2018 CAFR
CITY OF NEW HOPE
NEW HOPE, MINNESOTA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED
DECEMBER 31, 2018
THIS PAGE IS LEFT
BLANK INTENTIONALLY
CITY OF NEW HOPE
HENNEPIN COUNTY, MINNESOTA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED
DECEMBER 31, 2018
KIRK MCDONALD - CITY MANAGER
PREPARED BY: DEPARTMENT OF FINANCE
Member GFOA of U.S. and Canada
THIS PAGE IS LEFT
BLANK INTENTIONALLY
City of New Hope, Minnesota
Comprehensive Annual Financial Report
Table of Contents
For the Year Ended December 31, 2018
Page No.
Introductory Section
Letter of Transmittal from City Manager 8
Certificate of Achievement for Excellence in Financial Reporting 14
Organizational Chart 15
Elected and Appointed Officials 16
Financial Section
Independent Auditor’s Report 19
Management’s Discussion and Analysis 23
Basic Financial Statements
Government-wide Financial Statements
Statement of Net Position 35
Statement of Activities 36
Fund Financial Statements
Governmental Funds
Balance Sheet 40
Reconciliation of the Balance Sheet to the Statement of Net Position 43
Statement of Revenues, Expenditures and Changes in Fund Balances 44
Reconciliation of the Statement of Revenues, Expenditures and
Changes in Fund Balances to the Statement of Activities 46
General Fund
Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual 47
Economic Development Authority Fund
Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual 49
Proprietary Funds
Statement of Net Position 50
Statement of Revenues, Expenses and Changes in Net Position 54
Statement of Cash Flows 56
Fiduciary Funds
Statement of Fiduciary Net Position 60
Notes to the Financial Statements 61
Required Supplementary Information
Schedule of Employer’s and Non-Employer Contributing Entity’s Share of
Public Employees Retirement Association Net Pension Liability - General Employees Retirement Fund 100
Schedule of Employer’s Public Employees Retirement Association Contributions -
General Employees Retirement Fund 100
Notes to the Required Supplementary Information - General Employees Retirement Fund 101
Schedule of Employer’s Share of Public Employees Retirement Association Net Pension Liability -
Public Employees Police and Fire Fund 102
Schedule of Employer’s Public Employees Retirement Association Contributions -
Public Employees Police and Fire Fund 102
Notes to the Required Supplementary Information - Public Employees Police and Fire Fund 103
Schedule of Changes in the City’s Total OPEB Liability and Related Ratios 104
Combining and Individual Fund Financial Statements and Schedules
Nonmajor Governmental Funds
Combining Balance Sheet 106
Combining Statement of Revenues, Expenditures and Changes in Fund Balances 107
Nonmajor Special Revenue Funds
Subcombining Balance Sheet 110
Subcombining Statement of Revenues, Expenditures and Changes in Fund Balances 111
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual
Solid Waste Management Fund 112
5
City of New Hope, Minnesota
Comprehensive Annual Financial Report
Table of Contents (Continued)
For the Year Ended December 31, 2018
Page No.
Combining and Individual Fund Financial Statements and Schedules (Continued)
Nonmajor Capital Projects Funds
Subcombining Balance Sheet 114
Subcombining Statement of Revenues, Expenditures and Changes in Fund Balances 115
Nonmajor Debt Service Funds
Subcombining Balance Sheet 118
Subcombining Statement of Revenues, Expenditures and Changes in Fund Balances 119
General Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual 121
Internal Service Funds
Combining Statement of Net Position 128
Combining Statement of Revenues, Expenses and Changes in Net Position 129
Combining Statement of Cash Flows 130
Agency Fund
Statement of Changes in Assets and Liabilities 131
Statistical Section (Unaudited)
Financial Trends
Summary Financial Report
Revenues and Expenditures for General Operations - Governmental Funds 137
Net Position by Component 138
Changes in Net Position 140
Governmental Activities Tax Revenues by Source 145
Fund Balances of Governmental Funds 146
Changes in Fund Balances of Governmental Funds 148
General Government Tax Revenues by Source 151
Revenue Capacity
Tax Capacity, Market Value and Estimated Actual Value of Taxable Property 152
Property Tax Capacity Rates - Direct and Overlapping Governments 154
Principal Property Taxpayers 156
Property Tax Levies and Collections 159
Debt Capacity
Ratios of Outstanding Debt by Type 160
Ratios of General Bonded Debt Outstanding 162
Computation of Direct and Overlapping Debt 163
Legal Debt Margin Information 164
Pledged Revenue Coverage 166
Demographic and Economic Information
Demographic and Economic Statistics 167
Principal Employers 168
Operating Information
Full-Time Equivalent City Government Employees by Function 170
Operating Indicators by Function 172
Capital Asset Statistics by Function 174
6
INTRODUCTORY SECTION
CITY OF NEW HOPE
NEW HOPE, MINNESOTA
FOR THE YEAR ENDED
DECEMBER 31, 2018
7
May 15, 2019
Honorable Mayor and City Council
City of New Hope
4401 Xylon Avenue North
New Hope, MN 55428-4898
The Comprehensive Annual Financial Report (CAFR) of the City of New Hope, Minnesota (the City), for the fiscal year ended
December 31, 2018, is submitted herewith. As required by state law, this report is published annually, prior to June 30, and submitted
to the Office of the State Auditor. The form and contents of this report and the accompanying financial statements and statistical tables
are designed to meet the needs of a broad spectrum of financial statement readers, and were prepared in conformance with standards
set forth by:
1. The Governmental Accounting Standards Board (GASB)
2. The American Institute of Certified Public Accountants
3. The United States Office of Management and Budget
4. The State Auditor, State of Minnesota
5. The Government Finance Officers' Association (GFOA) of the United States and Canada
The financial data presented in this report was prepared by the City's finance department staff. The responsibility for the accuracy of
the presented data and the completeness and fairness of the presentation, including all disclosures, rests with the City. We believe the
data as presented is accurate in all material respects and is presented in a manner designed to fairly set forth the financial activity of
the various funds, and that all disclosures necessary to enable the reader to gain the maximum understanding of the City's financial
activity have been included.
Accounting principles generally accepted in the United States of America require that management provide a narrative introduction,
overview, and analysis to accompany the basic financial statements in the form of the 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 City's
MD&A can be found immediately following the report of the independent auditors.
PROFILE OF THE GOVERNMENT
The City is a residential suburb of the City of Minneapolis with a population of 21,545. The City is 5.6 square miles in area and is
substantially developed with the exception of just under 12 acres of property which consists primarily of residential zoned property.
The City was incorporated in 1953 and enjoys a diverse commercial and residential tax base.
The City operates under the "Optional Plan B” government structure as defined in Minnesota Statutes. Optional Plan B is known as
the council-manager plan. Under this plan, as specified in the statutes, "The City Council shall exercise the legislative power of the
City and determine all matters of policy. The city manager shall be the head of the administrative branch of the city government and
shall be responsible to the City Council for the proper administration of all affairs relating to the City." The City Council is composed
of five members, including the mayor. The city manager is appointed by the City Council.
CITY O F NEW HOPE
4401 Xylon Avenue North • New Hope, Minnesota 55428-4898 • www.ci.new-hope.rrm.us
City Hall: 763-531-5100 • Police (non-emergency): 763-531-5170 • Public Works: 763-592-6777 • TDD: 763-531-5109
City Hall Fax: 763-531-5136 • Police Fax: 763-531-5174 • Public Works Fax: 763-592-6776
8
The City's accounting system is organized and operated on a "fund basis." Each fund is a distinct self-balancing accounting entity. The
City's accounting records for governmental fund types are maintained on the modified accrual basis and the accrual basis is utilized by
proprietary and fiduciary funds, as defined in the notes to basic financial statements.
The City maintains a system of internal control that provides a reasonable assurance of accounting data reliability, and the
safeguarding of assets against loss from unauthorized use or disposition. The concept of reasonable assurance recognizes the cost of
control should not exceed the benefits likely to be derived, and the evaluation of costs and benefits requires estimates and judgments
by management.
Budgets are maintained for the General Fund and certain special revenue funds (as noted in the notes to basic financial statements).
The city manager is directed to submit an annual budget to the City Council. Upon adoption of the annual budget resolution by the
City Council, it becomes the formal budget for city operations. Any changes to the original budget have to be authorized by City
Council action, but must maintain a balanced budget by either recognizing additional receipts, or utilizing fund balances.
Budget controls are maintained through a system of purchase orders and monthly financial statements which compare actual
performance with the budget.
The City has reviewed its reporting entity definition in light of GASB's pronouncements. The entities included in the City's report are
those for which the City has financial accountability.
Blended component units, although legally separate entities, are, in substance, part of the primary government's operations and are
included as part of the primary government. Accordingly, the Economic Development Authority (EDA) is reported as special revenue
fund of the primary government and the Housing and Redevelopment Authority (HRA) reports a debt service fund and a capital
projects fund within the primary government.
The City provides a full range of municipal services, including: police and fire protection, culture and recreation, public
improvements, street maintenance, sanitary and storm sewer collection, water distribution, planning, zoning and building inspection
services, and general administrative services.
ECONOMIC OUTLOOK
The City is a nearly fully developed community with little vacant land available for development. The City has a good mix of
single/multi-family residential housing stock, parks and open space, and a strong commercial/industrial tax base.
There are approximately 480 commercial/industrial/service businesses in the City, and the major employers are listed as follows:
Major Employers Products/Services New Hope Based Employees
(Total Employees)
Independent School District 281 Education 791 (1,852)
Hy-Vee Grocery & convenience store 632
Minnesota Masonic Home/
North Ridge Care Center Skilled nursing care facility 560
St. Therese Home of New Hope Skilled nursing care facility 544 (1,117)
Horwitz Mechanical contractor 345
Perrigo Company Pharmaceutical & medicine manufacturing 290
Intermediate District 287 Education 266 (943)
Coborn’s Delivers Direct selling establishments 240
Liberty Diversified International Stationery supplies 200
Parker - Hannifin Oildyne Division Hydraulic component production 172
The City has four major industrial park areas including Science Industry Park, 49th and Quebec Avenues, Winnetka Avenue area
between 32nd and 36th Avenues, and north of Medicine Lake Road on Nevada Avenue.
The major shopping centers/areas in the City include: Midland Shopping Center, Winnetka Commons Shopping Center, New Hope
Mall, Winnetka Center, Post Haste Square, and the 42nd Avenue Redevelopment District.
9
Business Assistance Programs
Local commercial/industrial businesses are extremely important to the City. The City Council has undertaken programs and initiatives
to address both commercial and industrial properties. These programs focus on: 1} retaining existing businesses, 2} assisting with
expansions, 3} attracting new businesses to vacant available buildings, 4} attracting new construction to a limited number of available
vacant sites, and 5} improving communication with businesses and responding more effectively to business concerns and inquiries.
The City Council has continued the Outstanding Business Award Program initiated in 2006, to recognize the City's businesses'
contributions to the local community.
In 2009, the Business Networking Group forum was established to share information and improve communications between
businesses and the City and the forum continued through 2018. The City is also a long time member of the TwinWest Chamber of
Commerce. The city has also partnered with Hennepin County and Open to Business, a company that provides free business advice
and also provides gap financing.
In 2018, $46,952,876 of reinvestment was approved in the City in construction permits. The City will work to increase the momentum
to continually expand the tax base while continuing to provide the high level of services delivered to the residents, businesses, and
property owners of the City.
PLANNING AND DEVELOPMENT
The following planning and development activities occurred in 2018:
Police Department & City Hall
A new police department and city hall for the city of New Hope is currently under construction. The City Council approved a bid from
Terra General Contractors for $14.78 million in December of 2017 for the new building. The sale of $18.435 million in general obligation
capital improvement plan bonds at the interest rate of 2.6339% was also approved to pay for project. A ground breaking for the building
took place on January 5, 2018, and it anticipated that the building will be completed in July of 2019.
The pool that was previously located where the new police department and city hall is being constructed was demolished and will be
reconstructed in the area of the current city hall. In June 2018, the City Council voted on a preferred pool concept and entered into an
agreement with Stantec Engineering to provide the final planning and design. The preferred pool concept includes a current channel,
two body slides, a shallow water area, and a 50-meter, 8-lane pool with diving boards. The original concept had a 25-yard pool, however
during the 2018 legislative session; the city received $2 million in order to expand the 25-yard pool concept to 50 meters. Construction
on the pool is expected to begin in August of 2019 with a June of 2020 opening.
IronWood
Alatus, LLC constructed a four-story, 182-unit luxury apartment building on the site previously owned by the city, adjacent to the
New Hope Village Golf Course. The city completed a market feasibility study in the spring of 2015 to determine what type of
redevelopment was best suited for the site and concluded that luxury apartments were the most viable option. The final plat and
vacation of easements for the project were approved in February 2017, and construction of the $43 million building began in the
summer of 2017. Residents began moving into the building in January 2019.
Good Samaritan Society
Good Samaritan expanded its campus in New Hope with the construction of a three-story, 31-unit assisted living facility. Construction
on the $4.4 million building began in October 2017 and was completed in the fall of 2018. Good Samaritan acquired two parcels to the
north of the property in 2012, where the assisted living facility was constructed. The building connection and site layout created the
need for special zoning considerations, and the property was rezoned to Planned Unit Development to allow flexibility to
accommodate the project. The city created a housing Tax Increment Financing District in conjunction with the project that authorized
the expenditures for site improvements and preparation, utilities, administrative costs, and other qualifying improvements.
Now Mart
A 5,060-square foot gas station and convenience store opened in December 2018 at 7201 Bass Lake Road. Construction of 3,780-
square foot car wash on the same site is underway and will be completed in the summer of 2019. The $8.471 million project replaced a
previously underutilized retail building. The development includes several environmentally conscious improvements, including a
stormwater collection system that retains all rainwater onsite and re-uses it for the car wash. A filtration system will recycle and reuse
water that is used by the car wash.
10
CubeSmart Self Storage
The previously vacant industrial building at 3216 Winnetka Avenue North was converted into a self-storage facility. The $3.758
million project included a 23,000-square foot addition to the second floor at the southwest corner of the building. Building
improvements included several exterior modifications and improvements, including the second floor addition, fresh paint on the
existing building, new roofing, additional windows, parking area improvements, and the construction of an outdoor storage area.
McDonald’s Restaurant
McDonald’s, located at 4201 Winnetka Avenue North, completed a $450,000 renovation project in 2018. Improvements included
modernizing the building’s facade, reconfiguring the site to accommodate tandem drive-thru lanes, new signage, and
improvements to interior restaurant areas.
Holy Trinity Church
Holy Trinity Church received approval in October 2018 to expand their school and daycare center by approximately 11,123 square
feet with a second floor addition over the existing school area. The project also includes a 1,140 square foot expansion of the main
floor entryway. Construction is expected to begin in the summer of 2019.
Northwest Church of Christ
A 5,400-square foot expansion at the Northwest Church of Christ campus, located at 8624 50th Avenue North, was completed in
December 2018. The $1.495 million addition includes a new assembly hall to help accommodate the need for additional space for a
growing congregation. The church purchased the adjacent parcel to the north of the property that contained a single-family home,
which was razed in preparation for the expansion.
Housing
The City's commitment to maintaining its housing stock is supported through a variety of cooperative projects and programs.
Approximately $5,095,775 was reinvested in the City's housing stock in 2018 for private home construction, additions, and/or
remodeling projects.
