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FINANCE COMMITTE Packet 07262022
CITY OF MUSKEGO FINANCE COMMITTEE AGENDA 07/26/2022 5:30 PM Muskego City Hall, W182 S8200 Racine Avenue CALL TO ORDER PLEDGE OF ALLEGIANCE ROLL CALL PUBLIC MEETING NOTICE APPROVAL OF MINUTES Approval of June 28, 2022 Finance Committee Minutes FCM.2202.06.28 Unappr.pdf 2021 AUDIT PRESENTATION Audit Presentation 4e C21 of SKEGO City of Muskego AUD 12-31-21 FS FINAL.pdf C of Muskego 2021 presentation. pdf City of Muskego AUD 12-31-21 Audit Results Rpt FINAL.pdf LICENSE APPROVALS NEW BUSINESS Recommend Approval of the Purchase of a Virtual Reality Simulator VR Simulator -Request to purchase memo.docx VR Simulator (InVeris) Quote.pdf Recommend Approval of an Agreement Terminating a Termination and REC Agreement Between The City of Muskego and the Village of Muskego Lakes Partnership CCR2022.059-Agreement.pdf Recommend Approval of Dedication of Public Improvements for PEGARL LLP PEGARL LLP Public Infrastructure Dedication -Finance Memo.docx Recommend Approval of Letter of Credit Reduction for PEGARL LLP PEGARL LLP LOC reduction -Finance Memo.docx VOUCHER APPROVAL Utility Vouchers - $98,297.27 General Fund Vouchers - $336,538.87 Wire Transfers for Payroll/Invoice Transmittals - $387,899.50 Vouchers - Total Sheet.pdf Vouchers - Alpha Report.pdf FINANCE DIRECTOR'S REPORT Quarterly Report Qtrly FD Report - 7-26-22 FC.pdf COMMUNICATIONS AND ANY OTHER BUSINESS AS AUTHORIZED BY LAW ADJOURNMENT NOTICE IT IS POSSIBLE THAT MEMBERS OF AND POSSIBLY A QUORUM OF MEMBERS OF OTHER GOVERNMENTAL BODIES OF THE MUNICIPALITY MAY BE IN ATTENDANCE AT THE ABOVE -STATED MEETING TO GATHER INFORMATION; NO ACTION WILL BE TAKEN BY ANY GOVERNMENTAL BODY AT THE ABOVE -STATED MEETING OTHER THAN THE GOVERNMENTAL BODY SPECIFICALLY REFERRED TO ABOVE IN THIS NOTICE. ALSO, UPON REASONABLE NOTICE, EFFORTS WILL BE MADE TO ACCOMMODATE THE NEEDS OF DISABLED INDIVIDUALS THROUGH APPROPRIATE AIDS AND SERVICES. FOR ADDITIONAL INFORMATION OR TO REQUEST THIS SERVICE, CONTACT MUSKEGO CITY HALL, (262) 679-4100. K UNAPPROVED CITY OF MUSKEGO FINANCE COMMITTEE MINUTES C4 of June 28, 2022 5:55 PM USKEGO Muskego City Hall, W182 S8200 Racine Avenue iu, CALL TO ORDER Mayor Petfalski called the meeting to order at 5:55 pm. PLEDGE OF ALLEGIANCE Those present recited the Pledge of Allegiance. ROLL CALL Present: Committee Members Alderpersons Kubacki, Wolfe, and Hammel. Also present: Alderpersons Madden, Terrence, Kapusta, and Schroeder; City Attorney Warchol; Public Works and Development Director Kroeger; Utilities Superintendent Kloskowski; and Assistant Deputy Clerk -Treasurer Crisp. PUBLIC MEETING NOTICE Ms. Crisp stated that the meeting was noticed in accordance with the open meeting law. APPROVAL OF MINUTES Alderperson Kubacki moved to approve the Finance Committee Minutes from June 14, 2022. Alderperson Wolfe seconded; motion carried. LICENSE APPROVALS Recommend Approval of Salvage and Recycling Permit for Kohne Salvage, W200 S7203 Williams Drive Alderperson Hammel moved to approve. Alderperson Wolfe seconded; motion carried. Recommend Approval of Change of Agent (Christina M. Blazek) for the "Class A" liquor license held by M & N Shooting Enterprize LLC (dba Boxhorn Gun Club) located at S90 W13960 Boxhorn Dr. Alderperson Wolfe moved to approve. Alderperson Hammel seconded; motion carried. NEW BUSINESS None. VOUCHER APPROVAL Alderperson Kubacki moved to recommend approval of Utility Vouchers in the amount of $72,826.97. Alderperson Wolfe seconded; motion carried. 3 Finance Committee Minutes June 28, 2022 Alderperson Kubacki moved to recommend approval of Tax Vouchers in the amount of $304,000.00. Alderperson Hammel seconded; motion carried. Alderperson Kubacki moved to recommend approval of General Fund Vouchers in the amount of $117,203.03. Alderperson Wolfe seconded; motion carried. Alderperson Kubacki moved to recommend approval of Wire Transfers for Payroll/Invoice Transmittals in the amount of $382,824.99. Alderperson Hammel seconded; motion carried. FINANCE DIRECTOR'S REPORT None. COMMUNICATIONS AND ANY OTHER BUSINESS AS AUTHORIZED BY LAW None. ADJOURNMENT Alderperson Wolfe moved to adjourn at 5:58 p.m. Alderperson Kubacki seconded; motion carried. Minutes taken and transcribed by Assistant Deputy Clerk -Treasurer Crisp. 4 CITY OF MUSKEGO Muskego, Wisconsin FINANCIAL STATEMENTS Including Independent Auditor's Report As of and for the Year Ended December 31, 2021 City of Muskego Table of Contents As of and for the Year Ended December 31, 2021 Independent Auditors' Report 1 — 3 Management's Discussion and Analysis (Required Supplementary Information) 4 — 13 Basic Financial Statements Statement of Net Position 14 Statement of Activities 15 Balance Sheet — Governmental Funds 16 Statement of Revenues, Expenditures and Changes in Fund Balances — Governmental Funds 17 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities 18 Statement of Revenues, Expenditures, and Changes in Fund Balance — Budget and Actual — Special Revenue Fund — Tax Increment Districts 19 Statement of Revenues, Expenditures, and Changes in Fund Balance — Budget and Actual — General Fund 20 Statement of Net Position — Proprietary Funds 21 Statement of Revenues, Expenses, and Changes in Net Position — Proprietary Funds 22 Statement of Cash Flows — Proprietary Funds 23 — 24 Statement of Fiduciary Net Position — Fiduciary Funds 25 Statement of Changes in Fiduciary Net Position — Fiduciary Funds 26 Index to Notes to Financial Statements 27 Notes to Financial Statements 28 — 73 Required Supplementary Information Schedule of Proportionate Share of the Net Pension Liability (Asset) and Schedule of Employer Contributions — Wisconsin Retirement System 74 Schedule of Proportionate Share of the Net Pension Liability and Schedule of Employer Contributions — LRLIF 75 Notes to Required Supplementary Information 76 City of Muskego Table of Contents As of and for the Year Ended December 31, 2021 Supplementary Information Combining Balance Sheet — Non -major Governmental Funds — Special Revenue Funds 77 — 78 Combining Balance Sheet — Non -major Governmental Funds — Capital Projects Funds Combining Balance Sheet — Non -major Governmental Funds 79 :e Combining Statement of Revenues, Expenditures and Changes in Fund Balances — Non -major Governmental Funds — Special Revenue Funds 81 — 82 Combining Statement of Revenues, Expenditures and Changes in Fund Balances — Non -major Governmental Funds — Capital Projects Funds 83 Combining Statement of Revenues, Expenditures and Changes in Fund Balances — Non -major Governmental Fund 84 7 INDEPENDENT AUDITORS' REPORT Independent Auditors' Report To the City Council of City of Muskego Opinions (9 bakertitty We have audited the accompanying financial statements of the governmental activities, the business -type activities, the discretely presented component unit, each major fund and the aggregate remaining fund information of the City of Muskego (the City), as of and for the year ended December 31, 2021, and the related notes to the financial statements, which collectively comprise the City's basic financial statements as listed in the table of contents. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business -type activities, the discretely presented component unit, each major fund and the aggregate remaining fund information of the City as of December 31, 2021 and the respective changes in financial position and, where applicable, cash flows thereof and the respective budgetary comparison for the general fund and the tax increment district special revenue fund for the year then ended in accordance with accounting principles generally accepted in the United States of America. Basis for Opinions We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America; and for the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City's ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter. Baker Tilly US, LLP, trading as Baker Tilly, is a member of the global network of Baker Tilly International Ltd., the members of which are separate and independent legal entities. © 2020 Baker Tilly US, LLP 9 Auditors' Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements. In performing an audit in accordance with GAAS, we: • Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, no such opinion is expressed. • Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. • Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the City's ability to continue as a going concern for a reasonable period of time. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings and certain internal control -related matters that we identified during the audit. Required Supplementary Information Accounting principles generally accepted in the United States of America require that the required supplementary information, as listed in the table of contents be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board 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. 2 10 Supplementary Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements. The supplementary information as listed in the table of contents is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the supplementary information is fairly stated in all material respects, in relation to the basic financial statements as a whole. Milwaukee, Wisconsin July 11, 2022 3 11 MANAGEMENT'S DISCUSSION AND ANALYSIS City of Muskego, Wisconsin Management Discussion and Analysis As of and for the Year Ended December 31, 2021 (Unaudited) As management of the City of Muskego, we offer readers of these financial statements this narrative overview and analysis of the financial activities of the City for the fiscal year ended December 31, 2021. The discussion and analysis presents the highlights of financial activities and financial position for the City of Muskego (City). The analysis focuses on significant financial issues, major financial activities and resulting changes in financial position, budget changes and variances from the budget, and specific issues related to funds and the economic factors affecting the City. Financial Highlights • The assets and deferred outflows of resources of the City exceeded its liabilities and deferred inflows of resources by $147,526,810 as of December 31, 2021. Of this amount, $16,012,244 (unrestricted net position) may be used to meet the government's ongoing obligations to citizens and creditors. Compared to the prior year, the City's total net position decreased by $651,022. • At the close of the 2021 fiscal year, the City's governmental funds reported combined ending fund balances of $16,188,165, which is a decrease of $6,607,868 in comparison with the prior year. Of this total amount, approximately 84% or $13,630,154 is available for spending at the government's discretion (committed, assigned and unassigned fund balances). • The City's unassigned fund balance for the General Fund was $7,841,809 or 50% of the total general fund expenditures (including transfers out) for fiscal year 2021. Of this total, $2,821,115 is committed to meet the requirements of the City's Fund Balance and Annual General Fund Budgeted Contingency policy. • The City's total long-term debt, excluding compensated absences, decreased by $3,400,178 (8.18%) during the 2021 fiscal year. The decrease was due to the net of scheduled payment. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the City's basic financial statements. The City's basic financial statements comprise three components: 1) government -wide financial statements, 2) fund financial statements and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Government -wide Financial Statements The government -wide financial statements are designed to provide readers with a broad overview of the City's finances, in a manner similar to a private -sector business. The statement of net position presents information on all of the City's assets, deferred outflow of resources, liabilities, and deferred inflows of resources, with the difference reported as net position. Over time, increases or decreased in net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. The statement of activities presents information showing how the City's net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation and sick leave). 4 13 City of Muskego Management Discussion and Analysis As of and for the Year Ended December 31, 2021 (Unaudited) Government -wide Financial Statements (continued) Both the government -wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business -type activities). The governmental activities of the City include general government, protection of persons and property, highways and transportation, health and sanitation, recreation and education and conservation and development. Business -type activities of the City include the Sewer Utility and the Water Utility. The government -wide financial statements include the City and the following component units: The Community Development Authority and the Big Muskego Lake Bass Bay Protection and Rehabilitation District. There are no other organizations or agencies whose financial statements should be combined and presented with the financial statements of the City. The government -wide financial statements can be found on pages 16 through 18 of this report. Fund Financial Statements A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance - related legal requirements. All of the funds of the City may be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. Governmental Funds Governmental funds are used to account for essentially the same functions reported as governmental activities in the government -wide financial statements. However, unlike the government -wide financial statements, governmental funds financial statements focus on the near -term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near -term financing requirements. Because the focus of governmental funds is narrower than that of the government -wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government -wide financial statements. By doing so, readers may better understand the long-term impact of the government's near -term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The City maintains twenty-four individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures and changes in fund balances for the General Fund, Debt Service Fund, Capital Budget Fund and Tax Increment District Capital Project Funds, all of which are considered to be major funds. Individual fund data for each of the fifteen non -major governmental funds is provided in the form of combining statements and can be found on pages 77 through 84 of this report. The City adopts an annual appropriated budget for its General Fund. A budgetary comparison statement has been provided for the General Fund to demonstrate compliance with its budget on page 20 this report. The basic governmental fund financial statements can be found on pages 14 through 20 of this report. 5 14 City of Muskego Management Discussion and Analysis As of and for the Year Ended December 31, 2021 (Unaudited) Proprietary Funds The City maintains one type of proprietary fund: Enterprise funds are used to report the same functions presented as business -type activities in the government -wide financial statements. The City maintains two enterprise funds. Proprietary funds provide the same type of information as the government -wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for the water and sewer operations, both of which are considered to be major funds of the City. The basic proprietary fund financial statements can be found on pages 21 through 24 of this report. Fiduciary Funds Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government -wide financial statement because the resources of those funds are not available to support the City's own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. The fiduciary funds for the City are private purpose trust funds and agency funds. Total assets of the fiduciary funds were $33,450,696. The basic fiduciary funds financial statements can be found on pages 25 and 26 of this report. Notes to the Financial Statements The notes provide additional information that is essential to a full understanding of the data provided in the government -wide and fund financial statements. The notes to the financial statements can be found on pages 27 through 73 of this report. Other Information The combining statements referred to earlier in connection with non -major governmental funds is presented immediately following the notes to the financial statements. Combining and individual fund statements and schedules can be found on pages 76 through 83 of this report. Required supplementary information for the Wisconsin Retirement System and Local Retiree Life Insurance Fund are included on pages 74 through 76. Government -Wide Financial Analysis As financial information is accumulated from year-to-year, changes in net position may serve as a useful indicator of a government's financial position. In the case of the City, assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $147,526,810 as of December 31, 2021. The largest portion of the City's net position (75.5%) reflects its investment in capital assets (e.g., land, buildings, improvements, and machinery and equipment), less any debt used to acquire those assets that is still outstanding. The City uses these capital assets to provide services to citizens. Consequently, these assets are not available for future spending. Although the City's investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. 6 15 City of Muskego Management Discussion and Analysis As of and for the Year Ended December 31, 2021 (Unaudited) The following provides a summary of the City's net position: City of Muskego - Net Position Governmental Activities Business - type Activities Total 2021 2020 2021 2020 2021 2020 Current and other assets $ 37,515,916 $ 41,363,146 $ 23,088,748 $ 22,502,168 $ 60,604,664 $ 63,865,314 Capital assets 81,967,019 80,781,352 67,151,218 68,274,562 149,118,237 149,055,914 Total assets 119,482,935 122,144,498 90,239,966 90,776,730 209,722,901 212,921,228 Deferred outflows ofresources 6,035,707 4,364,828 628,944 469,292 6,664,651 4,834,120 Total Assets and Deferred Outflows of Resources 125,518,642 126,509,326 90,868,910 91,246,022 216,387,552 217,755,348 Current liabilities 2,984,815 1,832,681 1,261,466 1,837,486 4,246,281 3,670,167 Noncurrent outstanding 38,487,084 41,869,342 2,056,380 2,379,275 40,543,464 44,248,617 Other liabilities - - 539,051 550,240 539,051 550,240 Total liabilities 41,471,899 43,702,023 3,856,897 4,767,001 45,328,796 48,469,024 Deferred inflows of resources 22,781,409 20,574,269 750,537 534,223 23,531,946 21,108,492 Net investment in capital assets 47,254,179 44,170,391 64,885,348 65,735,249 110,846,470 108,542,094 Restricted 5,550,747 8,321,906 14,547,273 13,181,693 20,098,020 21,503,599 Unrestricted 8,460,408 9,740,737 6,828,855 7,027,856 16,582,320 18,132,139 Total net position 61,265,334 62,233,034 86,261,476 85,944,798 147,526,810 148,177,832 Total Liabilities, Deferred Inflows of Resources, and Net Position $ 125,518,642 $ 126,509,326 $ 90,868,910 $ 91,246,022 $ 216,387,552 $ 217,755,348 At the end of the 2021 fiscal year, the City is able to report positive balances in all three categories of net position, both for the government as a whole, as well as for its separate governmental and business -type activities. Changes in Net position As of December 31, 2021, total net position of the City amounted to $147,526,810, which is a decrease of $651,022 as compared to the 2020 fiscal year end. The major items attributing to this decrease is declining investment earnings and landfill host fees. Net position of the City's governmental activities totaled $61,265,334, which is a decrease of $967,700 as compared to the prior year. Of this total, $8,460,408 or 13.8% is classified as unrestricted assets and may be used to finance the City's ongoing obligations to citizens and creditors. The restricted net position portion (9.1%) represents resources that are subject to external restrictions on how they may be used, which include financing for debt service. " The net position section includes an adjustment for capital assets owned by the business -type activities, but financed by the debt of the governmental activities. 7 16 City of Muskego Management Discussion and Analysis As of and for the Year Ended December 31, 2021 (Unaudited) The business -type activities net position amounted to $86,261,476, an increase of $316,678. The unrestricted balance of $6,828,855 is used to finance the continued operations of the water and sewer utilities. The following schedule highlights the key elements of the City's revenues and expenses for the 2021 and 2020 fiscal year ends. These two main components are subtracted to yield the change in net position and are summarized as follows: City of Muskego's Change in Net Position Governmental Business -type Activities Activities Total 2021 2020 2021 2020 2021 2020 Revenues: Program Revenues Charges for services $ 4,810,748 $ 5,138,251 $ 8,774,814 $ 8,601,885 $ 13,585,562 $ 13,740,136 Operating grants and contributions 1,892,200 1,809,570 4,351 - 1,896,551 1,809,570 Capital grants and contributions 15,404 1,491,012 971,909 3,580,152 987,313 5,071,164 General Revenues Property taxes 15,151,985 14,719,325 - - 15,151,985 14,719,325 Other Taxes 105,173 117,853 _ _ 105,173 117,853 Grants and contributions not restricted to specific programs 617,545 958,429 - - 617,545 958,429 Unrestricted investment earnings 197,767 456,164 104,118 163,424 301,885 619,588 Miscellaneous 476 419 - - 476 419 Total Revenues 22,791,298 24,691,023 9,855,192 12,345,461 32,646,490 37,036,484 Expenses: General government 4,119,983 2,928,227 - - 4,119,983 2,928,227 Public safety 8,653,092 7,645,264 - - 8,653,092 7,645,264 Highway and transportation 5,119,141 5,167,163 - - 5,119,141 5,167,163 Health and sanitation 1,449,324 1,160,338 - - 1,449,324 1,160,338 Economic development 1,000,065 966,069 - - 1,000,065 966,069 Education and recreation 2,577,278 2,329,896 - - 2,577,278 2,329,896 Interest on long -tern debt 1,281,940 1,504,344 - - 1,281,940 1,504,344 Sewer - - 7,234,241 7,719,851 7,234,241 7,719,851 Water - - 1,862,448 1,828,697 1,862,448 1,828,697 Total Expenses 24,200,823 21,701,301 9,096,689 9,548,548 33,297,512 31,249,849 Decrease in Net Position before transfers (1,409,525) 2,989,722 758,503 2,796,913 (651,022) 5,786,635 Transfers 441,825 474,627 (441,825) (474,627) - - Change in Net Position (967,700) 3,464,349 316,678 2,322,286 (651,022) 5,786,635 Net Position - Beginning 62,233,034 58,768,685 85,944,798 83,622,512 148,177,832 142,391,197 Net Position - Ending $ 61,265,334 $ 62,233,034 $ 86,261,476 $ 85,944,798 $ 147,526,810 $ 148,177,832 8 17 City of Muskego Management Discussion and Analysis As of and for the Year Ended December 31, 2021 (Unaudited) Governmental Activities The table below discloses cost of services for Governmental Activities. The total cost of services column contains all costs related to the programs. The net of services column shows how much of the total amount is not covered by program revenues. Succinctly put net costs that must be covered by local taxes or other general revenue or transfers. Programs General government Public safety Public works Health and sanitation Conservation & development Education and recreation Interest and long-term debt Total Total Cost of Services 2021 2020 $ 4,119,983 $ 2,928,227 8,653,092 5,119,141 1,449,324 1,000,065 2,577,278 1,281,940 $ 24,200,823 7,645,264 5,167,163 1,160,338 966,069 2,329,896 1,504,344 $ 21,701,301 Net (Expenses) of Services 2021 2020 $ (3,825,074) (7,351,047) (3,644,654) 1,398,814 (920,023) (1,858,547) (1,281,940) $ (17,482,471) $ (2,616,677) (6,360,073) (2,442,323) 2,108,079 (642,553) (1,804,577) (1,504,344 ) $ (13,262,468) The increase in total cost of services is primarily attributed to the public safety building remodel and addition; as well as additional pension expense accounted for under GASB 68. Net cost of services is 72% of total cost of services in 2021. This reflects a continued reliance on taxes and other general revenue sources to fund the cost of services. The graph below shows the percentage of the total governmental activities revenues allocated by each revenue type. Revenues by Source - Governmental Activities Investment Earnings Charges for 0.87% Miscellaneous Services Shared Revenue 0.00% 21.11 % 2.71 % Operating Grants and Contributions 8.30% Capital Grants and Contributions Property taxes 0.07% 66.94% 9 18 City of Muskego Management Discussion and Analysis As of and for the Year Ended December 31, 2021 (Unaudited) Business -Type Activities Total Business -type activities' charges for service revenues for the year ending December 31, 2021 were $8,774,814, which is a slight increase of $172,929 over 2020 and primarily due to additional revenue generated from the sewer and water utility charges for services. The Business -type activities increased the City's net position by $316,678, which reflects reduction in sewer utility related operating expenses. The following graph shows the relationship between revenues and expenses for the City Sewer and Water Utilities. 8,000,000 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 Expenses and Revenues - Business -type Activities Sewer Utility Water Utility oExpenses ■Charges for Service The graph below displays the breakdown of revenues by source for the business -type activities. Revenues by Source - Business -type Activities Operating Grants & Capital Grants & Contributions Contributions ■ Charges for Service 0.04% 9.86% ■ Investment Earnings Investment Operating Grants & Contributions Earnings o ■Capital Grants &Contributions 1.06 /o Charges for Service 89.04% 10 19 City of Muskego Management Discussion and Analysis As of and for the Year Ended December 31, 2021 (Unaudited) Financial Analysis of the Government's Funds As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance - related legal requirements. This section will discuss major developments within the City's governmental funds and proprietary funds. Governmental Funds The focus of the City's governmental funds is to provide information on near -term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City's financing requirements. In particular, unrestricted fund balance (includes committed, assigned and unassigned fund balance) may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year. As of the end of the current fiscal year, the City's governmental funds — General Fund, Debt Service Fund, Tax Increment District Capital Project Funds, and all Other Non -major Governmental Funds — reported a combined ending fund balances of $16,188,165, a decrease of $6,607,868 in comparison with the prior year. Approximately 84% of this total amount ($13,630,154) is available for spending at the government's discretion. However, 36% of this amount ($5,788,345) is classified as committed, assigned or reported in special revenue funds or capital projects funds. The remainder of the fund balance is non -spendable or restricted. General Fund The General Fund is the chief operating fund of the City. During 2021, the General Fund balance increased by $118,044. This was primarily due to various position vacancies, employee benefit reductions, and remaining contingency funds. At the end of the year, the committed and unassigned fund balance of the General Fund was $7,841,809, while total fund balance reached $7,878,219. As a measure of the general fund's liquidity, it is useful to compare both unrestricted fund balance and total fund balance to total fund expenditures. The net committed and unassigned fund balance represents 49% of total general fund expenditures. Debt Service Fund Fund balance in the Debt Service Fund decreased by $1,199,832 during 2021. This decrease resulted from net principal retirements and interest payments, along with the $296,747 distribution of fund balance due to the termination of Tax Increment District #9. Capital Projects — Capital Budget Fund Fund balance in the Capital Budget Fund decreased by $909,234 during 2021, which reflects expenditures incurred for completion of a major road project. Proprietary Funds The City's proprietary fund statements provide the same type of information found in the government -wide financial statements, but in more detail. At year-end, net position of the Sewer Utility Fund amounted to $56,310,050 with the Water Fund totaling $29,951,426. The Sewer Utility Fund decreased in net position by $111,811 and the Water Utility Fund increased in net position by $428,489. 11 20 City of Muskego Management Discussion and Analysis As of and for the Year Ended December 31, 2021 (Unaudited) General Fund Budgetary Highlights The 2021 final budget of $16,390,786 included no amendments for the year. During the year revenues were slightly lower than budgetary revenues, however the deficit was offset by actual expenditures being less than budgetary expenditures. Capital Assets and Debt Administration Capital Assets The City's investment in capital assets for its governmental and business -type activities as of December 31, 2021, amounts to $149,118,237 (net of accumulated depreciation). This investment in capital assets includes land, buildings and improvements, equipment, infrastructure and construction in progress. Major capital events during the current year included final completion of the Hillendale Road project; purchase of an aerial ladder truck for the Fire Department, road reconstruction and various public safety and public works equipment purchases. City of Muskego's Capital Assets Governmental Activities Business -Type Activities Total 2021 2020 2021 2020 2021 2020 Land $ 5,721,603 $ 5,722,103 $ 272,448 $ 272,448 $ 5,994,051 $ 5,994,551 Intangibles 778,050 715,392 36,500 36,500 814,550 751,892 Construction in progress 3,189,983 437,536 70,458 126,261 3,260,441 563,797 Land Improvements 4,337,081 4,337,081 - - 4,337,081 4,337,081 Buildings 33,019,646 32,870,539 21,473,043 21,334,183 54,492,689 54,204,722 Equipment 11,304,308 10,591,057 82,005,580 5,465,844 93,309,888 16,056,901 Library Collection 4,234,003 4,071,099 - - 4,234,003 4,071,099 Infrasturcture 89,964,834 88,797,671 5,671,139 82,005,580 95,635,973 170,803,251 Ace. Deprectiation (70,582,489) (66,761,126) (42,377,950) (40,966,254) (112,960,439) (107,727,380) Total $ 81,967,019 $ 80,781,352 $ 67,151,218 $ 68,274,562 $ 149,118,237 $ 149,055,914 Additional information on the City's capital assets can be found in Note IV on pages 49 through 51 of this report. Long -Term Debt As of December 31, 2021, the City had general obligation bonds and notes outstanding totaling $35,883,828. The City's business -type activities include revenue bonds and notes payable, which total $2,265,872. In the current year, the City paid $3,029,188 in principal and $1,293,788 in interest on outstanding debt. Business -Type Activities paid $266,807 in principal and $80,373 in interest on its outstanding debt. Of the total City debt, $2,731,927 will become due within one year. The City has a Moody's "Aal" rating on its General Obligation Debt, and past Sewer Revenue Bonds; and a Moody's "Al" on its Water Revenue Bonds. 