FUND BALANCE 2,171,305$ 2,171,305$ 14,751,365 12,580,060$ Fund Balance - January 1 24,185,214 FUND BALANCE - DECEMBER 31 38,936,579$ Budgeted Amounts CITY OF EDINA, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION OTHER POSTEMPLOYMENT BENEFITS PLAN SCHEDULE OF CHANGES IN THE CITY’S TOTAL OPEB LIABILITY AND RELATED RATIOS YEAR ENDED DECEMBER 31, 2021 Notes: The City implemented GASB Statement No. 75 in fiscal 2018. This schedule is intended to present 10-year trend information. Additional years will be added as they become available. No plan assets are accumulated in a trust that meets the criteria in paragraph 4 of GASB Statement No. 75. (78) December 31,December 31,December 31,December 31, 2020 2019 2018 2017 Total OPEB Liability: Service Cost 239,792$ 192,093$ 296,634$ 270,435$ Interest 65,302 154,222 128,559 127,096 Difference Between Expected and Actual Experience 9,714 (1,909,627) - - Changes of Assumptions 105,246 212,364 (178,824) 87,259 Benefit Payments (90,566) (77,801) (138,732) (133,679) Net Changes in Total OPEB Liability 329,488 (1,428,749) 107,637 351,111 Total OPEB Liability - Beginning of Year 2,188,763 3,617,512 3,509,875 3,158,764 Total OPEB Liability - End of Year 2,518,251$ 2,188,763$ 3,617,512$ 3,509,875$ Covered-Employee Payroll 26,700,000$ 25,800,000$ 24,800,000$ 23,900,000$ Total OPEB Liability as a Percentage of Covered-Employee Payroll 9.43%8.48%14.59%14.69% Measurement Date CITY OF EDINA, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION GERF SCHEDULE OF CITY’S AND NONEMPLOYER PROPORTIONATE SHARE OF NET PENSION LIABILITY AND SCHEDULE OF CITY CONTRIBUTIONS YEAR ENDED DECEMBER 31, 2021 Note: The City implemented GASB Statement No. 68 in fiscal 2015 (using a June 30, 2015 measurement date). This schedule is intended to present 10-year trend information. Additional years will be added as they become available. (79) City's Proportionate Share of the Net State's Pension Liability City's Plan Proportionate and the State's Proportionate Fiduciary Net City's City's Share of the Proportionate Share of the Position as a PERA Fiscal Proportion Proportionate Net Pension Share of the Net Net Pension Percentage City Fiscal Year-End Date of the Net Share of the Liability Pension Liability City's Liability as a of the Total Year End (Measurement Pension Net Pension Associated Associated with Covered Percentage of Pension Date Date)Liability Liability with the City the City Payroll Covered Payroll Liability 12/31/2015 6/30/2015 0.2683% 13,765,652$ -$ 13,765,652$ 15,508,173$ 88.76% 78.20% 12/31/2016 6/30/2016 0.2656% 21,349,748 278,868 21,628,616 16,481,973 131.23% 68.91% 12/31/2017 6/30/2017 0.2772% 17,519,302 220,299 17,739,601 17,858,560 99.33% 75.90% 12/31/2018 6/30/2018 0.2679% 14,713,374 482,647 15,196,021 18,007,013 84.39% 79.53% 12/31/2019 6/30/2019 0.2694% 14,745,577 462,813 15,208,390 19,063,827 79.78% 80.00% 12/31/2020 6/30/2020 0.2764% 16,405,731 511,142 16,916,873 19,847,440 85.23% 79.06% 12/31/2021 6/30/2021 0.2911% 12,320,807 379,625 12,700,432 20,898,307 60.77% 87.00% Contributions in Relation to City Fiscal Statutorily the Statutorily Contribution Contributions as a Year-End Required Required Deficiency Covered Percentage of Date Contributions Contributions (Excess)Payroll Covered Payroll 12/31/2015 1,248,845$ 1,248,845$ -$ 16,651,267$ 7.50% 12/31/2016 1,265,817 1,265,817 - 16,877,560 7.50% 12/31/2017 1,317,596 1,317,596 - 17,567,947 7.50% 12/31/2018 1,378,743 1,378,743 - 18,382,627 7.50% 12/31/2019 1,471,059 1,471,059 - 19,614,120 7.50% 12/31/2020 1,518,494 1,518,494 - 20,246,587 7.50% 12/31/2021 1,607,199 1,607,199 - 21,429,320 7.50% Schedule of City's and Nonemployer Proportionate Share of Net Pension Liability Schedule of City Contributions CITY OF EDINA, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION PEPFF SCHEDULE OF CITY’S PROPORTIONTE SHARE OF NET PENSION LIABILITY AND SHEDULE OF CITY CONTRIBUTIONS YEAR ENDED DECEMBER 31, 2021 Note: The City implemented GASB Statement No. 68 in fiscal 2015 (using a June 30, 2015 measurement date). This schedule is intended to present 10-year trend information. Additional years will be added as they become available. (80) City's Proportionate Share of the Net State's Pension Liability City's Plan Proportionate and the State's Proportionate Fiduciary Net City's City's Share of the Proportionate Share of the Position as a PERA Fiscal Proportion Proportionate Net Pension Share of the Net Net Pension Percentage City Fiscal Year-End Date of the Net Share of the Liability Pension Liability City's Liability as a of the Total Year-End (Measurement Pension Net Pension Associated Associated with Covered Percentage of Pension Date Date)Liability Liability with the City the City Payroll Covered Payroll Liability 12/31/2015 6/30/2015 0.8070% 9,169,408$ -$ 9,169,408$ 7,797,803$ 117.59% 86.60% 12/31/2016 6/30/2016 0.7990% 32,065,260 - 32,065,260 7,699,821 416.44% 63.88% 12/31/2017 6/30/2017 0.8110% 10,949,465 - 10,949,465 8,322,605 131.56% 85.43% 12/31/2018 6/30/2018 0.8022% 8,550,626 - 8,550,626 8,454,142 101.14% 88.84% 12/31/2019 6/30/2019 0.8479% 9,026,752 - 9,026,752 9,151,062 98.64% 89.30% 12/31/2020 6/30/2020 0.8704% 11,472,803 270,277 11,743,080 9,819,457 119.59% 87.19% 12/31/2021 6/30/2021 0.8688% 6,706,215 301,506 7,007,721 10,268,277 68.25% 93.70% Contributions in Relation to City Fiscal Statutorily the Statutorily Contribution Contributions as a Year-End Required Required Deficiency Covered Percentage of Date Contributions Contributions (Excess)Payroll Covered Payroll 12/31/2015 1,268,476$ 1,268,476$ -$ 7,830,099$ 16.20% 12/31/2016 1,272,485 1,272,485 - 7,854,846 16.20% 12/31/2017 1,335,917 1,335,917 - 8,246,401 16.20% 12/31/2018 1,399,053 1,399,053 - 8,623,704 16.22% 12/31/2019 1,595,304 1,595,304 - 9,847,556 16.20% 12/31/2020 1,784,694 1,784,694 - 10,083,017 17.70% 12/31/2021 1,850,353 1,850,353 - 10,453,972 17.70% Schedule of City's Proportionate Share of Net Pension Liability Schedule of City Contributions CITY OF EDINA, MINNESOTA NOTES TO REQUIRED SUPPLEMENTARY INFORMATION YEAR ENDED DECEMBER 31, 2021 (81) NOTE 1 LEGAL COMPLIANCE – BUDGETS The City follows these procedures in establishing the budgetary data reflected in the preceding schedules: 1. The City Manager 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. 2. Public hearings are conducted to obtain taxpayer comments. 3. The budget is legally enacted by the passage of a resolution by the City Council. 4. Formal budgetary integration is employed as a management control device during the year. 5. Budgets for all governmental funds are adopted on a basis consistent with accounting principles generally accepted in the United States of America. 6. Reported budget amounts are as originally adopted or as amended by Council- approved supplemental appropriations and budget transfers. 7. Expenditures may not legally exceed appropriations by department in the General Fund unless offset by increases in revenues. All unencumbered appropriations lapse at year-end. NOTE 2 EXCESS OF EXPENDITURES OVER APPROPRIATIONS The General Fund is legally adopted on a basis consistent with accounting principles generally accepted in the United States of America. The legal level of budgetary control is at the department level for the General Fund. The following is a listing of General Fund departments whose expenditures exceed budget appropriations. Final Over Budget Actual Budget General Fund: General Government: Administration 2,355,941$ 2,380,190$ 24,249$ Human Resources 1,317,285 1,739,118 421,833 Finance 1,220,537 1,448,712 228,175 Public Safety: Police 13,539,322 13,659,365 120,043 Fire 10,642,843 10,731,711 88,868 Public Works: Engineering 2,724,345 3,183,701 459,356 Capital Outlay - 26,676 26,676 Excess expenditures in the Human Resources are due to severance in the current year. Severance varies from year to year. Excess expenditures in Finance are due to American Rescue Plan Act (ARPA) expenditures incurred in 2021. Excess expenditures in Fire are related to severance benefits associated with the dissolution of the Fire Relief Association. CITY OF EDINA, MINNESOTA NOTES TO REQUIRED SUPPLEMENTARY INFORMATION YEAR ENDED DECEMBER 31, 2021 (82) NOTE 2 EXCESS OF EXPENDITURES OVER APPROPRIATIONS (CONTINUED) Excess expenditures in Engineering are due to changes in the organizational structure. Facilities management was moved from Public Works to Engineering for actual but budgets were not adjusted, resulting in unfavourability in Engineering and favorability in Public Works. Remaining excess expenditures were due to slightly higher than anticipated costs. The remaining governmental funds budgets are legally adopted on a basis consistent with accounting principles generally accepted in the United States of America. The legal level of budgetary control is at the fund level for these funds. The following is a listing of funds whose expenditures exceed budget appropriations. Final Over Budget Actual Budget Debt Service Fund 7,287,877$ 10,218,346$ 2,930,469$ Construction Fund 8,074,690 10,432,331 2,357,641 Braemar Memorial Fund - 450 450 CDBG Fund 125,000 150,000 25,000 Excess expenditures in the debt service fund are the result of higher than anticipated costs related to the issuance of new debt as well as total interest payments. Excess expenditures in the construction fund are the result of the timing of several larger construction projects. Excess expenditures in the remaining funds are due to slightly higher than anticipated costs. NOTE 3 PENSION INFORMATION General Employees Retirement Fund 2021 Changes Changes in Actuarial Assumptions: • The investment return and single discount rates were changed from 7.50% to 6.50%, for financial reporting purposes. • The mortality improvement scale was changed from Scale MP-2019 to Scale MP-2020. 2020 Changes Changes in Actuarial Assumptions • The price inflation assumption was decreased from 2.50% to 2.25%. • The payroll growth assumption was decreased from 3.25% to 3.00%. • Assumed salary increase rates were changed as recommended in the June 30, 2019 experience study. The net effect is assumed rates that average 0.25% less than previous rates. • Assumed rates of retirement were changed as recommended in the June 30, 2019 experience study. The changes result in more unreduced (normal) retirements and slightly fewer Rule of 90 and early retirements. CITY OF EDINA, MINNESOTA NOTES TO REQUIRED SUPPLEMENTARY INFORMATION YEAR ENDED DECEMBER 31, 2021 (83) NOTE 3 PENSION INFORMATION (CONTINUED) General Employees Retirement Fund (Continued) 2020 Changes (Continued) Changes in Actuarial Assumptions (Continued) • Assumed rates of termination were changed as recommended in the June 30, 2019 experience study. The new rates are based on service and are generally lower than the previous rates for years two through five and slightly higher thereafter. • Assumed rates of disability were changed as recommended in the June 30, 2019 experience study. The change results in fewer predicted disability retirements for males and females. • The base mortality table for healthy annuitants and employees was changed from the RP-2014 table to the Pub-2010 General Mortality table, with adjustments. The base mortality table for disabled annuitants was changed from the RP-2014 disabled annuitant mortality table to the PUB-2010 General/Teacher disabled annuitant mortality table, with adjustments. • The mortality improvement scale was changed from Scale MP-2018 to Scale MP-2019. • The assumed spouse age difference was changed from two years older for females to one year older. • The assumed number of married male new retirees electing the 100% Joint & Survivor option changed from 35% to 45%. The assumed number of married female new retirees electing the 100% Joint & Survivor option changed from 15% to 30%. The corresponding number of married new retirees electing the Life annuity option was adjusted accordingly. Changes in Plan Provisions • Augmentation for current privatized members was reduced to 2.0% for the period July 1, 2020 through December 31, 2023 and 0.0% after. Augmentation was eliminated for privatizations occurring after June 30, 2020. 