6.4 SR 06-16-2025The Elk River Vision
A welcoming community with revolutionary and spirited resourcefulness, exceptional service, and community
engagement that encourages and inspires prosperity
Request for Action
To
City Council
Item Number
6.4
Meeting Date
June 16, 2025
Prepared By
Lori Stich, Finance Manager
Item Description
Annual Comprehensive Financial Report for Year
ended December 31, 2024
Reviewed by
Lori Stich
Joe Stremcha
Cal Portner
Tina Allard
Action Requested
Accept, by motion, the Annual Comprehensive Financial Report for the City of Elk River for the year ended
December 31, 2024.
Background/Discussion
The city is required to have an annual independent audit of its financial statements in which the audit firm
issues an opinion on the city’s financial statements.
BerganKDV conducted the city’s audit for the year 2024 and will present a summary of the 2024 financial
report and audit results.
Financial Impact
N/A
Mission/Policy/Goal
Responsible for every dollar - good stewards.
Attachments
1. ACFR - City of Elk River - New Final
2. CL - City of Elk River - Final
3. GAS-LC - City of Elk River - Final
4. 2024 Elk River Audit Presentation
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CITY OF ELK RIVER
ELK RIVER, MINNESOTA
ANNUAL COMPREHENSIVE
FINANCIAL REPORT
FOR THE YEAR ENDED
DECEMBER 31, 2024
PREPARED BY:
THE FINANCE DEPARTMENT
Member of Governmental Finance Officers
Association of the United States and Canada
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City of Elk River, Minnesota
Table of Contents
Page
Introductory Section
Letter of Transmittal 3
Elected Officials and Administration 7
Organizational Chart 9
GFOA Certificate of Achievement for Excellence in Financial Reporting 11
Financial Section
Independent Auditor's Report 15
Management's Discussion and Analysis 19
Basic Financial Statements
Government-Wide Financial Statements
Statement of Net Position 36
Statement of Activities 38
Fund Financial Statements
Governmental Funds
Balance Sheet 40
Reconciliation of the Balance Sheet to the Statement of Net Position 41
Statement of Revenues, Expenditures, and Changes in Fund Balances 42
Reconciliation of the Statement of Revenues, Expenditures, and
Changes in Fund Balances to the Statement of Activities 43
Statement of Revenues, Expenditures, and Changes in Fund Balances
– Budget and Actual – General Fund 45
Proprietary Funds
Statement of Net Position 46
Statement of Revenues, Expenses, and Changes in Net Position 50
Statement of Cash Flows 52
Notes to Basic Financial Statements 57
Required Supplementary Information
Schedule of Changes in Total OPEB Liability and Related Ratios
– Municipal Retirees Health Plan 104
Schedule of City's Proportionate Share of Net Pension Liability
– General Employees Retirement Fund 106
Schedule of City's Proportionate Share of Net Pension Liability
– Public Employees Police and Fire Retirement Fund 107
Schedule of City Contributions – General Employees Retirement Fund 108
Schedule of City Contributions – Public Employees Police and Fire Retirement
Fund 109
Schedule of Changes in Net Pension Liability and Related Ratios
– Elk River Fire Relief Association 110
Schedule of City Contributions – Elk River Fire Relief Association 110
Notes to Required Supplementary Information 113
Combining and Individual Fund Financial Statements and Schedules
Nonmajor Governmental Funds 125
Combining Balance Sheet 126
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances 127
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City of Elk River, Minnesota
Table of Contents
Page
Combining and Individual Fund Financial Statements and Schedules (Continued)
Nonmajor Special Revenue Funds
Combining Balance Sheet 128
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances 130
Budgeted Special Revenue Funds
Schedule of Revenues, Expenditures, and Changes in Fund Balances
– Budget and Actual
Library 132
Multipurpose Facility 133
Economic Development Authority 135
Nonmajor Capital Projects Funds
Combining Balance Sheet 136
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances 140
Nonmajor Debt Service Funds
Combining Balance Sheet 144
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances 146
Component Unit Financial Statements
Housing and Redevelopment Authority
Balance Sheet 149
Statement of Revenues, Expenses, and Change in Fund Balance 150
Statistical Section (Unaudited) Table Page
Financial Trends
Net Position by Component 1 154
Changes in Net Position 2 156
Fund Balances of Governmental Funds 3 160
Changes in Fund Balances of Governmental Funds 4 162
Revenue Capacity
Electric Sales 5 164
Principal Electric Customers 6 165
Tax Capacity, Market Value, and Estimated Value of Taxable Property 7 166
Property Tax Rates – Direct and Overlapping Governments 8 169
Debt Capacity
Principal Property Taxpayers 9 170
Property Tax Levies and Collections 10 171
Ratios of Outstanding Debt by Type 11 172
Ratios of General Bonded Debt Outstanding 12 173
Direct and Overlapping Governmental Activities Debt 13 175
Legal Debt Margin Information 14 176
Debt Capacity (Continued)
Pledged-Revenue Coverage 15 178
Demographic and Economic Information
Demographic and Economic Statistics 16 179
Operating Information
Principal Employers 17 180
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City of Elk River, Minnesota
Table of Contents
Statistical Section (Unaudited) (Continued) Table Page
Operating Information (Continued)
Full-Time Equivalent Employees by Function 18 181
Operating Indicators by Function 19 182
Capital Asset Statistics by Function 20 183
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1
INTRODUCTORY SECTION
CITY OF ELK RIVER
ELK RIVER, MINNESOTA
FOR THE YEAR ENDED
DECEMBER 31, 2024
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J
June 16, 2025
Honorable Mayor, Members of the City Council,
and Citizens of Elk River:
The Annual Comprehensive Financial Report for the City of Elk River for the fiscal year ended
December 31, 2024, is hereby submitted. Minnesota state statutes and the city’s ordinance require
an annual audit of the city’s accounts by the Office of the State Auditor or an independent certified
public accountant. The firm of BerganKDV was selected to perform the city’s audit and their
unmodified opinion has been included in this report. The independent auditors’ report is included
in the financial section of this report.
The responsibility for the completeness and accuracy of this data, as well as the fairness of this
presentation including all enclosures, rests with the city. To the best of my knowledge and belief,
the enclosed data are accurate in all material respects and are recorded in a manner designed to
present fairly the financial position and the results of operations of the various funds of the city.
To provide a reasonable basis for making these representations, management has established a
comprehensive internal control framework that is designed to both protect the city’s assets from
loss, theft, or misuse, and to compile sufficient reliable information for the preparation of these
financial statements in accordance with generally accepted accounting principles (GAAP). Because
the cost of internal control should not exceed anticipated benefits, the objective is to provide
reasonable but not absolute assurance that the financial statements are free of any material
misstatements.
GAAP requires management to provide a narrative introduction, overview, and analysis to
accompany the basic financial statements in the form of Management’s Discussion and Analysis
(MD&A). This letter of transmittal is designed to complement the MD&A and should be read in
conjunction with it. The city’s MD&A can be found immediately following the independent auditor’s
report.
Profile of the City
Elk River was originally incorporated in 1880 and consolidated with Elk River Township in 1978 to
form a city of roughly 44 square miles. Elk River is the Sherburne County Seat and is located
approximately halfway between the metropolitan areas of Minneapolis/St. Paul and St. Cloud along
the Mississippi River. The city has been growing and will not reach full development in the near
future. The current population is approximately 27,520. Urban services are available to about one-
third of the city’s land area.
Elk River operates as a Statutory Plan A form of government consisting of a four-member city council
and an at-large mayor who is also a voting member. Council members are elected by ward to a
four-year term with two council seats up for election each even year. The mayor is also elected to
a four-year term. The mayor and council are responsible for adopting the city’s budget and tax
levy, passing resolutions and ordinances, all hiring and firing decisions, policy making, development
and growth planning, and overall direction of the city.
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The city provides a full range of services and amenities including police and fire protection, building
safety inspections, planning and zoning, economic development, environmental services,
recreation programming, street and park maintenance, and snow removal. The city also manages
municipal water, sanitary sewer, garbage/recycling, and electric services. Elk River also owns and
operates two municipal off-sale liquor stores, the city library, community event center and over 40
active and passive parks.
The annual budget serves as the foundation for the city’s financial planning and control. The city
administrator must prepare estimates for an annual budget and submit them to the city council for
approval. The council is required to adopt a final budget by late December for the subsequent year.
The budget is prepared by fund, function (e.g. public works), and department (e.g. streets).
Department directors are allowed to make administrative budget amendments (excluding personal
service and capital outlay) throughout the year if the total department budget does not change and
the amendment is approved by the city administrator and finance manager. Budget amendments
to the total budgeted expenditures require city council approval.
Budget-to-actual comparisons are provided in this report for each individual governmental fund for
which an appropriated annual budget has been adopted. For the General Fund, this comparison is
presented as part of the basic financial statements for the Governmental Funds. For other
Governmental Funds with appropriated annual budgets, this comparison is presented in the
Governmental Fund subsection of this report.
Local Economy
The local economy has remained steady as indicated by building permits with a construction value
of $72,199,970 issued in 2024. New construction accounts for $23,192,169 and additions/remodels
make up the $49,007,801 balance. In 2024, residential growth was stable as the city issued 98 new
housing permits, compared to the 93 permits issued in 2023. Single family homes accounted for all
of the new permits. The 2024 average home value increased to $358,100 from $340,300 in 2023.
The recent market trend shows stable property values on existing properties and new
construction/remodeling. There remains continued interest in both affordable and market rate
multi-family housing projects, as well as protecting property values of the existing housing stock.
Many of Elk River’s employers reported stable employment levels during 2024 and are expected to
remain stable. This is largely due to the diverse industry sectors of manufacturing, retail trade,
government, and health services that drive the local economy within the region. The
commercial/industrial sector has experienced modest growth and the economic outlook in this
region looks promising with recent development projects that should continue to spur tax base
growth and employment.
Long-term Financial Planning
The city has developed a financial management plan that provides a long-range forecast projecting
future expenditures, revenues, and development. The council diligently maintains a level tax rate
and the plan provides the guidance needed to develop and sustain city services while keeping the
property taxes stable. The council reviews and updates the financial management plan annually as
part of the annual budget and Capital Improvement Plan (CIP) process. The CIP is a comprehensive
five-year planning tool that forecasts the city’s capital needs based on the city’s long-range plans,
goals, and policies.
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Relevant Financial Policies
The council has adopted a comprehensive set of Financial Management Policies that provide the
basic framework for the overall fiscal management of the city. The policies provide guidance for
revenues, property taxes, investments, purchasing, financial reporting, reserves, fund balance,
capital investment, and debt. Financial stability requires reserve funds for unanticipated
expenditures or unforeseen emergencies, and adequate working capital for current operating needs
to avoid short-term borrowing. City policy requires the unassigned funds in the General Fund be
maintained at not less than 40-45% of budgeted operating expenditures; however, this may
fluctuate with each year’s budget objectives.
Major Initiatives
The Highway 169 reconstruction project was completed in 2024. Elk River received $157 million
state transportation funding to redesign and reconstruct three miles of Highway 169 which runs
north-south through the city. The Highway 169 corridor is an important arterial route serving
commuters, recreational uses, and connecting economic centers in the state. The project, which
began in 2022, converted Highway 169 to a new freeway by removing five stop lights from the
Mississippi River north through Elk River.
In 2024, the city completed several park and recreation projects. The Trott Brook Barn was
remodeled to improve the aging facility and make it more appealing to rental users. The work done
included electrical, flooring and roof repairs, painting, and replacing windows and siding.
Playgrounds were replaced at Lion John Weicht Park and Trott Brook Park. Deteriorating seating at
Rivers Edge Commons Park was also replaced with a more durable product.
The Furniture and Things Community Event Center transitioned from a traditional concession stand
to a restaurant and bar with enhanced food and beverage selections in 2024. There was significant
community support for the change. Community photos, memorabilia and furniture for the space
were donated by residents and local businesses. The grand opening was held in November.
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 Elk River for its
Annual Comprehensive Financial Report (ACFR) for the fiscal year ending December 31, 2023. This
was the 35th consecutive year the city has received this prestigious award. To be awarded the
certificate, a government must publish an easily readable and efficiently organized ACFR. This
report must satisfy both GAAP and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year. We believe that our current ACFR
will meet the program’s requirements, and we are submitting it to the GFOA to determine its
eligibility for another certificate.
The preparation of this report is made possible by the efficient and dedicated services of the entire
staff of the finance division, all city departments, and through the helpful guidance and assistance
from our auditing firm, BerganKDV. Credit must also be given to the mayor and city council for
their diligence and resolve in maintaining high standards in the financial management of the city.
Respectfully submitted,
Lori Stich
Finance Manager
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City of Elk River, Minnesota
Elected Officials and Administration
December 31, 2024
Elected Officials Position Term Expires
John Dietz Mayor December 31, 2026
Cory Grupa Council Member December 31, 2026
Matthew Westgaard Council Member December 31, 2024
Mike Beyer Council Member December 31, 2024
Jennifer Wagner Council Member December 31, 2026
Administration Position
Calvin Portner City Administrator
Joe Stremcha Assistant City Administrator/Business Services Director
David Kuhnly Chief of Police
Mark Dickinson Fire Chief
Zachary Carlton Community Development Director
Justin Femrite Public Works Director/Chief Engineer
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City of Elk River
Organizational Chart
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City of Elk River, Minnesota
GFOA Certificate of Achievement for Excellence in Financial Reporting
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FINANCIAL SECTION
CITY OF ELK RIVER
ELK RIVER, MINNESOTA
FOR THE YEAR ENDED
DECEMBER 31, 2024
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Independent Auditor's Report
Honorable Mayor and Members
of the City Council
City of Elk River
Elk River, Minnesota
Report on the Audit of the Financial Statements
Opinions
We have audited the financial statements of the governmental activities, the business-type
activities, the discretely presented component unit, each major fund, and the aggregate remaining
fund information of City of Elk River, as of and for the year ended December 31, 2024, and the
related notes to the financial statements , which collectively comprise City of Elk River's basic
financial statements as listed in the Table of Contents.
In our opinion, based on our report and the report of other auditors , the accompanying financial
statements present fairly, in all material respects, the respective financial position of the
governmental activities , the business-type activities, the discretely presented component unit , each
major fund, and the aggregate remaining fund information of City of Elk River , as of
December 31 , 2024, and the respective changes in financial position and , where applicable, cash
flows thereof , and the budgetary comparison for the General Fund 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 Auditor 's Responsibilities for the Audit of the
Financial Statements section of our report. We are required to be independent of City 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
The City of Elk River's 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 City of Elk
River'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.
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Auditor's 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 auditor's 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 City of Elk River'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 City of Elk River'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.
Our responsibility is to express opinions on these financial statements based on our audit. We did not
audit the financial statements of the Electric and Water proprietary funds , which represent 68% of
the assets and deferred outflows , 61% of the net position , and 77% of the revenues of the proprietary
funds and business-type activities. Those financial statements were audited by other auditors whose
report thereon has been furnished to us, and our opinion, insofar as it relates to the amounts
included for the proprietary funds and business -type activities, is based solely on the report of the
other auditors.
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Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
Management's Discussion and Analysis, which follows this report letter, and Required Supplementary
Information as listed in the Table of Contents 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 (GASB), who
considers it to be an essential part of financial reporting for placing the basic financial statements in
an appropriate operational, economic, or historical context. We have applied certain limited
procedures to the Required Supplementary Information in accordance with auditing standards
generally accepted in the United States of America , which consisted of inquiries of management
about the methods of preparing the information and comparing the information for consistency with
management's responses to our inquiries, the basic financial statements , and other knowledge we
obtained during our audit of the basic financial statements. We do not express an opinion or provide
any assurance on the information because the limited procedures do not provide us with sufficient
evidence to express an opinion or provide any assurance.
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise City of Elk River's basic financial statements. The accompanying supplementary
information identified in the Table of Contents is 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 auditing standards generally accepted in the United States of America. In our
opinion, the accompanying supplementary information is 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 Comprehensive Financial
Report. The other information comprises the introductory and statistical sections but does not
include the basic financial statements and our auditor 's 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.
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Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated
June 6, 2025, on our consideration of the City of Elk River'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 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 Elk River's internal control over financial reporting and
compliance.
Minneapolis, Minnesota
June 6, 2025
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City of Elk River
Management’s Discussion and Analysis
As management of the City of Elk River, Minnesota (the City), we offer readers of the City’s financial
statements this narrative overview and analysis of the financial activities of the City for the fiscal
year ended December 31, 2024. We encourage readers to consider the information presented here in
conjunction with additional information that we have furnished in our letter of transmittal, which
can be found starting on page 3 of 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 $265,192,979 (net position).
Of this amount, $58,391,988 (unrestricted net position) may be used to meet the City’s
ongoing obligations to citizens and creditors.
• The net position of business-type activities increased by $3,612,576 and net position of the
governmental activities increased by $7,839,532. This resulted in a total net position increase
of $11,452,108 for the City.
• As of the close of the current fiscal year, the City’s governmental funds reported combined
ending fund balances of $47,749,298 an increase of $4,964,053 from the prior year.
• At the end of the current fiscal year, unassigned fund balance for the General Fund was
$9,446,297. The City’s policy is to maintain a minimum of 40-45% of the following year’s
budget in unassigned fund balance. At year end, the unassigned fund balance is 43% of the
2025 budgeted General Fund expenditures.
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 basic financial statements.
This report also contains other supplemental information in addition to the basic financial
statements themselves.
The financial statements also include notes that explain some of the information in the financial
statements and provide more detailed data. The statements are followed by a section of “combining
and individual fund financial statements and schedules” that further explains and supports the
information in the financial statements. Figure 1 shows how the required parts of this annual report
are arranged and relate to one another. In addition to these required elements, we have included a
section with “combining and individual fund financial statements and schedules” that provide details
about nonmajor governmental funds, which are added together and presented in a single column for
governmental activities in the basic governmental financial statements.
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City of Elk River
Management’s Discussion and Analysis
OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED)
The following chart shows how the various parts of this annual report are arranged and related to
one another:
Figure 1
Required Components of the City’s Annual Financial Report
Figure 2 summarizes the major features of the City’s financial statements, including the portion of
the City government they cover and the types of information they contain. The remainder of this
overview section of management’s discussion and analysis explains the structure and contents of
each of the statements.
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City of Elk River
Management’s Discussion and Analysis
OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED)
Figure 2
Major Features of the Government-wide and Fund Financial Statements
Fund Financial Statements
Government-Wide
Statements
Governmental Funds
Proprietary Funds
Scope Entire City government
and the City’s
component units
The activities of the City that
are not proprietary or
fiduciary, such as police, fire
and parks
Activities the City operates
similar to private businesses,
such as the water and sewer
system
Required
financial
statements
• Statement of Net
Position
• Statement of
Activities
• Balance Sheet
• Statement of Revenues,
Expenditures and Changes
in Fund Balances
• Statement of Net Position
• Statement of Revenues,
Expenses and Changes in
Net Position
• Statement of Cash Flows
Accounting basis
and
measurement
focus
Accrual accounting and
economic resources
focus
Modified accrual accounting
and current financial
resources focus
Accrual accounting and
economic resources focus
Type of
asset/liability
information
All assets and liabilities,
both financial and
capital, and short-term
and long-term
Only assets expected to be
used up and liabilities that
come due during the year or
soon thereafter; no capital
assets included
All assets and liabilities,
both financial and capital,
and short-term and long-
term
Type of
deferred
outflows/inflow
s of resources
information
All deferred
outflows/inflows of
resources, regardless of
when cash is received or
paid
Only deferred outflows of
resources expected to be
used up and deferred inflows
of resources that come due
during the year or soon
thereafter; no capital assets
included
All deferred
outflows/inflows of
resources, regardless of
when cash is received or
paid
Type of
inflow/outflow
information
All revenues and
expenses during year,
regardless of when cash
is received or paid
Revenues for which cash is
received during or soon after
the end of the year;
expenditures when goods or
services have been received
and payment is due
during the year or soon
thereafter
All revenues and expenses
during the year, regardless
of when cash is received or
paid
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City of Elk River
Management’s Discussion and Analysis
OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED)
Government-Wide Financial Statements. The government-wide financial statements are designed
to provide readers with a broad overview of the City’s finances, in a manner similar to a private-
sector business.
The Statement of Net Position presents information on all of the City’s assets and deferred outflows of
resources and liabilities and deferred inflows of resources, with the difference between the four
reported as net position. Over time, increases or decreases in net position may serve as a useful
indicator of whether the financial position of the City is improving or deteriorating.
The Statement of Activities presents information showing how the City’s net position changed during
the most recent fiscal year. All changes in net position are reported as soon as the underlying event
giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and
expenses are reported in this statement for some items that will only result in cash flows in future
fiscal periods (e.g., uncollected taxes and earned but unused vacation leave).
Both of the government-wide financial statements distinguish functions of the City that are
principally supported by taxes and intergovernmental revenue (governmental activities) from other
functions that are intended to recover all or a significant portion of their costs through user fees and
charges (business-type activities). The governmental activities of the City include general
government, public safety, public works, culture and recreation, community development, and
interest on long-term debt. The business-type activities of the City include municipal liquor, sewer,
garbage, storm water, electric, and water utilities.
The government-wide financial statements include not only the City itself (known as the primary
government), but also a legally separate Housing and Redevelopment Authority (HRA) which are
backed by the full faith and credit of the City of Elk River. Financial information for this component
unit is discretely presented for the primary government.
The government-wide financial statements start on page 36 of this report.
Fund Financial Statements. A fund is a grouping of related accounts that is used to maintain control
over resources that have been segregated for specific activities or objectives. The City, like other
State and local governments, uses fund accounting to ensure and demonstrate compliance with
finance-related legal requirements. All of the funds of the City can be divided into three categories:
governmental funds, proprietary funds, and fiduciary funds.
Governmental Funds. Governmental funds are used to account for essentially the same functions
reported as governmental activities in the government-wide financial statements. However, unlike
the government-wide financial statements, governmental fund financial statements focus on near-
term inflows and outflows of spendable resources, as well as on balances of spendable resources
available at the end of the fiscal year. Such information may be useful in evaluating a government’s
near-term financing requirements.
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23
City of Elk River
Management’s Discussion and Analysis
OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED)
Because the focus of governmental funds is narrower than that of the government-wide financial
statements, it is useful to compare the information presented for governmental funds with similar
information presented for governmental activities in the government-wide financial statements. By
doing so, readers may better understand the long-term impact by the government’s near-term
financing decisions. Both the governmental fund balance sheet and the governmental fund statement
of revenues, expenditures and changes in fund balances (deficits) provide a reconciliation to
facilitate this comparison between governmental funds and governmental activities.
The City maintains several individual governmental funds, five of which are Debt Service 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 and
Pavement Management, which are considered to be major funds. Data from the other governmental
funds are combined into a single, aggregated presentation. Individual fund data for each of these
nonmajor governmental funds is provided in the form of combining statements or schedules
elsewhere in this report.
The City adopts an annual appropriated budget for its General, Library, Multipurpose Facility, and
Economic Development Funds. A budgetary comparison statement or schedule has been provided for
these funds to demonstrate compliance with this budget.
The basic governmental fund financial statements start on page 40 of this report.
Proprietary Funds. The City maintains one type of proprietary funds. Enterprise funds are used to
report the same functions presented as business-type activities in the government-wide financial
statements. The City uses enterprise funds to account for its liquor, sewer, garbage, storm water,
electric, and water operations.
Proprietary funds provide the same type of information as the government-wide financial
statements, only in more detail. The proprietary funds financial statements provide separate
information for each of the enterprise funds which are considered to be major funds of the City.
The basic proprietary funds financial statements start on page 46 of this report.
Notes to the Basic Financial Statements. The notes provide additional information that is essential
to a full understanding of the data provided in the government-wide and fund financial statements.
The notes to basic financial statements start on page 57 of this report.
Required Supplementary Information. In addition to the basic financial statements and
accompanying notes, this report also presents certain Required Supplementary Information
concerning the City of Elk River’s share of net pension liabilities for defined benefit plans, schedule
of contributions, and progress in funding its obligation to provide pension and other postemployment
benefits to its employees. Required Supplementary Information can be found starting on page 104 of
this report.
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24
City of Elk River
Management’s Discussion and Analysis
OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED)
Other Information. The combining statements referred to earlier in connection with nonmajor
governmental funds are presented following the notes to the financial statements. Combining and
individual fund financial statements and schedules start on page 126 of this report.
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 exceeded liabilities and deferred
inflows by $265,192,979 at the close of the most recent fiscal year.
By far, the largest portion of the City’s net position (70.9%) reflects its investment in capital assets
(e.g., land, buildings, machinery, and equipment) less any related debt used to acquire those assets
that are still outstanding. The City uses these capital assets to provide services to citizens;
consequently, these assets are not available for future spending. Although the City’s investment in
its capital assets is reported net of related debt, it should be noted that the resources needed to
repay this debt must be provided from other sources, since the capital assets themselves cannot be
used to liquidate these liabilities.
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25
City of Elk River
Management’s Discussion and Analysis
GOVERNMENT-WIDE FINANCIAL ANALYSIS (CONTINUED)
City of Elk River’s Summary of Net Position
2024 2023
Increase
(Decrease)2024 2023
Increase
(Decrease)
Assets
Current and other assets 58,021,796$ 52,338,622$ 5,683,174$ 52,464,685$ 53,501,629$ (1,036,944)$
Capital assets 141,524,199 144,232,117 (2,707,918) 137,776,785 134,870,351 2,906,434
Total assets 199,545,995 196,570,739 2,975,256 190,241,470 188,371,980 1,869,490
Deferred Outflows of Resources
Deferred OPEB resources 97,807 80,414 17,393 12,227 10,052 2,175
Deferred pension resources 8,084,371 10,565,477 (2,481,106) 513,078 1,081,073 (567,995)
Total deferred outflows of resources 8,182,178 10,645,891 (2,463,713) 525,305 1,091,125 (565,820)
Liabilities
Other liabilities 7,629,973 9,322,393 (1,692,420) 9,895,187 9,326,634 568,553
Noncurrent liabilities 61,846,324 67,468,390 (5,622,066) 37,247,595 40,379,748 (3,132,153)
Total liabilities 69,476,297 76,790,783 (7,314,486) 47,142,782 49,706,382 (2,563,600)
Deferred Inflows of Resources
Deferred OPEB resources 113,330 152,862 (39,532) 14,166 19,107 (4,941)
Deferred pension resources 10,126,024 10,043,971 82,053 1,877,254 1,290,188 587,066
Deferred lease resources 94,870 150,894 (56,024) 4,457,246 4,784,677 (327,431)
Total deferred inflows of resources 10,334,224 10,347,727 (13,503) 6,348,666 6,093,972 254,694
Net Position
Net investment in capital assets 86,319,232 86,306,541 12,691 101,791,407 97,325,836 4,465,571
Restricted 16,911,336 15,689,829 1,221,507 1,779,016 1,779,016 -
Unrestricted 24,687,084 18,081,750 6,605,334 33,704,904 34,557,899 (852,995)
Total net position 127,917,652$ 120,078,120$ 7,839,532$ 137,275,327$ 133,662,751$ 3,612,576$
Governmental Activities Business-Type Activities
An additional portion of the City’s net position (7.0%) represents resources that are subject to
external restrictions on how they may be used. The remaining balance of unrestricted net position
(22.0%) may be used to meet the City’s ongoing obligations to citizens and creditors.
At the end of the current fiscal year, the City is able to report positive balances in all three
categories of net position, both for the City as a whole, as well as for its separate governmental and
business-type activities. The same situation held true for the prior fiscal year.
Governmental Activities. Governmental activities increased the City’s net position by $7,839,532,
thereby accounting for 68.5% of the growth in the net position of the City. Key elements of this
change are as follows.
Page 215 of 637
26
City of Elk River
Management’s Discussion and Analysis
GOVERNMENT-WIDE FINANCIAL ANALYSIS (CONTINUED)
Governmental Activities (Continued)
City of Elk River’s Changes in Net Position
2024 2023
Increase
(Decrease)2024 2023
Increase
(Decrease)
Revenues
Program revenues
Charges for services 4,204,861$ 4,149,080$ 55,781$ 61,669,429$ 62,761,120$ (1,091,691)$
Operating grants
and contributions 1,666,226 2,553,557 (887,331) - - -
Capital grants and
contributions 5,616,041 3,843,438 1,772,603 2,379,420 1,583,273 796,147
General revenues
Property taxes 17,429,839 16,077,123 1,352,716 - - -
Franchise and gravel taxes 1,748,809 1,712,109 36,700 - - -
Sales taxes 3,266,064 3,810,301 (544,237) - - -
Grants and contributions not restricted 2,419,902 1,217,658 1,202,244 - - -
Unrestricted investment earnings 1,625,965 2,233,568 (607,603) 1,152,078 1,177,123 (25,045)
Gain on disposal
of capital assets 383,354 805,210 (421,856) 2,013 58,346 (56,333)
Miscellaneous revenues 621,504 539,436 82,068 - - -
Total revenues 38,982,565 36,941,480 2,041,085 65,202,940 65,579,862 (376,922)
Expenses
General government 5,953,862$ 5,993,465 (39,603) - -
Public safety 12,218,927 12,082,411 136,516 - -
Public works 6,642,111 6,469,657 172,454 - -
Culture and recreation 6,795,621 7,261,458 (465,837) - -
Economic development 755,488 685,115 70,373 - -
Interest and fiscal charges 1,312,176 1,506,222 (194,046) - -
Municipal liquor - - - 7,852,021 7,342,192 509,829
Sewer - - - 4,529,248 3,970,547 558,701
Garbage - - - 1,738,242 1,702,811 35,431
Storm water - - - 546,318 980,969 (434,651)
Electric - - - 40,780,800 42,868,962 (2,088,162)
Water - - - 3,608,583 3,232,421 376,162
Total expenses 33,678,185 33,998,328 (320,143) 59,055,212 60,097,902 (1,042,690)
Increase in Net
Assets before transfers 5,304,380 2,943,152 2,361,228 6,147,728 5,481,960 665,768
Transfers 2,535,152 (246,430) 2,781,582 (2,535,152) 246,430 (2,781,582)
Changes in Net Position 7,839,532 2,696,722 5,142,810 3,612,576 5,728,390 (2,115,814)
Net position, January 1 120,078,120 117,381,398 2,696,722 133,662,751 127,934,361 5,728,390
Net position, December 31 127,917,652$ 120,078,120$ 7,839,532$ 137,275,327$ 133,662,751$ 3,612,576$
Governmental Activities Business-Type Activities
• Property taxes represent approximately 44.7% of total revenues in 2024 in governmental
activities.
• The largest revenue variance was an increase in capital grants and contributions due to the
recognition of ARPA funding in 2024.
• The largest expense variance was a decrease in the culture and recreation function as a result
of capital project work that was completed in 2023.
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City of Elk River
Management’s Discussion and Analysis
GOVERNMENT-WIDE FINANCIAL ANALYSIS (CONTINUED)
Governmental Activities (Continued)
The following graph depicts various governmental activities and shows the revenues and expenses
directly related to those activities.
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28
City of Elk River
Management’s Discussion and Analysis
OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED)
Revenues by Source – Governmental Activities
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29
City of Elk River
Management’s Discussion and Analysis
GOVERNMENT-WIDE FINANCIAL ANALYSIS (CONTINUED)
Business-type Activities. Business-type activities increased the City’s net position by $3,612,576
primarily due to the operating income of the Electric Fund. Elements of the increase are as follows:
Page 219 of 637
30
City of Elk River
Management’s Discussion and Analysis
GOVERNMENT-WIDE FINANCIAL ANALYSIS (CONTINUED)
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31
City of Elk River
Management’s Discussion and Analysis
GOVERNMENT-WIDE FINANCIAL ANALYSIS (CONTINUED)
Financial Analysis of the Government’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, unrestricted fund balance may serve as a useful
measure of a government’s net resources available for spending at the end of the fiscal year.
As of the end of the current fiscal year, the City’s governmental funds reported combined ending
fund balances of $47,749,298, an increase of $4,964,053 in comparison with the prior year.
Approximately 16% of this total amount ($7,631,324) constitutes unassigned fund balance, which is
available for spending at the City’s discretion. The remainder of fund balance ($40,117,928) is not
available for new spending because it is either 1) nonspendable ($206,913), 2) restricted
($16,800,972), 3) committed ($10,166,249), or 4) assigned ($12,943.840) for the purposes described
in the fund balance section of each balance sheet.
2024 2023
Increase
(Decrease)
General 9,538,493$ 9,323,318$ 215,175$
Pavement Management 5,513,936$ 3,273,427$ 2,240,509$
Fund Balance December 31,
Major Funds
The General Fund is the chief operating fund of the City. The General Fund had an increase in fund balance of
$215,175. The fund had net transfers of $2,544,757 during the year, which contributed to the increase.
The Pavement Management Fund is a major capital projects fund with a total fund balance of $5,513,936.
Fund balance increased $2,240,509 from 2023 due to no major street improvement projects occurring in 2024.
Proprietary Funds. The City’s proprietary funds provide the same type of information found in the
government-wide financial statements, but in more detail. Unrestricted net position of the
enterprise funds at the end of the year amounted to $33,704,904. The total increase in net position
for the funds was $3,612,576.
General Fund Budgetary Highlights
The City’s General Fund budget was not amended during the year. The budget called for no change
in fund balance. The General Fund had an actual increase of $215,175 in 2024. Some of the larger
variances are as follows:
• Revenues were over budget by $232,712 with charges for services revenue being over budget
by $122,809. Intergovernmental revenues were over budget by $262,230.
• Expenditures were under budget by $95,186 in part due to public works being under budget by
$504,986 based on salaries and benefits and fuel and snow removal costs coming in under
anticipated amounts.
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32
City of Elk River
Management’s Discussion and Analysis
GOVERNMENT-WIDE FINANCIAL ANALYSIS (CONTINUED)
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, 2024, amounts to $279,300,984 (net of accumulated depreciation). This
investment in capital assets includes land, structures, improvements, machinery and equipment,
park facilities, roads, highways and bridges.
Major capital asset events during the current fiscal year included the following:
• New playgrounds at Lion John Weicht Park and Trott Brook Park
• Trail improvements
• Fire training equipment including a live burn trailer
• Completion of Rolling Hills sewer extension
• Purchases of vehicles and equipment
City of Elk River’s Capital Assets
(Net of Accumulated Depreciation and Amortization)
2024 2023
Increase
(Decrease)2024 2023
Increase
(Decrease)
Land 38,948,651 38,838,959$ 109,692$ 1,965,026$ 1,965,026$ -$
Construction in progress 299,347 20,000 279,347 325,998 3,828,700 (3,502,702)
Buildings 52,585,319 55,397,058 (2,811,739) 27,058,988 27,466,772 (407,784)
Improvements other than buildings 9,465,485 9,006,154 459,331 127,253 142,755 (15,502)
Equipment 9,192,115 8,370,431 821,684 6,515,278 7,186,638 (671,360)
Infrastructure 30,801,861 32,305,395 (1,503,534) 77,198,469 69,985,042 7,213,427
Intangible assets - - - 24,540,931 24,262,932 277,999
Equipment lease asset 231,421 294,120 (62,699) 44,842 32,486 12,356
Total 141,524,199$ 144,232,117$ (2,707,918)$ 137,776,785$ 134,870,351$ 2,906,434$
Governmental Activities Business-Type Activities
Additional information on the City’s capital assets can be found in Note 8 starting on page 73 of this
report.
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33
City of Elk River
Management’s Discussion and Analysis
GOVERNMENT-WIDE FINANCIAL ANALYSIS (CONTINUED)
Capital Asset and Debt Administration (Continued)
Long-term Debt. At the end of the current fiscal year, the City had total bonded debt outstanding of
$85,515,000. While all of the City’s bonds have revenue streams, they are also all backed by the full
faith and credit of the City.
City of Elk River’s Outstanding Debt
2024 2023
Increase
(Decrease)2024 2023
Increase
(Decrease)
General obligation bonds 22,215,000$ 23,685,000$ (1,470,000)$ -$ -$ -$
General obligation revenue bonds 28,690,000 29,625,000 (935,000) 7,605,000 8,185,000 (580,000)
Revenue bonds - - - 27,005,000 27,960,000 (955,000)
Total 50,905,000$ 53,310,000$ (2,405,000)$ 34,610,000$ 36,145,000$ (1,535,000)$
Governmental Activities Business-Type Activities
The City’s bond rating is AA+ from Standard and Poor’s. Additional information on the City’s long-
term debt can be found in Note 9 starting on page 76 of this report.
Economic Factors and Next Year’s Budgets and Rates
The City of Elk River estimates that the demand for City services will continue at stable growth
levels due to the economic environment and the outlook of recent building activity. This was taken
into consideration in preparation of the City’s 2025 budget. The property tax levy is set annually and
is adjusted as necessary to fund the cost of providing services to our citizens and customers. Charges
for services are evaluated each year and adjusted if warranted. The City expects to keep the tax levy
consistent in upcoming years.
Requests for Information
This financial report is designed to provide a general overview of the City’s finances for all those
with an interest in the City’s finances. Questions concerning any of the information provided in this
report or requests for additional financial information should be addressed to the finance
department, City of Elk River, 13065 Orono Pkwy, Elk River, Minnesota 55330 or by calling 763-635-
1000.
