2022 STMA Ice Arena Annual Financial ReportAnnual Financial
Report
St. Michael – Albertville Ice Arena
Albertville, Minnesota
For the years ended December 31, 2022
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St. Michael - Albertville Ice Arena
Annual Financial Report
Table of Contents
For the Year Ended December 31, 2022
Page No.
Introductory Section
Appointed Officials 7
Financial Section
Independent Auditor’s Report 10
Management’s Discussion and Analysis 13
Basic Financial Statements
Government-wide Financial Statements
Statement of Net Position 20
Statement of Activities 21
Fund Financial Statements
Governmental Funds
Balance Sheet 24
Statement of Revenues, Expenditures and Changes in Fund Balances 25
General Fund
Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual 26
Notes to the Financial Statements 27
Other Required Report
Independent Auditor’s Report
on Minnesota Legal Compliance 37
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INTRODUCTORY SECTION
ST. MICHAEL - ALBERTVILLE ICE ARENA
ALBERTVILLE, MINNESOTA
FOR THE YEAR ENDED
DECEMBER 31, 2022
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St. Michael - Albertville Ice Arena
Appointed Officials
For the Year Ended December 31, 2022
Name Title Appointed by
Larry Sorensen Chair ISD 885
Tim Lewis Member ISD 885
Kari Dwinnell Member ISD 885
Walter Hudson Member Albertville
Aaron Cocking Member Albertville
Ryan Gleason Member St. Michael
Keith Wettschreck Member St. Michael
APPOINTED
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FINANCIAL SECTION
ST. MICHAEL - ALBERTVILLE ICE ARENA
ALBERTVILLE, MINNESOTA
FOR THE YEAR ENDED
DECEMBER 31, 2022
9
INDEPENDENT AUDITOR’S REPORT
Board of Directors
St. Michael - Albertville Ice Arena
Albertville, Minnesota
Report on the Financial Statements
Opinions
We have audited the accompanying financial statements of the governmental activities and each major fund of the
St. Michael - Albertville Ice Arena (the Organization), as of and for the year ended December 31, 2022, and the related
notes to the financial statements, which collectively comprise the Organ ization’s basic financial statements as listed in
the table of contents.
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial
position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund
information of the Organization as of December 31, 2022, and the respective changes in financial position and, where
applicable, cash flows thereof and the budgetary comparison for the General fund for the year then ended in accordance
with accounting principles generally accepted in the United States of America.
Basis for Opinions
We conducted our audit in accordance with auditing standard s generally accepted in the United States of America
GAAS). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of
the Financial Statements section of our report. We are required to be independe nt of the Organization and to meet our
other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the
audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
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.
In preparing the financial statements, management is required to evaluate whether there are conditions or events,
considered in the aggregate, that raise substantial doubt about the Organization’s ability to continue as a going concern
for twelve months beyond the financial statement date, including any currently known information that may raise
substantial doubt shortly thereafter.
Auditor’s Responsibilities for the Audit of the Financial Stateme nts
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions.
Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an
audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are
considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the
judgment made by a reasonable user based on the financial statements.
10
In performing an audit in accordance with GAAS, we:
Exercise professional judgment and maintain professional skepticism throughout the audit.
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error,
and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test
basis, evidence regarding the amounts and disclosures in the financial statements.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Organization’s internal control. Accordingly, no such opinion is expressed.
Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting
estimates made by management, as well as evaluate the overall presentation of the financial statements.
Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise
substantial doubt about the Organization’s ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope
and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the
audit.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the Management’s Discussion and
Analysis starting on page 13 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.
Other Information
Management is responsible for the other information included in the annual report. The other information comprises the
introductory section but does not include the basic financial statements and our auditor’s report thereon. Our opinions on
the basic financial statements do not cover the other information, and we do not express an opinion or any form of
assurance thereon.
In connection with our audit of the basic financial statements, our responsibility is to read the other information and
consider whether a material inconsistency exists between the other information and the basic financial statements or the
other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an
uncorrected material misstatement of the other information exists, we are required to describe it in our report.
Abdo
Minneapolis, Minnesota
April 27, 2023
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12
Management’s Discussion and Analysis
As management of the St. Michael - Albertville Ice Arena of Albertville, Minnesota, (the Organization), we offer readers of
the Organization’s financial statements this narrative overview and analysis of the financial activities of the Organization
for the fiscal year ended December 31, 2022.
Financial Highlights
The assets of the Organization exceeded its liabilities at the close of the most recent fiscal year as shown in the
summary of net position on the following pages. The unrestricted amount of net position may be used to meet
the Organization’s ongoing obligations to citizens and creditors.
