2025 Annual Financial Report2025
Annual Comprehensive
Financial Report
For the Fiscal Year Ended December 31, 2025 City of Chanhassen, Minnesota
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CITY OF CHANHASSEN, MINNESOTA
ANNUAL COMPREHENSIVE FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED
DECEMBER 31, 2025
PREPARED BY
FINANCE DEPARTMENT
Member of the Government Finance Officers Association
of the United States and Canada
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City of Chanhassen, Minnesota
Annual Comprehensive Financial Report
Table of Contents
For the Year Ended December 31, 2025
Page No.
Introductory Section
Letter of Transmittal from Finance Director 11
Certificate of Achievement for Excellence in Financial Reporting 17
Organization Chart 18
Elected and Appointed Officials 19
Financial Section
Independent Auditor’s Report 23
Management’s Discussion and Analysis 27
Basic Financial Statements
Government-wide Financial Statements
Statement of Net Position 41
Statement of Activities 42
Fund Financial Statements
Governmental Funds
Balance Sheet 46
Reconciliation of the Balance Sheet to the Statement of Net Position 47
Statement of Revenues, Expenditures and Changes in Fund Balances 48
Reconciliation of the Statement of Revenues, Expenditures and Changes
in Fund Balances to the Statement of Activities 49
Proprietary Funds
Statement of Net Position 50
Statement of Revenues, Expenses and Changes in Net Position 53
Statement of Cash Flows 54
Notes to the Financial Statements 57
Required Supplementary Information
Schedule of Employer’s Share of Public Employees Retirement Association Net Pension Liability -
General Employees Retirement Fund 96
Schedule of Employer’s Public Employees Retirement Association Contributions -
General Employees Retirement Fund 96
Notes to the Required Supplementary Information - General Employees Retirement Fund 97
Schedule of Employer’s Share of Public Employees Retirement Association Net Pension Liability -
Public Employees Police and Fire Fund 99
Schedule of Employer’s Public Employees Retirement Association Contributions -
Public Employees Police and Fire Fund 99
Notes to the Required Supplementary Information - Public Employees Police and Fire Fund 100
Schedule of Changes in the Fire Relief Association’s Net Pension Liability (Asset) and Related Ratios 102
Notes the Required Supplementary Information - Fire Relief Association 104
Schedule of Employer’s Fire Relief Association’s Contributions 105
Schedule of Changes in the City’s OPEB Liability and Related Ratios 106
Budgetary Comparison Schedules
General Fund 108
Notes to the Required Supplemental Information – Budgetary Reporting 109
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City of Chanhassen, Minnesota
Annual Comprehensive Financial Report
Table of Contents (Continued)
For the Year Ended December 31, 2025
Page No.
Combining and Individual Fund Financial Statements and Schedules
General Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual 112
Pavement Management Program (PMP) Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual 118
Nonmajor Governmental Funds
Combining Balance Sheet 120
Combining Statement of Revenues, Expenditures and Changes in Fund Balances 121
Nonmajor Special Revenue Funds
Combining Balance Sheet 124
Combining Statement of Revenues, Expenditures and Changes in Fund Balances 125
Charitable Gambling Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual 126
Cemetery Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual 127
Cable Television Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual 128
Grant Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual 129
Nonmajor Debt Service Funds
Combining Balance Sheet 132
Combining Statement of Revenues, Expenditures and Changes in Fund Balances 133
2016A G.O. Refunding Bonds Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual 134
Nonmajor Capital Projects Funds
Combining Balance Sheet 136
Combining Statement of Revenues, Expenditures and Changes in Fund Balances 138
Capital Equipment/Vehicle Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual 140
Park Renovation Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual 141
Capital Facilities Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual 142
Park Development Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual 143
Transportation Infrastructure Management Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual 144
Frontier Development TIF #11 Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual 145
Lake Place Senior Apt TIF #12 Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual 146
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City of Chanhassen, Minnesota
Annual Comprehensive Financial Report
Table of Contents (Continued)
For the Year Ended December 31, 2025
Table No. Page No.
Statistical Section (Unaudited)
Financial Trends
Net Position by Component 1 150
Changes in Net Position 2 152
Fund Balances of Governmental Funds 3 156
Changes in Fund Balances of Governmental Funds 4 158
Revenue Capacity
Tax Capacity and Estimated Market Value of Property 5 160
Property Tax Rates - Direct and Overlapping Governments 6 162
Principal Property Taxpayers 7 163
Property Tax Levies and Tax Collections 8 164
Debt Capacity
Ratios of Outstanding Debt by Type 9 165
Ratios of General Bonded Debt Outstanding 10 166
Computation of Direct and Overlapping Debt 11 167
Legal Debt Margin Information 12 168
Pledged-revenue Coverage 13 170
Demographic and Economic Information
Demographic and Economic Statistics 14 171
Principal Employers 15 172
Operating Information
Full-time Equivalent City Government Employees by Function 16 173
Operating Indicators by Function 17 174
Capital Asset Statistics by Function 18 176
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INTRODUCTORY SECTION
CITY OF CHANHASSEN
CHANHASSEN, MINNESOTA
FOR THE YEAR ENDED
DECEMBER 31, 2025
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May 14, 2026
To the Citizens of the City of Chanhassen, Honorable Mayor and City Council Members,
and Ms. Laurie Hokkanen, City Manager
The Annual Comprehensive Financial Report of the City of Chanhassen, Minnesota (the “City”) for the
fiscal year ended December 31, 2025, is hereby submitted. The report was prepared in accordance with
accounting principles generally accepted in the United States of America (GAAP) as established by the
Governmental Accounting Standards Board and meets the requirements of the Minnesota State Auditor’s
Office.
This report consists of management’s representations concerning the finances of the City. Consequently,
management assumes full responsibility for the completeness and reliability of all the information
presented in this report. To provide a reasonable basis for making these representations, management of
the City has established a comprehensive internal control framework that is designed both to protect the
City’s assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation
of the City’s financial statements in conformity with GAAP. Because the cost of internal controls should
not outweigh their benefits, the City’s comprehensive framework of internal controls has been designed to
provide reasonable, rather than absolute assurance that the financial statements will be free from material
misstatement. As management, we assert that, to the best of our knowledge and belief, this financial
report is complete and reliable in all material respects.
The City’s financial statements have been audited by Abdo, a firm of licensed certified public
accountants. The goal of the independent audit was to provide reasonable assurance that the financial
statements of the City for the fiscal year ended December 31, 2025, are free of material misstatement. The
independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements; assessing the accounting principles used and significant estimates made by
management; and evaluating the overall financial presentation. Based upon the audit, the independent
auditor concluded that there was reasonable basis for rendering an unmodified opinion that the City’s
financial statements for the fiscal year ended December 31, 2025, are fairly presented in conformity with
GAAP. The independent auditor’s report is presented as the first item in the financial section of this
report.
GAAP requires the management provide a narrative introduction, overview, and analysis to accompany
the basic financial statements in the form of Management’s Discussion and Analysis (MD&A). This letter
of transmittal is designed to complement the MD&A and should be read in conjunction with it. The
MD&A can be found in the financial section of this report, immediately following the report of the
independent auditors.
City Profile
The City of Chanhassen strives to be "A Community for Life.” Our vision is that Chanhassen is a safe,
welcoming community with engaged residents, abundant natural amenities, and vibrant businesses,
supported by valued services that make this a community for life. Our mission is to serve the public. We
do this through the delivery of reliable, cost-effective services designed to provide a safe, sustainable
community. Our core values are innovation, respect, stewardship, and engagement.
The City of Chanhassen, Minnesota, a suburban community located southwest of the Twin Cities
metropolitan area, is situated primarily in eastern Carver County with a small portion in Hennepin
County. The City encompasses an area of 22.8 square miles. Chanhassen enjoys an excellent location,
with convenient access to the Minneapolis-Saint Paul metropolitan area via U.S. Highway 212, and State
Highways 5 and 7. State Highways 41 and 101 provide access to the north and south.
The village of Chanhassen was organized in 1896. In 1967 the village of Chanhassen and Chanhassen
Township merged to become the City of Chanhassen. The City of Chanhassen operates as a statutory Plan
B or Council-Manager form of government in Minnesota. Plan B cities have an elected mayor and council
members with an appointed City Manager. The City Manager oversees administrative duties for the City
while the Mayor and Council maintain traditional policy-making roles.
With a staff of about 86 regular, full-time employees and several part-time and seasonal employees, the
City of Chanhassen provides a full range of services, including police and fire protection; building
inspections; construction and maintenance of highways, streets, and other infrastructure; recreational
activities and cultural events; and general administrative services. The City also operates three
enterprises: water, sewer, and surface water management.
The City is also financially accountable for the Chanhassen Economic Development Authority (EDA),
which is included in this report as a blended component unit. The Chanhassen City Council serves as the
board of the EDA.
The Chanhassen Fire Relief Association is a separate legal entity and accordingly is excluded from this
report.
Strategic Priorities
The City’s current Strategic Plan consists of five strategic priorities. Associated with each priority is a set
of desired outcomes, key outcome indicators, and performance targets, describing expected results and
how the results will be measured.
The five strategic priorities (with desired outcomes) are:
•Financial Sustainability
o Financial stability in all funds
o Financial policies guide decision making
o Financial systems produce timely, accurate, and meaningful information
•Asset Management
o Effective utilization and protection of assets
o Ability to pay for critical assets
o Assets adequate to support adopted levels of service
•Development and Redevelopment
o Diversity in new development
o Redevelopment consistent with our vision
o New innovative places and spaces
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•Operational Excellence
o Satisfied workforce
o A competent workforce
o Improved operational effectiveness, including through the use of technology and innovation
•Communications
o Improved understanding of City operations
o Improved internal communication
o Improved communication with outside organizations
Annual Budget
The annual budget serves as the foundation for the City of Chanhassen’s financial planning and control.
The objectives of these budgetary controls are to ensure compliance with legal provisions embodied in the
annual appropriated budget approved by the Chanhassen City Council. Activities of the General Fund and
most of the special revenue, debt service, capital project, and enterprise funds are included in the annual
budget.
The level of budgetary control (that is, the level at which expenditures cannot legally exceed the
appropriated amount) is established at the fund level. Expenditures for departments or divisions that
exceed appropriations are not authorized unless additional revenue sources or fund balance are identified
and available. Unused appropriated expenditures lapse at year-end.
The City maintains stable financial operations due to a history of conservative budgeting, maintenance of
healthy reserves, and a lack of reliance on state aid.
Economic Condition and Outlook
The City has grown steadily since incorporating in 1967. The chart below shows population counts from
the U.S. Census through 2020 and forecasts from the Metropolitan Council for 2030, 2040, and 2050:
Forecasted employment and annual average wages continue to grow in the City according to the
Minnesota Department of Employment and Economic Development, which surveys quarterly
employment and wages in the state. Employment in 2024 was estimated at 14,698 and is expected to
increase to 16,610 by 2030 and 18,320 by 2040. Average annual wages in 2024 were $71,910, up from
$61,268 in 2020. Average annual unemployment is low for Chanhassen residents, coming in at 3.3% in
2025, up slightly from 2.5% in 2024.
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
1970 1980 1990 2000 2010 2020 2030 2040 2050
Chanhassen Population
Census
Forecast
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The City continues to see steady building permit activity and expects to see continuous growth into the
future. The Avienda Project, located near Highway 212 and Powers Boulevard is underway. The project
includes a mix of high-quality detached villa homes, multi-family and senior living residential facilities,
office, medical and professional services, retail, entertainment, restaurants, and hospitality. Two large
mixed apartment and first-floor retail apartments are currently under construction in downtown
Chanhassen.
The following chart summarizes the City’s annual market value since 2012.
The City has entered into tax abatement agreements for projects that, but for City assistance, would not
have occurred. The City currently has two pay-as-you-go (PAYGO) tax increment notes to reimburse
developers, which are outlined in the notes to the basic financial statements. The benefit to the City is
elimination of blighted and underutilized areas, job creation, and increased tax base in the future years.
The table below shows the increase in market value for the tax increment districts with PAYGO tax
increment notes:
Tax Increment Financing District Original Tax
Capacity
Pay 2025 Tax
Capacity
Percent
Increase in
Tax Capacity
TIF 11 – The Venue $27,510 $404,673 1,371%
TIF 12 – Lake Place Senior Apartments $9,195 $233,945 2,444%
In 2021, the City began a facilities study to evaluate the current condition and long-term replacement
needs of the City’s facilities. The study evaluated current condition, maintenance planning, and future
needs.
Based on the facilities study results, the City began construction of a new City Hall and Senior Center
building. The new civic campus will include a new City Hall, Council Chambers, Senior Center, and
destination park amenities, such as a playground, splash pad, pickleball courts, park rental facility,
bandshell, and several other features. Construction of the new City Hall started in the summer of 2024
and was completed in September 2025. The existing City Hall was demolished and construction of the
park amenities started, with completion expected by July 2026, in time for the City’s 4th of July festivities.
The City issued Capital Improvement Bonds in 2024 for construction of the new City Hall and Senior
Center building. The City issued additional bonds in 2025 for the remaining City Hall expenses and park
amenities portion of the project.
$-
$1
$2
$3
$4
$5
$6
$7
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Bi
l
l
i
o
n
s
Estimated Market Value
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In 2024, the City held a referendum vote on whether to enact a one-half of one percent sales tax to fund a
portion of the cost for a new community center. The referendum passed and the City has started design
work for the new Chanhassen Community Center. The total cost for the project, including land
acquisition, is $80 million. The City plans to begin construction in 2026, with occupancy expected in
2028. The City plans to issue bonds for this project also.
The Lake Ann Park Preserve Project is currently in the construction phase, but has been delayed due to
archelogical discoveries. This project has several objectives, including:
•Continue trails around Lake Ann to allow for an eventual loop
•Preserve the land as a valued natural area in Chanhassen
•Connect residents with nature, trails, and parks
•Protect the ecological functioning (habitat, water quality) of the site
•Celebrate Lake Ann, Lake Lucy, and this property as community amenities
Chanhassen General Obligation bonds continue to maintain an ‘AAA’ rating from Standard & Poor’s
Rating Services, the highest possible rating, reaffirming their confidence in the City’s financial
management and its economic outlook. High bond ratings mean the City is able to sell General Obligation
bonds at lower interest rates.
Long-Term Financial Planning
The City expanded its long-term financial planning in 2021 to prepare multi-year financial plans for each
of its funds, starting with the 2022 annual budget. The annually updated plans include projections of
revenues, expenditures, fund balance, and cash balance for a minimum of five years as well as a
comparison to historical actual results and the current budget. A narrative describes the fund, background,
sources and uses of funds, assumptions, and challenges for the future. These plans form the foundation for
making budget decisions for the City’s resources.
The City is committed to preserving the value of the City’s capital asset investment. The City has
dedicated franchise fee revenue from electric and natural gas utilities as a funding source for the
replacement of the City’s streets. The City annually adopts a five-year Capital Improvement Plan to
coordinate the financing and timing of major equipment purchases and construction projects.
Each year the City selects city streets for a pavement rehabilitation project. In 2025, approximately 1.5
miles of roadway were rehabilitated in the Frontier Trail neighborhood. The rehabilitation included repair
and/or replacement of street pavement, soil corrections, curb and gutter, pedestrian facilities, and storm
sewer, sanitary sewer, and watermain utilities within the City’s right of way and easements along with
other minor improvements.
Relevant Financial Policies
The City has established a comprehensive set of financial policies for use as a guideline for operations.
The City’s policy for General Fund reserve balances is to maintain an unassigned fund balance at a
minimum of 50% of the ensuing year’s budgeted tax levy to provide cash flow between property tax
settlements. The City’s Investment Policy is designed to preserve capital while attaining a market-
average yield consistent with cash flow needs. The policy prioritizes safety, liquidity, and yield in that
order. The City also has adopted policies for debt, capital assets, public purpose expenditures, and
purchasing.
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Awards
Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate
of Achievement for Excellence in Financial Reporting to the City of Chanhassen for its annual
comprehensive financial report for the fiscal year ended December 31, 2024. This was the 33rd
consecutive year that the City has achieved this prestigious award. In order to be awarded a Certificate of
Achievement, a government must publish an easily readable and efficiently organized annual
comprehensive financial report. This report must satisfy both generally accepted accounting principles
and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe that our current annual
comprehensive financial report continues to meet the Certificate of Achievement Program’s requirements
and we are submitting it to GFOA to determine its eligibility for another certificate.
Acknowledgments
We would like to express our appreciation to the members of the City Council for their interest and
support in planning and conducting the financial operations of the City. We also want to thank the City
Manager, department directors, and members of the Finance Department for their assistance in compiling
the information necessary for this report. Special recognition goes to Danielle Washburn, Assistant
Finance Director, for her essential contributions to the preparation of this report. Finally, we wish to
acknowledge Abdo for their assistance in preparing this report.
Respectfully submitted,
Kelly Grinnell
Kelly Grinnell
Finance Director
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Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Chanhassen
Minnesota
For its Annual Comprehensive
Financial Report
For the Fiscal Year Ended
December 31, 2024
Executive Director/CEO
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CITY OF CHANHASSEN
ORGANIZATION CHART
Ci
t
i
z
e
n
s
City Council
City Attorney
City Manager
Administration
Community
Development
Finance
Fire
Law Enforcement
Public Works
Parks & Recreation
City Commissions
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City of Chanhassen, Minnesota
Elected and Appointed Officials
For the Year Ended December 31, 2025
Name Title Term Expires*
Elise Ryan Mayor January 4, 2027
Josh Kimber Council Member January 1, 2029
Jerry McDonald Council Member January 4, 2027
Haley Schubert Council Member January 1, 2029
Mark von Oven Council Member January 4, 2027
*Elected officials terms expire on the first Monday in January or as soon as the newly elected officers qualify by taking an oath.
Name Title
Laurie Hokkanen City Manager
Matt Unmacht Assistant City Manager
Kelly Grinnell Finance Director
Charles Howley Public Works Director/City Engineer
Andrew Heger Fire Chief
Jerry Ruegemer Parks and Recreation Director
Eric Maass Community Development Director
ELECTED
APPOINTED
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FINANCIAL SECTION
CITY OF CHANHASSEN
CHANHASSEN, MINNESOTA
FOR THE YEAR ENDED
DECEMBER 31, 2025
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INDEPENDENT AUDITOR’S REPORT
Honorable Mayor and City Council
City of Chanhassen, Minnesota
Opinions
We have audited the accompanying financial statements of each major fund of the governmental activities, business-type
activities, each major fund and the aggregate remaining fund information of the City of Chanhassen, Minnesota (the City),
as of and for the year ended December 31, 2025, and the related notes to the financial statements, which collectively
comprise the City’s 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 City as of December 31, 2025, and the respective changes in financial position and, where applicable,
cash flows thereof for the year then ended in conformity with accounting principles generally accepted in the United
States of America.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the
standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of
the United States. 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 independent of the City and to meet our
other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that
the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with
accounting principles generally accepted in the United States of America and for the design, implementation, and
maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are conditions or events,
considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for twelve
months beyond the financial statement date, including any currently known information that may raise substantial doubt
shortly thereafter.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an 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 generally accepted auditing standards and Government Auditing Standards 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.
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In performing an audit in accordance with generally accepted auditing standards and Government Auditing Standards, we:
•Exercise professional judgment and maintain professional skepticism throughout the audit.
•Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error,
and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test
basis, evidence regarding the amounts and disclosures in the financial statements.
•Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
City’s internal control. Accordingly, no such opinion is expressed.
•Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting
estimates made by management, as well as evaluate the overall presentation of the financial statements.
•Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise
substantial doubt about the City’s ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope
and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the
audit.
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and
analysis starting on page 27 and the schedule of Employer’s Share of the Net Pension Liability, the schedule of Employer’s
Contributions, the related note disclosures, the Schedule of Changes in Net Pension Liability (Asset) and Related Ratios,
the Schedule of Changes in the City's OPEB Liability and Related Ratios, and the Budgetary Comparison Schedule and
related note disclosures starting on page 96 be presented to supplement the basic financial statements. Such information
is the responsibility of management and, although not a part of the basic financial statements, is required by the
Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the
basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited
procedures to the required supplementary information in accordance with auditing standards generally accepted in the
United States of America, which consisted of inquiries of management about the methods of preparing the information
and comparing the information for consistency with management’s responses to our inquiries, the basic financial
statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an
opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient
evidence to express an opinion or provide any assurance.
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the
City’s basic financial statements. The accompanying combining and individual fund financial statements and schedules
are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such
information is the responsibility of management and was derived from and related directly to the underlying accounting
and other records used to prepare the basic financial statements. The information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing
and reconciling such information directly to the underlying accounting and other records used to prepare the basic
financial statements or to the basic financial statements themselves, and other additional procedures in accordance with
auditing standards generally accepted in the United States of America. In our opinion, the accompanying combining and
individual fund financial statements and schedules are fairly stated, in all material respects, in relation to the basic
financial statements as a whole.
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Other Information
Management is responsible for the other information in the annual report. The other information comprises the
introductory section and statistical 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.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated May 14, 2026, on our
consideration of the City’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 solely to
describe the scope of our testing of internal control over financial reporting and compliance and the results of that
testing, and not to provide an opinion on the effectiveness of the City 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 the City’s internal control over financial reporting and compliance.
Abdo
Minneapolis, Minnesota
May 14, 2026
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26
Management’s Discussion and Analysis
As management of the City of Chanhassen, Minnesota, (the City), we offer readers of the City’s financial statements this
narrative overview and analysis of the financial activities of the City for the fiscal year ended December 31, 2025.
Overview of the Financial Statements
This discussion and analysis is intended to serve as an introduction to the City’s basic financial statements. The City’s
basic financial statements comprise three components: 1) government-wide financial statements, 2) fund financial
statements, and 3) notes to the financial statements. This report also contains other supplementary information in
addition to the basic financial statements themselves.
The financial statements also include notes that explain some of the information in the financial statements and provide
more detailed data. The statements are followed by a section of combining and individual fund financial statements and
schedules that 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. In addition to these required elements, we have
included a section with combining and individual fund financial statements and schedules that provide details about
nonmajor governmental funds, which are added together and presented in single columns in the basic financial
statements.
Figure 1
Required Components of the
City’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
27
Figure 2 summarizes the major features of the City’s financial statements, including the portion of the City 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
Fund Financial Statements
Government-wide
Statements
Governmental Funds Proprietary Funds
Scope Entire City government
(except fiduciary funds)
and the City’s component
units
The activities of the City that
are not proprietary or
fiduciary, such as
administrative, fire and parks
Activities the City operates
similar to private
businesses, such as the
water and sewer system
Required financial
statements
•Statement of Net
Position
•Statement of Activities
•Balance Sheet
•Statement of Revenues,
Expenditures, and
Changes in Fund Balances
•Statements of Net
Position
•Statements of
Revenues, Expenses and
Changes in Fund Net
Position
•Statements of Cash
Flows
Accounting basis and
measurement focus
Accrual accounting and
economic resources focus
Modified accrual accounting
and current financial
resources focus
Accrual accounting and
economic 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
All assets and liabilities,
both financial and capital,
and short-term and long-
term
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
All deferred
outflows/inflows of
resources, regardless of
when cash is received or
paid
Type of inflow/outflow
information
All revenues and expenses
during the 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
All revenues and expenses
during the year, regardless
of when cash is received or
paid
Government-wide Financial Statements. The government-wide financial statements are designed to provide readers with a
broad overview of the City’s finances, in a manner similar to a private-sector business.
The statement of net position presents information on all of the City’s assets, deferred outflows of resources, liabilities
and deferred inflows of resources, with the difference 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 City is improving or deteriorating.
The statement of activities presents information showing how the City’s net position changed during the most recent
fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs,
regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items
that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave).
28
Both of the government-wide financial statements distinguish functions of the City that are principally supported by taxes
and intergovernmental revenue (governmental activities) from other functions that are intended to recover all or a
significant portion of their costs through user fees and charges (business-type activities). The governmental activities of
the City include general government, public safety, public works (streets and highways), culture and recreation,
community development, and interest on long-term debt. The business-type activities of the City include water, sewer, and
surface water management.
The government-wide financial statements start on page 41 of this report.
Fund Financial Statements. A fund is a grouping of related accounts that is used to maintain control over resources that
have been segregated for specific activities or objectives. The City, like other state and local governments, uses fund
accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City
can be divided into three categories: governmental funds, proprietary funds and fiduciary funds.
Governmental Funds. Governmental funds are used to account for essentially the same functions reported as
governmental activities in the government-wide financial statements. However, unlike the government-wide financial
statements, governmental 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.
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 City maintains several 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, Civic Campus fund, and Pavement Management Program fund, which are considered to be major funds.
Data from the other governmental funds is presented as nonmajor.
The City adopts an annual appropriated budget for its General fund, Special Revenue funds, one Debt Service fund, and
select Capital Project funds. Budgetary comparison schedules have been provided for the General fund and Pavement
Management Program fund to demonstrate compliance with this budget. The combining and individual fund financial
statements and schedules also include budget to actual comparisons.
The basic governmental fund financial statements start on page 46 of this report.
Proprietary Funds. Proprietary funds are used to report the same functions presented as business-type activities in the
government-wide financial statements. The City uses enterprise funds to account for its water, sewer, and surface water
management operations.
Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail.
The proprietary fund financial statements provide separate information for each of the enterprise funds which are
considered to be major funds of the City.
The basic proprietary fund financial statements start on page 50 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 57 of this report.
Supplementary Information. In addition to the basic financial statements and accompanying notes, this report also
presents required supplementary information concerning the City’s progress in funding its obligation to provide pension
benefits and other post-employment benefits to its employees. Required supplementary information can be found on
page 96 of this report.
29
Other Information. The combining statements referred to earlier in connection with nonmajor governmental funds is
presented following the notes to the financial statements. Combining and individual fund statements and schedules start
on page 112 of this report.
Government-wide Financial Analysis
City of Chanhassen’s Summary of Net Position
Increase Increase
2025 2024 (Decrease)2025 2024 (Decrease)
Assets
Current and other assets 47,822,890$ 55,441,421$ (7,618,531)$ 7,951,582$ 11,911,158$ (3,959,576)$
Capital assets 134,724,716 84,778,378 49,946,338 84,251,605 80,400,354 3,851,251
Total Assets 182,547,606 140,219,799 42,327,807 92,203,187 92,311,512 (108,325)
Deferred Outflows of Resources
Deferred other postemployment benefit resources 71,027 65,614 5,413 11,750 11,468 282
Deferred pension resources 1,820,797 1,917,660 (96,863) 507,500 502,273 5,227
Total Deferred Outflows of Resources 1,891,824 1,983,274 (91,450) 519,250 513,741 5,509
Liabilities
Current liabilities 10,417,348 10,991,681 (574,333) 1,401,434 3,526,141 (2,124,707)
Noncurrent liabilities 54,459,419 30,989,563 23,469,856 20,428,719 20,485,420 (56,701)
Total Liabilities 64,876,767 41,981,244 22,895,523 21,830,153 24,011,561 (2,181,408)
Deferred Inflows of Resources
Deferred other postemployment benefit resources 65,309 82,802 (17,493) 10,805 14,472 (3,667)
Deferred pension resources 3,157,705 3,572,121 (414,416) 231,338 264,217 (32,879)
Deferred lease resources 2,993,421 3,271,051 (277,630) - - -
Total Deferred Inflows of Resources 6,216,435 6,925,974 (709,539) 242,143 278,689 (36,546)
Net Position
Net investment in capital assets 83,435,808 69,207,758 14,228,050 65,013,360 59,721,155 5,292,205
Restricted 7,524,986 2,784,210 4,740,776 - - -
Unrestricted 22,385,434 21,303,887 1,081,547 5,636,781 8,813,848 (3,177,067)
Total Net Position 113,346,228$ 93,295,855$ 20,050,373$ 70,650,141$ 68,535,003$ 2,115,138$
Net Position as a Percent of Total
Net investment in capital assets 73.7 %74.2 %92.0 %87.1 %
Restricted 6.6 3.0 - -
Unrestricted 19.7 22.8 8.0 12.9
Total 100.0 %100.0 %100.0 %100.0 %
Governmental Activities Business-type Activities
An additional portion of the City’s net position represents resources that are subject to external restrictions on how they
may be used. The remaining balance of unrestricted net position may be used to meet the City’s ongoing obligations to
citizens and creditors. At the end of the current fiscal year, the City is able to report positive balances in all three categories
of net position for governmental activities and net investment in capital assets for business -type activities.
30
Governmental Activities. Governmental activities increased the City’s net position, as shown below.
City of Chanhassen’s Changes in Net Position
Increase Increase
2025 2024 (Decrease)2025 2024 (Decrease)
Revenues
Program Revenues
Charges for services 6,247,621$ 3,517,012$ 2,730,609$ 11,672,512$ 10,535,783$ 1,136,729$
Operating grants and contributions 11,871,707 9,443,046 2,428,661 31,205 56,775 (25,570)
Capital grants and contributions 6,129,335 2,662,398 3,466,937 8,468,152 5,594,435 2,873,717
General Revenues
Taxes
Property taxes 15,291,443 14,357,960 933,483 - - -
Tax increment 492,492 444,581 47,911 - - -
Franchise fees 2,066,948 2,040,308 26,640 - - -
Local option sales tax 2,051,943 - 2,051,943 - - -
Grants and contributions not
restricted to specific programs 54,584 141,257 (86,673) - - -
Unrestricted investment earnings 1,897,538 1,466,312 431,226 280,313 406,491 (126,178)
Other general revenues 399,095 170,653 228,442 - - -
Loss on sale of capital assets - 248,053 (248,053) - - -
Total Revenues 46,502,706 34,491,580 12,011,126 20,452,182 16,593,484 3,858,698
Expenses
General government 5,001,417 3,810,386 1,191,031 - - -
Public safety 5,779,201 5,463,958 315,243 - - -
Public works 8,544,285 10,953,832 (2,409,547) - - -
Culture and recreation 4,059,608 3,896,895 162,713 - - -
Community development 1,139,546 998,188 141,358 - - -
Interest on long-term debt 1,928,276 1,053,664 874,612 - - -
Water - - - 6,791,348 5,966,996 824,352
Sewer - - - 7,278,242 5,838,537 1,439,705
Surface water management - - - 4,267,454 3,861,546 405,908
Total Expenses 26,452,333 26,176,923 275,410 18,337,044 15,667,079 2,669,965
Change in net position 20,050,373 8,314,657 11,735,716 2,115,138 926,405 1,188,733
Net Position, January 1 93,295,855 84,981,198 8,314,657 68,535,003 67,608,598 926,405
Net Position, December 31 113,346,228$ 93,295,855$ 20,050,373$ 70,650,141$ 68,535,003$ 2,115,138$
Governmental Activities Business-type Activities
Key elements of this increase in net position include large increases in program revenues and increases in taxes.
Increases in program revenues for charges for services
The city’s charge for services has increased in the current year mainly due to park development and building permit
fees.
Increase in program revenues for operating grants and contributions
The city’s operating grants and contributions increase was mainly due to an MSA construction grant and refunds and
reimbursements for the Galpin Blvd project during the year.
31
Increase in program revenues for capital grants and contributions
The city’s increase in capital grants and contributions was mainly due to a donation for the Community Center project.
Increases in taxes
The city’s property tax increased due to a levy increase. A local option sales tax began in April 2025, with
approximately $2.05 million collected in the current year. The local option sales tax was authorized to pay for debt
service on the new Community Center.