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34
(THIS PAGE LEFT BLANK INTENTIONALLY)
Page 224 of 637
35
BASIC FINANCIAL STATEMENTS
Page 225 of 637
See notes to basic financial statements. 36
Primary Government
Governmental
Activities
Business-Type
Activities Total
Housing and
Redevelopment
Authority
Assets
Cash and investments 46,997,770$ 39,920,052$ 86,917,822$ 1,446,277$
Restricted cash - 1,779,016 1,779,016 -
Taxes receivable 1,529,019 - 1,529,019 12,251
Accounts receivable 734,248 2,461,541 3,195,789 7,921
Interest receivable 187,112 123,028 310,140 -
Notes and loans receivable 1,245,472 - 1,245,472 592,670
Leases receivable 94,870 4,733,420 4,828,290 -
Special assessments receivable 1,906,626 556,493 2,463,119 -
Due from other governments 4,118,607 - 4,118,607 -
Due from primary government - - - 152,710
Due from component unit 27,012 - 27,012 -
Internal balances 634,079 (634,079) - -
Inventory - 3,216,661 3,216,661 -
Prepaid items 206,913 308,553 515,466 -
Pension asset 340,068 - 340,068 -
Capital assets not
being depreciated
Land 38,948,651 1,965,026 40,913,677 315,900
Construction in progress 299,347 325,998 625,345 -
Capital assets being depreciated/amortized
Buildings and building improvements 81,848,863 42,290,134 124,138,997 -
Improvements other
than buildings 16,320,007 266,259 16,586,266 174,290
Infrastructure 83,807,649 - 83,807,649 -
Collection and distribution systems - 158,398,256 158,398,256 -
Intangible assets - 28,715,624 28,715,624 -
Equipment and furniture 21,567,522 13,690,069 35,257,591 -
Equipment lease asset 478,823 46,388 525,211 -
Less accumulated depreciation/amortization (101,746,663) (107,920,969) (209,667,632) (140,400)
Total assets 199,545,995 190,241,470 389,787,465 2,561,619
Deferred Outflows of Resources
Deferred outflows of resources
related to OPEB 97,807 12,227 110,034 -
Deferred outflows of resources
related to pensions 8,084,371 513,078 8,597,449 7,357
Total deferred outflows
of resources 8,182,178 525,305 8,707,483 7,357
Total assets and deferred
outflows of resources 207,728,173$ 190,766,775$ 398,494,948$ 2,568,976$
Component
City of Elk River
Statement of Net Position
December 31, 2024
Page 226 of 637
See notes to basic financial statements. 37
Primary Government
Governmental
Activities
Business-Type
Activities Total
Housing and
Redevelopment
Authority
Liabilities
Accounts payable 2,051,329$ 4,684,620$ 6,735,949$ -$
Salaries and benefits payable 704,872 454,337 1,159,209 4,426
Contracts and deposits payable 32,230 1,253,746 1,285,976 -
Due to other governments 42,893 282,445 325,338 -
Due to primary government - - - 27,012
Due to component unit 152,710 - 152,710 -
Unearned revenue 830,138 161,560 991,698 -
Interest payable
Payable within one year 237,590 390,745 628,335 -
Compensated absences payable
Payable within one year 850,922 1,064,132 1,915,054 -
Payable after one year 1,269,080 88,397 1,357,477 -
Total OPEB liability
Payable within one year 90,530 10,059 100,589 -
Payable after one year 684,716 86,847 771,563 -
Lease liability
Payable within one year 106,759 8,543 115,302 -
Payable after one year 124,699 36,293 160,992 -
Net bonds payable
Payable within one year 2,530,000 1,585,000 4,115,000 -
Payable after one year 52,443,509 34,355,542 86,799,051 -
Net pension liability
Payable after one year 7,324,320 2,680,516 10,004,836 36,554
Total liabilities 69,476,297 47,142,782 116,619,079 67,992
Deferred Inflows of Resources
Deferred inflows of resources
related to OPEB 113,330 14,166 127,496 -
Deferred inflows of resources
related to pensions 10,126,024 1,877,254 12,003,278 24,912
Deferred inflows of resources
related to leases 94,870 4,457,246 4,552,116 -
Total deferred inflows
of resources 10,334,224 6,348,666 16,682,890 24,912
Net Position
Net investment in capital assets 86,319,232 101,791,407 188,110,639 349,790
Restricted for
Fiscal recovery 214,490 - 214,490 -
Public safety 3,871 - 3,871 -
Parks and recreation improvements 1,272,089 - 1,272,089 -
Capital projects 945,809 - 945,809 -
Economic development 2,349,561 - 2,349,561 -
Debt service 10,807,241 1,779,016 12,586,257 -
Pensions 340,068 - 340,068 -
Landfill mitigation 978,207 - 978,207 -
Housing and redevelopment - - - 2,126,282
Unrestricted 24,687,084 33,704,904 58,391,988 -
Total net position 127,917,652 137,275,327 265,192,979 2,476,072
Total liabilities, deferred
inflows of resources, and
net position 207,728,173$ 190,766,775$ 398,494,948$ 2,568,976$
Component
City of Elk River
Statement of Net Position
December 31, 2024
Page 227 of 637
See notes to basic financial statements. 38
Program Revenues
Expenses
Charges for
Services
Operating
Grants and
Contributions
Capital Grants
and
Contributions
Primary government
Governmental activities
General government 5,953,862$ 914,113$ 26,250$ -$
Public safety 12,218,927 1,134,021 957,319 -
Public works 6,642,111 68,919 520,589 5,612,975
Culture and recreation 6,795,621 2,062,960 61,605 3,066
Economic development 755,488 24,848 100,463 -
Interest on long-term debt 1,312,176 - - -
Total governmental activities 33,678,185 4,204,861 1,666,226 5,616,041
Business-type activities
Municipal liquor 7,852,021 8,631,336 - -
Sewer 4,529,248 2,961,773 - 1,188,578
Garbage 1,738,242 1,964,435 - -
Storm water 546,318 674,854 - -
Electric 40,780,800 44,100,902 - 690,934
Water 3,608,583 3,336,129 - 499,908
Total business-type activities 59,055,212 61,669,429 - 2,379,420
Total primary governmental 92,733,397$ 65,874,290$ 1,666,226$ 7,995,461$
Component unit
Housing and redevelopment authority 216,910$ 5,945$ 215$ -$
General revenues
Property taxes
Franchise and gravel taxes
Sales taxes
Grants and contributions not restricted to specific programs
Unrestricted investment income
Gain on sale of assets
Miscellaneous revenues
Transfers
Total general revenues and transfers
Change in net position
Net position - beginning
Net position - ending
Functions/Programs
City of Elk River
Statement of Activities
Year Ended December 31, 2024
Page 228 of 637
39
Primary
Government Component Unit
Governmental
Activities
Business-Type
Activities Total
Housing and
Redevelopment
Authority
(5,013,499)$ -$ (5,013,499)$ -$
(10,127,587) - (10,127,587) -
(439,628) - (439,628) -
(4,667,990) - (4,667,990) -
(630,177) - (630,177) -
(1,312,176) - (1,312,176) -
(22,191,057) - (22,191,057) -
- 779,315 779,315 -
- (378,897) (378,897) -
- 226,193 226,193 -
- 128,536 128,536 -
- 4,011,036 4,011,036 -
- 227,454 227,454 -
- 4,993,637 4,993,637 -
(22,191,057) 4,993,637 (17,197,420) -
- - - (210,750)
17,429,839 - 17,429,839 439,359
1,748,809 - 1,748,809 -
3,266,064 - 3,266,064 -
2,419,902 - 2,419,902 -
1,625,965 1,152,078 2,778,043 13,584
383,354 2,013 385,367 -
621,504 - 621,504 -
2,535,152 (2,535,152) - -
30,030,589 (1,381,061) 28,649,528 452,943
7,839,532 3,612,576 11,452,108 242,193
120,078,120 133,662,751 253,740,871 2,233,879
127,917,652$ 137,275,327$ 265,192,979$ 2,476,072$
Net (Expense) Revenues and Changes in Net Position
Page 229 of 637
See notes to basic financial statements. 40
General Fund
Pavement
Management
Nonmajor
Governmental
Funds
Total
Governmental
Funds
Assets
Cash and investments 9,091,514$ 5,174,998$ 32,731,258$ 46,997,770$
Taxes receivable 417,296 - 1,111,723 1,529,019
Accounts receivable 30,381 148,578 555,289 734,248
Interest receivable 41,001 24,316 121,795 187,112
Notes and loans receivable - - 1,245,472 1,245,472
Leases receivable - - 94,870 94,870
Special assessments receivable
Delinquent - 268 4,275 4,543
Deferred - 6,854 1,895,229 1,902,083
Due from other funds 837,973 260,434 910,045 2,008,452
Due from other governments 110,820 3,980,617 27,170 4,118,607
Due from component unit 26,969 - 43 27,012
Advances to other funds - - 180,000 180,000
Prepaid items 92,196 - 114,717 206,913
Total assets 10,648,150$ 9,596,065$ 38,991,886$ 59,236,101$
Liabilities
Accounts payable 316,849$ 94,390$ 1,640,090$ 2,051,329$
Salaries and benefits payable 652,414 - 52,458 704,872
Contracts and deposits payable - - 32,230 32,230
Due to other funds - - 1,374,373 1,374,373
Due to other governments 20,817 - 22,076 42,893
Due to component unit - - 152,710 152,710
Advances from other funds - - 180,000 180,000
Unearned revenue - - 830,138 830,138
Total liabilities 990,080 94,390 4,284,075 5,368,545
Deferred Inflows of Resources
Unavailable revenue - property taxes 119,577 - 16,900 136,477
Unavailable revenue - special assessments - 7,122 1,899,172 1,906,294
Unavailable revenue - other - 3,980,617 - 3,980,617
Deferred inflow related to leases receivable - - 94,870 94,870
Total deferred inflows of resources 119,577 3,987,739 2,010,942 6,118,258
Fund Balances
Nonspendable 92,196 - 114,717 206,913
Restricted - - 16,800,972 16,800,972
Committed - 5,513,936 4,652,313 10,166,249
Assigned - - 12,943,840 12,943,840
Unassigned 9,446,297 - (1,814,973) 7,631,324
Total fund balances 9,538,493 5,513,936 32,696,869 47,749,298
Total liabilities, deferred inflows
of resources, and fund balances 10,648,150$ 9,596,065$ 38,991,886$ 59,236,101$
City of Elk River
Balance Sheet - Governmental Funds
December 31, 2024
Page 230 of 637
See notes to basic financial statements. 41
Total fund balances - governmental funds 47,749,298$
Capital assets used in governmental activities are not current financial resources and, therefore,
are not reported as assets in governmental funds.
Cost of capital assets 243,270,862
Less accumulated depreciation/amortization (101,746,663)
Long-term liabilities, including bonds payable, are not due and payable in the current period and,
therefore, are not reported as liabilities in the funds.
Long-term liabilities at year-end consist of:
Bond principal payable (50,905,000)
Unamortized bond premiums/discounts (4,068,509)
Lease liability (231,458)
Compensated absences payable (2,120,002)
Total OPEB liability (775,246)
Net pension liability (7,324,320)
Net pension asset 340,068
Delinquent receivables will be collected in subsequent years, but are not available soon enough
to pay for the current period's expenditures and, therefore, are deferred in the funds.
Property taxes 119,076
Deferred outflows of resources and deferred inflows of resources are created as a result of
various differences related to pensions and OPEB that are not recognized in the governmental
funds.
Deferred inflows of resources related to pensions (10,126,024)
Deferred outflows of resources related to pensions 8,084,371
Deferred outflows of resources related to OPEB 97,807
Deferred inflows of resources related to OPEB (113,330)
Revenues in the Statement of Activities that do not provide current financial resources are not
reported as revenues in the funds.
Deferred special assessments 1,923,695
State shared taxes 3,980,617
Governmental funds do not report a liability for accrued interest on long-term debt until due and
payable. (237,590)
127,917,652$
City of Elk River
the Statement of Net Position - Governmental Funds
Reconciliation of the Balance Sheet to
Amounts reported for governmental activities in the Statement of Net Position are different because:
Total net position - governmental activities
December 31, 2024
Page 231 of 637
See notes to basic financial statements. 42
General Fund
Pavement
Management
Nonmajor
Governmental
Funds
Total
Governmental
Funds
Revenues
Property taxes 14,887,537$ -$ 2,522,992$ 17,410,529$
Sales taxes - - 3,266,064 3,266,064
Other taxes 168,050 1,580,759 - 1,748,809
Special assessments - 1,909 104,983 106,892
Licenses and permits 768,995 - - 768,995
Intergovernmental 921,230 471,623 3,375,121 4,767,974
Charges for services 1,308,509 - 1,890,857 3,199,366
Fines and forfeitures 176,559 - 4,489 181,048
Other revenue
Investment income 235,663 84,171 1,306,131 1,625,965
Contributions and donations - - 343,442 343,442
Refunds and reimbursements 199,996 1,850 137,049 338,895
Landfill expansion fee - - 2,213,448 2,213,448
Miscellaneous revenue 41,773 - 135,270 177,043
Total revenues 18,708,312 2,140,312 15,299,846 36,148,470
Expenditures
Current
General government 5,340,356 - 418,940 5,759,296
Public safety 10,517,190 - 419,132 10,936,322
Public works 2,373,814 12,500 95,342 2,481,656
Culture and recreation 2,522,176 - 2,423,599 4,945,775
Economic development - - 746,553 746,553
Capital outlay
General government 99,914 - 535,033 634,947
Public safety - - 800,390 800,390
Public works 41,929 784,337 1,295,631 2,121,897
Culture and recreation 33,480 - 1,584,149 1,617,629
Debt service
Principal 105,472 - 2,412,219 2,517,691
Interest and other charges 3,563 - 1,669,233 1,672,796
Total expenditures 21,037,894 796,837 12,400,221 34,234,952
Excess of revenues over (under) expenditures (2,329,582) 1,343,475 2,899,625 1,913,518
Other Financing Sources (Uses)
Proceeds from sale of capital asset - - 383,354 383,354
Lease issuance 99,914 - 32,115 132,029
Transfers in 2,915,843 897,034 2,203,513 6,016,390
Transfers out (471,000) - (3,010,238) (3,481,238)
Total other financing sources (uses) 2,544,757 897,034 (391,256) 3,050,535
Net change in fund balances 215,175 2,240,509 2,508,369 4,964,053
Fund Balances
Beginning of year 9,323,318 3,273,427 30,188,500 42,785,245
End of year 9,538,493$ 5,513,936$ 32,696,869$ 47,749,298$
City of Elk River
Statement of Revenues, Expenditures, and
Changes in Fund Balances - Governmental Funds
Year Ended December 31, 2024
Page 232 of 637
See notes to basic financial statements. 43
4,964,053$
Capital outlays are reported in governmental funds as expenditures. However, in the Statement
of Activities, the cost of those assets is allocated over the estimated useful lives as depreciation
expense.
Capital outlays 4,976,652
Depreciation/amortization expense (7,698,803)
Loss on disposal of capital assets (34,782)
Some expenses are recognized as paid in the governmental funds but recognized as the expense is
incurred in the Statement of Activities.
Compensated absences payable (127,124)
Total other post employment benefits (OPEB) liability 16,222
Principal payments on long-term debt are recognized as expenditures in the governmental funds
but as an increase in the net position in the Statement of Activities.
Bond principal payments 2,405,000
Lease principal payments 112,691
Governmental funds report the effects of bond premiums and discounts when debt is first issued,
whereas these amounts are deferred and amortized in the Statement of Activities. 251,933
Interest on long-term debt in the Statement of Activities differs from the amount reported in the
governmental funds because interest is recognized as an expenditure in the funds when it is due
and thus requires use of current financial resources. In the Statement of Activities, however,
interest expense is recognized as the interest accrues, regardless of when it is due. 105,867
Governmental funds recognize pension contributions as expenditures at the time of payment
whereas the Statement of Activities factors in items related to pensions on a full accrual
perspective.
Pension expense 669,475
Revenues in the Statement of Activities that do not provide current financial resources are not
reported as revenues in the funds.
State shared taxes 1,414,867
Certain revenues are recognized as soon as they are earned. Under the modified accrual basis of
accounting certain revenues cannot be recognized until they are available to liquidate liabilities
of the current period.
Property taxes 17,401
Special assessments 766,080
7,839,532$
Expenditures, and Changes in Fund Balances to the
City of Elk River
Reconciliation of the Statement of Revenues,
Statement of Activities - Governmental Funds
Change in net position - governmental activities
Total change in fund balances - governmental funds
Amounts reported for governmental activities in the Statement of Activities are different because:
Year Ended December 31, 2024
Page 233 of 637
44
(THIS PAGE LEFT BLANK INTENTIONALLY)
Page 234 of 637
See notes to basic financial statements. 45
City of Elk River
Statement of Revenues, Expenditures, and
Changes in Fund Balances -
Budget and Actual - General Fund
Year Ended December 31, 2024
Original Final
Revenues
Property taxes 14,917,700$ 14,917,700$ 14,887,537$ (30,163)$
Other taxes 225,000 225,000 168,050 (56,950)
Licenses and permits 1,008,200 1,008,200 768,995 (239,205)
Intergovernmental 659,000 659,000 921,230 262,230
Charges for services 1,185,700 1,185,700 1,308,509 122,809
Fines and forfeitures 150,000 150,000 176,559 26,559
Other revenue
Investment income 150,000 150,000 235,663 85,663
Refunds and reimbursements 145,000 145,000 199,996 54,996
Miscellaneous revenue 35,000 35,000 41,773 6,773
Total revenues 18,475,600 18,475,600 18,708,312 232,712
Expenditures
Current
General government 5,316,650 5,316,650 5,340,356 23,706
Public safety 10,119,500 10,119,500 10,517,190 397,690
Public works 2,878,800 2,878,800 2,373,814 (504,986)
Culture and recreation 2,668,700 2,668,700 2,522,176 (146,524)
Debt service
Principal 91,750 91,750 105,472 13,722
Interest and other charges - - 3,563 3,563
Capital outlay
General government 24,200 24,200 99,914 75,714
Public works - - 41,929 41,929
Culture and recreation - - 33,480 -
Total expenditures 21,099,600 21,099,600 21,037,894 (95,186)
Excess of revenues over
(under) expenditures (2,624,000) (2,624,000) (2,329,582) 327,898
Other Financing Sources (Uses)
Lease issuance - - 99,914 99,914
Transfers in 3,095,000 3,095,000 2,915,843 (179,157)
Transfers out (471,000) (471,000) (471,000) -
Total other financing sources (uses)2,624,000 2,624,000 2,544,757 (79,243)
Net change in fund balances -$ -$ 215,175 248,655$
Fund Balances
Beginning of year 9,323,318
End of year 9,538,493$
Budgeted Amounts
Actual Amounts
Variance with
Final Budget -
Over (Under)
Page 235 of 637
See notes to basic financial statements. 46
Municipal
Liquor Sewer Garbage Storm Water
Assets
Current assets
Cash and investments 3,398,275$ 10,149,395$ 999,419$ 2,396,833$
Restricted cash - - - -
Accounts receivable - 40,178 - -
Interest receivable 16,119 46,762 4,741 11,369
Due from other funds - 404,126 164,444 56,712
Leases receivable - - - -
Special assessments receivable - 521,886 2,675 284
Inventory 1,521,976 - - -
Prepaid items - - - -
Total current assets 4,936,370 11,162,347 1,171,279 2,465,198
Noncurrent assets
Leases receivable - - - -
Capital assets
Land 753,961 302,581 - 9,900
Construction in progress - - - -
Buildings and building improvements 3,051,851 20,312,707 - -
Improvements other
than buildings - 232,178 - -
Collection and distribution - 31,229,179 - 20,449,218
Intangible assets - - - -
Equipment and furniture 167,743 7,524,358 - 27,821
Equipment lease asset 21,410 24,978 - -
Total capital assets 3,994,965 59,625,981 - 20,486,939
Less accumulated depreciation/amortization (2,552,362) (29,180,060) - (11,320,548)
Net capital assets 1,442,603 30,445,921 - 9,166,391
Total noncurrent assets 1,442,603 30,445,921 - 9,166,391
Total assets 6,378,973 41,608,268 1,171,279 11,631,589
Deferred Outflows of Resources
Deferred outflows of resources
related to OPEB 6,522 5,705 - -
Deferred outflows of resources
related to pensions 75,269 51,686 2,522 -
Total deferred outflows
of resources 81,791 57,391 2,522 -
Total assets and deferred
outflows of resources 6,460,764$ 41,665,659$ 1,173,801$ 11,631,589$
Business-Type Activities - Enterprise Funds
City of Elk River
Statement of Net Position - Proprietary Funds
December 31, 2024
Page 236 of 637
47
Electric Water Total
13,014,941$ 9,961,189$ 39,920,052$
1,779,016 - 1,779,016
2,150,154 271,209 2,461,541
3,635 40,402 123,028
3,569 150,760 779,611
- 250,524 250,524
7,317 24,331 556,493
1,637,839 56,846 3,216,661
252,217 56,336 308,553
18,848,688 10,811,597 49,395,479
- 4,482,896 4,482,896
697,870 200,714 1,965,026
323,516 2,482 325,998
15,645,663 3,279,913 42,290,134
34,081 - 266,259
61,322,374 45,397,485 158,398,256
28,715,624 - 28,715,624
5,286,801 683,346 13,690,069
- - 46,388
112,025,929 49,563,940 245,697,754
(40,957,293) (23,910,706) (107,920,969)
71,068,636 25,653,234 137,776,785
71,068,636 30,136,130 142,259,681
89,917,324 40,947,727 191,655,160
- - 12,227
322,181 61,420 513,078
322,181 61,420 525,305
90,239,505$ 41,009,147$ 192,180,465$
Business-Type Activities - Enterprise Funds
Page 237 of 637
See notes to basic financial statements. 48
Municipal
Liquor Sewer Garbage Storm Water
Liabilities
Current liabilities
Accounts payable 365,159$ 167,401$ 139,044$ 189$
Salaries and benefits payable 44,956 32,340 - -
Contracts and deposits payable - - - -
Interest payable - 33,181 - -
Unearned revenue 5,992 - - -
Due to other funds - 22,499 2,116 864
Due to other governments 89,442 - - -
Current compensated absences 45,920 50,848 - -
Current total OPEB liability 5,365 4,694 - -
Lease liability due within one year 3,943 4,600 - -
Bonds payable due within one year - 530,000 - -
Total current liabilities 560,777 845,563 141,160 1,053
Noncurrent liabilities
Compensated absences 48,932 39,465 - -
Total OPEB liability 46,318 40,529 - -
Lease liability 16,751 19,542 - -
Bonds payable - 5,654,847 - -
Net pension liability 374,084 256,876 12,536 -
Total noncurrent liabilities 486,085 6,011,259 12,536 -
Total liabilities 1,046,862 6,856,822 153,696 1,053
Deferred Inflows of Resources
Deferred inflows of resources
related to OPEB 7,555 6,611 - -
Deferred inflows of resources
related to pensions 254,878 175,020 8,541 -
Deferred inflows of resources
related to leases - - - -
Total deferred inflows
of resources 262,433 181,631 8,541 -
Net Position
Net investment in capital assets 1,421,909 24,236,932 - 9,166,391
Restricted for debt service - - - -
Unrestricted 3,729,560 10,390,274 1,011,564 2,464,145
Total net position 5,151,469 34,627,206 1,011,564 11,630,536
Total liabilities, deferred
inflows of resources, and
net position 6,460,764$ 41,665,659$ 1,173,801$ 11,631,589$
Business-Type Activities - Enterprise Funds
December 31, 2024
City of Elk River
Statement of Net Position - Proprietary Funds
Page 238 of 637
49
Electric Water Total
3,735,783$ 277,044$ 4,684,620$
315,039 62,002 454,337
1,132,673 121,073 1,253,746
341,231 16,333 390,745
4,305 151,263 161,560
1,144,738 243,473 1,413,690
184,382 8,621 282,445
863,148 104,216 1,064,132
- - 10,059
- - 8,543
990,000 65,000 1,585,000
8,711,299 1,049,025 11,308,877
- - 88,397
- - 86,847
- - 36,293
27,210,400 1,490,295 34,355,542
1,708,036 328,984 2,680,516
28,918,436 1,819,279 37,247,595
37,629,735 2,868,304 48,556,472
- - 14,166
1,206,975 231,840 1,877,254
- 4,457,246 4,457,246
1,206,975 4,689,086 6,348,666
42,868,236 24,097,939 101,791,407
1,779,016 - 1,779,016
6,755,543 9,353,818 33,704,904
51,402,795 33,451,757 137,275,327
90,239,505$ 41,009,147$ 192,180,465$
Business-Type Activities - Enterprise Funds
Page 239 of 637
See notes to basic financial statements. 50
Municipal
Liquor Sewer Garbage Storm Water
Sales and Cost of Sales
Sales 8,626,308$ -$ -$ -$
Cost of sales (6,169,284) - - -
Gross profit 2,457,024 - - -
Operating Revenues
User charges - 2,782,896 1,962,002 674,715
Delinquent collections - 2,946 2,433 139
Other 5,028 175,931 - -
Total operating revenues 5,028 2,961,773 1,964,435 674,854
Operating Expenses
Personnel services 1,169,606 808,186 28,071 -
Materials and supplies 38,311 249,755 2,106 315
Purchased power - - - -
Other services and charges 410,723 1,206,116 1,708,065 64,927
Depreciation/amortization 63,737 1,708,674 - 481,076
Equipment - 477,951 - -
Total operating expenses 1,682,377 4,450,682 1,738,242 546,318
Operating income (loss)779,675 (1,488,909) 226,193 128,536
Nonoperating Revenues (Expenses)
Investment income 186,556 419,465 30,739 72,875
Gain (loss) on sale of asset 135 1,878 - -
Interest and other charges (360) (78,566) - -
Miscellaneous revenue - - - -
Total nonoperating revenues 186,331 342,777 30,739 72,875
Income (loss) before capital
contributions and transfers 966,006 (1,146,132) 256,932 201,411
Capital Contributions
Contributions from Developers - 356,602 - -
Contributions from Customers - - - -
Connection Fees - 831,976 - -
Transfers in 9,682 640,795 - -
Transfers out (1,250,000) (175,000) (58,000) (175,000)
Change in net position (274,312) 508,241 198,932 26,411
Net Position
Beginning of year 5,425,781 34,118,965 812,632 11,604,125
End of year 5,151,469$ 34,627,206$ 1,011,564$ 11,630,536$
Business-Type Activities - Enterprise Funds
City of Elk River
Statement of Revenues, Expenses, and Changes
in Net Position - Proprietary Funds
Year Ended December 31, 2024
Page 240 of 637
51
Electric Water Totals
-$ -$ 8,626,308$
- - (6,169,284)
- - 2,457,024
42,557,925 2,803,602 50,781,140
- - 5,518
617,177 103,511 901,647
43,175,102 2,907,113 51,688,305
3,532,992 850,247 6,389,102
186,242 340,989 817,718
28,590,698 - 28,590,698
4,363,137 1,155,275 8,908,243
3,317,829 1,223,033 6,794,349
- - 477,951
39,990,898 3,569,544 51,978,061
3,184,204 (662,431) 2,167,268
338,157 104,286 1,152,078
(16,154) (5,090) (19,231)
(773,748) (33,949) (886,623)
925,800 429,016 1,354,816
474,055 494,263 1,601,040
3,658,259 (168,168) 3,768,308
- - 356,602
690,934 21,910 712,844
- 477,998 1,309,974
- - 650,477
(1,527,629) - (3,185,629)
2,821,564 331,740 3,612,576
48,581,231 33,120,017 133,662,751
51,402,795$ 33,451,757$ 137,275,327$
Business-Type Activities - Enterprise Funds
Page 241 of 637
See notes to basic financial statements. 52
Municipal
Liquor Sewer Garbage Storm Water
Cash Flows - Operating Activities
Receipts from customers and users 8,631,673$ 2,955,780$ 1,964,435$ 674,854$
Payments to suppliers (6,532,500) (1,867,959) (1,699,236) (93,929)
Payments to employees (1,173,876) (817,610) (36,949) -
Other operating receipts - - - -
Net cash flows - operating activities 925,297 270,211 228,250 580,925
Cash Flows - Noncapital
Financing Activities
Borrowing (payments) on
interfund balances - 10,360 (3,974) (3,413)
Transfer from other funds 9,682 640,795 - -
Transfer to other funds (1,250,000) (175,000) (58,000) (175,000)
Net cash flows - noncapital
financing activities (1,240,318) 476,155 (61,974) (178,413)
Cash Flows - Capital and Related
Financing Activities
Special assessments received - (101,052) (282) 7
Connection charges collected - 831,976 - -
Principal paid on bonds - (520,000) - -
Interest paid on debt (373) (83,211) - -
Principal paid on leases (14,924) (19,307) - -
Proceeds from sale of capital assets 10,781 15,716 - -
Acquisition of capital assets - - - -
Net cash flows - capital and related
financing activities (4,516) 124,122 (282) 7
Cash Flows - Investing Activities
Interest and dividends received 190,829 425,571 30,639 72,669
Net change in cash and cash equivalents (128,708) 1,296,059 196,633 475,188
Cash and Cash Equivalents
3,526,983 8,853,336 802,786 1,921,645
3,398,275$ 10,149,395$ 999,419$ 2,396,833$
City of Elk River
Statement of Cash Flows - Proprietary Funds
Year Ended December 31, 2024
December 31
January 1
Business-Type Activities - Enterprise Funds
Page 242 of 637
53
Electric Water Total
43,214,708$ 2,903,410$ 60,344,860$
(33,345,078) (1,414,839) (44,953,541)
(3,342,719) (808,326) (6,179,480)
425,678 141,645 567,323
6,952,589 821,890 9,779,162
215,687 276,476 495,136
- - 650,477
(1,527,629) - (3,185,629)
(1,311,942) 276,476 (2,040,016)
- - (101,327)
- 477,998 1,309,974
(955,000) (60,000) (1,535,000)
(849,381) (41,600) (974,565)
- - (34,231)
9,755 - 36,252
(6,063,793) (2,498,840) (8,562,633)
(7,858,419) (2,122,442) (9,861,530)
336,478 105,764 1,161,950
(1,881,294) (918,312) (960,434)
16,675,251 10,879,501 42,659,502
14,793,957$ 9,961,189$ 41,699,068$
Business-Type Activities - Enterprise Funds
Page 243 of 637
See notes to basic financial statements. 54
Municipal
Liquor Sewer Garbage Storm Water
Reconciliation of Operating
Income (Loss) to Net Cash Flows -
Operating Activities
Operating income (loss)779,675$ (1,488,909)$ 226,193$ 128,536$
Adjustments to reconcile operating
income (loss) to net cash flows -
operating activities
Other revenues - - - -
Bad debt expense - - - -
Depreciation/amortization expense 63,737 1,708,674 - 481,076
Pension expense (21,715) (33,448) (7,279) -
Accounts receivable - (5,993) - -
Special assessments receivable - - - -
Lease receivable - - - -
Other receivables - - - -
Prepaid items - - - -
Inventory 87,758 - - -
Accounts payable (4,737) 65,873 10,935 (28,687)
Contracts and deposits payable - - - -
Due to other governmental units 2,797 (10) - -
Salaries and benefits payable 4,009 5,933 (1,599) -
Unearned revenue 337 - - -
OPEB expense (1,083) (945) - -
Compensated absences payable 14,519 19,036 - -
Deferred lease resources - - - -
Total adjustments 145,622 1,759,120 2,057 452,389
Net cash flows
- operating activities 925,297$ 270,211$ 228,250$ 580,925$
Supplemental Schedule of
Noncash Capital and Related
Financing Activities
Contributions of capital assets -$ 356,602$ -$ -$
Gain (Loss) on disposal of capital assets 135 1,878 - -
Book value of disposed capital assets 20,873 27,135 - -
Capital assets purchased on account - - - -
Amortization of bond premium - 2,461 - -
Business-Type Activities - Enterprise Funds
City of Elk River
Statement of Cash Flows - Proprietary Funds
Year Ended December 31, 2024
Page 244 of 637
55
Electric Water Total
3,184,204$ (662,431)$ 2,167,268$
925,800 429,016 1,354,816
15,203 20 15,223
3,317,829 1,223,033 6,794,349
(274,402) (28,042) (364,886)
42,394 (16,540) 19,861
(2,788) 12,837 10,049
- 235,035 235,035
155,825 (134,106) 21,719
(66,618) (21,125) (87,743)
(589,329) (39,744) (541,315)
(170,367) 74,093 (52,890)
64,878 (7,823) 57,055
23,968 5,849 32,604
71,804 17,582 97,729
(138,683) 9,286 (129,060)
- - (2,028)
392,871 52,381 478,807
- (327,431) (327,431)
3,768,385 1,484,321 7,611,894
6,952,589$ 821,890$ 9,779,162$
690,934$ 1,348,943$ 2,396,479$
(16,154) - (14,141)
25,909 - 73,917
1,031,371 6,111 1,037,482
59,862 6,651 68,974
Business-Type Activities - Enterprise Funds
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57
City of Elk River
Notes to Basic Financial Statements
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Reporting Entity
The City of Elk River, Minnesota (the City) operates under the "Optional Plan A" form of government
as defined in Minnesota Statutes. Under this plan, the City Council is composed of an elected mayor
and four elected Council Members. The Council appoints personnel responsible for the proper
administration of all affairs relating to the City. The basic financial statements and the accounting
policies of the City conform to accounting principles generally accepted in the United States of
America as applicable to governmental units. The Governmental Accounting Standards Board (GASB)
is the accepted standard setting body for establishing governmental accounting and financial
reporting principles.
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 Elk River (the primary
government) and its component units. The Elk River Municipal Utilities is considered to be part of the
primary government. The Elk River Municipal Utilities was established, and statutory authority is
provided in accordance with Chapter 412.321 of the Minnesota Statutes and is considered to be part
of the City. The Utilities Commission has five council approved members who serve overlapping
three-year terms. The statutes provide the City Council all the discretionary authority necessary to
operate the utilities, except as its powers have been delegated to the Commission. The Utility funds
are included with the enterprise funds of this report. Separate financial statements for the Utilities
may be obtained at the Elk River Municipal Utilities, 13069 Orono Pkwy, Elk River, Minnesota, 55330.
The City has considered all potential units for which it is financially accountable , and other
organizations for which the nature and significance of their relationship with the City are such that
exclusion would cause the City's financial statements to be misleading or incomplete. The
Governmental Accounting Standards Board (GASB) has set forth criteria to be considered in
determining financial accountability. These criteria include appointing a voting majority of an
organization's governing body, and (1) the ability of the primary government to impose its will on
that organization or (2) the potential for the organization to provide specific benefits to , or impose
specific financial burdens on, the primary government. Based upon the application of these criteria ,
the City has the following component units:
1. Blended Component Unit
The Economic Development Authority (EDA) was created to carry out economic and industrial
development and redevelopment within the City in accordance with policies established by the
City Council. The seven-member board consists of three Council Members , the Mayor and three
other council approved members. The criteria that result in the EDA being reported as a blended
component unit include the fact that the EDA may not exercise any of its authorized powers
without prior approval of the City Council and the City having operational responsibility. The EDA
is reported as a special revenue fund and does not issue separate financial statements.
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City of Elk River
Notes to Basic Financial Statements
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
A. Reporting Entity (Continued)
2. Discretely Presented Component Unit
The Housing and Redevelopment Authority (HRA) is a legally separate entity created to carry out
community development consistent with policies established by the City Council. The HRA is
governed by five council appointed members , one of which is a Council Member; however, the
City does not have a financial benefit or burden relationship and does not have operational
responsibility. The criteria that result in the HRA being reported as a discretely presented
component unit include 1) the five council appointed member board and 2) the ability of the City
to impose its will on the HRA by significantly influencing the programs , projects, activities, or
level of service performed by the HRA by approving the HRA 's budget. The HRA does not issue
separate financial statements and are included in the financial section of this report.
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. The fiduciary funds are
only reported in the statement of fiduciary net position and the statement of changes in fiduciary
net position at the fund financial statement level. 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 segment is offset by program revenues. Direct expenses are those that are clearly
identifiable with a specific function or segment. Interest on general long -term debt is considered an
indirect expense and is reported separately in the Statement of Activities. Program revenues include
1) charges to customers or applicants who purchase , use, or directly benefit from goods, services, or
privileges provided by a given function or segment and 2) grants and contributions that are restricted
to meeting the operational or capital requirements of a particular function or segment. Taxes and
other items not properly included among program revenues are reported instead as general
revenues. Internally dedicated revenues are reported as general revenues rather than program
revenues.
Separate financial statements are provided for governmental funds and proprietary funds. Major
individual governmental funds and major individual enterprise funds are reported as separate
columns 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. 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.
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59
City of Elk River
Notes to Basic Financial Statements
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
C.Measurement Focus, Basis of Accounting , and Financial Statement Presentation (Continued)
Governmental fund financial statements are reported using the current financial resources
measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as
they are both measurable and available. Revenues are considered to be available when they are
collectible within the current period or soon enough thereafter to pay liabilities of the current
period. For this purpose , the City considers revenues to be available if they are collected within 60
days of the end of the current period. Expenditures generally are recorded when a liability is
incurred, as under accrual accounting. However , debt service expenditures, as well as expenditures
related to compensated absences and claims and judgments , are recorded only when payment is
due.
