Comprehensive Annual Financial Report - District #112 · 2016-07-12 · The Comprehensive Annual...

Comprehensive Annual Financial Report

Eastern Carver County SchoolsIndependent School District No. 112

Chaska, Minnesota

Year ended June 30, 2015

COMPREHENSIVE ANNUAL

FINANCIAL REPORT

EASTERN CARVER COUNTY SCHOOLS INDEPENDENT SCHOOL DISTRICT NO. 112

CHASKA, MINNESOTA

YEAR ENDED JUNE 30, 2015

PREPARED BY THE FINANCE DEPARTMENT

DEEDEE KAHRING

DIRECTOR OF FINANCE AND OPERATIONS

PAM JENSEN FINANCE MANAGER

INDEPENDENT SCHOOL DISTRICT NO. 112 EASTERN CARVER COUNTY SCHOOLS

TABLE OF CONTENTS YEAR ENDED JUNE 30, 2015

INTRODUCTORY SECTION

LETTER OF TRANSMITTAL 1

SCHOOL BOARD AND ADMINISTRATION 10

ORGANIZATIONAL CHART 11

CERTIFICATE OF EXCELLENCE IN FINANCIAL REPORTING 12

FINANCIAL SECTION

INDEPENDENT AUDITORS’ REPORT 13

REQUIRED SUPPLEMENTARY INFORMATION

MANAGEMENT’S DISCUSSION AND ANALYSIS 16

BASIC FINANCIAL STATEMENTS

STATEMENT OF NET POSITION 30

STATEMENT OF ACTIVITIES 31

BALANCE SHEET – GOVERNMENTAL FUNDS 32

RECONCILIATION OF THE BALANCE SHEET – GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION 33

STATEMENT OF REVENUES, EXPENDITURES AND CHANGE IN FUND BALANCE – GOVERNMENTAL FUNDS 34

RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGE IN FUND BALANCE – GOVERNMENTAL FUNDS TO STATEMENT OF ACTIVITIES 35

STATEMENT OF REVENUES, EXPENDITURES AND CHANGE IN FUND BALANCE – BUDGET AND ACTUAL – GENERAL FUND 36

STATEMENT OF REVENUES, EXPENDITURES AND CHANGE IN FUND BALANCE – BUDGET AND ACTUAL – FOOD SERVICE FUND 37

STATEMENT OF REVENUES, EXPENDITURES AND CHANGE IN FUND BALANCE – BUDGET AND ACTUAL – COMMUNITY SERVICE FUND 38

STATEMENT OF NET POSITION – PROPRIETARY FUND – INTERNAL SERVICE FUND 39

STATEMENT OF REVENUES, EXPENSES AND CHANGE IN NET POSITION – PROPRIETARY FUND – INTERNAL SERVICE FUND 40

STATEMENT OF CASH FLOWS – PROPRIETARY FUND – INTERNAL SERVICE FUND 41

STATEMENT OF FIDUCIARY NET POSITION 42

STATEMENT OF CHANGES IN FIDUCIARY NET POSITION 42

NOTES TO BASIC FINANCIAL STATEMENTS 43


TABLE OF CONTENTS (CONTINUED) YEAR ENDED JUNE 30, 2015

REQUIRED SUPPLEMENTAL INFORMATION

SCHEDULE OF FUNDING PROGRESS FOR OTHER POSTEMPLOYMENT BENEFITS 80

SCHEDULE OF EMPLOYER CONTRIBUTIONS FOR OTHER POSTEMPLOYMENT BENEFITS 80

TRA SCHEDULE OF THE DISTRICT’S PROPORTIONATE SHARE OF THE NET PENSION LIABILITY 81

TRA SCHEDULE OF DISTRICT CONTRIBUTIONS 82

PERA SCHEDULE OF THE DISTRICT’S PROPORTIONATE SHARE OF THE NET PENSION LIABILITY 83

PERA SCHEDULE OF DISTRICT CONTRIBUTIONS 84

SUPPLEMENTAL INFORMATION

GENERAL FUND

BALANCE SHEET 85

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGE IN FUND BALANCE – BUDGET AND ACTUAL 86

FOOD SERVICE FUND

BALANCE SHEET 89


COMMUNITY SERVICE FUND

BALANCE SHEET 91


CAPITAL PROJECTS – BUILDING CONSTRUCTION FUND

BALANCE SHEET 93


DEBT SERVICE FUND

BALANCE SHEET 95


UNIFORM FINANCIAL ACCOUNTING AND REPORTING STANDARDS COMPLIANCE TABLE 97


TABLE OF CONTENTS (CONTINUED) YEAR ENDED JUNE 30, 2015

STATISTICAL SECTION (UNAUDITED)

NET POSITION BY COMPONENT 99

CHANGES IN NET POSITION 101

FUND BALANCES, GOVERNMENTAL FUNDS 103

CHANGES IN FUND BALANCES, GOVERNMENTAL FUNDS 105

ASSESSED AND ACTUAL VALUE OF TAXABLE PROPERTY 107

DIRECT AND OVERLAPPING PROPERTY TAX RATES 108

PRINCIPAL PROPERTY TAXPAYERS 110

PROPERTY TAX LEVIES AND COLLECTIONS 111

OUTSTANDING DEBT BY TYPE 113

COMPUTATION OF DIRECT AND OVERLAPPING BONDED DEBT 114

LEGAL DEBT MARGIN INFORMATION 115

DEMOGRAPHIC AND ECONOMIC STATISTICS 117

PRINCIPAL EMPLOYERS 118

FULL-TIME EQUIVALENT DISTRICT EMPLOYEES BY TYPE 119

OPERATING STATISTICS 120

SCHOOL BUILDING INFORMATION 121

STANDARDIZED TESTING 123

SUMMARY OF MEALS SERVED 124

SCHEDULE OF INSURANCE COVERAGE 125

INTRODUCTORY SECTION

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November 6, 2015 To: Citizens of the School District Board of Education Employees of the School District INTRODUCTION The Comprehensive Annual Financial Report (CAFR) of Independent School District No. 112, Chaska, Minnesota (the District) for the fiscal year ended June 30, 2015 is presented for your information and review. The CAFR is intended to fully disclose the financial position of the District and the results of operations for the fiscal year. The District administration accepts total responsibility for the accuracy, completeness, and fairness in presentation of the enclosed financial reports. Questions and comments are solicited and welcome. REPORT FORMAT This CAFR is presented in three main sections: introductory, financial, and statistical. In addition to information contained in this letter, the introductory section includes the District’s organizational chart, and a list of the District’s principal officials. The financial section includes the independent auditor’s report, Management’s Discussion and Analysis (MD&A), basic financial statements, notes to basic financial statements, and detailed combining and individual statements and schedules. The statistical section includes selected financial and general information presented on a multi-year comparative basis. Where possible, historical data is presented for a 10-year period. Accounting principles generally accepted in the United States of America require management to provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of an MD&A. This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The MD&A of the District can be found immediately following the report of the independent auditors.

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DISTRICT ORGANIZATION Eastern Carver County Schools serves the cities of Carver, Chaska, Chanhassen and Victoria. This suburban school district ranks among the best in Minnesota by a number of independent analyses. Its students consistently perform above state averages on state tests and its graduates go on to 2-year, 4-year and elite colleges. The 2015 Washington Post “Challenge Index” included Chaska and Chanhassen high schools in the top 20 schools in Minnesota because of the number of students succeeding in Advanced Placement college-preparation courses. Of particular importance is that more students are taking Advanced Placement courses, at the same time achievement from those rigorous classes is increasing. Several elementary and middle schools have been recognized by state organizations for excellence in educational leadership. Since 2006, district teachers and administration have been redesigning curriculum to prepare students to be “world ready” and to recommit the district to higher levels of student academic achievement and success. That work has laid the foundation for the district’s new strategic plan for Exceptional, Personalized Learning started in 2014-15. Personalized learning places the student at the center of the learning process. Differentiated experiences, resources, digital tools, and course pacing are based on student need and readiness. Exceptional, Personalized Learning is a disruptive innovation to reimagine school and lead the charge to make learning more engaging, relevant, and personalized. It reconsiders many aspects of education from the ground-up including the layout and environment of learning spaces, expanding employee expectations and providing learning on a 24/7 basis. The district gave more than 40 tours during the 2014-15 school year to education leaders from around the country who wanted to see personalized learning first-hand. The District enrolled 9,326 students from a population of more than 51,600 residents residing in an 84.16 square mile area. During 2014-2015, the District operated 16 buildings: 2 traditional high schools, an arts-focused alternative high school, 3 middle schools, 7 elementary schools, a Spanish immersion elementary school, a kindergarten center, a transition center for young adult special education students, a bus garage and the District Education Center. Housing starts were up substantially in 2014 and 2015. In 2015, Eastern Carver County Schools proposed a November referendum for a new elementary school, classroom additions, physical education facilities, deferred maintenance and additional operating revenue. District buildings have an average age of 24.25 years and comprise of over 2.0 million square feet in size. The District is organized by grade level with elementary schools serving students in kindergarten through grade 5, middle schools serving grades 6-8, and the high school serving grades 9-12. The District is guided by its mission and vision: Mission District 112 will prepare learners to achieve their personal best. Vision District 112 is dedicated to the preparation of life-long learners so each may achieve personal success and contribute to family and community.

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REPORTING ENTITY Independent School District No. 112, also known as Eastern Carver County Schools, is an instrumentality of the State of Minnesota established to function as an educational institution. The elected School Board is responsible for legislative and fiscal control of Eastern Carver County Schools. The Superintendent is appointed by the Board and is responsible for administrative control of the District. The District’s financial statements include all funds, departments, agencies, boards, commissions, and other component units for which the District is considered to be financially accountable. Component units are legally separate entities for which the District (primary government) is financially accountable, or for which the exclusion of the component unit would render the financial statements of the primary government misleading. The criteria used to determine if the primary government is financially accountable for a component unit included whether or not the primary government appoints the voting majority of the potential component unit’s governing body, is able to impose its will on the potential component unit, is in a relationship of financial benefit or burden with the potential component unit, or is fiscally depended upon by the potential component unit. Based on these criteria, there are no organizations considered to be component units of the District. FINANCIAL STATEMENTS The financial statements contained in this report disclose the financial position of the District as of June 30, 2015, and the financial operations for the fiscal year then ended. The District’s financial records and reports are maintained and prepared on a modified or full accrual basis of accounting in accordance with the Uniform Financial Accounting and Reporting System for Minnesota School Districts as well as the standards of the Governmental Accounting Standards Board (GASB) and the American Institute of Certified Public Accountants. These records are audited annually by an independent certified public accountant as required by Minnesota law. The accounting firm of CliftonLarsonAllen LLP performed the audit for the 2014-15 fiscal year. Their report is included in the financial section of this report. The auditor has given an unqualified opinion on the District’s financial statements. An unqualified opinion means that, in the judgment of the auditor, the financial statements present fairly, in all material respects, the financial position of the District and the results of its operations for the year then ended, in conformity with accounting principles generally accepted in the United States of America. FEDERAL SINGLE AUDIT AND STATE COMPLIANCE AUDIT The independent audit of the financial statements of the District is part of a broader, federally mandated Single Audit designed to meet the special needs of federal grantor agencies. The standards governing Single Audit engagements require the independent auditor to report not only on the fair presentation of the financial statements, but also on the audited District’s internal controls and compliance with legal requirements, with special emphasis on internal controls and legal requirements involving the administration of federal awards. The District is also required to undergo an annual Minnesota State Legal Compliance Audit under Minnesota Statute §6.65. These reports are available in a separate document.

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ACCOUNTING AND BUDGETING A major thrust of the District’s accounting system is to provide adequate internal accounting controls. These controls are designed to provide reasonable, but not absolute, assurance regarding: (1) the safeguarding of assets against loss from unauthorized use or disposition, and (2) the reliability of financial records for preparing financial statements and maintaining accountability for assets. The concept of reasonable assurance recognizes that the cost of internal controls should not exceed the benefits likely to be derived, and that the evaluation of the cost and benefits requires estimates and judgments by management. All internal control evaluations occur within the above framework. We believe that the District’s internal accounting controls adequately safeguard assets and provide reasonable assurance for proper recording of financial transactions. Budgetary control is maintained through an annual budget adopted by the School Board for all funds as required by state statutes and School Board policy. The adopted budget serves as the authorizing document for all expenditures, although the School Board approves all checks issued on a monthly basis. The Superintendent and Director of Finance & Operations are authorized to make financial commitments within budgetary guidelines up to $50,000. Additional expenditure controls are maintained by the Business Office in accordance with state statutes, i.e., the District cannot incur a negative unassigned balance in the General Fund in excess of 2.5% of the preceding year’s expenditures. The budget is published annually in the District’s legal newspaper to inform residents of the District’s financial position and operating plan for the fiscal year. The District has established a system of internal controls that provide reasonable assurance that assets are safeguarded from misuse or losses. Encumbrances, or open purchase orders, are used as a budgetary control tool and are charged against line item budgets when issued. Specific expenditure, revenue and detail transaction reports are available online or in hard copy for individuals with budget responsibilities. The reports can be viewed and printed either in the Business Office or in the administrative office in each building or department. Ongoing budget monitoring by program managers helps to ensure budget integrity and provides an opportunity to detect material budget variances before the end of the fiscal year. The budget is adopted by the School Board in the spring of each year for the following fiscal year beginning July 1. If needed, the budget is revised based upon enrollment changes, effects of negotiated employee contracts, or other new information impacting revenues or expenditures in the fall, winter and spring. The revised budget is presented to the School Board for approval. To accurately track and report financial activities with a focus on site-based accounting, approximately 16,000 active accounts have been defined in the District’s chart of accounts. SIGNIFICANT EVENTS The District’s finances are largely dependent on student enrollment. (On average, State funding is about $6,000 per student.) Eastern Carver County has experienced increasing enrollment from FY06 to FY15. In that decade, 677 students joined the district, an increase of 7.8%. In the most recent 5 years, the annual increase averaged 2.2%.

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To accommodate increasing enrollment during this time period, Victoria Elementary School was opened and Chaska High School underwent a significant expansion in 2005. A second high school – Chanhassen High School was opened in 2009. On November 3, 2015, Citizens of Eastern Carver County Schools will be voting on a bond referendum for a new elementary school, land for current and future growth and additions at Clover Ridge and Victoria Elementary Schools which will provide space for 1,020 additional elementary students. The bond request includes a swimming pool and a multipurpose domed facility necessary space for physical education and personal wellness and to support co-curricular needs at both high schools. As the economy and residential housing construction continues to grow in the district, cities in the district issued 400 new housing permits in calendar year 2015. Local city officials estimate new construction at or above the number of permits issued in 2015. FINANCIAL PROSPECTS FOR FUTURE YEARS The residents of the District have repeatedly supported efforts to increase revenue through levy referenda. Since 1997, six operating referenda were brought to the voters and all were passed. The district has two existing operating referenda which provide approximately $12.4 million in operating revenue. One levy referendum was renewed in 2013, another expires in 2017. In addition to the bond referendum, voters will be asked to consider an additional $450 per pupil referendum for renewal on November 3, 2015. If approved, this referendum will provide approximately $4.8 million in additional revenue. The funds will be used to: continue with the district’s goal of exceptional, personalized learning; provide funds to operate the new facilities proposed in the bond referendum; and to continue to provide financial stability of the district. The district received approval in 2013 to levy 4.947% of the district’s net tax capacity annually for six years to improve technology in schools and school security. In 2014-15 this levy provided $2.45 million for secured entrances and technology. With the addition of Chanhassen High School in 2009, Eastern Carver County Schools became eligible for Alternative Facility funding which provide funds for deferred maintenance, ADA improvements and health and safety projects. In April 2012, the School Board issued $10 million of Alternative Facility Bonds to fund school building improvements. The District refunded its 2002A and 2004A bonds during FY 2011-12, its 2007A bonds in March 2013, its 2005A G.O. School Building Refunding Bonds and 2008A G.O. OPEB taxable bonds in October 2014. The refunding of these bonds provided over $10.7 million in present value savings. ECONOMIC FACTORS The District is located in eastern Carver County, which is part of the seven-county metro area of Minneapolis/St. Paul. Residents are typically employed in professional vocations within the metropolitan area. The taxable market value of property within the District continues to bounce back from the economic downturn. Taxable market values increased by $735 million from 2013 to 2015 due to new construction and valuation increases. The communities of Carver, Chanhassen, Chaska and Victoria continue to develop areas for residential expansion and growth. Commercial development and redevelopment is clearly evident throughout all four communities.

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In recent years, the State of Minnesota’s education funding has been very unpredictable. The Governor and Legislature enacted a number of measures to decrease spending to balance the state budget through fiscal year 2013. The impact to K-12 education included delaying State aid payments to school districts and a property tax shift. The state’s forecast of revenues and expenditures projected a positive unrestricted general fund balance and were able to repay school districts the remaining portion of tax shift in fiscal year 2014. This repayment was not additional revenue but provided an improvement in the district’s cash flow. The fund balance of the General Fund has been healthy enough to withstand both the State aid payment delay and property tax shift; consequently, the District has not had to borrow money through the entirety of these payment delays and tax shifts, avoiding short-term interest and issuance costs. The 2015 Legislative session increased K-12 funding in Minnesota for the biennium, including a 2.0% increase in the general education formula allowance. COMMUNITY Over the last ten years, the landscape of Eastern Carver County Schools has changed from rural to suburban. According to the 2010 census, Carver County’s population has 91,042 residents which make it the 11th largest county in Minnesota. According to the US Census Bureau, population has grown 5% to an estimated 95,562 residents since 2010. The majority of the population is in the eastern part of the county, including the cities of Chaska and Chanhassen. Residential development will continue in Carver, Chanhassen, Chaska and Victoria. Combined, these four cities have seen an 8% increase in population growth since 2010. In 2011 and 2013, the City of Chanhassen was selected as Money Magazine’s top 10 places to live in the U.S. Carver County is one of the fastest growing counties in Minnesota and the Twin Cities area. With a forecasted population of 161,240 people by 2040, Chanhassen and Chaska will have very little developable land remaining. Development will move further west and the cities of Carver & Victoria are expected to grow and look similar to the way Chaska and Chanhassen are today. Carver County’s availability of land, abundant lakes, woods and open space are attractive features for growing communities. The significant growth will increase the need for public investment in infrastructure. This will include residential and business development by the private sector and investment in schools, parks and libraries. With growth, the communities will see a need for more workers to meet the expanding population. In 2012, Carver County was ranked second in Minnesota for per capita person income of $60,458 which is well above both the state and national average.

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Transportation continues to expand to communities within Eastern Carver County School District. The Highway 212 corridor is seen as the “gateway” to Carver County communities. In 2014 construction began on Highways 101 and 61 Reconnection Project. This road project will construct a four-lane bridge over a floodplain, add a bike trail and make improvements to an interchange. The Reconnection Project will improve traffic flow for Carver County. Southwest Transit provides express bussing services to Minneapolis and St. Paul and has commuter stations in both Chanhassen and Chaska with plans for the Carver station to open in 2015. The second phase of Ridgeview’s Two Twelve Medical Center was completed in 2014 making the facility a healthcare destination offering high-quality care in an outpatient setting. The facility is located on Highways 212 and 41and has provided new jobs to the community. Carverlink, the Carver County fiber optic network, which was launched in 2013, is nearly 89 miles long, running through all 11 cities in the county. The link provides improved network connects for the County Departments, cities, school districts and other community partners. Carver County recently added 7 miles of trails including 5.5 miles of the Dakota Rail Regional Trail which completes the 44 mile trail which extends from Wayzata to Hutchinson. Carver County continues to attract commercial and industrial endeavors to the area. With the growth in residential housing developments infrastructure will continue to grow providing retail, commercial and industrial development. All four cities within Eastern Carver County have community development plans. An example of development planning is the City of Chaska has approximately 200 acres for future commercial and industrial development along Highway 212 with projections of future 8,100-10,000 jobs. With almost 1,400 total staff, Eastern Carver County Schools is one of the major employers in the area. Rosemount, Inc., a national organization, employs over 1,350 employees. INITIATIVES In 2013-14, the district prepared a strategic plan for Exceptional, Personalized Learning. The district has been on a steady mission to align curriculum and learning experiences with the heightened expectations of a more global, interconnected, and tech-savvy world. The new strategic plan articulates expectations called deliverables for district officials and for schools to accomplish over the next 3-5 years. These deliverables are the district’s benchmarks of progress and a means to assure personalized learning is accessible for all students. Personalized learning is not a buzz word for Eastern Carver County Schools. It reflects a preferred educational environment where students are at the center of the learning process. Artificial boundaries of education based on age or grade level are replaced by students demonstrating mastery of standards as their educational journey unfolds. The role of teacher is transformed from one who dispenses knowledge to one who is a content and learning expert. The teacher assists, coaches, and connects appropriate challenges with each learner’s personal path of discovery. The stakes for accountability are higher than ever because students have to demonstrate mastery of content and a readiness to move to the next benchmark.

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Challenging students at their personal level is a benefit to all learners. Encouraging student voice, choice, and true engagement multiplies the ways students can learn: from online tutorials, to teacher-led seminars, to working with peers. The antiquated factory model in which a lesson is taught in only one way, at one speed lacks relevance and authenticity for digital natives seeking flexibility, choice, opportunity, and meaning. The district’s two-way, dual-language Spanish/English immersion school, La Academia, continues its growth by adding 3rd grade classrooms in the fall of 2014. The program has proven to be a popular option for district families and is recognized as the best way to acquire a second language for both native English and native Spanish speakers. Last year, the first class of Kinder Academy started. This is a program for “young” 5-year old students to spend one or two years in kindergarten before “graduating” to first grade. Demand was sufficient to add another classroom of Kinder Academy in the fall of 2015. This year, the district began offering all-day kindergarten in accordance with a new state law and new funding. The district moved kindergarten from the Kindergarten Center back into neighborhood elementary schools with the exception of one school that was too crowded. This required 13 classrooms and schools repurposed unused space to accommodate new kindergarten classrooms. During the past school year, two district task forces looking at space and facility needs concluded 18 months of work. It is estimated that 400 to 700 new elementary students will join the district over the next four years and that growth will continue through subsequent years. The task forces summarized their findings as three options: cram, shuffle or build. Rather than cram students into the limited space available or shuffle grade levels from one school into a school with unused space, the task forces recommended that the district build to meet the needs of expected housing growth. They suggested the school board put a referendum before voters in 2015 for a new elementary school and to build 12 additional classrooms onto existing elementary schools. The school board reviewed a number of facility needs during the fall of 2014 and prepared a decision in the early part of 2015. On November 3, 2015 voters approved a $66.7 million bond referendum to:

purchase land for a new elementary and a future elementary school build a 720 student elementary in Carver add classroom spaces to Clover Ridge and Victoria Elementary Schools construct a multipurpose dome facility at Chaska Middle School East add a 8-lane swimming pool to Pioneer Ridge Middle School provide funds for deferred maintenance

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INDEPENDENT AUDIT AND CERTIFICATE OF EXCELLENCE State statutes require an annual audit by independent certified public accountants. The accounting firm of CliftonLarsonAllen LLP was selected by the District Board to conduct the annual audit.

This report has been prepared following the guidelines provided by the Association of School Business Officials International (ASBO) for their Certificate of Excellence in Financial Reporting Program. Achieving recognition by this program is a goal of the District’s Business Office and provides a clear indication of the District’s high standards for financial reporting. The District received ASBO’s Certificate of Excellence in Financial Reporting for its 2010-2011, 2011-2012, 2012-2013 and 2013-2014 Comprehensive Annual Financial Report (CAFR). The District plans to submit the 2014-2015 CAFR to the ASBO Certificate Program for consideration. ACKNOWLEDGMENTS The time, effort, and attention that go into the timely preparation of a CAFR require the commitment and cooperation of many people. Special appreciation must be extended to the entire Finance Department staff for their dedication and to the School Board for their encouragement and leadership. Sincerely,

Pam Jensen DeeDee Kahring Dr. James Bauck Finance Manager Director of Finance & Operations Superintendent


SCHOOL BOARD AND ADMINISTRATION JUNE 30, 2015

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SCHOOL BOARD

NAME

TERM ON BOARD EXPIRES

BOARD POSITION

Lisa Anderson January 5, 2019 Chairperson Tim Klein January 5, 2019 Vice Chairperson/Clerk Jeff Ross, Ph.D. January 5, 2017 Treasurer Fred Berg January 5, 2019 Director Josie Colleran January 2, 2019 Director Amy Logue January 2, 2017 Director Heather Nelson January 2, 2017 Director

ADMINISTRATION

Dr. James Bauck Superintendent DeeDee Kahring Director of Finance & Operations Pamela Jensen Finance Manager Clint Christopher Associate Superintendent Dr. James O’Connell Director of Administrative Services Dr. Laura Pingry-Kile Director of Specialized Services Diane Bourassa Brett Johnson Jackie Johnston

Director of Information Technology Director of Communications & Community Relations Director of Community Education

Donna Quaas Accountant


ORGANIZATIONAL CHART JUNE 30, 2015

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School Board

Lisa Anderson, Tim Klein, Jeff Ross, Ph.D., Fred Berg, Josie Colleran, Amy Logue, Heather Nelson

Superintendent

Dr. James M. Bauck

Administrative Assistant

Caroline Long

Director of Community Education

Jackie Johnston

Director of Finance & Operations

DeeDee Kahring

Director of Information

Systems

Diane Bourassa

Associate Superintendent

Clint Christopher

Director of Administrative

Services

Dr. James O’Connell

Director of Communications &

Community Relations

Brett Johnson

Director of Specialized

Services

Dr. Laura Pingry-Kile


CERTIFICATE OF EXCELLENCE IN FINANCIAL REPORTING JUNE 30, 2015

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FINANCIAL SECTION

CliftonLarsonAllen LLPCLAconnect.com

(13) An independent member of Nexia International

INDEPENDENT AUDITORS’ REPORT

School Board Eastern Carver County Schools Independent School District No. 112 Chaska, Minnesota Report on the Financial Statements

We have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of Independent School District No. 112, as of and for the year ended June 30, 2015, and the related notes to the financial statements, which collectively comprise Independent School District No. 112’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors’ Responsibility

Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

School Board Eastern Carver County Schools Independent School District No. 112

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Opinions

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information of Independent School District No. 112 as of June 30, 2015, and the respective changes in financial position the budgetary comparison for General, Food Service and Community Service funds and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Report on Prior Year Summarized Information

We have previously audited Independent School District No. 112’s 2014 financial statements of the governmental activities, each major fund and the aggregate remaining fund information, and we have expressed an unmodified opinion on those audited financial statements in our report dated September 30, 2014. In our opinion, the summarized comparative information presented herein as of and for the year ended June 30, 2014 is consistent, in all material respects, with the audited financial statements from which it has been derived. Emphasis of a Matter

During the fiscal year ended June 30, 2015, the District adopted GASB Statement No. 68, Accounting and Financial Reporting for Pensions, and the related GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date-an amendment of GASB Statement No. 68. As a result of the implementation of these standards, the District reported a restatement for the change in accounting principle (see Note 1). Our auditors’ opinion was not modified with respect to the restatement. Other Matters

Required Supplementary Information

Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, schedule of funding progress for other postemployment benefits, schedules of district’s proportionate share of net pension liability and schedules of district’s pension contributions, as listed in the table of contents, be presented to supplement the basic financial statements. Such information, 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.