The following graphs depict various governmental activities and show the program revenue and expenses directly related
to those activities.
Expenses and Program Revenue - Governmental Activities
$-
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
$14,000,000
$16,000,000
General
Government
Public Safety Public Works Culture and
Recreation
Community
Development
Interest on
Long-term
Debt
Expense Program Revenues
Revenue by Source - Governmental Activities
Charges for
Services
13.5%Operating Grants
and
Contributions
25.5%
Capital Grants
and
Contributions
13.2%
Grants and
Contributions
Unrestricted
0.1%
Taxes
42.8%
Other
4.9%
32
Expense by Program - Governmental Activities
General
Government
53.9%
Public Safety
12.4%
Public Works
18.4%
Culture and
Recreation
8.7%
Community
Development
2.5%
Interest on
Long-term
Debt
4.1%
Business-type Activities. Business-type activities increased the City’s net position as noted in the changes in net position
table on page 31. Key elements of the changes are listed below:
• Revenues in the business-type activities increased mainly due to the increase in capital grants and contributions
for the year relating to connection fees revenues and contributed assets.
Expenses and Program Revenues - Business-type Activities
$-
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
$7,000,000
$8,000,000
$9,000,000
Water Sewer Surface Water Management
Expenses Program Revenues
33
Revenue by Source - Business-type Activities
Charges for
Services
57.0%
Operating
Grants and
Contributions
0.2%
Capital Grants
and
Contributions
41.4%
Other
1.4%
Expenses by Program - Business-type Activities
Water
75.1%
Sewer
15.7%
Surface Water
Management
9.2%
34
Financial Analysis of the Government’s Funds
As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal
requirements.
Governmental Funds. The focus of the City’s governmental funds is to provide information on near-term inflows, outflows
and balances of spendable resources. Such information is useful in assessing the City’s financing requirements. In
particular, unassigned fund balance may serve as a useful measure of a government’s net resources available for
spending at the end of the fiscal year.
Pavement Other
General Civic Mgmt Prgm Governmental Prior Year Increase/
Fund Campus (PMP)Funds Total Total (Decrease)
Fund Balances
Nonspendable 13,366$ -$ -$ -$ 13,366$ 135,138$ (121,772)$
Restricted - 5,265,735 - 6,862,891 12,128,626 19,296,060 (7,167,434)
Committed - -- 93,152 93,152 144,359 (51,207)
Assigned 5,745,000 - - 6,047,508 11,792,508 9,325,013 2,467,495
Unassigned 8,327,284 - (3,495,042) (4,537) 4,827,705 7,742,346 (2,914,641)
Total Fund Balances 14,085,650$ 5,265,735$ (3,495,042)$ 12,999,014$ 28,855,357$ 36,642,916$ (7,787,559)$
As of the end of the current fiscal year, the City’s governmental funds reported combined ending fund balances as shown
above. Additional information on the City’s fund balances can be found in Note 1 starting on page 63 of this report.
The General fund is the chief operating fund of the City. The current year-end fund balance of the General fund is shown in
the table above. The overall General fund balance increased due to positive revenue and expenditure budget variances.
Revenues were nearly two million dollars over budget due to revenues related to development and investment earnings.
As a measure of the General fund’s liquidity, it may be useful to compare unassigned fund balance to total fund
expenditures. The total unassigned fund balance percent of total fund expenditures is shown in the chart below along
with total fund balance as a percentage of total expenditures.
Current Year Prior Year Increase/
Ending Balance Ending Balance (Decrease)
General Fund Fund Balances
Nonspendable 13,366$ 135,138$ (121,772)$
Assigned 5,745,000 4,225,000 1,520,000
Unassigned 8,327,284 7,762,840 564,444
Total General Fund Balances 14,085,650$ 12,122,978$ 1,962,672$
General Fund expenditures 16,111,558 14,834,409
Unassigned as a percent of expenditures 51.7%52.3%
Total Fund Balance as a percent of expenditures 87.4%81.7%
Other governmental fund analysis is shown below:
December 31,December 31, Increase/
2025 2024 (Decrease)
Civic Campus fund 5,265,735$ 16,130,983$ (10,865,248)$
Pavement Management Program (PMP) fund (3,495,042)$ 771,562$ (4,266,604)$
The Pavement Management Program (PMP) fund balance decreased during the year due to capital expenditures. These
expenditures were associated with construction costs relating to the City's ongoing projects as part of the Pavement
Management Program.
The Civic Campus fund balance decreased during the year due to expenditures from the Civic Campus project.
35
Proprietary Funds. The City’s proprietary funds provide the same type of information found in the government-wide
financial statements, but in more detail. Net position of the City’s proprietary funds is as follows:
Ending Ending
Net Position Net Position Increase/
2025 2024 (Decrease)
Water 37,690,202$ 36,553,909$ 1,136,293$
Sewer 16,238,284$ 16,253,877$ (15,593)$
Surface Water Management 16,721,655$ 15,727,217$ 994,438$
The decrease is primarily attributed to an operating loss and the loss on disposals of assets during the year.
The increase is primarily attributed to contributions of capital assets and from connection fees during the year.
The increase is primarily attributed to contributions of capital assets and from connection fees during the year.
Capital Asset and Debt Administration
Capital Assets. The City’s investment in capital assets for its governmental and business-type activities as of
December 31, 2025, is shown below in the schedule of capital assets (net of depreciation). This investment in capital
assets includes land, structures, improvements, machinery and equipment, park facilities, and roads.
Significant asset additions that occurred during the year are as follows:
•Completion of the following projects:
o Public work Fuel Island Canopy project
o Lake Ann Park Preserve – Boardwalk project
o TH 101 Improvements (Pioneer to Fly) – Trail, Water and Sewer project
o 2023 Street Rehab project
o Lift station #3 Forcemain replacement
o Erhart Farm Watermain/Sewer oversizing project
•Purchase of 2026 Mack GR64F Dump Truck
•Purchase of 2025 Mack GR42B Dump Truck
•Purchase of 2025 Ford F600 Dump truck
•Purchase of 2024 Ford F600
•Large increase in construction in progress due to the Civic Campus and Galpin Blvd projects.
Significant asset disposals that occurred during the year are as follows:
•Demolished city hall and other building assets in the city hall
•Sold at auction for the old City Hall’s standby generator #3
•Traded in 2023 Bobcat Toolcat VW56
Additional information on the City’s capital assets can be found in Note 4 starting on page 68 of this report.
36
City of Chanhassen’s Capital Assets
(Net of Depreciation/Amortization)
Increase Increase
2025 2024 (Decrease)2025 2024 (Decrease)
Land 32,706,339$ 19,920,218$ 12,786,121$ 2,116,835$ 2,116,335$ 500$
Permanent easements 2,875,509 2,826,748 48,761 5,658,329 7,088,204 (1,429,875)
Construction in progress 58,268,987 19,596,516 38,672,471 11,588,195 7,597,828 3,990,367
Buildings and structures 10,597,052 12,300,991 (1,703,939) 21,512,740 22,078,064 (565,324)
Right to use lease assets - vehicles 402,953 631,977 (229,024) 133,571 215,911 (82,340)
Machinery and equipment 3,949,525 3,404,523 545,002 954,680 1,058,010 (103,330)
Other improvements 5,931,300 6,297,818 (366,518) 42,287,255 40,246,002 2,041,253
Infrastructure 19,993,051 19,799,587 193,464 - - -
Total 134,724,716$ 84,778,378$ 49,946,338$ 84,251,605$ 80,400,354$ 3,851,251$
Percent increase (decrease)58.9%4.8%
Governmental Activities Business-type Activities
Long-term Debt. At the end of the current fiscal year, the City had total bonded debt outstanding consisting solely of
general obligation debt as noted in the table below. While all of the City’s bonds have revenue streams, they are all backed
by the full faith and credit of the City. The City leases multiple vehicles from Enterprise Rent-a-Car. As of
December 31, 2025, the City had 41 outstanding vehicle leases.
City of Chanhassen’s Outstanding Debt
Increase Increase
2025 2024 (Decrease)2025 2024 (Decrease)
General Obligation Bonds 49,850,000$ 26,870,000$ 22,980,000$ -$ -$ -$
General Obligation Revenue Bonds - - - 17,710,000 19,520,000 (1,810,000)
Bond Premium 1,472,489 1,288,708 183,781 671,009 775,613 (104,604)
Lease Payable 449,663 675,181 (225,518) 139,136 218,636 (79,500)
Total 51,772,152$ 28,833,889$ 22,938,263$ 18,520,145$ 20,514,249$ (1,994,104)$
Percent increase (decrease)79.6%-9.7%
Governmental Activities Business-type Activities
The City’s total debt increased during the current fiscal year. The key factors in the increase was the issuance of the
2025A GO Temporary Sales Tax Revenue Bonds for the purchase of land for the Community Center and the 2025B GO
Tax Abatement & Capital improvement bonds issuance for the Civic Campus.
Additional information on the City’s long-term debt can be found in Note 8 starting on page 72 of this report.
Currently Known Facts, Decisions, or Conditions
The City’s elected officials considered many factors when setting the fiscal year 2026 budget, rates, and fees. These
considerations included, but are not limited to, the following:
• The City participates in several long-term planning processes that align with the City’s budget process. The
strategic plan and comprehensive plan form the basis for the City’s operating and capital budgets.
• The City’s contract with the County Sheriff for policing services increased 5.9 percent from 2025, which is less
than the 6.9 percent increase from 2024 to 2025, but still higher than the general inflation rate.
37
Currently Known Facts, Decisions, or Conditions (Continued)
• The 2026 budget does not include any additional full-time employees, however, the City did adjust its pay plan by
adding a tenth step. The City also increased the pay grades for some employees in positions to remain
competitive because of a market study which showed several employees below key benchmarks. Premiums for
health insurance increased 15 percent over 2025 rates.
• The budget maintains planned, modest annual increases in funding levels for transportation/routine road
maintenance, pavement management/street reconstruction, trail maintenance, and capital equipment.
• The City’s goal is to maintain road conditions in the City to achieve a stable score of 70 on the Pavement
Condition Index (PCI).
• The City contracted for a utility rate study analysis to determine rates for 2023 and beyond given the increased
capital and operating costs for each utility. The 2026 rates from the study are incorporated into the utility fund
budgets.
• Another City Council goal was to minimize the total increase on the levy given the increase in the debt service levy
for the Civic Campus bonds.
• The City voted to provide for a slight increase in the levy for the park renovation fund (which started in 2025 for
$100,000). This new dedicated levy will help the City accumulate funds for maintenance and replacement of
existing park amenities, which have historically not had a dedicated funding source.
The City’s adopted budget for 2026 includes a property tax levy of $16,438,000, which is a 6.9 percent increase over the
previous year. The City’s growth in tax capacity was approximately 5.6 percent and the tax rate increased approximately
1.3 percent, from 21.80 percent to 22.08 percent.
Requests for Information
This financial report is designed to provide a general overview of the City’s finances for all those with an interest in the
City’s finances. Questions concerning any of the information provided in this report or requests for additional financial
information should be addressed to the Finance Director, City of Chanhassen, 7700 Market Boulevard, P.O. Box 147,
Chanhassen, Minnesota 55317.
38
GOVERNMENT-WIDE FINANCIAL STATEMENTS
CITY OF CHANHASSEN
CHANHASSEN, MINNESOTA
FOR THE YEAR ENDED
DECEMBER 31, 2025
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BLANK INTENTIONALLY
40
Governmental Business-type
Activities Activities Total
Assets
Cash and investments 31,336,840$ 3,694,324$ 35,031,164$
Receivables
Accounts 763,329 1,121,885 1,885,214
Accrued interest 114,214 20,887 135,101
Taxes 64,372 - 64,372
Leases 2,993,421 - 2,993,421
Special assessments 4,152,869 2,799,660 6,952,529
Due from other governments 8,132,173 82,367 8,214,540
Inventories - 231,289 231,289
Prepaid items 13,366 1,170 14,536
Pension asset 252,306 - 252,306
Capital assets
Land and construction in progress 93,850,835 19,363,359 113,214,194
Depreciable assets (net of accumulated depreciation and amortization)40,873,881 64,888,246 105,762,127
Total Assets 182,547,606 92,203,187 274,750,793
Deferred Outflows of Resources
Deferred pension resources 1,820,797 507,500 2,328,297
Deferred other postemployment benefit resources 71,027 11,750 82,777
Total Deferred Outflows of Resources 1,891,824 519,250 2,411,074
Liabilities
Accounts and contracts payable 7,022,036 1,050,215 8,072,251
Accrued salaries 237,551 76,617 314,168
Accrued interest payable 772,482 229,015 1,001,497
Due to other governments 379,859 45,587 425,446
Deposits payable 1,618,613 - 1,618,613
Unearned revenue 386,807 - 386,807
Noncurrent liabilities
Due within one year
Long-term liabilities 865,102 1,418,743 2,283,845
Other postemployment benefits liability 24,545 4,060 28,605
Due in more than one year
Long-term liabilities 51,691,449 17,405,390 69,096,839
Other postemployment benefits liability 173,764 28,746 202,510
Net pension liability 1,704,559 1,571,780 3,276,339
Total Liabilities 64,876,767 21,830,153 86,706,920
Deferred Inflows of Resources
Deferred pension resources 3,157,705 231,338 3,389,043
Deferred other postemployment benefit resources 65,309 10,805 76,114
Deferred lease resources 2,993,421 - 2,993,421
Total Deferred Inflows of Resources 6,216,435 242,143 6,458,578
Net Position
Net investment in capital assets 83,435,808 65,013,360 148,449,168
Restricted for
Local affordable housing 359,147 - 359,147
Park improvements 3,595,859 - 3,595,859
Tax increments 110,347 - 110,347
Public safety 596,618 - 596,618
Debt service 2,610,709 - 2,610,709
Pension asset 252,306 - 252,306
Unrestricted 22,385,434 5,636,781 28,022,215
Total Net Position 113,346,228$ 70,650,141$ 183,996,369$
City of Chanhassen, Minnesota
Statement of Net Position
December 31, 2025
The notes to the financial statements are an integral part of this statement.
41
City of Chanhassen, Minnesota
Statement of Activities
For the Year Ended December 31, 2025
Operating Capital
Charges For Grants and Grants and
Expenses Services Contributions Contributions
Primary Government
Governmental activities
General government 5,001,417$ 486,997$ -$ 127,477$
Public safety 5,779,201 2,113,832 680,212 25,799
Public works 8,544,285 1,097,774 10,589,267 2,074,859
Culture and recreation 4,059,608 2,481,782 294,436 3,901,200
Community development 1,139,546 67,236 307,792 -
Interest on long-term debt 1,928,276 - - -
Total Governmental Activities 26,452,333 6,247,621 11,871,707 6,129,335
Business-type Activities
Water 6,791,348 4,688,977 3,281 3,137,992
Sewer 7,278,242 4,611,967 - 2,467,760
Surface water management 4,267,454 2,371,568 27,924 2,862,400
Total Business-type Activities 18,337,044 11,672,512 31,205 8,468,152
Total Governmental and 44,789,377$ 17,920,133$ 11,902,912$ 14,597,487$
Business-type Activities
General Revenues
Taxes
Property taxes, levied for general purposes
Tax increments
Franchise fees
Local option sales tax
Grants and contributions not restricted to specific programs
Unrestricted investment earnings
Other general revenues
Total General Revenues
Change in Net Position
Net Position - January 1
Net Position - December 31
Program Revenues
Functions/Programs
The notes to the financial statements are an integral part of this statement.
42
Governmental Business-type
Activities Activities Total
(4,386,943)$ -$ (4,386,943)$
(2,959,358) - (2,959,358)
5,217,615 - 5,217,615
2,617,810 - 2,617,810
(764,518) - (764,518)
(1,928,276) - (1,928,276)
(2,203,670) - (2,203,670)
- 1,038,902 1,038,902
- (198,515) (198,515)
- 994,438 994,438
- 1,834,825 1,834,825
(2,203,670) 1,834,825 (368,845)
15,291,443 - 15,291,443
492,492 - 492,492
2,066,948 - 2,066,948
2,051,943 - 2,051,943
54,584 - 54,584
1,897,538 280,313 2,177,851
399,095 - 399,095
22,254,043 280,313 22,534,356
20,050,373 2,115,138 22,165,511
93,295,855 68,535,003 161,830,858
113,346,228$ 70,650,141$ 183,996,369$
Net (Expenses) Revenues and
Changes in Net Position
Primary Government
The notes to the financial statements are an integral part of this statement.
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44
FUND FINANCIAL STATEMENTS
CITY OF CHANHASSEN
CHANHASSEN, MINNESOTA
FOR THE YEAR ENDED
DECEMBER 31, 2025
45
601
414 Pavement Other
Civic Mgmt Prgm Governmental
General Campus (PMP)Funds Total
Assets
Cash and investments 9,991,228$ 8,049,309$ 942$ 13,295,361$ 31,336,840$
Receivables
Accounts 97,485 26,421 503,763 135,660 763,329
Accrued interest 61,927 9,479 349 42,459 114,214
Taxes 64,372 - - - 64,372
Leases 2,993,421 - - - 2,993,421
Special assessments 1,969 - 2,652,187 1,498,713 4,152,869
Due from other funds 6,201,000 - -- 6,201,000
Due from other governments 402,400 - 7,206,878 522,895 8,132,173
Prepaid items 13,366 - -- 13,366
Total Assets 19,827,168$ 8,085,209$ 10,364,119$ 15,495,088$ 53,771,584$
Liabilities
Accounts payable 437,993$ 84,464$ 736,406$ 980,682$ 2,239,545$
Accrued salaries payable 237,551 - - - 237,551
Contracts payable - 2,735,010 2,047,481 - 4,782,491
Due to other governments 304,474 - 64,706 10,679 379,859
Due to other funds - - 6,195,000 6,000 6,201,000
Deposits payable 1,618,613 - - - 1,618,613
Unearned revenue 48,168 - 338,639 - 386,807
Total Liabilities 2,646,799 2,819,474 9,382,232 997,361 15,845,866
Deferred Inflows of Resources
Unavailable revenue - miscellaneous 34,957 - - - 34,957
Unavailable revenue - property taxes 64,372 - - - 64,372
Unavailable revenue - intergovernmental - - 1,828,751 - 1,828,751
Unavailable revenue - special assessments 1,969 - 2,648,178 1,498,713 4,148,860
Deferred lease resources 2,993,421 - -- 2,993,421
Total Deferred Inflows
of Resources 3,094,719 - 4,476,929 1,498,713 9,070,361
Fund Balances
Nonspendable 13,366 - - - 13,366
Restricted - 5,265,735 - 6,862,891 12,128,626
Committed - -- 93,152 93,152
Assigned 5,745,000 - - 6,047,508 11,792,508
Unassigned 8,327,284 - (3,495,042) (4,537) 4,827,705
Total Fund Balances 14,085,650 5,265,735 (3,495,042) 12,999,014 28,855,357
Total Liabilities, Deferred Inflows
of Resources and Fund Balances 19,827,168$ 8,085,209$ 10,364,119$ 15,495,088$ 53,771,584$
City of Chanhassen, Minnesota
Balance Sheet
Governmental Funds
December 31, 2025
The notes to the financial statements are an integral part of this statement.
46
City of Chanhassen, Minnesota
Reconciliation of the Balance Sheet
to the Statement of Net Position
Governmental Funds
December 31, 2025
Amounts reported for the governmental activities in the statement of net position are different because
Total Fund Balances - Governmental 28,855,357$
Capital assets used in governmental activities are not financial
resources and therefore are not reported as assets in governmental funds.
Cost of capital assets 264,817,642
Less accumulated depreciation (130,092,926)
Long-term assets from pensions reported in governmental activities are not financial resources
and therefore are not reported as assets in the funds 252,306
Long-term liabilities, including bonds payable, are not due and payable in the
current period and therefore are not reported as liabilities in the funds.
Long-term liabilities at year-end consist of
Bond principal payable (49,850,000)
Unamortized premiums on bonds (1,472,489)
Leases payable (449,663)
Compensated absences payable (784,399)
Other postemployment benefits payable (198,309)
Net pension liability (1,704,559)
Some receivables are not available soon enough to pay for the current period's expenditures,
and therefore are reported as unavailable in the funds.
Property taxes receivable 64,372
Special assessments receivable 4,148,860
Intergovernmental 1,828,751
Miscellaneous 34,957
Governmental funds do not report long-term amounts related to pensions
and other post-employment benefits.
Deferred outflows of pension resources 1,820,797
Deferred inflows of pension resources (3,157,705)
Deferred outflows of OPEB resources 71,027
Deferred inflows of OPEB resources (65,309)
Governmental funds do not report a liability for accrued interest until due and payable.(772,482)
Total Net Position - Governmental Activities 113,346,228$
The notes to the financial statements are an integral part of this statement.
47
601
414 Pavement Other
Civic Mgmt Prgm Governmental
General Campus (PMP)Funds Total
Revenues
Taxes 11,995,814$ -$ 1,000,000$ 2,280,000$ 15,275,814$
Local option sales tax - - - 2,051,943 2,051,943
Tax increments - - - 492,492 492,492
Licenses and permits 2,945,704 - - 1,929,600 4,875,304
Intergovernmental 642,665 - 10,577,747 621,438 11,841,850
Charges for services 1,134,779 - -10,282 1,145,061
Franchise fees 109,617 - 1,916,904 40,427 2,066,948
Fines and forfeits 69,790 - -- 69,790
Special assessments - - 1,302,480 - 1,302,480
Investment earnings 727,081 460,695 196,660 523,512 1,907,948
Miscellaneous 118,780 10,863 62,937 3,977,389 4,169,969
Total Revenues 17,744,230 471,558 15,056,728 11,927,083 45,199,599
Expenditures
Current
General government 3,577,571 25,412 - 3,856 3,606,839
Public safety 5,551,292 - - - 5,551,292
Public works 3,388,557 - - - 3,388,557
Culture and recreation 2,934,137 - - - 2,934,137
Community development 660,001 - - 500,199 1,160,200
Capital outlay
General government - 22,098,633 - - 22,098,633
Public safety - -- 155,913 155,913
Public works - -19,316,432 988,217 20,304,649
Culture and recreation - -- 15,298,724 15,298,724
Debt service
Principal - - 96,888 757,627 854,515
Interest and other charges - - - 1,293,831 1,293,831
Bond issuance costs - 120,482 - - 120,482
Total Expenditures 16,111,558 22,244,527 19,413,320 18,998,367 76,767,772
Excess (Deficiency) of Revenues
Over (Under) Expenditures 1,632,672 (21,772,969) (4,356,592) (7,071,284) (31,568,173)
Other Financing Sources (Uses)
Sale of capital assets - - - 105,131 105,131
Transfers in 330,000 443,037 89,988 426,285 1,289,310
Issuance of leases - - - 25,799 25,799
Issuance of bonds - 10,205,000 - 13,185,000 23,390,000
Premiums on bonds issued - 259,684 - -259,684
Transfers out - -- (1,289,310) (1,289,310)
Total Other Financing
Sources (Uses)330,000 10,907,721 89,988 12,452,905 23,780,614
Net Changes in Fund Balances 1,962,672 (10,865,248) (4,266,604) 5,381,621 (7,787,559)
Fund Balances, January 1 12,122,978 16,130,983 771,562 7,617,393 36,642,916
Fund Balances, December 31 14,085,650$ 5,265,735$ (3,495,042)$ 12,999,014$ 28,855,357$
City of Chanhassen, Minnesota
Statement of Revenues, Expenditures and
Changes in Fund Balances
Governmental Funds
For the Year Ended December 31, 2025
The notes to the financial statements are an integral part of this statement.
48
City of Chanhassen, Minnesota
Reconciliation of the Statement of
Revenues, Expenditures and Changes in Fund Balances
to the Statement of Activities
Governmental Funds
For the Year Ended December 31, 2025
Amounts reported for governmental activities in the statement of activities are different because
Total Net Change in Fund Balances (7,787,559)$
Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost
of those assets is allocated over their estimated useful lives and reported as depreciation expense. This
is the amount by which capital outlays exceeded depreciation in the current period.
Depreciation expense (4,080,533)
Capital outlays 56,325,256
Contribution of capital assets from developers (789,309)
Governmental funds report a gain (loss) on sale of capital assets to the extent of cash exchanged, whereas the
disposition of the assets book value is included in the total gain (loss) in the statement of activities.
Loss on disposal (1,567,908) Gain on trade 62,000 Easements released (3,168)
The issuance of long-term debt provides current financial resources to governmental funds, while
the repayment of principal of long-term debt consumes the current financial resources of governmental
funds. Neither transaction, however, has any effect on net position. Also, governmental funds report
the effect of issuance costs, premiums, discounts and similar items when debt is first issued,
whereas these amounts are deferred and amortized in the statement of activities.
Issuance of debt (23,390,000)
Premium on bonds issued (259,684)
Principal repayments on bonds 410,000
Principal repayments on leases 251,317
Principal repayments on project financing 193,198
Adjustments to project financing 14,219
Leases issued (25,799)
Interest on long-term debt in the statement of activities differs from the amount reported in the
governmental funds because interest is recognized as an expenditure in the funds when it is due,
and thus requires the use of current financial resources. In the statement of activities, however,
interest expense is recognized as the interest accrues, regardless of when it is due.(352,768)
Governmental funds report debt issuance premiums and discounts as an other financing
source or use at the time of issuance. Premiums and discounts are reported
as an unamortized asset or liability in the city-wide financial statements.
Amortization of bond premiums and discounts 75,903
Certain revenues are recognized as soon as they are earned. Under the modified accrual
basis of accounting certain revenues cannot be recognized until they are available
to liquidate liabilities of the current period.
Special assessments 208,342
Property taxes 4,137
Intergovernmental (85,856)
Miscellaneous 34,957
Some expenses reported in the statement of activities do not require the use of current
financial resources and, therefore, are not reported as expenditures in governmental funds.
Compensated absences and other postemployment benefits payable (101,801)
Long-term pension activity is not reported in governmental funds.
Pension expense 596,346
Direct aid contributions 319,083
Change in Net Position - Governmental Activities 20,050,373$
The notes to the financial statements are an integral part of this statement.
49
City of Chanhassen, Minnesota
Statement of Net Position
Proprietary Funds
December 31, 2025
Surface Water
Water Sewer Management Totals
Assets
Current Assets
Cash and investments 2,297,334$ 1,396,972$ 18$ 3,694,324$
Receivables
Accounts 283,306 422,832 415,747 1,121,885
Accrued interest 9,144 11,743 - 20,887
Special assessments 379,693 51,357 - 431,050
Due from other funds 1,060,000 1,410,000 - 2,470,000
Due from other governments 3,541 46,621 32,205 82,367
Inventory 231,289 - - 231,289
Prepaid expenses - 1,170 - 1,170
Total Current Assets 4,264,307 3,340,695 447,970 8,052,972
Noncurrent Assets
Special assessments 1,869,632 498,978 - 2,368,610
Capital assets
Land 1,370,974 145,550 600,311 2,116,835
Land improvements 1,956,705 1,850,812 1,850,812 5,658,329
Construction in progress 4,209,755 2,226,280 5,152,160 11,588,195
Improvements 57,930,231 39,638,214 35,585,813 133,154,258
Leased equipment 134,302 134,302 - 268,604
Buildings 28,189,036 - - 28,189,036
Machinery and equipment 855,905 904,186 783,036 2,543,127
Less accumulated depreciation/amortization (45,038,412) (30,676,416) (23,551,951) (99,266,779)
Total Capital Assets (Net of
Accumulated Depreciation/Amortization)49,608,496 14,222,928 20,420,181 84,251,605
Total Noncurrent Assets 51,478,128 14,721,906 20,420,181 86,620,215
Total Assets 55,742,435 18,062,601 20,868,151 94,673,187
Deferred Outflows of Resources
Deferred other postemployment benefit resources 6,790 3,419 1,541 11,750
Deferred pension resources 140,557 153,678 213,265 507,500
Total deferred outflows of resources 147,347 157,097 214,806 519,250
Total Assets and Deferred Outflows of Resources 55,889,782$ 18,219,698$ 21,082,957$ 95,192,437$
Liabilities
Current Liabilities
Accounts payable 137,949$ 48,257$ 145,909$ 332,115$
Contracts payable 357,152 160,459 200,489 718,100
Accrued salaries 26,334 22,645 27,638 76,617
Accrued interest payable 211,786 9,958 7,271 229,015
Due to other governments 3,189 42,398 - 45,587
Due to other funds - - 2,470,000 2,470,000
Lease liability - current 43,263 43,263 - 86,526
Bonds payable - current 970,000 175,000 130,000 1,275,000
OPEB liability 2,346 1,182 532 4,060
Compensated absences payable - current 21,675 17,308 18,234 57,217
Total Current Liabilities 1,773,694 520,470 3,000,073 5,294,237
Business-type Activities - Enterprise Funds
The notes to the financial statements are an integral part of this statement.
50
City of Chanhassen, Minnesota
Statement of Net Position (Continued)
Proprietary Funds
December 31, 2025
Surface Water
Water Sewer Management Total
Noncurrent Liabilities
Compensated absences 93,485$ 74,646$ 78,640$ 246,771$
Lease liability 26,305 26,305 - 52,610
Bonds payable 15,709,793 807,470 588,746 17,106,009
OPEB liability 16,612 8,364 3,770 28,746
Net pension liability 457,126 474,772 639,882 1,571,780
Total Noncurrent Liabilities 16,303,321 1,391,557 1,311,038 19,005,916
Total Liabilities 18,077,015 1,912,027 4,311,111 24,300,153
Deferred Inflows of Resources
Deferred other postemployment benefit resources 6,244 3,144 1,417 10,805
Deferred pension resources 116,321 66,243 48,774 231,338
Total deferred inflows of resources 122,565 69,387 50,191 242,143
Net Position
Net investment in capital assets 32,501,983 13,010,431 19,500,946 65,013,360
Unrestricted 5,188,219 3,227,853 (2,779,291) 5,636,781
Total Net Position 37,690,202 16,238,284 16,721,655 70,650,141
Total Liabilities, Deferred
Inflows of Resources and
Net Position 55,889,782$ 18,219,698$ 21,082,957$ 95,192,437$
Business-type Activities - Enterprise Funds
The notes to the financial statements are an integral part of this statement.
