Chaska accepts 2024 comprehensive financial report; auditors issue clean opinion

Chaska accepts 2024 comprehensive financial report; auditors issue clean opinion Noel Grasic, administrative services director for the City of Chaska, presented the city's 2024 Comprehensive Annual Financial Report and related audit materials Monday and asked the council to accept the reports after a presentation by auditors from CliftonLarsonAllen (CLA). The reports matter because they summarize the city's financial position for 2024, show compliance with relevant auditing standards and support continuing disclosure for the city’s bond issues. City staff and CLA told the council the audit produced an unmodified ("clean") opinion, meaning CLA concluded the financial statements are fairly stated in all material respects. CLA partner Christopher Kanopic and audit manager Ezra Ketsi reviewed a few restatements the firm required, including reclassifying certain utility-related infrastructure into the utility (enterprise) funds, accounting adjustments in the turbine fund and the timing treatment of a receivable in a public improvement project fund. CLA also reported that, because the city’s federal expenditure threshold was met, a federal single-audit was performed and that the city received an unmodified opinion on federal compliance for the grants reviewed. Grasic summarized key figures from the report: the city incurred about $119 million in operating expenditures in 2024, operates nine enterprise funds that together comprised roughly $75.3 million (63%) of expenditures, and reported a total net position of about $271 million at year-end. He said the general fund represented about $25.7 million (22%) of operations, supported by an 2024 property tax levy of roughly $18.1 million (about 15% of total expenditures). Grasic highlighted a $1.4 million increase in general fund balance driven in part by stronger-than-expected building permit revenue and continued council-directed reserve additions. CLA noted three restatements implemented in the 2024 statements after adopting the firm as the city's auditor for the first time in 25 years. The adjustments included (1) reclassification of water, sewer and stormwater portions of street assets into the utility funds to better align asset recognition with rate-setting, (2) a reallocation in the turbine fund related to bond premium accounting that increased net position by about $626,000, and (3) moving an agreement with a third party (MMPA) into lease accounting under GASB Statement No. 87 where CLA concluded the counterparty operates the facility. CLA also reported two internal-control items for the Chaska Fire Relief Association related to limited staff and cash-control processes; those weaknesses were described as longstanding, and both the relief association and the auditor said they are taking steps (including contracting accounting services) to address them. CLA identified one legal-compliance finding involving a missing certificate of insurance from a contractor; Grasic said the issue was addressed in 2025. The council voted to accept the reports. Council Member Hatfield moved to accept the annual comprehensive financial report; Council Member Grama seconded. The motion carried on the council voice vote. Councilors praised the finance staff's work and noted the city had applied for the Government Finance Officers Association (GFOA) Certificate of Achievement for Excellence in Financial Reporting for the 35th consecutive year. Grasic said the city’s total cash and investments were about $103 million at year-end, with roughly $59.3 million restricted by bond covenants and about $44 million reported as unrestricted cash for cash-flow needs between property-tax collection dates. He further summarized bond rating context: the city’s GO debt carried a Standard & Poor’s AA rating, certain lease/revenue issues were AA-minus, and electric revenue debt was rated A by S&P and highly rated by Moody’s on its scale. Questions from council members were limited; CLA emphasized the city received no findings for Minnesota legal compliance under the Office of the State Auditor guide and that the small accounting estimate changes (compensated absences increase of roughly $230,000) resulted from new accounting standards adopted for 2024. CLA also recommended formalizing documentation of internal review processes for reports submitted under the federal single-audit program. The council then voted to adopt the financial report as presented.