School Board Eastern Carver County Schools Independent School District No. 112

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Other Information

Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Independent School District No. 112’s basic financial statements. The introductory section, the individual fund financial statements, the uniform financial accounting and reporting standards compliance table and the statistical section are presented for purposes of additional analysis and are not a required part of the basic financial statements. The individual fund financial statements and the uniform financial accounting and reporting standards compliance table are the responsibility of management and were derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the individual fund financial statements and the uniform financial accounting and reporting standards compliance table are fairly stated, in all material respects, in relation to the basic financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated November 6, 2015, on our consideration of Independent School District No. 112's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the result of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Independent School District No. 112’s internal control over financial reporting and compliance.

CliftonLarsonAllen LLP

Minneapolis, Minnesota November 6, 2015

REQUIRED SUPPLEMENTARY INFORMATION


MANAGEMENT’S DISCUSSION AND ANALYSIS YEAR ENDED JUNE 30, 2015

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This section of Independent School District No. 112’s annual financial report presents its discussion and analysis of the District’s financial performance during the fiscal year ending June 30, 2015. Please read it in conjunction with the district’s financial statements, which immediately follow this letter. The Management’s Discussion and Analysis (MD&A) is an element of Required Supplementary Information specified in the Government Accounting Standard Board’s (GASB) Statement No. 34 – Basic Financial Statements – and Management’s Discussion and Analysis – for State and Local Governments issued in June 1999. Financial Highlights Key financial highlights for the 2014-2015 fiscal year include the following:

During fiscal year ended June 30, 2015, the District adopted GASB Statement No. 68, Accounting and Financial Reporting for Pensions, and related Statement No. 71. As a result, the District’s net position as of June 30, 2014 has been restated to reflect the recognition of the School’s proportionate share of the Public Employees’ Retirement Association of Minnesota General Employees’ Retirement Fund’s net pension liability as well as their portion of the Teachers’ Retirement Association’s Coordinated and Basic Plan net pension liability (see Note 12 in Notes to Basic Financial Statements). The District’s liabilities exceeded its assets at June 30, 2015 for a net position of $(4,867,846). The District had $3,114,036 of net position that was available to meet its ongoing obligations, but restricted for specific uses.

The District’s total net position decreased by $59,460,561 during the fiscal year ended June 30, 2015 due to recognition of the proportionate share of PERA’s and TRA’s net pension liability, as discussed above.

At June 30, 2015, the District’s governmental funds reported a combined ending fund balance of $90,013,954 a decrease of $4,639,401 from the prior year. The decrease is primarily due to the spend-down of the Alternative Facility Bond proceeds for deferred maintenance projects. Approximately 11% of this total amount, $9,815,081, is unassigned fund balance and $68,200,345 is held for refunding the 2007A General Obligation Bonds which were used to build Chanhassen High School. The proceeds of this refunding which occurred in 2013, were placed in an escrow account and will be used to pay off the remaining maturities on February 1, 2017.

The District’s General Fund, its primary operating fund, closed the fiscal year with an unassigned fund balance of $9,815,081, compared to an unassigned fund balance of $9,884,913 as of June 30, 2014. With a planned spend-down of fund balance, the unassigned fund balance is 9.8% of total General Fund expenditures compared to 10.4% in fiscal year 2014.

In FY 2014-15 the District continued participation in the Alternative Compensation (Q-Comp) which is comprised of both aid and levy. Q-Comp is a voluntary program that that allows local Districts and teachers to design and collectively bargain a plan that contains five components: career ladder/advancement options, job-embedded professional development, teacher evaluation, performance pay and an alternative salary schedule. The unspent funds are held in an assigned fund balance.



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In July of 2013, the District moved to a self-insured medical plan. An internal service fund was created to record the revenue and expenditures of the plan. The self-insured medical plan met the projected claims experience and has a remaining balance of $1,911,764. Our self-insured dental plan has remaining balance of $324,134.

Over the last couple of years, better than expected earnings on the OPEB irrevocable trust brought it to a level that now meets or exceeds the financial obligations of the District.

Overview of the Financial Statements

The financial section of the annual report consists of four parts: Independent Auditors’ Report, Required Supplementary Information which includes MD&A (this section), the basic financial statements, single and supplemental information. The basic financial statements include several statements that present different views of the District:

The district-wide financial statements, including the Statement of Net Position and the Statement of Activities, provide both short-term and long-term information about the District’s overall financial status.

The remaining statements are fund financial statements that focus on individual parts of the District, reporting the District’s operations in more detail than the district-wide statements.

Governmental funds statements tell how basic services such as regular and special education were financed in the short term as well as what remains for future spending.

Proprietary funds statements offer short- and long-term financial information about the activities the District operates like businesses.

Fiduciary funds statements provide information about the financial relationships in which the District acts solely as a trustee or agent for the benefit of others to whom the resources belong.

The financial statements also include notes that explain some of the information in the statements and provide more detailed data. Government-Wide Statements

The government-wide statements report information about the District as a whole using accounting methods similar to those used by private-sector companies. The statement of net position includes all of the District’s assets, deferred outflows of resources, liabilities and deferred inflows of resources. All of the current year’s revenues and expenses are accounted for in the statement of activities regardless of when cash is received or paid. The two government-wide statements report the District’s net position and how they have changed. Net position – the difference between the District’s assets, deferred outflows of resources and liabilities, and deferred inflows of resources – is one way to measure the District’s financial health or position.

Over time, increases or decreases in the District’s net position are an indicator of whether its financial position is improving or deteriorating, respectively.

To assess the overall health of the District you need to consider additional non-financial factors such as changes in the District’s property tax base and the condition of school buildings and other facilities.



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In the government-wide financial statements the District’s activities are shown in one category:

Governmental Activities – Most of the District’s basic services are included here, such as regular and special education, transportation, administration, food services, and community education. Property taxes and state aids finance most of these activities.

Fund Financial Statements

The fund financial statements provide more detailed information about the District’s funds – focusing on its most significant or “major” funds – not the District as a whole. Funds are accounting devices the District uses to keep track of specific sources of funding and spending on particular programs:

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

The District may establish other funds to control and manage money for particular purposes (e.g., repaying its long-term debts) or to show that it is properly using certain revenues (e.g., federal grants).

The District has three kinds of funds:

Governmental Funds – Most of the District’s basic services are included in governmental funds, which generally focus on (1) how cash and other financial assets that can readily be converted to cash flow in and out and (2) the balances left at year-end that are available for spending. Consequently, the governmental funds statements provide a detailed short-term view that helps to determine whether there are more or fewer financial resources that can be spent in the near future to finance the District’s programs. Because this information does not encompass the additional long-term focus of the government-wide statements, we provide additional information at the bottom of the governmental funds statements to explain the relationship (or differences) between them.

Proprietary Fund – The District maintains one type of proprietary fund. The Internal Service Fund is used as an accounting device to accumulate and allocate costs internally among the District’s various functions. The District uses its Internal Service Fund to account for its dental and health self-insurance programs. These services have been included within the governmental activities in the government-wide financial statements.

Fiduciary Funds – The District is the trustee, or fiduciary, for assets that belong to others. The District is responsible for ensuring that the assets reported in these funds are used only for their intended purposes and by those to whom the assets belong. All of the District’s fiduciary activities are reported in a separate statement of fiduciary net position and a statement of changes in fiduciary net position. We exclude these activities from the government-wide financial and governmental fund statements because the District cannot use these assets to finance its operations.



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FINANCIAL ANALYSIS OF THE DISTRICT AS A WHOLE

Net Position

The District’s combined net position was $(4,867,846) on June 30, 2015. (see Table A-1). During fiscal year ended June 30, 2015, the District adopted GASB Statement No. 68, Accounting and Financial Reporting for Pensions, and related Statement No. 71. As a result, the District’s net position as of June 30, 2014 has been restated to $(14,482,548) (see Note 12 in Notes to Basic Financial Statements). The District’s assets exceeded its liabilities at June 30, 2015 improving our net position to $(4,798,193). The District had $3,114,036 of net position that was available to meet its ongoing obligations, but restricted for specific uses. A large part of the District’s net position is the investment in capital assets (land, buildings and equipment) less depreciation and the related debt outstanding that was used to acquire the assets. The District uses the capital assets to provide educational services to students. These are not capital assets available for future spending. Even though the District’s investment in capital assets is reported net of the related debt, the resources needed to repay this debt must be provided from other sources because the capital assets cannot be used to liquidate these liabilities.

Percentage2015 2014 Change

Current and Other Assets 148,602,569$ 149,655,244$ (0.7)%Capital and Non-Current Assets 193,710,841 195,229,506 (0.8)

Total Assets 342,313,410 344,884,750 (0.7)

Deferred Outflows 13,526,645 277,595 4772.8

Current Liabilities 31,301,521 31,412,114 (0.4)Long-Term Liabilities 271,258,386 222,269,371 22.0

Total Liabilities 302,559,907 253,681,485 19.3

Deferred Inflows 58,147,994 36,888,145 57.6

Net Position:Net Investment in Capital Assets 46,515,312 36,163,062 28.6Restricted 3,114,036 2,942,042 5.8Unrestricted (54,497,194) 15,487,611 (451.9)

Total Net Position (4,867,846)$ 54,592,715$ (108.9)

Governmental Activities

Table A-1The District's Net Position



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Changes in Net Position

In Table A-2, Change in Net Position, operations are reported on a governmental-wide basis with no reference to funds.

Total %2015 2014 Change

RevenuesProgram Revenues

Charges for Services 10,169,539$ 11,360,979$ (10.5)%Operating Grants and Contributions 15,091,251 13,831,646 9.1Capital Grants and Contributions 2,061,041 2,061,041 -

General Revenues Property Taxes 38,825,959 30,780,559 26.1Unrestricted State Aid 66,743,149 68,797,029 (3.0)Investment Earnings 801,631 1,387,783 (42.2)Other 1,609,072 1,988,207 (19.1)

Total Revenues 135,301,642 130,207,244 3.9

ExpensesAdministration 3,297,791 3,626,402 (9.1)District Support Services 3,300,589 3,321,431 (0.6)Regular Instruction 46,033,831 42,899,211 7.3Vocational Education Instruction 1,679,924 1,428,802 17.6Special Education Instruction 15,405,025 14,576,886 5.7Instructional Support Services 9,918,408 9,082,972 9.2Pupil Support Services 8,918,109 9,284,103 (3.9)Sites and Buildings 15,713,675 14,340,867 9.6Fiscal and Other Fixed Cost Programs 197,113 186,669 5.6Food Service 4,924,330 4,889,769 0.7Community Service 7,468,189 8,197,305 (8.9)Interest and Fiscal Charges on Long-Term Liabilities 8,829,956 8,208,150 7.6

Total Expenses 125,686,940 120,042,567 4.7

Increase in Net Position 9,614,702 10,164,677 Beginning Net Position 54,592,715 44,428,038 Prior Period Adjustment (69,075,263) - Beginning Net Position, as Restated (14,482,548) 44,428,038 Ending Net Position (4,867,846)$ 54,592,715$

Governmental Activities for theFiscal Year Ended June 30,

Table A-2Change in Net Position

Total revenues were $135,301,642 while total expenses were $125,686,940 increasing net position by $9,164,702.



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The cost of all governmental activities this year was $125,686,940.

A portion of the cost was paid by the users of the District’s programs (Table A-2, Charges for Services, $10,169,539). The majority of this category, $8.4 million, comes from food service meal sales and community education class tuition.

The federal and state governments subsidized certain programs with grants and contributions (Table A-2, Operating and Capital Grants and Contributions, $17,152,292).

Most of the District’s costs were supported by local property taxes, unrestricted state aid, investment earnings, and other general revenues. Governmental activities were sustained by accessing $38,825,959 in property taxes, $66,743,149 of unrestricted state aid, and with investment earnings and other general revenues.

Charges for Services7%

Operating and Capital Grants

13%

Property Taxes29%

Unrestricted State Aid49%

All Other2%

Figure A-1Sources of District's Revenues for Fiscal 2015

Administration3%

Instruction-Related50%

Student Support Services

18%

Food & Comm Serv10%

Maintenance12%

Other7%

Figure A-2District Expenses for Fiscal 2015



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All governmental activities include not only funds received for the general operation of the District, which are used for classroom instruction, but also include resources from the entrepreneurial-type funds of Food Service and Community Education. Funding for the general operation of the District is controlled by the State and the District does not have the latitude to allocate money received in Food Service or Community Education or for fiscal services to enhance general operation resources. The District cannot take funds from these restricted areas and use the funds to enhance instruction-related programs.

Table A-3, seen below, presents the cost of twelve major District activities such as, instruction, pupil and instructional services, administration and business, maintenance and operations, transportation, and others. The table also shows each activity’s net cost (total cost less fees generated by the activities and intergovernmental aid provided for specific programs).

Percentage Percentage2015 2014 Change 2015 2014 Change

Administration 3,297,791$ 3,626,402$ (9.1)% 3,177,803$ 3,506,414$ (9.4)%District Support Services 3,300,589 3,321,431 (0.6) 2,926,357 2,947,199 (0.7)Regular Instruction 46,033,831 42,899,211 7.3 43,742,764 40,390,429 8.3Vocational Education Instruction 1,679,924 1,428,802 17.6 1,553,177 1,324,865 17.2Special Education Instruction 15,405,025 14,576,886 5.7 4,137,980 4,200,572 (1.5)Instructional Support Services 9,918,408 9,082,972 9.2 8,782,639 7,960,621 10.3Pupil Support Services 8,918,109 9,284,103 (3.9) 8,146,234 8,638,521 (5.7)Sites and Buildings 15,713,675 14,340,867 9.6 15,334,817 14,083,973 8.9Fiscal and Other Fixed Cost Programs 197,113 186,669 5.6 197,113 186,669 5.6Food Service 4,924,330 4,889,769 0.7 (361,246) (168,088) 114.9Community Service 7,468,189 8,197,305 (9.0) 1,897,515 1,509,576 25.7Interest and Fiscal Charges on Long-Term Liabilities 8,829,956 8,208,150 7.6 8,829,956 8,208,150 7.6 Total 125,686,940$ 120,042,567$ 5.0 98,365,109$ 92,788,901$ 6.0

Total Cost of Services Net Cost of Services

Table A-3Change in Net Position

The cost of all governmental activities this year was $125,686,940, an increase of $5,644,373 over the prior year. After applying program specific revenue, the net cost of all governmental activities this year was $92,788,901 or an increase of $5,576,208 over the prior year. FINANCIAL ANALYSIS OF THE DISTRICT’S FUNDS

The financial performance of the District as a whole is reflected in its governmental funds. The Food Service Fund and Community Service Funds had more revenue than expenditures in 2014-15. The other funds, General Fund, Capital Projects-Building Construction and Debt Service all had planned deficit spending. At the end of the 2014-15 fiscal year, the District’s governmental funds reported combined fund balances (non-spendable, restricted, committed, assigned and unassigned) of $90,013,954, a net decrease in fund balances of $4,639,401. The decrease is primarily in the Capital Projects-Building Construction Fund which decreased by $2,694,707.



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Revenues were $135,374,411 plus other financing sources of $9,453,714 for the District’s governmental funds totaled $144,828,125, while expenditures of $140,122,526 plus other financing uses of $9,354,000 totaled $149,476,526. As a result, the District completed the year with a net change in fund balances of ($4,639,401).

General Fund

The General Fund is used to account for all revenues and expenditures of the District not accounted for elsewhere. The General Fund is used to account for: K-12 educational activities; District instructional and student support programs; expenditures for the superintendent; District administration; normal operations and maintenance; pupil transportation; capital expenditures; and legal school District expenditures not specifically designated to be accounted for in any other fund.

Enrollment

Enrollment is a critical factor in determining revenue with approximately 70% of General Fund revenue being determined by enrollment. While many Minnesota school districts are facing declining enrollment, during the last five years, the District has averaged a 0.61% increase in students. The following chart shows the number of students served over the past ten years.

Table A-4 Average Daily Membership (ADM)

01,0002,0003,0004,0005,0006,0007,0008,0009,000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Eastern Carver County SchoolsStudent Enrollment (in ADMs)

Secondary Elementary

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Pre-K & KH 66 79 79 83 88 92 84 82 85 127.74 Reg K, Pre-K & KH 630 647 571 578 625 603 564 606 627 589.89 Elementary 3,985 4,114 4,186 4,170 4,138 4,210 4,149 4,132 4,111 4,105.91 Secondary 3,967 3,979 4,027 4,124 4,196 4,219 4,379 4,378 4,437 4,502.70

Total Students for Aid 8,649 8,818 8,864 8,956 9,046 9,124 9,176 9,198 9,259 9,326

Percent Change 3.55% 1.96% 0.52% 1.03% 1.00% 0.86% 0.58% 0.23% 0.67% 0.72%



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The following schedule presents a summary of General Fund Revenues.

Table A-5 General Fund Revenues

June 30, June 30, Increase2015 2014 (Decrease) Percent

Local Sources: Property Taxes 16,221,766$ 10,838,216$ 5,383,550$ 49.7 %Earnings on Investments 62,018 69,289 (7,271) (10.5)Other 3,162,404 3,534,566 (372,162) (10.5)

State Sources 77,752,072 78,208,580 (456,508) (0.6)Federal Sources 2,176,521 2,463,899 (287,378) (11.7)

Total General Fund Revenue 99,374,781$ 95,114,550$ 4,260,231$ 4.5

Fund

ChangeYear Ended

General Fund revenue increased by $4,260,231 or 4.5% from the previous year. The changes in the major sources of revenue include:

Property Taxes increased by $5,383,550 or 49.7%. This increase is primarily due to the pay back of the property tax shift in fiscal 2014.

Other local revenue decreased by $372,162 or 10.5% and earnings on investments decreased by $7,271. Most of the decrease was from gifts and donations. The District experienced a large donation in fiscal 2014 related to a new scoreboard at Chaska High School.

State Sources overall decreased by $456,508 or 0.6%. The net decrease is caused by a variety of increases and decreases. Increases include a 1.8% in the general education formula and an increase in 66.9 enrollment. The decrease is primarily due to the pay back of the property tax shift in fiscal 2014.

Federal revenue is recorded in the year in which the related expenditure is made. Federal sources decreased by $287,378. The decrease is primarily due to a decrease in the Title I entitlement from the previous year.

General Fund Revenue is received in two major categories. In summary, the two categories are:

1. State Education Finance Appropriations A. General Education Aid – The largest share of the education finance appropriation, general

education aid, is intended to provide the basic financial support for the education program and is enrollment driven.

B. Categorical Aids – Categorical revenue formulas are used to meet costs of that program (i.e. special education) or promote certain types of programs (i.e., career and technical aid, adult basic education aid).

2. Property Tax Levies The largest share of the levy is from voter-approved levies which include the operating referendum, which is enrollment driven.



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The following schedule presents a summary of General Fund Expenditures.

Table A-6 General Fund Expenditures

Amount of PercentJune 30, June 30, Increase Increase

2015 2014 (Decrease) (Decrease)Salaries 63,357,276$ 59,103,746$ 4,253,530$ 7.2 %Employee Benefits 15,833,673 14,163,334 1,670,339 11.8Purchased Services 13,494,479 13,852,929 (358,450) (2.6)Supplies and Materials 3,271,466 3,194,122 77,344 2.4Capital Expenditures 2,979,939 3,246,023 (266,084) (8.2)Other Expenditures 1,080,585 1,055,105 25,480 2.4 Total Expenditures 100,017,418$ 94,615,259$ 5,402,159$ 5.7

Year Ended

Total General Fund expenditures increased $5,402,159 or 5.7% from the previous year. The changes in the major expenditure categories include: Overall salaries increased by $4,253,530 due to a number of factors, including planned contract increases and 15 FTE for Administrative Dean positions added to all school buildings. An additional grade level was added to our two-way immersion program, La Academia which required additional licensed staff. Employee benefits increased $1,670,339 or 11.8% over the previous year. This change is due to a 12.5% increase in the pooled benefits in the teacher contract. Purchased Services consist of expenditures for fees for service including transportation contracts, postage, utilities, property insurance, maintenance repairs, leases, travel, telephone and tuition. The District’s decrease of 2.6% or $358,450 in purchased services was partially due to a more mild winter than previous year. Capital Expenditures decreased in the General Fund by $266,084 or 8.2% due to our first year of Capital Project funding in the Construction Fund.



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General Fund Budgetary Highlights

The District is required to adopt an operating budget prior to the beginning of its fiscal year (July 1) and is referred to as the original budget. Over the course of the year, the District revised its annual operating budget to the appropriate levels. The budget amendments fall into two categories:

Implementing budgets for specially funded projects, which include both federal and state grants, adjusting staffing and various instructional allocations to the schools based on actual enrollment and unspent funds carried over from fiscal year 2013-14.

Increase in appropriations for significant unbudgeted costs. While the District anticipated that the net change in fund balance would be a decrease of $2,620,388, total fund balance decreased by $641,135 resulting in a total fund balance of $14,398,649 at June 30, 2015. The unassigned portion of the fund balance in the General Fund is 9.8% of expenditures. This is within the Board policy guideline, which requires this percentage to be between 5% and 12%. Revenue was over budget by 1.5% or $1,499,589. The variance is primarily due to two items, the District received more state special education revenue than anticipated for the 2013-14 school year which was recognized in 2014-15. Additionally, other revenue which includes donations, interest, fees, miscellaneous was over budget by $380,104. The District practices conservative budgeting for these types of items as they can fluctuate dramatically from year to year. Overall expenditures were within 0.48% of budget. Food Service Fund

The Food Service Fund revenue for 2014-15 totaled $5,295,456 and expenditures were $4,957,802. The June 30, 2015 fund balance is $1,085,515, an increase of $337,654 from fiscal year 2014. A decrease in fund balance of $330,236 from 2014 was budgeted. Results were better than budgeted due to greater school lunch participation levels than anticipated. Free and reduced meals served increased by 29,322 meals, which increased the federal reimbursement revenue. The state funding was higher because reduced meals became “free” because of more funding from the state. Expenditures were under budget by $244,834 or 4.7%. This was due to a planned equipment purchase that was received after the fiscal year-end. Community Service Fund

The Community Service Fund revenue for 2014-15 totaled $7,693,332 and expenditures were $7,554,270. The June 30, 2015 fund balance is $1,440,468, an increase of $139,062 from fiscal year 2014. Actual revenues were 4.1% or $301,809 over budget and expenditures were 0.3% or $22,447 over budget. Tuition and fee revenue exceeded budget by $95,589 due to larger than anticipated participation in programming.



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Capital Projects - Building Construction Fund

The Capital Projects - Building Construction Fund revenue for 2014-15 totaled $2,458,023, which was mostly funded through property taxes. This was the first year of the Capital Projects levy which was used to fund our secured entrances and technology infrastructure improvements. This was the third year for our Alternative Facilities Projects funded by bonds sold in 2011-12. The expenditure budget to actual variance is due to Alternative Facility Projects that are ongoing and completion of the projects does not necessarily follow a specific fiscal year. Debt Service Fund

The Debt Service Fund is used to record revenues and expenditures for a school district’s outstanding bonded indebtedness, whether for building construction, other postemployment benefits (OPEB) or for initial or refunding bonds. The Debt Service Fund revenue for 2014-15 totaled $20,560,419 plus other financing sources of $9,444,612 from refunding bonds. Expenditures were $22,440,306 plus other financing uses of $9,345,000 for payment of refunding bond escrow bring the June 30, 2015 total fund balance to $72,178,500, a decrease of $1,780,275 from fiscal year 2014. Revenue and expenditures were within 1.6% and .01% of budget, respectively. The total fund balance consists of $68,200,345 in funds restricted for bond refunding, with a call date of February 1, 2017, while the remainder of $3,978,155 is for debt payments related to regular and other postemployment bond sales. CAPITAL ASSET AND DEBT ADMINISTRATION

Capital Assets

By the end of June 30, 2015, the District had invested just over $269 million in a broad range of capital assets, including school buildings, athletic facilities, computer and audio-visual equipment, and administrative offices (see Table A-7). (More detailed information about capital assets can be found in Note 4 to the financial statements.) Total depreciation expense for the year was slightly under $6.6 million.


Land 18,578,303$ 18,578,303$ - %Construction in Progress 1,458,880 - N/ALand Improvements 6,472,840 6,342,694 2.1Buildings and Improvements 234,655,379 232,064,587 1.1Equipment 7,963,155 7,101,516 12.1

Less: Accumulated Depreciation (75,417,716) (68,857,594) 9.5

Total 193,710,841$ 195,229,506$ (0.8)

Table A-7The District's Capital Assets



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Long-Term Liabilities

At year-end, the District had $203,415,000 in general obligation bonds outstanding as shown in Note 5 to the financial statements. The District had $367,990 in obligations under capital leases, a decrease of $142,796. Additionally, the District had $2,960,000 in certificates of participation outstanding. The District also had an estimated $2,809,763 in net severance and compensated absences at June 30, 2015, a net increase of $99,112 from June 30, 2014, as well as a net OPEB asset of $3,864,711 resulting from the District’s irrevocable trust.


General Obligation Bonds 203,415,000$ 217,285,000$ (6.4)%Net Bond Premium and Discount 14,062,840 15,111,381 (6.9)Obligations Under Capital Leases 367,990 510,786 (28.0)Certificates of Participation Payable 2,960,000 3,490,000 (15.2)Pension Benefits Payable 62,354,409 73,606,933 (15.3)Severance Benefits Payable 2,003,147 1,978,916 1.2Compensated Absences Payable 806,616 731,735 10.2

Total 285,970,002$ 312,714,751$ (8.6)

Long-Term Liabilities:Due Within One Year 14,711,616$ 16,838,447$ Due in More than One Year 271,258,386 295,876,304

Total 285,970,002$ 312,714,751$

Table A-8The District's Long-Term Liabilities

FACTORS BEARING ON THE DISTRICT’S FUTURE

Similar to other states throughout the nation, the State of Minnesota has experienced major budget shortfalls with expenditures outpacing revenues in recent years. The state’s financial difficulties have produced delays in state aid payments and property tax recognition shifts to school districts. The state economy has improved and is expected to continue to improve over the next couple of years. The state was able to repay the property tax recognition shifts and delayed payments have been restored. With the exception of the voter-approved excess operating referendum, the District is dependent on the State of Minnesota for its revenue authority. The general education program is the method by which school districts receive the majority of their financial support. This source of funding is primarily state aid and, as such, school districts rely heavily on the State of Minnesota for educational resources.