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52
Surface Water
Water Sewer Management Total
Charges for services 4,684,932$ 4,610,007$ 2,370,092$ 11,665,031$
Intergovernmental 3,281 -27,924 31,205
Total Operating Revenues 4,688,213 4,610,007 2,398,016 11,696,236
Operating Expenses
Salaries and benefits 1,187,756 877,796 1,015,373 3,080,925
Materials and supplies 279,344 53,156 22,984 355,484
Professional services 259,912 3,341,262 476,723 4,077,897
Utilities 362,553 63,590 -426,143
Insurance 20,600 20,600 8,000 49,200
Repairs and maintenance 761,446 653,576 324,886 1,739,908
Depreciation 1,923,323 811,207 1,028,563 3,763,093
Other 365,100 250,358 226,787 842,245
Total Operating Expenses 5,160,034 6,071,545 3,103,316 14,334,895
Operating Income (Loss)(471,821) (1,461,538) (705,300) (2,638,659)
Nonoperating Revenues (Expenses)
Investment income 97,391 182,922 -280,313
Refunds and reimbursements 4,045 1,960 1,476 7,481
Interest expense and fiscal charges (446,159) (21,889) (6,985) (475,033)
Gain (loss) on disposal of assets (1,185,155) (1,184,808) (1,157,153) (3,527,116)
Total Nonoperating
Revenues (Expenses)(1,529,878) (1,021,815) (1,162,662) (3,714,355)
Income (Loss) Before Contributions (2,001,699) (2,483,353) (1,867,962) (6,353,014)
Capital Contributions
Contributions of capital assets 1,225,154 1,903,250 2,386,609 5,515,013
Intergovernmental -44,564 -44,564
Connection charges 1,912,838 519,946 475,791 2,908,575
Change in Net Position 1,136,293 (15,593) 994,438 2,115,138
Net Position, January 1 36,553,909 16,253,877 15,727,217 68,535,003
Net Position, December 31 37,690,202$ 16,238,284$ 16,721,655$ 70,650,141$
Operating Revenues
Business-type Activities - Enterprise Funds
City of Chanhassen, Minnesota
Statement of Revenues, Expenses and
Changes in Net Position
Proprietary Funds
For the Year Ended December 31, 2025
The notes to the financial statements are an integral part of this statement.
53
Surface Water
Water Sewer Management Total
Cash Flows from Operating Activities
Receipts from customers and users and grants 4,626,938$ 4,601,362$ 2,260,445$ 11,488,745$
Payments to suppliers (2,013,870) (4,379,375) (1,025,969) (7,419,214)
Payments to employees (1,224,367) (878,979) (1,006,435) (3,109,781)
Net Cash Provided (Used)
by Operating Activities 1,388,701 (656,992) 228,041 959,750
Cash Flows from Noncapital
Financing Activities
Receipts (payments) from (to) other funds - (1,410,000) 1,410,000 -
Cash Flows from Capital
and Related Financing Activities
Acquisition of capital assets (2,730,009) (1,293,824) (1,972,812) (5,996,645)
Connection charges 2,202,856 603,768 475,791 3,282,415
Intergovernmental receipts - 44,564 - 44,564
Proceeds from the sale of assets 42,378 42,378 - 84,756
Principal paid on bonds (1,514,999) (170,000) (125,001) (1,810,000)
Principal paid on leases (39,750) (39,750) - (79,500)
Interest and fiscal charges (544,381) (38,380) (19,482) (602,243)
Net Cash Provided (Used) by Capital
and Related Financing Activities (2,583,905) (851,244) (1,641,504) (5,076,653)
Cash Flows from Investing Activities
Interest received from investments 112,364 192,491 - 304,855
Net Increase (Decrease)
in Cash and Cash Equivalents (1,082,840) (2,725,745) (3,463) (3,812,048)
Cash and Cash Equivalents, January 1 3,380,174 4,122,717 3,481 7,506,372
Cash and Cash Equivalents, December 31 2,297,334$ 1,396,972$ 18$ 3,694,324$
City of Chanhassen, Minnesota
Statement of Cash Flows
Proprietary Funds
For the Year Ended December 31, 2025
Business-type Activities - Enterprise Funds
The notes to the financial statements are an integral part of this statement.
54
Surface Water
Water Sewer Management Total
Reconciliation of Operating Income (Loss)
to Net Cash Provided (Used)
By Operating Activities
Operating income (loss)(471,821)$ (1,461,538)$ (705,300)$ (2,638,659)$
Adjustments to reconcile operating income (loss)
to net cash provided (used)
by operating activities
Depreciation 1,923,323 811,207 1,028,563 3,763,093
Miscellaneous revenue 4,045 1,960 1,476 7,481
(Increase) decrease in assets/deferred outflows
of resources
Accounts receivable 6,954 (82,346) (156,794) (232,186)
Due from other governments (1,030) 104,533 17,747 121,250
Special Assessments (71,244) (32,792) - (104,036)
Inventory (46,947) - - (46,947)
Prepaid items 6,385 3,286 1,394 11,065
Deferred pension resources (2,125) (2,239) (863) (5,227)
Deferred other post employment benefits 8 (258) (32) (282)
Increase (decrease) in liabilities/deferred inflows
of resources
Due to other governments 865 (2,498) (45,601) (47,234)
Accounts payable 74,782 2,379 77,618 154,779
Salaries payable 764 3,961 9,042 13,767
Compensated absences payable 11,504 11,053 16,104 38,661
Other postemployment benefits payable 353 894 173 1,420
Deferred pension resources (19,818) (6,394) (6,667) (32,879)
Deferred post employment benefits (2,335) (845) (487) (3,667)
Net pension liability (24,962) (7,355) (8,332) (40,649)
Net Cash Provided (Used)
by Operating Activities 1,388,701$ (656,992)$ 228,041$ 959,750$
Supplemental Schedule of Noncash
Capital and Related Financing Activities
Amortization of bond premiums 79,302$ 14,367$ 10,935$ 104,604$
Purchase of capital assets on account 357,152$ 160,459$ 200,489$ 718,100$
Contributions of capital assets 1,225,154$ 1,903,250$ 2,386,609$ 5,515,013$
Disposal of capital assets - easements 1,157,499$ 1,157,153$ 1,157,153$ 3,471,805$
Disposal of capital assets 90,651$ 90,651$ -$ 181,302$
City of Chanhassen, Minnesota
Statement of Cash Flows (Continued)
Proprietary Funds
For the Year Ended December 31, 2025
Business-type Activities - Enterprise Funds
The notes to the financial statements are an integral part of this statement.
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City of Chanhassen, Minnesota
Notes to the Financial Statements
December 31, 2025
Note 1: Summary of Significant Accounting Policies
A. Reporting Entity
The City of Chanhassen, Minnesota (the City) was incorporated in 1967 and operates under the State of Minnesota
Statutory Plan B form of government. The governing body consists of a five-member City council elected by voters of the
City.
The financial statements of the City have been prepared in conformity with accounting principles generally accepted in
the United States of America as applied to governmental units by the Governmental Accounting Standards Board (GASB).
The following is a summary of the significant accounting policies.
In accordance with GASB pronouncements and accounting principles generally accepted in the United States of America,
the financial statements of the reporting entity should include those of the City (the primary government) and its
component units. The component unit discussed below is included in the City’s reporting entity because of the
significance of its operational or financial relationships with the City.
Component Units
The City has one component unit, the Economic Development Authority (EDA). The financial statements of the EDA are
included as a blended component unit because its governing body is substantively the same as the City Council, the City
is in a relationship of financial burden with the EDA, and because management of the City has operational responsibilities
for the EDA. Separate financial statements for the EDA are not prepared.
Jointly Governed Organizations
Southwest Transit Commission – The City, in conjunction with the Cities of Eden Prairie and Chaska, established the
Southwest Transit Commission (the Commission). The purpose of the Commission is to provide public transit service for
the three cities. The Commission’s board is composed of two commissioners from each of the cities.
Joint Powers Agreement
Pursuant to a joint powers agreement dated April 14, 1994, the City and Independent School District No. 112 (ISD No. 112)
jointly constructed the Chanhassen Recreation Center and Bluff Creek Elementary. The City entered into a revised joint
powers agreement with ISD No. 112 in 2022 to provide for the mutual long-term use of the facility. According to the terms
of the agreement, which expires in 2093, the City reimburses ISD No. 112 24% of the cost to operate and maintain the
facility.
B. Government-wide and Fund Financial Statements
The government-wide financial statements (i.e., the statement of net position and the statement of activities) report
information on all of the nonfiduciary activities of the City and its component units. Governmental activities, which
normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities,
which rely to a significant extent on fees and charges for support.
The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is offset
by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. 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. Taxes and other items not properly
included among program revenues are reported instead as general revenues.
Separate financial statements are provided for governmental funds and proprietary funds. Major individual governmental
funds and major individual enterprise funds are reported as separate columns in the fund financial statements.
57
City of Chanhassen, Minnesota
Notes to the Financial Statements
December 31, 2025
Note 1: Summary of Significant Accounting Policies (Continued)
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, as are the proprietary 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 recognized as
revenues in the year for which they are levied. 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 City 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. However, debt service expenditures, as well as expenditures related to compensated absences and
claims and judgments, are recorded only when payment is due.
Property taxes, franchise fees, licenses and interest associated with the current fiscal period are all considered to be
susceptible to accrual and so have been recognized as revenues of the current fiscal period. Only the portion of special
assessments receivable due within the current fiscal period is considered to be susceptible to accrual as revenue of the
current period. All other revenue items are considered to be measurable and available only when cash is received by the
City.
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.
Non-exchange transactions, in which the City receives value without directly giving equal value in return, include property
taxes, grants, entitlements and donations. On an accrual basis, revenue from property taxes 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 City must provide local resources to be used for a specified purpose, and expenditure requirements, in which
the resources are provided to the City 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 have 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 City reports the following major governmental funds:
The General fund is the City’s primary operating fund. It accounts for all financial resources of the general
government, except those required to be accounted for in another fund.
The Civic Campus fund accounts for the revenues and expenditures related to the construction of the City’s Civic
Campus facility.
The Pavement Management Program (PMP) fund accounts for the City’s street reconstruction and other significant
street maintenance projects. Individual property owners pay a portion of the cost of the annual project with
assessments and the City funds its portion with the reserves created in this fund, an annual tax levy, and franchise
fees.
58
City of Chanhassen, Minnesota
Notes to the Financial Statements
December 31, 2025
Note 1: Summary of Significant Accounting Policies (Continued)
The City reports the following major proprietary funds:
The Water fund accounts for the water service charges which are used to finance the water system operating
expenses.
The Sewer fund accounts for the sewer service charges which are used to finance the sanitary sewer system
operating expenses.
The Surface Water Management fund accounts for the surface water charges which are used to finance the surface
water system operating expenses.
As a general rule, the effect of interfund activity has been eliminated from government-wide financial statements.
Exceptions to this general rule are payments-in-lieu of taxes and other charges between the City’s water and sewer
function and various other functions of the City. Elimination of these charges would distort the direct costs and program
revenues reported for the various functions concerned.
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 revenues of the City’s enterprise funds are charges to
customers for sales and services. Operating expenses for enterprise funds include the cost of sales and services,
administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are
reported as nonoperating revenues and expenses.
D. Deposits and Investments
The City’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. The proprietary funds’ portion in the
government-wide cash and temporary investments pool is considered to be cash and cash equivalents for purposes of
the statement of cash flows.
Cash balances from all funds are pooled and invested, to the extent available, in certificates of deposit and other
authorized investments. Earnings from such investments are allocated on the basis of applicable participation by each of
the funds.
The City 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 that 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 which is 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
Minnesota Statute Section 126C.55.
Broker money market funds operate in accordance with appropriate state laws and regulations. The reported value of the
pool is the same as the fair value of the shares.
59
City of Chanhassen, Minnesota
Notes to the Financial Statements
December 31, 2025
Note 1: Summary of Significant Accounting Policies (Continued)
The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted
accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1
inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level
3 inputs are significant unobservable inputs. The City has the following recurring fair value measurements as of
December 31, 2025:
• US government agency securities of $1,469,550 are valued using quoted market prices (Level 1 inputs)
• Municipal securities of $16,037,255 are valued using quoted market prices (Level 2 inputs)
• Brokered certificates of deposit of $3,319,773 are valued using a matrix pricing model (Level 2 inputs)
• U.S Treasury Obligations of $4,109,438 are valued using a matrix pricing model (Level 1 inputs)
Investment Policy
The City’s investment policy incorporates Minnesota statutes as described above which reduces the City’s exposure to
credit, custodial credit and interest rate risks. Specific risk information for the City is as follows:
• Credit Risk. Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its
obligations. Ratings are provided by various credit rating agencies and where applicable, indicate associated
credit risk. Minnesota statutes and the City’s investment policy limit the City’s investments to the list above.
• Custodial Credit Risk. Custodial credit risk for investments is the risk that, in the event of the failure of the
counterparty to a transaction, a government will not be able to recover the value of investment or collateral
securities that are in the possession of an outside party. The City’s investment policy does not address custodial
credit risk but typically limits its exposure by purchasing insured or registered investments.
• Concentration of Credit Risk. Concentration of credit risk is the risk of loss attributed to the magnitude of a
government’s investment in a single issuer. The City’s investment policy states investments shall be diversified by
limiting investments to avoid over concentration in securities from a specific issuer or business sector (excluding
U.S. Treasury securities).
• Interest Rate Risk. Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of
an investment. The City’s investment policy requires the City to diversify its investment portfolio to eliminate the
risk of loss resulting from over concentration of assets in a specific maturity. The policy also states the City’s
investment portfolio will remain sufficiently liquid to enable the City to meet all operating requirements which
might be reasonable.
E. Property Taxes
The City Council annually adopts a tax levy in December and certifies it to the County for collection the following year.
The County is responsible for collecting all property taxes for the City. These taxes attach an enforceable lien on taxable
property within the City on January 1 and are payable by the property owners in two installments. The taxes are collected
by the County Treasurer and tax settlements are made to the City during January, July and December each year.
Delinquent taxes receivable include the past six years’ uncollected taxes. Delinquent taxes have been offset by a deferred
inflow of resources for taxes not received within 60 days after year end in the fund financial statements.
60
City of Chanhassen, Minnesota
Notes to the Financial Statements
December 31, 2025
Note 1: Summary of Significant Accounting Policies (Continued)
F. Accounts Receivable
Accounts receivable include amounts billed for services provided before year end. The City annually certifies delinquent
utility accounts to the County for collection in the following year. Therefore, there has been no allowance for doubtful
accounts established.
G. Special Assessments
Special assessments represent the financing for public improvements paid for by benefiting property owners. These
assessments are recorded as receivable upon certification to the County. Special assessments are recognized as revenue
when they are received in cash or within 60 days after year end. All governmental special assessments receivable are
offset by deferred inflows of resources in the fund financial statements.
H. Interfund Receivables and Payables
Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal
year are referred to as either “due to/from other funds” (i.e., the current portion of interfund loans) or “advances to/from
other funds” (i.e., the non-current portion of interfund loans). All other outstanding balances between funds are reported
as “due to/from other funds.”
I. Inventories and Prepaid Items
Inventories of materials and supplies are recorded at cost, which approximates market, using the first in, first out (FIFO)
method. Inventories consist of expendable supplies held for consumption. Inventories of governmental funds are
recorded as expenditures when consumed rather than when purchased.
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in
both government-wide and fund financial statements. The City recognizes prepaid items using the consumption method.
J. Lease Receivable
The City’s lease receivable is measured at the present value of lease payments expected to be received during the lease
term.
A deferred inflow of resources is recorded for the lease. The deferred inflow of resources is recorded at the initiation of
the lease in an amount equal to the initial recording of the lease receivable. The deferred inflow of resources is amortized
on a straight-line basis over the term of the lease.
K. Capital Assets
Capital assets are defined by the City as assets with an initial, individual cost of more than $10,000 and an estimated
useful life in excess of two years. As the City 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 and service concession arrangements, the
City values these capital assets at acquisition value of the item at the date of its donation or arrangement.
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.
61
City of Chanhassen, Minnesota
Notes to the Financial Statements
December 31, 2025
Note 1: Summary of Significant Accounting Policies (Continued)
Property, plant and equipment of the City are depreciated using the straight-line method over the following estimated
useful lives:
Assets Years
Buildings and structures 10 - 30
Machinery and equipment (including software)3 - 10
Drainage systems 30
Water and sewer lines 30
Streets 30
Trails 25
Sidewalks 25
Other improvements 10 - 25
Temporary easements 2
Right to use lease assets are amortized over the remaining life of the asset or the related lease term, whichever is shorter.
L. Deferred Outflows of Resources
In addition to assets, the statement of net position 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
assets that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure)
until then. The City has two items which qualify for reporting in this category. Accordingly, the items, deferred pension
resources and deferred other postemployment benefit resources, are reported only in the statement of net position. These
items result from actuarial calculations and current year pension/OPEB contributions made subsequent to the
measurement dates.
M. Compensated Absences
The City compensates all employees upon termination for unused vacation, sick, and PTO hours up to a maximum based
upon length of service. The City compensates nonexempt employees for unused comp time. All vacation, PTO, and
comp time is accrued when incurred in the government-wide and proprietary fund financial statements. A liability for
these amounts is reported in governmental funds only if they have matured, for example, as a result of employee
resignations and retirements. Estimated use is recorded for nonvesting accumulating rights to receive sick pay benefits.
An additional liability is recognized for that portion of accumulating sick leave benefits that is vested as severance pay.
The General fund is typically used to liquidate governmental compensated absences.
N. Pensions
For purposes of measuring the net pension liability, deferred outflows/inflows of resources, and pension expense,
information about the fiduciary net position of the Public Employees Retirement Association (PERA) and additions
to/deductions from PERA’s fiduciary net position have been determined on the same basis as they are reported by PERA
except that PERA’s fiscal year end is June 30. 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. The General fund is typically used to liquidate the governmental net pension
liability.
62
City of Chanhassen, Minnesota
Notes to the Financial Statements
December 31, 2025
Note 1: Summary of Significant Accounting Policies (Continued)
The total pension expense for the General Employee Plan (GERP), Police and Fire Plan (PEPFF), Public Employee Defined
Contribution Plan (PEDCP), and Chanhassen Fire Relief Association (FRA) is as follows:
GERP PEPFF PEDCP FRA Total
City's proportionate share (58,365)$ 77,410$ 2,599$ 327,092$ 348,736$
Proportionate share of State's contribution (9,542) 11,699 - - 2,157
Total pension expense (67,907)$ 89,109$ 2,599$ 327,092$ 350,893$
O. Long-term Obligations
In the government-wide financial statements, long-term debt is reported as a liability in the statement of net position. The
recognition of bond premiums and discounts are delayed and amortized over the life of the bonds using the effective
interest method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are
reported as an expense in the period incurred.
In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond
issuance costs, 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. Issuance costs, whether or not withheld from the actual debt proceeds received, are
reported as debt service expenditures.
P. Deferred Inflows of Resources
In addition to liabilities, the statement of net position 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
assets that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time.
The City has only one type of item, which arises only under a modified accrual basis of accounting, that qualifies as
needing to be reported in this category. Accordingly, the item, unavailable revenue, is reported only in the governmental
funds balance sheet. The governmental funds report unavailable revenues from three sources: property taxes, special
assessments, and miscellaneous revenues. These amounts are deferred and recognized as an inflow of resources in the
period that the amounts become available.
Furthermore, the City has additional items which qualify for reporting in this category on the statement of net position.
The items, deferred pension resources and deferred other postemployment benefit resources, are reported only in the
statement of net position and result from actuarial calculations involving net differences between projected and actual
earnings on plan investments and changes in proportions. Furthermore, the City reports deferred lease resources related
to cell tower leases which are recorded under GASB 87, and reported in the governmental funds and the statement of net
position.
Q. Fund Balance
In the fund financial statements, fund balance is divided into five classifications based primarily on the extent to which
the City is bound to observe constraints imposed upon the use of resources reported in the governmental funds. These
classifications are defined as follows:
Nonspendable - Amounts that cannot be spent because they are not in spendable form, such as prepaid items.
Restricted - Amounts related to externally imposed constraints established by creditors, grantors, or contributors; or
constraints imposed by state statutory provisions.
63
City of Chanhassen, Minnesota
Notes to the Financial Statements
December 31, 2025
Note 1: Summary of Significant Accounting Policies (Continued)
Committed - Amounts constrained for specific purposes that are internally imposed by formal action (resolution) of
the City Council, which is the City’s highest level of decision-making authority. Committed amounts cannot be used
for any other purpose unless the City Council 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 City Council itself or by an official to which the governing body delegates the authority. The City Council has
adopted a fund balance policy which delegates the authority to assign amounts for specific purposes to the City
Manager and/or Finance Director.
Unassigned - The residual classification for the General fund and also negative residual amounts in other funds.
When both restricted and unrestricted resources are available for use, it is the City’s policy to first use restricted
resources, and then use unrestricted resources as they are needed.
When committed, assigned, or unassigned resources are available for use, it is the City’s policy to use resources in the
following order: 1) restricted, 2) assigned, and 3) committed.
The City’s policy for General Fund reserve balances is to maintain an unassigned fund balance at a minimum of 50% of
the ensuing year’s budgeted tax levy to provide cash flow between property tax settlements.
R. Net Position
In the government-wide financial statements, net position represents the difference between assets, deferred outflows of
resources, liabilities and deferred inflows of resources. Net position is displayed in three components:
a. Net investment in capital assets - Consists of capital assets, net of accumulated depreciation reduced by any
outstanding debt attributable to acquire capital assets.
b. Restricted net position - Consists of net position balances 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 position balances that do not meet the definition of “restricted” or “net
investment in capital assets”.
When both restricted and unrestricted resources are available for use, it is the City’s policy to use restricted resources
first, then unrestricted resources as they are needed.
Note 2: Stewardship, Compliance and Accountability
A. 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 and certain special revenue, debt service, and capital project funds. All annual
appropriations lapse at fiscal year-end. The City does not use encumbrance accounting.
The City Council adopts budgets prior to January 1. The budgets are prepared by fund, function, and activities. The
budgets are adopted on a basis consistent with generally accepted accounting principles and all appropriations lapse at
the end of the budget year to the extent that they have not been expended. The expenditures appropriated in the budget
resolution may not legally exceed estimated revenues available from various sources.
64
City of Chanhassen, Minnesota
Notes to the Financial Statements
December 31, 2025
Note 2: Stewardship, Compliance and Accountability (Continued)
Formal budgetary integration is employed as a management control device during the year. Budget revisions between
functions or activities may be made by the City Manager. The legal level of budgetary control is therefore at the fund level.
There were no budget amendments made in 2025 in the General fund and certain special revenue, debt service, and
capital project funds. All budget amendments are approved based on unanticipated expenditures and revenues
encountered during the year.
B. Excess of Expenditures Over Appropriations
For the year ended December 31, 2025, expenditures exceeded appropriations in the following funds:
Excess of
Expenditures
Over
Budget Actual Appropriations
Major
Pavement Management Program 16,732,108$ 19,413,320$ 2,681,212$
Nonmajor
Charitable Gambling 55,000 72,038 17,038
2016A G.O. Refunding Bonds 458,700 459,046 346
Park Renovation - 88,194 88,194
Capital Facilities 165,000 210,691 45,691
Lake Place Senior Apt TIF #12 171,321 176,109 4,788
Fund
The excess expenditures were funded by greater than anticipated revenues and available fund balance.
C. Deficit Fund Balance
As of December 31, 2025, the following funds reported deficit fund balance:
Amount
Major
Pavement Management Program (PMP)3,495,042$
Nonmajor
Lake Place Senior Apt TIF #12 4,537
Fund
The deficit is expected to be eliminated with future property taxes and tax increment collections.
Note 3: Deposits and Investments
Deposits
Custodial credit risk for deposits and investments is the risk that in the event of a bank failure, the City’s deposits and
investments may not be returned or the City 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 City Council, the City maintains deposits at those
depository banks, all of which are members of the Federal Reserve System.
Minnesota statutes require that all City 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 or bonds, with the exception of
irrevocable standby letters of credit issued by Federal Home Loan Banks as this type of collateral only requires collateral
pledged equal to 100 percent of the deposits not covered by insurance or bonds.
65
City of Chanhassen, Minnesota
Notes to the Financial Statements
December 31, 2025
Note 3: Deposits and Investments (Continued)
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 rated “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.
Investments are carried at fair value. Investment and dividend income are recognized as revenue when earned.
At year end, the City’s carrying amount of deposits was $1,155,308 and the bank balance was $2,829,335. Of the bank
balance, $500,000 was covered by federal depository insurance and the remaining was covered by collateral in the City’s
name.
66
City of Chanhassen, Minnesota
Notes to the Financial Statements
December 31, 2025
Note 3: Deposits and Investments (Continued)
Investments
As of December 31, 2025, the City had the following investments that are insured or registered, or securities held by the
City or its agent in the City’s name.
Credit Segmented
Quality/Time
Ratings (1)Distribution (2)Amount Level 1 Level 2
Pooled Investments at Amortized Costs
Brokered money market N/A Less than 1 year 8,939,340$ -$ -$
Non-pooled Investments at Fair Value
U.S. government agency securities N/A Less than 1 year 498,825 498,825 -
U.S. government agency securities N/A 1 to 3 years 970,725 970,725 -
Municipal securities AAA Less than 1 year 1,360,283 - 1,360,283
Municipal securities AAA 1 to 3 years 2,246,698 - 2,246,698
Municipal securities AAA More than 3 years 2,344,224 - 2,344,224
Municipal securities AA Less than 1 year 295,959 - 295,959
Municipal securities AA 1 to 3 years 502,890 - 502,890
Municipal securities AA-1 to 3 years 481,220 - 481,220
Municipal securities Aa1 More than 3 years 874,825 - 874,825
Municipal securities N/A Less than 1 year 496,615 - 496,615
Municipal securities N/A 1 to 3 years 2,900,407 - 2,900,407
Municipal securities N/A More than 3 years 4,534,134 - 4,534,134
U.S. treasury obligations AAA Less than 1 year 4,109,438 4,109,438 -
Brokered certificates of deposit N/A Less than 1 year 1,482,346 - 1,482,346
Brokered certificates of deposit N/A 1 to 3 years 1,837,427 - 1,837,427
Total Investments 33,875,356$ 5,578,988$ 19,357,028$
(1) Ratings are provided by various credit rating agencies where applicable to indicate associated credit risk.
(2) Interest rate risk is disclosed using the segmented time distribution method.
N/A Indicates not applicable or available.
Types of Investments
Fair Value Measurement Using
A reconciliation of cash and investments as shown on the statement of net position for the City follows:
Primary
Government
Deposits 1,155,308$
Investments 33,875,356
Petty Cash 500
Total 35,031,164$
67
City of Chanhassen, Minnesota
Notes to the Financial Statements
December 31, 2025
Note 4: Capital Assets
Capital asset activity for the year ended December 31, 2025, was as follows:
Beginning Ending
Balance Increases Decreases Balance
Governmental Activities
Capital Assets not being Depreciated
Land 19,920,218$ 13,095,121$ (309,000)$ 32,706,339$
Permanent easements 2,826,748 51,929 (3,168) 2,875,509
Construction in progress 19,596,516 40,785,402 (2,112,931) 58,268,987
Total Capital Assets not
being Depreciated 42,343,482 53,932,452 (2,425,099) 93,850,835
Capital Assets being Depreciated/Amortized
Buildings and structures 24,852,984 - (3,779,503) 21,073,481
Temporary easements 3,436,870 - (3,436,870) -
Right to use lease assets - vehicles 1,005,204 25,799 - 1,031,003
Machinery and equipment 9,711,320 1,076,665 (755,378) 10,032,607
Other improvements 12,762,939 247,978 (1,137,411) 11,873,506
Infrastructure 125,646,619 2,427,984 (1,118,393) 126,956,210
Total Capital Assets
being Depreciated/Amortized 177,415,936 3,778,426 (10,227,555) 170,966,807
Less Accumulated Depreciation/Amortization for
Buildings and structures (12,551,993) (618,356) 2,693,920 (10,476,429)
Temporary easements (3,436,870) - 3,436,870 -
Right to use lease assets - vehicles (373,227) (254,823) - (628,050)
Machinery and equipment (6,306,797) (479,586) 703,301 (6,083,082)
Other improvements (6,465,121) (493,248) 1,016,163 (5,942,206)
Infrastructure (105,847,032) (2,234,520) 1,118,393 (106,963,159)
Total Accumulated Depreciation/Amortization (134,981,040) (4,080,533) 8,968,647 (130,092,926)
Total Capital Assets
being Depreciated/Amortized, Net 42,434,896 (302,107) (1,258,908) 40,873,881
Governmental Activities
Capital Assets, Net 84,778,378$ 53,630,345$ (3,684,007)$ 134,724,716$
68
City of Chanhassen, Minnesota
Notes to the Financial Statements
December 31, 2025
Note 4: Capital Assets (Continued)
Beginning Ending
Balance Increases Decreases Balance
Business-type Activities
Capital Assets not being Depreciated
Land 2,116,335$ 500$ -$ 2,116,835$
Permanent easements 7,088,204 2,041,930 (3,471,805) 5,658,329
Construction in progress 7,597,828 6,970,722 (2,980,355) 11,588,195
Total Capital Assets
not being Depreciated 16,802,367 9,013,152 (6,452,160) 19,363,359
Capital Assets being Depreciated/Amortized
Buildings and structures 28,189,036 - - 28,189,036
Right to use lease assets - vehicles 268,604 - - 268,604
Machinery and equipment 2,617,895 225,846 (300,614) 2,543,127
Other improvements 128,207,442 4,946,816 - 133,154,258
Total Capital Assets
being Depreciated/Amortized 159,282,977 5,172,662 (300,614) 164,155,025
Less Accumulated Depreciation/Amortization for
Buildings and structures (6,110,972) (565,324) - (6,676,296)
Right to use lease assets - vehicles (52,693) (82,340) - (135,033)
Machinery and equipment (1,559,885) (209,866) 181,304 (1,588,447)
Other improvements (87,961,440) (2,905,563) - (90,867,003)
Total Accumulated
Depreciation/Amortization (95,684,990) (3,763,093) 181,304 (99,266,779)
Total Capital Assets
being Depreciated/Amortized, Net 63,597,987 1,409,569 (119,310) 64,888,246
Business-type Activities
Capital Assets, Net 80,400,354$ 10,422,721$ (6,571,470)$ 84,251,605$
69
City of Chanhassen, Minnesota
Notes to the Financial Statements
December 31, 2025
Note 4: Capital Assets (Continued)
Depreciation/amortization expense was charged to functions/programs of the City as follows:
Governmental Activities
General government 293,828$
Public safety 284,100
Public works 2,447,129
Culture and recreation 1,048,023
Community development 7,453
Total Depreciation/Amortization Expense - Governmental Activities 4,080,533$
Business-type Activities
Water 1,923,323$
Sewer 811,207
Surface water management 1,028,563
Total Depreciation/Amortization Expense - Business-type Activities 3,763,093$
Note 5: Construction Commitments
The City has active construction projects as of December 31, 2025. The projects include various street and road
improvements and public facilities projects. At year end, the City’s commitments with contractors are as follows:
Remaining
Spent-to-Date Commitment
Galpin Blvd Improvements 18,312,944$ 203,169$
2024 Pavement Rehab 7,350,615 117,941
2025 Pavement Rehab 8,002,955 1,003,481
Crimson Bay Road Improvements 1,584,827 321,326
Civic Campus 25,589,993 3,906,668
Total 60,841,334$ 5,552,585$
Project
Note 6: Interfund Receivables, Payables, and Transfers
The composition of interfund balances as of December 31, 2025 are as follows:
Amount
Due from/to other Funds
Governmental Governmental
General Pavement Management Program 6,195,000$
General Nonmajor Governmental 6,000
Business-type Business-type
Water Surface Water Management 1,060,000
Sewer Surface Water Management 1,410,000
Total Due from/to other Funds 8,671,000$
Receivable Fund Payable Fund
70
City of Chanhassen, Minnesota
Notes to the Financial Statements
December 31, 2025
Note 6: Interfund Receivables, Payables, and Transfers (Continued)
All interfund loan balances represent a transfer of funds to cover cash deficits.
