Council accepts Cottage Grove 2025 financial report after auditors issue clean opinion

The Cottage Grove City Council voted to accept the annual comprehensive financial report for the year ended Dec. 31, 2025, after auditors presented a summary of their findings.

Rebecca Peterson, the auditor presenting the report, told the council the audit resulted in "a clean, unmodified opinion" on the city's 2025 financial statements and that the audit did not identify any internal control findings or instances of reportable noncompliance in the Minnesota legal compliance testing. She described the fourth required communication — the letter to those charged with governance — and pulled out key matters for the council's attention.

Peterson identified two sensitive estimates in the financial statements: the ambulance receivable uncollectible estimate and the city's share of the net pension liability. She said the city's share of the pension liability for 2025 is "about $10 million," noting the figure is an actuarial allocation from the state's PAR pension plan.

Peterson also flagged an "other matters" item: city staff discovered that 2025 approved ambulance rates were not used to generate billings for a portion of the year. She said redating or re-running the billings was not feasible and that because reimbursements are capped by insurance and Medicare, the net effect on revenue is immaterial, but the council should be aware of it.

Council member Bethi moved to accept the report; the motion was seconded by Council member Garza and carried by voice vote.

The auditor also called out financial highlights included in the report: the city’s general fund reserves were at about 50% of next year’s budgeted expenditures (within the policy target of 45%–55%), about $39 million in MPCA-funded water treatment and infrastructure investments in 2025, and a property tax collection rate just under 99%.