12 21 City of Muskego Management Discussion and Analysis As of and for the Year Ended December 31, 2021 (Unaudited) Long-term Debt (continued) G.O. Bonds and Notes Unamortized premium Revenue Refunding Bonds Wisconsin Safe Drinking Water Loan Total City of Muskego's Outstanding Debt General Obligation and Revenue Bonds Governmental Activities 2021 2020 $ 35,054,048 $ 38,083,237 829,780 927,327 Business -Type Activities 2021 2020 Total 2021 2020 $ 1,992,870 $ 2,234,786 $ 37,046,918 $ 40,318,023 48,424 55,058 878,204 982,385 - - 224,578 249,469 224,578 249,469 $ 35,883,828 $ 39,010,564 $ 2,265,872 $ 2,539,313 $ 38,149,700 $ 41,549,877 Additional information about the City's long-term debt can be found in Note IV on pages 52 through 54 of the financial statements. Economic Factors and Next Year's Budgets and Rates The following economic factors are noteworthy: • The City experienced a 6% increase in equalized valuation over the prior year, amounting to a value of $3.7 billion. • Current population estimates reached 25,704; which represents an increase of 6.5% since the 2010 Census. • Compared to the prior year, the 2021 tax rate of $3.81 per thousand reflected a significant decrease of $0.74 due the City-wide assessment revaluation and termination of Tax Increment Districts #8 & #9; adding 0.60% or $80,000 to the allowable levy funding. • Approximately $486,400 of residual tax increment revenue was recognized as a result of the Tax Increment District closures. • Minimal debt service tax levy adjustments are anticipated in part due to an upcoming advance refunding of the 2013 $12,625,000 Bond issue and structured amortization schedules. • The City received 50% of the estimated $2,630,007 Federal American Rescue Plan Act award, which will be used to combat the negative effects of the public health emergency in the local economy. All these factors were considered in preparing the City's budget for the year ending December 31, 2021. Requests for information This financial report is designed to provide a general overview of the City's finances for all those with an interest in the government's finances. Readers having question about any of the information in this report or needing additional information should contact Director of Finance and Administration, City of Muskego, W182 S8200 Racine Ave, Muskego, WI 53150, direct contact at 262-679-5622 or e-mail smueller@cityofmuskego.org. 13 22 BASIC FINANCIAL STATEMENTS 23 City of Muskego Statement of Net Position As of December 31, 2021 ASSETS Cash and cash equivalents Temporary investments Receivables (net of allowance for uncollectibles) Accounts Loan Due from other governments Taxes Prepaid items Restricted Assets Cash and cash equivalents RCA and WCA assessments receivable Pension assets Special assessments receivable Capital Assets Land and easements Construction in progress Other capital assets, net of depreciation Total Assets DEFERRED OUTFLOWS OF RESOURCES Deferred outflow related to pension Deferred outflow related to OPEB - LRLIF Total Deferred Outflows of Resources LIABILITIES Accounts payable and other current liabilities Accrued interest payable Unearned revenue Special Deposits Liabilities payable from restricted assets Accounts payable Accrued interest payable Current portion of long-term debt Noncurrent Liabilities: Due within one year Due in more than one year Net OPEB liability - LRLIF Unearned revenue Total Liabilities DEFERRED INFLOWS OF RESOURCES Property taxes for the subsequent year Deferred inflow related to pension Deferred inflow related to OPEB - LRLIF Total Deferred Inflows of Resources NET POSITION Net investment in capital assets Restricted for: Depreciation and equipment and replacement funds Water and sewer capacity assessment funds Landfill Big Muskego Lake - Bass Bay Protection and Rehabilitation District Revolving loans Library Tax increment district purposes Debt service Pensions Unrestricted TOTAL NET POSITION Governmental Business -type Component Activities Activities Totals Unit $ 17,638,612 $ 5,031,791 $ 22,670,403 $ 190,355 - 897,821 897,821 - 1,058,914 2,526,573 3,585,487 154,368 154,368 62,304 - 62,304 15,072,618 15,072,618 36,410 36,410 - 13,818,290 13,818,290 - 424,591 424,591 3,492,690 322,532 3,815,222 - 67,150 67,150 5,721,603 308,948 6,030,551 3,189,983 70,458 3,260,441 73,055,433 66,771,812 139,827,245 - 119,482,935 90,239,966 209,722,901 190,355 5,767,375 576,699 6,344,074 268,332 52,245 320,577 6,035,707 628,944 6,664,651 1,149,125 771,491 1,920,616 215,085 - 215,085 1,315,987 155,188 1,471,175 304,869 - 304,869 - 15,739 15,739 12,645 12,645 - 306,403 306,403 2,831,927 - 2,831,927 34,992,481 1,959,467 36,951,948 662,676 96,913 759,589 - 539,051 539,051 41,472,150 3,856,897 45,329,047 15,065,080 - 15,065,080 7,620,604 731,549 8,352,153 95,474 18,988 114,462 22,781,158 750,537 23,531,695 47,254,179 64,885,348 111,416,546 - 1,436,608 1,436,608 - 12,788,133 12,788,133 1,433,731 - 1,433,731 191,381 191,381 201,541 201,541 40,132 40,132 56,856 56,856 134,416 - 134,416 3,492,690 322,532 3,815,222 - 8,460,408 6,828,855 16,012,244 190,355 $ 61,265,334 $ 86,261,476 $ 147,526,810 $ 190,355 See accompanying notes to financial statements 14 24 Functions/Programs Expenses Primary government Governmental Activities City of Muskego Statement of Activities For the Year Ended December 31, 2021 Net (Expenses) Revenues and Program Revenues Changes in Net Position Operating Capital Charges for Grants and Grants and Governmental Business -type Services Contributions Contributions Activities Activities Component General government $ 4,119,983 $ 294,909 $ - $ - $ (3,825,074) $ $ (3,825,074) $ Public safety 8,653,092 1,093,047 195,998 13,000 (7,351,047) (7,351,047) Public works 5,119,141 121,947 1,350,136 2,404 (3,644,654) (3,644,654) Health and sanitation 1,449,324 2,774,900 73,238 - 1,398,814 1,398,814 Conservation and development 1,000,065 41,610 38,432 (920,023) (920,023) Education and recreation 2,577,278 484,335 234,396 (1,858,547) (1,858,547) Interest on long-term debt and fiscal charges 1,281,940 - - - (1,281,940) (1,281,940) Total Governmental Activities 24,200,823 4,810,748 1,892,200 15,404 (17,482,471) (17,482,471) Business -type activities Sewer Utility 7,234,241 6,420,914 4,351 614,735 (194,241) (194,241) Water Utility 1,862,448 2,353,900 357,174 848,626 848,626 Total Business -type Activities 9,096,689 8,774,814 4,351 971,909 654,385 654,385 Total primary government $ 33,297,512 $ 13,585,562 $ 1,896,551 $ 987,313 (17,482,471) 654,385 (16,828,086) Component Unit Community Development Authority $ - $ - $ - $ - $ $ - $ - $ General Revenues Taxes Property taxes, levied for general purposes 12,911,985 12,911,985 Property taxes, levied for debt service 2,240,000 2,240,000 Other taxes 105,173 105,173 Intergovernmental revenues not restricted to specific programs 617,545 - 617,545 Investment income 197,767 104,118 301,885 Miscellaneous 476 - 476 Total General Revenues 16,072,946 104,118 16,177,064 Transfers 441,825 (441,825) - Change in Net Position (967,700) 316,678 (651,022) NET POSITION - Beginning of Year 62,233,034 85,944,798 148,177,832 190,355 NET POSITION - END OF YEAR $ 61,265,334 $ 86,261,476 $ 147,526,810 $ 190,355 See accompanying notes to financial statements IV 15 LVI City of Muskego ASSETS Cash and cash equivalents Receivables - net Accounts Due from other governments Taxes Loan receivables Prepaid items Total Assets LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Liabilities Accounts payable Accrued liabilities Unearned revenues Special Deposits Total Liabilities Deferred Inflows of Resources Property taxes for the subsequent year Total Deferred Inflows of Resources Fund Balances Nonspendable Restricted Committed Assigned Unassigned Total Fund Balances TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Balance Sheet Governmental Funds As of December 31, 2021 Capital Special Projects Revenue Tax Debt Capital Increment Nonmajor Total General Service Budget District Governmental Governmental Fund Fund Fund Funds Funds Funds $ 8,522,574 $ 349,501 $ 321,561 $ 56,856 $ 8,388,120 $ 17,638,612 239,745 819,169 1,058,914 29,459 32,845 62,304 11,400,489 2,240,000 1,389,975 42,154 15,072,618 - - - 154,368 154,368 36,410 36,410 $ 20,228,677 $ 2,589,501 $ 321,561 $ 1,446,831 $ 9,436,656 $ 34,023,226 $ 414,785 $ $ 73,102 $ - $ 465,539 $ 953,426 195,699 - - 195,699 - 1,315,987 1,315,987 304,869 - - 304,869 915,353 73,102 1,781,526 2,769,981 11,435,105 2,240,000 1,389,975 15,065,080 11,435,105 2,240,000 1,389,975 15,065,080 36,410 - - 36,410 - 349,501 248,459 56,856 1,866,785 2,521,601 - - - 5,189,427 5,189,427 - 598,918 598,918 7,841,809 - 7,841,809 7,878,219 349,501 248,459 56,856 7,655,130 16,188,165 $ 20,228,677 $ 2,589,501 $ 321,561 $ 1,446,831 $ 9,436,656 Amounts reported for governmental activities in the statement of net position are different because: Capital assets used in governmental funds are not financial resources and therefore are not reported in the funds. See Note II. 81,967,019 Net Pension asset does not relate to current financial resources and is not reported in the governmental funds 3,492,690 Net OPEB does not relate to current financial resources and is not reported in the governmental funds (662,676) Deferred outflow of resources related to pension and OPEB do not relate to current financial resources and is not reported in the governmental funds 6,035,707 Deferred inflow of resources related to pension and OPEB do not relate to current financial resources and is not reported in the governmental funds (7,716,078) Some liabilities, including long-term debt, are not due and payable in the current period and therefore are not reported in the funds. See Note II. (38,039,493) NET POSITION OF GOVERNMENTAL ACTIVITIES $ 61,265,334 See accompanying notes to financial statements 16 26 City of Muskego Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds For the Year Ended December 31, 2021 Capital Special Projects Revenue Tax Debt Capital Increment Nonmajor Total General Service Budget District Governmental Governmental Fund Fund Fund Funds Funds Funds REVENUES Taxes $11,132,602 $ 2,240,000 $ $ 1,852,186 $ - $ 15,224,788 Intergovernmental 2,297,375 - 10,184 82,093 2,389,652 Licenses and permits 673,986 - 2 673,988 Fines, forfeitures and penalties 323,769 - 323,769 Public charges for services 605,915 - 2,831,292 3,437,207 Commercial revenue 135,012 430 444 147,881 283,767 Intergovernmental charges for services 243,156 - - - 243,156 Interdepartmental revenues 104,422 104,422 Total Revenues 15,516,237 2,240,430 444 1,862,370 3,061,268 22,680,749 EXPENDITURES Current General government 2,458,171 - - 29,113 260,453 2,747,737 Public safety 7,370,737 - 7,370,737 Public works 2,971,187 26,166 2,997,353 Health and sanitation 3,829 1,442,754 1,446,583 Conservation and development 425,494 28,621 454,115 Education and recreation 1,759,602 371 1,759,973 Debt service Principal retirement - 3,029,188 - 3,029,188 Interest - 1,293,788 - - - 1,293,788 Capital outlay 1,028,418 1,984,751 1,553,720 4,077,079 8,643,968 Total Expenditures 16,017,438 4,322,976 1,984,751 1,582,833 5,835,444 29,743,442 Excess (Deficiency) of revenues under expenditure: (501,201) (2,082,546) (1,984,307) 279,537 (2,774,176) (7,062,693) OTHER FINANCING SOURCES (USES) Transfers in 606,245 1,348,648 1,075,073 300,774 3,526,648 6,857,388 Transfers out - (465,934) - (1,565,830) (4,383,799) (6,415,563) Proceeds from sale of capital assets 13,000 13,000 Total Other Financing Sources (Uses; 619,245 882,714 1,075,073 (1,265,056) (857,151) 454,825 Net Change in Fund Balance 118,044 (1,199,832) (909,234) (985,519) (3,631,327) (6,607,868) FUND BALANCES - Beginning of Year 7,760,175 1,549,333 1,157,693 1,042,375 11,286,457 22,796,033 FUND BALANCES - END OF YEAR $ 7,878,219 $ 349,501 $ 248,459 $ 56,856 $ 7,655,130 $ 16,188,165 See accompanying notes to financial statements 17 27 City of Muskego Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds To the Statement of Activities For the Year Ended December 31, 2021 Net change in fund balances - total governmental funds $ (6,607,868) Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures. However in the statement of net position, the cost of these assets is capitalized and they are depreciated over their estimated useful lives and reported as depreciation expense in the statement of activities. Capital outlay reported as an expenditure in the fund financial statements but is capitalized in the government -wide financial statements 8,643,968 Some items capitalized were not reported as capital outlay 162,904 Some items reported as capital outlay were not capitalized (3,757,014) Depreciation is reported in the government -wide statements (3,851,107) Net book value of assets retired (13,085) Debt issued provides current financial resources to governmental funds, but issuing debt increases long-term liabilities in the statement of net position. Repayment of debt principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the statement of net position Principal repaid 3,029,188 Amortization of premium on long term debt issues 97,548 Some expenses in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in the governmental funds. Compensated absences 397,303 Accrued interest on debt 11,848 Net pension asset 1,723,160 Net OPEB liability - LRLIF (141,781) Deferred outflows related to pensions 1,619,193 Deferred outflows related to OPEB - LRLIF 51,686 Deferred inflows related to pensions (2,318,546) Deferred inflows related OPEB - LRLIF (15,097) CHANGE IN NET POSITION OF GOVERNMENTAL ACTIVITIES $ (967,700) See accompanying notes to financial statements 18 28 City of Muskego Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Special Revenue Fund - Tax Increment District Funds For the Year Ended December 31, 2021 REVENUES Taxes Intergovernmental Total Revenues EXPENDITURES Current General government Close TID Capital Outlay Total Expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) Transfers in Transfers out Total Other Financing Sources Net Change in Fund Balance FUND BALANCES - Beginning of Year FUND BALANCES - END OF YEAR Variance with Final Budget - Budgeted Amounts Over Original and Final Actual (Under) $ 1,824,769 $ 1,852,186 $ 27,417 10,684 10,184 (500) 1,835,453 1,862,370 26,917 20,600 29,113 8,513 1,361,020 1,249,039 (111,981) 300,635 304,681 4,046 1,682,255 1,582,833 (99,422) 153,198 279,537 126,339 475,616 300,774 (174,842) (1,604,111) (1,565,830) 38,281 (1,128,495) (1,265,056) (136,561) $ (975,297) (985,519) $ (10,222) 1,042,375 $ 56,856 See accompanying notes to financial statements 19 29 City of Muskego Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual General Fund For the Year Ended December 31, 2021 REVENUES Taxes Intergovernmental Licenses and permits Fines, forfeitures and penalties Public charges for service Commercial revenues Intergovernmental charges for services Interdepartmental revenues Total Revenues EXPENDITURES Current General government Public safety Public works Health and sanitation Conservation and development Education and recreation Capital Outlay Contingency Total Expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) Transfers in Transfers out Sale of property Total Other Financing Sources (Uses) Net Change in Fund Balance FUND BALANCES - Beginning of Year FUND BALANCES - END OF YEAR Variance with Final Budget - Budgeted Amounts Over Original and Final Actual (Under) $ 11,129,052 $ 11,132,602 $ 3,550 2,218,725 2,297,375 78,650 795,840 673,986 (121,854) 310,000 323,769 13,769 572,694 605,915 33,221 296,675 135,012 (161,663) 242,000 243,156 1,156 326,250 104,422 (221,828) 15,891,236 15,516,237 (374,999) 2,525,040 2,458,171 (66,869) 7,424,000 7,370,737 (53,263) 3,064,595 2,971,187 (93,408) 3,850 3,829 (21) 434,486 425,494 (8,992) 1,850,190 1,759,602 (90,588) 1,006,625 1,028,418 21,793 82,000 - (82,000) 16,390,786 16,017,438 (373,348) 499,550 (501,201) (1,651) 524,550 606,245 81,695 (50,000) - 50,000 25,000 13,000 (12,000) 499,550 619,245 119,695 $ - 118,044 $ 118,044 7,760,175 $ 7,878,219 See accompanying notes to financial statements 20 30 City of Muskego Statement of Net Position Proprietary Funds As of December 31, 2021 ASSETS CURRENT ASSETS Cash and cash equivalents Temporary investments Receivables, net Restricted Assets Cash and cash equivalents Total Current Assets NON -CURRENT ASSETS Restricted Assets Cash and cash equivalents RCA and WCA assessments receivable Pension asset Capital Assets Land and easements Construction work in progress Plant in service Accumulated depreciation Other assets Special assessments Total Non -Current Assets Total Assets DEFERRED OUTFLOWS OF RESOURCES Deferred outflows related to pensions Deferred outflows related to OPEB - LRLIF Total Deferred Outflows of Resources LIABILITIES AND NET POSITION CURRENT LIABILITIES Accounts payable Accrued vacation, sick leave and compensatory time Deferred lease and other revenue Liabilities Payable From Restricted Assets Accounts payable Current portion of long-term debt Accrued interest Total Current Liabilities NON -CURRENT LIABILITIES Long-term debt Net pension liability Net OPEB liability - LRLIF Unearned revenue Total Non -current Liabilities Total Liabilities DEFERRED INFLOWS OF RESOURCES Deferred inflows related to pensions Deferred inflows related to OPEB - LRLIF Total Deferred Inflows of Resources NET POSITION Net investment in capital assets Restricted for RCA and WCA funds Depreciation and equipment replacement funds Pension Unrestricted TOTAL NET POSITION Business Type Activities Enterprise Funds Total Sewer Water Enterprise Utility Utility Funds $ 4,275,274 $ 756,517 $ 5,031,791 897,821 - 897,821 2,011,446 515,127 2,526,573 - 5,258 5,258 7,184,541 1,276,902 8,461,443 11,711,817 2,101,215 13,813,032 231,571 193,020 424,591 210,638 111,894 322,532 130,918 178,030 308,948 - 70,458 70,458 65,311,509 43,838,253 109,149,762 (27,196,730) (15,181,220) (42,377,950) - 67,150 67,150 50,399,723 31,378,800 81,778,523 57,584,264 32,655,702 90,239,966 365,806 210,893 576,699 29,756 22,489 52,245 395,562 233,382 628,944 500,991 24,632 525,623 165,318 80,550 245,868 48,978 106,210 155,188 - 15,739 15,739 306,403 306,403 - 12,645 12,645 715,287 546,179 1,261,466 - 1,959,467 1,959,467 13,096 83,817 96,913 471,901 67,150 539,051 484,997 2,110,434 2,595,431 1,200,284 2,656,613 3,856,897 458,282 273,267 731,549 11,210 7,778 18,988 469,492 281,045 750,537 38,245,697 26,639,651 64,885,348 10,995,545 1,792,588 12,788,133 947,843 488,765 1,436,608 210,638 111,894 322,532 5,910,327 918,528 6,828,855 $ 56,310,050 $ 29,951,426 $ 86,261,476 See accompanying notes to financial statements 21 31 City of Muskego Statement of Revenues, Expenses And Changes in Fund Net Position Proprietary Funds For the Year Ended December 31, 2021 OPERATING REVENUES Charges for services Other operating revenues Total Operating Revenues OPERATING EXPENSES Operation and maintenance Depreciation Taxes Total Operating Expenses Operating Income (Loss) NON -OPERATING REVENUES (EXPENSES) Investment income Interest income on special assessments MMSD I&I subsidy I&I MMSD program expenses Amortization of bond premium Interest on long term debt Total Nonoperating Revenues (Expenses) Income (Loss) before Contributions and Transfers CAPITAL CONTRIBUTIONS TRANSFERS - TAX EQUIVALENT Change in Net Position NET POSITION - BEGINNING OF YEAR NET POSITION - END OF YEAR Business Type Activities Enterprise Funds Total Sewer Water Enterprise Utility Utility Funds $ 6,296,849 $ 2,224,861 $ 8,521,710 124,065 129,039 253,104 6,420,914 2,353,900 8,774,814 6,597,302 891,885 7,489,187 632,588 868,916 1,501,504 - 29,055 29,055 7,229,890 1,789,856 9,019,746 (808,976) 564,044 (244,932) 10,474 9,985 20,459 71,956 11,703 83,659 4,351 - 4,351 (4,351) - (4,351) - 6,634 6,634 - (79,226) (79,226) 82,430 (50,904) 31,526 (726,546) 513,140 (213,406) 614,735 357,174 971,909 - (441,825) (441,825) (111,811) 428,489 316,678 56,421,861 29,522,937 85,944,798 $ 56,310,050 $ 29,951,426 $ 86,261,476 See accompanying notes to financial statements 22 32 City of Muskego Statement of Cash Flows Proprietary Funds For the Year Ended December 31, 2021 CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers Receipts from municipality for services Payments to other funds Paid to vendor for goods and services Paid to employees for services Net Cash Flows From Operating Activities CASH FLOWS FROM NON -CAPITAL FINANCING ACTIVITIES Paid to municipality for tax equivalent Net Cash Flows From Non -Capital Financing Activities CASH FLOWS FROM CAPITAL AND RELATEC FINANCING ACTIVITIES Principal paid Interest paid Special assessments received Acquisition and construction of capital assets Connection fees received Net Cash Flows From Capital and Related Financing Activities CASH FLOWS FROM INVESTING ACTIVITIES Investment income Interest on investments Interest on special assessments Investments purchased Net Cash Flows From Investing Activities Net Change in Cash and Cash Equivalents CASH AND CASH EQUIVALENTS - Beginning of Year CASH AND CASH EQUIVALENTS - END OF YEAF Business Type Activities Enterprise Funds Total Sewer Water Enterprise Utility Utility Funds $ 6,410,883 $ 1,976,355 $ 8,387,238 - 347,783 347,783 (52,139) - (52,139) (5,926,210) (561,816) (6,488,026) (771,314) (366,174) (1,137,488) (338,780) 1,396,148 1,057,368 (441,825) (441,825) (441,825) (441,825) - (266,807) (266,807) - (80,374) (80,374) 1,390,171 348,849 1,739,020 (92,181) (345,356) (437,537) 11,500 - 11,500 1,309,490 (343,688) 965,802 10,474 9,985 20,459 71,956 11,703 83,659 (1,006) - (1,006) 81,424 21,688 103,112 1,052,134 632,323 1,684,457 14,934,956 2,230,667 17,165,623 $ 15,987,090 $ 2,862,990 $ 18,850,080 See accompanying notes to financial statements 23 33 City of Muskego Statement of Cash Flows Proprietary Funds For the Year Ended December 31, 2021 (Concluded) Business Type Activities Enterprise Funds Total Sewer Water Enterprise Utility Utility Funds RECONCILIATION OF CASH AND CASH EQUIVALENTS TO THE STATEMENT OF NET POSITION - PROPRIETARY FUNDS Current: Cash and cash equivalents $ 4,275,274 $ 756,517 $ 5,031,791 Temporary investments 897,821 - 897,821 Restricted cash and cash equivalents - 5,258 5,258 Non -current Restricted cash and cash equivalents 11,711,816 2,101,215 13,813,031 Less: Non -cash equivalents (897,821) - (897,821) Cash and cash equivalents - end of year $ 15,987,090 $ 2,862,990 $ 18,850,080 NON CASH INVESTING, CAPITAL AND RELATED FINANCING ACTIVITIES Assessment of benefits for property owners for improvements $ 603,235 $ 357,174 $ 960,409 Premium on debt amortization $ - $ 6,634 $ 6,634 Reconciliation of operating income (loss) to net cash provided by operating activities: Operating Income (loss) $ (808,976) $ 564,044 $ (244,932) Adjustments to reconcile operating income (loss) to net cash provided by operating activities: Depreciation 632,588 868,916 1,501,504 Depreciation charged to other accounts - 35,320 35,320 Pension related expense (116,949) 15,226 (101,723) (Increase) decrease in assets/deferred outflows: Accounts receivable - other 321,858 (34,197) 287,661 Prepaid Items 1,084 1,084 2,168 Increase (decrease) in liabilities/deferred inflows: Accounts payable (13,052) (47,640) (60,692) Accrued vacation, sick leave and compensatory time (23,444) (12,417) (35,861) Deferred contractual credit (331,889) - (331,889) Unearned revenue - 1,377 1,377 Unearned lease revenue - 4,435 4,435 Total adjustments 470,196 832,104 1,302,300 Net Cash Flows From Operating Activities $ (338,780) $ 1,396,148 $ 1,057,368 See accompanying notes to financial statements 24 34 ASSETS Cash and cash equivalents Taxes receivable Total Assets LIABILITIES Accounts payable Due to other taxing units Other Deferred Credits Total Liabilities NET POSITION Restricted - held in trust TOTAL NET POSITION City of Muskego Statement of Fiduciary Net Position Fiduciary Funds As of December 31, 2021 Private Purpose Trust Funds Custodial Fund Volunteer Library Fire Co. Expansion Scholarship Tax Collection $ 25,878 $ 186,976 $ 28,805,127 - - 4,432,715 25,878 186,976 33,237,842 - - 200,291 33,035,332 - 2,219 - 33,237,842 25,878 186,976 $ 25,878 $ 186,976 $ See accompanying notes to financial statements 25 35 City of Muskego Statement of Changes in Fiduciary Net Position - Fiduciary Funds For the Year Ended December 31, 2021 Private Purpose Trust Funds Custodial Fund Volunteer Library Fire Co. Expansion Scholarship Tax Collection Trust Fund Fund Fund ADDITIONS Investment income $ 33 $ 112 $ - Tax collections - - 34,458,566 Total additions 33 112 34,458,566 DEDUCTIONS Payments to overlying districts - - 34,458,566 Total deductions - - 34,458,566 Change in Net Position 33 112 - NET POSITION - Beginning 25,845 186,864 - NET POSITION - ENDING $ 25,878 $ 186,976 $ - See accompanying notes to financial statements 26 36 City of Muskego Index to Notes to Financial Statements As of and for the Year Ended December 31, 2021 NOTE Paqe I. Summary of Significant Accounting Policies 28 A. Reporting Entity 28 B. Government -Wide and Fund Financial Statements 29 C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation 32 D. Assets, Liabilities, Deferred Inflows of Resources and Net Position or Equity 34 1. Deposits and Investments 34 2. Receivables 36 3. Inventories and Prepaid Items 37 4. Restricted Assets 37 5. Capital Assets 37 6. Deferred Outflows of Resources 38 7. Compensated Absences 38 8. Long -Term Obligations 39 9. Utility Deferred Lease and Other Revenue 39 10. Deferred Inflows of Resources 39 11. Equity Classifications 40 12. Pension 42 13. Postemployment Benefits Other Than Pensions (OPEB) — LRLIF 42 E. Other Policies -Tax Incremental Districts 43 II. Reconciliation of Government -Wide and Fund Financial Statements 44 Explanation of Certain Differences Between the Governmental Fund Balance Sheet and the Statement of Net Position 44 III. Stewardship, Compliance, and Accountability 45 A. Budgetary Information 45 B. Excess Expenditures Over Appropriations 45 C. Limitations on the City's Tax Levy 45 IV. Detailed Notes on All Funds 46 A. Deposits and Investments 46 B. Restricted Assets 48 C. Receivables 49 D. Capital Assets 50 E. Interfund Transfers 52 F. Long -Term Obligations 53 G. Net Position / Fund Balances 56 H. Component Unit 60 V. Other Information 61 A. Employees' Retirement System 61 B. Risk Management 66 C. Commitments and Contingencies 66 D. Other Post -Employment Benefits - LRLIF 67 E. Water and Sewer Utility Rates 72 F. Antenna Lease Agreements 72 G. Effect of New Accounting Standards on Current Period Financial Statements 73 H. Subsequent Events 73 27 37 City of Muskego Notes to Financial Statements As of and for the Year Ended December 31, 2021 NOTE I — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accounting policies of the City of Muskego, Wisconsin ("City") conform to accounting principles generally accepted in the United State of America as applicable to governmental units. The accepted standard -setting body for establishing governmental accounting and financial reporting principles is the Governmental Accounting Standards Board (GASB). A. REPORTING ENTITY This report includes all of the funds of the City. The reporting entity for the City consists of the primary government and its component units. Component units are legally separate organizations for which the primary government is financially accountable or other organizations for which the nature and significance of their relationship with the primary government are such that their exclusion would cause the reporting entity's financial statements to be misleading. The primary government is financially accountable if (1) it appoints a voting majority of the organization's governing body and it is able to impose its will on that organization, (2) it appoints a voting majority of the organization's governing body and there is a potential for the organization to provide specific financial benefits to, or impose specific financial burdens on, the primary government, (3) the organization is fiscally dependent on and there is a potential for the organization to provide specific financial benefits to, or impose specific financial burdens on, the primary government. Certain legally separate, tax exempt organizations should also be reported as a component unit if all of the following criteria are met: (1) the economic resources received or held by the separate organization are entirely or almost entirely for the direct benefit of the primary government, its component units, or its constituents; (2) the primary government or its component units, is entitled to, or has the ability to access, a majority of the economic resources received or held by the separate organization; and (3) the economic resources received or held by an individual organization that the primary government, or its component units, is entitled to, or has the ability to otherwise access, are significant to the primary government. Component units are reported using one of two methods, discrete presentation or blending. Generally, component units should be discretely presented in a separate column in the financial statements. A component unit should be reported as part of the primary government using the blending method if it meets any one of the following criteria: (1) the primary government and the component unit have substantively the same governing body and a financial benefit or burden relationship exists, (2) the primary government and the component unit have substantively the same governing body and management of the primary government has operational responsibility for the component unit, (3) the component unit serves or benefits, exclusively or almost exclusively, the primary government rather than its citizens, or (4) the total debt of the component unit will be paid entirely or almost entirely from resources of the primary government. Discretely Presented Component Unit Muskego Community Development Authority The government -wide financial statements include the Muskego Community Development Authority ("Authority") as a component unit. The Authority is a legally separate organization. The board of the Authority is appointed by the mayor and city council of the City of Muskego. Wisconsin Statutes provide for circumstances whereby the City can impose their will on the Authority, and also create a potential financial benefit to or burden on the City. See Note IV H. As a component unit, the Authority's financial statements have been presented as a discrete column in the financial statements. The information presented is for the fiscal year ended December 31, 2021. The Authority does not issue separate financial statements. 28 38 City of Muskego Notes to Financial Statements As of and for the Year Ended December 31, 2021 NOTE I — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) A. REPORTING ENTITY (continued) Blended Component Unit Big Muskego Lake — Bass Bay Protection and Rehabilitation District The basic financial statements of the City also include the financial data of the City's component unit, Big Muskego Lake - Bass Bay Protection and Rehabilitation District (district). The City created the district under certain provisions of the Wisconsin Statutes in order to assist the City in undertaking programs of lake protection and rehabilitation. The district's governing body is substantively the same as the City, with all members serving on the City common council and with the Mayor acting as chairman. Separately issued financial statements for the district may be obtained from the district's office. The district is reported as part of the Non -Major Special Revenue Funds. B. GOVERNMENT -WIDE AND FUND FINANCIAL STATEMENTS Government -Wide Financial Statements The statement of net position and statement of activities display information about the reporting government as a whole. They include all funds of the reporting entity except for fiduciary funds. The statements distinguish between governmental and business -type activities. Governmental activities generally are financed through taxes, intergovernmental revenues, and other non - exchange revenues. Business -type activities are financed in whole or in part by fees charged to external parties for goods or services. Likewise, the primary government is reported separately from certain legally separate component units for which the primary government is financially accountable. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. The City does not allocate indirect expenses to functions in the Statement of Activities. Program revenues include 1) charges to customers or applicants who purchase, use or directly benefit from goods, services, or privileges provided by a given function or segment, and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not included among program revenues are reported as general revenues. Internally dedicated resources are reported as general revenues rather than as program revenues. 