1. Housing rehabilitation programs:
a. Community Development Block Grant (CDBG) Housing Rehabilitation Program - administered by Hennepin County:
i. CDBG funded activity in 2018 continued the expenditure of previously allocated CDBG funds.
ii. The city continued to operate their scattered site housing program by acquiring multiple properties for
demolition and new construction. Since 2014, the Economic Development Authority has acquired 14
properties, resulting in the creation of 17 lots. The lots purchased by the city are located at 7215, 7303,
7311, and 9121 62nd Avenue North, 4511 Boone Avenue North, 3751 and 6065 Louisiana Avenue North,
3856 Maryland Avenue North, 4415 Nevada Avenue North, 5355 Oregon Avenue North, 5212
Pennsylvania Avenue North, 5431 Virginia Avenue North, 6059 West Broadway, and 5400 Yukon Avenue
North. Three of the lots were large enough to split into two buildable lots and were sold to developers for
the construction of two new single-family, owner-occupied homes.
b. Rehabilitation Re-sell:
i. The city has purchased two distressed properties for rehabilitation in the last three years. The city chose to
rehabilitate the home at 3984 Zealand Avenue North as it was too valuable to demolish. It sold for
$295,000. The city also recently acquired the property at 3924 Utah Avenue North and intends to
rehabilitate the home. The city has a goal of breaking even on such projects and will invest all available
resources into the home to create the highest valued product possible.
2. Housing maintenance programs
a. Code compliance inspections – 1,546 inspections completed in 2018
b. Rental housing program and inspections:
i. A rental registration permit program, which requires the registration and inspection of all rental units in the
City, was implemented in 2006 for single-family and 2007 for multi-family units.
ii. A total of 505 single-family rental units are registered with the City.
iii. A total of 3,776 multi-family rental units are registered with the City.
c. Multifamily Property Manager’s Association – quarterly meetings.
d. Partnership with Center for Energy and Environment and Hennepin County for fix-up loans and grants.
3. Metropolitan Council Livable Communities Act - annually renewed by the City.
11
PARKS AND RECREATION
The City provides the residents with a vast array of park amenities and recreation opportunities at an affordable cost. In 2018, the city
maintained 18 parks, four additional school district parks (summer only), two sheets of indoor ice at the ice arena, a par 3 nine-hole
golf course, outdoor theatre and skate park. In addition, the city programs the New Hope Community Gyms during non-school time.
During 2018, several park projects took place including the replacement of the playground at Sunnyside Park, replacement of the
basketball courts at both Begin and Sunnyside Parks, court resurfacing of the basketball courts at Liberty and Corner parks, Buckthorn
removal was continued in several parks and new signage was installed at Sunnyside Park. The city also added additional wood fiber
mulch at several playgrounds and replaced fencing at Northwood Park Field #1 backstop, Begin Park Softball Field backstop and
dugouts, Lighted Field Softball backstop, dugouts and sidelines, Lions Park Field #1 backstop, Lions Park Field #2 backstop and 1st
base dugout and Sunnyside Park Softball Field backstop and dugouts. The parking lots at Lighted Field received crack seal, seal coat
and fog seal. During the 2017-2018 winter season parks staff also continued to plow a section of trail at Hidden Valley Park and
Northwood Park. The plowing was extended to include a loop at Lions Park.
At the outdoor theatre, the popular Movies in the Park continued and the musical ran for three weekends. In addition, theater classes
and parent/child story time were held at the facility.
The outdoor swimming pool was not open in 2018, due to its removal for a new police station/city hall facility. The City was awarded
$2 million in state bonding to construct a 50-meter pool. In June, the Council voted to move forward with the project and the final
design. A great deal of time was spent finalizing plans for the pool and Civic Center Park amenities.
The ice arena offered year-round use of ice time for youth, adult recreational, league hockey and skating lessons. In addition, lighting
on the north rink was replaced with LED, and lighting on south rink and non-ice areas were retrofitted with LED. The protective
netting on both rinks was replaced and a new ice edger and Zamboni were received. Both the advertising agreement and concession
stand agreement were renewed for three years each with the Armstrong Cooper Youth Hockey Association.
The golf course continued to offer leagues, lessons, tournaments, open golf and picnic rentals. During the non-golf season, the
clubhouse continued to be rented to outside groups. In 2018, the irrigation controllers were replaced and riprap was added along the
east side of the 9th hole pond. Some modifications were made to the golf course entrance as part of the Ironwood development.
PROPERTY TAX PROCESS
Preliminary tax levies have to be sent to the county auditor by September 15th. This levy can be lowered at a later date, but cannot be
increased. The county sends out notices to all property owners informing them of proposed property taxes and the dates of public
hearings by the various taxing districts. The final budget is adopted by the City in December at a City Council meeting after the public
hearing.
OTHER PERTINENT INFORMATION
Independent Audit - As required by Minnesota statute, City policy requires an annual audit of all city accounts to be made by
independent certified public accountants selected by the City Council. This requirement has been complied with and the opinion of
MMKR is included with this report.
Claims and Litigation - The City had the usual and customary types of miscellaneous claims pending at year-end, mostly of a minor
nature and entirely covered by insurance carried for that purpose.
Long-term Financial Planning - Management provided a long-term plan to City Council in 2018 that will highlight the tax effect of
major capital and operating decisions. This will also be an important document when preparing future budgets.
12
AWARDS AND ACKNOWLEDGEMENTS
The Certificate of Achievement for Excellence in Financial Reporting - The Government Finance Officers Association of the United
States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City for its
comprehensive annual financial report for the fiscal year ended December 31, 2017. This was the 10th consecutive year that the
government has achieved this prestigious award. In order to be awarded a Certificate of Achievement, a government must publish an
easily readable and efficiently organized comprehensive annual 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 comprehensive annual 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.
Preparation of this report could not have been accomplished without the professional, efficient, and dedicated services of the entire
staff of the Department of Finance, AEM Financial Solutions, LLC (the City’s contracted finance director) other City departments,
and the staff of MMKR.
We wish to express our appreciation to all the contributors for their efforts to complete this report.
Respectfully submitted,
Kirk McDonald
City Manager
13
14
Ci
t
y
of New Hope August 2018
Pa
r
k
s
& Re
c
r
e
a
t
i
o
n
Re
c
r
e
a
t
i
o
n
Pa
r
k
s
Re
c
r
e
a
t
i
o
n
Fa
c
i
l
i
t
i
e
s
Fo
r
e
s
t
r
y
Po
l
i
c
e
Pa
t
r
o
l
In
v
e
s
t
i
g
a
t
i
o
n
Co
m
m
u
n
i
t
y
Se
r
v
i
c
e
s
An
i
m
a
l
Co
n
t
r
o
l
Cr
i
m
e
Pr
e
v
e
n
t
i
o
n
Sc
h
o
o
l
Li
a
i
s
o
n
Re
s
e
r
v
e
s
Ex
p
l
o
r
e
r
s
Public Works Utility Billing Utilities Central Garage Streets Parks Maintenance
Hu
m
a
n
Re
s
o
u
r
c
e
s
/
Ad
m
i
n
i
s
t
r
a
t
i
v
e
Se
r
v
i
c
e
s
Hu
m
a
n
Re
s
o
u
r
c
e
s
Sa
f
e
t
y
In
f
o
Te
c
h
n
o
l
o
g
y
Co
m
m
u
n
i
c
a
t
i
o
n
s
Ri
s
k
Mg
m
t
/
I
n
s
u
r
a
n
c
e
Fi
n
a
n
c
e
/
A
c
c
o
u
n
t
i
n
g
Pa
y
r
o
l
l
Co
m
m
u
n
i
t
y
De
v
e
l
o
p
m
e
n
t
In
s
p
e
c
t
i
o
n
s
Pe
r
m
i
t
s
Ho
u
s
i
n
g
Ec
o
n
o
m
i
c
De
v
e
l
o
p
m
e
n
t
Pl
a
n
n
i
n
g
/
Z
o
n
i
n
g
Pl
a
n
n
i
n
g
Co
m
m
i
s
s
i
o
n
Ci
t
i
z
e
n
Ad
v
i
s
o
r
y
Co
m
m
i
s
s
i
o
n
Hu
m
a
n
Ri
g
h
t
s
Co
m
m
i
s
s
i
o
n
Pe
r
s
o
n
n
e
l
Bo
a
r
d
City Attorney Steve Sondrall City Engineer Stantec Fiscal Advisors AEM Dorsey and Whitney Ehlers
We
s
t
Me
t
r
o
Fi
r
e
‐Re
s
c
u
e
Di
s
t
r
i
c
t
Fi
r
e
Su
p
p
r
e
s
s
i
o
n
Fi
r
e
Pr
e
v
e
n
t
i
o
n
Em
e
r
g
e
n
c
y
Mg
m
t
.
Co
o
r
d
.
Re
s
c
u
e
Ex
p
l
o
r
e
r
s
Ci
t
y
Co
u
n
c
i
l
Po
l
i
c
y
ED
A
Bo
a
r
d
HR
A
Bo
a
r
d
Ci
t
y
Ma
n
a
g
e
r
Ch
i
e
f
Ad
m
i
n
i
s
t
r
a
t
o
r
Go
v
e
r
n
m
e
n
t
Re
l
a
t
i
o
n
s
Bu
d
g
e
t
Co
u
n
c
i
l
Re
l
a
t
i
o
n
s
Em
e
r
g
e
n
c
y
Ma
n
a
g
e
m
e
n
t
Fi
r
e
Bo
a
r
d
ED
A
Ex
e
c
u
t
i
v
e
Di
r
e
c
t
o
r
HR
A
Ex
e
c
u
t
i
v
e
Di
r
e
c
t
o
r
Au
d
i
t
JW
C
Co
m
m
i
s
s
i
o
n
HR
G
Re
p
r
e
s
e
n
t
a
t
i
v
e
AE
M
Co
n
t
r
a
c
t
Ci
t
y
Cl
e
r
k
/
T
r
e
a
s
u
r
e
r
Co
u
n
c
i
l
Re
l
a
t
i
o
n
s
El
e
c
t
i
o
n
s
Li
c
e
n
s
i
n
g
In
s
u
r
a
n
c
e
Ci
t
y
Ha
l
l
Fa
c
i
l
i
t
y
Re
s
i
d
e
n
t
s
City Planner Alan Brixius
15
City of New Hope, Minnesota
Elected and Appointed Officials
For the Year Ended December 31, 2018
Name Title Term Expires
Kathi Hemken Mayor 12/31/20
John Elder Council Member 12/31/22
Andrew Hoffe Council Member 12/31/20
Cedrick Frazier Council Member 12/31/20
Jonathan London Council Member 12/31/22
Name Title
Kirk McDonald City Manager
Bernie Weber Director of Public Works
Jeff Sargent Director of Community Development
Susan Rader Director of Parks and Recreation
Tim Fournier Director of Police
Rich Johnson Director of Human Resources and Administrative Services
Valerie Leone City Clerk/Treasurer
ELECTED
APPOINTED
16
FINANCIAL SECTION
CITY OF NEW HOPE
NEW HOPE, MINNESOTA
FOR THE YEAR ENDED
DECEMBER 31, 2018
17
THIS PAGE IS LEFT
BLANK INTENTIONALLY
18
INDEPENDENT AUDITOR’S REPORT
To the City Council and Management
City of New Hope, Minnesota
REPORT ON THE FINANCIAL STATEMENTS
We have audited the accompanying financial statements of the governmental activities, the business-type
activities, each major fund, and the aggregate remaining fund information of the City of New Hope,
Minnesota (the City) as of and for the year ended December 31, 2018, and the related notes to the
financial statements, which collectively comprise the City’s basic financial statements as listed in the
table of contents.
MANAGEMENT’S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes
the design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
error.
AUDITOR’S RESPONSIBILITY
Our responsibility is to express opinions on these financial statements based on our audit . 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. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts a nd disclosures in
the financial statements. The procedures selected depend on the auditor’s judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or error .
In making those risk assessments, the auditor considers internal control relevant to the City’s preparation
and fair presentation of the financial statements in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion o n the effectiveness of the City’s
internal control. Accordingly, we express no such opinion. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of significant accounting estimates
made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinions.
(continued)
C E R T I F I E D
A C C O U N T A N T S
P UBLIC
PRINCIPALS
Thomas A. Karnowski, CPA
Paul A. Radosevich, CPA
William J. Lauer, CPA
James H. Eichten, CPA
Aaron J. Nielsen, CPA
Victoria L. Holinka, CPA/CMA
Jaclyn M. Huegel, CPA
Malloy, Montague, Karnowski, Radosevich & Co., P.A.
5353 Wayzata Boulevard • Suite 410 • Minneapolis, MN 55416 • Phone: 952-545-0424 • Fax: 952-545-0569 • www.mmkr.com
Standard Letterhead-r2.qxp_167639 Letterhead-RV1 9/7/18 6:34 PM Page 1
19
OPINIONS
In our opinion, the financial statements referred to on the previous page 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, 2018, and the
respective changes in financial position and, where applicable, cash flows thereof, and the budgetary
comparisons for the General Fund and Economic Development Authority Special Revenue Fund for the
year then ended, in accordance with accounting principles generally accepted in the United States of
America.
EMPHASIS OF MATTER
As described in Note 7 of the notes to basic financial statements, the City has implemented Governmental
Accounting Standards Board (GASB) Statement No. 75, Accounting and Financial Reporting for
Postemployment Benefits Other Than Pensions during the year ended December 31, 2018. Our opinion is
not modified with respect to this matter.
OTHER MATTERS
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s
discussion and analysis and the required supplementary information (RSI), as listed in the table of
contents, be presented to supplement the basic financial statements. Such information, although not a part
of the basic financial statements, is required by the GASB, 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 RSI in accordance with auditing
standards generally accepted in the United States of America, which consisted of inquiries o f
management about the methods of preparing the information and comparing the information for
consistency with management’s responses to our inquiries, the basic financial statements, and other
knowledge we obtained during our audit of the basic financial statements. We do not express an opinion
or provide any assurance on the information because the limited procedures do not provide us with
sufficient evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the City’s basic financial statements. The introductory section, combining and individual fund
financial statements and schedules, and statistical section, as listed in the table of contents, are presented
for purposes of additional analysis and are not required parts of the basic financial statements.
The combining and individual fund financial statements and schedules are the responsibility of
management and were derived from and relate directly to the underlying accounting and other records
used to prepare the basic financial statements. Such 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 themsel ves, and
other additional procedures in accordance with auditing standards generally accepted in the United States
of America. In our opinion, the information is fairly stated, in all material respects, in relation to the basic
financial statements as a whole.
The introductory and statistical sections have not been subjected to the auditing procedures applied in the
audit of the basic financial statements and, accordingly, we do not express an opinion or provide any
assurance on them.
(continued)
20
OTHER REPORTING REQUIRED BY GOVERNMENT AUDITING STANDARDS
In accordance with Government Auditing Standards, we have also issued our report dated May 15, 2019
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, 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’s 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.
Minneapolis, Minnesota
May 15, 2019
21
THIS PAGE IS LEFT
BLANK INTENTIONALLY
22
Management Discussion & Analysis
As management of the City of New Hope, 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, 2018. We encourage readers to
consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal,
whic h starts on page 8 of this report.
Financial Highlights
• The assets and deferred outflows of resources of the City exceeded its liabilities and deferred inflows of resources at the close
of the most recent fiscal year by $70,001,401 (net position). Of this amount, $16,167,563 (unrestricted net position) may be
used to meet the City’s ongoing obligations to citizens and creditors.