2019 Changes Changes in Actuarial Assumptions • The morality projection scale was changed from MP-2017 to MP-2018. Changes in Plan Provisions • The employer supplemental contribution was changed prospectively, decreasing from $31.0 million to $21.0 million per year. The State’s special funding contribution was changed prospectively, requiring $16.0 million due per year through 2031. CITY OF EDINA, MINNESOTA NOTES TO REQUIRED SUPPLEMENTARY INFORMATION YEAR ENDED DECEMBER 31, 2021 (84) NOTE 3 PENSION INFORMATION (CONTINUED) General Employees Retirement Fund (Continued) 2018 Changes Changes in Actuarial Assumptions: • The mortality projection scale was changed from MP-2015 to MP-2017. • The assumed benefit increase was changed from 1.00% per year through 2044 and 2.50% per year thereafter to 1.25% per year. Changes in Plan Provisions • The augmentation adjustment in early retirement factors is eliminated over a five- year period starting July 1, 2019, resulting in actuarial equivalence after June 30, 2024. • Interest credited on member contributions decreased from 4.00% to 3.00% , beginning July 1, 2018. • Deferred augmentation was changed to 0.00% , effective January 1, 2019. Augmentation that has already accrued for deferred members will still apply. • Contribution stabilizer provisions were repealed. • Postretirement benefit increases were changed from 1.00% per year with a provision to increase to 2.50% upon attainment of 90.00% funding ratio to 50.00% of the Social Security Cost of Living Adjustment, not less than 1.00% and not more than 1.50%, beginning January 1, 2019. • For retirements on or after January 1, 2024, the first benefit increase is delayed until the retiree reaches normal retirement age; does not apply to Rule of 90 retirees, disability benefit recipients, or survivors. • Actuarial equivalent factors were updated to reflect revised mortality and interest assumptions. 2017 Changes Changes in Actuarial Assumptions: • The Combined Service Annuity (CSA) loads were changed from 0.8% for active members and 60% for vested and nonvested deferred members. The revised CSA loads are now 0.0% for active member liability, 15.0% for vested deferred member liability, and 3.0% for nonvested deferred member liability. • The assumed postretirement benefit increase rate was changed from 1.0% per year for all years to 1.0% per year through 2044 and 2.5% per year thereafter. Changes in Plan Provisions • The State’s contribution for the Minneapolis Employees Retirement Fund equals $16,000,000 in 2017 and 2018, and $6,000,000 thereafter. • The Employer Supplemental Contribution for the Minneapolis Employees Retirement Fund changed from $21,000,000 to $31,000,000 in calendar years 2019 to 2031. The state’s contribution changed from $16,000,000 to $6,000,000 in calendar years 2019 to 2031. CITY OF EDINA, MINNESOTA NOTES TO REQUIRED SUPPLEMENTARY INFORMATION YEAR ENDED DECEMBER 31, 2021 (85) NOTE 3 PENSION INFORMATION (CONTINUED) General Employees Fund Retirement Fund (Continued) 2016 Changes Changes in Actuarial Assumptions: • The assumed postretirement benefit increase rate was changed from 1.0% per year through 2035 and 2.5% per year thereafter to 1.0% per year for all years. • The assumed investment return was changed from 7.9% to 7.5%. The single discount rate was changed from 7.9% to 7.5%. • 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% to 3.25% for payroll growth and 2.5% for inflation. Changes in Plan Provisions • There have been no changes since the prior valuation. 2015 Changes Changes in Actuarial Assumptions: • The assumed postretirement benefit increase rate was changed from 1.0% per year through 2030 and 2.5% per year thereafter to 1.0% per year through 2035 and • 2.5% per year thereafter. Changes in Plan Provisions: • On January 1, 2015, the Minneapolis Employees Retirement Fund was merged into the General Employees Fund, which increased the total pension liability by $1.1 billion and increased the fiduciary plan net position by $892 million. Upon consolidation, state and employer contributions were revised. Public Employees Police and Fire Fund 2021 Changes Changes in Actuarial Assumptions: • The investment return and single discount rates were changed from 7.50% to 6.50%, for financial reporting purposes. • The inflation assumption was changed from 2.50% to 2.25%. • The payroll growth assumption was changed from 3.25% to 3.00%. • The base mortality table for healthy annuitants and employees was changed from the RP-2014 table to the Pub-2010 Public Safety Mortality table. The mortality improvement scale was changed from MP-2019 to MN-2020. • The base mortality table for disabled annuitants was changed from the RP-2014 healthy annuitant mortality table (with future mortality improvement according to Scale MP-2019) to the Pub-2010 Public Safety disabled annuitant mortality table (with future mortality improvement according to Scale MP-2020). • Assumed rates of salary increase were modified as recommended in the July 14, 2020 experience study. The overall impact is a decrease in gross salary increase rates. • Assumed rates of retirement were changed as recommended in the July 14, 2020 experience study. The changes result in slightly more unreduced retirements and fewer assumed early retirements. CITY OF EDINA, MINNESOTA NOTES TO REQUIRED SUPPLEMENTARY INFORMATION YEAR ENDED DECEMBER 31, 2021 (86) NOTE 3 PENSION INFORMATION (CONTINUED) Public Employees Police and Fire Fund (Continued) 2021 Changes (Continued) • Assumed rates of withdrawal were changed from select and ultimate rates to service-based rates. The changes result in more assumed terminations. • Assumed rates of disability were increased for ages 25-44 and decreased for ages over 49. Overall, proposed rates result in more projected disabilities. • Assumed percent married for active female members was changed from 60% to 70%. Minor changes to form of payment assumptions were applied. 2020 Changes Changes in Actuarial Assumptions • The morality projection scale was changed from MP-2018 to MP-2019. Changes in Plan Provisions • There have been no changes since the prior valuation. 2019 Changes Changes in Actuarial Assumptions • The morality projection scale was changed from MP-2017 to MP-2018. Changes in Plan Provisions • There have been no changes since the prior valuation. • 2018 Changes Changes in Actuarial Assumptions: • The mortality projection scale was changed from MP-2016 to MP-2017. Changes in Plan Provisions • Postretirement benefit increases were changed to 1.00% for all years, with no trigger. • An end date of July 1, 2048 was added to the existing $9.0 million state contribution • New annual state aid will equal $4.5 million in fiscal years 2019 and 2020, and $9.0 million thereafter until the plan reaches 100% funding, or July 1, 2048, if earlier. • Member contributions were changed from 10.80% to 11.30% of pay, effective January 1, 2019 and 11.80% of pay, effective January 1, 2020. • Employer contributions were changed from 16.20% to 16.95% of pay, effective January 1, 2019 and 17.70% of pay, effective January 1, 2020. • Interest credited on member contributions decreased from 4.00% to 3.00%, beginning July 1, 2018. • Deferred augmentation was changed to 0.00%, effective January 1, 2019. Augmentation that has already accrued for deferred members will still apply. • Actuarial equivalent factors were updated to reflect revised mortality and interest assumptions. CITY OF EDINA, MINNESOTA NOTES TO REQUIRED SUPPLEMENTARY INFORMATION YEAR ENDED DECEMBER 31, 2021 (87) NOTE 3 PENSION INFORMATION (CONTINUED) Public Employees Police and Fire Fund (Continued) 2017 Changes Changes in Actuarial Assumptions (Continued): • Assumed salary increases were changed as recommended in the June 30, 2016 experience study. The net effect is proposed rates that average 0.34% lower than the previous rates. • Assumed rates of retirement were changed, resulting in fewer retirements. • The Combined Service Annuity (CSA) load was 30% for vested and nonvested deferred members. The CSA has been changed to 33% for vested members and 2% for nonvested members. • The base mortality table for healthy annuitants was changed from the RP-2000 fully generational table to the RP-2014 fully generational table (with a base year of 2006), with male rates adjusted by a factor of 0.96. The mortality improvement scale was changed from Scale AA to Scale MP-2016. The base mortality table for disabled annuitants was changed from the RP-2000 disabled mortality table to the mortality tables assumed for healthy retirees. • Assumed termination rates were decreased to 3.0% for the first three years of service. Rates beyond the select period of three years were adjusted, resulting in more expected terminations overall. • Assumed percentage of married female members was decreased from 65% to 60%. • Assumed age difference was changed from separate assumptions for male members (wives assumed to be three years younger) and female members (husbands assumed to be four years older) to the assumption that males are two years older than females. • The assumed percentage of female members electing Joint and Survivor annuities was increased. • The assumed postretirement benefit increase rate was changed from 1.0% for all years to 1.0% per year through 2064 and 2.5% thereafter. • The single discount rate changed from 5.6% to 7.5% per annum. Changes in Plan Provisions • There have been no changes since the prior valuation. 2016 Changes Changes in Actuarial Assumptions: • The assumed postretirement benefit increase rate was changed from 1.05% per year through 2037 and 2.5% thereafter to 1.0% per year for all future years. • The assumed investment return was changed from 7.9% to 7.5%. The single discount rate changed from 7.9% to 5.6%. • The assumed future salary increases, payroll growth, and inflation were decreased by 0.25% to 3.25% for payroll growth and 2.5% for inflation. Changes in Plan Provisions • There have been no changes since the prior valuation. CITY OF EDINA, MINNESOTA NOTES TO REQUIRED SUPPLEMENTARY INFORMATION YEAR ENDED DECEMBER 31, 2021 (88) NOTE 3 PENSION INFORMATION (CONTINUED) Public Employees Police and Fire Fund (Continued) 2015 Changes Changes in Plan Provisions: • The postretirement benefit increase to be paid after attainment of the 90% funding threshold was changed, from inflation up to 2.5%, to a fixed rate of 2.5%. Changes in Actuarial Assumptions: • The assumed postretirement benefit increase rate was changed from 1.0% per year through 2030 and 2.5% per year thereafter to 1.0% per year through 2037 and 2.5% per year thereafter. NOTE 4 OTHER POSTEMPLOYMENT BENEFITS INFORMATION Other Postemployment Benefits Plan 2020 Changes Changes in Actuarial Assumptions: • The discount rate was changed from 4.09% to 2.74%. • The payroll growth rate was changed from 3.50% to 3.25% 2019 Changes Changes in Actuarial Assumptions: • The discount rate was changed from 3.44% to 4.09%. 