29 39 City of Muskego Notes to Financial Statements As of and for the Year Ended December 31, 2021 NOTE I — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) B. GOVERNMENT -WIDE AND FUND FINANCIAL STATEMENTS (continued) Fund Financial Statements Financial statements of the City are organized into funds, each of which is considered to be a separate accounting entity. Each fund is accounted for by providing a separate set of self - balancing accounts, which constitute its assets, liabilities, deferred inflows of resources, net position/fund balance, revenues, and expenditure/expenses. Funds are organized as major funds or non -major funds within the governmental and proprietary statements. An emphasis is placed on major funds within the governmental and proprietary categories. A fund is considered major if it is the primary operating fund of the City or meets the following criteria: a. Total assets, liabilities/deferred inflows of resources, revenues, or expenditures/expenses of that individual governmental or enterprise fund are at least 10 percent of the corresponding total for all funds of that category or type, and b. The same element of the individual governmental or enterprise fund that met the 10 percent test is at least 5 percent of the corresponding total for all governmental and enterprise funds combined. In addition, any other governmental or enterprise fund that the City believes is particularly important to financial statement users may be reported as a major fund. Separate financial statements are provided for governmental funds and proprietary funds, and fiduciary funds, even though the latter are excluded from the government -wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. The City reports the following major governmental funds: General Fund — accounts for the City's primary operating activities. It is used to account for and report all financial resources except those required to be accounted for and report in another fund. Debt Service Fund — used to account for and report financial resources that are restricted, committed, or assigned to expenditures for the payment of general long- term debt principal, interest, and related costs, other than TID or enterprise debt. Special Revenue Fund - Tax Increment District Funds — used to account for and report financial resources that are restricted for debt and administrative costs for the Tax Increment District #8, 9,10 and 11. Capital Projects - Capital Budget Fund - used to account for and report financial resources that are restricted, committed, or assigned to expenditures for capital outlay, including the acquisition or construction of capital facilities and other capital assets. 30 40 City of Muskego Notes to Financial Statements As of and for the Year Ended December 31, 2021 NOTE I — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) B. GOVERNMENT -WIDE AND FUND FINANCIAL STATEMENTS (continued) Fund Financial Statements (continued) The City reports the following major enterprise funds: Sewer Utility — accounts for operations of the sewer system Water Utility — accounts for operations of the water system The City reports the following non -major governmental funds: Special Revenue Funds — used to account for and report the proceeds of specific revenue sources that are restricted or committed to expenditures for specified purposes (other than debt service or capital projects). Park Compensated Absences Refuse/Recycling Revolving Loan Landfill Standing Committee Storm Water Management Well Testing Reserve Land Open Space Conservation Cable TV Capital Improvements Federated Library System Big Muskego Lake — Bass Bay Protection and Rehabilitation District Landfill ARPA Capital Projects Funds — used to account for and report financial resources that are restricted, committed, or assigned to expenditures for capital outlay, including the acquisition or construction of capital facilities and other capital assets. Capital Equipment Tax Increment District Capital Projects In addition, the City reports the following fund types: Private -purpose trust funds are used to account for and report any trust arrangement not properly reported in a pension trust fund under which principal and income benefit the expansion of the library or scholarships. Library Expansion Trust Volunteer Fire Co. Scholarship Custodial funds are used to account for and report assets held by the City in a trustee capacity or as an agent for individuals, private organizations, and/or other governmental units. Tax Collection 31 41 City of Muskego Notes to Financial Statements As of and for the Year Ended December 31, 2021 NOTE I — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) C. MEASUREMENT FOCUS, BASIS OF ACCOUNTING, AND FINANCIAL STATEMENT PRESENTATION Government -Wide Financial Statements The government -wide statement of net position and statement of activities are reported using the economic resources measurement focus and the accrual basis of accounting. Under the accrual basis of accounting, revenues are recognized when earned and expenses are recorded when the liability is incurred or economic asset used. Revenues, expenses, gains, losses, assets, and liabilities resulting from exchange and exchange -like transactions are recognized when the exchange takes place. Property taxes are recognized as revenues in the year for which they are levied. Taxes receivable for the following year are recorded as receivables and deferred inflows. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider are met. Special assessments are recorded as revenue when earned. Unbilled receivables are recorded as revenues when services are provided. As a general rule, the effect of inter -fund activity has been eliminated from the government -wide financial statements. Exceptions to this general rule are charges between the City's water and sewer utilities and various other functions of the government. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. Fund Financial Statements Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recorded when they are both measurable and available. Available means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. For this purpose, the City considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures are recorded when the related fund liability is incurred, except for un-matured interest on long-term debt, claims, judgments, compensated absences, and pension expenditures, which are recorded as a fund liability when expected to be paid with expendable available financial resources. Property taxes are recorded in the year levied as receivables and deferred inflows. They are recognized as revenues in the succeeding year when services financed by the levy are being provided. Intergovernmental aids and grants are recognized as revenues in the period the City is entitled to the resources and the amounts are available. Amounts owed to the City which are not available are recorded as receivables and unavailable revenues. Amounts received before eligibility requirements (excluding time requirements) are met and recorded as liabilities. Amounts received in advance of meeting time requirements are recorded as deferred inflows. Special assessments are recorded as revenues when they become measurable and available as current assets. Annual installments due in future years are reflected as receivables and unavailable revenues. At December 31, 2021, there are unrecorded future assessments of $670,075 in the Sewer Utility, which are not recorded as receivables because collection is subject to certain events occurring in the future. No formal repayment schedule has been established. 32 42 City of Muskego Notes to Financial Statements As of and for the Year Ended December 31, 2021 NOTE I — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) C. MEASUREMENT FOCUS, BASIS OF ACCOUNTING, AND FINANCIAL STATEMENT PRESENTATION (continued) Fund Financial Statements (continued) Revenues susceptible to accrual include property taxes, miscellaneous taxes, public charges for services, special assessments and interest. Other general revenues such as fines and forfeitures, inspection fees, recreation fees, and miscellaneous revenues are recognized when received in cash or when measurable and available under the criteria described above. Proprietary and fiduciary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as described previously in this note. The 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. The principal operating revenues of the Water Utility and Sewer Utility are charges to customers for sales and services. Special assessments are recorded as receivables and contribution revenue when levied. Operating expenses for proprietary funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non -operating revenues and expenses. All Financial Statements The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenditures/expenses during the reporting period. Actual results could differ from those estimates. 33 43 City of Muskego Notes to Financial Statements As of and for the Year Ended December 31, 2021 NOTE I — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) D. ASSETS, DEFERRED OUTFLOWS OF RESOURCES, LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND NET POSITION OR EQUITY 1. Deposits and Investments For purposes of the statement of cash flows, the City considers all highly liquid investments with an initial maturity of three months or less when acquired to be cash equivalents. Investment of City funds is restricted by Wisconsin state statutes. Available investments are limited to: 1. Time deposits in any credit union, bank, savings bank or trust company. 2. Bonds or securities of any county, city, drainage district, technical college district, village, town, or school district of the state. Also, bonds issued by a local exposition district, a local professional baseball park district, a local professional football stadium district, a local cultural arts district, the University of Wisconsin Hospitals and Clinics Authority, or the Wisconsin Aerospace Authority. 3. Bonds or securities issued or guaranteed by the federal government. 4. The local government investment pool. 5. Any security maturing in seven years or less and having the highest or second highest rating category of a nationally recognized rating agency. 6. Securities of an open-end management investment company or investment trust, subject to various conditions and investment options. 7. Repurchase agreements with public depositories, with certain conditions. The City's investment of library trust funds is regulated by Chapter 112 of the Wisconsin state statutes. That section gives broad authority to use such funds to acquire various kinds of investments including stocks, bonds and debentures. The City has adopted an investment policy that follows state statues for allowable investments. The City is exposed to various risks related to their cash and investments. The City's policy related to these risks is described below: Custodial Credit Risk The City's policy indicates that to the extent possible bank balances should be maintained at amounts less than or equal to the amounts insured by FDIC or State of Wisconsin guaranteed amounts. (At year end the City had bank balances in excess of insured amounts as disclosed in Note IV A.) Additionally, all certificates of deposit exceeding these coverage's shall be collateralized with U.S. securities or Wisconsin municipal debt. Collateral shall be in the City's name and held by a third party custodian. Credit Risk The City's investment policy does not address this risk. 34 44 City of Muskego Notes to Financial Statements As of and for the Year Ended December 31, 2021 NOTE I — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) D. ASSETS, DEFERRED OUTFLOWS OF RESOURCES, LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND NET POSITION OR EQUITY (continued) 1. Deposits and Investments (continued) Interest Rate Risk The City investment policy only addresses interest rate risk on certificates of deposit and specifies that they must mature within three years or less from the date of investment. Investments are stated at fair value, which is the amount at which an investment could be exchanged in a current transaction between willing parties. No investments are reported at amortized cost. Adjustments necessary to record investments at fair value are recorded in the operating statement as increases or decreases in investment income. Investment income on commingled investments of municipal accounting funds is allocated based on the average investment balance. The difference between the bank balance and carrying value is due to outstanding checks and/or deposits in transit. The Wisconsin Local Government Investment Pool (LGIP) is part of the State Investment Fund (SIF), and is managed by the State of Wisconsin Investment Board. The SIF is not registered with the Securities and Exchange Commission, but operates under the statutory authority of Wisconsin Chapter 25. The SIF reports the fair value of its underlying assets annually. Participants in the LGIP have the right to withdraw their funds in total on one day's notice. At December 31, 2021, the fair value of the City's share of the LGIP's assets was substantially equal to the amount as reported in these statements. Certificate of Deposit Account Registry Service (CDARS) is a member of a special network which offers access to multi -million dollar FDIC insurance coverage on CD investments through one bank. See Note W.A. for further information. 35 45 City of Muskego Notes to Financial Statements As of and for the Year Ended December 31, 2021 NOTE I — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) D. ASSETS, DEFERRED OUTFLOWS OF RESOURCES, LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND NET POSITION OR EQUITY (continued) 2. Receivables Property taxes are levied in December on the assessed value as of the prior January 1. In addition to property taxes for the City, taxes are collected for and remitted to the state and county governments as well as the local school district and technical college district. Taxes for all state and local governmental units billed in the current year for the succeeding year are reflected as receivables and due to other taxing units on the accompanying agency fund statement of fiduciary net position. Property tax calendar — 2021 tax roll: Lien date and levy date December 2021 Tax bills mailed December 2021 Payment in full, or January 31, 2022 First installment due January 31, 2022 Second installment due July 31, 2022 Personal property taxes in full January 31, 2022 Tax deed by county — 2021 delinquent Real estate taxes October 2024 Accounts receivable have been shown net of an allowance for uncollectible accounts. Delinquent real estate taxes as of July 31 are paid in full by the county, which assumes the collection thereof. No provision for uncollectible accounts receivable has been made for the water and sewer utilities because they have the right by law to place all delinquent bills on the tax roll, and other delinquent bills are generally not significant. During the course of operations, transactions occur between individual funds that may result in amounts owed between funds. Short-term interfund loans are reported as "due to and from other funds." Long-term interfund loans (noncurrent portion) are reported as "advances from and to other funds." Interfund receivables and payables between funds within governmental activities are eliminated in the Statement of Net Position. Any residual balances outstanding between the governmental activities and business -type activities are reported in the government -wide financial statements as internal balances. The City has received state grant funds for economic development loan programs to various businesses and individuals. The City records a loan receivable when the loan has been made and funds have been disbursed. The amount recorded as economic development loans receivable has not been reduced by an allowance for uncollectible accounts. The Water and Sewer Utilities provide services to customers within the municipal boundaries. Metered water sales to customers are billed on a quarterly basis at rates approved by the Public Service Commission of Wisconsin. Sewer customers are billed rates established by the Common Council. Bills are payable in 30 days. Delinquent balances at the time of the property tax lien date are placed on the customer's tax bill and collected through the normal tax collection process. 36 46 City of Muskego Notes to Financial Statements As of and for the Year Ended December 31, 2021 NOTE I — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) D. ASSETS, DEFERRED OUTFLOWS OF RESOURCES, LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND NET POSITION OR EQUITY (continued) 3. Inventories and Prepaid Items Governmental fund inventory items are charged to expenditure accounts when purchased. Year- end inventory was not significant. Proprietary fund inventories are generally used for construction and for operation and maintenance work. They are not for resale. They are valued at cost based on weighted average, and charged to construction or operation and maintenance expense when used. 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. 4. Restricted Assets Mandatory segregations of assets are presented as restricted assets. Such segregations are required by bond agreements and other external parties. Current liabilities payable from these restricted assets are so classified. The excess of restricted assets over current liabilities payable from restricted assets will be used first for retirement of related long-term debt. The remainder, if generated from earning, is shown as restricted net position. Restricted net position principally represents Water and Sewer Reserve Capacity Assessment Funds, Special Redemption Funds, Pension Asset and Equipment Replacement Funds restricted assets, less related current liabilities payable from the restricted assets. 5. Capital Assets Government —Wide Statements Capital assets, which include property, plant and equipment, are reported in the government -wide financial statements. Capital assets are defined by the government as assets with an initial cost of more than $5,000 for general capital assets and $10,000 for infrastructure assets, and an estimated useful life in excess of one year. All capital assets are valued at historical cost or estimated historical cost if actual amounts are unavailable. Donated capital assets are recorded at their estimated fair value at the date of donation. Additions to and replacements of capital assets of business -type activities are recorded at original cost, which includes material, labor, overhead, and an allowance for the cost of funds used during construction when significant. The cost of renewals and betterments relating to retirement units is added to plant accounts. The cost of property replaced retired or otherwise disposed of, is deducted from plant accounts and, generally, together with removal costs less salvage, is charged to accumulated depreciation. 37 47 City of Muskego Notes to Financial Statements As of and for the Year Ended December 31, 2021 NOTE I — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) D. ASSETS, DEFERRED OUTFLOWS OF RESOURCES, LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND NET POSITION OR EQUITY (continued) 5. Capital Assets (continued) Government —Wide Statements (continued) Depreciation of all exhaustible capital assets is recorded as an allocated expense in the statement of activities, with accumulated depreciation reflected in the statement of net position. Depreciation is provided over the assets' estimated useful lives using the straight-line method. The range of estimated useful lives by type of asset is as follows: Buildings 20-50 Years Land Improvements Other than Building 10-50 Years Machinery and Equipment 3-20 Years Utility System 19-125 Years Infrastructure 10-50 Years Intangibles 5 Years Fund Financial Statements In the fund financial statements, capital assets used in governmental fund operations are accounted for as capital outlay expenditures of the governmental fund upon acquisition. Capital assets used in proprietary fund operations are accounted for the same way as in the government - wide statements. 6. Deferred Outflows of Resources A deferred outflow of resources represents a consumption of net position/fund balance that applies to a future period and will not be recognized as an outflow of resources (expense/expenditure) until that future time. 7. Compensated Absences Under terms of employment, employees are granted sick leave and vacations in varying amounts. Only benefits considered to be vested are disclosed in these statements. All vested vacation and sick leave pay are accrued when incurred in the government -wide and proprietary fund financial statements. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee resignations and retirements, and are payable with expendable resources. Payments for vacation and sick leave will be made at rates in effect when the benefits are used. Accumulated vacation and sick leave liabilities at December 31, 2021 are determined on the basis of current salary rates and include salary related payments. 38 48 City of Muskego Notes to Financial Statements As of and for the Year Ended December 31, 2021 NOTE I — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) D. ASSETS, DEFERRED OUTFLOWS OF RESOURCES, LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND NET POSITION OR EQUITY (continued) 8. Long -Term Obligations All long-term obligations to be repaid from governmental and business -type resources are reported as liabilities in the government -wide statements. The long-term obligations consist primarily of notes and bonds payable, and accrued compensated absences. Long-term obligations for governmental funds are not reported as liabilities in the fund financial statements. The face value of debts (plus any premiums) is reported as other financing sources and payments of principal and interest are reported as expenditures. The accounting in proprietary funds is the same as it is in the government -wide statements. For the government -wide statements and proprietary fund statements, bond premiums and discounts are amortized over the life of the issue using the effective interest method. The balance at year end is shown as an increase or decrease in the liability section of the statement of net position. 9. Utility Deferred Lease and Other Unearned Revenue Utility deferred lease and other unearned revenue principally represents unearned special assessments which will be reported as contributed capital when and if the property owner connects to the water system and the assessment becomes due, and prepayments of reserve capacity assessments. The federal government passed the American Rescue Plan Act on March 11, 2021 to respond to the COVID-19 public health emergency and its negative economic impacts. Amounts were appropriated for fiscal year 2021 to units of local government to mitigate the fiscal effects stemming from the public health emergency. The City's estimated award is $2,630,007, which will be used to combat the negative effects of the public health emergency in the local economy. The City received 50% of the funds in 2021, with the remaining expected in 2022. The funds are to cover costs incurred by December 31, 2024. 10. Deferred Inflows of Resources A deferred inflow of resources represents an acquisition of net position/fund balance that applies to a future period and therefore will not be recognized as an inflow of resources (revenue) until that future time. 39 49 City of Muskego Notes to Financial Statements As of and for the Year Ended December 31, 2021 NOTE I — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) D. ASSETS, DEFERRED OUTFLOWS OF RESOURCES, LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND NET POSITION OR EQUITY (continued) 11. Equity Classifications Government —Wide Statements Equity is classified as net position and displayed in three components: a. Net investment in capital assets — Consists of capital assets including restricted capital assets, net of accumulated depreciation and reduced by the outstanding balances (excluding unspent bond proceeds) of any bonds, mortgages, notes, or other borrowings that are attributable to the acquisition, construction, or improvement of those assets. b. Restricted net position — Consists of net position with constraints placed on the use either by 1) external groups such as creditors, grantors, contributors, or laws or regulations of other governments or, 2) law through constitutional provisions or enabling legislation. c. Unrestricted net position — All other net positions that do not meet the definition of "restricted" or "net investment in capital assets." The net position section includes an adjustment for capital assets owned by the business -type activities column, but financed by the debt of the governmental activities column. The amount is a reduction of "net investment in capital assets", and an increase in "unrestricted" net position, shown only in the total column. A reconciliation of this adjustment is as follows: Governmental Business -type Activities Activities Adjustment Total Net investment in capital assets $ 47,254,179 $ 64,885,348 $ (722,981) $ 111,416,546 Unrestricted 8,460,408 6,828,855 722,981 16,012,244 When both restricted and unrestricted resources are available for use, it is the City's policy to use restricted resources first, then unrestricted resources as they are needed. 40 50 City of Muskego Notes to Financial Statements As of and for the Year Ended December 31, 2021 NOTE I — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) C. ASSETS, DEFERRED OUTFLOWS OF RESOURCES, LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND NET POSITION OR EQUITY (continued) 11. Equity Classifications (continued) Fund Statements Governmental fund balances are displayed as follows: a. Non -spendable — Includes fund balance amounts that cannot be spent either because they are not in spendable form or because legal or contractual requirements require them to be maintained intact. b. Restricted — Consists of fund balances with constraints place on their use either by 1) external groups such as creditors, grantors, contributors, or laws or regulations of other governments or 2) law through constitutional provisions or enabling legislation. c. Committed - Includes fund balance amounts that are constrained for specific purposes that are internally imposed by the government through formal action of the highest level of decision making authority. Fund balance amounts are committed through a formal action (resolution) of the City. This formal action must occur prior to the end of the reporting period, but the amount of the commitment, which will be subject to the constraints, may be determined in the subsequent period. Any changes to the constraints imposed require the same formal action of the City that originally created the commitment. Assigned - Includes spendable fund balance amounts that are intended to be used for specific purposes that are not considered restricted or committed. Fund balance may be assigned through the following; 1) The City has adopted a financial policy authorizing the Finance Committee to assign amounts for a specific purpose, and 2) All remaining positive spendable amounts in governmental funds, other than the general fund, that are neither restricted nor committed. Assignments may take place after the end of the reporting period. e. Unassigned - Includes residual positive fund balance within the general fund which has not been classified within the other above mentioned categories. Unassigned fund balance may also include negative balances for any governmental fund if expenditures exceeds amounts restricted, committed, or assigned for those purposes. The City considers restricted amounts to be spent first when both restricted and unrestricted fund balance is available unless there are legal documents / contracts that prohibit doing this, such as in grant agreements requiring dollar for dollar spending. Additionally, the City would first use committed, then assigned and lastly unassigned amounts of unrestricted fund balance when expenditures are made. The City has a formal minimum fund balance policy. That policy is to maintain an unassigned fund balance in the general fund of $2,821,115, or 17% of the ensuing year's budgeted general fund expenditures. The balance at year end was $7,841,809 or 47% of 2022 budgeted general fund expenditures. Proprietary fund equity is classified the same as in the government -wide statements. 41 51 City of Muskego Notes to Financial Statements As of and for the Year Ended December 31, 2021 NOTE I — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) D. ASSETS, DEFERRED OUTFLOWS OF RESOURCES, LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND NET POSITION OR EQUITY (continued) 11. Equity Classifications (continued) Fund Statements (continued) Fiduciary fund equity is classified as held in trust for the Library Expansion Trust and the Volunteer Fire Co. Scholarship on the statement of fiduciary net position. Various donor restrictions apply, including authorizing and spending trust income, and the City believes it is in compliance with all significant restrictions. 12. Pension For purposes of measuring the net pension (asset), deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Wisconsin Retirement System (WRS) and additions to/deductions from WRS' fiduciary net position have been determined on the same basis as they are reported by WRS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms, investments are reported at fair value. 13. Postemployment Benefits Other Than Pensions (OPEB) - LRLIF The fiduciary net position of the Local Retiree Life Insurance Fund (LRLIF) has been determined using the flow of economic resources measurement focus and the accrual basis of accounting. This includes for purposes of measuring the net OPEB liability, deferred outflows of resources and deferred inflows of resources related to other post -employment benefits, OPEB expense, and information about the fiduciary net position of the LRLIF and additions to/deductions from LRLIFs fiduciary net position have been determined on the same basis as they are reported by LRLIF. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. 42 52 City of Muskego Notes to Financial Statements As of and for the Year Ended December 31, 2021 NOTE I — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) E. OTHER POLICIES - TAX INCREMENTAL DISTRICTS The City has created a number of "City of Muskego Tax Incremental Districts" to encourage development of the City tax base, efficient use of land, buildings and public improvements and private investment in various specific areas of the City. Property taxes of each specific District generated in future years, measured by the increment in value of the property in the district over the base year, will be used to retire the interest and principal of the related debt incurred to finance the project costs. Below is a summary of each district: 1. District No. 8 was created in 2000 and is for the development of the City's downtown area. Project costs were originally estimated at $2.7 million. In September, 2005 the City amended the project plan to include an additional $855,000 in project costs. This district was officially terminated on September 9, 2021. 2. District No. 9 was created in 2003 for development in the City's Community Development Authority Redevelopment District No. 1. Project costs were estimated at $1.5 million and have been financed with a $2.0 million Community Development Lease Revenue Bond. This district was officially terminated on September 9, 2021. 3. District No. 10 was created in 2007 and is a mixed use tax increment district comprised of the east and west sides of Moorland Road from College Avenue on the north to one-half mile south. Project costs were estimated at $8.3 million and have been financed with $9.25 million bonds. 4. District No. 11 was created in 2016 and is a mixed use tax increment district located along Janesville Road near the northeast corner of Lannon Road. Project costs were estimated at $2.9 million and have been financed with $1.6 million of Taxable General Obligation Promissory Notes. 