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CITY OF PEQUOT LAKES,MINNESOTA
<br /> MANAGEMENT'S DISCUSSION AND ANALYSIS
<br /> DECEMBER 31,2022
<br /> THE CITY AS A WHOLE(Continued)
<br /> Governmental Activities
<br /> Revenue for the City's governmental activities decreased by$315,144(10.78 percent),largely due to the Pequot Lakes Fire
<br /> District being established through a joint powers agreement with the City of Breezy Point during the year.This resulted in the fire
<br /> department's activity being broken out from the City's governmental activities and reported as a fiduciary fund in the City of
<br /> Pequot Lakes'financial statements for the year ended December 31,2022. Total expenses for the City's governmental activities
<br /> increased$204,704(8.25 percent),largely due to increased expenses for general government and public safety expenses related to
<br /> pensions.
<br /> Table 3 presents the cost of each of the City's programs-general government,public safety,public works,parks and recreation,
<br /> economic development,cemetery and debt service-as well as each program's net cost(total cost less revenues generated by the
<br /> activities).The net cost shows the financial burden that was placed on the City's taxpayers by each of these functions. Activities
<br /> (net of capital outlay which is excluded from Table 3)were generally comparable to the prior year as operations remained fairly
<br /> consistent with the prior year,with the exception of:
<br /> • General Government total and net cost of services increased largely due to increased expenses related to pensions,as
<br /> noted above,as well as increased costs for property and workers' compensation insurance in the current year.
<br /> • Public Safety net cost of services increased due to a significant increase in pension expenses in conjunction with a
<br /> decrease in charges for services revenues for fire protection services.These changes are the result of the Pequot Lakes
<br /> Fire District being established and broken out from the City in the current year,as previously discussed.
<br /> • Public Works net cost of services increased due to the City receiving a Business Development Public Infrastructure
<br /> Grant in 2021 that offset prior year road construction costs.No such grant was received in the current year.
<br /> Table 3
<br /> Governmental Activities
<br /> Total Cost Net Cost
<br /> of Services of Services
<br /> 2022 2021 2022 2021
<br /> General Government $ 721,508 $ 641,415 $ 547,045 $ 447,546
<br /> Public Safety 984,413 863,011 754,366 469,000
<br /> Public Works 782,775 817,725 789,373 652,488
<br /> Parks and Recreation 99,302 71,267 (1,916) 62,197
<br /> Economic Development 37,593 43,263 37,593 43,263
<br /> Cemetery 1,761 3,934 1,361 (1,666)
<br /> Debt Service 57,382 39,415 57,382 39,415
<br /> Totals $ 2,684,734 $ 2,480,030 $ 2,185,204 $ 1,712,243
<br /> Business-type Activities
<br /> Revenues of the City's business-type activities(see Table 2)decreased by$56,426(7.65 percent)and program expenses increased
<br /> by$118,925(22.98 percent). The increase in expenses is primarily due to an increase in wages and repair and maintenance
<br /> expenses in the current year.
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