The Organization’s total net position increased as shown in the summary of changes in net assets table on the
following pages. This increase is attributable mainly to charges for services increasing in the current year due to
the Arena being open all year.
At the close of the current fiscal year, the Organization’s governmental funds combined ending balance increased
in comparison with the prior year. Unassigned fund balance is available for spending at the Organization’s
discretion, but a portion has been assigned for specific purposes. The remaining is nonspendable for inventory.
The unassigned fund balance in the General fund, as shown in the financial analysis of the Organization’s funds
section, increased from prior year.
13
Overview of the Financial Statements
This discussion and analysis is intended to serve as an introduction to the Organization’s basic financial statements. The
Organization’s basic financial statements comprise three components: 1) government-wide financial statements, 2) fund
financial statements, and 3) notes to the financial statements. This report also contains other supplemental information
in addition to the basic financial statements themselves.
The financial statements also include notes that explain some of the information in the fin ancial statements and provide
more detailed data. The statements are followed by a section of supplementary information which further explain and
support the information in the financial statements. Figure 1 shows how the required parts of this annual report are
arranged and relate to one another.
Figure 1
Required Components of the
Organization’s Annual Financial Report
Management's
Discussion and
Analysis
Basic
Financial
Statements
Required
Supplementary
Information
Government-
wide Financial
Statements
Fund
Financial
Statements
Notes to the
Financial
Statements
Summary Detail
14
Figure 2 summarizes the major features of the Organization’s financial statements, including the portion of the
Organization government they cover and the types of information they contain. The remainder of this overview section of
management’s discussion and analysis explains the structure and contents of each of the statements.
Figure 2
Major Features of the Government-wide and Fund Financial Statements
Government-wide Statements Governmental Funds
Scope Entire Organization government (except
fiduciary funds) and the Organization’s
component units
The activities of the Organization that are not
proprietary or fiduciary, such as police, fire and
parks
Required financial
statements
Statement of Net Position
Statement of Activities
Balance Sheet
Statement of Revenues, Expenditures, and
Changes in Fund Balances
Accounting basis and
measurement focus
Accrual accounting and economic
resources focus
Modified accrual accounting and current
financial resources focus
Type of asset/liability
information
All assets and liabilities, both financial
and capital, and short-term and long-
term
Only assets expected to be used up and liabilities
that come due during the year or soon thereafter;
no capital assets included
Type of deferred
outflows/inflows of
resources information
All deferred outflows/inflows of
resources, regardless of when cash is
received or paid
Only deferred outflows of resources expected to
be used up and deferred inflows of resources
that come due during the year or soon thereafter;
no capital assets included
Type of in flow/out
flow information
All revenues and expenses during year,
regardless of when cash is received or
paid
Revenues for which cash is received during or
soon after the end of the year; expenditures
when goods or services have been received and
payment is due during the year or soon
thereafter
Government-wide Financial Statements. The Government-wide financial statements are designed to provide readers with
a broad overview of the Organization’s finances, in a manner similar to a private-sector business.
The statement of net position presents information on all of the Organization’s assets and liabilities, with the difference
between the two reported as net position. Over time, increases or decreases in net position may serve as a useful
indicator of whether the financial position of the Organization is improving or deteriorating.
The statement of activities presents information showing how the Organization’s net position changed during the most
recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change
occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for
some items that will only result in cash flows in future fiscal periods.
The government-wide financial statements start on page 20 of this report.
Fund Financial Statements. A fund is a grouping of related accounts that is used to maintain control over resources that
have been segregated for specific activities or objectives. The Organization, like other state and local governments, uses
fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the
Organization are governmental funds.
Governmental Funds. Governmental funds are used to account for essentially the same functions reported as
governmental activities in the government-wide financial statements. However, unlike the government-wide financial
statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as
well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in
evaluating a government’s near-term financing requirements.
15
Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful
to compare the information presented for governmental funds with similar information presented for governmental
activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact
by the government’s near-term financing decisions. Both the governmental fund balance sheet and the governmental fund
statement of revenues, expenditures and changes in fund balances provide a reconciliation to facilitate this comparison
between governmental funds and governmental activities.
The Organization maintains two individual governmental funds. Information is presented separately in the governmental
fund balance sheet and in the governmental fund statement of revenues, expenditures and changes in fund balances for
the General fund and Capital Improvement fund.
The Organization adopts an annual appropriated budget for its General fund. A budgetary comparison statement has been
provided for the General fund to demonstrate compliance with this budget.
The basic governmental fund financial statements start on page 24 of this report.
Notes to the Financial Statements. The notes provide additional information that is essential to a full understanding of
the data provided in the government-wide and fund financial statements. The notes to the financial statements start on
page 27 of this report.