The composition of interfund transfers for the year ended December 31, 2025 is as follows:
Other
Civic Governmental
General
Pavement
Management
Program Campus Funds Total
Transfers Out
Other Governmental Funds 330,000$ 89,988$ 443,037$ 426,285$ 1,289,310$
Transfers in
Fund
During the year, transfers were used for the following:
x Budgeted transfer of $30,000 from the Cable TV fund to the General fund to fund for communication expenses
incurred in the General fund.
x Budgeted transfer of $300,000 from the Grant fund to the General fund to offset public safety expenses.
x Budgeted transfer of $18,037 to close the 2024A GO Capital Imp Plan Bond fund to the Civic Campus fund.
x Budgeted fund transfer of $381,919 from the 2009A GO Refunding fund to the 2024A GO Capital Imp Plan Bond
fund.
x Close out fund transfer of $44,366 from the 2009A GO Refunding fund to the Permanent Debt Revolving fund.
x Transfer of 300,000 from the Park Acquisition & Development Fund to the Civic Campus Fund for planned
projects.
x Close out fund transfer of $89,988 from the TH101 Imp/Pioneer-Fly CLD 14-08 Fund to the Pavement
Management Program Fund.
x A planned project transfer of $125,000 from the Cable TV fund to the Civic Campus fund for project expenditures.
Note 7: Lease Receivable
The City leases space on its water towers for cellular tower antenna sites. The leases are non-cancelable for a period of
five years, with one to four renewal periods of five years each at the lessee’s option. The City considers the likelihood of
these options being exercised to be greater than 50%. The agreements call for varying annual lease payments with
increases of 2% to 4% per year. The lease receivables are measured at the present value of the future minimum lease
payments expected to be received during the lease term at a discount rate of 3% which is based on the rate available to
finance equipment over the same time periods.
At December 31, 2025, the City recorded $2,993,421 in lease receivables and deferred inflows of resources for these
arrangements.
Lease related inflows of resources (e.g. lease revenue) recognized during the year ended December 31, 2025 was
$310,478.
71
City of Chanhassen, Minnesota
Notes to the Financial Statements
December 31, 2025
Note 8: Long-term Liabilities
General Obligation Improvement Bonds
The City issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities.
General obligation bonds have been issued for both general government and proprietary activities. These bonds are
reported in the proprietary funds if they are expected to be repaid from proprietary fund revenues. In addition, general
obligation bonds have been issued to refund both general obligation and revenue bonds.
General obligation bonds are direct obligations and pledge the full faith and credit of the City. The G.O. Improvement
Bonds have been issued to finance improvements. They will be repaid with special assessment collections and ad
valorem tax levies. General obligation bonds currently outstanding are as follows:
Authorized Issue Maturity Balance at
and Issued Date Date Year End
G.O. Bonds,
Series 2016A 4,805,000$ 2.00 - 3.00 %03/03/16 02/01/30 2,210,000$
G.O. Capital Improvement Plan Bonds
Series 2024A 24,250,000 4.00 - 5.00 08/15/24 02/01/54 24,250,000
G.O. Temporary Sales Tax Revenue Bonds
Series 2025A 13,185,000 3.00 06/26/25 02/01/28 13,185,000
G.O. Tax Abatement & Capital Improvement Bonds
Series 2025B 10,205,000 4.00 - 5.00 10/02/25 02/01/54 10,205,000
Total General Obligation Bonds 49,850,000$
Interest
RateDescription
Annual debt service requirements to maturity for general obligation improvement bonds are as follows:
Year Ending
December 31,Principal Interest Total
2026 420,000$ 1,908,960$ 2,328,960$
2027 575,000 1,936,313 2,511,313
2028 13,925,000 1,718,713 15,643,713
2029 765,000 1,496,738 2,261,738
2030 790,000 1,471,663 2,261,663
2031 - 2035 4,490,000 6,754,938 11,244,938
2036 - 2040 5,725,000 5,491,288 11,216,288
2041 - 2045 7,180,000 4,035,534 11,215,534
2046 - 2050 8,230,000 2,440,453 10,670,453
2051 - 2054 7,750,000 645,004 8,395,004
Total 49,850,000$ 27,899,604$ 77,749,604$
Governmental Activities
72
City of Chanhassen, Minnesota
Notes to the Financial Statements
December 31, 2025
Note 8: Long-term Liabilities (Continued)
General Obligation Revenue Bonds
The following bonds will be repaid solely from revenue derived from the activities of the fund. They are backed by the full
faith and credit of the City. Annual net operating revenues, principal and interest payments, and the percentage of revenue
required to cover principal and interest payments are as follows:
Surface Water
Water Sewer Management
Net Operating Revenues 4,688,213$ 4,610,007$ 2,398,016$
Principal and Interest 2,059,380 208,380 144,483
Percentage of Revenues 44%5%6%
The components of the general obligation revenues bonds are as follows:
Authorized Issue Maturity Balance at
and Issued Date Date Year End
G.O. Water Revenue
Bonds, Series 2016A 1,565,000$ 2.00 - 3.00 %03/03/16 02/01/26 175,000$
G.O. Water Revenue
Bonds, Series 2016B 3,630,000 3.50 - 4.00 12/29/16 02/01/42 3,630,000
G.O Water Revenue
Bonds, Series, 2017A 10,000,000 2.00 - 4.00 02/01/17 02/01/38 8,505,000
G.O. Water Revenue
Bonds, Series 2018A 3,595,000 3.00 - 4.00 03/15/18 02/01/30 1,650,000
G.O. Water Revenue
Bonds, Series 2020A 3,415,000 2.00 - 3.00 04/02/20 02/01/31 2,150,000
G.O. Sewer Revenue
Bonds, Series 2020A 1,540,000 2.00 - 3.00 04/02/20 02/01/31 925,000
G.O. Surface Water Revenue
Bonds, Series 2020A 1,265,000 2.00 - 3.00 04/02/20 02/01/31 675,000
Total G.O. Revenue Bonds 17,710,000$
Rate
Interest
Description
Annual debt service requirements to maturity for general obligation revenue bonds are as follows:
Year Ending
December 31,Principal Interest Total
2026 1,275,000$ 530,538$ 1,805,538$
2027 1,550,000 488,188 2,038,188
2028 1,600,000 440,938 2,040,938
2029 1,650,000 395,563 2,045,563
2030 1,690,000 352,263 2,042,263
2031 - 2035 4,045,000 1,347,563 5,392,563
2036 - 2040 4,090,000 721,969 4,811,969
2041 - 2042 1,810,000 73,200 1,883,200
Total 17,710,000$ 4,350,222$ 22,060,222$
Business-type Activities
73
City of Chanhassen, Minnesota
Notes to the Financial Statements
December 31, 2025
Note 8: Long-term Liabilities (Continued)
Lease Payable
Lease agreements are summarized as follows:
Beginning Ending Due Within
Balance Additions Deletions Balance One Year
Governmental activities 675,181$ 25,799$ (251,317)$ 449,663$ 254,590$
Business-type activities 218,636 - (79,500) 139,136 86,526
Total lease liability 893,817$ 25,799$ (330,817)$ 588,799$ 341,116$
The City leases multiple vehicles from Enterprise Rent-a-Car. As of December 31, 2025, the City had 41 outstanding
vehicle leases, 1 of which was entered into during 2025. Leases range from 36 to 60 months with monthly payments
ranging from $516 to $1,082. The leases are all under a master lease agreement with individual schedules for each
vehicle. The lease liability is measured at discount rates ranging from 10.0% to 13.3% as stated in the lease agreements.
Annual requirements to amortize long-term obligations and related interest are as follows:
Year Ending
December 31,Principal Interest Total Principal Interest Total
2026 254,590$ 39,833$ 294,423$ 86,526$ 12,874$ 99,400$
2027 144,354 13,189 157,543 52,610 2,337 54,947
2028 44,351 2,585 46,936 - - -
2029 6,368 141 6,509 - - -
Total 449,663$ 55,748$ 505,411$ 139,136$ 15,211$ 154,347$
Governmental Activities Business-type Activities
74
City of Chanhassen, Minnesota
Notes to the Financial Statements
December 31, 2025
Note 8: Long-term Liabilities (Continued)
Changes in Long-term Liabilities
During the year ended December 31, 2025, the following changes occurred in long-term liabilities:
Beginning Ending
Balance Increases Decreases Adjustments Balance
Governmental Activities
Bonds Payable
General obligation bonds 26,870,000$ 23,390,000$ (410,000)$ -$ 49,850,000$
Bond premium 1,288,708 259,684 (75,903) - 1,472,489
Project financing 207,417 - (193,198) (14,219) -
Lease payable 675,181 25,799 (251,317) - 449,663
Compensated absences*678,432 105,967 - - 784,399
Governmental Activity
Long-term Liabilities 29,719,738$ 23,781,450$ (930,418)$ (14,219)$ 52,556,551$
Business-type Activities
Bonds Payable
G.O. revenue bonds 19,520,000$ -$ (1,810,000)$ -$ 17,710,000$
Bond premium 775,613 - (104,604) - 671,009
Lease payable 218,636 - (79,500) - 139,136
Compensated absences*265,327 38,661 - - 303,988
Business-type Activity
Long-term Liabilities 20,779,576$ 38,661$ (1,994,104)$ -$ 18,824,133$
*The change in compensated absences is presented as a net change.
Nonexchange Financial Guarantee of Debt
On August 1, 2014, the Carver County Community Development Agency (CDA), a legally separate entity from the City,
issued $2,370,000 of Taxable Housing Development and Refunding Bonds, Series 2014T. The proceeds were used to
refund a portion of prior bonds and to fund certain capital improvements of the Centennial Hill Apartments, which are
located within the City.
In accordance with Minnesota Statutes Section 469.034, Subd. 2, the City has pledged its full faith and credit and taxing
powers to the payment of debt service on the Series 2014T bonds. In the event that the Carver County CDA is unable to
pay the debt service on the bonds due to insufficient housing revenues and cash reserves, the City is obligated to pay the
debt service. The City’s guarantee extends until the bonds have fully matured, which is scheduled to occur in 2034. The
total amount of outstanding guaranteed debt, including interest, at December 31, 2025, is $2,414,824.
The City’s management does not expect the City will be required to make any debt service payments towards these
bonds. Accordingly, the bonds are not reflected in the financial statements of the City.
75
City of Chanhassen, Minnesota
Notes to the Financial Statements
December 31, 2025
Note 8: Long-term Liabilities (Continued)
Conduit Debt Obligations
The City of Chanhassen has issued revenue bonds to provide financial assistance to private-sector entities for the
acquisition and construction of facilities deemed to be in the public interest. The bonds are secured by the property
financed and are payable solely from the private-sector entity served by the bond issuance. Neither the City of
Chanhassen or the State of Minnesota, or any political subdivision thereof is obligated in any manner for repayment of the
bonds. Accordingly, the bonds are not reported as liabilities in the accompanying financial statements. As of
December 31, 2025, there was one bond outstanding with Presbyterian Homes with a principal amount of $3,530,034.
Authorized Issue Maturity Balance at
and Issued Date Date Year End
Presbyterian Homes, Series 2014B 9,300,000$ June 2014 2034 3,530,034$
Project Name
76
City of Chanhassen, Minnesota
Notes to the Financial Statements
December 31, 2025
Note 9: Components of Fund Balance
At December 31, 2025, portions of the City’s fund balance are not available for appropriation due to not being in
spendable form (nonspendable), legal restrictions (restricted), City Council action (committed), policy and/or intent
(assigned), and available for spending (unassigned). The following is a summary of the components of fund balance:
Pavement Other
General Civic Management Governmental
Fund Campus Program (PMP)Funds Totals
Nonspendable
Prepaid items 13,366$ -$ -$ -$ 13,366$
Restricted for
Debt service -$ -$ -$ 3,383,191$ 3,383,191$
Tax increment - - - 110,347 110,347
Capital projects - 5,265,735 - 2,413,588 7,679,323
Public safety - - - 596,618 596,618
Local affordable housing aid - - - 359,147 359,147
Total Restricted -$ 5,265,735$ -$ 6,862,891$ 12,128,626$
Committed for
Cemetery -$ -$ -$ 85,475$ 85,475$
Cable TV - - - 7,677 7,677
Total Committed -$ -$ -$ 93,152$ 93,152$
Assigned for
Payout of compensated
absences for retirement 100,000$ -$ -$ -$ 100,000$
Land purchase - new community
center 2,100,000 - - - 2,100,000
Civic campus phase II grand opening 20,000 - - - 20,000
Grants - - - 267,211 267,211
Lake Ann Park Preserve 1,675,000 - - - 1,675,000
Community center (initial operations)1,500,000 - - - 1,500,000
Health insurance premiums 100,000 - - - 100,000
Comprehensive plan update 150,000 - - - 150,000
Computer hardware/software 100,000 - - - 100,000
Capital improvements - - - 4,946,653 4,946,653
Debt service reserve - - - 833,644 833,644
Total Assigned 5,745,000$ -$ -$ 6,047,508$ 11,792,508$
Unassigned 8,327,284$ -$ (3,495,042)$ (4,537)$ 4,827,705$
Total Fund Balance 14,085,650$ 5,265,735$ (3,495,042)$ 12,999,014$ 28,855,357$
77
City of Chanhassen, Minnesota
Notes to the Financial Statements
December 31, 2025
Note 10: Defined Benefit Pension Plans - Statewide
A. Plan Description
General Employees Retirement Plan (General Plan)
Public Employees Police and Fire Plan (Police and Fire Plan)
B. Benefits Provided
General Employee Plan Benefits
The City participates in the following cost-sharing multiple-employer defined benefit pension plans administered by the
Public Employees Retirement Association of Minnesota (PERA). These plan provisions are established and
administered according to Minnesota Statutes chapters 353, 353D, 353E, 353G, and 356. Minnesota Statutes chapter
356 defines each plan’s financial reporting requirements. PERA’s defined benefit pension plans are tax qualified plans
under Section 401(a) of the Internal Revenue Code.
Membership in the General Plan includes employees of counties, cities, townships, schools in non-certified
positions,and other governmental entities whose revenues are derived from taxation, fees, or assessments. Plan
membership is required for any employee who is expected to earn more than $425 in a month, unless the employee
meets exclusion criteria.
Membership in the Police and Fire Plan includes full-time, licensed police officers and firefighters who meet the
membership criteria defined in Minnesota Statutes section 353.64 and who are not earning service credit in any other
PERA retirement plan or a local relief association for the same service. Employers can provide Police and Fire Plan
coverage for part-time positions and certain other public safety positions by submitting a resolution adopted by the
entity’s governing body. The resolution must state that the position meets plan requirements.
PERA provides retirement, disability, and death benefits. Benefit provisions are established by state statute and can
only be modified by the state Legislature. 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. When a
member is “vested,” they have earned enough service credit to receive a lifetime monthly benefit after leaving public
service and reaching an eligible retirement age. Members who retire at or over their Social Security full retirement age
with at least one year of service qualify for a retirement benefit.
General Employees Plan requires three years of service to vest. 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 General Plan members. Members hired prior to July 1, 1989, receive the
higher of the Step or Level formulas. Only the Level formula is used for members hired after June 30, 1989. Under the
Step formula, General Plan members receive 1.2% of the highest average salary for each of the first 10 years of
service and 1.7% for each additional year. Under the Level formula, General Plan members receive 1.7% of highest
average salary for all years of service. For members hired prior to July 1, 1989 a full retirement benefit is available
when age plus years of service equal 90 and normal retirement age is 65. Members can receive a reduced
retirement benefit as early as age 55 if they have three or more years of service. Early retirement benefits are
reduced by .25% for each month under age 65. Members with 30 or more years of service can retire at any age with a
reduction of .25% for each month the member is younger than age 62. The Level formula allows General Plan
members to receive a full retirement benefit at age 65 if they were first hired before July 1, 1989 or at age 66 if they
were hired on or after July 1, 1989. Early retirement begins at age 55 with an actuarial reduction applied to the benefit.
78
City of Chanhassen, Minnesota
Notes to the Financial Statements
December 31, 2025
Note 10: Defined Benefit Pension Plans - Statewide (Continued)
Police and Fire Plan Benefits
C. Contributions
General Employees Fund Contributions
Police and Fire Fund Contributions
Benefit increases are provided to benefit recipients each January. The postretirement increase is equal to 50% of the
cost-of-living adjustment (COLA) announced by the SSA, with a minimum increase of at least 1% and a maximum of
1.5%. The 2025 annual increase was 1.25%. Recipients that have been receiving the annuity or benefit for at least a
full year as of the June 30 before the effective date of the increase will receive the full increase. Recipients receiving
the annuity or benefit for at least one month but less than a full year as of the June 30 before the effective date of the
increase will receive a prorated increase.
Benefits for Police and Fire Plan members hired before July 1, 2010, are vested after three years of service. Members
hired on or after July 1, 2010, are 50% vested after five years of service and 100% vested after ten years. After five
years, vesting increases by 10% each full year of service until members are 100% vested after ten years. Police and
Fire Plan members receive 3% of highest average salary for all years of service. Police and Fire Plan members receive
a full retirement benefit when they are age 55 and vested, or when their age plus their years of service equals 90 or
greater if they were first hired before July 1, 1989. Early retirement starts at age 50, and early retirement benefits are
reduced by 0.417% each month members are younger than age 55.
Benefit increases are provided to benefit recipients each January. The postretirement increase is fixed at 1%. Recipients
that have been receiving the annuity or benefit for at least 36 months as of the June 30 before the effective date of the
increase will receive the full increase. Recipients receiving the annuity or benefit for at least 25 months but less than 36
months as of the June 30 before the effective date of the increase will receive a prorated increase.
Minnesota Statutes chapters 353, 353E, 353G, and 356 set the rates for employer and employee contributions.
Contribution rates can only be modified by the state Legislature.
General Plan members were required to contribute 6.50% of their annual covered salary in fiscal year 2025 and the City
was required to contribute 7.50% for General Plan members. The City’s contributions to the General Employees Fund for
the year ended December 31, 2025, were $543,195. The City's contributions were equal to the required contributions as
set by state statute.
Police and Fire Plan members were required to contribute 11.80% of their annual covered salary in fiscal year 2025 and
the City was required to contribute 17.70% for Police and Fire Plan members. The City’s contributions to the Police and
Fire Fund for the year ended December 31, 2025, were $165,988. The City’s contributions were equal to the required
contributions as set by state statute.
79
City of Chanhassen, Minnesota
Notes to the Financial Statements
December 31, 2025
Note 10: Defined Benefit Pension Plans - Statewide (Continued)
D. Pension Costs
General Employees Fund Pension Costs
City’s proportionate share of the total pension liability 2,578,850$
State of Minnesota's proportionate share of the net pension
liability associated with the City 62,210
Total 2,641,060$
Deferred Deferred
Outflows Inflows
of Resources of Resources
Differences between expected and actual economic experience 245,708$ -$
Changes in actuarial assumptions 62,135 593,384
Net difference between projected and actual investment earnings - 1,026,149
Changes in proportion - 152,639
Employer contributions subsequent to the measurement date 274,238 -
Total 582,081$ 1,772,172$
At December 31, 2025, the City reported a liability of $2,578,850 for its proportionate share of the General Employees
Fund’s net pension liability. The City’s total pension liability reflected a reduction due to the State of Minnesota’s
contribution of $16 million. The State of Minnesota is considered a non-employer contributing entity and the state’s
contribution meets the definition of a special funding situation. The State of Minnesota’s proportionate share of the
total pension liability associated with the City totaled $62,210.
The net pension liability was measured as of June 30, 2025, and the total pension liability used to calculate the net
pension liability was determined by an actuarial valuation as of that date. The City’s proportion of the net pension
liability was based on the City’s contributions received by PERA during the measurement period for employer payroll
paid dates from July 1, 2024 through June 30, 2025, relative to the total employer contributions received from all of
PERA’s participating employers. The City’s proportionate share was 0.0778% at the end of the measurement period and
0.0783% for the beginning of the period.
For the year ended December 31, 2025, the City recognized pension expense of negative $58,365 for its proportionate
share of the General Employees Plan’s pension expense. In addition, the City recognized an additional negative $9,542
as pension expense (and grant revenue) for its proportionate share of the State of Minnesota’s contribution of $16
million to the General Employees Fund.
At December 31, 2025, the City reported deferred outflows of resources and deferred inflows of resources related to
pensions from the following sources:
80
City of Chanhassen, Minnesota
Notes to the Financial Statements
December 31, 2025
Note 10: Defined Benefit Pension Plans - Statewide (Continued)
2026 (370,739)$
2027 (549,044)
2028 (361,238)
2029 (183,308)
Police and Fire Fund Pension Costs
City’s proportionate share of the total pension liability 697,489$
State of Minnesota's proportionate share of the net pension
liability associated with the City 24,178
Total 721,667$
The $274,238 reported as deferred outflows of resources related to pensions resulting from City contributions
subsequent to the measurement date will be recognized as a reduction of the total pension liability in the year ended
December 31, 2026. Other amounts reported as deferred outflows and deferred inflows of resources related to pensions
will be recognized in pension expense as follows:
At December 31, 2025, the City reported a liability of $697,489 for its proportionate share of the Police and Fire Fund’s
total pension liability. The total pension liability was measured as of June 30, 2025, and the total pension liability used to
calculate the total pension liability was determined by an actuarial valuation as of that date. The City's proportionate
share of the total pension liability was based on the City’s contributions received by PERA during the measurement
period for employer payroll paid dates from July 1, 2024 through June 30, 2025, relative to the total employer
contributions received from all of PERA’s participating employers. The City’s proportionate share was 0.0595% at the
end of the measurement period and 0.0612% for the beginning of the period.
For the year ended December 31, 2025, the City recognized pension expense of $77,410 for its proportionate share of
the Police and Fire Plan’s pension expense. The City recognized $11,699 as grant revenue and pension expense for its
proportionate share of the State of Minnesota’s contribution of $9 million to the Police and Fire special funding
situation.
The State of Minnesota contributed $18 million to the Police and Fire Fund in the plan fiscal year ended June 30, 2025.
The contribution consisted of $9 million in direct state aid that meets the definition of a special funding situation and $9
million in supplemental state aid that does not meet the definition of a special funding situation. The $9 million direct
state aid was paid on October 1, 2024. The direct state aid payment will increase by $17.7 million which was paid on
October 1, 2025. Thereafter, by October 1 of each year, the state will pay $26.7 million to the Police and Fire Fund until
the fund is 110% funded for a minimum of three consecutive years (on an actuarial value of assets basis). The $9
million in supplemental state aid will continue until the fund and the State Patrol Plan (administered by the Minnesota
State Retirement System) are 100% funded for three consecutive years (on an actuarial value of assets basis). The State
of Minnesota’s proportionate share of the net pension liability associated with the City totaled $24,178.
The State of Minnesota is not included as a non-employer contributing entity in the Police and Fire Pension Plan pension
allocation schedules for the $9 million in supplemental state aid because this contribution was not considered to meet
the definition of a special funding situation. The City recognized $5,358 for the year ended December 31, 2025 as
revenue and an offsetting reduction of net pension liability for its proportionate share of the State of Minnesota’s on-
behalf contributions to the Police and Fire Fund.
81
City of Chanhassen, Minnesota
Notes to the Financial Statements
December 31, 2025
Note 10: Defined Benefit Pension Plans - Statewide (Continued)
Deferred Deferred
Outflows Inflows
of Resources of Resources
Differences between expected and actual economic experience 322,262$ -$
Changes in actuarial assumptions 528,920 873,924
Net difference between projected and actual earnings on investments - 311,299
Changes in proportion 315,119 23,931
Employer contributions subsequent to the measurement date 84,212 -
Total 1,250,513$ 1,209,154$
2026 264,536$
2027 (59,467)
2028 (268,668)
2029 7,269
2030 13,477
E. Long-term Expected Return on Investment
Domestic Equity 33.5 %5.10 %
International Equity 16.5 5.30
Fixed Income 25.0 0.75
Private Markets 25.0 5.90
Total 100.0 %
At December 31, 2025, the City reported deferred outflows of resources and deferred inflows of resources related to
pensions from the following sources:
The $84,212 reported as deferred outflows of resources related to pensions resulting from City contributions
subsequent to the measurement date will be recognized as a reduction of the total pension liability in the year ended
December 31, 2026. Other amounts reported as deferred outflows and inflows of resources related to pensions will be
recognized in pension expense as follows:
The State Board of Investment, which manages the investments of PERA, prepares an analysis of the
reasonableness on a regular basis of the long-term expected rate of return 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. The target allocation and best estimates of geometric real rates of return for each major
asset class are summarized in the following table:
Long-term
Target Expected Return
Asset Class Allocation on Investment
82
City of Chanhassen, Minnesota
Notes to the Financial Statements
December 31, 2025
Note 10: Defined Benefit Pension Plans - Statewide (Continued)
F. Actuarial Assumptions
The following changes in actuarial assumptions and plan provisions occurred in 2025:
General Employees Fund
Changes in Actuarial Assumptions:
Changes in Plan Provisions:
The total pension liability for each of the cost-sharing defined benefit plans was determined by an actuarial valuation as
of June 30, 2025, using the entry age normal actuarial cost method. The long-term rate of return on pension plan
investments used to determine the total liability is 7%. The 7% assumption is based on a review of inflation and
investment return assumptions from a number of national investment consulting firms. The review provided a range
of investment return rates considered reasonable by the actuary. An investment return of 7% is within that range.
- Inflation is assumed to be 2.25% for the General Employees Plan, and Police & Fire Plan.
- Benefit increases after retirement are assumed to be 1.50% for the General Employees Plan and
1%for the Police & Fire Plan.
Salary growth assumptions in the General Employees Plan range in annual increments from 11.5% after one year of
service to 3% after 27 years of service. In the Police & Fire Plan, salary growth assumptions range in annual increments
from 10.75% after one year of service to 3% after 23 years of service.
Mortality rates for the General Employees Plan are based on the Pub-2010 General Employee Mortality Table. Mortality
rates for the Police & Fire Plan are based on the Pub-2010 Public Safety Employee Mortality tables. The tables are
adjusted slightly to fit PERA’s experience.
Actuarial assumptions for the General Employees Plan are reviewed every four years. The General Employees Plan was
last reviewed in 2022. The assumption changes were adopted by the board and became effective with the
July 1, 2023 actuarial valuation. The Police & Fire Plan was reviewed in 2024. The assumption
changes were adopted by the board and became effective with the July 1, 2025 actuarial valuation.
- The combined service annuity loading factors increased from 15% to 19% for vested, terminated members and
from 3% to 44% for non-vested, terminated members.
- The assumed post-retirement benefit increase changed from 1.25% to 1.5%.
- The post-retirement benefit increase formula changed to 100% of the Social Security annual increase, between 1%
and 1.75%, beginning January 1, 2026. If the funded ratio (on a market value of assets basis) is less than 85% for
the last two consecutive annual valuations or is less than 80% in the most recent actuarial valuation, the
maximum is reduced to 1.5%. Previously, the benefit increase was 50% of the Social Security annual increase,
between 1% and 1.5%.
- The 1% additional employer contribution is eliminated when the plan reaches 98% funded status (on an actuarial
value of assets basis); this contribution was previously scheduled to stop when the plan reached 100% funded
status.
83
City of Chanhassen, Minnesota
Notes to the Financial Statements
December 31, 2025
Note 10: Defined Benefit Pension Plans - Statewide (Continued)
Police and Fire Fund
Changes in Actuarial Assumptions:
Changes in Plan Provisions:
G. Discount Rate
- The period of time needed for benefit recipients to receive their first benefit increase was reduced by one year
(from 36 months to 24 months for a full increase).
- The January 1, 2026 benefit increase changed from 1% to 3%; subsequent January 1 increases will be 1%.
- The threshold to end the $9 million annual state aid contribution changed from the earlier of July 1, 2048 or 90%
funded for both PERA Police & Fire and MSRS State Patrol for three consecutive years to 100% funded for both
PERA Police & Fire and MSRS State Patrol for three consecutive years (on an actuarial value of assets basis).
- The threshold to end the additional $9 million annual state aid contribution changed from the earlier of July 1, 2024
or 100% funded for a minimum of three consecutive years to 110% funded for a minimum of three consecutive
years (on an actuarial value of assets basis).
- An additional $17.7 million in direct state aid will be paid annually each October 1 beginning October 1, 2025
through June 30, 2048.
- Joint and survivor actuarial equivalent factors were updated to reflect changes in assumptions.
The discount rate used to measure the total pension liability in 2025 was 7.00%. The projection of cash flows used to
determine the discount rate assumed that contributions from plan members and employers will be made at rates set in
Minnesota Statutes. Based on these assumptions, the fiduciary net position of the General Employees and Police and
Fire Plans were projected to be available to make all projected future benefit payments of current plan members. 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.
- Assumed rates of salary increases were reduced slightly.
- Assumed rates of retirement were adjusted, resulting in an overall increase in unreduced (full) retirements and an
overall increase in reduced (early) retirements.
- Assumed rates of withdrawal were modified; the new rates will increase predicted terminations, especially in the
first few years of employment.
- Assumed rates of disabled retirement were significantly increased, especially for ages over age 30.
- Continued used of Pub-2010 Public Safety Mortality Table with rates adjusted to better fit observed experience.
- Percent married assumption for female retirees lowered from 70% to 65%.
- Minor changes were made to form of payment assumptions for retirees.
- Minor changes were made to assumptions made with respect to missing participant data.
- The combined service annuity load changed from 33% to 13% for vested, terminated members and from 2% to 38%
for non-vested, terminated members.
84
City of Chanhassen, Minnesota
Notes to the Financial Statements
December 31, 2025
Note 10: Defined Benefit Pension Plans - Statewide (Continued)
H. Pension Liability Sensitivity
1 Percent 1 Percent
Decrease (6.00%)Current (7.00%)Increase (8.00%)
General Employees Fund 6,263,622$ 2,578,850$ (410,329)$
Police and Fire Fund 1,827,569 697,489 (230,485)
I. Pension Plan Fiduciary Net Position
The following presents the City’s proportionate share of the total pension liability for all plans it participates in,
calculated using the discount rate disclosed in the preceding paragraph, as well as what the City’s proportionate share
of the total 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:
Detailed information about each pension plan’s fiduciary net position is available in a separately issued PERA
financial report that includes financial statements and required supplementary information. That report may be obtained
on the Internet at www.mnpera.org.
85
City of Chanhassen, Minnesota
Notes to the Financial Statements
December 31, 2025
Note 11: Defined Benefit Pension Plans - Fire Relief Association
A. Plan Description
All members of the City of Chanhassen Fire Department (the Department) are covered by a defined benefit plan
administered by the City of Chanhassen Fire Department Relief Association (the Association). As of December 31, 2024,
the plan covered 25 active firefighters and 3 vested terminated firefighters whose pension benefits are deferred. The plan
is a single employer retirement plan and is established and administered in accordance with Minnesota Statute, Chapter
69.
The Association maintains a separate Special fund to accumulate assets to fund the retirement benefits earned by the
Department’s membership. Funding for the Association is derived from an insurance premium tax in accordance with the
Volunteer Firefighter’s Relief Association Financing Guidelines Act of 1971 (chapter 261 as amended by chapter 509 of
Minnesota statutes 1980). Funds are also derived from investment income.
B. Benefits Provided
Twenty Year Service Pension
Prior to April 1997, each member who is at least 50 years of age, has retired from the Fire Department, has served at least
twenty years of active service with such department before retirement, and has been a member of the Relief Association
in good standing at least ten years prior to such retirement shall be entitled to receive either a monthly lifetime service
pension or a defined benefit lump sum pension. After April 1997, each member shall be entitled to receive a defined
benefit lump sum pension.