Property taxes, franchise taxes, licenses, and interest associated with the current period are all
considered to be susceptible to accrual and so have been recognized as revenues of the current
period. Only the portion of special assessments receivable due within the current 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.
Description of Funds:
Major Governmental Funds:
General Fund – This fund is the City's primary operating fund. It accounts for all financial
resources of the general government, except those required to be accounted for in another fund.
Pavement Management Fund – This fund accounts for franchise taxes collected to fund
expenditures for the ongoing maintenance and repair of the City streets.
Proprietary Funds:
Municipal Liquor Fund – This fund accounts for the operations of the City's off-sale liquor stores.
Sewer Fund – This fund accounts for the sewer service charges which are used to finance the
sanitary sewer system operating expenses.
Garbage Fund – This fund accounts for the activities of the garbage and recycling collection
programs.
Storm Water Fund – This fund accounts for the activities of the storm water collection
system.
Electric Fund – This fund accounts for the activities of the electric distribution system.
Water Fund – This fund accounts for the activities of the water distribution system.
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60
City of Elk River
Notes to Basic Financial Statements
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (C ONTINUED)
C. Measurement Focus, Basis of Accounting , and Financial Statement Presentation (Continued)
As a general rule , the effect of interfund activity has been eliminated from the government -wide
financial statements. Exceptions to this general rule are charges between the City 's utility functions
and various other functions of the City. Elimination of these charges would distort the direct costs
and program revenues reported for the various functions concerned .
Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating
revenues and expenses generally result from providing services and producing and delivering goods in
connection with a proprietary fund's principal ongoing operations. The principal operating revenues
of the City's Enterprise Funds are charges to customers for sales and services. The City also
recognizes as operating revenue the portion of tap fees intended to recover the cost of connecting
new customers to the system. Operating expenses for enterprise funds 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.
When both restricted and unrestricted resources are available for use , it is the City's policy to use
restricted resources first , then unrestricted resources as they are needed.
D. Assets, Liabilities, Deferred Outflows/Inflows of Resources , and Net Position or Equity
1. Deposits and Investments
Cash and investments include balances from all funds that are combined and invested to the
extent available in various securities as authorized by state law. Earnings from the pooled
investments are allocated to the individual funds based on the average of month -end cash and
investment balances.
The City's cash and cash equivalents are considered to be cash on hand, demand deposits and
short-term investments with original maturities of three months or less from the date of
acquisition.
Minnesota Statutes authorizes the City to invest in obligations of the U.S. Treasury , agencies and
instrumentalities, shares of investment companies whose only investments are in the
aforementioned securities, obligations of the State of Minnesota or its municipalities , bankers'
acceptances, future contracts, repurchase and reverse repurchase agreements , and commercial
paper of the highest quality with a maturity of no longer than 270 days and in the Minnesota
Municipal Investment Pool.
Certain investments for the City are reported at fair value as disclosed in Note 3. The City
categorizes its fair value measurements within the fair value hierarchy established by generally
accepted accounting principles. The Hierarchy is based on the valuation inputs used to measure
the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets;
Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable
inputs.
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61
City of Elk River
Notes to Basic Financial Statements
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
D.Assets, Liabilities, Deferred Outflows/Inflows of Resources , and Net Position or Equity
(Continued)
1.Deposits and Investments (Continued)
In accordance with GASB Statement No. 79 , the Minnesota Municipal Investment Pool securities
are valued at amortized cost , which approximates fair value. There are no restrictions or
limitations on withdrawals from the 4M Liquid Asset Fund. Investments in the 4M Plus must be
deposited for a minimum of 14 calendar days. Withdrawals prior to the 14 -day restriction period
will be subject to a penalty equal to seven days interest on the amount withdrawn. Seven days '
notice of redemption is required for withdrawals of investments in the 4M Term Series withdrawn
prior to the maturity date of that series. A penalty could be assessed as necessary to recoup the
Series for any charges, losses, and other costs attributable to the early redemption.
2.Receivables
All trade and property tax receivables are shown at a gross amount since both are assessable to
the property taxes and are collectible upon the sale of the property.
The City Council annually adopts a tax levy and certifies it to the County in December for
collection in the following year. The County is responsible for collecting all property taxes for the
City. These taxes attach an enforceable lien on taxable property within the City on January 1 and
are payable by the property owners in two installments. The taxes are collected by the County
and tax settlements are made to the City during January , July, and December each year.
The County Auditor submits the list of taxes and special assessments to be collected on each
parcel of property to the County Treasurer in January of each year.
Accounts receivable include amounts billed for services provided before year end. Unbilled utility
enterprise fund receivables are also included for services provided in 20 24. The City annually
certifies delinquent accounts to the County for collection in the following year. Therefore , there
has been no allowance for doubtful accounts established.
Special assessments represent the financing for public improvements paid for by benefiting
property owners. These assessments are recorded as receivable upon certification to the County.
Special assessments are recognized as revenue when they are received in cash or within 60 days
after year end. All governmental special assessments receivable are offset by a deferred inflow of
resources in the fund financial statements unless related to unpaid charges and are due within
one year.
3.Inventory and Prepaid Items
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. Prepaid items
are recorded as an expenditure at the time of consumption.
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62
City of Elk River
Notes to Basic Financial Statements
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
D. Assets, Liabilities, Deferred Outflows/Inflows of Resources , and Net Position or Equity
(Continued)
3. Inventory and Prepaid Items (Continued)
Inventory is valued at cost using the first in , first out (FIFO) method. Inventories of enterprise
funds are recorded as expenditures when consumed rather than when purchased.
Property held for resale consists of property that the City and Housing and Redevelopment
Authority component unit holds for resale. Properties held for resale are reported as an asset at
the lower of cost or estimated fair value.
4. Capital Assets
Capital assets, which include property , plant, equipment, and infrastructure assets (e.g., roads,
sidewalks, and similar items), are reported in the applicable governmental or business -type
activities columns in the government-wide financial statements. Capital assets are defined by the
City as assets with an initial cost of more than $10,000 and an estimated useful life in excess of
two years.
In the case of initial capitalization of general infrastructure assets (i.e., those reported by
governmental activities) the City chose to include all items previously accounted for. The City
had already accounted for its prior infrastructure at historical cost for the initial reporting of
these assets. As the City constructs or acquires capital assets each period , including
infrastructure assets, they are capitalized and reported at historical cost. The reported value
excludes normal maintenance and repairs which are essentially amounts spent in relation to
capital assets that do not increase the capacity or efficiency of the item or extend its useful life
beyond the original estimate. In the case of donations, the City values these capital assets at
acquisition value of the item at the date of its donation.
Property, plant, and equipment of the City, as well as the component unit, are depreciated using
the straight-line method over the following useful lives:
Years
Buildings and improvements 10 - 40
Other park improvements 10 - 20
Machinery and equipment 3 - 20
Public domain infrastructure 15 - 50
Infrastructure 20 - 50
Land improvements 5 - 60
System infrastructure 4 - 50
Land improvements 5 - 60
Classification
The City recognizes lease liabilities and intangible right -to-use lease assets (lease assets) in the
government-wide financial statements. The City recognizes lease liabilities with an initial ,
individual value of $10,000 or more for equipment leases , and an initial, individual value of
$25,000 or more property, plant and infrastructure leases.
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63
City of Elk River
Notes to Basic Financial Statements
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
D. Assets, Liabilities, Deferred Outflows/Inflows of Resources , and Net Position or Equity
(Continued)
5. Lease Receivable
The City is a lessor for numerous noncancellable leases. The City recognizes a lease receivable
and a deferred inflow of resources in the government -wide and governmental fund financial
statements.
At the commencement of a lease, the City measures the lease receivable at the present value of
payments expected to be received during the lease term. Subsequently, the lease receivable is
reduced by the principal portion of lease payments received. The deferred inflow of resources is
initially measured as the initial amount of the lease receivable, adjusted for lease payments
received at or before the lease commencement date.
Subsequently, the deferred inflow of resources is recognized as revenue over the life of the lease
term in a systematic and rational manner.
Key estimates and judgments include how the City determines (1) the discount rate, (2) lease
term, (3) lease receipts, and (4) amortization.
The City determines the discount rate for leases based on the applicable State and Local
Government Securities (SLGS) rate. The lease term includes the noncancellable period of the
lease. Lease receipts included in the measurement of the lease receivable is composed of fixed
payments from the lessee.
6. Right-to-Use Lease Assets/Lease Liabilities
The City recorded right-to-use lease assets as a result of implementing GASB Statement No. 87,
Leases. The right-to-use lease assets are initially measured at an amount equal to the initial
measurement of the lease liability plus any payments made prior to the lease term, less lease
incentives, and plus ancillary charges necessary to place the lease into service. The right -to-use
assets are amortized on a straight-line basis over the life of the related lease.
Key estimates and judgments related to leases include (1) the discount rate, (2) lease term, (3)
lease payments, and (4) amortization .
The City uses the interest rate charged by the lessor as the discount rate. When the interest rate
charged by the lessor is not provided, the City determines its estimated borrowing rate based on
the applicable State and Local Government Securities rate. The lease term includes the
noncancellable period of the lease. Lease payments included in the measurement of the lease
liability are composed of fixed payments and purchase option the City is reasonably certain to
exercise.
The City monitors changes in circumstances that would require a re -measurement of the leases
and will remeasure the right-to-use lease assets and liabilities if certain changes occur that are
expected to significantly affect the amount of the lease liability.
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64
City of Elk River
Notes to Basic Financial Statements
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position or Equity
(Continued)
7. 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 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 that time. The City has two items that qualify
for reporting in this category. The City presents deferred outflows of resources on the Statement
of Net Position for deferred outflows of resources related to pensions and OPEB for various
estimate differences that will be amortized and recognized over future years.
In addition to liabilities, the statement of financial position and fund financial statements 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 a future period(s) and
so will not be recognized as an inflow of resources (revenue) until that time. The City has four
items that qualify for reporting in this category. The City presents deferred inflows of resources
on the Governmental Fund Balance Sheet as unavailable revenue. The governmental funds report
unavailable revenues from three sources: property taxes, special assessments, and other. These
amounts are deferred and recognized as an inflow of resources in the period that the amounts
become available. The City presents deferred inflows of resources on the Statement of Net
Position for deferred inflows of resources related to pensions and OPEB for various estimate
differences that will be amortized and recognized over future years. Deferred inflows of
resources related to leases receivable is reported in both the government -wide Statement of Net
Position, the Governmental Funds Balance Sheet, and the Proprietary Funds Statement of Net
Position.
8. Compensated Absences
It is the City's policy to permit employees to accumulate earned but unused vacation and sick pay
benefits. Unused vacation can be accrued by the employees up to a maximum of 240 hours , the
limit of which is determined by years of service. 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 the event a liability is recorded
in the governmental funds, the General fund would be used to liquidate the compensated
absences payable. Employees can also accrue an unlimited amount of unused sick leave.
Employees with two or more years of service are entitled to receive severance pay equal to 50% of
unused sick leave, up to a maximum of 480 hours. The liability for severance pay is accounted for
the same as accrued vacation pay.
9. Long-Term Obligations
In the government-wide financial statements and proprietary fund types in the fund financial
statements, long-term debt, and other long-term obligations are reported as liabilities in the
applicable governmental activities, business -type activities, or proprietary fund type Statement
of Net Position. Bond premiums and discounts are deferred and amortized over the life of the
bonds using the straight-line method.
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65
City of Elk River
Notes to Basic Financial Statements
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
D.Assets, Liabilities, Deferred Outflows/Inflows of Resources , and Net Position or Equity
(Continued)
9.Long-Term Obligations (Continued)
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 is reported as other financing sources. Premiums received on debt issuances are reported
as other financing sources while discounts on debt issuances are reported as other financing uses.
Issuance costs, whether or not withheld from the actual debt proceeds received , are reported as
debt service expenditures.
10. Pensions
For purposes of measuring the net pension liability, net pension asset, deferred outflows/inflows
of resources, and pension expense, information about the fiduciary net position of the Public
Employees Retirement Association (PERA) and the relief association and additions to/deductions
from PERA's and the relief association's fiduciary net position have been determined on the same
basis as they are reported by PERA and the relief association except that PERA 's fiscal year end is
June 30. For this purpose, plan contributions are recognized as of employer payroll paid dates
and benefit payments and refunds are recognized when due and payable in accordance with the
benefit terms. Investments are reported at fair value.
11. Postemployment Benefits
The City of Elk River and its discretely presented component unit provide a single employer
defined benefit healthcare plan to eligible retirees and their spouses. The plan offers medical
insurance benefits. The total OPEB liability , deferred outflows of resources and deferred inflows
of resources related to OPEB and OPEB expense were measured actuarially in accordance with
GASB Statement No. 75 , based on entry age normal cost method.
12. Unearned Revenue
Unearned revenue arises when assets are recognized before revenue recognition criteria have
been satisfied. Grants and entitlements received before eligibility requirements are met are also
recorded as unearned revenue.
13. Fund Balance
In the fund financial statements, governmental funds report various levels of spending
constraints.
•Nonspendable Fund Balances – These are amounts that cannot be spent because they are
not in spendable form as they are legally or contractually required to be maintained intact
and include prepaid items, inventory, and advances to other funds.
•Restricted Fund Balances – These are subject to externally enforceable legal restrictions.
•Committed Fund Balances – The government's highest level of decision-making authority is
the City Council. The formal action to establish or modify a commitment is made through
resolution. Committed amounts cannot be used for any other purpose unless the City
Council modifies or rescinds the commitment by resolution.
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66
City of Elk River
Notes to Basic Financial Statements
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position or Equity
(Continued)
13. Fund Balance (Continued)
In the fund financial statements, governmental funds report various levels of spending
constraints.
• Assigned Fund Balances – Amounts constrained for specific purposes that are internally
imposed. In governmental funds other than the General Fund , assigned fund balance
represents all remaining amounts that are not classified as nonspendable and are neither
restricted nor committed. The City Council has adopted a fund balance policy which
delegates the authority to assign amounts for specific purposes to the City Administrator.
• Minimum Fund Balance Policy – The City has formally adopted a fund balance policy for
the General Fund. The City's policy is to maintain a minimum unassigned fund balance of
40-45% of budgeted operating expenditures for cash -flow timing needs.
The City will spend restricted funds first for expenditures that meet the intended purpose before
using unrestricted fund balance. Additionally, the City would first use committed , then assigned,
and lastly unassigned amounts of unrestricted fund balance when expenditures are made for the
purposes intended.
E. Net Position
Net position represents the difference between assets and deferred outflows of resources and
liabilities and deferred inflows of resources in the government -wide financial statements. Net
investment in capital assets, consists of capital assets, net accumulated depreciation , reduced by
the outstanding balance of any long -term debt used to build or acquire the capital assets. Net
position is reported as restricted in the government -wide financial statement when there are
limitations on use through external restrictions imposed by creditors , grantors, or laws or regulations
of other governments.
F. Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted
in the United States of America requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements. Estimates also affect the reported amounts of revenue and
expenditures/expense during the reporting period. Actual results could differ from those estimates.
G. Budgetary Information
Annual budgets are adopted on a basis consistent with accounting principles generally accepted in
the United States of America. Annual appropriated budgets are legally adopted for the General Fund
and the Library, Multipurpose Facility, and Economic Development Authority special revenue funds.
Project-length financial plans are adopted for all capital projects funds. All annual appropriations
lapse at fiscal year-end.
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67
City of Elk River
Notes to Basic Financial Statements
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
G. Budgetary Information (Continued)
On or before July 1 of each year, all departments and agencies of the City submit requests for
appropriation to the City's administrator so that a budget may be prepared. Before September 30 ,
the proposed budget is presented to the City Council for review and approval. The City Council holds
public hearings and may add to , subtract from, or change appropriations. Any changes in the budget
must be within the revenue and reserves estimated as available or the revenue estimates must be
changed by an affirmative vote by a majority of the City Council.
The budget is prepared by fund , function, and activity and includes information on the past year,
current year estimates, and requested appropriations for the next fiscal year. Expenditures may not
legally exceed budgeted appropriations at the fund level without Council approval. Spending control
is established by the amount of expenditures budgeted for the fund , but management control is
exercised at the department level. Reported budget amounts are as originally adopted or as
amended by Council approved supplemental appropriations and budget transfers.
NOTE 2 – STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY
A. Deficit Fund Balances
The following fund s had a deficit fund balance at December 31, 2024:
Amount
Nonmajor Special Revenue
Insurance Reserve 137,155$
Nonmajor Capital Projects
Park Dedication 405,306
TIF Districts 1,157,795
Fund
The deficits will be funded with future charges for services, refunds and reimbursements, transfers,
and tax increment revenue.
NOTE 3 – DEPOSITS AND INVESTMENTS
Cash balances of the City's funds that are intended to be invested on a long -term basis are combined
(pooled) and invested to the extent available in various investments authorized by Minnesota
Statutes. Each fund's portion of this pool (or pools) is displayed in the financial statements as "cash
and investments". For purposes of identifying risk of investing public funds , the balances and related
restrictions are summarized as follows.
A. Deposits
Custodial Credit Risk – Deposits: This is the risk that in the event of a bank failure, the City 's
deposits may not be returned to it. The City (including Elk River Municipal Utilities) has an
investment policy in place to address custodial credit risk for deposits, stating all deposits and
investments must be in compliance with Minnesota Statutes § 118A, with collateralization levels of
110% of the market value of the principal and accrued interest. As of December 31, 2024, the City's
bank balance of $15,825,885 was not exposed to custodial credit risk because it was insured and fully
collateralized by federal depository insurance and collateral pledged. The book balance as of
December 31, 2024, was $15,913,884.
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68
City of Elk River
Notes to Basic Financial Statements
NOTE 3 – DEPOSITS AND INVESTMENTS (CONTINUED)
A. Deposits (Continued)
Discretely Presented Component Unit
As of December 31, 2024, the HRA's bank balance of $1,450,277 was not exposed to custodial credit
risk because it was fully collateralized. The HRA's book balance of all deposits at December 31, 2024,
totaled $1,446,277.
B. Investments
Rating Fair Value
Less than 1
year 1-5 years 5+ years
Money market NR 5,840,724$ 5,840,724$ -$ -$
Certificates of deposit NR 7,297,284 2,360,538 4,936,746 -
Municipal bonds A to AAA 27,359,358 4,110,139 15,815,286 7,433,933
Other gov't backed securities NR 17,760,823 498,045 7,281,704 9,981,074
4M NR 14,519,308 14,519,308 - -
Total investments 72,777,497$ 27,328,754$ 28,033,736$ 17,415,007$
Type of Investments
Investment Maturities
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 and no more than 50% of the
City's total investment portfolio may be invested in certificates of deposit or commercial paper. As of
December 31 , 2024, the City had invested 5% or more of its total investment portfolio in one single
issuer, the Minnesota Municipal Money Market (4M Fund).
Credit Risk: Credit risk is the risk that an issuer to an investment will not fulfill its obligation. State
law limits investments in state and local securities and commercial paper to those with specified
rating by nationally recognized rating agencies. U.S. treasury obligations are not considered to have
credit risk. The City's investment policy does not further limit the ratings of their investments.
Interest Rate Risk: This is the risk that fair values of securities in a portfolio would decrease due to
changes in fair value interest rates. The City's investment policy uses diversification of maturity
dates as a means of managing exposure to fair value by stating that no more than 30% of the City 's
investments may extend beyond a five -year maturity.
Custodial Credit Risk – Investments: This is the risk in the event of the failure of the counterparty
the City will not be able to recover the value of its investments or collateral securities that are in
the possession of an outside party. The City typically limits its exposure by purchasing insured or
registered investments, or by the control of who holds the securities. As of December 31, 202 4, all
investments were insured or registered, or securities were held by the City or its agent in the City 's
name.
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NOTE 3 – DEPOSITS AND INVESTMENTS (CONTINUED)
B. Investments (Continued)
The City has the following recurring fair value measurements as of December 31 , 2024:
Type of investments Total Level 1 Level 2 Level 3
Money market 754,674$ 754,674$ -$ -$
Certificates of deposit 7,297,284 - 7,297,284 -
Municipal bonds 27,359,358 - 27,359,358 -
Other gov't backed securities 17,760,823 - 17,760,823 -
53,172,139$ 754,674$ 52,417,465$ -$
Investments at amortized cost 19,605,358
Total investments 72,777,497$
C. Deposits and Investments
Summary of cash deposits and investments as of December 31 , 2024, were as follows:
Deposits 15,913,884$ 1,446,277$ 17,360,161$
Investments 72,777,497 - 72,777,497
Petty cash 5,500 - 5,500
Total deposits and investments 88,696,881$ 1,446,277$ 90,143,158$
Primary
Government
Component
Unit HRA Total
Deposits and investments are presented in the December 31 , 2024, basic financial statements as
follows:
Statement of Net Position
Cash and investments 86,917,865$ 1,446,277$ 88,364,142$
Restricted cash 1,779,016 - 1,779,016
Total deposits and investments 88,696,881$ 1,446,277$ 90,143,158$
Primary
Government
Component
Unit HRA Total
NOTE 4 – NOTES RECEIVABLE/CONTRACT FOR DEED
The City has made several business subsidy loans to local businesses , some of which were funded
with grant proceeds received from the state and federal governments. The terms of repayment vary
with each loan and will be repaid over a period of 10 years. Under the terms of the grant agreement ,
the City retains the grant repayments. Notes receivable of $131,098 in the Revolving Loan Fund and
$285,699 in the State DEED Fund are outstanding at December 31 , 2024.
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NOTE 4 – NOTES RECEIVABLE/CONTRACT FOR DEED (CONTINUED)
In 2015, the City issued a $1 ,288,589 long-term note receivable related to the sale of property to a
developer under an abatement agreement. The note shall be payable in semiannual installments as
tax abatement revenues are received , commencing on August 1 , 2017, and maturing February 1,
2037. A note receivable of $558,562 in the Development Fund is outstanding at December 31 , 2024.
In 2021, the City entered into a $320,000 contract for deed for property, equipment, and buildings
located at property commonly referred to as Pinewood Golf Course , located in Elk River, Minnesota.
The contract for deed is to be repaid annually at 4% interest beginning July 2022. The contract for
deed matures on August 1, 2037. The balance of this contract for deed is $270,113 at December 31,
2024.
In 2006, the HRA issued a loan to a developer to assist in the financing of a housing development for
the benefit of low and moderate income residents which was funded with state grant proceeds.
Repayment of the loan is deferred for 30 years , payable in one lump sum at an interest rate of 1%.
Notes receivable of $400 ,000 in the HRA is outstanding at December 31 , 2024.
Starting in 2015, the HRA issued loans to applicants under the rehabilitation loan program. The terms
of each loan vary and are payable over five to 15 years with rates from 1.25% to 3.25%. Notes
receivable of $192,670 in the HRA are outstanding at December 31 , 2024.
NOTE 5 – LEASES RECEIVABLE
The City has various leases for building space. The lease agreements include annual principal and
interest payments. Interest and discount rates on the lease agreements range from 3.0% to 3.9%.
Revenue from these leases for the year ended December 31 , 2024, was $65,395.
There are also multiple leases with Verizon and Sprint that allows Elk River Municipal Utilities to
place antennas on water towers. The lease payments increase yearly. Interest and discount rates on
the lease agreements range from 1.41% to 1.78%. As of December 31 , 2024, the lease principal
receivable balance was $4,733,420. This is partially offset with a deferred inflow of lease resources.
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NOTE 6 – INTERFUND ASSETS/LIABILITIES
At December 31 , 2024, interfund balances for the City were as follows:
Amount
Due from/to other funds
General Fund Nonmajor Governmental Funds 266,033$
General Fund Electric 328,467
General Fund Water 243,473
Pavement Management Electric 260,434
Nonmajor Governmental Funds Nonmajor Governmental Funds 807,690
Nonmajor Governmental Funds Electric 102,355
Sewer Nonmajor Governmental Funds 171,800
Sewer Electric 232,326
Garbage Electric 164,444
Storm Water Electric 56,712
Electric Sewer 589
Electric Garbage 2,116
Electric Storm Water 864
Water Sewer 21,910
Water Nonmajor Governmental Funds 128,850
Total due from/to other funds 2,788,063$
Advances to/from other funds
Nonmajor Governmental Funds Nonmajor Governmental Funds 180,000$
Due from/to component unit
Primary Government - General Fund Component Unit - HRA 26,969$
Primary Government - Nonmajor Component Unit - HRA 43
Component Unit - HRA Primary Government - Nonmajor Governmental Funds 152,710
Total due from/to component unit 179,722$
Payable FundReceivable Fund
The interfund receivable/payable balances result from the distribution of utility collections and the
lending/borrowing between funds for operating or capital purposes.
The advance between nonmajor governmental funds represents an interfund balance related to the
purchase of a Zamboni ice resurfacer. In 2023, an amount of $200,000 was advanced from the Capital
Outlay Reserve Fund to the Multipurpose Facility Fund. Annual principal payments of $20,000 will be
made along with interest at a rate of four percent annually until the year 2033.
The outstanding balance between the primary government and the component unit represents the
transfer for administrative services and the lending/borrowing arrangement to finance construction
costs. The $152,710 payable to the HRA will be paid with the collection of tax increment revenue
and will not be repaid within one year.
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NOTE 7 – INTERFUND TRANSFERS
Transfers during the year ended December 31 , 2024, were as follows:
Nonmajor
Pavement Governmental Municipal
Transfers Out General Management Funds Liquor Sewer Total
General -$ -$ 471,000$ -$ -$ 471,000$
Nonmajor governmental funds 147,843 897,034 1,314,884 9,682 640,795 3,010,238
Municipal Liquor 1,000,000 - 250,000 - - 1,250,000
Sewer 175,000 - - - - 175,000
Garbage 58,000 - - - - 58,000
Storm Water 135,000 - 40,000 - - 175,000
Electric 1,400,000 - 127,629 - - 1,527,629
Total 2,915,843$ 897,034$ 2,203,513$ 9,682$ 640,795$ $6,666,867
Transfers In
Interfund transfers are used to provide additional capital funding or to move revenues from the fund
with collection authorization to debt service funds as principal and interest payments come due. In
addition, interfund transfers are occasionally authorized to allow redistribution of resources between
funds for the most efficient use of funds.
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NOTE 8 – CAPITAL ASSETS
Capital asset activity for the year ended December 31 , 2024, was as follows:
Primary Government
Beginning Ending
Balance Increases Decreases Balance
Governmental activities
Capital assets not being depreciated
Land 38,838,959$ 135,600$ 25,908$ 38,948,651$
Construction in progress 20,000 279,347 - 299,347
Total capital assets
not being depreciated 38,858,959 414,947 25,908 39,247,998
Other capital assets
Buildings 81,818,173 30,690 - 81,848,863
Other improvements 15,175,353 1,144,654 - 16,320,007
Equipment 19,798,937 2,249,067 480,482 21,567,522
Infrastructure 82,670,355 1,137,294 - 83,807,649
Equipment lease asset 507,518 132,029 160,724 478,823
Total other capital assets
at historical cost 199,970,336 4,693,734 641,206 204,022,864
Less accumulated depreciation for
Buildings 26,421,115 2,842,429 - 29,263,544
Other improvements 6,169,199 685,323 - 6,854,522
Equipment 11,428,506 1,417,464 470,563 12,375,407
Infrastructure 50,364,960 2,640,828 - 53,005,788
Less accumulated amortization for
Equipment lease asset 213,398 112,759 78,755 247,402
Total accumulated
depreciation and amortization 94,597,178 7,698,803 549,318 101,746,663
Total other capital
assets, net 105,373,158 (3,005,069) 91,888 102,276,201
Governmental activities capital
assets, net 144,232,117$ (2,590,122)$ 117,796$ 141,524,199$
Depreciation and amortization expense was charged to functions/programs of the governmental
activities as follows:
Governmental activities
General government 363,641$
Public safety 1,431,181
Public works 3,404,679
Culture and recreation 2,499,302
Total depreciation and amortization expense - governmental activities 7,698,803$
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NOTE 8 – CAPITAL ASSETS (CONTINUED)
Primary Government (Continued)
Beginning Ending
Balance Increases Decreases Balance
Business-type activities
Capital assets not being depreciated
Land 1,965,026$ -$ -$ 1,965,026$
Construction in progress 3,828,700 7,102,927 10,605,629 325,998
Total capital assets not
being depreciated 5,793,726 7,102,927 10,605,629 2,291,024
Other capital assets
Buildings and improvements 41,406,580 883,554 - 42,290,134
Improvements other than buildings 266,259 - - 266,259
Equipment and furniture 13,519,301 197,631 26,863 13,690,069
Intangible assets 27,769,490 946,134 - 28,715,624
Collection and distribution 147,904,911 11,185,261 691,916 158,398,256
Equipment lease asset 48,008 46,388 48,008 46,388
Total other capital assets
at historical cost 230,914,549 13,258,968 766,787 243,406,730
Less accumulated depreciation for
Buildings and improvements 13,939,808 1,291,338 - 15,231,146
Improvements other than buildings 123,504 15,502 - 139,006
Equipment and furniture 6,332,663 868,991 26,863 7,174,791
Intangible assets 3,506,558 668,135 - 4,174,693
Collection and distribution 77,919,869 3,940,835 660,917 81,199,787
Less accumulated amortization for
Equipment lease asset 15,522 9,548 23,524 1,546
Total accumulated
depreciation and amortization 101,837,924 6,794,349 711,304 107,920,969
Total other capital
assets, net 129,076,625 6,464,619 55,483 135,485,761
Business-type activities
capital assets, net 134,870,351$ 13,567,546$ 10,661,112$ 137,776,785$
Depreciation and amortization expense was charged to functions/programs of the business -type
activities as follows:
Business-type activities
Municipal liquor 63,737$
Sewer 1,708,674
Storm water 481,076
Electric 3,317,829
Water 1,223,033
Total depreciation expense - business-type activities 6,794,349$
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NOTE 8 – CAPITAL ASSETS (CONTINUED)
Capital asset activity for the HRA for the year ended December 31, 2024, was as follows:
Discretely Presented Component Unit
Beginning Ending
Balance Increases Decreases Balance
Capital assets not being depreciated
Land 315,900$ -$ -$ 315,900$
Capital assets being depreciated
Improvements other than buildings 174,290 - - 174,290
Less accumulated depreciation for
Improvements other than buildings 128,781 11,619 - 140,400
Total capital assets being
depreciated, net 45,509 (11,619) - 33,890
Component unit
capital assets, net 361,409$ (11,619)$ -$ 349,790$
Depreciation expense was charged to functions/programs of the HRA as follows:
Business-type activities
Housing and Redevelopment Authority 11,619$
NOTE 9 – LONG-TERM DEBT
A. General Obligation Bonds
The City issues general obligation (G.O.) bonds to provide for the construction of major capital
improvements having a relatively long life. They are payable from special assessments levied and
collected on local improvements to property and are backed by the full faith and credit of the City.
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NOTE 9 – LONG-TERM DEBT (CONTINUED)
B.Components of Long -Term Liabilities
Primary Government
Issue Interest Original Final Balance
Date Rates Issue Maturity End of Year
Governmental activities
General obligation bonds
EDA G.O. Refunding Bonds, Series 2013A 02/12/13 2.00%-3.00%9,685,000$ 02/01/33 5,910,000$
G.O. Sales Tax Revenue Bonds, Series 2019A 09/19/19 2.50%-5.00%32,715,000 12/01/44 28,690,000
G.O. Capital Improvement Bonds, Series 2020A 12/29/20 1.00%-5.00%9,435,000 02/01/42 8,745,000
12/29/20 1.00%-5.00%5,340,000 02/01/33 3,235,000
05/20/21 1.35%-5.00%4,805,000 02/01/42 4,325,000
Total general obligation bonds 50,905,000
Unamortized bond premium/discount 4,068,509
Lease liability 231,458
Compensated absences 2,120,002
Total governmental activities 57,324,969
Business-type activities
General obligation revenue bonds
12/29/20 1.00%-1.70%7,200,000 02/01/35 6,160,000
G.O. Water Revenue Bonds, Series 2021C 06/10/21 2.00%-4.00%1,615,000 08/01/41 1,445,000
Total general obligation revenue bonds 7,605,000
Revenue Bonds
Electric Revenue Bonds, Series 2016A 07/14/16 2.00%-4.00%9,755,000 02/01/36 7,020,000
Electric Revenue Bonds, Series 2018A 09/26/18 3.50%-5.00%10,000,000 08/01/48 8,815,000
Electric Revenue Bonds, Series 2021B 05/13/21 2.00%-5.00%11,810,000 08/01/51 11,170,000
Total revenue bonds 27,005,000
Total bonds 34,610,000
Unamortized bond premium/discount 1,330,542
Lease liability 44,836
Compensated absences 1,152,529
Total business-type activities 37,137,907
Total all long-term liabilities 94,462,876$
G.O. Capital Improvement Refunding Bonds,
Series 2020B
G.O. Capital Improvement and Equipment Bonds,
Series 2021A
G.O. Sewer Revenue Refunding Bonds,
Series 2020C
Long-term bonded indebtedness listed above were issued to finance equipment and the acquisition
and construction of capital facilities or to refinance (refund) previous bond issues.
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NOTE 9 – LONG-TERM DEBT (CONTINUED)
C. Changes in Long-Term Liabilities
Long-term liability activity for the year ended December 31 , 2024, was as follows:
Primary Government
Beginning Ending Due Within
Balance Additions Reductions Balance One Year
Governmental activities
Bonds payable
General obligation bonds 23,685,000$ -$ (1,470,000)$ 22,215,000$ 1,530,000$
General obligation revenue bonds 29,625,000 - (935,000) 28,690,000 1,000,000
Unamortized bond premiums 4,320,442 - (251,933) 4,068,509 -
Total bonds payable 57,630,442 - (2,656,933) 54,973,509 2,530,000
Lease liability 295,134 132,029 (195,705) 231,458 106,759
Compensated absences payable 1,992,878 1,044,522 (917,398) 2,120,002 850,922
Governmental activities
long-term liabilities 59,918,454$ 1,176,551$ (3,770,036)$ 57,324,969$ 3,487,681$
Business-type activities
Bonds payable
General obligation revenue bonds 8,185,000$ -$ (580,000)$ 7,605,000$ 595,000$
Revenue bonds 27,960,000 - (955,000) 27,005,000 990,000
Unamortized bond premiums 1,399,515 - (68,973) 1,330,542 -
Total bonds payable 37,544,515 - (1,603,973) 35,940,542 1,585,000
Lease liability 32,679 46,388 (34,231) 44,836 8,543
Compensated absences payable 673,722 2,007,048 (1,528,241) 1,152,529 1,064,132
Business-type activities
long-term liabilities 38,250,916$ 2,053,436$ (3,166,445)$ 37,137,907$ 2,657,675$
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NOTE 9 – LONG-TERM DEBT (CONTINUED)
D. Minimum Debt Payments
Minimum annual principal and interest payments required to retire long -term liabilities:
Primary Government
Year Ending
December 31, Principal Interest Principal Interest Principal Interest
2025 1,530,000$ 531,760$ 1,000,000$ 938,088$ 106,759$ 5,832$
2026 1,590,000 473,060 1,030,000 888,087 46,762 4,221
2027 1,640,000 412,616 1,080,000 836,588 26,452 2,781
2028 1,705,000 353,966 1,135,000 782,587 27,590 1,643
2029 1,765,000 297,560 1,195,000 725,838 23,895 465
2030-2034 8,015,000 831,274 6,680,000 2,915,037 - -
2035-2039 3,640,000 362,518 7,755,000 1,838,244 - -
2040-2044 2,330,000 64,124 8,815,000 782,400 - -
Total 22,215,000$ 3,326,878$ 28,690,000$ 9,706,869$ 231,458$ 14,942$
Year Ending
December 31, Principal Interest Principal Interest Principal Interest
2025 595,000$ 116,185$ 990,000$ 811,306$ 8,543$ 1,728$
2026 605,000 108,260 1,035,000 774,406 8,910 1,361
2027 605,000 100,110 1,075,000 738,256 9,294 977
2028 620,000 91,910 1,105,000 700,606 9,694 577
2029 620,000 88,910 1,140,000 663,606 8,395 163
2030-2034 3,285,000 299,940 6,330,000 2,707,856 - -
2035-2039 1,075,000 68,995 5,210,000 1,778,056 - -
2040-2044 200,000 6,000 4,460,000 1,159,756 - -
2045-2049 - - 4,570,000 484,563 - -
2050-2051 - - 1,090,000 36,900 - -
Total 7,605,000$ 880,310$ 27,005,000$ 9,855,311$ 44,836$ 4,806$
Governmental Activities
Business-Type Activities
Lease Liability
G.O. Revenue BondsG.O. Bonds Lease Liability
G.O. Revenue Bonds Revenue Bonds
E. Lease Liability
The City entered into lease agreements for copiers , body cameras, fleet cameras, and tasers. The
lease agreements include annual principal and interest payments as noted above. Interest and
discount rates on the lease agreements range from 0.36% to 4.22%.
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NOTE 10 – FUND BALANCE
Fund equity balances are classified as follows to reflect the limitations and restrictions of the
respective funds.