• The City’s total net position increased by $4,536,885. This was a result of governmental activities and business type
activities increasing net position by $2,589,287 and $1,947,598, respectively.
• As of the close of the current fiscal year, the City’s governmental funds reported combined ending fund balances of
$39,489,572, an increase of $1,160,365 in comparison with the prior year. Approximately 9.4 percent of this total amount
($3,713,980) is available for spending at the City’s discretion (unassigned fund balance).
• At the end of the current fiscal year, unassigned fund balance for the General fund was $7,162,188 or 52.5 percent of total
General fund 2018 expenditures and transfers out.
• The City’s total bonded debt increased by $8,659,099 (19.6 percent) during the current fiscal year. The key factor of this
increase was the issuance of the 2018A Tax Abatement Bond.
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 are comprised of 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.
The financial statements 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 which further explain
and support the information in the financial statements.
23
Figure A-1 shows how the various parts of this annual report are arranged and related to one another.
Figure A-1
Annual Report Format
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 and deferred outflows of resources and liabilities and
deferred inflows of resources, with the difference between the four 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 the 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).
Both of the government-wide financial statements distinguish functions of the City that are principally supported by taxes and
intergovernmental revenues (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, culture and recreation, economic development, and interest on long-term debt. The business-
type activities of the City include sewer utility, water utility, golf course, ice arena, storm water, and street lighting.
The government-wide financial statements start on page 35 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.
24
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 of 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 the governmental fund statement of revenues, expenditures, and changes in fund balances for the General, Economic
Development Authority, HRA Construction, City Hall CIP, Street Infrastructure, Park/Pool Improvement Project, and HRA Bonds
funds, all of which are considered to be major funds. Data from the remaining governmental funds are combined into a single,
aggregated presentation. Individual fund data for each of these non-major governmental funds is provided in the form of combining
statements or schedules elsewhere in this report.
The City adopts annual appropriated budgets for its General fund and the Economic Development Authority and Solid Waste
Management special revenue funds. A budgetary comparison statement has been provided for these funds to demonstrate compliance
with the adopted budgets.
The basic governmental fund financial statements start on page 40 of this report.
Proprietary Fund. The City maintains two different types of proprietary funds. Enterprise 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
sewer utility, water utility, golf course, ice arena, storm water, and street lighting operations. Internal service funds are an accounting
device used to accumulate and allocate costs internally among the City’s various functions. The City uses internal service funds to
account for distribution of vehicle and equipment costs, government-wide costs of insurance coverage and employee leave, and
information technology cost allocation. Because all of these services predominately benefit governmental rather than business-type
functions, they have been included within governmental activities in the governmental-wide financial statements.
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, all of which are considered to be
major funds of the City. All internal service funds are combined into a single, aggregated presentation in the proprietary fund financial
statements. Individual fund data for the internal service funds is provided in the form of combining statements elsewhere in this report.
The basic proprietary fund financial statements start on page 50 of this report.
Fiduciary Funds. These funds are used to account for resources held for the benefit of parties outside the City. Fiduciary funds are not
reflected in the government-wide financial statements because the resources of those funds are not available to support the City’s own
programs. The accounting used for fiduciary funds is much like that used for proprietary funds.
The basic fiduciary fund financial statements start on page 60 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 61 of this report.
Other Information. In addition to the basic financial statements and accompanying notes, this report also presents certain required
supplementary information concerning the City’s progress in funding its obligation to provide pension and other postemployment
benefits to its employees. Required supplementary information can be found starting on page 100 of this report.
The combining statements referred to earlier, in connection with non-major governmental funds and internal service funds are
presented immediately following the required supplementary information. Combining and individual fund financial statements and
schedules start on page 106 of this report.
The statistical section starting on page 135 of this report presents information as a context for understanding what the information in
the financial statements, note disclosures, and required supplementary information says about the City’s overall financial health. The
information in the statistical section is not audited.
25
Government-wide Financial Analysis
As noted earlier, net position may serve over time as a useful indicator of a government’s financial position. In the case of the City,
assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $70,001,401 at the close of the
most recent fiscal year.
A portion of the City’s net position (66.7 percent) reflects its investment in capital assets (e.g., land, buildings, vehicles and
equipment); less any related debt used to acquire those assets that is still outstanding. The City uses these capital assets to provide
services to citizens; consequently, these assets are not available for future spending. Although the City’s investment in its capital
assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other
sources, since the capital assets themselves cannot be used to liquidate these liabilities.
City of New Hope’s Summary of Net Position
Restated Increase Restated Increase
2018 2017 (Decrease)2018 2017 (Decrease)
Assets
Current and other assets 55,738,883$ 51,987,190$ 3,751,693$ 4,361,994$ 2,661,909$ 1,700,085$
Capital assets, net of depreciation 49,203,864 39,652,935 9,550,929 29,051,346 29,335,527 (284,181)
Total Assets 104,942,747 91,640,125 13,302,622 33,413,340 31,997,436 1,415,904
Deferred Outflows of Resources
Deferred pension resources 5,073,986 6,475,709 (1,401,723) 136,143 204,673 (68,530)
Liabilities
Other liabilities 2,639,091 1,156,973 1,482,118 495,207 550,221 (55,014)
Noncurrent liabilities 49,598,029 41,443,666 8,154,363 11,125,254 11,652,735 (527,481)
Total Liabilities 52,237,120 42,600,639 9,636,481 11,620,461 12,202,956 (582,495)
Deferred Inflows of Resources
Deferred pension resources 6,764,590 7,657,570 (892,980) 194,380 218,867 (24,487)
Deferred other postemployment benefit resources 41,781 - 41,781 6,758 - 6,758
Resources received in advance 2,699,725 2,173,395 526,330 - - -
Total Deferred Inflows of Resources 9,506,096 9,830,965 (324,869) 201,138 218,867 (17,729)
Net Position
Net investment in capital assets 27,888,417 27,747,845 140,572 18,783,898 18,663,872 120,026
Restricted 6,000,843 6,207,578 (206,735) 1,160,680 1,031,673 129,007
Unrestricted 14,384,257 11,728,807 2,655,450 1,783,306 84,741 1,698,565
Total Net Position 48,273,517$ 45,684,230$ 2,589,287$ 21,727,884$ 19,780,286$ 1,947,598$
Governmental Activities Business-type Activities
An additional portion of the City’s net position, $7,161,523, represents resources that are subject to external restrictions on how they
may be used. The remaining balance of unrestricted net position, $16,167,563, may be used to meet the City’s ongoing obligations to
citizens and creditors.
At the end of the current fiscal year, the City is able to report a positive balance in all three categories of net position for both the
governmental activities and the business-type activities.
26
The following table indicates the changes in net position for the City’s governmental and business-type activities:
City of New Hope’s Changes in Net Position
Restated Increase Restated Increase
2018 2017 (Decrease)2018 2017 (Decrease)
Revenues
Program Revenues
Charges for services 1,984,494$ 2,604,983$ (620,489)$ 10,298,118$ 9,541,427$ 756,691$
Operating grants and contributions 967,499 777,368 190,131 327,335 27,568 299,767
Capital grants and contributions 941,212 1,150,840 (209,628) 14,203 58,237 (44,034)
General Revenues
Taxes
Property taxes 12,941,920 11,929,597 1,012,323 - - -
Tax increments 1,112,753 841,098 271,655 - - -
Franchise taxes 945,244 912,357 32,887 - - -
Grants and contributions not
restricted to specific programs 697,895 628,119 69,776 - - -
Unrestricted investment earnings 798,557 531,240 267,317 72,531 36,811 35,720
Gain on sale of capital assets 70,400 50,456 19,944 - - -
Total Revenues 20,459,974 19,426,058 1,033,916 10,712,187 9,664,043 1,048,144
Expenses
General government 1,983,179 2,666,781 (683,602) - - -
Public safety 7,578,150 8,257,709 (679,559) - - -
Public works 3,661,766 2,975,007 686,759 - - -
Culture and recreation 2,280,418 2,485,417 (204,999) - - -
Economic development 1,244,292 2,163,967 (919,675) - - -
Interest on long-term debt 1,074,469 725,982 348,487 - - -
Sewer utility - - - 2,631,598 2,399,248 232,350
Water utility - - - 4,038,859 3,504,722 534,137
Golf course - 299,217 322,278 (23,061)
Ice arena - - - 987,912 996,056 (8,144)
Storm water - - - 736,166 834,688 (98,522)
Street lighting - - - 119,250 101,668 17,582
Total Expenses 17,822,274 19,274,863 (1,452,589) 8,813,002 8,158,660 654,342
Changes in Net Position Before Transfers 2,637,700 151,195 2,486,505 1,899,185 1,505,383 393,802
Transfers - Internal Activities (48,413) (19,110) (29,303) 48,413 19,110 29,303
Change in Net Position 2,589,287 132,085 2,457,202 1,947,598 1,524,493 423,105
Net Position, January 1 (restated)*45,684,230 45,552,145 132,085 19,780,286 18,255,793 1,524,493
Net Position, December 31 48,273,517$ 45,684,230$ 2,589,287$ 21,727,884$ 19,780,286$ 1,947,598$
* GASB Statement No. 75 was implemented for the year ended December 31, 2018 and required a ($375,234) and ($59,818) restatement of
beginning net position for governmental and business-type activities, respectively. Prior year amounts were not restated causing a
variance in ending net position at December 31, 2017 and beginning net position on January 1, 2018. See Note 7 for further information.
Governmental Activities Business-type Activities
The decreases in general government, public safety, culture and recreation and economic development expenses were a result of a
decrease in pension liability and recognition of pension expense. The increase in public works expenses was due to capital activity in
the current year. The increase in property taxes were a result of an increase in the debt service and capital levies, which will be used to
fund current and future bond payments and street projects.
27
Governmental Activities. Governmental activities increased the City’s net position by $2,589,287.
Expenses - The following chart illustrates the City’s expenses and program revenues for its governmental activities:
Expenses and Program Revenues - Governmental Activities
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
$4,500,000
$5,000,000
$5,500,000
$6,000,000
$6,500,000
$7,000,000
$7,500,000
$8,000,000
General government Public safety Public works Culture and recreation Economic
development
Interest on long-term
debt
Expenses Program revenues
Revenues - The following chart illustrates the City’s revenue by source for its governmental activities:
Revenues by Source - Governmental Activities
Charges for services
9.8%Operating grants and
contributions
4.7%
Capital grants and
contributions
4.6%
Property taxes
63.3%
Tax increments
5.4%
Franchise taxes
4.6%
Grants and
contributions
unrestricted
3.4%
Unrestricted investment
earnings
3.9%
Gain on sale of capital
assets
0.3%
28
Business-type Activities. The net position of business-type activities increased by $1,947,598. This increase was primarily the result
of operating net income in the Sewer, Water and Storm Water Utility funds of $470,679, $361,424 and $400,700, respectively.
Below are the graphs showing the business-type activities revenue and expense comparisons.
Expense and Program Revenues - Business-type Activities
$-
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
Sewer utility Water utility Golf course Ice arena Storm water Street lighting
Expenses Program revenues
Revenue Sources - Business-type Activities
Charges for services
96.1%
Operating grants and
contributions
3.1%
Capital grants and
contributions
0.1%
Unrestricted
investment earnings
0.7%
29
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.
As of the end of the current fiscal year, the City’s governmental funds had combined ending fund balances of $39,489,572, an increase
of $1,160,365 in comparison with the prior year. Approximately 9.4 percent of this total amount, $3,713,980, constitutes unassigned
fund balance, which is available for spending at the City’s discretion. The remainder of fund balance is either not available for new
spending, or available for new spending, but limited in use, because it is either 1) nonspendable ($18,763), 2) restricted ($24,646,820),
3)committed ($5,414,740), or 4) assigned ($5,695,269). For further classification refer to Note 3F on page 84 of this report.
Activity in the City’s major funds is discussed below:
Increase
2018 2017 (Decrease)
General 7,180,951$ 6,888,655$ 292,296$
Economic Development Authority 5,109,286$ 5,634,105$ (524,819)$
HRA Construction 5,233,849$ 4,932,405$ 301,444$
City Hall CIP 9,527,103$ 18,764,085$ (9,236,982)$
Street Infrastructure (948,474)$ (1,867,156)$ 918,682$
Park/Pool Improvement Project 9,492,781$ - 9,492,781$
The increase in fund balance is due to the issuance of the 2018A bonds for park and pool improvements.
HRA Bonds (2,286,122)$ (2,303,670)$ 17,548$
The increase in fund balance is primarily related to tax increment revenues exceeding debt service requirements and other expenditures in the fund.
Fund Balance December 31,
Major Funds
The General fund is the chief operating fund of the City. As a measure of the General fund's liquidity, it may be useful to compare fund balance to total fund
expenditures and transfers out. Unassigned fund balance represents 52.5 percent of total 2018 expenditures and transfers out. The increase in fund balance was a
result of expenditures being under appropriations by $335,709.
This fund accounts for the activity within the City's Tax Increment Financing (TIF) Districts, less resources accumulated elsewhere for TIF related long-term
obligations. The increase in fund balance is primarily a result of increased tax increment collections.
This fund accounts for capital outlay expenditures related to street infrastructure. The increase was a result of revenues exceeding current year project costs.
The decrease in fund balance is primarily due to a loss on sale of land held for resale.
The decrease in fund balance is due to bonds issued in 2017 for project expenditures in 2018.
Proprietary Funds. The City’s proprietary funds provide the same type of information found in the government-wide financial
statements, but in more detail. At the end of the year, unrestricted net position of the enterprise funds amounted to $2,386,606. Other
factors concerning the finances of these funds have already been addressed in the discussion of the City’s business-type activities.
30
General Fund Budgetary Highlights
The City’s General fund budget was not amended during the year. Revenues and expenditures provided positive budget variances.
Actual revenues were over budget by $206,587 and expenditures were under budget by $335,709. Revenue line items with significant
budget variances include the following:
• Investment earnings were over budget by $68,969.
• Intergovernmental revenue was over budget by $99,674, mostly due to more state and local grants and state insurance
premium tax than expected.
• Special assessments revenue of $39,569 was not included in the budget.
Expenditure line items with significant budget variances include the following:
• General government expenditures were under budget by $160,875, mostly due to personnel services for the planning and
zoning department coming in under budget by $92,692.
• Public safety expenditures were under budget by $110,209, mostly due to personnel services for the police department
coming in under budget by $167,413 offset by protective inspection other services and charges coming in over budget by
$30,473.
• Public works and culture and recreation expenditures were under budget by $20,970 and $33,745, respectively.
In addition, the General fund transfers out were $250,000 more than budget. The transfer out amount related to the City Council
approved transfers to the Fire capital fund and City Hall CIP fund.
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, 2018, was
$78,255,210 (net of accumulated depreciation). This investment in capital assets includes land, buildings and system improvements,
vehicles and equipment, park facilities, roads, highways, and bridges. The total increase in the City’s investment in capital assets for
the current fiscal year was 13.4 percent.
Major capital asset events during the current fiscal year consisted of:
• Multiple vehicle and equipment purchases were made for a total of $655,823.
• Several capital projects were completed in 2018 including 2018 Street Infrastructure MSA Project, 2017 & 2018 Sanitary
Sewer Lining Project, Northwood Area North Infrastructure Project, Northwood Lake Water Quality Road, and the
Northwood Park Playground Project.