Monthly service pensions shall be $410 per month. Defined benefit service pensions per year of service shall be $8,500.
The maximum service pension shall not exceed the maximum service pension amount permitted under the flexible
pension maximums pursuant to Minnesota Statute Section 424A.02, Subdivision 3. Members who choose the lump sum
receive no additional interest accrual.
Ten Year Service but Less than Twenty Year Service
Each member who is at least 50 years of age; who has retired from the Fire Department; who has served at least five
years of active service with such department before retirement but has not served at least 20 years of active service; and,
who has been a member of the Relief Association in good standing at least ten years prior to such retirement, shall be
entitled to either a pro-rated monthly service pension or a pro-rated lump sum service pension based on the percentages
in the following table:
More Than but Less Than
5 years 6 years 40%
6 7 44
7 8 48
8 9 52
9 10 56
10 11 60
11 12 64
12 13 68
13 14 72
14 15 76
15 16 80
16 17 84
17 18 88
18 19 92
19 20 96
20 100 86
City of Chanhassen, Minnesota
Notes to the Financial Statements
December 31, 2025
Note 11: Defined Benefit Pension Plans - Fire Relief Association (Continued)
The payment amount will be calculated by using the amount payable per year of service in effect at the time of such early
retirement, multiplied by the number of accumulated years of service, multiplied by the appropriate percentage as defined
above.
During the time a member is on early-vested pension, he or she will not be eligible for disability benefits.
Survivors Benefit
Prior to April 1997, if any active vested or deferred member dies leaving an eligible surviving spouse, they shall receive a
monthly pension for a guaranteed fifteen year period. After April 1997, an eligible surviving spouse shall receive a lump
sum payment calculated in accordance with the by-laws. If there is no surviving spouse, then the deceased member’s
designated beneficiary or their estate would receive the payment.
A surviving spouse of a member receiving a monthly pension shall receive 50% of the member’s monthly benefit, based
on the date of death.
Permanent Disability
If any member of the Relief Association contracts sickness or injury, which incapacitates the member from attending to
their business, from causes outside or within their line of duty, and a physician’s report shows that the member is unable
to perform their duties, then they are entitled to their full accrued lump sum benefit, payable immediately.
Temporary Disability
Any member of the Relief Association who becomes temporarily incapacitated from attending to their business due to
illness of injury, sustained in the performance of such business, and is unable to work for a period of one week or longer,
shall be paid a benefit of $5 per day for a period of no longer than 120 days in any one fiscal year, providing the member is
under the care of a physician or doctor during this period.
Death Benefit
Upon the death of any active or deferred member, the beneficiaries of the deceased member shall be paid a death benefit
in an amount equivalent to the accrued service pension.
C. Contributions
Minnesota statutes, chapters 424 and 424A authorize pension benefits for volunteer fire relief associations. The plan is
funded by fire state aid, investment earnings and, if necessary, employer contributions as specified in Minnesota statutes
and voluntary City contributions (if applicable). The State of Minnesota contributed $278,338 of fire state aid to the plan
on behalf of the City Fire Department for the year ended December 31, 2024, which was recorded as a revenue. Required
employer contributions are calculated annually based on statutory provisions. The City’s statutorily-required contributions
to the plan for the year ended December 31, 2024 was $0. The City’s contributions were equal to the required
contributions as set by state statute. The City made no voluntary contributions to the plan. The firefighter has no
obligation to contribute to the plan.
87
City of Chanhassen, Minnesota
Notes to the Financial Statements
December 31, 2025
Note 11: Defined Benefit Pension Plans - Fire Relief Association (Continued)
D. Pension Costs
At December 31, 2025, the City reported a net pension liability (asset) of $252,306 for the Volunteer Firefighter Fund. The
net pension liability (asset) was measured as of December 31, 2024. The following table presents the changes in net
pension liability (asset) during the year:
Total Plan Net
Pension Fiduciary Pension
Liability Net Position Liability (Asset)
(a)(b)(a-b)
Beginning Balance January 1, 2024 2,447,346$ 2,486,193$ (38,847)$
Changes for the Year
Service cost 118,936 - 118,936
Interest 119,580 - 119,580
Contributions - nonemployer contributing member - 278,071 (278,071)
Net investment income - 197,234 (197,234)
Benefit payments (349,382) (349,382) -
Administrative expense - (23,330) 23,330
Total Net Changes (110,866) 102,593 (213,459)
Ending Balance December 31, 2024 2,336,480$ 2,588,786$ (252,306)$
For the year ended December 31, 2025, the City recognized pension expense of $327,092.
At December 31, 2025, the City reported its deferred outflows of resources and deferred inflows of resources, and its
contributions subsequent to the measurement date, to the plan from the following sources:
Deferred Deferred
Outflows Inflows
of Resources of Resources
Differences Between Expected and Actual Experience -$ 260,395$
Net Difference Between Projected and Actual Earnings on Plan Investments 32,812 -
Contributions to Plan Subsequent to the Measurement Date 315,569 -
Total 348,381$ 260,395$
Note that the difference between projected and actual earnings on plan investments have been presented net.
Deferred outflows of resources totaling $315,569 related to pensions resulting from the City’s contributions to the plan
subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended
December 31, 2026. Other amounts reported as deferred outflows of resources related to the plan will be recognized in
pension expense as follows:
2026 (97,586)$
2027 (77,535)
2028 (37,404)
2029 (15,058)
88
City of Chanhassen, Minnesota
Notes to the Financial Statements
December 31, 2025
Note 11: Defined Benefit Pension Plans - Fire Relief Association (Continued)
E. Actuarial Assumptions
The total pension liability at December 31, 2025 was determined using the entry age normal actuarial cost method and
the following actuarial assumptions:
Inflation Rate 3.00%
Investment Rate of Return 5.00%
Discount Rate 5.00%
F. Discount Rate
The discount rate used to measure the total pension liability was 5.0 percent. The projection of cash flows used to
determine the discount rate assumed that contributions to the plan will be made as specified in statute. Based on that
assumption and considering the funding ratio of the plan, the fiduciary net position was projected to be available to make
all projected future benefit payments of current active and inactive members. 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 City’s net pension liability (asset) for the plan, calculated using the discount rate disclosed in
the preceding paragraph, as well as what the City’s net pension liability (asset) would be if it were calculated using a
discount rate 1 percent lower or 1 percent higher than the current discount rate:
1 Percent 1 Percent
Decrease (4.0%)Current (5.0%)Increase (6.0%)
Defined Benefit Plan (125,558)$ (252,306)$ (368,786)$
H. Asset Allocation
The long-term expected rate of return on pension plan investments was set based on the plan’s target investment
allocation along with long-term return expectations by asset class. All economic assumptions were based on input from
various published sources and projected future financial data available.
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
Stock & Mutual Funds 60.00 %5.20 %
Fixed Income 30.00 0.60
Other 5.00 0.60
Cash 5.00 -
Total 100.00 %
Long-term
Target Expected Real
Allocation Rate of Return
I. Pension Plan Fiduciary Net Position
The Association issues a publicly available financial report. The report may be obtained by writing to the Chanhassen
Firefighters Relief Association, PO Box 97, 7610 Laredo Drive, Chanhassen, MN 55317.
89
Note 12: Postemployment Benefits Other Than Pensions
A. Plan Description
At December 31, 2025, the following employees were covered by the benefit terms:
Inactive Plan Members or Beneficiaries Currently Receiving Benefit Payments 3
Active Plan Members 83
Total Plan Members 86
B. Funding Policy
The City operates a single-employer retiree benefit plan (“the Plan”) that provides health, life, and dental insurance to
eligible employees and their families through the City’s health insurance plan. The full cost of the benefits is covered by
the plan. Benefit and eligibility provisions are established through negotiations between the City and various unions
representing City employees and are renegotiated at the end of each agreement. The Plan does not issue a publicly
available report and is not administered through a trust or equivalent arrangement and thus there are no assets
accumulated in a GASB-compliant trust.
The City is required by State Statute to allow retirees to continue participation in the City’s group health insurance plan if
the individual terminates service with the City through service retirement or disability retirement. Employees who satisfy
the rule of 80 or attain age 55 and have completed 10 years of service at termination can immediately commence
medical benefits. Retirees may obtain dependent coverage while the participating retiree is under age 65. Covered
spouses may continue coverage after the retiree’s death. The surviving spouse of an active employee may continue
coverage in the group health insurance plan after the employee’s death.
All health care is provided through the City’s group health insurance plans. The retiree is required to pay 100% of their
premium cost for the City-sponsored health insurance plan in which they participate. The premium is a blended rate
determined on the entire active and retiree population. Since the projected claims costs for retirees exceed the blended
premium paid by retirees, the retirees are receiving an implicit rate subsidy (benefit). The coverage levels are the same
as those afforded to active employees. Upon a retiree reaching age 65, Medicare becomes the primary insurer and the
City’s plan becomes secondary.
For the year ended December 31, 2025, the City's average contribution rate was 2.83 percent of covered-employee
payroll. For the fiscal year 2025, the City did not directly contribute to the plan. The General fund is typically used to
liquidate the governmental portion of the net OPEB obligation.
City of Chanhassen, Minnesota
Notes to the Financial Statements
December 31, 2025
90
Note 12: Postemployment Benefits Other Than Pensions (Continued)
C. Actuarial Methods and Assumptions
Discount Rate 4.83%
Expected Long-Term Investment Return N/A
20-Year Municipal Bond Yield 4.83%
Inflation Rate 3.00%
Salary Increases 8.0% in 2025, trending down 0.5% every year after
to an ultimate rate of 4.5%
D. Changes in the Total OPEB Liability
Total OPEB
Liability
Balances at December 31, 2024 210,955$
Changes for the Year
Service Costs 18,347
Interest Costs 9,208
Assumption Changes 14,177
Differences between expected and actual experience 7,033
Benefit Payment (28,605)
Net Changes 20,160
Balances at December 31, 2025 231,115$
Mortality assumptions are set to reflect general population trends based upon Pub-2010 Mortality tables and the most
recent generational projected scale MP-2021.
Notes to the Financial Statements
December 31, 2025
Assets were projected using expected benefit payments and expected asset returns. Expected benefit payments by year
were discounted using the expected asset return assumption for years in which the assets were sufficient to pay all
benefit payments. Any remaining benefit payments after the trust fund is exhausted are discounted at the 20-year
municipal bond rate. The equivalent single rate is the discount rate.
The actuarial assumptions used in the valuation were based on input from a variety of published sources of historical
and projected future financial data. Each assumption was reviewed for reasonableness with the source information as
well as for consistency with the other economic assumptions.
The City’s total OPEB liability of $231,115 was measured as of December 31, 2025, and the OPEB liability was
determined by an actuarial valuation as of January 1, 2026.
The total OPEB liability in the January 1, 2026 actuarial valuation was determined using the following actuarial
assumptions, applied to all periods included in the measurement, unless otherwise specified:
City of Chanhassen, Minnesota
91
Note 12: Postemployment Benefits Other Than Pensions (Continued)
Notes to the Financial Statements
December 31, 2025
City of Chanhassen, Minnesota
Since the prior measurement date, the following assumptions changed:
Since the prior measurement date, the following plan provisions changed:
Since the prior measurement date, the following benefit terms changed:
E. Sensitivity of the Net OPEB Liability
1 Percent Discount Rate 1 Percent
Decrease 3.83%Current 4.83%Increase 5.83%
245,923$ 231,115$ 217,415$
Healthcare Cost
1 Percent Decrease Trend Rates 1 Percent Increase
212,089$ 231,115$ 253,231$
The following presents the net OPEB liability of the City, as well as what the City’s net OPEB 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:
• None
The following presents the City’s net OPEB liability, as well as what the City’s net OPEB liability would be if it were
calculated using a healthcare cost trend rate one percentage point lower or one percentage point higher than the current
healthcare cost trend rate:
• None
• Healthcare trend rates were reset to an initial rate of 8.00% in 2026 decreasing annually by 0.25% to an ultimate rate
of 4.50%. Rising GLP-1 drug (diabetic/weight loss drug) usage is driving increased pre-65 trends. The initial trend rate
considered employer history, national trends, professional judgment, and data from government agencies. Healthcare
cost trend rates integrated these factors and additionally incorporated both short-term and long-term expectations.
This change caused a significant increase in liabilities.
h d d h d b b d h ld f l bl
7.0% Decreasing to
3.50%
8.0% Decreasing to
4.50%
9.0% Decreasing to
5.50%
92
Note 12: Postemployment Benefits Other Than Pensions (Continued)
Notes to the Financial Statements
December 31, 2025
City of Chanhassen, Minnesota
F. OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB
Deferred Deferred
Outflows Inflows
of Resources of Resources
Differences Between Expected and Actual Economic Experience 52,047$ 63,994$
Changes in Actuarial Assumptions 30,730 12,119
Total 82,777$ 76,113$
(5,650)$
(4,830)
2,935
2,733
6,087
Thereafter 5,389
For the year ended December 31, 2025, the City Recognized negative OPEB expense of $20,160. At December 31, 2025,
the City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following
sources:
2029
2030
2026
2028
2027
Other amounts reported as deferred outflows and inflows of resources related to OPEB will be recognized in pension
expense as follows:
93
City of Chanhassen, Minnesota
Notes to the Financial Statements
December 31, 2025
Note 13: Other Information
A. Legal Debt Margin
In accordance with Minnesota statutes, the City may not incur or be subject to net debt in excess of three percent of the
market value of taxable property within the City. Net debt is payable solely from ad valorem taxes and therefore, excludes
debt financed partially or entirely by special assessments, enterprise fund revenues, or tax increments.
B. Risk Management
The City 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 City carries insurance. The City 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 City 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 amount for each insurance event. Settled claims have not exceeded the City’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 City’s management is
not aware of any incurred but not reported claims.
C. Tax Abatements
The City occasionally provides tax abatements pursuant to Minnesota Statutes Sections 469.174 to 469.1794 (Tax
Increment Financing) through a pay-as-you-go note program. Tax increment financing (TIF) can be used to encourage
private development, redevelopment, renovation and renewal, growth in low-to-moderate-income housing, and economic
development within the City. TIF captures the increase in tax capacity and property taxes from development or
redevelopment to provide funding for the related project.
The City has two tax increment districts, which have outstanding pay-as-you-go revenue notes. The notes are not a
general obligation of the City and is payable solely from available tax increments. Accordingly, the notes are not
reflected in the financial statements of the City. Details of the pay-as-you-go revenue notes are as follows:
Tax Increment Revenue Note (Frontier Redevelopment) - issued in 2020 in the principal sum of $1,300,000 with an interest
rate of 5.0% per annum. Principal and interest payments shall be paid commencing August 1, 2020, and each February 1
and August 1 thereafter to and including February 1, 2045. Payments are payable solely from tax increments, which shall
mean 95% of the tax increments derived from the tax increment property and received by the City. The payment
reimburses the developer for street, utilities, right-of-way, land acquisition, and other public improvements. The City shall
have no obligation to pay unpaid balance of principal or accrued interest that may remain after the final payment on
February 1, 2045. Current year abatement (TIF note payments) amount to $246,431. At December 31, 2025, the principal
amount outstanding on the note was $0.
Tax Increment Revenue Note (Lakes at Chanhassen LLC) - issued in 2023 in the principal sum of $3,065,000 with no
interest. Principal and interest payments shall be paid commencing August 1, 2023, and each February 1 and August 1
thereafter to and including February 1, 2042. Payments are payable solely from tax increments, which shall mean 90% of
the tax increments derived from the tax increment property and received by the City. The payment reimburses the
developer for the construction of affordable housing. The City shall have no obligation to pay unpaid balance of principal
or accrued interest that may remain after the final payment on February 1, 2042. Current year abatement (TIF note
payments) amount to $172,435. At December 31, 2025, the principal amount outstanding on the note was $2,730,212.
94
REQUIRED SUPPLEMENTARY INFORMATION
CITY OF CHANHASSEN
CHANHASSEN, MINNESOTA
FOR THE YEAR ENDED
DECEMBER 31, 2025
95
Schedule of Employer’s Share of PERA Net Pension Liability - General Employees Retirement Fund
State's
Proportionate
City's Share of
Proportionate the Net Pension
Share of Liability City's
Fiscal the Net Pension Associated with Covered
Year Liability the City Total Payroll
Ending (a)(b)(a+b)(c)
6/30/2025 0.0778 %2,578,850$ 62,210$ 2,641,060$ 7,047,924$ 36.6 %90.8 %
6/30/2024 0.0783 2,896,284 74,892 2,971,176 6,630,559 43.7 89.1
6/30/2023 0.0819 4,579,756 95,109 4,674,865 6,511,778 70.3 83.1
6/30/2022 0.0830 6,573,627 116,850 6,690,477 6,058,627 108.5 76.7
6/30/2021 0.0768 3,279,704 59,983 3,339,687 5,654,500 58.0 87.0
6/30/2020 0.0741 4,442,634 83,038 4,525,672 5,332,860 83.3 79.1
6/30/2019 0.0727 4,019,420 74,330 4,093,750 5,158,453 77.9 80.2
6/30/2018 0.0760 4,216,168 77,700 4,293,868 5,036,733 83.7 79.5
6/30/2017 0.0751 4,794,334 32,757 4,827,091 4,869,567 98.5 75.9
6/30/2016 0.0759 6,162,704 40,405 6,203,109 4,703,280 131.0 68.9
Schedule of Employer’s PERA Contributions - General Employees Retirement Fund
Contributions in
Relation to the Contributions as
Statutorily Statutorily Contribution City's a Percentage of
Required Required Deficiency Covered Covered
Year Contribution Contribution (Excess)Payroll Payroll
Ending (a)(b)(a-b)(c)(b/c)
12/31/2025 543,195$ 543,195$ -$ 7,242,597$ 7.50 %
12/31/2024 513,282 513,282 - 6,843,766 7.50
12/31/2023 490,256 490,256 - 6,536,751 7.50
12/31/2022 477,007 477,007 - 6,360,093 7.50
12/31/2021 438,328 438,328 - 5,844,373 7.50
12/31/2020 409,847 409,847 - 5,464,627 7.50
12/31/2019 390,082 390,082 - 5,201,093 7.50
12/31/2018 383,686 383,686 - 5,115,813 7.50
12/31/2017 371,824 371,824 - 4,957,653 7.50
12/31/2016 358,611 358,611 - 4,781,480 7.50
City of Chanhassen, Minnesota
Required Supplementary Information
For the Year Ended December 31, 2025
Proportionate
City's
Share of the
Net Pension
Liability as a Plan Fiduciary
City's Percentage of Net Position
Proportion of Covered as a Percentage
the Net Pension Payroll of the Total
Liability (a/c)Pension Liability
96
Notes to the Required Supplementary Information - General Employee Retirement Fund
City of Chanhassen, Minnesota
Changes in Actuarial Assumptions
2025 - The combined service annuity loading factors increased from 15% to 19% for vested terminated members and from 3% to 44% for non-
vested, terminated members. The assumed post-retirement benefit increase changed from 1.25% to 1.5%.
2024 - The following changes in assumptions are effective with the July 1, 2024 valuation, as recommended in the most recent experience study
(dated June 29, 2023): Rates of merit and seniority were adjusted, resulting in slightly higher rates. Assumed rates of retirement were adjusted
as follows: increase the rate of assumed unreduced retirements, slight adjustments to Rule of 90 retirement rates, and slight adjustments to
early retirement rates for Tier 1 and Tier 2 members. Minor increase in assumed withdrawals for males and females. Lower rates of disability.
Continued use of Pub-2010 general mortality table with slight rate adjustments as recommended in the most recent experience study. Minor
changes to form of payment assumptions for male and female retirees. Minor changes to assumptions made with respect to missing
participant data.
2023 - The investment return and single discount rates were changed from 6.5 percent to 7.0 percent.
2022 - The mortality improvement scale was changed from Scale MP-2020 to Scale MP-2021.
2021 - The investment return and single discount rates were changed from 7.50 percent to 6.50 percent, for financial reporting purposes. The
mortality improvement scale was changed from Scale MP-2019 to Scale MP-2020.
2020 - The price inflation assumption was decreased from 2.50% to 2.25%. The payroll growth assumption was decreased from 3.25% to 3.00%.
Assumed salary increase rates were changed as recommended in the June 30, 2019 experience study. The net effect is assumed rates that
average 0.25% less than previous rates. Assumed rates of retirement were changed as recommended in the June 30, 2019 experience study.
The changes result in more unreduced (normal) retirements and slightly fewer Rule of 90 and early retirements. Assumed rates of termination
were changed as recommended in the June 30, 2019 experience study. The new rates are based on service and are generally lower than the
previous rates for years 2-5 and slightly higher thereafter. Assumed rates of disability were changed as recommended in the June 30, 2019
experience study. The change results in fewer predicted disability retirements for males and females. The base mortality table for healthy
annuitants and employees was changed from the RP-2014 table to the Pub-2010 General Mortality table, with adjustments. The base mortality
table for disabled annuitants was changed from the RP-2014 disabled annuitant mortality table to the PUB-2010 General/Teacher disabled
annuitant mortality table, with adjustments. The mortality improvement scale was changed from Scale MP-2018 to Scale MP-2019. The
assumed spouse age difference was changed from two years older for females to one year older. The assumed number of married male new
retirees electing the 100% Joint & Survivor option changed from 35% to 45%. The assumed number of married female new retirees electing the
100% Joint & Survivor option changed from 15% to 30%. The corresponding number of married new retirees electing the Life annuity option was
adjusted accordingly.
2019 - The mortality projection scale was changed from MP-2017 to MP-2018.
2018 - The mortality projection scale was changed from MP-2015 to MP-2017. The assumed benefit increase was changed from 1.00 percent
per year through 2044 and 2.50 percent per year thereafter to 1.25 percent per year.
2017 - The Combined Service Annuity (CSA) loads were changed from 0.8 percent for active members and 60 percent for vested and non-vested
deferred members. The revised CSA loads are now 0.0 percent for active member liability, 15.0 percent for vested deferred member liability and
3.0 percent for non-vested deferred member liability. The assumed post-retirement benefit increase rate was changed from 1.0 percent per year
for all years to 1.0 percent per year through 2044 and 2.5 percent per year thereafter.
2016 - The assumed post-retirement benefit increase rate was changed from 1.0 percent per year through 2035 and 2.5 percent per year
thereafter to 1.0 percent per year for all future years. The assumed investment return was changed from 7.9 percent to 7.5 percent. The single
discount rate was changed from 7.9 percent to 7.5 percent. Other assumptions were changed pursuant to the experience study dated June 30,
2015. The assumed future salary increases, payroll growth and inflation were decreased by 0.25 percent to 3.25 percent for payroll growth and
2.50 percent for inflation.
Required Supplementary Information (Continued)
For the Year Ended December 31, 2025
97
City of Chanhassen, Minnesota
Required Supplementary Information (Continued)
For the Year Ended December 31, 2025
Notes to the Required Supplementary Information - General Employee Retirement Fund (Continued)
Changes in Plan Provisions
2025 - The post-retirement benefit increase formula changed to 100% of the Social Security annual increase, between 1% and 1.75% , beginning
January 1, 2026. If the funded ratio (on a market value of assets basis) is less than 85% for the last two consecutive annual valuations or is less
than 80% in the most recent actuarial valuation, the maximum is reduced to 1.5%. Previously, the benefit increase was 50% of the Social Security
annual increase, between 1% and 1.5%.The 1% additional employer contribution is eliminated when the plan reaches 98% funded status (on an
actuarial value of assets basis); this contribution was previously scheduled to stop when the plan reached 100% funded status.
2024 - The workers’ compensation offset for disability benefits was eliminated. The actuarial equivalent factors updated to reflect the changes
in assumptions.
2023 - An additional one-time direct state aid contribution of $170.1 million will be contributed to the Plan on October 1, 2023. The vesting
period of those hired after June 30, 2010, was changed from five years of allowable service to three years of allowable service. The benefit
increase delay for early retirements on or after January 1, 2024 was eliminated. A one-time non-compounding benefit increase of 2.5 percent
minus the actual 2024 adjustment will be payable in a lump sum for calendar year 2024 by March 31, 2024.
2022 - There were no changes in plan provisions since the previous valuation.
2021 - There were no changes in plan provisions since the previous valuation.
2020 - Augmentation for current privatized members was reduced to 2.0% for the period July 1, 2020 through December 31, 2023 and 0.0% after.
Augmentation was eliminated for privatizations occurring after June 30, 2020.
2019 - The employer supplemental contribution was changed prospectively, decreasing from $31.0 million to $21.0 million per year. The state’s
special funding contribution was changed prospectively, requiring $16.0 million due per year through 2031.
2018 - The augmentation adjustment in early retirement factors is eliminated over a five-year period starting July 1, 2019, resulting in actuarial
equivalence after June 30, 2024. Interest credited on member contributions decreased from 4.0 percent to 3.0 percent, beginning July 1, 2018.
Deferred augmentation was changed to 0.0 percent, effective January 1, 2019. Augmentation that has already accrued for deferred members
will still apply. Contribution stabilizer provisions were repealed. Postretirement benefit increases were changed from 1.0 percent per year with a
provision to increase to 2.5 percent upon attainment of 90.0 percent funding ratio to 50.0 percent of the Social Security Cost of Living
Adjustment, not less than 1.0 percent and not more than 1.5 percent, beginning January 1, 2019. For retirements on or after January 1, 2024, the
first benefit increase is delayed until the retiree reaches normal retirement age; does not apply to Rule of 90 retirees, disability benefit recipients,
or survivors. Actuarial equivalent factors were updated to reflect revised mortality and interest assumptions.
2017 - The State’s contribution for the Minneapolis Employees Retirement Fund equals $16,000,000 in 2017 and 2018, and $6,000,000
thereafter. The Employer Supplemental Contribution for the Minneapolis Employees Retirement Fund changed from $21,000,000 to $31,000,000
in calendar years 2019 to 2031. The state’s contribution changed from $16,000,000 to $6,000,000 in calendar years 2019 to 2031.
2016 - There were no changes in plan provisions since the previous valuation.
98
City of Chanhassen, Minnesota
Required Supplementary Information (Continued)
For the Year Ended December 31, 2025
Schedule of Employer’s Share of PERA Net Pension Liability - Police and Fire Fund
State's
Proportionate
City's Share of
Proportionate the Net Pension
Share of Liability City's
Fiscal the Net Pension Associated with Covered
Year Liability the City Total Payroll
Ending (a)(b)(a+b)(c)
6/30/2025 0.0595 %697,489$ 24,178$ 721,667$ 903,468$ 77.2 %91.8 %
6/30/2024 0.0612 805,121 30,691 835,812 847,428 95.0 90.2
6/30/2023 0.0506 873,796 129,787 1,003,583 663,845 131.6 86.5
6/30/2022 0.0319 1,388,162 358,279 1,746,441 374,492 370.7 70.5
6/30/2021 0.0220 169,817 59,909 229,726 272,672 62.3 93.7
6/30/2020 0.0200 263,621 59,909 323,530 225,881 116.7 87.2
6/30/2019 0.0205 218,243 - 218,243 214,818 101.6 89.3
6/30/2018 0.0193 205,718 - 205,718 204,083 100.8 88.8
6/30/2017 0.0190 256,523 - 256,523 195,685 131.1 85.4
6/30/2016 0.0190 762,503 - 762,503 186,534 408.8 63.9
Schedule of Employer’s PERA Contributions - Police and Fire Fund
Contributions in
Relation to the Contributions as
Statutorily Statutorily Contribution City's a Percentage of
Required Required Deficiency Covered Covered
Year Contribution Contribution (Excess)Payroll Payroll
Ending (a)(b)(a-b)(c)(b/c)
12/31/2025 165,988$ 165,988$ -$ 937,785$ 17.70 %
12/31/2024 161,628 161,628 - 913,153 17.70
12/31/2023 135,550 135,550 - 765,817 17.70
12/31/2022 86,742 86,742 - 490,068 17.70
12/31/2021 55,996 55,996 - 316,362 17.70
12/31/2020 40,530 40,530 - 228,983 17.70
12/31/2019 37,761 37,761 - 222,779 16.95
12/31/2018 33,511 33,511 - 206,858 16.20
12/31/2017 32,612 32,612 - 201,309 16.20
12/31/2016 30,790 30,790 - 190,062 16.20
Net Pension
Proportionate
Share of the
City's
Liability as a
Percentage of Net Position
Proportion of Covered as a Percentage
Plan Fiduciary
City's
the Net Pension Payroll of the Total
Liability (a/c)Pension Liability
99
City of Chanhassen, Minnesota
Required Supplementary Information (Continued)
For the Year Ended December 31, 2025
Notes to the Required Supplementary Information - Police and Fire Fund
Changes in Actuarial Assumptions
2025 - Assumed rates of salary increases were reduced slightly. Assumed rates of retirement were adjusted, resulting in an overall increase in
unreduced (full) retirements and an overall increase in reduced (early) retirements. Assumed rates of withdrawal were modified; the new rates
will increase predicted terminations, especially in the first few years of employment. Assumed rates of disabled retirement were significantly
increased, especially for ages over age 30. Continued used of Pub-2010 Public Safety Mortality Table with rates adjusted to better fit observed
experience. Percent married assumption for female retirees lowered from 70% to 65%. Minor changes were made to form of payment
assumptions for retirees. Minor changes were made to assumptions made with respect to missing participant data. The combined service
annuity load changed from 33% to 13% for vested, terminated members and from 2% to 38% for non-vested, terminated members.
2024 - There were no changes in actuarial assumptions since the previous valuation.
2023 - The investment return assumption was changed from 6.5 percent to 7.0 percent. The single discount rate changed from 5.4 percent to
7.0 percent.
2022 - The mortality improvement scale was changed from Scale MP-2020 to Scale MP-2021. The single discount rate changed from 6.50
percent to 5.40 percent.
2021 - The investment return and single discount rates were changed from 7.5 percent to 6.5 percent, for financial reporting purposes. The
inflation assumption was changed from 2.5 percent to 2.25 percent. The payroll growth assumption was changed from 3.25 percent to 3.0
percent. The base mortality table for healthy annuitants and employees was changed from the RP-2014 table to the Pub-2010 Public Safety
Mortality table. The mortality improvement scale was changed from MP-2019 to MN-2020. The base mortality table for disabled annuitants was
changed from the RP-2014 healthy annuitant mortality table (with future mortality improvement according to Scale MP-2019) to the Pub-2010
Public Safety disabled annuitant mortality table (with future mortality improvement according to Scale MP-2020). Assumed rates of salary
increase were modified as recommended in the July 14, 2020 experience study. The overall impact is a decrease in gross salary increase rates.
Assumed rates of retirement were changed as recommended in the July 14, 2020 experience study. The changes result in slightly more
unreduced retirements and fewer assumed early retirements. Assumed rates of withdrawal were changed from select and ultimate rates to
service-based rates. The changes result in more assumed terminations. Assumed rates of disability were increased for ages 25-44 and
decreased for ages over 49. Overall, proposed rates result in more projected disabilities. Assumed percent married for active female members
was changed from 60.0 percent to 70.0 percent. Minor changes to form of payment assumptions were applied.
2020 - The mortality projection scale was changed from MP-2018 to MP-2019.
2019 - The mortality projection scale was changed from MP-2017 to MP-2018.
2018 - The mortality projection scale was changed from MP-2016 to MP-2017.