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CONTACTING THE DISTRICT’S FINANCIAL MANAGEMENT

This financial report is designed to provide the District’s citizens, taxpayers, customers, and investors and creditors with a general overview of the District’s finances and to demonstrate the District’s accountability for the money it receives. If you have questions about this report or need additional financial information, contact the Business Office, Independent School District No. 112, 11 Peavey Road, Chaska, MN 55318.

BASIC FINANCIAL STATEMENTS


STATEMENT OF NET POSITION JUNE 30, 2015

(WITH SUMMARIZED FINANCIAL INFORMATION AS OF JUNE 30, 2014)

See accompanying Notes to Basic Financial Statements. (30)


2015 2014ASSETS

Cash and Investments 44,838,555$ 44,658,066$ Cash and Investments Held by Trustee 68,200,345 69,770,504 Receivables:

Property Taxes 21,960,875 21,208,261 Other Governments 8,904,890 8,634,782 Other 462,643 439,029

Prepaid Items 112,761 112,233 Inventory 133,954 253,646 Due from OPEB Irrevocable Trust Fund 123,835 178,289 Net OPEB Prepaid Asset 3,864,711 4,400,434 Capital Assets:

Land 20,037,183 18,578,303 Other Capital Assets, Net of Depreciation 173,673,658 176,651,203

Total Assets 342,313,410 344,884,750

DEFERRED OUTFLOWS OF RESOURCESLoss on Refunding 173,088 277,595 Pension Deferred Outflows - See Note 8 13,353,557 -

Total Deferred Outflows of Resources 13,526,645 277,595

LIABILITIESSalaries and Compensated Absences Payable 9,734,087 9,200,740 Accounts and Contracts Payable 2,360,699 1,817,060 Accrued Interest Payable 3,484,868 2,316,719 Due to Other Governmental Units 528,904 805,376 Unearned Revenue:

Local Sources 481,347 433,772 Long-Term Liabilities:

Portion Due Within One Year 14,711,616 16,838,447 Portion Due in More Than One Year 271,258,386 222,269,371

Total Liabilities 302,559,907 253,681,485

DEFERRED INFLOWS OF RESOURCESProperty Taxes Levied for Subsequent Year 39,193,218 36,888,145 Pension Deferred Inflows - See Note 8 18,954,776 -

Total Deferred Inflows of Resources 58,147,994 36,888,145

NET POSITIONNet Investment in Capital Assets 46,515,312 36,163,062 Restricted for:

General Fund Operating Capital Purposes 454,075 381,734 General Fund State-Mandated Reserves 130,045 220,722 Food Service 1,085,515 747,861 Community Service 1,444,401 1,307,316 Debt Service - 284,409

Unrestricted (54,497,194) 15,487,611

Total Net Position (4,867,846)$ 54,592,715$


STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2015

(WITH SUMMARIZED FINANCIAL INFORMATION FOR YEAR ENDED JUNE 30, 2014)


2014

Net (Expense) Net (Expense)Revenue and Revenue andChanges in Changes inNet Position Net Position

Operating Capital Total Total

Charges for Grants and Grants and Governmental GovernmentalFunctions Expenses Services Contributions Contributions Activities Activities

Governmental ActivitiesAdministration 3,297,791$ -$ -$ 119,988$ (3,177,803)$ (3,506,414)$ District Support Services 3,300,589 - - 374,232 (2,926,357) (2,947,199) Regular Instruction 46,033,831 1,185,797 660,466 444,804 (43,742,764) (40,390,429) Vocational Education Instruction 1,679,924 - 116,062 10,685 (1,553,177) (1,324,865) Special Education Instruction 15,405,025 200,253 11,066,792 - (4,137,980) (4,200,572) Instructional Support Services 9,918,408 202,462 - 933,307 (8,782,639) (7,960,621) Pupil Support Services 8,918,109 - 771,875 - (8,146,234) (8,638,521) Sites and Buildings 15,713,675 200,833 - 178,025 (15,334,817) (14,083,973) Fiscal and Other Fixed Cost Programs 197,113 - - - (197,113) (186,669) Food Service 4,924,330 3,377,014 1,908,562 - 361,246 168,088 Community Service 7,468,189 5,003,180 567,494 - (1,897,515) (1,509,576) Interest and Fiscal Charges on Long-Term Liabilities 8,829,956 - - - (8,829,956) (8,208,150)

Total School District 125,686,940$ 10,169,539$ 15,091,251$ 2,061,041$ (98,365,109) (92,788,901)

General RevenuesProperty Taxes Levied for:

General Purposes 16,180,398 10,782,119 Community Service 1,349,324 1,013,910 Debt Service 18,846,237 18,984,530 Capital Projects 2,450,000 -

State and Federal Aid Not Restricted to Specific Purposes 66,743,149 68,797,029 Earnings on Investments 801,631 1,387,783 Gain on Sale of Capital Assets 9,102 1,517 Miscellaneous 1,599,970 1,986,690

Total General Revenues 107,979,811 102,953,578

Change in Net Position 9,614,702 10,164,677

Net Position - Beginning 54,592,715 44,428,038

Change in Accounting Principal - Implementation of GASB

Standard - See Note 12 (69,075,263) -

Net Position - Beginning, as Restated (14,482,548) -

Net Position - Ending (4,867,846)$ 54,592,715$

2015

Program Revenues


BALANCE SHEET GOVERNMENTAL FUNDS

JUNE 30, 2015 (WITH SUMMARIZED FINANCIAL INFORMATION AS OF JUNE 30, 2014)


CapitalProjects -

Food Community Building DebtGeneral Service Service Construction Service 2015 2014

ASSETSCash and Investments 24,091,538$ 1,153,638$ 2,064,498$ 1,272,621$ 13,264,328$ 41,846,623$ 42,760,277$ Cash and Investments Held by Trustee - - - - 68,200,345 68,200,345 69,770,504 Receivables:

Current Property Taxes 10,693,620 - 298,682 - 10,627,875 21,620,177 20,679,925 Delinquent Property Taxes 163,854 - 6,864 - 169,980 340,698 528,336 Due from Other Minnesota School Districts 45,765 11,417 56,026 - - 113,208 5,481 Due from Minnesota Department of Education 6,986,534 70,727 94,133 - 94,290 7,245,684 7,244,505 Due from Federal through Minnesota Department of Education 1,124,548 187,764 - - - 1,312,312 1,128,889 Due from Other Governmental Units 227,268 - 6,418 - - 233,686 255,907 Other Receivables 57,834 360 304,475 1,484 - 364,153 439,029

Due from Other Funds 123,835 - - - - 123,835 160,515 Prepaid Items 100,412 5,050 7,299 - - 112,761 112,233 Inventory 69,589 64,365 - - - 133,954 253,646

Total Assets 43,684,797$ 1,493,321$ 2,838,395$ 1,274,105$ 92,356,818$ 141,647,436$ 143,339,247$

LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCE

Liabilities:Salaries and Payroll Deductions Payable 9,129,456$ 228,371$ 376,260$ -$ -$ 9,734,087$ 9,200,740$ Accounts and Contracts Payable 1,017,217 15,982 109,693 363,283 - 1,506,175 1,079,125 Due to Other Governmental Units 491,390 - 37,514 - - 528,904 805,376 Unearned Revenue:

Local Sources 11,771 163,453 306,123 - - 481,347 433,772

Total Liabilities 10,649,834 407,806 829,590 363,283 - 12,250,513 11,519,013

Deferred Inflows of Resources:Property Taxes Levied for Subsequent Year 18,545,878 - 564,404 - 20,082,936 39,193,218 36,888,145 Unavailable Revenue - Delinquent Taxes 90,436 - 3,933 - 95,382 189,751 278,734

Total Deferred Inflows of Resources 18,636,314 - 568,337 - 20,178,318 39,382,969 37,166,879

Fund Balance:Nonspendable:

Prepaid Items 100,412 5,050 7,299 - - 112,761 112,233 Inventory 69,589 64,365 - - - 133,954 253,646

Restricted for:Alternative Facilities - - - 910,822 - 910,822 3,605,529 Basic Skills Programs 52,676 - - - - 52,676 - Health and Safety 77,369 - - - - 77,369 220,722 Operating Capital 454,075 - - - - 454,075 381,734 Community Education Programs - - 1,326,911 - - 1,326,911 1,247,098 Early Childhood and Family Educations Programs - - 79,246 - - 79,246 40,146 School Readiness - - 14,747 - - 14,747 - Bond Refundings - - - - 68,200,345 68,200,345 69,770,504 Other Purposes - 1,016,100 12,265 - 3,978,155 5,006,520 4,805,735

Assigned for:Transportation 91,497 - - - - 91,497 91,497 21st Century 526,514 - - - - 526,514 526,514 Separation/Retirement Benefits 1,400,000 - - - - 1,400,000 1,400,000 Third Party Billing Med-Asst. 627,658 - - - - 627,658 536,810 Capital Maintenance - Victoria Field House 80,000 - - - - 80,000 80,000 Quality Comp 333,154 - - - - 333,154 237,075 Deferred Maintenance 135,430 - - - - 135,430 750,000 Capital Projects - - - - - - 100,000 Site Carry-over 635,194 - - - - 635,194 609,199

Unassigned 9,815,081 - - - - 9,815,081 9,884,913

Total Fund Balance 14,398,649 1,085,515 1,440,468 910,822 72,178,500 90,013,954 94,653,355

Total Liabilities, Deferred Inflows of Resources, and Fund Balance 43,684,797$ 1,493,321$ 2,838,395$ 1,274,105$ 92,356,818$ 141,647,436$ 143,339,247$

Total GovernmentalFunds

Major Funds


RECONCILIATION OF THE BALANCE SHEET – GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION



2015 2014

Total Fund Balance for Governmental Funds 90,013,954$ 94,653,355$

Land 18,578,303 18,578,303 Construction in Progress 1,458,880 - Land Improvements, Net of Accumulated Depreciation 3,667,066 3,858,162 Buildings and Improvements, Net of Accumulated Depreciation 166,413,270 169,539,687 Equipment, Net of Accumulated Depreciation 3,593,322 3,253,354

189,751 278,734

3,864,711 4,400,434

(3,484,868) (2,316,719)

Net Pension Liability (62,354,409) - Deferred Inflows of Resources - Pensions (18,954,776) - Deferred Outflows of Resources - Pensions 13,353,557 -

2,235,898 1,177,628

Bonds Payable (203,415,000) (217,285,000) Unamortized Premiums (14,078,828) (15,148,770) Unamortized Discounts 15,988 37,389 Deferred Loss on Refunding 173,088 277,595 Certificates of Participation Payable (2,960,000) (3,490,000) Obligations Under Capital Leases (367,990) (510,786) Severance Benefits Payable (2,003,147) (1,978,916) Compensated Absences Payable (806,616) (731,735)

Total Net Position of Governmental Activities (4,867,846)$ 54,592,715$

The District's Net Pension Liability and related deferred inflows and outflows are recorded only on the Statement of Net Position. Balances at year-end are:

Long-term liabilities that pertain to governmental funds, including bonds payable, are not due and payable in the current period and, therefore, are not reported as fund liabilities. All liabilities - both current and long-term - are reported in the statement of net position. Balances at year-end are:

Internal service funds are used by management to charge the costs of health and dental insurance services to individual funds. The assets and liabilities of the internal service funds are included in governmental activities in the statement of net position. Internal service fund net position at year-end is:

Interest on long-term debt is not accrued in governmental funds, but rather is recognized as an expenditure when due.

Total net position reported for governmental activities in the statement of net position is different because:

Capital assets used in governmental funds are not financial resources and, therefore, are not reported in the funds. Those assets consist of:

Some of the District's property taxes will be collected after year-end, but are not available soon enough to pay for the current period's expenditures and, therefore, are reported as deferred inflows in the funds.

Cumulative OPEB contributions in excess of the Annual Required Contribution (ARC) since adoption of GASB 45 (which includes payment of OPEB bond proceeds to the District's irrevocable trust). This Net OPEB Asset is not a current financial resource and, therefore, is not reported at the fund level.


STATEMENT OF REVENUES, EXPENDITURES AND CHANGE IN FUND BALANCE GOVERNMENTAL FUNDS

YEAR ENDED JUNE 30, 2015 (WITH SUMMARIZED FINANCIAL INFORMATION FOR YEAR ENDED JUNE 30, 2014)


CapitalProjects -

Food Community Building DebtGeneral Service Service Construction Service 2015 2014

REVENUESLocal Sources:

Property Taxes 16,221,766$ -$ 1,351,301$ 2,450,000$ 18,891,875$ 38,914,942$ 30,905,377$ Earnings on Investments 62,018 2,280 3,213 8,023 718,985 794,519 1,384,323 Other 3,162,404 3,377,014 5,223,524 - 6,567 11,769,509 13,347,669

State Sources 77,752,072 290,654 1,115,294 - 942,992 80,101,012 80,721,823 Federal Sources 2,176,521 1,617,908 - - - 3,794,429 3,967,893

Total Revenues 99,374,781 5,287,856 7,693,332 2,458,023 20,560,419 135,374,411 130,327,085

EXPENDITURESCurrent:

Administration 3,573,219 - - - - 3,573,219 3,229,555 District Support Services 3,027,945 - - - - 3,027,945 2,921,996 Regular Instruction 45,641,940 - - - - 45,641,940 42,559,310 Vocational Education Instruction 1,685,188 - - - - 1,685,188 1,435,161 Special Education Instruction 15,558,570 - - - - 15,558,570 14,780,351 Instructional Support Services 9,543,585 - - - - 9,543,585 7,983,086 Pupil Support Services 8,873,347 - - - - 8,873,347 9,240,479 Sites and Buildings 8,128,629 - - - - 8,128,629 8,210,977 Fiscal and Other Fixed Cost Programs 197,113 - - - - 197,113 186,669 Food Service - 4,795,546 - - - 4,795,546 4,800,632 Community Service - - 7,379,725 - - 7,379,725 8,073,085

Capital Outlay 2,979,939 162,256 174,545 5,152,730 - 8,469,470 7,879,474 Debt Service:

Principal 672,796 - - - 13,455,000 14,127,796 13,521,548 Interest and Fiscal Charges 135,147 - - - 8,985,306 9,120,453 9,175,695

Total Expenditures 100,017,418 4,957,802 7,554,270 5,152,730 22,440,306 140,122,526 133,998,018

Excess (Deficiency) of Revenues Over (Under) Expenditures (642,637) 330,054 139,062 (2,694,707) (1,879,887) (4,748,115) (3,670,933)

OTHER FINANCING SOURCES (USES)Sale of Equipment Proceeds 1,502 7,600 - - - 9,102 12,539 Face Amount of Bonds Issued - - - - 8,930,000 8,930,000 - Bond Premium - - - - 514,612 514,612 - Payment to Refunded Bond Escrow Agent - - - - (9,345,000) (9,345,000) -

Total Other Financing Sources (Uses) 1,502 7,600 - - 99,612 108,714 12,539

Net Change in Fund Balances (641,135) 337,654 139,062 (2,694,707) (1,780,275) (4,639,401) (3,658,394)

Fund Balances - Beginning 15,039,784 747,861 1,301,406 3,605,529 73,958,775 94,653,355 98,311,749

Fund Balances - Ending 14,398,649$ 1,085,515$ 1,440,468$ 910,822$ 72,178,500$ 90,013,954$ 94,653,355$

Total GovernmentalFunds

Major Funds


RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGE IN FUND BALANCE

GOVERNMENTAL FUNDS TO STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2015



2015 2014

Net Change in Fund Balance - Total Governmental Funds (4,639,401)$ (3,658,394)$

Capital Outlays 5,041,457 5,343,075 Gain on Disposal of Capital Assets 9,102 1,517 Proceeds from Sales of Capital Assets (9,102) (12,539) Depreciation Expense (6,560,122) (6,394,759)

Principal Payments - Capital Leases 142,796 136,548

(535,723) (298,607)

1,119,635 -

General Obligation Bond Proceeds (8,930,000) - Payment to Refunded Bond Escrow Agent 9,345,000 - Bond (Premium) Discount (514,612) - Repayment of Certificates of Participation Principal 530,000 515,000 Repayment of Bond Principal 13,455,000 12,870,000 Change in Accrued Interest Expense - General Obligation Bonds (1,168,149) 241,008 Amortization of Deferred Outflow - Loss on Refunding (104,507) (40,514) Amortization of Bond Premium 1,584,554 777,280 Amortization of Discount (21,401) (10,229)

(88,983) (124,818)

(99,112) 123,772

1,058,270 696,337

Change in Net Position of Governmental Activities 9,614,702$ 10,164,677$

The governmental funds report bond proceeds as financing sources, while repayment of bond principal is reported as an expenditure. In the statement of net position, however, issuing debt increases long-term liabilities and does not affect the statement of activities and repayment of principal reduces the liability. Also, governmental funds report the effect of discounts and premiums when debt is first issued, whereas discounts and premiums are amortized in the statement of activities. Interest is recognized as an expenditure in the governmental funds when it is due. In the statement of activities, however, interest expense is recognized as it accrues, regardless of when it is due. The net effect of these differences in the treatment of general obligation bonds and related items is as follows:

Delinquent property taxes receivable will be collected this year, but are not available soon enough to pay for the current period’s expenditures and, therefore, are deferred in the funds.

Governmental funds report capital outlays as expenditures. However, in the statement of activities, assets with an initial, individual cost of more than $5,000 are capitalized and the cost is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which depreciation exceeded capital outlays in the current period.

Some capital asset additions are financed through capital leases. In governmental funds, a capital lease arrangement is considered a source of financing, but in the statement of net position, the lease obligation is reported as a liability. Repayment of capital lease principal is an expenditure in the governmental funds, but repayment reduces the lease obligation in the statement of net position.

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

In the statement of activities, certain operating expenses - severance benefits and compensated absences - are measured by the amounts earned during the year. In the governmental funds, however, expenditures for these items are measured by the amount of financial resources used (essentially, the amounts actually paid).

Internal service funds are used by the District to charge the costs of employee health and dental benefits to individual funds. The net revenue of the internal service funds is reported with governmental activities.

Annual OPEB Cost, which includes the Annual Required Contribution (ARC) and adjustments to the ARC, netted with interest on the Net OPEB Asset.

Pension expenses on the governmental funds are measured by current year employee contributions. Pension expenditures on the Statement of Activities are measured by the change in Net Pension Liability and the related deferred inflows and outflows of resources.


STATEMENT OF REVENUES, EXPENDITURES AND CHANGE IN FUND BALANCE BUDGET AND ACTUAL

GENERAL FUND YEAR ENDED JUNE 30, 2015


Over

(Under)Actual Final

Original Final Amounts BudgetREVENUES

Local Sources:Property Taxes 15,790,923$ 15,790,923$ 16,221,766$ 430,843$ Earnings on Investments 20,000 20,000 62,018 42,018 Other 2,471,970 2,782,300 3,162,404 380,104

State Sources 77,416,317 76,981,106 77,752,072 770,966 Federal Sources 2,223,115 2,302,365 2,176,521 (125,844)

Total Revenues 97,922,325 97,876,694 99,374,781 1,498,087


Administration 3,289,106 3,588,300 3,573,219 (15,081) District Support Services 3,379,204 3,274,071 3,027,945 (246,126) Elementary and Secondary Regular Instruction 45,615,489 45,817,787 45,641,940 (175,847) Vocational Education Instruction 1,574,886 1,696,086 1,685,188 (10,898) Special Education Instruction 16,439,988 15,691,486 15,558,570 (132,916) Instructional Support Services 9,317,237 9,363,149 9,543,585 180,436 Pupil Support Services 8,929,480 9,017,174 8,873,347 (143,827) Sites and Buildings 7,627,836 8,018,303 8,128,629 110,326 Fiscal and Other Fixed Cost Programs 194,136 197,113 197,113 -

Capital Outlay 2,473,920 3,025,670 2,979,939 (45,731) Debt Service:

Principal 440,000 660,565 672,796 12,231 Interest and Fiscal Charges 367,943 147,378 135,147 (12,231)

Total Expenditures 99,649,225 100,497,082 100,017,418 (479,664)

Excess (Deficiency) of Revenues Over (Under) Expenditures (1,726,900) (2,620,388) (642,637) 1,977,751

OTHER FINANCING SOURCESSale of Equipment Proceeds - - 1,502 1,502

Net Change in Fund Balances (1,726,900)$ (2,620,388)$ (641,135) 1,979,253$

FUND BALANCEBeginning of Year 15,039,784

End of Year 14,398,649$

Budgeted Amounts


STATEMENT OF REVENUES, EXPENDITURES AND CHANGE IN FUND BALANCE BUDGET AND ACTUAL FOOD SERVICE FUND



Over

(Under)Actual Final


Local Sources:Earnings on Investments 500$ 500$ 2,280$ 1,780$ Other - Primarily Meal Sales 3,308,950 3,367,450 3,377,014 9,564

State Sources 169,650 169,650 290,654 121,004 Federal Sources 1,334,800 1,334,800 1,617,908 283,108

Total Revenues 4,813,900 4,872,400 5,287,856 415,456


Food Service 4,889,336 4,889,336 4,795,546 (93,790) Capital Outlay 53,300 313,300 162,256 (151,044)

Total Expenditures 4,942,636 5,202,636 4,957,802 (244,834)

Excess (Deficiency) of Revenues Over (Under) Expenditures (128,736) (330,236) 330,054 660,290

OTHER FINANCING SOURCES Sale of Equipment Proceeds - - 7,600 7,600

Net Change in Fund Balance (128,736)$ (330,236)$ 337,654 667,890$

FUND BALANCEBeginning of Year 747,861

End of Year 1,085,515$

Budgeted Amounts


STATEMENT OF REVENUES, EXPENDITURES AND CHANGE IN FUND BALANCE BUDGET AND ACTUAL

COMMUNITY SERVICE FUND YEAR ENDED JUNE 30, 2015


Over

(Under)Actual Final


Local Sources:Property Taxes 1,217,861$ 1,217,861$ 1,351,301$ 133,440$ Earnings on Investments 2,000 2,000 3,213 1,213 Other - Primarily Tuition and Fees 4,845,484 5,127,935 5,223,524 95,589

State Sources 937,687 1,043,727 1,115,294 71,567

Total Revenues 7,003,032 7,391,523 7,693,332 301,809


Community Service 7,073,397 7,411,423 7,379,725 (31,698) Capital Outlay 60,400 120,400 174,545 54,145

Total Expenditures 7,133,797 7,531,823 7,554,270 22,447

Excess (Deficiency) of Revenues Over (Under) Expenditures (130,765)$ (140,300)$ 139,062 279,362$

FUND BALANCEBeginning of Year 1,301,406

End of Year 1,440,468$

Budgeted Amounts


STATEMENT OF NET POSITION PROPRIETARY FUND

INTERNAL SERVICE FUND AS OF JUNE 30, 2015

(WITH SUMMARIZED FINANCIAL INFORMATION AS OF JUNE 30, 2014)


2015 2014

ASSETSCurrent Assets:

Cash and Investments 2,991,932$ 1,897,789$ Due from Other Funds - 17,774

Accounts Receivable 98,490 -

Total Current Assets 3,090,422$ 1,915,563$

LIABILITIESCurrent Liabilities:

Accounts Payable 854,524$ 737,935$

NET POSITIONUnrestricted 2,235,898 1,177,628

Total Liabilities and Net Position 3,090,422$ 1,915,563$


STATEMENT OF REVENUES, EXPENSES, AND CHANGE IN NET POSITION PROPRIETARY FUND

INTERNAL SERVICE FUND YEAR ENDED JUNE 30, 2015



2015 2014

OPERATING REVENUESHealth Insurance Premiums 8,133,772$ 7,993,379$ Dental Insurance Premiums 552,923 542,787

Total Operating Revenues 8,686,695 8,536,166

OPERATING EXPENSESHealth Insurance Claim Payments 7,141,919 7,209,366 Dental Insurance Claim Payments 493,618 633,923

Total Operating Expenses 7,635,537 7,843,289

Operating Income 1,051,158 692,877

NONOPERATING INCOMEEarnings on Investments 7,112 3,460

Change in Net Position 1,058,270 696,337

Total Net Position - Beginning 1,177,628 481,291

Total Net Position - Ending 2,235,898$ 1,177,628$


STATEMENT OF CASH FLOWS PROPRIETARY FUND

INTERNAL SERVICE FUND YEAR ENDED JUNE 30, 2015



2015 2014

CASH FLOWS FROM OPERATING ACTIVITIESReceipts from Interfund Services Provided 8,704,469$ 8,518,392$ Payments for Medical Fees and Insurance Claims (7,617,438) (7,114,168)

Net Cash Provided by Operating Activities 1,087,031 1,404,224

CASH FLOWS FROM INVESTING ACTIVITIESInterest Received 7,112 3,460

NET INCREASE IN CASH AND CASH EQUIVALENTS 1,094,143 1,407,684

Cash and Cash Equivalents - Beginning 1,897,789 490,105

Cash and Cash Equivalents - Ending 2,991,932$ 1,897,789$

Displayed on Statements of Fund Net Position as:Cash and Investments 2,991,932$ 1,897,789$

RECONCILIATION OF OPERATING INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES

Operating Income 1,051,158$ 692,877$ Adjustments to Reconcile Operating Income to Net Cash Provided by Operating Activities:

(Increase) Decrease in Due from Other Funds (98,490) - (Increase) Decrease in Due from Other Funds 17,774 (17,774) Increase in Accounts Payable 116,589 729,121

Total Adjustments 35,873 711,347

Net Cash Provided by Operating Activities 1,087,031$ 1,404,224$


STATEMENT OF FIDUCIARY NET POSITION JUNE 30, 2015


Employee Scholarship OPEB

Benefit Private-Purpose IrrevocableTrust Trust Trust

ASSETSCash and Investments 400,703$ 98$ 6,641,894$

LIABILITIESAccounts and Contracts Payable 136,144$ -$ -$ Due to Governmental and Internal Service Funds - - 123,835

Total Liabilities 136,144 - 123,835

NET POSITIONHeld in Trust for Employee Benefits 264,559 - - Held in Trust for Private Purpose - 98 - Held in Trust for OPEB Benefits - - 6,518,059

Total Net Position 264,559$ 98$ 6,518,059$

STATEMENT OF CHANGES IN FIDUCIARY NET POSITION YEAR ENDED JUNE 30, 2015

Employee Scholarship OPEB

Benefit Private-Purpose IrrevocableTrust Trust Trust

ADDITIONSPlan Member Contributions 795,613$ -$ -$ Earnings on Investments 921 98 187,972Contributions - 78,396 -

Total Additions 796,534 78,494 187,972

DEDUCTIONSBenefits Paid to Plan Members 784,288 - 396,732 Scholarships Awarded 98 78,396 - Miscellaneous - - 34,863

Total Deductions 784,386 78,396 431,595

Change in Net Position 12,148 98 (243,623)

Net Position - Beginning of Year 252,411 - 6,761,682

Net Position - End of Year 264,559$ 98$ 6,518,059$

NOTES TO BASIC FINANCIAL STATEMENTS


NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2015

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NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. Basis of Presentation

The financial statements of Independent School District No. 112 have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP) as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for establishing governmental accounting and financial reporting principles.

