Stearns County Minnesota

Stearns County Minnesota

Mission Statement: Provide Exceptional Public Services to Assure a Safe, Healthy, Vibrant County for All

Longest Covered Bridge in Minnesota - Lake Wobegon Trail

Located in Holdingford, MN

Annual Financial Report For The Fiscal Year Ended December 31, 2016

• Established: 1855 • Form of Government: Board of Commissioners – Administrator • Area: 1,390 Square Miles • County Seat: St. Cloud • Number of Townships: 34 • Number of Cities: 31

Stearns County Minnesota

Annual Financial Report For The Fiscal Year Ended December 31, 2016

Randy Schreifels, Auditor/Treasurer

Prepared by: Finance Division of the Auditor‐Treasurer’s Office Issued September 2017

Stearns County 705 Courthouse Square

St. Cloud, MN 56303

STEARNS COUNTY ST. CLOUD, MINNESOTA

TABLE OF CONTENTS

Reference Page

INTRODUCTORY SECTION

Organization Schedule 1 FINANCIAL SECTION

Independent Auditor’s Report 3 Management’s Discussion and Analysis 7 BASIC FINANCIAL STATEMENTS

Government-Wide Financial Statements Statement of Net Position Exhibit 1 18 Statement of Activities Exhibit 2 19 Fund Financial Statements Governmental Funds Balance Sheet Exhibit 3 20 Reconciliation of Governmental Funds Balance Sheet to the Statement of Net Position--Governmental Activities

Exhibit 4

21

Statement of Revenues, Expenditures, and Changes in Fund Balances Exhibit 5 22 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities--Governmental Activities

Exhibit 6

23 Proprietary Funds Statement of Net Position Exhibit 7 24 Statement of Revenues, Expenses, and Changes in Fund Net Position Exhibit 8 25 Statement of Cash Flows Exhibit 9 26 Fiduciary Fund Statement of Fiduciary Net Position Exhibit 10 27 Notes to the Financial Statements 29 REQUIRED SUPPLEMENTARY INFORMATION Budgetary Comparison Schedules General Fund Exhibit A-1 104 Road and Bridge Special Revenue Fund Exhibit A-2 106 Human Services Special Revenue Fund Exhibit A-3 107 Schedule of Funding Progress - Other Postemployment Benefits Exhibit A-4 108 Schedule of Proportionate Share of Net Pension Liability - PERA General

Employees Retirement Plan Exhibit A-5

109 Schedule of Contributions - PERA General Employees Retirement Plan Exhibit A-6 110 Schedule of Proportionate Share of Net Pension Liability - PERA Public

Employees Police and Fire Plan Exhibit A-7

111 Schedule of Contributions - PERA Public Employees Police and Fire Plan Exhibit A-8 111 Schedule of Proportionate Share of Net Pension Liability - PERA Public

Employees Correctional Plan Exhibit A-9

112 Schedule of Contributions - PERA Public Employees Correctional Plan Exhibit A-10 112 Notes to the Required Supplementary Information 113 SUPPLEMENTARY INFORMATION Combining and Individual Fund Financial Statements Budgetary Comparison Schedule - Debt Service Fund Exhibit B-1 118 Nonmajor Governmental Funds 119 Combining Balance Sheet Exhibit C-1 120 Combining Statement of Revenues, Expenditures, and Changes Exhibit C-2 121


TABLE OF CONTENTS

Reference Page

FINANCIAL SECTION

SUPPLEMENTARY INFORMATION (Continued)

Budgetary Comparison Schedules

County Building Special Revenue Fund Exhibit C-3

122

County Park Special Revenue Fund Exhibit C-4 123 Law Library Special Revenue Fund Exhibit C-5

124

Solid Waste Special Revenue Fund Exhibit C-6 125 Economic Development Special Revenue Fund Exhibit C-7 126 Internal Service Funds 127 Combining Statement of Fund Net Position Exhibit D-1 128 Combining Statement of Revenues, Expenses, and Changes in Fund Net Position

Exhibit D-2

129

Combining Statement of Cash Flows Exhibit D-3 130 Agency Fund 131 Statement of Changes in Assets and Liabilities Exhibit E-1 132 Other Exhibits and Schedules Balance Sheet - by Ditch - Ditch Special Revenue Fund Exhibit F-1 134 Schedule of Intergovernmental Revenue Exhibit F-2 135 Schedule of Expenditures of Federal Awards Exhibit F-3 136 Notes to the Schedule of Expenditures of Federal Awards 139 STATISTICAL SECTION Table of Contents and Schedule Descriptions Financial Trends

142

Net Position by Component Schedule 1 143 Changes in Net Position Schedule 2 144 Fund Balances, Governmental Funds Schedule 3 145 Changes in Fund Balances, Government Funds Revenue Capacity

Schedule 4 147

Net Tax Capacity and Taxable Market Value of Taxable Property Schedule 5 149 Direct and Overlapping Property Tax Rates Schedule 6 150 Principal Property Taxpayers Schedule 7 156 Property Tax Levies and Collections – Stearns County Portion Schedule 8 157 Property Tax Levies and Collections – Overlapping Governments Schedule 9 158 Debt Capacity Ratio of Annual Debt Service Expenditures for General Bonded Debt to Total General Expenditures

Schedule 10

159

Ratios of Net General Obligation Bonded Debt Outstanding Computation of Underlying, Overlapping, and Direct Debt

Schedule 11 Schedule 12

160 161

Legal Debt Margin Information Schedule 13 162

INTRODUCTORY SECTION

STEARNS COUNTY

ST. CLOUD, MINNESOTA

ORGANIZATION SCHEDULE

2016

*Chair

Term of Office

Office Name From To

Commissioners

1st District DeWayne Mareck March 2006 January 2019

2nd District Mark Bromenschenkel January 2011 January 2017

3rd District Jeff Mergen January 2011 January 2021

4th District Leigh Lenzmeier January 1992 January 2021

5th District Steve Notch* February 2014 January 2019

Officers

Elected

Attorney Janelle Kendall January 2003 January 2019

Auditor-Treasurer Randy Schreifels January 1999 January 2019

County Recorder/Registrar of

Titles Diane Grundhoefer January 2003 January 2019

Sheriff John Sanner January 2003 January 2019

Appointed

Administrator Mike Williams Indefinite

Agriculture Inspector Robert Dunning Indefinite

Assessor Jeff Johnson November 2014 January 2021

Building Facilities Pete Reuter Indefinite

Emergency Management Erin Hausauer Indefinite

Environmental Service Chelle Benson Indefinite

Extension (State Regional) Sarah Chur Indefinite

Highway Engineer Jodi Teich May 2012 May 2021

Human Resources Jennifer Thorsten Indefinite

Human Services Administrator Mark Sizer Indefinite

Information Services George McClure Indefinite

Medical Examiner (Contracted)

Parks Peter Theismann Indefinite

Veterans Service Officer Corey Vaske August 2015 August 2019

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FINANCIAL SECTION

2

An Equal Opportunity Employer

REBECCA OTTO STATE AUDITOR

STATE OF MINNESOTA OFFICE OF THE STATE AUDITOR

SUITE 500

525 PARK STREET SAINT PAUL, MN 55103-2139

(651) 296-2551 (Voice) (651) 296-4755 (Fax)

[email protected] (E-mail) 1-800-627-3529 (Relay Service)

INDEPENDENT AUDITOR’S REPORT

Board of County Commissioners Stearns County St. Cloud, Minnesota Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of Stearns County, Minnesota, as of and for the year ended December 31, 2016, including the Housing and Redevelopment Authority (HRA) of Stearns County as of and for the year ended June 30, 2016, and the related notes to the financial statements, which collectively comprise the County’s basic financial statements, as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the financial statements of the HRA of Stearns County, the discretely presented component unit. Those statements were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for the HRA of Stearns County, is based solely on the report of the other auditors. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

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An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the County’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the County’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, based on our audit and the report of the other auditors, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of Stearns County as of December 31, 2016, including the HRA of Stearns County as of June 30, 2016, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Management’s Discussion and Analysis and Required Supplementary Information as listed in the table of contents be presented to supplement the basic financial statements. Such information, although not part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Supplementary and Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise Stearns County’s basic financial statements. The supplementary information and statistical section as listed in the table of contents are presented for purposes of additional analysis and are not a required part of the basic financial statements.

4

The supplementary 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. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated, in all material respects, in relation to the basic financial statements as a whole. The statistical section has not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on it. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated September 11, 2017, on our consideration of Stearns County’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Stearns County’s internal control over financial reporting and compliance. It does not include the HRA of Stearns County, which was audited by other auditors.

REBECCA OTTO GREG HIERLINGER, CPA STATE AUDITOR DEPUTY STATE AUDITOR September 11, 2017

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MANAGEMENT’S DISCUSSION AND ANALYSIS

6

(Unaudited)

STEARNS COUNTY


MANAGEMENT’S DISCUSSION AND ANALYSIS

DECEMBER 31, 2016

This section of Stearns County’s annual financial report presents an overview and analysis of the

County’s financial performance during the fiscal year that ended on December 31, 2016.

FINANCIAL HIGHLIGHTS

The assets and deferred outflows of resources of Stearns County exceeded its liabilities and

deferred inflows of resources by $341,033,571 (net position). Of this amount, $6,206,458

represents unrestricted net position that may be used to meet the County’s ongoing obligations

to citizens and creditors.

The County’s total net position increased by $6,867,448, or about 2.1 percent, over the prior

year.

As of the close of the fiscal year, Stearns County’s governmental funds reported combined

ending fund balances of $82,677,131. Of this amount, $65,744,177, or approximately

79.5 percent, is available for spending at the County’s discretion.

At the end of the year, the total fund balance for the General Fund increased by $376,695 to

$33,248,475. The General Fund’s unassigned fund balance increased to $31,807,409. This is

approximately 59.1 percent of total General Fund expenditures during the year. The assigned

fund balance at year-end was $4,965.

Stearns County’s total bonded debt decreased by $6,255,000 (25.6 percent) during the current

fiscal year. In 2016, the County issued Capital Improvement Bonds for $2,575,000 and paid

$8,830,000 of bond principal.

OVERVIEW OF THE FINANCIAL STATEMENTS

The financial section of the annual report consists of four parts--Independent Auditor’s Report;

required supplementary information, which includes the Management’s Discussion and Analysis

(MD&A) (this section); the basic financial statements; and supplementary information. The basic

financial statements include two kinds of statements that present different views of the County.

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(Unaudited)

The first two statements are government-wide financial statements which provide both short-

term and long-term information about the County’s overall financial status.

The remaining statements are fund financial statements which focus on individual parts of the

County, reporting the County’s operations in more detail than the government-wide statements.

The governmental funds statements tell how basic services, such as general government,

human services, and highways and streets, were financed in the short-term as well as what

remains for future spending.

The proprietary fund statements offer short-term and long-term financial information about

activities the County operates like a business.

Fiduciary fund statements provide information about the financial relationships in which the

County acts solely as a trustee or agent for the benefit of others to whom the resources belong.

The financial statements also include notes that explain some of the information in the statements

and provide more detailed data.

Figure A-1 shows how the various parts of this annual report are arranged and related to one

another.

Figure A-1

Annual Report Format

Management’s

Discussion

and

Analysis

Basic

Financial

Statements

Required

Supplementary

Information

Government-Wide

Financial

Statements

Fund

Financial

Statements

Notes

to the

Financial

Statements

Summary Detail

8

(Unaudited)

Figure A-2 summarizes the major features of the County’s financial statements, including the

portion of the County’s activities they cover and the types of information they contain. The

remainder of this overview section of the MD&A highlights the structure and content of each of

the statements.

Figure A-2

Major Features of the County’s Government-Wide and Fund Financial Statements

Government-Wide

Governmental Funds

Proprietary Funds

Fiduciary Funds

Scope Entire County

government (except

fiduciary funds) and

the County’s

component unit

The activities of the

County that are not

proprietary or

fiduciary

Activities the

County operates

similar to private

business

Instances in which the

County is the trustee

or agent for someone

else’s resources

Required financial

statements

Statement of net

position and statement

of activities

Balance sheet and

statement of

revenues,

expenditures, and

changes in fund

balance

Statement of net

position; statement

of revenues,

expenses, and

changes in net

position; and

statement

of cash flows

Statement of

fiduciary net position

Accounting basis and

measurement focus

Full accrual accounting

and economic

resources focus

Modified accrual

accounting and

current financial

resources focus

Full accrual

accounting

and economic

resources focus

Full accrual

accounting

and economic

resources focus

Type of asset/liability

information

All assets, deferred

outflows of resources,

liabilities, and deferred

inflows of resources,

both financial and

capital, short-term and

long-term

Only assets and

deferred outflows of

resources expected to

be used up and

liabilities and

deferred inflows of

resources that come

due during the year or

soon thereafter, no

capital assets

included.


outflows of

resources, liabilities,

and deferred inflows

of resources, both

financial and capital,

short-term and

long-term


outflows of resources,

liabilities, and

deferred inflows of

resources, both

short-term and

long-term; agency

funds do not currently

contain capital assets,

although they can

Type of

inflow/outflow

information

All revenues and

expenses during the

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

All revenues and

expenses during the

year, regardless of

when cash is received

or paid

Government-Wide Statements

The government-wide statements report information about the County as a whole using accounting

methods similar to those used by private-sector companies. The statement of net position includes

all of the County’s assets and liabilities. All of the current year’s revenues and expenses are

accounted for in the statement of activities regardless of when cash is received or paid.

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(Unaudited)

The two government-wide statements report the County’s net position and how it has changed.

Net position--the difference between the County’s assets, deferred outflows of resources, and

liabilities, and deferred inflows of resources--is one way to measure the County’s financial health

or position. All of the current year’s revenues and expenses are accounted for in the statement of

activities regardless of when cash is received or paid.

Over time, increases or decreases in the County’s net position is an indicator of whether its

financial position is improving or deteriorating, respectively.

To assess the overall health of the County, additional nonfinancial factors such as changes in

the County’s property tax base and the condition of County buildings and other facilities need

to be considered.

In the government-wide financial statements, the County’s activities are reported as governmental

activities:

Governmental activities - The County’s basic services are included here. Property taxes and

state aids finance most of these activities.

Fund Financial Statements

The fund financial statements provide more detailed information about the County’s funds--

focusing on its most significant or “major” funds--not the County as a whole. Funds are accounting

devices the County uses to keep track of specific sources of funding and spending on particular

programs.

Some funds are required by state law and by bond covenants.

The County establishes other funds to control and manage money for particular purposes (for

example, repaying its long-term debts) or to show that it is properly using certain revenues (for

example, federal grants).

The County has three kinds of funds:

Governmental funds - The County’s basic services are included in governmental funds, which

generally focus on (1) how cash and other financial assets that can readily be converted to cash

flow in and out, and (2) the balances left at year-end that are available for spending.

Consequently, the governmental funds statements provide a detailed short-term view that helps

to determine whether there are more or fewer financial resources that can be spent in the near

future to finance the County’s programs. Because this information does not encompass the

additional long-term focus of the government-wide statements, both the governmental fund

balance sheet and the governmental fund statement of revenues, expenditures, and changes in

fund balances provide a reconciliation to explain the relationship (or differences) between

them.

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(Unaudited)

Proprietary funds - The County maintains one type of proprietary fund. Internal service funds

are an accounting device used to accumulate and allocate costs internally among Stearns

County’s various functions. Stearns County uses internal service funds to account for its

information services improvements and self-insurance. These services benefit governmental

functions and have been allocated to governmental activities in the government-wide financial

statements.

Fiduciary funds - The County is the fiscal agent, or fiduciary, for assets that belong to others.

The County is responsible for ensuring that the assets reported in these funds are used only for

their intended purposes and by those to whom the assets belong. All of the County’s fiduciary

activities are reported in a separate statement of fiduciary net position. We exclude these

activities from the government-wide financial statements because the County cannot use these

assets to finance its operations.

FINANCIAL ANALYSIS OF THE COUNTY AS A WHOLE

Net Position

The County’s net position was $341,033,571 on December 31, 2016. (See Table A-1.)

Table A-1

Net Position

Assets

Current and Other Assets $ 103,904,021 $ 105,142,415

Capital Assets 333,469,185 323,629,728

Total Assets $ 437,373,206 $ 428,772,143

Deferred Outflows of Resources $ 45,783,515 $ 7,251,019

Liabilities

Current and Other Liabilities $ 21,934,061 $ 11,472,165

Long-Term Liabilities 108,029,052 81,339,612

Total Liabilities $ 129,963,113 $ 92,811,777

Deferred Inflows of Resources $ 12,160,037 $ 9,045,262

Net Position

Net Investment in Capital Assets $ 320,373,613 $ 309,536,902

Restricted 14,453,500 18,967,102

Unrestricted 6,206,458 5,662,119

Total Net Position as reported $ 341,033,571 $ 334,166,123

Governmental Activities

2016 2015

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(Unaudited)

Changes in Net Position

The government-wide total revenues were $146,143,151 for the year ended December 31, 2016.

Property taxes and intergovernmental revenues accounted for 89.2 percent of total revenue for the

year. (See Table A-2.)

Table A-2

Changes in Net Position

Revenues

Program Revenues

Fees, charges, fines, and other $ 12,534,587 $ 12,588,339

Operating grants and contributions 41,732,703 40,611,750

Capital grants and contributions 8,124,275 3,663,646

General revenues

Property taxes 71,531,373 70,069,436

Wheelage tax 1,442,299 1,451,740

Unrestricted grants and contributions 8,932,359 8,677,970

Unrestricted investment earnings 1,288,560 1,422,145

Other 556,995 693,044

Total Revenues $ 146,143,151 $ 139,178,070

Expenses

General government $ 25,056,099 $ 22,659,030

Public safety 36,436,493 31,554,453

Highways and streets 18,293,761 16,464,409

Sanitation 610,991 775,327

Human services 41,361,303 39,735,905

Health 3,751,928 3,727,593

Culture and recreation 4,295,748 4,127,215

Conservation of natural resources 8,414,603 5,448,511

Economic development 334,536 416,102

Interest 720,241 758,977

Total Expenses $ 139,275,703 $ 125,667,522

Change in Net Position $ 6,867,448 $ 13,510,548

Net Position at Beginning of Year 334,166,123 320,655,575

Net position at Year End $ 341,033,571 $ 334,166,123


2016 2015

Total revenues surpassed expenses, increasing net position $6,867,448 over last year. The

government-wide cost of all governmental activities this year was $139,275,703.

Some of the cost was paid by the users of the County’s programs ($12,534,587).

The federal and state governments subsidized certain programs with grants and contributions

($49,856,978).

The remaining County costs ($76,884,138), however, were paid for by County taxpayers and

the taxpayers of our state. This portion of governmental activities was paid for with

$71,531,373 in property taxes, $1,442,299 in wheelage tax, $8,932,359 in state aid, $1,288,560

in investment earnings and additional other general revenues of $556,995.

12

(Unaudited)

Table A-3

Cost of Services


Percent Percent

(%) (%)Change Change

General government $ 25,056,099 $ 22,659,030 10.58% $ 19,569,082 $ 16,032,439 22.06%Public safety 36,436,493 31,554,453 15.47% 30,723,760 26,482,983 16.01%Highways and streets 18,293,761 16,464,409 11.11% (2,537,281) (485,190) 422.95%Sanitation 610,991 775,327 -21.20% (430,771) (756,800) -43.08%Human services 41,361,303 39,735,905 4.09% 21,648,656 19,380,861 11.70%Health 3,751,928 3,727,593 0.65% 737,507 296,785 148.50%Culture and recreation 4,295,748 4,127,215 4.08% 2,441,697 3,524,862 -30.73%Conservation of natural

rrresources 8,414,603 5,448,511 54.44% 3,680,500 3,306,093 11.32%Economic development 334,536 416,102 -19.60% 330,747 262,777 25.87%Interest 720,241 758,977 -5.10% 720,241 758,977 -5.10%

Total $ 139,275,703 $ 125,667,522 10.83% $ 76,884,138 $ 68,803,787 11.74%

2015

Total Cost of Services Net Cost of Services

2016 2015 2016

FINANCIAL ANALYSIS OF THE COUNTY AT THE FUND LEVEL

The financial performance of the County as a whole is reflected in its governmental funds as well.

As the County completed the year, its governmental funds reported a combined fund balance of

$82,677,131. Of this amount, $65,744,177, or approximately 79.5 percent, is available for

spending at the County’s discretion.

Revenues for the County’s governmental funds were $144,582,166 while total expenditures were

$149,945,471.

General Fund

The General Fund includes the primary operations of the County in providing services to citizens

and some capital outlay projects.

The following schedule presents a summary of General Fund revenues:

Table A-4

General Fund Revenues

Percent

(%)

Source Change

Taxes $ 33,622,730 $ 33,407,305 $ 215,425 0.64%

Intergovernmental 11,748,000 11,658,216 89,784 0.77%

Charges for services 4,641,446 4,397,084 244,362 5.56%

Investment income 1,103,342 1,235,343 (132,001) -10.69%

Miscellaneous and other 3,397,950 4,591,535 (1,193,585) -26.00%

Total General Fund Revenues $ 54,513,468 $ 55,289,483 $ (776,015) -1.40%

Change

Year Ended December 31 Increase/

2016 2015 (Decrease)

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(Unaudited)

Total General Fund revenues decreased by $776,015, or 1.4 percent, from the previous year.

The following schedule presents a summary of General Fund expenditures:

Table A-5

General Fund Expenditures

Percent

Increase/ (%)

Source 2016 2015 (Decrease) Change

General government $ 22,213,621 $ 20,937,371 $ 1,276,250 6.10%

Public safety 23,180,763 22,392,640 788,123 3.52%

Culture and recreation 2,873,872 2,811,117 62,755 2.23%

Conservation of natural resources 5,383,271 5,054,638 328,633 6.50%

Economic development 180,045 71,352 108,693 152.33%

Total General Fund Revenues $ 53,831,572 $ 51,267,118 $ 2,564,454 5.00%

Change

Year Ended December 31

Total General Fund expenditures increased by $2,564,454 or 5.0 percent, from the previous year.

General Fund Budgetary Highlights

Over the course of the year, the County revised the annual operating budget, increasing revenues

$420,351and decreasing budgeted expenditures by $237,942.

Actual revenues were $1,310,929 greater than expected.

The actual expenditures were $864,326 more than final budget.

CONSTRUCTION PROJECTS AND DEBT SERVICE

The Capital Projects Fund is currently being used to track the capital notes and capital

improvement bonds approved by the Board over the past years. The majority of the expenditures

are for the construction of various capital improvements throughout the County. An annual levy

is made to fund the bond payments for all previous bond issues.

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CAPITAL ASSETS

By the end of 2016, the County had invested over $333,000,000 in a broad range of capital assets,

including buildings, computers, equipment, and infrastructure. (See Table A-6.) More detailed

information about capital assets can be found in Note 3.A.3. to the financial statements. Total

depreciation expense for the year was $9,861,551.

Table A-6

Capital Assets

Percent

(%)

Change

Land $ 15,003,727 $ 15,003,727 $ - -

Construction in progress 8,183,281 10,962,874 (2,779,593) -25.35%

Right-of-way 19,314,646 17,692,193 1,622,453 9.17%

Infrastructure 315,142,475 298,402,999 16,739,476 5.61%

Buildings 67,261,759 66,315,460 946,299 1.43%

Machinery, furniture, equipment, and other 30,846,074 28,464,762 2,381,312 8.37%

Less: accumulated depreciation (122,282,777) (113,212,287) (9,070,490) 8.01%

Total $ 333,469,185 $ 323,629,728 $ 9,839,457 3.04%

2016 2015 Increase/(Decrease)

LONG-TERM DEBT

At year-end, Stearns County had total outstanding long-term bonded debt of $18,796,310 which

is backed by the full faith, credit and taxing powers of the County.

The County maintains a “AA+” rating from Standard and Poor’s for general obligation debt.

Additional information about the County’s long-term debt is included in note 3.C.4 to the financial

statements.

Table A-7

Long-Term Debt

Percent

(%)

Change

General obligation bonds payable $ 10,479,372 $ 16,272,055 $ (5,792,683) -35.60%

Revenue bonds payable 2,670,000 3,195,000 (525,000) -16.43%

General obligation refunding

bonds payable 5,646,938 5,707,261 (60,323) -1.06%

Total $ 18,796,310 $ 25,174,316 $ (6,378,006) -25.34%

2016 2015 Increase/(Decrease)

15

(Unaudited)

ECONOMIC FACTORS AND NEXT YEAR’S BUDGET

The County is dependent on the State of Minnesota for a significant portion of its revenue. The

State has continued to generate surpluses in recent years and thereby the likelihood of revenues

being reduced by the State in the near future is less.

The County’s unemployment rate continues to hover around 3.6%. This percentage is slightly

better than both the state and national unemployment rates which were around 3.9% and 4.9%

respectively.

The Stearns County Board of Commissioners approved a budget of $137,038,103 for 2017 and a

property tax levy of $74,003,595. The approved amounts resulted in a 3.5% increase to the budget

and a 3.5% increase to the property tax levy versus those respective items in 2016.

CONTACTING THE COUNTY’S FINANCIAL MANAGEMENT

This financial report is designed to provide our citizens, taxpayers, customers, investors, and

creditors with a general overview of the County’s finances and to demonstrate the County’s

accountability for the money it receives. If you have questions about this report, or need additional

financial information, contact Jim Stegura, Financial Manager, at 320-656-3914, or Randy

Schreifels, County Auditor-Treasurer, at 320-656-3901.