City of New Hope’s Capital Assets
(Net of Depreciation)
Increase Increase
2018 2017 (Decrease)2018 2017 (Decrease)
Land 994,268$ 994,268$ -$ 485,042$ 485,042$ -$
Buildings and Structures 2,663,755 2,930,703 (266,948) 6,361,559 6,479,965 (118,406)
Vehicles and Equipment 2,603,664 2,643,270 (39,606) 500,309 585,244 (84,935)
Improvements other than
Buildings 32,420,271 29,333,450 3,086,821 21,249,254 18,079,881 3,169,373
Construction in Progress 10,521,906 3,751,244 6,770,662 455,182 3,705,395 (3,250,213)
Total 49,203,864$ 39,652,935$ 9,550,929$ 29,051,346$ 29,335,527$ (284,181)$
Business-type ActivitiesGovernmental Activities
Additional information on the City’s capital assets can be found in Note 3C starting on page 74 of this report.
31
Long-term Debt. At the end of the current fiscal year, the City had total bonded debt outstanding of $52,731,710. Of this amount
$32,926,656 will be paid from general property taxes and $7,059,188 from redevelopment district tax increments. The remaining
amount of outstanding bonds at year end were lease revenue bonds and G.O. revenue bonds, for which the City has pledged revenue
streams from the ice arena, sewer utility, water utility, and storm water for all principal and interest payments due on these bonds.
The Debt Service funds have a combined fund balance deficit of $1,212,167, of which $1,073,955 is restricted for the payment of debt
service and a deficit of $2,286,122 is unassigned. The City made efforts to shift the philosophy for financing major street
improvements away from debt financing to the pay-as-you-go philosophy. The City established the Street and Park Infrastructure
capital projects funds in 2001 with dedicated portions of the property tax levy, thereby reducing the need for this type of debt issuance.
City of New Hope’s Outstanding Debt
Increase Increase
2018 2017 (Decrease)2018 2017 (Decrease)
G.O. Bonds and Certificates 35,323,386$ 25,713,493$ 9,609,893$ 3,727,852$ 3,833,158$ (105,306)$
G.O. Tax Increment Bonds 7,140,876 7,687,463 (546,587) 1,494,575 1,584,964 (90,389)
Lease Revenue Bonds - - - 3,505,000 3,505,000 -
G.O. Revenue Bonds and Notes - - - 1,540,021 1,748,533 (208,512)
Total 42,464,262$ 33,400,956$ 9,063,306$ 10,267,448$ 10,671,655$ (404,207)$
Governmental Activities Business-type Activities
The City achieved an “AA” rating from Standard and Poor’s. Additional information on the City’s long-term debt can be found in
Note 3E starting on page 79 of this report.
Economic Factors and Next Year’s Budgets and Rates
Economic Outlook
•User charges have been increased to account for various utility improvements scheduled for 2018 and beyond.
•The overall tax levy had an 18.5 percent increase in 2019.
•Management provided a long-term plan to City Council in 2018 that will highlight the tax effect of major capital and
operating decisions. This will also be an important document when preparing future budgets.
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 department, City of New Hope, 4401 Xylon Avenue North, New Hope, Minnesota 55428.
32
GOVERNMENT-WIDE FINANCIAL STATEMENTS
CITY OF NEW HOPE
NEW HOPE, MINNESOTA
FOR THE YEAR ENDED
DECEMBER 31, 2018
33
THIS PAGE IS LEFT
BLANK INTENTIONALLY
34
City of New Hope, Minnesota
Statement of Net Position
December 31, 2018
Governmental Business-type
Activities Activities Total
Assets
Cash and temporary investments 46,543,709$ 3,971,662$ 50,515,371$
Cash held with fiscal agent - 1,160,680 1,160,680
Receivables
Taxes 192,501 - 192,501
Accrued interest 88,576 - 88,576
Accounts 397,473 1,407,966 1,805,439
Loans 262,586 - 262,586
Special assessments 803,380 190,832 994,212
Internal balances 2,716,631 (2,716,631) -
Due from other governments 1,291,713 131,330 1,423,043
Inventories 70,145 47,306 117,451
Prepaid items 18,763 340 19,103
Land held for resale 2,392,657 - 2,392,657
Investment in joint ventures 960,749 168,509 1,129,258
Capital assets
Land and construction in progress 11,516,174 940,224 12,456,398
Depreciable assets (net of accumulated deprecation)37,687,690 28,111,122 65,798,812
Total Assets 104,942,747 33,413,340 138,356,087
Deferred Outflows of Resources
Deferred pension resources 5,073,986 136,143 5,210,129
Liabilities
Accrued salaries payable 293,716 30,297 324,013
Accounts and contracts payable 1,792,928 192,706 1,985,634
Due to other governments 91,495 192,452 283,947
Accrued interest payable 441,048 79,752 520,800
Deposits payable 7,904 - 7,904
Unearned revenue 12,000 - 12,000
Noncurrent liabilities
Due within one year 1,040,112 515,325 1,555,437
Due in more than one year 48,557,917 10,609,929 59,167,846
Total Liabilities 52,237,120 11,620,461 63,857,581
Deferred Inflows of Resources
Deferred pension resources 6,764,590 194,380 6,958,970
Deferred other postemployment benefit resources 41,781 6,758 48,539
Resources received in advance 2,699,725 - 2,699,725
Total Deferred Inflows of Resources 9,506,096 201,138 9,707,234
Net Position
Net investment in capital assets 27,888,417 18,783,898 46,672,315
Restricted for
Economic development 5,233,849 - 5,233,849
Debt service 632,907 1,160,680 1,793,587
Public safety police expenses 128,872 - 128,872
Ice arena 5,215 - 5,215
Unrestricted 14,384,257 1,783,306 16,167,563
Total Net Position 48,273,517$ 21,727,884$ 70,001,401$
The notes to the financial statements are an integral part of this statement.
35
City of New Hope, Minnesota
Statement of Activities
For the Year Ended December 31, 2018
Operating Capital
Charges for Grants and Grants and
Expenses Services Contributions Contributions
Governmental Activities
General government 1,983,179$ 250,575$ 124,102$ -$
Public safety 7,578,150 935,116 409,759 -
Public works 3,661,766 228,660 214,477 941,012
Culture and recreation 2,280,418 570,143 58,227 200
Economic development 1,244,292 -160,934 -
Interest on long-term debt 1,074,469 ---
Total Governmental Activities 17,822,274 1,984,494 967,499 941,212
Business-type Activities
Sewer utility 2,631,598 3,154,709 1,435 -
Water utility 4,038,859 4,696,593 304,104 12,203
Golf course 299,217 298,696 312 -
Ice arena 987,912 864,531 20,492 -
Storm water 736,166 1,139,007 992 2,000
Street lighting 119,250 144,582 --
Total Business-type Activities 8,813,002 10,298,118 327,335 14,203
Total 26,635,276$ 12,282,612$ 1,294,834$ 955,415$
General Revenues
Taxes
Property taxes
Tax increments
Franchise taxes
Grants and contributions not restricted to specific programs
Unrestricted investment earnings
Gain on sale of capital assets
Transfers - Internal Activities
Total General Revenues and Transfers
Change in Net Position
Net Position, January 1 as restated (Note 7)
Net Position, December 31
Functions/Programs
Program Revenues
The notes to the financial statements are an integral part of this statement.
36
Governmental Business-type
Activities Activities Total
(1,608,502)$ -$(1,608,502)$
(6,233,275) -(6,233,275)
(2,277,617) -(2,277,617)
(1,651,848) -(1,651,848)
(1,083,358) -(1,083,358)
(1,074,469) -(1,074,469)
(13,929,069) -(13,929,069)
-524,546 524,546
-974,041 974,041
-(209)(209)
-(102,889)(102,889)
-405,833 405,833
-25,332 25,332
-1,826,654 1,826,654
(13,929,069) 1,826,654 (12,102,415)
12,941,920 -12,941,920
1,112,753 -1,112,753
945,244 -945,244
697,895 -697,895
798,557 72,531 871,088
70,400 -70,400
(48,413) 48,413 -
16,518,356 120,944 16,639,300
2,589,287 1,947,598 4,536,885
45,684,230 19,780,286 65,464,516
48,273,517$ 21,727,884$ 70,001,401$
Net (Expenses) Revenues
and Changes in Net Position
The notes to the financial statements are an integral part of this statement.
37
THIS PAGE IS LEFT
BLANK INTENTIONALLY
38
FUND FINANCIAL STATEMENTS
CITY OF NEW HOPE
NEW HOPE, MINNESOTA
FOR THE YEAR ENDED
DECEMBER 31, 2018
39
City of New Hope, Minnesota
Balance Sheet
Governmental Funds
December 31, 2018
9001 9015/9501 9213-9227 9202
Economic
Development HRA City Hall
General Authority Construction CIP
Assets
Cash and temporary investments 5,897,725$ -$ 5,723,016$ 10,657,994$
Receivables
Taxes 192,309 - 66 -
Accrued interest 81,953 - --
Accounts 209,015 90,202 30,142 -
Loans - 246,500 - -
Special assessments 83,709 12,891 - -
Due from other governments 116,493 490 - -
Prepaid items 18,763 - - -
Due from other funds 1,095,018 - - -
Advances to other funds - 2,876,666 2,005,750 -
Land held for resale - 2,392,657 - -
Total Assets 7,694,985$ 5,619,406$ 7,758,974$ 10,657,994$
Liabilities
Accrued salaries payable 170,593$ 7,007$ -$ -$
Accounts and contracts payable 138,715 34,185 - 1,130,681
Due to other governments 4,744 - - 210
Deposits payable 7,904 - - -
Due to other funds - 456,038 - -
Advances from other funds - - 2,525,125 -
Unearned revenue - - - -
Total Liabilities 321,956 497,230 2,525,125 1,130,891
Deferred Inflows of Resources
Unavailable revenue - taxes 108,546 - - -
Unavailable revenue - special assessments 83,532 12,890 - -
Resources received in advance - - - -
Total Deferred Inflows of Resources 192,078 12,890 - -
Fund Balances
Nonspendable 18,763 - - -
Restricted - - 5,233,849 8,712,148
Committed - 5,109,286 - -
Assigned - -- 814,955
Unassigned 7,162,188 - - -
Total Fund Balances 7,180,951 5,109,286 5,233,849 9,527,103
Total Liabilities, Deferred Inflows
of Resources, and Fund Balances 7,694,985$ 5,619,406$ 7,758,974$ 10,657,994$
The notes to the financial statements are an integral part of this statement.
40
9203 9234 9117-9121
Park/Pool Other Total
Street Improvement Governmental Governmental
Infrastructure Project HRA Bonds Funds Funds
1,248,604$ 9,776,967$ 72,175$ 4,118,535$ 37,495,016$
- - 126 - 192,501
- 680 - 5,943 88,576
38,888 - - 24,368 392,615
- - - 16,086 262,586
637,145 - - 69,635 803,380
1,169,760 - - 4,970 1,291,713
- - - - 18,763
- - - - 1,095,018
- - - 2,279,675 7,162,091
- - - - 2,392,657
3,094,397$ 9,777,647$ 72,301$ 6,519,212$ 51,194,916$
-$ -$ -$ -$ 177,600$
106,001 284,866 1,132 21,841 1,717,421
- - - 37,487 42,441
- - - - 7,904
- - - 205,324 661,362
600,000 - 2,357,291 - 5,482,416
- - - 12,000 12,000
706,001 284,866 2,358,423 276,652 8,101,144
- - - - 108,546
637,145 - - 62,362 795,929
2,699,725 - - - 2,699,725
3,336,870 - - 62,362 3,604,200
- - - - 18,763
- 9,492,781 - 1,208,042 24,646,820
- -- 305,454 5,414,740
- -- 4,880,314 5,695,269
(948,474) - (2,286,122) (213,612) 3,713,980
(948,474) 9,492,781 (2,286,122) 6,180,198 39,489,572
3,094,397$ 9,777,647$ 72,301$ 6,519,212$ 51,194,916$
The notes to the financial statements are an integral part of this statement.
41
THIS PAGE IS LEFT
BLANK INTENTIONALLY
42
City of New Hope, Minnesota
Reconciliation of the Balance Sheet
to the Statement of Net Position
Governmental Funds
December 31, 2018
Total Fund Balances - Governmental Funds 39,489,572$
Amounts reported for the governmental activities in the statement of net position are different because
Capital assets used in governmental activities are not financial resources and therefore are
not reported as assets in governmental funds.
Cost of capital assets 64,843,932
Less: accumulated depreciation (18,884,187)
Noncurrent liabilities, including bonds payable, are not due and payable in the current period and
therefore are not reported as liabilities in the funds. Noncurrent liabilities at year-end consist of
Bond principal payable (39,985,844)
Plus: unamortized bond premium (2,478,418)
Pension liability (5,508,949)
Internal service funds are used by management to charge certain costs of services to individual funds.
The assets and liabilities are included in the statement of net position.
Internal service fund net position included in governmental activities 10,448,154
Internal balances for internal services used by business-type activities 603,300
Some receivables are not available soon enough to pay for the current period's expenditures,
and therefore are reported as unavailable revenue in the funds.
Taxes 108,546
Special assessments 795,929
Governmental funds do not report long-term amounts related to pensions
Deferred outflows of pension resources 5,045,032
Deferred inflows of pension resources (6,723,251)
Governmental funds do not report a liability for accrued interest until due and payable.(441,048)
The City's investment in a joint venture is not a current financial resource and, therefore, is not
reported as an asset in the governmental funds, but is included in the Statement of Net Position.960,749
Total Net Position - Governmental Activities 48,273,517$
The notes to the financial statements are an integral part of this statement.
43
City of New Hope, Minnesota
Statement of Revenues, Expenditures and Changes in Fund Balances
Governmental Funds
For the Year Ended December 31, 2018
9001 9015/9501 9213-9227 9202
Economic
Development HRA City Hall
General Authority Construction CIP
Revenues
Taxes
Property taxes 9,971,064$ 200,000$ -$ -$
Tax increments - - 465,672 -
Franchise taxes 440,000 - - -
Licenses and permits 367,931 - - -
Intergovernmental 1,332,638 160,934 - -
Charges for services 1,103,221 - - -
Fines and forfeitures 226,757 - - -
Special assessments 39,569 1,636 - -
Investment earnings (charges)103,969 72,163 158,980 243,190
Miscellaneous 33,766 - - -
Total Revenues 13,618,915 434,733 624,652 243,190
Expenditures
Current
General government 1,787,553 - - -
Public safety 7,992,124 - - -
Public works 1,491,045 - - -
Culture and recreation 2,015,141 - - -
Economic development - 815,352 - -
Capital outlay
General government 555 - - 9,580,172
Public safety 115,635 - - -
Public works - - - -
Culture and recreation - - - -
Economic development - 14,944 337,644 -
Debt service
Principal - - - -
Interest - - - -
Bond issuance costs - - - -
Total Expenditures 13,402,053 830,296 337,644 9,580,172
Excess (Deficiency) of Revenues
Over (Under) Expenditures 216,862 (395,563) 287,008 (9,336,982)
Other Financing Sources (Uses)
Transfers in 325,434 - 66,053 100,000
Bonds issued - - - -
Premium on bonds issued - - - -
Transfers out (250,000) (129,256) (51,617) -
Total Other Financing Sources (Uses)75,434 (129,256) 14,436 100,000
Net Change in Fund Balances 292,296 (524,819) 301,444 (9,236,982)
Fund Balances, January 1 6,888,655 5,634,105 4,932,405 18,764,085
Fund Balances, December 31 7,180,951$ 5,109,286$ 5,233,849$ 9,527,103$
The notes to the financial statements are an integral part of this statement.