B. Financial Reporting Entity

Independent School District No. 112 (the District) is an instrumentality of the State of Minnesota established to function as an educational institution. The elected School Board (Board) is responsible for legislative and fiscal control of the District. A Superintendent is appointed by the Board and is responsible for administrative control of the District.

U.S. Generally Accepted Accounting Principles (GAAP) require that the District's financial statements include all funds, departments, agencies, boards, commissions, and other organizations which are not legally separated from the District. In addition, the District's financial statements are to include all component units - entities for which the District is financially accountable.

Financial accountability includes such aspects as appointing a voting majority of the organization's governing body, significantly influencing the programs, projects, activities or level of services performed or provided by the organization or receiving specific financial benefits from, or imposing specific financial burden on, the organization. There are no other entities for which the District is financially accountable.

Student activities are determined primarily by student participants under the guidance of an adult and are generally conducted outside school hours. The School Board does have a fiduciary responsibility in establishing broad policies and ensuring that appropriate financial records are maintained for student activities. However, in accordance with Minnesota State Statutes, the District’s School Board has not elected to control or exercise oversight responsibility with respect to the underlying student activities. Accordingly, the student activity accounts are not included in these financial statements.

C. Change in Accounting Principle

During the fiscal year ended June 30, 2015, the District adopted GASB Statement No. 68, Accounting and Financial Reporting for Pensions, and the related GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date-an amendment of GASB Statement No. 68. The primary objective of these Statements is to improve accounting and financial reporting by state and local governments for pensions. They also improve information provided by state and local governmental employers about financial support for pensions that is provided by other entities. See Note 12 for more detail of the effect of this change in accounting principle on the financial statements.



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NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

D. Basic Financial Statement Presentation

The government-wide financial statements (i.e. the statement of net position and the statement of activities) display information about the reporting government as a whole. These statements include all the financial activities of the District, except for the fiduciary funds. The Fiduciary Funds are only reported in the statements of Fiduciary Net Position at the fund financial statement level.

The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues.

The District applies restricted resources first when an expense is incurred for purpose for which both restricted and unrestricted net position is available. Depreciation expense that can be specifically identified by function is included in the direct expenses of each function. Interest on long-term debt is considered an indirect expense and is reported separately on the Statement of Activities. Generally, the effect of material interfund activity has been removed from the government-wide financial statements.

Separate fund financial statements are provided for governmental, proprietary, and fiduciary funds. Major individual governmental funds are reported as separate columns in the fund financial statements. The proprietary (internal service) fund is presented in the proprietary fund financial statements. Because the principal users of the internal services are the District’s governmental activities, the financial statement of the proprietary (internal service) fund is consolidated into the governmental activities in the government-wide financial statements. Fiduciary funds are presented in the fiduciary fund financial statements by type: pension (or other employee benefit) trust, private purpose trust and agency. Since, by definition, fiduciary fund assets are being held for the benefit of a third party and cannot be used for activities or obligations of the District, these funds are excluded from the government-wide statements.

The Internal Service Fund is presented in the proprietary fund financial statements. Because the principal users of the internal services are the District’s governmental activities, the financial statement of the internal service fund is consolidated into the governmental column when presented in the government-wide financial statements. The cost of these services is reported in the appropriate functional activity.

Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenue of the District’s internal service fund is charges for services in the form of health and dental insurance premiums, early retirement incentive costs, and sick pay.



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D. Basic Financial Statement Presentation (Continued)

Operating expenses for the internal service fund include the cost of services (claims and admin costs). All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses.

E. Measurement Focus and Basis of Accounting

The accounting and financial reporting treatment applied is determined by its measurement focus and basis of accounting. The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary and fiduciary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are generally recognized as revenues in the fiscal year for which they are levied, except for amounts advance recognized in accordance with a statutory “tax shift” described later in these notes. Grants and similar items are recognized when all eligibility requirements imposed by the provider have been met.

Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this basis of accounting transactions are recorded in the following manner:

1. Revenue Recognition

Revenue is recognized when it becomes measurable and available. “Measurable” means the amount of the transaction can be determined and “available” means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Property tax revenue is generally considered as available if collected within 60 days after year-end. State revenue is recognized in the year to which it applies according to Minnesota Statutes and U.S. generally accepted accounting principles. Minnesota Statutes include state aid funding formulas for specific fiscal years. Federal revenue is recorded in the year in which the related expenditure is made. Food service sales, community education tuition, and other miscellaneous revenue (except investment earnings) are recorded as revenues when received because they are generally not measurable until then. Investment earnings are recorded when earned because they are measurable and available. A six-month availability period is generally used for other fund revenue.

2. Recording of Expenditures

Expenditures are generally recorded when a liability is incurred. However, expenditures are recorded as prepaid for approved disbursements or liabilities incurred in advance of the year in which the item is to be used. Principal and interest on long-term debt issues are recognized on their due dates.



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E. Measurement Focus and Basis of Accounting (Continued)

Description of Funds

The existence of the various District funds has been established by the State of Minnesota, Department of Education. The accounts of the District are organized on the basis of funds, each of which is considered a separate accounting entity. A description of the funds included in this report is as follows:

Major Governmental Funds

General Fund

The General Fund is used to account for all financial resources except those required to be accounted for in another fund. It includes the general operations and pupil transportation activities of the District, as well as the capital related activities such as maintenance of facilities equipment purchases, health and safety projects, and disabled accessibility projects.

Food Service Special Revenue Fund

The Food Service Fund is used to account for food service revenues and expenditures.

Community Service Special Revenue Fund

The Community Service Fund is used to account for services provided to residents in the areas of recreation, civic activities, nonpublic pupils, adult or early childhood programs, or other similar services.

Capital Projects Fund – Building Construction Fund

The Capital Projects Fund is used to account for financial resources used for the acquisition or construction of major capital facilities.

Debt Service Fund

The Debt Service Fund is used to account for the accumulation of resources for, and payment of, general obligation bond principal, interest, and related costs.

Proprietary Fund

Internal Service Fund

The Internal Service Fund is used to account for the financial resources used for the District’s self-insurance of the employee dental and health insurance programs. As a proprietary fund, the internal service fund employs the economic resources measurement focus, and is accounted for on the accrual basis.



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E. Measurement Focus and Basis of Accounting (Continued)

Fiduciary Funds

Employee Benefit Trust Fund

The Employee Benefit Trust Fund is used to administer resources received and held by the District as the trustee for employees participating in the District’s flexible benefit plan (Internal Revenue Code § 125 Cafeteria Plan).

Scholarship Private-Purpose Trust Fund

The Scholarship Private-Purpose Trust Fund is used to account for resources held in trust to be used by various other third parties to award scholarships to students.

Other Postemployment Benefit Trust

The Other Postemployment Benefit Trust Fund is used to account for resources set aside and held in an irrevocable trust arrangement for postemployment benefits.

F. Budgeting

Budgets presented in this report for comparison to actual amounts are presented in accordance with U.S. generally accepted accounting principles. Each June, the School Board adopts an annual budget for the following fiscal year for the General, Food Service, Community Service, Capital Projects, and Debt Service Funds. The approved budget is published in summary form in the District's legal newspaper. Reported budget amounts represent the amended budget as adopted by the School Board. Legal budgetary control is at the fund level. Budgeted expenditure appropriations lapse at year-end.

Procedurally, in establishing the budgetary data reflected in these financial statements, the Superintendent submits to the School Board prior to July 1, a proposed operating budget for the fiscal year commencing July 1. The operating budget includes proposed expenditures and the means to finance them. The budget is legally enacted by School Board action. Revisions to budgeted amounts must be approved by the School Board.

Total fund expenditures in excess of the budget require approval of the School Board. Spending control is established by the amount of expenditures budgeted for the fund, but management control is exercised at line item levels.



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F. Budgeting (Continued)

Budgeted amounts include mid-year budget amendments that amended revenue and expenditure budgets as follows:

Original AmendedRevenues Budget Amendments BudgetGeneral Fund 97,922,325$ (45,631)$ 97,876,694$ Special Revenue Fund:

Food Service Fund 4,813,900 58,500 4,872,400 Community Service Fund 7,003,032 388,491 7,391,523 Debt Service Fund 20,524,007 9,445,588 29,969,595

ExpendituresGeneral Fund 99,649,225$ 847,857$ 100,497,082$ Special Revenue Fund:

Food Service Fund 4,942,636 260,000 5,202,636 Community Service Fund 7,133,797 398,026 7,531,823

Debt Service Fund 22,341,247 9,444,862 31,786,109

Budget provisions for the Debt Service Fund are set by state law governing required debt service levels.

At the end of each fiscal year, if the General Fund has a net unassigned deficit fund balance, calculated in accordance with the uniform financial accounting and reporting standards for Minnesota school districts which excludes certain restricted balances specified in Minnesota Statutes, exceeding 2.5% of expenditures, a condition referred to as "statutory operating debt" exists. That debt requires retirement through the accumulation of subsequent operating surpluses in accordance with a "special operating plan" approved by the Commissioner of the Department of Education.

G. Cash and Investments

Cash and cash equivalents are considered to be cash on hand, demand deposits, and short-term investments with original maturities of three months or less from the date of acquisition.

Cash balances from all funds are combined and invested to the extent available in various securities as authorized by Minnesota Statutes. Earnings from the pooled investments are allocated to the respective funds on the basis of applicable cash balance participation by each fund.

Cash and investments held by trustee include balances held in segregated accounts that are established for specific purposes. In the Debt Service Fund, the refunding bond escrow account held by trustee can be used only to retire refunded bond issues and to pay interest on refunding bond issues until the crossover refunding dates. Interest earned on these investments is allocated directly to the escrow account.



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NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

G. Cash and Investments (Continued)

Investments are stated at their fair value as determined by quoted market prices, except for money market investments and participating interest-earning investment contracts that have a remaining maturity at time of purchase of one year or less which are recorded at amortized cost, provided that the fair value of those investments is not significantly affected by the impairment of the credit standing of the issuer or by other factors. Money market investments are short-term, highly liquid debt instruments including commercial paper, banker's acceptances, and U.S. Treasury and agency obligations. Investments in external investment pools operated in a manner consistent with the SEC's Rule 2a7 of the Investment Act of 1940 are valued at the pool's share price.

H. Accounts Receivable

Represents amounts receivable from individuals, firms, and corporations for goods and services furnished by the District. No substantial losses are anticipated from present receivable balances, therefore, no allowance for uncollectible accounts is deemed necessary.

I. Inventories

Inventories are recorded using the consumption method of accounting and consist of purchased food, supplies, and surplus commodities received from the federal government. Food and supply purchases are recorded at invoice cost, computed on a first-in, first-out method, and surplus commodities are stated at standardized cost, as determined by the Department of Agriculture.

J. Prepaid Items

Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepayments. Prepaid items are reported using the consumption method and recorded as an expense or expenditure at the time of consumption.

K. Deferred Outflows/Inflows of Resources

In addition to assets, the statement of financial position and balance sheet will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then.



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NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

K. Deferred Outflows/Inflows of Resources (Continued)

The District has two types of items that qualify for reporting in this category. When refunding debt issuances, the difference between the reacquisition price of the refunded debt and the net carrying amount of that debt (net of any unamortized premium or discount) is considered a deferred outflow of resources and amortized as a component of interest expense over the shorter of the remaining life of the refunded debt or the life of the new refunding debt. The second is deferred outflows of resources related to pensions. See Note 8 for detail.

In addition to liabilities, the statement of financial position and balance sheet will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The District has three types of deferred inflows, two of which are related to revenue recognition. The first is property taxes levied for subsequent year. As an imposed non-exchange revenue transaction, property taxes received or reported as a receivable before the period for which the property taxes are levied are reported as a deferred inflow of resources in the government-wide financial statements and in the governmental fund financial statements. The second type of deferred inflow of resources is delinquent property taxes. Governmental fund revenues are not recognized until available (collected not later than 60 days after the end of the District’s year-end) under the modified accrual basis of accounting. Delinquent taxes not collected within 60 days after the District’s year end are considered unavailable and reported as a deferred inflow of resources in the governmental fund financial statements. The District also has deferred inflows of resources related to pensions. See Note 8 for detail.

L. Property Taxes

Property tax levies are established by the School Board in December each year and are certified to the County for collection the following calendar year. In Minnesota, counties act as collection agents for all property taxes and are responsible for spreading all levies over taxable property. Such taxes become a lien on January 1. Taxes are generally due on May 15 and October 15 and counties generally remit taxes to the Districts at periodic intervals as they are collected. A portion of property taxes levied is paid through state credits which are included in revenue from state sources in the financial statements.



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L. Property Taxes (Continued)

Generally, tax revenue is recognized in the fiscal year ending June 30, following the calendar year in which the tax levy is collectible, while the current calendar year tax levy is recorded as a deferred inflow of resources (property taxes levied for subsequent year). The majority of District revenue in the General Fund and Debt Service Fund (and to a lesser extent in the District’s Community Service Special Revenue Fund) is determined annually by statutory funding formulas. The total revenue allowed by these formulas is then allocated between taxes and state aids by the Legislature based on education funding priorities. Changes in this allocation are periodically accompanied by a change in property tax revenue recognition referred to as the “tax shift.”

In accordance with state law, the current tax shift consists of an amount equal to 31% of the District's 2000 Pay 2001 operating referendum levy (frozen at $1,809,945) advance recognized as revenue in fiscal 2013 with no corresponding state aid adjustment. Certain other portions of the District’s 2014 pay 2015 levy, normally revenue for the 2015-16 fiscal year, are also advance recognized as June 30, 2015, as required by state statute to match revenue with the same fiscal year as the related expenditures.

Taxes that remain unpaid are classified as delinquent taxes receivable. Revenue from these delinquent property taxes that is not collected within 60 days of year-end is not available to finance the operations of the District in the current year. No allowance for uncollectible taxes has been provided as such amounts are not expected to be material. Current levies of local taxes, less the amount recognized as revenue in the current period, including portions assumed by the state which will be recognized as revenue in the next fiscal year beginning July 1, 2015, are included in the Property Taxes Levied for Subsequent Year account to indicate that, while they are current assets, they will not be recognized as revenue until the following year.

M. Capital Assets

Capital assets are capitalized at historical cost, or estimated historical cost for assets where actual historical cost is not available. Donated assets are recorded as capital assets at their estimated fair market value at the date of donation. The District maintains a capital asset threshold level of $5,000 or more and an estimated useful life in excess of one year. The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend asset lives are not capitalized.



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M. Capital Assets (Continued)

Capital assets are recorded in the Government-wide financial statement, but are not reported in the Fund financial statements. Capital assets are depreciated using the straight-line method over their estimated useful lives. Since surplus assets are sold for an immaterial amount when declared as no longer needed for public school purpose by the District, no salvage value is taken into consideration for depreciation purposes. Useful lives vary from 20 to 50 years for land improvements and buildings, and 5 to 15 years for equipment.

Capital assets not being depreciated include land and construction in process.

The District does not possess any material amounts of infrastructure capital assets. Items such as sidewalks and other land improvements are considered to be part of the cost of buildings or other improvable property.

N. Long-Term Obligations

In the government-wide financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities. Bond premiums and discounts are amortized as a component of interest expense over the life of the bonds using the straight-line method. Bonds payable are reported net of the applicable bond premium or discount. In the fund financial statements, governmental fund types recognize bond premiums and discounts during the current period.

The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses.

O. Pensions

For purposes of measuring the net pension liability, deferred outflows/inflows of resources, and pension expense, information about the fiduciary net positions of the Public Employees Retirement Association (PERA) and Teachers Retirement Association (TRA) and additions to/deductions from PERA’s and TRA’s fiduciary net position have been determined on the same basis as they are reported by PERA and TRA. For this purpose, plan contributions are recognized as of employer payroll paid dates and benefit payments and refunds are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.



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P. Accrued Employee Benefits

Vacation Pay

Under the terms of union contracts, certain employees accrue vacation at varying rates, portions of which are carried over to future years. Employees are reimbursed for any unused, accrued vacation upon termination. Vacation pay is accrued when incurred as compensated absences payable in the government-wide financial statements. Vacation pay is accrued in the governmental fund financial statements only when used or matured due to employee termination or similar circumstances.

Sick Pay

Substantially all District employees are entitled to sick leave at various rates. For certain employees, unused sick leave enters into the calculation of severance pay upon termination.

Severance or Retirement Pay

Members of certain district employee groups, including teachers, may become eligible to receive lump sum severance or retirement pay benefits. Teachers who began teaching full-time after July 1, 1991 are not eligible for early retirement incentive payments, but are eligible for deferred compensation matching programs. Eligibility for these benefits is based on years of service and/or minimum age requirements. The amount of the severance or retirement benefit is calculated by converting a portion of unused accumulated sick leave. No employee can receive severance or retirement benefits that exceed one year’s salary. Retirement benefits for certain eligible employees are paid into a post-employment tax sheltered annuity account. For all other employees, severance benefits are paid out directly to the employee.

Postemployment Health Care Benefits

Under the terms of certain collectively bargained employment contracts, including the teachers’ contract, the District is required to pay the health insurance premiums for retired employees until they reach age 65. For employees meeting certain length of service experience requirements, the amount to be paid is equal to the same insurance premium benefit as a full-time employee. See Note 10 for further information.

Q. Restricted Assets

Restricted assets are cash and cash equivalents whose use is limited by legal requirements such as a bond indenture. Restricted assets in these financial statements are labeled "Cash and Investments Held by Trustee”.

R. Unearned Revenue

Unearned revenues are those in which resources are received by the District before it has a legal claim to them. The District has reported unearned revenues for prepaid General Fund and Community Service Fund revenues and school lunch balances for students in the Food Service Fund.



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S. Fund Balance

In the fund financial statements, governmental funds report fund balances in classifications that disclose constraints for which amounts in those funds can be spent. These classifications are as follows:

Nonspendable – portions of fund balance related to prepaids, inventories, long term receivables, and corpus on any permanent fund. Restricted – funds are constrained from outside parties (statute, grantors, bond agreements, etc.). Committed – funds are established and modified by a resolution approved by the Board of Education. Assigned – consists of internally imposed constraints. The Board of Education passed a resolution authorizing the Superintendent and Finance and Operations Director to assign fund balances and their intended uses. Unassigned – is the residual classification for the General Fund and also reflects negative residual amounts in other funds.

When an expenditure is incurred for purposes for which both restricted and unrestricted fund balance is available, it is the District’s policy to use restricted first, then unrestricted fund balance.

When an expenditure is incurred for purposes for which committed, assigned, and unassigned amounts are available, it is the District’s policy to use committed first, then assigned, and finally unassigned amounts.

The District formally adopted a fund balance policy for the General Fund. The policy establishes a year-end minimum unassigned fund balance target of 5% of the annual operating budget.

T. Risk Management

The District is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; natural disasters and workers compensation. The District purchases commercial insurance coverage for such risks.

There has been no significant reduction in insurance coverage from the previous year in any of the District’s policies. Settled claims resulting from these risks have not exceeded insurance coverage in any of the past three fiscal years.



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U. Net Position

Net position represents the difference between assets, deferred outflow of resources and liabilities, and deferred inflows of resources in the government-wide, proprietary and Fiduciary Fund financial statements. Net investment in capital assets, consists of capital assets, net of accumulated depreciation, reduced by the outstanding balance of any long-term debt used to build or acquire the capital assets. Net position is reported as restricted in the government-wide financial statement when there are limitations imposed on their use through external restrictions imposed by creditors, grantors, laws or regulations of other governments.

V. Use of Estimates

The preparation of financial statement in conformity with U.S. 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. Estimates also affect the reported amounts of revenue and expenditures/expense during the reporting period. Actual results could differ from those estimates.

W. Prior Period Comparative Financial Information/Reclassification

The basic financial statements include certain prior-year summarized comparative information in total but not at the level of detail required for a presentation in conformity with generally accepted accounting principles. Accordingly, such information should be read in conjunction with the District’s financial statements for the year ended June 30, 2014, from which the summarized information was derived. Also, certain amounts presented in the prior year data have been reclassified in order to be consistent with the current year’s presentation.

NOTE 2 STEWARDSHIP AND ACCOUNTABILITY

Excess of Expenditures Over Budget

Expenditures exceeded budgeted amounts in the following fund during the year ended June 30, 2015:

Budget Expenditures ExcessSpecial Revenue Fund: Community Service Fund 7,531,823$ 7,554,270$ 22,447$

The overages were considered by District management to be the result of necessary expenditures critical to operations and were approved by the Board.



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NOTE 3 DEPOSITS AND INVESTMENTS

A. Deposits

The District maintains a cash and investment pool that is available for use by all funds. Each fund type’s portion of this pool is displayed on the statement of net position and the balance sheet as “Cash and Investments.” In accordance with Minnesota Statutes, the District maintains deposits at financial institutions which are authorized by the School District’s Board.

Custodial Credit Risk – Custodial credit risk for deposits is the risk that in the event of a bank failure, the School District’s deposits may not be returned to it. The School District does not have a deposit policy for custodial credit risk and follows Minnesota Statutes for deposits. Minnesota Statutes require that all deposits be protected by insurance, surety bond, or collateral. The market value of collateral pledged must equal 110% of the deposits not covered by insurance or corporate surety bonds. Authorized collateral include: U.S. government treasury bills, notes, or bonds; issues of a U.S. government agency; general obligations of a state or local government rated “A” or better; revenue obligations of a state or local government rated “AA” or better; irrevocable standby letter of credit issued by a Federal Home Loan Bank; and time deposits insured by a federal agency. Minnesota Statutes require securities pledged as collateral be held in safekeeping in a restricted account at the Federal Reserve Bank or at an account at a trust departments of a commercial bank or other financial institution not owned or controlled by the depository.

The carrying value and bank balance of the District’s deposits in banks at June 30, 2015 is $35,240,537 and $38,255,895, respectively, and were entirely covered by federal depository insurance or by surety bonds and collateral in accordance with Minnesota Statutes.

At June 30, 2015, the District’s petty cash fund totaled $4,100.



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NOTE 3 DEPOSITS AND INVESTMENTS (CONTINUED)

B. Investments

The District may also invest idle funds as authorized by Minnesota Statutes as follows:

Direct obligations or obligations guaranteed by the United States or its agencies Shares of investment companies registered under the Federal Investment

Company Act of 1940 and received the highest credit rating, is rated in one of the two highest rating categories by a statistical rating agency, and all of the investments have a final maturity of thirteen months or less

General obligations rated “A” or better; revenue obligations rated “AA” or better General obligations of the Minnesota Housing Finance Agency rate “A” or better Bankers acceptances of United States banks eligible for purchase by the Federal

Reserve System Commercial paper issued by United States banks corporations or their Canadian

subsidiaries, of highest quality category by a least two nationally recognized rating agencies, and maturing in 270 days or less

Guaranteed investment contracts guaranteed by United States commercial banks or domestic branches of foreign banks or United States insurance companies if similar debt obligations of the issuer or the collateral pledged by the issuer is in the top two rating categories

Repurchase or reverse purchase agreement and securities lending agreements financial institutions qualified as a “depository” by the government entity, with banks that are members of the Federal Reserve System with capitalization exceeding $10,000,000, a primary reporting dealer in U.S. government securities to the Federal Reserve Bank of New York, or certain Minnesota securities broker-dealers

Investments related to the OPEB Revocable Trust Fund may be invested in accordance with Minnesota statute 356A.06.

At June 30, 2015, the District’s investment balances were as follows:

MN Trust Investment Shares 56,460$ Negotiable CDs 8,181,700 MSDLAF+ Liquid Class 261,947 MSDLAF+ MAX Class 494,612 MSDLAF+ TERM 1,000,000

Total 9,994,719$

The MSDLAF+ is an external investment pool and its investments are valued at amortized cost, which approximates fair value in accordance with Rule 2a-7 of the Investment Company Act of 1940. The amortized cost method of valuation values a security at its cost on the date of purchase and thereafter assumes a constant amortization to maturity of any discount or premium, regardless of the impact of fluctuating interest rates on the market value of instruments.



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B. Investments (Continued)

Investments Held in Other Postemployment Benefit Trust – The following investments are held within the other postemployment benefit trust. The funds are invested in accordance with the investment policy adopted by the District for the OPEB Trust. State statute does not limit the allowable investments for OPEB trust assets.

Mutual Funds - Equity 3,629,863$ Mutual Funds - Fixed Income 2,994,741 Money Market Fund 17,290

Total 6,641,894$

Cash and Investments Held by Trustee – Cash and investments held by trustee are held by an escrow agent in accordance with the escrow agreements established with the 2013A refunding bond proceeds. The following shows a breakdown of investments held with trustee:

Federal National Mortgage Association 68,200,345$ Total Investments Held with Broker 68,200,345$

Credit Risk Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. The credit ratings for the District’s investments are as follows:

CreditType Quality Rating Amount MN Trust Investment Shares Portfolio AAAm $ 56,460 MSDLAF+ Liquid Class AAAm 261,947 MSDLAF+ MAX Class AAAm 494,612 MSDLAF+ TERM AAAf 1,000,000

Total 1,813,019$

The credit ratings for the Refunding Escrow are as follows:

Type Quality Rating Amount Federal National Mortgage Association AA $ 68,200,345



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Custodial Credit Risk – For an investment, custodial risk is the risk that, in the event of failure of the counterparty, the School District will not be able to recover the value of its investment or collateral securities that are in the possession of an outside party. The School District’s investment policy requires that brokers provide insurance to cover balances held in each investment account. As of June 30, 2015, the investment balances were fully covered by insurance for each brokerage firm.