16

BASIC FINANCIAL STATEMENTS

17

STEARNS COUNTYST. CLOUD, MINNESOTA

EXHIBIT 1STATEMENT OF NET POSITIONGOVERNMENTAL ACTIVITIES

DECEMBER 31, 2016Component

Unit

GovernmentalActivities

Assets

Cash and pooled investments $ 88,706,753 $ 1,201,224 Cash with fiscal agents 5,051 - Petty cash and change funds 12,710 - Departmental cash 6,864 - Taxes receivable delinquent 1,214,304 272,694 Special assessments receivable Delinquent 62,578 - Noncurrent 2,760,003 - Accounts receivable - net 242,366 55,050 Accrued interest receivable 177,858 - Loans receivable 2,559,823 576,581 Due from other governments 6,808,538 - Inventories 1,345,350 - Prepaid items 1,823 12,485 Assets held for resale - 117,800 Capital assets Non-depreciable 42,501,654 597,794 Depreciable - net of accumulated depreciation 290,967,531 3,276,328

Total Assets $ 437,373,206 $ 6,109,956

Deferred Outflows of Resources

Deferred pension outflows $ 45,783,515 $ -

Liabilities

Accounts payable $ 3,901,860 $ 70,111 Salaries payable 3,832,164 31,688 Contracts payable 828,579 - Due to other governments 2,479,626 - Accrued interest payable 56,118 14,893 Unearned revenue 418,926 8,012 Noncurrent liabilities Due within one year 10,416,788 178,779 Due in more than one year 16,421,405 2,057,726 Net pension liability 87,385,807 - Net OPEB payable 4,221,840 -

Total Liabilities $ 129,963,113 $ 2,361,209

Deferred Inflows of Resources

Advance from other governments $ 2,430,800 $ - Deferred pension inflows 9,729,237 -

Total Deferred Inflows of Resources $ 12,160,037 $ -

Net Position

Net investment in capital assets $ 320,373,613 $ 1,698,482 Restricted for General government 696,396 - Public safety 320,153 - Highway and streets 268,622 - Sanitation 5,086,448 - Conservation of natural resources 747,816 - Economic development 1,986,892 - Debt service 5,347,173 24,227 Future projects - 737,740 Unrestricted 6,206,458 1,288,298

Total Net Position $ 341,033,571 $ 3,748,747

PrimaryGovernment Housing and

Redevelopment Authorityof Stearns County

The notes to the financial statements are an intergral part of this statement

18

EXHIBIT 2

Component Unit

Functions/Programs

Primary government Governmental activities General government $ 25,056,099 $ 4,896,477 $ 590,540 $ - $ (19,569,082) Public safety 36,436,493 1,482,339 4,230,394 - (30,723,760) Highways and streets 18,293,761 198,340 12,508,427 8,124,275 2,537,281 Sanitation 610,991 383,196 658,566 - 430,771 Human services 41,361,303 1,368,033 18,344,614 - (21,648,656) Health 3,751,928 364,931 2,649,490 - (737,507) Culture and recreation 4,295,748 241,922 1,612,129 - (2,441,697) Conservation of natural resources 8,414,603 3,595,560 1,138,543 - (3,680,500) Economic development 334,536 3,789 - - (330,747) Interest 720,241 - - - (720,241)

Total Primary Government $ 139,275,703 $ 12,534,587 $ 41,732,703 $ 8,124,275 $ (76,884,138)

Component unit Housing and Redevelopment Authority of Stearns County $ 2,098,410 $ 554,191 $ 1,193,340 $ 14,541 $ (336,338)

General Revenues Property taxes $ 71,531,373 $ 400,253 Tax increments - 45,978 Gravel taxes 66,136 - Wheelage tax 1,442,299 - Payments in lieu of tax 253,016 - Grants and contributions not restricted to specific programs 8,932,359 6,778 Unrestricted investment earnings 1,288,560 4,864 Gain on sale of capital assets 237,843 -

Total general revenues $ 83,751,586 $ 457,873

Change in net position $ 6,867,448 $ 121,535

Net Position - Beginning 334,166,123 3,627,212

Net Position - Ending $ 341,033,571 $ 3,748,747

Grants andContributions


STATEMENT OF ACTIVITIESFOR THE YEAR ENDED DECEMBER 31, 2016

Primary Government Housing andOperating CapitalProgram Revenues

Expenses Fines, and OtherFees, Charges, Grants and

Contributions ActivitiesGovernmental

Net (Expense) Revenue and Changes in Net Position

Redevelopment Authorityof Stearns County

The notes to the financial statements are an integral part of this statement 19

EXHIBIT 3

Road and Human Debt Capital NonmajorGeneral Bridge Services Service Projects Funds Total

Assets

Cash and pooled investments $ 37,596,368 $ 12,407,470 $ 15,878,731 $ 5,456,863 $ 6,252,192 $ 10,065,590 $ 87,657,214

Cash with fiscal agents - 5,051 - - - - 5,051

Petty cash and change funds 11,335 - 225 - - 1,150 12,710

Departmental cash 6,864 - - - - - 6,864

Taxes receivable delinquent 564,097 126,052 428,837 74,321 - 20,997 1,214,304

Special assessments receivable

Delinquent 3,268 - - 10,682 - 48,628 62,578

Noncurrent 80,977 - - 2,609,804 - 69,222 2,760,003

Accounts receivable 114,545 1,874 93,560 - - 24,557 234,536

Accrued interest receivable 177,858 - - - - - 177,858

Loans receivable - - - - 2,017,143 542,680 2,559,823

Due from other governments 249,869 1,635,199 3,488,581 - 1,400,000 34,889 6,808,538

Inventories 290,513 1,054,837 - - - - 1,345,350

Advance to other funds 73,186 - - - - 73,157 146,343

Prepaid items 100 - 1,723 - - - 1,823

Total Assets $ 39,168,980 $ 15,230,483 $ 19,891,657 $ 8,151,670 $ 9,669,335 $ 10,880,870 $ 102,992,995

Liabilities, Deferred Inflows of Resources,

and Fund Balances

Liabilities

Accounts payable $ 2,144,337 $ 198,534 $ 1,273,968 $ 12,300 $ 24,885 $ 29,436 $ 3,683,460

Salaries payable 2,034,553 250,737 1,500,363 - - 46,511 3,832,164

Contracts payable - 828,579 - - - - 828,579

Due to other governments 659,295 4,609 557,464 - - 1,258,258 2,479,626

Unearned revenue 418,926 - - - - - 418,926

Advance from other funds 73,157 - - 55,590 - - 128,747

Total Liabilities $ 5,330,268 $ 1,282,459 $ 3,331,795 $ 67,890 $ 24,885 $ 1,334,205 $ 11,371,502


Advance from other governments $ - $ 2,430,800 $ - $ - $ - $ - $ 2,430,800

Unavailable revenue 590,237 1,366,540 908,259 2,680,489 400,000 568,037 6,513,562

Total Deferred Inflows of Resources $ 590,237 $ 3,797,340 $ 908,259 $ 2,680,489 $ 400,000 $ 568,037 $ 8,944,362

Fund Balances (Note 3.D.)

Nonspendable $ 363,799 $ 1,054,837 $ 1,723 $ - $ - $ 81,765 $ 1,502,124

Restricted 1,072,302 268,622 - 5,403,291 - 7,765,403 14,509,618

Committed - - - - - 921,212 921,212

Assigned 4,965 8,827,225 15,649,880 - 9,244,450 210,248 33,936,768

Unassigned 31,807,409 - - - - - 31,807,409

Total Fund Balances $ 33,248,475 $ 10,150,684 $ 15,651,603 $ 5,403,291 $ 9,244,450 $ 8,978,628 $ 82,677,131

Total Liabilities, Deferred Inflows of

Resources, and Fund Balances $ 39,168,980 $ 15,230,483 $ 19,891,657 $ 8,151,670 $ 9,669,335 $ 10,880,870 $ 102,992,995

BALANCE SHEET


GOVERNMENTAL FUNDS

DECEMBER 31, 2016

The notes to the financial statements are an integral part of this statement.

20

EXHIBIT 4

Fund balances - total governmental funds (Exhibit 3) $ 82,677,131

Amounts reported for governmental activities in the statement of net position are different because:

Capital assets, net of accumulated depreciation, used in governmental activities are not financial resources and, therefore, are not reported in the governmental funds. 333,469,185

Deferred outflows resulting from pension obligations are not available resources and, therefore, are not reported in governmental funds. 45,783,515

Revenues in the statement of activities that do not provide current financial resources are not reported in the governmental funds. 6,513,562

Internal service funds are used to account for the County's self-insurance activities and to charge improvements for information services to the individual funds. The assets and liabilities of the internal service funds are included in governmental activities in the statement of net position. 821,373

Long-term liabilities are not due and payable in the current period and, therefore, are not reported in the governmental funds.

Bonds payable - net of premium $ (18,796,310) Compensated absences (8,041,883) Net pension liability (87,385,807) Net other postemployment benefits liability (4,221,840) (118,445,840)

Accrued interest payable is not due and payable in the current period and, therefore, is not reported in the governmental funds. (56,118)

Deferred inflows resulting from pension obligations are not due and payable in the current period and, therefore, are not reported in government funds. (9,729,237)

Net Position of Governmental Activities (Exhibit 1) $ 341,033,571

DECEMBER 31, 2016TO THE STATEMENT OF NET POSITION--GOVERNMENTAL ACTIVITIES

RECONCILIATION OF GOVERNMENTAL FUNDS BALANCE SHEET



21

EXHIBIT 5

Road and Human Debt Capital Nonmajor

General Bridge Services Service Projects Funds Total

Revenues

Taxes $ 33,622,730 $ 8,850,862 $ 25,812,111 $ 3,693,972 $ - $ 1,329,395 $ 73,309,070

Special assessments 13,537 - - 206,956 - 677,601 898,094

Licenses and permits 877,417 103,641 - - - 209,343 1,190,401

Intergovernmental 11,748,000 21,107,064 23,537,861 45,998 1,000,000 208,973 57,647,896

Charges for services 4,641,446 8,462 893,917 - - 635,832 6,179,657

Fines and forfeits 83,322 - - - - 230,330 313,652

Gifts and contributions 11,570 - 266 - 10,093 28,115 50,044

Investment income 1,103,342 23 - 27,360 - 9,902 1,140,627

Miscellaneous 2,412,104 86,376 1,129,273 - - 224,972 3,852,725

Total Revenues $ 54,513,468 $ 30,156,428 $ 51,373,428 $ 3,974,286 $ 1,010,093 $ 3,554,463 $ 144,582,166

Expenditures

Current

General government $ 22,213,621 $ - $ - $ 17,425 $ - $ 355,510 $ 22,586,556

Public safety 23,180,763 - 7,382,156 - - 23,922 30,586,841

Highways and streets - 26,606,347 - - - - 26,606,347

Sanitation - - - - - 580,138 580,138

Human services - - 40,524,488 - - - 40,524,488

Health - - 3,523,047 - - - 3,523,047

Culture and recreation 2,873,872 - - - - 1,229,526 4,103,398

Conservation of natural resources 5,383,271 87,453 - 2,621,043 - 30,681 8,122,448

Economic development 180,045 - - - - 154,492 334,537

Intergovernmental

Highways and streets - 810,176 - - - - 810,176

Capital outlay

General government - - - - 961,259 - 961,259

Public safety - - - - 223,780 - 223,780

Highways and streets - - - - 188,930 - 188,930

Human services - - - - 3,107 - 3,107

Culture and recreation - - - - 1,215,078 - 1,215,078

Debt service

Principal - - - 8,830,000 - - 8,830,000

Interest - - - 745,341 - - 745,341

Total Expenditures $ 53,831,572 $ 27,503,976 $ 51,429,691 $ 12,213,809 $ 2,592,154 $ 2,374,269 $ 149,945,471

Excess of Revenues Over (Under)

Expenditures $ 681,896 $ 2,652,452 $ (56,263) $ (8,239,523) $ (1,582,061) $ 1,180,194 $ (5,363,305)

Other Financing Sources (Uses)

Transfers in $ 1,687,319 $ 2,767,757 $ 1,853,652 $ - $ - $ 28,859 $ 6,337,587

Transfers out (2,017,566) (133,869) (1,553,450) - (2,632,702) - (6,337,587)

Proceeds from sale of capital assets 25,046 211,883 - - - 914 237,843

Bonds issued - - - 2,575,000 - - 2,575,000

Premium on bonds - - - 48,047 - - 48,047

Total Other Financing Sources

(Uses) $ (305,201) $ 2,845,771 $ 300,202 $ 2,623,047 $ (2,632,702) $ 29,773 $ 2,860,890

Net Change in Fund Balances $ 376,695 $ 5,498,223 $ 243,939 $ (5,616,476) $ (4,214,763) $ 1,209,967 $ (2,502,415)

Fund Balances - January 1 32,871,780 4,652,461 15,407,664 11,019,767 13,459,213 7,768,661 85,179,546

Fund Balances - December 31 $ 33,248,475 $ 10,150,684 $ 15,651,603 $ 5,403,291 $ 9,244,450 $ 8,978,628 $ 82,677,131

STEARNS COUNTY


STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES

GOVERNMENTAL FUNDS

FOR THE YEAR ENDED DECEMBER 31, 2016


22


EXHIBIT 6

RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES,

AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS

TO THE STATEMENT OF ACTIVITIES--GOVERNMENTAL ACTIVITIES


Net change in fund balances - total governmental funds (Exhibit 5) $ (2,502,415)

Amounts reported for governmental activities in the statement of activities are different because:

In the funds, under the modified accrual basis, receivables not available for expenditure are deferred. In the statement of activities, those revenues are recognized when earned. The adjustment to revenue between the fund statements and the statement of activities is the increase or decrease in unavailable revenue.

Unavailable revenue - December 31 $ 6,513,562 Unavailable revenue - January 1 (4,301,981) 2,211,581

Governmental funds report capital outlay as expenditures. However, in the statement of activities, the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense.

Expenditures for general capital assets and infrastructure $ 19,701,008 Current year depreciation (9,861,551) 9,839,457

The issuance of long-term debt provides current financial resources to governmental funds, while the repayment of principal of long-term debt consumes current financial resources of governmental funds. Neither transaction, however, has any effect on net position. Also, the governmental funds report the effect of bond premiums and discounts when debt is first issued; whereas, these amounts are deferred and amortized in the statement of activities.

Debt issuedBonds and premiums $ (2,623,047)

Principal repaymentsGeneral obligation bonds 8,305,000 Revenue bonds 525,000

Current year amortization of premiums 171,053 6,378,006

Some expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds.

Change in accrued interest payable $ 25,100 Change in compensated absences (55,846) Change in net pension liability (43,089,346) Change in deferred pension outflows 38,532,496 Change in deferred pension inflows (4,178,544) Change in other postemployment benefits liability (339,042) (9,105,182)

Internal service funds are used to account for the County's self-insurance activities and to charge improvements for information services to the individual funds. The increase or decrease in net position of the internal service funds is reported in the government-wide statement of activities. 46,001

Change in Net Position of Governmental Activities (Exhibit 2) $ 6,867,448


23


EXHIBIT 7

STATEMENT OF NET POSITIONPROPRIETARY FUNDS

DECEMBER 31, 2016

Assets

Current assets Cash and pooled investments $ 1,049,539 Accounts receivable 7,830

Total Assets $ 1,057,369

Liabilities

Current liabilities Accounts payable $ 218,400 Advance from other funds 17,596

Total Liabilities $ 235,996

Net Position

Unrestricted $ 821,373

GovernmentalActivitiesInternal

Service Funds


24


EXHIBIT 8

STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITIONPROPRIETARY FUNDS


Operating Revenues Charges for services $ 1,712,004 Miscellaneous 31,013

Total Operating Revenues $ 1,743,017

Operating Expenses Cost of services 1,697,016

Change in Net Position $ 46,001

Net Position - January 1 775,372

Net Position - December 31 $ 821,373


Service FundsInternal


25

STEARNS COUNTY


EXHIBIT 9

STATEMENT OF CASH FLOWS

PROPRIETARY FUNDS


Increase (Decrease) in Cash and Cash Equivalents

Cash Flows from Operating Activities

Receipts from internal services provided $ 1,737,809

Payments to suppliers (1,876,629)

Net Increase (Decrease) in Cash and Cash

Equivalents $ (138,820)

Cash and Cash Equivalents at January 1 1,188,359

Cash and Cash Equivalents at December 31 $ 1,049,539

Reconciliation of Operating Income (Loss) to Net

Cash Provided by (Used in) Operating Activities

Net operating income (loss) $ 46,001

Adjustments to reconcile operating income

(loss) to net cash provided by (used in)

operating activities

(Increase) decrease in accounts receivable $ (5,208)

Increase (decrease) in accounts payable (197,209)

Increase (decrease) in advance from other funds 17,596

Total adjustments $ (184,821)

Net Cash Provided by (Used in) Operating

Activities $ (138,820)

Service Funds

Internal

Governmental

Activities


26

STEARNS COUNTY


EXHIBIT 10

STATEMENT OF FIDUCIARY NET POSITION

FIDUCIARY FUND

DECEMBER 31, 2016

Agency Fund

Assets

Cash and pooled investments $ 3,669,980

Due from other governments 469,112

Total Assets $ 4,139,092

Liabilities

Accounts payable $ 113,014

Due to other governments 4,026,078

Total Liabilities $ 4,139,092


27

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28


NOTES TO THE FINANCIAL STATEMENTS AS OF AND FOR THE YEAR ENDED DECEMBER 31, 2016

1. Summary of Significant Accounting Policies The County’s financial statements are prepared in accordance with accounting principles

generally accepted in the United States of America (GAAP). The Governmental Accounting Standards Board (GASB) is responsible for establishing GAAP for state and local governments through its pronouncements (statements and interpretations). The more significant accounting policies established in GAAP and used by the County are discussed below.

A. Financial Reporting Entity

Stearns County was established February 23, 1854, and is an organized county having the powers, duties, and privileges granted counties by Minn. Stat. ch. 373. As required by accounting principles generally accepted in the United States of America, these financial statements present Stearns County and its component unit for which the County is financially accountable. The County is governed by a five-member Board of Commissioners elected from districts within the County. The Board is organized with a chair and vice chair elected at the annual meeting in January of each year. Blended Component Unit Blended component units are entities which are legally separate from the County, but are so intertwined that they are, in substance, the same as the County. They are reported as part of the primary government. The Stearns County Regional Rail Authority is governed by a five-member board consisting of three Stearns County Commissioners and two St. Cloud City Council members, and has the power to levy taxes, issue bonds, and enter into contracts. The Authority was established for the preservation and improvement of local rail service. Although it is legally separate from the County, the activity of the Regional Rail Authority is included in the Stearns County reporting entity as the Regional Rail Authority Special Revenue Fund because the Stearns County Board of Commissioners has operational responsibility for the Authority. Separate financial statements are not available for the Stearns County Regional Rail Authority.

29


1. Summary of Significant Accounting Policies

A. Financial Reporting Entity (Continued)

Discrete Component Unit

The Housing and Redevelopment Authority (HRA) of Stearns County is a component

unit of Stearns County and is reported in a separate column in the County’s government-wide financial statements to emphasize that the HRA is legally separate from Stearns County. The HRA operates as a local governmental unit for the purpose of providing housing and redevelopment services to Stearns County. The governing body consists of a five-member Board of Commissioners appointed by the Stearns County Board of Commissioners to serve five-year terms. The financial statements included are as of and for the year ended June 30, 2016.

The complete financial statements of the HRA of Stearns County can be obtained by

writing to the Housing and Redevelopment Authority of Stearns County, 401 West Wind Court, P. O. Box 484, Cold Spring, Minnesota 56320.

Joint Ventures and Jointly-Governed Organizations

The County participates in joint ventures described in Note 4.C. The County also participates in jointly-governed organizations described in Note 4.D.

B. Basic Financial Statements 1. Government-Wide Statements The government-wide financial statements (the statement of net position and the

statement of activities) display information about the primary government and its component unit. These statements include the financial activities of the overall County government, except for fiduciary activities. Eliminations have been made to minimize the double counting of internal activities. Governmental activities, which normally are supported by taxes and intergovernmental revenue, are reported separately from business-type activities, which rely to a significant extent on fees and charges to external parties for support.

30


1. Summary of Significant Accounting Policies B. Basic Financial Statements 1. Government-Wide Statements (Continued) In the government-wide statement of net position, the governmental activities

column is presented on a consolidated basis by column and is reported on a full accrual, economic resource basis, which recognizes all long-term assets and receivables as well as long-term debt and obligations. The County’s net position is reported in three parts: (1) net investment in capital assets; (2) restricted net position; and (3) unrestricted net position. The County first utilizes restricted resources to finance qualifying activities.

The statement of activities demonstrates the degree to which the direct expenses of each function of the County’s governmental activities are offset by program revenues. Direct expenses are those clearly identifiable with a specific function or activity. Program revenues include: (1) fees, fines, and charges paid by the recipients of goods, services, or privileges provided by a given function or activity; and (2) grants and contributions restricted to meeting the operational or capital requirements of a particular function or activity. Revenues not classified as program revenues, including all taxes, are presented as general revenues.

2. Fund Financial Statements

The fund financial statements provide information about the County’s funds, including its fiduciary funds and blended component unit. Separate statements for each fund category--governmental, proprietary, and fiduciary--are presented. The emphasis of governmental and proprietary fund financial statements is on major individual governmental funds, with each displayed as separate columns in the fund financial statements. All remaining governmental funds are aggregated and reported as nonmajor funds.

31


1. Summary of Significant Accounting Policies B. Basic Financial Statements 2. Fund Financial Statements (Continued)

Proprietary funds distinguish operating revenues and expenses from non-operating 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. Operating expenses for internal service fund activities may include cost of services and administrative expenses. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses.

The County reports the following major governmental funds:

The General Fund is the County’s primary operating fund. It accounts for all financial resources of the general government, except those accounted for in another fund. The Road and Bridge Special Revenue Fund is used to account for revenues and expenditures of the County Highway Department, which is responsible for the construction and maintenance of roads, bridges, and other projects affecting County roadways. The Human Services Special Revenue Fund is used to account for economic assistance and community social services programs. The Debt Service Fund is used to account for the accumulation of resources for, and the payment of, principal, interest, and related costs of general long-term debt. The Capital Projects Fund is used to account for the financial resources to be used for capital acquisition, construction, or improvement of capital facilities.

32


1. Summary of Significant Accounting Policies B. Basic Financial Statements 2. Fund Financial Statements (Continued) Additionally, the County reports the following fund types:

The Internal Service Funds account for information service projects and health insurance premiums and payments. The Agency Fund is custodial in nature and does not present results of operations or have a measurement focus. This fund accounts for assets that the County holds for others in an agent capacity.

C. Measurement Focus and Basis of Accounting

The government-wide, proprietary, and fiduciary fund financial statements are reported using the economic resources measurement focus and the full accrual basis of accounting. Revenues are recorded when earned, and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.

Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Stearns County considers all revenues as available if collected within 60 days after the end of the current period. Property and other taxes, licenses, and interest are all considered susceptible to accrual.

Expenditures are recorded when the related fund liability is incurred, except for principal and interest on long-term debt, compensated absences, and claims and judgments, which are recognized as expenditures to the extent that they have matured. Issuances of long-term debt and acquisitions under capital leases are reported as other financing sources.

33


1. Summary of Significant Accounting Policies C. Measurement Focus and Basis of Accounting (Continued)

When both restricted and unrestricted resources are available for use, it is the County’s policy to use restricted resources first and then unrestricted resources as needed.

D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position or Equity

1. Deposits and Investments

The cash balances of substantially all funds are pooled and invested by the County Auditor-Treasurer for the purpose of increasing earnings through investment activities. Pooled and fund investments are reported at their fair value at December 31, 2016, based on market prices. Pursuant to Minn. Stat. § 385.07, investment earnings on cash and pooled investments are credited to the General Fund. Other funds received investment earnings based on other state statutes, grant agreements, contracts, and bond covenants. Pooled investment earnings for 2016 were $1,103,342. Cash and cash equivalents are identified only for the purpose of the statement of cash flows for the proprietary funds. Pooled investments, which have the characteristics of demand deposits, are considered to be cash and cash equivalents on the statement of cash flows. Stearns County invests in an external investment pool, the Minnesota Association of Governments Investing for Counties (MAGIC) Fund, which is created under a joint powers agreement pursuant to Minn. Stat. § 471.59. The investment in the pool is measured at the net asset value per share provided by the pool.

2. Receivables and Payables

Activity between funds representative of lending/borrowing arrangements outstanding at the end of the fiscal year is referred to as either “due to/from other funds” (the current portion of interfund loans) or “advances to/from other funds” (the noncurrent portion of interfund loans). All other outstanding balances between funds are reported as “due to/from other funds.” No allowance for uncollectible accounts receivable have been provided because such amounts are not expected to be material.

34



D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position or Equity

2. Receivables and Payables (Continued) Advances between funds, as reported in the fund financial statements, are offset by a nonspendable fund balance account in applicable governmental funds to indicate they are not available for appropriation and are not expendable available financial resources.

Property taxes are levied as of January 1 on property values assessed as of the

same date. The tax levy notice is mailed in March with the first half payment due May 15 and the second half payment due October 15. Unpaid taxes at December 31 become liens on the respective property and are classified in the financial statements as delinquent taxes receivable.

Taxes receivable consist of uncollected taxes payable in the years 2010 through

2016. Taxes receivable are offset by unavailable revenue for the amount not collectible within 60 days of December 31 to indicate they are not available to pay current expenditures. No provision has been made for an estimated uncollectible amount.

Special assessments receivable consist of delinquent special assessments payable in

the years 2010 through 2016 and noncurrent special assessments payable in 2017 and after. No provision has been made for an estimated uncollectible amount. The receivable includes special assessments on solid waste fees, drainage systems, septic loans and ditches.

Loans receivable consist of economic development loans made to private

enterprises and agreements with the City of Sartell for a joint road project and the North Fork Watershed District for project funding of ditch systems.

35



D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position or Equity (Continued)

3. Inventories and Prepaid Items

All inventories are valued at cost using the first-in/first-out method. The inventory

in the General Fund consists primarily of technology projects not completed at the end of the year. The inventory in the Road and Bridge Special Revenue Fund consists of expendable supplies held for consumption. The cost of the inventory is recorded as an expenditure at the time individual items are purchased. At fiscal year-end the cost of the inventory is adjusted to the consumption method.

Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements. Reported inventories and prepaid items are equally offset by nonspendable fund balance to indicate that they do not constitute available spendable resources.

4. Capital Assets

Capital assets, including property, plant, equipment, and infrastructure assets (for example, roads, bridges, and similar items) are reported in the government-wide financial statements. The County defines capital assets as assets with an initial, individual cost of more than $5,000 and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at acquisition value.

The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets’ lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed.

Property, plant, and equipment of the County are depreciated using the

straight-line method over the following estimated useful lives:

Assets Years Buildings and improvements 20 - 50 Office furniture and equipment 5 - 10 Machinery and automotive equipment 3 - 12 Infrastructure 50 - 75 Software 5 - 10

36



D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position or Equity (Continued)

5. Compensated Absences

The liability for compensated absences reported in the financial statements consists of unpaid, accumulated annual paid time off (PTO) balances. The liability has been calculated using the vesting method, in which leave amounts for both employees who currently are eligible to receive termination payments and other employees who are expected to become eligible in the future to receive such payments upon termination are included. Compensated absences are accrued when incurred in the government-wide financial statements. A liability for these amounts is reported in the governmental funds only if they have matured, for example, as a result of employee resignations and retirements. The current portion consists of an amount based on a trend analysis of current usage of PTO. The noncurrent portion consists of the remaining amount of PTO.

6. Deferred Outflows/Inflows of Resources and Unearned Revenue

In addition to assets, the statement of financial position reports a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. Currently, the County has one item, deferred pension outflows, which qualifies for reporting in this category. These outflows arise only under the full accrual basis of accounting and consist of pension plan contributions paid subsequent to the measurement date, differences between expected and actual pension plan economic experiences, changes in actuarial assumptions, the differences between projected and actual earnings on pension plan investments and, pension plan changes in proportionate share and, accordingly, are reported only in the statement of net position. In addition to liabilities, the statement of financial position reports a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to future period(s) and so will not be recognized as an inflow of resources (revenue or reduction of expense) until that time.

37



D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position or Equity 6. Deferred Outflows/Inflows of Resources and Unearned Revenue (Continued)

Currently, the County has three such items that qualify for reporting in this category. The first item, unavailable revenue, arises only under the modified accrual basis of accounting; the second item, advance from other governments, arises under both the modified accrual and the full accrual basis of accounting; the third item, deferred pension inflows arises only under the full accrual basis of accounting. Unavailable revenue and the advance from other governments are reported in the governmental funds balance sheet, while only the advance from other governments and deferred pension inflows are reported in the government-wide statement of net position. Unavailable revenues are deferred and recognized as revenues in the period they become available. The governmental funds report unavailable revenue from the following sources: property taxes; special assessments; loans receivable; and, intergovernmental grants and reimbursements. Advances are recognized as revenue when the timing requirements have been met. Deferred pension inflows consist of differences between expected and actual pension plan economic experience and also pension plan changes in proportionate share. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available.

Governmental funds and government-wide financial statements report unearned revenue in connection with resources that have been received, but not yet earned.

7. Pension Plan

For purposes of measuring the net pension liability, deferred outflows/inflows of

resources, and pension expense, information about the fiduciary net position of the Public Employees Retirement Association (PERA) and additions to/deductions from PERA’s fiduciary net position have been determined on the same basis as they are reported by PERA, except that PERA’s fiscal year-end is June 30. For this purpose, plan contributions are recognized as of employer payroll paid dates and benefit payments and refunds are recognized when due and payable in accordance with the benefit terms. Plan investments are reported at fair value. The net pension liability is liquidated primarily by the General Fund and the Road and Bridge and Human Services Special Revenue Funds.

38


1. Summary of Significant Accounting Policies D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position or Equity

(Continued) 8. Long-Term Obligations

In the government-wide financial statements, long-term debt and other long-term

obligations are reported as liabilities in the governmental activities statement of net position. Bond premiums and discounts are deferred and amortized over the life of the bonds using the straight-line method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are expensed in the year the debt was issued.

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 the 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.

9. Classification of Net Position

Net position in the government-wide financial statements is classified in the following categories:

Net investment in capital assets - the amount of net position representing capital assets, net of accumulated depreciation, and reduced by outstanding debt attributed to the acquisition, construction, or improvement of the assets.

Restricted net position - the amount of net position for which external restrictions have been imposed by creditors, grantors, contributors, or laws or regulations of other governments and restrictions imposed by law through constitutional provisions or enabling legislation. Unrestricted net position - the amount of net position that does not meet the definition of restricted or net investment in capital assets.

39


1. Summary of Significant Accounting Policies D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position or Equity

(Continued)

10. Classification of Fund Balances

Fund balance is divided into five classifications based primarily on the extent to which the County is bound to observe constraints imposed upon the use of the resources reported in the governmental funds.

Fund balance classifications are as follows:

Nonspendable - amounts that cannot be spent because they are not in spendable form, or are legally or contractually required to be maintained intact. The “not in spendable form” criterion includes items that are not expected to be converted to cash.