44
9203 9234 9117-9121
Park/Pool Other Total
Street Improvement Governmental Governmental
Infrastructure Project HRA Bonds Funds Funds
1,330,915$ -$ -$ 1,402,318$ 12,904,297$
- - 647,081 - 1,112,753
505,244 - - - 945,244
- - - - 367,931
659,482 - - 42,706 2,195,760
- - - 296,777 1,399,998
- - - 3,900 230,657
228,046 - - 13,338 282,589
17,430 6,286 (510) 57,098 658,606
- - - 200 33,966
2,741,117 6,286 646,571 1,816,337 20,131,801
- - - - 1,787,553
- - - 5,187 7,997,311
- - - 226,770 1,717,815
- - - 588 2,015,729
- - - - 815,352
- - - - 9,580,727
- - - - 115,635
1,822,435 - - 246,542 2,068,977
- 361,813 - 390,725 752,538
- -86,020 - 438,608
- - 396,122 403,612 799,734
- - 132,445 637,052 769,497
- 148,365 - - 148,365
1,822,435 510,178 614,587 1,910,476 29,007,841
918,682 (503,892) 31,984 (94,139) (8,876,040)
- - 51,617 245,354 788,458
- 9,520,000 - - 9,520,000
- 476,673 - - 476,673
- -(66,053) (251,800) (748,726)
- 9,996,673 (14,436) (6,446) 10,036,405
918,682 9,492,781 17,548 (100,585) 1,160,365
(1,867,156) - (2,303,670) 6,280,783 38,329,207
(948,474)$ 9,492,781$ (2,286,122)$ 6,180,198$ 39,489,572$
The notes to the financial statements are an integral part of this statement.
45
City of New Hope, 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, 2018
Net Change in Fund Balances - Governmental Funds 1,160,365$
Amounts reported for governmental activities in the statement of activities are different because
Capital outlays are reported in governmental funds as expenditures. However, in the statement of
activities, the cost of those assets is allocated over the estimated useful lives as depreciation expense.
Capital outlays 11,894,055
Capital assets transferred from internal service funds 7,677
Depreciation expense (2,169,592)
The City's investment in a joint venture is not a current financial resource and, therefore, is not
reported as an asset in the governmental funds, but is included in the Statement of Net Position.
Change in investment in joint venture (84,545)
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 premiums, discounts and similar items when debt is first issued, whereas these amounts
are deferred and amortized in the statement of activities. The amounts below are the effects of these
differences in the treatment of long-term debt and related items.
Principal repayments 799,734
Bond issued (9,520,000)
Premium on bonds issued (476,673)
Amortization of bond premium 133,633
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.(290,240)
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.
Property taxes 37,623
Special assessments (1,059)
Long-term pension activity is not reported in governmental funds
Pension expense 451,182
Direct aid contributions 44,595
Internal service funds are used by management to charge the costs for equipment, information system,
equipment replacement, employee benefits and major losses incurred by individual funds. The
activities of internal service funds is reported in the government-wide financial statements.
Change in net position of the internal service funds, net of capital assets transferred 839,002
Capital assets transferred to governmental fund activities (7,677)
Less: the change in internal balances for internal services used by business-type activities (228,793)
Change in Net Position - Governmental Activities 2,589,287$
The notes to the financial statements are an integral part of this statement.
46
City of New Hope, Minnesota
General Fund
Statement of Revenues, Expenditures, and Changes in Fund Balances -
Budget and Actual
For the Year Ended December 31, 2018
Budgeted Amounts Actual Variance with
Original Final Amounts Final Budget
Revenues
Taxes
Property taxes 9,989,509$ 9,989,509$ 9,971,064$ (18,445)$
Franchise taxes 440,000 440,000 440,000 -
Licenses and permits 387,280 387,280 367,931 (19,349)
Intergovernmental 1,232,964 1,232,964 1,332,638 99,674
Charges for services 1,074,575 1,074,575 1,103,221 28,646
Fines and forfeitures 250,000 250,000 226,757 (23,243)
Special assessments - - 39,569 39,569
Investment earnings 35,000 35,000 103,969 68,969
Miscellaneous 3,000 3,000 33,766 30,766
Total Revenues 13,412,328 13,412,328 13,618,915 206,587
Expenditures
Current
General government 1,948,428 1,948,428 1,787,553 160,875
Public safety 8,102,333 8,102,333 7,992,124 110,209
Public works 1,512,015 1,512,015 1,491,045 20,970
Culture and recreation 2,048,886 2,048,886 2,015,141 33,745
Capital outlay
General government 15,000 15,000 555 14,445
Public safety 111,100 111,100 115,635 (4,535)
Total Expenditures 13,737,762 13,737,762 13,402,053 335,709
Excess (Deficiency) of Revenues
Over (Under) Expenditures (325,434) (325,434) 216,862 542,296
Other Financing Sources (Uses)
Transfers in 325,434 325,434 325,434 -
Transfers out - - (250,000) (250,000)
Total Other Financing
Sources (Uses)325,434 325,434 75,434 (250,000)
Net Change in Fund Balances - - 292,296 292,296
Fund Balances, January 1 6,888,655 6,888,655 6,888,655 -
Fund Balances, December 31 6,888,655$ 6,888,655$ 7,180,951$ 292,296$
The notes to the financial statements are an integral part of this statement.
47
THIS PAGE IS LEFT
BLANK INTENTIONALLY
48
City of New Hope, Minnesota
Economic Development Authority Fund
Statement of Revenues, Expenditures, and Changes in Fund Balances -
Budget and Actual
For the Year Ended December 31, 2018
Actual Variance with
Original Final Amounts Final Budget
Revenues
Taxes
Property taxes 200,000$ 200,000$ 200,000$ -$
Intergovernmental - - 160,934 160,934
Special assessments 10,000 10,000 1,636 (8,364)
Investment earnings 82,500 82,500 72,163 (10,337)
Total Revenues 292,500 292,500 434,733 142,233
Expenditures
Economic development
Current
Personnel services 272,300 272,300 343,957 (71,657)
Supplies 150 150 179 (29)
Other services and charges 344,566 344,566 471,216 (126,650)
Capital outlay 15,000 15,000 14,944 56
Total Expenditures 632,016 632,016 830,296 (198,280)
Deficiency of Revenues
Under Expenditures (339,516) (339,516) (395,563) (56,047)
Other Financing Uses
Transfers out (33,902) (33,902) (129,256) (95,354)
Net Change in Fund Balances (373,418) (373,418) (524,819) (151,401)
Fund Balances, January 1 5,634,105 5,634,105 5,634,105 -
Fund Balances, December 31 5,260,687$ 5,260,687$ 5,109,286$ (151,401)$
Budgeted Amounts
The notes to the financial statements are an integral part of this statement.
49
City of New Hope, Minnesota
Statement of Net Position (Continued on the Following Pages)
Proprietary Funds
December 31, 2018
9300 9301 9302 9303
Sewer Utility Water Utility Golf Course Ice Arena
Assets
Current Assets
Cash and temporary investments 1,194,800$ 1,775,725$ 100,022$ 800$
Cash held with fiscal agent - - - 1,160,680
Receivables
Accounts 324,170 787,067 209 179,788
Special assessments 51,532 121,811 - -
Due from other governments - 83,836 - 47,494
Inventories - 42,076 5,230 -
Prepaid items - 340 - -
Total Current Assets 1,570,502 2,810,855 105,461 1,388,762
Noncurrent Assets
Investment in joint ventures - 168,509 - -
Capital assets
Land - - 250,625 -
Buildings and structures - - 973,145 9,939,063
Improvements other than buildings 6,484,838 10,911,852 130,373 -
Vehicles and equipment 607,475 1,392,767 168,678 446,717
Construction in progress 133,848 122,605 - -
Less: accumulated depreciation (2,673,957) (3,540,570) (1,010,382) (4,101,447)
Total Capital Assets
(Net of Accumulated Depreciation)4,552,204 8,886,654 512,439 6,284,333
Total Noncurrent Assets 4,552,204 9,055,163 512,439 6,284,333
Total Assets 6,122,706 11,866,018 617,900 7,673,095
Deferred Outflows of Resources
Deferred pension resources 34,697 37,896 7,543 32,026
Business-type Activities - Enterprise Funds
The notes to the financial statements are an integral part of this statement.
50
City of New Hope, Minnesota
Statement of Net Position (Continued)
Proprietary Funds
December 31, 2018
9300 9301 9302 9303
Sewer Utility Water Utility Golf Course Ice Arena
Liabilities
Current Liabilities
Accrued salaries payable 7,704$ 9,526$ 1,158$ 9,302$
Accounts and contracts payable 25,129 117,913 3,349 20,786
Due to other governments - 179,921 64 12,467
Accrued interest payable 10,030 44,352 - 4,790
Due to other funds - - - 433,656
Advances from other funds - current portion 125,000 107,455 - -
Compensated absences payable, current portion - - - -
Bonds and notes payable, current portion 54,932 310,060 - -
Total Current Liabilities 222,795 769,227 4,571 481,001
Noncurrent Liabilities
Advances from other funds 875,000 572,220 - -
Other postemployment benefits payable 36,687 30,356 5,587 27,117
Pension liability 187,540 204,829 40,772 173,105
Compensated absences payable - - - -
Bonds and notes payable 875,110 3,695,871 - 3,505,000
Total Noncurrent Liabilities 1,974,337 4,503,276 46,359 3,705,222
Total Liabilities 2,197,132 5,272,503 50,930 4,186,223
Deferred Inflows of Resources
Deferred pension resources 49,540 54,105 10,770 45,726
Deferred other postemployment benefit resources 2,033 1,682 310 1,503
Total Deferred Inflows of Resources 51,573 55,787 11,080 47,229
Net Position
Net investment in capital assets 3,622,162 4,880,723 512,439 2,779,333
Restricted for debt service - - - 1,160,680
Unrestricted 286,536 1,694,901 50,994 (468,344)
Total Net Position 3,908,698$ 6,575,624$ 563,433$ 3,471,669$
Business-type Activities - Enterprise Funds
The notes to the financial statements are an integral part of this statement.
51
City of New Hope, Minnesota
Statement of Net Position (Continued)
Proprietary Funds
December 31, 2018
Governmental
Activities -
9304 9305 Internal
Storm Water Street Lighting Totals Service Funds
Assets
Current Assets
Cash and temporary investments 586,255$ 314,060$ 3,971,662$ 9,048,693$
Cash held with fiscal agent - - 1,160,680 -
Receivables
Accounts 107,741 8,991 1,407,966 4,858
Special assessments 15,193 2,296 190,832 -
Due from other governments - - 131,330 -
Inventories - - 47,306 70,145
Prepaid items - - 340 -
Total Current Assets 709,189 325,347 6,910,116 9,123,696
Noncurrent Assets
Investment in joint ventures - - 168,509 -
Capital assets
Land 234,417 - 485,042 85,647
Buildings and structures - - 10,912,208 3,158,296
Improvements other than buildings 9,675,761 - 27,202,824 -
Vehicles and equipment - - 2,615,637 9,348,458
Construction in progress 146,795 51,934 455,182 -
Less: accumulated depreciation (1,293,191) - (12,619,547) (9,348,282)
Total Capital Assets
(Net of Accumulated Depreciation)8,763,782 51,934 29,051,346 3,244,119
Total Noncurrent Assets 8,763,782 51,934 29,219,855 3,244,119
Total Assets 9,472,971 377,281 36,129,971 12,367,815
Deferred Outflows of Resources
Deferred pension resources 23,981 - 136,143 28,954
Business-type Activities - Enterprise Funds
The notes to the financial statements are an integral part of this statement.
52
City of New Hope, Minnesota
Statement of Net Position (Continued)
Proprietary Funds
December 31, 2018
Governmental
Activities -
9304 9305 Internal
Storm Water Street Lighting Totals Service Funds
Liabilities
Current Liabilities
Accrued salaries payable 2,607$ -$ 30,297$ 116,116$
Accounts and contracts payable 17,305 8,224 192,706 75,507
Due to other governments - - 192,452 49,054
Accrued interest payable 20,580 - 79,752 -
Due to other funds - - 433,656 -
Advances from other funds - current portion - - 232,455 -
Compensated absences payable, current portion - - - 71,438
Bonds and notes payable, current portion 150,333 - 515,325 -
Total Current Liabilities 190,825 8,224 1,676,643 312,115
Noncurrent Liabilities
Advances from other funds - - 1,447,220 -
Other postemployment benefits payable 22,191 - 121,938 753,933
Pension liability 129,622 - 735,868 156,500
Compensated absences payable - - - 642,947
Bonds and notes payable 1,676,142 - 9,752,123 -
Total Noncurrent Liabilities 1,827,955 - 12,057,149 1,553,380
Total Liabilities 2,018,780 8,224 13,733,792 1,865,495
Deferred Inflows of Resources
Deferred pension resources 34,239 - 194,380 41,339
Deferred other postemployment benefit resources 1,230 - 6,758 41,781
Total Deferred Inflows of Resources 35,469 - 201,138 83,120
Net Position
Net investment in capital assets 6,937,307 51,934 18,783,898 3,244,119
Restricted for debt service - - 1,160,680 -
Unrestricted 505,396 317,123 2,386,606 7,204,035
Total Net Position 7,442,703$ 369,057$ 22,331,184$ 10,448,154$
Total Net Position - Enterprise Funds 22,331,184$
Adjustment to reflect the consolidation of internal service fund
activities related to the enterprise funds (603,300)
Net Position - Business-type Activities 21,727,884$
Business-type Activities - Enterprise Funds
The notes to the financial statements are an integral part of this statement.
53
City of New Hope, Minnesota
Statement of Revenues, Expenses and
Changes in Net Position
Proprietary Funds
For the Year Ended December 31, 2018
9300 9301 9302 9303
Sewer Utility Water Utility Golf Course Ice Arena
Operating Revenues
Charges for services 3,154,709$ 4,391,025$ 274,735$ 825,531$
Billings to departments - - - -
Other - - - -
Total Operating Revenues 3,154,709 4,391,025 274,735 825,531
Operating Expenses
Cost of goods sold 1,765,960 2,583,834 25,833 -
Personnel services 373,903 323,734 125,847 352,031
Supplies 13,095 78,465 29,707 24,771
Utilities 9,590 661 24,875 239,586
Other services and charges 345,556 703,644 66,742 120,309
Depreciation 175,926 339,263 36,753 205,769
Total Operating Expenses 2,684,030 4,029,601 309,757 942,466
Operating Income (Loss)470,679 361,424 (35,022) (116,935)
Nonoperating Revenues (Expenses)
Investment earnings 18,763 18,789 1,630 21,310
Miscellaneous revenues 1,435 609,672 24,273 56,992
Intergovernmental - - - 2,500
Gain on sale of capital assets - - - -
Interest expense (16,509) (89,441) - (59,179)
Total Nonoperating
Revenues (Expenses)3,689 539,020 25,903 21,623
Income (Loss) Before Contributions
and Transfers 474,368 900,444 (9,119) (95,312)
Capital Contributions to
Governmental Activities - - - -
Capital Contributions - 12,203 - -
Transfers In - -- 200,000
Transfers Out (52,887) (55,147) (10,250) (10,250)
Change in Net Position 421,481 857,500 (19,369) 94,438
Net Position, January 1 as restated (Note 7)3,487,217 5,718,124 582,802 3,377,231
Net Position, December 31 3,908,698$ 6,575,624$ 563,433$ 3,471,669$
Business-type Activities - Enterprise Funds
The notes to the financial statements are an integral part of this statement.