43 53 City of Muskego Notes to Financial Statements As of and for the Year Ended December 31, 2021 NOTE II — RECONCILIATION OF GOVERNMENT —WIDE AND FUND FINANCIAL STATEMENTS EXPLANATION OF CERTAIN DIFFERENCES BETWEEN THE GOVERNMENTAL FUND BALANCE SHEET AND THE STATEMENT OF NET POSITION The governmental fund balance sheet includes reconciliation between fund balance — total governmental funds and net position — governmental activities as reported in the government -wide statement of net position. The details of this reconciliation include the following items. Capital assets used in governmental funds are not financial resources and, therefore, are not reported in the funds. Land $ 5,721,603 Intangibles 778,050 Construction in progress 3,189,983 Land improvements 4,337,081 Buildings 33,019,646 Machinery and equipment 11,304,308 Library collection 4,234,003 Infrastructure 89,964,834 Less: Accumulated depreciation (70,582,489) Adjustment for Capital Assets $ 81,967,019 Long-term liabilities applicable to the City's governmental activities are not due and payable in the current period, and accordingly, are not reported as fund liabilities. Interest on long-term debt is not accrued in governmental funds, but rather is recognized as an expenditure when due. All liabilities —both current and long -term —are reported in the statement of net position. Bonds and notes payable $ 35,054,048 Compensated absences 1,940,580 Unamortized debt premium 829,780 Accrued interest 215,085 Combined Adjustment for Long -Term Liabilities $ 38,039,493 44 54 City of Muskego Notes to Financial Statements As of and for the Year Ended December 31, 2021 NOTE III — STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY A. BUDGETARY INFORMATION Budgetary information is derived from the annual operating budget and is presented using the same basis of accounting for each fund as described in Note I.C. A budget has been adopted for the General Fund, certain Special Revenue Funds, Debt Service Funds, certain Capital Project Funds, the Water Utility and Sewer Utility. Budgets have not been formally adopted for the American Rescue Plan Act (ARPA) Special Revenue Fund, Federated Library System Fund, and Fiduciary Funds. Wisconsin Statute 65.90 requires that an annual budget be adopted for all funds. Appropriations lapse at year end unless specifically carried over by the Common Council. There were no carryovers to the following year. Budgetary control is exercised at the fund level for all funds. B. EXCESS EXPENDITURES OVER APPROPRIATIONS Expenditures exceeded appropriations due to the unbudgeted costs in the following funds. The excess expenditures were covered by additional revenues received or use of available fund balance. Excess Budgeted Actual Expenditures Fund Expenditures Expenditures Over Budget Special Revenue Funds Park Fund $ 1,055,000 $ 1,217,035 $ 162,035 Refuse/Recycling Fund 1,290,435 1,391,217 100,782 Compensated Absences Fund 161,475 398,635 237,160 The City controls expenditures at the department and function level. Some individual departments/functions experienced expenditures which exceeded appropriations. The detail of those items can be found in the City's year end budget to actual schedules. C. LIMITATIONS ON THE CITY'S TAX LEVY Wisconsin law limits the City's future tax levies. Generally, the City is limited to its prior tax levy dollar amount (excluding TIF Districts), increased by the greater of the percentage change in the City's equalized value due to new construction or zero percent. Changes in debt service from one year to the next are generally exempt from this limit with certain exceptions. The City is required to reduce its allowable levy by the estimated amount of fee revenue it collects for certain services, if those services were funded in 2013 by the property tax levy. Levies can be increased above the allowable limits if the amount is approved by referendum. 45 55 City of Muskego Notes to Financial Statements As of and for the Year Ended December 31, 2021 NOTE IV — DETAILED NOTES ON ALL FUNDS A. DEPOSITS AND INVESTMENTS The City's cash and investments at year end were comprised of the following: Deposits with banks LGI P Petty cash Total Cash and Investments Reconciliation to financial statements Per statement of net position Unrestricted cash and investments Temporary investments Restricted cash and investments Per statement of fiduciary net position Library expansion trust Volunteer Fire -Co. Scholarship Custodial Total Cash and Investments Carrying Bank Associated Value Balance Risks $ 66,356,905 $ 63,894,704 Custodial Credit Risk 45,825 45,825 Credit Risk 1,765 - None $ 66,404,495 $ 63,940,529 $ 22,670,403 897,821 13, 818, 290 25,878 186,976 28, 805,127 $ 66,404,495 Deposits in each local and area bank are insured by the FDIC in the amount of $250,000 for time and savings accounts (including NOW accounts) and $250,000 for demand deposit accounts (interest -bearing and non interest -bearing). In addition, if deposits are held in an institution outside of the state in which the government is located, insured amounts are further limited to a total of $250,000 for the combined amount of all deposit accounts. Bank accounts are also insured by the State Deposit Guarantee Fund in the amount of $400,000. However, due to the nature of this fund, recovery of material principal losses may not be significant to individual municipalities. This coverage has been considered in computing custodial credit risk. 46 56 City of Muskego Notes to Financial Statements As of and for the Year Ended December 31, 2021 NOTE IV — DETAILED NOTES ON ALL FUNDS (continued) A. DEPOSITS AND INVESTMENTS (continued) Custodial Credit Risk Deposits Custodial credit risk is the risk that in the event of a financial institution failure, the City's deposits may not be returned to the City. The City does not have any deposits exposed to custodial credit risk. Investments For an investment, custodial credit risk is the risk that, in the event of the failure of the counterparty, the City will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The City does not have any investments exposed to custodial credit risk. Credit Risk Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligation. The City had investments in the external Wisconsin Local Government Investment Pool and Wisconsin Investment Series Cooperative, which are not rated. See Note I.D.1. for further information on deposit and investment policies. 47 57 City of Muskego Notes to Financial Statements As of and for the Year Ended December 31, 2021 NOTE IV — DETAILED NOTES ON ALL FUNDS (continued) B. RESTRICTED ASSETS The following represent the balances of the restricted assets: Sewer Utility Cash and investments Equipment replacement Reserve capacity assessments RCA assessments receivable Net pension asset Total Sewer Utility Water Utility Cash and investments Redemption account Reserve account Depreciation account Construction funds Reserve capacity assessments WCA assessments receivable Net pension asset Total Water Utility Total Business -type Activities Liabilities Payable from Restricted Restricted Assets and Restricted Assets Other Liabilities Net Position $ 947,843 $ - $ 947,843 10, 763, 974 - 10, 763, 974 231,571 - 231,571 210,638 - 210,638 12,154,026 - 12,154,026 5,258 12,645 - - 306,403 - -1 488,765 - 488,765 - 24,632 - -1 1,612,450 - 1,612,450 193,020 12,882 180,138 111,894 - 111,894 2,411,387 356,562 2,393,247 $ 14, 565, 413 $ 356,562 $ 14, 547, 273 (1) — Reserve accounts and Construction funds consist of bond proceeds and are not a component of net position. Below are descriptions of restricted assets: Long Term Debt Accounts Redemption — Used to segregate resources accumulated for debt service payments over the next twelve months. Reserve — Used to report resources set aside to make up potential future deficiencies in the redemption account. Depreciation — Used to report resources set aside to fund plant renewals and replacement or make up potential future deficiencies in the redemption account. Construction — Used to report proceeds of revenue bond issuances that are restricted for use in construction. 48 58 City of Muskego Notes to Financial Statements As of and for the Year Ended December 31, 2021 NOTE IV — DETAILED NOTES ON ALL FUNDS (continued) B. RESTRICTED ASSETS (continued) Water and Sewer Capacity Assessments Account The water and sewer utilities established funds to account for capacity assessment levies that are restricted to finance certain system capital costs or related debt service costs. Equipment Replacement Account The sewer utility established an equipment replacement account to be used for significant mechanical equipment replacement as required by the Wisconsin Department of Natural Resources and debt covenants. Net Pension Asset Restricted assets have been reported in connection with the net pension asset balance since this balance must be used to fund employee benefits. C. RECEIVABLES Governmental funds report unavailable or unearned revenue in connection with receivables for revenues that are not considered to be available to liquidate liabilities of the current period. Property taxes levied for the subsequent year are not earned and cannot be used to liquidate liabilities of the current period. Governmental funds also defer revenue recognition in connection with resources that have been received, but not yet earned. At the end of the current fiscal year, the various components for unavailable revenue and unearned revenue reported in the governmental funds were as follows: Unearned Unavailable Total Property taxes receivable for subsequent year $ 15,065,080 - $ 15,065,080 Other - 251 251 Total Unearned/Unavailable Revenue for Governmental Funds $ 15,065,080 $ 251 $ 15,065,331 Significantly all governmental activities receivables are expected to be collected within one year. 49 59 City of Muskego Notes to Financial Statements As of and for the Year Ended December 31, 2021 NOTE IV — DETAILED NOTES ON ALL FUNDS (continued) D. CAPITAL ASSETS Capital asset activity for the year ended December 31, 2021 was as follows: Governmental Activities Capital assets not being depreciated/amortized Land Construction in progress Total capital assets not being depreciated/amortized Capital assets being depreciated/amortized Intangibles Land improvements Buildings Machinery and equipment Library collection Infrastructure Total Capital Assets Being Depreciated/Amortized Less: Accumulated depreciation/amortization for Intangibles Land improvements Buildings Machinery and equipment Library collection Infrastructure Total Accumulated Depreciation/Amortization Net Capital Assets Being Depreciated/Amortized Total Governmental Activities Capital Assets, Net of Depreciation/Amortization Beginning Ending Balance Additions Deletions Balance $ 5,722,103 $ - $ 500 $ 5,721,603 437,536 2,790,944 38,497 3,189,983 6,159,639 2,790,944 38,997 8,911,586 715,392 62,658 - 778,050 4,337,081 - - 4,337,081 32,870,539 149,107 - 33,019,646 10,591,057 755,580 42,329 11,304,308 4,071,099 162,904 - 4,234,003 88,797,671 1,167,163 - 89,964,834 141,382,839 2,297,412 42,329 143,637,922 (586,590) (43,150) (2,977,654) (143,039) (8,166,838) (666,968) (7,557,887) (704,296) (3,350,548) (179,729) (44,121,609) (2,113,925) (66,761,126) (3,851,107) - (629,740) - (3,120,693) - (8,833,806) 29,744 (8,232,439) - (3,530,277) (46,235,534) 29,744 (70,582,489) 74,621,713 (1,553,695) 12,585 73,055,433 $ 80,781,352 $ 1,237,249 $ 51,582 $ 81,967,019 50 60 City of Muskego Notes to Financial Statements As of and for the Year Ended December 31, 2021 NOTE IN — DETAILED NOTES ON ALL FUNDS (continued) D. CAPITAL ASSETS (continued) Depreciation/Amortization expense was charged to functions as follows: Governmental Activities General government Public safety Public works, which includes the depreciation of infrastructure Conservation and development Education and recreation Total Governmental Activities Depreciation/Amortization Expense Business Type Activities Capital Assets not being depreciated Land and easements Construction in progress Total Capital Assets Not Being Depreciated Capital Assets being depreciated Buildings and improvements Improvements other than buildings Machinery and equipment Total Capital Assets Being Depreciated Less: Accumulated Depreciation Buildings and improvements Improvements other than buildings Machinery and equipment Total Accumulated Depreciation Net Capital Assets Being Depreciated Total Business Activities Capital Assets, Net of Depreciation Beginning Balance $ 308,948 $ 126,261 435,209 Additions $ 278,524 542,621 2,162,380 209,355 658,227 $ 3,851,107 Ending Deletions Balance $ - $ 308,948 - 55,803 70,458 55,803 379,406 21,334,183 138,860 - 21,473,043 82,005,580 - - 82,005,580 5,465,844 330,423 125,128 5,671,139 108,805,607 469,283 125,128 109,149,762 (14,130,771) (284,442) - (14,415,213) (22,616,698) (1,046,300) - (23,662,998) (4,218,785) (206,082) 125,128 (4,299,739) (40,966,254) (1,536,824) 125,128 (42,377,950) 67,839,353 (1,067,541) - 66,771,812 $ 68,274,562 $ (1,067,541) $ 55,803 $ 67,151,218 Acquisition and construction of capital assets reflect a $24,062 non -cash reduction in accounts payable retainage amounts over the prior year. 51 61 City of Muskego Notes to Financial Statements As of and for the Year Ended December 31, 2021 NOTE IV — DETAILED NOTES ON ALL FUNDS (continued) D. CAPITAL ASSETS (continued) Depreciation expense was charged to functions as follows: Sewer utility $ 632,588 Water utility 868,916 Total Business -Type Activities Depreciation Expense $ 1,501,504 Depreciation expense may be different from business -type activity accumulated depreciation additions because of joint metering, salvage, cost of removal, internal allocations, or costs associated with the disposal of assets. E. INTERFUND TRANSFERS Transfers The following is a schedule of interfund transfers: Fund Transferred To General Fund General Fund Special Revenue Fund - Tax Increment District Debt Service Fund Debt Service Fund Fund Transferred From Water Utility Nonmajor Governmental Funds Nonmajor Governmental Funds Nonmajor Governmental Funds Debt Service Fund Capital Budget Fund Nonmajor Governmental Funds Debt Service Fund Special Revenue Fund - Tax Increment District Fund Nonmajor Governmental Funds Nonmajor Governmental Funds Subtotal - Fund Financial Statements Less: Fund eliminations Total Transfers - Government -Wide Statement of Activities Amount $ 441,825 164,420 300,774 100,000 169,187 1,075,073 1,079,461 3,526,648 6,857,388 (6,415,563) $ 441,825 Generally, transfers are used to (1) move revenues from the fund that collects them to the fund that the budget requires to expend them, (2) move receipts restricted to debt service from the funds collecting the receipts to the debt service fund, and (3) use unrestricted revenues collected in the general fund to finance various programs accounted for in other funds in accordance with budgetary authorizations. 52 62 City of Muskego Notes to Financial Statements As of and for the Year Ended December 31, 2021 NOTE IV - DETAILED NOTES ON ALL FUNDS (continued) F. LONG-TERM OBLIGATIONS General Obligation Debt Long-term obligations activity for the year ended December 31, 2021 was as follows: GOVERNMENTAL ACTIVITIES Bonds and Notes Payable General obligation debt General obligation notes from direct borrowings and direct placements Unamortized debt premium Total Bonds and Notes Payable Other Liabilities Accrued compensted absences - vacation and sick leave Net OPEB Liability - LRLIF Total Other Liabilities Total Governmental Activities Long -Term Liabilities Amounts Beginning Ending Due Within Balance Increases Decreases Balance One Year $ 36,759,217 $ $ 2,895,082 $ 33,864,134 $ 2,593,148 1,324,020 134,106 1,189,914 138,779 927,327 97,548 829,780 - 39,010,564 3,126,737 35,883,828 2,731,927 2,337,883 - 397,303 1,940,580 100,000 520,895 141,781 - 662,676 - 2,858,778 141,781 397,303 2,603,256 100,000 $ 41,869,343 $ 141,781 $ 3,524,040 $ 38,487,084 $ 2,831,927 BUSINESS -TYPE ACTIVITIES Bonds and Notes Payable General obligation debt $ 2,234,786 $ $ 241,916 $ 1,992,870 $ 280,849 Direct Debt - WI Safe Drinking Water Loan 249,469 24,891 224,578 25,554 Unamortized debt premium 55,058 6,634 48,424 - Total Bonds and Notes Payable 2,539,313 273,441 2,265,872 306,403 Other Liabilities Net pension liability - - - - Net OPEB Liability - LRLIF 106,767 46,502 56,356 96,913 Total Other Liabilities 106,767 46,502 56,356 96,913 - Total Business -type Activities Long -Term Liabilities $ 2,646,080 $ 46,502 $ 329,797 $ 2,362,785 $ 306,403 All general obligation notes and bonds payable are backed by the full faith and credit of the City. Notes and bonds in the governmental funds will be retired by future property tax levies or tax increments accumulated by the debt service fund. Business -type activities debt is payable by revenues from user fees of those funds or, if the revenues are not sufficient, by future tax levies. In accordance with Wisconsin Statutes, total general obligation indebtedness of the City may not exceed 5% of the equalized value of taxable property within the City's jurisdiction. The debt limit as of December 31, 2021, was $184,786,775 million. Total general obligation debt outstanding at year end was $37,046,916. 53 63 City of Muskego Notes to Financial Statements As of and for the Year Ended December 31, 2021 NOTE IV - DETAILED NOTES ON ALL FUNDS (continued) F. LONG-TERM OBLIGATIONS (continued) General Obligation Debt Date of Interest Principal Interest Original Balance Issue Rate Payable Payable Amount 12/31/21 Governmental Activities General Obligation Debt Refunding Debt 11/13/20 0.60-0.80% 4/1/21-24 4/1 & 10/1 $ 3,414,000 $ 2,612,000 Refunding Debt 10/22/13 2.00-4.00 4/1/14-31 4/1 & 10/1 11,805,000 10,145,372 Promissory notes 10/22/13 2.00-3.125 4/1/14-23 4/1 & 10/1 885,000 351,762 Refunding Debt 11/26/13 1.00-3.00 4/1/14-22 4/1 & 10/1 9,550,000 200,000 Direct Borrowing Pomissory notes 12/31/14 N/A 2/15/15-22 - 76,082 9,512 Direct Debt Promissory notes 7/31/19 3.75 3/15/20-29 3/15 1,444,690 1,180,402 General obligation debt 8/01/18 2.00-4.00 6/1/19-38 6/1 & 12/1 22,780,000 20,555,000 Total Governmental Activities - General Obligation Debt $ 35,054,048 Date of Interest Principal Interest Original Balance Issue Rate Payable Payable Amount 12/31/21 Business -type activities General obligation debt 10/22/13 2.00-4.00% 4/1/14-31 4/1 & 10/1 820,000 $ 704,628 General obligation debt 10/22/13 2.00-3.125 4/1/14-23 4/1 & 10/1 440,000 223,240 General obligation debt 8/01/18 2.00-4.00 6/1/19-28 6/1 & 12/1 1,450,000 1,065,000 Total Business -Type Activities $ 1,992,868 Debt service requirements to maturity are as follows: Governmental Type Direct Borrowing Business Type Long -Term Debt Long -Term Debt Long -Term Debt Principal Interest Principal 2022 $ 2,593,148 $ 1,190,516 $ 138,779 2023 2,075,361 1,137,011 134,116 2024 2,218,750 1,081,623 139,051 2025 1,358,500 1,026,400 144,360 2026 1,415,250 974,275 149,773 2027-2031 8,698,124 3,844,079 483,835 2032-2036 10,640,000 1,958,200 - 2037-2038 4,865,000 196,500 - Interest Principal Interest $ 44,265 $ 280,849 $ 67,964 39,418 290,650 59,939 34,482 213,250 49,458 29,174 221,500 41,513 23,760 229,750 34,013 36,767 756,870 56,109 Totals $ 33,864,134 $ 11,408,603 $ 1,189,914 $ 207,866 $ 1,992,868 $ 308,997 54 64 City of Muskego Notes to Financial Statements As of and for the Year Ended December 31, 2021 NOTE IV — DETAILED NOTES ON ALL FUNDS (continued) F. LONG-TERM OBLIGATIONS (continued) Other Debt Information Estimated payments of compensated absences are not included in the debt service requirement schedules. The compensated absences liability attributable to governmental activities will be primarily liquidated by the general fund. Date of Interest Principal Interest Issue Rate Payable Payable Original Balance Amount 12/31/21 Business -type activities WI Safe Drinking Water Direct Loan 11/25/09 2.668% 5/1/10-29 5/1&11/1 $ 453,974 $ 224,578 Total Business -Type Activities $ 224,578 Debt service requirements to maturity are as follows: Business -type Activities Lona-Term Debt Principal Interest 2022 $ 25,554 $ 5,651 2023 26,236 4,960 2024 26,936 4,251 2025 27,655 3,522 2026 28,393 2,775 2027-2029 89,804 3,637 $ 224,578 $ 24,795 The City's outstanding revenue bonds from direct borrowings and/or direct placement related to business type activities of $224,578 contain provisions that in an event of default, outstanding amounts are recoverable by the State by deducting those amounts from any State payments due the City, adding a special charge to the amount of taxes apportioned to and levied upon the county in which the City is located, or to collect user fees from the operations of the City's water and sewer system. 55 65 City of Muskego Notes to Financial Statements As of and for the Year Ended December 31, 2021 NOTE IV — DETAILED NOTES ON ALL FUNDS (continued) G. NET POSITION / FUND BALANCES Governmental Activities Net position reported on the government wide statement of net position at December 31, 2021 includes the following: Net investment in capital assets Land Other capital assets, net of accumulated depreciation Construction in progress Less: related long-term debt outstanding Less: unamortized debt premium Plus: unspent capital related debt proceeds Plus: non -capital debt proceeds Total Net investment in capital assets Resticted for: Tax Increment District purposes Library Big Muskego Lake - Bass Bay Protection and Rehabilitation District Revolving loans Landfill Other debt service Pension Total Restricted Net Position Unrestricted Total Governmental Activities Net Position $ 5,721,603 73,055,433 3,189,983 (35,054,048) (829,780) 321,561 849,427 47,254,179 56,856 40,132 191,381 201,541 1,433,731 134,416 3,492,690 5,550,747 8,460,408 $ 61,265,334 56 66 City of Muskego Notes to Financial Statements As of and for the Year Ended December 31, 2021 NOTE IV — DETAILED NOTES ON ALL FUNDS (continued) G. NET POSITION/FUND BALANCES (continued) Governmental Funds Governmental fund balances reported on the fund financial statements at December 31, 2021 include the following: Nonspendable Major Fund General Fund Prepaid items Total Nonspendable Fund Balance Re stri cte d Major Funds Debt Service Fund Capital Budget Fund Tax Increment District Funds Total Major Funds Nonmajor Fund Special Revenue Fund Landfill Fund Revolving Loan Fund Big Muskego Lake - Bass Bay Protection and Rehabilitation District Federated Library System Fund Total Nonmajor Funds Total Restricted Fund Balance $ 36,410 $ 36,410 $ 349,501 248,459 56,856 654,816 1,433,731 201,541 191,381 40,132 1,866,785 $ 2,521,601 57 67 City of Muskego Notes to Financial Statements As of and for the Year Ended December 31, 2021 NOTE IV — DETAILED NOTES ON ALL FUNDS (continued) G. NET POSITION/FUND BALANCES (continued) Governmental Funds (continued) Committed Nonmajor Funds Special Revenue Funds Park Fund $ 315,724 Refuse / Recycling Fund 1,006,145 Landfill Standing Committee Funds 124,248 Stormwater Management Fund 159,876 Well Testing Reserve Fund 709,793 Land Open Space Conservation Fund 479,435 Compensated Absences Fund 1,940,581 Capital Improvements Fund 453,625 Total Committed Fund Balance $ 5,189,427 Assigned Nonmajor Fund Capital Projects Fund Capital Equipment Fund $ 598,918 Unassigned Major Fund General Fund $ 7,841,809 58 68 City of Muskego Notes to Financial Statements As of and for the Year Ended December 31, 2021 NOTE IV — DETAILED NOTES ON ALL FUNDS (continued) G. NET POSITION/FUND BALANCES (continued) Net position reported on the government wide statement of net position at December 31, 2021 includes the following: Business -type Activities Net Investment in Capital Assets Land and easements Other capital assets, net of accumulated depreciation Construction in progress Less: related long-term debt outstanding Less: unamortized debt premium Total Net Investment in Capital Assets Resticted for: Depreciation and equipment replacement funds Net Pension Asset Water and sewer capacity assessment funds Total Restricted Net Position Unrestricted Total Business -type Activities Net Position $ 308,948 66, 771, 812 70,458 (2,217,446) (48,424) 64, 885, 348 1,436,608 322,532 12, 788,133 14, 547, 273 $ 86,261,476 59 69 City of Muskego Notes to Financial Statements As of and for the Year Ended December 31, 2021 NOTE IV — DETAILED NOTES ON ALL FUNDS (continued) H. COMPONENT UNIT This report contains the Muskego Community Development Authority (Authority), which is included as a component unit. In addition to the basic financial statements and the preceding notes to financial statements, which apply, the following additional disclosures are considered necessary for a fair presentation. a. Basis of Accounting/Measurement Focus The Authority follows the full accrual basis of accounting and the flow of economic resources measurement focus. b. Deposits and Investments At year-end, the carrying amount of the Authority's deposits was $190,355 and the bank balance was $190,355. The Authority does not have any deposits exposed to custodial credit risk. c. Cash and Cash Equivalents The Authority considers all highly liquid investments with an initial maturity of three months or less when acquired to be cash equivalents. d. Capital Assets Capital assets used by the Authority are those assets owned by the City of Muskego. Consequently, the Authority does not report any capital assets. e. Employee Retirement System The Muskego Community Development Authority does not participate in a pension plan. 60 70 City of Muskego Notes to Financial Statements As of and for the Year Ended December 31, 2021 NOTE V — OTHER INFORMATION A. EMPLOYEES' RETIREMENT SYSTEM General Information About the Pension Plan Plan description. The WRS is a cost -sharing multiple -employer defined benefit pension plan. WRS benefits and other plan provisions are established by Chapter 40 of the Wisconsin Statutes. Benefit terms may only be modified by the legislature. The retirement system is administered by the Wisconsin Department of Employee Trust Funds (ETF). The system provides coverage to all eligible State of Wisconsin, local government and other public employees. All employees, initially employed by a participating WRS employer on or after July 1, 2011, and expected to work at least 1,200 hours a year (880 hours for teachers and school district educational support employees) and expected to be employed for at least one year from employee's date of hire are eligible to participate in the WRS. ETF issues a standalone Annual Comprehensive Financial Report (ACFR), which can be found at http://etf.wi.gov/publications/cafr.htm Vesting. For employees beginning participation on or after January 1, 1990, and no longer actively employed on or after April 24, 1998, creditable service in each of five years is required for eligibility for a retirement annuity. Participants employed prior to 1990 and on or after April 24, 1998, and prior to July 1, 2011, are immediately vested. Participants who initially became WRS eligible on or after July 1, 2011, must have five years of creditable service to be vested. Benefits provided. Employees who retire at or after age 65 (54 for protective occupation employees, 62 for elected officials and executive service retirement plan participants, if hired on or before 12/31/2016) are entitled to receive a retirement benefit based on a formula factor, their final average earnings, and creditable service. Final average earnings is the average of the participant's three highest annual earnings periods. Creditable service includes current service and prior service for which a participant received earnings and made contributions as required. Creditable service also includes creditable military service. The retirement benefit will be calculated as a money purchase benefit based on the employee's contributions plus matching employer's contributions, with interest, if that benefit is higher than the formula benefit. Vested participants may retire at age 55 (50 for protective occupation employees) and receive an actuarially -reduced benefit. Participants terminating covered employment prior to eligibility for an annuity may either receive employee -required contributions plus interest as a separation benefit or leave contributions on deposit and defer application until eligible to receive a retirement benefit. The WRS also provides death and disability benefits for employees. 61 71 City of Muskego Notes to Financial Statements As of and for the Year Ended December 31, 2021 NOTE V — OTHER INFORMATION (continued) A. EMPLOYEES' RETIREMENT SYSTEM (continued) Post -Retirement adjustments. The Employee Trust Funds Board may periodically adjust annuity payments from the retirement system based on annual investment performance in accordance with s. 40.27, Wis. Stat. An increase (or decrease) in annuity payments may result when investment gains (losses), together with other actuarial experience factors, create a surplus (shortfall) in the reserves, as determined by the system's consulting actuary. Annuity increases are not based on cost of living or other similar factors. For Core annuities, decreases may be applied only to previously granted increases. By law, Core annuities cannot be reduced to an amount below the original, guaranteed amount (the "floor") set at retirement. The Core and Variable annuity adjustments granted during recent years are as follows: Core Fund Variable Fund Year Adjustment Adjustment 2011 (1.2)% 11.0% 2012 (7.0) (7.0) 2013 (9.6) 9.0 2014 4.7 25.0 2015 2.9 2.0 2016 0.5 (5.0) 2017 2.0 4.0 2018 2.4 17.0 2019 0.0 (10.0) 2020 1.7 21.0 Contributions. Required contributions are determined by an annual actuarial valuation in accordance with Chapter 40 of the Wisconsin Statutes. The employee required contribution is one-half of the actuarially determined contribution rate for general category employees, including teachers, and Executives and Elected Officials. Required contributions for protective employees are the same rate as general employees. Employers are required to contribute the remainder of the actuarially determined contribution rate. The employer may not pay the employee required contribution unless provided for by an existing collective bargaining agreement. During the reporting period, the WRS recognized $694,088 in contributions from the City. Contribution rates for the plan year reported as of December 31, 2021: Employee General (Executives & Elected Officials) 6.75% Protective with Social Security 6.75% Protective without Social Security 6.75% Employer 6.75% 11.65% 16.25% 62 72 City of Muskego Notes to Financial Statements As of and for the Year Ended December 31, 2021 NOTE V — OTHER INFORMATION (continued) A. EMPLOYEES' RETIREMENT SYSTEM (continued) Pension Asset, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions At December 31, 2020, the City reported an asset of $3,815,222 for its proportionate share of the net pension asset. The net pension asset was measured as of December 31, 2020, and the total pension liability used to calculate the net pension asset was determined by an actuarial valuation as of December 31, 2019 rolled forward to December 31, 2020. No material changes in assumptions or benefit terms occurred between the actuarial valuation date and the measurement date. The City's proportion of the net pension asset was based on the City's share of contributions to the pension plan relative to the contributions of all participating employers. At December 31, 2020, the City of Muskego's proportion was 0.06111064%, which was an increase of 0.00083594% from its proportion measured as of December 31, 2019. For the year ended December 31, 2021, the City recognized pension expense of ($402,532). At December 31, 2021, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Deferred Outflows of Inflows of Resources Resources Differences between expected and actual experience $ 5,521,797 $ 1,189,385 Changes in actuarial assumptions 86,536 Net differences between projected and actual earnings on pension plan investments - 7,162,768 Changes in proportion and differences between employer contributions and proportionate share of contributions 14,294 - Employer contributions subsequent to the measurement date 721,447 - Total $ 6,344,074 $ 8,352,153 $721,447 reported as deferred outflows related to pension resulting from the WRS Employer's contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability (asset) in the year ended December 31, 2022. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pension will be recognized in pension expense as follows: Year ended June 30: Deferred Outflows of Resources and Deferred Inflows of Resources net 2022 $ (697,955) 2023 (186,616) 2024 (1,296,090) 2025 (548,865) 63 73 City of Muskego Notes to Financial Statements As of and for the Year Ended December 31, 2021 NOTE V — OTHER INFORMATION (continued) A. EMPLOYEES' RETIREMENT SYSTEM (continued) Actuarial assumptions. The total pension liability in the December 31, 2020, actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement: Actuarial Valuation Date: December 31, 2019 Measurement Date of Net Pension Liability (Asset) December 31, 2020 Actuarial Cost Method: Entry Age Asset Valuation Method: Fair Value Long -Term Expected Rate of Return: 7.0% Discount Rate: 7.0% Salary Increases: Inflation Seniority/Merit 3.0% 0.1 % - 5.6% Mortality: Wisconsin 2018 Mortality Table Post -retirement Adjustments* 1.9% No post -retirement adjustment is guaranteed. Actual adjustments are based on recognized investment return, actuarial experience and other factors. 