Government-wide Financial Analysis
As noted earlier, net position may serve over time as a useful indicator of a government’s financial position. In the case of
the Organization, assets exceeded liabilities at the close of the most recent fiscal year.
By far, the largest portion of the Organization’s net position reflects its investment in capital assets (e.g., land, buildings,
machinery and equipment). The Organization uses these capital assets to provide services to citizens; consequently,
these assets are not available for future spending.
St. Michael - Albertville Ice Arena’s Summary of Net Position
Increase
2022 2021 (Decrease)
Current and Other Assets 500,348$ 413,519$ 86,829$
Capital Assets 1,161,261 1,220,550 (59,289)
Total Assets 1,661,609 1,634,069 27,540
Other Liabilities 50,784 39,277 11,507
Net Position
Investment in capital assets 1,161,261 1,220,550 (59,289)
Unrestricted 449,564 374,242 75,322
Total Net Position 1,610,825$ 1,594,792$ 16,033$
Governmental Activities
The remaining balance of unrestricted net position may be used to meet the Organization’s ongoing obligations to citizens
and creditors. At the end of the current fiscal year, the Organization is able to report positive balances in all categories of
net position.
Governmental Activities. Governmental activities increased the Organization’s net position as shown in summary below;
Significant changes from the prior year are also noted below:
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St. Michael - Albertville Ice Arena’s Changes in Net Position
Increase
2022 2021 (Decrease)
Revenues
Program Revenues
Charges for services 783,352$ 752,325$ 31,027$
Capital grants and contributions 45,073 45,134 (61)
General Revenues
Unrestricted investment earnings (11,198) (334) (10,864)
Total Revenues 817,227 797,125 20,102
Expenses
Culture and recreation 801,194 723,293 77,901
Change in Net Position 16,033 73,832 (57,799)
Net Position, January 1 1,594,792 1,520,960 73,832
Net Position, December 31 1,610,825$ 1,594,792$ 16,033$
Governmental Activities
Financial Analysis of the Government’s Funds
As noted earlier, the Organization uses fund accounting to ensure and demonstrate compliance with finance-related legal
requirements.
Governmental Funds: The focus of the Organization’s governmental funds is to provide information on near-term inflows,
outflows and balances of spendable resources. Such information is useful in assessing the Organization’s financing
requirements. In particular, unassigned fund balance may serve as a useful measure of a government’s net resources
available for spending at the end of the fiscal year.
As of the end of the current fiscal year, the Organization’s governmental funds had increased in comparison with the prior
year.
The General fund is the chief operating fund of the Organization. At the end of the current year, the fund balance of the
General fund is shown in the fund financial statements. The fund balance of the Organization’s General fund increased
during the current fiscal year.
The Capital Improvement fund balance increased as shown above. Each member of the Organization contributes money
for future capital needs.
General Fund Budgetary Highlights
The Organization’s General fund budget was not amended during the year. The budget called for an increase in fund
balance. The actual activity of the General fund resulted in an increase.
Revenues were under budget. The largest revenue variance was the ice rental revenue which was under budget.
Expenditures were under budget. This was mostly due to contracted services expenditures being under budget.
17
Capital Assets: The Organization’s investment in capital assets for its governmental activities as of December 31, 2022, is
shown in the table below. This investment in capital assets includes land, buildings, improvements, machinery and
equipment. The decrease from the prior year relates to depreciation expense.
Additional information on the Organization’s capital assets can be found in Note 3B on page 33 of this report.
St. Michael - Albertville Ice Arena’s Capital Assets
Net of Depreciation)
Increase
2022 2021 (Decrease)
Land 102,000$ 102,000$ -$
Buildings 928,832 985,320 (56,488)
Machinery and Equipment 130,429 133,230 (2,801)
Total 1,161,261$ 1,220,550$ (59,289)$
Governmental Activities
Economic Factors and Next Year’s Budgets and Rates
The Organization is a joint powers organization comprised of the City of Albertville, City of St. Michael and Independent
School District 885. The Organization strives to maintain reasonable and competitive rates, sufficient to fund operations.
The Organization has several primary parties that rent the ice time at the facility. These groups include, but are not limited
to, the STMA High School and the local youth hockey association, STMA Youth Hockey Association, Inc.
Other key economic factors are as follows:
There continues to be an annual shortage of the prime ice available for rentals during the typical hockey season.
Demand for off-season ice has greatly increased.
The arena will be leasing 2,850 SF out as retail space to Hat Trick Hockey. The retail use will complement the
arena’s operations and generate revenue.
The arena has an agreement with the local youth hockey association committing the association to a minimum
number of ice rental hours in exchange for use of dryland space in the arena.