Nonmajor
General Pavement Governmental
Fund Management Funds Total
Nonspendable
Prepaid items 92,196$ -$ 114,671$ 206,867$
Restricted
Park and recreation improvements - - 945,809 945,809
Debt service - - 11,036,945 11,036,945
Landfill mitigation - - 978,207 978,207
Law enforcement - - 3,871 3,871
Fiscal recovery - - 214,490 214,490
Economic development - - 2,349,561 2,349,561
Capital projects - - 1,272,089 1,272,089
Total restricted - - 16,800,972 16,800,972
Committed
Capital projects - - 99,367 99,367
Street improvements - 5,513,936 - 5,513,936
Library operations - - 225,422 225,422
Multipurpose facility operations - - 99,989 99,989
Economic development - - 4,227,535 4,227,535
Total committed - 5,513,936 4,652,313 10,166,249
Assigned
Building construction/improvements - - 6,245,313 6,245,313
Economic development - - 631,923 631,923
Capital equipment - - 3,959,478 3,959,478
Street improvements - - 436,554 436,554
Other improvement projects - - 1,340,151 1,340,151
Park improvements - - 330,421 330,421
Total assigned - - 12,943,840 12,943,840
Unassigned 9,446,297 - (1,814,927) 7,631,370
Total fund balances 9,538,493$ 5,513,936$ 32,696,869$ 47,749,298$
Major Funds
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NOTE 11 – RISK MANAGEMENT
The City is exposed to various risks of loss related to torts; theft of damage to and destruction of
assets; errors and omissions; injuries to employees; and natural disasters for which the City carries
insurance. The City obtains insurance through participation in the League of Minnesota Cities
Insurance Trust (LMCIT) which is a risk sharing pool with approximately 800 other governmental
units. The City pays an annual premium to LMCIT for its workers compensation and property and
casualty insurance. The LMCIT is self-sustaining through member premiums and will reinsure for
claims above a prescribed dollar amount for each insurance event. Settled claims have not exceeded
the City's coverage in any of the past three fiscal years.
Liabilities are reported when it is probable that a loss has occurred, and the amount of the loss can
be reasonably estimated. Liabilities, if any, include an amount for claims that have been incurred
but not reported (IBNRs). The City's management is not aware of any incurred but not reported
claims.
NOTE 12 – PENSION PLANS
The City participates in various pension plans. Total pension expense for the year ended
December 31 , 2024, was $1,369,978. The components of pension expense are noted in the following
plan summaries.
The General Fund and Municipal Liquor , Sewer, Electric, and Water Funds typically liquidate the
liability related to the pensions.
Public Employees' Retirement Association
A.Plan Description
The City participates in the following cost -sharing multiple-employer defined benefit pension plans
administered by PERA. PERA's defined benefit pension plans are established and administered in
accordance with Minnesota Statutes Chapters 353, 353D, 353E, 353G, and 356. Minnesota Statutes
Chapter 356 defines each plan's financial reporting requirements. PERA 's defined benefit pension
plans are tax qualified plans under Section 401(a) of the Internal Revenue Code.
General Employees Retirement Plan
Membership in the General Plan includes employees of counties, cities, townships, schools in non -
certified positions, and other governmental entities whose revenues are derived from taxation, fees,
or assessments. Plan membership is required for any employee who is expected to earn more than
$425 in a month, unless the employee meets exclusion criteria.
Public Employees Police and Fire Plan
Membership in the Police and Fire Plan includes full -time, licensed police officers and firefighters
who meet the membership criteria defined in Minnesota Statutes § 353.64 and who are not earning
service credit in any other PERA retirement plan or a local relief association for the same service.
Employers can provide Police and Fire Plan coverage for part -time positions and certain other public
safety positions by submitting a resolution adopted by the City of Elk River's governing body. The
resolution must state that the position meets plan requirements.
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NOTE 12 – PENSION PLANS (CONTINUED)
Public Employees' Retirement Association (Continued)
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. When a member is vested, they have earned enough
service credit to receive a lifetime monthly benefit after leaving public service and reaching an
eligible retirement age. Members who retire at or over their Social Security full retirement age with
at least one year of service qualify for a retirement benefit.
General Employees Plan Benefits
General Employees Plan requires three years of service to vest. Benefits are based on a member's
highest average salary for any 5 successive years of allowable service, age, and years of credit at
termination of service. Two methods are used to compute benefits for General Plan members.
Members hired prior to July 1, 1989, receive the higher of Step or Level formulas. Only the Level
formula is used for members hired after June 30, 1989. Under the Step formula, General Plan
members receive 1.2% of the highest average salary for each of the first 10 years of service and 1.7%
for each additional year. Under the Level formula, General Plan members receive 1.7% of the highest
average salary for all years of service. For members hired prior to July 1, 1989, a full retirement
benefit is available when age plus years of service equal 90 and normal retirement age is 65.
Members can receive a reduced requirement benefit as early as age 55 if they have three or more
years of service. Early retirement benefits are reduced by .25% for each month under age 65.
Members with 30 or more years of service can retire at any age with a reduction of .25% for each
month the member is younger than age 62. The Level formula allows General Plan members to
receive a full retirement benefit at age 65 if they were first hired before July 1, 1989 or a t age 66 if
they were hired on or after July 1, 1989. Early retirement begins at age 55 with an actuarial
reduction applied to the benefit.
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%. The 2024 annual increase was 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.
Police and Fire Plan Benefits
Benefits for the Police and Fire Plan members hired before July 1, 2010, are vested after three years
of service. Members hired on or after July 1, 2010, are 50% vested after five years of service and
100% vested after 10 years. After five years, vesting increase by 10% each full year of service until
members are 100% vested after 10 years. Police and Fire Plan members receive 3% of highest average
salary for all years of service. Police and Fire Plan members receive a full retirement benefit when
they are 55 and vested, or when their age plus their years of service equals 90 or greater if they
were first hired before July 1, 1989. Early retirement starts at age 50, and early retirement benefits
are reduced by 0.417% each month members are younger than age 55.
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NOTE 12 – PENSION PLANS (CONTINUED)
Public Employees' Retirement Association (Continued)
B. Benefits Provided (Continued)
Police and Fire Plan Benefits (Continued)
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.
C. Contributions
Minnesota Statutes Chapter 353, 353E, 353G, and 356 set the rates for employer and employee
contributions. Contribution rates can only be modified by the state Legislature .
General Employees Fund Contributions
General Plan members were required to contribute 6.5% of their annual covered salary in fiscal year
2024 and the City and HRA were required to contribute 7.5% for General Plan members. The City and
HRA contributions to the General Employees Fund for the year ended December 31 , 2024, were
$995,347 and $6,243, respectively. The contributions were equal to the required contributions as set
by state statute.
Police and Fire Fund Contributions
Police and Fire Plan members were required to contribute 11.8% of their annual covered salary in
fiscal year 2024, and the City was required to contribute 17.7% for Police and Fire Plan members .
The City's contributions to the Police and Fire Fund for the year ended December 31 , 2024, were
$831,248. The City's contributions were equal to the required contributions as set by state statute.
D. Pension Costs
General Employees Fund Pension Costs
At December 31 , 2024, the City and HRA reported liabilities of $5,817,021 and $36,554, respectively,
for their proportionate shares of the General Employees Fund's net pension liability. The City and
HRA net pension liabilit ies 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 and HRA totaled $150,416
and $945, respectively.
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City of Elk River
Notes to Basic Financial Statements
NOTE 12 – PENSION PLANS (CONTINUED)
Public Employees' Retirement Association (Continued)
D.Pension Costs (Continued)
General Employees Fund Pension Costs (Continued)
City's proportionate share of the net pension liability 5,817,021$
HRA's proportionate share of the net pension liability 36,554
State of Minnesota's proportionate share of the net pension
liability associated with the City 151,361
Total 6,004,936$
The net pension liability was measured as of June 30, 202 4, 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, 202 3, through
June 30, 2024, relative to the total employer contributions received from all of PERA 's participating
employers. The City's proportionate share was 0.1573% at the end of the measurement period and
0.1599% for the beginning of the period. The HRA 's proportionate share was 0.0010% at the end of
the measurement period and 0.00 10% for the beginning of the period.
For the year ended December 31, 2024, the City and HRA recognized pension expense of $541,451
and $1,069, respectively, for their proportionate share of General Employees Plan 's pension expense.
Included in the amount, the City recognized $3,632 and the HRA recognized $25 as pension expense
(and grant revenue), respectively, for their proportionate share of the State of Minnesota's
contribution of $16 million to the General Employees Fund.
During the plan year ended June 30, 2024, the State of Minnesota contributed $170.1 million to the
General Employees Fund. The State of Minnesota is not included as a non -employer contributing
entity in the General Employees Plan pension allocation schedule for the $170.1 million in direct
state aid because this contribution was not considered to meet the definition of a special funding
situation. The City recognized $267,644 and the HRA recognized $1,682 for the year ended December
31, 2024 as revenue and an offsetting reduction of net pension liability for its proportionate share of
the State of Minnesota's on-behalf contributions to the General Employees Fund.
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City of Elk River
Notes to Basic Financial Statements
NOTE 12 – PENSION PLANS (CONTINUED)
Public Employees' Retirement Association (Continued)
D. Pension Costs (Continued)
General Employees Fund Pension Costs (Continued)
At December 31, 2024, the City and HRA reported its proportionate share of the General Employees
Plan's deferred outflows of resources and deferred inflows of resources , related to pensions from the
following sources:
Primary Government
Differences between expected and actual economic experience 551,481$ -$
Changes in actuarial assumptions 28,951 2,244,026
Net difference between projected and actual investment earnings - 1,631,236
Changes in proportion 73,785 139,015
Contributions paid to PERA subsequent
to the measurement date 489,949 -
Total 1,144,166$ 4,014,277$
Deferred
Outflows of
Resources
Deferred
Inflows of
Resources
Discretely Presented Component Unit
Differences between expected and actual economic experience 3,455$ -$
Changes in actuarial assumptions 181 14,001
Net difference between projected and actual investment earnings - 10,242
Changes in proportion 599 669
Contributions paid to PERA subsequent
to the measurement date 3,122 -
Total 7,357$ 24,912$
Deferred
Outflows of
Resources
Deferred
Inflows of
Resources
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City of Elk River
Notes to Basic Financial Statements
NOTE 12 – PENSION PLANS (CONTINUED)
Public Employees' Retirement Association (Continued)
D. Pension Costs (Continued)
General Employees Fund Pension Costs (Continued)
Discretely Presented Component Unit (Continued)
The $489,949 for the City and the $3,122 for the HRA reported as deferred outflows of resources
related to pensions resulting from City and HRA contributions subsequent to the measurement date
will be recognized as a reduction of the net pension liability in the year ended December 31 , 2025.
Other amounts reported as deferred outflows and deferred inflows of resources related to pensions
will be recognized in pension expense as noted on the following page.
Primary Government
Pension
Year Ending Expense
December 31,Amount
2025 (1,806,417)$
2026 (367,020)
2027 (740,789)
2028 (445,838)
Total (3,360,064)$
Discretely Presented Component Unit
Pension
Year Ending Expense
December 31,Amount
2025 (11,023)$
2026 (2,130)
2027 (4,722)
2028 (2,802)
Total (20,677)$
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City of Elk River
Notes to Basic Financial Statements
NOTE 12 – PENSION PLANS (CONTINUED)
Public Employees' Retirement Association (Continued)
D. Pension Costs (Continued)
Police and Fire Fund Pension Costs (Continued)
At December 31, 2024, the City reported a liability of $4,187,814 for its proportionate share of the
Police and Fire Fund's net pension liability. The net pension liability was measured as of June 30,
2024, 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, 202 3, through June 30, 2024, relative to the total employer
contributions received from all of PERA's participating employers. The City's proportionate share was
0.3183% at the end of the measurement period and 0.3180% for the beginning of the period.
The State of Minnesota contributed $37.4 million to the Police and Fire Fund in the plan fiscal year
ended June 30, 2024. The contribution consisted of $9 million in direct state aid that meets the
definition of a special funding situation, additional one -time direct state aid contribution of $19.4
million, and $9 million in supplemental state aid that does not meet the definition of a special
funding situation. Additionally, $9 million supplemental state aid was paid on October 1, 2024.
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. The State of Minnesota 's
proportionate share of the net pension liability associated with the City totaled $159,638 .
City's proportionate share of the net pension liability 4,187,814$
State of Minnesota's proportionate share of the net pension
liability associated with the City 159,638
Total 4,347,452$
For the year ended December 31, 202 4, the City recognized pension expense of $827,635 for its
proportionate share of the Police and Fire Plan's pension expense. Included in this amount, the City
recognized $28,648 as pension expense (and grant revenue) for its proportionate share of the State
of Minnesota's contribution of $9 million to the Police and Fire Fund.
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 $28.4 million in supplemental state aid because
this contribution was not considered to meet the definition of a special funding situation. The City
recognized $15,502 for the year ended December 31, 2024, as revenue and an offsetting reduction of
the net pension liability for its proportionate share of the State of Minnesota's on -behalf
contributions to the Police and Fire Fund.
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City of Elk River
Notes to Basic Financial Statements
NOTE 12 – PENSION PLANS (CONTINUED)
Public Employees' Retirement Association (Continued)
D. Pension Costs (Continued)
Police and Fire Fund Pension Costs (Continued)
At December 31, 2024, the City reported its proportionate share of the Police and Fire Plan 's
deferred outflows of resources and deferred inflows of resources related to pensions from the
following sources.
Differences between expected and actual economic experience 1,636,267$ -$
Changes in actuarial assumptions 4,665,665 6,159,769
Net difference between projected and actual investment earnings - 1,280,049
Changes in proportion 118,499 312,810
Contributions paid to PERA subsequent
to the measurement date 415,624 -
Total 6,836,055$ 7,752,628$
Deferred
Outflows of
Resources
Deferred
Inflows of
Resources
The $415,624 reported as deferred outflows of resources related to pensions resulting from City
contributions subsequent to the measurement date will be recognized as a reduction of the net
pension liability in the year ended December 31, 202 5. Other amounts reported as deferred outflows
and inflows of resources related to pensions will be recognized in pension expense as follows:
Pension
Year Ending Expense
December 31,Amount
2025 (185,574)$
2026 1,094,703
2027 (643,591)
2028 (1,695,150)
2029 97,415
Total (1,332,197)$
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City of Elk River
Notes to Basic Financial Statements
NOTE 12 – PENSION PLANS (CONTINUED)
Public Employees' Retirement Association (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 table on the following page.
Domestic equity 33.5 %5.10 %
International equity 16.5 5.30
Fixed income 25.0 0.75
Private markets 25.0 5.90
Total 100.0 %
Long-Term
Asset Class Target Allocation
Expected Real
Rate of Return
F.Actuarial Methods and Assumptions
The total pension liability in the June 30, 2024, 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 7.0%. 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 considered
reasonable by the actuary. An investment return of 7.0% is within that range.
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 and
1% for the Police and Fire Plan.
Salary growth assumptions in the General Employees Plan range in annual increments from 10.25%
after one year of service to 3.0% after 27 years of service. 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.
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City of Elk River
Notes to Basic Financial Statements
NOTE 12 – PENSION PLANS (CONTINUED)
Public Employees' Retirement Association (Continued)
F.Actuarial Methods and Assumptions (Continued)
Actuarial assumptions for the General Employees Plan are reviewed every four years. The General
Employees Plan was last reviewed in 2022. The assumption changes were adopted by the Board and
became effective with the July 1, 2023, actuarial valuation. The Police and Fire Plan was reviewed in
2024. PERA anticipates the experience study will be approved by the Legislative Commission on
Pensions and Retirement and become effective with the July 1, 2025 actuarial valuation.
The following changes in actuarial assumptions and plan provisions occurred in 2024:
General Employees Fund
Changes in Actuarial Assumptions
•Rates of merit and seniority were adjusted, resulting in slightly higher rates.
•Assumed rates of retirement were adjusted as follows: Increase the rate of assumed
unreduced retirements, slight adjustments to Rule of 90 retirement rates, and slight
adjustments to early retirement rates for Tier 1 and Tier 2 members.
•Minor increase in assumed withdrawals for males and females.
•Lower rates of disability.
•Continued use of Pub-2010 general mortality table with slight rate adjustments as
recommended in the most recent experience study.
•Minor changes to form of payment assumptions for male and female retirees.
•Minor changes to assumptions made with respect to missing participant data.
Changes in Plan Provisions
•The workers' compensation offset for disability benefits was eliminated. The actuarial
equivalent factors updated to reflect the changes in assumptions.
Police and Fire Fund
Changes in Plan Provisions
•The State contribution of $9.0 million per year will continue until the earlier of 1) both the
Police and Fire Plan and the State Patrol Retirement Fund attain 90% funded status for three
consecutive years (on an actuarial value of assets basis) or 2) July 1, 2048. The contribution
was previously due to expire after attaining a 90% funded status for one year.
•The additional $9.0 million contribution will continue until the Police and Fire Plan is fully
funded for a minimum of three consecutive years on an actuarial value of assets basis, or
July 1, 2048, whichever is earlier. This contribution was previously due to expire upon
attainment of fully funded status on an actuarial value of assets basis for one year (or July 1,
2048 if earlier).
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City of Elk River
Notes to Basic Financial Statements
NOTE 12 – PENSION PLANS (CONTINUED)
Public Employees' Retirement Association (Continued)
G.Discount Rate
The discount rate used to measure the total pension liability in 2024 was 7.0%. The projection of
cash flows used to determine the discount rate assumed that contributions from Plan members and
employers will be made at rates set in Minnesota Statutes. Based on these assumptions, the fiduciary
net positions of the General Employees and Police and Fire Plans were projected to be available to
make all projected future benefit payments of current Plan members. Therefore, the long -term
expected rate of return on pension plan investments was applied to all periods of projected benefit
payments to determine the total pension liability.
H.Pension Liability Sensitivity
The following presents the City and HRA's proportionate shares of the net pension liability for all
plans it participates in, calculated using the discount rate disclosed in the preceding paragraph, as
well as what the City's proportionate share of the net pension liability would be if it were calculated
using a discount rate 1 percentage point lower or 1 percentage point higher than the current
discount rate:
Primary Government
1% Decrease in Current 1% Increase in
City's proportionate share of
the General Employees Fund
net pension liability 8,705,312$ 5,817,021$ 150,776$
1% Decrease in Current 1% Increase in
City's proportionate share of
the Police and Fire Fund
net pension liability (asset)9,896,623$ 4,187,814$ (500,312)$
Discount Rate
(6.0%)
Discount Rate
(6.0%)
Discount Rate
(7.0%)
Discount Rate
(7.0%)
Discount Rate
(8.0%)
Discount Rate
(8.0%)
Discretely Presented Component Unit
1% Decrease in Current 1% Increase in
HRA's proportionate share of
the General Employees Fund
net pension liability 79,859$ 36,554$ 948$
Discount Rate
(6.0%)
Discount Rate
(7.0%)
Discount Rate
(8.0%)
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 Internet at www.mnpera.org.
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City of Elk River
Notes to Basic Financial Statements
NOTE 12 – PENSION PLANS (CONTINUED)
Public Employees Defined Contribution Plan (Defined Contribution Plan)
Council members of the City of Elk River are covered by the Defined Contribution Plan , a multiple
employer deferred compensation plan administered by PERA. The Defined Contribution Plan is a tax
qualified plan under Section 401(a) of the Internal Revenue Code and all contributions by or on
behalf of employees are tax deferred until time of withdrawal.
The defined contribution plan consists of individual accounts paying a lump -sum benefit. Plan
benefits depend solely on amounts contributed to the plan plus investment earnings, less
administrative expenses; therefore, there is no future liability to the City. Minnesota Statutes
Chapter 353D and 356, 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% 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 percent of salary. 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% of employer contributions and twenty -five hundredths of 1% (.25%) of the assets in each member's
account annually .
Pension expense for the year is equal to the contributions made. Total contributions made by the
City during fiscal year 2024 were:
892$ 892$
Required Rate
5%
Percentage of Covered Payroll
Employee Employer
5%5%
Contribution Amount
Employee Employer
Defined Benefit Pension Plan – Volunteer Firefighter's Relief Association
A. Plan Description
The Elk River Firefighter's Relief Association is the administrator of a single employer defined benefit
pension plan established to provide benefits for members of the Elk River Fire Department per
Minnesota State Statutes.
B. Benefits Provided
Volunteer firefighters of the City are members of the Elk River Firefighter's Relief Association. Full
retirement benefits are payable to members who have reached age 50 and have completed 20 years
of service for lump sum service pensions. Partial benefits are payable to members who have reached
50 and have completed 5 years of service. Disability benefits and widow and children's survivor
benefits are also payable to members, or their beneficiaries based upon requirements set forth in the
bylaws. These benefit provisions and all other requirements are consistent with enabling state
statutes.
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City of Elk River
Notes to Basic Financial Statements
NOTE 12 – PENSION PLANS (CONTINUED)
Defined Benefit Pension Plan – Volunteer Firefighter's Relief Association
C. Employees Covered by Benefit Terms
At December 31, 2022, the following employees were covered by the benefit terms:
Inactive employees entitled to but not yet receiving benefit payments 14
Active employees 53
Total 67
D. Contributions
Minnesota Statutes Chapter 424A.092 specifies minimum support rates required on an annual basis.
The minimum support rates from the municipality and from State aids are determined as the amount
required to meet the normal cost plus amortizing any existing prior service costs over a ten year
period. The City's obligation is the financial requirement for the year less state aids. Any additional
payments by the City shall be used to amortize the unfunded liability of the relief association. The
Association is comprised of volunteers: therefore, there are no payroll expenditures (i.e., there are
no covered payroll percentage calculations). During the year , the City recognized as revenue and as
an expenditure on behalf payment of $326,633 made by the State of Minnesota for the Relief
Association.
E. Net Pension Liability
The City's net pension liability was measured as of December 31 , 2023, and the total pension liability
used to calculate the net pension liability was determined by an actuarial valuation as of
December 31, 2022.
The total pension liability in the December 31 , 2022, actuarial valuation was determined using the
following actuarial assumptions , applied to all periods included in the measurement:
Inflation 2.50 %Per year
Discount rate 5.00 %Per year
Investment rate of return 5.00 %Per year
The demographic assumption of mortality is based on the rates use in the July 1 , 2020, Minnesota
PERA Police & Fire Plan actuarial valuation as described below.
Healthy Pre-retirement: Pub-2010 Public Safety Employee mortality tables with projected
mortality improvements based on scale MP -2021.
Healthy Post-retirement: Pub-2010 Healthy Retired Public Safety mortality tables with projected
mortality improvements based on scale MP -2021 with male rates being adjusted by a factor of 0.98.
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City of Elk River
Notes to Basic Financial Statements
NOTE 12 – PENSION PLANS (CONTINUED)
Defined Benefit Pension Plan – Volunteer Firefighter's Relief Association (Continued)
E.Net Pension Liability (Continued)
Disabled: Pub-2010 Public Safety Disabled Retiree mortality tables with projected mortality
improvements based on scale MP-2021. Male rates are adjusted by a factor of 1.05 .
The 5.00% long-term expected rate of return on pension plan investments was determined using a
building-block method in which best estimates for expected future real rates of return (expected
returns, net of inflation) were developed for each asset class using the plan 's target investment
allocation along with long-term return expectations by asset class. Inflation expectations were
applied to derive the nominal rate of return for the portfolio.
Best estimates of arithmetic real rates of return for each major asset class included in the pension
plan's target asset allocation as of the measurement date are summarized in the table below.
Domestic equity 32.0 %4.10 %
International equity 23.0 4.64
Fixed income 25.0 1.05
Real estate and alternatives 5.0 3.54
Cash and equivalents 15.0 -0.45
Total 100.0 %
Target Allocation
Long-Term
Expected Real
Rate of ReturnAsset Class
The discount rate used to measure the total pension liability was 5.00%. The projection of cash flows
used to determine the discount rate assumed that contributions to the plan will be made as specified
in statute. Based on that assumption and considering the funding ratio of the plan , the fiduciary net
position was projected to be available to make all projected future benefit payments of current
active and inactive members. Therefore , the long-term expected rate of return on pension plan
investments was applied to all periods of projected benefit payments to determine the total pension
liability.
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City of Elk River
Notes to Basic Financial Statements
NOTE 12 – PENSION PLANS (CONTINUED)
Defined Benefit Pension Plan – Volunteer Firefighter's Relief Association (Continued)
F. Changes in the Net Pension Liability
Total Plan Fiduciary Net
Pension Net Pension
Liability Position Liability
(a) (b)(a) - (b)
Balances at December 31, 2023 3,174,258$ 3,281,918$ (107,660)$
Changes for the year
Service cost 218,430 - 218,430
Interest cost 154,984 - 154,984
Contributions - State and local - 308,775 (308,775)
Net investment income - 313,844 (313,844)
Benefit payments (586,017) (586,017) -
Administrative expense - (16,797) 16,797
Net changes (212,603) 19,805 (232,408)
Balances at December 31, 2024 2,961,655$ 3,301,723$ (340,068)$
Increase (Decrease)
Sensitivity of the net pension liability to changes in the discount rate. The following table on the
next page presents the net pension liability of the City , calculated using the discount rate of 5.0%, as
well as what the City's net pension liability would be if it were calculated using a discount rate that
is 1-percentage-point lower (4.0%) or 1-percentage-point higher (6.0%) than the current rate:
1%1%
Decrease in
Discount Rate
Current
Discount
Increase in
Discount Rate
(4.0%)Rate (5.0%)(6.0%)
City's net pension liability (asset)(243,616)$ (340,068)$ (431,302)$
Detailed information about the pension plan 's fiduciary net position is available in the separately
issued relief association financial report.
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City of Elk River
Notes to Basic Financial Statements
NOTE 12 – PENSION PLANS (CONTINUED)
Defined Benefit Pension Plan – Volunteer Firefighter's Relief Association (Continued)
G.Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources
Related to Pensions
For the year ended December 31, 2024, the City recognized pension expense of $194,814. At
December 31 , 2024, the City reported deferred outflows of resources and deferred inflows of
resources related to pensions from the following sources:
Deferred Deferred
Outflows of Inflows of
Resources Resources
Differences between expected and actual liability 12,473$ 227,737$
Changes in actuarial assumptions 36,447 8,630
Net difference between projected and actual earnings on
pension plan investments 211,672 -
Contributions subsequent to the measurement date 356,633 -
Total 617,225$ 236,367$
The $356,633 reported as deferred outflows of resources related to pensions resulting from
contributions subsequent to the measurement date will be recognized as a reduction of the net
pension liability in the year ended December 31 , 2025. Other amounts reported as deferred outflows
and inflows of resources related to pensions will be recognized in pension expense as shown below:
Pension
Year Ending Expense
December 31,Amount
2025 8,082$
2026 40,740
2027 85,745
2028 (60,488)
2029 (18,549)
Thereafter (31,305)
Total 24,225$
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City of Elk River
Notes to Basic Financial Statements
NOTE 13 – POST EMPLOYMENT HEALTH CARE PLAN
A. Plan Description
The City provides other postemployment health insurance benefits for retired employees through a
defined benefit plan: Municipal Retirees Health Plan (MRHP), a single employer defined benefit
healthcare plan. The plan provides benefits for eligible retirees and their dependents through the
City's group health insurance plans, which cover both active and retired members. Since the premium
is a blended rate determined on the active and retiree population , the retirees are receiving an
implicit rate subsidy. The MRHP does not issue publicly available financial reports. No assets are
accumulated in a trust.
Elk River Municipal Utilities has switched to age -based medical premiums and no longer has an OPEB
liability. Since medical premiums are age -based, the premiums are equal to the expected true cost
of retiree coverage. As a result, there is no implicit subsidy for these benefits. There is also no
explicit subsidy since retirees must pay the full premium to remain covered during retirement.
B. Funding Policy
Contribution requirements are reviewed at the time changes are made to the plans. Benefit
provisions for MRHP are established and amended by the City. Eligible retirees receiving benefits are
required to pay 100% of the total premium.
C. Members
As of the valuation date of January 1, 2023, the following were covered by the benefit terms:
Active employees electing coverage 135
Retirees receiving payments 7
Spouses receiving payments 4
Total 146
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City of Elk River
Notes to Basic Financial Statements
NOTE 13 – POST EMPLOYMENT HEALTH CARE PLAN (CONTINUED)
D.Actuarial Assumptions
The total OPEB liability was determined by an actuarial valuation measured as of January 1, 2024,
using the following actuarial assumptions , applied to all periods included in the measurement , unless
otherwise specified:
Discount rate 3.70%
Salary increases Service graded table
Inflation 2.50%
Medical trend rate
Mortality assumption
6.25% in 2024, grading to 5.00% over 5
years and then to 4.00% over the next
48 years
Key Methods and Assumptions Used in Valuation of Total OPEB Liability
Pub-2010 Public Retirement Plans
Headcount-Weighted Mortality Tables
(General, Safety) with MP-2021
Generational Improvement Scale
The actuarial assumptions used in the January 1, 2023, valuation were based on the results of an
actuarial experience study for the period January 1 , 2022, to December 31, 2022.
Changes in Actuarial Assumptions
•The discount rate was changed from 4.00% to 3.70% based on updated 20 -year municipal bond
rates.
E.Total OPEB Liability
The City's total OPEB liability of $872,152 was measured as of January 1, 2024, and was determined
by an actuarial valuation as of January 1, 2023.
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City of Elk River
Notes to Basic Financial Statements
NOTE 13 – POST EMPLOYMENT HEALTH CARE PLAN (CONTINUED)
E. Total OPEB Liability (Continued)
Changes in the total OPEB liability are as follows:
Balance at December 31, 2023 826,361$
Changes for the year
Service cost 53,574
Interest 34,074
Changes of assumptions 14,883
Benefit payments (56,740)
Net changes 45,791
Balance at December 31, 2024 872,152$
The General Fund and Municipal Liquor and Sewer Funds typically liquidate the liability related to
OPEB. No assets are accumulated in a trust to pay related benefits.
F. OPEB Liability Sensitivity
The following presents the City's total OPEB liability calculated using the discount rate of 3.70% as
well as the liability measured using 1% lower and 1% higher than the current discount rate.
1% Decrease in
Trend Rate Current
1% Increase in
Trend Rate
2.70%3.70%4.70%
933,098$ 872,152$ 815,367$
Total OPEB Liability
The table below 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% lower and 1%
higher than the current healthcare cost trend rates.
1% Decrease in
Discount Rate Current
1% Increase in
Discount Rate
787,215$ 872,152$ 971,646$
Total OPEB Liability
(5.25% Decreasing
to 3.0%)
(6.25% Decreasing
to 4.0%)
(7.25% Decreasing
to 5.0%)
Page 288 of 637
99
City of Elk River
Notes to Basic Financial Statements
NOTE 13 – POST EMPLOYMENT HEALTH CARE PLAN (CONTINUED)
G.OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources
Related to OPEB
For the year ended December 31, 2024, the City recognized OPEB expense of $55,044. At
December 31 , 2024, the City reported deferred outflows of resources and deferred inflows of
resources related to OPEB from the following sources:
Deferred Deferred
Outflows of Inflows of
Resources Resources
Differences between expected and actual liability 4,241$ 55,922$
Changes of assumptions 32,499 71,574
Contributions between measurement date and reporting date 73,294 -
Total 110,034$ 127,496$
The $73,294 reported as deferred outflows of resources related to OPEB resulting from City
contributions subsequent to the measurement date will be recognized as a reduction of the OPEB
liability in the year ended December 31 , 2025. Other amounts reported as deferred outflows of
resources related to OPEB will be recognized in pension expense as shown on the following page:
Total
(32,596)$
(16,130)
(23,061)
(10,544)
(10,546)
2,121
Total (90,756)$
Thereafter
2025
2026
2027
2028
2029
Year Ending
December 31,
Page 289 of 637
100
City of Elk River
Notes to Basic Financial Statements
NOTE 14 – COMMITMENTS AND CONTINGENCIES
A. Commitments
The Utilities entered into an agreement in 2007 with Central Minnesota Municipal Power Agency
(CMMPA) to acquire an interest in the CAPX Initiative Brookings Project , a power transmission line in
Minnesota. The project is a 250-mile, 345 kV AC transmission line with a rating of 2 ,300 MW,
between Brookings, South Dakota, and the Southeast Twin Cities. In 2011 , there was increased
opportunity for investment, and subsequent agreements provide the Utilities with an ownership share
of $5.6 million or 18.89%. Revenues have been less than originally projected due to the decrease in
Rate of Return (ROE) issued by FERC. The original ROE 12.38% has been reduced to 10.48% on this
investment through CMMPA is designed to provide approximately $80K annually over the 40 -year
project life. With majority of the distribution once the bonds are paid off , the projected over
recovery in 2024 is estimated to be $146K. The bond obligations are satisfied first, distribution to
participants is directly affected by under recovery. The under recovery is rolled forward under the
true up. However, the under recovery in 2024 (approximately $146K) would be included in the
revenue requirements in 2026. The transmission payments for 2024 were $0.
B. Contingent Liabilities
Amounts received or receivable from grant agencies are subject to audit and adjustment by grantor
agencies, principally the federal government. Any disallowed claims , including amounts already
collected, may constitute a liability of the applicable funds. The amount , if any, of expenditures that
may be disallowed by the grantor cannot be determined at this time , although the government
expects such amounts, if any, to be immaterial.
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. The City's management is not aware of any instances of noncompliance which would
have a material effect on the financial statements.
NOTE 15 – TAX ABATEMENTS
The City of Elk River has established a tax abatement program pursuant to Minnesota Statutes
Sections 469.1812 through 469.1815. As part of the City's program the City enters into agreements
through the use of tax increment financing districts under Minnesota Statutes Section 469.174 to
469.179 (the Tax Increment Act). Under these statutes, the City annually abates taxes collected
above the district's base tax capacity which is established during adoption of the tax increment
district. These agreements are established to foster economic development and redevelopment
through creating jobs, removing blight, and providing affordable housing.
For fiscal year ending December 31, 202 4, the City has six agreements established under Minnesota
Statutes Section 469.174 to 469.179 which resulted in property taxes totaling $276,800 being abated.
Individual abatement payments which constituted more than 1% of the City's 2023 tax levy include:
• A pay-as-you-go note resulting in an abatement amount of $1 72,027, for a financial
institution.
Page 290 of 637
101
City of Elk River
Notes to Basic Financial Statements
NOTE 15 – TAX ABATEMENTS (CONTINUED)
As part of the City's tax abatement program, the City also enters into agreements with local
businesses in the form of business subsidy agreements established under Minnesota Statutes Section
116J.993 through 116J.995. These agreements must meet a public purpose which may include , but
may not be limited to, increasing the tax base.
In 2024, the City of Elk River had five business subsidy agreements in place which resulted in
property taxes totaling $133,100 being abated. Individual agreements which result in taxes abated in
excess of 1% of the City's total tax levy would be disclosed individually. There were no such payments
made in 2023 or 2024 in excess of this amount.
NOTE 16 – OTHER INFORMATION
A. Territorial Acquisition Agreement
In 2015, the Utilities entered into an agreement to transfer ownership of electric plant and electric
service to customers in eight designated areas receiving service from Connexus Energy. Specific
payment terms have been negotiated for five years, and if any of the eight areas are not acquired
within this timeframe, the payment terms may be renegotiated. In 2019, the Utilities acquired the
final service areas.
The agreed cost of property purchased from Connexus Energy is net book value, integration
expenses, and a loss of revenue payment. The loss of revenue payment for each area acquired is
based on a formula outlined in the agreement, payable for the subsequent ten years after initial
purchase.
The Utilities acquired designated service area one in 2015 for $877,807, service area two in 2016 for
$663,586, service areas three and four in 2017 for $276,776, service areas five and six in 2018 for
$298,736 and service areas seven and eight in 2019 for $78,457. The loss of revenue payments made
were $411,157 in 2017, $570,725 in 2018, $751,860 in 2019, $834,185 in 2020, $857,538 in 2021,
$924,187 in 2022, $940,467 in 2023, $933,159 in 2024 , and $946,133 in 2025. All amounts paid are
included in property and equipment, and loss of revenue payments are included in intangible assets.
Page 291 of 637
102
City of Elk River
Notes to Basic Financial Statements
NOTE 17 – OTHER INFORMATION (CONTINUED)
B. Joint Ventures
The City has agreements with government and other entities which provide reduced costs , better
service, and additional benefits to the participants. In 2007 , the City and neighboring municipalities
formed the Sherburne/Wright Cable Communications Commission (the Commission). The purpose of
the organization is to monitor the operation and activities of cable communications of the member
municipalities. The Commission also provides coordination , administration, and enforcement of the
franchises for the cable communication system. The City has no ongoing financial interest or
responsibility with regards to the Cable Commission. Financial statements for the Commission can be
obtained by writing to: Sherburne/Wright Cable Communications Commission at 444 Cedar Street ,
Suite 950, St. Paul, Minnesota 55101.
C. Segment Information
The City maintains six enterprise funds that account for the municipal liquor operations , garbage
collections, sewer, storm water, water, and electric utilities. The City considers each of its
enterprise funds to be a segment. Since the required segment information is already included in the
City's proprietary funds' balance sheet and statement of revenues , expenses, and changes in net
position balance, this information has not been repeated in the notes to the basic financial
statements.