2017 - Assumed salary increases were changed as recommended in the June 30, 2016 experience study. The net effect is proposed rates that
average 0.34 percent lower than the previous rates. Assumed rates of retirement were changed, resulting in fewer retirements. The Combined
Service Annuity (CSA) load was 30 percent for vested and non-vested deferred members. The CSA has been changed to 33 percent for vested
members and 2 percent for non-vested members. The base mortality table for healthy annuitants was changed from the RP-2000 fully
generational table to the RP-2014 fully generational table (with a base year of 2006), with male rates adjusted by a factor of 0.96. The mortality
improvement scale was changed from Scale AA to Scale MP-2016. The base mortality table for disabled annuitants was changed from the RP-
2000 disabled mortality table to the mortality tables assumed for healthy retirees. Assumed termination rates were decreased to 3.0 percent for
the first three years of service. Rates beyond the select period of three years were adjusted, resulting in more expected terminations overall.
Assumed percentage of married female members was decreased from 65 percent to 60 percent. Assumed age difference was changed from
separate assumptions for male members (wives assumed to be three years younger) and female members (husbands assumed to be four years
older) to the assumption that males are two years older than females. The assumed percentage of female members electing joint and survivor
annuities was increased. The assumed post-retirement benefit increase rate was changed from 1.0 percent for all years to 1.0 percent per year
through 2064 and 2.5 percent thereafter. The single discount rate was changed from 5.6 percent to 7.5 percent.
2016 - The assumed post-retirement benefit increase rate was changed from 1.0 percent per year through 2037 and 2.5 percent per year
thereafter to 1.0 percent per year for all future years. The assumed investment return was changed from 7.9 percent to 7.5 percent. The single
discount rate was changed from 7.9 percent to 5.6 percent. The assumed future salary increases, payroll growth and inflation were decreased
by 0.25 percent to 3.25 percent for payroll growth and 2.5 percent for inflation.
100
City of Chanhassen, Minnesota
Required Supplementary Information (Continued)
For the Year Ended December 31, 2025
Notes to the Required Supplementary Information - Police and Fire Fund (Continued)
Changes in Plan Provisions
2025 - The period of time needed for benefit recipients to receive their first benefit increase was reduced by one year (from 36 months to 24
months for a full increase). The January 1, 2026 benefit increase changed from 1% to 3%; subsequent January 1 increases will be 1%.
The threshold to end the $9 million annual state aid contribution changed from the earlier of July 1, 2048 or 90% funded for both PERA Police &
Fire and MSRS State Patrol for three consecutive years to 100% funded for both PERA Police & Fire and MSRS State Patrol for three consecutive
years (on an actuarial value of assets basis). The threshold to end the additional $9 million annual state aid contribution changed from the
earlier of July 1, 2048 or 100% funded for a minimum of three consecutive years to 110% funded for a minimum of three consecutive years (on
an actuarial value of assets basis). An additional $17.7 million in direct state aid will be paid annually each October 1 beginning October 1, 2025
through June 30, 2048. Joint and survivor actuarial equivalent factors were updated to reflect changes in assumptions.
2024 - The State contribution of $9.0 million per year will continue until the earlier of 1) both the Police and Fire Plan and the State Patrol
Retirement Fund attain 90.0 percent funded status for three consecutive years (on an actuarial value of assets basis) or 2) July 1, 2048. The
contribution was previously due to expire after attaining a 90.0 percent funded status for one year. The additional $9.0 million contribution will
continue until the Police and Fire Plan is fully funded for a minimum of three consecutive years on an actuarial value of assets basis, or July 1,
2048, whichever is earlier. This contribution was previously due to expire upon attainment of fully funded status on an actuarial value of assets
basis for one year (or July 1, 2048 if earlier).
2023 - An additional one-time direct state aid contribution of $19.4 million will be contributed to the Plan on October 1, 2023. The vesting
requirement for new hires after June 30, 2014 was changed from a graded 20-year vesting schedule to a graded 10-year vesting schedule, with
50 percent vesting after five years increasing incrementally to 100 percent after 10 years. A one-time non-compounding benefit increase of 3.0
percent will be payable in a lump sum for calendar year 2024 by March 31, 2024. Psychological treatment is required effective July 1, 2023 prior
to approval for a duty disability benefit for a psychological condition relating to the member’s occupation. The total and permanent duty
disability was increased, effective July 1, 2023.
2022 - There were no changes in plan provisions since the previous valuation.
2021 - There were no changes in plan provisions since the previous valuation.
2020 - There were no changes in plan provisions since the previous valuation.
2019 - There were no changes in plan provisions since the previous valuation.
2018 - As set by statute, the assumed post-retirement benefit increase was changed from 1.0 percent per year through 2064 and 2.5 percent per
year, thereafter, to 1.0 percent for all years, with no trigger. An end date of July 1, 2048 was added to the existing $9 million state contribution.
New annual state aid will equal $4.5 million in fiscal years 2019 and 2020, and $9 million thereafter until the plan reaches 100 percent funding,
or July 1, 2048, if earlier. Member contributions were changed from 10.8 percent to 11.3 percent of pay, effective January 1, 2019 and 11.8
percent of pay, effective January 1, 2020. Employer contributions were changed from 16.2 percent to 16.95 percent of pay, effective January 1,
2019 and 17.7 percent of pay, effective January 1, 2020. Interest credited on member contributions decreased from 4.0 percent to 3.0 percent,
beginning July 1, 2018. Deferred augmentation was changed to 0.0 percent, effective January 1, 2019. Augmentation that has already accrued
for deferred members will still apply. Actuarial equivalent factors were updated to reflect revised mortality and interest assumptions.
2017- Assumed salary increases were changed as recommended in the June 30, 2016 experience study. The net effect is proposed rates that
average 0.34 percent lower than the previous rates. Assumed rates of retirement were changed, resulting in fewer retirements. The combined
service annuity (CSA) load was 30.0 percent for vested and non-vested, deferred members. The CSA has been changed to 33.0 percent for
vested members and 2.0 percent for non-vested members. The base mortality table for healthy annuitants was changed from the RP-2000 fully
generational table to the RP-2014 fully generational table (with a base year of 2006), with male rates adjusted by a factor of 0.96. The mortality
improvement scale was changed from Scale AA to Scale MP-2016. The base mortality table for disabled annuitants was changed from the RP-
2000 disabled mortality table to the mortality tables assumed for healthy retirees. Assumed termination rates were decreased to 3.0 percent for
the first three years of service. Rates beyond the select period of three years were adjusted, resulting in more expected terminations overall.
Assumed percentage of married female members was decreased from 65.0 percent to 60.0 percent. Assumed age difference was changed
from separate assumptions for male members (wives assumed to be three years younger) and female members (husbands assumed to be four
years older) to the assumption that males are two years older than females. The assumed percentage of female members electing joint and
survivor annuities was increased. The assumed postretirement benefit increase rate was changed from 1.0 percent for all years to 1.0 percent
per year through 2064 and 2.5 percent thereafter. The single discount rate was changed from 5.6 percent per annum to 7.5 percent per annum.
2016 - There were no changes in plan provisions since the previous valuation.
101
City of Chanhassen, Minnesota
Required Supplementary Information (Continued)
For the Year Ended December 31, 2025
Schedule of Changes in the Fire Relief Association’s Net Pension Liability (Asset) and Related Ratios
2016 2017 2018 2019
(Fire Relief (Fire Relief (Fire Relief (Fire Relief
Report Report Report Report
Date 2016)Date 2017)Date 2018)Date 2019)
Total Pension Liability
Service cost 88,924$ 88,924$ 143,922$ 143,922$
Interest 128,235 127,729 149,836 154,784
Changes of benefit terms - 212,120 - -
Differences between expected and actual experience - 5,145 - (79,049)
Changes of assumptions (203) 231,636 (1,074) (902)
Benefit payments, including refunds
of employee contributions (113,883) (340,243) (216,595) (170,835)
Net Change in Total Pension Liability 103,073 325,311 76,089 47,920
Total Pension Liability - January 1 2,532,712 2,635,785 2,961,096 3,037,185
Total Pension Liability - December 31 (A)2,635,785$ 2,961,096$ 3,037,185$ 3,085,105$
Plan Fiduciary Net Position
Contributions - employer -$ -$ 54,749$ 47,399$
Contributions - state 177,831 181,554 184,695 190,045
Net investment income 158,581 306,593 (130,928) 328,474
Benefit payments, including refunds
of employee contributions (113,883) (340,243) (216,595) (170,835)
Administrative expense (16,972) (14,875) (17,350) (16,386)
Other 500 29,900 - -
Net Change in Plan Fiduciary Net Position 206,057 162,929 (125,429) 378,697
Plan Fiduciary Net Position - January 1 1,907,513 2,113,570 2,276,499 2,151,070
Plan Fiduciary Net Position - December 31 (B)2,113,570$ 2,276,499$ 2,151,070$ 2,529,767$
Fire Relief's Net Pension Liability (Asset) -
December 31 (A-B)522,215$ 684,597$ 886,115$ 555,338$
Plan Fiduciary Net Position As a Percentage
Of the Total Pension Liability (B/A)80.19%76.88%70.82%82.00%
Covered-Employee Payroll N/A N/A N/A N/A
Fire Relief's Net Pension Liability (Asset)
as a Percentage of Covered-Employee Payroll N/A N/A N/A N/A
Beginning in 2021, the City's net pension liability was measured using a one-year lookback option.
102
2020 2021 2022 2023 2024 2025
(Fire Relief (Fire Relief (Fire Relief (Fire Relief (Fire Relief (Fire Relief
Report Report Report Report Report Report
Date 2020)Date 2020)Date 2021)Date 2022)Date 2023)Date 2024)
150,695$ 150,695$ 154,968$ 127,784$ 127,784$ 118,936$
156,622 156,622 161,407 143,544 142,367 119,580
- - - - - -
76,350 76,350 (126,365) - (520,791) -
58,144 58,144 233 - - -
(206,737) (206,737) (494,030) (546,601) (43,133) (349,382)
235,074 235,074 (303,787) (275,273) (293,773) (110,866)
3,085,105 3,085,105 3,320,179 3,016,392 2,741,119 2,447,346
3,320,179$ 3,320,179$ 3,016,392$ 2,741,119$ 2,447,346$ 2,336,480$
31,957$ 31,957$ -$ 42,580$ -$ -$
203,495 203,495 211,227 230,795 253,656 278,071
237,593 237,593 231,675 (323,036) 220,398 197,234
(206,737) (206,737) (494,030) (546,601) (43,133) (349,382)
(16,000) (16,000) (19,800) (11,350) (25,320) (23,330)
- - (20,943) - - -
250,308 250,308 (91,871) (607,612) 405,601 102,593
2,529,767 2,529,767 2,780,075 2,688,204 2,080,592 2,486,193
2,780,075$ 2,780,075$ 2,688,204$ 2,080,592$ 2,486,193$ 2,588,786$
540,104$ 540,104$ 328,188$ 660,527$ (38,847)$ (252,306)$
83.73%83.73%89.12%75.90%101.59%110.80%
N/A N/A N/A N/A N/A N/A
N/A N/A N/A N/A N/A N/A
103
City of Chanhassen, Minnesota
Required Supplementary Information (Continued)
For the Year Ended December 31, 2025
Notes to the Required Supplementary Information – Fire Relief Association
Changes in Actuarial Assumptions
2025 – No changes since prior report.
2024 – No changes since prior report.
2023 - No changes since prior report.
2022 - The mortality table used to measure funding liability has been changed from SOA Public Safety-2010 Mortality with
the MP-2019 Mortality Improvement Scale to the PubS-2010 Mortality Table Projected Generationally from 2010 with the
MP-2020 Mortality Improvement Scale.
2020 - The mortality assumption was updated from the PubS-2010 Mortality Table Projected Generationally from 2010
with the MP-2019 Mortality Improvement Scale to the PubS-2010 Mortality Table Projected Generationally from 2010 with
the MP-2020 Mortality Improvement Scale.
2019 - The mortality table used to measure funding liability has been changed from RP -2014 Sex Distinct Blue Collar
Mortality with generational improvements beginning in 2006 (based on assumptions developed from the 2017 Social
Security Trustees Report) to PubS-2010 Mortality with generational improvements projected beginning in 2010 based on
SOA Scale MP-2019.
2018 - Mortality assumptions were determined using the RP-2014 Blue Collar Mortality with fully generational
improvements from 2006 based on assumptions from the Social Security Administration’s 2018 trustees report. The
mortality improvement scale used to measure liability has been changed from an improvement scale based on
assumptions developed from the 2017 Social Security Trustees Report to an improvement scaled based on assumptions
developed from the 2018 Social Security trustees Report. The base table (RP-2014 Blue Collar) and year in which
improvements began (2006) remained unchanged. This results in a decrease in liability and service cost.
2017 - The mortality improvement scale has been changed from an improvement scale based on assumptions developed
from the 2016 Social Security Trustees Report to an improvement scale based on assumptions developed from the 2017
Social Security Trustees Report. Disability rates have changed from 0.03% at age 20, grading to 0.33% at age 50 to Class
1 1985 Disability Rates. The lump sum benefit accrual amount has been projected to increase by 9.27% every three years
(3% compounded each year).
2016 - As of December 31, 2016, the mortality assumption was changed to the RP-2014 Blue Collar Mortality with fully
generational improvements from 2006 based on assumptions from the Social Security Administration’s 2016 trustees
report.
104
City of Chanhassen, Minnesota
Required Supplementary Information (Continued)
For the Year Ended December 31, 2025
Schedule of Employer’s Fire Relief Association Contributions
Actuarial Contribution
Determined Employer State of MN Deficiency
Year Contribution Contributions Contributions (Excess)
Ending (a)(b)(c)(a-b-c)
12/31/25 148,320$ -$ 148,320$ -
12/31/24 190,629 - 190,629 -
12/31/23 190,629 42,580 190,629 (42,580)
12/31/22 233,452 - 211,227 22,225
12/31/21 233,452 31,957 203,495 (2,000)
12/31/20 233,452 31,957 203,495 (2,000)
12/31/19 236,444 47,399 190,045 (1,000)
12/31/18 236,444 54,749 184,695 (3,000)
12/31/17 171,760 - 181,554 (9,794)
12/31/16 171,760 - 177,831 (6,071)
105
Schedule of Changes in the City's OPEB Liability and Related Ratios
2018 2019 2020
Total OPEB Liability
Service Costs 14,388$ 13,547$ 13,504$
Interest Costs 7,032 8,738 5,463
Assumption Changes (7,402) 16,736 9,168
Differences between expected and actual experience - (82,370) (12,888)
Benefit Payment (9,869) - (3,343)
Net Change in Total OPEB Liability 4,149 (43,349) 11,904
Total OPEB Liability - Beginning 194,919 199,068 155,719
Total OPEB Liability - Ending 199,068$ 155,719$ 167,623$
Covered - Employee Payroll 5,151,178$ 5,270,695$ 5,588,447$
City's total OPEB liability as a percentage of
covered employee payroll 3.86 %2.95 %3.00
Note: Schedule is intended to show a 10-year trend. Additional years will be reported as they become available.
No assets are accumulated in a trust that meet the criteria in paragraph 4 of GASB Statement No. 75 to pay related benefits.
Changes in assumptions:
Changes in Plan Provisions:
Changes in benefits:
• None
• None
• None
City of Chanhassen, Minnesota
Required Supplementary Information (Continued)
For the Year Ended December 31, 2025
106
2021 2022 2023 2024 2025
15,307$ 18,755$ 14,008$ 21,713$ 18,347$
3,785 4,381 7,514 10,537 9,208
8,015 (17,614) 13,672 (3,197) 14,177
(6,405) (9,225) 68,691 (45,583) 7,033
(8,835) (7,075) (16,946) (28,166) (28,605)
11,867 (10,778) 86,939 (44,696) 20,160
167,623 179,490 168,712 255,651 210,955
179,490$ 168,712$ 255,651$ 210,955$ 231,115$
6,422,681$ 6,720,515$ 7,499,619$ 7,550,593$ 8,154,899$
%2.79 %2.51 %3.41 %2.79 %2.83 %
107
City of Chanhassen, Minnesota
Actual Variance with
Original and Final Amounts Final Budget
Revenues
Taxes 12,090,000$ 11,995,814$ (94,186)$
Franchise fees 145,000 109,617 (35,383)
Licenses and permits 1,591,000 2,945,704 1,354,704
Intergovernmental 557,370 642,665 85,295
Charges for services 1,031,000 1,134,779 103,779
Fines and forfeits 72,000 69,790 (2,210)
Investment earnings 250,000 727,081 477,081
Miscellaneous 59,500 118,780 59,280
Total Revenues 15,795,870 17,744,230 1,948,360
Expenditures
Current
General government 3,663,170 3,577,571 85,599
Public safety 5,769,579 5,551,292 218,287
Public works 3,061,950 3,388,557 (326,607)
Culture and recreation 2,927,742 2,934,137 (6,395)
Community development 703,429 660,001 43,428
Total Expenditures 16,125,870 16,111,558 14,312
Excess (Deficiency) of Revenues
Over (Under) Expenditures (330,000) 1,632,672 1,962,672
Other Financing Sources
Transfers in 330,000 330,000 -
Net Change in Fund Balances - 1,962,672 1,962,672
Fund Balances, January 1 12,122,978 12,122,978 -
Fund Balances, December 31 12,122,978$ 14,085,650$ 1,962,672$
Budgeted Amounts
Budgetary Comparison Schedule
General Fund
For the Year Ended December 31, 2025
The notes to the financial statements are an integral part of this statement.
108
City of Chanhassen, Minnesota
Required Supplementary Information (Continued)
For the Year Ended December 31, 2025
Notes to the Required Supplemental Information - Budgetary Reporting
A. Budgetary Comparison Schedule
The budgetary comparison schedule presents the comparison of the original and legally amended budget with actual
amounts on a departmental level for the General fund. The departmental level budgets are adopted on a basis consistent
with generally accepted accounting principles. The fund balance reports revenue in the period in which they become
measurable and available.
B. Summary of Significant Budget Variances
The General fund revenues and expenditures varied significantly from final budget amounts as noted below:
Revenues
• Licenses and permits revenue exceeded final budgeted amounts due to more building permit revenues than
anticipated at time of final budget approval. The city budgets for building permits based on a four-year average.
• Investment earnings exceeded final budgeted amounts due to conservative budgeting based on market
uncertainty which is reflected in net change in fair value of investment account in current year.
Expenditures
• Public safety expenditures were under final budgeted amounts due to less personnel costs associated with the
city’s police contract than anticipated.
• Public work expenditures were over final budgeted amounts due to more engineering services than anticipated at
time of final budget approval.
• The overall expenditure budget came in line with expectations as final expenditures were only about $15,000
under the final 2025 general fund budget.
C. Budgetary Compliance
There were no budgetary compliance violations for the fiscal year ending December 31, 2025.
109
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110
COMBINING AND INDIVIDUAL FUND
FINANCIAL STATEMENTS AND SCHEDULES
CITY OF CHANHASSEN
CHANHASSEN, MINNESOTA
FOR THE YEAR ENDED
DECEMBER 31, 2025
111
City of Chanhassen, Minnesota
General Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances
Budget and Actual (Continued on the Following Pages)
For the Year Ended December 31, 2025
Actual Variance with
Original and Final Amounts Final Budget
Revenues
Taxes
General property 12,090,000$ 11,995,814$ (94,186)$
Franchise fees
Cable franchise fee 145,000 109,617 (35,383)
Licenses and permits
General government 2,500 2,100 (400)
Public safety 1,505,500 2,031,139 525,639
Public works 67,000 894,646 827,646
Community development 16,000 17,819 1,819
Total licenses and permits 1,591,000 2,945,704 1,354,704
Intergovernmental
Local performance aid 3,600 3,637 37
Fire aid 280,000 331,377 51,377
Police aid 190,000 202,398 12,398
Other state aid - 2,425 2,425
County
Other county grants - 18,495 18,495
Local
Miscellaneous 83,770 84,333 563
Total intergovernmental 557,370 642,665 85,295
Charges for services
General government 390,200 385,513 (4,687)
Public safety 3,000 3,700 700
Public works 70,000 153,781 83,781
Culture and recreation 538,000 543,091 5,091
Community development 29,800 48,694 18,894
Total charges for services 1,031,000 1,134,779 103,779
Fines and forfeitures 72,000 69,790 (2,210)
Investment earnings 250,000 727,081 477,081
Miscellaneous revenues
Contributions and donations 22,700 45,486 22,786
Refunds and reimbursements 33,800 61,094 27,294
Other 3,000 12,200 9,200
Total miscellaneous 59,500 118,780 59,280
Total revenues 15,795,870 17,744,230 1,948,360
Budgeted Amounts
112
City of Chanhassen, Minnesota
General Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances
Budget and Actual (Continued)
For the Year Ended December 31, 2025
Actual Variance with
Original and Final Amounts Final Budget
Expenditures
Current
General government
City council
Personnel services 41,204$ 38,766$ 2,438$
Other services and charges 85,220 83,538 1,682
Total city council 126,424 122,304 4,120
Administration
Personnel services 499,006 498,467 539
Supplies 84,400 101,802 (17,402)
Other services and charges 108,055 80,174 27,881
Total administration 691,461 680,443 11,018
Finance
Personnel services 334,987 334,170 817
Supplies 100 718 (618)
Other services and charges 65,899 66,714 (815)
Total finance 400,986 401,602 (616)
Elections
Supplies - 42 (42)
Other services and charges 14,600 9,984 4,616
Total elections 14,600 10,026 4,574
Contracted central services
Other services and charges 417,000 428,841 (11,841)
Information technology
Personnel services 303,238 305,909 (2,671)
Supplies 366,158 343,181 22,977
Other services and charges 132,980 144,674 (11,694)
Total information technology 802,376 793,764 8,612
City hall
Personnel services 153,005 137,679 15,326
Supplies 14,000 5,306 8,694
Other services and charges 306,810 315,582 (8,772)
Total city hall 473,815 458,567 15,248
Library
Supplies 5,000 49 4,951
Other services and charges 164,808 135,901 28,907
Total library 169,808 135,950 33,858
Budgeted Amounts
113
City of Chanhassen, Minnesota
General Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances
Budget and Actual (Continued)
For the Year Ended December 31, 2025
Actual Variance with
Original and Final Amounts Final Budget
Budgeted Amounts
Expenditures (Continued)
Current (continued)
General government (continued)
Economic development
Personnel services 183,717$ 182,114$ 1,603$
Supplies 200 - 200
Other services and charges 11,970 3,694 8,276
Total economic development 195,887 185,808 10,079
Communication
Personnel services 280,450 282,611 (2,161)
Supplies 52,200 54,258 (2,058)
Other services and charges 38,163 23,397 14,766
Total communication 370,813 360,266 10,547
Total general government 3,663,170 3,577,571 85,599
Public Safety
Law enforcement
Supplies 500 99 401
Other services and charges 2,611,349 2,344,256 267,093
Total law enforcement 2,611,849 2,344,355 267,494
Fire department
Personnel services 1,880,302 1,952,703 (72,401)
Supplies 101,875 90,435 11,440
Other services and charges 175,860 158,129 17,731
Total fire department 2,158,037 2,201,267 (43,230)
Building permits & inspection
Personnel services 894,253 884,544 9,709
Supplies 5,400 3,527 1,873
Other services and charges 100,040 117,599 (17,559)
Total building permits & inspection 999,693 1,005,670 (5,977)
Total public safety 5,769,579 5,551,292 218,287
Public works
Engineering
Personnel services 608,364 619,812 (11,448)
Supplies 15,000 9,197 5,803
Other services and charges 22,170 640,005 (617,835)
Total engineering 645,534 1,269,014 (623,480)
114
City of Chanhassen, Minnesota
General Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances
Budget and Actual (Continued)
For the Year Ended December 31, 2025
Actual Variance with
Original and Final Amounts Final Budget
Budgeted Amounts
Expenditures (Continued)
Current (continued)
Public works (continued)
G.I.S.
Personnel services 84,356$ 73,267$ 11,089$
Supplies 2,500 4,780 (2,280)
Other services and charges 14,682 13,967 715
Total G.I.S.101,538 92,014 9,524
Street maintenance
Personnel services 599,884 536,161 63,723
Supplies 198,396 156,442 41,954
Other services and charges 343,200 274,227 68,973
Total street maintenance 1,141,480 966,830 174,650
Street lighting
Supplies 7,500 20,928 (13,428)
Other services and charges 534,515 494,112 40,403
Total street lighting 542,015 515,040 26,975
Fleet maintenance
Personnel services 287,004 288,710 (1,706)
Supplies 185,048 123,414 61,634
Other services and charges 8,100 4,333 3,767
Total fleet maintenance 480,152 416,457 63,695
Public works operations
Personnel services 111,119 108,701 2,418
Supplies 3,500 2,206 1,294
Other services and charges 36,612 18,295 18,317
Total public works operations 151,231 129,202 22,029
Total public works 3,061,950 3,388,557 (326,607)
Culture and recreation
Park administration
Personnel services 194,211 197,328 (3,117)
Supplies 300 98 202
Other services and charges 16,876 4,624 12,252
Total park administration 211,387 202,050 9,337
Recreation center
Personnel services 305,838 337,328 (31,490)
Supplies 18,300 9,270 9,030
Other services and charges 155,850 149,033 6,817
Total recreation center 479,988 495,631 (15,643)
115
City of Chanhassen, Minnesota
General Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances
Budget and Actual (Continued)
For the Year Ended December 31, 2025
Actual Variance with
Original and Final Amounts Final Budget
Budgeted Amounts
Expenditures (Continued)
Current (continued)
Culture and recreation (continued)
Senior center
Personnel services 112,216$ 112,170$ 46$
Supplies 6,525 7,801 (1,276)
Other services and charges 36,995 52,299 (15,304)
Total senior center 155,736 172,270 (16,534)
Recreation programs
Personnel services 354,837 342,655 12,182
Supplies 35,020 29,790 5,230
Other services and charges 189,760 174,291 15,469
Total recreation programs 579,617 546,736 32,881
Lake Ann Park
Personnel services 12,538 13,982 (1,444)
Supplies 19,700 16,058 3,642
Other services and charges 30,350 24,197 6,153
Total Lake Ann Park 62,588 54,237 8,351
Park maintenance
Personnel services 1,125,700 1,135,472 (9,772)
Supplies 124,576 135,115 (10,539)
Other services and charges 188,150 192,626 (4,476)
Total park maintenance 1,438,426 1,463,213 (24,787)
Total culture and recreation 2,927,742 2,934,137 (6,395)
Community development
Planning administration
Personnel services 482,179 466,115 16,064
Supplies 400 389 11
Other services and charges 40,850 42,151 (1,301)
Total planning administration 523,429 508,655 14,774
Environmental resources management
Other services and charges 180,000 151,346 28,654
Total environmental resources management 180,000 151,346 28,654
Total community development 703,429 660,001 43,428
Total current 16,125,870 16,111,558 14,312
Total expenditures 16,125,870 16,111,558 14,312
116
City of Chanhassen, Minnesota
General Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances
Budget and Actual (Continued)
For the Year Ended December 31, 2025
Actual Variance with
Original and Final Amounts Final Budget
Budgeted Amounts
Excess (deficiency) of revenues
Over (under) expenditures (330,000)$ 1,632,672$ 1,962,672$
Other financing sources (uses)
Transfers in 330,000 330,000 -
Net Change in Fund Balances - 1,962,672 1,962,672
Fund Balances, January 1 12,122,978 12,122,978 -
Fund Balances, December 31 12,122,978$ 14,085,650$ 1,962,672$
117
City of Chanhassen, Minnesota
Pavement Management Program (PMP) Fund
Budgeted Capital Project Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances -
Budget and Actual
For the Year Ended December 31, 2025
Actual Variance with
Original and Final Amounts Final Budget
Revenues
Tax Increment 1,000,000$ 1,000,000$ -$
Intergovernmental 5,154,571 10,577,747 5,423,176
Franchise fees 1,931,000 1,916,904 (14,096)
Special assessments 422,179 1,302,480 880,301
Investment earnings - 196,660 196,660
Miscellaneous revenues - 62,937 62,937
Total Revenues 8,507,750 15,056,728 6,548,978
Expenditures
Capital outlay
Public works 16,732,108 19,316,432 (2,584,324)
Debt service
Principal - 96,888 (96,888)
Total Expenditures 16,732,108 19,413,320 (2,681,212)
Excess (deficiency) of revenues
Over (under) expenditures (8,224,358) (4,356,592) 3,867,766
Other Financing Sources
Issuance of bonds 5,929,400 - (5,929,400)
Transfers in - 89,988 89,988
Total Other Financing
Sources 5,929,400 89,988 (5,839,412)
Net Change in Fund Balances (2,294,958) (4,266,604) (1,971,646)
Fund Balances, January 1 771,562 771,562 -
Fund Balances, December 31 (1,523,396)$ (3,495,042)$ (1,971,646)$
Budgeted Amounts
118
SPECIAL REVENUE FUNDS
The Special Revenue Funds are used to account for the proceeds of specific revenue sources that are legally restricted or
committed to expenditures for specified purposes.
DEBT SERVICE FUNDS
The Debt Service Funds are used to account for the accumulation of resources for, and payment of, interest, principal and
related costs on general long-term debt.
CAPITAL PROJECT FUNDS
The Capital Project Funds account for financial resources to be used for the acquisition or construction of major capital
facilities (other than those financed by Proprietary Funds).
119
City of Chanhassen, Minnesota
Nonmajor Governmental Funds
Combining Balance Sheet
December 31, 2025
Special Debt Capital
Revenue Service Projects Total
Assets
Cash and investments 1,301,054$ 4,186,480$ 7,807,827$ 13,295,361$
Receivables
Accounts 10,317 - 125,343 135,660
Accrued interest 5,437 15,808 21,214 42,459
Taxes - - - -
Special assessments - 316,442 1,182,271 1,498,713
Due from other governments - 514,797 8,098 522,895
Total Assets 1,316,808$ 5,033,527$ 9,144,753$ 15,495,088$
Liabilities
Accounts payable 680$ 500,250$ 479,752$ 980,682$
Due to other governments - - 10,679 10,679
Due to other funds - - 6,000 6,000
Total Liabilities 680 500,250 496,431 997,361
Deferred Inflows of Resources
Unavailable revenue - special assessments - 316,442 1,182,271 1,498,713
Fund Balances
Restricted for
Public safety 596,618 - - 596,618
Debt service - 3,383,191 - 3,383,191
Capital projects - - 2,413,588 2,413,588
Tax increments - - 110,347 110,347
Local affordable housing aid 359,147 - - 359,147
Committed 93,152 - - 93,152
Assigned 267,211 833,644 4,946,653 6,047,508
Unassigned - - (4,537) (4,537)
Total Fund Balances 1,316,128 4,216,835 7,466,051 12,999,014
Total Liabilities, Deferred Inflows
of Resources and Fund Balances 1,316,808$ 5,033,527$ 9,144,753$ 15,495,088$
120
City of Chanhassen, Minnesota
Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures and
Changes in Fund Balances
For the Year Ended December 31, 2025
Special Debt Capital
Revenue Service Projects Total
Revenues
Taxes -$ 1,065,000$ 1,215,000$ 2,280,000$
Local option sales tax - 2,051,943 - 2,051,943
Tax increments - - 492,492 492,492
Licenses and permits - - 1,929,600 1,929,600
Intergovernmental 307,292 - 314,146 621,438
Franchise fees 40,427 - - 40,427
Charges for services 10,282 - - 10,282
Investment earnings 74,936 147,471 301,105 523,512
Miscellaneous
Contributions and donations 73,389 - - 73,389
Refunds and reimbursements - - 1,000 1,000
Other - - 3,903,000 3,903,000
Total Revenues 506,326 3,264,414 8,156,343 11,927,083
Expenditures
Current
General government 1,651 2,205 - 3,856
Community development 75,000 - 425,199 500,199
Capital outlay
General government - - - -
Public safety 72,038 - 83,875 155,913
Public works - - 988,217 988,217
Culture and recreation - - 15,298,724 15,298,724
Debt service
Principal - 410,000 347,627 757,627
Interest and other charges - 1,061,219 232,612 1,293,831
Total Expenditures 148,689 1,473,424 17,376,254 18,998,367
Excess (Deficiency) of Revenues
Over (Under) Expenditures 357,637 1,790,990 (9,219,911) (7,071,284)
Other Financing Sources (Uses)
Sale of capital assets - - 105,131 105,131
Transfers in - 426,285 - 426,285
Issuance of leases - - 25,799 25,799
Issuance of bonds - - 13,185,000 13,185,000
Transfers out (455,000) (444,322) (389,988) (1,289,310)
Total Other Financing Sources (Uses)(455,000) (18,037) 12,925,942 12,452,905
Net Change in Fund Balances (97,363) 1,772,953 3,706,031 5,381,621
Fund Balances, January 1 1,413,491 2,443,882 3,760,020 7,617,393
Fund Balances, December 31 1,316,128$ 4,216,835$ 7,466,051$ 12,999,014$
121
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122
NONMAJOR SPECIAL REVENUE FUNDS
Special revenue funds are used to account for and report the proceeds of specific revenue sources that are restricted or
committed to expenditures for specified purposes other than debt service or capital projects.