2018 Changes Changes in Actuarial Assumptions: • The discount rate was changed from 4.50% to 3.44%. (This page left blank intentionally.) NONMAJOR GOVERNMENTAL FUNDS Special Revenue Funds A Special Revenue Fund is used to account for the proceeds of specific revenue sources that are legally restricted to expenditures for specified purposes. The following are nonmajor special revenue funds: Community Development Block Grant Fund – This fund was established to account for funds received under Title I of the Housing and Community Development Act of 1974. Police Fund – This fund was established to account for funds received for specific purposes within the police department, including E-911 and Forfeiture funds. Braemar Memorial Fund – This fund was established to account for funds donated to the City for the purpose of enhancing the Braemar golf course with equipment and amenities that might not otherwise be affordable or viewed as a necessity to the golf course. Pedestrian and Cyclist Safety Fund – This fund was established to account for funds received from gas and electric franchise fees to be used for pedestrian and cyclist improvements included in future street reconstruction projects. Arts and Culture Fund – This fund was established to account for funds donated to the City for the purpose of enhancing public arts and culture related activities. This fund was closed into the General Fund in 2021. Conservation and Sustainability Fund – This fund was established to account for funds received from gas and electric franchise fees to be used for initiatives focused on conservation and sustainability. CITY OF EDINA, MINNESOTA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS DECEMBER 31, 2021 (89) Community Pedestrian Conservation Total Nonmajor Development Braemar and Cyclist Arts and and Governmental Block Grant Police Memorial Safety Culture Sustainability Funds Cash and Investments -$ 736,467$ 130,532$ 205,343$ -$ 2,066,981$ 3,139,323$ Accrued Interest - - 613 1,100 - 6,219 7,932 Accounts Receivable - - - 307,139 - 238,118 545,257 Due from Other Governments - 18,860 - - - - 18,860 Prepaid Items - 13,534 - - - - 13,534 Total Assets -$ 768,861$ 131,145$ 513,582$ -$ 2,311,318$ 3,724,906$ Liabilities: Accounts Payable -$ 6,853$ -$ 69,247$ -$ 7,493$ 83,593$ Salaries Payable - - - - - 4,462 4,462 Contracts Payable - - - 20,744 - - 20,744 Total Liabilities - 6,853 - 89,991 - 11,955 108,799 Fund Balance: Nonspendable - 13,534 - - - - 13,534 Restricted - 748,474 131,145 423,591 - 2,299,363 3,602,573 Total fund balance - 762,008 131,145 423,591 - 2,299,363 3,616,107 Total Liabilities, Deferred Inflows of Resources, and Fund Balance -$ 768,861$ 131,145$ 513,582$ -$ 2,311,318$ 3,724,906$ Special Revenue Assets Liabilities, Deferred Inflows of Resources, and Fund Balance CITY OF EDINA, MINNESOTA COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED DECEMBER 31, 2021 (90) Community Pedestrian Conservation Total Nonmajor Development Braemar and Cyclist Arts and and Governmental Block Grant Police Memorial Safety Culture Sustainability Funds REVENUES Franchise Taxes -$ -$ -$ 1,229,526$ -$ 950,410$ 2,179,936$ Intergovernmental 150,000 - - - - - 150,000 Investment Income (Loss)- 31 (597) (1,077) - (8,956) (10,599) Other Revenues - 187,853 5,500 - - 12,189 205,542 Total Revenues 150,000 187,884 4,903 1,228,449 - 953,643 2,524,879 EXPENDITURES Current: General Government 150,000 - - - - - 150,000 Public Safety - 113,815 - - - - 113,815 Public Works - - - 43,519 - 416,687 460,206 Parks - - 450 - - - 450 Capital Outlay: Public Works - - - 710,729 - 30,980 741,709 Total Expenditures 150,000 113,815 450 754,248 - 447,667 1,466,180 Revenues Over (Under) Expenditures - 74,069 4,453 474,201 - 505,976 1,058,699 Other Financing Uses: Transfers Out - - - - (68,895) - (68,895) NET INCREASE (DECREASE) IN FUND BALANCE - 74,069 4,453 474,201 (68,895) 505,976 989,804 Fund Balance - January 1 - 687,939 126,692 (50,610) 68,895 1,793,387 2,626,303 FUND BALANCE - DECEMBER 31 -$ 762,008$ 131,145$ 423,591$ -$ 2,299,363$ 3,616,107$ Special Revenue CITY OF EDINA, MINNESOTA SPECIAL REVENUE FUND – COMMUNITY DEVELOPMENT BLOCK GRANT SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL YEAR ENDED DECEMBER 31, 2021 (91) Actual Variance with Original Final Amounts Final budget REVENUES Intergovernmental 125,000$ 125,000$ 150,000$ 25,000$ EXPENDITURES Current: General Government Contractual Services 125,000 125,000 150,000 25,000 NET INCREASE (DECREASE) IN FUND BALANCE -$ -$ - -$ Fund Balance - January 1 - FUND BALANCE - DECEMBER 31 -$ Budgeted Amounts CITY OF EDINA, MINNESOTA SPECIAL REVENUE FUND – POLICE SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL YEAR ENDED DECEMBER 31, 2021 (92) Actual Variance with Original Final Amounts Final budget REVENUES Investment Income 5$ 5$ 31$ 26$ Other Revenues 172,061 172,061 187,853 15,792 Total Revenues 172,066 172,066 187,884 15,818 EXPENDITURES Current: Public Safety: Contractual Services 92,882 92,882 104,592 11,710 Commodities 7,500 7,500 9,223 1,723 Capital Outlay: Public Safety 47,500 47,500 - (47,500) Total Expenditures 147,882 147,882 113,815 (34,067) NET INCREASE (DECREASE) IN FUND BALANCE 24,184$ 24,184$ 74,069 49,885$ Fund Balance - January 1 687,939 FUND BALANCE - DECEMBER 31 762,008$ Budgeted Amounts CITY OF EDINA, MINNESOTA SPECIAL REVENUE FUND – BRAEMAR MEMORIAL SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL YEAR ENDED DECEMBER 31, 2021 (93) Actual Variance with Original Final Amounts Final budget REVENUES Investment Income 2,007$ 2,007$ (597)$ (2,604)$ Donations 2,500 2,500 5,500 3,000 Total Revenues 4,507 4,507 4,903 396 EXPENDITURES Current: Parks and Recreation: Contractual Services - - 450 450 NET INCREASE (DECREASE) IN FUND BALANCE 4,507$ 4,507$ 4,453 (54)$ Fund Balance - January 1 126,692 FUND BALANCE - DECEMBER 31 131,145$ Budgeted Amounts CITY OF EDINA, MINNESOTA SPECIAL REVENUE FUND – PEDESTRIAN AND CYCLIST SAFETY SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL YEAR ENDED DECEMBER 31, 2021 (94) Actual Variance with Original Final Amounts Final budget REVENUES Franchise Taxes 1,200,000$ 1,200,000$ 1,229,526$ 29,526$ Investment Income 1,060 1,060 (1,077) (2,137) Total Revenues 1,201,060 1,201,060 1,228,449 27,389 EXPENDITURES Current: Public Works: Personal Services 120,202 120,202 10,651 (109,551) Contractual Services 75,000 75,000 - (75,000) Commodities 15,000 15,000 25,008 10,008 Internal Services 7,860 7,860 7,860 - Capital Outlay: Public Works:924,225 924,225 710,729 (213,496) Total Expenditures 1,142,287 1,142,287 754,248 (388,039) NET INCREASE (DECREASE) IN FUND BALANCE 58,773$ 58,773$ 474,201 415,428$ Fund Balance - January 1 (50,610) FUND BALANCE - DECEMBER 31 423,591$ Budgeted Amounts CITY OF EDINA, MINNESOTA SPECIAL REVENUE FUND – ARTS AND CULTURE SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL YEAR ENDED DECEMBER 31, 2021 (95) Actual Variance with Original Final Amounts Final budget REVENUES General Property Taxes 20,000$ 20,000$ -$ (20,000)$ Investment Income 485 485 - (485) Other Revenues 2,500 2,500 - (2,500) Total Revenues 22,985 22,985 - (22,985) EXPENDITURES Current: Parks: Contractual Services 14,000 14,000 - (14,000) Commodities 600 600 - (600) Total Expenditures 14,600 14,600 - (14,600) REVENUES OVER (UNDER) EXPENDITURES 8,385 8,385 - (8,385) OTHER FINANCING SOURCES (USES) Transfers Out - - (68,895) (68,895) NET INCREASE (DECREASE) IN FUND BALANCE 8,385$ 8,385$ (68,895) (77,280)$ Fund balance - January 1 68,895 FUND BALANCE - DECEMBER 31 -$ Budgeted Amounts CITY OF EDINA, MINNESOTA SPECIAL REVENUE FUND – CONSERVATION AND SUSTAINABILITY SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL YEAR ENDED DECEMBER 31, 2021 (96) Actual Variance with Original Final Amounts Final budget REVENUES Franchise Taxes 1,000,000$ 1,000,000$ 950,410$ (49,590)$ Investment Income (Loss)5,190 5,190 (8,956) (14,146) Other Revenues 7,000 7,000 12,189 5,189 Total Revenues 1,012,190 1,012,190 953,643 (58,547) EXPENDITURES Current: Public Works: Personal Services 165,109 165,109 116,119 (48,990) Contractual Services 123,100 123,100 253,711 130,611 Commodities - - 38,613 38,613 Internal Services 8,244 8,244 8,244 - Capital Outlay: Public Works 600,000 600,000 30,980 (569,020) Total Expenditures 896,453 896,453 447,667 (448,786) NET INCREASE (DECREASE) IN FUND BALANCE 115,737$ 115,737$ 505,976 390,239$ Fund Balance - January 1 1,793,387 FUND BALANCE - DECEMBER 31 2,299,363$ Budgeted Amounts MAJOR GOVERNMENTAL FUNDS Debt Service Fund – This fund was established to account for the payment of principal and interest on the General Obligation, Permanent Improvement Revolving, Public Project Revenue, and Edina Emerald Energy Program Bonds. Construction Fund – This fund was established to account for various special assessment and state aid projects throughout the City. This fund also provides financing for capital improvements as designated in the City’s capital improvement budget. CITY OF EDINA, MINNESOTA GOVERNMENTAL FUND – DEBT SERVICE SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL YEAR ENDED DECEMBER 31, 2021 (97) Actual Variance with Original Final Amounts Final budget REVENUES General Property Taxes 3,651,400$ 3,651,400$ 3,632,895$ (18,505)$ Special Assessments - - 191,646 191,646 Investment Income 8,000 8,000 - (8,000) Total Revenues 3,659,400 3,659,400 3,824,541 165,141 EXPENDITURES Debt Service 7,287,877 7,287,877 10,218,346 2,930,469 REVENUES OVER (UNDER) EXPENDITURES (3,628,477) (3,628,477) (6,393,805) (2,765,328) OTHER FINANCING SOURCES (USES) Transfers In 2,955,444 2,955,444 2,955,444 - Bonds Issued - - 4,085,343 4,085,343 Premium on Bonds Issued - - 804,204 804,204 Total Other Financing Sources (Uses)2,955,444 2,955,444 7,844,991 4,889,547 NET INCREASE (DECREASE) IN FUND BALANCE (673,033)$ (673,033)$ 1,451,186 2,124,219$ Fund Balance - January 1 9,727,306 FUND BALANCE - DECEMBER 31 11,178,492$ Budgeted Amounts CITY OF EDINA, MINNESOTA GOVERNMENTAL FUND – CONSTRUCTION CAPITAL PROJECTS SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL YEAR ENDED DECEMBER 31, 2021 (98) Actual Variance with Original Final Amounts Final budget REVENUES General Property Taxes 4,130,000$ 4,130,000$ 4,105,959$ (24,041)$ Franchise Taxes 105,000 105,000 86,100 (18,900) Special Assessments 4,281,222 4,281,222 3,939,057 (342,165) License and Permits 79,000 79,000 69,221 (9,779) Intergovernmental 950,000 950,000 606,825 (343,175) Charges for Services 200,000 200,000 215,256 15,256 Investment Income 225,000 225,000 (110,770) (335,770) Other Revenues - - 12,425 12,425 Total Revenues 9,970,222 9,970,222 8,924,073 (1,046,149) EXPENDITURES Current: General Government: Personal Services - - 25,948 25,948 Contractual Services - - 356,998 356,998 Commodities - - 5,850 5,850 Public Safety: Contractual Services - - 58,951 58,951 Commodities - - (6,067) (6,067) Public Works: Personal Services 104,740 104,740 98,139 (6,601) Contractual Services 303,671 303,671 1,270,092 966,421 Commodities 24,151 24,151 9,922 (14,229) Internal Services 1,152 1,152 1,152 - Parks: Personal Services - - 13 13 Contractual Services - - 780 780 Commodities - - 241 241 Capital Outlay: General Government 91,000 91,000 144,659 53,659 Public Safety 1,381,450 1,381,450 519,458 (861,992) Public Works 6,075,526 6,075,526 7,510,434 1,434,908 Parks 93,000 93,000 435,761 342,761 Total Expenditures 8,074,690 8,074,690 10,432,331 2,357,641 REVENUES OVER (UNDER) EXPENDITURES 1,895,532 1,895,532 (1,508,258) (3,403,790) OTHER FINANCING SOURCES (USES) Transfers In 250,000 250,000 4,710,306 4,460,306 Transfers Out (2,955,444) (2,955,444) (3,067,655) (112,211) Sale of Capital Assets - - 100,821 100,821 Bonds Issued 3,144,387 3,144,387 5,189,657 2,045,270 Premium on Bonds Issued - - 777,313 777,313 Total Other Financing Sources (Uses)438,943 438,943 7,710,442 7,271,499 NET INCREASE (DECREASE) IN FUND BALANCE 2,334,475$ 2,334,475$ 6,202,184 3,867,709$ Fund Balance - January 1 19,634,745 FUND BALANCE - DECEMBER 31 25,836,929$ Budgeted Amounts (This page left blank intentionally.) NONMAJOR PROPRIETARY FUNDS Enterprise Funds Enterprise funds account for the financing of self-supporting activities of governmental units which render services to the general public on a user charge basis. The following are nonmajor enterprise funds: Art Center Fund – This fund accounts for activities related to the City’s Art Center. Edinborough Park Fund – This fund accounts for activities related to Edinborough Park. Centennial Lakes Fund – This fund accounts for activities related to Centennial Lakes Park. Braemar Field Fund – This fund accounts for activities related to the Sports Dome. CITY OF EDINA, MINNESOTA COMBINING STATEMENT OF NET POSITION NONMAJOR PROPRIETARY FUNDS DECEMBER 31, 2021 (99) Total Nonmajor Art Edinborough Centennial Braemar Proprietary Center Park Lakes Field Funds ASSETS Current Assets: Cash and Investments 67,727$ 619,394$ 333,120$ 1,189,572$ 2,209,813$ Interest Receivable 223 8,506 2,871 4,958 16,558 Accounts Receivable - 20,856 28,127 - 48,983 Due from Other Governments - - 2,920 150 3,070 Total Current Assets 67,950 648,756 367,038 1,194,680 2,278,424 Noncurrent Assets: Net Capital Assets 36,870 1,129,408 199,806 6,057,775 7,423,859 Total Assets 104,820 1,778,164 566,844 7,252,455 9,702,283 DEFERRED OUTFLOWS OF RESOURCES OPEB Deferred Outflows 532 4,233 3,235 - 8,000 Pension Deferred Outflows 73,162 231,779 209,516 34,466 548,923 Total Deferred Outflows of Resources 73,694 236,012 212,751 34,466 556,923 LIABILITIES Current Liabilities: Accounts Payable 916 220,217 16,440 11,532 249,105 Salaries Payable 2,738 32,460 24,692 4,678 64,568 Due to Other Governments - 5,095 1,254 1,190 7,539 Unearned Revenue 251 4,235 15,355 - 19,841 Compensated Absences Payable 8,765 23,180 12,815 - 44,760 Total Current Liabilities 12,670 285,187 70,556 17,400 385,813 Noncurrent Liabilities: Total OPEB Liability 12,768 17,723 15,791 - 46,282 Net Pension Liability 96,916 307,035 277,544 45,657 727,152 Compensated Absences Payable 13,148 34,770 19,223 - 67,141 Total Noncurrent Liabilities 122,832 359,528 312,558 45,657 840,575 Total Liabilities 135,502 644,715 383,114 63,057 1,226,388 DEFERRED INFLOWS OF RESOURCES OPEB Deferred Inflows 400 16,072 11,425 - 27,897 Pension Deferred Inflows 89,043 282,093 254,999 41,948 668,083 Total Deferred Inflows of Resources 89,443 298,165 266,424 41,948 695,980 NET POSITION Net Investment in Capital Assets 36,870 1,129,408 199,806 6,057,775 7,423,859 Unrestricted (83,301) (58,112) (69,749) 1,124,141 912,979 Total Net Position (46,431)$ 1,071,296$ 130,057$ 7,181,916$ 8,336,838$ CITY OF EDINA, MINNESOTA COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION NONMAJOR PROPRIETARY FUNDS YEAR ENDED DECEMBER 31, 2021 (100) Total Nonmajor Art Edinborough Centennial Braemar Proprietary Center Park Lakes Field Funds OPERATING REVENUES Sales - Retail 28$ 6,817$ -$ -$ 6,845$ Sales - Concessions - 9,396 15,155 - 24,551 Memberships - 77,902 - - 77,902 Admissions - 255,945 - 6,345 262,290 Lodging Tax - 3,090 - - 3,090 Building Rental - 116,444 65,933 482,579 664,956 Rental of Equipment - - 108,923 - 108,923 Greens Fees - - 269,667 - 269,667 Class Registration and Other Fees 62,166 207,658 403,419 (28) 673,215 Total Operating Revenues 62,194 677,252 863,097 488,896 2,091,439 OPERATING EXPENSES Cost of Sales and Services - 1,098 9,606 - 10,704 Personal Services (14,673) 646,729 554,883 41,387 1,228,326 Internal Services 37,784 383,942 289,220 131,957 842,903 Commodities 14,326 103,326 83,958 10,948 212,558 Internal Services 75,838 144,833 113,057 35,719 369,447 Depreciation 5,892 100,562 37,144 523,926 667,524 Total Operating Expenses 119,167 1,380,490 1,087,868 743,937 3,331,462 OPERATING INCOME (LOSS)(56,973) (703,238) (224,771) (255,041) (1,240,023) NONOPERATING REVENUES (EXPENSES) Investment Income - (3,405) (1,513) (5,278) (10,196) Donations 1,402 - 2,200 - 3,602 Miscellaneous 14,215 15,302 1,247 50,650 81,414 Total Nonoperating Revenues (Expenses)15,617 11,897 1,934 45,372 74,820 INCOME (LOSS) BEFORE TRANSFERS (41,356) (691,341) (222,837) (209,669) (1,165,203) TRANSFERS Transfers In 250,000 12,673 149,112 692 412,477 CHANGE IN NET POSITION 208,644 (678,668) (73,725) (208,977) (752,726) Net Position - January 1 (255,075) 1,749,964 203,782 7,390,893 9,089,564 NET POSITION - DECEMBER 31 (46,431)$ 1,071,296$ 130,057$ 7,181,916$ 8,336,838$ CITY OF EDINA, MINNESOTA COMBINING STATEMENT OF CASH FLOWS NONMAJOR PROPRIETARY FUNDS YEAR ENDED DECEMBER 31, 2021 (101) Total Nonmajor Art Edinborough Centennial Braemar Proprietary Center Park Lakes Field Funds CASH FLOWS FROM OPERATING ACTIVITIES Receipts from Customers and Users 68,847$ 685,796$ 853,352$ 540,496$ 2,148,491$ Payment to Suppliers (123,841) (440,064) (487,903) (166,204) (1,218,012) Payment to Employees (176,056) (739,877) (628,217) (148,579) (1,692,729) Net Cash Provided (Used) by Operating Activities (231,050) (494,145) (262,768) 225,713 (762,250) CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfer from Other Funds 250,000 12,673 149,112 692 412,477 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition of Capital Assets - (45,818) (12,863) (108,457) (167,138) CASH FLOWS FROM INVESTING ACTIVITIES Interest Received - 7,847 3,489 12,164 23,500 NET INCREASE (DECREASE) IN CASH AND INVESTMENTS 18,950 (519,443) (123,030) 130,112 (493,411) Cash and Investments - January 1 47,889 1,117,264 450,183 1,058,775 2,674,111 CASH AND INVESTMENTS - DECEMBER 31 66,839$ 597,821$ 327,153$ 1,188,887$ 2,180,700$ CASH AND INVESTMENTS PRESENTED ON THE STATEMENT OF NET POSITION: Cash 66,839$ 597,821$ 327,153$ 1,188,887$ 2,180,700$ Investments 888 21,573 5,967 685 29,113 Total Cash and Investments 67,727$ 619,394$ 333,120$ 1,189,572$ 2,209,813$ RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES Operating Income (Loss)(56,973)$ (703,238)$ (224,771)$ (255,041)$ (1,240,023)$ Adjustments to Reconcile Operating Income (Loss) to Net Cash Provided (Used) by Operating Activities: Depreciation 5,892 100,562 37,144 523,926 667,524 Miscellaneous Income 15,617 15,302 3,447 50,650 85,016 (Increase) Decrease in: Receivables - (10,963) (25,627) 22,500 (14,090) Due From Other Governments - - (2,920) (150) (3,070) Inventory 3,447 - - - 3,447 Deferred Outflows of Resources (41,574) (185,174) (178,706) (18,671) (424,125) Increase (Decrease) in: Accounts Payable 663 188,046 6,684 11,330 206,723 Salaries Payable (2,134) 6,471 2,466 (2,144) 4,659 Due to Other Governments (3) 5,089 1,254 1,090 7,430 Unearned Revenue (8,964) 4,205 15,355 (21,400) (10,804) Total OPEB Liability - 3,295 3,295 - 6,590 Net Pension Liability (234,513) (190,108) (53,885) (120,057) (598,563) Compensated Absences 14,985 17,192 (82,854) - (50,677) Deferred Inflows of Resources 72,507 255,176 236,350 33,680 597,713 Total Adjustments (174,077) 209,093 (37,997) 480,754 477,773 Net Cash Provided (Used) by Operating Activities (231,050)$ (494,145)$ (262,768)$ 225,713$ (762,250)$ NONCASH INVESTING ACTIVITIES Increase (Decrease) in Fair Value of Investments -$ (11,461)$ (5,094)$ (17,766)$ (34,321)$ FIDUCIARY FUNDS Custodial Funds Custodial funds are used to report resources held by the City in a purely custodial capacity. The following are agency funds: Police Seizure Fund – This fund accounts for assets seized by the Police Department. Public Safety Training Facility – This fund accounts for assets and liabilities of the South Metro Public Safety Training Facility, which is a joint venture that the City has fiduciary responsibilities for. Minnesota Task Force 1 – This fund accounts for assets and liabilities of the Minnesota Task Force 1, which is comprised of personnel and equipment from public safety and specialist personnel from supporting entities that operates as part of a joint powers agreement that the City has administrative responsibilities for. (This page left blank intentionally.) CITY OF EDINA, MINNESOTA COMBINING BALANCE SHEET AND STATEMENT OF CHANGES IN ASSETS AND LIABILITIES CUSTODIAL FUNDS YEAR ENDED DECEMBER 31, 2021 (102) Public Safety Police Training Minnesota Seizure Facility Task Force 1 Total Cash and Investments 15,288$ 337,337$ (9,906)$ 342,719$ Accounts Receivable - 17,585 - 17,585 Total Assets 15,288 354,922 (9,906) 360,304 Accounts Payable - 9,131 115,275 124,406 Salaries Payable - 11,581 6,332 17,913 Due to Other Governmental Units 11,747 290 - 12,037 Unearned Revenue - 5,163 - 5,163 11,747 26,165 121,607 159,519 Restricted for Organizations and Other Governments 3,541$ 328,757$ (131,513)$ 200,785$ Public Safety Police Training Minnesota Seizure Facility Task Force 1 Total Collections on Behalf of Others 3,560$ 619,910$ 1,039,207$ 1,662,677$ Payments on Behalf of Others - 889,290 1,185,269 2,074,559 Net Increase (Decrease) in Fiduciary Net Position 3,560 (269,380) (146,062) (411,882) Net Position-Beginning (19) 598,137 14,549 612,667 Net Position-Ending 3,541$ 328,757$ (131,513)$ 200,785$ ADDITIONS DEDUCTIONS ASSETS LIABILITIES NET POSITION CITY OF EDINA, MINNESOTA TAX CAPACITY, TAX LEVIES, AND TAX CAPACITY RATES (SHOWN BY YEAR OF TAX COLLECTIBILITY) (103) 2018 2019 2020 2021 2022 Total Tax Capacity 141,934,212$ 151,279,391$ 157,910,360$ 164,716,554$ 169,928,228$ Increment Valuation (4,525,127) (5,229,452) (5,929,603) (8,291,891) (1,861,452) Contribution to Fiscal Disparities Pool (12,166,916) (13,440,625) (14,369,737) (15,151,282) (16,575,905) Tax Capacity Used for Rate Calculation 125,242,169 132,609,314 137,611,020 141,273,381 151,490,871 Fiscal Disparities Distribution 3,210,559 3,473,642 3,700,282 4,049,317 4,507,212 Adjusted Net Tax Capacity 128,452,728$ 136,082,956$ 141,311,302$ 145,322,698$ 155,998,083$ Tax Levies: General Fund 28,493,077$ 30,009,121$ 32,021,243$ 33,986,471$ 36,708,036$ Arts and Culture Fund 20,000 20,000 20,000 20,000 - Equipment 2,567,000 2,630,000 2,830,000 4,130,000 5,190,000 Debt Service 4,579,700 4,611,900 4,596,300 3,651,400 3,232,000 HRA Operating 125,000 160,000 192,000 230,400 237,300 Total Certified Tax Levies 35,784,777 37,431,021 39,659,543 42,018,271 45,367,336 Referendum Market Value Levy - - - - - Total Levy 35,784,777$ 37,431,021$ 39,659,543$ 42,018,271$ 45,367,336$ Tax Capacity Rate: General Fund Revenue 24.187%23.992%24.690%26.264%27.657% Bonds and Interest 3.564%3.388%3.255%2.515%2.133% HRA 0.098%0.119%0.137%0.163%0.157% Total Tax Capacity Rate 27.849%27.499%28.082%28.942%29.947% Market Value Rate 0.00000%0.00000%0.00000%0.00000%0.00000% CITY OF EDINA, MINNESOTA COMBINING SCHEDULE OF BONDED INDEBTEDNESS DECEMBER 31, 2021 (104) Final Interest Maturity Original Rates Date Date Issue Redeemed General Obligation Bonds: GO Capital Improvement Plan, Series 2010A 2.00 - 4.00 11/18/10 02/01/21 8,285,000$ 7,390,000$ GO Capital Improvement Plan, Series 2013A - Refunding 3.00 - 3.50 10/10/13 02/01/30 5,710,000 2,060,000 GO Refunding, Series 2016A 2.00 - 3.00 07/06/16 02/01/28 3,635,000 885,000 GO Refunding, Series 2017C 2.05 - 4.00 12/14/17 02/01/29 8,955,000 1,330,000 GO Equipment Certificate, Series 2019A 5.00 06/13/19 02/01/29 2,805,000 - GO Refunding, Series 2021B 5.00 12/16/21 02/01/30 2,515,000 - Total General Obligation Bonds 31,905,000 11,665,000 Permanent Improvement Revolving (PIR) Bonds: GO Permanent Improvement Revolving Series 2010B 2.00 - 3.00 11/18/10 02/01/22 2,305,000 1,800,000 GO Permanent Improvement Revolving Series 2011A 2.00 - 3.00 10/27/11 02/01/23 3,320,000 2,240,000 GO Permanent Improvement Revolving Series 2012A 3.00 - 4.00 11/15/12 02/01/29 2,675,000 915,000 GO Permanent Improvement Revolving Series 2013A 3.00 - 3.50 10/10/13 02/01/30 2,555,000 730,000 GO Permanent Improvement Revolving Series 2015A 2.00 - 4.00 07/09/15 02/01/32 6,545,000 1,090,000 GO Permanent Improvement Revolving Series 2015A - Parking 2.00 - 4.00 07/09/15 02/01/36 2,495,000 390,000 GO Permanent Improvement Revolving Series 2016A 2.00 - 3.00 07/06/16 02/01/33 3,940,000 435,000 GO Permanent Improvement Revolving Series 2017A 3.00 - 4.00 06/29/17 02/01/34 1,995,000 100,000 GO Permanent Improvement Revolving Series 2018A 3.00 - 3.125 06/27/18 02/01/35 2,210,000 - GO Permanent Improvement Revolving Series 2019A 3.00 - 5.00 06/13/19 02/01/36 2,195,000 - GO Permanent Improvement Revolving Series 2020A 2.00-4.00 06/25/20 02/01/37 390,000 - GO Permanent Improvement Revolving Series 2020B - Refunding 1.09 12/30/20 02/01/29 1,601,000 - GO Permanent Improvement Revolving Series 2021A 2.00 - 4.00 06/24/21 02/01/38 5,480,000 - GO Permanent Improvement Revolving Series 2021B - Refunding 5.00 