Interest Rate Risk

Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. The District’s investment policies do not limit the maturities of investments; however, when purchasing investments the District considers such things as interest rates and cash flow needs. Maturities of the District’s investments are as follows: DISTRICT HOLDINGS

Less thanType 1 year 1 -2 years 2 - 5 yearsNegotiable CDs 6,695,784$ 1,485,916$ -$ MSDLAF+ TERM 1,000,000 - -

Total 7,695,784$ 1,485,916$ -$

The average duration of the OPEB Trust assets are as follows: OPEB TRUST

Less thanType 1 year 1 -2 years 2 - 5 years Over 5 yearsMutual Funds - Fixed Income -$ -$ 267,451$ 2,727,290$ Money Market Mutual Fund 17,290 - - -

Total 17,290$ -$ 267,451$ 2,727,290$

Maturities of the Refunding Escrow are as follows:

REFUNDING TRUSTLess than

Type 1 year 1 -2 years 2 - 5 yearsFederal National Mortgage Association 1,414,895$ 66,785,450$ -$



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Concentration of Credit Risk

The District places no limit on the amount that the District may invest in any one issuer. Currently, the Refunding trust had investments in the following issuer which individually comprised more than 5% of total investments: Type Amount Percentage

Federal National Mortgage Association 68,200,345$ 80% The deposits and investments are presented in the financial statements as follows:

Statement of Net Position:Cash and Investments 44,838,555$ Cash and Investments - Held by Trustee 68,200,345

Statement of Fiduciary Net Position:Cash and Investments 7,042,695

Total Cash and Investments 120,081,595$

NOTE 4 CAPITAL ASSETS

Capital asset activity for the year ended June 30, 2015 was as follows:

Beginning EndingBalance Increases Decreases Balance

Governmental ActivitiesCapital Assets, Not Being Depreciated:

Land 18,578,303$ -$ -$ 18,578,303$ Construction in Progress - 1,458,880 - 1,458,880

Total Capital Assets, Not Being Depreciated 18,578,303 1,458,880 - 20,037,183

Capital Assets, Being Depreciated:Land Improvements 6,342,694 130,146 - 6,472,840 Buildings and Improvements 232,064,587 2,590,792 - 234,655,379 Equipment 7,101,516 861,639 - 7,963,155

Total Capital Assets, Being Depreciated 245,508,797 3,582,577 - 249,091,374

Accumulated Depreciation for:Land Improvements (2,484,532) (321,242) - (2,805,774) Buildings and Improvements (62,524,900) (5,717,209) - (68,242,109) Equipment (3,848,162) (521,671) - (4,369,833)

Total Accumulated Depreciation (68,857,594) (6,560,122) - (75,417,716)

Total Capital Assets, Being Depreciated, Net 176,651,203 (2,977,545) - 173,673,658

Governmental Activities Capital Assets, Net 195,229,506$ (1,518,665)$ -$ 193,710,841$



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NOTE 4 CAPITAL ASSETS (CONTINUED)

Depreciation expense was charged to functions of the District as follows: Governmental Activities

Regular Instruction 133,114$ Instructional Support Services 167,146 Pupil Support Services 51,459 Sites and Buildings 6,150,212 Food Service 58,191

Total Depreciation Expense, Governmental Activities 6,560,122$

NOTE 5 LONG-TERM LIABILITIES

A. Components of General Long-Term Debt

Net Due

Interest Original Final Within

Issue Rate Issue Maturity One Year Total

2006A Refunding Bonds 3.75% - 4.10% 5,375,000$ 2021 10,000$ 5,330,000$

2007A Building Bonds 4.00% - 5.00% 93,375,000 2028 3,725,000 72,305,000

2009A GO Refunding Bonds 3.00% - 5.00% 28,110,000 2019 5,985,000 8,260,000

2012A Alt. Facilities and Refunding Bonds 2.00% - 5.00% 47,830,000 2025 2,120,000 42,775,000

2013A GO Building Refunding Bonds 3.00% - 4.00% 65,815,000 2028 - 65,815,000

2014A GO Building Refunding Bonds 3.00% 7,575,000 2020 1,400,000 7,575,000

2014B GO Taxable OPEB Refunding Bonds 2.00% 1,355,000 2017 665,000 1,355,000

Total General Obligation Bonds 13,905,000 203,415,000

Bond Premium - Net - 14,078,828

Bond Discounts - Net - (15,988)

Capital Lease Payable - 367,990

Certificates of Participation - 2,960,000

Pension Benefits Payable - 62,354,409

Severance Benefits Payable - 2,003,147

Compensated Absences Payable 806,616 806,616

14,711,616$ 285,970,002$

Principal Outstanding



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NOTE 5 LONG-TERM LIABILITIES (CONTINUED)

B. Descriptions of Long-Term Liabilities

General Obligation Bonds Payable

These bonds were issued to finance acquisitions, improvements, and/or construction of capital facilities or to refinance (refund) prior bond issues. Assets of the Debt Service Fund, together with scheduled future ad valorem tax revenue, are dedicated for the retirement of these obligations. The annual future debt service levies authorized are equal to 105% of the principal and interest due each year. These levies are subject to reduction if fund balance amounts exceed limitations imposed by Minnesota law.

In April 2006, the District issued $5,375,000 of General Obligation Refunding Bonds, Series 2006A. The proceeds of this issue were used to refund the 2001A bonds and had net present value debt service savings of $192,948.

In February 2007, the District issued $93,375,000 of General Obligation School Building Bonds, Series 2007A. The proceeds of this issue were used to finance the acquisition and betterment of school sites and facilities in the District.

In November 2009, the District issued $28,110,000 of General Obligation Refunding Bonds, Series 2009A. The proceeds of this issue were used to refund the 1998A, 2001A and 2003A issuances and had net present value debt service savings of $3,040,466.

In May 2012, the District issued $47,830,000 of General Obligation Alternative Facilities and Refunding Bonds, Series 2012A. A portion of the proceeds will be used to refund the 2004A Bond and had net present value debt service savings of $5,489,499. The remaining portion of the proceeds will be used to fund various future projects as part of the District’s capital improvement plan.

In March 2013, the District issued $65,815,000 of General Obligation School Building Refunding Bonds, Series 2013A. The proceeds will be placed in an escrow account and used to refund the remaining maturities of the 2007A at the crossover date of February 1, 2017. The proceeds will also be used to make interest payments on the new refunding debt and the District will continue to make debt service payments on the 2007A bonds until the crossover date. This refunding will result in a net present value debt service savings of $4,113,037.

In November 2014, the District issued $7,575,000 of General Obligation School Building Refunding Bonds, Series 2014A, and $1,355,000 of General Obligation Taxable OPEB Refunding Bonds, Series 2014B. The proceeds of the 2014A issuance were used to refund the 2005A General Obligation Building Refunding Bonds on February 1, 2015. This refunding resulted in a net present value debt service savings of $642,590. The proceeds of the 2014B issuance were used to refund the 2008A General Obligation Taxable OPEB Bonds on February 1, 2015. This refunding resulted in a net present value debt service savings of $68,552.



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B. Descriptions of Long-Term Liabilities (Continued)

Certificates of Participation

In November of 2009, the District issued $5,445,000 of Refunding Certificates of Participation, Series 2009B. The proceeds of this issue were used to refund, in advance of its stated maturity, Series 1999A School Facilities Lease Revenue Bonds maturing in 2019. The proceeds of the 2009 bond issue were placed in an escrow account pending the December 1, 2009, call date of the refunded issue. Until the call date, the District continued to make all rental payments on the 1999A bonds from proceeds in the escrow accounts. On December 1, 2010, the escrow account was used to call these bonds. The advance refunding was undertaken to reduce total debt service payments by $1,060,917. Although these transactions did not result in an accounting gain or loss, it resulted in an economic gain (difference between present value of debt service payments of the refunded and refunding bonds) of $909,944.

Capital Leases

In June of 2002, the District entered into a lease-purchase agreement with the Lease Finance Group, Inc. to finance the purchase of an existing bus garage site capitalized at $1,600,000. The lease bears an interest rate of 6.5% and a final maturity of July 1, 2017. The District makes semi-annual payments through the General Fund. Expense from the amortization of this leased asset is included with depreciation expense. Accumulated depreciation as of June 30, 2015 was $418,667.

In September 2011, the District entered into a lease-purchase agreement to finance the purchase of a 2012 Thomas 051MS school bus capitalized at $49,629. The lease bears an interest rate of 3.1% and a final maturity of August 1, 2015. The District makes annual payments through the General Fund. Expense from the amortization of this leased asset is included with depreciation expense. Accumulated depreciation as of June 30, 2015 was $24,298.

C. Minimum Debt Payments

Minimum annual principal and interest payments required to retire long-term debt, not including pension, severance and health benefits payable are as follows:

Year Ending June 30, Principal Interest Principal Interest Principal Interest

2016 13,905,000$ 8,474,788$ 150,780$ 21,831$ 545,000$ 126,350$

2017 11,575,000 7,900,880 143,137 15,294 570,000 107,500

2018 15,430,000 7,506,535 74,073 8,455 590,000 85,200

2019 15,835,000 6,908,190 - 1,722 615,000 62,000

2020 16,515,000 6,191,903 - - 640,000 37,900

2021 - 2025 78,415,000 19,888,940 - - - 12,800

2026 - 2030 51,740,000 3,941,475 - - - -

Total 203,415,000$ 60,812,711$ 367,990$ 47,303$ 2,960,000$ 431,750$

General ObligationBonds Payable

Capital LeasePayable

Certificates of ParticipationPayable



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D. Changes in Long-Term Debt

June 30, Net June 30,2014 Additions Retirements 2015

Bonds Payable 217,285,000$ 8,930,000$ 22,800,000$ 203,415,000$ Bond Premium 15,148,770 514,612 1,584,554 14,078,828 Bond Discounts (37,389) - (21,401) (15,988) Lease Purchase Obligations 510,786 - 142,796 367,990 Certificates of Participation 3,490,000 - 530,000 2,960,000 Pension Benefits Payable 73,606,933 2,770,789 14,023,313 62,354,409 Severance Benefits Payable 1,978,916 24,231 - 2,003,147 Compensated Absences Payable - Net 731,735 74,881 - 806,616

Total 312,714,751$ 12,314,513$ 39,059,262$ 285,970,002$

Governmental compensated absences, severance benefits, and other postemployment benefits are typically liquidated (paid) by the operating funds.

NOTE 6 INTERFUND BALANCES AND TRANSFERS

The District had no interfund transfers for the year ended June 30, 2015. The District had the following interfund receivable and payable at June 30, 2015:

Due from Due toOther Fund Other Fund

General Fund 123,835$ -$ OPEB Irrevocable Trust Fund - 123,835

Total 123,835$ 123,835$

The purpose of the interfund balances is the OPEB Irrevocable Trust Fund is reimbursing the General Fund for post-retirement health care benefits paid by the General Fund during the year.

NOTE 7 FUND BALANCES

Certain portions of fund balance are restricted based on state requirements to track special program funding, to provide for funding on certain long-term liabilities, or as required by other outside parties. A description of deficit balance reserves is included herein since the District has specific statutory authority to levy taxes for such deficits.



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NOTE 7 FUND BALANCES (CONTINUED)

Restricted and Assigned fund balances at year-end are as follows:

Restricted for Alternative Facilities Program – Represents available resources from the capital projects levy to be used for deferred maintenance.

Restricted for Basic Skills Program – Represents available resources to be used for basic skills programs as specified by state statute.

Restricted for Health and Safety – Represents available resources to be used exclusively for capital expenditure health and safety projects. Revenues are derived from tax levies and expenditures are for necessary corrections for fire and life safety hazards, asbestos removal and related repairs and cleanup, removal, disposal and repairs related to storing heating fuel or transportation fuel.

Restricted for Operating Capital – The District levies taxes and receives state aid to be used for the purchase of equipment, books and vehicles and to purchase, rent, improve and repair school facilities as allowed by state statute. The cumulative excess of such revenues over equipment and facilities expenditures is reported as a restriction of fund balance in the General Fund.

Restricted for Community Education Programs – Represents accumulated resources available to provide general community education programming.

Restricted for Early Childhood and Family Education Programs – Represents accumulated resources available to provide services for early childhood and family education programming.

Restricted for School Readiness – Represents accumulated resources available to provide school readiness programming.

Restricted for Bond Refundings – Represents available resources dedicated for refunding bond payments.

Restricted for Other Purposes – Represents amounts that can be spent only for the specific purposes stipulated by constitution, external resource providers, or through enabling legislation.

Assigned for Transportation – Represents amounts that are assigned for transportation costs.

Assigned for 21st Century – Represents dollars assigned for the District’s 21st Century program.

Assigned for Separation/Retirement Benefits – Represents amounts assigned for retirement benefits, including compensated absences, pension, other postemployment benefits and termination benefits.



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NOTE 7 FUND BALANCES (CONTINUED)

Assigned for Third-Party Billing Med-Asst. – Represents dollars assigned related to third-party/medical assistance.

Assigned for Capital Maintenance – Victoria Field House – Represents dollars assigned for the capital maintenance of the Victoria Field House.

Assigned for Quality Comp (Alternative Compensation) – Represents dollars assigned for unspent Q-Comp Aid and Levy revenue.

Assigned for Deferred Maintenance Projects – Represents funds set-aside to fund deferred maintenance projects.

Assigned for Capital Projects – Designated funds to support security and technology.

Assigned for Site Carryover – Represents dollars assigned for unspent site supply allocations.

NOTE 8 DEFINED BENEFIT PENSION PLANS

Substantially all employees of the District are required by state law to belong to pension plans administered by Teachers’ Retirement Association (TRA) or Public Employees’ Retirement Association (PERA), all of which are administered on a statewide basis. Disclosures relating to these plans follows: A. Plan Description

The District participates in the following defined benefit pension plans administered by the Public Employees Retirement Association (PERA) and Teachers Retirement Fund (TRA). PERA and TRA’s defined benefit pension plans are established and administered in accordance with Minnesota Statutes. PERA and TRA’s defined benefit pension plans are tax qualified plans under Section 401(a) of the Internal Revenue Code.

1. General Employees Retirement Plan (GERF)

PERA’s defined benefit pension plans are established and administered in accordance with Minnesota Statutes, Chapters 353 and 356. All full-time and certain part-time employees of the District other than teachers are covered by the General Employees Retirement Fund (GERF). GERF members belong to either the Coordinated Plan or the Basic Plan. Coordinated Plan members are covered by Social Security and Basic Plan members are not. The Basic Plan was closed to new members in 1967. All new members must participate in the Coordinated Plan.



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NOTE 8 DEFINED BENEFIT PENSION PLANS (CONTINUED)

A. Plan Description (Continued)

2. Teachers Retirement Fund (TRA)

TRA administers a Basic Plan (without Social Security coverage) and a Coordinated Plan (with Social Security coverage) in accordance with Minnesota Statutes, Chapters 354 and 356. TRA is a separate statutory entity and administered by a Board of Trustees. The Board consists of four active members, one retired member and three statutory officials.

Teachers employed in Minnesota's public elementary and secondary schools, charter schools, and certain educational institutions maintained by the state (except those teachers employed by the cities of Duluth and St. Paul, and by the University of Minnesota system) are required to be TRA members.

B. Benefits Provided

PERA and TRA provide retirement, disability, and death benefits. Benefit provisions are established by state statute and can only be modified by the state legislature.

PERA: Benefit increases are provided to benefit recipients each January. Increases are related to the funding ratio of the plan. Members in plans that are at least 90% funded for two consecutive years are given 2.5% increases. Members in plans that have not exceeded 90% funded, or have fallen below 80%, are given 1% increases.

TRA: Postretirement benefit increases are provided to eligible benefit recipients each January. The TRA increase is 2.0%. After the TRA funded ratio exceeds 90% for two consecutive years, the annual postretirement benefit will increase to 2.5%.

The benefit provisions stated in the following paragraphs of this section are current provisions and apply to active plan participants. Vested, terminated employees who are entitled to benefits but are not receiving them yet are bound by the provisions in effect at the time they last terminated their public service.

1. GERF Benefits Benefits are based on a member’s highest average salary for any five successive years of allowable service, age, and years of credit at termination of service. Two methods are used to compute benefits for PERA's Coordinated and Basic Plan members. The retiring member receives the higher of a step-rate benefit accrual formula (Method 1) or a level accrual formula (Method 2). Under Method 1, the annuity accrual rate for a Basic Plan member is 2.2% of average salary for each of the first ten years of service and 2.7% for each remaining year. The annuity accrual rate for a Coordinated Plan member is 1.2% of average salary for each of the first ten years and 1.7% for each remaining year. Under Method 2, the annuity accrual rate is 2.7% of average salary for Basic Plan members and 1.7% for Coordinated Plan members for each year of service. For members hired prior to July 1, 1989, a full annuity is available when age plus years of service equal 90 and normal retirement age is 65. For members hired on or after July 1, 1989, normal retirement age is the age for unreduced Social Security benefits capped at 66. Disability benefits are available for vested members, and are based upon years of service and average high-five salary.



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B. Benefits Provided (Continued)

2. TRA Benefits

TRA provides retirement benefits as well as disability benefits to members, and benefits to survivors upon death of eligible members. Benefits are established by Minnesota Statute and vest after three years of service credit. The defined retirement benefits are based on a member's highest average salary for any five consecutive years of allowable service, age, and a formula multiplier based on years of credit at termination of service.

Two methods are used to compute benefits for TRA's Coordinated and Basic Plan members. Members first employed before July 1, 1989, receive the greater of the Tier I or Tier II benefits as described.

Tier 1 Benefits

Tier 1 Step Rate Formula PercentageBasic First Ten Years of Service 2.2% per Year

All Years After 2.7% per YearCoordinated First Ten Years of Service are Up to July 1, 2006 1.2% per Year

First Ten Years, If Service Years are July 1, 2006 or After 1.4% per YearAll Other Years of Service If Service Years are Up to July 1, 2006 1.7% per YearAll Other Years of Service If Services Years are July 1, 206 or After 1.9% per Year

With these provisions:

(a) Normal retirement age is 65 with less than 30 years of allowable service and age 62 with 30 or more years of allowable service.

(b) 3.0% per year early retirement reduction factor for all years under normal retirement age.

(c) Unreduced benefits for early retirement under a Rule-of-90 (age plus allowable service equals 90 or more).

or

Tier II Benefits

For years of service prior to July 1, 2006, a level formula of 1.7% per year for coordinated members and 2.7% per year for basic members. For years of service July 1, 2006 and after, a level formula of 1.9% per year for· Coordinated members and 2.7% for Basic members applies. Beginning July l, 2015, the early retirement reduction factors are based on rates established under Minnesota Statute. Smaller reductions, more favorable to the member, will be applied to individuals who reach age 62 and have 30 years or more of service credit.



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B. Benefits Provided (Continued)

2. TRA Benefits (Continued)

Members first employed after June 30, 1989, receive only the Tier II calculation with a normal retirement age that is their retirement age for full Social Security retirement benefits, but not to exceed age 66.

Six different types of annuities are available to members upon retirement. The No Refund Life Plan is a lifetime annuity that ceases upon the death of the retiree - no survivor annuity is payable. A retiring member may also choose to provide survivor benefits to a designated beneficiary(ies) by selecting one of the five plans that have survivorship features. Vested members may also leave their contributions in the TRA Fund upon termination of service in order to qualify for a deferred annuity at retirement age. Any member terminating service is eligible for a refund of their employee contributions plus interest.

C. Contributions

Minnesota Statutes, Chapter 353 sets the rates for employer and employee contributions. Contribution rates can only be modified by the state legislature.

1. GERF Contributions

Basic Plan members and Coordinated Plan members were required to contribute 9.1% and 6.25%, respectively, of their annual covered salary in calendar year 2014. Coordinated Plan members contributed 6.5% of pay in 2015. In calendar year 2014, the District was required to contribute 11.78% of pay for Basic Plan members and 7.25% for Coordinated Plan members. In 2015, employer rates increased to 7.5% in the Coordinated Plan. The District’s contributions to the GERF for the plan’s fiscal year ended June 30, 2015, were $1,247,423. The District’s contributions were equal to the required contributions for each year as set by state statute.

2. TRA Contributions

Per Minnesota Statutes, Chapter 354 sets the contribution rates for employees and employers. Rates for each fiscal year were:

Employee Employer Employee EmployerBasic 10.5 % 11.0 % 11.0 % 11.5 %Coordinated 7.0 7.0 7.5 7.5

Ended June 30, 2014 Ended June 30, 2015

The District's contributions to TRA for the plan's fiscal year ended June 30, 2015, were $3,801,128. The District's contributions were equal to the required contributions for each year as set by state statute.



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D. Pension Costs

3. GERF Pension Costs

At June 30, 2015, the District reported a liability of $14,830,383 for its proportionate share of the GERF’s net pension liability. The net pension liability was measured as of June 30, 2014, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The District’s proportion of the net pension liability was based on the District’s contributions received by PERA during the measurement period for employer payroll paid dates from July 1, 2013, through June 30, 2014, relative to the total employer contributions received from all of PERA’s participating employers. At June 30, 2015, the District’s proportion was 0.3156%.

For the year ended June 30, 2015, the District recognized pension expense of $1,100,561 for its proportionate share of GERF’s pension expense.

At June 30, 2015, the District reported its proportionate share of GERF’s deferred outflows of resources and deferred inflows of resources from the following sources:

Description

Deferred Outflows of Resources

Deferred Inflows of

ResourcesDifferences Between Expected and Actual Economic Experience 227,522$ -$ Changes in Actuarial Assumptions 1,527,895 -

Net Difference Between Projected and Actual Earnings on Pension Plan Investments - 4,005,785

Changes in Proportion and Differences Between District Contributions and Proportionate Share of Contributions - -

District Contributions Subsequent to the Measurement Date 1,247,423 -

Total 3,002,840$ 4,005,785$



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D. Pension Costs (Continued)

3. GERF Pension Costs (Continued)

A total of $1,247,423 reported as deferred outflows of resources related to pensions resulting from District contributions to GERF subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2016. Other amounts reported as deferred outflows and inflows of resources related to GERF pensions will be recognized in pension expense as follows:

Year Ended June 30,

Pension Expenses Amount

2016 (416,307)$ 2017 (416,307) 2018 (416,307) 2019 (1,001,447) 2020 -

Thereafter -

4. TRA Pension Costs

At June 30, 2015, the District reported a liability of $47,524,026 for its proportionate share of TRA's net pension liability. The net pension liability was measured as of June 30, 2014, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The District's proportion of the net pension liability was based on the District's contributions to TRA in relation to total system contributions including direct aid from the State of Minnesota, City of Minneapolis and Minneapolis School District. The District's proportionate share was 1.0319% at the end of the measurement period and 0.9836% for the beginning of the period.

The pension liability amount reflected a reduction due to direct aid provided to TRA. The amount recognized by the District as its proportionate share of the net pension liability, the direct aid, and total portion of the net pension liability that was associated with the District were as follows:

Description AmountDistrict's Proportionate Share of the TRA Net Pension Liability 47,524,026$ State's Proportionate Share of TRA's Net Pension Liability Associated with the District 3,345,045

A change in benefit provisions that affected the measurement of the total pension liability since the prior measurement date was an increase of the contribution rates for both the member and employer.



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D. Pension Costs (Continued)

4. TRA Pension Costs (Continued)

For the year ended June 30, 2015, the District recognized pension expense of $2,828,355. It also recognized $145,920 as pension expense for the support provided by direct aid.

At June 30, 2015, the District reported its proportionate share of the TRA's deferred outflows of resources and deferred inflows of resources, and its contributions subsequent to the measurement date, related to pensions from the following sources:

Description

Deferred Outflows of Resources

Deferred Inflows of

ResourcesDifferences Between Expected and Actual Economic Experience 4,057,237$ -$ Changes in Actuarial Assumptions - -

Net Difference Between Projected and Actual Investment Earnings - 14,948,991

Changes in Proportion and Differences Between District Contributions and Proportionate Share of Contributions 2,492,352 -

District Contributions Subsequent to the Measurement Date 3,801,128 -

Total 10,350,717$ 14,948,991$

A total of $3,801,128 reported as deferred outflows of resources related to pensions resulting from District contributions to TRA subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2016. Other amounts reported as deferred outflows and inflows of resources related to TRA will be recognized in pension expense as follows:

Year Ended June 30,

Pension Expenses Amount

2016 (2,369,901)$ 2017 (2,369,901) 2018 (2,369,901) 2019 (2,369,901) 2020 1,080,202

Thereafter -



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E. Actuarial Assumptions

The total pension liability in the June 30, 2015, actuarial valuation was determined using the following actuarial assumptions:

Assumptions GERFInflation 2,75% per Year 3.50%Active Member Payroll Growth 3.50% per Year 3.75% Based on Years of ServiceInvestment Rate of Return 7.90% 8.25%

TRA

Salary increases were based on a service-related table. Mortality rates for active members, retirees, survivors and disabilitants were based on RP-2000 tables for males or females, as appropriate, with slight adjustments.

Actuarial assumptions used in the June 30, 2015, valuation were based on the results of actuarial experience studies. The actuarial assumptions used in the June 30, 2014, valuation were based on the results of the actuarial experience study for the period of July 1, 2004, to June 30, 2008, and a limited scope experience study dated August 29, 2014. The limited scope experience study addressed only inflation and long-term rate of return for the GASB 67 valuation.

The following changes in actuarial assumptions for GERF occurred in 2014: As of July 1, 2013, the postretirement benefit increase rate was assumed to increase from 1.0% to 2.5% on January 1, 2046. As of July 1, 2014, the postretirement benefit increase rate was assumed to increase from 1.0% to 2.5% on January 1, 2031.

There was a change in actuarial assumptions that affected the measurement of the total liability for TRA since the prior measurement date. Postretirement benefit adjustments are now assumed to increase from 2.0% annually to 2.5% annually once the legally specified criteria are met. This is estimated to occur July 1, 2034.

The long-term expected rate of return on pension plan investments is 7.9% for GERF and 8.25% for TRA. The State Board of Investment, which manages the investments of PERA, prepares an analysis of the reasonableness of the long-term expected rate of return on a regular basis using a building-block method in which best-estimate ranges of expected future rates of return are developed for each major asset class. These ranges are combined to produce an expected long-term rate of return by weighting the expected future rates of return by the target asset allocation percentages.



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E. Actuarial Assumptions (Continued)

The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table:

Asset Class Target

Allocation

Long-Term Expected Real Rate of Return

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

Totals 100 %

F. Discount Rate

The discount rate used to measure the total pension liability was 7.9% for GERF and 8.25% for TRA. The projection of cash flows used to determine the discount rate assumed that employee and employer contributions will be made at the rate specified in statute. Based on that assumption, each of the pension plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current active and inactive employees. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability.

G. Pension Liability Sensitivity

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

Description 1% Decrease Current

Discount Rate1% Increase in Discount Rate

GERF Discount Rate 6.90% 7.90% 8.90%District's Proportionate Share of the GERF Net Pension Liability 23,898,993$ 14,830,383$ 7,359,798$

TRA Discount Rate 7.25% 8.25% 9.25%District's Proportionate Share of the TRA Net Pension Liability 78,582,559$ 47,524,026$ 21,678,124$



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H. Pension Plan Fiduciary Net Position

Detailed information about GERF’s fiduciary’s net position is available in a separately-issued PERA financial report. That report may be obtained on the Internet at www.mnpera.org; by writing to PERA at 60 Empire Drive #200, St. Paul, Minnesota, 55103-2088; or by calling (651) 296-7460 or 1-800-652-9026.