Page 292 of 637
103
REQUIRED SUPPLEMENTARY INFORMATION
Page 293 of 637
See notes to required supplementary information. 104
December 31,December 31,December 31,December 31,
2018 2019 2020 2021
Total OPEB Liability
Service cost 58,939$ 44,470$ 53,284$ 62,443$
Interest 30,051 31,024 32,766 27,703
Differences between expected
and actual experience - (87,455) - (101,343)
Changes of assumptions - (27,862) 48,516 13,730
Benefit payments (47,958) (42,048) (51,790) (49,504)
Net change in total OPEB liability 41,032 (81,871) 82,776 (46,971)
Beginning of year 875,478 916,510 834,639 917,415
End of year 916,510$ 834,639$ 917,415$ 870,444$
8,658,239$ 9,076,855$ 9,349,161$ 10,007,339$
Total OPEB liability as a percentage of
covered-employee payroll 10.59%9.20%9.81%8.70%
Note 1: Schedule is intended to show ten year trend. Additional years will be reported as they become available.
Note 2: No assets are accumulated in a trust.
Covered-employee payroll
City of Elk River
Schedule of Changes in Total OPEB Liability
and Related Ratios - Municipal Retirees Health Plan
Page 294 of 637
105
December 31,December 31,December 31,
2022 2023 2024
64,316$ 49,594$ 53,574$
18,192 18,488 34,074
- 5,939 -
- (94,638) 14,883
(50,618) (55,356) (56,740)
31,890 (75,973) 45,791
870,444 902,334 826,361
902,334$ 826,361$ 872,152$
10,307,559$ 11,694,646$ 12,045,485$
8.75%7.07%7.24%
Page 295 of 637
106
Primary Government
City's Covered-
Employee
Payroll
2015 0.1438%7,452,462$ -$ 7,452,462$ 8,712,032$ 85.54%78.19%
2016 0.1435%11,651,488 152,173 11,803,661 8,902,000 130.89%68.91%
2017 0.1515%9,611,075 120,624 9,731,699 9,695,118 99.13%75.90%
2018 0.1444%8,060,648 261,004 8,321,652 9,702,980 83.07%79.53%
2019 0.1443%7,977,792 247,930 8,225,722 10,216,960 78.08%80.23%
2020 0.1503%9,013,814 277,843 9,291,657 10,715,865 84.12%79.06%
2021 0.1548%6,610,551 201,689 6,812,240 11,138,929 59.35%87.00%
2022 0.1606%12,716,785 372,972 13,089,757 12,032,776 105.68%76.67%
2023 0.1599%9,033,562 249,055 9,282,616 12,846,330 70.32%83.10%
2024 0.1573%5,817,021 150,416 5,967,437 13,317,156 43.68%89.08%
Component Unit - Housing and Redevelopment Authority
HRA's Covered-
Employee
Payroll
2015 0.0009%46,951$ -$ 46,951$ 54,886$ 85.54%78.19%
2016 0.0009%73,404 959 74,363 59,083 124.24%68.91%
2017 0.0010%60,586 1,170 61,756 61,433 98.62%75.90%
2018 0.0009%51,835 1,698 53,533 62,892 82.42%79.53%
2019 0.0010%55,520 1,725 57,245 66,193 83.88%80.23%
2020 0.0009%51,316 1,582 52,898 61,042 84.07%79.06%
2021 0.0006%25,725 785 26,510 43,351 59.34%87.00%
2022 0.0008%66,148 1,940 68,088 62,584 105.70%76.67%
2023 0.0010%53,256 1,468 54,725 75,724 70.33%83.10%
2024 0.0010%36,554 945 37,499 83,684 43.68%89.08%
HRA's
Proportionate
Share of the
Net Pension
Liability (Asset)
as a Percentage
of its Covered-
Employee
Payroll
Plan Fiduciary
Net Position as
a Percentage of
the Total
Pension
Liability
City of Elk River
Schedule of City's Proportionate Share
of Net Pension Liability - General Employees Retirement Fund
Last Ten Years
City's
Proportionate
Share of the
Net Pension
Liability and
the State's
Proportionate
Share of the
Net Pension
Liability
Associated with
the City
For Fiscal
Year Ended
June 30,
City's
Proportionate
Share
(Percentage) of
the Net Pension
Liability (Asset)
City's
Proportionate
Share (Amount)
of the Net
Pension
Liability (Asset)
State's
Proportionate
Share (Amount)
of the Net
Pension
Liability
Associated with
the City
City's
Proportionate
Share of the
Net Pension
Liability (Asset)
as a Percentage
of its Covered-
Employee
Payroll
Plan Fiduciary
Net Position as
a Percentage of
the Total
Pension
Liability
HRA's
Proportionate
Share of the
Net Pension
Liability and
the State's
Proportionate
Share of the
Net Pension
Liability
Associated with
the HRA
For Fiscal
Year Ended
June 30,
HRA's
Proportionate
Share
(Percentage) of
the Net Pension
Liability (Asset)
HRA's
Proportionate
Share (Amount)
of the Net
Pension
Liability (Asset)
State's
Proportionate
Share (Amount)
of the Net
Pension
Liability
Associated with
the HRA
Page 296 of 637
107
For Fiscal
Year Ended
June 30,
City's
Proportion of
the Net Pension
Liability (Asset)
City's
Proportionate
Share of the
Net Pension
Liability (Asset)
State's
Proportionate
Share (Amount)
of the Net
Pension
Liability
Associated with
the City
City's
Proportionate
Share of the
Net Pension
Liability and
the State's
Proportionate
Share of the
Net Pension
Liability
Associated with
the City
City's Covered-
Employee
Payroll
City's
Proportionate
Share of the
Net Pension
Liability (Asset)
as a Percentage
of its Covered-
Employee
Payroll
Plan Fiduciary
Net Position as
a Percentage of
the Total
Pension
Liability
2015 0.3040%3,454,151$ -$ 3,454,151$ 2,788,952$ 123.85%86.61%
2016 0.3060%12,280,312 53,870 12,334,182 2,952,673 415.90%63.88%
2017 0.3140%4,239,374 43,337 4,282,711 3,211,726 132.00%85.43%
2018 0.3045%3,245,656 - 3,245,656 3,220,233 100.79%88.84%
2019 0.3175%3,380,110 - 3,380,110 3,352,444 100.83%89.26%
2020 0.2998%3,951,685 93,106 4,044,791 3,390,212 116.56%87.19%
2021 0.3115%2,404,450 108,129 2,512,579 3,682,040 65.30%93.66%
2022 0.3277%14,260,210 622,936 14,883,146 3,981,040 358.20%70.53%
2023 0.3180%5,491,447 221,260 5,712,707 4,176,503 131.48%86.47%
2024 0.3183%4,187,814 159,638 4,347,452 4,407,870 95.01%90.17%
City of Elk River
of Net Pension Liability - Public Employees Police and Fire Retirement Fund
Last Ten Years
Schedule of City's Proportionate Share
Page 297 of 637
108
Primary Government
2015 668,633$ 668,633$ -$ 8,915,107$ 7.50%
2016 690,811 690,811 - 9,210,813 7.50%
2017 706,711 706,711 - 9,422,813 7.50%
2018 736,804 736,804 - 9,824,053 7.50%
2019 753,933 753,933 - 10,052,440 7.50%
2020 810,637 810,637 - 10,808,493 7.50%
2021 886,693 886,693 - 11,822,573 7.50%
2022 923,995 923,995 - 12,319,933 7.50%
2023 972,578 972,578 - 12,967,707 7.50%
2024 995,347 995,347 - 13,271,293 7.50%
Component Unit - Housing and Redevelopment Authority
2015 4,212$ 4,212$ -$ 56,160$ 7.50%
2016 4,352 4,352 - 58,027 7.50%
2017 4,494 4,494 - 59,920 7.50%
2018 4,810 4,810 - 64,133 7.50%
2019 5,040 5,040 - 67,200 7.50%
2020 4,629 4,629 - 61,720 7.50%
2021 3,678 3,678 - 49,040 7.50%
2022 4,665 4,665 - 62,200 7.50%
2023 5,799 5,799 - 77,320 7.50%
2024 6,243 6,243 - 83,240 7.50%
City of Elk River
Schedule of City Contributions -
General Employees Retirement Fund
Last Ten Years
Fiscal Year
Ending
December 31,
Statutorily
Required
Contribution
Contributions
in Relation to
the Statutorily
Required
Contributions
Contribution
Deficiency
(Excess)
City's Covered-
Employee
Payroll
Contributions
as a
Percentage of
Covered-
Employee
Payroll
Contribution
Deficiency
(Excess)
City's Covered-
Employee
Payroll
Contributions
as a
Percentage of
Covered-
Employee
Payroll
Statutorily
Required
Contribution
Contributions
in Relation to
the Statutorily
Required
Contributions
Fiscal Year
Ending
December 31,
Page 298 of 637
109
2015 478,192$ 478,192$ -$ 2,951,802$ 16.20%
2016 495,478 495,478 - 3,058,506 16.20%
2017 508,774 508,774 - 3,140,580 16.20%
2018 533,296 533,296 - 3,291,951 16.20%
2019 631,494 631,494 - 3,725,628 16.95%
2020 610,950 610,950 - 3,451,695 17.70%
2021 690,006 690,006 - 3,898,339 17.70%
2022 724,413 724,413 - 4,092,729 17.70%
2023 779,420 779,420 - 4,403,503 17.70%
2024 831,248 831,248 - 4,696,316 17.70%
Schedule of City Contributions -
Public Employees Police and Fire Retirement Fund
City of Elk River
Last Ten Years
Fiscal Year
Ending
December 31,
Statutorily
Required
Contribution
Contributions
in Relation to
the Statutorily
Required
Contributions
Contribution
Deficiency
(Excess)
City's Covered-
Employee
Payroll
Contributions
as a
Percentage of
Covered-
Employee
Payroll
Page 299 of 637
110
2015 2016 2017 2018
Service cost $ 93,312 $ 99,459 $ 107,095 $ 101,600
126,522 127,413 142,222 146,894
Differences between expected
and actual experience - - (147,992) -
Changes of assumptions -297,706 - 11,196
Changes of benefit terms 62,318 - 55,532 -
Benefit payments - (423,760)(147,015)-
Net change in TPL 282,152 100,818 9,842 259,690
TPL - beginning 1,953,814 2,235,966 2,336,784 2,346,626
TPL - ending 2,235,966$ 2,336,784$ 2,346,626$ 2,606,316$
Plan Fiduciary Net Position (PFNP)
Contributions - State 164,825$ 177,826$ 179,192$ 182,297$
Contributions - City 30,000 30,000 30,000 30,000
Net investment income 124,109 (143,580) 229,424 457,331
Other additions - - - -
Benefit payments - (423,760)(147,015) -
Administrative expense (8,634) (13,663) (12,884) (12,907)
Net change in PFNP 310,300 (373,177) 278,717 656,721
PFNP - beginning 2,880,579 3,190,879 2,817,702 3,096,419
PFNP - ending 3,190,879$ 2,817,702$ 3,096,419$ 3,753,140$
$ (954,913)(480,918)$ (749,793)$ (1,146,824)$
142.71%120.58%131.95%144.00%
2015 2016 2017 2018
Statutorily required contribution (a) $ 174,826 $ 179,192 $ 182,297 $ 189,502
204,826 209,192 212,297 219,502
Contribution deficiency (excess) (a-b)(30,000) (30,000) (30,000) (30,000)
* This schedule is intended to show information for ten years. Additional years will be displayed
as they become available.
Actual contributions paid (b)
Interest on the pension liability
Total Pension Liability (TPL)
City of Elk River
Schedule of Changes in Net Pension Liability and Related Ratios -
Elk River Fire Relief Association
Last Ten Years*
Net pension liability/(asset) - ending
Plan fiduciary net position as a
percentage of the total pension
liability
Schedule of City Contributions -
Elk River Fire Relief Association
Last Ten Years*
Page 300 of 637
111
2019 2020 2021 2022 2023 2024
$ 107,610 $ 138,202 $ 154,084 $ 141,264 $ 196,328 $ 218,430
146,432 164,617 158,331 153,908 179,830 154,984
(14,808) - (141,716) 19,130 (162,665) -
39,541 25,224 16,270 - (11,236) -
645,281 - - 725,544 - -
(334,581) (396,875) (228,840) (296,383) (856,550) (586,017)
589,475 (68,832) (41,871) 743,463 (654,293) (212,603)
2,606,316 3,195,791 3,126,959 3,085,088 3,828,551 3,174,258
3,195,791$ 3,126,959$ 3,085,088$ 3,828,551$ 3,174,258$ 2,961,655$
189,502$ 199,451$ 206,496$ 220,909$ 255,658$ 278,775$
30,000 30,000 30,000 30,000 30,000 30,000
(224,880) 540,907 326,613 377,358 (525,860) 313,844
- - - - - -
(334,581) (396,875) (228,840) (296,383) (856,550) (586,017)
(11,963) (16,374) (13,085) (17,309) (15,416) (16,797)
(351,922) 357,109 321,184 314,575 (1,112,168) 19,805
3,753,140 3,401,218 3,758,327 4,079,511 4,394,086 3,281,918
3,401,218$ 3,758,327$ 4,079,511$ 4,394,086$ 3,281,918$ 3,301,723$
(205,427)$ (631,368)$ (994,423)$ (565,535)$ (107,660)$ (340,068)$
106.43%120.19%132.23%114.77%103.39%111.48%
2019 2020 2021 2022 2023 2024
$ 199,424 $ 206,496 $ 220,909 $ 252,658 $ 275,775 $ 326,633
229,424 236,496 250,909 282,658 305,775 356,633
(30,000) (30,000) (30,000) (30,000) (30,000) (30,000)
Page 301 of 637
112
(THIS PAGE LEFT BLANK INTENTIONALLY)
Page 302 of 637
City of Elk River
Notes to Required Supplementary Information
113
General Employees Fund
2024 Changes
Changes in Actuarial Assumptions
•Rates of merit and seniority were adjusted, resulting in slightly higher rates.
•Assumed rates of retirement were adjusted as follows: increase the rate of assumed
unreduced retirements, slight adjustments to Rule of 90 retirement rates, and slight
adjustments to early retirement rates for Tier 1 and Tier 2 members.
•Minor increase in assumed withdrawals for males and females.
•Lower rates of disability.
•Continued use of Pub-2010 general mortality table with slight rate adjustments as
recommended in the most recent experience study.
•Minor changes to form of payment assumptions for male and female retirees.
•Minor changes to assumptions made with respect to missing participant data.
Changes in Plan Provisions
•The workers' compensation offset for disability benefits was eliminated. The actuarial
equivalent factors updated to reflect the changes in assumptions.
2023 Changes
Changes in Actuarial Assumptions
•The investment return assumption and single discount rate were changed from 6.5% to 7.0%.
Changes in Plan Provisions
•An additional one-time direct state aid contribution of $170.1 million was contributed to the
Plan on October 1, 2023.
•The vesting period of those hired after June 30, 2010, was changed from five years of
allowable service to three years of allowable service.
•The benefit increase delay for early retirements on or after January 1, 2024, was eliminated.
•A one-time, non-compounding benefit increase of 2.5% minus the actual 2024 adjustment will
be payable in a lump sum for calendar year 2024 by March 31, 2024.
2022 Changes
Changes in Actuarial Assumptions
•The mortality improvement scale was changed from scale MP -2020 to scale MP-2021.
Changes in Plan Provisions
•There have been no changes since the prior valuation.
2021 Changes
Changes in Actuarial Assumptions
•The investment return and single discount rates were changed from 7.5% to 6.5% for financial
reporting purposes.
•The mortality improvement scale was changed from scale MP -2019 to scale MP-2020.
Changes in Plan Provisions
•There have been no changes since the prior valuation.
2020 Changes
Changes in Actuarial Assumptions
•The price inflation assumption was decreased from 2.5% to 2.25%.
•The payroll growth assumption was decreased from 3.25% to 3.0%.
Page 303 of 637
City of Elk River
Notes to Required Supplementary Information
114
General Employees Fund (Continued)
2020 Changes (Continued)
Changes in Actuarial Assumptions (Continued)
• 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.
• Assumed rates of termination were changes 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 2-5 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 and Survivor
option changed from 35% to 45%. The assumed number of married female new retires electing
the 100% Joint and 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% thereafter. Augmentation was eliminated for
privatizations occurring after June 30, 2020.
2019 Changes
Changes in Actuarial Assumptions
• The mortality 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.
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 1.0% per year through 2044 and 2.5% 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.
Page 304 of 637
City of Elk River
Notes to Required Supplementary Information
115
General Employees Fund (Continued)
2018 Changes (Continued)
Changes in Plan Provisions (Continued)
• 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.
• Annual 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 . This does 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 CSA loads were changed from 0.8% for active members and 60% for vested and non -vested
deferred members. The revised CSA loads are now 0.0% for active member liability, 15% for
vested deferred member liability and 3% for non -vested deferred member liability.
• The assumed annual 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.
2016 Changes
Changes in Actuarial Assumptions
• The assumed post-retirement 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 future 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, the inflation was decreased by 0.25% to
3.25% for payroll growth and 2.50% for inflation.
Changes in Plan Provisions
• There have been no changes since the prior valuation.
2015 Changes
Changes in Actuarial Assumptions
• The assumed post-retirement 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.
Page 305 of 637
City of Elk River
Notes to Required Supplementary Information
116
General Employees Fund (Continued)
2015 Changes (Continued)
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; the State's contribution of $6.0 million, which meets the special
funding situation definition, was due September 2015.
Page 306 of 637
City of Elk River
Notes to Required Supplementary Information
117
Police and Fire Fund
2024 Changes
Changes in Plan Provisions
•The State contribution of $9.0 million per year will continue until the earlier of 1) both the
Police and Fire Plan and the State Patrol Retirement Fund attain 90% funded status for three
consecutive years (on an actuarial value of assets basis) or 2) July 1, 2048. The contribution
was previously due to expire after attaining a 90% funded status for one year.
•The additional $9.0 million contribution will continue until the Police and Fire Plan is fully
funded for a minimum of three consecutive years on an actuarial value of assets basis, or
July 1, 2048, whichever is earlier. This contribution was previously due to expire upon
attainment of fully funded status on an actuarial value of assets basis for one year (or July 1,
2048 if earlier).
2023 Changes
Changes in Actuarial Assumptions
•The investment return assumption was changed from 6.5% to 7.0%.
•The single discount rate changed from 5.4% to 7.0%.
Changes in Plan Provisions
•Additional one-time direct state aid contribution of 19.4 million will be contributed to the
Plan on October 1, 2023.
•Vesting requirement for new hires after June 30, 2014, was changed from a graded 20-year
vesting schedule to a graded 10-year vesting schedule, with 50% vesting after five years,
increasing incrementally to 100% after 10 years.
•A one-time, non-compounding benefit increase of 3.0% will be payable in a lump sum for
calendar year 2024 by March 31, 2024.
•Psychological treatment is required effective July 1, 2023, prior to approval for a duty
disability benefit for a psychological condition relating to the member 's occupation.
•The total and permanent duty disability benefit was increased, effective July 1, 2023.
2022 Changes
Changes in Actuarial Assumptions
•The mortality improvement scale was changed from scale MP -2020 to scale MP-2021.
•The single discount rate was changed from 6.5% to 5.4%.
Changes in Plan Provisions
•There have been no changes since the prior valuation.
2021 Changes
Changes in Actuarial Assumptions
•The investment return and single discount rates were changed from 7.5% to 6.5% for financial
reporting purposes.
•The inflation assumption was changed from 2.5% to 2.25%.
•The payroll growth assumption was changed from 3.25% to 3.0%.
•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 MP-2020.
Page 307 of 637
City of Elk River
Notes to Required Supplementary Information
118
Police and Fire Fund (Continued)
2021 Changes (Continued)
Changes in Actuarial Assumptions (Continued)
• 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 resulted 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 resulted in more assumed terminations.
• Assumed rates of disability were increased for ages 25 -44 and decreased for ages over 49.
Overall, proposed rates resulted in more projected disabilities.
• Assumed % married for active female members was changed from 60% to 70%. Minor changes
to form of payment assumptions were applied.
Changes in Plan Provisions
• There have been no changes since the prior valuation.
2020 Changes
Changes in Actuarial Assumptions
• The mortality 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 mortality 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
• Annual 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.
Page 308 of 637
City of Elk River
Notes to Required Supplementary Information
119
Police and Fire Fund (Continued)
2018 Changes (Continued)
Changes in Plan Provisions (Continued)
•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.
2017 Changes
Changes in Actuarial Assumptions
•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 CSA load was 30% for vested and non -vested deferred members. The CSA has been
changed to 33% for vested members and 2% for non -vested 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% 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 annual benefit increase rate was changed from 1% for all years to 1% per year
through 2064 and 2.5% thereafter.
•The single discount rate was changed from 5.6% per annum 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 post-retirement benefit increase rate was changed from 1.0% 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 single discount rate changed from 7.90% to 5.60%.
•The assumed future salary increases, payroll growth, and inflation was decreased by 0.25% to
3.25% for payroll growth and 2.50% for inflation.
Changes in Plan Provisions
•There have been no changes since the prior valuation.
Page 309 of 637
City of Elk River
Notes to Required Supplementary Information
120
Police and Fire Fund (Continued)
2015 Changes
Changes in Actuarial Assumptions
•The assumed post-retirement 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.
Changes in Plan Provisions
•The post-retirement 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%.
Page 310 of 637
City of Elk River
Notes to Required Supplementary Information
121
Post Employment Benefits Plan
No assets are accumulated in a trust to pay related benefits.
2024 Changes
Changes in Actuarial Assumptions
• The discount rate was changed from 4.00% to 3.70% based on updated 20-year municipal bond
rates.
2023 Changes
Changes in Actuarial Assumptions
• The discount rate was changed from 2.00% to 4.00% based on updated 20 -year municipal bond
rates.
• The inflation rate changed from 2.00% to 2.50%.
• The health care trend rates were changed to better anticipate short term and long term
medical increases.
• The mortality tables were updated from the Pub-2010 Public Retirement Plans Headcount -
Weighted Mortality Tables (General, Safety) with MP -2020 Generational Improvement Scale to
the Pub-2010 Public Retirement Plans Headcount -Weighted Mortality Tables (General, Safety)
with MP-2021 Generational Improvement Scale.
• The retirement, withdrawal, and salary increase rates for public safety employees were
updated to reflect the latest experience study.
2022 Changes
Changes in Actuarial Assumptions
• None noted
2021 Changes
Changes in Actuarial Assumptions
• The discount rate was changed from 2.90% to 2.00% based on updated 20 -year municipal bond
rates.
• The inflation rate changed from 2.50% to 2.00%.
• The health care trend rates were changed to better anticipate short term and long term
medical increases.
• The mortality tables were updated from the RP -2014 Mortality Tables (Blue Collar for Public
Safety, White Collar for Others) with MP-2018 Generational Improvement Scale to the Pub-
2010 Public Retirement Plans Headcount -Weighted Mortality Tables (General, Safety) with
MP-2020 Generational Improvement Scale.
• The retirement and withdrawal rates for non -public safety employees were updated.
• The salary increase rates were changed from a flat 3.00% per year for all employees to rates
which vary by service and contract group.
2020 Changes
Changes in Actuarial Assumptions
• The discount rate was changed from 3.80% to 2.90% based on updated 20-year municipal bond
rates.
Page 311 of 637
City of Elk River
Notes to Required Supplementary Information
122
Post Employment Benefits Plan (Continued)
2019 Changes
Changes in Actuarial Assumptions
•The discount rate was changed from 3.30% to 3.80% based on updated 20 -year municipal bond
rates.
•The health care trend rates were changed to better anticipate short -term and long-term
medical increases.
Changes in Actuarial Assumptions (Continued)
•The mortality tables were updated from the RP -2014 White Collar Mortality Tables with MP-
2016 Generational Improvement Scale (with Blue Collar adjustment for Police and Fire
Personnel) to the RP-2014 White Collar Mortality Tables with MP-2018 Generational
Improvement Scale (with Blue Collar adjustment for Police and Fire Personnel).
2018 Changes
Changes in Actuarial Assumptions
•The discount rate was changed from 3.50% to 3.30% based on updated 20-year municipal bond
rates.
Page 312 of 637
123
COMBINING AND INDIVIDUAL FUND
FINANCIAL STATEMENTS AND SCHEDULES
Page 313 of 637
124
(THIS PAGE LEFT BLANK INTENTIONALLY)
Page 314 of 637
125
City of Elk River
Nonmajor Governmental Funds
Special Revenue Funds
Special revenue funds are established to account for specific revenue or other sources that are
designated for financing particular functions or activities as required by deferral regulations ,
Minnesota Statute, local ordinances, or specific grant agreements. Most of the special revenue funds
are related to specific federal and state housing programs or grants for specific activities.
Capital Projects Funds
Capital project funds are established to account for the resources used for the acquisition of capital
facilities and infrastructure for the City with the exception of those financed by the enterprise
funds.
Debt Service Funds
The Debt Service funds are established to account for the collection of ad valorem taxes , special
assessments, and tax increment revenue transfers as well as the payment of principal and interest of
general long-term debt.
Page 315 of 637
126
Special
Revenue
Capital
Projects Debt Service
Total Nonmajor
Governmental
Funds
Assets
Cash and investments 7,056,355$ 15,758,253$ 9,916,650$ 32,731,258$
Taxes receivable 17,899 31 1,093,793 1,111,723
Accounts receivable 244,807 310,482 - 555,289
Interest receivable 20,649 60,825 40,321 121,795
Notes and loans receivable 975,359 270,113 - 1,245,472
Leases receivable - 94,870 - 94,870
Special assessment receivable
Delinquent - 4,155 120 4,275
Deferred - 1,895,229 - 1,895,229
Due from other funds 807,690 102,355 - 910,045
Due from other governments - 27,170 - 27,170
Due from component unit 43 - - 43
Advances to other funds - 180,000 - 180,000
Prepaid items 113,953 764 - 114,717
Total assets 9,236,755$ 18,704,247$ 11,050,884$ 38,991,886$
Liabilities
Accounts payable 121,599$ 1,516,731$ 1,760$ 1,640,090$
Salaries and benefits payable 48,394 4,064 - 52,458
Contracts and deposits payable - 32,230 - 32,230
Due to other funds 265,593 1,108,340 440 1,374,373
Due to other governments 22,076 - - 22,076
Due to component unit - 152,710 - 152,710
Advances from other funds 180,000 - - 180,000
Unearned revenue - 830,138 - 830,138
Total liabilities 637,662 3,644,213 2,200 4,284,075
Deferred Inflows of Resources
Unavailable revenue - property taxes 5,250 31 11,619 16,900
Unavailable revenue - special assessments - 1,899,052 120 1,899,172
Deferred inflow related to leases receivable - 94,870 - 94,870
Total deferred inflows of resources 5,250 1,993,953 11,739 2,010,942
Fund Balances
Nonspendable 113,953 764 - 114,717
Restricted 3,546,129 2,217,898 11,036,945 16,800,972
Committed 4,552,946 99,367 - 4,652,313
Assigned 631,923 12,311,917 - 12,943,840
Unassigned (251,108) (1,563,865) - (1,814,973)
Total fund balances 8,593,843 13,066,081 11,036,945 32,696,869
Total liabilities, deferred inflows
of resources, and fund balances 9,236,755$ 18,704,247$ 11,050,884$ 38,991,886$
City of Elk River
Nonmajor Governmental Funds
Combining Balance Sheet
December 31, 2024
Page 316 of 637
127
Special
Revenue
Capital
Projects Debt Service
Total Nonmajor
Governmental
Funds
Revenues
Property taxes 642,028$ 373,878$ 1,507,086$ 2,522,992$
Sales taxes - - 3,266,064 3,266,064
Special assessments - 103,603 1,380 104,983
Intergovernmental 1,471,274 1,903,847 - 3,375,121
Charges for services 1,816,025 74,832 - 1,890,857
Fines and forfeitures 4,489 - - 4,489
Other revenue
Investment income 296,733 740,885 268,513 1,306,131
Contributions and donations 8,400 91,413 243,629 343,442
Refunds and reimbursements 44,449 92,600 - 137,049
Landfill expansion fee - 2,213,448 - 2,213,448
Miscellaneous revenue 62,282 72,988 - 135,270
Total revenues 4,345,680 5,667,494 5,286,672 15,299,846
Expenditures
Current
General government 129,438 289,502 - 418,940
Public safety 7,332 411,800 - 419,132
Public works 26,826 68,516 - 95,342
Culture and recreation 2,002,472 421,127 - 2,423,599
Economic development 494,744 251,809 - 746,553
Capital outlay
General government 535,033 - - 535,033
Public safety - 800,390 - 800,390
Public works - 1,295,631 - 1,295,631
Culture and recreation 32,115 1,552,034 - 1,584,149
Debt service
Principal 7,219 - 2,405,000 2,412,219
Interest and other charges 1,475 89,934 1,577,824 1,669,233
Total expenditures 3,236,654 5,180,743 3,982,824 12,400,221
Excess of revenues over (under)
expenditures 1,109,026 486,751 1,303,848 2,899,625
Other Financing Sources (Uses)
Proceeds from sale of capital asset 317,267 66,087 - 383,354
Lease issuance 32,115 - - 32,115
Transfers in 876,569 931,624 395,320 2,203,513
Transfers out (886,538) (2,123,700) - (3,010,238)
Total other financing sources (uses)339,413 (1,125,989) 395,320 (391,256)
Net change in fund balances 1,448,439 (639,238) 1,699,168 2,508,369
Fund Balances
Beginning of year 7,145,404 13,705,319 9,337,777 30,188,500
End of year 8,593,843$ 13,066,081$ 11,036,945$ 32,696,869$
City of Elk River
Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
Year Ended December 31, 2024
Page 317 of 637
128
Library
Multipurpose
Facility Landfill Revolving Loan
Assets
Cash and investments 227,350$ 201,412$ 972,821$ 1,039,129$
Taxes receivable 2,294 - - -
Accounts receivable - 243,112 1,695 -
Interest receivable 877 886 4,615 4,929
Notes and loans receivable - - - 131,098
Due from other funds - - - -
Due from component unit - - - -
Prepaid items - - - -
Total assets 230,521$ 445,410$ 979,131$ 1,175,156$
Liabilities
Accounts payable 4,377$ 101,548$ 924$ 188$
Salaries and benefits payable - 41,797 - -
Due to other funds - - -
Due to other governments - 22,076 - -
Advances from other funds - 180,000 - -
Total liabilities 4,377 345,421 924 188
Deferred Inflows of Resources
Unavailable revenue - property taxes 722 - - -
Fund Balances
Nonspendable - - - -
Restricted - - 978,207 -
Committed 225,422 99,989 - 1,174,968
Assigned - - - -
Unassigned - - - -
Total fund balances 225,422 99,989 978,207 1,174,968
Total liabilities, deferred inflows
of resources, and fund balances 230,521$ 445,410$ 979,131$ 1,175,156$
City of Elk River
Nonmajor Special Revenue Funds
Combining Balance Sheet
December 31, 2024
Page 318 of 637
129
State DEED
Development
Fund
Insurance
Reserve Drug Forfeiture CRF Grant EDA
Total Nonmajor
Special
Revenue Funds
275,853$ 1,682,302$ -$ 10,891$ 214,490$ 2,432,107$ 7,056,355$
- 3,937 - - - 11,668 17,899
- - - - - - 244,807
1,308 7,986 - 48 - - 20,649
285,699 558,562 - - - - 975,359
- 807,690 - - - - 807,690
- - - - - 43 43
- - 113,953 - - - 113,953
562,860$ 3,060,477$ 113,953$ 10,939$ 214,490$ 2,443,818$ 9,236,755$
-$ 6,762$ 231$ 7,068$ -$ 501$ 121,599$
- - - - - 6,597 48,394
- - 250,877 - - 14,716 265,593
- - - - - - 22,076
- - - - - - 180,000
- 6,762 251,108 7,068 - 21,814 637,662
- 1,148 - - - 3,380 5,250
- - 113,953 - - - 113,953
562,860 - - 3,871 214,490 1,786,701 3,546,129
- 3,052,567 - - - - 4,552,946
- - - - - 631,923 631,923
- - (251,108) - - - (251,108)
562,860 3,052,567 (137,155) 3,871 214,490 2,418,624 8,593,843
562,860$ 3,060,477$ 113,953$ 10,939$ 214,490$ 2,443,818$ 9,236,755$
Page 319 of 637
130
Library
Multipurpose
Facility Landfill Revolving Loan
Revenues
Property taxes 78,771$ -$ -$-$
Intergovernmental - - 5,836 -
Charges for services - 1,783,693 17,332 1,000
Fines and forfeitures - -- -
Other revenue
Investment income 5,658 1,916 45,916 42,602
Contributions and donations - 2,000 - -
Refunds and reimbursements - - - -
Miscellaneous revenue - 12,490 - 4,302
Total revenues 84,429 1,800,099 69,084 47,904
Expenditures
Current
General government - - - -
Public safety - - - -
Public works - - 26,826 -
Culture and recreation 113,193 1,889,279 - -
Economic development - - - 3,711
Capital outlay
General government - - - -
Culture and recreation - 32,115 - -
Debt service
Principal - 7,219 - -
Interest and other charges - 1,475 - -
Total expenditures 113,193 1,930,088 26,826 3,711
Excess of revenues over
(under) expenditures (28,764) (129,989) 42,258 44,193
Other Financing Sources (Uses)
Proceeds from sale of capital asset - - - -
Lease issuance - 32,115 - -
Transfers in 28,000 405,518 - -
Transfers out - - - -
Total other financing sources (uses)28,000 437,633 - -
Net change in fund balances (764) 307,644 42,258 44,193
Fund Balances
Beginning of year 226,186 (207,655) 935,949 1,130,775
End of year 225,422$ 99,989$ 978,207$ 1,174,968$
City of Elk River
Nonmajor Special Revenue Funds
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
Year Ended December 31, 2024
Page 320 of 637
131
State DEED
Development
Fund
Insurance
Reserve Drug Forfeiture CRF Grant EDA
Total Nonmajor
Special
Revenue Funds
-$ 139,621$ -$ -$ -$ 423,636$ 642,028$
- 94,063 - - 1,371,172 203 1,471,274
- 10,000 - - - 4,000 1,816,025
- - - 4,489 - - 4,489
28,467 23,996 (1) 255 71,164 76,760 296,733
- - - - - 6,400 8,400
- - 44,449 - - - 44,449
5,546 - - - - 39,944 62,282
34,013 267,680 44,448 4,744 1,442,336 550,943 4,345,680
- - 129,438 - - - 129,438
- - - 7,332 - - 7,332
- - - - - - 26,826
- - - - - - 2,002,472
- 219,931 - - - 271,102 494,744
- - - - 535,033 - 535,033
- - - - - - 32,115
- - - - - - 7,219
- - - - - - 1,475
- 219,931 129,438 7,332 535,033 271,102 3,236,654
34,013 47,749 (84,990) (2,588) 907,303 279,841 1,109,026
- - - - - 317,267 317,267
- - - - - - 32,115
- 443,051 - - - - 876,569
- - - - (840,538) (46,000) (886,538)
- 443,051 - - (840,538) 271,267 339,413
34,013 490,800 (84,990) (2,588) 66,765 551,108 1,448,439
528,847 2,561,767 (52,165) 6,459 147,725 1,867,516 7,145,404
562,860$ 3,052,567$ (137,155)$ 3,871$ 214,490$ 2,418,624$ 8,593,843$
Page 321 of 637
132
Budget and Actual
Library Special Revenue Fund
Year Ended December 31, 2024
Original Final Actual Amounts
Revenues
Property taxes 79,000$ 79,000$ 78,771$ (229)$
Other revenue
Investment income 5,000 5,000 5,658 658
Total revenues 84,000 84,000 84,429 429
Expenditures
Current
Culture and recreation 112,000 112,000 113,193 1,193
Capital outlay
Culture and recreation 13,000 13,000 - (13,000)
Total expenditures 125,000 125,000 113,193 (11,807)
Excess of revenues over
(under) expenditures (41,000) (41,000) (28,764) 12,236
Other Financing Sources (Uses)
Transfers in 28,000 28,000 28,000 -
Net change in fund balances (13,000)$ (13,000)$ (764) 12,236$
Fund Balances
Beginning of year 226,186
End of year 225,422$
Budgeted Amounts Variance with