Requests for Information
This financial report is designed to provide a general overview of the Organization’s finances for all those with an interest
in the Organization’s finances. Questions concerning any of the information provided in this report or requests for
additional financial information should be addressed to the Finance Director, City of Albertville, 5959 Main Avenue,
Albertville, Minnesota 55301.
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GOVERNMENT-WIDE FINANCIAL STATEMENTS
ST. MICHAEL - ALBERTVILLE ICE ARENA
ALBERTVILLE, MINNESOTA
FOR THE YEAR ENDED
DECEMBER 31, 2022
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St. Michael - Albertville Ice Arena
Statement of Net Position
December 31, 2022
Governmental
Activities
Assets
Cash and temporary investments 402,605$
Accounts receivable 95,190
Inventory 2,553
Capital assets
Land 102,000
Depreciable assets, net of accumulated depreciation 1,059,261
Total Assets 1,661,609
Liabilities
Accounts payable 40,334
Accrued salaries payable 10,450
Total Liabilities 50,784
Net Position
Investment in capital assets 1,161,261
Unrestricted 449,564
Total Net Position 1,610,825$
The notes to the financial statements are an integral part of this statement.
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St. Michael - Albertville Ice Arena
Statement of Activities
For the Year Ended December 31, 2022
Net (Expenses)
Revenues and
Changes in
Net Position
Operating Capital Grants
Charges for Grants and and Governmental
Expenses Services Contributions Contributions Activities
Governmental Activities
Culture and recreation 801,194$ 783,352$ -$ 45,073$ 27,231$
General Revenues
Unrestricted investment earnings (loss)(11,198)
Change in Net Position 16,033
Net Position, January 1 1,594,792
Net Position, December 31 1,610,825$
Program Revenues
Functions/Programs
The notes to the financial statements are an integral part of this statement.
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FUND FINANCIAL STATEMENTS
ST. MICHAEL - ALBERTVILLE ICE ARENA
ALBERTVILLE, MINNESOTA
FOR THE YEAR ENDED
DECEMBER 31, 2022
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St. Michael - Albertville Ice Arena
Balance Sheet
Governmental Funds
December 31, 2022
Total
Capital Governmental
General Improvement Funds
Assets
Cash and temporary investments 217,161$ 185,444$ 402,605$
Accounts receivable 95,190 - 95,190
Inventory 2,553 - 2,553
Total Assets 314,904$ 185,444$ 500,348$
Liabilities
Accounts payable 40,334$ -$ 40,334$
Accrued salaries payable 10,450 - 10,450
Total Liabilities 50,784 - 50,784
Fund Balances
Nonspendable for inventory 2,553 - 2,553
Assigned for future capital acquisitions - 185,444 185,444
Unassigned 261,567 - 261,567
Total Fund Balances 264,120 185,444 449,564
Total Liabilities and Fund Balances 314,904$ 185,444$ 500,348$
Total fund balance reported above 449,564$
Amounts reported for the governmental activities in the statement
of net position are different because
Capital assets used in governmental activities are not financial
resources and therefore are not reported as assets in governmental funds.
Cost of capital assets 2,514,106
Less: accumulated depreciation (1,352,845)
Total Net Position - Governmental Activities 1,610,825$
The notes to the financial statements are an integral part of this statement.
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St. Michael - Albertville Ice Arena
Statement of Revenues, Expenditures and
Changes in Fund Balances
Governmental Funds
For the Year Ended December 31, 2022
Total
Capital Governmental
General Improvement Funds
Revenues
Charges for services 753,711$ -$ 753,711$
Interest on investments (loss)(6,048) (5,150) (11,198)
Miscellaneous 29,641 45,073 74,714
Total Revenues 777,304 39,923 817,227
Expenditures
Current
Culture and recreation 730,169 - 730,169
Capital outlay
Culture and recreation 11,736 - 11,736
Total Expenditures 741,905 - 741,905
Net Change in Fund Balances 35,399 39,923 75,322
Fund Balances, January 1 228,721 145,521 374,242
Fund Balances, December 31 264,120$ 185,444$ 449,564$
Total Change is Fund Balances 75,322$
Amounts reported for governmental activities in the statement
of activities are different because
Capital outlays are reported in governmental funds as expenditures. However, in the statement of
activities, the cost of those assets is allocated over the estimated useful lives as depreciation expense.
Capital outlays 16,193
Depreciation expense (75,482)
Change in Net Position - Governmental Activities 16,033$
The notes to the financial statements are an integral part of this statement.