Restricted - amounts in which constraints placed on the use of resources are

either externally imposed by creditors (such as through debt covenants), grantors, contributors, or laws or regulations of other governments or are imposed by law through constitutional provisions or enabling legislation.

Committed - amounts that can be used only for the specific purposes imposed by formal action of the Board of Commissioners. Those committed amounts cannot be used for any other purpose unless the Board removes or changes the specified use by taking the same type of action it employed to previously commit those amounts.

Assigned - amounts the County intends to use for specific purposes that do not meet the criteria to be classified as restricted or committed. In governmental funds other than the General Fund, assigned fund balance represents the remaining amount not restricted or committed. The County Board has adopted a fund balance policy that delegates authority to assign fund balance to the County Auditor/Treasurer. Unassigned - is the residual classification for the General Fund and includes all spendable amounts not contained in the other fund balance classifications. In other governmental funds, the unassigned classification is used only to report a deficit balance resulting from overspending for specific purposes for which amounts had been restricted, committed, or assigned. Further detail on fund balance classifications is available in Note 3.D.

40


1. Summary of Significant Accounting Policies D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position or Equity 10. Classification of Fund Balances (Continued)

The County applies restricted resources first when expenditures are incurred for purposes for which either restricted or unrestricted (committed, assigned, and unassigned) amounts are available. Similarly, within unrestricted fund balance amounts, committed amounts are reduced first followed by assigned, and then unassigned amounts when expenditures are incurred for purposes for which amounts in any of the restricted fund balance classifications could be used. The County has adopted a minimum fund balance policy for the General Fund. The County is to maintain a yearly unassigned fund balance in the General Fund of 35 to 50 percent of the current year’s General Fund total operating expenditures.

11. 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, deferred outflows of resources, liabilities and deferred inflows of resources; and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

41


2. Stewardship, Compliance, and Accountability

A. Excess of Expenditures Over Budget

The legal level of budgetary control (i.e. the level at which expenditures may not legally exceed appropriations) is the fund level. The following nonmajor special revenue fund and major debt service fund had expenditures in excess of budget for the year ended December 31, 2016. These overages were seen as necessary and were funded by greater than anticipated revenues and existing fund balance.

Major Fund

Debt Service $ 12,213,809 $ 9,427,240 $ 2,786,569

Nonmajor Funds

County Park 1,229,526 1,019,536 209,990

Law Library 205,110 197,159 7,951

Expenditures Final Budget Excess

B. Tax Abatements The County entered into a tax abatement agreement with the City of St Cloud on August 22, 2006, under Minnesota Statutes 469.1812 to 469.1815. The tax abatement will be effective for 11 years, commencing in 2016 and ending in 2026. The estimated amount of the abatement shall be $79,000 per year, for an estimated total of $869,000. The abatement is conditional on the City constructing a public parking facility. The annual amount of the ad valorem real estate tax imposed by the County on the development property that will be abated shall be $79,000, provided the amount of the ad valorem real estate tax imposed by the County on the development property is sufficient for the County to retain the County base amount of such taxes on the development property. The County base amount is defined as $3,400 resulting in an abatement to the City of St Cloud in the amount of $58,353 for 2016.

Tax Abatements - Pay-as-You-Go Tax Increment The County is subject to tax abatements granted by Cities within the County pursuant to Minnesota Statutes 469.174 to 469.1794 (Tax Increment Financing) through a pay‐as‐you‐go note program. Tax increment financing (TIF) can be used to encourage private development, redevelopment, renovation and renewal, growth in low‐to‐moderate‐income housing, and economic development within a City. TIF captures the increase in tax capacity and property taxes (of all taxing jurisdictions, including the County) from development or redevelopment to provide funding for the related project.

42


2. Stewardship, Compliance, and Accountability

B. Tax Abatements

Tax Abatements - Pay-as-You-Go Tax Increment (Continued)

The pay‐as‐you‐go note provides for payment to the developer of a percentage of all tax increment received. The payment reimburses the developer for certain public improvements. During 2016, there were 52 pay–as–you–go TIF Districts within the County. The tax increment taxes collected during 2016 totaled $1,930,701. The County’s portion of the captured tax capacity and related property taxes was approximately 39%. In the case of the County, TIF agreements of other local governments have resulted in reductions of the County property tax revenues for the year ended December 31, 2016 as shown below:

Tax Abatement Program

Number of Pay-As-You-Go

TIFTaxes

Abated Impact to

Stearns County

Albany City 4 $ 101,509 $ 40,432 Avon City 2 398,089 118,962Belgrade City 1 3,774 1,341Cold Spring City 4 213,701 86,400Elrosa City 2 9,832 5,713Freeport City 1 2,932 1,019Holdingford City 3 33,925 9,939Kimball City 1 2,588 775Lake Henry City 1 22,788 9,307Meire Grove City 1 7,804 3,784Melrose City 5 141,310 51,461Paynesville City 4 89,096 40,556Richmond City 2 25,879 8,601Sartell City 3 157,001 63,514Sauk Centre City 2 35,298 15,546St Augusta City 2 185,000 90,715St Cloud City 9 350,004 141,810St Joseph City 2 51,481 20,498St Martin City 2 34,821 11,423Stearns County HRA 1 63,869 32,131

Total 52 $ 1,930,701 $ 753,927

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3. Detailed Notes on All Funds

A. Assets

1. Deposits and Investments Reconciliation of the County’s total cash and investments to the basic financial statements follows:

Government-wide statement of net position

Governmental activities

Cash and pooled investments $ 88,706,753

Cash with fiscal agents 5,051

Petty cash and change funds 12,710

Departmental cash 6,864

Statement of fiduciary net position

Fiduciary funds

Cash and pooled investments 3,669,980

Total Cash and Investments $ 92,401,358

44



A. Assets

1. Deposits and Investments (Continued)

a. Deposits

The County is authorized by Minn. Stat. §§ 118A.02 and 118A.04 to designate a depository for public funds and to invest in certificates of deposit. The County is required by Minn. Stat. § 118A.03 to protect deposits with insurance, surety bond, or collateral. The market value of collateral pledged shall be at least ten percent more than the amount on deposit at the close of the financial institution’s banking day, not covered by insurance or bonds. Authorized collateral includes treasury bills, notes and bonds; issues of U.S. government agencies; general obligations rated “A” or better and revenue obligations rated “AA” or better; irrevocable standby letters of credit issued by the Federal Home Loan Bank; and certificates of deposit. Minnesota statutes require that securities pledged as collateral be held in safekeeping in a restricted account at the Federal Reserve Bank or in an account at a trust department of a commercial bank or other financial institution that is not owned or controlled by the financial institution furnishing the collateral.

Custodial Credit Risk Custodial credit risk for deposits is the risk that, in the event of a financial institution failure, the County’s deposits may not be returned to it. The County’s policy is to minimize custodial risk for its deposits by monitoring the collateral balances on a daily basis and obtaining monthly updates on the par and market value of collateral pledged from financial institutions. As of December 31, 2016, the County’s deposits were not exposed to custodial credit risk.

45



A. Assets


b. Investments

The County may invest in the following types of investments as authorized by Minn. Stat. §§ 118A.04 and 118A.05:

(1) securities which are direct obligations or are guaranteed or insured

issues of the United States, its agencies, its instrumentalities, or organizations created by an act of Congress, except mortgage-backed securities defined as “high risk” by Minn. Stat. § 118A.04, subd. 6;

(2) mutual funds through shares of registered investment companies

provided the mutual fund receives certain ratings depending on its investments;

(3) general obligations of the State of Minnesota and its municipalities, and

in certain state agency and local obligations of Minnesota and other states provided such obligations have certain specified bond ratings by a national bond rating service;

(4) bankers’ acceptances of United States banks;

(5) commercial paper issued by United States corporations or their

Canadian subsidiaries that is rated in the highest quality category by two nationally recognized rating agencies and matures in 270 days or less; and

(6) with certain restrictions, in repurchase agreements, securities lending

agreements, joint powers investment trusts, and guaranteed investment contracts.

Custodial Credit Risk

The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty to a transaction, a government will not be able to recover the value of investment or collateral securities in the possession of an outside party.

46



A. Assets

1. Deposits and Investments

b. Investments

Custodial Credit Risk (Continued)

The County’s policy is that all investment securities purchased by the County shall be held in safekeeping by a third-party institution designated by the County. At December 31, 2016, $13,377,997 of the County’s investments were exposed to custodial risk not because they were not in safekeeping by a third-party institution designated by the County but rather because of GASB standards and their definition as to what constitutes custodial risk. Concentration of Credit Risk The concentration of credit risk is the risk of loss that may be caused by the County’s investment in a single issuer. The County’s policy is to minimize concentration of credit risk by diversifying the investment portfolio so that the impact of potential losses from any one type of security or issuer will be minimized. Interest Rate Risk Interest rate risk is the risk that changes in the market interest rates will adversely affect the fair value of an investment. The County’s policy is to minimize its exposure to interest rate risk by: (1) structuring its investment portfolio so that securities mature to meet cash requirements for ongoing operations, thereby avoiding the need to sell securities in the open market; and (2) investing operating funds primarily in shorter-term securities, liquid asset funds, money market mutual funds, or similar investment pools and limiting the average maturity in accordance with the County’s cash requirements. Credit Risk Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization.

It is the County’s policy to invest in instruments which are guaranteed or direct issues of the United States or rated in the highest quality category by at least two nationally recognized rating agencies.

47



A. Assets


The following table presents the County’s deposit and investment balances at December 31, 2016, and information relating to potential investment risk:

Concentration Interest Rate

Risk Risk

Credit Rating Over 5 Percent Maturity

Investment Type Rating Agency Of Portfolio Date

Federal Farm Credit Bank AAA S&P 1 - 3 years $ 2,971,900

Federal Farm Credit Bank AAA S&P 4 - 6 years 985,400

Total Federal Farm Credit Bank $ 3,957,300

Federal Home Loan Bank AAA S&P 4 - 6 years $ 6,784,782

Federal Home Loan Mortgage Corporation AAA S&P 1 - 3 years $ 1,997,483

Federal Home Loan Mortgage Corporation AAA S&P 4 - 6 years 13,074,947

Total Federal Home Loan Mortgage Corporation 16.82% $ 15,072,430

Federal National Mortgage Association AAA S&P 8.55% 4 - 6 years $ 7,665,675

Government National Mortgage Association AAA S&P 11 - 15 years $ 7,266

Total U.S. Government Agency Securities $ 33,487,453

Municipals A1/P1/F1 S&P 1 - 3 years $ 1,717,558

Municipals A1/P1/F1 S&P 4 - 6 years 1,320,883

Municipals A1/P1/F1 S&P 7 - 10 years 1,512,872

Municipals A1/P1/F1 S&P 11 - 15 years 460,575

Total Municipals 5.59% $ 5,011,888

Commercial Paper 15.61% $ 13,989,177

Negotiable Certificates of Deposit N/A N/A < 1 year $ 1,337,796

Negotiable Certificates of Deposit N/A N/A 1 - 3 years 12,403,542

Negotiable Certificates of Deposit N/A N/A 4 - 6 years 5,973,638

Total Negotiable Certificates of Deposit 22.00% $ 19,714,976

MAGIC Fund 16.02% $ 14,358,453

Money Market Funds $ 3,065,416

Total Investments $ 89,627,363

Deposits and Non-Negotiable Certificates of Deposit $ 2,754,421

Petty Cash and Change Funds 12,710

Departmental Cash 6,864

Total Deposits and Investments $ 92,401,358

N/A - Not ApplicableS&P - Standards and Poor’s

Credit Risk Carrying

(Fair)

Value

48



A. Assets

1. Deposits and Investments (Continued) Fair Value of Investments

The County measures and records its investments using fair value measurement guidelines established by accounting principles generally accepted in the United State of America. These guidelines recognize a three-tiered fair value hierarchy, as follows: Level 1: Quoted prices for identical investments in active markets Level 2: Observable inputs other than quoted market prices Level 3: Unobservable inputs At December 31, 2016, the County had the following recurring fair value measurements:

Debt securities U.S. Government agency securities $ 33,487,453 $ - $ 33,487,453 $ -

Municipal securities 5,011,888 - 5,011,888 -

Commercial paper 13,989,177 - 13,989,177 -

Negotiable certificates of deposit 19,714,976 - 19,714,976 -

Total investments by fair value hierarchy $ 72,203,494 $ - $ 72,203,494 $ -

Investments measured at the net asset value (NAV)

MAGIC Fund $ 14,358,453 Money market 3,065,416

Total investments measured at the NAV $ 17,423,869

Total investments $ 89,627,363

Investments by fair value level

December 31, 2016

Fair Value Measurements Using

Quoted Prices in Active Markets

for Identical Assets (Level 1)

Significant Other Observable Inputs

(Level 2)

Significant Unobservable

Inputs (Level 3)

49



A. Assets

1. Deposits and Investments Fair Value of Investments (Continued)

Debt and equity securities classified in Level 2 are valued using the following approaches: • U.S. government agency securities, municipal securities, and commercial

paper are valued using a market approach by utilizing quoted prices for identical securities in markets that are not active;

• Negotiable Certificates of Deposit are valued using matrix pricing based on

the securities’ relationship to benchmark quoted prices. MAGIC is a local government investment pool which is quoted at a net asset value (NAV). The County invests in this pool for the purpose of the joint investment of the County’s money with those of other counties to enhance the investment earnings accruing to each member. MAGIC Portfolio is valued using amortized cost. Shares of the MAGIC Portfolio are available to be redeemed upon proper notice without restrictions under normal operating conditions. There are no limits to the number of redemptions that can be made as long as the County has a sufficient number of shares to meet their redemption request. The Fund’s Board of Trustees can suspend the right of withdrawal or postpone the date of payment if the Trustees determine that there is an emergency that makes the sale of a Portfolio’s securities or determination of its net asset value not reasonably practical. The County invests in money market funds for the benefit of liquid investments that can be readily re-invested. Money market funds held by the County seek a constant net asset value (NAV) of $1.00 per share.

50



A. Assets (Continued)

2. Receivables Property Taxes and Special Assessments Property taxes and special assessments which remain unpaid at December 31 are delinquent. No allowance for uncollectible taxes/assessments has been provided because such amounts are not expected to be material.

Loans Receivable Economic development loans were made to private enterprises under the County’s economic development loan program. The County entered into an agreement with the North Fork Watershed District whereby the County would loan them funds for various ditch maintenance projects until a bond is to be issued by the County for the Watershed District. When the bonds are issued, the Watershed is to repay the loan with interest. The County entered into an agreement with the City of Sartell to fund a road project. The loan is to be repaid over the course of five years with interest.

A summary of loans receivable outstanding at December 31, 2016, are as follows:

InterestTerm Rate

(Years) (%)

$ 2,017,143 $ - $ 2,017,143 5 3.0109,232 - 109,232 1 2.0

100,000 31,791 68,209 7 2.0150,000 94,113 55,887 8 2.0149,000 18,219 130,781 10 0.5250,000 71,429 178,571 7 0.0

$ 2,775,375 $ 215,552 $ 2,559,823

$ 609,5361,950,287

$ 2,559,823Total

Tom Kraemer Properties New Flyer

Total Loans Receivable

Amounts expected to be collected within one yearAmounts due in more than one year

Felling Trailers

Amount 2016 2016

Governmental activities Loan to City of Sartell Loan to Watershed District

Economic development loans Midsota Manufacturing.

Loan December 31, December 31,

Balance OutstandingOriginal Repaid at Balance at

51



A. Assets (Continued)

3. Capital Assets

Capital asset activity for the year ended December 31, 2016, was as follows:

Capital assets not depreciated

Land $ 15,003,727 $ - $ - $ 15,003,727

Construction in progress 10,962,874 18,346,066 21,125,659 8,183,281

Right-of-way 17,692,193 1,622,453 - 19,314,646

Total capital assets not depreciated $ 43,658,794 $ 19,968,519 $ 21,125,659 $ 42,501,654

Capital assets depreciated

Buildings $ 66,315,460 $ 946,299 $ - $ 67,261,759

Improvements, other than buildings 1,995,208 1,091,745 - 3,086,953

Machinery and automotive 15,075,840 1,222,092 765,053 15,532,879

Office furniture and equipment 8,549,155 408,491 26,008 8,931,638

Software 2,844,559 450,045 - 3,294,604

Infrastructure 298,402,999 16,739,476 - 315,142,475

Total capital assets depreciated $ 393,183,221 $ 20,858,148 $ 791,061 $ 413,250,308

Less: accumulated depreciation for

Buildings $ 22,128,108 $ 1,565,124 $ - $ 23,693,232

Improvements, other than buildings 191,145 133,562 - 324,707

Machinery and automotive 10,539,617 1,215,374 765,053 10,989,938

Office furniture and equipment 5,743,087 571,379 26,008 6,288,458

Software 1,927,017 275,261 - 2,202,278

Infrastructure 72,683,313 6,100,851 - 78,784,164

Total accumulated depreciation $ 113,212,287 $ 9,861,551 $ 791,061 $ 122,282,777

Total capital assets depreciated, net $ 279,970,934 $ 10,996,597 $ - $ 290,967,531

Governmental Activities - Capital Assets, Net $ 323,629,728 $ 30,965,116 $ 21,125,659 $ 333,469,185

Beginning Balance Increase Decrease Ending Balance

52



A. Assets

3. Capital Assets (Continued)

Depreciation expense was charged to functions/programs of the primary government as follows:


General government $ 1,025,875

Public safety 1,340,362

Highways and streets, including depreciation of infrastructure assets 6,963,166

Human services 237,974

Culture and recreation 201,013

Conservation of natural resources 93,161

Total Depreciation Expense - Governmental Activities $ 9,861,551

B. Interfund Receivables, Payables, and Transfers The composition of interfund balances as of December 31, 2016, was as follows: 1. Advance From/To Other Funds

Receivable Fund Payable Fund

General Fund Debt Service Fund $ 55,590Solid Waste Fund General Fund 73,157General Fund Information Services Improvements

Internal Service Fund 17,596

$ 146,343

Amount

Total Advance From/To Other Funds

The General Fund advanced funds to the Debt Service Fund for the Cedar Island Bridge project. The advance will be repaid with special assessments. The Solid Waste Special Revenue Fund advanced funds to the General Fund to finance various septic system updates for individuals. The advance will be repaid through the collection of special assessments. The General Fund advanced funds to the Information Services Improvements Internal Service Fund to finance various technology projects. The advance will be repaid as projects are completed.

53



B. Interfund Receivables, Payables, and Transfers (Continued)

2. Interfund Transfers Interfund transfers for the year ended December 31, 2016, consisted of the following:

Description

Transfers to General Fund from

Road and Bridge Fund $ 133,869 Salaries adjustment

Human Services Fund 1,553,450 Salaries adjustment

Total Transfers to General Fund $ 1,687,319

Transfers to Road and Bridge Fund from

General Fund $ 86,627 Salaries adjustment

General Fund 48,428 Information services chargeback

Capital Projects Fund 2,632,702 Road projects

Total Transfers to Road and Bridge Fund $ 2,767,757

Transfers to Human Services Fund from

General Fund $ 1,190,239 Salaries adjustment


Total Transfers to Human Services Fund $ 1,853,652

Transfers to County Park Fund from

General Fund $ 11,295 Salaries adjustment


Total Transfers to County Park Fund $ 20,859

Transfers to County Building Fund from

General Fund $ 8,000 Building upgrades

Total Interfund Transfers $ 6,337,587

Transfers In

54


3. Detailed Notes on All Funds (Continued) C. Liabilities and Deferred Inflows of Resources 1. Payables

Payables at December 31, 2016, were as follows:

Accounts $ 3,901,860

Salaries 3,832,164

Contracts 828,579

Due to other governments 2,479,626

Accrued interest 56,118

Total Payables $ 11,098,347


2. Unearned Revenues/Deferred Inflows of Resources Unearned revenues and deferred inflows of resources consist of unavailable

revenue arising from taxes receivable, state and federal grants, installment loans and other items that are not collected soon enough after year-end to pay liabilities of the current year as well as state and federal grants and state allotment advances that have been receivable but not yet earned. Unearned revenues and deferred inflows of resources at December 31, 2016, are summarized on the next page by fund:

55


3. Detailed Notes on All Funds C. Liabilities and Deferred Inflows of Resources

2. Unearned Revenues/Deferred Inflows of Resources (Continued)

3. Paid Time Off

County employees are granted paid time off, in varying amounts, depending on union/non-union status and length of service. The County pays unused accumulated paid time off to employees upon termination based on two different severance plans. Unvested paid time off valued at $3,054,263 at December 31, 2016, is available to employees in the event of an absence but is not paid to them at termination.

Major governmental

funds

General $ 520,714 $ 255,418 $ - $ - $ 233,031 $ 1,009,163

Road and Bridge 98,070 - - 3,553,027 146,243 3,797,340

Human Services 328,839 579,420 - - - 908,259

Debt Service 2,680,489 - - - - 2,680,489

Capital Projects - 400,000 - - - 400,000

Nonmajor governmental funds

County Building 1,594 - - - - 1,594

County Park 11,582 - - - - 11,582

Solid Waste 112,803 - - - - 112,803

Economic Development 129 - 433,448 - - 433,577

Ditch 329 - - - - 329

Regional Rail Authority 3,434 - - - - 3,434

Miscellaneous 4,718 - - - - 4,718

Total $ 3,762,701 $ 1,234,838 $ 433,448 $ 3,553,027 $ 379,274 $ 9,363,288

Liability

Unearned revenue $ - $ 251,711 $ - $ - $ 167,215 $ 418,926

Deferred inflows of

resources

Advance from

other governments - - - 2,430,800 - 2,430,800

Unavailable revenue 3,762,701 983,127 433,448 1,122,227 212,059 6,513,562

Total $ 3,762,701 $ 1,234,838 $ 433,448 $ 3,553,027 $ 379,274 $ 9,363,288

Total

Taxes and Special

Assessments Grants Loans

State-Aid Highway

Allotments Other

56


3. Detailed Notes on All Funds C. Liabilities and Deferred Inflows of Resources (Continued) 4. Long-Term Debt - Bonds

Bond payments are typically made from the Debt Service Fund. Information on individual bonds payable is as follows:

Type of IndebtednessFinal

MaturityInstallment Amounts

Interest Rate (%)

General Obligation Bonds:

2005A G.O. Drainage Bonds2024

$40,000 - $75,000 3.50 - 4.375 $ 1,090,000 $ 150,000

2010A G.O. Capital Improvement Bonds2018

$305,000 - $2,550,000 2.00 - 3.00 8,935,000 920,000

2010B Taxable G.O. Capital Improvement Bonds – Recovery Zone Economic Development Bonds (RZEDBs) 2020

$330,000 - $685,000 4.15 - 4.50 1,665,000 1,665,000

2015 G.O. Capital Improvement Bonds2020

$1,170,000 - $1,275,000 2.00 - 3.00 7,295,000 4,920,000

2016A G.O. Watershed Bonds2035

$50,000 - $120,000 2.00 - 2.50 1,975,000 1,925,000

2016B G.O. Watershed Bonds2031 $40,000 1.50 - 3.00 600,000 600,000

Total General Obligation Bonds $ 21,560,000 $ 10,180,000

Add: Unamortized premium 299,372

Total General Obligation Bonds, Net $ 10,479,372

General Obligation Refunding Bonds:

2014A G.O. Capital Improvement Refunding Bonds 2022

$550,000 - $1,030,000 3.00 - 4.00 $ 5,285,000 $ 5,285,000

Add: Unamortized premium 361,938

Total General Obligation Refunding Bonds, Net $ 5,646,938

General Obligation Revenue Bonds:

2006A Public Facilities Revenue Bonds 2020$455,000 - $2,230,000 2.35 $ 11,200,000 $ 2,670,000

Original Issue Amount

Outstanding Balance

December 31, 2016

57


3. Detailed Notes on All Funds C. Liabilities and Deferred Inflows of Resources (Continued)

5. Debt Service Requirements Debt service requirements at December 31, 2016, were as follows:

2017 $ 1,930,000 $ 230,774

2018 1,975,000 188,710

2019 2,015,000 145,209

2020 2,090,000 88,391

2021 130,000 51,308

2022 - 2026 835,000 199,431

2027 - 2031 735,000 105,625

2032 - 2035 470,000 28,042

Total $ 10,180,000 $ 1,037,490

2017 $ 945,000 $ 171,950

2018 970,000 143,600

2019 1,000,000 114,500

2020 1,030,000 84,500

2021 1,340,000 75,600

Total $ 5,285,000 $ 590,150

2017 $ 670,000 $ 55,014

2018 685,000 39,061

2019 710,000 22,639

2020 605,000 7,096

Total $ 2,670,000 $ 123,810

General Obligation Revenue Bonds

Principal Interest

Year Ending December 31



General Obligation Bonds and Notes

Principal Interest

General Obligation Refunding Bonds

Principal Interest

58



5. Debt Service Requirements (Continued)

General Obligation Refunding Bond

On December 15, 2014, the County issued $5,285,000 General Obligation Capital Improvement Crossover Refunding Bonds, Series 2014A to refund $5,490,000 of outstanding General Obligation Capital Improvement Bonds, Series 2008A. The refunded bonds were called on December 1, 2016. Remaining annual payments on the Crossover Refunding Bonds are due through December 1, 2022.

Recovery Zone Economic Development Bonds (RZEDBs)

As part of the American Recovery and Reinvestment Act of 2009 (ARRA), Stearns County issued $1,665,000 of Recovery Zone Economic Development Bonds (RZEDBs) which were issued to finance capital improvements under an approved capital improvement plan. The Series 2010B bonds are direct pay tax credit RZEDBs, in which the County will receive a payment from the federal government equal to 45 percent of the amount of interest payable on each interest payment date. However, pursuant to the requirements of the Balanced Budget and Emergency Deficit Control Act of 1985 which took place March 1, 2013, sequestration reduction rates were applied which reduced the Federal Subsidy to a lesser percentage as reflected below.

The County has complied with all requirements of ARRA to be eligible for the RZEDB interest credit. The Series 2010B bonds were issued as taxable obligations which the County will elect to irrevocably designate as qualified RZEDBs. The entire County has been designated as a recovery zone pursuant to a resolution adopted by the Board of Commissioners of the County on November 24, 2009.

59



5. Debt Service Requirements Recovery Zone Economic Development Bonds (RZEDBs) (Continued) Taking into consideration the above RZEDB interest credit, as of December 31, 2016, the County’s net annual debt service requirements to amortize all taxable general obligation bonds outstanding, including interest of $116,529 on the governmental activities debt is as follows:

2017 $ - $ 73,120 $ 30,502 $ 42,618 $ 42,618

2018 330,000 66,272 27,645 38,627 368,627

2019 650,000 45,125 18,824 26,301 676,301

2020 685,000 15,413 6,430 8,983 693,983

Total $ 1,665,000 $ 199,930 $ 83,401 $ 116,529 $ 1,781,529

Total Payment

Federal Subsidy Net InterestInterest

Year Ending December 31 Principal

Conduit Debt

From time to time, the County has issued revenue bonds and notes to provide financial assistance to private sector or governmental entities for the acquisition and construction of facilities and equipment deemed to be in the public interest. These bonds and notes are secured by the property financed and are payable solely from revenue derived from the loan agreements. Upon repayment of the bonds, ownership of the acquired facilities or equipment transfers to the private sector or governmental entity served by the bond issuance. The County is not obligated in any manner for repayment of the bonds or notes. Accordingly, they are not reported as a liability in the accompanying financial statements. As of December 31, 2016, there is one such issue outstanding with an aggregate principal amount payable of $434,475.

60


3. Detailed Notes on All Funds C. Liabilities and Deferred Inflows of Resources (Continued)

6. Changes in Long-Term Liabilities Long-term liability activity for the year ended December 31, 2016, was as follows:

The bonds payable are liquidated by the Debt Service Fund. The compensated absences liability is primarily liquidated by the General Fund and the Road and Bridge and Human Services Special Revenue Funds.

