Yeah, it's just the three of us. There's three people that piece of property that goes from the road to Yeah. into 20 foot things. You can't build on it. You can't put it
down. Okay. Can I start? Oh, okay. will officially call to order the special city council meeting for the city of Nisa on this Wednesday, April 16th, 2025. It says 2024 at
4:02 p.m. Um the first item on the agenda is the city of Nisa audited financial statements for the year ended December 31st, 2024. And Ryan Schmidt is here to present. Ryan,
follow me. So I guess start us through the recap really people in the reviewing various reports invoices all based
on providing whether or not you have opinion. During the diff pretty standard test standard accounting policies that we are basically take a more conservative
approach. Thank you. Uh and we have a few internal control related matters to report and they're the same three that we had last year. Uh the first of these relates to audit adjustments. So as part of the audit process, uh we assist with certain
year-end adjustments to basically get you from the cash basis of accounting that you run throughout the year to the acrruel basis of accounting that's used for your liquor fund and your uh sewer fund. And because we assist with these year-end adjustments as part of the
audit process, we have to note that in the reports and and um put a finding in there related to it because you don't have a CPA on staff doing this for you. Uh the other item here uh relates to a lack of proper segregation of duties. Basically, this is saying that because
you only have so many people involved with the accounting procedures, you're not able to segregate all of the different accounting functions to the extent that's considered ideal. So, we need to make you aware of that. We need to make the readers aware of that and
let you know that um basically there's a little bit of extra risk when there's people who have access to the entire accounting system. um and as a result implement oversight and controls wherever you can. And then finally, we as a third party do prepare your
financial statements on your behalf. And then that is considered to be um an internal control finding because there's the heightened possibility that maybe a missing disclosure could occur or something along those lines. Sorry about that. Finally, as part of the audit
process, we do review your compliance with Minnesota statutes. So, the state actually gives us uh five or six checklists that relate to different Minnesota statutes. Uh some of them relating to contracting and bidding. How do you go about obtaining and and soliciting bids? Uh where do you keep
your deposits and investments? How do you handle conflicts of interest? So on and so forth. So we review for your compliance with those statutes. And we did not find any instances of non-compliance this past year. Now, from there before from there, I've got graphs
that show a trend analysis of numbers. Um, so I'm not sure if it's going to be pretty hard to go through them without you guys being able to see them. So, um, I don't know if Jenny's making hard copies. All
right. Okay. So, if you flip in, it's the first page that says general fund trend analysis and budgetary comparison. So, it would be the first page that has a graph on it with numbers. So, I'm going to start out by walking through the general fund. Just a real big
picture look for starters here. We're looking at the past five years, 2020 through 2024. Then we also have the 2024 budget on there as well. Um, so really big picture look for starters here. Uh, comparing to budget, you did have a few unusual items that occurred this year in
the general fund and I'll point these out and walk through them in the following pages here. Um, but big picture, your revenues were quite close to budget. They were over budget by 134,000. Expenditures on the other hand were quite a bit larger, quite a bit in
excess of budget by about 2.3 million. However, this was related to that land purchase that was financed via bond proceeds. Um, so you can see down at the bottom where we actually have the 2024 numbers summarized in a table, the other sources and uses line just under $2
million there. That's the net activity of your bond proceeds and then also transfers out to other funds. So in aggregate that kind of washes out with the excess expenditures and you had budgeted for a decrease of about $37,000
in your fund balance for the year and your actual decrease was about $216,000 for the year. Now the next two pages walk through this in a little more detail. Here we have the same revenues and then the next page shows expenditures. those
same revenues and expenditures broken out into smaller categories. And once again, we have 2024, we have the prior year 2023, and then also the 2024 budget on there as well. Um, but looking at the revenues page, you can see the vast majority of your funding does come from
property taxes for the general fund. Um, and all the categories listed here quite close to budget. I think the biggest difference here is interest income just because you're pretty conservative with what you budget for your investment earnings. Question on the intergovernmental piece,
is that where you would park the revenues from or the profit from the liquor side of the city? No. So, so the the if you go to the previous page, there's the other sources and uses category down at the bottom. So, I
believe what was it? 290,000 that got transferred from the liquor fund into the general fund that falls into that other sources category. So that's not considered a revenue for the general fund. It's a transfer from the liquor fund. Got it. Yep. So that's netted into
that area. Okay. So if I if I could um sometimes we do receive funding from the county. We do receive some funding from the state. So some of that um could be repayment from the county for um the roundabout project that was a little bit delayed
funding that came in, things like that. So yeah. Yeah. Yep. It's basically payments from other governments, mostly the state and then some county funding as well. Um I believe a lot of that grant funding for the the projects that you talked about would fall into a different fund that we'll look at in a little bit here.