25
General Fund
Actual Variance with
Original Final Amounts Final Budget
Revenues
Charges for services
Ice rental 710,400$ 710,400$ 672,010$ (38,390)$
Concessions 65,000 65,000 79,311 14,311
Vending machines 1,500 1,500 2,370 870
Skate sharpening 100 100 20 (80)
Total Charges for Services 777,000 777,000 753,711 (23,289)
Interest on investments (loss)1,000 1,000 (6,048) (7,048)
Miscellaneous
Other 20,000 20,000 29,641 9,641
Total Revenues 798,000 798,000 777,304 (20,696)
Expenditures
Current
Culture and recreation
Supplies 30,700 30,700 38,284 (7,584)
Contracted services 450,784 450,784 404,542 46,242
Utilities 236,600 236,600 262,063 (25,463)
Other services and charges 28,435 28,435 25,280 3,155
Total current expenditures 746,519 746,519 730,169 16,350
Capital outlay
Culture and recreation 18,200 18,200 11,736 6,464
Total Expenditures 764,719 764,719 741,905 22,814
Net Change in Fund Balances 33,281 33,281 35,399 2,118
Fund Balances, January 1 228,721 228,721 228,721 -
Fund Balances, December 31 262,002$ 262,002$ 264,120$ 2,118$
Budgeted Amounts
St. Michael - Albertville Ice Arena
Statement of Revenues, Expenditures and
Changes in Fund Balances - Budget to Actual
For the Year Ended December 31, 2022
The notes to the financial statements are an integral part of this statement.
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St. Michael - Albertville Ice Arena
Notes to the Financial Statements
December 31, 2022
Note 1: Summary of Significant Accounting Policies
A.Reporting Entity
St. Michael - Albertville Ice Arena (the Organization) was created under a joint powers agreement between the City of St.
Michael, the City of Albertville, and the Independent School District No. 885. The agreement was for the construction and
maintenance of a qualified ice arena.
The Board consists of seven regular members, two from each member city and three from the Independent School
District No. 885. Each member is also part of the City Council or Board of Education.
The Organization has considered all potential units for which it is financially accountable, and other organizations for
which the nature and significance of their relationship with the Organization are such that exclusion would cause the
Organization’s financial statements to be misleading or incomplete. The Governmental Accounting Standards Board
GASB) has set forth criteria to be considered in determining financial accountability. These criteria include appointing a
voting majority of an organization’s governing body, and (1) the ability of the primary government to impose its will on that
organization or (2) the potential for the organization to provide specific benefits to, or impose specific financial burdens
on the primary government. The Organization does not have any component units .
B.Government-wide and Fund Financial Statements
The goal of government-wide financial statements is to present a broad overview of the Organization’s finances.
The basic statements that form the government-wide financial statements are the statement of net position and the
statement of activities. The two statements report information on all of the non-fiduciary activities of the Organization.
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.
Amounts reported as program revenues include 1) charges to customers or applicants who purchase, use, or directly
benefit from goods, services or privileges provided by a given function or segment and 2) grants and contributions that
are restricted to meeting the operational or capital requirements of a particular function or segment. Other items not
properly included among program revenues are reported instead as general revenues.
Major individual governmental funds are reported as separate columns in the fund financial statements.
C.Measurement Focus, Basis of Accounting and Financial Statement Presentation
The government-wide financial statements are reported using the economic resources measurement focus and the
accrual basis of accounting . Revenues are recorded when earned and expenses are recorded when a liability is incurred,
regardless of the timing of related cash flows. Grants and similar items are recognized as revenue as soon as 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. Revenues are recognized as soon as they are both measurable and available.
Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to
pay liabilities of the current period. For this purpose, the Organization considers revenues to be available if they are
collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is
incurred, as under accrual accounting.
Revenue resulting from exchange transactions, in which each party gives and receives essentially equal value, is recorded
on the accrual basis when the exchange takes place. On a modified accrual basis, revenue is recorded in the year in
which the resources are measurable and become available.
27
St. Michael - Albertville Ice Arena
Notes to the Financial Statements
December 31, 2022
Note 1: Summary of Significant Accounting Policies (Continued)
Non-exchange transactions, in which the Organization receives value without directly giving equal value in return, include
grants, entitlement and donations. Revenue from grants, entitlements and donations is recognized in the year in which all
eligibility requirements have been satisfied. Eligibility requirements include timing requirements, which specify the year
when the resources are required to be used or the year when use is first permitted, matching requirements, in which the
Organization must provide local resources to be used for a specified purpose, and expenditure requirements, in which the
resources are provided to the Organization on a reimbursement basis. On a modified accrual basis, revenue from non-
exchange transactions must also be available before it can be recognized.
Unearned revenue arises when assets are recognized before revenue recognition criteria hav e been satisfied. Grants and
entitlements received before eligibility requirements are met are also recorded as unearned revenue.