7. Operating Leases

The County currently has eight operating leases. The County made operating lease payments totaling $111,298 in 2016. The following is a schedule of future minimum operating lease payments:

Year Due

2017 $ 111,8632018 107,4212019 95,6312020 93,6482021 66,972

Total $ 475,535

Lease Payments

Additions

General obligation bonds $ 14,245,000 $ 2,575,000 $ 8,305,000 $ 8,515,000 $ 1,930,000

Taxable general obligation bonds 1,665,000 - - 1,665,000 -

General obligation refunding bond 5,285,000 - - 5,285,000 945,000

General obligation revenue bonds 3,195,000 - 525,000 2,670,000 670,000

Compensated absences 7,986,037 7,583,543 7,527,697 8,041,883 6,871,788

Bond premiums 784,316 48,047 171,053 661,310 -

Total Long-Term Liabilities $ 33,160,353 $ 10,206,590 $ 16,528,750 $ 26,838,193 $ 10,416,788

Beginning Balance Reductions

Ending Balance

Due Within One Year

61


3. Detailed Notes on All Funds (Continued)

D. Fund Balances

1. Nonspendable Fund Balance

The detail of nonspendable fund balance as of December 31, 2016, is as follows:

Nonspendable fund balance

Inventories $ 290,513 $ 1,054,837 $ - $ - $ 1,345,350

Advance to other funds 73,186 - - 73,157 146,343

Missing Heirs - - - 8,608 8,608

Prepaids 100 - 1,723 - 1,823

Total Nonspendable $ 363,799 $ 1,054,837 $ 1,723 $ 81,765 $ 1,502,124

TotalGeneral Road and Bridge Human Services

Other Governmental

Funds

2. Restricted Fund Balance

The detail of restricted fund balance as of December 31, 2016, is as follows:

Restricted fund balance

Recorder’s technology equipment $ 369,221 $ - $ - $ - $ 369,221

Economic development - - - 662,312 662,312

Recorder’s enhancements 149,886 - - - 149,886

Sheriff's conceal and carry administration 256,397 - - - 256,397

Attorney’s prosecutorial purposes 49,698 - - - 49,698

DWI related enforcement 63,756 - - - 63,756

Aquatic invasive species 183,344 - - - 183,344

Highway projects - 268,622 - - 268,622

Debt service - - 5,403,291 - 5,403,291

Law library - - - 127,591 127,591

Landfill - - - 57,339 57,339

Gravel pit closure - - - 493,072 493,072

Regional rail authority - - - 1,324,580 1,324,580

Ditch repairs - - - 14,061 14,061

Sanitation - - - 5,086,448 5,086,448

Total Restricted $ 1,072,302 $ 268,622 $ 5,403,291 $ 7,765,403 $ 14,509,618

Other Governmental

Funds TotalRoad and

Bridge Debt ServiceGeneral

62


3. Detailed Notes on All Funds D. Fund Balances (Continued)

3. Committed Fund Balance

The detail of committed fund balance as of December 31, 2016, is as follows:

Committed fund balance

Parks $ 886,026

County Building 35,186

Total Committed $ 921,212

Other Governmental

Funds

4. Assigned Fund Balance

The detail of assigned fund balance as of December 31, 2016, is as follows:

Assigned fund balance

Road and bridge $ - $ 8,827,225 $ - $ - $ - $ 8,827,225

Human services - - 15,649,880 - - 15,649,880

K9-unit - - - - 8,972 8,972

Sheriff’s mounted reserve 4,965 - - - - 4,965

Parks contingency - - - - 194,949 194,949

Wellness activities - - - - 6,327 6,327

Capital projects - - - 9,244,450 - 9,244,450

Total Assigned $ 4,965 $ 8,827,225 $ 15,649,880 $ 9,244,450 $ 210,248 $ 33,936,768

TotalGeneralRoad and

Bridge Human ServicesCapital Projects

Other Governmental

Funds

63


3. Detailed Notes on All Funds (Continued)

E. Other Postemployment Benefits (OPEB)

Plan Description

Pursuant to Minn. Stat. § 471.61, subd. 2a, the County provides postemployment health care and dental benefits for eligible retired employees, spouses, and dependents through a single-employer defined benefit plan.

Qualified retirees are eligible to receive a postemployment benefit that reduces the monthly premium of the health care insurance coverage provided under Minn. Stat. § 471.61, subd. 2b, by $10 per month for each year of consecutive County service up to a maximum of 20 years of consecutive County service for a period of 24 months immediately upon retirement. In order to qualify for this benefit, retirees must meet the following criteria: (1) 12 or more consecutive years of County service, and (2) meets Public Employees Retirement Association of Minnesota (PERA) requirements for retirement benefits.

Retirees that receive health care benefits from subsequent employment are no longer

eligible for this benefit. Also, retirees must take any available Medicare benefits. The benefit terminates upon the death of the retiree.

In addition, the County provides benefits for other retirees and spouses of retirees as

required by Minn. Stat. § 471.61, subd. 2b. These benefits include access to the same health care and dental insurance coverage provided by the County to active employees.

The benefits are administered by the County Board of Commissioners and can be amended through its personnel manual and labor contracts. A separate benefits plan report is not issued. The activity of the plan is reported in the government-wide financial statements.

Participants Participants of the plan consisted of the following at January 1, 2015, the date of the

most recent actuarial valuation:

Active employees 861 Retired employees 23 Spouses of retirees 6 Total Plan Participants 890

64


3. Detailed Notes on All Funds E. Other Postemployment Benefits (OPEB) (Continued) Funding Policy The contribution requirements of plan members and the County are established and

may be amended by the Stearns County Board of Commissioners. The County finances the plan on a “pay-as-you-go” basis. During 2016, the County expended $265,211 for these benefits.

For those qualified retirees that meet the criteria for a full medical insurance benefit, the

County contributes 100 percent of the benefit cost. All other retirees and their spouses contribute 100 percent of the premium cost for medical and dental insurance. Since the premium is a blended rate determined on the entire active and retiree population, the retirees receive an implicit rate subsidy.

Annual OPEB Cost and Net OPEB Obligation The County’s annual OPEB cost is calculated based on the annual required contribution

(ARC) of the employer, an amount actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal costs each year and amortize any unfunded actuarial accrued liabilities (or funding excess) over a period not to exceed 30 years. The following table shows the components of the County’s OPEB cost for 2016, the amount actuarially contributed to the plan, and changes in the County’s net OPEB obligation.

ARC $ 669,123 Interest on net OPEB obligation 155,312 Adjustment to ARC (220,182) Annual OPEB cost $ 604,253 Contributions during the year (265,211) Increase in net OPEB obligation $ 339,042 Net OPEB Obligation - Beginning of Year 3,882,798 Net OPEB Obligation - End of Year $ 4,221,840

65


3. Detailed Notes on All Funds E. Other Postemployment Benefits (OPEB) Annual OPEB Cost and Net OPEB Obligation (Continued)

The County’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for 2011, 2012, 2013, 2014, 2015 and 2016 were as follows:

Fiscal

Year Ended Annual

OPEB Cost Employer

Contribution Percentage

Contributed Net OPEB

Obligation

December 31, 2011 $ 706,564 $ 234,615 33.21% $ 2,468,697 December 31, 2012 697,371 311,082 44.61 2,854,986 December 31, 2013 515,025 181,834 35.31 3,188,177 December 31, 2014 506,785 215,449 42.51 3,479,513 December 31, 2015 596,935 193,650 32.44 3,882,798 December 31, 2016 604,253 265,211 43.89 4,221,840

The net OPEB obligation is primarily liquidated by the General Fund and the Road and Bridge and Human Services Special Revenue Funds.

Funded Status and Funding Progress As of January 1, 2015, the most recent actuarial valuation date, the County currently has no assets that have been irrevocably deposited in a trust for future health benefits. Therefore, the actuarial value of plan assets is zero.

Actuarial accrued liability (AAL) $ 4,920,339 Actuarial value of plan assets - Unfunded Actuarial Accrued Liability (UAAL) $ 4,920,339

Funded ratio (actuarial value of plan assets/AAL) 0.0% Covered payroll (active plan members) $ 51,326,900 UAAL as a percentage of covered payroll 9.59%

66


3. Detailed Notes on All Funds E. Other Postemployment Benefits (OPEB)

Funded Status and Funding Progress (Continued) Actuarial valuations of an ongoing plan involve estimates of value of reported amounts

and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the health care cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The Schedule of Funding Progress - Other Postemployment Benefits, presented as required supplementary information following the notes to the financial statements, presents multi-year trend information that shows whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. Actuarial Methods and Assumptions Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques designed to reduce short-term volatility in actuarial accrued liabilities and the actuarial value of plan assets, consistent with the long-term perspective of the calculations. In the January 1, 2015, actuarial valuation, the projected unit credit actuarial cost method was used. The actuarial assumptions include a 4.0 percent investment rate of return and an annual health care cost trend rate of 7.25 percent initially, reduced by decrements to an ultimate rate of 5.0 percent after 9 years. The actuarial value of plan assets was set equal to the market value of assets. The UAAL is being amortized over 30 years on a closed group basis. The remaining amortization period at December 31, 2016, was 21 years.

F. Contract Commitments

The Road and Bridge Special Revenue Fund entered into several contract commitments for road projects which have not been completed as of December 31, 2016, totaling $212,000.

67


3. Detailed Notes on All Funds (Continued) G. Pension Plans

1. Defined Benefit Pension Plans

a. Plan Description

All full-time and certain part-time employees of Stearns County are covered by defined benefit pension plans administered by the Public Employees Retirement Association of Minnesota (PERA). PERA administers the General Employees Retirement Plan, the Public Employees Police and Fire Plan, and the Local Government Correctional Service Retirement Plan (the Public Employees Correctional Plan), which are cost-sharing, multiple-employer retirement plans. These plans are established and administered in accordance with Minn. Stat. chs. 353 and 356. PERA’s defined benefit pension plans are tax qualified plans under Section 401(a) of the Internal Revenue Code. General Employees Retirement Plan (accounted for in the General Employees Fund) has multiple benefit structures with members belonging to the Coordinated Plan, the Basic Plan, or the Minneapolis Employees Retirement Fund. Coordinated Plan members are covered by Social Security and Basic Plan and Minneapolis Employees Retirement Fund members are not. The Basic Plan was closed to new members in 1967. The Minneapolis Employees Retirement Fund was closed to new members during 1978 and merged into the General Employees Retirement Plan in 2015. All new members must participate in the Coordinated Plan, for which benefits vest after five years of credited service. Police officers, firefighters, and peace officers who qualify for membership by statute are covered by the Public Employees Police and Fire Plan (accounted for in the Police and Fire Fund). For members first hired after June 30, 2010, but before July 1, 2014, benefits vest on a graduated schedule starting with 50 percent after 5 years and increasing 10 percent for each year of service until fully vested after 10 years. Benefits for members first hired after June 30, 2014, vest on a prorated basis from 50 percent after 10 years and increasing 5 percent for each year of service until fully vested after 20 years. Local government employees of a county-administered facility who are responsible for the direct security, custody, and control of the county correctional facility and its inmates are covered by the Public Employees Correctional Plan (accounted for in the Correctional Fund). For members hired after June 30, 2010, benefits vest on a graduated schedule starting with 50 percent after 5 years and increasing 10 percent for each year of service until fully vested after 10 years.

68


3. Detailed Notes on All Funds G. Pension Plans

1. Defined Benefit Pension Plans (Continued)

b. Benefits Provided PERA provides retirement benefits as well as disability benefits to members and benefits to survivors upon death of eligible members. Benefit provisions are established by state statute and can be modified only by the state legislature. Benefit increases are provided to benefit recipients each January. Increases are related to the funding ratio of the plan. Benefit recipients receive a future annual 1.0 percent post-retirement benefit increase. If the funding ratio reaches 90 percent for two consecutive years, the benefit increase will revert to 2.5 percent. If, after reverting to a 2.5 percent benefit increase, the funding ratio declines to less than 80 percent for one year or less than 85 percent for two consecutive years, the benefit increase will decrease to 1.0 percent. The benefit provisions stated in the following paragraph of this section are current provisions and apply to active plan participants. Vested, terminated employees who are entitled to benefits but are not yet receiving them are bound by the provisions in effect at the time they last terminated their public service. Benefits are based on a member’s highest average salary for any five successive years of allowable service, age, and years of credit at termination of service. Two methods are used to compute benefits for General Employees Retirement Plan Coordinated and Basic Plan members. Members hired prior to July 1, 1989, receive the higher of a step-rate benefit accrual formula (Method 1) or a level accrual formula (Method 2). Under Method 1, the annuity accrual rate for a Basic Plan member is 2.2 percent of average salary for each of the first ten years of service and 2.7 percent for each remaining year. The annuity accrual rate for a Coordinated Plan member is 1.2 percent of average salary for each of the first ten years of service and 1.7 percent for each remaining year. Under Method 2, the annuity accrual rate is 2.7 percent of average salary for Basic Plan members and 1.7 percent for Coordinated Plan members for each year of service. Only Method 2 is used for members hired after June 30, 1989. Minneapolis Employees Retirement Fund members have an annuity accrual rate of 2.0 percent of average salary for each of the first ten years of service and 2.5 percent for each remaining year. For Public Employees Police and Fire Plan members, the annuity accrual rate is 3.0 percent of average salary for each year of service. For Public Employees Correctional Plan members, the annuity accrual rate is 1.9 percent of average salary for each year of service.

69




b. Benefits Provided (Continued)

For General Employees Retirement Plan members hired prior to July 1, 1989, a full annuity is available when age plus years of service equal 90, and normal retirement age is 65. For members hired on or after July 1, 1989, normal retirement age is the age for unreduced Social Security benefits capped at 66. For Public Employees Police and Fire Plan and Public Employees Correctional Plan members, normal retirement age is 55, and for members who were hired prior to July 1, 1989, a full annuity is available when age plus years of service equal 90. Disability benefits are available for vested members and are based on years of service and average high-five salary.

c. Contributions

Pension benefits are funded from member and employer contributions and income from the investment of fund assets. Rates for employer and employee contributions are set by Minn. Stat. ch. 353. These statutes are established and amended by the state legislature. General Employees Retirement Plan Basic members, Coordinated members, and Minneapolis Employees Retirement Fund members were required to contribute 9.10 percent, 6.50 percent, and 9.75 percent, respectively, of their annual covered salary in 2016. Public Employees Police and Fire Plan members were required to contribute 10.80 percent of their annual covered salary in 2016. Public Employees Correctional Plan members were required to contribute 5.83 percent of their annual covered salary in 2016. In 2016, the County was required to contribute the following percentages of annual covered salary:

General Employees Retirement Plan Basic Plan members 11.78% Coordinated Plan members 7.50 Minneapolis Employees Retirement Fund members 9.75 Public Employees Police and Fire Plan 16.20 Public Employees Correctional Plan 8.75

The employee and employer contribution rates did not change from the previous year.

70




c. Contributions (Continued)

The County’s contributions for the year ended December 31, 2016, to the pension plans were:

General Employees Retirement Plan $ 3,362,833 Public Employees Police and Fire Plan 757,145 Public Employees Correctional Plan 442,888

The contributions are equal to the contractually required contributions as set by state statute.

d. Pension Costs

General Employees Retirement Plan At December 31, 2016, the County reported a liability of $58,357,887 for its proportionate share of the General Employees Retirement Plan’s net pension liability. The net pension liability was measured as of June 30, 2016, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The County’s proportion of the net pension liability was based on the County’s contributions received by PERA during the measurement period for employer payroll paid dates from July 1, 2015, through June 30, 2016, relative to the total employer contributions received from all of PERA’s participating employers. At June 30, 2016, the County’s proportion was .7187 percent. It was .7356 percent measured as of June 30, 2015. The County recognized pension expense of $7,529,938 for its proportionate share of the General Employees Retirement Plan’s pension expense. The County also recognized $227,257 as revenue, which results in a reduction of the net pension liability, for its proportionate share of the State of Minnesota’s contribution to the General Employees Retirement Plan, which qualifies as a special funding situation. Legislation requires the State of Minnesota to contribute $6 million to the General Employees Retirement Plan each year, starting September 15, 2015, through September 15, 2031.

71




d. Pension Costs General Employees Retirement Plan (Continued)

County’s proportionate share of the net pension liability

$

58,357,887

State of Minnesota’s proportionate share of the net pension liability associated with the County

762,166

Total $ 59,120,053

The County reported its proportionate share of the General Employees Retirement Plan’s deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Deferred

Outflows of Resources


Differences between expected and actual economic experience

$

-

$

4,770,169

Changes in actuarial assumptions 11,426,527 - Difference between projected and actual investment earnings

11,138,799

-

Changes in proportion - 2,361,027 Contributions paid to PERA subsequent to the measurement date

1,688,390

-

Total

$

24,253,716

$

7,131,196

The $1,688,390 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, 2017. Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows:

72




d. Pension Costs General Employees Retirement Plan (Continued)

Year Ended

December 31

Pension Expense Amount

2017 $ 3,947,607 2018 3,947,607 2019 5,430,927 2020 2,107,989

Public Employees Police and Fire Plan

At December 31, 2016, the County reported a liability of $19,383,630 for its proportionate share of the Public Employees Police and Fire Plan’s net pension liability. The net pension liability was measured as of June 30, 2016, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The County’s proportion of the net pension liability was based on the County’s contributions received by PERA during the measurement period for employer payroll paid dates from July 1, 2015, through June 30, 2016, relative to the total employer contributions received from all of PERA’s participating employers. At June 30, 2016, the County’s proportion was .4830 percent. It was .5060 percent measured as of June 30, 2015. The County recognized pension expense of $3,319,702 for its proportionate share of the Public Employees Police and Fire Plan’s pension expense. The County also recognized $43,470 as revenue, which results in a reduction of the net pension liability, for its proportionate share of the State of Minnesota’s on-behalf contribution to the Public Employees Police and Fire Plan. Legislation requires the State of Minnesota to contribute $9 million to the Police and Fire Plan each year, starting in fiscal year 2014, until the plan is 90 percent funded.

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d. Pension Costs

Public Employees Police and Fire Plan (Continued)

The County reported its proportionate share of the Public Employees Police and Fire Plan’s deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Deferred




$

-

$

2,257,574


2,992,229

-

Changes in proportion 14,401 217,778 Contributions paid to PERA subsequent to the measurement date

389,074

-

Total

$

14,063,363

$

2,475,352

The $389,074 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, 2017. Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows:



2017 $ 2,415,432 2018 2,415,432 2019 2,415,432 2020 2,165,000 2021 1,787,641

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d. Pension Costs (Continued)

Public Employees Correctional Plan

At December 31, 2016, the County reported a liability of $9,644,290 for its proportionate share of the Public Employees Correctional Plan’s net pension liability. The net pension liability was measured as of June 30, 2016, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The County’s proportion of the net pension liability was based on the County’s contributions received by PERA during the measurement period for employer payroll paid dates from July 1, 2015, through June 30, 2016, relative to the total employer contributions received from all of PERA’s participating employers. At June 30, 2016, the County’s proportion was 2.64 percent. It was 2.73 percent measured as of June 30, 2015. The County recognized pension expense of $2,719,346 for its proportionate share of the Public Employees Correctional Plan’s pension expense. The County reported its proportionate share of the Public Employees Correctional Plan’s deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Deferred




$

7,550

$

107,726


1,092,267

-

Changes in proportion - 14,963 Contributions paid to PERA subsequent to the measurement date

222,045

-

Total

$

7,466,436

$

122,689

75




d. Pension Costs

Public Employees Correctional Plan (Continued)

The $222,045 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, 2017. Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows:



2017 $ 2,286,158 2018 2,286,158 2019 2,342,285 2020 207,101

Total Pension Expense

The total pension expense for all plans recognized by the County for the year ended December 31, 2016, was $13,568,986.

e. Actuarial Assumptions

The total pension liability in the June 30, 2016, actuarial valuation was determined using the individual entry-age normal actuarial cost method and the following additional actuarial assumptions:

Inflation 2.50 percent per year Active member payroll growth 3.25 percent per year Investment rate of return 7.50 percent

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1. Defined Benefit Pension Plans e. Actuarial Assumptions (Continued)

Salary increases were based on a service-related table. Mortality rates for active members, retirees, survivors, and disabilitants in the General Employees Retirement Plan were based on RP-2014 tables, while mortality rates for Public Employees Police and Fire Plan and Public Employees Correctional Plan were based on RP-2000 tables for males or females, as appropriate, with slight adjustments. For the General Employees Retirement Plan and the Public Employees Police and Fire Plan, cost of living benefit increases for retirees are assumed to be 1.0 percent. Cost of living benefit increases for retirees are assumed to be 2.5 percent for the Public Employees Correctional Plan. Actuarial assumptions used in the June 30, 2016, valuation were based on the results of actuarial experience studies. The experience study in the General Employees Retirement Plan was for the period 2008 through 2015. The experience study for the Public Employees Police and Fire Plan was for the period 2004 through 2009. The experience study for the Public Employees Correctional Plan was for the period 2006 through 2011. On August 16, 2016, an updated experience study was done for PERA’s Public Employees Police and Fire Plan for the period 2011 through 2015, which would result in a larger pension liability. However, PERA will implement the changes in assumptions for its June 30, 2017, estimate of pension liability. The long-term expected rate of return on pension plan investments is 7.5 percent. The State Board of Investment, which manages the investments of PERA, prepares an analysis of the reasonableness of the long-term expected rate of return on a regular basis 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 arithmetic real rates of return for each major asset class are summarized in the following table:

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1. Defined Benefit Pension Plans e. Actuarial Assumptions (Continued)

Asset Class

Target Allocation

Long-Term Expected Real Rate of Return

Domestic stocks 45% 5.50% International stocks 15 6.00 Bonds 18 1.45 Alternative assets 20 6.40 Cash 2 0.50

f. Discount Rate

The discount rate used to measure the total pension liability was 7.50 percent in 2016, a reduction of the 7.90 percent used in 2015. The projection of cash flows used to determine the discount rate assumed that employee and employer contributions will be made at the rate specified in statute. Based on that assumption, the fiduciary net position of the General Employees Retirement Plan was projected to be available to make all projected future benefit payments of current active and inactive employees. 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. In the Public Employees Police and Fire Plan and the Public Employees Correctional Plan, the fiduciary net position was projected to be available to make all projected future benefit payments of current plan members through June 30, 2056, and June 30, 2058, respectively. Beginning in fiscal years ended June 30, 2057, for the Police and Fire Plan and June 30, 2059, for the Public Employees Correctional Plan, when projected benefit payments exceed the Plans’ projected fiduciary net position, benefit payments were discounted at the municipal bond rate of 2.85 percent based on an index of 20-year general obligation bonds with an average AA credit rating at the measurement date. An equivalent single discount rate of 5.60 percent for the Public Employees Police and Fire Plan and 5.31 percent for the Public Employees Correctional Plan was determined that produced approximately the same present value of the projected benefits when applied to all years of projected benefits as the present value of projected benefits using 7.50 percent applied to all years of projected benefits through the point of asset depletion and 2.85 percent thereafter.

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1. Defined Benefit Pension Plans (Continued)

g. Changes in Actuarial Assumptions The following changes in actuarial assumptions occurred in 2016:

General Employees Retirement Plan

• The assumed post-retirement benefit increase rate was changed from

1.00 percent per year through 2035 and 2.50 percent per year thereafter, to 1.00 percent for all future years.

• The assumed investment rate was changed from 7.90 percent to 7.50

percent. The single discount rate was also changed from 7.90 percent to 7.50 percent.

• Other assumptions were changed pursuant to the experience study dated

June 30, 2015. The assumed payroll growth and inflation were decreased by 0.25 percent. Payroll growth was reduced from 3.50 percent to 3.25 percent. Inflation was reduced from 2.75 percent to 2.50 percent.


• The assumed post-retirement benefit increase rate was changed from

1.00 percent per year through 2037 and 2.50 percent per year thereafter, to 1.00 percent for all future years.


percent. The single discount rate was changed from 7.90 percent to 5.60 percent.

• The assumed payroll growth and inflation were decreased by 0.25

percent. Payroll growth was reduced from 3.50 percent to 3.25 percent. Inflation was reduced from 2.75 percent to 2.50 percent.

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g. Changes in Actuarial Assumptions (Continued)



percent. The single discount rate was changed from 7.90 percent to 5.31 percent.

• The assumed payroll growth and inflation were decreased by 0.25 percent. Payroll growth was reduced from 3.50 percent to 3.25 percent. Inflation was reduced from 2.75 percent to 2.50 percent.

h. Pension Liability Sensitivity

The following presents the County’s proportionate share of the net pension liability calculated using the discount rate disclosed in the preceding paragraph, as well as what the County’s proportionate share of the net pension liability would be if it were calculated using a discount rate 1.0 percentage point lower or 1.0 percentage point higher than the current discount rate:

Proportionate Share of the General Employees Public Employees Public Employees Retirement Plan Police and Fire Plan Correctional Plan Discount Net Pension Discount Net Pension Discount Net Pension Rate Liability Rate Liability Rate Liability 1% Decrease 6.50% $ 82,885,461 4.60% $ 27,134,510 4.31% $ 14,521,320 Current 7.50 58,357,887 5.60 19,383,630 5.31 9,644,290 1% Increase 8.50 38,153,814 6.60 13,050,573 6.31 5,836,829

i. Pension Plan Fiduciary Net Position

Detailed information about the 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; by writing to PERA at 60 Empire Drive, Suite 200, St. Paul, Minnesota 55103-2088; or by calling 651-296-7460 or 1-800-652-9026.

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3. Detailed Notes on All Funds G. Pension Plans (Continued) 2. Defined Contribution Plan

Four employees of Stearns County are covered by the Public Employees Defined Contribution Plan, a multiple-employer deferred compensation plan administered by PERA. The plan is established and administered in accordance with Minn. Stat. ch. 353D, which may be amended by the state legislature. The 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. Plan benefits depend solely on amounts contributed to the plan plus investment earnings, less administrative expenses. For those qualified personnel who elect to participate, Minn. Stat. § 353D.03 specifies plan provisions, including the employee and employer contribution rates. An eligible elected official who decides to participate contributes 5.00 percent of salary, which is matched by the employer. Employee and employer 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 2.00 percent of employer contributions and 0.25 percent of the assets in each member account annually. Total contributions by dollar amount and percentage of covered payroll made by Stearns County during the year ended December 31, 2016, were:

Employee Employer Contribution amount $ 7,302 $ 7,302 Percentage of covered payroll 5% 5%

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4. Summary of Significant Contingencies and Other Items A. Risk Management

The County is exposed to various risks of loss related to torts; theft of, damage to, or destruction of assets; errors or omissions; injuries to employees; or natural disasters. The County has entered into a joint powers agreement with other Minnesota counties to form the Minnesota Counties Intergovernmental Trust (MCIT). The County is a member of both the MCIT Workers’ Compensation and Property and Casualty Divisions. The County is self-insured for its health benefits plan. The County purchases commercial insurance for other risks of loss. There were no significant reductions in insurance from the previous year or settlements in excess of insurance for any of the past three years. The Workers’ Compensation Division of MCIT is self-sustaining based on the contributions charged, so that total contributions plus compounded earnings on these contributions will equal the amount needed to satisfy claims liabilities and other expenses. MCIT participates in the Workers’ Compensation Reinsurance Association with coverage at $500,000 per claim in 2016 and 2017. Should the MCIT Workers’ Compensation Division liabilities exceed assets, MCIT may assess the County in a method and amount to be determined by MCIT.

The Property and Casualty Division of MCIT is self-sustaining and the County pays an

annual premium to cover current and future losses. The MCIT carries reinsurance for its property lines to protect against catastrophic losses. Should the MCIT Property and Casualty Division liabilities exceed assets, MCIT may assess the County in a method and amount to be determined by MCIT.

In December, 2014, the County contracted with Medica to administer health benefits

plans for its employees for calendar year 2016. The County sets annual premiums for the plans based on the recommendation of the plan administrators and accumulates premiums collected from all participating funds in the General Fund.

Claims against the Medica Plans are processed within two to three business days after

receipt from Medica. At the beginning of each month, the County remits to Medica the monthly fees for the administrative charges and stop loss coverages. Changes in the balances of claims liabilities for the past two years are:

2016 2015 Unpaid claims - January 1 $ 1,672,500 $ 1,378,000 Current year claims 7,565,449 6,984,662 Claim payments (7,390,249) (6,690,162) Unpaid Claims - December 31 $ 1,847,700 $ 1,672,500

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4. Summary of Significant Contingencies and Other Items (Continued)

B. Contingent Liabilities The County is a defendant in various lawsuits. Although the outcome of these lawsuits

is not presently determinable, in the opinion of the County Attorney, the resolution of these matters will not have a material adverse effect on the financial condition of the government.