54
City of New Hope, Minnesota
Statement of Revenues, Expenses and
Changes in Net Position (Continued)
Proprietary Funds
For the Year Ended December 31, 2018
Governmental
Activities -
9304 9305 Internal
Storm Water Street Lighting Totals Service Funds
Operating Revenues
Charges for services 1,139,007$ 144,582$ 9,929,589$ -$
Billings to departments - - - 3,611,965
Other - - - 36,663
Total Operating Revenues 1,139,007 144,582 9,929,589 3,648,628
Operating Expenses
Cost of goods sold - - 4,375,627 -
Personnel services 182,545 - 1,358,060 931,915
Supplies 5,727 - 151,765 328,904
Utilities 43 95,032 369,787 99,195
Other services and charges 355,793 24,166 1,616,210 847,507
Depreciation 194,199 - 951,910 724,311
Total Operating Expenses 738,307 119,198 8,823,359 2,931,832
Operating Income (Loss)400,700 25,384 1,106,230 716,796
Nonoperating Revenues (Expenses)
Investment earnings 7,101 4,938 72,531 139,951
Miscellaneous revenues 992 - 693,364 -
Intergovernmental - - 2,500 -
Gain on sale of capital assets - - - 70,400
Interest expense (53,307) - (218,436) -
Total Nonoperating
Revenues (Expenses)(45,214) 4,938 549,959 210,351
Income (Loss) Before Contributions
and Transfers 355,486 30,322 1,656,189 927,147
Capital Contributions to
Governmental Activities - - - (7,677)
Capital Contributions 2,000 - 14,203 -
Transfers In - - 200,000 -
Transfers Out (23,053) - (151,587) (88,145)
Change in Net Position 334,433 30,322 1,718,805 831,325
Net Position, January 1 as restated (Note 7)7,108,270 338,735 20,612,379 9,616,829
Net Position, December 31 7,442,703$ 369,057$ 22,331,184$ 10,448,154$
Change in Net Position - Enterprise Funds 1,718,805$
Adjustment to reflect the consolidation of internal service fund activities related to
the enterprise funds.228,793
Change in Net Position - Business-type Activities 1,947,598$
Business-type Activities - Enterprise Funds
The notes to the financial statements are an integral part of this statement.
55
City of New Hope, Minnesota
Statement of Cash Flows (Continued on the Following Pages)
Proprietary Funds
For the Year Ended December 31, 2018
9300 9301 9302 9303
Sewer Utility Water Utility Golf Course Ice Arena
Cash Flows from Operating Activities
Receipts from customers and users 3,122,125$ 4,282,592$ 274,526$ 724,636$
Receipts from interfund services provided - - - -
Other operating receipts - 608,104 23,961 58,167
Payments to suppliers (2,113,302) (3,246,526) (147,497) (399,835)
Payments to employees (361,297) (334,483) (129,800) (368,557)
Net Cash Provided (Used)
by Operating Activities 647,526 1,309,687 21,190 14,411
Cash Flows From Noncapital
Financing Activities
Receipts on interfund balances - - - 433,656
Payments on interfund balances - - - (382,926)
Transfers in - - - 200,000
Transfers out (52,887) (55,147) (10,250) (10,250)
Net Cash Provided (Used) by
Noncapital Financing Activities (52,887) (55,147) (10,250) 240,480
Cash Flows from Capital
and Related Financing Activities
Acquisition of capital assets (307,523) (160,535) - (87,215)
Proceeds from sale of assets - - - -
Payment of advance from other funds (125,000) (107,456) - -
Capital contributions - 12,203 - -
Principal paid on long-term debt (41,048) (248,430) - -
Interest paid on long-term debt (24,537) (98,636) - (59,179)
Net Cash Provided (Used) by
Capital and Related
Financing Activities (498,108) (602,854) - (146,394)
Cash Flows from Investing Activities
Investment earnings 18,763 18,789 1,630 21,310
Net Increase (Decrease)
in Cash and Cash Equivalents 115,294 670,475 12,570 129,807
Cash and Cash Equivalents, January 1 1,079,506 1,105,250 87,452 1,031,673
Cash and Cash Equivalents, December 31 1,194,800$ 1,775,725$ 100,022$ 1,161,480$
Reconciliation to the Proprietary Funds
Statement of Net Position
Cash and temporary investments 1,194,800$ 1,775,725$ 100,022$ 800$
Cash held with fiscal agent - - - 1,160,680
Total Cash and Cash Equivalents 1,194,800$ 1,775,725$ 100,022$ 1,161,480$
Business-type Activities - Enterprise Funds
The notes to the financial statements are an integral part of this statement.
56
City of New Hope, Minnesota
Statement of Cash Flows (Continued)
Proprietary Funds
For the Year Ended December 31, 2018
9300 9301 9302 9303
Sewer Utility Water Utility Golf Course Ice Arena
Reconciliation of Operating Income (Loss)
to Net Cash Provided (Used)
by Operating Activities
Operating income (loss)470,679$ 361,424$ (35,022)$ (116,935)$
Adjustments to reconcile operating income (loss)
to net cash provided (used) by operating activities
Depreciation 175,926 339,263 36,753 205,769
Other income related to operations 1,435 609,672 24,273 59,492
(Increase) decrease in assets
Receivables
Accounts (38,358) (38,541) (209) (97,405)
Special assessments 5,774 13,063 - -
Due from other governments - (82,955) - (3,490)
Inventories - 3,144 752 -
Prepaid items - (340) - -
(Increase) decrease in deferred outflows of resources
Deferred pension resources 11,104 18,446 4,307 16,043
Increase (decrease) in liabilities
Accounts and contracts payable 19,255 94,323 (657) (12,069)
Accrued salaries payable 3,415 4,873 136 1,583
Due to other governments (389) 21,269 (745) (4,603)
Compensated absences payable - -- -
Other postemployment benefits payable 2,131 3,807 2,508 258
Pension liability (6,040) (33,300) (9,314) (30,059)
Increase (decrease) in deferred inflows of resources
Deferred pension resources 561 (6,143) (1,902) (5,676)
Deferred other postemployment benefit resources 2,033 1,682 310 1,503
Net Cash Provided (Used)
by Operating Activities 647,526$ 1,309,687$ 21,190$ 14,411$
Schedule of Noncash Capital and
Related Financing Activities
-$ -$ -$ -$
1,456$ 6,018$ -$ -$
-$ 12,536$ -$ -$
-$ -$ -$ -$
Amortization of bond discount
Amortization of bond premium
Capital assets purchased on account
Gain on sale of capital assets
Capital assets contributed to governmental activities -$ -$ -$ -$
Business-type Activities - Enterprise Funds
The notes to the financial statements are an integral part of this statement.
57
City of New Hope, Minnesota
Statement of Cash Flows (Continued)
Proprietary Funds
For the Year Ended December 31, 2018
Governmental
Activities -
9304 9305 Internal
Storm Water Street Lighting Totals Service Funds
Cash Flows from Operating Activities
Receipts from customers and users 1,173,914$ 143,521$ 9,721,314$ -$
Receipts from interfund services provided - - - 3,613,411
Other operating receipts - - 690,232 35,466
Payments to suppliers (388,570) (119,469) (6,415,199) (1,284,561)
Payments to employees (227,639) - (1,421,776) (782,462)
Net Cash Provided (Used)
by Operating Activities 557,705 24,052 2,574,571 1,581,854
Cash Flows from Noncapital
Financing Activities
Receipts on interfund balances - - 433,656 -
Payments on interfund balances - - (382,926) -
Transfers in - - 200,000 -
Transfers out (23,053) - (151,587) (88,145)
Net Cash Provided (Used) by
Noncapital Financing Activities (23,053) - 99,143 (88,145)
Cash Flows from Capital
and Related Financing Activities
Acquisition of capital assets (208,744) (51,934) (815,951) (489,577)
Proceeds from sale of assets - - - 9,200
Payment of advance from other funds - - (232,456) -
Capital contributions 2,000 - 14,203 -
Principal paid on long-term debt (104,788) - (394,266) -
Interest paid on long-term debt (50,576) - (232,928) -
Net Cash Provided (Used) by
Capital and Related
Financing Activities (362,108) (51,934) (1,661,398) (480,377)
Cash Flows from Investing Activities
Investment earnings 7,101 4,938 72,531 139,951
Net Increase (Decrease)
in Cash and Cash Equivalents 179,645 (22,944) 1,084,847 1,153,283
Cash and Cash Equivalents, January 1 406,610 337,004 4,047,495 7,895,410
Cash and Cash Equivalents, December 31 586,255$ 314,060$ 5,132,342$ 9,048,693$
Reconciliation to the Proprietary Funds
Statement of Net Position
Cash and temporary investments 586,255$ 314,060$ 3,971,662$ 9,048,693$
Cash held with fiscal agent - - 1,160,680 -
Total Cash and Cash Equivalents 586,255$ 314,060$ 5,132,342$ 9,048,693$
Business-type Activities - Enterprise Funds
The notes to the financial statements are an integral part of this statement.
58
City of New Hope, Minnesota
Statement of Cash Flows (Continued)
Proprietary Funds
For the Year Ended December 31, 2018
Governmental
Activities -
9304 9305 Internal
Storm Water Street Lighting Totals Service Funds
Reconciliation of Operating Income (Loss)
to Net Cash Provided (Used)
by Operating Activities
Operating income (loss)400,700$ 25,384$ 1,106,230$ 716,796$
Adjustments to reconcile operating income (loss)
to net cash provided (used) by operating activities
Depreciation 194,199 - 951,910 724,311
Other income related to operations 992 - 695,864 -
(Increase) decrease in assets
Receivables
Accounts 31,720 (1,453) (144,246) 1,446
Special assessments 3,187 392 22,416 -
Due from other governments - - (86,445) -
Inventories - - 3,896 6,897
Prepaid items - - (340) -
Decrease in deferred outflows of resources
Deferred pension resources 18,630 - 68,530 16,426
Increase (decrease) in liabilities
Accounts and contracts payable (27,860) (271) 72,721 (50,776)
Accrued salaries payable (124) - 9,883 19,429
Due to other governments (377) - 15,155 26,393
Compensated absences payable - -- 108,818
Other postemployment benefits payable (2,789) - 5,915 12,822
Pension liability (50,476) - (129,189) (35,301)
Increase (decrease) in deferred inflows of resources
Deferred pension resources (11,327) - (24,487) (7,188)
Deferred other postemployment benefit resources 1,230 - 6,758 41,781
Net Cash Provided (Used)
by Operating Activities 557,705$ 24,052$ 2,574,571$ 1,581,854$
Schedule of Noncash Capital and
Related Financing Activities
740$ -$ 740$ -$
3,207$ -$ 10,681$ -$
-$ -$ 12,536$ -$
-$ -$ -$ 61,200$
Amortization of bond discount
Amortization of bond premium
Capital assets purchased on account
Gain on sale of capital assets
Capital assets contributed to governmental activities -$ -$ -$ 7,677$
Business-type Activities - Enterprise Funds
The notes to the financial statements are an integral part of this statement.
59
City of New Hope, Minnesota
Statement of Fiduciary Net Position
Fiduciary Fund
December 31, 2018
Agency
Assets
14,246$
Liabilities
Accounts payable 97$
Deposits payable 14,149
Total Liabilities 14,246$
Cash and temporary investments
The notes to the financial statements are an integral part of this statement.
60
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2018
Note 1: Summary of Significant Accounting Policies
A. Financial Reporting Entity
The City of New Hope (the City) operates under “Optional Plan B” as defined in Minnesota statutes. Optional Plan B is known as the
City Council-Manager Plan. Under this plan, as specified in the statutes, “The City Council shall exercise the legislative power of the
City and determine all matters of policy. The City manager shall be the head of the administrative branch of the City government and
shall be responsible to the City Council for proper administration of all affairs relating to the City.” The City Council is composed of
five members including the mayor. The City Council appoints the City manager. The City has considered all potential units for which
it is financially accountable, and other organizations for which the nature and significance of their relationship with the City are such
that exclusion would cause the City’s financial statements to be misleading or incomplete. The Governmental Accounting Standards
Board (GASB) has set forth criteria to be considered in determining financial accountability. These criteria include appointing a
voting majority of an organization’s governing body, and (1) the ability of the primary government to impose its will on that
organization or (2) the potential for the organization to provide specific benefits to, or impose specific financial burdens on the
primary government. Blended component units are, in substance, part of the government’s operations and so are reported as if they
were part of the primary government. The City has identified the following component units using the above criteria:
Blended Component Unit
The New Hope Economic Development Authority (EDA) and Housing and Redevelopment Authority (HRA) are fiscally dependent
upon the City, and were developed to control and operate the housing and redevelopment and tax increment districts within the City.
Since the City Council makes up the New Hope EDA and HRA boards, and funding for New Hope EDA and HRA activities are
provided by the City, both entities are considered to be blended component units of the City, and are reported as special revenue, debt
service, and capital projects funds.
The City participates in various joint ventures and jointly controlled organizations which are described later in these notes.
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 non-fiduciary activities of the primary government 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 are offset by program
revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Amounts reported as program
revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, service, 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 programs revenue are reported
instead as general revenues.
Separate fund financial statements are provided for governmental, proprietary, and fiduciary funds, even though the latter are excluded
from the government-wide financial statements. Major individual governmental and enterprise funds are reported as separate columns
in the fund financial statements. Aggregated information for the remaining nonmajor funds are reported in single columns in the
respective fund financial statements.
Aggregated information for the internal service funds is presented in a single column in the proprietary fund financial statements.
Because the principal users of the internal services are the City’s governmental activities, the financial statements of the internal
service funds are consolidated into the governmental activities column when presented in the government-wide financial statements.
The cost of these services is reported in the appropriate functional activity.
61
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2018
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 funds. The fiduciary fund financial statements have no measurement focus but utilize the accrual
basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the
timing of related cash flows. 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, pensions, other postemployment benefits, and claims and judgments, are
recorded only when payment is due.
Property taxes, tax increments, franchise taxes, 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, entitlement and donations. On an accrual basis, revenue from property taxes is recognized in the year for which the tax is
levied. Revenue from grants, entitlements and donations is recognized in the year in which all eligibility requirements have been
satisfied. Eligibility requirements include timing requirements, which specify the year when the resources are required to be used or
the year when use is first permitted, matching requirements, in which the 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 Economic Development Authority Special Revenue fund accounts for the activities of the authority which controls and
operates the housing and redevelopment projects and tax increment districts in the City. Activities in the fund are funded through
property tax levies and Federal and state aids and grants.
The HRA Construction Capital Projects fund is used to account for redevelopment costs for tax increment districts, which are
primarily funded by tax increment bonds and tax increment revenues.
The City Hall CIP Capital Projects fund is used to account for the accumulation of reserves for City Hall projects.
62
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2018
Note 1: Summary of Significant Accounting Policies (Continued)
The Street Infrastructure Capital Projects fund is used to account for various street projects within the City.
The Park/Pool Improvement Project Capital Projects fund is used to account for park and pool improvements.
The HRA Bonds Debt Service fund accounts for revenue from tax increments and interest income to pay for the principal and
interest on the City’s tax increment bond issues.