Final Budget -
Over (Under)
Page 322 of 637
133
City of Elk River
Schedule of Revenues, Expenditures, and
Changes in Fund Balances -
Budget and Actual
Multipurpose Facility Special Revenue Fund
Year Ended December 31, 2024
Original Final Actual Amounts
Revenues
Charges for services 1,876,900$ 1,876,900$ 1,783,693$ (93,207)$
Other revenue
Investment income 2,000 2,000 1,916 (84)
Contributions and donations - - 2,000 2,000
Miscellaneous revenue 16,900 16,900 12,490 (4,410)
Total revenues 1,895,800 1,895,800 1,800,099 (95,701)
Expenditures
Current
Culture and recreation 1,721,750 1,721,750 1,889,279 167,529
Capital outlay
Culture and recreation 113,000 113,000 32,115 (80,885)
Debt service
Principal 7,400 7,400 7,219 (181)
Interest and other charges - - 1,475 1,475
Total expenditures 1,842,150 1,842,150 1,930,088 87,938
Excess of revenues over
(under) expenditures 53,650 53,650 (129,989) (183,639)
Other Financing Sources (Uses)
Proceeds from sale of capital asset 200 200 - (200)
Lease issuance - - 32,115 32,115
Transfers in - - 405,518 405,518
Total other financing sources (uses)200 200 437,633 437,433
Net change in fund balances 53,850$ 53,850$ 307,644 253,794$
Fund Balances
Beginning of year (207,655)
End of year 99,989$
Budgeted Amounts Variance with
Final Budget -
Over (Under)
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135
City of Elk River
Schedule of Revenues, Expenditures, and
Changes in Fund Balances -
Budget and Actual
Economic Development Authority Special Revenue Fund
Year Ended December 31, 2024
Original Final Actual Amounts
Revenues
Property taxes 415,950$ 415,950$ 423,636$ 7,686$
Intergovernmental - - 203 203
Charges for services 4,000 4,000 4,000 -
Other revenue
Investment income 15,000 15,000 76,760 61,760
Contributions and donations - - 6,400 6,400
Miscellaneous revenue - - 39,944 39,944
Total revenues 434,950 434,950 550,943 115,993
Expenditures
Current
Economic development 388,950 388,950 271,102 (117,848)
Excess of revenues over
expenditures 46,000 46,000 279,841 233,841
Other Financing Sources (Uses)
Proceeds from sale of capital asset - - 317,267 317,267
Transfers out (46,000) (46,000) (46,000) -
Total other financing sources (uses)(46,000) (46,000) 271,267 317,267
Net change in fund balances -$ -$ 551,108 551,108$
Fund Balances
Beginning of year 1,867,516
End of year 2,418,624$
Budgeted Amounts Variance with
Final Budget -
Over (Under)
Page 325 of 637
136
Park
Dedication
Capital Outlay
Reserve
Government
Buildings GRE Reserve
Assets
Cash and investments 339,262$ 1,927,718$ 5,780,739$ 767,540$
Taxes receivable - - 9 -
Accounts receivable - - 309,597 -
Interest receivable 1,609 9,144 27,420 3,641
Notes and loans receivable 270,113 - - -
Leases receivable - - 94,870 -
Special assessment receivable
Delinquent - 184 - -
Deferred - 5,648 - -
Due from other funds - -- -
Due from other governments - 27,170 - -
Advances to other funds - 180,000 - -
Prepaid items - -- -
Total assets 610,984$ 2,149,864$ 6,212,635$ 771,181$
Liabilities
Accounts payable 177,953$ 129,172$ 17,816$ 156,333$
Salaries and benefits payable - 4,064 - -
Contracts and deposits payable 8,199 - - 8,228
Due to other funds - - - -
Due to component unit - - - -
Unearned revenue 830,138 - - -
Total liabilities 1,016,290 133,236 17,816 164,561
Deferred Inflows of Resources
Unavailable revenue - property taxes - - 9 -
Unavailable revenue - special assessments - 5,832 - -
Deferred inflow related to leases receivable - -94,870 -
Total deferred inflows of resources - 5,832 94,879 -
Fund Balances
Nonspendable - - - -
Restricted - - - -
Committed - - - -
Assigned - 2,010,796 6,099,940 606,620
Unassigned (405,306) - - -
Total fund balances (405,306) 2,010,796 6,099,940 606,620
Total liabilities, deferred inflows
of resources, and fund balances 610,984$ 2,149,864$ 6,212,635$ 771,181$
City of Elk River
Nonmajor Capital Projects Funds
Combining Balance Sheet
December 31, 2024
Page 326 of 637
137
Street
Improvements
Improvement
Projects
Equipment
Replacement
Active ER
Projects
Public Safety
Building / Fire
Station #3
Park
Improvements
Developer
Deposits
472,450$ 756,260$ 2,044,466$ 1,516,829$ 945,809$ 336,308$ 711,944$
- - - 22 - - -
- - - - - 813 72
2,241 5,203 9,830 - - 1,479 -
- - - - - - -
- - - - - - -
3,497 474 - - - - -
9,953 1,879,628 - - - - -
- - 102,355 - - - -
- - - - - - -
- - - - - - -
- - - - - - 764
488,141$ 2,641,565$ 2,156,651$ 1,516,851$ 945,809$ 338,600$ 712,780$
38,469$ 12,129$ 261,692$ -$ -$ 8,179$ 712,780$
- - - - - - -
- 15,803 - - - - -
- - - - - - -
- - - - - - -
- - - - - - -
38,469 27,932 261,692 - - 8,179 712,780
- - - 22 - - -
13,118 1,880,102 - - - - -
- - - - - - -
13,118 1,880,102 - 22 - - -
- - - - - - 764
- - - 1,272,089 945,809 - -
- - - 99,367 - - -
436,554 733,531 1,894,959 145,373 - 330,421 -
- - - - - - (764)
436,554 733,531 1,894,959 1,516,829 945,809 330,421 -
488,141$ 2,641,565$ 2,156,651$ 1,516,851$ 945,809$ 338,600$ 712,780$
Page 327 of 637
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Page 328 of 637
139
TIF Districts
Technology
Replacement
Total Nonmajor
Capital
Projects Funds
Assets
Cash and investments 104,539$ 54,389$ 15,758,253$
Taxes receivable - - 31
Accounts receivable - - 310,482
Interest receivable - 258 60,825
Notes and loans receivable - - 270,113
Leases receivable - - 94,870
Special assessment receivable
Delinquent - - 4,155
Deferred - - 1,895,229
Due from other funds - - 102,355
Due from other governments - - 27,170
Advances to other funds - - 180,000
Prepaid items - - 764
Total assets 104,539$ 54,647$ 18,704,247$
Liabilities
Accounts payable 1,284$ 924$ 1,516,731$
Salaries and benefits payable - - 4,064
Contracts and deposits payable - - 32,230
Due to other funds 1,108,340 - 1,108,340
Due to component unit 152,710 - 152,710
Unearned revenue - - 830,138
Total liabilities 1,262,334 924 3,644,213
Deferred Inflows of Resources
Unavailable revenue - property taxes - - 31
Unavailable revenue - special assessments - - 1,899,052
Deferred inflow related to leases receivable - - 94,870
Total deferred inflows of resources - - 1,993,953
Fund Balances
Nonspendable - - 764
Restricted - - 2,217,898
Committed - - 99,367
Assigned - 53,723 12,311,917
Unassigned (1,157,795) - (1,563,865)
Total fund balances (1,157,795) 53,723 13,066,081
Total liabilities, deferred inflows
of resources, and fund balances 104,539$ 54,647$ 18,704,247$
City of Elk River
Nonmajor Capital Projects Funds
Combining Balance Sheet
December 31, 2024
Page 329 of 637
140
Park Dedication
Capital Outlay
Reserve
Government
Buildings GRE Reserve
Revenues
Property taxes -$ -$-$-$
Special assessments - 1,487 - -
Intergovernmental - 199,304 - -
Charges for services 3,066 26,078 - -
Other revenue
Investment income 149,737 189,448 100,876 38,812
Contributions and donations - 80,614 - -
Refunds and reimbursements - -- -
Landfill expansion fee - -2,213,448 -
Miscellaneous revenue - 607 58,777 4,500
Total revenues 152,803 497,538 2,373,101 43,312
Expenditures
Current
General government - 227,505 3,544 -
Public safety - 378,906 32,894 -
Public works - 54,645 - 13,871
Culture and recreation 241,185 - - -
Economic development - - - -
Capital outlay
Public safety - 316,877 30,690 -
Public works - -- 185,104
Culture and recreation 1,121,292 - 82,304 -
Debt service
Interest and other charges 62,449 - - -
Total expenditures 1,424,926 977,933 149,432 198,975
Excess of revenues over
(under) expenditures (1,272,123) (480,395) 2,223,669 (155,663)
Other Financing Sources (Uses)
Proceeds from sale of capital asset - - - -
Transfers in - 20,995 - -
Transfers out - (97,500) (395,320) -
Total other financing sources (uses)- (76,505) (395,320) -
Net change in fund balances (1,272,123) (556,900) 1,828,349 (155,663)
Fund balances
Beginning of year 866,817 2,567,696 4,271,591 762,283
End of year (405,306)$ 2,010,796$ 6,099,940$ 606,620$
City of Elk River
Nonmajor Capital Projects Funds
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
Year Ended December 31, 2024
Page 330 of 637
141
Street
Improvements
Improvement
Projects
Equipment
Replacement
Active ER
Projects
Public Safety
Building / Fire
Station #3
Park
Improvements
Developer
Deposits
-$ -$-$21$ -$ -$-$
331 101,785 - - - - -
13,597 1,100,000 590,946 - - - -
- - - - - 45,688 -
26,937 76,933 74,822 32,109 42,822 7,678 -
- - - - - 10,799 -
- - - - - - -
- - - - - - -
- - 9,104 - - - -
40,865 1,278,718 674,872 32,130 42,822 64,165 -
- - - - - - -
- - - - - - -
- - - - - - -
- - 6,094 - - 173,848 -
- - - - - - -
- - 452,823 - - - -
101,308 360,452 640,997 7,770 - - -
- - 230,405 - - 118,033 -
- - - - - - -
101,308 360,452 1,330,319 7,770 - 291,881 -
(60,443) 918,266 (655,447) 24,360 42,822 (227,716) -
- - 66,087 - - - -
- - 660,629 - - 250,000 -
- (1,630,880) - - - - -
- (1,630,880) 726,716 - - 250,000 -
(60,443) (712,614) 71,269 24,360 42,822 22,284 -
496,997 1,446,145 1,823,690 1,492,469 902,987 308,137 -
436,554$ 733,531$ 1,894,959$ 1,516,829$ 945,809$ 330,421$ -$
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Page 332 of 637
143
TIF Districts
Technology
Replacement
Total Nonmajor
Capital
Projects Funds
Revenues
Property taxes 373,857$ -$ 373,878$
Special assessments - - 103,603
Intergovernmental - - 1,903,847
Charges for services - - 74,832
Other revenue
Investment income - 711 740,885
Contributions and donations - - 91,413
Refunds and reimbursements - 92,600 92,600
Landfill expansion fee - - 2,213,448
Miscellaneous revenue - - 72,988
Total revenues 373,857 93,311 5,667,494
Expenditures
Current
General government - 58,453 289,502
Public safety - - 411,800
Public works - - 68,516
Culture and recreation - - 421,127
Economic development 251,809 - 251,809
Capital outlay
Public safety - - 800,390
Public works - - 1,295,631
Culture and recreation - - 1,552,034
Debt service
Interest and other charges 27,485 - 89,934
Total expenditures 279,294 58,453 5,180,743
Excess of revenues over
expenditures 94,563 34,858 486,751
Other Financing Sources (Uses)
Proceeds from sale of capital asset - - 66,087
Transfers in - - 931,624
Transfers out - - (2,123,700)
Total other financing sources (uses)- - (1,125,989)
Net change in fund balances 94,563 34,858 (639,238)
Fund balances
Beginning of year (1,252,358) 18,865 13,705,319
End of year (1,157,795)$ 53,723$ 13,066,081$
Year Ended December 31, 2024
City of Elk River
Nonmajor Capital Projects Funds
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
Page 333 of 637
144
Government
Building Bonds Sales Tax Bonds YMCA Bonds
2020A Capital
Improvement
Bonds
Assets
Cash and investments 179,063$ 8,106,769$ 749,954$ 531,274$
Taxes receivable 878 1,053,949 12,158 16,300
Interest receivable 788 35,658 - 2,337
Special assessment receivable
Delinquent - 120 - -
Total assets 180,729$ 9,196,496$ 762,112$ 549,911$
Liabilities
Accounts payable 440$ 440$ -$ 440$
Due to other funds - - 440 -
Total liabilities 440 440 440 440
Deferred Inflows of Resources
Unavailable revenue - property taxes 854 - 3,853 4,201
Unavailable revenue - special assessments - 120 - -
Total deferred inflows of resources 854 120 3,853 4,201
Fund Balances
Restricted 179,435 9,195,936 757,819 545,270
Total deferred inflows of resources
and fund balances 180,729$ 9,196,496$ 762,112$ 549,911$
City of Elk River
Nonmajor Debt Service Funds
Combining Balance Sheet
December 31, 2024
Page 334 of 637
145
2021A Capital
Improvement
Bonds
Total Nonmajor
Debt Service
Funds
349,590$ 9,916,650$
10,508 1,093,793
1,538 40,321
- 120
361,636$ 11,050,884$
440$ 1,760$
- 440
440 2,200
2,711 11,619
- 120
2,711 11,739
358,485 11,036,945
361,636$ 11,050,884$
Page 335 of 637
146
Government
Building Bonds Sales Tax Bonds YMCA Bonds
2020A Capital
Improvement
Bonds
Revenues
Property taxes 747$ -$ 508,834$ 606,602$
Sales taxes - 3,266,064 - -
Special assessments - 1,380 - -
Other revenue
Investment income 21,691 224,048 10,501 7,406
Contributions and donations - - 243,629 -
Total revenues 22,438 3,491,492 762,964 614,008
Expenditures
Debt service
Principal 295,000 935,000 575,000 355,000
Interest and other charges 101,260 985,278 156,328 214,538
Total expenditures 396,260 1,920,278 731,328 569,538
Excess of revenues over
(under) expenditures (373,822) 1,571,214 31,636 44,470
Other Financing Sources (Uses)
Transfers in 395,320 - - -
Net change in fund balances 21,498 1,571,214 31,636 44,470
Fund Balances
Beginning of year 157,937 7,624,722 726,183 500,800
End of year 179,435$ 9,195,936$ 757,819$ 545,270$
City of Elk River
Nonmajor Debt Service Funds
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
Year Ended December 31, 2024
Page 336 of 637
147
2021A Capital
Improvement
Bonds
Total Nonmajor
Debt Service
Funds
390,903$ 1,507,086$
- 3,266,064
- 1,380
4,867 268,513
- 243,629
395,770 5,286,672
245,000 2,405,000
120,420 1,577,824
365,420 3,982,824
30,350 1,303,848
- 395,320
30,350 1,699,168
328,135 9,337,777
358,485$ 11,036,945$
Page 337 of 637
148
City of Elk River
Component Unit Financial Statements
The Housing and Redevelopment Authority of Elk River is a component unit of the City. Its operations
are presented as a separate column on the combined financial statements.
Housing and Redevelopment Authority Fund
This governmental fund is used to account for housing and redevelopment activities. Revenues are
derived from the HRA property tax levy.
Page 338 of 637
149
Housing and
Redevelopment
Authority
Assets
Cash and investments 1,446,277$
Taxes receivable 12,251
Accounts receivable 7,921
Notes receivable 592,670
Due from primary government 152,710
Total assets 2,211,829$
Liabilities
Salaries and benefits payable 4,426$
Due to primary government 27,012
Total liabilities 31,438
Deferred Inflows of Resources
Unavailable revenue - property taxes 3,494
Fund Balances
Nonspendable 592,670
Restricted for housing and redevelopment 1,584,227
Total fund balances 2,176,897
Total liabilities, deferred inflows
of resources, and fund balances 2,211,829$
Total fund balances reported above 2,176,897$
Amounts reported for the Housing and Redevelopment Authority in the
Statement of Net Position are different because:
Capital assets used in governmental activities are not financial resources, and therefore,
are not reported in the funds
Land 315,900
Other improvements 174,290
Less accumulated depreciation (140,400)
Some receivables are not available soon enough to pay for the current period's expenditures,
and therefore are reported as unavailable revenue in the funds
Delinquent taxes receivable 3,494
The net pension liability and related deferred inflows and deferred outflows are recorded
only on the Statement of Net Position. Balances at year-end are:
Net pension liability (36,554)
Deferred inflows of resources related to pensions (24,912)
Deferred outflows of resources related to pensions 7,357
Total net position - Housing and Redevelopment Authority 2,476,072$
City of Elk River
Balance Sheet - Governmental Fund
Housing and Redevelopment Authority Component Unit
December 31, 2024
Page 339 of 637
150
Housing and
Redevelopment
Authority
Revenues
Property taxes 438,820$
Intergovernmental 215
Charges for services 5,945
Other revenue
Investment income 13,584
Total revenues 458,564
Expenditures
Current
General governmentEconomic development 206,360
Net change in fund balances 252,204
Fund Balances
Beginning of year 1,924,693
End of year 2,176,897$
Amounts reported for the Housing and Redevelopment Authority in the
Statement of Activities are different because:
Net changes in fund balances - Housing and Redevelopment Authority 252,204$
Capital outlays are reported in governmental funds as expenditures. However, in the
Statement of Activities the cost of those assets is allocated over their estimated useful
lives as depreciation expense.
Depreciation expense (11,619)
Certain revenues are recognized as soon as they are earned. Under the modified accrual
basis of accounting, certain revenues cannot be recognized until they are available to
liquidate liabilities of the current period.
Property taxes 539
Pension expenditures in the governmental funds are measured by current year employee
contributions. Pension expenses on the Statement of Activities are measured by the
change in net position liability and the related deferred inflows and deferred outflows
of resources.1,069
Change in net position - Housing and Redevelopment Authority 242,193$
Housing and Redevelopment Authority Component Unit
Statement of Revenues, Expenditures, and Change in Fund Balances
Year Ended December 31, 2024
City of Elk River
Page 340 of 637
151
STATISTICAL SECTION (UNAUDITED)
CITY OF ELK RIVER
ELK RIVER, MINNESOTA
FOR THE YEAR ENDED
DECEMBER 31, 2024
Page 341 of 637
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Page 342 of 637
153
City of Elk River
Statistical Section (Unaudited)
This part of the City of Elk River'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.
Financial Trends 154
These schedules contain trend information to help the reader understand how the government's
financial performance and well-being have changed over time.
Revenue Capacity 164
These schedules contain information to help the reader assess the government's most significant
local revenue source, property taxes.
Debt Capacity 170
These schedules present information to help the reader assess the affordability of the
government's current level of outstanding debt and the government's ability to issue additional
debt in the future.
Demographic and Economic Information 179
These schedules offer demogra phic and economic indicators to help the reader understand the
environment within which the government's financial activities take place.
Operating Information 180
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.
Page 343 of 637
154
2015 2016 2017 2018
Governmental Activities
Net investment in capital assets 75,030,579$ 78,119,790$ 78,958,608$ 77,092,055$
Restricted 3,675,588 11,990,647 2,925,562 4,236,048
Unrestricted 20,170,751 6,584,209 15,779,965 17,685,456
Total governmental
activities net position 98,876,918$ 96,694,646$ 97,664,135$ 99,013,559$
Business-Type Activities
Net investment in capital assets 76,747,269$ 82,230,963$ 83,919,324$ 85,104,737$
Restricted 490,500 997,660 997,660 1,261,359
Unrestricted 24,504,299 21,466,617 21,912,125 24,308,658
Total business-type
activities net position 101,742,068$ 104,695,240$ 106,829,109$ 110,674,754$
Total Primary Government
Net investment in capital assets 160,350,753$ 162,877,932$ 162,196,792$ 162,615,814$
Restricted 12,988,307 3,923,222 5,497,407 5,002,727
Unrestricted 28,050,826 37,692,090 41,994,114 47,480,658
Total primary government 201,389,886$ 204,493,244$ 209,688,313$ 215,099,199$
Fiscal Year
City of Elk River
Statistical Section (Unaudited)
Net Position by Component
Last Ten Fiscal Years
Page 344 of 637
155
Table 1
2019 2020 2021 2022 2023 2024
78,288,782$ 78,477,651$ 75,360,937$ 83,281,488$ 86,306,541$ 86,319,232$
3,741,368 17,138,100 12,112,762 9,676,717 15,689,829 16,911,336
19,823,663 14,546,321 26,690,158 24,423,193 18,081,750 24,687,084
101,853,813$ 110,162,072$ 114,163,857$ 117,381,398$ 120,078,120$ 127,917,652$
84,327,032$ 86,155,217$ 87,943,523$ 93,539,999$ 97,325,836$ 101,791,407$
1,261,359 1,261,359 1,779,016 1,779,016 1,779,016 1,779,016
27,656,995 31,499,220 33,405,459 32,615,346 34,557,899 33,704,904
113,245,386$ 118,915,796$ 123,127,998$ 127,934,361$ 133,662,751$ 137,275,327$
164,632,868$ 163,304,460$ 176,821,487$ 176,821,487$ 183,632,377$ 188,110,639$
18,399,459 13,891,778 11,455,733 11,455,733 17,468,845 18,690,352
46,045,541 60,095,617 57,038,539 57,038,539 52,639,649 58,391,988
229,077,868$ 237,291,855$ 245,315,759$ 245,315,759$ 253,740,871$ 265,192,979$
Fiscal Year
Page 345 of 637
156
2014 2015 2016 2017
Expenses
Governmental activities
General government 3,619,293$ 3,996,316$ 3,932,100$ 3,981,134$
Public safety 6,720,283 9,231,492 7,670,839 7,398,041
Public works 5,351,630 5,539,045 6,803,504 5,619,836
Culture and recreation 3,970,704 4,014,737 4,157,960 4,474,619
Economic development 959,414 954,723 1,221,761 969,443
Interest and other charges 1,084,902 996,933 549,303 486,630
Total governmental activities expenses 21,706,226 24,733,246 24,335,467 22,929,703
Business-type activities
Municipal liquor 5,945,126 6,063,922 6,030,973 6,233,700
Sewer 2,318,709 2,473,139 3,377,828 3,504,489
Garbage 1,382,890 1,475,027 1,521,803 1,588,956
Storm water 736,411 645,596 774,805 634,073
Water 2,478,904 2,532,653 2,856,343 2,666,149
Electric 30,012,830 32,190,114 33,688,690 35,680,220
Total business-type activities expenses 42,874,870 45,380,451 48,250,442 50,307,587
Total expenses 64,581,096$ 70,113,697$ 72,585,909$ 73,237,290$
Program Revenues
Governmental activities
Charges for services
General government 439,826$ 678,679$ 756,586$ 648,183$
Public safety 1,194,458 1,041,141 1,471,063 1,219,783
Public works 174,452 199,034 177,802 111,740
Culture and recreation 925,591 931,674 1,051,312 1,071,902
Economic development 92,716 32,961 87,842 91,503
Operating grants and contributions 1,033,338 1,692,517 1,319,377 1,381,151
Capital grants and contributions 3,574,036 1,333,057 3,187,830 1,721,638
Total governmental activities program revenue 7,434,417 5,909,063 8,051,812 6,245,900
Business-type activities
Charges for services
Municipal liquor 6,974,336 7,009,574 6,951,988 7,203,155
Sewer 1,818,476 1,921,190 2,116,900 2,301,428
Garbage 1,321,301 1,342,900 1,352,728 1,553,498
Storm water 355,454 477,377 509,365 485,484
Water 2,379,835 2,370,221 2,553,651 2,757,237
Electric 32,831,209 34,746,098 36,465,382 39,151,208
Operating grants and contributions - - - -
Capital grants and contributions 2,708,564 1,758,131 2,196,626 2,295,004
Total governmental activities program revenue 48,389,175 49,625,491 52,146,640 55,747,014
Total program revenues 55,823,592$ 55,534,554$ 60,198,452$ 61,992,914$
Fiscal Year
City of Elk River
Statistical Section (Unaudited)
Changes in Net Position
Last Ten Fiscal Years
(Accrual Basis of Accounting)
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157
Table 2
2018 2019 2020 2021 2022 2023
3,786,257$ 4,526,987$ 4,655,075$ 5,180,758$ $5,993,465 $5,953,862
9,188,562 8,372,884 8,082,449 11,558,469 12,082,411 12,218,927
5,920,022 4,468,711 5,340,633 7,638,554 6,469,657 6,642,111
4,094,690 6,080,466 11,070,966 6,139,661 7,261,458 6,795,621
540,497 691,956 433,530 527,673 685,115 755,488
979,755 1,490,127 1,796,294 1,615,250 1,506,222 1,312,176
24,509,783 25,631,131 31,378,947 32,660,365 33,998,328 33,678,185
6,772,414 7,119,662 7,683,695 7,785,027 7,342,192 7,852,021
3,550,622 3,672,176 3,743,503 3,759,165 3,970,547 4,529,248
1,456,482 1,565,482 1,623,785 1,670,454 1,702,811 1,738,242
1,024,928 571,170 612,527 663,420 980,969 546,318
35,200,295 34,565,317 38,462,316 43,262,804 42,868,962 40,780,800
2,703,390 2,697,201 3,210,394 3,208,929 3,232,421 3,608,583
50,708,131 50,191,008 55,336,220 60,349,799 60,097,902 59,055,212
75,217,914$ 75,822,139$ 86,715,167$ 93,010,164$ 94,096,230$ 92,733,397$
765,646$ 647,010$ 853,100$ 800,973$ $926,657 $914,113
1,267,920 1,176,435 1,211,025 1,184,261 1,267,373 1,134,021
94,832 51,986 65,332 380,000 88,288 68,919
810,476 448,022 1,148,991 1,338,079 1,745,735 2,062,960
57,075 83,785 246,301 102,066 121,027 24,848
1,396,313 3,354,583 1,328,148 1,905,073 2,553,557 1,666,226
1,509,650 3,254,122 5,916,070 8,005,633 3,843,438 5,616,041
5,901,912 9,015,943 10,768,967 13,716,085 10,546,075 11,487,128
7,617,790 7,927,706 8,620,643 8,531,414 7,978,894 8,631,336
2,383,196 2,481,522 2,517,025 2,633,732 2,774,077 2,961,773
1,645,115 1,686,664 1,773,620 1,889,247 1,920,516 1,964,435
510,889 564,699 586,049 609,101 905,891 674,854
2,552,630 2,936,855 3,412,990 44,729,379 45,379,292 44,100,902
38,663,268 38,469,516 41,396,708 3,413,829 3,802,450 3,336,129
1,200 - - - - -
1,277,596 3,331,984 4,308,960 7,289,979 1,583,273 2,379,420
54,651,684 57,398,946 62,615,995 69,096,681 64,344,393 64,048,849
60,553,596$ 66,414,889$ 73,384,962$ 82,812,766$ 74,890,468$ 75,535,977$
Fiscal Year
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158
2015 2016 2017 2018
Net (Expenses) Revenues
Governmental activities (14,271,809)$ (18,824,183)$ (16,283,655)$ (16,683,803)$
Business-type activities 5,514,305 4,245,040 3,896,198 5,439,427
Total primary government (8,757,504)$ (14,579,143)$ (12,387,457)$ (11,244,376)$
General Revenues and Other
Changes in Net Position
Governmental activities
Taxes
Property taxes 10,931,945$ 11,136,310$ 11,645,328$ 12,192,911$
Sales taxes - - - -
Other taxes 1,513,621 1,552,499 1,543,086 1,591,663
Unrestricted grants and contributions 1,642,098 1,820,248 1,720,932 1,754,373
Unrestricted investment earnings 512,193 311,469 498,235 430,642
Miscellaneous 2,796,041 29,695 116,012 -
Capital contributions (11,188,695) - - -
Gain on sale of capital assets - - - -
Transfers 297,362 1,791,690 1,971,250 2,063,638
Total governmental activities expenses 6,504,565 16,641,911 17,494,843 18,033,227
Business-type activities
Unrestricted investment earnings 259,494 167,849 231,599 467,294
Miscellaneous 8,899 331,973 17,500 2,462
Capital contributions 11,188,695 - - -
Gain on sale of capital assets - - - -
Transfers (297,362) (1,791,690) (1,971,250) (2,063,638)
Total business-type activities expenses 11,159,726 (1,291,868) (1,722,151) (1,593,882)
Total primary government 17,664,291$ 15,350,043$ 15,772,692$ 16,439,345$
Change in Net Position
Governmental activities (7,767,244)$ (2,182,272)$ 1,211,188$ 1,349,424$
Business-type activities 16,674,031 2,953,172 2,174,047 3,845,545
Total primary government 8,906,787$ 770,900$ 3,385,235$ 5,194,969$
Fiscal Year
City of Elk River
Statistical Section (Unaudited)
Changes in Net Position (Continued)
Last Ten Fiscal Years
(Accrual Basis of Accounting)
Page 348 of 637
159
Table 2 (Continued)
2019 2020 2021 2022 2023 2024
(18,607,871)$ (16,615,188)$ (20,609,980)$ (18,944,280)$ (23,452,253)$ (22,191,057)$
3,943,553 7,207,938 7,279,775 8,746,882 4,246,491 4,993,637
(14,664,318)$ (9,407,250)$ (13,330,205)$ (10,197,398)$ (19,205,762)$ (17,197,420)$
13,022,991$ 13,972,068$ 14,290,673$ 15,250,309$ 16,077,123$ 17,429,839$
652,665 3,030,938 3,469,146 3,862,154 3,810,301 3,266,064
1,636,333 1,698,040 1,754,189 1,722,678 1,712,109 1,748,809
2,588,461 2,644,469 747,226 734,932 1,217,658 2,419,902
1,420,677 1,240,595 (56,944) (2,079,797) 2,233,568 1,625,965
- 56,457 522,275 537,061 539,436 621,504
- - - - - -
41,698 - 1,053,072 108,455 805,210 383,354
2,085,300 2,280,880 2,832,128 2,026,029 (246,430) 2,535,152
21,448,125 24,923,447 24,611,765 22,161,821 26,148,975 30,030,589
704,099 716,582 (75,566) (1,947,278) 1,177,123 1,152,078
- - - - - -
- - - - - -
8,280 26,770 (159,879) 32,788 58,346 2,013
(2,085,300) (2,280,880) (2,832,128) (2,026,029) 246,430 (2,535,152)
(1,372,921) (1,537,528) (3,067,573) (3,940,519) 1,481,899 (1,381,061)
20,075,204$ 23,385,919$ 21,544,192$ 18,221,302$ 27,630,874$ 28,649,528$
2,840,254$ 8,308,259$ 4,001,785$ 3,217,541$ 2,696,722$ 7,839,532$
2,570,632 5,670,410 4,212,202 4,806,363 5,728,390 3,612,576
5,410,886$ 13,978,669$ 8,213,987$ 8,023,904$ 8,425,112$ 11,452,108$
Fiscal Year
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160
2015 2016 2017 2018
General Fund
Nonspendable 23,676$ 20,964$ 88,038$ 124,064$
Restricted 7,000 - - -
Committed 376,943 - - -
Assigned -266,832 356,174 237,813
Unassigned 6,157,179 6,470,281 6,853,298 7,299,540
Total general fund 6,564,798$ 6,758,077$ 7,297,510$ 7,661,417$
All other governmental funds
Nonspendable 103,295$ 108,176$ -$ 114,976$
Restricted 13,202,500 12,245,679 3,104,196 3,150,743
Committed 8,099,951 9,250,014 10,354,648 12,068,614
Assigned 15,579,524 12,632,948 10,984,072 10,716,044
Unassigned (2,438,049) (2,660,264) (2,627,513) (2,934,515)
Total all other governmental funds 34,547,221$ 31,576,553$ 21,815,403$ 23,115,862$
Fiscal Year
City of Elk River
Statistical Section (Unaudited)
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
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161
Table 3
2019 2020 2021 2022 2023 2024
187,305$ 282,860$ 160,019$ -$ 82,513$ 92,196$
- - - - - -
- - - - - -
- - - - - -
7,684,153 7,967,868 8,590,610 8,888,888 9,240,805 9,446,297
7,871,458$ 8,250,728$ 8,750,629$ 8,888,888$ 9,323,318$ 9,538,493$
62,017$ 16$ 432$ 114,967$ 131,738$ 114,717$
28,548,680 26,250,482 12,443,162 12,149,090 15,918,585 16,800,972
10,182,700 11,705,506 11,880,096 9,583,438 7,291,361 10,166,249
13,177,577 14,950,419 13,784,749 13,064,623 11,764,159 12,943,840
(2,824,246) (2,652,806) (1,691,896) 7,610,065 (1,643,916) (1,814,973)
49,146,728$ 50,253,617$ 36,416,543$ 42,522,183$ 33,461,927$ 38,210,805$
Fiscal Year
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162
2015 2016 2017 2018
Revenues
Property taxes 10,953,633$ 11,171,496$ 11,642,778$ 12,214,702$
Sales taxes - - - -
Other taxes 1,513,621 1,552,499 1,543,086 1,591,663
Licenses and permits 639,791 655,607 1,007,543 790,831
Intergovernmental 3,913,721 1,681,666 3,928,374 1,405,931
Charges for services 1,761,958 1,851,408 2,226,936 2,182,917
Fines and forfeitures 169,459 167,526 205,456 157,492
Special assessments 315,259 456,666 241,304 379,054
Investment earnings 512,193 311,469 498,235 430,642
Miscellaneous 2,169,789 1,455,555 2,313,388 2,212,818
Total revenues 21,949,424 19,303,892 23,607,100 21,366,050
Expenditures
General government 3,365,570 3,601,468 3,524,634 3,733,746
Public safety 6,203,211 6,859,139 6,791,738 7,325,724
Public works 2,318,123 1,861,251 1,974,095 1,875,645
Culture and recreation 2,816,411 2,872,281 2,937,333 3,438,103
Economic development 954,673 949,205 1,122,261 964,926
Capital outlay 5,251,352 2,682,358 7,165,286 2,431,103
Debt service
Principal 1,505,000 5,100,000 10,675,000 1,575,000
Interest and fiscal charges 1,113,963 1,148,535 725,732 507,661
Total expenditures 23,528,303 25,074,237 34,916,079 21,851,908
Deficiency of revenues under expenditures (1,578,879) (5,770,345) (11,308,979) (485,858)
Other financing sources (uses)
Bonds issued - - - -
Premium on bonds issued - - - -
Sale of capital assets 3,017,674 80,587 116,012 86,586
Payment to refunding escrow agent - - - -
Lease issuance - - - -
Transfers in 4,703,787 6,524,537 4,275,797 3,354,035
Transfers out (4,406,425) (4,832,400) (2,304,547) (1,290,397)
Total other financing sources (uses)3,315,036 1,772,724 2,087,262 2,150,224
Net change in fund balances 1,736,157$ (3,997,621)$ (9,221,717)$ 1,664,366$
Debt service as a percentage of non capital expenditures 14.3%27.4%38.4%10.4%
Fiscal Year
City of Elk River
Statistical Section (Unaudited)
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
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163
Table 4
2019 2020 2021 2022 2023 2024
13,011,977$ 13,975,014$ 14,286,904$ 15,016,982$ 16,279,104$ 17,410,529$
652,665 3,030,938 3,469,146 3,862,154 3,810,301 3,266,064
1,636,333 1,698,040 1,754,189 1,722,678 1,712,109 1,748,809
822,899 665,519 1,015,529 939,133 976,260 768,995
1,396,706 3,865,069 8,114,298 2,573,156 4,000,818 4,767,974
1,723,091 1,473,581 2,575,843 3,083,542 3,068,103 3,199,366
166,787 107,018 161,183 147,484 169,910 181,048
58,416 122,000 339,278 230,872 224,426 106,892
1,420,677 1,240,595 (56,944) (2,079,797) 2,233,568 1,625,965
3,202,501 2,899,380 3,278,522 3,218,201 3,058,965 3,072,828
24,092,052 29,077,154 34,937,948 28,714,405 35,533,564 36,148,470
4,004,917 4,333,018 4,439,105 4,638,041 5,155,639 5,759,296
7,620,997 7,764,843 8,335,808 9,100,633 9,789,473 10,936,322
2,217,650 2,274,616 2,421,631 2,528,964 2,701,433 2,481,656
2,968,847 3,056,757 3,891,907 4,326,742 4,711,517 4,945,775
540,763 693,157 454,657 517,691 580,422 746,553
16,631,953 24,556,635 28,183,763 9,210,937 11,495,481 5,174,863
1,315,000 1,900,000 2,195,000 2,375,772 3,077,697 2,517,691
713,023 1,865,033 1,847,335 1,917,993 1,795,928 1,672,796
36,013,150 46,444,059 51,769,206 34,616,773 39,307,590 34,234,952
(11,921,098) (17,366,905) (16,831,258) (5,902,368) (3,774,026) 1,913,518
32,715,000 14,775,000 4,805,000 - - -
3,234,515 1,364,913 428,885 - - -
127,190 432,271 1,053,072 108,455 805,210 383,354
- - (5,625,000) - - -
- - - 263,291 - 132,029
3,288,938 4,533,426 4,128,325 4,085,115 4,994,167 6,016,390
(1,203,638) (2,252,546) (1,296,197) (1,199,482) (1,762,289) (3,481,238)
38,162,005 18,853,064 3,494,085 3,257,379 4,037,088 3,050,535
26,240,907$ 1,486,159$ (13,337,173)$ (2,644,989)$ 263,062$ 4,964,053$
10.4%18.1%15.1%16.1%16.2%14.3%
Fiscal Year
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164
Table 5
Fiscal Number of Total
Year Customers KWh's Sold Billings
2015 10,499 282,265,268 32,704,279$
2016 10,816 305,337,641 34,569,098
2017 11,448 313,952,561 36,458,061
2018 11,983 331,124,011 39,039,573
2019 12,244 325,981,176 37,640,985
2020 12,365 324,469,638 37,714,965
2021 12,789 341,047,710 39,719,268
2022 12,955 333,644,951 42,395,048
2023 13,232 329,773,349 43,986,269
2024 13,466 316,756,062 42,557,925
Source: Elk River Municipal Utilities
City of Elk River
Electric Sales
Last Ten Fiscal Years
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165
Table 6
Percentage Percentage
Total kWh Total of Total Total kWh Total of Total
Customer Sold Billings Billings Sold Billings Billings
Customer 1 41,779,200 4,411,040$ 10.36%55,070,400 3,991,415$ 12.20%
Customer 2 30,494,400 3,123,237 7.34%26,035,200 2,302,359 7.04%
Customer 3 5,622,400 625,182 1.47%
Customer 4 4,066,650 448,105 1.05%
Customer 5 4,052,000 542,311 1.27%
Customer 6 3,689,760 392,969 0.92%4,490,400 333,193 1.02%
Customer 7 3,546,000 383,226 0.90%5,265,000 470,441 1.44%
Customer 8 2,969,000 324,291 0.76%3,427,000 312,539 0.96%
Customer 9 2,829,000 305,671 0.72%3,448,750 326,632 1.00%
Customer 10 2,668,250 298,572 0.70%
Customer 11 5,634,000 517,594 1.70%
Customer 12 4,779,200 440,325 1.45%
Total 101,716,660 10,854,604$ 25.49%108,149,950 8,694,498$ 26.81%
Minnesota Statute 13.685 considers data on customers of municipal electric utilities as private data
and will no longer be disclosing customer names.