C. Joint Ventures Stearns-Benton Employment and Training Council The Stearns-Benton Employment and Training Council was created for the purpose of

undertaking, implementing, and maintaining the programs established under the Job Training Partnership Act of 1982 and other federal and state laws and regulations governing the establishment and implementation of programs within areas governed by Stearns and Benton Counties. The Council is an organized joint venture having the duties, powers, and privileges granted joint powers by Minn. Stat. § 471.59. The Council is governed by a Joint Powers Board and a Workforce Development Council. The Joint Powers Board is composed of two Commissioners each from Stearns and Benton Counties and one Workforce Development Council member. The Workforce Development Council is composed of 25 members from local business, industry, agriculture, labor organizations, public or private education, and community service groups. Included in the Joint Powers Board’s duties and powers is the authority to approve the Council’s budget and enter into any necessary contracts or leases. The County did not contribute to the Council during 2016.

Complete financial statements of the Stearns-Benton Employment and Training Council can be obtained by writing to the administrative offices at the Minnesota Workforce Center at 1540 Northway Drive, St. Cloud, Minnesota 56303.

Northstar Corridor Development Authority Stearns County entered into a joint powers agreement with 24 counties, regional rail

authorities, cities, and townships along the Northstar Corridor to create the Northstar Corridor Development Authority (NCDA), in May 1997.

The joint powers board consists of one elected official each from the member

governmental units. The NCDA was created to develop the Northstar commuter rail project from St. Cloud, Minnesota to Minneapolis, Minnesota. Grant monies, member county contributions, and the regional railroad authorities’ agreement to allocate the initial contributions of capital has provided funding for the NCDA. Members pay annual dues to NCDA. In 2016, Stearns County paid dues of $98,010 to the NCDA.

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4. Summary of Significant Contingencies and Other Items

C. Joint Ventures Northstar Corridor Development Authority (Continued)

The NCDA Board has the authority to make all administrative decisions regarding the Northstar Commuter Rail. The NCDA does not have the authority to levy taxes nor issue bonds. The NCDA does have the authority to enter into contracts and acquire, hold, and dispose of real and personal property. Upon termination of the joint powers agreement, NCDA has the authority to dispose of any property.

The joint powers agreement does not authorize the NCDA to operate or finance the

operations of the Northstar commuter rail. Sherburne County, in an agency capacity, reports the cash transactions of the NCDA in an agency fund on its financial statements. Current financial statements are available from: Sherburne County Auditor/Treasurer’s Office 13880 Business Center Dr. NW Elk River, Minnesota 55330

Central Minnesota Emergency Medical Services Region The Central Minnesota Emergency Medical Services Region was established in 2001,

under Minn. Stat. § 471.59, to improve access, delivery, and effectiveness of the emergency medical services system; promote systematic and cost-effective delivery of services; and identify and address system need within the member counties. The member counties are Benton, Cass, Crow Wing, Kanabec, Mille Lacs, Morrison, Pine, Sherburne, Stearns, Todd, Wadena, and Wright. The Region established a Board comprising of one Commissioner from each member county. The Region’s Board has financial responsibility, and Stearns County is the fiscal agent.

Complete financial information can be obtained from:

Ms. Marion Larson, Regional EMS Coordinator Central Minnesota Emergency Medical Services Region Stearns County Administration Center P.O. Box 1107 St. Cloud, Minnesota 56302

.

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C. Joint Ventures (Continued)

Central Minnesota Emergency Services Board The Central Minnesota Regional Radio Board was established in 2007, under the authority conferred upon the member parties by Minn. Stat. §§ 471.59 and 403.39. As of June 1, 2011, the Central Minnesota Regional Radio Board changed its name to the Central Minnesota Emergency Services Board. Members include the City of St. Cloud and the counties of Benton, Big Stone, Douglas, Grant, Kandiyohi, Meeker, Mille Lacs, Morrison, Otter Tail, Pope, Sherburne, Stearns, Stevens, Swift, Todd, Traverse, Wadena, Wilkin, and Wright. The purpose of the Central Minnesota Emergency Services Board is to provide for regional administration of enhancements to the Statewide Public Safety Radio and Communication System (ARMER) owned and operated by the State of Minnesota. The Central Minnesota Emergency Services Board is composed of one Commissioner of each county appointed by their respective County Board and one City Council member from each city appointed by their respective City Council, as provided in the Central Minnesota Emergency Services Board’s by-laws. In the event of dissolution of the Central Minnesota Emergency Services Board, all property, assets, and funds of the Board shall be distributed to the parties of the agreement upon termination in direct proportion to their participation and contribution. Any city or county that has withdrawn from the agreement prior to termination of the Board shall share in the distribution of property, assets, and funds of the Board only to the extent they shared in the original expense. The Central Minnesota Emergency Services Board has no long-term debt. Financing is provided by the appropriations from member parties and by state and federal grants. During 2016, Stearns County contributed $8,245 to the Joint Powers Board.

Complete financial information can be obtained from: Central Minnesota Emergency Services Board City of St. Cloud Office of the Mayor City Hall 400 Second Street South St. Cloud, Minnesota 56303

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Central Minnesota Violent Offender Task Force

The Counties of Benton, Morrison, Sherburne, Stearns, and Todd, and the cities of

Little Falls, St. Cloud, St. Joseph, Sartell, Sauk Rapids, and Waite Park, have entered into a joint powers agreement to investigate, identify, and disrupt illegal drug and gang activity through multi-jurisdictional investigations in Central Minnesota.

The Stearns County Sheriff’s Office is the fiscal agent for the Central Minnesota

Violent Offender Task Force. Members provide officers to the Task Force in lieu of appropriations. Stearns County provided no cash funding to this organization during 2016.

Control of the Task Force is vested in a Board of Directors. The members of the board

shall be the Sheriff of each member county, a County Attorney from a member party as the legal advisor to the Task Force, the Chief of Police for the Little Falls Police Department, the Chief of Police for the City of St. Cloud, and one representative from among the Chiefs of Police of St. Joseph, Sartell, Sauk Rapids, and Waite Park, who shall be selected annually by a majority vote of the Chiefs of Police.

Separate financial information for the Task Force can be obtained from:

St. Cloud Police Department 101 - 11th Avenue North P.O. Box 1616 St. Cloud, Minnesota 56303

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Crow River Joint Powers Agreements In April 1999, Stearns County entered into a joint powers agreement with Carver,

Hennepin, Kandiyohi, McLeod, Meeker, Pope, Renville, Sibley, and Wright Counties creating the Crow River Joint Powers Agreement. The Agreement is authorized by Minn. Stat. §§ 103B.311 and 103B.315. The Prairie County Resource Conservation and Development Council is the fiscal agent for this Joint Powers Agreement.

The Board of Directors meets at least two times per year, or more often if needed, at the location to be set by the chair of the Joint Powers Board. The purpose of this Agreement is the joint exercise of powers by the member counties to promote the orderly water quality improvement and management of the Crow River Watershed through information sharing, education, coordination, and related support to the member counties by assisting in the implementation and goal achievement of comprehensive water plans.

The governing board is composed of one Board member from each of the participating

counties. Stearns County contributed $2,129 to the Joint Powers Board during 2016. Current financial statements are not available.

Great River Regional Library On September 25, 1969, the Great River Regional Library was formed under a joint

powers agreement, creating a regional public library system with Benton, Morrison, Stearns, and Wright counties. It has expanded to include library services in Sherburne and Todd counties.

The Board of Directors consists of 15 people, representing all six of the member

counties. During 2016, Stearns County contributed $2,283,872 to the Great River Regional Library.

Separate financial information can be obtained from: Great River Regional library 1300 W. Germain Street St. Cloud, Minnesota 56301

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Stearns County Family Services Collaborative The Stearns County Family Services Collaborative was established in March 2001

between Stearns County, all school districts in Stearns County, Reach-Up/Head Start and Tri-Cap for the purpose of designing and implementing an integrated service delivery system for children and families to address physical and mental health, educational and family-related needs.

The Board consists of 12 people, one from each school district in Stearns County (10),

one from the Stearns County Human Services Board and one from Stearns County as an entity. Financing is provided by state proceeds and Stearns County serves as the fiscal agent. Current financial statements are not available.

St. Cloud Area Planning Organization The St. Cloud Area Planning Organization was created to keep governmental units and

the general public informed and advised on all matters relative to the transportation planning, programming, and funding. The Council is an organized joint venture between Benton, Sherburne, and Stearns Counties; St. Augusta, St. Cloud, St. Joseph, Sartell, Sauk Rapids, and Waite Park cities; Haven and Le Sauk townships, the Central Minnesota Transportation Alliance; and the St. Cloud Metro Bus, having the duties, powers, and privileges granted joint powers by Minn. Stat. §471.59. During 2016, the County contributed $19,155 to the St. Cloud Area Planning Organization.

The joint venture is governed by the Policy Board, which is comprised of 11 local government member jurisdictions, as well as representatives from the Central Minnesota Transportation Alliance and St. Cloud Metro Bus. The Policy Board is responsible for adopting regional transportation plans, projects and policies. The Policy Board consists of 43 voting members, 36 of which are elected officials from cities, counties, and townships.

Complete financial statements can be obtained from:

St. Cloud Area Planning Organization 1040 County Road #4 St. Cloud, Minnesota 56303

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4. Summary of Significant Contingencies and Other Items (Continued)

D. Jointly-Governed Organizations

Tri-County Solid Waste Management Commission

The Tri-County Solid Waste Management Commission was established in July 1983 by a joint powers agreement among Benton, Sherburne, and Stearns Counties to conduct a solid waste management program on behalf of the participating counties. The Commission is an organized joint venture having the duties, powers, and privileges granted joint powers by Minn. Stat. § 471.59. The Commission is governed by a Board of Directors. Each member county is entitled to no less than two and no more than four of its own County Commissioners on the Board. Population of the member counties determines how many of their commissioners sit on the Board. The Board of Directors is currently composed of eight members: four County Commissioners from Stearns County and two each from Benton and Sherburne Counties. Each county’s proportionate share of the net operating costs is based on the usage of the household hazardous waste facility and the solid waste picked up in each county. During 2016, the County expended $105,296 to the Tri-County Solid Waste Management Commission. The Commission will remain in existence as long as two or more counties remain as parties to the agreement. Upon dissolution of the Commission, there will be an accounting to determine assets and liabilities. The assets of the Commission will be liquidated and, after payment of liabilities, the proceeds will be distributed to the member counties in the ratio that the total contributions made by each of them bears to the sum total of contributions made by all. Separate financial information can be obtained from: Tri-County Solid Waste Management Commission 3601 5th Street South Waite Park, Minnesota 56387

Central Minnesota Immunization Connection

The Central Minnesota Immunization Connection Joint Powers Board promotes an implementation and maintenance of a regional immunization information system to ensure age-appropriate immunizations through complete and accurate records. All funding comes from state grants. Current financial statements are not available.

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D. Jointly-Governed Organizations (Continued)

Region Four – West Central Minnesota Homeland Security Emergency Management Organization The Region Four – West Central Minnesota Homeland Security Emergency Management Organization (WCMHSEM) was established to provide for regional coordination of planning, training, purchase of equipment, and allocating emergency services and staff in order to better respond to emergencies and natural or other disasters within the WCMHSEM region. Control is vested in the Board, which is composed of representatives appointed by each Board of County Commissioners. Stearns County’s responsibility does not extend beyond making this appointment. Minnesota Counties Computer Cooperative (MCCC) Under Minnesota Joint Powers Law, Minn. Stat. § 471.59, Minnesota counties have created MCCC to jointly provide for the establishment, operation, and maintenance of data processing systems, facilities, and management information systems. During the year, Stearns County expended $131,281 to the MCCC. Minnesota Criminal Justice Data Communications Network The Minnesota Criminal Justice Data Communications Network Joint Powers Agreement exists to create access for the County Sheriff and County Attorney to systems and tools available from the State of Minnesota, Department of Public Safety, and the Bureau of Criminal Apprehension to carry out criminal justice. During 2016, the County made no payments to the joint powers.

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5. Housing and Redevelopment Authority of Stearns County

A. Summary of Significant Accounting Policies Reporting Entity

The Housing and Redevelopment Authority (HRA) of Stearns County is a component unit of Stearns County and is reported in a separate column in the County’s financial statements to emphasize that the HRA is a legally separate entity from Stearns County. The HRA operates as a public agency created by Stearns County under the Minnesota Housing and Redevelopment Authority Act of 1947. The primary purpose is to provide housing and redevelopment services to the County. The governing body consists of a five-member Board of Commissioners appointed by the Stearns County Board of Commissioners to serve five-year terms. The financial statements included are as of and for the year ended June 30, 2016.

Deposits and Investments

The HRA’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.

Cash balances from all funds are pooled and invested, to the extent available, in

certificates of deposit and other authorized investments. Earnings from such investments are allocated on the basis of applicable participation by each of the funds.

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5. Housing and Redevelopment Authority of Stearns County A. Summary of Significant Accounting Policies Deposits and Investments (Continued) Minnesota statutes authorize the HRA to invest, with certain restrictions, in obligations

of the U.S. Treasury, general obligations of the State of Minnesota or any of its municipalities, banker’s acceptances, commercial paper, repurchase or reverse repurchase agreements, shares of investment companies registered under the Federal Investment Company Act of 1940 and whose only investments are obligations guaranteed by the United States or its agencies, and guaranteed investment contracts.

Investments are stated at fair value. It is the policy of the HRA to invest funds in US Department of Housing and Urban Development (HUD)-approved securities; there are no further restrictions then those set forth by HUD.

Property Taxes

The HRA annually adopts a levy and certifies it to the County for collection. The

County is responsible for collecting all property taxes for the HRA. Real property taxes are paid by taxpayers of the County in two equal installments on May 15 and October 15. The County provides tax settlements to the HRA four times per year - in January, June, July, and December.

Prepaid Items Certain payments to vendors reflect costs applicable to future accounting periods and

are recorded as prepaid items. Capital Assets Capital assets are defined by the HRA as assets with an initial, individual cost of more

than $1,000 and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at acquisition value.

The costs of normal maintenance and repairs that do not add to the value of the asset or

materially extend assets’ lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business-type activities is included as part of the capitalized value of the assets constructed.

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A. Summary of Significant Accounting Policies Capital Assets (Continued)

Property, plant and equipment of the HRA are depreciated using the straight-line method over the following estimated useful lives:

Assets Years

Buildings and structures 40 Improvements other than buildings 10 Furniture and equipment Computer equipment and software

10 - 30 3

Compensated Absences It is the HRA’s policy to permit certain employees to accumulate paid time off (PTO).

After an employee has successfully completed probation, an employee who leaves the employment of the HRA in good standing shall be compensated for previously credited unused PTO at the current rate of pay up to a limited amount, based on years of service. A liability of $60,865 represents accrued PTO unused at year end and is recognized as expense in the year it is earned. The General Fund is typically used to liquidate governmental compensated absences payable.

Long-Term Obligations Long-term debt and other long-term obligations are reported as liabilities. The

recognition of bond premiums and discounts are delayed and amortized over the life of the bonds using the straight-line method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are reported as an expense in the period incurred.

B. Detailed Notes

Deposits and Investments

Custodial credit risk for deposits and investments is the risk that in the event of a bank failure, the HRA’s deposits and investments may not be returned or the HRA will not be able to recover collateral securities in the possession of an outside party. In accordance with Minnesota statutes, and as authorized by the HRA, the HRA maintains deposits at depository banks, all of which are members of the Federal Reserve System.

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B. Detailed Notes Deposits and Investments (Continued)

Minnesota statutes require that all HRA deposits be protected by insurance, surety bond, or collateral. The market value of collateral pledged must equal 110 percent of the deposits not covered by insurance or bonds. Minnesota statutes require that all collateral shall be placed in safekeeping in a restricted account at a Federal Reserve Bank, or in an account at a trust department of a commercial bank or other financial institution not owned or controlled by the financial institution furnishing the collateral. The selection should be approved by the governing body. At year-end, the HRA’s carrying amount of deposits was $1,201,224 and the bank balance was $1,227,425. Of the bank balance, $687,031 was covered by Federal depository insurance and the remaining $540,394 was sufficiently covered by pledged collateral at 110 percent held by the HRA’s agent in the HRA’s name.

Custodial Credit Risk - Investments

In accordance with the HRA’s investment policy, the investment officer shall structure all investments, deposits, and repurchase agreements so that the custodial risk is categorized as either insured or registered, or securities held by the HRA or its agent in the HRA’s name, or uninsured and unregistered, with securities held by the counterparty’s trust department or agent in the HRA’s name. All investments are placed in safekeeping at financial institutions. Concentration of Credit Risk

The HRA’s investment policy does not address concentration of credit risk; however, the HRA diversifies its investment portfolio to eliminate the risk of loss resulting from overconcentration of assets in a specific maturity, a specific issuer, or a specific class of securities. The maturities selected shall provide for stability of income and reasonable liquidity.

Interest Rate Risk Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment.

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B. Detailed Notes (Continued)

Credit Risk

Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. Ratings are provided by various credit rating agencies and indicate associated credit risk. Minnesota statutes and HRA investment policy limit the HRA’s investments to those authorized by Minnesota statute.

Loans Receivable The following is a summary of loans receivable at June 30, 2016:

DEED $ 1,687,761 Minnesota Department of Health 10,000 Minnesota Department of Health 2 30,500 Minnesota Department of Health 3 15,860 Less: allowance for forgivable loans (1,167,540) Total Loans Receivable $ 576,581

Loans are receivable from property owners that have been provided rehabilitation assistance. A portion of these loans are forgivable based on the number of years the owner lives in the rehabilitated property. The forgivable portions of the loans are offset by an allowance account.

Capital Assets Capital asset activity for the year ended June 30, 2016 was as follows:

Beginning Balance

Increase

Decrease

Ending Balance

Governmental Activities Capital assets not depreciated Land $ 24,379 $ - $ - $ 24,379 Capital assets depreciated Buildings $ 491,599 $ - $ - $ 491,599 Machinery and equipment 51,676 - - 51,676 Total capital assets depreciated $ 543,275 $ - $ - $ 543,275 Less: accumulated depreciation for Buildings $ 122,900 $ 12,290 $ - $ 135,190 Machinery and equipment 48,963 1,068 - 50,031 Total accumulated depreciation $ 171,863 $ 13,358 $ - $ 185,221 Total capital assets depreciated, net $ 371,412 $ (13,358) $ - $ 358,054 Governmental Activities Capital Assets, Net $ 395,791 $ (13,358) $ - $ 382,433

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B. Detailed Notes

Capital Assets (Continued)

Beginning Balance

Increase

Decrease

Ending Balance

Business-type Activities Capital assets not depreciated Land $ 573,415 $ - $ - $ 573,415 Capital assets depreciated Land improvements $ 127,155 $ - $ - $ 127,155 Buildings 4,428,295 - - 4,428,295 Machinery and equipment 229,646 - - 229,646 Total capital assets depreciated $ 4,785,096 $ - $ - $ 4,785,096 Less: accumulated depreciation for Land improvements $ 78,893 $ 3,420 $ - $ 82,313 Buildings 1,510,282 113,318 - 1,623,600 Machinery and equipment 153,470 7,439 - 160,909 Total accumulated depreciation $ 1,742,645 $ 124,177 $ - $ 1,866,822 Total capital assets depreciated, net $ 3,042,451 $ (124,177) $ - $ 2,918,274 Business-Type Activities Capital Assets, Net $ 3,615,866 $ (124,177) $ - $ 3,491,689

Depreciation expense was charged to functions/programs of the HRA as follows:

Governmental Activities Housing and economic development $ 13,358 Business-type Activities Public Housing $ 45,045 Rental Properties 60,890 Section 8 Housing 1,009 The Bell 17,233 Total Depreciation Expense - Business-Type Activities

$

124,177

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B. Detailed Notes (Continued)

Long-Term Debt 1. Housing Development Bonds

The following bonds were issued to finance the construction of rental buildings and will be repaid from rental income.

Authorized and

Issued Interest

Rate (%) Issue

Date Maturity

Date Balance at

Year-End Housing Development Refunding Bonds, Series 2014A $ 1,420,000 0.75 - 3.25 12/10/14 02/01/31 $ 1,340,000

2. Loans

The following loans are through the State’s Economic Development and Housing Challenge Program used in the production of housing.

Authorized and Issued

Interest Rate (%)

Issue Date

Maturity Date

Balance at Year-End

MHFA Loans $ 555,500 - 03/15/2002 05/01/2032 $ 555,500 Bell Apartment Loan 400,000 4.38 04/28/2005 05/15/2020 131,153 Sauk Centre DEED Loan 36,877 - 09/01/2012 09/17/2017 36,877 Sunrise USDA Loan 135,122 3.13 07/17/2012 10/01/2031 112,110 Total Loans Payable $ 835,640

3. Debt Service Requirements

Debt service requirements at June 30, 2016 were as follows:

Year Ending Loans Payable Housing Development Bonds June 30 Principal Interest Principal Interest

2017 $ 37,914 $ 6,177 $ 80,000 $ 35,138 2018 76,325 4,708 80,000 34,538 2019 40,981 3,176 80,000 33,538 2020 39,505 1,533 80,000 32,538 2021 6,859 788 85,000 30,938

2022 - 2026 35,343 2,890 450,000 117,938 2027 - 2031 37,155 1,079 485,000 46,547

2032 561,558 6 - -

Total $ 835,640 $ 20,357 $ 1,340,000 $ 331,175

97



B. Detailed Notes

Long-Term Debt (Continued) 4. Changes in Long-Term Liabilities

Long-term liability activity for the year ended June 30, 2016, was as follows: Beginning

Balance

Additions

Reductions Ending

Balance Due Within

One Year Governmental activities Compensated absences $ 25,012 $ 23,823 $ 20,260 $ 28,575 $ 28,575 Business-type activities Bonds payable Housing Development Refunding bonds, series 2014A $ 1,420,000 $ - $ 80,000 $ 1,340,000 $ 80,000 Loans MHFA Loans $ 555,500 $ - $ - $ 555,500 $ - Bell Apartment Loan 161,181 - 30,028 131,153 31,389 Kimball 12 DEED Loan 95,173 - 95,173 - - Sauk Centre DEED Loan 36,877 - - 36,877 - Sunrise USDA Loan 118,182 - 6,072 112,110 6,525 Total loans $ 966,913 $ - $ 131,273 $ 835,640 $ 37,914 Compensated absences $ 28,432 $ 28,791 $ 24,933 $ 32,290 $ 32,290 Business-Type Activities Long-Term Liabilities $ 2,415,345 $ 28,791 $ 236,206 $ 2,207,930 $ 150,204

C. Defined Contribution Pension Plans

On October 1, 1998, the HRA adopted a defined contribution plan for all employees working at least 20 hours per week for at least 5 months out of the year. The employer contributes 7.5 percent annually of the employee’s base rate of pay to the plan. Participating employees shall vest in employer contributions at the rate of 50 percent for each full year of continuous employment. For the years ended June 30, 2016, 2015 and 2014, employer contributions totaled $31,437, $29,875, and $30,576, respectively. The plan does not issue a stand-alone financial report.

98


5. Housing and Redevelopment Authority of Stearns County (Continued)

D. Other Information

Risk Management The HRA 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 HRA carries insurance through the Minnesota Counties Intergovernmental Trust. The HRA retains risk for the deductible portions of the insurance. The amount of these deductibles is considered immaterial to the financial statements. There were no significant reductions in insurance from the previous year or settlements in excess of insurance for any of the past three 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 HRA’s management is not aware of any incurred but not reported claims. Joint Powers Agreement A Joint Powers Agreement has been entered into between the Housing and Redevelopment Authorities of Carver County, Northwest Minnesota Multi-County, Olmsted County, the City of St. Cloud, Scott County, Southeastern Minnesota Multi-County, and Stearns County (the Members) pursuant to Minn. Stat. § 471.59 and chapter 462C. The purpose of this agreement is to preserve the quality of life in these jurisdictions through the maintenance provision and preservation of adequate housing stock, to encourage new housing construction, and to provide affordable housing to persons of low and moderate income. The Members have obtained allocations of tax-exempt bonding authority to be used for issuance of qualified mortgage bonds and have previously issued certain single-family mortgage revenue refunding bonds, which they have determined to refund. The bonds shall be special limited obligations of the Members, payable solely from proceeds, revenues, and other amounts pledged thereto, and more fully described in, the indenture. The bonds and interest thereon shall neither constitute nor give rise to indebtedness; pecuniary liability; general or moral obligation; or a pledge of the faith or loan of credit of the Members, the State, or any other political subdivision thereof.

99



D. Other Information (Continued) Conduit Debt Obligations

The HRA has issued Industrial Development Notes and Public Project Revenue Bonds to finance construction of industrial and commercial facilities deemed to be in the public interest. The bonds are secured by the property financed and shall not constitute debt for which the full faith and credit or taxing powers of the HRA will be pledged. Neither the HRA nor any political subdivision thereof is obligated in any manner for repayment of the bonds. Accordingly, the bonds are not reported as liabilities in the accompanying financial statements.

As of June 30, 2016, there were bonds outstanding with an aggregate principal payable

of $786,424. E. Commitment

On June 18, 2007, the HRA entered into a development agreement with the City of Belgrade, MN for the construction of a project. The HRA has an obligation to the City for a portion of the bond payments, for bonds issued to finance the project. If tax increment revenue received by the City is insufficient to cover the principal and interest amounts for the applicable period, the HRA is required to pay the City a portion of the net deficiency. As of June 30, 2016, the HRA has a possible remaining principal obligation of $100,000 plus interest at a rate of 4.050 - 4.175 percent. The final payment on the bonds is March 1, 2026.

100


5. Housing and Redevelopment Authority of Stearns County (Continued) F. Capital Grant Program

The HRA receives capital grant funds from HUD. The following schedule reconciles the grant with the current activity:

Grant Year MN46P17250115 MN46P17250116 Total Funds approved $ 26,184 $ 26,613 $ 52,797 Funds expended 26,184 - 26,184 Excess of funds approved $ - $ 26,613 $ 26,613

Funds advanced $ 26,184 $ - $ 26,184

2016 Revenue $ 26,184 $ - $ 26,184

G. Subsequent Event

In July 2015, the HRA was approved by HUD to complete a RAD conversion. This RAD conversion will allow the HRA to convert projects funded under the Public Housing program to projects funded under the Section 8 program. The RAD conversion process is expected to be finalized in October of 2016. In August 2016, the HRA closed on the sale of the Bell property and operation of the Bell will discontinue in fiscal year 2017.

101


102

REQUIRED SUPPLEMENTARY INFORMATION

103


EXHIBIT A-1

BUDGETARY COMPARISON SCHEDULEGENERAL FUND


Budgeted Amounts Actual Variance withOriginal Final Amounts Final Budget

Revenues Taxes $ 33,936,632 $ 33,492,862 $ 33,622,730 $ 129,868 Special assessments - - 13,537 13,537 Licenses and permits 649,200 649,200 877,417 228,217 Intergovernmental 10,737,032 11,158,188 11,748,000 589,812 Charges for services 4,451,924 4,541,424 4,641,446 100,022 Fines and forfeits 33,000 33,000 83,322 50,322 Gifts and contributions 2,500 12,500 11,570 (930) Investment income 925,000 925,000 1,103,342 178,342 Miscellaneous 2,046,900 2,390,365 2,412,104 21,739

Total Revenues $ 52,782,188 $ 53,202,539 $ 54,513,468 $ 1,310,929

Expenditures Current General government Commissioners $ 451,702 $ 467,467 $ 458,588 $ 8,879 Courts 310,000 310,000 375,823 (65,823) County administration 990,880 985,031 1,045,781 (60,750) Auditor-Treasurer 5,333,588 5,420,762 5,471,894 (51,132) Assessor 1,564,070 1,563,476 1,551,822 11,654 Purchasing 310,855 314,401 314,890 (489) Information services 1,818,235 283,961 44,628 239,333 Graphical information systems 366,525 334,270 298,275 35,995 Human resources 993,598 1,025,735 1,020,136 5,599 Attorney 6,381,074 6,627,803 6,839,647 (211,844) Recorder 1,251,762 1,269,221 1,479,998 (210,777) Maintenance 2,308,912 2,091,365 2,213,225 (121,860) Veterans service officer 356,770 365,815 374,634 (8,819) Sexual assault victims 35,000 35,000 82,948 (47,948) Other general government (215,604) 718,347 641,332 77,015

Total general government $ 22,257,367 $ 21,812,654 $ 22,213,621 $ (400,967)

Public safety Sheriff $ 11,016,619 $ 11,074,024 $ 10,966,780 $ 107,244 Boat and water safety 52,187 52,187 45,471 6,716 Coroner 301,260 301,260 308,595 (7,335) E-911 system 250,000 250,000 170,790 79,210 County jail 10,867,347 10,761,908 11,045,739 (283,831) Civil defense 319,251 324,005 643,388 (319,383)

Total public safety $ 22,806,664 $ 22,763,384 $ 23,180,763 $ (417,379)

The notes to the required supplementary information are an integral part of this schedule.