1.9% is the assumed annual adjustment based on the investment return assumption and the post -retirement discount rate. Actuarial assumptions are based upon an experience study conducted in 2018 that covered a three-year period from January 1, 2015 to December 31, 2017. The Total Pension Liability for December 31, 2020 is based upon a roll -forward of the liability calculated from the December 31, 2019 actuarial valuation. 64 74 City of Muskego Notes to Financial Statements As of and for the Year Ended December 31, 2021 NOTE V — OTHER INFORMATION (continued) A. EMPLOYEES' RETIREMENT SYSTEM (continued) Long-term expected Return on Plan Assets. The long-term expected rate of return on pension plan investments was determined using a building-block method in which best -estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target allocation and best estimates of geometric real rates of return for each major asset class are summarized in the following table: Description Current Asset Allocation % Long -Term Expected Normal Rate of Return % Long -Term Expected Real Rate of Return % Core Fund Asset Class: Global Equities 51 % 7.2 % 4.7 % Fixed Income 25 3.2 0.8 Inflation Sensitive Assets 16 2.0 (0.4) Real Estate 8 5.6 3.1 Private Equity/Debt 11 10.2 7.6 Multi -Asset 4 5.8 3.3 Total Core Fund 115 % 6.6 % 4.1 % Variable Fund Asset Class: US Equities 70 6.6 4.1 International Equities 30 7.4 4.9 Total Variable Fund 100 % 7.1 % 4.6 % New England Pension Consultants Long Term US CPI (Inflation) Forecast 2.4%. Asset Allocations are managed within established ranges, target percentages may differ from actual monthly allocations. Single Discount rate. A single discount rate of 7.00% was used to measure the Total Pension Liability for the current and prior year. This single discount rate is based on the expected rate of return on pension plan investments of 7.00% and a municipal bond rate of 2.00% (Source: Fixed -income municipal bonds with 20 years to maturity that include only federally tax-exempt municipal bonds as reported in Fidelity Index's "20- year Municipal GO AA Index" as of December 31, 2020. In describing this index, Fidelity notes that the Municipal Curves are constructed using option -adjusted analytics of a diverse population of over 10,000 tax- exempt securities.). Because of the unique structure of WRS, the 7.00% expected rate of return implies that a dividend of approximately 1.9% will always be paid. For purposes of the single discount rate, it was assumed that the dividend would always be paid. The projection of cash flows used to determine this single discount rate assumed that plan member contributions will be made at the current contribution rate and that employer contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on these assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments (including expected dividends) of current plan members. Therefore, the municipal bond rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. 65 75 City of Muskego Notes to Financial Statements As of and for the Year Ended December 31, 2021 NOTE V — OTHER INFORMATION (continued) A. EMPLOYEES' RETIREMENT SYSTEM (continued) Sensitivity of the City's proportionate share of the net pension liability/(asset) to changes in the discount rate. The following presents the City's proportionate share of the net pension liability (asset) calculated using a single discount rate of 7.0 percent, as well as what the plan's net pension liability (asset) would be if it were calculated using a single discount rate that is one percentage point lower or one percentage point higher: 1% Decrease to Current Single 1% Increase To Discount Rate Discount Rate Discount Rate 6.0% Assumption 7.0% 8.0% City of Muskego's proportionate share of the net pension liability asset $ 3,631,562 $ 3,815,222 $ 9,284,829 Pension plan fiduciary net position. Detailed information about the pension plan's fiduciary net position is available in separately issued financial statements available at http://etf.wi.gov/about-etf/reports-and-studies/financial-reports-and-statements. B. RISK MANAGEMENT The City is exposed to various risks of loss related to torts; theft of, damage to, or destruction of assets; errors and omissions; workers compensation; health care of its employees; and environmental damages. All of these risks are covered through the purchase of commercial insurance, with minimal deductibles. Settled claims have not exceeded the commercial coverage in any of the past three years. There were no significant reductions in coverage compared to the prior year. C. COMMITMENT AND CONTINGENCIES Claims and judgments are recorded as liabilities if all the conditions of Governmental Accounting Standards Board pronouncements are met. The liability and expenditure for claims and judgments are only reported in the governmental funds if it has matured. Claims and judgments are recorded in the government -wide statements and proprietary funds as expenses when the related liabilities are incurred. From time to time, the City is party to various pending claims and legal proceedings. Although the outcome of such matters cannot be forecasted with certainty, it is the opinion of management that the likelihood is remote that any such claims or proceedings will have a material adverse effect on the City's financial position or results of operations. The City has received federal and state grants for specific purposes that are subject to review and audit by the grantor agencies. Such audits could lead to the requests for reimbursements to the grantor agency for expenditures disallowed under terms of the grants. Management believes such disallowances, if any, would be immaterial. The City has active construction projects as of December 31, 2021. Work that has been completed on these projects but not yet paid for (including contract retainages) is reflected as accounts payable and expenditures. 66 76 City of Muskego Notes to Financial Statements As of and for the Year Ended December 31, 2021 NOTE V — OTHER INFORMATION (continued) C. COMMITMENTS AND CONTINGENCIES (continued) Environmental Protection Agency In 1983, the Environmental Protection Agency placed the Muskego Sanitary Landfill on the National Superfund list. This prompted an investigation into alleged ground water contamination emitting from the site. As a result of the initial investigation, the Environmental Protection Agency named the City of Muskego as one of approximately 30 potentially responsible parties, in the owner/operator group. Another potentially responsible party, Waste Management of Wisconsin, Inc., has headed the negotiations with the EPA relative to the preparation of a Remedial Investigation/Feasibility Study. The City of Muskego is not a party to this stipulation regarding payment for this Study, which has not yet been completed. At December 31, 2021, the nature and extent of a potential liability for payment for the study as well as payment for possible clean-up costs is unknown. The City has tendered the defense to its insurance carriers but has not been advised as to its carrier's position with respect to the potential liability. In addition, the City has received Notices of Claims and Claims from other property owners alleging the City's involvement with ground water contamination. The Notices have been forwarded to the City's insurance carrier and the questions of coverage, liability and damages are, as yet, unresolved. The City has an agreement with Waste Management wherein Waste Management shall indemnify the City from any potential Superfund liability. D. OTHER POST -EMPLOYMENT BENEFITS Local Retiree Life Insurance Fund (LRLIF) Plan description. The LRLIF is a multiple -employer defined benefit OPEB plan. LRLIF benefits and other plan provisions are established by Chapter 40 of the Wisconsin Statutes. The Wisconsin Department of Employee Trust Funds (ETF) and the Group Insurance Board have statutory authority for program administration and oversight. The plan provides post -employment life insurance benefits for all eligible employees. OPEB Plan Fiduciary Net Position. ETF issues a standalone Annual Comprehensive Financial Report (ACFR), which can be found at http://etf.wi.gov/publications/cafr.htm Benefits provided. The LRLIF plan provides fully paid up life insurance benefits for post -age 64 retired employees and pre-65 retirees who pay for their coverage. 67 77 City of Muskego Notes to Financial Statements As of and for the Year Ended December 31, 2021 NOTE V — OTHER INFORMATION (continued) D. OTHER POST -EMPLOYMENT BENEFITS (continued) Local Retiree Life Insurance Fund (LRLIF) (cont.) Contributions. The Group Insurance Board approves contribution rates annually, based on recommendations from the insurance carrier. Recommended rates are based on an annual valuation, taking into consideration an estimate of the present value of future benefits and the present value of future contributions. A portion of employer contributions made during a member's working lifetime funds a post -retirement benefit. Employers are required to pay the following contribution based on employee contributions for active members to provide them with Basic Coverage after age 65. There are no employer contributions required for pre -age 65 annuitant coverage. If a member retires prior to age 65, they must continue paying the employee premiums until age 65 in order to be eligible for the benefit after age 65. Contribution rates for the plan year reported as of December 31, 2021 are: Coverage Type Employer Contribution 50% Post Retirement Coverage 40% of employee contribution 25% Post Retirement Coverage 20% of employee contribution Employee contributions are based upon nine age bands through age 69 and an additional eight age bands for those age 70 and over. Participating employees must pay monthly contribution rates per $1,000 of coverage until the age of 65 (age 70 if active). The employee contribution rates in effect for the plan year are as listed below: Life Insurance Employee Contribution Rates For the Plan Year Ended December 31, 2020 Attained Age Basic Under 30 $0.05 30-34 0.06 34-39 0.07 40-44 0.08 45-49 0.12 50-54 0.22 55-59 0.39 60-64 0.49 65-69 0.57 During the reporting period, the LRLIF recognized $2,753 in contributions from the employer. 68 78 City of Muskego Notes to Financial Statements As of and for the Year Ended December 31, 2021 NOTE V - OTHER INFORMATION (continued) D. OTHER POST -EMPLOYMENT BENEFITS (continued) Local Retiree Life Insurance Fund (LRLIF) (cont.) OPEB Liability, OPEB Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEBs At December 31, 2021 the City reported a liability of $759,589 for its proportionate share of the net OPEB liability. The net OPEB liability was measured as of December 31, 2020, and the total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation as of December 31, 2019 rolled forward to December 31, 2020. No material changes in assumptions or benefit terms occurred between the actuarial valuation date and the measurement date. The City's proportion of the net OPEB liability was based on the City's share of contributions to the OPEB plan relative to the contributions of all participating employers. At December 31, 2020, the City's proportion was 0.13808900%, which was a decrease of 0.009312% from its proportion measured as of December 31, 2019. For the year ended December 31, 2021, the City recognized OPEB expense of $$91,594. At December 31, 2021 the City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources: Differences between expected and actual experience Changes in assumptions Net differences between projected and actual earnings on OPEB plan investments Changes in proportion and differences between employer contributions and proportionate share of contributions Employer contributions subsequent to the measurement date Total Deferred Outflows Deferred Inflows of Resources of Resources $ - $ 36,244 295,490 52,118 11,059 11,262 26,100 2,766 $ 320,577 $ 114,462 .• 79 City of Muskego Notes to Financial Statements As of and for the Year Ended December 31, 2021 NOTE V — OTHER INFORMATION (continued) D. OTHER POST -EMPLOYMENT BENEFITS (continued) Local Retiree Life Insurance Fund (LRLIF) (cont.) $2,766 reported as deferred outflows related to OPEB resulting from the LRLIF Employer's contributions subsequent to the measurement date will be recognized as a reduction of the net OPEB liability in the year ended December 31, 2022. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows: Deferred Outflow of Resources and Year ended Deferred Inflows of December 31: Resources (net) 2022 $ 39,487 2023 38,291 2024 37,059 2025 33,104 2026 39,778 Thereafter 15,630 Actuarial assumptions. The total OPEB liability in the January 1, 2020 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement: Actuarial Valuation Date: Measurement Date of Net OPEB Liability Actuarial Cost Method: 20 Year Tax -Exempt Municipal Bond Yield: Long -Term Expected Rate of Return: Discount Rate: Salary Increases: Inflation Seniority/Merit Mortality: January 1, 2020 December 31, 2020 Entry Age Normal 2.12% 4.25% 2.25% 3.00% 0.1 % - 5.6% Wisconsin 2018 Mortality Table Actuarial assumptions are based upon an experience study conducted in 2018 that covered a three-year period from January 1, 2015 to December 31, 2017. The total OPEB liability for December 31, 2019 is based upon a roll -forward of the liability calculated from the January 1, 2020 actuarial valuation. 70 80 City of Muskego Notes to Financial Statements As of and for the Year Ended December 31, 2021 NOTE V — OTHER INFORMATION (continued) D. OTHER POST -EMPLOYMENT BENEFITS (continued) Local Retiree Life Insurance Fund (LRLIF) (cont.) Long-term expected return on plan assets. The long-term expected rate of return is determined by adding expected inflation to expected long-term real returns and reflecting expected volatility and correlation. Investments for the LRLIF are held with Securian, the insurance carrier. Interest is calculated and credited to the LRLIF based on the rate of return for a segment of the insurance carriers' general fund, specifically 10-year A- Bonds (as a proxy, and not tied to any specific investments). The overall aggregate interest rate is calculated using a tiered approach based on the year the funds were originally invested and the rate of return for that year. Investment interest is credited based on the aggregate rate of return and assets are not adjusted to fair market value. Furthermore, the insurance carrier guarantees the principal amounts of the reserves, including all interest previously credited thereto. Asset Class US Credit Bonds US Mortgages Inflation Local OPEB Life Insurance Asset Allocation Targets and Expected Returns As of December 31, 2018 Index Barclays Credit Barclays MBS Long -Term Expected Rate of Return Target Allocation 50% 50% Long -Term Expected Geometric Real Rate of Return % 1.47% 0.82 2.2 4.25 Single Discount rate. A single discount rate of 2.25% was used to measure the Total OPEB Liability for the current year, as opposed to a discount rate of 2.87% for the prior year. The significant change in the discount rate was primarily caused by the decrease in the municipal bond rate from 2.74% as of December 31, 2019 to 2.12% as of December 31, 2020. The Plan's fiduciary net position was projected to be insufficient to make all projected future benefit payments of current active and inactive members. Therefore, the discount rate for calculating the Total OPEB Liability is equal to the single equivalent rate that results in the same actuarial present value as the long-term expected rate of return applied to benefit payments, to the extent that the plan's fiduciary net position is projected to be sufficient to make projected benefit payments, and the municipal bond rate applied to benefit payment to the extent that the plan's fiduciary net position is projected to be insufficient. The plan's fiduciary net position was projected to be available to make projected future benefit payments of current plan members through December 31, 2036. The projection of cash flows used to determine the single discount rate assumed that employer contributions will be made according to the current employer contribution schedule and that contributions are made by plan members retiring prior to age 65. 71 81 City of Muskego Notes to Financial Statements As of and for the Year Ended December 31, 2021 NOTE V — OTHER INFORMATION (continued) D. OTHER POST -EMPLOYMENT BENEFITS (continued) Local Retiree Life Insurance Fund (LRLIF) (cont.) Sensitivity of the City's proportionate share of the net OPEB liability to changes in the discount rate. The following presents the City's proportionate share of the net OPEB liability calculated using the discount rate of 2.25 percent, as well as what the City's proportionate share of the net OPEB liability would be if it were calculated using a discount rate that is one percentage point lower (1.25 percent) or one percentage point higher (3.25 percent) than the current rate: 1 % Decrease to 1 % Increase to Discount Rate Current Discount Discount Rate (1.25%) Rate (2.25%) (3.25%) City's proportionate share of the net OPEB liability $1 033 258 759 589 552 621 E. WATER AND SEWER UTILITY RATES The Water Utility implemented current rates effective January 1, 2021 as a result of the Wisconsin Public Service Commission simplified rate case. Effective January 1, 2010 the sewer rate for a single family residence is $167.66 per quarter or $670.64 per year. All industrial and commercial users were charge on actual metered use at $6.81 per 1,000 gallons plus a connection charge of $69.10 per quarter. F. ANTENNA LEASE AGREEMENTS The City has lease agreements with four cellular phone companies to lease a Utility water tower as a site for cellular antennas. The initial term of the leases was 5 years with the right to extend the leases for four additional 5-year terms. Rental income from rental of the water tower reported in other water revenues amounted to $119,739. Future minimum rentals related to these leases and expected future extensions are as follows: 2022 $125,726 2023 132,012 2024 138,613 2025 145,543 2026 152.820 Total $694, 713 72 82 City of Muskego Notes to Financial Statements As of and for the Year Ended December 31, 2021 NOTE V — OTHER INFORMATION (continued) G. EFFECT OF NEW ACCOUNTING STANDARDS ON CURRENT -PERIOD FINANCIAL STATEMENTS The Governmental Accounting Standards Board (GASB) has approved the following: • Statement No. 87, Leases • Statement No., 91, Conduit Debt Obligations • Statement No. 92, Omnibus • Statement No. 93, Replacement of Interbank Offered Rates • Statement No. 94, Public -Private and Public -Public Partnerships and Availability Payment Arrangements • Statement No. 96, Subscription Based Information Technology Arrangements • Statement No. 97, Certain Component Unit Criteria, and Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans — an amendment of GASB Statements No. 14 and No. 84, a Supersession of GASB Statement No. 32. The statements listed above through Statement No. 93 had their effective dates postponed by one year with the issuance of Statement No. 95, Postponement of Effective Dates of Certain Authoritative Guidance, with the exception of Statement No. 87 which was postponed by one and a half years. When they become effective, application of these standards may restate portions of these financial statements. H. SUBSEQUENT EVENTS Relief through the American Rescue Plan Act The federal government passed the American Rescue Plan Act on March 11, 2021 to respond to the COVID-19 public health emergency and its negative economic impacts. Amounts were appropriated for the fiscal year 2021 to units of local government to mitigate the fiscal effects stemming from the public health emergency. The City's estimated award is $2,630,007, which will be used to combat the negative effects of the public health emergency in the local economy. The City received 50% of the funds in 2021, with the remaining expected a year later. The funds are to cover costs incurred by December 31, 2024. Future Refunding On January 18, 2022, the City issued a General Obligation Refunding Bonds in the amount of $10,335,000 for the public purpose of advance refunding a portion of the 2013 $12,625,000 Bond issue. 73 83 REQUIRED SUPPLEMENTARY INFORMATION 84 City of Muskego SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY (ASSET) - WISCONSIN RETIREMENT SYSTEM For the Year Ended December 31, 2021 Plan Fiscal Year Ending Proportion of the Net Pension Liability (Asset) Proportionate Share of the Net Pension Liability (Asset) Covered Payroll Proportionate Share of the Net Pension Liability (Asset) as a Percentage of Covered Payroll Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 12/31/14 0.06195031% $ (1,521,669) $ 7,320,021 -20.79% 102.74% 12/31/15 0.00061570 1,000,506 7,419,369 0.13 0.98 12/31/16 0.00060099 495,356 7,115,805 0.07 0.99 12/31/17 0.00059270 (1,759,782) 7,095,534 -0.25 1.03 12/31 /18 0.00059378 2,112,467 7,473,478 0.28 0.96 12/31/19 0.00060275 (1,943,531) 7,706,785 -0.25 1.03 12/31/20 0.00061111 (3,815,222) 7,855,868 -0.49 1.05 SCHEDULE OF EMPLOYER CONTRIBUTIONS - WISCONSIN RETIREMENT SYSTEM For the Year Ended December 31, 2021 Contributions in Relation to the Contributions City Contractually Contractually Contribution as a Percentage Fiscal Required Required Deficiency Covered of Covered Year Ending Contributions Contributions (Excess) Payroll Payroll 12/31/15 $ 565,424 $ 565,424 $ - $ 7,419,369 7.62% 12/31 /16 566,173 566,173 - 7,115,805 0.08 12/31/17 621,541 621,541 - 7,095,534 0.09 12/31/18 630,846 630,846 - 7,473,478 0.08 12/31/19 640,490 640,490 - 7,340,429 0.09 12/31/20 709,006 709,006 - 7,661,789 0.09 12/31 /21 721,447 721,447 - 8,100,420 0.09 See accompanying notes to required supplementary information 74 85 City of Muskego SCHEDULE OF PROPORTIONATE SHARE OF THE NET OPEB LIABILITY - LRLIF For the Year Ended December 31, 2021 Proportionate Share of the Net Plan Fiduciary Proportion Proportionate OPEB Liability Net Position ETF of the Net Share of the (Asset) as a as a Percentage Fiscal OPEB Net OPEB Covered Percentage of of the Total OPEB Year Ending Liability Liability Payroll Covered Payroll Liability 12/31/17 0.14145900% $ 425,591 $ 5,948,756 7.15% 44.81% 12/31/18 0.00147190 379,800 7,304,000 5.20% 0.49 12/31/19 0.00147401 627,662 7,560,000 8.30% 0.38 12/31/20 0.00138089 759,589 7,490,000 10.14% 0.31 SCHEDULE OF EMPLOYER CONTRIBUTIONS - LRLIF For the Year Ended December 31, 2021 Contributions in City Relation to the Contributions Fiscal Contractually Contractually Contribution as a Percentage Year End Required Required Deficiency Covered of Covered Date Contributions Contributions (Excess) Payroll Payroll 12/31/18 $ 2,836 $ 2,836 $ - $ 7,473,480 0.04% 12/31/19 2,910 2,910 - 7,340,429 0.00 12/31/20 3,770 3,770 - 7,661,789 0.00 12/31/21 2,766 2,766 - 7,734,000 0.00 See accompanying notes to required supplementary information 75 86 City of Muskego Notes to Required Supplementary Information As of and for the Year Ended December 31, 2021 NOTE I — Wisconsin Retirement System The amounts determined for each fiscal year were determined as of the calendar year-end that occurred within the fiscal year. The City is required to present the last ten fiscal years of data; however accounting standards allow the presentation of as many years as are available until ten fiscal years are presented. Changes in benefit terms. There were no changes of benefit terms for any participating employer in the Wisconsin Retirement System. Changes in Assumptions. No significant change in assumptions were noted from the prior year. NOTE II — Local Retiree Life Insurance Fund The City is required to present the last ten fiscal years of data; however, accounting standards allow the presentation of as many years as are available until ten fiscal years are presented. Changes in benefit terms. There were no changes of benefit terms for any participating employer in the LRLIF. Changes in Assumptions. Several actuarial assumptions changed from the prior year, including the single discount rate, long-term expected rate of return and expected inflation. Please refer to the Actuarial Assumptions Section in Note V D for additional details. 76 87 SUPPLEMENTARY INFORMATION W. ASSETS Cash and cash equivalents Accounts receivable - net Loan receivables Due from other governments Taxes receivable TOTAL ASSETS LIABILITIES AND FUND BALANCES Liabilities Accounts payable Unearned revenue Total Liabilities Fund Balances Restricted Committed Total Fund Balances TOTAL LIABILITIES AND FUND BALANCES City of Muskego Combining Balance Sheet Non -major Governmental Funds Special Revenue Funds As of December 31, 2021 Landfill Well Land Refuse/ Revolving Standing Stormwater Testing Open Space Park Recycling Loan Committee Management Reserve Conservation Fund Fund Fund Fund Fund Fund Fund $ 355,649 $ 793,607 $ 94,624 $ 124,248 $ 159,876 $ 709,793 $ 479,747 - 272,122 106,917 - - - 6,451 - 42,154 $ 355,649 $ 1,107,883 $ 201,541 $ 124,248 $ 159,876 $ 709,793 $ 486,198 $ 39,925 $ 101,738 $ - $ - $ - $ - $ 6,763 39,925 101,738 6,763 - - 201,541 - - - - 315,724 1,006,145 - 124,248 159,876 709,793 479,435 315,724 1,006,145 201,541 124,248 159,876 709,793 479,435 $ 355,649 $ 1,107,883 $ 201,541 $ 124,248 $ 159,876 $ 709,793 $ 486,198 tb 77 to ASSETS Cash and cash equivalents Accounts receivable - net Loan receivables Due from other governments Taxes receivable TOTAL ASSETS LIABILITIES AND FUND BALANCES Liabilities Accounts payable Unearned revenue Total Liabilities Fund Balances Restricted Committed Total Fund Balances TOTAL LIABILITIES AND FUND BALANCES City of Muskego Combining Balance Sheet Non -major Governmental Funds Special Revenue Funds As of December 31, 2021 (Concluded) Big Muskego Lake- Non -Major Federated Bass Bay Special Compensated Cable Capital Library Protection and Revenue Absences TV Improvements System Rehabilitation Landfill ARPA Fund Fund Fund Fund Fund District Fund Funds Total $ 1,940,581 $ $ 300,241 $ 40,132 $ 158,536 $ 1,008,967 $ 1,315,003 $ 7,481,004 - - - - 428,383 - 813,873 154,368 - - 154,368 - 32,845 32,845 42,154 $ 1,940,581 $ $ 454,609 $ 40,132 $ 191,381 $ 1,437,350 $ 1,315,003 $ 8,524,244 1,940,581 1,940,581 984 984 $ 3,619 $ - $ 152,045 1,315,003 1,315,987 3,619 1,315,003 1,468,032 - 40,132 191,381 1,433,731 453,625 - - 453,625 40,132 191,381 1,433,731 1,866,785 5,189,427 7,056,212 $ 1,940,581 $ - $ 454,609 $ 40,132 $ 191,381 $ 1,437,350 $ 1,315,003 $ 8,524,244 w 78 O City of Muskego Combining Balance Sheet Non -major Governmental Funds Capital Projects Funds As of December 31, 2021 ASSETS Cash and cash equivalents Accounts receivable - net TOTAL ASSETS LIABILITIES AND FUND BALANCES Liabilities Accounts payable TOTAL LIABILITIES Fund Balances Assigned Total Fund Balances TOTAL LIABILITIES AND FUND BALANCES Tax Non -Major Increment Capital Capital District Projects Equipment Capital Project Fund Fund Funds Total $ 907,116 $ - $ 907,116 5,296 - 5,296 $ 912,412 $ - $ 912,412 $ 313,494 $ - $ 313,494 313,494 - 313,494 598,918 - 598,918 598,918 - 598,918 $ 912,412 $ - $ 912,412 cc 79 3 City of Muskego ASSETS Cash and cash equivalents Accounts receivable - net Loan receivables Due from other governments Taxes receivable TOTAL ASSETS LIABILITIES AND FUND BALANCES Liabilities Accounts payable Unearned revenues Total Liabilities Fund Balances Restricted Committed Assigned Total Fund Balances Combining Balance Sheet Non -major Governmental Funds As of December 31, 2021 Non -Major Non -Major Special Capital Non -major Revenue Projects Governmental Fund Fund Funds Total Total Total $ 7,481,004 $ 907,116 $ 8,388,120 813,873 5,296 819,169 154,368 - 154,368 32,845 - 32,845 42,154 - 42,154 $ 8,524,244 $ 912,412 $ 9,436,656 $ 152,045 $ 313,494 $ 465,539 1,315,987 - 1,315,987 1,468,032 313,494 1,781,526 1,866,785 - 1,866,785 5,189,427 - 5,189,427 - 598,918 598,918 7,056,212 598,918 7,655,130 TOTAL LIABILITIES AND FUND BALANCES $ 8,524,244 $ 912,412 $ 9,436,656 80 92 City of Muskego Combining Statement of Revenues, Expenditures and Changes in Fund Balances Non -Major Governmental Funds Special Revenue Funds For the Year Ended December 31, 2021 REVENUES Intergovernmental Licenses and permits Public charges for services Commercial revenue Total Revenues EXPENDITURES Current General government Public works Health and sanitation Conservation and development Education and recreation Capital Outlay Total Expenditures Excess (deficiency) of revenues over expenditures OTHER FINANCING SOURCES (USES) Transfers in Transfers out Total Other Financing Source (Uses) Net Change in Fund Balance FUND BALANCES - Beginning of Year FUND BALANCES - END OF YEAR Landfill Well Land Refuse/ Revolving Standing Stormwater Testing Open Space Park Recycling Loan Committee Management Reserve Conservation Fund Fund Fund Fund Fund Fund Fund $ - $ 73,238 $ - $ - $ - $ - $ 6,451 2 - - - - - - 401,717 1,032,710 - 10,000 - - 242,800 33,637 95,818 3,220 13 125 426 271 435,356 1,201,766 3,220 10,013 125 426 249,522 26,166 1,391,217 - - - - - 2,600 - 1,217,035 - - - 9,791 1,217,035 1,391,217 - 2,600 35,957 (781,679) (189,451) 3,220 7,413 (35,832) 480,000 480,000 - (400,000) - (400,000) 26,021 58,464 - 84,485 426 165,037 - - - (100,000) - - - (100,000) (301,679) (189,451) (396,780) 7,413 (35,832) 426 65,037 617,403 1,195,596 598,321 116,835 195,708 709,367 414,398 $ 315,724 $ 1,006,145 $ 201,541 $ 124,248 $ 159,876 $ 709,793 $ 479,435 to 81 to City of Muskego Combining Statement of Revenues, Expenditures and Changes in Fund Balances Non -Major Governmental Funds Special Revenue Funds For the Year Ended December 31, 2021 (Concluded) REVENUES Intergovernmental revenues Licenses and permits Public charges for services Commercial revenue Total Revenues EXPENDITURES Current General government Public Works Health and sanitation Conservation and development Education and recreation Capital Outlay Total Expenditures Excess (deficiency) of revenues over expenditures OTHER FINANCING SOURCES (USES) Transfers in Transfers out Total Other Financing Source (Uses) Net Change in Fund Balance FUND BALANCES - Beginning of Year FUND BALANCES - END OF YEAR Big Muskego Lake- Non -Major Federated Bass Bay Special Compensated Capital Library Protection and Revenue Absences Cable TV Improvements System Rehabilitation Landfill Fund Fund Fund Fund Fund District Fund Total $ - $ - $ - $ - $ - $ - $ 79,689 - - - - - - 2 - - - - 31,981 1,112,084 2,831,292 1,333 - 3,317 3,168 49 1,208 142,585 1,333 - 3,317 3,168 32,030 1,113,292 3,053,568 234,215 - - - 26,238 - 260,453 - - - - - - 26,166 - - - - - 51,537 1,442,754 - - - - - - 28,621 - - - 371 - - 371 - - - - - - 1,285,290 234,215 - - 371 26,238 51,537 3,043,655 (232,882) - 3,317 2,797 5,792 1,061,755 9,913 - - 486,369 - - - 966,369 (164,420) - (725,000) - - (2,990,352) (4,379,772) (164,420) - (238,631) - - (2,990,352) (3,413,403) (397,302) - (235,314) 2,797 5,792 (1,928,597) (3,403,490) 2,337,883 - 688,939 37,335 185,589 3,362,328 10,459,702 $ 1,940,581 $ - $ 453,625 $ 40,132 $ 191,381 $ 1,433,731 $ 7,056,212 to 82 City of Muskego Combining Statement of Revenues, Expenditures and Changes in Fund Balances Non -Major Governmental Funds Capital Projects Funds For the Year Ended December 31, 2021 REVENUES Intergovernmental revenues Commercial revenue Total Revenues EXPENDITURES Capital Outlay General government Public safety Public works Conservation and development Education and recreation Total Expenditures Deficiency of revenues under expenditures OTHER FINANCING SOURCES (USES) Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balance FUND BALANCES - Beginning of Year FUND BALANCES - END OF YEAR Tax Non -Major Increment Capital Capital District Projects Equipment Capital Project Fund Fund Funds Total $ 2,404 $ 5,296 _ 7,700 $ 2,404 5,296 7,700 153,984 - 153,984 432,171 - 432,171 1,953,010 - 1,953,010 32,523 - 32,523 220,099 - 220,099 21791,789 - 2,791,789 (2,784,089) - (2,784,089) 2,560,279 - 2,560,279 - (4,027) (4,027) 2,560,279 (4,027) 2,556,252 (223,810) (4,027) (227,837) 822,728 4,027 826,755 $ 598,918 $ - $ 598,918 cc 83 City of Muskego Combining Statement of Revenues, Expenditures and Changes in Fund Balances Non -Major Governmental Funds For the Year Ended December 31, 2021 REVENUES Taxes Intergovernmental Licenses and permits Public charges for services Commercial revenue Total Revenues EXPENDITURES Current: General government Public works Health and sanitation Conservation and development Education and recreation Capital Outlay Total Expenditures Deficiency of revenues under expenditures OTHER FINANCING SOURCES (USES) Transfers in Transfers out Total Other Financing Source (Uses) Net Change in Fund Balance FUND BALANCES - Beginning of Year Non -Major Non -Major Special Capital Non -major Revenue Projects Governmental Fund Fund Funds Total Total Total 79,689 2,404 82,093 2 - 2 2,831,292 - 2,831,292 142,585 5,296 147,881 3,053,568 7,700 3,061,268 260,453 - 260,453 26,166 - 26,166 1,442,754 - 1,442,754 28,621 - 28,621 371 - 371 1,285,290 2,791,789 4,077,079 3,043,655 2,791,789 5,835,444 9,913 (2,784,089) (2,774,176) 966,369 2,560,279 3,526,648 (4,379,772) (4,027) (4,383,799) (3,413,403) 2,556,252 (857,151) (3,403,490) (227,837) (3,631,327) 10,459,702 826,755 11,286,457 FUND BALANCES - END OF YEAR $ 7,056,212 $ 598,918 $ 7,655,130 84 96 Executive Summary of 2021 Audit of City's Financial Statements Meeting Date — July 26, 2022 Presented by: Wendi M. Unger, Partner, CPA A. Communications with Finance Committee/Common Council 1. Audit process — Select a team, develop an audit plan specific to your City, review and test internal controls and compliance with laws and regulations, test year end account balances, review draft financial statements and footnote disclosures that are prepared by management. 