12/16/21 02/01/30 1,280,000 - Total PIR Bonds 38,986,000 7,700,000 Tax Increment Financing Bonds" TIF, Series 2021A 2.00 - 4.00 06/24/21 02/04/43 7,545,000 - Public Project Revenue Bonds: Taxable Public Project Revenue, Series 2009A 2.10 - 4.55 11/24/09 02/01/30 2,595,000 1,330,000 HRA Public Project Revenue, Series 2014A 2.00 - 3.625 07/15/14 02/01/35 16,155,000 3,220,000 HRA Public Project Revenue, Series 2015A - Refunding 2.50 - 3.00 07/09/15 05/01/26 3,490,000 1,445,000 Total Public Project Revenue Bonds 22,240,000 5,995,000 Revenue Bonds: Recreational Facility Bonds, Series 2012C 2.00 - 3.00 11/15/12 02/01/33 2,100,000 60,000 Recreational Facility Bonds, Series 2013B 3.00 - 3.45 10/10/13 02/01/29 1,125,000 385,000 Recreational Facility Bonds, Series 2015B 2.00 - 3.25 07/09/15 02/01/31 2,140,000 490,000 Recreational Facility Bonds, Series 2017B 3.00 - 4.00 06/29/17 02/01/33 7,425,000 900,000 Recreational Facility Bonds, Series 2017D - Refunding 2.00 12/20/17 02/01/30 1,640,000 307,000 Recreational Facility Bonds, Series 2021C - Refunding 2.00 - 3.00 12/16/21 02/01/33 2,210,000 - Utility Revenue Bonds, Series 2011A 2.00 - 3.00 10/27/11 02/01/22 11,230,000 8,760,000 Utility Revenue Bonds, Series 2012A 3.00 - 4.00 11/15/12 02/01/23 6,100,000 4,030,000 Utility Revenue Bonds, Series 2014A 2.00 - 3.00 07/15/14 02/01/24 5,680,000 3,270,000 Utility Revenue Bonds, Series 2015A 2.00 - 4.00 07/09/15 02/01/25 5,235,000 2,490,000 Utility Revenue Bonds, Series 2016A 2.00 - 3.00 07/06/16 02/01/27 8,775,000 2,375,000 Utility Revenue Bonds, Series 2017A 3.00 - 4.00 06/29/17 02/01/28 6,595,000 1,120,000 Utility Revenue Bonds, Series 2018A 3.00 - 3.125 06/27/18 02/01/29 3,305,000 285,000 Utility Revenue Bonds, Series 2019A 5.00 06/13/19 02/01/30 5,815,000 - Utility Revenue Bonds, Series 2020A 2.00-4.00%06/25/20 02/01/31 4,830,000 - Utility Revenue Bonds, Series 2020B - Refunding 1.09%12/30/20 02/01/23 1,414,000 - Total Public Project Revenue Bonds 75,619,000 24,472,000 Total - Bonded indebtedness 168,750,000$ 49,832,000$ Prior Years CITY OF EDINA, MINNESOTA COMBINING SCHEDULE OF BONDED INDEBTEDNESS (CONTINUED) DECEMBER 31, 2021 (105) Principal Interest Interest Outstanding Payable Due Due Payable12/31/2020 Issued Payments 12/31/2021 In 2022 In 2022 to Maturity 895,000$ -$ 895,000$ -$ -$ -$ -$ 3,650,000 - 320,000 3,330,000 3,330,000 49,313 49,313 2,750,000 - 310,000 2,440,000 320,000 58,500 217,225 7,625,000 - 725,000 6,900,000 755,000 208,950 817,553 2,805,000 - 255,000 2,550,000 265,000 120,875 543,000 - 2,515,000 - 2,515,000 - 78,594 685,469 17,725,000 2,515,000 2,505,000 17,735,000 4,670,000 516,232 2,312,560 505,000 - 250,000 255,000 255,000 3,825 3,825 1,080,000 - 350,000 730,000 360,000 16,500 22,050 1,760,000 - 1,760,000 - - 44,850 197,025 1,825,000 - 160,000 1,665,000 1,665,000 24,650 24,650 5,455,000 - 380,000 5,075,000 385,000 165,575 985,988 2,105,000 - 100,000 2,005,000 105,000 68,150 571,850 3,505,000 - 230,000 3,275,000 235,000 86,075 573,650 1,895,000 - 105,000 1,790,000 110,000 57,500 388,700 2,210,000 - 115,000 2,095,000 120,000 65,594 495,747 2,195,000 - - 2,195,000 105,000 86,225 656,675 390,000 - - 390,000 - 10,500 82,050 1,601,000 - 96,000 1,505,000 195,000 15,876 66,299 - 5,480,000 - 5,480,000 - 199,768 1,702,593 - 1,280,000 - 1,280,000 - 40,000 313,500 24,526,000 6,760,000 3,546,000 27,740,000 3,535,000 885,088 6,084,602 - 7,545,000 - 7,545,000 - 245,092 2,463,767 1,265,000 - 1,265,000 - - - - 12,935,000 - 695,000 12,240,000 715,000 384,869 3,106,091 2,045,000 - 315,000 1,730,000 325,000 43,400 118,513 16,245,000 - 2,275,000 13,970,000 1,040,000 428,269 3,224,604 2,040,000 - 135,000 1,905,000 1,905,000 23,972 23,972 740,000 - 75,000 665,000 665,000 10,583 10,583 1,650,000 - 130,000 1,520,000 130,000 44,294 245,759 6,525,000 - 440,000 6,085,000 450,000 213,100 1,283,950 1,333,000 - 129,000 1,204,000 131,000 23,430 111,280 - 2,210,000 - 2,210,000 - 38,313 337,563 2,470,000 - 1,215,000 1,255,000 1,255,000 18,825 18,825 2,070,000 - 2,070,000 - - - - 2,410,000 - 580,000 1,830,000 595,000 43,000 80,425 2,745,000 - 515,000 2,230,000 525,000 72,800 161,950 6,400,000 - 840,000 5,560,000 865,000 132,288 420,131 5,475,000 - 595,000 4,880,000 620,000 167,500 621,250 3,020,000 - 290,000 2,730,000 300,000 87,750 389,325 5,815,000 - 465,000 5,350,000 485,000 255,375 1,284,375 4,830,000 - - 4,830,000 405,000 152,400 746,050 1,414,000 - 350,000 1,064,000 707,000 9,676 10,044 48,937,000 2,210,000 7,829,000 43,318,000 9,038,000 1,293,306 5,745,482 107,433,000$ 11,485,000$ 16,155,000$ 110,308,000$ 18,283,000$ 3,122,895$ 17,367,248$ 2021 CITY OF EDINA, MINNESOTA SCHEDULE OF BALANCE SHEET ACCOUNTS TAX INCREMENT FINANCING DISTRICTS DECEMBER 31, 2021 (106) Centennial Valley View Southdale 2 Pentagon Park Grandview 2 66th West 50th and France 2 44th and France West 76th Street TotalDistrict District District District District District District District District Tax IncrementNo. 1203 No. 1207 No. 1208 No. 1211 No. 1212 No. 1214 No. 1215 No. 1216 No. 1217 Financing DistrictsASSETSCash and Investments 2,695,898$ 341,215$ 17,434,547$ 1,201,008$ 7,172,613$ 25,740$ 253,948$ 16,205$ 10$ 29,141,184$ Accrued Interest 2,439 1,677 53,242 2,629 6,299 104 94 2 - 66,486 Loans Receivable - - 6,470,967 - - - - - - 6,470,967 Due from Other Districts 4,650,000 - 265,000 - - - - - - 4,915,000 Due from Other Governments - - 10,449 - - - - - - 10,449 Total Assets7,348,337$ 342,892$ 24,234,205$ 1,203,637$ 7,178,912$ 25,844$ 254,042$ 16,207$ 10$ 40,604,086$ LIABILITIESAccounts Payable -$ -$ 17,204$ 1,464$ 616,394$ 554$ 224,858$ 796$ 528$ 861,798$ Salaries Payable 840 - 527 1,049 1,049 - 525 525 - 4,515 Contracts Payable - - - - 52,201 - - - - 52,201 Due to Other Districts - - - - 500,000 265,000 4,150,000 - - 4,915,000 Unearned Revenue 13,000 - - - - - - - - 13,000 Total Liabilities 13,840 - 17,731 2,513 1,169,644 265,554 4,375,383 1,321 528 5,846,514 FUND BALANCERestricted 7,334,497 342,892 24,216,474 1,201,124 6,009,268 (239,710) (4,121,341) 14,886 (518) 34,757,572 Total Liabilities andFund Balance 7,348,337$ 342,892$ 24,234,205$ 1,203,637$ 7,178,912$ 25,844$ 254,042$ 16,207$ 10$ 40,604,086$ CITY OF EDINA, MINNESOTA SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES TAX INCREMENT FINANCING DISTRICTS YEAR ENDED DECEMBER 31, 2021 (107) Total TaxCentennial Valley View Southdale 2 Pentagon Park Grandview 2 66th West 50th and France44th and FranceWest 76th Street IncrementDistrict District District District District District France 2 DistrictDistrictDistrict FinancingNo. 1203 No. 1207 No. 1208 No. 1211 No. 1211 No. 1214 No. 1215No. 1216No. 1217 DistrictsREVENUESTax Increment Collections -$ -$ 6,681,171$ 529,365$ 534,481$ 15,813$ 496,140$ 38,786$ -$ 8,295,756$ Other Fees - - - - - - - - 517 517 Investment Income (6,177) (1,587) (68,320) (3,901) (2,898) (127) (403) (36) - (83,449) Other Revenues - - 2,900,000 - - - - - - 2,900,000 Total Revenues (6,177) (1,587) 9,512,851 525,464 531,583 15,686 495,737 38,750 517 11,112,824 EXPENDITURESCurrent:General Government 50,503 - 81,758 19,415 123,551 3,165 516,762 23,864 1,035 820,053 Capital Outlay:General Government - - - - 2,672,078 - - - - 2,672,078 Total Expenditures 50,503 - 81,758 19,415 2,795,629 3,165 516,762 23,864 1,035 3,492,131 REVENUES OVER (UNDER)EXPENDITURES(56,680) (1,587) 9,431,093 506,049 (2,264,046) 12,521 (21,025) 14,886 (518) 7,620,693 OTHER FINANCING SOURCES (USES)Interfund Loan Interest 59,000 - (59,000) - - - - - - - Bonds Issued - - - - 7,545,000 - - - - 7,545,000 Premium on Bonds Issued - - - - 748,128 - - - - 748,128 Total Other Financing Sources (Uses)59,000 - (59,000) - 8,293,128 - - - - 8,293,128 NET INCREASE (DECREASE) IN FUND BALANCE2,320 (1,587) 9,372,093 506,049 6,029,082 12,521 (21,025) 14,886 (518) 15,913,821 Fund Balance - January 1 7,332,177 344,479 14,844,381 695,075 (19,814) (252,231) (4,100,316) - - 18,843,751 FUND BALANCE - DECEMBER 317,334,497$ 342,892$ 24,216,474$ 1,201,124$ 6,009,268$ (239,710)$ (4,121,341)$ 14,886$ (518)$ 34,757,572$ STATISTICAL SECTION This part of the City’s annual comprehensive financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the City’s overall financial health. Contents Page Financial Trends 108 These schedules contain trend information to help the reader understand how the City’s financial performance and well-being have changed over time. Revenue Capacity 116 These schedules contain information to help the reader assess the City’s most significant local revenue source, the property tax. Debt Capacity 120 These schedules contain information to help the reader assess the affordability of the City’s current levels of outstanding debt and the City’s ability to issue additional debt in the future. Demographic and Economic Information 125 These schedules offer demographic and economic indicators to help the reader understand the environment within which the City’s financial activities take place. Operating Information 127 These schedules contain service and infrastructure data to help the reader understand how the information in the City’s financial report relates to the services the City provides and the activities it performs. Sources: Unless otherwise noted, the information in these schedules is derived from the annual comprehensive financial reports for the relevant year. (This page left blank intentionally.) CITY OF EDINA, MINNESOTA NET POSITION BY COMPONENT LAST TEN FISCAL YEARS (ACCRUAL BASIS OF ACCOUNTING) (108) 2012 2013a 2014 2015b GOVERNMENTAL ACTIVITIES Net Investment in Capital Assets 78,644,392$ 83,842,970$ 85,708,114$ 85,838,618$ Restricted 23,215,910 20,289,579 18,268,724 16,925,171 Unrestricted 29,587,700 33,242,317 31,316,605 21,957,830 Total Governmental Activities Net Position 131,448,002$ 137,374,866$ 135,293,443$ 124,721,619$ BUSINESS-TYPE ACTIVITIES Net Investment in Capital Assets 63,766,144$ 66,126,387$ 75,803,672$ 83,395,794$ Restricted 876,909 611,377 619,295 793,664 Unrestricted 14,390,609 16,867,459 21,176,026 16,405,405 Total Business-Type Activities Net Position 79,033,662$ 83,605,223$ 97,598,993$ 100,594,863$ PRIMARY GOVERNMENT Net Investment in Capital Assets 142,410,536$ 149,969,357$ 161,511,786$ 169,234,412$ Restricted 24,092,819 20,900,956 18,888,019 17,718,835 Unrestricted 43,978,309 50,109,776 52,492,631 38,363,235 Total Primary Government Net Position 210,481,664$ 220,980,089$ 232,892,436$ 225,316,482$ a The City implemented GASB 65 in fiscal year 2013. Prior year information has not been restated as a result of this change in accounting principle. b The City implemented GASB 68 in fiscal year 2015. Prior year information has not been restated as a result of this change in accounting principle. c The City implemented GASB 75 in fiscal year 2018. Prior year information has not been restated as a result of this change in accounting principle. Fiscal Year CITY OF EDINA, MINNESOTA NET POSITION BY COMPONENT (CONTINUED) LAST TEN FISCAL YEARS (ACCRUAL BASIS OF ACCOUNTING) (109) 2016 2017 2018c 2019 2020 2021 93,247,973$ 96,149,011$ 107,133,225$ 110,670,335$ 117,052,475$ 116,754,295$ 20,892,680 22,840,869 25,017,586 36,999,647 60,063,244 76,262,266 22,146,168 26,412,441 31,277,308 27,680,337 16,475,796 15,308,966 136,286,821$ 145,402,321$ 163,428,119$ 175,350,319$ 193,591,515$ 208,325,527$ 85,158,869$ 82,338,560$ 81,980,815$ 80,452,583$ 81,135,647$ 86,975,121$ 804,393 1,338,276 1,360,336 1,360,336 1,268,479 1,225,093 17,300,872 22,443,806 27,285,949 32,045,171 33,086,023 32,253,873 103,264,134$ 106,120,642$ 110,627,100$ 113,858,090$ 115,490,149$ 120,454,087$ 178,406,842$ 178,487,571$ 189,114,040$ 191,122,918$ 198,188,122$ 203,729,416$ 21,697,073 24,179,145 26,377,922 38,359,983 61,331,723 77,487,359 39,447,040 48,856,247 58,563,257 59,725,508 49,561,819 47,562,839 239,550,955$ 251,522,963$ 274,055,219$ 289,208,409$ 309,081,664$ 328,779,614$ Fiscal Year CITY OF EDINA, MINNESOTA CHANGES IN NET POSITION LAST TEN FISCAL YEARS (ACCRUAL BASIS OF ACCOUNTING) (110) 2012 2013a 2014b 2015c EXPENSES Governmental Activities:General Government 12,598,979$ 8,256,261$ 8,522,319$ 8,518,236$ Public Safety 16,598,423 17,117,693 18,145,498 19,507,770 Public Works 9,437,285 11,502,250 15,553,852 15,284,777 Parks 5,904,724 6,132,709 3,330,781 3,385,367 Interest on Long-Term Debt 2,222,392 2,024,749 1,989,863 2,180,678 Total Governmental Activities Expenses 46,761,803 45,033,662 47,542,313 48,876,828 Business-Type Activities: Water 12,610,875 13,748,186 14,207,197 14,963,304 Sewer - - - - Stormwater - - - - Recycling - - - - Liquor 11,740,744 12,261,413 12,393,218 11,818,602 Aquatic Center 866,944 822,932 827,485 872,960 Golf Course 3,293,192 3,199,815 3,342,544 3,409,343 Arena 2,182,200 2,272,510 2,375,173 2,642,097 Community Activity Centers 2,842,139 2,967,115 2,975,782 3,436,325 Total Business-Type Activities Expenses 33,536,094 35,271,971 36,121,399 37,142,631 Total Primary Government Expenses 80,297,897$ 80,305,633$ 83,663,712$ 86,019,459$ PROGRAM REVENUES Governmental Activities: Charges for Services: General Government 1,142,984$ 1,259,908$ 1,529,555$ 1,322,430$ Public Safety 6,549,929 7,410,755 8,102,352 8,683,465 Other Activities 913,864 846,999 960,261 1,158,207 Operating Grants and Contributions 1,685,026 2,283,007 1,578,538 3,122,178 Capital Grants and Contributions 9,137,011 6,372,735 8,244,695 10,044,077 Total Governmental Activities Program Revenues 19,428,814 18,173,404 20,415,401 24,330,357 Business-Type Activities: Charges for Services: Water 17,729,589 17,831,225 17,550,802 19,335,443 Sewer - - - - Stormwater - - - - Recycling - - - - Liquor 13,230,941 13,711,557 13,515,168 12,462,387 Aquatic Center 1,001,946 928,055 918,412 971,936 Golf Course 3,225,591 2,711,743 3,229,348 2,857,190 Arena 1,452,435 1,942,971 2,092,567 2,316,853 Community Activity Centers 2,399,090 2,625,633 2,583,257 3,119,789 Operating Grants and Contributions 1,042,195 516,242 428,416 595,141 Capital Grants and Contributions - - - - Total Business-Type Activities Program Revenues 40,081,787 40,267,426 40,317,970 41,658,739 Total Primary Government Program Revenues 59,510,601$ 58,440,830$ 60,733,371$ 65,989,096$ NET (EXPENSE) REVENUEGovernmental Activities (27,332,989)$ (26,860,258)$ (27,126,912)$ (24,546,471)$ Business-Type Activities 6,545,693 4,995,455 4,196,571 4,516,108 Total Primary Government Net Expense (20,787,296)$ (21,864,803)$ (22,930,341)$ (20,030,363)$ GENERAL REVENUES AND OTHER CHANGES IN NET POSITION Governmental Activities:Property Taxes 25,884,662$ 26,894,161$ 27,062,224$ 29,632,072$ Tax Increment Collections 3,536,935 3,981,938 5,052,705 1,792,896 Franchise Taxes 815,530 1,891,967 2,055,396 2,089,038 Lodging Taxes - - 11,301 22,716 Unrestricted Investment Earnings 341,986 (96,390) 440,051 195,620 Gain on Disposal of Capital Assets - 16,654 29,037 41,900 Insurance Recovery - 816,654 - - Transfers 696,935 133,907 (9,605,225) (2,230,966) Total Governmental Activities 31,276,048 33,638,891 25,045,489 31,543,276 Business-Type Activities: Unrestricted Investment Earnings 113,177 (77,848) 191,974 91,907 Gain (Loss) on Disposal of Capital Assets 2,644,854 17,587 - 39,427 Transfers (696,935) (133,907) 9,605,225 2,230,966 Total Business-Type Activities 2,061,096 (194,168) 9,797,199 2,362,300 Total Primary Government 33,337,144$ 33,444,723$ 34,842,688$ 33,905,576$ CHANGE IN NET POSITION Governmental Activities 3,943,059$ 6,778,633$ (2,081,423)$ 6,996,805$ Business-Type Activities 8,606,789 4,801,287 13,993,770 6,878,408 Total Primary Government 12,549,848$ 11,579,920$ 11,912,347$ 13,875,213$ a The City implemented GASB 65 in fiscal year 2013. Prior year information has not been restated as a result of this change in accounting principle. b The City completed a major departmental reorganization in 2014, moving parks maintenance activities from parks to public works. Prior year information has not been modified as a result of this change. c The City implemented GASB 68 in fiscal year 2015. Prior year information has not been restated as a result of this change in accounting principle. d The City completed a major departmental reorganization in 2018, moving parks maintenance activities from public works to parks. The City also implemented GASB 75 in fiscal year 2018. Prior year information has not been restated as a result of either change. e The City broke out the various functions within the utilities fund for the first time in 2020. Prior year information has not been restated. Fiscal Year CITY OF EDINA, MINNESOTA CHANGES IN NET POSITION (CONTINUED) LAST TEN FISCAL YEARS (ACCRUAL BASIS OF ACCOUNTING) (111) 2016 2017 2018d 2019 2020e 2021 9,587,567$ 9,164,272$ 10,964,266$ 11,252,538$ 11,698,533$ 14,844,785$ 20,243,209 21,815,101 20,971,184 27,496,563 27,058,719 24,288,956 19,444,472 17,750,505 14,170,463 10,979,180 16,117,060 11,497,445 3,822,716 4,222,431 7,235,405 7,554,919 6,798,866 7,365,756 2,133,474 1,996,354 1,726,901 1,999,318 1,561,462 1,282,299 55,231,438 54,948,663 55,068,219 59,282,518 63,234,640 59,279,241 16,780,474 17,361,659 18,045,516 19,303,212 9,592,913 9,094,274 - - - - 7,641,660 7,690,708 - - - - 3,424,049 3,146,475 - - - - 1,392,003 1,956,546 12,130,254 12,007,885 11,995,159 11,970,986 11,500,971 13,435,305 915,560 1,015,328 996,671 979,376 386,026 1,052,346 3,041,169 3,469,121 2,464,563 4,009,097 4,257,484 4,822,338 2,842,660 2,961,787 2,996,844 2,982,674 2,876,897 2,882,067 3,853,091 4,095,309 4,096,452 4,286,773 3,412,784 3,231,622 39,563,208 40,911,089 40,595,205 43,532,118 44,484,787 47,311,681 94,794,646$ 95,859,752$ 95,663,424$ 102,814,636$ 107,719,427$ 106,590,922$ 1,453,009$ 1,142,120$ 2,395,535$ 1,204,947$ 4,172,729$ 2,207,889$ 8,996,046 9,627,122 9,978,816 9,747,031 10,152,772 9,970,031 1,289,770 1,288,452 1,202,732 1,265,918 1,007,903 1,351,458 2,751,495 2,194,336 4,028,247 4,271,243 7,626,236 2,721,724 15,252,861 9,775,184 6,695,172 6,625,040 7,318,687 4,030,108 29,743,181 24,027,214 24,300,502 23,114,179 30,278,327 20,281,210 19,505,905 21,361,972 22,697,468 21,875,655 9,236,665 10,302,974 - - - - 10,622,411 10,732,193 - - - - 4,773,432 5,207,295 - - - - 1,148,338 1,447,226 12,937,092 12,991,764 13,401,754 13,094,407 12,117,414 14,280,055 956,068 962,857 997,727 996,778 - 1,071,692 2,809,702 1,254,412 1,396,173 3,395,815 3,968,529 5,290,109 2,314,892 2,508,192 2,629,945 2,516,629 1,638,011 2,347,678 3,190,775 3,348,628 3,303,278 3,240,000 1,499,060 2,106,088 445,464 179,086 545,682 44,953 47,780 404,419 - 904,201 - 692,281 396,103 - 42,159,898 43,511,112 44,972,027 45,856,518 45,447,743 53,189,729 71,903,079$ 67,538,326$ 69,272,529$ 68,970,697$ 75,726,070$ 73,470,939$ (25,488,257)$ (30,921,449)$ (30,767,717)$ (36,168,339)$ (32,956,313)$ (38,998,031)$ 2,596,690 2,600,023 4,376,822 2,324,400 962,956 5,878,048 (22,891,567)$ (28,321,426)$ (26,390,895)$ (33,843,939)$ (31,993,357)$ (33,119,983)$ 31,396,421$ 33,665,029$ 35,616,432$ 37,133,269$ 39,545,279$ 41,826,967$ 2,779,097 3,422,898 4,997,706 5,447,108 6,452,819 8,295,756 2,346,423 2,408,884 2,559,443 2,881,726 3,071,392 3,090,322 22,624 21,006 25,298 24,119 8,313 17,214 344,277 514,073 901,405 2,037,306 1,835,870 (372,080) 65,044 - 5,032,815 408,659 - 101,404 - - - - - - 99,573 5,059 305,428 158,352 283,836 772,460 37,053,459 40,036,949 49,438,527 48,090,539 51,197,509 53,732,043 136,208 254,990 481,754 1,064,942 945,580 (141,650) 35,946 6,554 - - 7,359 - (99,573) (5,059) (305,428) (158,352) (283,836) (772,460) 72,581 256,485 176,326 906,590 669,103 (914,110) 37,126,040$ 40,293,434$ 49,614,853$ 48,997,129$ 51,866,612$ 52,817,933$ 11,565,202$ 9,115,500$ 18,670,810$ 11,922,200$ 18,241,196$ 14,734,012$ 2,669,271 2,856,508 4,553,148 3,230,990 1,632,059 4,963,938 14,234,473$ 11,972,008$ 23,223,958$ 15,153,190$ 19,873,255$ 19,697,950$ Fiscal Year CITY OF EDINA, MINNESOTA FUND BALANCES OF GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (MODIFIED ACCRUAL BASIS OF ACCOUNTING) (112) 2012 2013 2014a 2015 GENERAL FUND Nonspendable 413,200$ 13,322$ 240,291$ 529,513$ Restricted 880,395 185,395 757,673 417,673 Assigned 1,643,077 1,559,461 1,566,329 1,547,398 Unassigned 11,902,462 12,573,457 11,429,444 11,825,799 Total General Fund 14,839,134$ 14,331,635$ 13,993,737$ 14,320,383$ ALL OTHER GOVERNMENTAL FUNDS Nonspendable -$ -$ -$ -$ Restricted, Reported in: Special Revenue Funds 13,185,962 13,040,516 9,719,309 9,405,757 Debt Service Funds 9,704,408 6,246,769 12,678,291 7,134,575 Construction Funds 2,759,463 3,318,947 6,598,832 551,132 Assigned, Reported in: Capital Projects Funds 7,159,890 8,354,268 7,046,610 13,127,881 Unassigned, Reported in: Special Revenue Funds - - - - Total all Other Governmental Funds 32,809,723$ 30,960,500$ 36,043,042$ 30,219,345$ a The substantial increase in other governmental funds restricted fund balance is due to unspent bond proceeds related to the current refunding that took place on February 1 of the following year. Fiscal Year CITY OF EDINA, MINNESOTA FUND BALANCES OF GOVERNMENTAL FUNDS (CONTINUED) LAST TEN FISCAL YEARS (MODIFIED ACCRUAL BASIS OF ACCOUNTING) (113) 2016a 2017a 2018 2019 2020 2021 27,643$ 13,124$ -$ 28,403$ 28,403$ 85,083$ 927,673 961,133 961,133 58,086 58,086 58,086 1,612,240 1,739,079 2,105,741 2,093,760 6,679,877 5,627,113 14,624,755 15,656,518 16,812,851 16,411,412 20,476,747 18,003,259 17,192,311$ 18,369,854$ 19,879,725$ 18,591,661$ 27,243,113$ 23,773,541$ -$ -$ -$ -$ -$ 71,784$ 12,673,995 14,453,556 14,755,259 18,653,029 26,862,127 42,539,152 11,187,468 17,000,806 7,871,858 8,341,996 9,727,306 11,178,492 209,510 78,702 30,072 - - 13,109,438 15,710,621 19,726,343 21,927,249 19,634,745 25,778,679 (190,845) - - - (50,610) - 36,989,566$ 47,243,685$ 42,383,532$ 48,922,274$ 56,173,568$ 79,568,107$ Fiscal Year CITY OF EDINA, MINNESOTA CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (MODIFIED ACCRUAL BASIS OF ACCOUNTING) (114) 2012 2013 2014 2015 REVENUES General Property Taxes 25,838,422$ 26,891,756$ 26,988,493$ 29,535,270$ Tax Increment Collections 3,536,935 3,981,938 5,052,705 1,792,896 Franchise Taxes 815,530 1,891,967 2,055,396 2,089,038 Lodging Fees - - 11,301 22,716 Special Assessments 4,975,641 4,884,510 4,606,010 4,132,128 License and Permits 3,155,351 4,150,512 4,583,183 4,907,364 Intergovernmental 2,032,966 2,509,166 3,961,509 6,093,966 Charges for Services 3,708,482 3,667,612 4,270,720 4,414,991 Fines and Forfeitures 1,195,054 1,109,710 1,163,907 1,195,271 Investment Income 341,986 (96,390) 440,051 195,314 Rental of Property 506,276 518,862 546,874 416,522 Parkland Dedication 702,100 - 757,278 800,000 Other Revenues 240,841 278,607 78,775 361,425 Total Revenues 47,049,584 49,788,250 54,516,202 55,956,901 EXPENDITURES General Government 6,624,573 7,351,556 7,625,826 6,337,944 Public Safety 14,985,068 15,859,622 16,647,821 17,537,528 Public Works 6,277,506 7,018,614 10,201,335 10,578,472 Parks 3,852,260 3,915,568 1,341,884 1,416,858 Capital Outlay 13,622,443 10,690,207 19,883,144 19,912,565 Debt Service: Principal 6,620,000 14,531,375 4,096,375 13,276,375 Interest and Other Charges 2,292,394 2,270,259 1,923,647 2,375,613 Total Expenditures 54,274,244 61,637,201 61,720,032 71,435,355 REVENUES OVER (UNDER) EXPENDITURES (7,224,660) (11,848,951) (7,203,830) (15,478,454) OTHER FINANCING SOURCES (USES) Utility Contributions from Other Funds - - - - Transfers In 4,495,940 3,472,964 1,404,975 3,232,770 Transfers Out (3,799,005) (3,339,057) (11,010,200) (6,472,066) Sale of Capital Assets 94,975 61,642 70,603 78,509 Insurance Recovery - 816,654 - 167,167 Loans Issued - - - - Bonds Issued 2,748,720 2,555,000 16,155,000 9,040,000 Refunding Bonds Issued 1,990,000 5,710,000 5,180,000 3,490,000 Premium on Bonds Issued 436,148 275,360 327,987 492,838 Discount on Bonds Issued - (60,334) (179,891) (47,815) Payment to Refunding Escrow - - - - Total Other Financing Sources (Uses)5,966,778 9,492,229 11,948,474 9,981,403 NET CHANGE IN FUND BALANCES (1,257,882)$ (2,356,722)$ 4,744,644$ (5,497,051)$ Debt Service as a Percentage of Noncapital Expenditures 19.4%32.2%13.7%28.9% Fiscal Year CITY OF EDINA, MINNESOTA CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS (CONTINUED) LAST TEN FISCAL YEARS (MODIFIED ACCRUAL BASIS OF ACCOUNTING) (115) 2016 2017 2018 2019 2020 2021 31,354,023$ 33,696,550$ 35,613,883$ 37,093,074$ 39,509,239$ 41,796,463$ 2,779,097 3,422,898 4,997,706 5,447,108 6,452,819 8,295,756 2,346,423 2,408,884 2,559,443 2,881,726 3,071,392 3,090,322 22,624 21,006 25,298 24,119 8,313 17,214 5,276,194 5,330,766 4,747,205 4,741,557 4,629,551 4,130,703 5,268,519 5,403,222 5,912,757 5,183,754 6,454,749 6,077,446 5,775,114 3,687,262 5,124,573 3,687,620 11,218,739 3,321,222 4,689,389 4,917,173 4,898,548 5,431,941 4,968,288 5,980,258 1,016,817 1,135,986 1,122,426 1,097,122 485,472 460,914 344,344 512,448 889,550 1,989,881 1,835,870 (372,080) 514,955 459,099 632,011 487,797 479,148 491,579 1,250,000 33,460 - - - - 2,599,830 761,281 990,277 600,905 3,069,269 704,558 63,237,329 61,790,035 67,513,677 68,666,604 82,182,849 73,994,355 6,815,725 7,065,729 8,630,290 8,973,194 8,577,452 12,236,821 18,554,507 19,233,386 20,323,076 21,701,254 25,612,596 25,694,255 10,474,008 11,524,896 8,682,928 8,998,768 8,843,557 10,718,078 1,529,384 1,695,397 5,202,962 5,453,778 4,878,372 5,917,562 16,787,575 11,053,212 19,752,836 18,558,023 13,056,078 12,203,492 5,246,375 5,496,375 5,523,369 5,778,476 5,865,000 8,326,000 2,360,827 2,359,551 2,099,594 1,923,526 2,007,730 1,892,346 61,768,401 58,428,546 70,215,055 71,387,019 68,840,785 76,988,554 1,468,928 3,361,489 (2,701,378) (2,720,415) 13,342,064 (2,994,199) - - 37,978 115,494 - - 3,504,542 5,130,405 5,464,771 6,738,864 6,260,386 8,408,356 (3,404,969) (5,057,263) (5,139,771) (6,604,736) (5,976,550) (7,639,656) 65,044 84,388 6,201,630 1,172,391 251,670 3,000,821 - - - - - - - - - 750,000 - - 3,940,000 1,995,000 2,210,000 5,000,000 1,991,000 16,820,000 3,635,000 8,955,000 - - - - 450,409 798,791 74,787 799,080 34,176 2,329,645 (16,805) (51,148) (18,299) - - - - (3,785,000) (9,480,000) - - - 8,173,221 8,070,173 (648,904) 7,971,093 2,560,682 22,919,166 9,642,149$ 11,431,662$ (3,350,282)$ 5,250,678$ 15,902,746$ 19,924,967$ 16.2%15.9%14.6%13.8%13.2%15.6% Fiscal Year CITY OF EDINA, MINNESOTA ASSESSED VALUE, ACTUAL VALUE, AND TAX CAPACITY OF TAXABLE PROPERTY LAST TEN FISCAL YEARS (116) City Tax City Used Adjusted Capacity Referendum Estimated Limited Taxable Total for Rate Net Rate Rate 9,179,305$ 9,179,305$ 9,025,565$ 109,013$ 94,811$ 97,879$ 26.247%0.00667%2.799 8,955,431 8,955,431 8,798,601 106,530 93,504 96,120 27.216%0.00690%2.921 9,065,550 9,065,550 8,911,695 108,069 93,607 96,156 27.920%0.00695%2.961 9,837,972 9,837,972 9,701,677 117,907 106,662 109,203 26.605%0.00631%2.953 10,420,339 10,420,339 10,296,342 125,664 112,491 115,128 27.137%0.00550%2.998 10,902,621 10,902,621 10,785,198 132,180 116,854 119,756 28.271%0.00000%3.105 11,655,318 11,655,318 11,547,520 141,934 125,242 128,453 27.849%0.00000%3.069 12,370,205 12,370,205 12,271,673 151,279 132,609 136,083 27.499%0.00000%3.025 12,879,164 12,879,164 12,785,798 157,910 137,611 141,311 28.082%0.00000%3.081 13,344,357 13,344,357 13,255,470 164,716 141,273 145,322 28.942%0.00000%3.152 Source: Hennepin County Taxpayer Services. a Property in the City is assessed annually. Assessed value is equal to market value, although taxable value may be different, as shown. The City receives reports from Hennepin County showing total market value, but not separated by property classification. b This value is estimated by the City Finance Department by taking City taxes as a rate of estimated market value (rate per $1,000 of assessed value). The property tax system in Minnesota uses a tax capacity system whereby each parcel is assigned a tax capacity based on taxable value and class. In Minnesota, local taxes are usually expressed as a percentage of this calculated tax capacity (see column titled "City Tax Capacity Rate"). Therefore, this rate is only theoretical and shown for comparative purposes only. Estimated Rate b Market Value (In Thousands) a Tax Capacity (In Thousands) 2015 Fiscal Direct 2013 2014 2012 2019 2018 2021 Year 2016 2017 2020 CITY OF EDINA, MINNESOTA DIRECT AND OVERLAPPING TAX CAPACITY RATES LAST TEN FISCAL YEARS (117) Total Basic Debt HRA Total Tax Direct and Rate Rate Rate Capacity RMV Hennepin Tax Cap.RMV Other Overlap 23.131%3.116%0.000%26.247%0.007%48.231%27.565%0.215%10.911%112.954% 23.762%3.454%0.000%27.216%0.007%49.461%27.762%0.217%11.483%115.922% 24.458%3.462%0.000%27.920%0.007%49.959%27.556%0.223%12.051%117.486% 22.477%4.128%0.000%26.605%0.006%46.398%27.344%0.215%11.100%111.447% 23.223%3.914%0.000%27.137%0.006%45.356%34.898%0.201%11.254%118.645% 24.348%3.841%0.082%28.271%0.000%44.087%34.798%0.188%11.057%118.213% 24.187%3.564%0.098%27.849%0.000%42.808%30.972%0.222%10.667%112.296% 23.992%3.388%0.119%27.499%0.000%41.861%30.589%0.210%9.714%109.663% 24.690%3.255%0.137%28.082%0.000%41.084%30.589%0.219%9.330%109.085% 26.264%2.515%0.163%28.942%0.000%38.210%31.474%0.211%8.833%107.459% Source: Hennepin County Taxpayer Services. RMV: Referendum Market Value Geographic boundaries for overlapping district are not identical to the City's boundaries. City boundaries contain six different school districts but only ISD #273 is shown here. Other districts include Mosquito Control, Met Council, Metro Transit, Hennepin Parks, Park Museum and Regional Railroad Authority. In addition, there are two watershed districts in the City, Nine Mile Creek and Minnehaha Creek, and rates for Nine Mile are included in Other. Total rates do not include RMV rates. 2017 2021 2020 2019 City Rates Overlapping Rates ISD #273 EdinaFiscal Year 2018 2013 2014 2012 2015 2016 CITY OF EDINA, MINNESOTA PRINCIPAL PROPERTY TAXPAYERS CURRENT YEAR AND NINE YEARS AGO (118) Percentage Percentage of Total of Total Tax Capacity Rank Capacity Tax Capacity Rank Capacity Galleria Shopping Center 2,746,321$ 1 1.62%1,271,050$ 2 1.17% Southdale Shopping Center 2,737,316 2 1.62%2,373,048 1 2.18% Southdale Medical Building 1,602,487 3 0.95%620,285 5 0.57% Southdale Office Center 893,250 4 0.53%686,102 3 0.63% Onyx Apartments 860,663 5 0.51%DNA DNA DNA Loden Apartments 837,969 6 0.50%DNA DNA DNA Centennial Lakes Phase V 797,170 7 0.47%553,770 6 0.51% Centennial Lakes Phase IV 785,224 8 0.46%543,040 7 0.50% One Southdale Place Apartments 749,796 9 0.44%DNA DNA DNA Lifetime Fitness/Lifetime Works 749,558 10 0.44%DNA DNA DNA Centennial Lakes Retail DNA DNA DNA 670,848 4 0.62% National Car DNA DNA DNA 484,530 8 0.44% Target DNA DNA DNA 439,250 9 0.40% Hellmuth & Johnson DNA DNA DNA 358,912 10 0.33% Totals 12,759,754$ 7.54%8,000,835$ 7.35% Source: City of Edina Assessing Office DNA: Data is not available 20122021 Taxpayer CITY OF EDINA, MINNESOTA PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS (119) Total Collections in Tax Percentage Subsequent Percentage Levy Amount of Levy Years Amount of Levy 26,248,226$ 25,983,685$ 98.99%(132,633)$ 25,851,052$ 98.49% 26,747,384 26,545,984 99.25%(201,500) 26,344,484 98.49% 27,454,872 27,326,092 99.53%(44,905) 27,281,187 99.37% 29,700,010 29,497,362 99.32%(80,678) 29,416,684 99.05% 31,799,123 31,383,415 98.69%45,132 31,428,547 98.83% 33,822,369 33,645,085 99.48%(56,896) 33,588,189 99.31% 35,784,777 35,551,096 99.35%(33,548) 35,517,548 99.25% 37,431,021 37,104,274 99.13%62,960 37,167,234 99.30% 39,659,543 39,392,703 99.33%(96,138) 39,296,565 99.08% 42,018,271 41,704,258 99.25%(74,324) 41,629,934 99.08% Source: Hennepin County Taxpayer Services. Collected within the Fiscal Year of the Levy 2012 2021 Total Collections to Date Taxes Payable 2013 2014 2020 2019 2018 2016 2015 2017 CITY OF EDINA, MINNESOTA RATIOS OF OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS (DOLLARS IN THOUSANDS, EXCEPT PER CAPITA) (120) General Public Tax Permanent EEEP Rec.Utility Total Percentage Obligation Project Increment Improvement Revenue Notes Facility Revenue Primary of Personal Per Debt Revenue Bonds Revolving Bonds Payable Bonds Bonds Government Income a Capita a 28,318$ 11,787$ 550$ 22,067$ 74$ -$ 5,952$ 33,160$ 101,908$ 3.21%2,087$ 32,035 5,627 - 18,889 62 - 6,540 29,635 92,788 3.14%1,885 30,806 21,445 - 21,554 51 - 6,249 39,633 119,738 3.84%2,382 27,225 21,300 - 24,776 40 - 8,055 32,575 113,971 3.53%2,245 28,560 20,395 - 26,874 28 - 7,677 36,691 120,225 3.68%2,321 31,748 19,485 - 26,772 17 - 16,946 38,661 133,629 3.75%2,545 20,115 18,434 - 26,415 13 - 14,696 36,768 116,441 3.35%2,216 21,211 17,495 - 26,323 - 750 12,423 39,230 117,432 3.16%2,205 18,917 16,363 - 25,559 - 750 11,631 33,680 106,900 2.61%2,007 16,383 13,869 6,797 25,979 - 750 12,937 27,725 104,440 2.70%1,952 Details regarding the City's outstanding debt may be found in the notes to the financial statements. All figures are presented net of related premiums, discounts, and adjustments if applicable. a Population and personal income data from U.S. Census Bureau/Metropolitan Council found on page 125. 2021 2020 2019 Business-Type Activities Year Fiscal 2018 2012 2015 2016 2013 2014 2017 Governmental Activities CITY OF EDINA, MINNESOTA RATIOS OF GENERAL BONDED DEBT OUTSTANDING LAST TEN FISCAL YEARS (DOLLARS IN THOUSANDS, EXCEPT PER CAPITA) (121) General Obligation Less: Amounts Available Percentage of Debt a in Debt Service Fund b Total Property Value c Per Capita d 27,680$ 9,704$ 17,976$ 0.20%368$ 31,390 6,247 25,143 0.28%511 30,200 12,678 17,522 0.19%349 26,710 7,135 19,575 0.20%386 27,935 11,187 16,748 0.16%323 30,630 17,001 13,629 0.13%260 19,155 7,872 11,283 0.10%215 19,905 8,342 11,563 0.09%217 18,917 9,727 9,190 0.07%173 16,383 11,178 5,205 0.04%97 Details regarding the City's outstanding debt may be found in the notes to the financial statements. a Presented net of related premiums, discounts, and adjustments. b This is the amount restricted for debt service principal payments. c See statistical schedule titled "Assessed Value, Actual Value and Tax Capacity of Taxable Property" for estimated property value data. d Population from U.S. Census Bureau/Metropolitan Council found on page 125. 2021 2020 2019 Year Fiscal 2013 2018 2016 2015 2014 2012 2017 CITY OF EDINA, MINNESOTA DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT DECEMBER 31, 2021 (122) Net General Percentage Obligation Bonded Applicable City Share Debt Outstanding in City a of Debt Overlapping Debt: Hennepin County 1,037,033,516$ 7.08%73,421,973$ Hennepin Suburban Park District 45,542,541 10.07%4,586,134 Hennepin Regional Rail Authority 89,332,530 7.08%6,324,743 School Districts: ISD No. 273 (Edina)187,450,040 98.84%185,275,620 ISD No. 270 (Hopkins)155,731,784 8.00%12,458,543 ISD No. 271 (Bloomington)143,141,624 0.02%28,628 ISD No. 272 (Eden Prairie)93,478,941 1.05%981,529 ISD No. 280 (Richfield)129,039,843 32.53%41,976,661 ISD No. 283 (St. Louis Park)124,472,934 0.02%24,895 Metro Council 73,049,600 3.45%2,520,211 Total Overlapping Debt 2,078,273,353 327,598,937 City of Edina 75,746,046 100.00%75,746,046 Total Overlapping and Direct Debt 2,154,019,399$ 403,344,983$ Ratio of Debt Per Capita (53,494 Population)7,540$ Ratio of Debt to Estimated Market Valuation of $13,344,357,600 3.02% Source: Hennepin County Taxpayer Services a The percentage of overlapping debt applicable is estimated using tax capacity. Applicable percentages were estimated by determining the portion of another governmental unit's tax capacity that is within the City's boundaries and dividing it by each unit's total tax capacity. Direct Debt: Debt Ratios: CITY OF EDINA, MINNESOTA LEGAL DEBT MARGIN INFORMATION LAST TEN FISCAL YEARS (DOLLARS IN THOUSANDS) (123) 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Debt Limit 270,767$ 263,958$ 267,351$ 291,050$ 308,890$ 323,556$ 346,426$ 368,150$ 383,574$ 400,331$ Total Net Debt Applicable to Limit 39,545 37,030 51,760 48,000 48,325 50,115 37,595 37,265 33,970 31,705 Legal