Okay. Next page, looking at expenditures. Uh same layout as the previous page, looking at smaller categories here. Um most of them pretty close to budget. Um obviously the big one that stands out here is capital outlay. Uh that would be where that land
and property purchase fell as well as some additional vehicle purchases that were in excess of your budget. But as I mentioned, you had the bond proceeds that financed that. Um the other item that stands out here a little bit would be your general government on the far left hand side here. you were about
$157,000 over. Um, looked like it was mostly repairs and maintenance, engineering costs, etc. And the next page, still looking at just the general fund here. Here we look at your unassigned fund balance as a percentage of your annual budget. Uh so
this is a pretty commonly used ratio just to track uh you know where where you want your fund balance to be at as the city grows and as your expenses increase. Um so you have a policy in place to keep this ratio at at least 100%. So your unassigned fund balance at
least 100% of your annual budgeted expenses. And you can see it did drop off a little bit. Last year it was 170% this year down to 143%. And that's basically a combined impact of your expenses increasing and
then also your fund balance decreasing a bit. The next page we have just the cash balance for the general fund. Um but we have a little bit extra going on here. So I'll explain why we have these three different lines here. So the the blue line that you see is just the general
fund's cash. That's just the cash over the past five years. Now, with the projects that you've had going on in recent years, the general fund's been essentially fronting this cash and forwarding it to those funds. So then we have an amount that's due from those other funds as a reimbursement. And that
would be the green line that you see there. So then in aggregate, if you look at those two in combination, you can see kind of where the general fund's cash is really at with that amount that's also due from other funds. And you can see that that's held pretty steady for the
past five years. All right, with that we'll move away from the general fund. Take a quick look at some of your other more significant funds that have a little more activity this past year. Uh here we have your two project funds related to the east to the Gull Lake Trail project and the county
road 77 Nomus roundabout. Um, these are the two funds that I was referring to on the previous page that were being kind of frontended by the general fund and then those grant revenues came in as reimbursements and that is what the revenues are made up of here um in the the blue bar there. That would be the
grant funding coming in. Then a little bit of expenditures for wrapping up the the project there in the G Lake. no expenditures uh in the current year for the roundabout project and then the transfers from the general fund to basically close out the portion of the
costs that weren't funded by grants. And overall you had an increase in both of these fund balances. Uh Gull Lake Trail about 1.8 million and about 1.2 million for the round boat project. Next page we have the same layout
looking at the debt service fund and then all of your non- major smaller funds kind of wrapped together there in aggregate. Um these are fully broken out into the finina in the back of the financial statements if you want more detail. But debt service fund here you
have your property tax revenues of about 621,000 debt service principal and interest of about 584,000. Overall, an increase in fund balance about 37,000 for the year. And your non- major funds, most of that activity there is made up of the fire
fund, parks and wreck, community center. Um overall increase in fund balance there of about 66,000 for the year. And the next page here shows the uh cash for both of those categories over the past five years. Uh you can see your debt service fund has been pretty
steadily rising over the past five years, up about $37,000 this past year. And then your non- major governmental funds. The drop off in 2023, that was a firetruck purchase. Um but you can see it bounced back this year about uh up about
$182,000 the prior year. All right, that will move forward into your enterprise funds. Uh looking at your liquor fund here for starters, uh the graph focuses just on operations. So it's it's correlates to the operating
revenues and operating expenses that are down in the table below. Comparing the liquor fund activity to the prior year, revenues were pretty steady, up about 124,000 and expenses were up about 46,000. Uh overall, you had operating
income for the year of about 461,000. And then down under the nonoperating section within that nonoperating expenses and transfers out, that's where that $290,000 transfer out to the general
fund is showing up. Um, so even after that transfer out to the general fund, you did have an increase in net position for the year of 157,000. And the next page, same layout for the sewer fund. Um, once again, just doing a quick comparison to last year,
revenues were up about $68,000 and operating expenses up about $53,000. So, you had operating income for the year of about $76,000. And down under the nonoperating section, that $410,000 that you see there of
nonoperating revenues, most of that is connection fees of about 373,000. So with that, you had an increase in the net position here of about 436,000 for the year. And then just like with the others, the next page shows the cash for
these two funds over the past five years. Both of them pretty steadily increasing. And finally, I just have two more graphs here showing your projected future debt payments based on the debt that was outstanding at the end of the year. So,
this is not showing debt balances. This is showing the payments that are required going forward into the future. Um, so on the first page here, we have your governmental fund debt, which is debt that's being financed by property taxes. Um, so you can see after uh some
fi some final debt payments on a couple issuances get paid off in the next couple years and then that drops off uh fairly significantly and based on what's currently outstanding your debt would be paid off by 2040. And the next page has the same
thing uh but it's for your proprietary funds which is basically your PFA loans in the sewer fund. You can see that holds pretty steady also through 2040. Any questions? Nothing. Okay. Thank you, Mayor Cara. And if I
could, um, just always want to acknowledge Ryan and his team for, um, being great partners for our audit and helpful to both Maggie and myself and various other staff that contributes to providing the information that they need. So, thank you. We appreciate it. Yeah, I appreciate it. Thank you very
much. Thank you. Thank you. Okay, we're going to move next to the um 2026 budget discussion, but we're going a little bit out of order. That's fine. We are going to reboot the computer. So, that's you. We can continue. I just that we're just going to do that to see if we
can't get the screen up. That will be helpful. But yes, whatever order you would um I think we were going to start with fire.