2. Auditor's Report - Financial statements are presented fairly. 3. Reporting and Insights document dated July 11, 2022 — Audit went well and we received full cooperation of City personnel. The report includes: ➢ Two way communication regarding your audit. ➢ Other comments and recommendations. ➢ Required communications — all normal and customary. ➢ Management Representation Letter. B. Financial statement highlights 1. Management's Discussion and Analysis Report (Pages 4 - 13): Narrative report prepared by management that summarizes current year activity and highlights points of financial interest in comparison to the prior year. 2. Government -wide financial state770.ments (Pages 14 & 15): These statements consolidate all funds, are presented on the full accrual basis, and report a decrease in net position of $651,022. Operation expenses were $33.298 million an increase of $2.05 million over the prior year. 3. General Fund operations compared to budget (Page 20): Revenues were under budget by $374,999 and expenditures showed favorable results compared with budget of $373,348. The City had budgeted to not use any fund balance during 2021. The City added $118,044 to the beginning of the year fund balance. 4. Sewer and Water Utilities Financial Statements (Pages 21 - 24): Sewer operations had a decrease in net position of $111,811 while water had an increase in net position of $428,489. 5. Long-term Debt (Pages 53-55): Discloses all of the City's long-term obligations at $40.8 million in 2021 vs. $44.5 million in 2020. Balance consists of: GO bonds and notes of $37.047 million, compensated absences of $1.941 million and net OPEB liability of $759,589. Ability to borrow an additional $147.7 million with tax pledge. In 2021 the City did not borrow any more money. 6. Net Position & Fund Balances (Pages 56 - 59): Discloses components of net position & fund balances. C. Questions and comments If you have any comments or concerns related to the 2021 audit, the related reports or our presentation, please contact me at 414.777.5423 or wend i.unger(a-)bakertiIIV. com. 97 C'r* bakertitty now, for tomorrow Reporting and insights from 2021 audit: -Cify of Muskego Executive summary July 11, 2022 To the Mayor and Common Council City of Muskego We have completed our audit of the financial statements of the City of Muskego (the "City") for the year ended December 31, 2021, and have issued our report thereon dated July 11, 2022. This letter presents communications required by our professional standards. Your audit should provide you with confidence in your financial statements. The audit was performed based on information obtained from meetings with management, data from your systems, knowledge of your City's operating environment and our risk assessment procedures. We strive to provide you clear, concise communication throughout the audit process and of the final results of our audit. Additionally, we have included information on key risk areas the City of Muskego should be aware of in your strategic planning. We are available to discuss these risks as they relate to your organization's financial stability and future planning. If you have questions at any point, please connect with us: - Wendi Unger, CPA, Partner: wend i.unger .bakertilly.com or +1 (414) 777 5423 Sincerely, Baker Tilly US, LLP Wendi M. Unger, CPA, Partner © 2021 Baker Tilly US, LLP Page 12 99 Responsibilities Our responsibilities As your independent auditor, our responsibilities include: - Planning and performing the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. Reasonable assurance is a high level of assurance. - Assessing the risks of material misstatement of the financial statements, whether due to fraud or error. Included in that assessment is a consideration of the City's internal control over financial reporting. - Performing appropriate procedures based upon our risk assessment. - Evaluating the appropriateness of the accounting policies used and the reasonableness of significant accounting estimates made by management. - Forming and expressing an opinion based on our audit about whether the financial statements prepared by management, with the oversight of the common council: - Are free from material misstatement - Present fairly, in all material respects and in accordance with accounting principles generally accepted in the United States of America - Our audit does not relieve management or the common council of their responsibilities. We are also required to communicate significant matters related to our audit that are relevant to the responsibilities of the common council, including: - Internal control matters - Qualitative aspects of the City's accounting practice including policies, accounting estimates and financial statement disclosures - Significant unusual transactions - Significant difficulties encountered - Disagreements with management - Circumstances that affect the form and content of the auditors' report and key audit matters - Audit consultations outside the engagement team - Corrected and uncorrected misstatements - Other audit findings or issues © 2021 Baker Tilly US, LLP Page 13 100 Audit status Significant changes to the audit plan There were no significant changes made to either our planned audit strategy or to the significant risks and other areas of emphasis identified during the performance of our risk assessment procedures. © 2021 Baker Tilly US, LLP Page 14 101 Audit approach and results Planned scope and timing Audit focus Based on our understanding of the City and environment in which you operate, we focused our audit on the following key areas: - Key transaction cycles - Areas with significant estimates - Areas of complexity including Our areas of audit focus were informed by, among other things, our assessment of materiality. Materiality in the context of our audit was determined based on specific qualitative and quantitative factors combined with our expectations about the City's current year results. Key areas of focus and significant findings Significant risks of material misstatement A significant risk is an identified and assessed risk of material misstatement that, in the auditor's professional judgment, requires special audit consideration. Within our audit, we focused on the following areas below. Management override of controls Improper revenue recognition due to fraud Incorporate unpredictability into audit procedures, emphasize professional skepticism and utilize audit team with industry expertise Confirmation or validation of certain revenues supplemented with detailed predictive analytics based on non -financial data and substantive testing of related receivables Procedures identified provided sufficient evidence for our audit opinion Procedures identified provided sufficient evidence for our audit opinion © 2021 Baker Tilly US, LLP Page 15 102 Other areas of emphasis We also focused on other areas that did not meet the definition of a significant risk, but were determined to require specific awareness and a unique audit response. Cash and investments Payroll Capital assets including infrastructure Revenues and receivables General disbursements Pension asset and OPEB liability Net position calculations Internal control matters Long-term debt Financial reporting and required disclosures We considered the City's internal control over financial reporting as a basis for designing our audit procedures for the purpose of expressing an opinion on the financial statements. We are not expressing an opinion on the effectiveness of the City's internal control. Our consideration of internal control was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and, therefore, material weaknesses or significant deficiencies may exist that were not identified. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency or combination of deficiencies in internal control such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected, on a timely basis. We did not identify any deficiencies in internal control that we consider to be material weaknesses. © 2021 Baker Tilly US, LLP Page 16 103 Other comments and recommendations Decentralized Cash Collections Many governments collect cash at numerous decentralized locations that are separate from the primary system of accounting procedures and controls. The opportunity for theft is often higher at those locations because one person is frequently involved in most, if not all, aspects of a transaction (i.e. lack of segregation of duties). Examples in your government that fit this situation include: police department/court, parks and recreation department. Management is responsible for designing and implementing controls and procedures to detect and prevent fraud. As a result, we recommend that management review its decentralized cash collection procedures and controls on a periodic basis and make changes as necessary to strengthen the internal control environment. Reviewing the adequacy of the controls is a responsibility of the governing body. Below are example procedures and controls to help mitigate the risk of loss at decentralized cash collection points: - Implement a centralized receipting process with adequate segregation of duties - For cash collections, ensure pre -numbered receipts are being used and all receipts in the sequence are being reviewed by someone other than the person receipting the cash and receipts tie to deposits - Perform surprise procedures at decentralized locations (cash counts, walkthrough of processes, etc.) - Require regular cash deposits to minimize collection on -hand - Limit the number of separate bank accounts - Segregate duties as much as possible — the person receipting cash should be separate from the person preparing deposits and the person reconciling bank accounts should be separate from the cash collection activity - Perform a month -to -month or year-to-year comparisons to look for unusual changes in collections - If collecting from a drop box site, consider sending two people to collect the funds, especially during peak times As always, the cost of controls and staffing must be weighed against the benefits of safeguarding your assets. © 2021 Baker Tilly US, LLP Page 17 104 Required communications Qualitative aspect of accounting practices Accounting policies: Management is responsible for the selection and use of appropriate accounting policies. In accordance with the terms of our engagement letter, we have advised management about the appropriateness of accounting policies and their application. The significant accounting policies used by City are described in Note I to the financial statements. No new accounting policies were adopted and the application of existing accounting policies was not changed during 2021. We noted no transactions entered into by the City during the year for which accounting policies are controversial or for which there is a lack of authoritative guidance or consensus or diversity in practice. Accounting estimates: Accounting estimates, including fair value estimates, are an integral part of the financial statements prepared by management and are based on management's knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements, the degree of subjectivity involved in their development and because of the possibility that future events affecting them may differ significantly from those expected. The following estimates are of most significance to the financial statements: Accrued Evaluation of hours earned and Reasonable in relation to the compensated accumulated in accordance with financial statements as a whole absences employment policies and average wage per hour rates Net pension Evaluation of information provided Reasonable in relation to the asset and by the Wisconsin Retirement financial statements as a whole related deferrals System Net OPEB Key assumptions set by Reasonable in relation to the liability and management with the assistance of financial statements as a whole related deferrals a third party actuary Depreciation Evaluate estimated useful life of the Reasonable in relation to the asset and original acquisition value financial statements as a whole There have been no significant changes made by management to either the processes used to develop the particularly sensitive accounting estimates, or to the significant assumptions used to develop the estimates, noted above. - Financial statement disclosures: The disclosures in the financial statements are neutral, consistent and clear. © 2021 Baker Tilly US, LLP Page 18 105 Significant unusual transactions There have been no significant transactions that are outside the normal course of business for the City or that otherwise appear to be unusual due to their timing, size or nature. Significant difficulties encountered during the audit We encountered no significant difficulties in dealing with management and completing our audit. Disagreements with management Professional standards define a disagreement with management as a matter, whether or not resolved to our satisfaction, concerning a financial accounting, reporting, or auditing matter that could be significant to the financial statements or the auditors' report. We are pleased to report that no such disagreements arose during the course of our audit. Audit report There have been no departures from the auditors' standard report. Audit consultations outside the engagement team We encountered no difficult or contentious matters for which we consulted outside of the engagement team. Uncorrected misstatements and corrected misstatements Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are trivial, and communicate them to the appropriate level of management. There were no misstatements identified. Other audit findings or issues We encountered no other audit findings or issues that require communication at this time. We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the City's auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. Management's consultations with other accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters. Management informed us that, and to our knowledge, there were no consultations with other accountants regarding auditing or accounting matters. Written communications between management and Baker Tilly The Appendix includes copies of other material written communications, including a copy of the management representation letter. Compliance with laws and regulations We did not identify any non-compliance with laws and regulations during our audit. Fraud We did not identify any known or suspected fraud during our audit. © 2021 Baker Tilly US, LLP Page 19 106 Going concern Pursuant to professional standards, we are required to communicate to you, when applicable, certain matters relating to our evaluation of the City's ability to continue as a going concern for a reasonable period of time but no less than 12 months from the date the financial statements are issued or available to be issued, including the effects on the financial statements and the adequacy of the related disclosures, and the effects on the auditor's report. No such matters or conditions have come to our attention during our engagement. Independence We are not aware of any relationships between Baker Tilly and the City that, in our professional judgment, may reasonably be thought to bear on our independence. Related parties We did not have any significant findings or issues arise during the audit in connection with the City's related parties. Other matters We applied certain limited procedures to the required supplementary information (RSI) that supplements the basic financial statements. Our procedures consisted of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We did not audit the RSI and do not express an opinion or provide any assurance on the RSI. We were engaged to report on the supplementary information which accompanies the financial statements but is not RSI. With respect to the supplementary information, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America, the method of preparing it has not changed from the prior period, and the information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves. © 2021 Baker Tilly US, LLP Page 110 107 Common Council resources Visit our resource page for regulatory updates, trending challenges and opportunities in your industry and other timely updates. Visit the resource page at https://www.bakertilly.com/insights/audit-committee-resource-page. © 2021 Baker Tilly US, LLP Page 111 108 Management representation letter © 2021 Baker Tilly US, LLP Page 112 109 0 T T SKEGO July 11, 2022 Baker Tilly US, LLP 777 E. Wisconsin Avenue, 32nd Floor Milwaukee, Wisconsin 53202 Dear Baker Tilly US, LLP: We are providing this letter in connection with your audit of the financial statements of the City of Muskego as of December 31, 2021 and for the year then ended for the purpose of expressing opinions as to whether the financial statements present fairly, in all material respects, the respective financial position of the governmental activities, the business -type activities, the discretely presented component unit, each major fund and the aggregate remaining fund information of the City of Muskego and the Big Muskego Lake - Bass Bay Protection and Rehabiliation District and the respective changes in financial position and cash flows, where applicable, in conformity with accounting principles generally accepted in the United States of America. We confirm that we are responsible for the fair presentation of the previously mentioned financial statements in conformity with accounting principles generally accepted in the United States of America. We are also responsible for adopting sound accounting policies, establishing and maintaining internal control over financial reporting, and preventing and detecting fraud. Certain representations in this letter are described as being limited to matters that are material. Items are considered material, regardless of size, if they involve an omission or misstatement of accounting information that, in the light of surrounding circumstances, makes it probable that the judgment of a reasonable person relying on the information would be changed or influenced by the omission or misstatement. An omission or misstatement that is monetarily small in amount could be considered material as a result of qualitative factors. We confirm, to the best of our knowledge and belief, the following representations made to you during your audit Financial Statements 1) We have fulfilled our responsibilities, as set out in the terms of the audit engagement letter. 2) The financial statements referred to above are fairly presented in conformity with accounting principles generally accepted in the United States of America and include all properly classified funds and other financial information of the primary government and all component units required by accounting principles generally accepted in the United States of America to be included in the financial reporting entity. 3) We acknowledge our responsibility for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. 4) We acknowledge our responsibility for the design, implementation, and maintenance of internal control to prevent and detect fraud. 5) Significant assumptions we used in making accounting estimates, if any, are reasonable. 6) All events subsequent to the date of the financial statements and for which accounting principles generally accepted in the United States of America require adjustment or disclosure have been adjusted or disclosed. No other events, including instances of noncompliance, have occurred subsequent to the financial statement date and through the date of this letter that would require adjustment to or disclosure in the aforementioned financial statements. 7) All material transactions have been recorded in the accounting records and are reflected in the financial statements. 8) All known audit and bookkeeping adjustments have been included in our financial statements, and we are in agreement with those adjustments. 9) There are no known or possible litigation, claims, and assessments whose effects should be considered when preparing the financial statements. There are no unasserted claims or assessments that our lawyer has advised us are probable of assertion and must be disclosed in accordance with accounting principles generally accepted in the United States of America. 10) Guarantees, whether written or oral, under which the City is contingently liable, if any, have been properly recorded or disclosed. Information Provided 11) We have provided you with: a) Access to all information, of which we are aware, that is relevant to the preparation and fair presentation of the financial statements, such as financial records and related data, documentation, and other matters. b) Additional information that you have requested from us for the purpose of the audit. c) Unrestricted access to persons within the entity from whom you determined it necessary to obtain audit evidence. d) Minutes of the meetings of the Common Council and Pulic Utilities Committee or summaries of actions of recent meetings for which minutes have not yet been prepared. 12) We have not completed an assessment of the risk that the financial statements may be materially misstated as a result of fraud. 13) We have no knowledge of any fraud or suspected fraud that affects the entity and involves: a) Management, b) Employees who have significant roles in internal control, or c) Others where the fraud could have a material effect on the financial statements. 14) We have no knowledge of any allegations of fraud or suspected fraud affecting the entity received in communications from employees, former employees, regulators, or others. 15) We have no knowledge of known instances of noncompliance or suspected noncompliance with provisions of laws, regulations, contracts, or grant agreements, or abuse, whose effects should be considered when preparing financial statements. 16) There are no known related parties or related party relationships and transactions of which we are aware. Other 17) There have been no communications from regulatory agencies concerning noncompliance with, or deficiencies in, financial reporting practices. 18) We have a process to track the status of audit findings and recommendations. 19) We have identified to you any previous financial audits, attestation engagements, and other studies related to the audit objectives and whether related recommendations have been implemented. 20) The City has no plans or intentions that may materially affect the carrying value or classification of assets, liabilities, or equity. 21) We are responsible for compliance with federal, state, and local laws, regulations, and provisions of contracts and grant agreements applicable to us, including tax or debt limits, debt contracts, and IRS arbitrage regulations; and we have identified and disclosed to you all federal, state, and local laws, regulations and provisions of contracts and grant agreements that we believe have a direct and material effect on the determination of financial statement amounts or other financial data significant to the audit objectives, including legal and contractual provisions for reporting specific activities in separate funds. 22) There are no: a) Violations or possible violations of budget ordinances, federal, state, and local laws or regulations (including those pertaining to adopting, approving and amending budgets), provisions of contracts and grant agreements, tax or debt limits, and any related debt covenants whose effects should be considered for disclosure in the financial statements or as a basis for recording a loss contingency, or for reporting on noncompliance, except those already disclosed in the financial statement, if any. b) Other liabilities or gain or loss contingencies that are required to be accrued or disclosed by accounting principles generally accepted in the United States of America. c) Nonspendable, restricted, committed, or assigned fund balances that were not properly authorized and approved. d) Rates being charged to customers other than the rates as authorized by the applicable authoritative body. e) Violations of restrictions placed on revenues as a result of bond resolution covenants such as revenue distribution or debt service funding. M T T 23) The City of Muskego has satisfactory title to all owned assets, and there are no liens or encumbrances on such assets nor has any asset been pledged as collateral. 24) The City of Muskego has complied with all aspects of contractual agreements that would have a material effect on the financial statement in the event of noncompliance. 25) The financial statements include all component units as well as joint ventures with an equity interest, and properly disclose all other joint ventures and other related organizations, if any. Component units have been properly presented as either blended or discrete. 26) The financial statements properly classify all funds and activities. 27) All funds that meet the quantitative criteria in GASB Statement No. 34 and No. 37 for presentation as major are identified and presented as such and all other funds that are presented as major are particularly important to financial statement users. 28) Components of net position (net investment in capital assets; restricted; and unrestricted) and components of fund balance (nonspendable, restricted, committed, assigned and unassigned) are properly classified and, if applicable, approved. 29) Provisions for uncollectible receivables, if any, have been properly identified and recorded. 30) Expenses have been appropriately classified in or allocated to functions and programs in the statement of activities, and allocations have been made on a reasonable basis. 31) Revenues are appropriately classified in the statement of activities within program revenues and general revenues. 32) Interfund, internal, and intra-entity activity and balances have been appropriately classified and reported. 33) Deposits and investments are properly classified, valued, and disclosed (including risk disclosures, collateral ization agreements, valuation methods, and key inputs, as applicable). 34) Capital assets, including infrastructure and intangible assets, are properly capitalized, reported, and, if applicable, depreciated/amortized. Any known impairments have been recorded and disclosed. 35) Tax-exempt bonds issued have retained their tax-exempt status. 36) We have appropriately disclosed the City of Muskego's policy regarding whether to first apply restricted or unrestricted resources when an expense is incurred for purposes for which both restricted and unrestricted net position are available and have determined that net position were properly recognized under the policy. We have also disclosed our policy regarding which resources (that is, restricted, committed, assigned or unassigned) are considered to be spent first for expenditures for which more than one resource classification is available. 37) We acknowledge our responsibility for the required supplementary information (RSI). The RSI is measured and presented within prescribed guidelines and the methods of measurement and presentation have not changed from those used in the prior period. We have disclosed to you any significant assumptions and interpretations underlying the measurement and presentation of the RSI. 38) With respect to the supplementary information, (SI): a) We acknowledge our responsibility for presenting the SI in accordance with accounting principles generally accepted in the United States of America, and we believe the SI, including its form and content, is fairly presented in accordance with accounting principles generally accepted in the United States of America. The methods of measurement and presentation of the SI have not changed from those used in the prior period, and we have disclosed to you any significant assumptions or interpretations underlying the measurement and presentation of the supplementary information. b) If the SI is not presented with the audited financial statements, we will make the audited financial statements readily available to the intended users of the supplementary information no later than the date we issue the supplementary information and the auditor's report thereon. 