The City reports the following major enterprise funds:
The Sewer Utility fund accounts for the provisions of sewer services to residents of the City. All activities necessary to provide
such services are accounted for in this fund, including administration, operations, maintenance, billing and collection.
The Water Utility fund is used to account for the provisions of water services to residents of the City. All activities necessary to
provide such services are accounted for in this fund, including administration, operations, maintenance, billing and collection.
The Golf Course fund is used to account for the operations of the City’s public golf course.
The Ice Arena fund is used to account for the operation of the City’s indoor ice arena.
The Storm Water fund accounts for the general operation and maintenance of the City’s storm water system.
The Street Lighting fund is used to account for the operation of the City’s streetlight system.
Additionally, the City reports the following fund types:
Internal service funds are used to account for the City’s vehicle and equipment rental operation, employee leave benefits,
insurance, and information technology operations. Internal service funds operate in a manner similar to enterprise funds; however,
they provide services primarily to other departments within the City.
Fiduciary funds account for assets held by the City in a trustee capacity or as an agent on behalf of others.
The Agency funds are custodial in nature and do not present results of operations or have measurement focuses. The Flexible
Spending fund was established to account for flexible spending accounts held by the City as the agent for others.
As a general rule the effect of interfund activity has been eliminated from government-wide financial statements. Exceptions to this
general rule are charges between the City’s enterprise fund functions and various other functions of the government. 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 non-operating 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 enterprise funds and of the City’s internal service funds are charges to customers
for sales and services. Operating expenses for enterprise funds and internal service 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 non-
operating revenues and expenses.
63
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2018
Note 1: Summary of Significant Accounting Policies (Continued)
D. Assets, Liabilities, Deferred Inflows of Resources, and Net Position/Fund Balance
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 date of acquisition. The proprietary funds’ portion of the government-wide cash and temporary
investments pool is considered to be cash and cash equivalent for purposes of the Statements of Cash Flows.
Cash balances from all funds are pooled and invested, to the extent available, in certificates of deposit, U.S. government obligations,
and other authorized investments. Investments are stated at their estimated fair value. Earnings from such investments are allocated on
the basis of applicable participation by each of the funds. For cash held with fiscal agent, interest earned on those investments is
allocated directly to that fund.
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 and received the highest
credit rating, rated in one of the two highest rating categories by a statistical rating agency, and have a final maturity of
thirteen months or less.
3. General obligations of a state or local government with taxing powers rated “A” or better; revenue obligations rated “AA” or
better.
4. General obligations of the Minnesota Housing Finance Agency rated “A” or better.
5. Obligation of a school district with an original maturity not exceeding 13 months and (i) rated in the highest category by a
national bond rating service or (ii) enrolled in the credit enhancement program pursuant to statute section 126C.55.
6. Bankers’ acceptances of United States banks eligible for purchase by the Federal Reserve System.
7. Commercial paper issued by United States banks corporations or their Canadian subsidiaries, of highest quality category by
at least two nationally recognized rating agencies, and maturing in 270 days or less.
8. Repurchase or reverse repurchase agreements and securities lending agreements with financial institutions qualified as a
“depository” by the government entity, with banks that are members of the Federal Reserve System with capitalization
exceeding $10,000,000, a primary reporting dealer in U.S. government securities to the Federal Reserve Bank of New York,
or certain Minnesota securities broker-dealers.
9. Guaranteed Investment Contracts (GIC’s) issued or guaranteed by a United States commercial bank, a domestic branch of a
foreign bank, a United States insurance company, or its Canadian subsidiary, whose similar debt obligations were rated in
one of the top two rating categories by a nationally recognized rating agency.
64
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2018
Note 1: Summary of Significant Accounting Policies (Continued)
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.
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. See Note 3A on page 72 for the City’s recurring fair value measurements.
The City has the following recurring fair value measurements as of December 31, 2018:
• U.S. Government Treasury Securities of $1,916,262 are valued using a matrix pricing model (Level 2 inputs).
• U.S. Government Agency Securities of $8,526,470 are valued using a matrix pricing model (Level 2 inputs).
• State and local government securities of $1,102,404 are valued using a matrix pricing model (Level 2 inputs).
• Negotiable certificates of deposit of $9,543,741 are valued using a matrix pricing model (Level 2 inputs)
• Negotiable certificates of deposit of $490,154 are valued using a matrix pricing model (Level 1 inputs)
Property Taxes
The City Council annually adopts a tax levy in December and certifies it to the County for collection in 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.
Accounts Receivable
Accounts receivable include amounts billed for services provided before year end. Unbilled utility enterprise fund receivables are also
included for services provided in 2018. The City annually certifies delinquent water, sewer, storm water, and street lighting accounts
to the County for collection in the following year. Therefore, there has been no allowance for doubtful accounts established for the
delinquent water and sewer accounts.
Special Assessments
Special assessments are levied against benefited properties for the cost or a portion of the cost of special assessment improvement
projects in accordance with Minnesota statutes. These assessments are collectible by the City over a term of years usually consistent
with the term of the related bond issue. Collection of annual installments (including interest) is handled by the County Auditor in the
same manner as property taxes. Property owners are allowed to (and often do) prepay future installments without interest or
prepayment penalties.
In governmental fund financial statements, revenue from special assessments is recognized by the City when it becomes measurable
and available to finance expenditures of the current fiscal period. In practice, current and delinquent special assessments received by
the City are recognized as revenue for the current year. Special assessments are collected by the County and remitted by December 31
(remitted to the City the following January) and are also recognized as revenue for the current year. All special assessments receivable
in governmental funds are completely offset by a deferred inflow of resources for assessments not received within 60 days after year
end. In government-wide financial statements, special assessments are recognized as revenues in the year for which they are certified.
At December 31, 2018, the total delinquent special assessment receivable balance was $57,489.
65
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2018
Note 1: Summary of Significant Accounting Policies (Continued)
Once a special assessment roll is adopted, the amount attributed to each parcel is a lien upon that property until full payment is made
or the amount is determined to be excessive by the City Council or court action. If special assessments are allowed to go delinquent,
the property is subject to tax forfeit sale and the first proceeds of that sale (after costs, penalties and expenses of sale) are remitted to
the City in payment of delinquent special assessments. Generally, the City will collect the full amount of its special assessments not
adjusted by City Council or court action. Pursuant to Minnesota statutes, a property shall be subject to a tax forfeit sale after three
years unless it is homesteaded, agricultural or seasonal recreational land in which event the property is subject to such sale after five
years.
Interfund Receivables and Payables
Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred
“advances to/from other funds”. All other outstanding balances between funds are reported as “due to/from other funds.” Any residual
balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial
statements as “internal balances.”
Inventory and Prepaid Items
Inventory is valued at cost using the first-in/first-out (FIFO) method. Inventory consists mainly of expendable supplies held for
consumption.
Certain cash payment to vendors reflects costs applicable to future accounting periods are recorded as prepaid items in both
government-wide and fund financial statements. Inventory and prepaid items of the governmental funds are recorded as expenditures
when consumed rather than when purchased.
Land Held for Resale
Land held for resale is valued at the lower of the cost or acquisition of the property. The fair value of the property was determined
based on quoted market prices.
Investment in Joint Ventures
Included in the assets of the government-wide statements and proprietary funds are amounts representing the City’s investment in two
joint ventures described later in these notes.
Capital Assets
Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items),
are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital
assets are defined by the City as assets with an initial, individual cost of more than $5,000 (amount not rounded) and an estimated
useful life of two years or more. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed.
Donated capital assets would be recorded at acquisition value at the date of donation.
The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not
capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the
construction phase of capital assets of business-type activities is included as part of the capitalized value of the assets constructed.
Land and Construction in Process are non-depreciable assets. 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 15 - 50
Improvements other than Buildings 15 - 50
Vehicles and Equipment 3 - 20
66
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2018
Note 1: Summary of Significant Accounting Policies (Continued)
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 position 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 only one item that
qualifies for reporting in this category. Accordingly, the item, deferred pension resources, is reported only in the statements of net
position. This item results from actuarial calculations and current year pension contributions made subsequent to the measurement
date.
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.
The total pension expense for the GERF, PEPFF, and PEDCP is as follows:
Public Employees Retirement
Association of Minnesota (PERA)Total All
GERF PEPFF PEDCP Plans
Pension Expense 139,867$ 176,556$ 2,525$ 318,948$
Deferred Inflows of Resources
In addition to liabilities, the statement of net position and fund financial statements 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 position 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 four types of items, unavailable revenue, resources received in advance, deferred pension resources, and deferred
other postemployment benefit resources.
• Unavailable revenue 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 two sources: property taxes and special assessments. These
amounts are deferred and recognized as an inflow of resources in the period that the amounts become available.
• Resources received in advance is reported in both the governmental fund financial statements and within the government-
wide financial statements. This item is reported for amounts that have been received before time requirements are met, but
after all other eligibility requirements have been met.
• Deferred pension resources is reported only in the statements of net position and results from actuarial calculations.
• Deferred other postemployment benefit resources is reported only in the statements of net position and results from actuarial
calculations involving net differences between projected and actual earnings on plan investments and changes in proportions.
67
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2018
Note 1: Summary of Significant Accounting Policies (Continued)
Compensated Absences
A liability is recognized for unpaid vacation, sick leave, wellness days, and personal leave earned by employees at the balance sheet
date if it is probable the benefit will be paid as time off or at separation of service. The City implemented a personal leave plan in
1994 in which all new employees, other than police officers, participate. Employees who have had five or more years of service at the
time of implementation were allowed to choose between the personal leave plan or the vacation/sick leave plan. Under the
vacation/sick leave plan, employees are entitled to compensation for unpaid vacation time up to 160 hours and one-third of their
accumulated sick leave to a maximum of 320 hours. Under personal leave, employees are entitled to 200 hours of accumulated leave
time. The Employee Leave internal service fund is typically used to liquidate governmental compensated absences payable.
Other Postemployment Benefits (OPEB)
Under Minnesota statute 471.61, subdivision 2b, public employers must allow retirees and their dependents to continue coverage
indefinitely in an employer-sponsored health care plan, under the following conditions: 1) Retirees must be receiving (or eligible to
receive) an annuity from a Minnesota public pension plan, 2) Coverage must continue in a group plan until age 65, and retirees must
pay no more than the group premium, and 3) Retirees are able to add dependent coverage during open enrollment period or qualifying
life event prior to retirement. All premiums are funded on a pay-as-you-go basis. The liability was determined, in accordance with
GASB Statement No.75 , at December 31, 2018. The Insurance Reserve Internal service fund is typically used to liquidate
governmental other postemployment benefits payable.
Long-term Obligations
In the government-wide financial statements, and proprietary fund types in the fund financial statements, long-term debt and other
long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund
type statement of net position. The recognition of bond premiums and discounts are delayed and amortized over the life of the bonds
using the straight-line 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 recognized bond premium 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.
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.
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 Finance Manager or City Manager.
Unassigned - The residual classification for the General fund and also negative residual amounts in other funds.
68
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2018
Note 1: Summary of Significant Accounting Policies (Continued)
The City considers restricted amounts to be spent first when both restricted and unrestricted fund balance is available. Additionally,
the City would first use committed, then assigned, and lastly unassigned amounts of unrestricted fund balance when expenditures are
made.
The City has formally adopted a fund balance policy for the General fund. The City will maintain an unassigned fund balance in the
General fund of an amount not less than 42% of the next year’s budgeted expenditures of the General fund.
Net Position
Net position represents the difference between assets and deferred outflows of resources and 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 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
Budgets are legally adopted on a basis consistent with accounting principles generally accepted in the United States of America.
Annual appropriated budgets are legally adopted for the General and certain special revenue funds.
Budgeted amounts are reported as originally adopted, or as amended by the City Council. The budget was not amended during the
current year. Budgeted expenditure appropriations lapse the year end.
The City follows these procedures in establishing the budgetary data reflected in the financial statements:
1. The City Manager submits to the City Council a proposed operating budget for the fiscal year commencing the following
January 1. The operating budget includes proposed expenditures and the means of financing them.
2. Public hearings are conducted to obtain taxpayer comments.
3. When adopted through passage of a resolution, the budget becomes the formal appropriation budget.
4. The legal level of budget control is at the fund level. Total fund expenditures may not legally exceed budgeted fund
appropriations. Budget appropriations lapse at year-end.
5. The City Manager may make transfers of appropriations within funds, or departments within funds, but cannot adjust the total
budget of a fund.
6. Adjustments to budgets at the fund level must be authorized by the City Council.
7. Monitoring of budgets is maintained at the expenditure category level (personnel services, supplies, other services and
charges, or capital outlay) within each activity and fund.
69
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2018
Note 2: Stewardship, Compliance and Accountability (Continued)
8.Legally adopted budgets are adopted for the following funds:
a.General fund
b.Special revenue funds
i.Solid Waste Management
ii.Economic Development Authority
9.Formal budgetary integration is employed as a management control device during the year for the General fund and special
revenue funds. Budgets are not prepared for the Police Forfeitures, Ice Arena Endowment, or CEE Revolving Loan special
revenue funds.
B.Excess of expenditures Over Appropriations
For the year ended December 31, 2018, expenditures exceeded appropriations in the following funds. The excess spending was funded
by revenues received in excess of budget and available fund balance.
Excess of
Expenditures
Final Over
Budget Actual Appropriations
Major Governmental
Economic Development Authority 632,016$ 830,296$ 198,280$
Nonmajor Governmental
Solid Waste Management 220,735 225,116 4,381
Fund
C.Deficit Fund Equity
The following funds had fund balance or net position deficits at December 31, 2018:
Amount
Major Governmental
Street Infrastructure 948,474$
HRA Bonds 2,286,122
Nonmajor Governmental
Xylon Avenue Improvements 779
2016 Street Improvement Project 10,096
2017 Street Improvement Project 202,737
Internal Service
Insurance Reserve 271,242
Fund
The City plans to fund these deficits with future tax increment receipts, transfers, tax levy receipts and special assessment collections.
Note 3: Detailed Notes on All Funds
A.Deposits and Investments
Deposits
Custodial credit risk for deposits and investments is the risk that in the event of a bank failure, the 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.
70
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2018
Note 3: Detailed Notes on All Funds (Continued)
Minnesota statutes require that all City deposits be protected by insurance, surety bond or collateral. The market 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.
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 City.
At year-end, the carrying amount of the City’s deposits was $6,489,024 and the bank balance was $6,557,354. At December 31, 2018,
all deposits were fully covered by federal depository insurance, surety bonds, or by collateral held by the City’s agent in the City’s
name.
Investments
The investments of the City are subject to the following risks:
• 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 limit
the City’s investments to the list on page 64 of the notes. The City’s investment policy does not address this risk any further.
• Custodial Credit Risk. The 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 the City 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, excluding U.S. guaranteed investments (such as treasuries), investment pools, and mutual funds.
The City’s investment policy does not limit the concentration of investments.
• Interest Rate Risk. This is the risk of potential variability in the fair value of fixed rate investments resulting from changes in
interest rates (the longer period for which an interest rate is fixed, the greater the risk). The City’s investment policy does not
limit the duration of investments.