Source: Elk River Municipal Utilities
City of Elk River
Principal Electric Customers
Current Year and Nine Years Ago
2024 2015
Page 355 of 637
166
2014 2015 2016 2017 2018
Tax capacity
Real property 20,047,632$ 21,060,822$ 21,850,219$ 22,672,085$ 23,858,008$
Personal property 367,641 366,113 385,056 381,355 384,540
Total tax capacity 20,415,273 21,426,935 22,235,275 23,053,440 24,242,548
Tax increment (116,513) (198,997) (204,017) (184,717) (196,166)
Taxable net tax capacity 20,298,760$ 21,227,938$ 22,031,258$ 22,868,723$ 24,046,382$
Total tax capacity rate 48.544%47.190%46.170%46.193%46.011%
Taxable market value
Real property 1,622,624,100$ 1,735,898,300$ 1,826,858,800$ 1,909,814,070$ 2,026,119,675$
Personal property 18,736,600 18,585,200 19,469,900 19,234,400 19,393,900
Taxable market value 1,641,360,700$ 1,754,483,500$ 1,846,328,700$ 1,929,048,470$ 2,045,513,575$
Estimated actual market value
of taxable property 1,796,401,800$ 1,900,894,800$ 1,978,763,900$ 2,060,082,600$ 2,178,621,000$
Taxable market value as a percentage
of estimated actual market value 91.37%92.30%93.31%93.64%93.89%
Note: Property in the county is reassessed annually. The county assessor's market value of property is approximately 95 percent
of actual value for all types of real and personal property.
Source: Sherburne County Assessor
Fiscal Year
City of Elk River
Tax Capacity, Market Value and Estimated Actual Value of
Taxable Property
Last Ten Fiscal Years
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167
Table 7
2019 2020 2021 2022 2023
25,796,978$ 27,658,820$ 29,276,840$ 31,408,437$ 37,852,795$
408,699 375,332 396,605 467,376 540,816
26,205,677 28,034,152 29,673,445 31,875,813 38,393,611
(199,061) (211,066) (263,732) (294,137) (371,512)
26,006,616$ 27,823,086$ 29,409,713$ 31,581,676$ 38,022,099$
45.907%46.241%44.556%43.967%39.700%
2,219,031,172$ 2,394,547,946$ 2,558,852,731$ 2,766,271,639$ $3,387,630,626
20,605,300 18,945,900 20,009,600 23,548,900 27,213,700
2,239,636,472$ 2,413,493,846$ 2,578,862,331$ 2,789,820,539$ 3,414,844,326$
2,374,405,900$ 2,547,475,200$ 2,707,389,000$ 2,912,167,000$ $3,517,039,400
94.32%94.74%95.25%95.80%97.09%
Fiscal Year
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168
(THIS PAGE LEFT BLANK INTENTIONALLY)
Page 358 of 637
169
Table 8
Total
Direct and
Fiscal Debt Referendum Special Overlapping
Year Operating Service Total County Operating Mkt. Value Districts Rates
2014 46.740 1.804 48.544 54.861 51.286 0.156 4.987 159.834
2015 45.433 1.757 47.190 51.979 42.483 0.209 4.779 146.640
2016 44.507 1.663 46.170 50.478 39.268 0.215 4.778 140.909
2017 44.584 1.609 46.193 50.460 36.659 0.219 4.509 138.040
2018 44.474 1.537 46.011 49.356 36.137 0.218 4.269 135.991
2019 44.099 1.808 45.907 47.928 32.865 0.216 2.496 129.412
2020 44.013 2.228 46.241 47.426 34.371 0.320 2.533 130.891
2021 42.452 2.104 44.556 45.835 31.717 0.306 2.328 124.742
2022 42.059 1.908 43.967 44.080 30.889 0.305 2.200 121.441
2023 37.082 2.618 39.700 38.630 26.605 0.289 2.099 107.323
1 Overlapping rates are those of local and county governments that apply to property owners within the City of Elk
River. Not all overlapping rates apply to all City of Elk River property owners (e.g., the rates for special districts
apply only to the proportion of the city's property owners whose property is located within the geographic
Source: Sherburne County Auditor/Treasurer
boundaries of the special district.
City of Elk River Overlapping Rates
School District
City of Elk River
Property Tax Rates
Direct and Overlapping1 Governments
Last Ten Fiscal Years
Page 359 of 637
170
Table 9
Percentage Percentage
Net Tax of Total Net Net Tax of Total Net
Taxpayer Capacity Rank Tax Capacity Capacity Rank Tax Capacity
Great River Energy $879,681 1 2.06%$1,071,962 1 5.05%
Cristobal Ventures LLC 641,200 2 1.50 - - -
Egpsyc Elk River II, LLC 524,814 3 1.23 - - -
Target Corporation 402,468 4 0.94 262,808 - 1.24
Minnegasco 383,230 5 0.90 137,068.00 9 0.65
St Elk River MN LLC 297,424 6 0.70 - - -
Walmart Stores 284,598 7 0.67 267,192.00 4 1.26
Elk River Senior Properties LLC 216,726 8 0.51 - - -
BIGO-Evans Meadows LLC 202,942 9 0.48 - - -
Granite Shores LLC 186,936 10 0.44 - - -
JPM Capital Corporation - -- 379,972 2 1.79
BRE Retail Residual Owner, LLC - -- 269,158 3 1.27
Menards, Inc - -- 176,714 6 0.83
Envision Company LLC - -- 143,730 7 0.68
Home Depot - -- 142,754 8 0.67
ARHC ERELKMN01 LLC - -- 108,140 10 0.51
Total 4,020,019$ 13.37%2,959,498$ 16.00%
Source: Sherburne County Assessor
2024 2015
City of Elk River
Principal Taxpayers
Current Year and Nine Years Ago
Page 360 of 637
171
Table 10
Collections in
Fiscal Total Year's Percentage Subsequent Percentage
Year Tax Levy Amount of Levy Years Amount of Levy
2015 10,541,718$ 10,511,527$ 99.71 27,864$ 10,539,391$ 99.98
2016 10,852,545 10,843,359 99.92 7,950 10,851,309 99.99
2017 11,397,665 11,362,631 99.69 34,552 11,397,183 100.00
2018 11,910,489 11,899,143 99.90 11,150 11,910,293 100.00
2019 12,749,645 12,706,730 99.66 42,124 12,748,855 99.99
2020 13,632,710 13,647,883 100.11 (16,099) 13,631,783 99.99
2021 13,922,492 13,911,413 99.92 4,408 13,915,822 99.95
2022 14,725,913 14,679,784 99.69 34,800 14,714,585 99.92
2023 15,973,005 15,892,157 99.49 55,710 15,947,867 99.84
2024 17,054,338 16,958,540 99.44 -16,958,540 99.44
Collected within the
Fiscal Year of the Levy Total Collections to Date
City of Elk River
Property Tax Levies and Collections
Last Ten Fiscal Years
Page 361 of 637
172
General General Total Percentage
Fiscal General Obligation Special Lease Obligation Revenue Notes Lease Primary of Personal Per
Year Obligation Revenue Assessment Liability Other Revenue Bonds Payable Liability Government Income1 Capita1
2015 32,789,690$ -$ 924,765$ -$ 1,410,000$ 12,564,299$ 3,020,935$ 1,408,368$ -$ 52,118,057$ 6.69%2,183$
2016 29,365,466 - 607,918 - - 11,858,552 12,462,779 1,214,076 - 55,508,791 6.81%2,294
2017 18,951,241 - 296,071 - - 11,132,723 11,781,983 1,018,860 - 43,180,878 5.19%1,758
2018 17,632,016 - - - - 10,381,894 21,528,442 820,608 - 50,362,960 5.89%2,023
2019 16,277,791 35,913,322 - - - 9,233,625 21,004,411 619,692 - 83,048,841 9.49%3,290
2020 31,028,479 35,235,066 - - - 16,053,687 19,741,758 415,740 - 102,474,730 11.44%4,004
2021 29,062,498 34,301,810 - - - 16,737,477 31,305,891 209,124 - 111,616,800 12.50%4,320
2022 27,518,821 33,328,554 - 407,831 - 8,918,365 30,190,124 -41,895 100,405,590 10.02%3,785
2023 25,320,144 32,310,298 - 295,134 - 8,329,253 29,215,262 -32,679 95,502,770 8.25%3,525
2024 23,726,467 31,247,042 - 231,458 - 7,740,142 28,200,400 -44,836 91,190,345 6.94%3,314
Note: Details regarding the city's outstanding debt can be found in the notes to the financial statements.
1 See the Schedule of Demographic and Economic Statistics for personal income and population data.
Governmental Activities
City of Elk River
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
Business-Type Activities
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173
Table 12
Less
Amounts Less Percentage Net
General Restricted Cash with Net of Net Bonded Bonded
Fiscal Bonded for Debt Fiscal Bonded Debt to Tax Debt per
Year Debt1 Service Agent Debt Capacity2 Capita3
2015 28,986,667$ 1,154,728$ 9,423,440$ 18,408,499$ 86.72%771$
2016 25,728,333 1,556,232 9,284,303 14,887,798 67.58%611
2017 15,331,667 1,608,880 -13,722,787 60.01%559
2018 14,220,000 1,473,230 -12,746,770 53.01%512
2019 13,076,667 1,553,879 -11,522,788 44.31%456
2020 26,676,667 7,510,704 -19,165,963 68.89%749
2021 24,646,667 2,019,928 -22,626,739 76.94%876
2022 23,410,000 1,915,672 -21,494,328 68.06%814
2023 21,523,333 1,713,055 -19,810,278 52.10%734
2024 20,245,000 1,841,009 -18,403,991 43.13%669
Note: Details regarding the city's outstanding debt can be found in the notes to the financial statements.
1 Only includes debt supported by tax levy; does not include sales tax revenue bonds.
2 See the Schedule of Tax Capacity, Market Value and Estimated Actual Value of Taxable
Property for property value data.
3 Population data can be found in the Schedule of Demographic and Economic Statistics.
City of Elk River
Ratios of General Bonded Debt Outstanding
Last Ten Fiscal Years
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174
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Page 364 of 637
175
Direct and Overlapping Governmental Activities Debt
December 31, 2024
Table 13
Percent
of Debt City's
Outstanding Applicable Share
Debt to City1 of Debt
Direct Debt:
City of Elk River2 55,204,967$ 100.00%55,204,967$
Overlapping Debt:
Sherburne County 36,194,597 25.87%9,365,161
School District #728 263,240,000 28.48%74,977,320
Total overlapping debt 299,434,597 84,342,481
Total direct and overlapping debt 354,639,564$ 139,547,448$
Debt Ratios:
Ratio of debt per capita (27,001 population)$5,071
Ratios of debt to taxable market value of $3,826,433,595 3.65%
1 The percentage of overlapping debt applicable is estimated using taxable market property values.
Applicable percentages were estimated by determining the portion of the county's and school
district's taxable market value that is within the city's boundaries and dividing it by the county's
and school district's total taxable market value.
2 Excludes debt payable from enterprise revenue.
Note: Overlapping governments are those that coincide, at least in part, with the geographic
boundaries of the city. This schedule estimates the portion of the outstanding debt of those
overlapping governments that is borne by the residents and business of the City of Elk River.
This process recognizes that, when considering the city's ability to issue and repay
long-term debt, the entire debt burden borne by the residents and businesses should be taken
into account. However, this does not imply that every taxpayer is a resident, and therefore
responsible for repaying the debt of each overlapping government.
Source: Sherburne County and School District #728
City of Elk River
Page 365 of 637
176
2015 2016 2017 2018 2019
Debt limit 57,026,844$ 59,362,917$ 61,802,478$ 65,358,630$ 71,232,177$
Bonds 28,986,667 25,706,667 15,331,667 14,220,000 13,076,667
Reserves 10,673,852 10,560,614 1,377,746 1,457,117 1,528,399
Total net debt applicable to limit 18,312,815 15,146,053 13,953,921 12,762,883 11,548,268
Legal debt margin 38,714,029$ 44,216,864$ 47,848,557$ 52,595,747$ 59,683,909$
Total net debt applicable to the
limit as a percentage of debt limit 32.11%25.51%22.58%19.53%16.21%
Note: Under state law, the City of Elk River's outstanding general obligation debt should not exceed
3 percent of the market value of taxable property. By law, the general obligation debt subject to the
limitation may be offset by amounts set aside for the extinguishment of those obligations.
1 Only 2/3 of the $7,050,000 GO EDA Refunding Bonds, Series 2013A
are subject to the debt limit. The remaining 1/3 will be paid by the YMCA.
Fiscal Year
City of Elk River
Legal Debt Margin Information
Last Ten Fiscal Years
Page 366 of 637
177
Table 14
2020 2021 2022 2023 2024
76,424,256$ 77,365,870$ 83,694,616$ 102,445,330$ 114,793,008$
26,676,667 24,646,667 23,410,000 21,523,333 20,245,000
7,511,416 1,780,459 1,785,970 1,682,530 1,809,881
19,165,251 22,866,208 21,624,030 19,840,803 18,435,119
57,259,005$ 54,499,662$ 62,070,586$ 82,604,527$ 96,357,889$
25.08%29.56%25.84%19.37%16.06%
Legal Debt Margin Calculation for Fiscal Year 2023
Estimated taxable market value $3,826,433,595
Debt limit (3% of market value)$114,793,008
Debt applicable to limit:
G.O. capital improvement bonds 16,305,000
G.O. EDA bonds1 3,940,000
Less: Cash and investments in related
debt service funds (1,809,881)
Total net debt applicable to limit 18,435,119
Legal debt margin 96,357,889$
Fiscal Year
Page 367 of 637
178
Table 15
Net Special
Fiscal Gross Operating Revenue Debt Service Assessment Debt Service
Year Revenue 2 Expenses 3 Available Principal Interest Coverage Collections Principal Interest Coverage
2015 36,586,235$ 30,281,264$ 6,286,971$ 900,000$ 464,938$ 4.61 162,519$ 310,000$ 21,550$ 0.49
2016 38,559,107 32,376,907 6,182,200 2,860,000 183,634 2.03 135,447 305,000 15,400 0.42
2017 40,563,969 34,509,407 6,054,562 1,355,000 673,662 2.98 106,349 300,000 8,900 0.34
2018 43,542,520 35,946,427 7,596,093 1,390,000 627,528 3.77 -295,000 2,950 0.00
2019 42,781,499 34,883,488 7,898,011 1,620,000 924,505 3.10 - - -0.00
2020 43,078,573 34,310,476 8,768,097 1,625,000 1,023,466 3.31 - - -0.00
2021 46,398,629 38,450,863 7,947,766 1,915,000 927,535 2.80 - - -0.00
2022 49,445,623 43,409,827 6,035,796 8,865,000 1,262,155 0.60 - - -0.00
2023 50,608,815 43,077,556 7,531,259 1,435,000 973,191 3.13 - - -0.00
2024 49,043,988 41,761,588 7,282,400 1,535,000 935,776 2.95 - - -0.00
Note: Details regarding the government's outstanding debt can be found in the notes to the financial statements.
1 Includes Liquor, Sewer, Water and Electric revenue bonds
2 Gross revenue excludes interest income, connection fees and miscellaneous revenues
3 Expenses exclude depreciation, interest on bonds and miscellaneous expenses
Revenue Bonds 1 Special Assessment Bonds
City of Elk River
Pledged-Revenue Coverage
Last Ten Fiscal Years
Page 368 of 637
179
Table 16
Personal
Fiscal Income Per Capita Median School Unemployment
Year Population1 (in thousands)Income2 Age3 Enrollment4 Rate5
2015 23,987 782,528$ 32,623$ 35 13,751 4.0%
2016 24,368 815,597 33,470 36 14,077 3.4%
2017 24,567 832,784 33,899 36 14,294 4.0%
2018 24,891 854,433 34,327 36 14,448 3.8%
2019 25,243 875,452 34,681 36 14,623 3.9%
2020 25,590 895,676 35,001 36 14,280 4.9%
2021 25,835 893,090 34,569 37 14,169 3.7%
2022 26,406 997,143 37,762 37 14,956 2.9%
2023 27,001 1,154,158 42,745 36 15,041 3.0%
2024 27,520 1,314,328 47,759 36 15,297 2.9%
Data Sources
1 State Demographer
2 Bureau of Economic Analysis
3 US Census Bureau
4 School District
5 Minnesota Department of Employment and Economic Development
n/a - not available
City of Elk River
Demographic and Economic Statistics
Last Ten Fiscal Years
Page 369 of 637
180
Table 17
Percentage Percentage
of Total City of Total City
Employer Employees Rank Employment Employees Rank Employment
Independent School District 728 1 2,100 1 16.86%1,450 1 11.51%
Sherburne County 697 2 5.60%618 2 4.91%
Guardian Angels of Elk River 374 3 3.00%317 4 2.52%
Walmart 354 4 2.84%380 3 3.02%
City of Elk River 251 5 2.02%223 6 1.77%
Great River Energy 210 6 1.69%236 5 1.87%
Sportech, Inc.185 7 1.49%185 8 1.47%
Menards 173 8 1.39%150 9 1.19%
Tescom Corporation 170 9 1.37%187 7 1.48%
First National Financial Services 142 10 1.14%- - -
Cornerstone Auto Resource - - - 147 10 1.17%
Total 4,656 37.40%3,893 30.91%
Total Employment 2 12,453 12,599
1 Total District
2 Minnesota Department of Employment and Economic Development
20152024
City of Elk River
Principal Employers
Current Year and Nine Years Ago
Page 370 of 637
181
Table 18
Function 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
General government 29.3 29.3 29.3 30.3 29.3 29.8 29.9 31.3 31.5 31.5
Public safety:
Police
Officers 32.0 32.0 32.0 34.0 34.0 34.0 34.0 34.0 34.0 34.0
Civilians 9.0 9.0 9.0 9.0 9.0 10.0 10.0 10.0 11.0 11.0
Fire
Fire administration 3.0 3.0 3.0 3.0 5.0 5.0 5.0 5.0 5.0 5.0
Paid on-call volunteers 44.0 44.0 44.0 45.0 45.0 45.0 45.0 45.0 45.0 51.0
Other public safety 9.0 9.0 9.0 9.0 7.0 7.0 7.0 7.0 7.0 7.0
Public works 15.0 15.0 15.0 15.0 16.0 15.5 15.6 15.6 16.6 16.6
Culture and recreation 17.5 17.5 17.8 18.3 18.6 19.7 23.6 24.6 24.9 25.9
Economic development 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0
Municipal liquor 13.0 13.0 13.0 13.0 13.5 13.5 13.5 13.5 13.5 14.5
Sewer 6.0 6.0 6.0 6.0 6.0 6.0 7.0 7.0 7.0 7.0
Storm Water 1.0 1.0 1.0 1.0 1.0 1.0 0.0 0.0 0.0 0.0
Water 8.0 8.0 8.0 8.0 8.0 8.0 8.5 8.5 8.5 8.7
Electric 34.0 34.0 34.0 34.0 36.0 36.0 37.0 36.4 37.2 36.5
Total 222.8 222.8 223.1 227.6 230.4 232.5 238.1 239.9 243.2 250.7
Source: City of Elk River Finance Department
Fiscal Year
City of Elk River
Full-Time Equivalent Employees by Function
Last Ten Fiscal Years
Page 371 of 637
182
Table 19
Function 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Planning
Land use applications 118 138 122 103 102 126 89 112 115 97
Police
Police calls 21,930 24,728 26,329 27,061 26,209 24,083 25,449 23,982 24,314 23,303
Traffic citations 2,778 2,818 3,294 2,309 2,575 1,570 2,339 1,751 2,533 3,059
Fire
Fire calls 436 442 473 483 497 497 577 547 613 566
Building/environmental
Permits issued 1,722 1,804 2,245 2,316 2,466 2,701 2,747 2,456 2,734 2,295
Valuation of permits 57,965$ 51,368$ 106,983$ 66,048$ 70,313$ 81,056$ 137,788$ 109,930$ 105,926$ 72,462$
(thousands of dollars)
Public works
Street sweeping (hours)1,824 1,520 1,314 991 1,000 1,100 950 825 800 730
Snowplowing (hours)3,018 3,368 3,812 5,122 4,200 3,900 4,160 5,500 4,800 4,400
Equipment repair (hours)3,575 3,688 4,196 5,140 5,100 5,200 5,440 4,950 4,947 2,896
Culture and recreation
Recreation participants 27,348 27,452 27,811 27,637 33,522 12,285 36,752 41,061 26,789 28,636
Ice arena usage (hours)5,469 4,583 4,518 4,459 4,234 2,108 1,870 5,035 6,796 6,463
Sewer
Average daily treatment flow 1,200 1,300 1,300 1,300 1,300 1,350 1,350 1,350 1,350 1,350
(thousands of gallons)
Water
Number of customers 4,672 4,903 5,011 5,140 5,256 5,320 5,430 5,551 5,611 5,708
Average daily consumption 2,192 2,196 2,159 2,254 2,133 2,391 2,677 2,429 2,751 2,304
(thousands of gallons)
Electric
Number of customers 10,499 10,816 11,448 11,983 12,244 12,365 12,789 12,955 13,232 13,466
Average daily consumption 773 837 878 931 922 923 953 943 936 898
(thousands of KWh's)
Sources: Various city departments
Fiscal Year
City of Elk River
Operating Indicators by Function
Last Ten Fiscal Years
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183
Table 20
Function 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Public safety
Police:
Stations 1 1 1 1 1 1 1 1 1 1
Patrol units 13 13 13 14 14 14 14 16 17 16
Fire Stations 2 2 2 2 2 2 2 3 3 3
Public works
Streets (miles)151 155 155 155 155 157 157 157 157 157
Culture and recreation
Parks 46 46 46 46 40 1 40 40 40 40 40
Parks acreage 1,392 1,392 1,392 1,392 1,392 1,392 1,392 1,392 1,392 1,392
Sewer
Sanitary sewers (miles)80 80 80 80 80 82 87 87 87 87
Lift stations 21 21 21 21 21 22 23 23 23 24
Maximum daily treatment capacity 2,200 4,500 4,500 4,500 4,500 4,500 4,500 4,500 4,500 5,000
(thousands of gallons)
Water
Maximum daily capacity 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000
(thousands of gallons)
Electric
Generating facilities 6 6 6 6 6 6 6 6 6 6
Note: No capital asset indicators are available for the general government function.
1 Several smaller parks were consolidated into Woodland Trails Regional Park
Sources: Various city departments
Fiscal Year
City of Elk River
Capital Asset Statistics by Function
Last Ten Fiscal Years
Page 373 of 637
City of Elk River
Sherburne County, Minnesota
Communications Letter
December 31, 2024
Page 374 of 637
City of Elk River
Table of Contents
Report on Matters Identified as a Result of
the Audit of the Basic Financial Statements 1
Required Communication 3
Financial Analysis 8
Emerging Issues 24
Page 375 of 637
1
Report on Matters Identified as a Result of
the Audit of the Basic Financial Statements
Honorable Mayor, Members of the
City Council, and Management
City of Elk River
Elk River, Minnesota
In planning and performing our audit of the financial statements of the governmental activities,
business-type activities, the aggregate discretely presented component unit, each major fund, and
the aggregate remaining fund information of the City of Elk River, Minnesota, as of and for the year
ended December 31, 2024, in accordance with auditing standards generally accepted in the United
States of America and the standards applicable to financial audits contained in Government Auditing
Standards, issued by the Comptroller General of the United States, we considered the City's internal
control over financial reporting (internal control) as a basis for designing audit procedures that are
appropriate in the circumstances for the purpose of expressing our opinions on the financial
statements, but not for the purpose of expressing an opinion on the effectiveness of the City's
internal control. Accordingly, we do not express an opinion on the effectiveness of the City's internal
control over financial reporting.
Our consideration of internal control was for the limited purpose described in the preceding
paragraph and was not designed to identify all deficiencies in internal control that might be material
weaknesses or significant deficiencies and, therefore, material weaknesses or significant deficiencies
may exist that have not been identified. In addition, because of inherent limitations in internal
control, including the possibility of management override of controls, misstatements due to error, or
fraud may occur and not be detected by such controls.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent,
or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a
combination of deficiencies, in internal control over financial reporting, such that there is a
reasonable possibility that a material misstatement of the City's basic financial statements will not
be prevented, or detected and corrected, on a timely basis. A reasonable possibility exists when the
likelihood of an event occurring is either reasonably possible or probable as defined as follows:
• Reasonably possible. The chance of the future event or events occurring is more than remote
but less than likely.
• Probable. The future event or events are likely to occur.
We did not identify any deficiencies in internal control that we consider to be material weaknesses.
The accompanying memorandum also includes financial analysis provided as a basis for discussion.
The matters discussed herein were considered by us during our audit and they do not modify the
opinion expressed in our Independent Auditor's Report dated June 6, 2025, on such statements.
Page 376 of 637
2
The purpose of this communication, which is an integral part of our audit, is to describe for the
Members of the City Council and management and others within the City and state oversight agencies
the scope of our testing of internal control and the results of that testing. Accordingly, this
communication is not intended to be and should not be used for any other purpose.
Minneapolis, Minnesota
June 6, 2025
Page 377 of 637
3
City of Elk River
Required Communication
We have audited the basic financial statements of the governmental activities, business-type
activities, the aggregate discretely presented component unit, each major fund, and the aggregate
remaining fund information of the City as of and for the year ended December 31, 2024. Professional
standards require that we advise you of the following matters related to our audit.
Our Responsibility in Relation to the Financial Statement Audit
As communicated in our engagement letter, our responsibility, as described by professional
standards, is to form and express opinions about whether the basic financial statements prepared by
management with your oversight are presented fairly, in all material respects, in accordance with
accounting principles generally accepted in the United States of America. Our audit of the basic
financial statements does not relieve you or management of its respective responsibilities.
Our responsibility, as prescribed by professional standards, is to plan and perform our audit to obtain
reasonable, rather than absolute, assurance about whether the basic financial statements are free of
material misstatement. An audit of the basic financial statements includes consideration of internal
control over financial reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City's
internal control over financial reporting. Accordingly, as part of our audit, we considered the
internal control of the City solely for the purpose of determining our audit procedures and not to
provide any assurance concerning such internal control.
We are also responsible for communicating significant matters related to the audit that are, in our
professional judgement, relevant to your responsibilities in overseeing the financial reporting
process. However, we are not required to design procedures for the purpose of identifying other
matters to communicate to you.
Generally accepted accounting principles provide for certain Required Supplementary Information
(RSI) to supplement the basic financial statements. Our responsibility with respect to the RSI, which
supplements the basic financial statements, is to apply certain limited procedures in accordance
with generally accepted auditing standards. However, the RSI was not audited and, because the
limited procedures do not provide us with sufficient evidence to express an opinion or provide any
assurance, we do not express an opinion or provide any assurance on the RSI.
Our responsibility for the supplementary information accompanying the basic financial statements,
as described by professional standards, is to evaluate the presentation of the supplementary
information in relation to the basic financial statements as a whole and to report on whether the
supplementary information is fairly stated, in all material respects, in relation to the basic financial
statements as a whole.
Our responsibility with respect to the other information in documents containing the audited basic
financial statements and auditor's report does not extend beyond the basic financial information
identified in the report. We have no responsibility for determining whether this other information is
properly stated. This other information was not audited, and we do not express an opinion or provide
any assurance on it.
Page 378 of 637
4
City of Elk River
Required Communication
Our Responsibility in Relation to Government Auditing Standards
As communicated in our engagement letter, part of obtaining reasonable assurance about whether
the basic financial statements are free of material misstatement, we performed tests of the City's
compliance with certain provisions of laws, regulations, contracts, and grant agreements,
noncompliance with which could have a direct and material effect on the determination of basic
financial statement amounts. However, the objective of our tests was not to provide an opinion on
compliance with such provisions.
Our Responsibility in Relation to Title 2 U.S. Code of Federal Regulations Part 200, Uniform
Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards
(Uniform Guidance)
As communicated in our engagement letter, in accordance with the Uniform Guidance, we examined
on a test basis, evidence about the City's compliance with the types of compliance requirements
described in the U.S. Office of Management and Budget (OMB) Compliance Supplement applicable to
each of its major federal programs for the purpose of expressing an opinion on the City's compliance
with those requirements. While our audit provided a reasonable basis for our opinion, it did not
provide a legal determination on the City's compliance with those requirements.
In planning and performing our audit of compliance, we considered the City's internal control over
compliance with the types of requirements that could have a direct and material effect on each
major federal program to determine the auditing procedures that are appropriate in the
circumstances for the purpose of expressing an opinion on compliance for each major federal
program and to test and report on internal control over compliance in accordance with the Uniform
Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control
over compliance.
Planned Scope and Timing of the Audit
We conducted our audit consistent with the planned scope and timing we previously communicated
to you.
Compliance with All Ethics Requirements Regarding Independence
The engagement team, others in our firm, as appropriate, our firm, and our network firms have
complied with all relevant ethical requirements regarding independence.
Significant Risks Identified
We have identified the following significant risks of material misstatement:
• Management Override of Controls – Management override of internal control is considered a
risk in substantially all engagements as management may be incentivized to produce better
results.
• Misappropriation of Assets – If duties cannot be appropriately segregated, there is a risk of
unauthorized disbursements being made by the City. In addition, generally this results in less
review taking place as transactions are recorded in the financial statements.
• Improper Revenue Recognition – Revenue recognition is considered a fraud risk on
substantially all engagements as it generally has a significant impact on the results of the
government's operations. In addition, complexities exist surrounding the calculation and
recording of various revenue sources.
• Pension Valuation – Net Pension Liability, Deferred Outflows of Resources Related to Pensions,
and Deferred Inflows of Resources Related to Pensions – These pensions are generally material
to the financial
statements and involve significant estimates.
Page 379 of 637
5
City of Elk River
Required Communication
Qualitative Aspects of the City's Significant Accounting Practices
Significant Accounting Policies
Management has the responsibility to select and use appropriate accounting policies. A summary of
the significant accounting policies adopted by the City is included in the notes to the basic financial
statements. There have been no initial selection of accounting policies and no changes to significant
accounting policies or their application during 2024. No matters have come to our attention that
would require us, under professional standards, to inform you about (1) the methods used to account
for significant unusual transactions and (2) the effect of significant accounting policies in
controversial or emerging areas for which there is a lack of authoritative guidance or consensus.
Significant Accounting Estimates and Related Disclosures
Accounting estimates and related disclosures are an integral part of the basic financial statements
prepared by management and are based on management's current judgements. Those judgements
are normally based on knowledge and experience about past and current events and assumptions
about future events. Certain accounting estimates are particularly sensitive because of their
significance to the basic financial statements and because of the possibility that future events
affecting them may differ markedly from management's current judgements.
The most sensitive estimate affecting the basic financial statements relate to:
Net Pension Liability, Deferred Outflows of Resources Related to Pensions and Deferred Inflows of
Resources Related to Pensions – These balances are based on an allocation by the pension plans
using estimates based on contributions.
We evaluated the key factors and assumptions used to develop the accounting estimates and
determined that they are reasonable in relation to the basic financial statements taken as a whole
and in relation to the applicable opinion units.
Financial Statement Disclosures
Certain basic financial statement disclosures involve significant judgment and are particularly
sensitive because of their significance to financial statement users. The basic financial statement
disclosures are neutral, consistent, and clear.
Significant Difficulties Encountered during the Audit
We encountered no significant difficulties in dealing with management relating to the performance
of the audit.
Uncorrected and Corrected Misstatements
For the purposes of this communication, professional standards require us to accumulate all known
and likely misstatements identified during the audit, other than those that we believe are trivial,
and communicate them to the appropriate level of management. Further, professional standards
require us to also communicate the effects of uncorrected misstatements related to prior periods on
the relevant classes of transactions, account balances or disclosures, and the basic financial
statements taken as a whole and each applicable opinion unit.
Management did not identify, and we did not notify them of any uncorrected financial statement
misstatements.
Page 380 of 637
6
City of Elk River
Required Communication
Uncorrected and Corrected Misstatements (Continued)
In addition, professional standards require us to communicate to you all material, corrected
misstatements that were brought to the attention of management as a result of our audit
procedures. None of the misstatements detected as a result of audit procedures and corrected by
management were material, either individually or in the aggregate, to the basic financial statements
taken as a whole.
Disagreements with Management
For purposes of this letter, professional standards define a disagreement with management as a
matter, whether or not resolved to our satisfaction, concerning a financial accounting, reporting, or
auditing matter, which could be significant to the City's basic financial statements or the auditor's
report. No such disagreements arose during the course of our audit.
Representations Requested from Management
We have requested certain written representations from management, which are included in the
management representation letter.
Management's Consultations with Other Accountants
In some cases, management may decide to consult with other accountants about auditing and
accounting matters. Management has informed us that, and to our knowledge, there were no
consultations with other accountants regarding auditing and accounting matters.
Other Significant Matters, Findings, or Issues
In the normal course of our professional association with the City, we generally discuss a variety of
matters, including the application of accounting principles and auditing standards, significant events
or transactions that occurred during the year, operating and regulatory conditions affecting the City,
and operational plans and strategies that may affect the risks of material misstatement. None of the
matters discussed resulted in a condition to our retention as the City's auditor.
Other Information Included in Annual Reports
Pursuant to professional standards, our responsibility as auditors for other information, whether
financial or nonfinancial, included in the City's annual reports, does not extend beyond the
information identified in the audit report, and we are not required to perform any procedures to
corroborate such other information.
We applied certain limited procedures to the RSI that supplements the basic financial statements.
Our procedures consisted of inquiries of management regarding 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 did not audit the RSI and do not express an opinion or provide any
assurance on the RSI.
With respect to the supplementary information accompanying the financial statements, we made
certain inquiries of management and evaluated the form, content and methods of preparing the
information to determine that the information complies with accounting principles generally
accepted in the United States of America, the method of preparing it has not changed from the prior
period, and the information is appropriate and complete in relation to our audit of the financial
statements.
Page 381 of 637
7
City of Elk River
Required Communication
Other Information Included in Annual Reports (Continued)
We compared and reconciled the supplementary information to the underlying accounting records
used to prepare the basic financial statements or to the basic financial statements themselves.
We were not engaged to report on the other information accompanying the basic financial
statements but are not RSI. Such information has not been subjected to the auditing procedures
applied in the audit of the basic financial statements, and accordingly, we do not express an opinion
or provide any assurance on it.
Our responsibility also includes communicating to you any information which we believe is a material
misstatement of fact. Nothing came to our attention that caused us to believe that such information,
or its manner of presentation, is materially inconsistent with the information, or manner of its
presentation, appearing in the basic financial statements.
Page 382 of 637
8
City of Elk River
Financial Analysis
The following pages provide graphic representations of select data pertaining to the financial
position and operations of the City for the past five years. Our analysis of each graph is presented to
provide a basis for discussion of past performance and how implementing certain changes may
enhance future performance. We suggest you view each graph and document if our analysis is
consistent with yours. A subsequent discussion of this information should be useful for planning
purposes.
General Fund – Fund Balance
The following graph illustrates the relationship between cash and investments and fund balance over
the past five years. At December 31, 2024, the General Fund balance consisted of an unrestricted
fund balance of $9,538,493. The total unrestricted fund balance represented just over five months of
expenditures at current levels. The Office of the State Auditor has issued a statement of position
recommending cities maintain an unrestricted fund balance of approximately 35% to 50% of fund
operating revenues, or no less than five months of operating expenditures. The City's fund balance
policy for the General Fund identifies a minimum unassigned fund balance of 40-45% of budgeted
operating expenditures. Based on the 2025 budgeted expenditures of $22,210,100, the City's
unassigned General Fund balance was at 43% at December 31, 2024.
$8,250,728
$8,750,629
$8,888,888
$9,323,318
$9,538,493
$8,015,854
$8,716,326
$9,307,918
$9,243,274
$9,091,514
$7,000,000
$8,000,000
$9,000,000
$10,000,000
2020 2021 2022 2023 2024
Cash and Investments and Fund Balance
Fund Balance Cash and Investment Balance
On the following pages, we will discuss the revenues and expenditures of the General Fund and the
variations in the fund balance.