Detailed information about TRA's fiduciary net position is available in a separately-issued TRA financial report. That report can be obtained at www.MinnesotaTRA.org; by writing to TRA at 60 Empire Drive #400, St. Paul, Minnesota, 55103-2088; or by calling (651) 296-2409 or 1-800-652-9026.

NOTE 9 COMMITMENTS AND CONTINGENCIES

A. Federal and State Programs

Amounts received or receivable from federal and state agencies are subject to agency audit and adjustment. Any disallowed claims, including amounts already collected, may constitute a liability of the applicable fund. The amount, if any, of funds which may be disallowed by the agencies cannot be determined at this time although the District expects such amounts, if any, to be immaterial.

B. Contingencies

The District is subject to legal proceedings and claims which arise in the ordinary course of business. As of the date of these financial statements, it is not determinable what the outcome of these issues will be or the potential liability, if any, to the District.



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NOTE 10 OTHER POSTEMPLOYMENT BENEFITS PAYABLE

The District follows GASB Statement No. 45, Accounting and Financial Reporting by Employer for Postemployment Benefits Other than Pensions. The District engaged an actuary to determine the District’s liability for postemployment healthcare benefits other than pensions as of July 1, 2013. A. Plan Description

The District operates a single-employer retiree benefit plan (the Plan) that provides health insurance to eligible employees and their spouses through the District’s health insurance plan. There are 1,053 active participants and 63 retired participants. Benefit and eligibility provisions are established through individual contracts and negotiations between the District and various unions representing District employees and are renegotiated each two-year bargaining period. The Plan does not issue a publicly available financial report.

B. Funding Policy

Contribution requirements are also negotiated between the District and union representatives. The eligibility for, amount of, duration of, and District's contribution to the cost of the benefits provided varies by contract and date of retirement. For fiscal year 2015, the District was reimbursed by its irrevocable trust for the explicit and implicit cost of benefits for retirees, and made no additional contributions to the irrevocable trust, and therefore made no contributions in relation to the ARC.

C. Annual OPEB Cost and Net OPEB Obligation

The District’s annual other postemployment benefit (OPEB) cost (expense) is calculated based on the annual required contribution (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any un-funded actuarial liabilities over a period not to exceed thirty years. The following table shows the components of the District’s annual OPEB cost for the year, the amount actually paid from the plan, and changes in the District’s net OPEB obligation.

Annual Required Contribution 465,446$ Interest on Net OPEB Obligation (154,015) Adjustment to Annual Required Contribution 224,292 Annual OPEB Cost (Expense) 535,723 Contributions Made - Increase in Net OPEB Obligation 535,723 Net OPEB Obligation (Asset) - Beginning of Year (4,400,434) Net OPEB Obligation (Asset) - End of Year (3,864,711)$



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NOTE 10 OTHER POSTEMPLOYMENT BENEFITS PAYABLE (CONTINUED)

C. Annual OPEB Cost and Net OPEB Obligation (Continued)

The District’s annual OPEB cost, the percentage of the annual OPEB cost contributed to the plan, and the net OPEB obligation for 2015 and the two preceding years are as follows:

Percentage NetFiscal Annual of Annual OPEBYear OPEB OPEB Cost Obligation

Ended Cost Contributed (Asset)6/30/2015 535,723$ 0.0% (3,864,711)$ 6/30/2014 555,953 46.3% (4,400,434) 6/30/2013 613,530 87.8% (4,699,041)

D. Funded Status and Funding Progress

In November 2011, the OPEB Trust was changed from a Revocable Trust to an Irrevocable Trust. As of July 1, 2013, the value of plan assets in the irrevocable trust totaled $6,304,081, which is 102.5% of the actuarially accrued liability. The annual payroll for active employees covered by the plan in the actuarial valuation was $46,631,738 for a ratio of UAAL to covered payroll of -0.3%.

Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and healthcare cost trends. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits.

E. Actuarial Methods and Assumptions

Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations.



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NOTE 10 OTHER POSTEMPLOYMENT BENEFITS PAYABLE (CONTINUED)

E. Actuarial Methods and Assumptions (Continued)

In the July 1, 2013 actuarial valuation, the projected unit credit actuarial cost method was used. The actuarial assumptions included a 3.5% discount rate which is a blended rate of the expected long-term investment returns on plan assets and on the employer’s own investments calculated based on the funded level of the plan at the valuation date. The initial healthcare trend rate was 7.5%, reduced by decrements to an ultimate rate of 5% after five years. The UAAL is being amortized as a level percentage of projected payrolls on an open basis. The amortization period at June 30, 2015 was not to exceed 28 years.

NOTE 11 SELF-INSURANCE

The District maintains an Internal Service Fund to account for and finance self-insurance programs for health and dental benefits. Accordingly, the District has not purchased outside insurance for the risks of losses to which it is exposed for amounts under its stop-loss limit of $150,000 at which point reinsurance coverage is available. The District also has aggregate stop-loss coverage in place which limits the District’s liability to 125% of the prior years’ claims. District management believes it is more economical to manage its risks internally and set aside assets for claim settlement. The Internal Service Fund currently services all claims and risk of loss to which the District is exposed for health expenses. Claims have not exceeded the District’s aggregate stop-loss limit for the past 2 years (fiscal year 2014 was the first year the District was self-insured for health benefits). Participants in the program make premium payments to the fund based on the insurance premium. The excess amount received above current year claims is used to establish a reserve for future claims. At June 30, 2015, there is a reserve of $2,235,898. District liabilities are reported when it is probable that a loss has occurred and the amount of that loss can be reasonably estimated. Liabilities include an amount for claims that have been incurred but not reported. Because actual claim liabilities depend on such complex factors as inflation, changes in legal doctrines, and damage awards, the process used in computing a claim liability does not necessarily result in an exact amount. Claims liabilities are re-evaluated periodically to take into consideration recently settled claims, the frequency of claims, and other economic and social factors. There were no liabilities in excess of claims paid at June 30, 2015. There is a possibility for loss if claims are in excess of the premiums collected. The District does not believe this occurrence would have a material financial effect on the District. The District held $2,991,932 in cash and investments at June 30, 2015, for payment of claims.



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NOTE 11 SELF-INSURANCE (CONTINUED)

Changes in the balances of claim liabilities during fiscal years 2015 and 2014 were as follows:

2015 2014Beginning of Fiscal Year Liability - July 1, 737,935$ 8,814$

Current Year Claims, Changes in Estimates 7,734,027 7,843,289 and Other ChargesCurrent Year Claims Paid, including an estimate of Claims Incurred but Not Reported (IBNR) (7,617,438) (7,114,168)

End of Fiscal Year Liability - June 30, 854,524$ 737,935$

NOTE 12 CHANGE IN ACCOUNTING PRINCIPLE

During fiscal year ended June 30, 2015, the District adopted GASB Statement No. 68, Accounting and Financial Reporting for Pensions, and related Statement No. 71. As a result, the District’s net position as of June 30, 2014 has been restated to reflect the recognition of the School’s proportionate share of the Public Employees’ Retirement Association of Minnesota General Employees’ Retirement Fund’s net pension liability as well as their portion of the Teacher’s Retirement Association’s Coordinated and Basic Plan net pension liability.


Net Position, June 30, 2014, as Previously Reported 54,592,715$

Cumulative Affect of Application of GASB 68, Net Pension Liability (73,606,933) Cumulative Affect of Application of GASB 71, Deferred Outflow of Resources for District Contributions Made to the Plan During Fiscal Year Ending June 30, 2014 4,531,670 Net Position, June 30, 2014, as Restated (14,482,548)$

NOTE 13 SUBSEQUENT EVENT

At the September 24, 2015 meeting, the school board approved issuance and sale of $4,985,000 General Obligation Refunding Bonds, Series 2015A with a sale date of October 22, 2015. These bonds will be used to refund the outstanding maturities of the District’s General Obligation Refunding Bonds, Series 2006A. Based on preliminary estimates of interest rates, the current refunding of these bonds will generate a net present value savings of approximately $447,609 over the remaining life of the bonds.

REQUIRED SUPPLEMENTAL INFORMATION


SCHEDULE OF FUNDING PROGRESS AND EMPLOYER CONTRIBUTIONS FOR OTHER POSTEMPLOYMENT BENEFITS

JUNE 30, 2015

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SCHEDULE OF FUNDING PROGRESS FOR:

Actuarial UAAL as aActuarial Accrued Percentage

Actuarial Value of Liability Unfunded Funded Covered of CoveredValuation Assets (AAL) AAL Ratio Payroll Payroll

Date (a) (b) (b-a) (a/b) (c) ((b-a)/c)7/1/2013 6,304,081$ 6,150,824$ (153,257)$ 102.5% 46,631,738$ -0.3%7/1/2011 5,736,086 6,629,716 893,630 86.5% 47,107,851 1.9%7/1/2009 - 7,348,381 7,348,381 0.0% 44,876,204 16.4%

Other Postemployment Benefits Payable

SCHEDULE OF EMPLOYER CONTRIBUTIONS FOR:

AnnualYear Ended Required Percentage

June 30, Contribution Contributed2014 465,446$ 0%2012 820,953 741%2010 838,808 76%

Other Postemployment Benefits


TRA SCHEDULE OF THE DISTRICT’S PROPORTIONATE SHARE OF THE NET PENSION LIABILITY

JUNE 30, 2015

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District's Proportion of the Net Pension Liability 1.0319%

District's Proportionate Share of the Net Pension Liability 47,524,026$ State's Proportionate Share of the Net Pension Liability Associated with District 3,345,045

Total 50,869,071$

District's Covered-Employee Payroll 50,681,707 District's Proportionate Share of the Net Pension Liability as a Percentage of Its Covered-Employee Payroll 93.77%Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 81.50%


TRA SCHEDULE OF DISTRICT CONTRIBUTIONS YEAR ENDED JUNE 30, 2015


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2015 2014

Statutorily Required Contribution 3,801,128$ 3,330,362$ Contributions in Relation to the Statutorily Required Contribution (3,801,128) (3,330,362) Contribution Deficiency (Excess) -$ -$

District's Covered-Employee Payroll 50,681,707$ 47,576,600$

Contributions as a Percentage of Covered Employee Payroll 7.5% 7.0%


PERA SCHEDULE OF THE DISTRICT’S PROPORTIONATE SHARE OF THE NET PENSION LIABILITY

JUNE 30, 2015

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District's Proportion of the Net Pension Liability 0.3156%

District's Proportionate Share of the Net Pension Liability 14,830,383$ District's Covered-Employee Payroll 16,914,210

District's Proportionate Share of the Net Pension Liability as a Percentage of Its Covered-Employee Payroll 87.68%Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 78.70%


PERA SCHEDULE OF THE DISTRICT CONTRIBUTIONS YEAR ENDED JUNE 30, 2015


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2015 2014

Statutorily Required Contribution 1,247,423$ 1,201,308$ Contributions in Relation to the Statutorily Required Contribution (1,247,423) (1,201,308) Contribution Deficiency (Excess) -$ -$

District's Covered-Employee Payroll 16,914,210$ 16,569,766$

Contributions as a Percentage of Covered Employee Payroll 7.38% 7.25%

SUPPLEMENTAL INFORMATION


GENERAL FUND BALANCE SHEET


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2015 2014

ASSETSCash and Temporary Investments 24,091,538$ 23,072,506$ Receivables:

Current Taxes 10,693,620 10,110,643 Delinquent Taxes 163,854 251,692 Accounts and Interest Receivable 57,834 105,598 Due from Other Funds 123,835 160,515 Due from Other Minnesota School Districts 45,765 4,824 Due from Minnesota Department of Education 6,986,534 7,085,139 Due from Federal through the Minnesota Department of Education 1,124,548 1,053,538

Due from Other Governmental Units 227,268 247,616 Inventories 69,589 117,535 Prepaid Items 100,412 103,785

Total Assets 43,684,797$ 42,313,391$

LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCE

Liabilities:Salaries and Payroll Deductions Payable 9,129,456$ 8,523,484$ Accounts and Contracts Payable 1,017,217 574,772 Due to Other Minnesota School Districts 292,506 277,473 Due to Other Governmental Units 198,884 480,422 Unearned Revenue 11,771 21,328

Total Liabilities 10,649,834 9,877,479

Deferred Inflows of Resources:Property Taxes Levied for Subsequent Year 18,545,878 17,264,324 Unavailable Revenue - Delinquent Taxes 90,436 131,804

Total Deferred Inflows of Resources 18,636,314 17,396,128


Prepaid Items 100,412 103,785Inventory 69,589 117,535

Restricted for:Basic Skills Programs 52,676 - Health and Safety 77,369 220,722 Operating Capital 454,075 381,734

Assigned for:Transportation 91,497 91,497 21st Century 526,514 526,514 Separation/Retirement Benefits 1,400,000 1,400,000 Third-Party Billing Med-Asst. 627,658 536,810 Capital Maintenance - Victoria Field House 80,000 80,000 Quality Comp 333,154 237,075 Deferred Maintenance 135,430 750,000 Capital Projects - 100,000 Site Carry-Over 635,194 609,199

Unassigned 9,815,081 9,884,913 Total Fund Balance 14,398,649 15,039,784

Total Liabilities, Deferred Inflows of Resources, and Fund Balance 43,684,797$ 42,313,391$


GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGE IN FUND BALANCE

BUDGET AND ACTUAL YEAR ENDED JUNE 30, 2015


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2015 2014

Over(Under)

Final Actual Final ActualBudget Amounts Budget Amounts

REVENUES Local Sources:

Property Taxes 15,790,923$ 16,221,766$ 430,843$ 10,838,216$ Earnings on Investments 20,000 62,018 42,018 69,289 Other 2,782,300 3,162,404 380,104 3,534,566

State Sources 76,981,106 77,752,072 770,966 78,208,580 Federal Sources 2,302,365 2,176,521 (125,844) 2,463,899

Total Revenues 97,876,694 99,374,781 1,498,087 95,114,550 EXPENDITURES

Current:Administration:

Salaries 2,769,084 2,767,310 (1,774) 2,468,905 Employee Benefits 653,379 646,241 (7,138) 596,485 Purchased Services 86,772 71,943 (14,829) 92,770 Supplies and Materials 24,034 31,411 7,377 29,369 Capital Expenditures 2,500 2,025 (475) 121,655 Other Expenditures 55,031 56,314 1,283 42,026

Total Administration 3,590,800 3,575,244 (15,556) 3,351,210

District Support Services:Salaries 1,795,918 1,758,125 (37,793) 1,711,513 Employee Benefits 496,580 487,660 (8,920) 480,601 Purchased Services 720,025 629,737 (90,288) 657,816 Supplies and Materials 312,828 174,576 (138,252) 67,393 Capital Expenditures 223,797 330,105 106,308 349,720 Other Expenditures (51,280) (22,153) 29,127 4,673

Total District Support Services 3,497,868 3,358,050 (139,818) 3,271,716

Elementary and Secondary Regular Instruction:

Salaries 34,174,274 33,419,376 (754,898) 31,313,588 Employee Benefits 8,362,872 8,395,092 32,220 7,475,832 Purchased Services 1,524,443 1,965,016 440,573 2,047,766 Supplies and Materials 1,731,285 1,827,997 96,712 1,689,597 Capital Expenditures 891,339 914,451 23,112 905,338 Other Expenditures 24,913 34,459 9,546 32,527

Total Elementary and Secondary Regular Instruction 46,709,126 46,556,391 (152,735) 43,464,648



BUDGET AND ACTUAL (CONTINUED) YEAR ENDED JUNE 30, 2015


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2015 2014

Over(Under)

Final Actual Final Actual

Budget Amounts Budget AmountsEXPENDITURES (CONTINUED)

Current (Continued):Vocational Education Instruction:

Salaries 797,591$ 800,776$ 3,185$ 538,368$ Employee Benefits 217,700 214,460 (3,240) 126,654 Purchased Services 679,155 669,053 (10,102) 760,379 Supplies and Materials 1,345 499 (846) 9,255 Capital Expenditures 1,100 - (1,100) 1,229 Other Expenditures 295 400 105 505

Total Vocational Education Instruction 1,697,186 1,685,188 (11,998) 1,436,390

Special Education Instruction:

Salaries 11,937,396 11,933,968 (3,428) 11,247,608 Employee Benefits 2,920,992 2,919,152 (1,840) 2,654,187 Purchased Services 432,859 368,707 (64,152) 539,255 Supplies and Materials 222,838 166,029 (56,809) 201,474 Capital Expenditures 42,000 14,648 (27,352) 27,260 Other Expenditures 177,401 170,714 (6,687) 137,827

Total Special Education Instruction 15,733,486 15,573,218 (160,268) 14,807,611

Instructional Support Services:

Salaries 6,897,653 7,172,659 275,006 5,997,204 Employee Benefits 1,636,936 1,668,218 31,282 1,285,840 Purchased Services 602,024 378,663 (223,361) 399,438 Supplies and Materials 204,063 303,675 99,612 294,269 Capital Expenditures 852,286 754,400 (97,886) 1,046,476 Other Expenditures 22,473 20,370 (2,103) 6,335

Total Instructional Support Services 10,215,435 10,297,985 82,550 9,029,562

Pupil Support Services:

Salaries 2,522,331 2,492,577 (29,754) 2,821,546 Employee Benefits 608,031 590,345 (17,686) 655,797 Purchased Services 5,594,752 5,615,547 20,795 5,452,937 Supplies and Materials 291,660 173,673 (117,987) 309,189 Capital Expenditures 40,763 37,841 (2,922) 79,150 Other Expenditures 400 1,205 805 1,010

Total Pupil Support Services 9,057,937 8,911,188 (146,749) 9,319,629



BUDGET AND ACTUAL (CONTINUED) YEAR ENDED JUNE 30, 2015


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2015 2014

Over(Under)

Final Actual Final Actual

Budget Amounts Budget AmountsEXPENDITURES (CONTINUED)

Current (Continued): Sites and Buildings:

Salaries 3,029,709$ 3,012,485$ (17,224)$ 3,005,014$ Employee Benefits 912,919 912,505 (414) 887,938 Purchased Services 3,525,638 3,598,700 73,062 3,715,899 Supplies and Materials 536,846 593,606 56,760 593,576 Capital Expenditures 971,885 926,469 (45,416) 715,195 Other Expenditures 13,191 11,333 (1,858) 8,550

Total Sites and Buildings 8,990,188 9,055,098 64,910 8,926,172

Fiscal and Other Fixed Cost Programs:

Purchased Services 197,113 197,113 - 186,669

Debt Service:Principal 660,565 672,796 12,231 651,548 Interest and Fiscal Charges 147,378 135,147 (12,231) 170,104

Total Debt Service 807,943 807,943 - 821,652

Total Expenditures 100,497,082 100,017,418 (479,664) 94,615,259

Excess (Deficiency) of Revenues Over (Under) Expenditures (2,620,388) (642,637) 1,977,751 499,291

OTHER FINANCING SOURCESSale of Equipment Proceeds - 1,502 1,502 -

Net Change in Fund Balance (2,620,388)$ (641,135) 1,979,253$ 499,291

FUND BALANCEBeginning of Year 15,039,784 14,540,493

End of Year 14,398,649$ 15,039,784$


FOOD SERVICE FUND BALANCE SHEET


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2015 2014

Cash and Temporary Investments 1,153,638$ 1,078,194$ Accounts and Interest Receivable 360 108 Due from Other Minnesota School Districts 11,417 657 Due from Minnesota Department of Education 70,727 2,371 Due from Federal through the Minnesota Department of Education 187,764 75,351 Inventory 64,365 136,111 Prepaid Items 5,050 4,130

Total Assets 1,493,321$ 1,296,922$

Liabilities:Salaries and Payroll Deductions Payable 228,371$ 222,995$ Accounts and Contracts Payable 15,982 186,718 Due to Other Minnesota School Districts - 7,841 Unearned Revenue 163,453 131,507

Total Liabilities 407,806 549,061


Prepaid Items 5,050 4,130Inventory 64,365 136,111

Restricted for Fund Purposes 1,016,100 607,620 Total Fund Balance 1,085,515 747,861

Total Liabilities and Fund Balance 1,493,321$ 1,296,922$

ASSETS

LIABILITIES AND FUND BALANCE


FOOD SERVICE FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGE IN FUND BALANCE



(90)

2014

Over (Under)



Earnings on Investments 500$ 2,280$ 1,780$ 1,916$ Other - Primarily Meal Sales 3,367,450 3,377,014 9,564 3,405,897

State Sources 169,650 290,654 121,004 147,966 Federal Sources 1,334,800 1,617,908 283,108 1,503,994

Total Revenues 4,872,400 5,287,856 415,456 5,059,773


Salaries 1,566,036 1,552,939 (13,097) 1,504,114 Employee Benefits 357,659 354,475 (3,184) 333,739 Purchased Services 264,625 258,226 (6,399) 256,937 Supplies and Materials 2,699,016 2,629,582 (69,434) 2,705,245 Other Expenditures 2,000 324 (1,676) 597

Capital Outlay 313,300 162,256 (151,044) 460,512


Excess (Deficiency) of Revenues Over (Under) Expenditures (330,236) 330,054 660,290 (201,371)

OTHER FINANCING SOURCESSale of Equipment Proceeds - 7,600 7,600 12,539

Net Change in Fund Balance (330,236)$ 337,654 667,890$ (188,832)

FUND BALANCE

Beginning of Year 747,861 936,693

End of Year 1,085,515$ 747,861$

2015


COMMUNITY SERVICE FUND BALANCE SHEET


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2015 2014

ASSETSCash and Temporary Investments 2,064,498$ 2,139,809$ Receivables:

Current Taxes 298,682 393,829 Delinquent Taxes 6,864 11,246 Accounts and Interest Receivable 304,475 325,368 Due from Other Minnesota School Districts 56,026 - Due from Minnesota Department of Education 94,133 45,972

Due from Other Governmental Units 6,418 8,291 Prepaid Items 7,299 4,318

Total Assets 2,838,395$ 2,928,833$

LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCE

Liabilities:Salaries and Payroll Deductions Payable 376,260$ 454,261$ Accounts and Contracts Payable 109,693 115,464 Due to Other School Districts 2,756 - Due to Other Governmental Units 34,758 39,640 Unearned Revenue 306,123 280,937

Total Liabilities 829,590 890,302

Deferred Inflows of Resources:Property Taxes Levied for Subsequent Year 564,404 731,215 Unavailable Revenue - Delinquent Taxes 3,933 5,910

Total Deferred Inflows of Resources 568,337 737,125


Prepaid Items 7,299 4,318Restricted for Community Education Programs 1,326,911 1,247,098 Restricted for Early Childhood and Family Education 79,246 40,146 Restricted for School Readiness 14,747 9,844 Restricted for Other Programs 12,265 -

Total Fund Balance 1,440,468 1,301,406

Total Liabilities, Deferred Inflows of Resources, and Fund Balance 2,838,395$ 2,928,833$


COMMUNITY SERVICE FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGE IN FUND BALANCE



(92)

2014

Over (Under)



Property Taxes 1,217,861$ 1,351,301$ 133,440$ 1,016,755$ Earnings on Investments 2,000 3,213 1,213 2,335 Other - Primarily Tuition and Fees 5,127,935 5,223,524 95,589 6,407,206

State Sources 1,043,727 1,115,294 71,567 1,255,034

Total Revenues 7,391,523 7,693,332 301,809 8,681,330


Salaries 4,055,574 4,088,897 33,323 4,615,110 Employee Benefits 912,850 865,690 (47,160) 1,008,074 Purchased Services 1,744,883 1,844,080 99,197 1,678,669 Supplies and Materials 671,619 554,820 (116,799) 688,030 Other Expenditures 26,497 26,238 (259) 83,202

Capital Outlay 120,400 174,545 54,145 165,735

Total Expenditures 7,531,823 7,554,270 22,447 8,238,820

Excess (Deficiency) of Revenues Over (Under) Expenditures (140,300)$ 139,062 279,362$ 442,510

FUND BALANCEBeginning of Year 1,301,406 858,896

End of Year 1,440,468$ 1,301,406$

2015


CAPITAL PROJECTS – BUILDING CONSTRUCTION FUND BALANCE SHEET


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2015 2014

ASSETSCash and Temporary Investments 1,272,621$ 3,799,745$ Accounts and Interest Receivable 1,484 7,955

Total Assets 1,274,105$ 3,807,700$

LIABILITIES AND FUND BALANCELiabilities:

Accounts and Contracts Payable 363,283$ 202,171$

Fund Balance:Restricted for Alternative Facility Program 910,822 3,605,529

Total Liabilities and Fund Balance 1,274,105$ 3,807,700$


CAPITAL PROJECTS – BUILDING CONSTRUCTION FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGE IN FUND BALANCE



(94)

2014

OverFinal (Under)

Budgeted Actual Final ActualAmounts Amounts Budget Amounts


Property Taxes 2,450,000$ 2,450,000$ -$ -$ Earnings on Investments 2,500 8,023 5,523 12,272

Total Revenues 2,452,500 2,458,023 5,523 12,272


Salaries 148,500 148,994 494 68,927 Employee Benefits 41,363 41,362 (1) 17,606 Purchased Services 369,971 807,080 437,109 1,266,745 Supplies and Materials - 2,319 2,319 -

Capital Outlay 4,877,422 4,152,975 (724,447) 2,653,926


Excess (Deficiency) of Revenues Over (Under) Expenditures (2,984,756)$ (2,694,707) 290,049$ (3,994,932)

Fund Balance - Beginning 3,605,529 7,600,461

Fund Balance - Ending 910,822$ 3,605,529$

2015


DEBT SERVICE FUND BALANCE SHEET


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Regular Other

Debt PostemploymentService Benefits 2015 2014

Cash and Temporary Investments 12,774,607$ 489,721$ 13,264,328$ 12,670,023$ Cash and Investments Held by Trustee 68,200,345 - 68,200,345 69,770,504 Receivables:

Current Taxes 10,243,943 383,932 10,627,875 10,175,453 Delinquent Taxes 161,078 8,902 169,980 265,398 Due from Minnesota Department of Education 94,170 120 94,290 111,023

Total Assets 91,474,143$ 882,675$ 92,356,818$ 92,992,401$

RESOURCES, AND FUND BALANCEDeferred Inflows of Resources:

Property Taxes Levied for Subsequent Year 19,357,440$ 725,496$ 20,082,936$ 18,892,606$ Unavailable Revenue - Delinquent Taxes 89,604 5,778 95,382 141,020

Total Deferred Inflows of Resources 19,447,044 731,274 20,178,318 19,033,626

Fund Balance:Restricted for Bond Refunding 68,200,345 - 68,200,345 69,770,504 Restricted for Debt Service 3,826,754 151,401 3,978,155 4,188,271

Total Fund Balance 72,027,099 151,401 72,178,500 73,958,775

Total Liabilities, Deferred Inflows of Resources, and Fund Balance 91,474,143$ 882,675$ 92,356,818$ 92,992,401$