104


EXHIBIT A-1

BUDGETARY COMPARISON SCHEDULEGENERAL FUND



(Continued)

Expenditures Current (Continued) Culture and recreation Historical society $ 590,000 $ 590,000 $ 590,000 $ - County library 2,283,872 2,283,872 2,283,872 -

Total culture and recreation $ 2,873,872 $ 2,873,872 $ 2,873,872 $ -

Conservation of natural resources County extension $ 416,097 $ 426,779 $ 413,792 $ 12,987 Soil and water conservation 1,030,000 1,030,000 1,030,000 - Agricultural society 20,000 20,000 20,000 - Environmental services 3,719,015 3,858,384 3,919,479 (61,095)

Total conservation of natural resources $ 5,185,112 $ 5,335,163 $ 5,383,271 $ (48,108)

Economic development Community development $ 82,173 $ 182,173 $ 180,045 $ 2,128

Total Expenditures $ 53,205,188 $ 52,967,246 $ 53,831,572 $ (864,326)

Excess of Revenues Over (Under) Expenditures $ (423,000) $ 235,293 $ 681,896 $ 446,603

Other Financing Sources (Uses) Transfers in $ - $ 1,687,319 $ 1,687,319 $ - Transfers out - (2,017,566) (2,017,566) - Proceeds from sale of capital assets 23,000 23,000 25,046 2,046

Total Other Financing Sources (Uses) $ 23,000 $ (307,247) $ (305,201) $ 2,046

Net Change in Fund Balance $ (400,000) $ (71,954) $ 376,695 $ 448,649

Fund Balance - January 1 32,871,780 32,871,780 32,871,780 -

Fund Balance - December 31 $ 32,471,780 $ 32,799,826 $ 33,248,475 $ 448,649


105

STEARNS COUNTY


EXHIBIT A-2

BUDGETARY COMPARISON SCHEDULE

ROAD AND BRIDGE SPECIAL REVENUE FUND


Budgeted Amounts Actual Variance with

Original Final Amounts Final Budget

Revenues

Taxes $ 8,880,188 $ 8,794,958 $ 8,850,862 $ 55,904

Licenses and permits 64,000 64,000 103,641 39,641

Intergovernmental 10,465,000 15,778,230 21,107,064 5,328,834

Charges for services 2,000 2,000 8,462 6,462

Investment income - - 23 23

Miscellaneous 12,000 12,000 86,376 74,376

Total Revenues $ 19,423,188 $ 24,651,188 $ 30,156,428 $ 5,505,240

Expenditures

Current

Highways and streets

Administration $ 858,405 $ 918,456 $ 915,229 $ 3,227

Maintenance 5,924,580 5,761,969 5,486,764 275,205

Construction 11,844,167 18,147,891 18,261,645 (113,754)

Equipment maintenance and shop 2,377,860 2,307,814 1,942,709 365,105

Total highways and streets $ 21,005,012 $ 27,136,130 $ 26,606,347 $ 529,783

Conservation of natural resources

Agricultural inspector $ 87,176 $ 88,646 $ 87,453 $ 1,193

Intergovernmental

Highways and streets $ - $ - $ 810,176 $ (810,176)

Total Expenditures $ 21,092,188 $ 27,224,776 $ 27,503,976 $ (279,200)


Expenditures $ (1,669,000) $ (2,573,588) $ 2,652,452 $ 5,226,040


Transfers in $ 1,500,000 $ 2,767,747 $ 2,767,757 $ 10

Transfers out - (133,869) (133,869) -

Proceeds from sale of capital assets 169,000 169,000 211,883 42,883


(Uses) $ 1,669,000 $ 2,802,878 $ 2,845,771 $ 42,893

Net Change in Fund Balance $ - $ 229,290 $ 5,498,223 $ 5,268,933


Fund Balance - December 31 $ 4,652,461 $ 4,881,751 $ 10,150,684 $ 5,268,933


106

STEARNS COUNTY


EXHIBIT A-3


HUMAN SERVICES SPECIAL REVENUE FUND


Budgeted Amounts Actual Variance with


Revenues

Taxes $ 26,167,322 $ 25,862,572 $ 25,812,111 $ (50,461)

Intergovernmental 23,385,081 24,196,981 23,537,861 (659,120)

Charges for services 960,666 960,666 893,917 (66,749)

Gifts and contributions 266 266

Miscellaneous 1,331,000 1,334,550 1,129,273 (205,277)

Total Revenues $ 51,844,069 $ 52,354,769 $ 51,373,428 $ (981,341)

Expenditures

Current

Public safety

Community corrections $ 7,796,804 $ 7,746,286 $ 7,382,156 $ 364,130

Human services

Gateway services $ 11,476,422 $ 11,539,988 $ 11,387,288 $ 152,700

Community support 10,823,529 10,654,877 10,470,839 184,038

Family and children services 10,680,657 10,905,528 10,768,089 137,439

Finance and technology 7,563,875 7,746,430 7,898,272 (151,842)

Total human services $ 40,544,483 $ 40,846,823 $ 40,524,488 $ 322,335

Health

Nursing service $ 3,502,782 $ 3,577,178 $ 3,523,047 $ 54,131

Total Expenditures $ 51,844,069 $ 52,170,287 $ 51,429,691 $ 740,596


Expenditures $ - $ 184,482 $ (56,263) $ (240,745)


Transfers in $ - $ 1,853,652 $ 1,853,652 $ -

Transfers out - (1,553,450) (1,553,450) -


(Uses) $ - $ 300,202 $ 300,202 $ -

Net Change in Fund Balance $ - $ 484,684 $ 243,939 $ (240,745)


Fund Balance - December 31 $ 15,407,664 $ 15,892,348 $ 15,651,603 $ (240,745)


107

UAAL as aPercentage

Actuarial Funded of CoveredValuation Ratio Payroll

Date (a/b) ((b - a)/c)

January 1, 2011 $ - $ 5,753,918 $ 5,753,918 0.00% $ 46,584,529 12.35%January 1, 2013 - 4,201,774 4,201,774 0.00 48,406,593 8.68 January 1, 2015 - 4,920,339 4,920,339 0.00 51,326,900 9.59

DECEMBER 31, 2016

EXHIBIT A-4

STEARNS COUNTYST CLOUD, MINNESOTA

SCHEDULE OF FUNDING PROGRESSOTHER POSTEMPLOYMENT BENEFITS

Unfunded

(b)LiabilityAccruedActuarial

(b - a)(UAAL)LiabilityAccruedActuarial

ActuarialValue ofAssets

(a) (c)PayrollCovered


108


EXHIBIT A-5

SCHEDULE OF PROPORTIONATE SHARE OF NET PENSION LIABILITYPERA GENERAL EMPLOYEES RETIREMENT PLAN

DECEMBER 31, 2016

PlanFiduciary

Net Positionas a

Percentageof the Total

Measurement PensionDate Liability

2016 $ 58,357,887 $ 762,166 $ 59,120,053 $ 44,597,576 68.91%2015 38,125,059 N/A 38,125,059 43,237,840 78.19

N/A - Not Applicable

Employer's

(Asset) as a

88.18

(c)Payroll

Proportionate

Net PensionLiability

Share of theEmployer's

State'sShare of theNet Pension

the State's

Proportion

Proportionate Liability andShare of theNet Pension

LiabilityRelated

Share of the

This schedule is intended to show information for ten years. Additional years will be displayed as they become available.The measurement date for each year is June 30.

(a)

Percentageof Covered

0.7356%

(b) (a + b)

Associatedwith Stearns

County

Net PensionLiability(Asset)

of the Net

Employer'sProportionate

Employer's

130.85%0.7187%

Payroll(a/c)(Asset)

LiabilityPension

(Asset)

ProportionateShare of theNet Pension

Liability Covered


109


SCHEDULE OF CONTRIBUTIONSPERA GENERAL EMPLOYEES RETIREMENT PLAN

DECEMBER 31, 2016

Year Ending

2016 $ 3,362,833 $ 3,362,833 $ - $ 44,837,768 2015 3,297,209 3,297,209 - 43,963,188

This schedule is intended to show information for ten years. Additional years will be displayed as they become available.The County's year-end is December 31.

ActualContributions Actualin Relation to Contributions

Statutorily Statutorily Contribution as a PercentageRequired Required (Deficiency) Covered of Covered

Contributions Contributions Excess Payroll Payroll

7.50

(a) (b) (b - a) (c) (b/c)

EXHIBIT A-6

7.50%


110

EXHIBIT A-7

Plan FiduciaryNet Position

as a PercentageMeasurement of the Total

Date Pension Liability

2016 $ 19,383,630 $ 4,651,291 63.88%2015 5,749,344 4,630,997 86.61

EXHIBIT A-8

ActualContributions as a Percentage

of CoveredYear Payroll

Ending (b/c)

2016 $ 757,145 $ 757,145 $ - $ 4,673,733 16.20%2015 762,269 762,269 - 4,705,362 16.20


0.506% 124.15

ActualContributions in Relation to

Employer's


SCHEDULE OF PROPORTIONATE SHARE OF NET PENSION LIABILITYPERA PUBLIC EMPLOYEES POLICE AND FIRE PLAN

DECEMBER 31, 2016

of the NetProportionEmployer's

0.483%

RequiredStatutorily

This schedule is intended to show information for ten years. Additional years will be displayed as they become available.The measurement date for each year is June 30.

Covered Payroll(a/b)(b)

PayrollCovered


416.74%

Liability(Asset)

(a)(Asset)LiabilityPension

ProportionateShare of theNet Pension

Liability (Asset)as a Percentage of

Employer'sProportionateShare of theNet Pension

Contributions(a)

SCHEDULE OF CONTRIBUTIONSPERA PUBLIC EMPLOYEES POLICE AND FIRE PLAN

DECEMBER 31, 2016

(b) (b - a)Excess

(Deficiency)Contribution Statutorily

RequiredContributions

CoveredPayroll

(c)

The notes to the required supplementary information are an integral part of these schedules.

111


EXHIBIT A-9

SCHEDULE OF PROPORTIONATE SHARE OF NET PENSION LIABILITYPERA PUBLIC EMPLOYEES CORRECTIONAL PLAN

DECEMBER 31, 2016

Plan FiduciaryNet Position

as a PercentageMeasurement of the Total

Date Pension Liability

2016 $ 9,644,290 $ 4,975,788 58.16%2015 422,058 4,908,235


EXHIBIT A-10

SCHEDULE OF CONTRIBUTIONSPERA PUBLIC EMPLOYEES CORRECTIONAL PLAN

DECEMBER 31, 2016

ActualContributions as a Percentage

of CoveredYear Payroll

Ending (b/c)

2016 $ 442,888 $ 442,888 $ - $ 5,061,582 8.75%2015 432,538 432,538 - 4,943,296 8.75

(c)Payroll

Covered

Actual

8.60

(a) (b)Contributions

Required (Deficiency)Excess(b - a)

Employer's

193.82%

Statutorily Statutorilyin Relation toContributions

Contribution

(a/b)Covered Payroll

as a Percentage ofLiability (Asset)

Net PensionProportionate

Employer's

(b)

This schedule is intended to show information for ten years. Additional years will be displayed as they become available.

Proportionate


Employer'sProportionof the NetPensionLiability(Asset)

2.640%

(a)(Asset)

LiabilityNet Pension

RequiredContributions

Share of the

CoveredPayroll

The measurement date for each year is June 30.

Share of the

2.730% 96.95

The notes to the required supplementary information are an integral part of these schedules.

112

STEARNS COUNTY


NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION


1. Budgetary Information

Budget Policies

Annual budgets are adopted on a basis consistent with generally accepted accounting

principles for the General Fund, certain special revenue funds, and the Debt Service Fund.

All annual appropriations lapse at fiscal year-end unless specifically carried over to the

next budget year by Board action.

Budgets can be amended or modified during the year only by the County Board, County

Auditor-Treasurer, or Financial Manager. All transfers of budgeted amounts within

departments (except capital outlay) can be made by the County Auditor-Treasurer or the

Financial Manager. Capital outlay changes or additions require County Board approval.

Additional appropriations would be allowed only to the extent that resources are currently

available or attainable to cover expenditures. The legal level of budgetary control (the

level at which expenditures may not legally exceed appropriations) is the fund level.

Encumbrances

Encumbrance accounting, under which commitments for the expenditure of monies are

recorded in order to reserve that portion of the applicable appropriation, is used in the

governmental funds. Encumbrances lapse at year-end and are rebudgeted the following

year.

2. Excess of Expenditures Over Budget

The following major governmental funds had expenditures in excess of budget for the year

ended December 31, 2016:

Expenditures

Actual Final Budget Excess

General Fund $ 53,831,572 $ 52,967,246 $ 864,326

Road and Bridge Special Revenue Fund 27,503,976 27,224,776 279,200

113

STEARNS COUNTY




3. Other Postemployment Benefits Funded Status

Stearns County implemented the requirements of Governmental Accounting Standards

Board Statement No. 45, Accounting and Financial Reporting by Employers for

Postemployment Benefits Other Than Pensions, for the fiscal year ended December 31,

2008. Since the County has not irrevocably deposited funds in a trust for future health

benefits, the actuarial value of the assets is zero.

See Note 3.E. in the notes to the financial statements for additional information regarding

the County’s other postemployment benefits.

4. Changes in Significant Plan Provisions, Actuarial Methods, and Assumptions

The following changes were reflected in the valuation performed on behalf of the Public

Employees Retirement Association for the year ended June 30, 2016:

General Employees Retirement Plan

The assumed post-retirement benefit increase rate was changed from 1.00 percent per

year through 2035 and 2.50 percent per year thereafter, to 1.00 percent for all future

years.

The assumed investment rate was changed from 7.90 percent to 7.50 percent. The

single discount rate was also changed from 7.90 percent to 7.50 percent.

Other assumptions were changed pursuant to the experience study dated June 30,

2015. The assumed payroll growth and inflation were decreased by 0.25 percent.

Payroll growth was reduced from 3.50 percent to 3.25 percent. Inflation was reduced

from 2.75 percent to 2.50 percent.

114

STEARNS COUNTY




4. Changes in Significant Plan Provisions, Actuarial Methods, and Assumptions

(Continued)


The assumed post-retirement benefit increase rate was changed from 1.00 percent per

year through 2037 and 2.50 percent per year thereafter, to 1.00 percent for all future

years.


single discount rate was changed from 7.90 percent to 5.60 percent.

The assumed payroll growth and inflation were decreased by 0.25 percent. Payroll

growth was reduced from 3.50 percent to 3.25 percent. Inflation was reduced from

2.75 percent to 2.50 percent.



single discount rate was changed from 7.90 percent to 5.31 percent.

The assumed payroll growth and inflation were decreased by 0.25 percent. Payroll

growth was reduced from 3.50 percent to 3.25 percent. Inflation was reduced from

2.75 percent to 2.50 percent.

115

SUPPLEMENTARY INFORMATION

116

COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS

117


EXHIBIT B-1

BUDGETARY COMPARISON SCHEDULEDEBT SERVICE FUND



Revenues Taxes $ 3,740,240 $ 3,696,680 $ 3,693,972 $ (2,708) Special assessments - - 206,956 206,956 Intergovernmental - 43,560 45,998 2,438 Investment income - - 27,360 27,360

Total Revenues $ 3,740,240 $ 3,740,240 $ 3,974,286 $ 234,046

Expenditures Current General government Other general government $ 5,150 $ 5,150 $ 17,425 $ (12,275) Conservation of natural resources Other conservation of natural resources - - 2,621,043 (2,621,043) Debt service Principal 3,220,000 8,710,000 8,830,000 (120,000) Interest 540,090 712,090 745,341 (33,251)

Total Expenditures $ 3,765,240 $ 9,427,240 $ 12,213,809 $ (2,786,569)

Excess of Revenues Over (Under) Expenditures $ (25,000) $ (5,687,000) $ (8,239,523) $ (2,552,523)

Other Financing Sources (Uses) Bond issued $ - $ - $ 2,575,000 $ 2,575,000 Premium on bonds - - 48,047 48,047

Total Other Financing Sources (Uses) $ - $ - $ 2,623,047 $ 2,623,047

Net Change in Fund Balance $ (25,000) $ (5,687,000) $ (5,616,476) $ 70,524



118


NONMAJOR GOVERNMENTAL FUNDS SPECIAL REVENUE FUNDS The special revenue funds are used to account for the proceeds of specific revenue sources that are legally or administratively restricted to expenditures for specified purposes.

County Building - to account for funds being accumulated for future building construction and capital acquisition. Financing is provided primarily by an annual property tax levy. County Park - to account for the operations of the County’s park system. Financing is provided primarily by an annual property tax levy and state grants. Law Library - to account for funds used to maintain the law library. Financing is provided by the assessment of fees according to state statute. Solid Waste - to account for revenues and expenditures related to County-wide solid waste management. Financing is provided by a County-wide solid waste management fee. Economic Development - to account for the revenues and expenditures associated with economic development loans issued to the business community to spur growth. Financing is provided by repayments of loans originally financed by intergovernmental revenues. Ditch - to account for the costs for maintaining County ditches. Financing is provided by special assessments against the benefited property owners. Regional Rail Authority - to account for the revenues and expenditures related to the preservation of rail right-of-ways for alternative modes of transportation. The Regional Rail Authority is governed by a five-member board and has independent taxing authority. Miscellaneous - to account for gravel tax, missing heirs, forfeited tax sale, and other activities.

119

EXHIBIT C-1

County County Law Solid Economic

Building Park Library Waste Development Ditch Authority

Assets

Cash and pooled investments $ 34,828 $ 935,447 $ 133,501 $ 5,074,646 $ 717,311 $ 13,326 $ 1,323,700 $ 1,832,831 $ 10,065,590

Petty cash and change funds - 850 300 - - - - - 1,150

Taxes receivable delinquent 1,977 14,576 - - 130 - 4,314 - 20,997

Special assessments receivable

Delinquent - - - 48,299 - 329 - - 48,628

Noncurrent - - - 64,504 - - - 4,718 69,222

Accounts receivable - - - 24,557 - - - - 24,557

Loans receivable - - - - 433,448 - - 109,232 542,680

Due from other governments - - 15,762 5,255 - 735 - 13,137 34,889

Advance to other funds - - - 73,157 - - - - 73,157

Total Assets $ 36,805 $ 950,873 $ 149,563 $ 5,290,418 $ 1,150,889 $ 14,390 $ 1,328,014 $ 1,959,918 $ 10,880,870

Liabilities, Deferred Inflows of Resources,

and Fund Balances

Liabilities

Accounts payable $ 25 $ 9,343 $ 19,289 $ 279 $ - $ - $ - $ 500 $ 29,436

Salaries payable - 26,097 2,683 17,731 - - - - 46,511

Due to other governments - 17,825 - - 55,000 - - 1,185,433 1,258,258

Total Liabilities $ 25 $ 53,265 $ 21,972 $ 18,010 $ 55,000 $ - $ - $ 1,185,933 $ 1,334,205


Unavailable revenue $ 1,594 $ 11,582 $ - $ 112,803 $ 433,577 $ 329 $ 3,434 $ 4,718 $ 568,037

Fund Balances

Nonspendable $ - $ - $ - $ 73,157 $ - $ - $ - $ 8,608 $ 81,765

Restricted - - 127,591 5,086,448 662,312 14,061 1,324,580 550,411 7,765,403

Committed 35,186 886,026 - - - - - - 921,212

Assigned - - - - - - - 210,248 210,248

Total Fund Balances $ 35,186 $ 886,026 $ 127,591 $ 5,159,605 $ 662,312 $ 14,061 $ 1,324,580 $ 769,267 $ 8,978,628

Total Liabilities, Deferred Inflows

of Resources, and Fund Balances $ 36,805 $ 950,873 $ 149,563 $ 5,290,418 $ 1,150,889 $ 14,390 $ 1,328,014 $ 1,959,918 $ 10,880,870

Regional Rail

TotalMiscellaneous

STEARNS COUNTY


COMBINING BALANCE SHEET

NONMAJOR GOVERNMENTAL FUNDS

DECEMBER 31, 2016

Special Revenue Funds

120

EXHIBIT C-2

County County Law Solid EconomicBuilding Park Library Waste Development Ditch Authority Miscellaneous Total

Revenues Taxes $ 98,751 $ 879,048 $ - $ - $ 55,071 $ - $ 230,389 $ 66,136 $ 1,329,395 Special assessments - - - 658,566 - 17,457 - 1,578 677,601 Licenses and permits - 209,343 - - - - - - 209,343 Intergovernmental 1,230 207,743 - - - - - - 208,973 Charges for services - - - 635,832 - - - - 635,832 Fines and forfeits - - 230,330 - - - - - 230,330 Gifts and contributions - 3,911 - - - - - 24,204 28,115 Investment income - 19 - 6,092 3,789 2 - - 9,902 Miscellaneous - 3,329 75 6,615 47,372 - - 167,581 224,972

Total Revenues $ 99,981 $ 1,303,393 $ 230,405 $ 1,307,105 $ 106,232 $ 17,459 $ 230,389 $ 259,499 $ 3,554,463

Expenditures Current General government $ 95,831 $ - $ 205,110 $ - $ - $ - $ - $ 54,569 $ 355,510 Public safety - - - - - - - 23,922 23,922 Sanitation - - - 580,138 - - - - 580,138 Culture and recreation - 1,229,526 - - - - - - 1,229,526 Conservation of natural resources - - - - - 30,681 - - 30,681 Economic development - - - - 55,000 - 99,492 - 154,492

Total Expenditures $ 95,831 $ 1,229,526 $ 205,110 $ 580,138 $ 55,000 $ 30,681 $ 99,492 $ 78,491 $ 2,374,269

Excess of Revenues Over (Under) Expenditures $ 4,150 $ 73,867 $ 25,295 $ 726,967 $ 51,232 $ (13,222) $ 130,897 $ 181,008 $ 1,180,194

Other Financing Sources (Uses) Transfers in $ 8,000 $ 20,859 $ - $ - $ - $ - $ - $ - $ 28,859 Proceeds from sale of capital assets - 914 - - - - - - 914

Total Other Financing Sources (Uses) $ 8,000 $ 21,773 $ - $ - $ - $ - $ - $ - $ 29,773

Net Change in Fund Balance $ 12,150 $ 95,640 $ 25,295 $ 726,967 $ 51,232 $ (13,222) $ 130,897 $ 181,008 $ 1,209,967

Fund Balance - January 1 23,036 790,386 102,296 4,432,638 611,080 27,283 1,193,683 588,259 7,768,661

Fund Balance - December 31 $ 35,186 $ 886,026 $ 127,591 $ 5,159,605 $ 662,312 $ 14,061 $ 1,324,580 $ 769,267 $ 8,978,628

Regional Rail

ST. CLOUD, MINNESOTASTEARNS COUNTY

COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCENONMAJOR GOVERNMENTAL FUNDS


Special Revenue Funds

121

EXHIBIT C-3

Revenues

Taxes $ 100,000 $ 98,835 $ 98,751 $ (84)

Intergovernmental - 1,165 1,230 65

Total Revenues $ 100,000 $ 100,000 $ 99,981 $ (19)

Expenditures

Current

General government 100,000 108,000 95,831 12,169


Expenditures $ - $ (8,000) $ 4,150 $ 12,150


Transfers in - 8,000 8,000 -

Net Change in Fund Balance $ - $ - $ 12,150 $ 12,150

Fund Balance - January 1 23,036 23,036 23,036 -

Fund Balance - December 31 $ 23,036 $ 23,036 $ 35,186 $ 12,150


COUNTY BUILDING SPECIAL REVENUE FUND


STEARNS COUNTY


Budgeted Amounts


Variance withActual

122


EXHIBIT C-4

BUDGETARY COMPARISON SCHEDULECOUNTY PARK SPECIAL REVENUE FUND



Revenues Taxes $ 782,109 $ 772,999 $ 879,048 $ 106,049 Licenses and permits 155,000 155,000 209,343 54,343 Intergovernmental 54,968 64,078 207,743 143,665 Gifts and contributions 6,600 6,600 3,911 (2,689) Investment income - - 19 19 Miscellaneous - - 3,329 3,329

Total Revenues $ 998,677 $ 998,677 $ 1,303,393 $ 304,716

Expenditures Current Culture and recreation 998,677 1,019,536 1,229,526 (209,990)

Excess of Revenues Over (Under) Expenditures $ - $ (20,859) $ 73,867 $ 94,726

Other Financing Sources (Uses) Transfers in $ - $ 20,859 $ 20,859 $ - Proceeds from sale of capital assets - - 914 914

Total Other Financing Sources (Uses) $ - $ 20,859 $ 21,773 $ 914




123


EXHIBIT C-5

BUDGETARY COMPARISON SCHEDULELAW LIBRARY SPECIAL REVENUE FUND



Revenues Fines and forfeits $ 197,159 $ 197,159 $ 230,330 $ 33,171 Miscellaneous - - 75 75

Total Revenues $ 197,159 $ 197,159 $ 230,405 $ 33,246

Expenditures Current General government Law library 197,159 197,159 205,110 (7,951)

. Net Change in Fund Balance $ - $ - $ 25,295 $ 25,295



124


EXHIBIT C-6

BUDGETARY COMPARISON SCHEDULESOLID WASTE SPECIAL REVENUE FUND



Revenues Special assessments $ 656,500 $ 656,500 $ 658,566 $ 2,066 Charges for services 610,000 610,000 635,832 25,832 Investment income 6,000 6,000 6,092 92 Miscellaneous 10,000 10,000 6,615 (3,385)

Total Revenues $ 1,282,500 $ 1,282,500 $ 1,307,105 $ 24,605

Expenditures Current Sanitation Solid waste 1,282,500 1,285,500 580,138 705,362

Net Change in Fund Balance $ - $ (3,000) $ 726,967 $ 729,967



125


EXHIBIT C-7

BUDGETARY COMPARISON SCHEDULEECONOMIC DEVELOPMENT SPECIAL REVENUE FUND



Revenues Taxes $ - $ 55,000 $ 55,071 $ 71 Investment income 10,000 10,000 3,789 (6,211) Miscellaneous 50,000 50,000 47,372 (2,628)

Total Revenues $ 60,000 $ 115,000 $ 106,232 $ (8,768)

Expenditures Current Economic development Community development 60,000 115,000 55,000 60,000




126

STEARNS COUNTY


INTERNAL SERVICE FUNDS

Information Services Improvements - to account for information services projects.

Self Insurance - to account for health insurance premiums and payments.

127


EXHIBIT D-1

COMBINING STATEMENT OF FUND NET POSITIONINTERNAL SERVICE FUNDS

DECEMBER 31, 2016

Assets

Current assets Cash and pooled investments $ 105,004 $ 944,535 $ 1,049,539 Accounts receivable - 7,830 7,830

Total Assets $ 105,004 $ 952,365 $ 1,057,369

Liabilities

Current liabilities Accounts payable $ 7,261 $ 211,139 $ 218,400 Advance from other funds 17,596 - 17,596

Total Liabilities $ 24,857 $ 211,139 $ 235,996

Net Position

Unrestricted $ 80,147 $ 741,226 $ 821,373


Improvements Self-Insurance Total

InformationServices

128


EXHIBIT D-2

COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITIONINTERNAL SERVICE FUNDS


Operating Revenues Charges for services $ 600,000 $ 1,112,004 $ 1,712,004 Miscellaneous - 31,013 31,013

Total Operating Revenues $ 600,000 $ 1,143,017 $ 1,743,017

Operating Expenses Cost of services 659,153 1,037,863 1,697,016

Change in Net Position $ (59,153) $ 105,154 $ 46,001

Net Position - January 1 139,300 636,072 775,372

Net Position - December 31 $ 80,147 $ 741,226 $ 821,373


ServicesTotal

Information

Self-InsuranceImprovements

129


EXHIBIT D-3

COMBINING STATEMENT OF CASH FLOWSINTERNAL SERVICE FUNDS

FOR THE YEAR ENDED DECEMBER 31, 2016Increase (Decrease) in Cash and Cash Equivalents

Cash Flows from Operating Activities Receipts from internal services provided $ 600,000 $ 1,137,809 $ 1,737,809 Payments to suppliers (730,982) (1,145,647) (1,876,629)

Net Increase (Decrease) in Cash and Cash Equivalents $ (130,982) $ (7,838) $ (138,820)

Cash and Cash Equivalents at January 1 235,986 952,373 1,188,359

Cash and Cash Equivalents at December 31 $ 105,004 $ 944,535 $ 1,049,539

Reconciliation of Operating Income (Loss) to Net Cash Provided by (Used in) Operating Activities Net operating income (loss) $ (59,153) $ 105,154 $ 46,001

Adjustments to reconcile operating income (loss) to net cash provided by (used in) operating activities (Increase) decrease in accounts receivable $ - $ (5,208) $ (5,208) Increase (decrease) in accounts payable (89,425) (107,784) (197,209) Increase (decrease) in advance from other funds 17,596 - 17,596

Total adjustments $ (71,829) $ (112,992) $ (184,821)

Net Cash Provided by (Used in) Operating Activities $ (130,982) $ (7,838) $ (138,820)

ServicesImprovements Self-Insurance Total

InformationGovernmental Activities

130

STEARNS COUNTY


AGENCY FUND

Agency Fund - to account for assets held by the County as an agent for other governmental units,

individuals, private organizations, or other funds.