The preparation of financial statements in conformity with accounting principles generally accepted in the United States
of America requires management to make estimates and assumptions that affect certain reported amounts and
disclosures. Accordingly, actual results could differ from those estimates.
The Organization reports the following major governmental funds:
The General fund is the Organization’s primary operating fund. It accounts for all financial resources of the
Organization, except those required to be accounted for in another fund.
The Capital Improvement fund accounts for future capital acquisitions and other capital improvements.
As a general rule, the effect of interfund activity has been eliminated from government -wide financial statements.
D.Assets, Liabilities, and Net Position/Fund Balance
Deposits and Investments
The Organization’s 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 of the City of Albertville are pooled and invested, to the extent available, in certificates of
deposit and other authorized investments. The Organization’s balances are maintained in a separate fund with in the City’s
financial statements. Earnings from such investments are allocated on the basis of applicable participation by each of
the funds.
The Organization may also invest idle funds as authorized by Minnesota statutes, as follows:
1.Direct obligations or obligations guaranteed by the United States or its agencies.
2.Shares of investment companies registered under the Federal Investment Company Act of 1940 and received the
highest credit rating, rated in one of the two highest rating categories by a statistical rating agency, and have a
final maturity of thirteen months or less.
3.General obligations of a state or local government with taxing powers rated “A” or better; revenue obligations
rated “AA” or better.
4.General obligations of the Minnesota Housing Finance Agency rated “A” or better.
5.Obligation of a school district with an original maturity not exceeding 13 months and (i) rated in the highest
category by a national bond rating service or (ii) enrolled in the credit enhancement program pursuant to statute
section 126C.55.
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St. Michael - Albertville Ice Arena
Notes to the Financial Statements
December 31, 2022
Note 1: Summary of Significant Accounting Policies (Continued)
6. Bankers’ acceptances of United States banks eligible for purchase by the Federal Reserve System.
7. Commercial paper issued by United States banks corporations or their Canadian subsidiaries, of highest quality
category by at least two nationally recognized rating ag encies, and maturing in 270 days or less.
8. Repurchase or reverse repurchase agreements and securities lending agreements with financial institutions
qualified as a “depository” by the government entity, with banks that are members of the Federal Reserve System
with capitalization exceeding $10,000,000, a primary reporting dealer in U.S. government securities to the Federal
Reserve Bank of New York, or certain Minnesota securities broker-dealers.
9. Guaranteed Investment Contracts (GIC’s) issued or guaranteed by a United States commercial bank, a domestic
branch of a foreign bank, a United States insurance company, or its Canadian subsidiary, whose similar debt
obligations were rated in one of the top two rating categories by a nationally recognized rating agen cy.
The Organization does not have an investment policy that addresses interest rate and credit risk.
Accounts Receivable
Accounts receivable include amounts billed for services provided before year end and are expected to be collected.
Therefore, there has been no allowance for doubtful accounts established.
Prepaid Items
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in
both the government-wide and fund financial statements. Prepaid items are reported using the consumption method and
recorded as expenditures/expenses at the time of consumption.
Inventory
The inventory in the General fund is stated at FIFO (first-in, first-out) cost and consists of expendable supplies held for
consumption. The cost is recognized as an expenditure at the time the individual inventory items are used (consumption
method).
Capital Assets
Capital assets, which include property, plant, equipment, and infrastructure assets are reported in the applicable
governmental-type activities columns in the government-wide financial statements. Capital assets are defined by the
Organization as assets with an estimated useful life of more than one year and an initial individual cost of more than the
following:
Category Cost
Land/Land Improvements 10,000$
Other Improvements 25,000
Infrastructure 100,000
Buildings 25,000
Building Improvements 25,000
Vehicles 5,000
Other Equipment 5,000
Intangible Assets 10,000
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St. Michael - Albertville Ice Arena
Notes to the Financial Statements
December 31, 2022
Note 1: Summary of Significant Accounting Policies (Continued)
The Organization reports infrastructure assets on a network and subsystem basis. Accordingly, the amounts spent for the
construction or acquisition of infrastructure assets are capitalized and reported in the government -wide financial
statements regardless of their amount.
In the case of initial capitalization of general infrastructure assets (i.e., those reported by governmental activities) the
Organization chose to include items dating back to June 30, 1980. The Organization was able to estimate the historical
cost for the initial reporting of these assets through back trending (i.e., estimating the current replacement cost of the
infrastructure to be capitalized and using an appropriate price-level index to deflate the cost to the acquisition year or
estimated acquisition year). As the Organization constructs or acquires capital assets each period, including
infrastructure assets, they are capitalized and reported at historical cost. The reported value excludes normal
maintenance and repairs which are essentially amounts spent in relation to capital assets that do not increase the
capacity or efficiency of the item or extend its useful life beyond the original estimate. In the case of donations, the
Organization values these capital assets at the acquisition value of the item at the date of its donation.