ASSETS

LIABILITIES, DEFERRED INFLOWS OF

Totals


DEBT SERVICE FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGE IN FUND BALANCE


(WITH SUMMARIZED FINANCIAL INFORMATION FOR THE YEAR ENDED JUNE 30, 2014)

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2015 2014

Actual OverFinal Regular Other (Under)

Budgeted Debt Postemployment Actual Final ActualAmounts Service Benefits Amounts Budget Amounts


Property Tax 18,892,892$ 18,120,361$ 771,514$ 18,891,875$ (1,017)$ 19,050,406$ Earnings on Investments 880,226 717,590 1,395 718,985 (161,241) 1,298,511 Other - 1,684 4,883 6,567 6,567 -

State Sources 751,865 941,788 1,204 942,992 191,127 1,110,243

Total Revenues 20,524,983 19,781,423 778,996 20,560,419 35,436 21,459,160

EXPENDITURESDebt Service:

Bond Principal 13,455,000 12,830,000 625,000 13,455,000 - 12,870,000Bond Interest 8,878,747 8,769,945 108,800 8,878,745 (2) 8,996,171Paying Agent Fees and other 107,362 74,149 32,412 106,561 (801) 9,420

Total Expenditures 22,441,109 21,674,094 766,212 22,440,306 (803) 21,875,591

Excess (Deficiency) of Revenues Over (Under) Expenditures (1,916,126) (1,892,671) 12,784 (1,879,887) 36,239 (416,431)

OTHER FINANCING SOURCES (USES)Face Amount of Bonds Issued 9,444,612 7,575,000 1,355,000 8,930,000 (514,612) - Bond Premium 514,612 487,200 27,412 514,612 - - Payment to Refunded Bond Escrow Agent (9,345,000) (7,995,000) (1,350,000) (9,345,000) - -

Total Other Financing Sources (Uses) 614,224 67,200 32,412 99,612 (514,612) -

Net Change in Fund Balances (1,301,902)$ (1,825,471) 45,196 (1,780,275) (478,373)$ (416,431)

Fund Balance - Beginning 73,852,570 106,205 73,958,775 74,375,206

Fund Balance - Ending 72,027,099$ 151,401$ 72,178,500$ 73,958,775$


UNIFORM FINANCIAL ACCOUNTING AND REPORTING STANDARDS COMPLIANCE TABLE


(97)

AUDIT UFARS AUDIT-UFARS

01 GENERAL FUNDTotal Revenue 99,374,781$ 99,374,778$ 3$ Total Expenditures 100,017,418 100,017,418 - Nonspendable

460 Nonspendable Fund Balance 170,001 170,001 - Restricted/Reserved:

403 Staff Development - - - 405 Deferred Maintenance - - - 406 Health & Safety 77,369 77,369 - 407 Capital Project Levy - - - 408 Cooperative Programs - - - 411 Severance Pay413 Project Funded by COP - - - 414 Operating Debt - - - 416 Levy Reduction - - - 417 Taconite Building Maint - - - 423 Certain Teacher Programs - - - 424 Operating Capital 454,075 454,075 - 426 $25 Taconite - - - 427 Disabled Accessibility - - - 428 Learning & Development - - - 434 Area Learning Center - - - 435 Contracted Alt. Programs - - - 436 State Approved Alt. Program - - - 438 Gifted & Talented - - - 441 Basic Skills Programs 52,676 52,676 - 445 Career and Technical Programs - - - 446 First Grade Preparedness - - - 449 Safe Schools Crime - - - 450 Prekindergarten - - - 451 QZAB Payments - - - 452 OPEB Liab Not In Trust - - - 453 Unfunded Sev & Retirement Levy - - -

Restricted:464 Restricted Fund Balance - - -

Committed:418 Committed for Separation461 Committed Fund Balance - - -

Assigned:462 Assigned Fund Balance 3,829,447 3,829,448 (1)

Unassigned:422 Unassigned Fund Balance 9,815,081 9,815,081 -

02 FOOD SERVICETotal Revenue 5,287,856 5,287,856 - Total Expenditures 4,957,802 4,957,799 3 Nonspendable:

460 Nonspendable 69,415 69,415 - Restricted:

452 OPEB Liab Not In Trust - - - 464 Restricted Fund Balance 1,016,100 1,016,101 (1)

Unassigned:463 Unassigned Fund Balance - - -

04 COMMUNITY SERVICETotal Revenue 7,693,332 7,693,330 2 Total Expenditures 7,554,270 7,554,271 (1) Nonspendable:

460 Nonspendable 7,299 7,299 - Restricted/Reserved:

426 $25 Taconite - - - 431 Community Education 1,326,911 1,326,910 1 432 E.C.F.E. 79,246 79,246 - 444 School Readiness 14,747 14,747 - 447 Adult Basic Education - - - 452 OPEB Liab Not In Trust - - -

Restricted:464 Restricted Fund Balance 12,265 12,265 -



UNIFORM FINANCIAL ACCOUNTING AND REPORTING STANDARDS COMPLIANCE TABLE (CONTINUED)


(98)

AUDIT UFARS AUDIT-UFARS

06 BUILDING CONSTRUCTIONTotal Revenue 2,458,023$ 2,458,023$ -$ Total Expenditures 5,152,730 5,152,729 1 Nonspendable:

460 Nonspendable Fund Balance - - - Restricted/Reserved:

407 Capital Projects Levy (125,000) (125,000) - 409 Alternative Facility Program 1,035,822 1,035,824 (2) 413 Project Funded by COP - - -

Restricted:464 Restricted Fund Balance - - -


07 DEBT SERVICETotal Revenue 19,781,423 19,781,423 - Total Expenditures 21,674,094 21,674,095 (1) Nonspendable:

460 Nonspendable Fund Balance - - - Restricted/Reserved:

425 Bond Refundings 68,200,345 68,200,345 - 451 QZAB Payments - - -

Restricted:464 Restricted Fund Balance 3,826,754 3,826,754 -


08 TRUSTTotal Revenue 875,028 875,028 - Total Expenditures 862,782 862,782 -

422 Net Position 264,657 264,656 1

20 INTERNAL SERVICETotal Revenue 8,693,807 8,693,807 - Total Expenditures 7,635,537 7,635,537 -

422 Net Position 2,235,898 2,235,898 -

25 OPEB REVOCABLE TRUSTTotal Revenue - - - Total Expenditures - - -

422 Net Position - - -

45 OPEB IRREVOCABLE TRUSTTotal Revenue 187,972 187,972 - Total Expenditures 431,595 431,595 -

422 Net Position 6,518,059 6,518,059 -

47 OPEB DEBT SERVICETotal Revenue 778,996 778,997 (1) Total Expenditures 766,212 766,212 - Nonspendable:

460 Nonspendable - - - Restricted:

425 Bond Refundings - - - 464 Restricted Fund Balance 151,401 151,401 -


STATISTICAL SECTION (UNAUDITED) This part of Independent School District No. 112’ comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the District’s overall financial health. Contents Page Financial Trends

These schedules contain trend information to help the reader understand how the District’s financial performance and well-being have changed over time. 99 Revenue Capacity

These schedules contain information to help the reader assess the District’s most significant local revenue source, the property tax. 107 Debt Capacity

These schedules present information to help the reader assess the affordability of the District’s current levels of outstanding debt and the District’s ability to issue additional debt in the future. 113 Demographic and Economic Information

These schedules offer demographic and economic indicators to help the reader understand the environment within which the District’s financial activities take place. 117 Operating Information

These schedules contain service and infrastructure data to help the reader understand how the information in the District’s financial report relates to services the District provides and the activities it performs. 119 Sources: Unless otherwise noted, the information in these tables is derived from the comprehensive financial reports for the relevant year.


NET POSITION BY COMPONENT LAST TEN FISCAL YEARS

(ACCRUAL BASIS OF ACCOUNTING) (UNAUDITED)

(99)

2006 2007 2008 2009Governmental Activities

Net Investment in Capital Assets 1,685,464$ 6,234,466$ 9,831,206$ 12,651,529$ Restricted 1,420,162 2,066,645 5,324,503 3,875,775 Unrestricted (757,487) (1,437,089) (286,454) 7,935,597

Total Governmental Activities Net Position 2,348,139$ 6,864,022$ 14,869,255$ 24,462,901$

Fiscal Year

(100)

2010 2011 2012 2013 2014 2015

11,406,161$ 11,653,829$ 20,696,189$ 25,761,731$ 36,163,062$ 46,163,329$ 1,018,598 1,624,690 2,778,615 4,187,805 2,942,042 3,372,493

10,937,587 14,440,062 14,118,400 14,478,502 15,487,611 (54,403,668)

23,362,346$ 27,718,581$ 37,593,204$ 44,428,038$ 54,592,715$ (4,867,846)$

Fiscal Year


CHANGES IN NET POSITION LAST TEN FISCAL YEARS


(101)

2006 2007 2008 2009Expenses

Governmental Activities:Administration 3,208,324$ 3,579,896$ 3,768,839$ 2,942,016$ District Support Services 2,179,022 2,575,897 2,524,034 3,804,102 Regular Instruction 34,772,549 35,468,106 38,753,240 41,232,692 Vocational Education Instruction 446,597 589,174 1,075,912 1,046,155 Special Education Instruction 13,276,842 14,243,787 15,888,211 13,993,772 Instructional Support Services 5,293,492 6,551,986 6,850,493 5,503,487 Pupil Support Services 6,923,021 7,400,869 8,137,015 8,319,981 Sites and Buildings 8,925,021 6,760,580 6,411,282 13,446,611 Fiscal and Other Fixed Cost Programs 184,084 211,439 166,701 160,797 Food Service 3,658,808 4,091,057 4,273,592 4,257,252 Community Service 4,145,199 4,594,081 5,083,408 5,845,857 Depreciation Not Allocated to Other Functions 3,067,974 3,260,935 3,312,637 - Interest and Fiscal Charges on Long-Term Debt 8,589,837 8,466,233 10,778,996 10,466,454

Total Governmental Activities Expenses 94,670,770 97,794,040 107,024,360 111,019,176

Program RevenuesGovernmental Activities:

Charges for Services:Administration 59,794 54,414 4,182 9,692 District Support Services 172,283 175,923 198,359 196,407 Regular Instruction 2,110,238 2,125,275 2,235,613 2,345,617 Special Education Instruction 148,743 302,230 263,772 724,694 Instructional Support Services - - - - Pupil Support Services - - - - Sites and Buildings 87,803 98,226 91,505 55,087 Food Service 2,966,720 3,012,892 3,155,227 3,100,983 Community Service 2,611,487 2,983,287 3,438,793 3,785,820

Operating Grants and Contributions 10,761,745 11,745,071 13,509,823 13,085,070 Capital Grants and Contributions 402,600 - - 2,005,127

Total Governmental Activities Program Revenues 19,321,413 20,497,318 22,897,274 25,308,497

General Revenues and Other Changes in Net PositionGovernmental Activities:

Property Taxes:General Purpose 6,914,840 11,012,301 15,093,313 16,053,885 Community Service 356,933 714,489 751,830 682,199 Debt Service 11,653,989 12,201,437 15,726,061 17,497,159 Capital Projects - - 671,299 364,246

Unrestricted State Aid 55,498,830 53,994,742 55,883,044 54,613,832 Unrestricted Investment Earnings 2,485,986 3,651,018 5,113,670 2,551,162 Miscellaneous 270,655 238,618 302,866 1,268,922

Total Governmental Activities 77,181,233 81,812,605 93,542,083 93,031,405

Change in Net Position 1,831,876 4,515,883 9,414,997 7,320,726

Net Position - Beginning, as Previously Stated 516,263 2,348,139 6,864,022 14,869,255

Prior Period Adjustment - - (1,409,764) 2,272,920

Net Position - Beginning, as Restated 516,263 2,348,139 5,454,258 17,142,175

Net Position - Ending 2,348,139$ 6,864,022$ 14,869,255$ 24,462,901$

Fiscal Year

(102)

2010 2011 2012 2013 2014 2015

3,037,287$ 3,103,027$ 3,070,561$ 3,212,710$ 3,626,402$ 3,297,791$ 4,418,312 4,017,516 3,774,333 3,890,877 3,321,431 3,300,589

43,154,663 42,561,001 41,957,126 42,607,593 42,899,211 46,033,831 987,545 1,026,580 1,260,709 1,596,799 1,428,802 1,679,924

13,777,038 14,262,502 14,509,410 14,206,646 14,576,886 15,405,025 5,873,527 5,630,860 5,304,793 6,973,472 9,082,972 9,918,408 8,342,322 8,606,176 8,466,970 8,958,437 9,284,103 8,918,109

17,671,492 12,592,160 13,464,155 14,932,559 14,340,867 15,713,675 179,712 185,888 161,549 166,687 186,669 197,113

4,580,418 4,300,678 4,533,818 4,583,002 4,889,769 4,924,330 7,025,204 7,055,801 7,194,509 7,953,288 8,197,305 7,468,189

- - - - - 9,041,537 7,968,970 7,673,615 7,004,520 8,208,150 8,829,956

118,089,057 111,311,159 111,371,548 116,086,590 120,042,567 125,686,940

- - - - - - - - - - - -

2,406,352 3,082,121 3,102,695 1,628,820 1,241,884 1,185,797 259,894 461,505 638,505 318,409 226,020 200,253

- - - 3,831 189,044 202,462 - - - - -

54,995 48,750 65,461 75,988 78,869 200,833 3,153,699 3,263,367 3,345,854 3,368,464 3,405,897 3,377,014 4,409,348 4,538,786 5,108,522 5,505,281 6,219,265 5,003,180

17,514,837 15,590,593 11,064,246 12,114,349 13,831,646 15,091,251 1,986,262 1,294,958 1,190,790 2,047,800 2,061,041 2,061,041

29,785,387 28,280,080 24,516,073 25,062,942 27,253,666 27,321,831

15,711,947 22,194,745 16,190,394 17,515,743 10,782,119 16,180,398 1,052,095 1,215,708 1,331,703 1,298,456 1,013,910 1,349,324

17,990,537 17,351,246 18,196,133 19,881,937 18,984,530 18,846,237 379,198 1,043,202 905,000 - - 2,450,000

49,652,210 49,113,665 59,048,542 58,542,203 68,797,029 66,743,149 606,286 175,242 66,718 (1,245,964) 1,387,783 801,631

1,810,842 1,316,352 991,608 1,866,107 1,986,690 1,609,072 87,203,115 92,410,160 96,730,098 97,858,482 102,953,578 107,979,811

(1,100,555) 9,379,081 9,874,623 6,834,834 10,164,677 9,614,702

24,462,901 23,362,346 27,718,581 37,593,204 44,428,038 54,592,715

- (5,022,846) - - - (69,075,263)

24,462,901 18,339,500 27,718,581 37,593,204 44,428,038 (14,482,548)

23,362,346$ 27,718,581$ 37,593,204$ 44,428,038$ 54,592,715$ (4,867,846)$

Fiscal Year


FUND BALANCES, GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS


(103)

2006 2007 2008 2009General Fund Nonspendable -$ -$ -$ -$ Restricted (Formerly Reserved) 753,269 1,471,229 2,214,225 3,049,284

Assigned (Formerly Designated) 639,401 788,177 2,491,078 1,698,253 Unassigned (Formerly Unreserved) 4,032,667 3,835,697 1,881,018 3,802,254

Total General Fund 5,425,337$ 6,095,103$ 6,586,321$ 8,549,791$

All Other Governmental FundsNonspendable: Food Service -$ -$ -$ -$ Community Service Fund - - - - Restricted:

Food Service Fund 804,060 834,858 728,554 575,425 Community Service Fund 469,792 670,170 692,080 499,521 Capital Project Funds 3,143,991 86,797,094 52,740,661 11,569,933 Debt Service Funds 23,597,115 27,412,353 28,210,024 9,287,183

Total All Other Governmental Funds 28,014,958$ 115,714,475$ 82,371,319$ 21,932,062$

Total All Funds 33,440,295$ 121,809,578$ 88,957,640$ 30,481,853$

The District adopted the provisions of Government Accounting Standards Board Statement No. 54, Fund Balance Reportingand Governmental Fund Type Definitions , as of and for the year ended June 30, 2011. The fiscal 2006 through fiscal 2010

fund balances were restated with new fund balance categories.

Fiscal Year

(104)

2010 2011 2012 2013 2014 2015

181,247$ 244,879$ 237,899$ 288,083$ 221,320$ 170,001$ 266,388 367,530 611,597 767,340 602,456 584,120

2,817,303 3,610,007 3,674,342 3,464,424 4,331,095 3,829,447 4,210,425 7,251,844 9,758,851 10,020,646 9,884,913 9,815,081

7,475,363$ 11,474,260$ 14,282,689$ 14,540,493$ 15,039,784$ 14,398,649$

59,285$ 58,982$ 58,476$ 69,379$ 140,241$ 69,415$ 223,848 226,752 10,969 7,199 4,318 7,299

319,733 557,929 697,986 867,314 607,620 1,016,100 107,241 67,156 675,515 851,697 1,297,088 1,433,169 465,366 801,148 10,403,267 7,600,461 3,605,529 910,822

3,744,144 3,672,526 48,907,989 74,375,206 73,958,775 72,178,500

4,919,617$ 5,384,493$ 60,754,202$ 83,771,256$ 79,613,571$ 75,615,305$

12,394,980$ 16,858,753$ 75,036,891$ 98,311,749$ 94,653,355$ 90,013,954$

Fiscal Year


CHANGES IN FUND BALANCES, GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS

(MODIFIED ACCRUAL BASIS OF ACCOUNTING) (UNAUDITED)

(105)

2006 2007 2008 2009Revenues

Local Sources:Property Taxes 18,827,746$ 24,009,711$ 32,061,531$ 34,467,275$ Earnings on Investments 2,485,986 3,651,018 5,944,626 2,462,882 Other 8,427,723 8,990,865 9,607,607 11,487,222

State Sources 63,737,267 62,649,915 66,452,372 66,448,805 Federal Sources 2,523,308 3,089,898 2,940,495 3,255,224

Total Revenues 96,002,030 102,391,407 117,006,631 118,121,408

ExpendituresCurrent:

Administration 3,188,406 3,511,179 3,741,334 3,091,027 District Support Services 2,210,323 2,634,477 2,560,329 3,269,034 Regular Instruction 35,071,785 35,902,041 38,413,456 45,408,259 Vocational Education Instruction 446,597 589,174 1,075,912 1,109,565 Special Education Instruction 13,307,094 14,301,585 15,853,386 14,791,619 Instructional Support Services 5,286,258 6,468,768 6,951,417 7,038,406 Pupil Support Services 6,923,021 7,400,869 8,179,516 8,471,806 Sites and Buildings 5,348,523 5,514,352 5,855,840 6,317,579 Fiscal and Other Fixed Cost Programs 184,084 211,439 166,701 160,797 Food Service 3,566,520 4,038,398 4,206,052 4,299,516 Community Service 4,127,748 4,569,629 5,012,959 6,009,447

Capital Outlay 8,852,970 11,536,316 39,127,846 44,897,528 Debt Service:

Principal 7,926,329 6,675,389 6,606,555 12,144,093 Interest and Fiscal Charges 8,926,547 7,099,845 10,780,212 10,634,160

Total Expenditures 105,366,205 110,453,461 148,531,515 167,642,836

Excess (Deficiency) of Revenues Over (Under) Expenditures (9,364,175) (8,062,054) (31,524,884) (49,521,428)

Other Financing Sources (Uses)Proceeds from Sale of Equipment - - 82,710 - Proceeds from Insurance Recovery - - - - Bond Proceeds 5,375,000 93,375,000 - 7,010,000 Bond Premium 16,073 3,056,337 - - Bond Discount - - - (44,359) Capital Lease Proceeds - - - - Payment to Refunded Bond Escrow Agent (27,700,000) - - (15,920,000) Transfer In - - - 19,358 Transfer Out - - - (19,358)

Total Other Financing Sources (Uses) (22,308,927) 96,431,337 82,710 (8,954,359)

Prior Period Adjustment - - (1,409,764) -

Net Change in Fund Balances (31,673,102)$ 88,369,283$ (32,851,938)$ (58,475,787)$

Debt Service as a Percentage of Noncapital Expenditures 17.5% 13.9% 15.9% 18.6%

Fiscal Year

(106)

2010 2011 2012 2013 2014 2015

34,881,925$ 42,105,756$ 36,627,102$ 38,705,044$ 30,905,377$ 38,914,942$ 374,366 10,881 66,321 (1,246,662) 1,384,323 794,519

12,095,130 12,709,791 13,252,645 12,588,495 13,347,669 11,769,509 59,746,652 59,857,513 67,733,367 68,453,513 80,721,823 80,101,012

9,406,657 6,141,703 3,570,211 4,250,839 3,967,893 3,794,429 116,504,730 120,825,644 121,249,646 122,751,229 130,327,085 135,374,411

3,016,436 2,989,686 3,053,551 3,183,911 3,229,555 3,573,219 3,483,678 3,575,930 3,441,379 3,220,168 2,921,996 3,027,945

41,239,964 41,723,907 41,548,792 41,438,470 42,559,310 45,641,940 995,847 1,022,997 1,252,724 1,595,765 1,435,161 1,685,188

13,994,736 14,064,526 14,480,818 14,173,613 14,780,351 15,558,570 6,035,646 5,494,400 5,196,677 6,685,300 7,983,086 9,543,585 8,405,971 8,551,977 8,321,449 8,902,325 9,240,479 8,873,347 6,039,797 6,695,546 6,747,298 7,313,460 8,210,977 8,128,629

179,712 185,888 161,549 166,687 186,669 197,113 4,547,429 4,249,397 4,498,731 4,462,184 4,800,632 4,795,546 6,972,413 7,005,956 7,150,503 7,648,954 8,073,085 7,379,725

14,023,907 1,893,340 2,616,556 5,979,968 7,879,474 8,469,470

9,888,755 10,193,636 11,248,746 13,305,575 13,521,548 14,127,796 10,947,682 8,715,775 8,406,999 9,258,760 9,175,695 9,120,453

129,771,973 116,362,961 118,125,772 127,335,140 133,998,018 140,122,526

(13,267,243) 4,462,683 3,123,874 (4,583,911) (3,670,933) (4,748,115)

- - - - 12,539 9,102 - 1,090 - - - -

33,555,000 - 52,360,000 65,815,000 - 8,930,000 2,463,455 - 7,984,635 6,200,364 - 514,612

- - - - - - - - 49,629 178,405 - -

(40,838,085) - (5,340,000) (44,335,000) - (9,345,000) 255,211 401,753 - - - -

(255,211) (401,753) - - - - (4,819,630) 1,090 55,054,264 27,858,769 12,539 108,714

- - - - - -

(18,086,873)$ 4,463,773$ 58,178,138$ 23,274,858$ (3,658,394)$ (4,639,401)$

18.0% 16.5% 17.0% 18.6% 18.0% 17.7%

Fiscal Year


ASSESSED AND ACTUAL VALUE OF TAXABLE PROPERTY LAST TEN FISCAL YEARS

(UNAUDITED)

(107)

(1) (2) Total Total Direct

Payable Residential Commercial Assessed School

Year Property Property Value Tax Rate

2006 4,398,254,933$ 585,894,567$ 4,984,149,500$ 32.808%

2007 4,906,938,433 698,998,667 5,605,937,100 35.831%

2008 5,280,787,233 777,946,767 6,058,734,000 35.970%

2009 5,387,436,767 818,204,233 6,205,641,000 35.505%

2010 5,334,932,400 879,165,700 6,214,098,100 35.839%

2011 5,047,737,600 835,594,000 5,883,331,600 40.235%

2012 4,652,809,233 794,184,667 5,446,993,900 44.383%

2013 4,423,059,433 796,860,467 5,219,919,900 45.319%

2014 4,739,454,967 800,140,833 5,539,595,800 44.917%

2015 5,446,146,333 828,199,567 6,274,345,900 39.121%

Notes:

(1) Residential includes single family homes, townhomes and condominiums, and

all other property including vacant land, farm, utilities, personal property and

railroad property.

(2) Commercial property above includes both commercial and industrial property.

Source: Carver County Department of Property Tax and Public Records


DIRECT AND OVERLAPPING PROPERTY TAX RATES LAST TEN FISCAL YEARS

(UNAUDITED)

(108)

Fiscal Year

Ended June 30,

General Fund Basic Rate

Community Service

General Obligation

Debt Service OPEB

Total Direct School

Tax RateCity of Carver

City of Chanhassen

City of Chaska

2006 5.837 1.489 25.482 - 32.808 41.745 26.638 19.821

2007 6.232 1.349 28.250 - 35.831 42.119 23.788 19.475

2008 6.173 1.116 28.681 35.970 42.913 23.713 19.423

2009 5.696 1.230 24.484 4.095 35.505 45.215 22.993 20.434

2010 6.771 1.311 25.462 2.295 35.839 46.527 25.183 21.886

2011 7.374 1.387 30.268 1.206 40.235 47.958 26.603 23.484

2012 7.081 1.392 34.673 1.237 44.383 52.247 28.532 25.785

2013 8.738 1.506 33.762 1.313 45.319 57.320 28.428 28.075

2014 10.887 1.268 31.421 1.341 44.917 54.555 27.238 26.586

2015 9.489 0.802 27.799 1.031 39.121 48.950 24.633 24.928

Notes:

(1) Overlapping rates are those of local and county governments that apply to property owners within the District.

Not all overlapping rates apply to all of the District's property owners (e.g., the rates for special districts apply only

to the proportion of the District's property owners whose property is located within the geographic boundaries of the

special district).