131


EXHIBIT E-1

STATEMENT OF CHANGES IN ASSETS AND LIABILITIESAGENCY FUND


Balance BalanceJanuary 1 Additions Deductions December 31

Assets

Cash and pooled investments $ 5,331,260 $ 289,294,898 $ 290,956,178 $ 3,669,980 Due from other governments 75,292 469,727 75,907 469,112

Total Assets $ 5,406,552 $ 289,764,625 $ 291,032,085 $ 4,139,092

Liabilities

Accounts payable $ 116,633 $ 3,734,880 $ 3,738,499 $ 113,014 Due to other governments 5,289,919 411,261,788 412,525,629 4,026,078

Total Liabilities $ 5,406,552 $ 414,996,668 $ 416,264,128 $ 4,139,092

132

OTHER EXHIBITS AND SCHEDULES

133

EXHIBIT F-1

Judicial Ditches

3 $ 1,343 $ - $ - $ - $ 1,343 $ - $ - $ 1,343 $ 1,343

County Ditches

4 1,038 - - - 1,038 - - 1,038 1,038

9 1,956 - - - 1,956 - - 1,956 1,956

10 726 - - - 726 - - 726 726

12 79 - 77 735 891 500 77 314 891

14 479 - - - 479 - - 479 479

17 1,590 - - - 1,590 - - 1,590 1,590

25 233 - - - 233 - - 233 233

28 36 - - - 36 - - 36 36

31 378 - 33 - 411 - 33 378 411

39 1,210 - 5 - 1,215 - 5 1,210 1,215

50 - 500 214 - 714 - 214 500 714

51 4,258 - - - 4,258 - - 4,258 4,258

Total $ 13,326 $ 500 $ 329 $ 735 $ 14,890 $ 500 $ 329 $ 14,061 $ 14,890

Reconcilement

Add (Deduct) - (500) - - (500) (500) - - (500)

Modified Accrual

$ 13,326 $ - $ 329 $ 735 $ 14,390 $ - $ 329 $ 14,061 $ 14,390

STEARNS COUNTY


BALANCE SHEET - BY DITCH

(ACCRUAL BASIS)

DITCH SPECIAL REVENUE FUND

Unavailable

DECEMBER 31, 2016

Per Exhibit C-1

Liabilities

Investments

Intrafund

DelinquentAdvances

Special

Assessments

Total

Total Liabilities,

Deferred Inflows

of Resources, and

Fund Balance

Due from

Other

Governments Fund BalanceRevenueAdvances

Intrafund

Deferred Inflows

of Resources

Assets

Cash and

Pooled

134

EXHIBIT F-2

SCHEDULE OF INTERGOVERNMENTAL REVENUE


Appropriations and Shared Revenue

State

Highway users tax $ 13,776,909

County program aid 7,907,205

Market value credit 832,561

PERA rate reimbursement 145,954

Disparity reduction aid 46,638

Police aid 529,204

Enhanced 911 262,362

Aquatic invasive species 254,239

SCORE 449,663

Total Appropriations and Shared Revenue $ 24,204,735

Reimbursement for Services

Minnesota Department of Human Services $ 2,931,568

Payments

Local

Payments in lieu of taxes $ 253,016

Local share of construction 4,789,464

Total Payments $ 5,042,480

Grants

State

Minnesota Department/Board of

Corrections $ 2,621,154

Public Safety 231,627

Transportation 655,062

Health 871,618

Natural Resources 1,242,546

Human Services 5,715,888

Veterans Affairs 17,500

Water and Soil Resources 124,036

Pollution Control Agency 275,605

Peace Officer Standards and Training Board 19,385

Total State $ 11,774,421

Federal

Department of

Agriculture $ 2,043,824

Justice 104,340

Transportation 1,853,376

Health and Human Services 9,446,648

Homeland Security 246,504

Total Federal $ 13,694,692

Total State and Federal Grants $ 25,469,113

Total Intergovernmental Revenue $ 57,647,896

STEARNS COUNTY


135

EXHIBIT F-3

Federal Grantor Federal

Pass-Through Agency CFDA Pass-Through

Program or Cluster Title Number Grant Numbers

U.S. Department of Agriculture

Passed Through Minnesota Department of Health

Special Supplemental Nutrition Program for Women, Infants, and Children 10.557 16162MN004W1003 $ 749,280 $ -

Passed Through Minnesota Department of Human Services

State Administrative Matching Grants for the Supplemental

Nutrition Assistance Program 10.561 172MN101S2514 352,193 -

State Administrative Matching Grants for the Supplemental

Nutrition Assistance Program 10.561 16162MN101S2514 942,351 -

(Total State Administrative Matching Grants for the Supplemental

Nutrition Assistance Program 10.561 $1,294,544)

Total U.S. Department of Agriculture $ 2,043,824 $ -

U.S. Department of Justice

Direct

Justice Systems Response to Families 16.021 $ 1,037 $ -

State Criminal Alien Assistance Program 16.606 40,601 -

Edward Byrne Memorial Justice Assistance Grant Program 16.738 18,140 17,468

Passed Through Minnesota Department of Public Safety

Crime Victim Assistance 16.575 A-CVS-2016-STEARNA0-00087

44,562 -

Total U.S. Department of Justice $ 104,340 $ 17,468

U.S. Department of Transportation

Passed Through Minnesota Department of Transportation

Highway Planning and Construction Cluster

Highway Planning and Construction 20.205 27-7314205 $ 2,432 $ -

Highway Planning and Construction 20.205 27-7315085 13,588 -

Highway Planning and Construction 20.205 27-7315120 90,809 -

(Total Highway Planning and Construction 20.205 $106,829)

Passed Through Minnesota Department of Natural Resources

Highway Planning and Construction Cluster

Recreational Trails Program 20.219 TRAL020 174,968 -

(Total Highway Planning and Construction Cluster $281,797)

Passed Through the City of St. Cloud

Highway Safety Cluster

State and Community Highway Safety 20.600 Not Provided 11,783 -

National Priority Safety Programs 20.616 Not Provided 6,659 -

(Total Highway Safety Cluster $18,442)

Minimum Penalties for Repeat Offenders for Driving While Intoxicated 20.608 Not Provided 14,337 -

Total U.S. Department of Transportation $ 314,576 $ -

Passed Through

to SubrecipientsExpenditures

STEARNS COUNTY


SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS


The notes to the schedule of expenditures of federal awards are an integral part of this schedule.

136

EXHIBIT F-3(Continued)




Passed Through


STEARNS COUNTY




U.S. Department of Health and Human Services

Passed Through Minnesota Department of Health

Public Health Emergency Preparedness 93.069 U90TP000529 $ 111,495 $ -

Universal Newborn Hearing Screening 93.251 H61MC0035-16-02 2,550 -

Immunization Cooperative Agreements 93.268 68583 9,530 -

Immunization Cooperative Agreements 93.268 SH23IP000737 48,826 -

(Total Immunization Cooperative Agreements 93.268 $58,356)

Early Hearing Detection and Intervention Information System (EHDI-IS)

Surveillance Program 93.314 6 NUR3DD000842-06-02 450 -

Affordable Care Act (ACA) Maternal, Infant, and Early Childhood Home

Visiting Program 93.505 57445 340,175 -

Affordable Care Act (ACA) Maternal, Infant, and Early Childhood Home

Visiting Program 93.505 57446 372,501 -

(Total Affordable Care Act (ACA) Maternal, Infant, and Early Childhood

Home Visiting Program 93.505 $712,676)

PPHF Capacity Building Assistance to Strengthen Public Health

Immunization Infrastructure and Performance Financed in Part by

Prevention and Public Health Funds 93.539 68583 3,055 -

Temporary Assistance for Needy Families 93.558 2015G996115 86,803 -

(Total Temporary Assistance for Needy Families 93.558 $1,776,164)

Maternal and Child Health Services Block Grant to the States 93.994 Not Provided 145,039 -

Passed Through Minnesota Department of Human Services

Projects for Assistance in Transition from Homelessness (PATH) 93.150 SM016024-15 52,048 -

Promoting Safe and Stable Families 93.556 G-1601MNFPSS 40,640 -

Temporary Assistance for Needy Families 93.558 1601MNTANF 1,689,361 1,368,961

(Total Temporary Assistance for Needy Families 93.558 $1,776,164)

Child Support Enforcement 93.563 1604MNCEST 71,611 -

Child Support Enforcement 93.563 1604MNCSES 1,666,238 -

Child Support Enforcement 93.563 1704MNCSES 528,727 -

(Total Child Support Enforcement 93.563 $2,266,576)

Refugee and Entrant Assistance - State

Administered Programs 93.566 1601MNRCMA 12,484 -

Refugee and Entrant Assistance - State

Administered Programs 93.566 1701MNRCMA 13,480 -

(Total Refugee and Entrant Assistance - State

Administered Programs 93.566 $25,964)

Child Care and Development Block Grant 93.575 G1601MNCCDF 70,634 -

Child Care and Development Block Grant 93.575 G1701MNCCDF 19,435 -

(Total Child Care and Development Block Grant 93.575 $90,069)

Community-Based Child Abuse Prevention Grants 93.590 G-1502MNFRPG 5,908 -

Stephanie Tubbs Jones Child Welfare Services Program 93.645 G-1601MNCWSS 14,765 -

Foster Care - Title IV-E 93.658 1601MNFOST 762,371 -

Foster Care - Title IV-E 93.658 1701MNFOST 9,283 -

(Total Foster Care - Title IV-E 93.658 $771,654)


137

EXHIBIT F-3(Continued)




Passed Through


STEARNS COUNTY




U.S. Department of Health and Human Services

Passed Through Minnesota Department of Human Services (continued)

Social Services Block Grant 93.667 G-1601MNSOSR $ 480,897 $ -

Social Services Block Grant 93.667 G-1701MNSOSR 160,295 -

(Total Social Services Block Grant 93.667 $641,192)

Chafee Foster Care Independence Program 93.674 G-1501MNCILP 5,590 -

Medical Assistance Program 93.778 05-1605MN5ADM 2,698,747 -

Medical Assistance Program 93.778 05-1705MN5ADM 370,735 -

Medical Assistance Program 93.778 05-1605MN5MAP 38,820 -

Medical Assistance Program 93.778 05-1705MN5MAP 8,650 -

(Total Medical Assistance Program 93.778 $3,116,952)

Total U.S. Department of Health and Human Services $ 9,841,143 $ 1,368,961

U.S. Department of Homeland Security

Passed Through Minnesota Department of Natural Resources

Boating Safety Financial Assistance 97.012 Not Provided $ 1,285 $ -

Passed Through Minnesota Department of Public Safety

Hazard Mitigation Grant 97.039 F-HMPG-DR4113-STEARNCO-1556

180,875 -

Emergency Management Performance Grants 97.042 F-EMPG-2016-STEARNCO-1725

62,806 -

Total U.S. Department of Homeland Security $ 244,966 $ -

Total Federal Awards $ 12,548,849 $ 1,386,429


138

STEARNS COUNTY


NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS


1. Reporting Entity

The Schedule of Expenditures of Federal Awards presents the activities of federal award

programs expended by Stearns County. The County’s reporting entity is defined in Note 1

to the financial statements. Stearns County’s financial statements include the operations of

the Housing and Redevelopment Authority (HRA) of Stearns County component unit,

which expended $1,311,285 in federal awards during the year ended June 30, 2016. Those

expenditures are not included in the County’s Schedule of Expenditures of Federal Awards

because the HRA of Stearns County had a separate single audit.

2. Basis of Presentation

The accompanying Schedule of Expenditures of Federal Awards includes the federal grant

activity of Stearns County under programs of the federal government for the year ended

December 31, 2016. 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

Stearns County, it is not intended to and does not present the financial position, changes in

net position, or cash flows of Stearns County.


Expenditures reported on the schedule are reported on the modified accrual basis of

accounting. Such expenditures are recognized following the Uniform Guidance, wherein

certain types of expenditures are not allowable or are limited as to reimbursement. Stearns

County has elected to use the 10 percent de minimis indirect cost rate allowed under the

Uniform Guidance.

139

STEARNS COUNTY


NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS


4. Reconciliation to Schedule of Intergovernmental Revenue

Federal grant revenue per Schedule of Intergovernmental Revenue 13,694,692$

Grants received more than 60 days after year-end, unavailable in 2016

Temporary Assistance for Needy Families 416,437

Recreational Trails Program 150,000

Maternal and Child Health Service Block Grant to the States 49,863

Hazard Mitigation Grant 412

Projects for Assistance in Transition from Homelessness (PATH) 11,319

Unavailable in 2015, recognized as revenue in 2016

Child Support Enforcement (83,100)

Hazard Mitigation Grant (1,950)

Community-Based Child Abuse Prevention Grants (24)

Federal revenue recognized for previous year expenditures

Highway Planning and Construction (1,688,800)

Expenditures Per Schedule of Expenditures of Federal Awards 12,548,849$

140


141

STATISTICAL SECTION

SCHEDULE DESCRIPTIONS

Financial Trends: How the County’s financial performance and well-being have changed over time.

• Net Position by Component Schedule 1 Page 143 • Changes in Net Position Schedule 2 Page 144 • Fund Balances, Governmental Funds Schedule 3 Page 145 • Changes in Fund Balances, Governmental Funds Schedule 4 Page 147

Revenue Capacity: Assesses the County’s most significant revenue source, the property tax.

• Net Tax Capacity and Taxable Market Value of Taxable Property Schedule 5 Page 149 • Direct and Overlapping Property Tax Rates Schedule 6 Page 150 • Principal Property Taxpayers Schedule 7 Page 156 • Property Tax Levies and Collections – Stearns County Portion Schedule 8 Page 157 • Property Tax Levies and Collections – Overlapping Governments Schedule 9 Page 158

Debt Capacity: Assesses the affordability of the County’s current levels of outstanding debt and the County’s ability to issue additional debt in the future.

• Ratios of Annual Debt Service Expenditures for General Bonded Debt to Total General Expenditures Schedule 10 Page 159

• Ratios of Net General Obligation Bonded Debt Outstanding Schedule 11 Page 160 • Computation of Underlying, Overlapping, and Direct Debt Schedule 12 Page 161 • Legal Debt Margin Information Schedule 13 Page 162

142

SCHEDULE 1

Unaudited

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016Governmental Activities

Net investment in Capital Assets 204,080$ 212,823$ 220,012$ 233,257$ 263,256$ 268,673$ 282,479$ 301,413$ 309,537$ 326,021$ Restricted 8,763 2,529 2,291 2,141 8,800 10,065 11,986 18,442 18,967 14,453 Unrestricted 24,498 34,249 44,625 47,600 42,436 49,575 43,674 42,260 5,662 560

Total Governmental Activities Net Position 237,341$ 249,601$ 266,928$ 282,998$ 314,492$ 328,313$ 338,139$ 362,115$ 334,166$ 341,034$

Business-Type ActivitiesUnrestricted -$ 1$ 2$ 2$ 4$ 5$ -$ -$ -$ -$

Total Business-Type Activities Net Position -$ 1$ 2$ 2$ 4$ 5$ -$ -$ -$ -$

Primary GovernmentNet investment in Capital Assets 204,080$ 212,823$ 220,012$ 233,257$ 263,256$ 268,673$ 282,479$ 301,413$ 309,537$ 326,021$ Restricted 8,763 2,529 2,291 2,141 8,800 10,065 11,986 18,442 18,967 14,453 Unrestricted 24,498 34,250 44,627 47,602 42,440 49,580 43,674 42,260 5,662 560

Total Primary Government Net Position 237,341$ 249,602$ 266,930$ 283,000$ 314,496$ 328,318$ 338,139$ 362,115$ 334,166$ 341,034$

Data Source: Stearns County Auditor-Treasurer's OfficeNote: Numbers may differ from the financial statements due to rounding.

(accrual basis of accounting)

STEARNS COUNTY


Net Position by Component(in thousands of dollars)

Last Ten Fiscal Years

143

SCHEDULE 2

Unaudited

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016ExpensesGovernmental Activities

General Government 16,446$ 18,205$ 18,844$ 20,325$ 20,317$ 23,015$ 23,889$ 25,199$ 22,659$ 25,056$ Public Safety 23,788 25,809 27,571 28,857 28,278 28,888 30,474 31,280 31,555 36,436 Highways and Streets 28,133 14,397 12,395 11,528 12,444 17,993 13,685 15,154 16,464 18,294 Sanitation 374 377 668 532 494 577 450 457 775 611 Human Services 29,807 31,830 30,055 31,028 32,877 33,310 35,489 36,617 39,736 41,361 Health 2,208 2,186 2,266 2,803 3,102 2,858 2,933 3,137 3,728 3,752 Culture and Recreation 3,506 4,347 4,553 3,646 4,215 4,031 3,613 3,792 4,127 4,296 Conservation of Natural Resources 4,156 4,620 4,447 4,531 4,528 5,511 5,077 4,754 5,449 8,415 Economic Development 481 287 323 894 1,030 586 521 1,278 416 335 Interest 606 948 897 943 834 745 786 545 759 720

Total Governmental Activities Expenses 109,505$ 103,006$ 102,019$ 105,087$ 108,119$ 117,514$ 116,917$ 122,213$ 125,668$ 139,276$ Business-Type Activities

Solid Waste 1$ 1$ 1$ 1$ 1$ -$ -$ -$ -$ -$ Total Business-Type Activities Expenses 1$ 1$ 1$ 1$ 1$ -$ -$ -$ -$ -$ Total Primary Government Expenses 109,506$ 103,007$ 102,020$ 105,088$ 108,120$ 117,514$ 116,917$ 122,213$ 125,668$ 139,276$

Program RevenuesGovernmental ActivitiesFees, Charges, Fines, and Other

General Government 4,655$ 4,311$ 3,621$ 5,042$ 5,129$ 7,249$ 6,201$ 7,337$ 6,225$ 4,896$ Public Safety 1,322 1,227 1,235 1,159 1,158 1,274 1,211 1,508 1,313 1,482 Highways and Streets 133 391 68 112 104 146 118 124 97 198 Sanitation 765 694 547 631 644 1,214 685 695 970 383 Human Services 1,704 2,075 2,188 2,479 2,850 2,406 2,863 2,821 2,316 1,368 Health 255 260 265 127 109 212 317 363 490 365 Culture and Recreation 145 131 110 133 393 133 208 120 179 242 Conservation of Natural Resources 595 587 528 559 482 668 730 785 845 3,596 Economic Development 45 56 40 35 59 275 255 296 153 4 Interest - - - - - - - - - -

Operating Grants and Contributions 27,154 27,702 25,750 26,906 34,367 35,217 35,407 40,693 40,612 41,733 Capital Grants and Contributions 13,237 7,416 10,596 8,701 15,750 4,752 4,919 7,708 3,664 8,124 Total Governmental Activities Program Revenues 50,010$ 44,850$ 44,948$ 45,884$ 61,045$ 53,546$ 52,914$ 62,450$ 56,864$ 62,391$ Business-Type Activities

Solid Waste 1$ 1$ 2$ 1$ 2$ 2$ -$ -$ -$ -$ Total Business-Type Activities Program Revenues 1$ 1$ 2$ 1$ 2$ 2$ -$ -$ -$ -$ Total Primary Government Program Revenues 50,011$ 44,851$ 44,950$ 45,885$ 61,047$ 53,548$ 52,914$ 62,450$ 56,864$ 62,391$

Net (Expense) Revenue (a)Governmental Activities (59,495)$ (58,156)$ (57,071)$ (59,203)$ (47,074)$ (63,968)$ (64,003)$ (59,763)$ (68,804)$ (76,885)$ Business-Type Activities - - 1 - 1 2 - - - - Total Primary Government Net Expense (59,495)$ (58,156)$ (57,070)$ (59,203)$ (47,073)$ (63,966)$ (64,003)$ (59,763)$ (68,804)$ (76,885)$



Changes in Net Position(in thousands of dollars)


144

SCHEDULE 2 (Continued)

Unaudited

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016



Changes in Net Position(in thousands of dollars)


General Revenues and Other Changes in Net PositionGovernmental Activities:

Property Taxes 52,101$ 57,493$ 61,666$ 64,498$ 66,903$ 69,338$ 70,031$ 69,030$ 70,070$ 71,531$ Gravel Taxes 17 20 38 44 57 52 53 58 61 66 Wheelage Tax - - - - - - - 1,340 1,452 1,442 Payments in Lieu of Tax 132 131 205 173 188 199 220 237 390 253 Grants and Contributions not Restricted to Specific Programs 11,438 10,593 11,532 9,738 9,727 7,172 6,475 8,115 8,678 8,932 Unrestricted Investment Income 3,038 2,158 909 797 1,652 977 (3,067) 4,606 1,422 1,289 Gain on Sale of Capital Asset - 21 47 25 42 50 64 306 242 238 Transfers - - - - - - 5 - - - Miscellaneous 41 - - - - - 48 47 - -

Total Governmental Activities 66,767$ 70,416$ 74,397$ 75,275$ 78,569$ 77,788$ 73,829$ 83,739$ 82,315$ 83,751$ Business-Type Activities

Solid Waste -$ -$ -$ -$ -$ -$ (5)$ -$ -$ -$ Total Business-Type Activities -$ -$ -$ -$ -$ -$ (5)$ -$ -$ -$ Total Primary Government 66,767$ 70,416$ 74,397$ 75,275$ 78,569$ 77,788$ 73,824$ 83,739$ 82,315$ 83,751$

Changes in Net PositionGovernment Activities 7,272$ 12,260$ 17,326$ 16,072$ 31,495$ 13,820$ 9,826$ 23,976$ 13,511$ 6,866$ Business-Type Activities - - 1 - 1 2 (5) - - - Total Primary Government 7,272$ 12,260$ 17,327$ 16,072$ 31,496$ 13,822$ 9,821$ 23,976$ 13,511$ 6,866$

(a) Net revenue (expense) is the difference between the expenses and program revenues of a function or program. It indicates the degree to which a function orprogram is supported with its own fees and program-specific grants versus its reliance upon funding from taxes and other government revenues. Numbers inparentheses indicate that expenses were greater than program revenues and therefore general revenues were needed to finance that function or program. Numbers without parentheses mean that program revenues were more than sufficient to cover expenses.


145

SCHEDULE 3

Unaudited

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016General Fund

Nonspendable 5$ -$ -$ -$ 2$ -$ 92$ 80$ 71$ 364$ Restricted 1,274 1,243 1,587 1,676 1,426 1,431 1,493 1,384 1,136 1,072 Committed - - - - - - - - - - Assigned 3 8 6 4 4 6 8 8 4 5 Unassigned 16,942 18,459 20,307 22,886 26,201 28,497 24,538 27,743 31,661 31,807

Total General Fund 18,224$ 19,710$ 21,900$ 24,566$ 27,633$ 29,934$ 26,131$ 29,215$ 32,872$ 33,248$

All Other Governmental FundsNonspendable 476$ 483$ 454$ 864$ 1,378$ 1,844$ 1,675$ 1,231$ 1,839$ 1,138$ Restricted 8,073 1,436 1,366 1,072 7,471 8,720 10,569 17,126 17,912 13,438 Committed 470 540 414 532 610 686 667 800 813 921 Assigned 17,387 35,885 28,939 41,813 38,498 34,819 30,898 28,478 31,747 33,932 Unassigned - - - - - - - - (3) -

Total All Other Government Funds 26,406$ 38,344$ 31,173$ 44,281$ 47,957$ 46,069$ 43,809$ 47,635$ 52,308$ 49,429$

Total Government Funds 44,630$ 58,054$ 53,073$ 68,847$ 75,590$ 76,003$ 69,940$ 76,850$ 85,180$ 82,677$


Last Ten Fiscal years(modified accrual basis of accounting)

STEARNS COUNTY


Fund Balances, Governmental Funds(in thousands of dollars)

146

SCHEDULE 4

Unaudited

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016Revenues

Taxes 51,820$ 57,106$ 61,252$ 64,053$ 67,170$ 69,460$ 70,498$ 70,587$ 71,682$ 73,309$ Special Assessments 786 827 771 776 749 779 819 740 830 898 Licenses & Permits 573 602 583 636 579 638 852 859 916 1,190 Intergovernmental 49,043 45,597 40,919 49,912 62,700 46,043 46,039 55,362 53,509 57,648 Charges for Services 6,164 6,580 6,259 6,312 6,388 6,890 6,745 7,165 6,861 6,180 Fines and Forfeits 303 289 273 293 331 320 522 297 352 314 Gifts and Contributions 9 24 9 7 7 16 21 23 16 50 Investment Income 3,054 2,118 919 663 1,596 992 (3,129) 4,564 1,267 1,141 Miscellaneous 3,504 3,353 2,598 3,771 4,639 6,337 5,770 6,941 5,368 3,853

Total Revenues 115,256$ 116,496$ 113,583$ 126,423$ 144,159$ 131,475$ 128,137$ 146,538$ 140,801$ 144,583$

Expenditures

CurrentGeneral Government 15,698$ 17,398$ 17,663$ 19,444$ 19,062$ 21,727$ 22,642$ 23,741$ 21,280$ 22,587$ Public Safety 23,338 25,214 26,588 27,195 27,444 28,619 30,155 31,170 30,161 30,587 Highways and Streets 27,508 18,813 15,109 20,623 33,218 27,374 23,897 31,470 26,425 26,606 Sanitation 373 376 636 500 467 574 446 445 772 580 Human Services 30,907 32,616 30,789 32,490 33,604 33,697 36,293 37,636 40,077 40,524 Health 2,221 2,162 2,140 2,779 3,121 2,814 2,902 3,112 3,638 3,523 Culture and Recreation 3,292 3,648 3,639 3,544 4,082 4,017 3,629 3,702 4,785 4,103 Conservation of Natural Resources 4,130 4,572 4,419 4,469 4,801 4,850 4,955 4,652 5,286 8,122 Economic Development 260 287 323 762 391 270 431 1,278 416 335

IntergovernmentalHighways and Streets 496 512 559 608 660 695 718 740 782 810 Community Development 221 - - 132 639 316 90 - - - Culture and Recreation - 32 397 - - - - - - -

Capital OutlayGeneral Government - 3,443 3,244 732 306 516 154 292 641 961 Public Safety - 285 2,338 702 507 371 734 4,477 760 224 Highways and Streets 5,727 321 160 159 587 527 233 - - 189 Sanitation - - - 39 3,508 471 - - - - Human Services - 47 3,291 77 25 10 163 409 246 3 Culture and Recreation - 1,210 511 842 129 747 593 94 663 1,215 Conservation of Natural Resources - - - 666 74 - - - - -

Debt ServicePrincipal 3,240 4,580 5,885 4,865 3,800 3,985 4,145 1,990 3,620 8,830 Interest 627 891 904 920 816 729 636 552 746 745 Bond Issuance Costs - 127 - 100 - - - - - -

Total Expenditures 118,038$ 116,534$ 118,595$ 121,648$ 137,241$ 132,309$ 132,816$ 145,760$ 140,298$ 149,944$

Excess of Revenues Over (Under) Expenditures (2,782)$ (38)$ (5,012)$ 4,775$ 6,918$ (834)$ (4,679)$ 778$ 503$ (5,361)$