Debt Margin 231,222$ 226,928$ 215,591$ 243,050$ 260,565$ 273,441$ 308,831$ 330,885$ 349,604$ 368,626$ Total Net Debt Applicable to the Limit as a Percentage of Debt Limit 14.60%14.03%19.36%16.49%15.64%15.49%10.85%10.12%8.86%7.92% Market Value (After Fiscal Disparities)13,344,357,600$ Debt Limit (3% of Market Value)400,330,728 Debt Applicable to Limit: General Obligation Bonds 17,735,000 Public Project Revenue Bonds 13,970,000 Total Debt Applicable to Limit 31,705,000 Legal Debt Margin 368,625,728$ Legal Debt Margin Calculation for Fiscal Year 2021 Fiscal Year CITY OF EDINA, MINNESOTA PLEDGED REVENUE COVERAGE LAST TEN FISCAL YEARS (124) Less: Operating Net Available Revenue Expenses Revenue Principal Interest Total Coverage Public Project Revenue Bonds (Annual Appropriation Lease Revenue) 2012 1,362,444$ -$ 1,362,444$ 1,295,000$ 548,691$ 1,843,691$ 0.74 2013 1,346,294 - 1,346,294 6,225,000 589,734 6,814,734 0.20 2014 1,356,844 - 1,356,844 235,000 223,754 458,754 2.96 2015 2,521,840 - 2,521,840 3,760,000 729,879 4,489,879 0.56 2016 2,499,521 - 2,499,521 900,000 654,473 1,554,473 1.61 2017 2,496,500 - 2,496,500 905,000 633,527 1,538,527 1.62 2018 2,507,700 - 2,507,700 1,045,000 607,148 1,652,148 1.52 2019 2,510,900 - 2,510,900 1,080,000 574,566 1,654,566 1.52 2020 2,506,300 - 2,506,300 1,115,000 540,690 1,655,690 1.51 2021 1,554,400 - 1,554,400 1,145,000 521,504 1,666,504 0.93 Tax Increment Bonds 2012 3,536,935 - 3,536,935 1,930,000 48,445 1,978,445 1.79 2013 3,981,939 - 3,981,939 550,000 9,350 559,350 7.12 2014 5,052,705 - 5,052,705 - - - - 2015 1,792,896 - 1,792,896 - - - - 2016 2,779,097 - 2,779,097 - - - - 2017 3,422,898 - 3,422,898 - - - - 2018 4,997,706 - 4,997,706 - - - - 2019 5,447,108 - 5,447,108 - - - - 2020 6,452,819 - 6,452,819 - - - - 2021 8,295,756 - 8,295,756 - - - - Permanent Improvement Revolving Bonds (Special Assessment) 2012 2,520,862 - 2,520,862 1,375,000 557,514 1,932,514 1.30 2013 2,837,227 - 2,837,227 5,745,000 567,551 6,312,551 0.45 2014 2,870,102 - 2,870,102 1,555,000 548,927 2,103,927 1.36 2015 3,732,374 - 3,732,374 6,015,000 503,029 6,518,029 0.57 2016 4,727,881 - 4,727,881 1,925,000 705,628 2,630,628 1.80 2017 4,746,414 - 4,746,414 2,105,000 745,783 2,850,783 1.66 2018 4,121,203 - 4,121,203 2,480,000 746,023 3,226,023 1.28 2019 4,097,625 - 4,097,625 2,630,000 745,697 3,375,697 1.21 2020 4,075,208 - 4,075,208 2,570,000 771,215 3,341,215 1.22 2021 2,338,866 - 2,338,866 1,961,000 699,572 2,660,572 0.88 Utility Bond 2012 17,723,103 11,811,468 5,911,635 2,360,000 811,990 3,171,990 1.86 2013 17,830,425 12,893,159 4,937,266 3,400,000 933,970 4,333,970 1.14 2014 17,548,883 13,443,940 4,104,943 3,670,000 884,075 4,554,075 0.90 2015 19,334,023 14,387,132 4,946,891 12,300,000 882,427 13,182,427 0.38 2016 19,472,645 16,222,211 3,250,434 4,925,000 814,238 5,739,238 0.57 2017 21,360,262 16,718,288 4,641,974 5,040,000 930,123 5,970,123 0.78 2018 22,757,745 17,411,983 5,345,762 4,980,000 1,049,101 6,029,101 0.89 2019 21,846,239 18,457,754 3,388,485 5,685,000 999,754 6,684,754 0.51 2020 25,731,887 21,401,340 4,330,547 4,580,000 1,169,779 5,749,779 0.75 2021 27,663,593 21,984,700 5,678,893 6,920,000 1,143,996 8,063,996 0.70 Recreational Facility Bonds 2012 5,679,972 6,240,222 (560,250) 520,000 105,000 625,000 (0.90) 2013 5,582,769 6,118,195 (535,426) 550,000 138,127 688,127 (0.78) 2014 6,239,445 6,358,030 (118,585) 290,000 176,197 466,197 (0.25) 2015 6,137,111 6,258,138 (121,027) 350,000 176,808 526,808 (0.23) 2016 6,080,529 6,593,312 (512,783) 375,000 231,285 606,285 (0.85) 2017 4,724,288 6,247,649 (1,523,361) 500,000 217,958 717,958 (2.12) 2018 5,019,374 6,069,584 (1,050,210) 2,197,000 494,192 2,691,192 (0.39) 2019 6,908,708 7,516,553 (607,845) 849,000 430,733 1,279,733 (0.47) 2020 5,585,853 7,213,408 (1,627,555) 876,000 404,703 1,280,703 (1.27) 2021 8,801,478 8,759,248 42,230 909,000 376,723 1,285,723 0.03 Debt Service RequirementsFiscal Year CITY OF EDINA, MINNESOTA DEMOGRAPHIC AND ECONOMIC STATISTICS LAST TEN FISCAL YEARS (125) Estimated Personal Per Capita High School Income Personal Graduation Unemployment Population (In thousands)Income Rate Rate 48,829 3,171,346$ 64,948$ 97.4%4.56% 49,216 2,955,913 60,060 97.7%3.98% 50,261 3,117,991 62,036 97.8%3.10% 50,766 3,231,154 63,648 97.9%2.82% 51,804 3,264,895 63,024 97.7%3.08% 52,497 3,567,906 67,964 97.9%2.83% 52,535 3,480,339 66,248 98.0%2.26% 53,268 3,711,714 69,680 98.2%2.63% 53,268 4,093,965 76,856 98.2%4.70% 53,494 3,867,402 72,296 98.4%2.70% Sources: Population data from U.S. Census Bureau/Metropolitan Council. 2020 is the most recent. Personal income and per capita income estimates based on MN Department of Employment and Economic Development Quarterly Census of Employment and Wages. 2020 is the most recent. High school graduation rate data from U.S. Census Bureau for the City of Edina. Unemployment rate data from State of Minnesota Department of Employment and Economic Development. 2021 Fiscal Year 2014 2013 2012 2020 2019 2018 2015 2016 2017 CITY OF EDINA, MINNESOTA PRINCIPAL EMPLOYERS CURRENT YEAR AND NINE YEARS AGO (126) Percentage Percentage of Total City of Total City Employees Rank Employment Employees Rank Employment Edina Realty 2,304 1 DNA DNA DNA DNA Coldwell Banker Realty 1,870 2 DNA DNA DNA DNA Fairview Southdale Hospital 1,624 3 6.54%1,000 1 4.39% Edina Public Schools ISD #273 1,414 4 5.69%600 5 2.64% BI Worldwide 1,000 5 4.02%1,000 3 4.39% City of Edina 795 6 3.20%DNA DNA DNA Children's Minnesota Pediatric Health 700 7 2.82%DNA DNA DNA Dow Water & Process Solutions 600 8 2.41%DNA DNA DNA Lund Food Holdings, Inc 500 9 2.01%DNA DNA DNA Western National Insurance Company 420 10 1.69%DNA DNA DNA Macy's (Marshall Field's or Dayton's)DNA DNA DNA 1,000 2 4.39% Univeral Hospital Services Inc. DNA DNA DNA 1,000 4 4.39% Promenade Salon Concepts DNA DNA DNA 500 6 2.20% Regis Salons Division DNA DNA DNA 500 7 2.20% Regis Franchise Division DNA DNA DNA 500 8 2.20% Master Cuts Division DNA DNA DNA 500 9 2.20% Smart Style Family Hair Care DNA DNA DNA 500 10 2.20% Totals 7,053 28.38%7,100 31.20% Sources: 2021 data from the City, Axle Reference Solutions, written and telephone survey (April 2021) done by Ehlers, and the Minnesota Department of Employment and Economic Development. 2012 data from previous ACFR. DNA: Data is not available 20122021 Employer CITY OF EDINA, MINNESOTA FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION LAST TEN FISCAL YEARS (127) 2012 b 2013 b 2014 b 2015 2016 b 2017 b 2018 2019 2020 2021 Administration General Fund 6.85 5.85 4.85 4.85 5.00 5.00 5.00 5.00 7.00 7.00 Communications General Fund 4.65 5.15 6.15 6.15 6.00 6.00 6.00 6.00 6.80 6.80 Internal Services - - - - - - - - 0.20 0.20 Information Technology Services Internal Services 5.00 5.00 5.00 5.00 5.00 5.00 6.00 6.00 7.00 7.00 Community Development General Fund 10.85 10.85 12.00 12.00 12.00 12.00 12.00 12.00 12.00 12.00 HRA Fund - - 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 Engineering General Fund 10.50 12.00 10.00 11.00 11.00 11.00 12.00 12.00 17.30 17.30 PACS Fund - - 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 Utilities Fund - - 1.00 1.00 1.00 1.00 1.00 1.00 1.35 1.35 CAS Fund - - - - 1.00 1.00 1.00 1.00 1.00 1.00 Construction Fund 1.00 1.00 1.00 1.00 1.10 1.10 1.10 1.10 1.00 1.00 Internal Services - - - - - - - - 4.35 5.35 Finance General Fund 5.25 5.25 6.00 6.00 5.00 5.00 6.00 6.00 6.00 6.00 Utilities Fund 2.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 2.00 Liquor Fund 0.75 0.75 - - - - - - - - Fire Protection General Fund 39.75 42.75 42.85 43.85 45.90 45.90 45.80 49.80 63.35 63.35 Utilities Fund 0.25 0.25 0.25 0.25 - - - - 1.65 1.65 Human Resources General Fund 1.00 4.00 4.00 4.00 5.00 5.00 5.00 5.00 4.00 5.00 Internal Services - - - - - - - - 1.00 1.00 Parks & Recreation General Fund 23.20 24.40 23.65 23.65 25.05 25.05 25.30 25.30 24.65 24.65 Aquatic Center 0.55 0.55 0.55 0.55 0.60 0.60 0.70 0.70 0.70 0.70 Golf Course 12.00 12.00 12.00 12.00 8.05 8.05 9.00 9.00 11.00 11.18 Arena 5.00 5.00 5.00 5.00 4.85 4.85 6.25 6.25 5.95 6.03 Sports Dome - - - - 0.15 0.15 1.00 1.00 1.05 1.08 Art Center 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.08 Edinborough Park 7.00 5.80 5.80 5.80 5.80 5.80 5.65 5.65 5.65 5.75 Centennial Lakes 5.00 5.00 5.00 5.00 5.00 5.00 5.05 5.05 5.00 5.03 Liquor Fund 9.00 9.00 9.00 9.00 9.00 9.00 9.00 9.00 8.50 9.50 Enterprise Funds - - - - - - - - 0.50 - Police Protection General Fund 71.65 70.65 72.50 70.50 72.55 72.55 76.55 76.55 77.00 78.00 Public Works General Fund 31.80 30.00 26.70 26.70 25.40 25.40 23.30 23.30 19.15 19.15 Utilities Fund 13.95 13.75 15.20 15.20 16.85 16.85 18.65 18.65 19.05 20.05 Internal Services 8.50 8.50 11.00 11.00 10.25 10.25 10.20 10.20 6.60 6.60 Enterprise Funds - - - - - - - - 0.20 0.20 Other - - - - - - - - - - Total 277.50 280.50 284.50 284.50 286.55 286.55 296.55 300.55 324.00 330.00 Source: City of Edina 2022-2023 Budget a Full-time employee counts do not include Council members, part-time, contract or seasonal employees. In a typical year the City will employ an additional 700-800 people in these categories. b The City completed departmental reorganizations that are reflected on this chart between years 2012-2014, 2016-2017, and 2020. In some cases, data for years before the reorganization has been modified from what was originally reported to improve comparisons. Function Budgeted Full-Time Employees for Fiscal Year a CITY OF EDINA, MINNESOTA OPERATING INDICATORS BY FUNCTION LAST TEN FISCAL YEARS (128) 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 General Government Total City Employees 989 1,040 1,093 1,077 1,155 1,067 1,136 1,174 953 1,021 Votes Cast a 31,841 3,480 24,049 9,370 31,986 11,440 30,774 10,990 36,088 14,881 Public Works Asphalt Placed (Tons)9,000 9,273 8,383 8,888 9,298 11,176 14,419 9,847 10,593 10,962 Concrete (cu. yds.)667 560 396 670 897 708 868 963 816 435 Public Safety Fire Calls 858 893 926 1,251 1,276 1,220 1,321 1,600 1,265 1,419 Medical Calls 3,946 3,803 3,982 3,818 4,063 4,508 4,572 4,727 4,288 5,337 Police Calls for Service d 46,549 45,624 49,053 50,735 61,325 71,738 62,981 60,975 47,833 48,757 Internal Services Vehicle Fixes 2,546 3,493 3,277 2,923 2,721 2,478 2,336 1,910 1,780 1,555 Utilities Daily Consumption b 7,613 6,652 6,489 6,308 6,047 5,950 6,101 5,394 5,785 6,705 Aquatic Center Attendance 139,909 91,340 92,200 128,523 108,609 89,318 88,342 83,499 - 88,217 Golf Course Total Rounds Played c 96,496 79,529 85,231 66,483 61,256 23,241 20,679 60,561 74,180 76,383 Source: Various City departments N/AData not available a The City elections department runs general elections in even-numbered years and school district elections in odd-numbered years. Number of votes cast tend to vary between even and odd-numbered years and based on presidential election cycles. b Daily average of water pumped from city wells, measured in thousands of gallons. c 27-hole golf course was closed and reconstructed into an 18-hole championship course from 2017-2018 d Changed from Crimes reported to provide full data of police service calls Function Fiscal Year CITY OF EDINA, MINNESOTA CAPITAL ASSET STATISTICS BY FUNCTION LAST TEN FISCAL YEARS (129) 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Public Works Miles of Streets 224 224 224 224 224 224 224 224 224 224 City Parking Ramps 4 4 4 4 4 4 4 4 4 4 Public Safety Fire Stations 2 2 2 2 2 2 2 2 2 2 Parks and Recreation City Parks 40 40 40 40 40 40 40 40 40 40 Acreage of Parks 1,553 1,553 1,553 1,553 1,553 1,553 1,553 1,553 1,553 1,553 Park Buildings 27 27 27 27 27 27 27 27 27 27 Utilities Wells 18 18 18 18 18 18 18 18 18 18 Watermain Miles 199 199 199 199 199 199 199 199 199 199 Sanitary Sewer Miles 186 186 186 186 186 186 186 186 186 186 Sewer Connections 13,979 13,979 13,979 13,979 13,979 13,979 13,979 13,979 13,979 13,979 Arena Ice Sheets 3 3 3 4 4 4 4 4 4 4 Source: Various City departments Function Fiscal Year