39) We assume responsibility for, and agree with, the information provided by the Wisconsin Retirement System as audited by the Legislative Audit Bureau relating to the net pension asset/liability and related deferred outflows and deferred inflows and have adequately considered the reasonableness of the amounts and disclosures used in the financial statements and underlying accounting records. We also assume responsibility for the census data that has been reported to the plan. 40) We assume responsibility for, and agree with the information provided by the Department of Employee Trust Funds for the Local Retiree Life Insurance program as audited by the Legislative Audit Bureau relating to the net OPEB liability and related deferred outflows and deferred inflows and have adequately considered the reasonableness of the amounts and disclosures used in the financial statements and underlying accounting records. We also assume responsibility for the census data that has been reported to the plan. 41) The auditing standards define an annual report as "a document, or combination of documents, typically prepared on an annual basis by management or those charged with governance in accordance with law, regulation, or custom, the purpose of which is to provide owners (or similar stakeholders) with information on the entity's operations and the entity's financial results and financial position as set out in the financial statements." Among other items, an annual report contains, accompanies, or incorporates by reference the financial statements and the auditor's report thereon. We do not issue an annual report. Sincerely, City of Muskego -1 Signed: fil-/ C c%C_ Ms. Sharon Mueller, Finance and Administration Director Signed: M . etfalski, r Client service team Wendi Unger, CPA Partner 777 East Wisconsin Ave 32" d Floor Milwaukee, WI 53202 United States T +1 (414) 777 5423 wendi.unger@bakertiIly.com © 2021 Baker Tilly US, LLP Page 118 115 Accounting changes relevant to the City of Muskego Future accounting standards update 87 Leases G 12/31 /22* 91 Conduit Debt G 12/31/22* 92 Omnibus 2020 Q1 12/31/22* 93 Replacement of Interfund Bank Offered G✓ 12/31/22* Rates 94 Public -Private and Public -Public Partnerships G 12/31/23 and Availability Payment Arrangements 96 Subscription -Based Information Technology G✓ 12/31/23 Arrangements 97 Certain Component Unit Criteria, and C✓ 12/31/22 Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans * The statements listed above through Statement No. 93 had their required effective dates postponed by one year with the issuance of Statement No. 95, Postponement of Effective Dates of Certain Authoritative Guidance, with the exception of Statement No. 87 which was postponed by one and a half years. The effective date reflected above is the required revised implementation date. Further information on upcoming GASB pronouncements. Ready or not — the new lease standard is here! GASB's new single model for lease accounting is effective for next year's audit (fiscal years ending June 30, 2022 and later). This standard requires governments to identify and evaluate contracts that convey control of the right to use another entity's nonfinancial asset for a period of time in an exchange or exchange -like transaction. Contracts meeting the criteria for control, term and other items within the standard will result in recognizing a right to use asset and lease liability or a receivable and deferred inflow of resources. The standard specifies that leases should be recognized and measured using the facts and circumstances that exist at the beginning of the period of implementation (or, if applied to earlier periods, the beginning of the earliest period restated). © 2021 Baker Tilly US, LLP Page 119 116 The implementation process can be broken down into a four -step methodology: Now is the time to evaluate where your government is in this process and the timeline to complete implementation. The third step for lease evaluation, data extraction and review is typically the most time- consuming step; organizations should begin this process well before year end to ensure adequate lead time. A key decision that will need to be made is whether a lease administration software package is necessary. Depending on the volume and complexity of your lease activity, spreadsheets may not be sufficient to track and calculate all the required information. We are available to discuss this further and help you develop an action plan. Baker Tilly also has complimentary resources available online including: - GASB 87 lease identification questionnaire - GASB 87 lease assistance tool - Variety of GASB 87 podcasts and articles Access tools and learn more about GASB 87. Future accounting for subscription -based IT arrangements Subscription -based IT arrangements include contracts that convey control of the right to use another party's IT software. It would not include any licensing arrangements that provide a perpetual license, which would still be accounted for as an intangible asset. Subscription -based IT arrangements are becoming more and more popular with IT vendors. This standard mirrors the new lease standard. The City will be able to utilize the systems put into place to implement the lease standard to properly account for these contracts. Common examples of these contracts in the utility industry include: - Leasing space in the cloud - GIS systems - SCADA systems - Some work order or inventory systems as well as some general ledger or billing systems The City should work with its IT department and department managers to determine a population listing of contracts that would fall under this standard to determine the potential future impact to financial reporting. © 2021 Baker Tilly US, LLP Page 120 117 Two-way audit communications As part of our audit of your financial statements, we are providing communications to you throughout the audit process. Auditing requirements provide for two-way communication and are important in assisting the auditor and you with more information relevant to the audit. As this past audit is concluded, we use what we have learned to begin the planning process for next year's audit. It is important that you understand the following points about the scope and timing of our next audit: a. We address the significant risks of material misstatement, whether due to fraud or error, through our detailed audit procedures. b. We will obtain an understanding of the five components of internal control sufficient to assess the risk of material misstatement of the financial statements whether due to error or fraud, and to design the nature, timing and extent of further audit procedures. We will obtain a sufficient understanding by performing risk assessment procedures to evaluate the design of controls relevant to an audit of financial statements and to determine whether they have been implemented. We will use such knowledge to: - Identify types of potential misstatements. - Consider factors that affect the risks of material misstatement. - Design tests of controls, when applicable, and substantive procedures. c. We will not express an opinion on the effectiveness of internal control over financial reporting or compliance with laws, regulations and provisions of contracts or grant programs. The concept of materiality recognizes that some matters, either individually or in the aggregate, are important for fair presentation of financial statements in conformity with generally accepted accounting principles while other matters are not important. In performing the audit, we are concerned with matters that, either individually or in the aggregate, could be material to the financial statements. Our responsibility is to plan and perform the audit to obtain reasonable assurance that material misstatements, whether caused by errors or fraud, are detected. Our audit will be performed in accordance with auditing standards generally accepted in the United States of America. We are very interested in your views regarding certain matters. Those matters are listed here: a. We typically will communicate with your top level of management unless you tell us otherwise. b. We understand that the governing board has the responsibility to oversee the strategic direction of your organization, as well as the overall accountability of the entity. Management has the responsibility for achieving the objectives of the entity. c. We need to know your views about your organization's objectives and strategies, and the related business risks that may result in material misstatements. d. We anticipate that the City will receive an unmodified opinion on its financial statements. e. Which matters do you consider warrant particular attention during the audit, and are there any areas where you request additional procedures to be undertaken? © 2021 Baker Tilly US, LLP Page 121 118 f. Have you had any significant communications with regulators or grantor agencies? g. Are there other matters that you believe are relevant to the audit of the financial statements? Also, is there anything that we need to know about the attitudes, awareness and actions of the governing body concerning: a. The entity's internal control and its importance in the entity, including how those charged with governance oversee the effectiveness of internal control? b. The detection or the possibility of fraud? We also need to know if you have taken actions in response to developments in financial reporting, laws, accounting standards, governance practices, or other related matters, or in response to previous communications with us. With regard to the timing of our audit, here is some general information. If necessary, we may do preliminary financial audit work during the months of October -December, and sometimes early in January. Our final financial fieldwork is scheduled during the spring to best coincide with your readiness and report deadlines. After fieldwork, we wrap up our financial audit procedures at our office and may issue drafts of our report for your review. Final copies of our report and other communications are issued after approval by your staff. This is typically 6-12 weeks after final fieldwork, but may vary depending on a number of factors. Keep in mind that while this communication may assist us with planning the scope and timing of the audit, it does not change the auditor's sole responsibility to determine the overall audit strategy and the audit plan, including the nature, timing and extent of procedures necessary to obtain sufficient appropriate audit evidence. We realize that you may have questions on what this all means, or wish to provide other feedback. We welcome the opportunity to hear from you. © 2021 Baker Tilly US, LLP Page 122 119 MUSKEGO POLICE DEPARTMENT MEMORANDUM TO: Finance Committee FROM: Chief Steve Westphal DATE: June 28, 2022 RE: Request to Purchase I request to purchase a Virtual Reality Simulator as part of "New Business" on the July 12th 2022 Finance Committee meeting. I submitted a 5-year Capital purchase plan in 2021 which included a Virtual Realty Simulator for purchase in 2023. We received the attached quote from Inveris for $62,500 for purchase of a Virtual Reality Simulator The Virtual Reality Simulator will add additional cutting -edge training capacities to the Muskego Police Department. This tool will assist in training areas including, but not limited to use of force, de-escalation techniques, crisis intervention, and deadly force scenarios. The Muskego Police Department received reimbursable grant funding from the State of Wisconsin for technology and training purposes in the amount of $56,783.25 for approved purchases. The Citizen's Academy Alumni Association has agreed to fund the remainder of this purchase resulting in the entire purchase being reimbursed from funding outside the City of Muskego operating or capital funds. The point of contact for this memorandum is the undersigned. 5year Capital Projects 2022-2026 F Stephen Westphal dt.�,, C3-,:q4a, 120 Muskego Police Department virtuai Reality Simulator: Two Person Configuration For Law Enforcement Training Submitted To: Muskego Police Department Sgt. Brian Pelock W182 58200 Racine Ave Muskego, WI 53150 USA 608-412-3055 bpelock@citvofmuskego.org InVeris Point of Contact: Robert Griffin Sr. Sales Representative InVeris Training Solutions 470-337-0287 Robert.Griffin@inveristraining.com [SURVIVR company purchased by InVeris] VX InVeris 8--Sec nd5 Matter Quote Doc. No.: 23058-22-USL Submit Date: May 23, 2022 Valid To: August 23, 2022 Prepared by: Amber Pritchett Proposal Coordinator W USE AND DISCLOSURE OF DATA: Any and all information and data contained herein is the property of InVeris Training Solutions, Inc. (InVeris); and shall not for any reason, whether tangible or intangible, be disclosed, duplicated, or used, in whole or in part, for any reason other than to evaluate this proposal. If, however, a contract is awarded to InVeris because of, or in connection with this proposal offer, the recipient (Buyer) shall have the right to duplicate, use, or disclose the information and data contained herein to the extent provided in the resulting contract. These restrictions do not limit Buyer's right to use information or if it is obtained from another, legitimate source without restriction. DESTINATION CONTROL STATEMENT: The enclosed document contains Technical Data that is subject to the Export Administration Regulations. Diversion contrary to U.S. Law is prohibited. 121 XVI nveri s Because Seconds Matter 1 Pricing 1.1 Pricing — Base Package Virtual Reality Simulator Muskego Police Department Table 1 below provides pricing for items proposed as part of the Base Package. OPEN VR- VIRTUAL REALITY SIMULATOR: MKT SIMULATOR 1-Person simulator configuration with Service Package. Includes the following: o One VR head -mounted display that fully immerses a trainee into a realistic training environment. o One VR-Optimized Computer system with wireless adapter and two batteries. o One portable lighthouse tracking system with hand tracking to track the trainee in up to a 35' x 35' space. o One VR Toolset with one each of the following: VR Handgun, VR Rifle, VR Taser, VR OC Spray, and VR Flashlight. o One Desktop Computer with keyboard, external keypad, mouse, charging hub, audio/ microphone, headset & speakers. o Two Monitors for initial simulator (additional simulators receive one monitor). o Miscellaneous wires/parts. o One year Warranty that covers hardware. o One year Service Package that provides software updates and new features. OPEN VR- MULTI-USER NETWORKING: MKT NETWORK Advanced networking software and configuration KIT needed for multi-user functionality. 2 LOT $45,000.00 $90,000.00 1 LOT $5,000.00 $5,000.00 InVeris Ref: 23058-22-USL Page 2 Commercial in Confidence: Use or Disclosure of Proposal Data is Subject to the Restrictions on Page 1 herein May 23, 2022 122 XVI nveri s Because Seconds Matter OPEN VR-INSTALL/ IN -PERSON INSTALLATION AND TRAINING: MKT TRAIN Includes on -site equipment setup and train -the - trainer onboarding. OPEN EXT WRTY EXTENDED SERVICE AGREEMENT PACKAGE: MKT Additional year Service Agreement provides software updates and technical support. o Covers a 1-year period starting after the Initial Coverage Period ends. o Service Package price for one simulator is $950 per year. Add $350 for each additional simulator per year of coverage. Virtual Reality Simulator Muskego Police Department 1 LOT $2,000.00 $2,000.00 1 YR $1,300.00 $1,300.00 SUBTOTAL (USD) $98,300.00 One -Time Discount (USD) ($35,800.00) TOTAL PRICE (USD) $62,500.00 InVeris Ref: 23058-22-USL Page 3 Commercial in Confidence: Use or Disclosure of Proposal Data is Subject to the Restrictions on Page 1 herein May 23, 2022 123 XVI nveri s Because Seconds Matter Virtual Reality Simulator Muskego Police Department 1.2 Pricing —Optional Items Other Optional Items: Table 2 defines additional items that are available for purchase in addition to the Base Package defined in Table 1, respectively. MKT -- VR SIMULATOR 1 LOT $45,000.00 MKT -- VR HANDGUN 1 EA $750.00 MKT - VR RIFLE 1 EA $900.00 MKT - VR SHOTGUN 1 EA $900.00 MKT -- VR FLASHLIGHT 1 EA $450.00 MKT - VR TASER 1 EA $450.00 MKT - VR OC SPRAY 1 EA $450.00 MKT - VR HAND TRACKING EQUIPMENT 1 EA $900.00 MKT - VR SCENARIO — CUSTOM OUTDOOR: 1 EA $17,500.00 Scenario includes up to 20,000 sq. ft. of a single outdoor environment MKT - VRSCENARIO— CUSTOM INDOOR: 1 EA $23,350.00 Scenario includes up to 10,000 sq. ft. of a single indoor environment InVeris Ref: 23058-22-USL Page 4 Commercial in Confidence: Use or Disclosure of Proposal Data is Subject to the Restrictions on Page 1 herein May 23, 2022 124 XVI nveri s Because Seconds Matter 2 Notes and Assumptions Virtual Reality Simulator Muskego Police Department 1. Quote Reference: Please reference InVeris quote number 23058-22-USL for future correspondence with InVeris. 2. Supplied by Buyer with Purchase Order: Please fill out the attached VR Configuration Questionnaire form to be provided with Purchased Order. 3. Currency: All prices are fixed price, quoted in US Dollars, and do not include any taxes or any other fees not expressly included herein. 4. Open Market: All items included herein are OPEN MARKET items unless specified otherwise in the pricing table. 5. Delivery: Delivery on all items is 120-180 days after receipt and acceptance of order, receipt of End User Certificate, and any required United States State Dept. or Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) licensing, whichever occurs last, unless otherwise noted. • Delivery time frame is subject to availability of weapons from the manufacturer. 6. Documentation: All products, documentation, manuals, training, training materials, etc. will be provided in US English only in InVeris content and format. No language translations have been priced or included. 7. Payment Terms: 100% NET 30 days 8. Payment Address: InVeris Training Solutions, Inc., 296 Brogdon Road, Suwanee, GA 30024 Business Size: Large CAGE Code: 087W6 TIN: 58-2272995 Unique Entity Identifier (UEI): For DUNS 007655863 is H3BJSKLLEF57 9. Sales Tax: If your organization is federal or state tax exempt, provide a copy of the tax exemption. InVeris is responsible for collecting sales tax in the following states: CA, CT, FL, MN, GA, IL, KY, VA, NJ, SD, and WA. If work is to be performed in any of these states under a Purchase order issued as a result of this proposal, any applicable sales tax will be added to the final invoice. If your organization is exempt from state sales tax, a copy of the tax exemption certificate will be required. Otherwise, please include the sales tax value on any resulting purchase order. 10. Bonds: N/A — no bonds are required. 11. Special Markings: Pricing does not include any special markings or certifications. If markings or certifications must be provided, a price can be provided upon request and further specifications. 12. Design Modifications: InVeris reserves the right to make modifications in the design of its products without prior notification. InVeris Ref: 23058-22-USL Page 5 May 23, 2022 Commercial in Confidence: Use or Disclosure of Proposal Data is Subject to the Restrictions on Page 1 herein 125 XVI nveri s Because Seconds Matter Virtual Reality Simulator Muskego Police Department 13. Terms and Conditions: The InVeris Training Solutions, Inc. (InVeris) Standard Terms & Conditions [ITSI-INT- 003-REV11-08-19-2020] incorporated by reference herein shall apply to all Open Market Items. If the Seller is awarded the contract\purchase order by the Buyer, the Seller presumes that the buying agency has followed all required competition justification. Neither party shall be in default of its obligations under this Agreement by reason of delay or failure to perform if such delay or failure arises out of causes beyond the reasonable control and without the fault or negligence of the party including, but not restricted to, acts of God, acts of governments, fires, floods, epidemics, pandemics, quarantine restrictions, terrorism, war, labor unrest and unusually severe weather ("Excusable Delay"). The party experiencing the Excusable Delay shall give prompt written notice to the other party upon such party becoming aware of any circumstance or event which may reasonably be anticipated to cause or constitute an Excusable Delay as described herein. Such notice shall contain a description of the delay and of the affected portion of the Work. If InVeris is the party experiencing the Excusable Delay, InVeris, in its discretion, may delay delivery, cancel delivery, make price adjustments and/or allocate delivery among customers as necessary due to such unexpected event and during the period of such Excusable Delay. If the Excusable Delay continues for a period of 90 days, the party not experiencing the Excusable Delay may terminate this Agreement with no cost or liabilities accruing to either party. InVeris Ref: 23058-22-USL Page 6 Commercial in Confidence: Use or Disclosure of Proposal Data is Subject to the Restrictions on Page 1 herein May 23, 2022 126 AGREEMENT TO TERMINATE A 2003 TERMINATION AND REC AGREEMENT BETWEEN THE VILLAGE OF MUSKEGO LAKES PARTNERSHIP AND THE CITY OF MUSKEGO WHEREAS, Country Club Villages, Inc. (CCV) is a Wisconsin Corporation formed in 1989 to own and develop property in City of Muskego located around the Muskego Lakes Golf Course; and WHEREAS, On February 3, 1992, CCV entered into a Petition for Improvements and Agreement regarding Special Assessments with The City of Muskego (City) whereby CCV agreed to pay for the entire cost of sewer construction needed to bring sewer service to certain parcels owned by CCV for development and, in exchange, CCV was awarded a prepaid balance of residential equivalent connections (RECs); and WHEREAS, The RECs are pre -paid credits that are drawn down by City upon completion of residential units and connection to the sewer lines; and WHEREAS, On August 23, 1994, CCV and City entered into an amended and restated version of the Petition; and WHEREAS, By agreement of the parties, the Petition and the Amended and Restated Petition were assigned by CCV to Village of Muskego Lakes Partnership (VML) on June 27, 1995; and WHEREAS, The parties operated under these Agreements until April 17, 2003, when they agreed to enter into a Termination and REC Agreement which terminated both the Agreements referenced above; that said Agreement was entitled "Termination Agreement as to Amended and Restated Petition for Improvements and Agreement Regarding Special Assessments Entered By and Between Country Club Villages, Inc. and the City of Muskego Dated August 23, 1994 and Agreement as to Use of REC's"; and WHEREAS, The Termination and REC Agreement substantially attempted to simplify and clarify the agreement between the parties as to (a) the then -current balance of RECs, (b) the procedure for applying for the use of RECs, and (c) the land towards which the REC balance may be applied; and WHEREAS, To date the City is holding prepaid REC funds from VML in the amount of $459,943.48 in an accrual account; and WHEREAS, The City is unable to use said funds in any manner other than the assignment of RECs for properties developed by VML; and WHEREAS, In the past year, the City and VML have been in a legal dispute as to the further assignment of unused prepaid RECs for properties owned by VML as well as C:AUsers\kroller\AppData\Local\Microsoft\Windows\TNetCache\Content.Outlook\QXDNCWUC\TERMINATE TERMINATION AND REC AGREEMENT (VML).docx 127 properties that were sold by VML to other developers of which VML is requesting the assignment of RECs for; and WHEREAS, the parties wish to enter into an Agreement terminating the 2003 Termination and REC Agreement and pay out to VML the remaining funds being held in the prepaid REC accrual account. Based upon the above, the parties hereby agree to the following: The City shall pay to VML the amount of $459,943.48 representing the total balance of the unused REC Accrual Account as referenced herein within thirty (30) days of the signing of this Agreement by both parties. 2. That the Termination and REC Agreement referenced herein, signed by the parties on April 17, 2003 and recorded with the Waukesha County Register of Deeds Office on April 28, 2003, as Document Number 2976547 is terminated as of the date of the signing of this Agreement. CITY OF MUSKEGO Rick Petfalski, Mayor VILLAGE OF MUSKEGO LAKES, PARTNERSHIP Date Signature Print Name Date C:AUsers\kroller\AppData\Local\Microsoft\Windows\TNetCache\Content.Outlook\QXDNCWUC\TERMINATE TERMINATION AND REC AGREEMENT (VML).docx 128 �„�iSKEGO Reports and Presentations to Finance Committee and Common Council To: Finance Committee & Common Council From: Scott Kroeger Department: Public Works and Development Subject: Dedication of Public Improvements PEGARL, LLP Date: July 26, 2022 PEGARL, LLP entered into a Developer's Agreement with the City to construct sanitary sewer for the four -lot development on Crowbar Drive across from the entrance to The Waters of Denoon project. All work associated with public improvements for this project has been completed. The development is at a point for public dedication. Key Issues for Consideration: Attachments 1. N/A Recommendation for Action by Committee and/or Council: Approval of dedication of public improvements for PEGARL, LLP development. Date of Committee Action: Finance Committee July 26, 2022 Planned Date of Council Action (if required): July 26, 2022 Total $ Needed: N/A Fiscal Note(s): N/A $ Budgeted: $0.00 Expenditure Account(s) to Be Used: # N/A (3/2019) 129 �„�iSKEGO Reports and Presentations to Finance Committee and Common Council To: Finance Committee & Common Council From: Scott Kroeger Department: Public Works and Development Subject: Reduction of LOC for PEGARL LLP Date: July 26, 2022 PEGARL LLP entered into a Development Agreement with the City for the development on Crowbar Drive across from the entrance to The Waters of Denoon project. All the work associated with public infrastructure has been completed. The recommendation is to reduce the LOC to be reduced by $39,116. The LOC would be reduced from $39,116 to $0. Key Issues for Consideration: Attachments 1. Cost Breakdown Review for PEGARL LLP LOC Reduction Recommendation for Action by Committee and/or Council: Approval that the PEGARL LLP LOC to be reduced by $39,116. The LOC would be reduced from $39,116 to $0. Date of Committee Action: Finance Committee July 26, 2022 Planned Date of Council Action (if required): July 26, 2022 Total $ Needed: N/A Fiscal Note(s): N/A $ Budgeted: $0.00 Expenditure Account(s) to Be Used: # N/A (3/2019) 130 Council Date Total Vouchers All Funds Utility Vouchers (Approve Separately) Water Vouchers $ 13,754.84 Water Wire Transfers Total Water $ 13,754.84 Sewer Vouchers 84,542.43 Sewer Wire Transfers July 26, 2022 $ 434,836.14 Total Voucher Approval Total Sewer $ 84,542.43 Net Total Utility Vouchers $ 98,297.27 #1 -Utility Voucher Approval Tax Vouchers - Refunds & Tax Settlements (Approve Separately) Tax Vouchers $ Tax Void Checks Total Tax Vouchers Total General Fund Vouchers (Approve Separately) General Fund Vouchers $ 336,538.87 Total General Fund Vouchers #2 - Tax Voucher Approval $ 336, 538.87 #3 - General Voucher Approval Big Muskego Lake Vouchers $ Development Fund Vouchers $ Wire transfers (Approve Separately): Debt Service $ Payroll/Invoice Transmittals $ Void Checks Since Last Report Check Amount Total Total $ - Total 387,899.50 #4 - Wire Transfers Approval Check # Amount 131 CITY OF MUSKEGO Payment Approval Report - Board Report Alpha Page: 1 Report dates: 7/12/2022-7/26/2022 Jul 21, 2022 12:OOPM Report Criteria: Detail report. Invoices with totals above $0 included. Paid and unpaid invoices included. [Report]. Description = {<>} "1099 adjustment" Invoice Number SegNo Type Description Invoice Date Payment Due Date Total Cost GL Period GLAccount Number ALSTAR CO LLC, THE 27375 1 Invoice WELL GENERATOR #7 BATTERIES 07/11/2022 07/26/2022 138.57 722 605.52.06.25.5702 Total ALSTAR CO LLC, THE: 138.57 AMAZON CAPITAL SERVICES 116Y-VCGH-VL 1 Invoice AV 07/08/2022 08/07/2022 .57- 722 100.05.71.02.5711 11pd-4tyn-p3dt 1 Invoice THUMBDRIVES 07/10/2022 08/09/2022 221.33 722 100.02.20.01.5701 11RX-DRMN-X 2 Invoice KIDS 1ST LIB CARD PR MATERIAL 07/03/2022 08/02/2022 6.94 722 100.05.71.00.6062 11RX-DRMN-X 1 Invoice KIDS MASKS 07/03/2022 08/02/2022 34.95 722 100.05.71.00.5703 179P-KXKM-7 1 Invoice PLAYGROUND SOCK HOP TRIP P 07/19/2022 08/18/2022 227.98 722 100.05.72.16.5702 19N3-XDT9-TQ 1 Invoice AV 07/08/2022 08/07/2022 4.09- 722 100.05.71.02.5711 19W1-RYMF-C 1 Invoice E6000 CRAFT ADHESIVE 07/05/2022 08/04/2022 9.01 722 100.05.71.00.5701 1DIW-79WC-FJ 1 Invoice SQUAD CASE/VELCRO 07/07/2022 08/06/2022 40.96 722 100.01.14.00.5701 1HTK-PHJW-3 1 Invoice FOL- KIDSLEGOCLUB 06/27/2022 07/27/2022 15.90 722 100.05.71.00.5752 1HTK-PHJW-3 4 Invoice TAPE, BINDER CLIPS, BANDAIDS 06/27/2022 07/27/2022 48.92 722 100.05.71.00.5701 1HTK-PHJW-3 3 Invoice MASKS 06/27/2022 07/27/2022 34.95 722 100.05.71.00.5703 1HTK-PHJW-3 2 Invoice FIRST LIB CARD PROGRAM SUPP 06/27/2022 07/27/2022 83.74 722 100.05.71.00.6062 1 HYL-4CCP-V 1 Invoice AV CREDIT 07/08/2022 08/07/2022 2.35- 722 100.05.71.02.5711 1K7Q-RYMX-6 1 Invoice CHARGING STATION, SWITCH RE 07/04/2022 08/03/2022 175.95 722 100.05.71.00.5401 1M4C-XCMP-T 1 Invoice AV 07/08/2022 08/07/2022 273.71 722 100.05.71.02.5711 1M9F-XW4P-T 1 Invoice AV CREDIT 07/08/2022 08/07/2022 .07- 722 100.05.71.02.5711 1P67-RQJW-V 1 Invoice AV CREDIT 07/08/2022 08/07/2022 3.79- 722 100.05.71.02.5711 1pvf-9yjd-1vrf 1 Invoice BATTERIES FOR AIMPOINTS 07/11/2022 08/10/2022 32.94 722 100.02.20.01.5722 1QWY-D3Y3-6 1 Invoice ELECTRONIC MATERIAL -XBOX, 07/04/2022 08/03/2022 136.96 722 100.05.71.03.5711 1QWY-D3Y3-6 2 Invoice PRINT 07/04/2022 08/03/2022 46.32 722 100.05.71.01.5711 1VVL-HYHF-1T 1 Invoice PLAYGROUND ART SUPPLIES 07/18/2022 08/17/2022 82.91 722 100.05.72.16.5702 1WYH-4D1W-V 1 Invoice AV 07/08/2022 08/07/2022 .57- 722 100.05.71.02.5711 1xrh-319x-gx61 1 Invoice PENS 07/10/2022 08/09/2022 33.97 722 100.02.20.01.5701 1Y7P-4K7W-V 1 Invoice AV CREDIT 07/08/2022 08/07/2022 .37- 722 100.05.71.02.5711 1YKF-MQTJ-H 1 Invoice KAYAK REPLACEMENT PIECES 07/10/2022 08/09/2022 120.10 722 100.05.72.13.5702 1YKG-KF49-4R 1 Invoice PRINT 07/06/2022 08/05/2022 36.98 722 100.05.71.01.5711 Total AMAZON CAPITAL SERVICES: 1,652.71 AQUAFIX INC IN003219 1 Invoice GREASE ZILLA 07/07/2022 08/06/2022 8,655.47 722 601.61.61.12.5750 Total AQUAFIX INC: 8,655.47 AT&T 1523871704 1 Invoice MONTHLY PRI- 07/07/2022 08/06/2022 21.71 722 100.01.06.00.5601 2057810705 1 Invoice MONTHLY PRI-PD & CITY HALL 06/19/2022 07/19/2022 752.22 722 100.01.06.00.5601 262679561407 1 Invoice MONTHLY-CENTREX LINES 07/01/2022 07/23/2022 219.32 722 100.01.06.00.5601 8655090707 1 Invoice MOINTHLY PRI 07/07/2022 08/06/2022 3.48 722 100.01.06.00.5601 Total AT&T: 996.73 BAKER & TAYLOR COMPANY 0003265604 1 Invoice PRINT - CREDIT 07/06/2022 08/06/2022 17.53- 722 100.05.71.01.5711 0003265605 1 Invoice PRINT - CREDIT 07/06/2022 08/06/2022 18.36- 722 100.05.71.01.5711 2036858238 1 Invoice PRINT 07/01/2022 08/01/2022 1,113.47 722 100.05.71.01.5711 132 CITY OF MUSKEGO Payment Approval Report - Board Report Alpha Page: 2 Report dates: 7/12/2022-7/26/2022 Jul 21, 2022 12:OOPM Invoice Number SegNo Type Description Invoice Date Payment Due Date Total Cost GL Period GLAccount Number 2036860003 1 Invoice PRINT 07/05/2022 08/05/2022 863.32 722 100.05.71.01.5711 2036866083 1 Invoice PRINT 07/06/2022 08/05/2022 78.14 722 100.05.71.01.5711 Total BAKER & TAYLOR COMPANY: BAKER & TAYLOR ENTERTAINMENT H61921130 1 Invoice AV 07/06/2022 H61926670 1 Invoice AV 07/06/2022 H61946480 1 Invoice AV 07/08/2022 H61946481 1 Invoice AV 07/07/2022 H61954660 1 Invoice AV 07/11/2022 H61977290 1 Invoice AV 07/12/2022 H61977291 1 Invoice AV 07/12/2022 H61985700 1 Invoice AV 07/13/2022 Total BAKER & TAYLOR ENTERTAINMENT: BATTERIES PLUS LLC 37.20 1 Invoice AAA, AA, AND D BATTERIES 07/12/2022 Total BATTERIES PLUS LLC: BAYCOM INC WQUIPINV 03 1 Invoice 2 LAPTOPS -SQUAD 1 & 8 07/11/2022 Total BAYCOM INC: BUMPER TO BUMPER MUSKEGO 561335 1 Invoice SQUAD MAINTENANCE SUPPLIES 06/25/2022 Total BUMPER TO BUMPER MUSKEGO: BUREAU VERITAS NATIONAL ELEVATOR 06292022 1 Invoice ELEVATOR INSPECTION 06/29/2022 Total BUREAU VERITAS NATIONAL ELEVATOR: BURTON & MAYER INC 2202370 1 Invoice WHITE ENVELOPES #10 07/07/2022 Total BURTON & MAYER INC: CAPITAL CITY CULVERT 8345 1 Invoice 12",15",18" AND 21" ARCHES 03/31/2022 8377 1 Invoice CULVERTSUPPLIES 04/20/2022 Total CAPITAL CITY CULVERT CARLIN SALES CORPORATION 7007626-00 1 Invoice WATERING BAGS 07/13/2022 Total CARLIN SALES CORPORATION: CITY PRESS INC 212813 1 Invoice FORM 1062 07/06/2022 Total CITY PRESS INC: 2,019.04 08/06/2022 453.34 722 100.05.71.02.5711 08/06/2022 13.67 722 100.05.71.02.5711 08/07/2022 83.91 722 100.05.71.02.5711 08/07/2022 135.94 722 100.05.71.02.5711 08/11/2022 24.61 722 100.05.71.02.5711 08/12/2022 21.56 722 100.05.71.02.5711 08/12/2022 72.63 722 100.05.71.02.5711 08/13/2022 23.74 722 100.05.71.02.5711 08/11/2022 37.20 722 100.04.51.11.5415 37.20 07/19/2022 4,894.00 722 100.07.20.01.6501 07/25/2022 25.92 722 100.02.20.01.5405 07/29/2022 88.00 722 100.02.20.01.5415 08/07/2022 335.45 722 100.01.06.00.5701 07/26/2022 12,596.00 722 100.04.51.04.5745 07/26/2022 13,912.00 722 100.04.51.04.5745 26,508.00 08/12/2022 357.78 722 215.06.00.00.6009 08/06/2022 117.72 722 100.02.20.01.5723 117.72 133 CITY OF MUSKEGO Payment Approval Report - Board Report Alpha Report dates: 7/12/2022-7/26/2022 Page: 3 Jul 21, 2022 12:OOPM Invoice Number SegNo Type Description Invoice Date Payment Due Date Total Cost GL Period GLAccount Number COMPLETE OFFICE OF WIS 630778 1 Invoice POCKET FILES 07/07/2022 08/07/2022 77.00 722 100.01.06.00.5701 955745 1 Invoice 8X11 PRINTER PAPER 07/15/2022 08/14/2022 433.68 722 100.02.20.01.5610 Total COMPLETE OFFICE OF WIS: 510.68 CONLEY MEDIA, LLC 3340750722-1 2 Invoice TYPE E NOTICE 07/20/2022 08/05/2022 157.96 722 100.01.03.00.5704 3340750722-1 1 Invoice PENDING RES VACATE STREET 07/20/2022 08/05/2022 61.68 722 100.01.06.00.6001 Total CONLEY MEDIA, LLC: 219.64 CORE & MAIN LP R130462 1 Invoice SEWER PARTS 06/30/2022 07/30/2022 184.00 622 601.61.61.16.5411 R136788 1 Invoice SEWER SUPPLIES 06/30/2022 07/30/2022 388.51 622 601.61.61.16.5411 Total CORE & MAIN LP: 572.51 DAVE JONES, INC. 20221293 1 Invoice OVERPAYMENT 20221293 07/15/2022 08/15/2022 33.78 722 100.02.25.00.4250 20221294 1 Invoice OVERPAYMENT 20221294 07/15/2022 08/15/2022 33.78 722 100.02.25.00.4250 Total DAVE JONES, INC.: 67.56 DEEPNET SECURITY 10121537 1 Invoice DEEPNET ANNUAL MAINT. 