Charitable Gambling Fund - This fund accounts for the proceeds that the City receives from charitable gambling. The City
collects 10% of the net profits from lawful gambling within City boundaries. Per state statute, the fund is used for
equipment and training for the City’s fire department.
Cemetery Fund - The City owns and operates a municipal cemetery. This fund accounts for all plot fees and maintenance
of the cemetery.
Cable TV Fund - The City has had a franchise agreement with Mediacom for several years. Cable franchise fees were
accounted for in this fund until 2023, when they were moved to the General Fund. PEG fees collected are still accounted
for in this fund. The PEG fees balance in this fund are restricted solely to improving public broadcasting capabilities,
studio improvements, and other capital expenditures improving the overall cable system. The assigned fund balance in
this fund is used for other communications operating and capital expenditures.
Grant Fund - This fund accounts for the revenues and expenditures related to federal and state financial assistance
programs.
Local Affordable Housing Aid Fund - This fund accounts for the revenues and expenditures related to the Local
Affordable Housing Aid program.
123
201 202 210 212 213
Charitable Local Affordable
Gambling Cemetery Cable TV Grant Fund Housing Aid Total
Assets
Cash and investments 53,637$ 85,145$ 5,219$ 797,906$ 359,147$ 1,301,054$
Receivables
Accounts 8,461 - 1,856 - - 10,317
Accrued interest 233 330 602 4,272 - 5,437
Total Assets 62,331$ 85,475$ 7,677$ 802,178$ 359,147$ 1,316,808$
Liabilities
Accounts payable 680$ -$ -$ -$ -$ 680$
Fund Balances
Restricted for
Public safety 61,651 - - 534,967 - 596,618
Local affordable housing - - - - 359,147 359,147
Committed - 85,475 7,677 - - 93,152
Assigned - - - 267,211 - 267,211
Total Fund Balances 61,651 85,475 7,677 802,178 359,147 1,316,128
Total Liabilities and Fund Balances 62,331$ 85,475$ 7,677$ 802,178$ 359,147$ 1,316,808$
City of Chanhassen, Minnesota
Nonmajor Special Revenue Funds
Combining Balance Sheet
December 31, 2025
124
201 202 210 212 213
Charitable Local Affordable
Gambling Cemetery Cable TV Grant Fund Housing Aid Total
Revenues
Intergovernmental - - - - 307,292 307,292
Franchise fees - - 40,427 - - 40,427
Charges for services - 10,282 - - - 10,282
Investment earnings 3,265 4,165 6,684 60,822 - 74,936
Miscellaneous revenues
Contributions 73,389 - - - - 73,389
Total Revenues 76,654 14,447 47,111 60,822 307,292 506,326
Expenditures
Current
General government - 1,651 - - - 1,651
Community development - - - - 75,000 75,000
Capital outlay
Public safety 72,038 - - - - 72,038
Total Expenditures 72,038 1,651 - - 75,000 148,689
Excess (Deficiency) of Revenues
Over (Under) Expenditures 4,616 12,796 47,111 60,822 232,292 357,637
Other Financing Sources (Uses)
Transfers out - - (155,000) (300,000) - (455,000)
Net Change in Fund Balances 4,616 12,796 (107,889) (239,178) 232,292 (97,363)
Fund Balances, January 1 57,035 72,679 115,566 1,041,356 126,855 1,413,491
Fund Balances, December 31 61,651$ 85,475$ 7,677$ 802,178$ 359,147$ 1,316,128$
City of Chanhassen, Minnesota
Nonmajor Special Revenue Funds
Combining Statement of Revenues, Expenditures
and Changes in Fund Balances
For the Year Ended December 31, 2025
125
City of Chanhassen, Minnesota
Charitable Gambling Fund
Budgeted Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances -
Budget and Actual
For the Year Ended December 31, 2025
Actual Variance with
Original and Final Amounts Final Budget
Revenues
Investment earnings 1,200$ 3,265$ 2,065$
Miscellaneous revenues 55,000 73,389 18,389
Total Revenues 56,200 76,654 20,454
Expenditures
Capital outlay
Public safety 55,000 72,038 (17,038)
Net Change in Fund Balances 1,200 4,616 3,416
Fund Balances, January 1 57,035 57,035 -
Fund Balances, December 31 58,235$ 61,651$ 3,416$
Budgeted Amounts
126
City of Chanhassen, Minnesota
Cemetery Fund
Budgeted Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances -
Budget and Actual
For the Year Ended December 31, 2025
Budgeted Amounts Actual Variance with
Original and Final Amounts Final Budget
Revenues
Charges for services 2,500$ 10,282$ 7,782$
Investment earnings 1,300 4,165 2,865
Total Revenues 3,800 14,447 10,647
Expenditures
Current
General government 3,000 1,651 1,349
Net Change in Fund Balances 800 12,796 11,996
Fund Balances, January 1 72,679 72,679 -
Fund Balances, December 31 73,479$ 85,475$ 11,996$
127
City of Chanhassen, Minnesota
Cable Television Fund
Budgeted Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances -
Budget and Actual
For the Year Ended December 31, 2025
Actual Variance with
Original and Final Amounts Final Budget
Revenues
Franchise fees -$ 40,427$ 40,427$
Investment earnings 2,400 6,684 4,284
Total Revenues 2,400 47,111 44,711
Expenditures
Current
General government 40,000 - 40,000
Excess (deficiency) of revenues
Over (under) expenditures (37,600) 47,111 84,711
Other Financing Sources (Uses)
Transfers out (30,000) (155,000) (125,000)
Net Change in Fund Balances (67,600) (107,889) (40,289)
Fund Balances, January 1 115,566 115,566 -
Fund Balances, December 31 47,966$ 7,677$ (40,289)$
Budgeted Amounts
128
City of Chanhassen, Minnesota
Grant Fund
Budgeted Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances -
Budget and Actual
For the Year Ended December 31, 2025
Actual Variance with
Original and Final Amounts Final Budget
Revenues
Investment earnings 16,600$ 60,822$ 44,222$
Other Financing Sources (Uses)
Transfers out (300,000) (300,000) -
Net Change in Fund Balances (283,400) (239,178) 44,222
Fund Balances, January 1 1,041,356 1,041,356 -
Fund Balances, December 31 757,956$ 802,178$ 44,222$
Budgeted Amounts
129
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130
NONMAJOR DEBT SERVICE FUNDS
Debt Service Funds are maintained on the modified accrual basis of accounting for revenues from taxes and other
sources set aside for the payment of the debt obligations of the City. Principal and interest on the general long-term debt
is recognized when due.
Permanent Revolving Debt - This fund is used to account for excess resources from matured bond issues.
General Obligation Bond Funds - These funds are used to account for the accumulation of resources for payment of
general obligation bonds or other general indebtedness and the interest thereon.
131
300 368 370 371 372
2009A G.O.2016A G.O.2024A G.O.2025A G.O.
Permanent Refunding Refunding Capital Temp Sales
Revolving Debt Bonds Bonds Improvement Bonds Tax Bonds Total
Assets
Cash and investments 1,327,244$ -$ 582,382$ 716,215$ 1,560,639$ 4,186,480$
Receivables
Accrued interest 6,650 - 2,239 1,179 5,740 15,808
Special assessments 316,442 - - - - 316,442
Due from other governments - - 1,266 5,830 507,701 514,797
Total Assets 1,650,336$ -$ 585,887$ 723,224$ 2,074,080$ 5,033,527$
Liabilities
Accounts payable 500,250$ -$ -$ -$ -$ 500,250$
Deferred Inflows of Resources
Unavailable revenue - special assessments 316,442 - - - - 316,442
Fund Balances
Restricted for debt service - - 585,887 723,224 2,074,080 3,383,191
Assigned 833,644 - - - - 833,644
Total Fund Balances 833,644 - 585,887 723,224 2,074,080 4,216,835
Total Liabilities, Deferred Inflows
of Resources and Fund Balances 1,650,336$ -$ 585,887$ 723,224$ 2,074,080$ 5,033,527$
City of Chanhassen, Minnesota
Debt Service Funds
Combining Balance Sheet
December 31, 2025
132
300 368 370 371 372
2009A G.O.2016A G.O.2024A G.O.2025A G.O.
Permanent Refunding Refunding Capital Temp Sales
Revolving Debt Bonds Bonds Improvement Bonds Tax Bonds Total
Revenues
Property taxes -$ -$ 190,000$ 875,000$ -$ 1,065,000$
Local option sales tax - - - - 2,051,943 2,051,943
Investment earnings 40,839 47,943 23,146 12,799 22,744 147,471
Total Revenues 40,839 47,943 213,146 887,799 2,074,687 3,264,414
Expenditures
Current
General government - - 304 1,294 607 2,205
Debt service
Principal - - 410,000 - - 410,000
Interest and other - - 48,742 1,012,477 - 1,061,219
Total Expenditures - - 459,046 1,013,771 607 1,473,424
Excess (Deficiency) of Revenues
Over (Under) Expenditures 40,839 47,943 (245,900) (125,972) 2,074,080 1,790,990
Other Financing Sources (Uses)
Transfers in 44,366 - - 381,919 - 426,285
Transfers out - (426,285) - (18,037) - (444,322)
Total Other Financing
Sources (Uses)44,366 (426,285) - 363,882 - (18,037)
Net Change in Fund Balances 85,205 (378,342) (245,900) 237,910 2,074,080 1,772,953
Fund Balances, January 1 748,439 378,342 831,787 485,314 - 2,443,882
Fund Balances, December 31 833,644$ -$ 585,887$ 723,224$ 2,074,080$ 4,216,835$
City of Chanhassen, Minnesota
Debt Service Funds
Combining Statement of Revenues, Expenditures and
Changes in Fund Balances
For the Year Ended December 31, 2025
133
City of Chanhassen, Minnesota
2016A G.O. Refunding Bonds Fund
Budgeted Debt Service Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances -
Budget and Actual
For the Year Ended December 31, 2025
Actual Variance with
Original and Final Amounts Final Budget
Revenues
Tax Increment 190,000$ 190,000$ -$
Investment earnings 9,300 23,146 13,846
Total Revenues 199,300 213,146 13,846
Expenditures
Current
General government - 304 (304)
Debt service
Principal 410,000 410,000 -
Interest and other charges 48,700 48,742 (42)
Total Expenditures 458,700 459,046 (346)
Net Change in Fund Balances (259,400) (245,900) 13,500
Fund Balances, January 1 831,787 831,787 -
Fund Balances, December 31 572,387$ 585,887$ 13,500$
Budgeted Amounts
134
NONMAJOR CAPITAL PROJECTS FUNDS
Capital projects funds are used to account for the acquisition and construction of major capital facilities other than those
financed by enterprise funds.
400 Capital Equipment/Vehicle Fund - Accounts for the City’s annual equipment purchases not related to the City’s
enterprise funds. The fund currently does include a property tax levy to support the annual purchases.
401 Park Renovation Fund - Accounts for replacement or repair of major park equipment/infrastructure, including
playgrounds, picnic shelters, hockey rinks, bridges, fences, walls, etc. The maintenance and replacement schedule is an
ongoing endeavor that will be updated as new investments are made or aging structures are removed.
402 Capital Facilities Fund - Accounts for the City’s expenditures related to the City’s facilities, except for those related to
the enterprise funds. The fund currently does include a property tax levy to support projects.
410 Park Development Fund - Accounts for park dedication fees as required by the City ordinance and Minnesota State
Statute. These funds are then utilized to finance park and trail improvements identified in the park and recreation section
of the City’s comprehensive plan.
416 Chanhassen Community Center – Accounts for funding and expenditures related to the new Community Center
project.
420 Transportation Infrastructure Management - Accounts for trail construction and certain maintenance costs of local
streets such as sealcoating, patching, and inspections.
480 TIF #11 - Accounts for tax increment financing for the downtown district, TIF #11 - Frontier Development #2.
481 TIF #12 - Accounts for tax increment financing for TIF #12 - Lake Place Senior Apt.
605 TH101 Improvements - Accounts for the City’s expenditures related to TH101 Improvements.
135
400 401 402 410 416
Capital Chanhassen
Equipment/Park Capital Park Community
Vehicle Renovation Facilities Development Center
Assets
Cash and investments 1,359,180$ 142,642$ 210,217$ 2,414,434$ 2,551,949$
Receivables
Accounts 125,343 - - - -
Accrued interest 5,404 541 819 9,833 -
Special assessments - - - 1,182,271 -
Due from other governments 4,699 666 1,133 - -
Total Assets 1,494,626$ 143,849$ 212,169$ 3,606,538$ 2,551,949$
Liabilities
Accounts payable 10,478$ 5,778$ 10,289$ -$ 263,484$
Due to other governments - - - 10,679 -
Due to other funds - - - - -
Total Liabilities 10,478 5,778 10,289 10,679 263,484
Deferred Inflows of Resources
Unavailable revenue - special assessments - - - 1,182,271 -
Fund Balances
Restricted for
Park improvements - - - 2,413,588 -
Tax increments - - - - -
Assigned for
Capital projects 1,484,148 138,071 201,880 - 2,288,465
Unassigned - - - - -
Total Fund Balances 1,484,148 138,071 201,880 2,413,588 2,288,465
Total Liabilities and Fund Balances 1,494,626$ 143,849$ 212,169$ 3,606,538$ 2,551,949$
City of Chanhassen, Minnesota
Nonmajor Capital Projects Funds
Combining Balance Sheet
December 31, 2025
136
420 480 481 605
Transportation Frontier Lake Place
Infrastructure Development Senior Apt TH101
Management TIF #11 TIF #12 Improvements Total
829,071$ 213,042$ 87,292$ -$ 7,807,827$
- - - - 125,343
3,418 810 389 - 21,214
- - - - 1,182,271
1,600 - - - 8,098
834,089$ 213,852$ 87,681$ -$ 9,144,753$
-$ 103,505$ 86,218$ -$ 479,752$
- - - - 10,679
- - 6,000 - 6,000
- 103,505 92,218 - 496,431
- - - - 1,182,271
- - - - 2,413,588
- 110,347 - - 110,347
834,089 - - - 4,946,653
- - (4,537) - (4,537)
834,089 110,347 (4,537) - 7,466,051
834,089$ 213,852$ 87,681$ -$ 9,144,753$
137
400 401 402 410 416
Capital Chanhassen
Equipment/Park Capital Park Community
Vehicle Renovation Facilities Development Center
Revenues
Taxes
General property 705,000$ 100,000$ 170,000$ -$ -$
Tax increment - - - - -
Intergovernmental
State of Minnesota - - - 250,000 -
Other - - - - -
Licenses and permits - - - 1,929,600 -
Investment earnings 79,000 6,795 11,007 51,470 100,096
Miscellaneous
Refunds and reimbursements - - - 1,000 -
Other 1,800 - - - 3,901,200
Total Revenues 785,800 106,795 181,007 2,232,070 4,001,296
Expenditures
Current
Community development - - - - -
Capital outlay
General government - - - - -
Public safety 29,450 - 54,425 - -
Public works 549,882 - 133,524 - -
Culture and recreation 357,137 88,194 22,742 94,306 14,736,345
Debt service
Principal 251,317 - - 96,310 -
Interest and other charges 71,126 - - - 161,486
Total Expenditures 1,258,912 88,194 210,691 190,616 14,897,831
Excess (Deficiency) of Revenues
Over (Under) Expenditures (473,112) 18,601 (29,684) 2,041,454 (10,896,535)
Other Financing Sources (Uses)
Sale of capital assets 105,131 - - - -
Issuance of leases 25,799 - - - -
Issuance of bonds - - - - 13,185,000
Transfers out - - - (300,000) -
Total Other Financing
Sources (Uses)130,930 - - (300,000) 13,185,000
Net Changes in Fund Balances (342,182) 18,601 (29,684) 1,741,454 2,288,465
Fund Balances, January 1 1,826,330 119,470 231,564 672,134 -
Fund Balances, December 31 1,484,148$ 138,071$ 201,880$ 2,413,588$ 2,288,465$
City of Chanhassen, Minnesota
Nonmajor Capital Projects Funds
Combining Statement of Revenues, Expenditures and
Changes in Fund Balances
For the Year Ended December 31, 2025
138
420 480 481 605
Transportation Frontier Lake Place
Infrastructure Development Senior Apt TH101
Management TIF #11 TIF #12 Improvements Total
240,000$ -$ -$ -$ 1,215,000$
- 300,897 191,595 - 492,492
- - - - 250,000
- - - 64,146 64,146
- - - - 1,929,600
44,681 3,613 471 3,972 301,105
- - - - 1,000
- - - - 3,903,000
284,681 304,510 192,066 68,118 8,156,343
- 249,090 176,109 - 425,199
- - - - -
- - - - 83,875
240,454 - - 64,357 988,217
- - - - 15,298,724
- - - - 347,627
- - - - 232,612
240,454 249,090 176,109 64,357 17,376,254
44,227 55,420 15,957 3,761 (9,219,911)
- - - - 105,131
- - - - 25,799
- - - - 13,185,000
- - - (89,988) (389,988)
- - - (89,988) 12,925,942
44,227 55,420 15,957 (86,227) 3,706,031
789,862 54,927 (20,494) 86,227 3,760,020
834,089$ 110,347$ (4,537)$ -$ 7,466,051$
139
City of Chanhassen, Minnesota
Capital Equipment/Vehicle Fund
Budgeted Capital Project Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances -
Budget and Actual
For the Year Ended December 31, 2025
Actual Variance with
Original and Final Amounts Final Budget
Revenues
Taxes 705,000$ 705,000$ -$
Investment earnings 26,153 79,000 52,847
Miscellaneous revenues - 1,800 1,800
Total Revenues 731,153 785,800 54,647
Expenditures
Capital outlay
General government 14,000 25,799 (11,799)
Public safety - 3,651 (3,651)
Public works 621,000 549,882 71,118
Culture and recreation 368,000 357,137 10,863
Debt service
Principal 357,979 251,317 106,662
Interest and other charges - 71,126 (71,126)
Total Expenditures 1,360,979 1,258,912 102,067
Excess (deficiency) of revenues
Over (under) expenditures (629,826) (473,112) 156,714
Other Financing Sources (Uses)
Sale of capital assets 239,835 105,131 (134,704)
Issuance of leases - 25,799 25,799
Total Other Financing
Sources (Uses)239,835 130,930 (108,905)
Net Change in Fund Balances (389,991) (342,182) 47,809
Fund Balances, January 1 1,826,330 1,826,330 -
Fund Balances, December 31 1,436,339$ 1,484,148$ 47,809$
Budgeted Amounts
140
City of Chanhassen, Minnesota
Park Renovation Fund
Budgeted Capital Project Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances -
Budget and Actual
For the Year Ended December 31, 2025
Budgeted Amounts Actual Variance with
Original and Final Amounts Final Budget
Revenues
Taxes 100,000$ 100,000$ -$
Investment earnings - 6,795 6,795
Total Revenues 100,000 106,795 6,795
Expenditures
Capital outlay
Culture and recreation - 88,194 (88,194)
Net Change in Fund Balances 100,000 18,601 (81,399)
Fund Balances, January 1 119,470 119,470 -
Fund Balances, December 31 219,470$ 138,071$ (81,399)$
141
City of Chanhassen, Minnesota
Capital Facilities Fund
Budgeted Capital Project Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances -
Budget and Actual
For the Year Ended December 31, 2025
Actual Variance with
Original and Final Amounts Final Budget
Revenues
Taxes 170,000$ 170,000$ -$
Investment earnings 2,900 11,007 8,107
Total Revenues 172,900 181,007 8,107
Expenditures
Capital outlay
Public safety 45,000 54,425 (9,425)
Public works 97,000 133,524 (36,524)
Culture and recreation 23,000 22,742 258
Total Expenditures 165,000 210,691 (45,691)
Net Change in Fund Balances 7,900 (29,684) (37,584)
Fund Balances, January 1 231,564 231,564 -
Fund Balances, December 31 239,464$ 201,880$ (37,584)$
Budgeted Amounts
142
City of Chanhassen, Minnesota
Park Development Fund
Budgeted Capital Project Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances -
Budget and Actual
For the Year Ended December 31, 2025
Actual Variance with
Original and Final Amounts Final Budget
Revenues
Intergovernmental 158,400$ 250,000$ 91,600$
Licenses and permits 849,376 1,929,600 1,080,224
Investment earnings - 51,470 51,470
Miscellaneous revenues - 1,000 1,000
Total Revenues 1,007,776 2,232,070 1,224,294
Expenditures
Capital outlay
Culture and recreation 246,310 94,306 152,004
Debt service
Principal - 96,310 (96,310)
Total Expenditures 246,310 190,616 55,694
Excess (deficiency) of revenues
Over (under) expenditures 761,466 2,041,454 1,279,988
Other Financing Sources (Uses)
Transfers out - (300,000) (300,000)
Net Change in Fund Balances 761,466 1,741,454 979,988
Fund Balances, January 1 672,134 672,134 -
Fund Balances, December 31 1,433,600$ 2,413,588$ 979,988$
Budgeted Amounts
143
City of Chanhassen, Minnesota
Transportation Infrastructure Management Fund
Budgeted Capital Project Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances -
Budget and Actual
For the Year Ended December 31, 2025
Actual Variance with
Original and Final Amounts Final Budget
Revenues
Taxes 240,000$ 240,000$ -$
Investment earnings 24,900 44,681 19,781
Total Revenues 264,900 284,681 19,781
Expenditures
Capital outlay
Public works 281,000 240,454 40,546
Net Change in Fund Balances (16,100) 44,227 60,327
Fund Balances, January 1 789,862 789,862 -
Fund Balances, December 31 773,762$ 834,089$ 60,327$
Budgeted Amounts
144
City of Chanhassen, Minnesota
Frontier Development TIF #11 Fund
Budgeted Capital Project Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances -
Budget and Actual
For the Year Ended December 31, 2025
Actual Variance with
Original and Final Amounts Final Budget
Revenues
Tax Increment 297,945$ 300,897$ 2,952$
Investment earnings 796 3,613 2,817
Total Revenues 298,741 304,510 5,769
Expenditures
Capital outlay
Community development 283,692 249,090 34,602
Net Change in Fund Balances 15,049 55,420 40,371
Fund Balances, January 1 54,927 54,927 -
Fund Balances, December 31 69,976$ 110,347$ 40,371$
Budgeted Amounts
145
City of Chanhassen, Minnesota
Lake Place Senior Apt TIF #12 Fund
Budgeted Capital Project Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances -
Budget and Actual
For the Year Ended December 31, 2025
Actual Variance with
Original and Final Amounts Final Budget
Revenues
Tax Increment 189,000$ 191,595$ 2,595$
Investment earnings - 471 471
Total Revenues 189,000 192,066 3,066
Expenditures
Capital outlay
Community development 171,321 176,109 (4,788)
Excess (deficiency) of revenues
Over (under) expenditures 17,679 15,957 (1,722)
Other Financing Sources (Uses)
Transfers out - - -
Net Change in Fund Balances 17,679 15,957 (1,722)
Fund Balances, January 1 (20,494) (20,494) -
Fund Balances, December 31 (2,815)$ (4,537)$ (1,722)$
Budgeted Amounts
146
STATISTICAL SECTION (UNAUDITED)
CHANHASSEN, MINNESOTA
FOR THE YEAR ENDED
DECEMBER 31, 2025
147
THIS PAGE IS LEFT
BLANK INTENTIONALLY
148
STATISTICAL SECTION (UNAUDITED)
This part of the City’s annual comprehensive 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 government’s overall financial health.
Financial Trends
These schedules contain trend information to help the reader understand how the government’s financial performance
and well-being have changed over time.
Revenue Capacity
These schedules contain information to help the reader assess the government’s most significant local revenue source,
the property tax.
Debt Capacity
These schedules present information to help the reader assess the affordability of the government’s current levels of
outstanding debt and the government’s ability to issue additional debt in the future.
Demographic and Economic Information
These schedules offer demographic and economic indicators to help the reader understand the environment within which
the government’s financial activities take place.
Operating Information
These schedules contain service and infrastructure data to help the reader understand how the information in the
government’s financial report relates to the services the government provides and the activities it performs.
149
City of Chanhassen, Minnesota
Statistical Section (Unaudited)
Net Position by Component
Last Ten Fiscal Years
2016 2017 2018 2019
Governmental Activities
Net investment in capital assets 72,588,940$ 70,255,784$ 71,053,355$ 72,986,179$
Restricted 3,459,840 3,270,087 2,548,980 2,883,391
Unrestricted 10,221,704 10,028,355 8,781,660 8,360,013
Total Governmental
Activities Net Position 86,270,484$ 83,554,226$ 82,383,995$ 84,229,583$
Business-type Activities
Net investment in capital assets 57,478,975$ 57,212,106$ 56,195,385$ 54,469,960$
Unrestricted 10,516,316 10,126,315 12,342,280 13,557,181
Total Business-type
Activities Net Position 67,995,291$ 67,338,421$ 68,537,665$ 68,027,141$
Total Primary Government
Net investment in capital assets 130,067,915$ 127,467,890$ 127,248,740$ 127,456,139$
Restricted 3,459,840 3,270,087 2,548,980 2,883,391
Unrestricted 20,738,020 20,154,670 21,123,940 21,917,194
Total Primary Government 154,265,775$ 150,892,647$ 150,921,660$ 152,256,724$
Fiscal Year
150
Table 1
2020 2021 2022 2023 2024 2025
73,063,927$ 70,860,083$ 68,702,496$ 67,404,190$ 69,207,758$ 83,435,808$
1,629,219 1,020,560 1,135,813 2,858,088 2,784,210 7,524,986
9,369,203 12,019,412 13,915,001 14,718,920 21,303,887 22,385,434
84,062,349$ 83,900,055$ 83,753,310$ 84,981,198$ 93,295,855$ 113,346,228$
55,526,666$ 56,069,887$ 56,585,833$ 56,649,651$ 59,721,155$ 65,013,360$
11,740,521 16,353,752 11,289,333 10,958,947 8,813,848 5,636,781
67,267,187$ 72,423,639$ 67,875,166$ 67,608,598$ 68,535,003$ 70,650,141$
128,590,593$ 126,929,970$ 125,288,329$ 124,053,841$ 128,928,913$ 148,449,168$
1,629,219 1,020,560 1,135,813 2,858,088 2,784,210 7,524,986
21,109,724 28,373,164 25,204,334 25,677,867 30,117,735 28,022,215
151,329,536$ 156,323,694$ 151,628,476$ 152,589,796$ 161,830,858$ 183,996,369$
Fiscal Year
151
City of Chanhassen, Minnesota
Statistical Section (Unaudited)
Changes in Net Position (Continued on the Following Pages)
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2016 2017 2018 2019
Expenses
Governmental Activities
General government 2,887,111$ 3,230,517$ 3,291,465$ 2,968,604$
Public safety 3,973,031 3,969,540 3,819,890 4,045,361
Public works 7,591,530 8,161,048 7,225,531 9,808,088
Culture and recreation 3,278,139 3,227,236 3,158,725 3,275,021
Community development 689,448 918,962 589,570 535,700
Interest on long-term debt 493,746 408,273 173,323 132,327
Total Governmental Activities Expenses 18,913,005 19,915,576 18,258,504 20,765,101
Business-type Activities
Water 4,422,789 3,866,810 4,567,874 5,842,506
Sewer 3,254,619 3,746,880 4,122,804 3,879,581
Surface water management 1,388,979 1,538,468 1,634,475 1,918,378
Total Business-type Activities Expenses 9,066,387 9,152,158 10,325,153 11,640,465
Total Expenses 27,979,392$ 29,067,734$ 28,583,657$ 32,405,566$
Program Revenues
Governmental Activities
Charges for services
General government 508,067$ 481,125$ 559,077$ 320,681$
Public safety 1,219,943 1,289,794 1,752,643 1,474,555
Public works 253,468 329,129 144,963 140,753
Culture and recreation 968,122 891,390 1,098,679 1,078,128
Community development 28,507 35,582 32,228 28,866
Operating grants and contributions 735,840 902,871 948,912 2,770,655
Capital grants and contributions 3,705,857 2,425,333 1,669,995 4,716,702
Total Governmental Activities
Program Revenue 7,419,804 6,355,224 6,206,497 10,530,340
Business-type Activities
Charges for services
Water 2,717,285 2,921,936 3,121,292 3,108,307
Sewer 2,619,882 2,764,674 3,034,207 3,144,282
Surface water management 684,199 709,508 764,930 998,832
Operating grants and contributions 72,007 45,109 44,604 460,905
Capital grants and contributions 5,199,139 1,678,595 3,965,466 3,108,377
Total Business-type Activities
Program Revenue 11,292,512 8,119,822 10,930,499 10,820,703
Total Program Revenues 18,712,316$ 14,475,046$ 17,136,996$ 21,351,043$
Fiscal Year
152
Table 2
2020 2021 2022 2023 2024 2025
3,503,418$ 3,545,101$ 3,537,796$ 4,326,016$ 3,810,386$ 5,001,417$
3,975,838 4,055,112 4,396,715 5,825,937 5,463,958 5,779,201
25,142,224 17,282,830 11,350,075 10,646,546 10,953,832 8,544,285
2,704,009 2,957,867 3,432,625 4,252,161 3,896,895 4,059,608
754,205 814,146 850,151 868,229 998,188 1,139,546
107,993 72,195 71,680 218,628 1,053,664 1,928,276
36,187,687 28,727,251 23,639,042 26,137,517 26,176,923 26,452,333
4,908,477 5,245,018 7,301,583 5,782,514 5,966,996 6,791,348
4,312,195 5,025,866 6,548,611 5,359,316 5,838,537 7,278,242
1,694,090 2,541,714 4,489,250 2,565,581 3,861,546 4,267,454
10,914,762 12,812,598 18,339,444 13,707,411 15,667,079 18,337,044
47,102,449$ 41,539,849$ 41,978,486$ 39,844,928$ 41,844,002$ 44,789,377$
426,339$ 394,576$ 483,008$ 952,621$ 466,197$ 486,997$
1,550,768 2,283,340 1,555,525 1,556,441 1,943,159 2,113,832
396,649 275,801 210,555 81,253 475,766 1,097,774
162,546 613,935 648,730 1,007,606 588,499 2,481,782
30,426 16,060 33,385 44,243 43,391 67,236
14,970,473 6,047,214 2,552,195 4,556,281 9,443,046 11,871,707
4,066,959 4,683,258 3,881,530 1,693,875 2,662,398 6,129,335
21,604,160 14,314,184 9,364,928 9,892,320 15,622,456 24,248,663
3,533,939 4,384,603 4,485,402 5,193,977 4,133,781 4,688,977
3,260,080 3,469,282 3,699,835 3,998,048 4,330,428 4,611,967
1,083,833 1,458,751 1,564,000 1,807,415 2,071,574 2,371,568
39,552 38,380 47,850 46,458 56,775 31,205
2,084,681 8,513,319 4,090,784 1,853,961 5,594,435 8,468,152
10,002,085 17,864,335 13,887,871 12,899,859 16,186,993 20,171,869
31,606,245$ 32,178,519$ 23,252,799$ 22,792,179$ 31,809,449$ 44,420,532$
Fiscal Year
153
City of Chanhassen, Minnesota
Statistical Section (Unaudited)
Changes in Net Position (Continued)
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2016 2017 2018 2019
Net (Expenses) Revenues
Governmental activities (11,493,201)$ (13,560,352)$ (12,052,007)$ (10,234,761)$
Business-type activities 2,226,125 (1,032,336) 605,346 (819,762)
Total Primary Government (9,267,076)$ (14,592,688)$ (11,446,661)$ (11,054,523)$
General Revenues and Other Changes in Net Position
Governmental Activities
Taxes
Property taxes 10,643,917$ 10,826,116$ 10,877,849$ 10,996,831$
Tax increments 111,761 - - -
Franchise fees - - - 185,181
Local option sales tax - - - -
Grants and contributions not
restricted to specific programs 19,754 19,753 19,755 20,009
Unrestricted investment earnings (loss)156,202 164,393 258,456 491,345
Sale of capital assets 41,129 38,254 45,244 103,976
Other general revenues - - - -
Transfers 73,032 (204,422) (319,528) 283,007
Total Governmental Activities 11,045,795 10,844,094 10,881,776 12,080,349
Business-type Activities
Unrestricted investment earnings 79,765 171,044 263,802 548,747
Sale of capital assets 25,224 - 10,568 43,498
Transfers (73,032) 204,422 319,528 (283,007)
Total Business-type Activities 31,957 375,466 593,898 309,238
Total Primary Government 11,077,752$ 11,219,560$ 11,475,674$ 12,389,587$
Change in Net Position
Governmental activities (447,406)$ (2,716,258)$ (1,170,231)$ 1,845,588$
Business-type activities 2,258,082 (656,870) 1,199,244 (510,524)
Total Primary Government 1,810,676$ (3,373,128)$ 29,013$ 1,335,064$
Note: In 2023, 2024 & 2025, transfers for both governmental activities and business-type activities is shown as $0,
as there were no transfers between opinion activities.