Property, plant, and equipment will be depreciated using the straight-line method over the following estimated useful lives:
Useful Lives
Assets in Years
Land Improvements 5 to 30
Infrastructure 15 to 50
Buildings 15 to 40
Vehicles 3 to 15
Other Equipment 3 to 20
Fund Balance
In the fund financial statements, fund balance is divided into five classifications based primarily on the extent to which the
Organization is bound to observe constraints imposed upon the use of resources repor ted in the governmental funds.
These classifications are defined as follows:
Nonspendable - Amounts that cannot be spent because they are not in spend able form, such as inventory.
Restricted - Amounts related to externally imposed constraints established by creditors, grantors or contributors; or
constraints imposed by state statutory provisions.
Committed - Amounts constrained for specific purposes that are internally imposed by formal action (resolution) of
the Ice Arena Board, which is the Organization’s highest level of decision-making authority. Committed amounts
cannot be used for any other purpose unless the Ice Arena Board modifies or rescinds the commitment by resolution.
Assigned - Amounts constrained for specific purposes that are internally imposed. In governmental funds other than
the General fund, assigned fund balance represents all remaining amounts that are not classified as nonspendable
and are neither restricted nor committed. In the General fund, assigned amounts represent intended uses established
by the Ice Arena Board itself or by an official to which the governing body delegates the authority. The Ice Arena
Board has adopted a fund balance policy which delegates the authority to assign amounts for specific purposes to
the Finance Director and/or Organization Administrator.
Unassigned - The residual classification for the General fund and also negative residual amounts in other funds.
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St. Michael - Albertville Ice Arena
Notes to the Financial Statements
December 31, 2022
Note 1: Summary of Significant Accounting Policies (Continued)
The Organization considers restricted amounts to be spent first when both restricted and unrestricted fund balance is
available. Additionally, the Organization would first use committed, then assigned, and lastly unassigned amounts of
unrestricted fund balance when expenditures are made.
Net Position
Net position represents the difference between assets and deferred outflows and liabilities and deferred inflows. Net
position is displayed in three components:
a. Investment in Capital Assets - Consists of capital assets, net of accumulated depreciation.
b. Restricted Net Position - Consists of net position restricted when there are limitations imposed on their use
through external restrictions imposed by creditors, grantors, laws or regulations of other governments.
c. Unrestricted Net Position - All other net positions that do not meet the definition of “restricted” or “investment in
capital assets”.
When both restricted and unrestricted resources are available for use, it is the Organization’s policy to use restricted
resources first, then unrestricted resources as they are needed.
Note 2: Stewardship, Compliance and Accountability
Budgetary Information
An annual budget is adopted on a basis consistent with accounting principles generally accepted in the United States of
America for the General fund. All annual appropriations lapse at fiscal year-end. The Organization does not use
encumbrance accounting.
The Board adopts an annual budget for the Organization. During the budget year, supplemental appropriations and
deletions may be authorized by the Organization. The amounts shown in the financial statements as ‘Budget’ represent
the original and final budgeted amounts. The Organization prepares its budget on a basis consistent with accounting
principles generally accepted in the United States of America. All budgeting appropriations lapse at year -end.
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St. Michael - Albertville Ice Arena
Notes to the Financial Statements
December 31, 2022
Note 3: Detailed Notes on All Funds
A. Deposits and Investments
Deposits
Custodial credit risk for deposits and investments is the risk that in the event of a bank failure, the Organization’s deposits
and investments may not be returned or the Organization will not be able to recover collateral securities in the possession
of an outside party. In accordance with Minnesota statutes and as authorized by the Organization Council, the
Organization maintains deposits at those depository banks, all of which are members of the Federal Reserve System.
Minnesota statutes require that all District deposits be protected by insurance, surety bond or collateral. The fair value of
collateral pledged must equal 110 percent of the deposits not covered by insurance, bonds, or irrevocable standby letters
of credit from Federal Home Loan Banks.
Authorized collateral in lieu of a corporate surety bond includes:
United States government Treasury bills, Treasury notes, Treasury bonds;
Issues of United States government agencies and instrumentalities as quoted by a recognized industry quotation
service available to the government entity;
General obligation securities of any state or local government with taxing powers which is rate d “A” or better by a
national bond rating service, or revenue obligation securities of any state or local government with taxing powers
which is rated “AA” or better by a national bond rating service;
General obligation securities of a local government with taxing powers may be pledged as collateral against funds
deposited by that same local government entity;
Irrevocable standby letters of credit issued by Federal Home Loan Banks to a municipality accompanied by
written evidence that the bank’s public debt is rated “AA” or better by Moody’s Investors Service, Inc., or Standard
Poor’s Corporation; and
Time deposits that are fully insured by any federal agency.