07/13/2022 07/13/2022 1,090.09 722 100.02.20.01.5504 Total DEEPNET SECURITY: 1,090.09 DIVERSIFIED BENEFIT SERV INC. 357920 1 Invoice HRA HEALTH REIMBURSEMENT 07/05/2022 07/05/2022 400.70 722 100.01.06.00.5203 Total DIVERSIFIED BENEFIT SERV INC.: 400.70 DIXON ENGINEERING INC 22-0715 1 Invoice 2ND BILL FOR W12021JTH-3733 M 07/08/2022 08/08/2022 1,350.00 722 100.04.19.00.5815 Total DIXON ENGINEERING INC: 1,350.00 EAGLE MEDIA, INC. 00135056 1 Invoice IDLE ISLE SIGNAGE (MOORING, G 07/15/2022 08/14/2022 427.50 722 100.04.51.03.5743 135010 1 Invoice ANDERSON UNIFORMS 07/11/2022 08/10/2022 89.94 722 100.02.20.10.5151 Total EAGLE MEDIA, INC.: 517.44 FERGUSON WATERWORKS #1476 0360582 1 Invoice HYDRANT PARTS 06/08/2022 07/08/2022 659.30 622 605.54.06.54.5702 Total FERGUSON WATERWORKS #1476: 659.30 FIRST RESPONDERS PSYCHOLOGICAL SERVICES 0622-2mkpd 1 Invoice NECK UP CHECKUP FOLLOWUP 07/11/2022 07/26/2022 200.00 722 100.02.20.01.5845 Total FIRST RESPONDERS PSYCHOLOGICAL SERVICES: 200.00 FRANKLIN AGGREGATES INC. 1811976 1 Invoice 1 1/4 AND #1 COMMERCIAL GRAD 07/14/2022 08/14/2022 3,791.98 722 100.04.51.02.5741 134 CITY OF MUSKEGO Payment Approval Report - Board Report Alpha Report dates: 7/12/2022-7/26/2022 Page: 4 Jul 21, 2022 12:OOPM Invoice Number SegNo Type Description Invoice Date Payment Due Date Total Cost GL Period GLAccount Number Total FRANKLIN AGGREGATES INC.: 3,791.98 FRANKLIN POLICE DEPT. fFR072622 1 Invoice WARRANT 21267 - KGEIBEL 07/16/2022 07/26/2022 185.00 722 100.01.08.00.4272 Total FRANKLIN POLICE DEPT.: 185.00 FRANKLIN, CITY OF 05596.00/0726 1 Invoice 12442 TC - 2ND QTR 2022 07/12/2022 07/26/2022 24.67 722 601.61.63.43.5801 09024.00 2ND 1 Invoice 12466 TC - 2ND QTR 2022 07/01/2022 07/26/2022 24.67 722 601.61.63.43.5801 Total FRANKLIN, CITY OF: 49.34 FROEDTERT HEALTH/WORKFORECE HEALTH 00011628-00 1 Invoice HEALTH RISK ASSESSMENT EVAL 06/30/2022 07/30/2022 7,900.00 722 100.01.06.00.5206 Total FROEDTERT HEALTH/WORKFORECE HEALTH: 7,900.00 GAIL BARTZ LEVIN 5481 1 Invoice CLASS INSTRUCTION YOGA PUN 07/11/2022 08/10/2022 85.00 722 100.05.72.13.5110 Total GAIL BARTZ LEVIN: 85.00 GALLS, LLC -DBA RED THE UNIFORM TAILOR bc1645532 1 Invoice SUNDSTROM UNIFORMS 06/21/2022 07/22/2022 62.49 722 100.02.20.01.5151 bc1645665 1 Invoice LYNKIEWICZ UNIFORMS 06/21/2022 07/22/2022 27.12 722 100.02.20.01.5151 bc1647560 1 Invoice KRISTALIDIS UNIFORMS 06/23/2022 07/24/2022 141.79 722 100.02.20.01.5151 Total GALLS, LLC -DBA RED THE UNIFORM TAILOR: 231.40 GLACIER REFRIGERATION INC 15478 1 Invoice DEHUMIDIFIER SERVCE 06/28/2022 07/28/2022 583.35 622 601.61.61.16.5411 Total GLACIER REFRIGERATION INC: 583.35 GLEASON REDI MIX 313433 1 Invoice #1 SLURRY, FUEL CHARGE 07/11/2022 08/11/2022 2,322.00 722 100.04.51.04.5744 313642 1 Invoice 6 BAG AIR & FUEL 07/13/2022 08/13/2022 220.50 722 100.04.51.04.5744 Total GLEASON REDI MIX: 2,542.50 GRAEF INC 0121693 1 Invoice PELLMAN FARM 07/05/2022 08/05/2022 35.00 722 507.00.00.00.2691 0121694 1 Invoice HILLENDALE RECONSTRUCTION 07/05/2022 08/05/2022 1,012.87 722 401.08.91.19.6507 0121697 1 Invoice HRIN 4 LOT DEVELOPEMENT 07/05/2022 08/05/2022 392.39 722 507.00.00.00.2783 0121698 1 Invoice COBBLESTONE COURT DEVELOP 07/05/2022 08/05/2022 35.00 722 507.00.00.00.2646 0121701 1 Invoice RENO BERG CROWBAR DEVELO 07/05/2022 08/05/2022 832.87 722 507.00.00.00.2725 0121702 1 Invoice WATER UTILITY WATER TRUSTS 07/05/2022 08/05/2022 380.00 722 605.56.09.23.5815 0121704 1 Invoice KIRKLAND CROSSING 07/05/2022 08/05/2022 946.25 722 507.00.00.00.2648 0121710 1 Invoice GWA CONSTRUCTION INSPECTIO 07/05/2022 07/18/2022 1,465.16 722 507.00.00.00.2690 0121712 1 Invoice BIOTECH 07/05/2022 08/05/2022 127.50 722 507.00.00.00.2707 0121715 1 Invoice HILLENDALE BIL APPLICATION 07/05/2022 08/05/2022 4,930.00 722 100.04.19.00.5815 0121756 1 Invoice WILL ROSE APTS 07/06/2022 08/06/2022 526.54 722 507.00.00.00.2699 0121757 1 Invoice PRESBYTERIAN HOMES 07/06/2022 08/06/2022 460.00 722 507.00.00.00.2768 0121758 1 Invoice GLEN AT MUSKEGO LAKES 07/06/2022 08/06/2022 3,364.64 722 507.00.00.00.2716 0121759 1 Invoice MALLARD POINTE DEVELOPEME 07/06/2022 08/06/2022 26,566.38 722 507.00.00.00.2740 0121760 1 Invoice APPLE HILLS DEVELOPMENT 07/06/2022 08/06/2022 7,119.25 722 507.00.00.00.2655 135 CITY OF MUSKEGO Payment Approval Report - Board Report Alpha Page: 5 Report dates: 7/12/2022-7/26/2022 Jul 21, 2022 12:OOPM Invoice Number SegNo Type Description Invoice Date Payment Due Date Total Cost GL Period GLAccount Number 0121761 1 Invoice NORTH CAPE STORAGE FACILITY 07/06/2022 08/06/2022 1,870.00 722 507.00.00.00.2677 0121762 1 Invoice 2022 ROAD PROGRAM 07/06/2022 08/06/2022 3,950.50 722 100.07.51.02.6502 0121763 1 Invoice GENERAL ENGINEERING SERVIC 07/06/2022 08/06/2022 4,430.15 722 100.04.19.00.5815 0121764 1 Invoice BASELER HENNEBERRY DEVELO 07/06/2022 08/06/2022 895.00 722 507.00.00.00.2665 0121765 1 Invoice FLEET FARM DEVELOPMENT 07/06/2022 08/06/2022 1,966.00 722 507.00.00.00.2704 0121766 1 Invoice GENEREAL ENGINEERING WATER 07/06/2022 07/18/2022 3,262.60 722 605.56.09.23.5815 0121767 1 Invoice SEWER UTILITY 07/06/2022 08/06/2022 1,030.00 722 601.61.63.43.5815 0121768 1 Invoice LUDWIG 4 LOT CSM 07/06/2022 08/06/2022 856.00 722 507.00.00.00.2711 0121769 1 Invoice BAY LANE PLACE STORM SEWER 07/06/2022 08/06/2022 6,803.50 722 216.08.00.00.6503 0121770 1 Invoice KOHNE CSM 07/06/2022 08/05/2022 532.50 722 507.00.00.00.2714 0121771 1 Invoice HELM CSM 07/06/2022 08/05/2022 532.50 722 507.00.00.00.2718 Total GRAEF INC: GRANICUS 153790 1 Invoice AGENDA MGMT 1/31122-1/30/23 07/07/2022 Total GRANICUS: HAWKINS INC. 6221529 1 Invoice BALL VALVE 06/20/2022 6225441 1 Invoice AZONE 15 - SODIUM SILICATE 06/30/2022 Total HAWKINS INC.: HEARTLAND BUSINESS SYSTEMS 532174-H 1 Invoice MONTHLY-365.GOV 07/14/2022 532788-H 1 Invoice FLEX- BLOCK- CONSULANT 07/13/2022 Total HEARTLAND BUSINESS SYSTEMS: HID GLOBAL CORPORATION 13402010421 1 Invoice ANNUAL CROSSMATCH(FINGERP 07/15/2022 Total HID GLOBAL CORPORATION: HUMPHREY SERVICE PARTS 1276261 1 Invoice #52 07/08/2022 1276500 1 Invoice DEGREASER 07/13/2022 1276895 1 Invoice DEGREASER 07/18/2022 1277067 1 Invoice PAINT 07/20/2022 Total HUMPHREY SERVICE PARTS: IDI in358081 1 Invoice REVERSE LOOKUP 06/30/2022 Total IDI: IIMC 25342/072622 1 Invoice MEMBERSHIP DUES - SHARON 07/06/2022 Total IIMC: INDELCO PLASTICS CORP INV336567 1 Invoice WATER SUPPLIES 06/30/2022 74,322.60 08/06/2022 15,699.60 722 100.01.06.00.5506 15,699.60 07/20/2022 36.71 622 605.53.06.32.5702 07/30/2022 4,051.98 622 605.53.06.31.5750 4,088.69 08/13/2022 310.19 722 100.01.14.00.5507 O8/13/2022 8,417.20 722 100.01.14.00.5840 8,727.39 08/14/2022 2,063.04 722 100.02.20.01.5504 2,063.04 08/08/2022 57.94 722 100.04.51.11.5405 08/13/2022 238.80 722 100.04.51.07.5405 08/18/2022 400.80 722 100.04.51.07.5405 O8/20/2022 173.68 722 100.04.51.07.5405 871.22 07/26/2022 146.00 722 100.02.20.01.5722 09/30/2022 240.00 722 100.01.03.00.5305 240.00 07/26/2022 43.55 622 605.51.06.05.5702 136 CITY OF MUSKEGO Payment Approval Report - Board Report Alpha Page: 6 Report dates: 7/12/2022-7/26/2022 Jul 21, 2022 12:OOPM Invoice Number SegNo Type Description Invoice Date Payment Due Date Total Cost GL Period GLAccount Number Total INDELCO PLASTICS CORP: 43.55 JM BRENNAN, INC. SALES000142 1 Invoice REPAIR BOILER 1 VALVE TOWER 06/30/2022 07/30/2022 1,046.25 722 100.05.71.00.5415 Total JM BRENNAN, INC.: 1,046.25 JOHNNY'S PETROLEUM PROD INC 40109/40110 2 Invoice ULSC DIELSEL 07/14/2022 07/26/2022 11,629.21 722 100.04.51.07.5736 40109/40110 1 Invoice E-10 5999 GAL 07/14/2022 07/26/2022 26,749.54 722 100.04.51.07.5736 Total JOHNNY'S PETROLEUM PROD INC: 38,378.75 JOHNSON CONTROLS 1-11884623720 1 Invoice CH DATAT ROOM A/C REPAIRS 06/28/2022 07/19/2022 1,627.53 722 100.01.09.00.5415 Total JOHNSON CONTROLS: 1,627.53 KARSTEN,BRETT KAR07262022 1 Invoice RESTITUTION FROM KRISTY HUN 07/20/2022 09/12/2022 807.73 722 100.01.08.00.4269 Total KARSTEN, BRETT. 807.73 KETTLE MORAINE LAND STEWARDS 172022 1 Invoice TREAT ENGEL & BADERTSCHER 07/07/2022 08/07/2022 2,225.00 722 215.06.00.00.6008 Total KETTLE MORAINE LAND STEWARDS: 2,225.00 KONE, INC. 962255249 1 Invoice CITY HALL MAINTENANCE 070120 07/01/2022 07/31/2022 492.90 722 100.02.20.01.5415 Total KONE, INC.: 492.90 KUJAWA ENTERPRISES INC. 106935 1 Invoice 07 22 PLANT MAINT 07/01/2022 08/01/2022 61.00 722 100.05.71.00.5415 Total KUJAWA ENTERPRISES INC.: 61.00 LAKE DENOON LAKE DISTRICT LA072622 1 Invoice CITY CONTRIBUTION 07/21/2022 07/26/2022 7,412.00 722 100.05.06.00.6053 Total LAKE DENOON LAKE DISTRICT: 7,412.00 LEGACY RECYCLING 2882 1 Invoice EMERALD PARK LANDFILL JUNE 2 07/07/2022 08/07/2022 1,610.14 722 205.03.00.00.5820 Total LEGACY RECYCLING: 1,610.14 LITURGICAL PUBLICATIONS, INC. 020553 1 Invoice CCR REPORT PRINTING 06/29/2022 07/26/2022 1,383.71 622 605.56.09.21.6056 Total LITURGICAL PUBLICATIONS, INC.: 1,383.71 MICROMARKETING LLC 892730 1 Invoice AV 07/06/2022 08/06/2022 40.00 722 100.05.71.02.5711 137 CITY OF MUSKEGO Payment Approval Report - Board Report Alpha Page: 7 Report dates: 7/12/2022-7/26/2022 Jul 21, 2022 12:OOPM Invoice Number SegNo Type Description Invoice Date Payment Due Date Total Cost GL Period GLAccount Number Total MICROMARKETING LLC: 40.00 MIDWEST TAPE 502350614 1 Invoice AV 07/05/2022 08/05/2022 39.98 722 100.05.71.02.5711 Total MIDWESTTAPE: 39.98 MISS BECKY LLC 770 1 Invoice CLASS INSTRUCTION CHEER CA 07/07/2022 07/26/2022 693.00 722 100.05.72.13.5110 Total MISS BECKY LLC: 693.00 NELSON SYSTEMS INCORPORATED P102077 1 Invoice ANNUAL CALL RECODING MAINT. 07/13/2022 07/13/2022 4,063.11 722 100.02.20.01.5504 Total NELSON SYSTEMS INCORPORATED: 4,063.11 NORD CONSTRUCTION LLC 332-21 1 Invoice LIONS PARK REMOVAL & INSTALL 05/27/2021 05/27/2021 13,380.00 722 202.08.94.74.6581 Total NORD CONSTRUCTION LLC: 13,380.00 NORTHERN LAKE SERVICE INC 420878 1 Invoice BACTERIATESTS 07/01/2022 08/01/2022 31.50 722 605.56.09.23.5865 420993 1 Invoice COLI FORM BACTERIA TESTS 07/05/2022 07/26/2022 31.50 722 605.56.09.23.5865 Total NORTHERN LAKE SERVICE INC: 63.00 OLSEN SAFETY EQUIPMENT CORP. 0399134-IN 1 Invoice STARLITE GLASSES - BLUE MIRR 07/08/2022 08/08/2022 89.40 722 601.61.61.12.5228 0399211-IN 1 Invoice HELMET FLASHLIGHT 07/12/2022 08/12/2022 147.32 722 601.61.61.12.5228 Total OLSEN SAFETY EQUIPMENT CORP.: 236.72 O'REILLY AUTOMOTIVE INC. 3853-320848 1 Invoice SQUAD #3 07/05/2022 07/26/2022 63.98 722 100.04.51.11.5405 Total O'REILLYAUTOMOTIVE INC.: 63.98 PARAGON DEVELOPMENT SYS INC 15122582 1 Invoice BADGER BOOK 07/13/2022 08/12/2022 29,640.00 722 410.08.90.02.6506 15122588 1 Invoice BADGER BOOK 07/13/2022 08/12/2022 18,008.00 722 410.08.90.02.6506 Total PARAGON DEVELOPMENT SYS INC: 47,648.00 PAYNE & DOLAN OF WISCONSIN 1810483 1 Invoice 5LT 9.5 MM 07/07/2022 08/06/2022 693.76 722 100.04.51.02.5740 Total PAYNE & DOLAN OF WISCONSIN: 693.76 PERRILL 257738 1 Invoice ROW WEB APPS 07/01/2022 07/31/2022 85.00 722 100.04.19.00.5815 Total PERRILL: 85.00 PROHEALTH CARE 10001164317 1 Invoice BLOOD DRAWS 07/19/2022 07/19/2022 180.25 722 100.02.20.01.5722 138 CITY OF MUSKEGO Payment Approval Report - Board Report Alpha Report dates: 7/12/2022-7/26/2022 Page: 8 Jul 21, 2022 12:OOPM Invoice Number SegNo Type Description Invoice Date Payment Due Date Total Cost GL Period GLAccount Number 314009 1 Invoice FUNDERBURK/MROTEK/SAX 07/01/2022 08/01/2022 335.00 722 100.02.20.01.5845 Total PROHEALTH CARE: 515.25 PUMP 4 LESS, INC PUM072622 1 Invoice RESTITUTION FROM MELISSA LA 07/20/2022 07/20/2022 81.91 722 100.01.08.00.4269 Total PUMP 4 LESS, INC: 81.91 QUALITY DOOR AND HARDWARE 710345 1 Invoice DOOR LOCKS 06/08/2022 08/08/2022 1,990.22 622 605.52.06.25.5101 Total QUALITY DOOR AND HARDWARE: 1,990.22 R.S. PAINT & TOOLS LLC 863030 1 Invoice GREEN MARKING PAINT 07/13/2022 08/13/2022 337.68 722 100.04.51.04.5744 Total R.S. PAINT & TOOLS LLC: 337.68 RAY O'HERRON CO., INC. 2204686 1 Invoice AMMUNITION 06/30/2022 07/30/2022 8,275.00 722 410.08.91.20.6517 Total RAY O'HERRON CO., INC.: 8,275.00 RELIANCE STANDARD LIFE INS CO VPL302974/07 1 Invoice LONG TERM DISABILITY 07/18/2022 07/26/2022 563.37 722 100.00.00.00.2246 Total RELIANCE STANDARD LIFE INS CO: 563.37 RUEKERT & MIELKE INC 142150 1 Invoice MALLARD RESERVE DXF FILES F 07/13/2022 08/12/2022 232.50 722 605.56.09.23.5620 142151 1 Invoice GWA WEEKLY MEETING 05212022 07/13/2022 08/13/2022 532.50 722 507.00.00.00.2690 142152 1 Invoice 2021 PP 1/1 07/13/2022 08/13/2022 4,175.00 722 601.65.00.00.6516 142153 1 Invoice FUTURE DEVELOPMENT WATER 07/13/2022 07/26/2022 142.00 722 605.56.09.23.5815 142154 1 Invoice AGATE PUMP STATION 07/20/2022 07/26/2022 4,289.39 722 601.00.00.00.1903 142155 1 Invoice SCADA SERVICE - 5/21/22 - 6/17/22 07/13/2022 08/12/2022 1,245.20 722 605.56.09.23.5620 Total RUEKERT & MIELKE INC: 10,616.59 RUNDLE-SPENCE S3034094.002 1 Invoice SHOP SUPPLIES 06/24/2022 07/24/2022 6.68 622 601.61.61.15.5415 S3034756.001 1 Invoice OTH DRINKING FOUNTAIN FILTER 07/01/2022 08/01/2022 94.29 722 100.04.51.11.5415 Total RUNDLE-SPENCE: 100.97 SAFEWAY PEST MANAGEMENT INC. 686001 1 Invoice PEST CONTROL -CH 06/20/2022 07/20/2022 40.00 722 100.01.09.00.5415 688103 1 Invoice PEST CONTROL -OLD PD 07/18/2022 08/18/2022 38.00 722 100.02.20.01.5415 688104 1 Invoice 07 JUL 22 PEST CONTROL 07/11/2022 08/11/2022 35.00 722 100.05.71.00.5415 Total SAFEWAY PEST MANAGEMENT INC.: 113.00 SECURIAN FINANCIAL GROUP, INC. 002832UO7262 1 Invoice LIFE INS PREMIUMS 07/15/2022 07/24/2022 2,646.14 722 100.00.00.00.2207 Total SECURIAN FINANCIAL GROUP, INC.: 2,646.14 139 CITY OF MUSKEGO Payment Approval Report - Board Report Alpha Page: 9 Report dates: 7/12/2022-7/26/2022 Jul 21, 2022 12:OOPM Invoice Number SegNo Type Description Invoice Date Payment Due Date Total Cost GL Period GLAccount Number SOMAR TEK LLC/ ENTERPRISES 102656 1 Invoice PETZ UNIFORMS 05/04/2022 07/26/2022 123.38 722 100.02.20.01.5151 102714 1 Invoice AWARDS CEREMONY PINS 07/06/2022 08/06/2022 193.20 722 505.00.00.00.2637 102722 1 Invoice TARGET BACKINGS RANGE 07/14/2022 08/14/2022 74.70 722 100.02.20.01.6023 Total SOMAR TEK LLC/ ENTERPRISES: SPECTRUM 015280507062 1 Invoice M.PARK CONNECTION- MONTHLY 07/06/2022 Total SPECTRUM: STATE DISPOSAL SERVICES LLC STA07262022 1 Invoice REFUND OVERPAYMENT 07/20/2022 Total STATE DISPOSAL SERVICES LLC: STREICHER'S 11578093 2 Invoice LANGE EXCESS VEST/CARRIER 07/08/2022 11578093 1 Invoice LANGE EXCESS VEST/CARRIER 07/08/2022 Total STREICHER'S: SUPERIOR CHEMICAL 336149 1 Invoice EVER GREEN FOAM SOAP BAGS 06/10/2022 Total SUPERIOR CHEMICAL: SWEETWATER 32031052 1 Invoice ARPA IT HARDWARE - GRANT 06/20/2022 Total SWEETWATER: TESS CORNERS VOL FIRE DEPT APR-JUNE 202 1 Invoice 2ND QTR REVIEWS 2022 07/01/2022 Total TESS CORNERS VOL FIRE DEPT: TIAA BANK 9027105 1 Invoice STAFF P RINTER LEASE 8/1/22-8/3 07/10/2022 Total TIAA BANK: TOWN OF NORWAY TN/072622 1 Invoice 2022 2ND QTR 07/12/2022 Total TOWN OF NORWAY: TYLER TECHNOLOGIES, INC 060-113670 1 Invoice JUNE 2022 BILLING -SCHEDULE A 07/11/2022 Total TYLER TECHNOLOGIES, INC: US CELLULAR 0517701383 7 Invoice MONTHLY CHARGE - REC 06/28/2022 0517701383 1 Invoice MONTHLY CHARGE-PD 06/28/2022 0517701383 3 Invoice MONTHLY CHARGE - SEWER SCA 06/28/2022 0517701383 5 Invoice MONTHLY CHARGE - FINANCE 06/28/2022 391.28 07/23/2022 119.98 722 100.04.51.11.5415 119.98 08/08/2022 526.00 722 100.01.08.00.4269 526.00 08/08/2022 211.55 722 100.02.20.01.5151 08/08/2022 29.00 722 100.02.20.01.5227 07/10/2022 649.33 622 100.04.51.07.5405 649.33 07/20/2022 1,178.70 722 100.05.71.00.5505 1,178.70 08/01/2022 425.00 722 100.02.21.00.5850 07/30/2022 336.55 722 100.05.71.00.5401 07/26/2022 64,818.47 722 601.61.61.10.6068 64,818.47 08/18/2022 7,719.23 722 100.01.04.00.5801 07/23/2022 10.00 722 100.05.72.10.5601 07/23/2022 174.74 722 100.02.20.01.5604 07/23/2022 125.50 722 601.61.63.42.5606 07/23/2022 30.00 722 100.01.03.00.5601 140 CITY OF MUSKEGO Payment Approval Report - Board Report Alpha Report dates: 7/12/2022-7/26/2022 Page: 10 Jul 21, 2022 12:OOPM Invoice Number SegNo Type Description Invoice Date Payment Due Date Total Cost GL Period GLAccount Number 0517701383 6 Invoice MONTHLY CHARGE - DPW 06/28/2022 07/23/2022 139.50 722 100.04.51.01.5605 0517701383 4 Invoice MONTHLY CHARGE - IS 06/28/2022 07/23/2022 33.00 722 100.01.14.00.5601 0517701383 2 Invoice MONTHLY CHARGE - WATER SCA 06/28/2022 07/23/2022 125.50 722 605.56.09.21.5607 Total US CELLULAR: 638.24 VERIZON WIRELESS 9910780459 1 Invoice MONTHLY VERIZON-PD CELLS 07/20/2022 08/02/2022 1,245.04 722 100.02.20.01.5604 Total VERIZON WIRELESS: 1,245.04 WARRIOR WASH, LLC warriorwashjun 1 Invoice SQUAD WASHES 06/30/2022 07/30/2022 108.00 722 100.02.20.01.5405 warrriorwashm 1 Invoice SQUAD WASHES 05/31/2022 07/26/2022 152.00 722 100.02.20.01.5405 Total WARRIOR WASH, LLC: 260.00 WAUKESHA CO TECHNICAL COLLEGE s0773593 1 Invoice MILLER/WEINKAUF/KLINK 06/29/2022 07/22/2022 1,055.00 722 100.02.20.01.5301 Total WAUKESHA CO TECHNICAL COLLEGE: 1,055.00 WAUKESHA COUNTY TREASURER WA/072622 1 Invoice MSKC2257.200 CLARK 07/11/2022 07/26/2022 2,787.00 722 100.00.00.00.1601 Total WAUKESHA COUNTY TREASURER: 2,787.00 WE ENERGIES 4208325835 1 Invoice STREET LIGHTING (00120) 07/08/2022 08/01/2022 5,553.70 722 100.04.51.06.5910 4211983149 1 Invoice PARKS (00123) 07/12/2022 08/03/2022 1,348.17 722 100.04.51.11.5910 4213882156 1 Invoice VETERAN'S MEMORIAL PARK (000 07/13/2022 08/04/2022 75.94 722 100.04.51.11.5910 Total WE ENERGIES: 6,977.81 WELDERS SUPPLY COMPANY 10296703 1 Invoice MONTHLY ACETYLENE 06/30/2022 07/30/2022 6.65 722 100.04.51.07.5405 Total WELDERS SUPPLY COMPANY: 6.65 WISCONSIN BUILDING INSPECTION LLP 213 1 Invoice JUNE INSPECTION SERVICES 07/10/2022 08/10/2022 22,810.05 722 100.02.25.00.5820 Total WISCONSIN BUILDING INSPECTION LLP: 22,810.05 WOODLAND RESTORATION LLC 20220705-003 1 Invoice PULL/SPRAY AT DENOON, ENGEL, 07/05/2022 08/05/2022 1,545.00 722 215.06.00.00.6008 Total WOODLAND RESTORATION LLC: 1,545.00 Grand Totals: 434,836.14 141 CITY OF MUSKEGO Payment Approval Report - Board Report Alpha Page: 11 Report dates: 7/12/2022-7/26/2022 Jul 21, 2022 12:OOPM Invoice Number SegNo Type Description Invoice Date Payment Due Date Total Cost GL Period GLAccount Number Report Criteria: Detail report. Invoices with totals above $0 included. Paid and unpaid invoices included. [Report]. Description = (—) "1099 adjustment' 142 J" USKE V V Sharon Mueller Finance & Administration Director Finance & AdxninistYation Dgxulment 1 July 26', 2022, Finance Committee Meeting Major Projects and Activities being worked on within the Finance & Administration Department: Elections — The upcoming 2022 Elections and offices on the ballot will include the following: • August 9th Partisan Pdp2M — Primary for the General Election • November 8th Fall General — Governor and Lieutenant; U.S. Senator; U.S. Representative to Congress; State Senator seats (odd -numbered districts); State Representative; State Treasurer; and Secretary of State 2021 Tax Roll/Rates/Bills — The 2' or final tax bill is due July 31' and payable to Waukesha County as approved with adoption of Ordinance #39 on February 2P, 2020. 2021 Audit (Operating, Special Revenue, Capital, BML, Sewer & Water Utility) — Fieldwork began on May 2rd and was completed by May 6th. The State Financial Report (Form C) was completed and submitted to the Wisconsin Department of Revenue on a timely basis. Failure to submit this report by the due date will result in State Transportation Aid reductions. The draft Financial Statements and Management & Discussion Analysis (MD&A) were completed by staff on June 2"d. As a result of the City's population exceeding 25,000, all municipalities must also send an auditor's opinion of the Comprehensive Annual Financial Report (Tax 16.05) to the Department of Revenue. The audit summary presentation will take place at the July 26th Finance meeting for Committee review. Although there was a decrease in net position of $651,022 or 0.44%, final audit results for all City funds continue to reflect healthy fund balances. 2021 Workers Compensation Audit — Audit took place on March 21', resulting in a $10,117 credit to the City. 2021 Budget Amendments — As in prior years, due to proper budgetary control being exercised at the General fund level, it appears no amendments will be required which will save the City in publishing costs as well as Committee, Council and staff time. Budgets — The tentative 2023 Budget Timeline was reviewed at the June 14" d Common Council meeting. Finance and Administrative staff have begun working with the Mayor and Department Heads in preparation of the proposed Operating, Debt Service, Special Revenues, Water and Sewer Utilities and Big Muskego Lake budgets. Investments — The Federal Reserve raised its short-term interest rates by three-quarters of a percentage point in June and another hike anticipated in July. This will allow the City's savings yields to slowly rise over the 3rd & 4th quarters. Financing/Debt Issuance — Long-term projections and financing options are under review for the anticipated 2023 Capital Budget projects. 11 & 2nd Quarter Utility Bills — The Refuse and Recycling rate increase from $26.50 to $34.45 went into effect with the I" quarter utility billing, as approved through Resolution #105-2021. There were no issues to report. OVER a 143 FINANCE & ADMIN. DIRECTOR'S REPORT 07/26/22 PAGE 2 Payroll/Benefit Administration — • Staff has been working with the interim human resource coordinator on various benefit administration priorities since May; and will continue to do so until a permanent position is in place. • 1' & 2nd Quarter Federal and State payroll tax reports were reconciled and submitted to the IRS and DOR. • The City Wellness Program Health Risk Assessment began on June 16th. Employee participation has declined to 76%. The HR Coordinator will be working on promoting participation for the 2023 assessment. • The dual option health insurance open enrollment included a 3.9% rate increase, which amounts to an additional cost to the City of approximately $74,000. Participation in the alternative Arise plan has remained the same as in the prior year at 22%. Board of Review — Open book assessment examination took place on June 24d' & 30th. According the contracted Assessor staff, there were minimal inquires with no issues to report. The meetings for property owners to file an objection took place on July 21', of which there were none. Licensing — 2022 marks the first year virtually all licenses were placed on one (1) resolution for Committee review. Taking into consideration the deferral, all licenses and permits were processed and issued in a timely manner. The Deputy Clerk is to be commended for implementing efficient processes, excellent teamworking skills and organization in order for all establishments to be in possession of their licenses by the deadline of June 30th. Other Proiects — The new accounts payable workflow has been successfully implemented across all departments; allowing for a paperless invoice filing process within the upgraded document management system (Laserfiche). Staff has also been working with the Interim Human Resource Coordinator and IT Director to review various HR systems, modules and workflows to aid in onboarding and recruitment. Lastly, the Badger Books (electronic poll books) were delivered on July 15th. Due to the delayed shipping and training availability, the books will be implemented with the 2023 Spring Election. 2021 Annual Results & 2022 2nd Quarter General Fund Operating Results — See attached and below. The first three (3) attached worksheets recap the City's annual operating results for the General Operating Fund. As of December 3 V, 2021, revenues exceeded expenditures resulting in a surplus of $118,044, which is down $367,088 or 75% over the prior year. Contributing to the reduction were additional costs associated to the assessment revaluation, workers comp insurance, fuel, salt and public safety personnel; as well as a significant reduction of investment earnings. The remaining attachments summarize the City's General Fund operating results for the first two quarters ending June 30', 2022. Net revenues over expenditures reflect an increase of $130,270 over the prior year mainly due to the authorized tax levy increase. As compared to the budget, revenue results typically include significant variances within each category either because of economic factors or the timing of funds received and will become more proportionate with the budget by the 3rd and 4th quarters. The expenditures also vary due to seasonal events or the timing of transactions such as with recreational program activity, hydrant rental, vehicle replacements and road program costs. Total expenditures under budget amounted to (-) 54.11 %, which is within 0.11 % of the prior year. 2 144 Budget Actual Over/(Under) % Over/(Under) $11,129,052 $11,132,602 $3,550 0. 33% - • • - $2,218,725 $2,297,375 $78,650 3.54% . • '- $795,840 1 $673,9861 -$121,854 15.31% • - • '- $310,000 $323,769 $13,769 4.44% ' • • - • $572,693 1 $605,915 1 $33,222 5.80% - • • • - • $242,000 1 $243,156 1 $1,156 0.48% -• $296,675 $135,012 -$161,663 54.49% • • • $549,550 1 $619,245 1 $69,695 12.68% - • - • . $326,250 1 $104,4221 -$221,828 -67.99% $16,440,785 1 $16,135,482 1 ($305,303)1 -1.86% ■ "faxes ■ Intergovernmental ■ Licenses and Permits ■ Fines, Forfeits and Penalties ■ Public Charges for Services ■ Intergov. Charges for Services ■ Miscellaneous ■ Other Financing Sources ■ Interdepartmental 145 General Government Common Council/Mayor Finance & Administration Assessor Attorney Non -Departmental Municipal Court Building Maintenance Information Technology Bank Service Charges • e $235,346 $215,206 Over/(Under) -$20,140 Over/(Under) -8.56% $574,081 $548,560 -$25,521 -4.45% $159,200 $158,944 -$256 -0.16% $145,338 $144,845 -$493 -0.34% $593,195 $636,335 $43,140 7.27% $172,244 $171,288 -$956 -0.56% $208,8181 $199,421 -$9,396 -4.500% $430,8191 $373,987 -$56,832 -13.19% $6,0001 $2,525,040 $9,5861 $2,458,171 $3,5861 -$66,868 59.77% -2.650/b Total Police - Sworn Officers Police - Dispatch & Clerical Volunteer Fire Non -Departmental Building Inspection Tota I Engineering Public Work Budget• d • $5,410,028 $5,417,518 $7,490 0.14% $822,355 $830,654 $8,299 1.01% $852,496 $847,620 -$4,876 -0.57% $21,102 $22,757 $1,655 7.84% $318,018 $252,187 -$65,831 -20.70% $7,424,0001 $7,370,7371-$53,263 -0.72% 153,8771 $124,7981 -$29 -18.90% ITota1 53.064,5941 $2,971,1871 493.407 -3.05% Planning, Conservation & Development $434,485 1$425,494-$8,991 -2.07% Total $434,4851 $425,494-$8,991 -2.07% 'Capital Outlay -Operations Computer Replacements Mobile Devices Social Media Archive Police Vehicle Replacements Road Program Public Works Vehicle Replacements Contingency Trf to Comp Abs from GF Budget $20,000 Actual $19,884 Over/(Under) -$116 % Over/(Under) -0.58% $20,000 $19,910 -$90 -0.45% $4,925 $5,148 $223 4.53% $211,700 $184,543 -$27,157 -12.83% $750,000 $798,933 $48,933 6.52% $0 $0 $0 #DIV/0! $82,000 $0 -$82,000 -100.00% 1 $50,000 $0 -$50,000 100.00% Total $1,138,625 $1,028,418 -$110,207 -9.68% Total Expenditures Budget Actual Over/(under) % Over/(under) FM General Government Public Safety Health & Human Services Public Works Culture, Recreation & Education 13Conservation & Development ■Capital Outlay -Operations 10/ 60/ i% $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 �\o� ot� P a`�o JeN O Qec era JF Q Oe aq} wad ac�o� \0 1�e a G oyes (�a�`a ■Budget ■Actual 146 Total Revenues Total Expenditures Tota I IN Surplus/(Deficit) 16,135,482 1 $16,093,986 16.017.438 1 $15.608.854 $485,132 $41,496 $16,200,000 $408,584 $16,100,000 $16,000,000 $15,900,000 $15,800,000 $15,700,000 ($367,089) $15,600,000 $15, 500,000 $15,400,000 $15, 300,000 2021 2020 147 Budget Actual Over/(Under) % Over/(Under) Revenue Comparison $11,446,330 $11,436,2031 -$10,127 -0.09% - • • - $2,216,872 $780,1251 -$1,436,747 64.81% • '- $723,670 1 $464,5111 -$259,159 35.81% • - • '- $335,000 $189,6041 -$145,396 -43.40% • •' • $602,248 1 $344,7421 -$257,506 -42.76-/ - • • • - • $246,250 1 $2171 -$246,033 99.91% -• $196,675 $18,243 -$178,432 90.72% • • • $501,000 $22,4031 -$478,597 95.53% - •-•. $326,750 1 $51,7531 -$274,998 -84.16% $16,594,795 1 $13,307,801 1 ($3,286,994)1-19.810/0 ■ Intergovernmental ■ Licenses and Permits ■ Fines, Forfeits and Penalties ■ Public Charges for Services ■ Intergov. Charges for Services ■ Miscellaneous ■ Other Financing Sources ■ Interdepartmental 148 General Government Common Council/Mayor Finance & Administration Assessor Attorney Non -Departmental Municipal Court Building Maintenance Information Technology Bank Service Charges • e $261,620 $97,545 Over/(Under) -$164,075 Over/(Under) -62.720/a $551,534 $237,010 -$314,523 -57.03% $107,500 $45,633 -$61,867 -57.55% $132,377 $56,607 -$75,770 -57.24% $644,115 $480,891 -$163,224 -25.34% $192,658 $80,219 -$112,439 -58.36% $213,194 $95,340 -$117,854 -55.28% $465,325 $217,542 -$247,782 -53.25% 1 $6,500 $2,574,823 $7,106 $1,317,894 $6061 -$1,256,929 9.33% -48.82% Total ' U Police - Sworn Officers Police - Dispatch & Clerical Volunteer Fire Non -Departmental Building Inspection Tota I Engineering Public Work Budget• d • $5,588,934 $2,643,598 -$2,945,336 -52.70% $838,457 $378,030 -$460,426 -54.91% $898,334 $274,536 -$623,799 -69.44% $23,956 $23,456 -$500 -2.09% $305,117 $158,076 -$147,041 -48.19% $7,654,7981 $3,477,6971-$4,177,102-54.57% 156,9231 $60 -61.61% ITota1 $3.095,0891 $1,528,3001-$1,566.789-50.62% Planning, Conservation & Development $448,115 1$207,093-$241,022-53.79% Total $448,1151 $207,093-$241,022-53.79% 'Capital Outlay -Operations Computer Replacements Mobile Devices Social Media Archive Police Vehicle Replacements Road Program Public Works Vehicle Replacements Contingency Trf to Comp Abs from GF Budget $18,000 Actual $9,085 Over/(Under) -$8,915 % Over/(Under) -49.53% $10,000 $2,331 -$7,669 -76.69% $5,200 $4,356 -$844 -16.23% $0 $89,859 $89,859 #DIV/0! $725,000 $35,126 -$689,874 -95.15% $0 $0 $0 #DIV/0! $83,000 $0 -$83,000 -100.00% $50,0001 $50,0001 $01 0.00% Total $891,200 $190,757 -$700,443 -78.60% Total Expenditures Budget Actual Over/(under) % Over/(under) BreakdownActual Cost ■General Government ■ Public Safety ❑Health & Human Services ■Public Works ■Culture, Recreation & Education ❑Conservation & Development ■ Capital Outlay -Operations '1 of 10 $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 �\o� P a`�o Je\o Qec era JF Q Oe O acN q} wad \0 1�e a G oyes (�a�`a ■Budget ■Actual 149 Total Revenues Total Expenditures 13,307,801 $13,089,020 17.614.942 $7.526.431 Total Surplus/(Deficit) $5,692,859 $5,562,589 $218,781 $14,000,000 $88,511 $12,000,000 $10,000,000 $8,000,000 $6,000,000 $130,270 $4,000,000 $2,000,000 $0 2022 2021 150 $11,446,330 $11,431,817 -$14,513 0.13 - • • - $2,216,872 $339,7561 -$1,877,116 -84.67% • '- $723,670 1 $228,3751 -$495,295 -68.44% • - • '- $335,000 1 $68,5171 -$266,483 79.55% • • •- • $602,248 1 $53,2191 -$549,029 -91.16% - •• •- • $246,250 $217 -$246,033 99.91% -• $196,675 $2,222 -$194,453 98.87% • • • $501,000 $0 -$501,000 -100.00% - •-•. $326,750 1 $01 -$326,750 -100.00% $16,594,795 1 $12,124,123 1 ($4,470,672)1-26.94% 94% ■ Intergovernmental ■ Licenses and Permits ■ Fines, Forfeits and Penalties ■ Public Charges for Services ■ Intergov. Charges for Services ■ Miscellaneous ■ Other Financing Sources ■ Interdepartmental 151 General Government Common Council/Mayor Finance & Administration Assessor Attorney Non -Departmental Municipal Court Building Maintenance Information Technology Bank Service Charges • e $261,620 $53,607 Over/(Under) -$208,014 Over/(Under) -79.51% $551,534 $122,330 -$429,204 -77.82% $107,500 $17,365 -$90,135 -83.85% $132,377 $28,832 -$103,545 -78.22% $644,115 $290,646 -$353,469 -54.88% $192,658 $45,031 -$147,627 -76.63% $213,1941 $46,656 -$166,538 -78.120% $465,3251 $125,899 -$339,426 -72.94% 1 $6,5001 $2,574,823 $1,340 $731,706 -$5,160 -$1,843,117 -79.38% -71.58% Total Police - Sworn Officers Police - Dispatch & Clerical Volunteer Fire Non -Departmental Building Inspection Tota I Engineering Public Work Budget• de • $5,588,934 $1,344,068 -$4,244,866 -75.95% $838,457 $185,877 -$652,579 -77.83% $898,334 $137,013 -$761,321 -84.75% $23,956 $18,576 -$5,380 -22.46% $305,117 $69,686 -$235,432 -77.16% $7,654,7981 $1,755,2201-$5,899,578-77.07% 156,923� $31,407I -$125,5161-79.99% CI'iR 1 FiFi G7'i1 1 FiQ -47 7nFi QQ7 -75 11 0/ ITota1 $3.095.0891 $762,5761 42.332.513-75.36% Planning, Conservation & Development $448,1151 $109,260-$338,854-75.62% Total $448,1151 $109,260-$338,854-75.62% 'Capital Outlay -Operations Computer Replacements Mobile Devices Social Media Archive Police Vehicle Replacements Road Program Public Works Vehicle Replacements Contingency Trf to Comp Abs from GF Budget $18,000 Actual $3,952 Over/(Under) -$14,048 % Over/(Under) -78.04% $10,000 $610 -$9,390 -93.90% $5,200 $4,092 -$1,108 -21.31% $0 $6,317 $6,317 #DIV/0! $725,000 $23,714 -$701,286 -96.73% $0 $0 $0 #DIV/0! $83,000 $0 -$83,000 -100.00% 1 $50,000 $891,200 $0 $38,685 -$50,000 -$852,515 100.00% -95.66% Total Total Expenditures Budget Actual Over/(under) % Over/(under) �KMOEMEEM IKEHEEO=�M- ■General Government ■ Public Safety ❑Health & Human Services ®Public Works WCulture, Recreation & Education ❑Conservation & Development ■ Capital Outlay -Operations 3% . ,,, $8,000,000 $7,000,000 $6,000,000 $ 5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 �\o� P a`�o JeN Qec era JF Q Oe O acN q} wad ac�o� \0 �e a G oyes 0a�`a ■Budget ■Actual 152 Total Revenues $12,124,123 $11,793,578 $330,545 Total Expenditures $3,809,900 $3,984,099 ($174,199 Tota Surplus/(Deficit) $7,809,479 $504,744 $14,000,000 $12,000,000 $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $0 2022 2021 153