Cottage Grove audit yields clean opinion; council accepts 2024 financial report

On June 4, 2025, the Cottage Grove City Council unanimously accepted the city’s 2024 Annual Comprehensive Financial Report after auditor Rebecca Peterson of Redpath & Company delivered a presentation showing a clean, unmodified opinion and no internal-control findings.

The report — introduced by Finance Director Brenda Malinowski and presented by Rebecca Peterson — summarizes the city’s fiscal results, including a 99.42% property-tax collection rate for 2024, a general-fund unassigned reserve equal to about 48.2% of 2025’s budgeted expenditures (roughly $13.7 million), and an actuarially determined net pension liability of $10,800,000 attributable to participation in the State retirement plan (PERA). Peterson told the council, “we've issued a clean, unmodified opinion on the statements,” and emphasized that while statements provide reasonable assurance, not every single transaction is audited to the penny.

Why it matters: A clean opinion and no reportable internal-control findings indicate that the city’s financial statements fairly present its finances under applicable accounting standards, giving council members and residents more confidence as the city moves into the 2026 budget cycle. The presentation also highlighted areas staff and council should monitor going forward — notably the ambulance/EMS fund.

Peterson outlined several key figures and risks: the city’s reserve policy target of 45%–55% of the next year’s budget puts Cottage Grove inside its target at 48.2%, but the auditor noted a $10.8 million pension liability allocation from PERA and called attention to estimates in the statements (pension actuarials, ambulance receivables, and lease receivables). On the EMS fund, Peterson warned that "you need to be very acutely aware of what's happening in the fund and make sure that you have a plan for the future," saying the fund’s unrestricted net position was slightly negative for 2024 and that long-term capital costs for ambulances will require planning.

Council members pressed the auditor and staff about the EMS shortfall and regional service-area impacts. Councilmember Olson said the negative net operating amount in the EMS fund is a “wake-up call” and noted that Cottage Grove’s ambulance service covers surrounding communities, which increases cost exposure. City staff said they have been meeting with neighboring jurisdictions about possible cost-sharing arrangements, and Peterson described options other cities are trying, from combined fire/ambulance fees to transport-fee models, while noting there is no single solution that fits every community.

Motion and next steps: Councilmember Olson moved to accept the annual comprehensive financial report for the year ended Dec. 31, 2024; Councilmember Garza seconded. The motion passed by voice vote. Council members and staff said the audit’s findings and the EMS fund trends will inform upcoming 2026 budget discussions and rate studies for utilities and enterprise funds.

The council accepted the report and recorded no formal dissent, while staff and the council signaled further budgeting and intergovernmental discussions to address the EMS funding pressures.