Page 383 of 637
9
City of Elk River
Financial Analysis
General Fund – Revenues and Expenditures
The following table and graph show the overall operations of the General Fund. Revenues have
increased over each of the five years shown from a low of $14,656,694 in 2020 to a high in 2024 of
$18,708,312. Overall, from 2020 to 2024, revenues have increased $4,051,618, or 27.6%. Revenues
increased by $1,220,276 when comparing 2024 to 2023. Similarly, expenditures have increased over
each of the five years presented. In 2024, expenditures were $21,037,894, an increase from the prior
year of $1,255,788. Since 2020, expenditures have increased $5,423,213, or 34.7%.
$14,656,694 $15,633,492 $16,417,671 $17,488,036 $18,708,312
$15,614,681 $16,829,600 $18,663,781 $19,782,106 $21,037,894
$0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
2020 2021 2022 2023 2024
Revenues and Expenditures
Total Revenues Total Expenditures
Page 384 of 637
10
City of Elk River
Financial Analysis
General Fund – Revenues
The following graph presents comparisons of revenues by type, illustrating the majority of revenue
for the City is from taxes, representing 80.5% of total General Fund revenues. Other revenues include
items such as fines and forfeitures, investment earnings, and other miscellaneous items.
Revenues of the General Fund increased from 2023 to 2024 by $1,220,276, or 7.0%. Tax revenue had
the largest increase of $1,113,940 based on the increase in taxes levied for the fund. The
intergovernmental revenue category increased $214,313 related to increases in police state aid and
state crime prevention grants compared to 2023. Licenses and permits revenue decreased $207,265
due to a decrease in construction resulting in less licenses and permits applied for. Other category
sources of revenue had relatively minor fluctuations when compared to the prior year.
2020 2021 2022 2023 2024
Charges for Services $820,666 $1,077,855 $1,164,410 $1,247,308 $1,308,509
Other 369,125 426,864 466,605 615,904 653,991
Licenses and Permits 665,519 1,015,529 939,133 976,260 768,995
Intergovernmental 674,061 581,927 657,107 706,917 921,230
Taxes 12,127,323 12,531,317 13,190,416 13,941,647 15,055,587
$-
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
$14,000,000
$16,000,000
$18,000,000
$20,000,000
General Fund Revenues
Page 385 of 637
11
City of Elk River
Financial Analysis
General Fund – Expenditures
The graph below represents the breakdown of expenditures by department. Public safety continues
to comprise the largest portion of General Fund expenditures, representing 50.0%. Overall, General
Fund expenditures increased $1,255,788, or 6.3%, from 2023.
Public safety expenditures increased $820,990 with higher salaries and benefits. General government
expenditures increased $431,653 with increased wages for employees and greater professional
service expenditures. Public works expenditures decreased $256,499 with lower salaries and benefits
due to staffing vacancies along with less costs for supplies and equipment repair and maintenance.
2020 2021 2022 2023 2024
Capital Outlay -37,718 257,243 3,830 175,323
Debt Service --106,845 110,257 109,035
Culture and Recreation 1,941,732 2,015,790 2,398,314 2,432,803 2,522,176
Public Works 2,132,913 2,328,853 2,399,494 2,630,313 2,373,814
General Government 4,036,523 4,173,627 4,463,622 4,908,703 5,340,356
Public Safety 7,503,513 8,273,612 9,038,263 9,696,200 10,517,190
$-
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
General Fund Expenditures
Page 386 of 637
12
City of Elk River
Financial Analysis
General Fund – Budgetary Comparison
Actual
Amounts
Revenues
Property taxes $14,917,700 $14,887,537 (30,163)$
Other taxes 225,000 168,050 (56,950)
Licenses and permits 1,008,200 768,995 (239,205)
Intergovernmental 659,000 921,230 262,230
Charges for services 1,185,700 1,308,509 122,809
Fines and forfeitures 150,000 176,559 26,559
Miscellaneous revenues 330,000 477,432 147,432
Total revenues 18,475,600 18,708,312 232,712
Expenditures
General government 5,316,650 5,340,356 23,706
Public safety 10,119,500 10,517,190 397,690
Public works 2,878,800 2,373,814 (504,986)
Culture and recreation 2,668,700 2,522,176 (146,524)
Debt service 91,750 109,035 17,285
Capital outlay 24,200 175,323 151,123
Total expenditures 21,099,600 21,037,894 (61,706)
Excess of revenues over
(under) disbursements (2,624,000) (2,329,582) 294,418
Other Financing Sources (Uses)
Lease issuance - 99,914 99,914
Net transfers 2,624,000 2,444,843 (179,157)
Net change in fund balances -$ 215,175$ 215,175$
Variance With
Final Budget -
Over (Under)
Original and
Final Budget
The City had a balanced budget in 2024 with anticipated revenues and net transfers equaling
budgeted expenditures of $21,099,600. Overall, actual revenue was $232,712, or 1.3%, over budget.
Intergovernmental revenue was $262,230 over budget with fire and police aid amounts along with
state crime prevention grants exceeding budgeted amounts. The miscellaneous revenues category
was $147,432 over budget due in large part to investment income coming in higher than budgeted.
Charges for services was $122,809 over budget due in part to revenue from fire contracts, farmer’s
market, and park use fees coming in higher than anticipated. Licenses and permits was $239,205
under budget as building permit revenue was less than budgeted.
Overall, actual expenditures were less than budgeted amounts by $61,706, or 0.3%. The primary
driver of the expenditures being under budget related to the public works expenditures, which were
$504,986 under budget based on lesser wages and supply costs than anticipated. Culture and
recreation was $146,524 under budget based on personnel costs and less repair and maintenance
expenditures than anticipated.
Page 387 of 637
13
City of Elk River
Financial Analysis
Multipurpose Facility Operations
The following graph illustrates the current operations of the Multipurpose Facility Fund for the past
four years.
In 2024, the Fund showed revenues of $1,800,099, which was an increase of $253,483 compared to
2023 as more revenue for facility rentals was obtained during the year. Expenditures decreased by
$88,152 during 2024 with decreased equipment purchases. The Fund entered into an interfund loan
with the Capital Outlay Reserve Fund in 2023 for $200,000 relating to the purchase of a Zamboni.
The effect of increased revenues and decreased expenditures in 2024, along with $437,633 in other
financing sources, resulted in an increase in fund balance of $307,644. The fund balance at the end
of 2024 was $99,989.
2021 2022 2023 2024
Revenue $1,058,645 $1,854,970 $1,546,616 $1,800,099
Expenditures 1,312,075 1,591,340 2,018,240 1,930,088
Revenues over (under) Expenditures ($253,430)$263,630 ($471,624)($129,989)
Other Financing Sources (Uses)-38,772 30,000 437,633
Fund Balance (68,433)233,969 (207,655)99,989
(500,000)
(300,000)
(100,000)
100,000
300,000
500,000
700,000
900,000
$(1,000,000)
$(500,000)
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
Multipurpose Facility Operations
Page 388 of 637
14
City of Elk River
Financial Analysis
Enterprise funds may be used to account for any activity in which a fee is charged. It is not required
to have the fee support the entire activity; however, the basic premise in establishing an enterprise
fund is that the activity will be operated similar to a business. Therefore, it is expected the
enterprise fund would at least be able to meet its obligations currently and into the future.
Sewer Operations
The following graph illustrates the current operations of the Sewer Fund for the past five years.
Operating income is shown with and without depreciation below.
Operating revenue increased $187,696, or 6.8%, from 2023 with increased rates and increased usage.
Operating expenses increased by $564,042, or 14.5%, due in large part to legal fees and purchases
with ARPA funds. The net effect of the increased revenues and expenses is an operating loss of
$1,488,909 for the year. When not including depreciation and amortization of capital assets in the
calculation, the Sewer Fund had an operating income of $219,765.
2020 2021 2022 2023 2024
Operating Revenues $2,481,522 $2,517,025 $2,633,732 $2,774,077 $2,961,773
Operating Expenses 3,344,218 3,417,504 3,651,793 3,886,640 4,450,682
Operating Income without
Depreciation/Amortization 773,717 739,615 623,383 598,378 219,765
Operating Loss (862,696)(900,479)(1,018,061)(1,112,563)(1,488,909)
$(2,000,000)
$(1,000,000)
$-
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
Sewer Operations
Page 389 of 637
15
City of Elk River
Financial Analysis
Sewer Fund
2020 2021 2022 2023 2024
Cash and Investments $13,476,183 $14,540,459 $8,078,281 $8,853,336 $10,149,395
Unrestricted Net Position 6,602,622 7,726,366 8,305,312 9,039,420 10,390,274
$-
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
$14,000,000
$16,000,000
Sewer Fund
The above graph shows the cash and investment and unrestricted net position balances as of
December 31 for the last five years. The Sewer Fund cash and investment balance has decreased
$3,326,788 since 2020. The cash and investment balance increased $1,296,059 during 2024 while the
unrestricted net position for the Sewer Fund increased $1,350,854 during the same time period.
Page 390 of 637
16
City of Elk River
Financial Analysis
Garbage Operations
The following graph illustrates the current operations of the Garbage Fund for the past five years.
The Garbage Fund has shown an operating income in each of the last five years presented. In 2024,
the Fund showed an operating income of $226,193. This is a slight increase in operating income of
$8,488 from 2023. The Fund experienced an increase in operating revenue of $43,919 based on usage
for the year, while garbage operating expenses increased $35,431 due to increased contractual
service expenses based on garbage customer charges.
2020 2021 2022 2023 2024
Operating Revenues $1,686,664 $1,773,620 $1,889,247 $1,920,516 $1,964,435
Operating Expenses 1,565,482 1,623,785 1,670,454 1,702,811 1,738,242
Operating Income without Depreciation 121,182 149,835 218,793 217,705 226,193
Operating Income (Loss)121,182 149,835 218,793 217,705 226,193
$0
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
$1,400,000
$1,600,000
$1,800,000
$2,000,000
Garbage Operations
Page 391 of 637
17
City of Elk River
Financial Analysis
Garbage Fund
2020 2021 2022 2023 2024
Cash and Investments $442,825 $528,325 $610,952 $802,786 $999,419
Unrestricted Net Position 438,738 531,665 620,506 812,632 1,011,564
$-
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
Garbage Fund
The graph above shows the cash and investment and unrestricted net position balances as of
December 31 for the last five years. The Garbage Fund cash and investment balance has increased
$556,594 since 2020. In 2024, the Garbage Fund cash and investment balance increased $196,633
while the unrestricted net position increased $198,932 based on positive operations during the year.
Both balances for cash and investments and unrestricted net position were the highest in 2024 of the
five years presented.
Page 392 of 637
18
City of Elk River
Financial Analysis
Storm Water Operations
The following graph illustrates the current operations of the Storm Water Fund for the past five
years. Operating revenue decreased $231,037 in 2024 while expenses decreased $434,651 due in
large part to grant funding received and related expenses related to an erosion prevention project in
2023. The net effect of the changes in revenues and expenses is an operating gain of $128,536, which
was positive for the first time in the past five years. The Fund had operating income of $609,612
when excluding depreciation.
2020 2021 2022 2023 2024
Operating Revenues $564,699 $586,049 $609,101 $905,891 $674,854
Operating Expenses 571,170 612,527 663,420 980,969 546,318
Operating Income without
Depreciation/Amortization 456,587 440,918 424,183 419,715 609,612
Operating Income (Loss)(6,471)(26,478)(54,319)(75,078)128,536
$(200,000)
$-
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
Storm Water Operations
Page 393 of 637
19
City of Elk River
Financial Analysis
Storm Water Fund
2020 2021 2022 2023 2024
Cash and Investments $1,179,754 $1,433,529 $1,548,347 $1,921,645 $2,396,833
Unrestricted Net Position 1,181,615 1,488,809 1,586,357 1,956,658 2,464,145
$-
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
$1,400,000
$1,600,000
$1,800,000
$2,000,000
$2,200,000
$2,400,000
$2,600,000
$2,800,000
$3,000,000
Storm Water Fund
As of December 31, 2024, the Storm Water Fund had an ending net cash and investment balance of
$2,396,833. This is an increase of $475,188 compared to 2023. Unrestricted net position at year-end
was $2,464,145 and also increased $507,487 compared to the prior year, the highest mark of the
five-year period.
Page 394 of 637
20
City of Elk River
Financial Analysis
Municipal Liquor Operations
The following graph illustrates the current operations of the Municipal Liquor Fund for the past five
years. Sales increased $652,107 in 2024 while cost of sales also increased $406,616, ending with an
increase in gross profit of 11.1%. The net effect of the increases in revenues and expenses is
operating income of $779,675, an increase of $142,512 compared to 2023.
2020 2021 2022 2023 2024
Gross Profit $2,245,745 $2,379,769 $2,335,534 $2,211,533 $2,457,024
Operating Expenses 1,440,451 1,448,717 1,593,173 1,579,063 1,682,377
Operating Income without
Depreciation/Amortization 904,042 1,031,887 840,546 699,193 843,412
Operating Income 808,044 936,948 746,731 637,163 779,675
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
Municipal Liquor Operations
Page 395 of 637
21
City of Elk River
Financial Analysis
Municipal Liquor Fund
2020 2021 2022 2023 2024
Cash and Investments $5,023,743 $4,713,463 $3,978,266 $3,526,983 $3,398,275
Unrestricted Net Position 5,111,153 5,005,721 4,334,085 3,930,205 3,729,560
$-
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
Municipal Liquor Fund
As of December 31, 2024, the Municipal Liquor Fund had an ending net cash and investment balance
of $3,398,275. This is a decrease of $128,708 compared to 2023 due in large part to transfers out of
$1,250,000 made during 2024. Unrestricted net position at year-end was $3,729,560, a decrease of
$200,645 compared to the prior year. Unrestricted net position has decreased by $1,381,593, or
27.0%, over the last five years when comparing 2024 to 2020.
Page 396 of 637
22
City of Elk River
Financial Analysis
Tax Capacity, Certified Tax Levy, and City Tax Rate
The chart below graphs the tax capacity, certified tax levy, and City tax rate for 2020 through 2024.
The tax capacity is based on total tax capacity, prior to adjustments for captured Tax Increment
Financing (TIF) and fiscal disparities. The certified tax levy amount is also prior to fiscal disparity
adjustments.
With market values continuing to climb, the City's tax capacity increased from 2023 to 2024, by
$4,190,584, or 10.9%. With certified levy increasing at a lower rate to the taxable market value over
the last five years, the City's tax rate has decreased from 46.2% in 2020 to 37.9% in 2024.
$28,034,152 $29,673,445
$31,875,813
$38,393,611
$43,047,251
$13,632,710 $13,922,492 $14,725,913 $15,973,005 $17,054,338
46.2%44.6%44.0%
39.7%37.8%
-5%
5%
15%
25%
35%
45%
55%
65%
75%
85%
$-
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
$35,000,000
$40,000,000
$45,000,000
$50,000,000
2020 2021 2022 2023 2024
Tax Capacity, Certified Levy, and City Tax Rate
Tax Capacity Certified Tax Levy City Tax Rate
Page 397 of 637
23
City of Elk River
Financial Analysis
Governmental Activities
The chart below presents the minimum annual principal payments required to retire long-term
liabilities.
2025 2026 2027 2028 2029 2030-2034 2035-2039 2040-2044
YMCA $590,000 $605,000 $615,000 $630,000 $650,000 $2,820,000 $-$-
Sales Tax 1,000,000 1,030,000 1,080,000 1,135,000 1,195,000 6,680,000 7,755,000 8,815,000
Govt Bldgs 940,000 985,000 1,025,000 1,075,000 1,115,000 5,195,000 3,640,000 2,330,000
$-
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
$7,000,000
$8,000,000
$9,000,000
Debt Service Funds -Maturities
Page 398 of 637
City of Elk River
Emerging Issues
24
Executive Summary
The following is an executive summary of financial related updates to assist you in staying current on
emerging issues in accounting and finance. This summary will give you a preview of the new
standards that have been recently issued and what is on the horizon for the near future. The most
recent and significant updates include:
• Accounting Standard Update – GASB Statement No. 102 – Certain Risk Disclosures
GASB has issued GASB Statement No. 102 relating to risk disclosures. The disclosures will
provide users with timely information regarding certain concentrations or constraints and
related events that have occurred or have begun to occur that make a government vulnerable
to a substantial impact.
• Accounting Standard Update – GASB Statement No. 103 – Financial Reporting Model
Improvements
GASB has issued GASB Statement No. 103 relating to changes in financial reporting
requirements. The changes provide clarity, enhance the relevance of information, provide
more useful information for decision-making, and provide for greater comparability amongst
government entities.
• Accounting Standard Update – GASB Statement No. 104 – Disclosure of Certain Capital
Assets
GASB has issued GASB Statement No. 104 relating to capital asset disclosures. The disclosures
required by this Statement provide users of the financial statements with essential
information about certain types of capital assets.
The following are extensive summaries of the current updates. As your continued business partner,
we are committed to keeping you informed of new and emerging issues. We are happy to discuss
these issues with you further and their applicability to your City.
Page 399 of 637
City of Elk River
Emerging Issues
25
Accounting Standard Update – GASB Statement No. 102 – Certain Risk Disclosures
The objective of this Statement is to provide users of government financial statements with
information about risks related to a government's vulnerabilities due to certain concentrations or
constraints that is essential to their analyses for making decisions or assessing accountability.
This Statement provides definitions for concentration and constraint. A concentration as a lack of
diversity related to an aspect of a significant inflow of resources or outflow of resources. A
constraint is a limitation imposed on a government by an external party or by formal action of the
government's highest level of decision-making authority.
This Statement requires a government to assess whether a concentration or constraint could present
a risk of financial difficulty. The City will need to make a disclosure in the notes to the financial
statements if all three of the following criteria are true:
• The City knows about the concentration or constraint prior to financial statement issuance.
• The concentration or constraint makes the City vulnerable to risk of a substantial impact.
• An event or events associated with the concentration or constraint that could cause a
substantial impact have either (1) happened; (2) started to happen; or (3) are more likely
than not to start happening within 12 months of the financial statements being issued.
If a government determines the above criteria for disclosure have been met, it should disclose
information in notes to financial statements in sufficient detail to enable users of financial
statements to understand the nature of the circumstances disclosed and the government's
vulnerability to the risk of a substantial impact. Disclosures are required for the government as a
whole as well as any opinion unit in the financial statements that includes outstanding revenue debt.
Disclosures can be combined to avoid unnecessary duplication (e.g., a subsequent event footnote).
GASB Statement No. 102 is effective for fiscal years beginning after June 15, 2024. Earlier
application is encouraged.
Information provided above was obtained from www.gasb.org.
Page 400 of 637
City of Elk River
Emerging Issues
26
Accounting Standard Update – GASB Statement No. 103 – Financial Reporting Model
Improvements
The objective of this Statement is to improve key components of the financial reporting model to
enhance its effectiveness in providing information that is essential for decision making and assessing
a government's accountability. This Statement also addresses certain application issues.
This Statement addresses 5 areas of the financial statements (1) Management's Discussion and
Analysis (MD&A), (2) Unusual or Infrequent Items, (3) Presentation of the Proprietary Fund Statement
of Revenues, Expenses, and Changes in Fund Net Position, (4) Major Component Unit Information,
and (5) Budgetary Comparison Information.
This Statement continues the requirement that the MD&A precede the basic financial statements as
part of the Required Supplementary Information (RSI). This Statement requires that the information
presented in MD&A be limited to the related topics discussed in five sections: (1) Overview of the
Financial Statements, (2) Financial Summary, (3) Detailed Analyses, (4) Significant Capital Asset and
Long-Term Financing Activity, and (5) Currently Known Facts, Decisions, or Conditions. The
Statement stresses that detailed analyses should explain why balances and results of operations
changed, rather than stating amounts and "boilerplate" discussions.
This Statement describes unusual or infrequent items as transactions and other events that are either
unusual in nature or infrequent in occurrence. Furthermore, governments are required to display the
inflows and outflows related to each unusual or infrequent item separately as the last presented
flow(s) of resources prior to the net change in resource flows in the government-wide, governmental
fund, and proprietary fund statements of resource flows.
This Statement requires that the proprietary fund statement of revenues, expenses, and changes in
fund net position continue to distinguish between operating and nonoperating revenues and
expenses. The Statement provides clarification regarding operating and nonoperating revenues and
expenses. Also, this Statement requires that a subtotal for operating income (loss) and noncapital
subsidies be presented before reporting other nonoperating revenues and expenses.
This Statement requires governments to present each major component unit separately in the
reporting entity's statement of net position and statement of activities if it does not reduce the
readability of the statements. If the readability of those statements would be reduced,
combining statements of major component units should be presented after the fund financial
statements.
This Statement requires governments to present budgetary comparison information using a single
method of communication - RSI. Governments also are required to present (1) variances between
original and final budget amounts and (2) variances between final budget and actual amounts. An
explanation of significant variances is required to be presented in notes to RSI.
GASB Statement No. 103 is effective for fiscal years beginning after June 15, 2025. Earlier
application is encouraged.
Information provided above was obtained from www.gasb.org.
Page 401 of 637
City of Elk River
Emerging Issues
27
Accounting Standard Update – GASB Statement No. 104 – Disclosure of Certain Capital Assets
The objective of this Statement is to provide users of government financial statements with essential
information about certain types of capital assets.
This Statement requires certain types of capital assets continue to be disclosed separately in the
capital assets note disclosures including presentation of capital assets by major class and separate
disclosure of lease assets, subscription assets, and intangible right-to-use assets.
This Statement requires additional disclosures for capital assets held for sale. A capital asset is held
for sale if (a) the government has decided to pursue the sale of the capital asset and (b) it is
probable that the sale will be finalized within one year of the financial statement date.
Governments should disclose (1) the ending balance of capital assets held for sale, with separate
disclosure for historical cost and accumulated depreciation by major class of asset, and (2) the
carrying amount of debt for which the capital assets held for sale are pledged as collateral for each
major class of asset.
GASB Statement No. 104 is effective for fiscal years beginning after June 15, 2025. Earlier
application is encouraged.
Information provided above was obtained from www.gasb.org.
Page 402 of 637
City of Elk River
Sherburne County, Minnesota
Reports on Compliance with
Government Auditing Standards,
Uniform Guidance, and Legal Compliance
December 31, 2024
Page 403 of 637
City of Elk River
Table of Contents
Schedule of Expenditures of Federal Awards 1
Notes to Schedule of Expenditures of Federal Awards 2
Report on Internal Control over Financial Reporting and on Compliance
and Other Matters Based on an Audit of Financial Statements Performed
in Accordance with Government Auditing Standards 3
Report on Compliance for each Major Federal Program and Report on
Internal Control over Compliance in Accordance with the Uniform Guidance 5
Schedule of Findings and Questioned Costs 8
Minnesota Legal Compliance 10
Page 404 of 637
See notes to schedule of expenditures and federal awards.1
Federal
Expenditures
U.S. Department of the Interior
Passed through the State of Minnesota
Historic Preservation Fund Grants 15.904 532$
U.S. Department of Transportation
Passed through Minnesota Department of Transportation
State and Community Highway Safety 20.600 72,833
Minimum Penalties for Repeat Offenders for Driving While Intoxicated 20.608 20,447
Total U.S. Department of Transportation 93,280
U.S. Department of Treasury
Passed through the State of Minnesota
Coronavirus Relief Fund - America Rescue Plan 21.027 1,372,738
Total Federal Expenditures 1,466,550$
Federal Agency/Pass Through Agency/Program Title
City of Elk River
Schedule of Expenditures of Federal Awards
Year Ended December 31, 2024
Federal
Assistance
Listing
Number
Page 405 of 637
2
City of Elk River
Notes to Schedule of Expenditures of Federal Awards
NOTE 1 – BASIS OF PRESENTATION
The accompanying Schedule of Expenditures of Federal Awards (the "Schedule") includes the federal
award activity of the City under programs of the federal government for the year-ended
December 31, 2024. The information in this Schedule is presented in accordance with the
requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative
Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance).
Because the Schedule presents only a selected portion of the operations of the City, it is not
intended to and does not present the financial position, changes in net position, or cash flows of the
City.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Expenditures reported on the Schedule are reported on the modified accrual basis of accounting.
Such expenditures are recognized following the cost principles contained in the Uniform Guidance,
wherein certain types of expenditures are not allowable or are limited as to reimbursement.
NOTE 3 – PASS-THROUGH GRANT NUMBERS
All pass-through entities listed above use the same Assistance Listing numbers as the federal grantors
to identify these grants and have not assigned any additional identifying numbers.
NOTE 4 – INDIRECT COST RATE
The City did not elect to use the 10 percent de minimis indirect cost rate, as allowed under the
Uniform Guidance.
Page 406 of 637
3
Report on Internal Control over Financial Reporting
and on Compliance and Other Matters Based on an Audit of
Financial Statements Performed in Accordance with
Government Auditing Standards
Independent Auditor's Report
Honorable Mayor and Members
of the City Council
City of Elk River
Elk River, Minnesota
We have audited, in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing
Standards issued by the Comptroller General of the United States (Government Auditing Standards),
the financial statements of the governmental activities, the business-type activities, the discretely
presented component unit, each major fund, and the aggregate remaining fund information of the
City of Elk River, Minnesota as of and for the year ended December 31, 2024,and the related notes
to financial statements, which collectively comprise the City's basic financial statements, and have
issued our report thereon dated June 5, 2025.
Report on Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City's internal
control over financial reporting (internal control) as a basis for designing audit procedures that are
appropriate in the circumstances for the purpose of expressing our opinions on the financial
statements, but not for the purpose of expressing an opinion on the effectiveness of the City 's
internal control. Accordingly, we do not express an opinion on the effectiveness of the City 's internal
control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent,
or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a
combination of deficiencies, in internal control such that there is a reasonable possibility that a
material misstatement of the City's financial statements will not be prevented, or detected and
corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of
deficiencies, in internal control that is less severe than a material weakness, yet important enough
to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of
this section and was not designed to identify all deficiencies in internal control that might be
material weaknesses, or significant deficiencies. Given these limitations, during our audit we did not
identify any deficiencies in internal control that we consider to be material weaknesses. However,
material weaknesses may exist that have not been identified.
Page 407 of 637
4
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City's financial statements are free
from material misstatement, we performed tests of its compliance with certain provisions of laws,
regulations, contracts, and grant agreements, noncompliance with which could have a direct and
material effect on the financial statements. However, providing an opinion on compliance with those
provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The
results of our tests disclosed no instances of noncompliance or other matters that are required to be
reported under Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and
compliance and the result of that testing, and not to provide an opinion on the effectiveness of the
City's internal control or on compliance. This report is an integral part of an audit performed in
accordance with Government Auditing Standards in considering the City's internal control and
compliance. Accordingly, this communication is not suitable for any other purpose.
Minneapolis, Minnesota
June 6, 2025
Page 408 of 637
5
Report on Compliance for each Major Federal Program
and Report on Internal Control over Compliance in Accordance with
the Uniform Guidance
Independent Auditor's Report
Honorable Mayor and Members
of the City Council
City of Elk River
Elk River, Minnesota
Report on Compliance for Each Major Federal Program
Opinion on Each Major Federal Program
We have audited the City of Elf River's compliance with the types of compliance requirements
identified as subject to audit in the U.S. Office of Management and Budget (OMB)Compliance
Supplement that could have a direct and material effect on the City's major federal program for the
year ended December 31, 2024. The City's major federal program is identified in the summary of
auditor's results section of the accompanying Schedule of Findings and Questioned Costs.
In our opinion, the City complied in all material respects, with the compliance requirements referred
to above that could have a direct and material effect on its major federal program for the year
ended December 31, 2024.
Basis for Opinion on Each Major Federal Program
We conducted our audit of compliance in accordance with auditing standards generally accepted in
the United States of America (GAAS); the standards applicable to financial audits contained in
Government Auditing Standards issued by the Comptroller General of the United States (Government
Auditing Standards); and the audit requirements of Title 2 U.S. Code of Federal Regulations Part
200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal
Awards (Uniform Guidance). Our responsibilities under those standards and the Uniform Guidance are
further described in the Auditor's Responsibilities for the Audit of Compliance section of our report.
We are required to be independent of the City and to meet our other ethical responsibilities, in
accordance with 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 opinion on
compliance for each major federal program. Our audit does not provide a legal determination of the
City's compliance with the compliance requirements referred to above.
Responsibilities of Management for Compliance
Management is responsible for compliance with the requirements referred to above and for the
design, implementation, and maintenance of effective internal control over compliance with the
requirements of laws, statutes, regulations, rules,and provisions of contracts or grant agreements
applicable to the City's federal programs.
Page 409 of 637
6
Auditor's Responsibilities for the Audit of Compliance
Our objectives are to obtain reasonable assurance about whether material noncompliance with the
compliance requirements referred to above occurred, whether due to fraud or error, and express an
opinion on the City's compliance based on our audit. 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, Government Auditing Standards, and the Uniform Guidance will always
detect material noncompliance when it exists. The risk of not detecting material noncompliance
resulting from fraud is higher than for that resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or the override of internal control.
Noncompliance with the compliance requirements referred to above is considered material, if there
is a substantial likelihood that, individually or in the aggregate, it would influence the judgment
made by a reasonable user of the report on compliance about the City's compliance with the
requirements of each major federal program as a whole.
In performing an audit in accordance with GAAS, Government Auditing Standards, and the Uniform
Guidance, we:
x Exercise professional judgment and maintain professional skepticism throughout the audit.
x Identify and assess the risks of material noncompliance, 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 City's compliance with the compliance
requirements referred to above and performing such other procedures as we considered
necessary in the circumstances.
x Obtain an understanding of the City's internal control over compliance relevant to the audit in
order to design audit procedures that are appropriate in the circumstances and to test and
report on internal control over compliance in accordance with the Uniform Guidance, but not
for the purpose of expressing an opinion on the effectiveness of the City's internal control
over compliance. Accordingly, no such opinion is expressed.
We are required to communicate with those charged with governance regarding, among other
matters, the planned scope and timing of the audit and any significant deficiencies and material
weaknesses in internal control over compliance that we identified during the audit.
Report on Internal Control over Compliance
A deficiency in internal control over compliance exists when the design or operation of a control over
compliance does not allow management or employees, in the normal course of performing their
assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance
requirement of a federal program on a timely basis. A material weakness in internal control over
compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such
that there is a reasonable possibility that material noncompliance with a type of compliance
requirement of a federal program will not be prevented, or detected and corrected, on a timely
basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of
deficiencies, in internal control over compliance with a type of compliance requirement of a federal
program that is less severe than a material weakness in internal control over compliance, yet
important enough to merit attention by those charged with governance.
Our consideration of internal control over compliance was for the limited purpose described in
Auditor's Responsibilities for the Audit of Compliance section and was not designed to identify all
deficiencies in internal control over compliance that might be material weaknesses or significant
deficiencies in internal control over compliance. Given these limitations, during our audit we did not
identify any deficiencies in internal control over compliance that we consider to be material
weaknesses, as defined above. However, material weaknesses or significant deficiencies in internal
control over compliance may exist that were not identified.
Page 410 of 637
7
Report on Internal Control over Compliance (Continued)
Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal
control over compliance. Accordingly, no such opinion is expressed.
The purpose of this report on internal control over compliance is solely to describe the scope of our
testing of internal control over compliance and the results of that testing based on the requirements
of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose.
Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance
We have audited the financial statements of the governmental activities, the business-type
activities, the discretely presented component units, each major fund, and the aggregate remaining
fund information of the City of Elk River, Minnesota, as of and for the year ended December 31,
2024, and the related notes to financial statements which collectively comprise the City's basic
financial statements. We issued our report thereon dated June 6, 2025, which contained unmodified
opinions on those financial statements. Our audit was conducted for the purpose of forming opinions
on the financial statements that collectively comprise the basic financial statements. The
accompanying schedule of expenditures of federal awards is presented for purposes of additional
analysis as required by the Uniform Guidance and is not a required part of the 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 financial statements. The
information has been subjected to the auditing procedures applied in the audit of the financial
statements and certain additional procedures, including comparing and reconciling such information
directly to the underlying accounting and other records used to prepare the financial statements or
to the financial statements themselves, and other additional procedures in accordance with auditing
standards generally accepted in the United States of America. In our opinion, the Schedule of
Expenditures of Federal Awards is fairly stated in all material respects in relation to the basic
financial statements as a whole.
Minneapolis, Minnesota
June 6, 2025
Page 411 of 637
8
City of Elk River
Schedule of Findings and Questioned Costs
SECTION I – SUMMARY OF AUDITOR'S RESULTS
Financial Statements
Type of auditor's report issued: We issued an unmodified opinion on
the fair presentation of the financial
statements of the governmental
activities, business-type activities, the
discretely presented component unit,
each major fund, and the aggregate
remaining fund information in
accordance with accounting principles
generally accepted in the United
States of America (GAAP).
Internal control over financial reporting:
x Material weakness(es) identified? No
x Significant deficiency(ies) identified? None reported
Noncompliance material to financial statements
noted? No
Federal Awards
Type of auditor's report issued on compliance for
major programs: Unmodified
Internal control over major programs:
x Material weakness(es) identified? No
x Significant deficiency(ies) identified? None reported
Any audit findings disclosed that are required to
be reported in accordance with 2 CFR 200.516(a)? No
Identification of Major Programs
Assistance Listing No.: 21.027
Name of Federal Program or Cluster: Coronavirus Relief Fund – America
Rescue Plan
Dollar threshold used to distinguish
between type A and type B programs: $750,000
Auditee qualified as low risk auditee? Yes
Page 412 of 637
9
City of Elk River
Schedule of Findings and Questioned Costs
SECTION II – FINANCIAL STATEMENT FINDINGS
There were no financial statement findings.
SECTION III – FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
There were no Federal award findings.
There were no questioned costs.
SECTION IV – PRIOR YEAR FINDINGS AND QUESTIONED COSTS
None
Page 413 of 637
10
Minnesota Legal Compliance
Independent Auditor's Report
Honorable Mayor and Members
of the City Council
City of Elk River
Elk River, Minnesota
We have audited, in accordance with auditing standards generally accepted in the United States of
America, and the standards applicable to financial audits contained in Government Auditing
Standards, issued by the Comptroller General of the United States, the financial statements of the
governmental activities, the business-type activities, the discretely presented component unit, each
major fund, and the aggregate remaining fund information of the City of Elk River, Minnesota as of
and for the year ended December 31, 2024, and the related notes to financial statements, which
collectively comprise the City's basic financial statements, and have issued our report thereon dated
June 6, 2025.
In connection with our audit, nothing came to our attention that caused us to believe that the City
failed to comply with the provisions of the contracting – bid laws, depositories of public funds and
public investments, conflicts of interest, public indebtedness, claims and disbursements,
miscellaneous provisions, and tax increment financing sections of the Minnesota Legal Compliance
Audit Guide for Cities, promulgated by the State Auditor pursuant to Minnesota Statute § 6.65,
insofar as they relate to accounting matters. However, our audit was not directed primarily toward
obtaining knowledge of such noncompliance. Accordingly, had we performed additional procedures,
other matters may have come to our attention regarding the City's noncompliance with the above
referenced provisions, insofar as they relate to accounting matters.
The purpose of this report is solely to describe the scope of our testing of compliance and the results
of that testing, and not to provide an opinion on compliance. Accordingly, this communication is not
suitable for any other purpose.
Minneapolis, Minnesota
June 6, 2025
Page 414 of 637
City of Elk River
Audit Presentation
Page 415 of 637
The Audit
Page 416 of 637
Independent Auditor’s Report “unmodified” or “clean” opinion.
Independent Auditor’s Report in accordance with Government
Auditing Standards – no significant deficiencies or material
weaknesses in internal control reported
Independent Auditor’s Report on Minnesota Legal Compliance – no
compliance findings reported
Independent Auditor’s Report on Compliance on each Major
Federal Program and Report on Internal Control over Compliance
required by the Uniform Guidance – no compliance findings or
internal control findings reported
Independent Auditor’s Report
Page 417 of 637
Financial Communications
Page 418 of 637
General Fund – Cash and Investments and
Fund Balance
Page 419 of 637
General Fund – Revenues and Expenditures
Page 420 of 637
General Fund - Revenues
Page 421 of 637
General Fund - Expenditures
Page 422 of 637
General Fund – Budgetary Comparison
Page 423 of 637
Multipurpose Facility Fund
Page 424 of 637
Sewer Operations
Page 425 of 637
Sewer Fund
Page 426 of 637
Garbage Operations
Page 427 of 637
Garbage Fund
Page 428 of 637
Storm Water Operations
Page 429 of 637
Storm Water Fund
Page 430 of 637
Municipal Liquor Operations
Page 431 of 637
Municipal Liquor Fund
Page 432 of 637
Tax Capacity, Certified Levy, and City Tax Rate
Page 433 of 637
Debt Service Funds - Maturities
Page 434 of 637
Auditor
Page 435 of 637
Andrew Grice
AUDIT SHAREHOLDER
952-563-6862
ANDY.GRICE@CREATIVEPLANNING.COM
Page 436 of 637
Thank You
Page 437 of 637
This commentary is provided for general information purposes only, should not be construed as investment, tax or legal advice, and does not constitute an
attorney/client relationship. Past performance of any market results is no assurance of future performance. The information contained herein has been obtained
from sources deemed reliable but is not guaranteed.Page 438 of 637