Minnesota statutes require that all collateral shall be placed in safekeeping in a restricted account at a Federal Reserve
Bank, or in an account at a trust department of a commercial bank or other financial institution that is not owned or
controlled by the financial institution furnishing the collateral. The selection should be approved by the government entity.
At December 31, 2022, the Organization had $402,605 invested in an external investment pool maintained by the City of
Albertville. The Organization funds are pooled with the City of Albertville and invested in accordance with Minnesota
Statues which are the same for Minnesota Cities as for the Organization. Investment earnings (including interest and
market value changes) are allocated to the Organization each month based on the Organization’s respective share of the
total investment portfolio held by the pool.
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St. Michael - Albertville Ice Arena
Notes to the Financial Statements
December 31, 2022
Note 3: Detailed Notes on All Funds
B.Capital Assets
Capital asset activity for the year ended December 31, 2022 was as follows:
Beginning Ending
Balance Increases Decreases Balance
Governmental Activities
Capital Assets not Being Depreciated
Land 102,000$ -$ -$ 102,000$
Capital Assets Being Depreciated
Buildings 2,017,446 - - 2,017,446
Improvements other than buildings 8,495 - - 8,495
Machinery and equipment 369,972 16,193 - 386,165
Total Capital Assets
Being Depreciated 2,395,913 16,193 - 2,412,106
Less Accumulated Depreciation for
Buildings (1,032,126) (56,488) - (1,088,614)
Improvements other than buildings (8,495) - - (8,495)
Machinery and equipment (236,742) (18,994) - (255,736)
Total Accumulated
Depreciation (1,277,363) (75,482) - (1,352,845)
Total Capital Assets
Being Depreciated, Net 1,118,550 (59,289) - 1,059,261
Governmental Activities
Capital Assets, Net 1,220,550$ (59,289)$ -$ 1,161,261$
Depreciation expense charged to the culture and recreation function was $75,482.
Note 4: Other Information
Risk Management
The Organization is exposed to various risks of loss related to torts; theft of damage to and destruction of assets; errors
and omissions; injuries to employees; and natural disasters for which the Organization carries insurance. The
Organization obtains insurance through participation in the League of Minnesota Cities Insurance Trust (LMCIT), which is
a risk sharing pool with approximately 800 other governmental units. The Organization pays an annual premium to LMCIT
for its workers compensation and property and casualty insurance. The LMCIT is self-sustaining through member
premiums and will reinsure for claims above a prescribed dollar am ount for each insurance event. Settled claims have not
exceeded the Organization’s coverage in any of the past three fiscal years.
Liabilities are reported when it is probable that a loss has occurred, and the amount of the loss can be reasonably
estimated. Liabilities, if any, include an amount for claims that have been incurred but not reported (IBNRs). The
Organization’s management is not aware of any incurred but not reported claims.
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OTHER REQUIRED REPORT
ST. MICHAEL - ALBERTVILLE ICE ARENA
ALBERTVILLE, MINNESOTA
FOR THE YEAR ENDED
DECEMBER 31, 2022
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INDEPENDENT AUDITOR’S REPORT
ON MINNESOTA LEGAL COMPLIANCE
Board of Directors
St. Michael - Albertville Ice Arena
Albertville, Minnesota
We have audited, in accordance with auditing standards generally accepted in the United States of A merica, the financial
statements of the governmental activities and each major fund of the St. Michael - Albertville Ice Arena (the Organization),
as of and for the year ended December 31, 2022, and the related notes to the financial statements which collectively
comprise the Organization’s financial statements, and have issued our report thereon dated April 27, 2023.
In connection with our audit, nothing came to our attention that caused us to believe that the St. Michael - Albertville Ice
Arena failed to comply with the provisions of the contracting and bidding, deposits and investments, conflicts of interest,
public indebtedness, claims and disbursements and miscellaneous provisions sections of the Minnesota Legal
Compliance Audit Guide for Other Political Subdivisions, promulgated by the State Auditor pursuant to Minn. Stat. § 6.65,
insofar as they relate to accounting matters. However, our audit was not directed primarily toward obtaining knowledge
of such noncompliance. Accordingly, had we performed additional procedures, other matters may have come to our
attention regarding the Organization’s noncompliance with the above referenced provisions, inso far as they relate to
accounting matters.
This report is intended solely for the information and use those charged with governance and management of the
Organization and the State Auditor and is not intended to be and should not be used by anyone other than these specified
parties.
Abdo
Minneapolis, Minnesota
April 27, 2023
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