STEARNS COUNTY


Changes in Fund Balances, Government Funds(in thousands of dollars)

Last Ten Fiscal Years(accrual basis of accounting)

147

SCHEDULE 4 (Continued)

Unaudited

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

STEARNS COUNTY


Changes in Fund Balances, Government Funds(in thousands of dollars)



Transfers In 1,592$ 4,055$ 4,391$ 4,444$ 5,605$ 6,155$ 3,088$ 4,889$ 6,957$ 6,338$ Transfers Out (1,592) (4,297) (4,391) (4,444) (6,336) (5,769) (4,706) (4,889) (6,957) (6,338) Premium on Bonds and Notes Issued - 70 - 291 - - - 543 289 48 Discount on Bonds Issued - (5) - - - - - - - - Bonds and Notes Issued 8,134 14,453 - 10,600 - - - - 7,295 2,575 Refunding Bonds Issued - 1,800 - 1,935 - - - 5,285 - - Refunded Bonds - (2,645) - (1,955) - - - - - - Proceeds From Sale of Capital Assets 48 21 58 36 42 50 64 305 242 238

Total Other Financing Sources (Uses) 8,182$ 13,452$ 58$ 10,907$ (689)$ 436$ (1,554)$ 6,133$ 7,826$ 2,861$

Net Change in Fund Balances 5,400$ 13,414$ (4,954)$ 15,682$ 6,229$ (398)$ (6,233)$ 6,911$ 8,329$ (2,500)$

Increase (Decrease) in Inventories (31) 8 (29) 93 513 812 170 - - -

5,369$ 13,422$ (4,983)$ 15,775$ 6,742$ 414$ (6,063)$ 6,911$ 8,329$ (2,500)$

Ratio of Debt Services to

Noncapital Expenditures 3.44% 5.03% 6.23% 4.94% 3.49% 3.64% 3.65% 1.81% 3.16% 6.50%


Net Change in Fund Balances with Increase (Decrease) in

Inventories

148

SCHEDULE 5

Unaudited

Net Tax

Capacity to

Fiscal/Payable Estimated Taxable Net Estimated Taxable Net Estimated Taxable Net Taxable County Tax

Year Market Value Market Value Tax Capacity Market Value Market Value Tax Capacity Market Value Market Value Tax Capacity Market Value Extension Rate

2008 12,010,578 11,826,394 126,799 79,856 79,856 1,503 12,090,434 11,906,250 128,302 1.1% 47.5162009 13,372,236 12,390,685 133,470 96,720 96,720 1,844 13,468,956 12,487,405 135,314 1.1% 48.0572010 13,685,427 12,799,602 137,497 117,162 117,162 2,314 13,802,589 12,916,764 139,812 1.1% 48.6572011 13,223,768 12,444,765 133,446 112,868 112,868 2,224 13,336,635 12,557,632 135,671 1.1% 51.6002012 14,811,083 11,429,030 122,939 122,597 122,592 2,418 14,933,680 11,551,622 125,356 1.1% 55.2842013 12,613,193 11,140,006 120,113 153,229 153,224 3,027 12,766,422 11,293,229 123,140 1.1% 55.7032014 12,795,838 11,373,533 121,696 179,369 179,363 3,470 12,975,207 11,552,896 125,166 1.1% 54.7912015 15,207,285 11,955,883 126,831 207,522 207,517 3,979 15,414,808 12,163,400 130,810 1.1% 53.3682016 15,797,669 12,534,346 133,201 270,728 270,723 5,123 16,068,397 12,805,069 138,323 1.1% 51.6732017 15,912,737 12,719,131 136,095 279,492 279,363 5,303 16,192,228 12,998,494 141,398 1.1% 52.337

Data Source: Stearns County Auditor-Treasurer's Office

STEARNS COUNTY

(in thousands of dollars)

Real Property Personal Property Total

Net Tax Capacity and Taxable Market Value of Taxable Property



149

SCHEDULE 6

Unaudited

Unit of Government 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Stearns County:

Revenue 19.632 19.540 21.295 23.450 24.834 24.694 23.981 23.409 22.483 22.764Road & Bridge 5.709 5.720 5.227 5.187 5.628 5.739 5.870 5.604 5.291 5.176Social Services 16.528 17.039 16.398 16.912 18.395 18.784 18.536 18.729 18.918 19.549Building 0.158 0.104 0.101 0.104 0.112 0.082 0.080 0.076 0.072 0.071Parks 0.672 0.674 0.651 0.633 0.701 0.714 0.707 0.705 0.565 0.582Debt Service 3.220 3.400 3.425 3.701 3.916 3.980 3.916 3.120 2.693 2.565Economic Development - - - - 0.020 0.018 0.017 0.016 - -Library 1.597 1.580 1.560 1.613 1.678 1.692 1.684 1.709 1.651 1.630Stearns County Total 47.516 48.057 48.657 51.600 55.284 55.703 54.791 53.368 51.673 52.337

Townships:

Albany 37.192 33.210 29.203 33.306 33.881 34.055 31.844 29.887 30.212 30.907Ashley 14.217 14.330 11.048 12.050 11.415 10.707 10.321 9.609 9.234 9.431Avon 19.000 18.478 19.296 21.640 21.962 22.105 22.551 21.399 20.878 20.493Brockway 20.081 17.611 17.655 19.896 21.511 24.503 24.434 24.408 22.624 22.977Collegeville 14.754 13.933 13.376 15.197 15.392 16.905 21.272 21.617 20.127 19.537Crow Lake 15.275 13.748 10.814 10.669 11.055 10.773 10.291 10.708 10.773 11.429Crow River 24.731 23.431 18.079 18.092 18.480 18.431 16.806 15.700 14.838 14.900Eden Lake 20.731 18.897 18.291 18.696 20.734 21.261 21.082 20.447 19.209 19.925Fair Haven 19.520 17.996 17.710 18.555 21.168 23.271 23.280 24.001 24.022 24.194Farming 26.279 23.130 22.274 23.811 28.294 19.903 26.668 24.750 21.481 21.513Getty 14.052 13.291 11.633 13.763 13.712 12.773 12.122 9.754 10.249 11.718


Direct and Overlapping Property Tax Rates


150

SCHEDULE 6 (continued)

Unaudited





Townships (continued):

Grove 17.921 18.019 15.583 17.236 17.586 16.593 15.139 13.567 13.218 13.289Holding 33.557 33.081 31.775 31.919 34.878 35.298 34.100 31.883 31.306 32.785Krain 23.243 22.336 18.578 20.869 22.464 22.940 20.678 19.359 18.351 18.230Lake George 12.113 11.464 8.876 9.052 8.998 9.327 8.195 6.411 5.981 6.235Lake Henry 21.464 21.019 16.071 16.061 15.684 13.972 12.505 11.719 12.011 12.460Lesauk 11.105 11.663 11.522 12.076 13.379 14.165 14.644 14.558 21.165 20.798Luxemburg 32.939 32.535 28.144 28.470 29.643 28.364 28.203 29.021 30.153 30.596Lynden 16.324 14.563 12.929 13.332 14.208 14.235 13.873 13.929 13.260 19.779Maine Prairie 27.167 25.352 24.210 25.697 27.899 28.078 33.551 31.758 30.341 30.675Melrose 18.202 16.882 15.490 15.356 16.496 16.751 15.874 14.730 13.422 13.656Millwood 17.771 16.676 15.799 17.279 22.166 22.330 21.470 20.040 19.703 20.118Munson 10.795 12.556 11.193 12.452 14.839 16.111 15.785 15.542 15.290 15.632North Fork 19.876 21.145 16.925 19.670 19.521 19.249 16.775 14.461 14.362 14.792Oak 23.051 21.767 18.877 19.302 19.702 23.257 20.684 20.098 21.281 22.941Paynesville 16.836 15.637 15.140 16.058 17.289 17.245 16.755 16.671 15.900 15.988Raymond 18.623 16.747 14.771 14.835 13.848 12.699 10.354 8.653 8.134 8.507St Joseph 14.656 19.429 18.255 18.467 18.562 17.639 16.756 18.046 16.238 17.783St Martin 34.180 34.312 28.013 29.025 30.531 29.695 26.031 21.809 17.715 17.971St Wendel 15.832 16.334 18.760 18.182 20.781 22.334 23.076 22.943 23.896 23.963Sauk Centre 9.591 9.914 10.809 11.313 12.255 15.620 14.534 14.540 10.980 10.897Spring Hill 28.787 26.833 21.230 21.591 21.626 20.067 17.826 15.689 14.774 15.117Wakefield 13.264 13.382 13.327 14.618 17.376 17.962 19.507 21.421 19.632 20.223Zion 45.148 41.708 32.890 36.104 39.027 36.305 32.445 27.136 25.046 25.162

151


Unaudited





Cities:

Albany 38.915 38.271 38.210 38.259 43.347 46.175 45.375 46.177 44.532 42.661Avon 61.734 60.717 62.713 67.562 79.714 85.303 86.352 86.481 84.525 84.469Belgrade 84.773 82.796 78.384 81.551 89.924 97.400 92.102 78.307 83.199 70.319Brooten 48.252 47.886 48.579 53.641 75.747 85.296 87.944 85.743 90.297 97.729Cold Spring 26.912 27.405 27.232 29.137 35.256 38.018 37.894 44.248 44.793 48.440Eden Valley 81.312 82.232 75.329 79.977 95.907 96.225 99.023 115.506 115.419 124.422Elrosa 27.170 25.334 24.446 25.135 27.718 27.768 27.644 27.712 26.556 26.918Freeport 80.732 80.312 80.519 81.784 86.375 80.333 82.834 74.500 81.117 81.576Greenwald 23.410 24.302 24.870 27.896 34.317 34.533 38.411 37.429 36.580 36.057Holdingford 69.038 70.502 71.102 70.509 93.784 94.908 95.932 96.031 90.737 88.503Kimball 59.652 63.230 68.996 73.280 82.723 90.663 96.053 98.180 96.097 102.396Lake Henry 41.338 40.023 41.140 45.591 56.856 56.693 55.472 56.763 53.676 52.692Meire Grove 31.385 31.513 31.371 32.574 40.273 38.307 40.583 40.074 39.491 39.346Melrose 61.876 61.900 61.403 60.800 65.702 69.694 69.353 71.535 71.199 70.992New Munich 36.821 40.538 46.963 51.480 67.113 70.317 73.462 69.923 68.157 68.199Paynesville 33.173 32.876 30.894 33.493 39.357 40.062 40.772 41.748 41.985 44.270Richmond 57.285 59.168 59.572 62.518 69.845 74.757 75.081 77.716 72.493 71.676Rockville 40.645 38.705 34.082 36.958 42.678 43.293 48.746 47.075 46.930 48.423Roscoe 28.001 28.014 26.278 27.810 38.069 39.034 42.629 43.499 41.581 41.401St Anthony 6.426 5.324 5.355 5.293 6.837 6.981 6.863 7.875 7.751 7.574St Augusta 20.758 22.327 23.925 26.531 28.712 29.664 30.286 30.274 29.819 29.995

152


Unaudited





Cities (continued):

St Cloud NTC 41.051 40.416 40.866 41.305 42.604 44.347 45.282 47.582 47.568 47.752St Cloud RMV 0.07714 0.07133 0.07104 0.07067 0.07099 0.07172 0.07514 0.07375 0.07226 0.07025St Joseph 47.665 48.408 48.466 48.494 50.474 53.885 52.057 52.701 55.010 59.263St Martin 45.604 49.111 49.570 51.443 59.341 62.644 73.126 73.272 76.677 75.733St Rosa 24.054 25.820 25.485 25.804 28.759 28.523 28.565 28.662 31.361 31.138St Stephen 40.412 39.895 38.544 40.259 48.969 50.115 50.621 49.706 47.420 45.033Sartell 31.655 32.768 33.126 33.602 36.370 37.679 37.868 38.973 40.609 40.808Sauk Centre 60.632 58.248 58.948 59.305 66.361 64.791 62.658 51.404 48.048 49.152Spring Hill 33.214 29.653 28.487 30.298 37.086 37.508 40.010 38.257 35.886 36.328Waite Park 55.750 52.441 54.361 57.784 62.392 63.778 66.972 72.417 71.769 71.911

School Districts:

2364 NTC 25.258 25.799 20.720 21.252 22.233 21.277 6.530 7.462 7.811 7.596RMV 0.20501 0.21705 0.21983 0.23123 0.22248 0.22809 0.20827 0.17082 0.17537 0.17869

738 NTC 31.872 32.705 30.070 27.315 30.098 31.342 35.134 36.391 32.273 35.314RMV 0.12378 0.13051 0.13301 0.13126 0.13350 0.14897 0.10771 0.16232 0.17737 0.20418

739 NTC 29.406 20.664 20.059 20.708 22.465 21.108 21.098 19.417 22.007 22.511RMV 0.07614 0.08012 0.08425 0.21937 0.22485 0.22615 0.20363 0.19671 0.21554 0.22833

740 NTC 21.572 21.983 19.682 21.070 24.521 18.479 16.529 15.536 14.436 15.624RMV 0.15258 0.16392 0.16938 0.16836 0.16904 0.17321 0.14087 0.14344 0.13886 0.15140

741 NTC 21.288 16.033 16.242 17.619 19.073 18.989 15.499 18.457 18.783 19.518RMV 0.10302 0.10696 0.11208 0.11774 0.11453 0.17603 0.14952 0.15394 0.14956 0.15873

153


Unaudited





School Districts (continued):

742 NTC 11.237 13.492 12.363 18.640 20.083 20.446 20.098 24.280 23.688 30.505RMV 0.03775 0.10593 0.11602 0.11396 0.13149 0.14165 0.14558 0.14276 0.13144 0.11610

743 NTC 18.743 15.728 18.338 16.676 17.124 16.728 15.102 12.510 16.647 16.959RMV 0.14465 0.23316 0.24496 0.24198 0.25800 0.25922 0.23417 0.20161 0.24857 0.26368

745 NTC 23.037 23.990 23.720 24.674 27.292 28.621 31.336 32.635 38.085 34.494RMV 0.10076 0.10672 0.11048 0.12041 0.11310 0.11433 0.06297 0.14693 0.14288 0.14677

748 NTC 34.557 33.725 34.166 34.457 39.384 40.914 40.992 38.096 34.684 49.453RMV 0.08070 0.08698 0.08897 0.09046 0.17170 0.17648 0.14554 0.13675 0.14188 0.14248

750 NTC 16.409 19.022 25.156 26.522 28.897 30.053 32.006 31.529 30.417 30.303RMV 0.11388 0.12194 0.12779 0.13542 0.10626 0.10916 0.10607 0.15261 0.14759 0.16903

463 NTC 22.004 21.129 18.586 19.386 34.976 33.638 29.578 32.050 29.679 29.552RMV 0.10936 0.11458 0.17209 0.19450 0.18434 0.18669 0.17330 0.16408 0.21095 0.16093

485 NTC 33.616 28.983 28.083 29.287 32.473 32.699 30.791 31.483 44.833 43.506RMV 0.04740 0.04991 0.03812 0.04282 0.04599 0.04426 0.07952 0.19593 0.22085 0.19948

487 NTC 50.851 51.571 54.105 34.296 45.450 41.586 40.507 44.247 42.316 39.961RMV 0.13135 0.13704 0.13241 0.12434 0.26160 0.25796 0.21404 0.21544 0.23945 0.30069

2149 NTC 19.931 15.361 15.199 15.367 16.647 16.535 15.002 17.018 18.758 17.298RMV 0.14300 0.15746 0.15037 0.14053 0.14837 0.14729 0.14579 0.16142 0.17981 0.16647

2753 NTC 32.635 33.103 29.788 27.082 28.467 27.066 28.613 32.534 34.235 18.364RMV 0.15756 0.16156 0.16530 0.15963 0.16500 0.16591 0.16391 0.15126 0.16247 0.16352

876 NTC 11.466 11.312 7.095 8.869 23.002 23.885 23.511 22.443 23.367 22.900RMV 0.15260 0.13366 0.13399 0.14496 0.16113 0.17205 0.15093 0.16547 0.16116 0.15510

154


Unaudited





Special Taxing Districts:

Annandale Fire 1.600 1.483 2.019 2.058 2.146 2.416 2.397 1.773 2.305 -Lynden Fire 2.416 2.587 3.613 3.364 3.674 3.939 3.946 4.009 3.788 -Glacial Ridge Hospital 3.132 2.829 2.550 2.550 2.701 2.635 2.410 2.329 2.260 2.240St Cloud Metro Transit 1.166 1.151 1.374 1.372 1.502 1.556 1.560 3.457 3.288 3.194Regional Rail Authority 0.180 0.196 0.273 0.426 0.285 0.249 0.185 0.177 0.166 0.106St Cloud HRA 1.143 1.129 1.064 0.649 0.789 0.816 0.815 0.797 0.933 0.925St Cloud EDA - - - - 0.771 0.797 0.796 0.825 0.853 0.881Stearns County HRA 0.282 0.268 0.257 0.263 0.339 0.402 0.450 0.427 0.397 0.390Clearwater River Watershed 1.909 1.755 1.721 2.173 1.958 2.044 2.012 1.988 2.263 1.921North Fork Crow River Watershed 3.624 3.866 3.060 3.004 2.685 2.627 2.526 2.318 2.620 2.283Sauk River Watershed 0.580 0.702 0.677 0.775 0.840 0.877 0.881 0.842 0.786 0.803South Two River Watershed - - - - - - - - - -Middle Fork Crow River Watershed 1.902 1.774 1.565 1.692 1.801 2.008 2.069 1.947 2.578 2.151


155

SCHEDULE 7

Unaudited

Taxable Market Net Tax % of Total Taxable Market Net Tax % of Total Taxpayer Value Capacity Net Tax Capacity Taxpayer Value Capacity Net Tax Capacity

Northern States Power 132,166$ 2,636$ 1.86% St Cloud Mall LLC 85,335$ 1,707$ 1.33%St Cloud Mall LLC 80,500 1,609 1.14% Northern States Power 63,322 1,266 0.99%Centracare Health System 50,413 1,003 0.71% IRET Properties 22,698 454 0.35%Great River Energy 43,644 872 0.62% Cold Spring Granite 18,003 360 0.28%Minnesota Pipeline Co 30,343 606 0.43% Coborns Incorporated 17,423 348 0.27%Western MN Municipal Power 24,865 497 0.35% IRET Properties 17,226 345 0.27%Cold Spring Granite 22,023 402 0.29% Welsh Fingerhut MN LLC 16,772 335 0.26%Allet, INC 19,300 385 0.27% Allina Health System 16,008 320 0.25%IRET Properties 27,575 345 0.24% Levimo LLC 15,394 308 0.24%Welsh Fingerhut MN LLC 17,260 344 0.24% Beumer Baird LLC 13,605 272 0.21%All Others 15,744,140 132,699 93.85% All Others 11,620,464 122,586 95.55%Total 16,192,229$ 141,398$ 100.00% Total 11,906,250$ 128,301$ 100.00%


20082017

STEARNS COUNTY

Principal Property Taxpayers(in thousands of dollars)

Current Fiscal Payable Year and Nine Years Ago


156

SCHEDULE 8

Unaudited

Collections in

Fiscal/Payable Year Total Tax Levied Amount % of Levy Subsequent Years Amount % of Levy

2007 51,396 50,573 98.40% 812 51,386 99.98%2008 56,499 55,380 98.02% 1,102 56,482 99.97%2009 60,512 59,100 97.67% 1,383 60,483 99.95%2010 65,353 63,946 97.85% 1,372 65,318 99.95%2011 65,443 64,278 98.22% 1,122 65,400 99.93%2012 68,288 67,324 98.59% 918 68,243 99.93%2013 68,085 67,196 98.70% 835 68,032 99.92%2014 67,985 67,267 98.94% 618 67,885 99.85%2015 68,609 67,977 99.08% 446 68,423 99.73%2016 70,599 70,009 99.16% - 70,009 99.16%


Collected within the Fiscal Year of the Levy Total Collections to Date

STEARNS COUNTY

Property Tax Levies and Collections


Last Ten fiscal Years

Stearns County Portion Only


157

SCHEDULE 9

Unaudited

Collections in

Fiscal/Payable Year Total Tax Levied Amount % of Levy Subsequent Years Amount % of Levy

2007 162,559 159,055 97.84% 3,490 162,545 99.99%2008 172,751 167,672 97.06% 5,056 172,728 99.99%2009 182,853 177,576 97.11% 5,238 182,814 99.98%2010 187,915 183,122 97.45% 4,744 187,866 99.97%2011 193,389 189,360 97.92% 3,969 193,329 99.97%2012 201,777 197,677 97.97% 4,037 201,714 99.97%2013 199,918 196,205 98.14% 3,636 199,842 99.96%2014 102,463 101,418 98.98% 904 102,321 99.86%2015 104,656 103,723 99.11% 658 104,381 99.74%2016 104,842 104,010 99.21% - 104,010 99.21%


Collected within the Fiscal Year of the Levy Total Collections to Date

STEARNS COUNTY

Property Tax Levies and Collections


Last Ten fiscal Years

All Overlapping Governments


158

SCHEDULE 10

Unaudited

Debt ServiceFiscal Debt Interest and Total Debt Total General to GeneralYear Principal Fiscal Charges Service Expenditures Expenditures

2007 3,210 625 3,835 118,039 3.2%2008 4,560 903 5,463 116,532 4.7%2009 5,885 904 6,789 118,594 5.7%2010 4,865 940 5,805 121,649 4.8%2011 3,775 816 4,591 137,240 3.3%2012 3,985 729 4,714 132,310 3.6%2013 4,145 636 4,781 132,816 3.6%2014 1,990 569 2,559 145,760 1.8%2015 3,620 765 4,385 140,298 3.1%2016 8,830 3,384 12,214 149,946 8.1%


STEARNS COUNTY

Ratio of Annual Debt Service Expenditures forGeneral Bonded Debt to Total General Expenditures




159

SCHEDULE 11

Unaudited

Fiscal Year

Total General Obligation

Bonded Debt

G.O. Bonded Debt -- Paid by

Special Assessments

Adjusted G.O.

Bonded Debt

(1)

Accumulated Resources

Restricted to Repaying

Principal of Adjusted G.O. Bonded Debt

Net Adjusted G.O. Bonded

Debt Estimated

Population (2)

Net Adjusted G.O. Debt Per

CapitaNet Tax Capacity

% of Net Adjusted G.O.

Debt to Tax Capacity

2007 20,489 990 19,499 6,542 12,957 146 89 117,386 11.0%

2008 29,495 930 28,565 6,488 22,077 147 150 133,782 16.5%

2009 23,688 885 22,803 4,866 17,937 149 120 140,234 12.8%

2010 29,647 840 28,807 3,832 24,975 151 165 139,812 17.9%

2011 25,827 795 25,032 4,227 20,805 151 138 135,671 15.3%

2012 21,796 745 21,051 4,484 16,567 152 109 125,356 13.2%

2013 17,605 695 16,910 5,494 11,416 153 75 123,140 9.3%

2014 21,351 656 20,695 11,220 9,475 153 62 125,166 7.6%

2015 25,174 230 24,945 11,020 13,925 154 90 130,810 10.6%

2016 18,796 159 18,638 5,403 13,234 155 86 138,323 9.6%

(1) Excludes special assessment General Obligation Bonds

(2) Data Source: Stearns County Auditor-Treasurer's Office and the Minnesota State Demographic Center – County Data

Note: Numbers may differ from the financial statements due to rounding.

STEARNS COUNTY

Ratios of Net General Obligation Bonded Debt Outstanding


(in thousands, except per capita)



160

SCHEDULE 12

Unaudited

Amount AmountTownships SchoolsAvon 94$ 100.00 % 94$ Brockway 17 100.00 17 Albany #745 38,895$ 100.00 % 38,895$ Collegeville 754 100.00 754 Annandale #876 27,740 8.43 2,338 Eden Lake 315 100.00 315 Belgrade-Brooten #2364 2,600 60.69 1,578 Krain 268 100.00 268 Eden Valley #0463 15,708 72.22 11,344 Luxemburg 610 100.00 610 Holdingford #738 5,545 97.14 5,386 Munson 376 100.00 376 Kimball #739 4,920 76.65 3,771 Wakefield 934 100.00 934 Long Prairie #2753 10,115 0.22 22

Total Townships 3,368$ 3,368$ Melrose #740 10,135 95.66 9,695 Minnewaska #2149 17,515 0.05 8

Cities Paynesville #741 4,980 82.02 4,085 Albany 9,421$ 100.00 % 9,421$ Rocori (Cold Spring) #750 38,020 100.00 38,020 Avon 15,731 100.00 15,731 Royalton #0485 27,605 0.07 20 Belgrade 3,544 100.00 3,544 Sartell St. Stephen #748 120,055 97.93 117,570 Brooten 2,101 100.00 2,101 Sauk Centre #743 3,904 78.27 3,056 Cold Spring 10,034 100.00 10,034 St Cloud #742 94,115 81.96 77,137 Eden Valley 1,428 46.79 668 Upsala #0487 13,940 5.91 824 Freeport 3,366 100.00 3,366 Total Schools 435,792$ 313,749$ Greenwald 162 100.00 162 Holdingford 4,620 100.00 4,620 Kimball 4,909 100.00 4,909 Other Taxing DistrictsLake Henry 101 100.00 101 Glacial Ridge Hospital 18,556 3.55 659 Melrose 3,135 100.00 3,135 Middle Fork Crow River Watershed 420 6.03 25 New Munich 397 100.00 397 St. Cloud HRA 2,635 85.35 2,249 Paynesville 3,015 100.00 3,015 St. Cloud Metro Transit 5,850 79.82 4,669 Richmond 9,436 100.00 9,436 Stearns County HRA 1,340 100.00 1,340 Rockville 6,595 100.00 6,595 Total Other Taxing Districts 28,801$ 8,942$ Roscoe 150 100.00 150 Sartell 43,875 90.45 39,685 Stearns County 18,135$ 100.00 % 18,135$ Sauk Centre 20,186 100.00 20,186 St Augusta 4,647 100.00 4,647 Totals 886,565$ 710,546$ St Cloud 208,784 86.03 179,617 St Joseph 19,585 100.00 19,585 St Martin 1,916 100.00 1,916 St Stephen 151 100.00 151 Waite Park 23,180 100.00 23,180

Total Cities 400,469$ 366,352$

Data Source: Stearns County Auditor-Treasurer's OfficeNote: Percentage determined by the portion of property subject to taxation by Stearns County


Net G.O. Debt Outstanding

STEARNS COUNTY

Computation of Underlying, Overlapping, and Direct Debt

December 31, 2016


Net G.O. Debt Outstanding

Applicable to Stearns CountyPercentPercent

Applicable to Stearns County

161

SCHEDULE 13

Unaudited

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Market Valuation of Taxable Property 1 10,857,168$ 11,906,250$ 12,487,405$ 12,919,764$ 12,557,632$ 11,551,622$ 11,293,229$ 11,552,896$ 12,163,400$ 12,805,069$

Debt Limit 2 2.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00%

Debt applicable to limit 217,143$ 357,187$ 374,622$ 387,593$ 376,729$ 346,549$ 338,797$ 346,587$ 364,902$ 384,152$

General obligation debt 19,499$ 28,565$ 22,803$ 28,807$ 25,032$ 21,051$ 16,910$ 20,706$ 24,390$ 18,135$

Less: Assets available for debt service 6,212 6,091 4,431 3,386 3,786 4,023 5,082 10,829 11,003 11,003

Total Net Debt Applicable to Limit 13,287$ 22,474$ 18,373$ 25,421$ 21,245$ 17,028$ 11,829$ 9,877$ 13,387$ 7,132$

Unused Margin of Indebtedness 203,857$ 334,714$ 356,249$ 362,172$ 355,484$ 329,520$ 326,968$ 336,710$ 351,515$ 377,020$

Percent of Legal Debt Incurred 6.12% 6.29% 4.90% 6.56% 5.64% 4.91% 3.49% 2.85% 3.67% 1.86%

(1) Source: Stearns County Auditor-Treasurer

(2) Through 2007, the debt limit was 2%. In 2008, the Minnesota Statute was changed to increase the limit allowed from 2% to 3%. Statute Reference 475.53.

STEARNS COUNTY

Legal Debt Margin Information



ST CLOUD, MINNESOTA

162

Documents

Stearns County Minnesota