(2) Special Districts includes Mosquito Control, Watershed Districts, Carver County CDA, Chaska City HRA,

NYA City EDA, Watertown City EDA, Carver County Rail Authority

Sources: Overlapping Rate Data provided by the Carver County Department of Property Tax and Public Records

School Tax Report from County Auditor's Office

ISD No. 112 Direct Rate Overlapping Rates

(109)

City of Victoria

Dahlgren Township

Laketown Township

San Francisco Township

Metro Council

Metro Transit

Special Districts

Carver County

Total Directand

OverlappingTax Rate

City of Chaska

(2)

37.398 9.635 15.873 6.977 0.915 1.623 9.125 40.836 105.128

37.512 8.314 14.257 9.529 0.884 1.285 10.551 37.802 105.828

37.445 9.323 13.028 12.116 0.847 1.267 11.853 37.563 106.923

37.409 10.651 13.352 12.641 0.824 1.255 13.154 38.033 109.205

37.443 10.986 13.411 13.472 0.838 1.406 14.569 39.509 114.047

37.422 15.483 15.722 14.272 0.851 1.546 14.728 41.752 122.596

39.554 16.128 16.398 17.780 0.979 1.669 11.208 43.562 127.586

39.574 16.694 18.765 15.863 1.025 1.728 11.564 46.115 133.826

37.887 15.486 18.121 17.572 1.047 1.712 11.615 45.210 131.087

31.730 14.313 16.803 17.638 0.947 1.477 13.690 40.488 120.651

Overlapping Rates


PRINCIPAL PROPERTY TAXPAYERS CURRENT YEAR AND NINE YEARS AGO

(UNAUDITED)

(110)

2015

Percentage Percentageof Total of Total

Tax Tax Tax TaxTaxpayer Capacity Rank Capacity Capacity Rank Capacity

Northern States Power 866,972$ 1 1.34% 197,306$ 10 0.36%Centerpoint Energy Minnegasco 729,167 2 1.13% 245,786 8 0.45%Target Corp 681,012 3 1.05% 275,906 4 0.50%United Healthcare Services Inc. 438,320 4 0.68%Istar Minnesota LLC 420,786 5 0.65% 252,386 6 0.46%Mills Properties Inc. 394,951 6 0.61%IRET Properties 387,666 7 0.60% 273,986 5 0.50%Aurora Investments LLC 339,046 8 0.52% 250,205 7 0.46%Rosemount Inc. 316,584 9 0.49% 278,296 3 0.51%Hazeltine National Golf Club 290,647 10 0.45%Ameriprise Financial Inc. (formerly IDS) 262,215 - 472,711 1 0.86%Fluoroware Inc. 307,724 2 0.56%McGlynn BakeriesLifecore Biomedical Inc. - 220,874 9 0.40%

Total 5,127,366$ 7.53% 2,775,180$ 5.06%

Source: Carver County Department of Property Tax and Public Records

2006


PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS

(UNAUDITED)

(111)

Fiscal General Fund General Fund General Fund Community Debt Service Total TaxYear RMV Voter RMV Other Basic Levy Service Levy Fund Levy OPEB Levy Levy (1)

2006 6,967,106$ 771,718$ 2,801,734$ 714,689$ 12,231,172$ -$ 23,486,418$ (2)2007 10,788,633 884,124 3,471,733 751,481 15,737,437 - 31,633,409 (2)2008 11,338,743 1,044,958 3,767,525 681,117 17,504,723 - 34,337,067 (2)2009 11,248,253 955,529 3,596,349 776,606 15,459,021 2,585,534 34,621,294 (2)2010 11,222,686 1,205,641 4,276,479 828,186 16,081,026 1,449,197 35,063,215 (2)2011 12,040,766 1,147,462 4,307,964 810,546 17,682,731 704,879 36,694,348 (2)2012 12,245,015 1,024,083 3,958,435 777,901 19,383,223 691,470 38,080,127 (2)2013 12,687,407 1,026,502 4,762,166 820,806 18,400,154 715,837 38,412,872 (2)2014 9,780,635 5,180,251 (4) 3,827,860 731,300 18,119,320 773,572 38,412,938 (2)2015 9,921,808 5,915,795 (4) 4,389,511 564,404 19,357,440 725,496 40,874,454 (2)

Notes:(1) State credits are included in the operating levy

(2) Original Gross Levy

(3) Collections are through 6/5/2015

(4) 2013 Minnesota legislation allows for conversion of up to $424 of voter approved to non-voter approved referendum

Source: Carver County Department of Property Tax and Public Records - School Tax Report; State Auditor - Taxes Receivable Report

Taxes Levied for the Fiscal Year

(112)

Collected within theFiscal Year of Levy Total Collections to Date

Current Percentage Collections Total Percentage Outstanding PercentageTax of in Subsequent Tax of Delinquent of Levy

Collection Levy Years Collection Levy Taxes Outstanding

23,234,604$ 98.9% 251,814$ 23,486,418$ 100.00% -$ 0.00%31,127,831 98.4% 505,578 31,633,409 100.00% - 0.00%33,673,093 98.1% 637,555 34,310,648 99.92% 26,419 0.08%33,736,336 97.4% 875,585 34,611,921 99.97% 9,373 0.03%34,509,242 98.4% 542,055 35,051,297 99.97% 11,918 0.03%35,823,215 97.6% 850,981 36,674,196 99.95% 20,152 0.05%37,561,301 98.6% 493,197 38,054,498 99.93% 25,629 0.07%37,977,273 98.9% 388,606 38,365,879 99.88% 46,993 0.12%37,884,602 98.6% 328,122 37,884,602 98.62% 200,214 0.53%19,254,277 47.1% - 19,254,277 (3) 47.11% - 0.00%


OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS

(UNAUDITED)

(113)


General Capital Certificates TotalFiscal Obligation Leases of Primary Estimated PerYear Bonds Payable Participation Government Population Capita

2006 151,020,000$ 8,118,539$ -$ 159,138,539$ 53,161 2,994$ 2007 238,095,000 7,743,150 - 245,838,150 55,754 4,409 2008 231,890,000 7,341,595 - 239,231,595 56,000 4,272 2009 211,355,000 6,822,500 - 218,177,500 56,000 3,896 2010 194,610,000 950,662 5,445,000 201,005,662 51,662 3,891 2011 184,980,000 842,026 4,990,000 190,812,026 51,662 3,693 2012 221,350,000 777,909 4,505,000 226,632,909 51,662 4,387 2013 230,155,000 647,334 4,005,000 234,807,334 51,662 4,545 2014 217,285,000 510,786 3,490,000 221,285,786 56,000 3,952 2015 203,415,000 367,990 2,960,000 206,742,990 56,000 3,692

Notes: Details regarding the District's outstanding debt can be found in the notes to the financial statements.


COMPUTATION OF DIRECT AND OVERLAPPING BONDED DEBT JUNE 30, 2015

(UNAUDITED)

(114)

2013/14 EstimatedAdjusted Estimated Share of

Taxable Net Debt Percentage OverlappingTax Capacity Outstanding Applicable Debt

Overlapping:Carver County 104,975,969$ 18,065,000$ 54.90% 9,917,685$ Cities:

Carver 3,551,616 5,810,000 100.00% 5,810,000 Chanhassen 36,231,132 11,915,000 65.40% 7,792,410 Chaska 19,371,587 31,585,000 100.00% 31,585,000 Victoria 10,548,851 13,120,000 76.90% 10,089,280

Townships:Dahlgren 1,583,991 - 70.30% - Laketown 746,206 - 28.30% - San Francisco 540,054 - 43.90% -

Metropolitan Council 2,999,061,916 21,040,000 1.90% 399,760 Metropolitan Transit 2,381,101,627 370,010,000 1.80% 6,660,180

Total Overlapping 72,254,315

Direct:Eastern Carver County Schools ISD No. 112 64,588,548 203,415,000 100.00% 203,415,000

Total Direct and Overlapping Bonded Debt: 275,669,315$

Sources: Taxable value data used to estimate applicable percentages and Debt outstanding data provided by Carver County Taxpayer Services Department

Notes: Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the district. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of the district. This process recognizes that, when considering the district's ability to issue and repay long-term debt, the entire debt burden borne by the residents and businesses should be taken into account. However, this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt, of each overlapping government.

INDEPENDENT SCHOOL DISTRICT NO. 112 EASTERN CARVER COUNTY SCHOOLS LEGAL DEBT MARGIN INFORMATION

LAST TEN FISCAL YEARS (UNAUDITED)

(115)

Net % of Net Debt

Fiscal Bonded Net Tax to Net Tax Estimated Net DebtYear Debt (1) Capacity (1) Capacity Population (1) per Capita

2006 151,020,000 57,750,531 261.50% 53,161 2,841

2007 238,095,000 62,615,347 380.25% 55,754 4,270

2008 231,890,000 64,690,975 358.46% 56,000 4,141

2009 211,355,000 64,756,703 326.38% 56,000 3,774

2010 194,610,000 58,859,056 330.64% 51,662 3,767

2011 184,980,000 56,422,204 327.85% 51,662 3,581

2012 221,350,000 54,604,846 405.37% 51,662 4,285

2013 230,155,000 57,621,949 399.42% 51,662 4,455

2014 217,285,000 52,665,352 412.58% 56,000 3,880

2015 203,415,000 64,588,548 314.94% 56,000 3,632

Notes:

(1)

(2)

(3)

(4)

The legal debt limit for a school district in Minnesota is 15% of the indicated market value of all taxable property within the school district.

The legal debt margin is calculated by subtracting outstanding net bonded debt from the legal debt limit.

Net Bonded Debt, Net Tax Capacity and Estimated Population data is taken from other schedules within this Statistical Section.

The Indicated Market Value is calculated by dividing the taxable market value ($9,628,799,946) by the sales ratio (98.2%).

(116)

Percent

Indicated Legal Debt Legal Debt Bonded DebtMarket Value (2) Limit (3) Margin (4) to Debt Limit

6,130,565,191 919,584,779 768,564,779 16.42%

6,541,350,175 981,202,526 743,107,526 24.27%

6,672,614,537 1,000,892,181 769,002,181 23.17%

6,789,541,575 1,018,431,236 807,076,236 20.75%

6,520,564,638 978,084,696 783,474,696 19.90%

5,889,220,821 883,383,123 698,403,123 20.94%

5,441,552,348 816,232,852 594,882,852 27.12%

5,443,086,444 816,462,967 586,307,967 28.19%

6,134,657,586 920,198,638 702,913,638 23.61%

6,667,742,721 1,000,161,408 796,746,408 20.34%


DEMOGRAPHIC AND ECONOMIC STATISTICS LAST TEN FISCAL YEARS

(UNAUDITED)

(117)

Personal PerIncome Capita Carver Co.

Fiscal (thousands Personal UnemploymentYear Population of dollars) Income Enrollment Rate

(1) (2) (2) (3) (4)2006 53,161 - - 8,649 3.2%2007 55,754 - - 8,818 3.8%2008 56,000 - - 8,864 4.7%2009 56,000 - - 8,955 8.2%2010 51,662 - - 9,045 6.7%2011 51,662 - - 9,123 6.2%2012 51,662 - - 9,175 5.3%2013 51,662 - - 9,198 4.6%2014 56,000 91,816 41,047 9,259 4.0%2015 56,000 93,535 41,093 9,326 3.4%

Sources:

(1) Carver County Levy Documentation(2) 2014 Data from US Census - Quick Facts, prior data unavailable(3) MN Department of Education(4) MN Department of Employment and Economic Development (month of June each year)


PRINCIPAL EMPLOYERS CURRENT YEAR AND NINE YEARS AGO

(UNAUDITED)

(118)

2015

Employer Employees Rank Employees Rank

Ridgeview Medical Center 1,500 1 1,109 2ISD #112 1,397 2 1,078 3Rosemount Inc. 1,376 3 1,300 1Lifetime Fitness 1,166 4Instant Web Companies (IWCO Direct) 1,100 5 548 9Entergris, Inc. 1,000 6 920 4Beckman Coulter, Inc. 780 7 720 6FSI International, Inc. 850 8 500 10Carver County 800 9 655 7Lake Region Manufacturing Co. 745 10 750 5General Mills 600 8

Total 10,714 8,180

Source: (1)

Note:Total employment for the area served by Eastern Carver County Schools is not available and, therefore, apercentage of total employment for each of the employers listed above is not included.

Information provided by City & County 2014 Comprehensive Annual Financial Reports

(1) (1)2006


FULL-TIME EQUIVALENT DISTRICT EMPLOYEE BY TYPE LAST TEN FISCAL YEARS

(UNAUDITED)

(119)

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015Administrative StaffSuperintendent 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0Principals 13.5 12.0 10.5 11.0 13.0 12.0 12.0 12.2 12.7 12.6

Administrative Assistants (Asst. Principals & Asst. Superintendent) 3.0 7.0 8.5 10.0 8.0 9.0 9.0 9.8 9.8 10.0Supervisory Coordinator 4.0 4.8 5.0 5.0 3.7 4.0 3.0 4.0 4.5 4.0Total Administrative Staff 21.5 24.8 25.0 27.0 25.7 26.0 25.0 27.0 28.0 27.6Support Service StaffOther Non-Instructional StaffCounselors/Deans 18.0 17.4 18.5 21.0 22.0 23.0 25.0 28.0 29.0 31.5Media/Librarian 9.7 11.4 12.0 12.0 13.8 14.0 12.5 12.5 12.5 12.5Nurse 1.0 1.0 0.0 0.0 14.0 14.0 16.3 15.8 14.3 13.7Social Worker 5.4 6.0 6.0 6.0 8 8.0 7.5 7.5 8.0 7.6Psychologists 1.8 2.8 3.7 1.8 4.0 5.8 8.5 7.6 7.4 6.4Teacher on Sp Assignment 3.1 1.8 8.8 9.0 12.0 11.7 12.1 10.3 3.0 3.0District-Wide Sp Ed Coordinators 2.0 2.0 3.0 3.0 6.0 5.0 0.0 0.0 0.0 0.0District-Wide Development Support * 1.1 1.0 0.0 0.0 4.7 2.0 3.0 2.7 23.0 26.5Total Support Service Staff 42.0 43.4 52.0 52.8 84.5 83.47 84.9 84.4 97.2 101.1Special Education TeachersSpeech Language 14.0 13.0 16.2 15.2 17.0 18.0 17.3 17.4 17.7 18.2Other Special Education Teachers 60.8 68.7 75.5 78.0 85.2 88.7 86.1 84.2 85.5 89.2Total Special Education Teachers 74.8 81.7 91.7 93.2 102.2 106.7 103.4 101.6 103.2 107.3Classroom TeachersK-12 Teacher 426.0 437.5 443.0 461.0 444.6 455.02 433.0 445.7 460.4 457.4Vocational Education Teacher 3.4 3.3 4.0 4.0 3.0 3.7 5.3 5.8 5.5 8.5Pre-K, ECFE, and Other Teacher 2.0 3.4 9.8 9.1 9.0 9.0 8.4 11.1 10.1 10.9Total Classroom Teachers 431.4 444.2 456.8 474.1 456.64 467.7 446.8 462.6 476.0 476.8

Total 569.72 594.1 625.5 647.0 669.00 683.9 660.0 675.6 704.4 712.8

* Includes Instructional Coach Positions starting in FY14

Source: Minnesota Department of Education STARS data and District records for Licensed Staff.

Full-Time-Equivalent Employees as of June 30


OPERATING STATISTICS LAST TEN FISCAL YEARS

(UNAUDITED)

(120)

Total

Governmental Cost Pupil–Fiscal Fund per Teaching TeacherYear Enrollment Expenditures Pupil Staff Ratio

2006 8,649 105,366,205$ 12,182$ -15.79% 506.2 17.1

2007 8,818 110,453,461 12,526 2.82% 525.9 16.8

2008 8,864 148,531,515 16,757 33.78% 548.5 16.2

2009 8,955 167,642,836 18,721 11.72% 567.3 15.8

2010 9,045 129,771,973 14,347 -23.36% 558.8 16.2

2011 9,123 116,362,961 12,755 -11.10% 574.4 15.9

2012 9,175 118,125,772 12,875 -10.26% 550.2 16.7

2013 9,198 127,335,140 13,844 8.54% 564.2 16.3

2014 9,259 133,998,018 14,472 12.41% 574.8 16.1

2015 9,326 140,122,526 15,025 8.53% 584.1 16.0

PercentageChange

Source: District records and teaching staff numbers from the Minnesota Department of Education STARS data.


SCHOOL BUILDING INFORMATION LAST TEN FISCAL YEARS

(UNAUDITED)

(121)

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

School

Elementary

Chaska Elementary

Square feet 64,015 64,015 64,015 64,015 64,015 64,015 64,015 64,015 64,015 64,015

Building Capacity 576 576 576 576 576 576 576 576 576 576

Program Capacity 540 540 540 540 540 540 540 540 540 540

Enrollment (1) 570 593 587 563 550 488 486 465 475 505

Chanhassen Elementary

Square feet 66,508 66,508 66,508 66,508 66,508 66,508 66,508 66,508 66,508 67,056



Enrollment (1) 560 566 530 515 544 520 490 456 469 526

East Union Elementary

Square feet 22,608 22,608 22,608 22,608 22,608 22,608 22,608 22,608 22,608 22,608



Enrollment (1) 155 159 154 174 191 187 201 203 164 160

Early Childhood Center K.C.

Square feet 58,061 58,061 58,061 58,061 58,061 58,061 58,061 45,571 30,718 26,708



Enrollment (1) 590 569 511 373 418 418 367 356 322 174

Bluff Creek Elementary

Square feet 112,549 112,549 112,549 112,549 112,549 112,549 112,549 112,549 112,549 112,549



Enrollment (1) 558 538 530 539 536 537 526 535 534 569

Clover Ridge Elementary

Square feet 90,497 90,497 90,497 90,497 90,497 90,497 90,497 90,497 90,497 90,497



Enrollment (1) 543 580 629 673 669 683 704 703 692 682

Victoria Elementary

Square feet 94,600 94,600 94,600 94,600 94,600 94,600 94,600 94,600 94,600 94,600



Enrollment (1) 501.28 546 591 667 653 698 693 667 692 666

Jonathan Elementary

Square feet 85,100 85,100 85,100 85,100 85,100 85,100 85,100 85,100 85,100 85,100



Enrollment (1) 554 568 539 566 535 559 552 542 562 597

La Academia (2)

Square feet - - - - - - - 12,490 27,343 31,353

Building Capacity - - - - - - - 142 218 356

Program Capacity 123 184 302

Enrollment (1) - - - - - - - 90 157 204

Middle

Chaska Middle East

Square feet 158,563 158,563 158,563 158,563 158,563 158,563 158,563 158,563 158,563 158,563

Building Capacity 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000


Enrollment (1) 984 971 975 988 700 690 686 735 702 695

Chaska Middle West

Square feet 155,352 155,352 155,352 155,352 155,352 155,352 155,352 155,352 155,352 155,352



Enrollment (1) 885 937 1,000 1,065 702 740 763 779 771 789

Pioneer Ridge Middle

Square feet 128,970 128,970 128,970 128,970 128,970 128,970 128,970 128,970 128,970 128,970



Enrollment (1) 599 660 658 639 709 714 700 678 637 579

Fiscal Year


SCHOOL BUILDING INFORMATION (CONTINUED) LAST TEN FISCAL YEARS

(UNAUDITED)

(122)

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

High

Chaska High School

Square feet 410,336 410,336 410,336 410,336 410,336 410,336 410,336 410,336 410,336 410,336


Program Capacity 1,779 1,779 1,779 1,779 1,779 1,779 1,779 1,779 1,779 1,779

Enrollment (1) 1,846 1,811 1,847 1,873 1,450 1,121 1,174 1,229 1,295 1,335

Chanhassen High School

Square feet - - - - 405,000 405,000 405,000 405,000 405,000 410,000

Building Capacity - - - - 2,000 2,000 2,000 2,000 2,000 2,000

Program Capacity - - - - 1,731 1,731 1,731 1,731 1,731 1,731

Enrollment (1) - - - - 1,084 1,482 1,571 1,540 1,558 1,596

Integrated Arts Academy (ALC) (3)

Square feet - - - - - - - 16,505 16,505 16,505

Building Capacity - - - - - - - 100 100 100

Program Capacity - - - - - - - 100 100 100

Enrollment (1) - - - - - - - 72 72 65

Other

District Education Center

Square feet 54,153 54,153 54,153 54,153 54,153 54,153 54,153 37,648 37,648 37,648

Enrollment (1) 49 62 62 59 63 70 58 71 79 62

STAR Building (Transitional Program)

Square feet - - - - - - - - 9,494 10,739

Enrollment (1) - - - - - - - - 17 20

District Transportation Center

Square feet 45,800 45,800 45,800 45,800 45,800 45,800 45,800 45,800 45,800 45,800 Victoria Field House Square feet - - - 36,798 36,798 36,798 36,798 36,798 36,798 36,798

Total Square feet 1,547,112 1,547,112 1,547,112 1,583,910 1,988,910 1,988,910 1,988,910 1,988,910 1,998,404 1,998,404

Building Capacity 9,129 9,129 9,129 9,129 11,129 11,129 11,129 11,229 11,229 11,229 Program Capacity 8,479 8,479 8,479 8,479 10,210 10,210 10,210 10,310 10,309 10,309 Enrollment 8,584 8,577 8,670 8,139 8,831 8,840 8,970 9,122 9,199 9,290

Athletics

Football fields 1 1 1 1 2 2 2 2 2 2

Soccer fields (include other use of fields) 7 7 7 7 8 8 8 8 8 8

Running tracks 2 2 2 2 3 3 3 3 3 3

Baseball/softball 12 12 12 12 16 16 16 16 16 16

Tennis courts 5 5 5 5 7 7 7 7 7 7

Multi-practice fields (lacrosse, football) 4 4 4 4 7 7 7 7 7 7

Swimming pools 1 1 1 1 1 1 1 1 1 1

Playgrounds 9 9 9 9 9 9 9 9 9 9

Notes: (1) Enrollment reflects average daily membership served by site. Resident students served under tuition agreements are excluded from this enrollment data.

(2) Portion of KC is now used for La Academia program (54% sq. ft. is allotted toward the Kindergarten program and 46% toward La Academia)

(3) Portion of DEC is now used for the Integrated Arts Academy (most of second floor)

Fiscal Year

Source: Square footage, capacity and athletic statistics are derived from District records. Enrollment was obtained from a combination of District records and "School Average Daily Membership" reports available on the Minnesota Department of Education website.


STANDARDIZED TESTING LAST TEN FISCAL YEARS

(UNAUDITED)

(123)

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Standardized Tests

MCA Reading (See Note 1) Grade 3 91.4% 89.3% 87.5% 86.5% 88.5% 88.5% 89.6% 69.9% 67.6% 68.9% Grade 5 87.6% 83.2% 83.4% 83.7% 89.9% 87.1% 84.4% 73.0% 80.9% 78.0% Grade 7 83.2% 77.3% 77.4% 76.5% 77.6% 79.9% 82.6% 69.7% 71.1% 66.5% Grade 10 75.7% 76.9% 86.5% 86.3% 86.8% 88.8% 87.0% 77.1% 72.9% 71.6%

MCA Math (See Note 1) Grade 3 87.30% 88.40% 90.40% 88.10% 91.10% 76.3% 80.0% 81.6% 77.8% 78.0% Grade 5 73.40% 71.30% 75.60% 75.50% 77.20% 55.9% 65.3% 67.1% 65.4% 65.0% Grade 7 77.30% 75.80% 80.10% 79.10% 76.20% 66.6% 70.9% 62.9% 66.1% 60.3% Grade 11 32.50% 40.60% 54.60% 54.80% 56.70% 58.5% 60.2% 66.5% 62.6% 62.2%

MCA Science (See Note 1) Grade 5 N/A N/A 57.5% 67.3% 67.8% 65.7% 71.6% 70.6% 77.7% 71.9% Grade 8 N/A N/A 46.1% 62.0% 58.7% 54.0% 55.9% 57.7% 56.9% 50.3% Grade HS N/A N/A 55.9% 57.8% 67.0% 75.0% 75.1% 72.0% 69.7% 69.6%

ACT ISD #112 Average Composite Score 22.4% 22.4% 22.8% 23.7% 23.7% 23.8% 23.4% 24.1% 23.8% 23.9%

State Average Composite Score 22.3% 22.5% 22.6% 22.7% 22.9% 22.9% 22.8% 23.0% 22.9% 22.7%

N/A - Not Available

Note 1: Percent of students scoring at or above proficiency on the Minnesota Comprehensive Assessment Test

Fiscal Year


SUMMARY OF MEALS SERVED LAST TEN FISCAL YEARS

(UNAUDITED)

(124)

Non- Total

Program Meals Regular Free ReducedYear Ended Adult Served Price Meals Price Meals

June 30, Meals Students Meals Served Served

2006 21,939 877,368 712,482 121,375 43,511

2007 20,615 950,788 764,503 140,967 45,318

2008 21,043 960,431 767,810 150,749 41,872

2009 20,966 918,171 742,642 131,887 43,642

2010 23,240 1,019,177 815,715 151,939 51,523

2011 24,546 1,077,064 840,808 173,201 63,055

2012 25,993 1,082,420 840,566 179,192 62,662

2013 28,132 1,055,425 805,564 187,565 62,296

2014 26,182 1,033,539 784,185 204,316 45,038

2015 24,719 1,049,451 766,070 234,583 48,798

Year EndedJune 30, Elementary Middle High School (1)

2005 1.90$ 2.05$ 2.25$

2006 1.95 2.10 2.30

2007 2.00 2.15 2.35

2008 2.00 2.15 2.35

2009 2.05 2.20 2.40

2010 2.10 2.25 2.45

2011 2.15 2.30 2.50

2012 2.20 2.35 2.55

2013 2.30 2.45 2.75

2014 2.35 2.55 2.75

2015 2.35 2.55 2.75

(1) Includes standard lunch menu and various lunch choices.

Source: District Food Service Department

Student Regular Lunch Prices

INDEPENDENT SCHOOL DISTRICT NO. 112 EASTERN CARVER COUNTY SCHOOLS SCHEDULE OF INSURANCE COVERAGE

JUNE 30, 2015 (UNAUDITED)

(125)

Type of Coverage Amount of Coverage

Property Coverage: Real and Personal Property 1,000,000$ Flood Aggregate 1,000,000 Earthquake Aggregate 1,000,000 Builder Risk 1,000,000

General Liability Coverage: Each Occurrence Limit 2,000,000 General Aggregate Limit 4,000,000 Sexual Abuse/Harassment Liability 2,000,000 Law Enforcement Liability Aggregate 4,000,000 Money and Securities (each and every loss) 1,000,000 Forgery and Alteration (each and every loss) 1,000,000 Employee Dishonesty (each and every loss) 1,000,000

Boiler and Machinery Coverage: Property Damage 200,000,000

School Board Legal Liability: Per Claim Aggregate per District 2,000,000

Business Auto Coverage: Limit of Liability 2,000,000 Uninsured/underinsured Motorist Liability 1,000,000 PIP / No Fault 40,000 Auto Physical Damage 1,000,000

Excess Property Limits: Excess Property 500,000,000 Excess Flood 20,000,000 Excess Earthquake 20,000,000 Per Occurrence Sublimits (Total Insured Values) 2,853,290,146

Excess Liability Limits: Excess Auto Liability (each occurrence) 2,000,000 Excess General Liability (each occurrence) 2,000,000 Excess Sexual Abuse Liability (each occurrence) 2,000,000 Excess Sexual Harassment Liability (each occurrence) 2,000,000 Employee Benefits Liability (aggregate per Member, all coverage combined) 4,000,000 Director / Sch Bd Legal Liability (per occurrence) 2,000,000 Director / Sch Bd Legal Liability (aggregate per member) 2,000,000

Workers' Compensation Each Accident 1,000,000 By Disease - each employee 1,000,000 By Disease - policy limit 1,000,000

Comprehensive Annual Financial Report - District #112 · 2016-07-12 · The Comprehensive Annual...

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