Fiscal Year
154
Table 2
2020 2021 2022 2023 2024 2025
(14,583,527)$ (14,413,067)$ (14,274,114)$ (16,245,197)$ (10,554,467)$ (2,203,670)$
(912,677) 5,051,737 (4,451,573) (807,552) 519,914 1,834,825
(15,496,204)$ (9,361,330)$ (18,725,687)$ (17,052,749)$ (10,034,553)$ (368,845)$
11,745,709$ 12,075,260$ 12,644,286$ 13,409,631$ 14,357,960$ 15,291,443$
236,485 279,653 279,283 282,067 444,581 492,492
1,826,255 2,019,812 2,036,470 2,045,767 2,040,308 2,066,948
- - - - - 2,051,943
- 311 170,656 390,075 141,257 54,584
368,168 (22,856) (824,062) 1,054,685 1,466,312 1,897,538
- 84,387 155,654 164,746 248,053 -
- - - 126,114 170,653 399,095
239,676 (185,794) (334,918) - - -
14,416,293 14,250,773 14,127,369 17,473,085 18,869,124 22,254,043
390,604 (78,079) (434,818) 540,984 406,491 280,313
1,795 - - - - -
(239,676) 185,794 334,918 - - -
152,723 107,715 (99,900) 540,984 406,491 280,313
14,569,016$ 14,358,488$ 14,027,469$ 18,014,069$ 19,275,615$ 22,534,356$
(167,234)$ (162,294)$ (146,745)$ 1,227,888$ 8,314,657$ 20,050,373$
(759,954) 5,159,452 (4,551,473) (266,568) 926,405 2,115,138
(927,188)$ 4,997,158$ (4,698,218)$ 961,320$ 9,241,062$ 22,165,511$
Fiscal Year
155
2016 2017 2018 2019
General Fund
Nonspendable 25,832$ 81,032$ 87,067$ 82,265$
Assigned - - - -
Unassigned 5,286,880 5,307,088 5,667,626 5,255,804
Total General Fund 5,312,712$ 5,388,120$ 5,754,693$ 5,338,069$
All other Governmental Funds
Nonspendable -$ 990,723$ 9,326$ 8,781$
Restricted 8,673,981 8,458,576 2,618,680 2,944,091
Committed - - - -
Assigned 7,806,958 6,602,135 6,414,882 6,657,125
Unassigned (264,772) (154,506) (24,491) (570)
Total all other Governmental Funds 16,216,167$ 15,896,928$ 9,018,397$ 9,609,427$
Fiscal Year
City of Chanhassen, Minnesota
Statistical Section (Unaudited)
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
156
Table 3
2020 2021 2022 2023 2024 2025
63,775$ 69,953$ 91,340$ 63,227$ 135,138$ 13,366$
- - 657,000 797,600 4,225,000 5,745,000
6,684,991 7,919,562 7,623,891 8,011,272 7,762,840 8,327,284
6,748,766$ 7,989,515$ 8,372,231$ 8,872,099$ 12,122,978$ 14,085,650$
49,690$ 690$ -$ 15,400$ -$ -$
1,669,927 1,056,768 1,167,396 2,884,859 19,296,060 12,128,626
- - - 344,647 144,359 93,152
6,809,934 7,819,511 8,603,977 7,112,372 5,100,013 6,047,508
- (22,425) (94,155) (1,002,175) (20,494) (3,499,579)
8,529,551$ 8,854,544$ 9,677,218$ 9,355,103$ 24,519,938$ 14,769,707$
Fiscal Year
157
2016 2017 2018 2019
Revenues
Taxes 10,640,315$ 10,820,682$ 10,856,842$ 10,960,876$
Local option sales tax - - - -
Tax increment 111,761 - - -
Licenses and permits 1,653,858 1,641,140 2,289,052 2,047,190
Intergovernmental 974,917 2,149,875 2,019,215 6,294,417
Charges for services 846,540 838,498 820,745 808,010
Franchise fees - - - -
Fines and forfeits 114,367 128,394 95,351 89,989
Special assessments 820,026 842,523 600,056 727,026
Investment earnings 156,202 164,393 258,456 491,345
Miscellaneous 486,962 512,701 452,781 353,177
Total Revenues 15,804,948 17,098,206 17,392,498 21,772,030
Expenditures
General government 2,479,271 2,871,267 2,835,108 2,644,661
Public safety 3,713,146 3,602,897 3,593,877 3,802,544
Public works 3,961,016 4,617,523 3,847,782 6,041,417
Culture and recreation 2,256,314 2,395,554 2,326,272 2,418,229
Community development 659,276 940,000 610,368 567,461
Capital outlay 1,989,622 3,005,792 4,824,061 6,568,983
Debt service
Principal 1,795,000 670,000 5,985,000 720,000
Interest and fiscal charges 483,533 433,925 295,294 157,312
Total Expenditures 17,337,178 18,536,958 24,317,762 22,920,607
Deficiency of Revenues
Under Expenditures (1,532,230) (1,438,752) (6,925,264) (1,148,577)
Other Financing Sources (Uses)
Bond issued 4,805,000 - - -
Project financing - - - -
Leases issued - - - -
Premium on bonds issued 239,773 - - -
Sale of capital assets 90,318 19,286 58,458 25,698
Transfer in 1,347,883 1,924,157 6,724,164 2,153,197
Transfer out (1,044,114) (748,522) (6,369,316) (855,912)
Total Other Financing
Sources (Uses)5,438,860 1,194,921 413,306 1,322,983
Net Change in Fund Balances 3,906,630$ (243,831)$ (6,511,958)$ 174,406$
Debt Service as a Percentage of
Noncapital Expenditures*14.85%7.11%32.22%5.37%
*Debt service as a percentage of noncapital expenditures is calculated using only the capitalized capital outlay
as shown on the Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances
to the Statement of Activities.
Fiscal Year
City of Chanhassen, Minnesota
Statistical Section (Unaudited)
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
158
Table 4
2020 2021 2022 2023 2024 2025
11,800,538$ 12,046,658$ 12,714,095$ 13,403,452$ 14,328,499$ 15,275,814$
- - - - - 2,051,943
236,485 279,653 279,283 282,067 444,581 492,492
1,574,780 2,608,294 1,684,578 1,952,623 2,249,933 4,875,304
18,569,329 6,883,846 3,698,522 4,026,405 8,421,376 11,841,850
546,809 535,608 693,912 1,028,021 1,101,914 1,145,061
1,826,255 2,019,812 2,036,470 2,045,767 2,040,308 2,066,948
73,800 78,673 69,173 76,295 75,887 69,790
464,373 987,431 1,098,027 1,318,777 1,397,913 1,302,480
368,168 (22,856) (824,062) 1,055,081 1,474,923 1,907,948
408,248 445,083 561,796 288,661 217,572 4,169,969
35,868,785 25,862,202 22,011,794 25,477,149 31,752,906 45,199,599
3,361,771 3,452,273 3,261,430 3,504,923 3,541,180 3,606,839
3,786,905 3,858,508 4,535,583 4,820,264 5,303,287 5,551,292
20,127,051 3,207,828 7,851,764 2,521,038 2,808,607 3,388,557
1,854,471 2,247,485 2,448,568 2,752,491 2,826,840 2,934,137
803,234 886,104 864,577 651,641 1,010,785 1,160,200
7,280,266 10,379,700 1,613,111 10,983,787 22,498,329 57,857,919
1,585,000 360,000 536,502 740,208 830,933 854,515
143,970 92,680 92,290 125,527 482,083 1,414,313
38,942,668 24,484,578 21,203,825 26,099,879 39,302,044 76,767,772
(3,073,883) 1,377,624 807,969 (622,730) (7,549,138) (31,568,173)
- - - - 24,250,000 23,390,000
546,108 288,929 - - - -
- - 243,263 506,576 255,365 25,799
- - - - 1,192,800 259,684
46,443 84,983 154,158 293,907 266,687 105,131
2,852,877 - 642,375 793,623 2,675,226 1,289,310
(40,724) (185,794) (642,375) (793,623) (2,675,226) (1,289,310)
3,404,704 188,118 397,421 800,483 25,964,852 23,780,614
330,821$ 1,565,742$ 1,205,390$ 177,753$ 18,415,714$ (7,787,559)$
5.46%3.21%3.21%4.08%5.75%11.10%
Fiscal Year
159
2016 2017 2018 2019
Tax Capacity
Residential property 33,790,483$ 34,470,607$ 36,545,419$ 39,891,179$
Agricultural 222,144 278,224 296,153 191,360
Commercial/Industrial property 9,508,063 9,910,242 10,317,456 10,897,809
All other 669,890 764,420 869,646 896,937
Total Tax Capacity 44,190,580 45,423,493 48,028,674 51,877,285
Captured tax capacity on
tax increment district (103,638) - - -
Fiscal disparity contribution (2,119,400) (2,055,461) (2,009,509) (2,001,778)
Adjusted Tax Capacity 41,967,542$ 43,368,032$ 46,019,165$ 49,875,507$
City direct tax rate 24.25249 23.85464 22.66614 21.10456
Estimated market value 3,802,904,100$ 3,899,829,200$ 4,112,577,100$ 4,444,627,000$
Tax Capacity as a Percent of EMV 1.10%1.11%1.12%1.12%
Source: Carver County Taxpayer Services and Hennepin County
Fiscal Year
City of Chanhassen, Minnesota
Statistical Section (Unaudited)
Tax Capacity and Estimated Market Value of Property
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
160
Table 5
2020 2021 2022 2023 2024 2025
42,947,538$ 43,933,317$ 45,814,017$ 54,661,795$ 56,846,427$ 57,664,658$
135,300 133,667 125,056 138,075 140,037 111,559
11,666,538 12,245,999 12,596,386 13,760,724 14,874,523 15,793,422
886,150 935,227 600,978 601,659 564,789 614,109
55,635,526 57,248,210 59,136,437 69,162,253 72,425,776 74,183,748
(248,355) (294,955) (299,262) (343,924) (530,995) (577,718)
(2,077,771) (2,261,018) (2,268,028) (2,440,367) (2,792,897) (2,960,582)
53,309,400$ 54,692,237$ 56,569,147$ 66,377,962$ 69,101,884$ 70,645,448$
21.17559 22.11399 22.41520 20.19532 20.95605 21.79966
4,749,987,200$ 4,868,292,100$ 5,041,556,300$ 5,886,580,500$ 6,127,185,500$ 6,242,269,200$
1.12%1.12%1.12%1.13%1.13%1.13%
Fiscal Year
161
Table 6
Statistical Section (Unaudited)
Property Tax Rates - Direct and Overlapping Governments
Last Ten Fiscal Years
Fiscal Year
Direct &
Ended Operational Debt City School Carver Overlapping
December 31 and Capital Service Total District #112 County Other Total
2016 21.314 %2.938 %24.252 %39.245 %38.880 %6.417 %108.794 %
2017 21.536 2.317 23.853 37.005 38.851 6.565 106.274
2018 20.731 1.935 22.666 33.837 37.436 6.537 100.476
2019 19.314 1.791 21.105 33.631 36.488 6.368 97.592
2020 19.484 1.692 21.176 33.006 35.179 6.101 95.462
2021 21.235 0.879 22.114 32.327 34.634 5.981 95.056
2022 21.559 0.856 22.415 31.220 34.170 5.747 93.552
2023 19.472 0.723 20.195 27.747 29.267 5.012 82.221
2024 20.135 0.821 20.956 28.660 30.106 5.241 84.963
2025 20.289 1.511 21.800 27.552 30.934 5.176 85.462
Source: Carver County Taxpayer Services
*The City Direct Rate is the Urban Based Rate, not including market value levies.
City Direct Rate*Overlapping Governments
City of Chanhassen, Minnesota
162
Table 7City of Chanhassen, Minnesota
Statistical Section (Unaudited)
Principal Property Taxpayers
Current Year and Ten Years Ago
Taxable Taxable
Capacity Capacity
Value Rank Value Rank
Nicola Dell5 LP 1,249,600$ 1 1.7 %-$ - %
LFT Real Estate Company Inc 1,061,850 2 1.5 306,584 4 0.7
Istar Minnesota LLC 607,246 3 0.8 430,422 1 1.0
IPX West Village Station LLC 457,340 4 0.6 - -
Rosemount 432,342 5 0.6 321,864 3 0.8
Lake Susan Apartment Homes LLC 366,250 6 0.5 - -
8610 LLP 350,266 7 0.5 - -
Chanhassen Frontier LLC 346,369 8 0.5 - -
Centerpoint Energy Minnegasco 312,922 9 0.4 204,488 8 0.5
Northern States Power Co 308,786 10 0.4 290,656 5 0.7
SGO MN West Village LLC - - 391,666 2 0.9
Prince R. Nelson - - 228,494 6 0.5
PHM/Chanhassen Inc - - 209,474 7 0.5
Target Corporation T-0862 - - 204,178 9 0.5
LTF Real Estate MP II LLC - - 202,346 10 0.5
Total 5,492,971$ 7.6 %2,790,172$ 6.5 %
Total All Property 72,656,663$ 42,734,822$
Source: Carver County Taxpayer Services and Hennepin County
* Information pertaining to Hennepin County was not available, information listed is for Carver County only.
2025 2016*
Taxpayer Capacity Value
Total City
Percentage of
Capacity Value
Total City
Percentage of
163
Table 8City of Chanhassen, Minnesota
Statistical Section (Unaudited)
Property Tax Levies and Tax Collections
Last Ten Fiscal Years
Collection Collections
Fiscal Total of Current in Subsequent Total
Year Levy Year's Levy Years Collections
2016 10,629,621$ 10,564,815$ 99.4 %49,076$ 10,613,891$ 99.9 %
2017 10,795,121 10,718,876 99.3 21,785 10,740,661 99.5
2018 10,913,868 10,834,344 99.3 35,653 10,869,997 99.6
2019 11,019,868 10,924,102 99.1 67,454 10,991,556 99.7
2020 11,741,368 11,656,656 99.3 40,136 11,696,792 99.6
2021 12,066,700 12,013,225 99.6 48,368 12,061,593 100.0
2022 12,663,076 12,614,877 99.6 1,202 12,616,079 99.6
2023 13,463,000 13,397,330 99.5 2,837 13,400,167 99.5
2024 14,455,000 14,380,337 99.5 5,309 14,385,646 99.5
2025 15,370,000 15,267,665 99.3 - 15,267,665 99.3
Source: City Finance Department
of Levy
Percentage
Collected To Date
of Levy Collected
Percentage
164
Table 9
General G.O.Total
Fiscal Obligation Lease Other Revenue Lease Primary Per
Year Bonds Obligations Debt (1)Bonds Obligations Government Capita
2016 13,313,788$ -$ -$ 13,926,719$ -$ 27,240,507$ 0.42 1,092$
2017 12,627,803 - - 23,379,318 - 36,007,121 0.52 1,425
2018 6,626,818 - - 25,671,988 - 32,298,806 0.44 1,238
2019 5,890,833 - - 23,755,499 - 29,646,332 0.38 1,125
2020 4,289,848 - 546,108 28,535,933 - 33,371,889 0.41 1,228
2021 3,913,863 - 835,037 26,311,508 - 31,060,408 0.34 1,182
2022 3,527,878 221,761 690,037 24,132,877 26,136 28,598,689 0.29 1,081
2023 3,126,893 614,439 448,727 22,169,245 37,140 26,396,444 0.25 977
2024 28,158,708 675,181 207,417 20,295,613 218,636 49,555,555 0.45 1,920
2025 51,322,489 449,663 - 18,381,009 139,136 70,292,297 (a)2,706
Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements.
(1) The City has a Joint Powers Agreement with Carver County for the Lyman Boulevard-Phase 3 project
and the pedestrian trail to the Arboretum. The City is paying its portion of those projects to Carver County through 2025
at 0% interest.
(2) Information pertaining to Chanhassen Personal Income is not available, information for
Carver County was included instead.
(a) Information not available
City of Chanhassen, Minnesota
Statistical Section (Unaudited)
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
Income (2)
of Personal
Percentage
Governmental Activities
Business-type
Activities
165
Table 10
Net General
General G.O.Total General Less Amounts Net General Percentage Obligation
Fiscal Obligation Revenue Obligation Restricted for Obligation of Tax Bonded Debt
Year Bonds Bonds Bonded Debt Debt Service Bonded Debt Capacity Per Capita
2016 13,313,788$ 13,926,719$ 27,240,507$ (6,418,913)$ 20,821,594$ 48.72%834$
2017 12,627,803 23,379,318 36,007,121 (6,413,214) 29,593,907 67.23%1,171
2018 6,626,818 25,671,988 32,298,806 (1,189,446) 31,109,360 66.81%1,192
2019 5,890,833 23,755,499 29,646,332 (1,283,606) 28,362,726 56.31%1,076
2020 4,289,848 28,535,933 32,825,781 (564,713) 32,261,068 60.00%1,187
2021 3,913,863 26,311,508 30,225,371 (594,203) 29,631,168 53.63%1,128
2022 3,527,878 24,132,877 27,660,755 (618,646) 27,042,109 47.38%1,031
2023 3,126,893 22,169,245 25,296,138 (673,860) 24,622,278 37.09%912
2024 28,158,708 20,295,613 48,454,321 (897,387) 47,556,934 68.82%1,843
2025 51,322,489 18,381,009 69,703,498 (2,610,709) 67,092,789 94.97%2,583
Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements.
City of Chanhassen, Minnesota
Statistical Section (Unaudited)
Ratios of General Bonded Debt Outstanding
Last Ten Fiscal Years
166
Table 11City of Chanhassen, Minnesota
Statistical Section (Unaudited)
Computation of Direct and Overlapping Debt
December 31, 2025
Estimated
Share of
Debt Overlapping
Outstanding Debt
Direct Debt
City of Chanhassen*51,772,152$ 100.00 %51,772,152$
Overlapping Debt
Eastern Carver County School District 188,485,000 33.54 %63,223,524
Eden Prairie Independent School District 95,454,751 1.01 964,093
Carver County 5,200,000 28.50 1,481,792
Hennepin County 1,210,482,117 0.06 726,289
Hennepin Suburban Park District 51,775,077 0.08 41,420
Hennepin Regional Railroad Authority 71,548,562 0.06 42,929
Metropolitan Council 426,134 0.03 128
Metro Transit 73,513,264 0.03 22,054
Total Overlapping Debt 1,696,884,905 63.31 66,502,229
Total Direct and Overlapping Debt 1,748,657,057$ 118,274,381$
* Excludes debt related to the City's business-type activities.
Estimated
Percentage
Applicable
167
City of Chanhassen, Minnesota
Statistical Section (Unaudited)
Legal Debt Margin Information
Last Ten Fiscal Years
2016 2017 2018 2019
Population 24,951 25,273 26,088 26,335
Debt Limit 114,087,123$ 116,994,876$ 123,377,313$ 133,338,810$
Total Net Debt Applicable to Limit 6,721,445 6,048,333 5,377,482 4,555,132
Legal Debt Margin 107,365,678$ 110,946,543$ 117,999,831$ 128,783,678$
Total Net Debt Applicable to the Limit as
a Percentage of Debt Limit 5.89%5.17%4.36%3.42%
Total Net Debt Applicable to Limit per Capita 269$ 239$ 206$ 173$
Legal Debt Margin Calculation for Fiscal Year
Estimated Taxable Market Value
Debt Limit (3% of Taxable Market Value)
Debt Applicable to Limit
Total Bonded Debt
Less
Enterprise Fund Debt
Less
Cash and investments in G.O. Bond Debt Service Fund
Total Net Debt Applicable to Limit
Legal Debt Margin
Note: Under state of Minnesota law, the City's outstanding general obligation debt should not exceed 3 percent of the
market value of taxable property. By law, the general obligation debt subject to the limitation may be offset by amounts
set aside for the extinguishment of those obligations.
Fiscal Year
168
Table 12
2020 2021 2022 2023 2024 2025
27,170 26,271 26,237 27,005 25,807 25,979
142,499,616$ 146,048,763$ 151,246,689$ 176,597,415$ 183,815,565$ 187,268,076$
3,686,297 3,288,043 2,883,662 2,431,979 26,848,686 48,463,253
138,813,319$ 142,760,720$ 148,363,027$ 174,165,436$ 156,966,879$ 138,804,823$
2.59%2.25%1.91%1.38%14.61%25.88%
136$ 125$ 110$ 90$ 1,040$ 1,865$
6,242,269,200$
187,268,076$
69,703,498$
(18,381,009)
(2,859,236)
48,463,253
138,804,823$
Fiscal Year
169
Table 13
Special
Fiscal Assessment
Year Collections Principal Interest
2016 6,298$ 1,155,000$ 26,175$ 0.005 %
2017 - - - -
2018 - - - -
2019 - - - -
2020 - - - -
2021 - - - -
2022 - - - -
2023 - - - -
2024 - - - -
2025 - - - -
Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements.
Improvement bonds with a designated revenue source of special assessments were paid off in 2016.
City of Chanhassen, Minnesota
Statistical Section (Unaudited)
Pledged-revenue Coverage
Last Ten Fiscal Years
Improvement Bonds
Debt Service
Coverage
170
Table 14City of Chanhassen, Minnesota
Statistical Section (Unaudited)
Demographic and Economic Statistics
Last Ten Fiscal Years
Carver County Carver County
Fiscal Chanhassen Personal Income Per Capita
Year Population (1)(thousands) (3)Personal Income (3)
2016 24,951 2.9 %3.3 %6,539,351$ 64,864$
2017 25,273 3.0 2.9 6,990,605 68,125
2018 26,088 2.6 2.5 7,383,477 70,880
2019 26,355 2.7 2.8 7,755,123 73,328
2020 27,170 5.4 5.2 8,064,279 75,158
2021 26,271 2.7 2.9 9,077,666 83,389
2022 26,237 1.8 2.0 9,736,399 88,416
2023 27,005 2.3 2.4 10,355,178 93,242
2024 25,807 2.5 2.6 10,825,179 96,114
2025 25,979 3.3 3.4 (a)(a)
Sources:(1) Federal Census Data and Chanhassen Planning Department
(2) State of Minnesota, Department of Employment and Economic Development
(3) U.S. Department of Commerce, Bureau of Economic Analysis
(a) Information not available
Note: Information pertaining to Chanhassen Personal Income and Per Capita Personal Income is not available,
information for Carver County was included instead.
Rate (2)
Unemployment
Carver CountyChanhassen
Unemployment
Rate (2)
171
Table 15
Number Number
of Employees Rank of Employees Rank
Lifetime Fitness 2,345 1 38.4 %1,218 1 21.0 %
The Bernard Group 900 2 14.7 581 4 10.0
Rosemount Inc 554 3 9.1 943 3 16.3
Instant Web Companies 541 4 8.9 1,193 2 20.6
General Mills 360 5 5.9 326 7 5.6
Eastern Carver County Schools 343 6 5.6 400 5 6.9
Minnesota Landscape Arboretum 332 7 5.4 270 9 4.7
Chanhassen Dinner Theatres 320 8 5.2 275 8 4.7
Target 234 9 3.8 -
RR Donnelley 181 10 3.0 382 6 6.6
Checkpoint Systems Inc - 204 10 3.5
Total 6,110 100.0 %5,792 100.0 %
Source: Survey by City Administration and Finance Departments.
Note: This does not purport to be a comprehensive list and is based on available data obtained through a
survey of individual employers. Some employers do not respond to inquiries for employment data.
* The statistic for total City employment is not available, therefore the percentage represents the
percentage of the top ten listed.
Employer Employment*
City of Chanhassen, Minnesota
Statistical Section (Unaudited)
Principal Employers
Current Year and Nine Years Ago
Employment*
2025 2016
Percent of Percent of
Total City Total City
172
Table 16
General Public Public Culture and Community
Government Safety Works Recreation Development Total
2016 13 10 29 12 6 70
2017 13 10 31 13 6 73
2018 13 10 31 13 6 73
2019 13 9 31 13 6 72
2020 13 9 32 14 6 74
2021 15 11 32 14 6 78
2022 17 13 32 13 6 81
2023 19 17 32 13 4 85
2024 18 18 32 13 4 85
2025 19 18 32 13 4 86
Source: City Finance Department
Year
Function
City of Chanhassen, Minnesota
Full-time Equivalent City Government Employees by Function
Last Ten Fiscal Years
173
2016 2017 2018 2019
2,891 2,981 3,085 3,259
73,881,121$ 82,430,550$ 136,016,287$ 103,902,405$
17,769 17,769 17,480 17,480
45 45 45 45
22.88 22.88 22.88 22.88
employees (excluding fire department)70 73 73 72
15 15 15 15
Number of crimes - MNCJRS*313 - - -
Number of crimes - NIBRS*472 737 698 692
Water
Number of customers 8,254 8,312 8,407 8,481
Daily average consumption - gallons 2,565,905 2,624,486 2,888,586 2,247,455
Plant capacity - gallons 8,550,000 8,550,000 17,100,000 17,100,000
City of Chanhassen, Minnesota
Operating Indicators by Function
Last Ten Fiscal Years
* Crime statistics in Minnesota had been reported for the last forty years utilizing Minnesota's Criminal Justice Reporting
System (MNCJRS). The Federal Bureau of Investigation has mandated that all states become National Incident Based
Reporting System (NIBRS) compliant by 2019. The Carver County Sheriff's Office transitioned to NIBRS June 1, 2016.
Registered voters
Function/Program
Building
Total permits issued
Total estimated value
Election
Average number of permanent full-time
Police
Average number of employees
Source: Various City Departments
Fire
Average number of employees
General government
Area of city - square miles
174
Table 17
2020 2021 2022 2023 2024 2025
4,528 6,072 3,936 3,439 3,277 3,333
87,160,588$ 160,438,828$ 87,812,422$ 90,564,997$ 160,521,505$ 157,842,212$
19,245 19,245 19,182 19,182 19,959 19,959
45 41 37 30 27 26
22.88 22.88 22.88 22.88 22.88 22.88
74 78 81 85 85 86
15 15 15 15 15 15
- - - - - -
796 758 740 526 443 449
8,539 8,608 8,689 8,732 8,760 8,773
2,677,163 3,040,992 2,953,945 3,087,597 2,429,693 2,598,337
17,100,000 17,100,000 17,100,000 17,100,000 17,100,000 17,100,000
175
City of Chanhassen, Minnesota
Capital Asset Statistics by Function
Last Ten Fiscal Years
2016 2017 2018 2019
Fire
Number of stations 2 2 2 2
Culture and Recreation
Acres of parks 384 445 445 445
Acres of open space 568 593 593 693
Number of shelter buildings 4 4 4 4
Number of picnic shelters 15 18 21 21
Number of playgrounds 27 27 27 28
Number of swimming beaches 5 5 5 5
Number of tennis courts 15 16 16 16
Number of outdoor pickleball courts 6 10 10 10
Police
Number of stations 1 1 1 1
Public works
Miles of streets 117.3 117.3 117.8 117.9
Miles of sidewalks 36.7 36.7 36.7 36.7
Miles of trails 59.9 59.9 62.5 63.9
Sewer
Miles of storm sewers 81.5 81.7 84.0 84.1
Miles of sanitary sewers 127.0 127.0 127.4 127.5
Number of lift stations 31 31 31 31
Water
Miles of watermains 147.0 147.0 150.2 150.4
Number of wells 12 12 12 12
Source: Various City Departments
Function/Program
176
Table 18
2020 2021 2022 2023 2024 2025
2 2 2 1 1 1
445 445 445 445 440 445
693 693 693 693 693 730
4 4 4 4 4 4
21 21 21 21 21 21
28 28 28 28 28 28
5 5 5 5 5 5
16 16 16 16 16 16
10 10 10 10 10 10
1 1 1 1 1 1
118.1 118.1 118.9 118.9 118.7 118.9
36.7 36.7 36.8 36.8 36.9 36.9
66.2 66.6 66.6 68.9 74.7 74.5
84.9 85.9 86.9 87.4 88.5 92.3
127.7 128.4 130.3 130.3 133.8 137.2
31 31 32 32 32 33
151.1 151.6 152.5 154.7 159.1 160.5
12 12 12 12 12 12
177