71
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2018
Note 3: Detailed Notes on All Funds (Continued)
As of December 31, 2018, 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 Level 3
Pooled Investments at Net Asset Value
Broker Money Market Funds AAA Less than 6 months 15,806,927$
Broker Money Market Funds N/A Less than 6 months 6,662,615
Total Money Market Funds 22,469,542
Non-pooled Investments at Fair Value
Negotiable Certificates of Deposit N/A Less than 6 months 1,711,078 -$ 1,711,078$ -$
Negotiable Certificates of Deposit N/A 6 months to 1 year 2,438,970 490,154 1,948,816 -
Negotiable Certificates of Deposit N/A 1 to 3 years 2,773,270 - 2,773,270 -
Negotiable Certificates of Deposit N/A More than 3 years 3,110,577 - 3,110,577 -
U.S. Government Treasury Securities AA+Less than 6 months 1,916,262 - 1,916,262 -
U.S. Government Agency Securities AA+1 to 3 years 2,925,746 - 2,925,746 -
U.S. Government Agency Securities AA+More than 3 years 5,600,724 - 5,600,724 -
State and Local Government Securities A Less than 6 months 100,099 - 100,099 -
State and Local Government Securities A+1 to 3 years 498,010 - 498,010 -
State and Local Government Securities AA+More than 3 years 504,295 - 504,295 -
U.S. Government State and Local
Government Securities N/A More than 3 years 1,150,000 - - -
Total Investments 45,198,573$ 490,154$ 21,088,877$ -$
Types of Investments
Fair Value Measurement
(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 Indicated not applicable or available.
72
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2018
Note 3: Detailed Notes on All Funds (Continued)
The following table discloses the nature and risk of investments for which fair value has been estimated using the net asset value per
share (NAV) of the investments as a practical expedient as of December 31, 2018:
Unfunded Redemption Redemption
Fair Value Commitments Frequency Notice Period
Broker Money Market Funds
UBS Select Prime Institutional Fund (1)921,817$ -$ Daily None Required
Invesco Government and Agency Fund (2)14,885,110 - Daily None Required
Minnesota Municipal Money Market Fund (3)6,662,615 - Daily None Required
22,469,542$ -$
Description
(1)This fund includes investments primarily in short-term, high-credit-quality money market instruments. hedge funds that invest
domestically and globally in both long and short common stocks across all market capitalizations. The fund aims to preserve
capital, maintain liquidity and produce a competitive yield. This is an external investment pool that operates in conformity with
the Securities and Exchange Commission’s rules. There are no withdrawal restrictions related to the fund.
(2)This fund seeks maximum current income consistent with liquidity and the preservation of capital. The Fund invests in a
diversified portfolio of high-quality money market instruments of governmental and private issuers.
(3)The Minnesota Municipal Money Market Fund is regulated by Minnesota statutes and the Board of Directors of the League of
Minnesota Cities and is an external investment pool not registered with the Securities Exchange Commission (SEC) that
follows the regulatory rules of the SEC. In accordance with GASB Statement No. 79, the City’s investment in this pool is
valued at amortized cost, which approximates fair value. There are no restrictions or limitations on withdrawals from the 4M
Liquid Asset Fund. Investments in the 4M Plus must be deposited for a minimum of 14 calendar days. Withdrawals prior to the
14-day restriction period will be subject to a penalty equal to seven days interest on the amount withdrawn. Seven days' notice
of redemption is required for withdrawals of investments in the 4M Term Series withdrawn prior to the maturity date of that
series. A penalty could be assessed as necessary to recoup the Series for any charges, losses, and other costs attributable to the
early redemption. Financial statements of the 4M Fund can be obtained by contracting RBC Global Management at 100 South
Fifth Street, Suite 2300, Minneapolis, MN 55402-1240.
A reconciliation of cash and temporary investments as reported on the statement of net position follows:
Carrying Amount of Deposits 6,489,024$
Investments 45,198,573
Petty Cash 2,700
Total 51,690,297$
Statement of Net Position
Cash and temporary investments 50,515,371$
Cash held with fiscal agent 1,160,680
Statement of Fiduciary Net Assets
Cash and temporary investments 14,246
Total 51,690,297$
B. Receiva bles
Loans Receivable
The City has made several business subsidy loans to local businesses, some of which were funded with grant proceeds received from
Hennepin County. The terms and periods of repayment vary with each loan. Loans receivable in the Economic Development
Authority fund at December 31, 2018 totaled $246,500. Loans receivable in nonmajor governmental funds total $16,086.
73
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2018
Note 3: Detailed Notes on All Funds (Continued)
C. Capital Assets
Capital asset activity for the year ended December 31, 2018 was as follows:
Beginning Ending
Balance Increases Decreases Balance
Governmental Activities
Capital Assets not being Depreciated
Land 994,268$ -$ -$ 994,268$
Construction in progress 3,751,244 11,833,994 (5,063,332) 10,521,906
Total Capital Assets not
being Depreciated 4,745,512 11,833,994 (5,063,332) 11,516,174
Capital Assets, being Depreciated
Buildings and structures 9,367,855 - - 9,367,855
Vehicles and equipment 10,458,163 610,836 (334,643) 10,734,356
Improvements other than buildings 40,754,614 5,063,334 - 45,817,948
Total Capital Assets
being Depreciated 60,580,632 5,674,170 (334,643) 65,920,159
Less Accumulated Depreciation for
Buildings and structures (6,437,152) (266,948) - (6,704,100)
Vehicles and equipment (7,814,893) (650,442) 334,643 (8,130,692)
Improvements other than buildings (11,421,164) (1,976,513) - (13,397,677)
Total Accumulated Depreciation (25,673,209) (2,893,903) 334,643 (28,232,469)
Total Capital Assets
being Depreciated, Net 34,907,423 2,780,267 - 37,687,690
Governmental Activities
Capital Assets, Net 39,652,935$ 14,614,261$ (5,063,332)$ 49,203,864$
74
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2018
Note 3: Detailed Notes on All Funds (Continued)
Beginning Ending
Balance Increases Decreases Balance
Business-type Activities
Capital Assets not being Depreciated
Land 485,042$ -$ -$ 485,042$
Construction in progress 3,705,395 626,158 (3,876,371) 455,182
Total Capital Assets
not being Depreciated 4,190,437 626,158 (3,876,371) 940,224
Capital Assets being Depreciated
Buildings and structures 10,820,032 92,176 - 10,912,208
Improvements other than buildings 23,422,045 3,780,779 - 27,202,824
Vehicles and equipment 2,570,650 44,987 - 2,615,637
Total Capital Assets
being Depreciated 36,812,727 3,917,942 - 40,730,669
Less Accumulated Depreciation for
Buildings and structures (4,340,067) (210,582) - (4,550,649)
Improvements other than buildings (5,342,164) (611,406) - (5,953,570)
Vehicles and equipment (1,985,406) (129,922) - (2,115,328)
Total Accumulated
Depreciation (11,667,637) (951,910) - (12,619,547)
Total Capital Assets
being Depreciated, Net 25,145,090 2,966,032 - 28,111,122
Business-type Activities
Capital Assets, Net 29,335,527$ 3,592,190$ (3,876,371)$ 29,051,346$
75
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2018
Note 3: Detailed Notes on All Funds (Continued)
Depreciation expense was charged to functions/programs of the City as follows:
Governmental Activities
General government 88,750$
Public safety 61,943
Public works 1,689,117
Culture and recreation 329,782
Internal service 724,311
Total Depreciation Expense - Governmental Activities 2,893,903$
Business-type Activities
Sewer utility 175,926$
Water utility 339,263
Golf course 36,753
Ice arena 205,769
Storm water 194,199
Total Depreciation Expense - Business-type Activities 951,910$
Construction Commitments
The City has active construction projects as of December 31, 2018. At year-end, the City’s commitments with the contractors are as
follows:
Spent Remaining
to Date Commitment
2011 Street Infrastructure 61,234$ 22,931$
2018 Seal Coat and Fog Seal 290,213 1,640
North Water Tower Paint 141,900 322,100
Sunnyside Park Playgroung Project 187,173 2,911
Water Main Replacement 217,650 22,030
New Police Station & City Hall 8,980,537 6,066,463
Total 9,878,707$ 6,438,075$
Project
76
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2018
Note 3: Detailed Notes on All Funds (Continued)
D. Interfund Receivables, Payables, and Transfers
The composition of internal balances as of December 31, 2018 is as follows:
Purpose Amount
Due from/to other funds
Governmental Governmental
General fund Economic Development Authority Cash deficit coverage 456,038$
General fund Nonmajor governmental Cash deficit coverage 205,324
Governmental Business-type
General fund Ice Arena Cash flow 433,656
Total Due From/To Other Funds 1,095,018$
Advances to/from other funds
Governmental Governmental
Economic Development Authority HRA Construction Finance capital purchase 2,525,125$
Economic Development Authority HRA Bonds Finance capital purchase 351,541
HRA Construction HRA Bonds Finance capital purchase 2,005,750
Nonmajor governmental Street Infrastructure Finance capital purchase 600,000
Governmental Business-type
Nonmajor governmental Sewer Utility Construction financing 1,000,000
Nonmajor governmental Water Utility Construction financing 679,675
Total Advances To/From Other Funds 7,162,091
Interfund Activity Eliminated From Government-wide Statements (6,143,778)
Internal Service Fund Activities Related to the Enterprise Funds 603,300
Total Internal Balances - Government-wide Statements 2,716,631$
Payable FundReceivable Fund
The Economic Development Authority fund loaned the HRA Construction fund $2,433,162 in 2008 for the purchase of land at Bass
Lake Road. The interfund loan matures in 2028 and carries an interest rate of four percent. As of December 31, 2018, the balance
outstanding was $2,525,125. In 2014, the Temporary Financing fund loaned the Water Utility fund $1,100,000 to finance the
emergency water supply system project. The loan will be paid back over a 10-year period with a 1.51 percent interest rate. As of
December 31, 2018, the balance outstanding was $679,675. In 2016, the Temporary Financing fund loaned the Sewer Utility fund
$1,250,000 to fund the 2016 capital improvement plan. The loan will be paid back over a 10-year period with a 2.00 percent interest
rate. As of December 31, 2018, the balance outstanding was $1,000,000. In 2016, the Temporary Financing fund loaned the Street
Infrastructure fund $750,000 to fund future capital purchases. The loan will be paid back over a 10-year period with a 2.00 percent
interest rate. As of December 31, 2018, the balance outstanding was $600,000. In 2017, the General fund loaned the Ice Arena fund
$433,656 for cash flow purposes, the loan will be paid back in 2019. The Economic Development Authority fund and the HRA
Construction fund loaned the HRA Bonds fund $351,541 and $2,005,750, respectively for the purchase of the Hy-Vee property. The
interfund loan matures in 2042 and carries an interest rate of 4.00 percent.
77
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2018
Note 3: Detailed Notes on All Funds (Continued)
Interfund transfers at December 31, 2018 are as follows:
Ice
HRA City Hall HRA Nonmajor Arena
General Construction CIP Bonds Governmental Enterprise Total
Transfer Out
General -$ -$ 100,000$ -$ 150,000$ -$ 250,000$
Economic Development Authority 33,902 - - - 95,354 - 129,256
HRA Construction - - - 51,617 - - 51,617
HRA Bonds - 66,053 - - - - 66,053
Nonmajor Governmental 51,800 - - - - 200,000 251,800
Sewer Utility Enterprise 52,887 - - - - - 52,887
Water Utility Enterprise 55,147 - - - - - 55,147
Golf Course Enterprise 10,250 - - - - - 10,250
Ice Arena Enterprise 10,250 - - - - - 10,250
Storm Water Enterprise 23,053 - - - - - 23,053
Internal Service 88,145 - - - - - 88,145
Total Transfers 325,434$ 66,053$ 100,000$ 51,617$ 245,354$ 200,000$ 988,458$
Fund
Transfer In
• The General fund transferred $150,000 to the Nonmajor Governmental funds to fund the Fire Capital Projects fund.
• The General fund transferred $100,000 to the City Hall CIP Fund for future capital improvements.
• Transfers were made out of the Economic Development Authority fund, Nonmajor Governmental Fire Capital Projects fund,
Sewer Utility Enterprise fund, Water Utility Enterprise fund, Golf Course Enterprise fund, Ice Arena Enterprise fund, Storm
Water enterprise fund, and Internal Service fund for $33,902, $51,800, $52,887, $55,147, $10,250, $10,250, $23,053, and
$88,145, respectively, to the General fund to cover administrative charges paid for by the General fund.
• The HRA Construction fund transferred $51,617 to the HRA Bonds fund to reimburse the fund for tax increment project
costs.
• The Economic Development Authority fund transferred $95,354 to Nonmajor Governmental funds to fund the CEE
Revolving Loan Fund.
• The HRA Bonds fund transferred $66,053 to the HRA Construction fund to reimburse the funds for tax increment project
costs.
• The Nonmajor Governmental Park Infrastructure fund transferred $200,000 to the Ice Arena Enterprise fund to reimburse
costs.
78
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2018
Note 3: Detailed Notes on All Funds (Continued)
E. Long-term D ebt
General Obligation (G.O.) Bonds
The City issues G.O. bonds to provide funds for the acquisition and construction of major capital facilities. G.O. bonds have been
issued for both governmental and business-type activities. These bonds are reported in the proprietary funds if they are expected to be
repaid from proprietary fund revenues.
The following G.O. bonds will be repaid from future tax levies.
Authorized Issue Maturity Balance at
and Issued Date Date Year End
2010B G.O. Certificates of
Indebtedness 1,245,000$ 2.00 - 2.60 %11/23/10 02/01/20 295,000$
G.O. Street Reconstruction
Bonds, Series 2015B 3,825,000 2.25 - 3.00 12/30/15 02/01/31 3,415,000
G.O. Street Reconstruction
Bonds, Series 2016A 4,855,000 2.25 - 3.00 12/29/16 02/01/33 4,855,000
G.O. Capital Improvement
Bonds, Series 2017A 18,435,000 3.00 - 5.00 12/28/17 02/01/34 18,435,000
G.O. Tax Abatement
Bonds, Series 2018A 9,520,000 3.25 - 5.00 12/20/18 02/01/35 9,520,000
Total General Obligation Bonds 36,520,000$
Interest
RateDescription
The annual debt service to maturity for G.O. bonds are as follows:
Year Ending
December 31,Principal Interest Total Principal Interest Total
2019 415,584$ 1,081,871$ 1,497,455$ 209,415$ 101,542$ 310,957$
2020 1,334,113 1,186,081 2,520,194 215,887 95,163 311,050
2021 1,699,734 1,127,173 2,826,907 220,266 88,620 308,886
2022 1,763,688 1,055,922 2,819,610 231,312 81,847 313,159
2023 1,842,218 971,833 2,814,051 237,782 74,810 312,592
2024 - 2028 10,493,668 3,588,248 14,081,916 1,291,333 268,090 1,559,423
2029 - 2033 12,222,651 1,526,728 13,749,379 1,187,349 78,484 1,265,833
2034 - 2035 3,155,000 74,810 3,229,810 - - -
Total 32,926,656$ 10,612,666$ 43,539,322$ 3,593,344$ 788,556$ 4,381,900$
Governmental Activities Business-type Activities
79
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2018
Note 3: Detailed Notes on All Funds (Continued)
G.O. Tax Increment Bonds
The following bonds were issued for development purposes. The additional tax increment resulting from the increased tax capacity of
the redeveloped properties has been pledged to retire the related debt. Tax increment revenues are projected to produce over 55
percent of the debt service requirements over the life of the bonds. For the current year, principal and interest paid and total related tax
increment revenues were $727,853 and $647,081, respectively.
Authorized Issue Maturity Balance at
and Issued Date Date Year End
G.O. Tax Increment Refunding
Bonds, Series, 2012A 2,695,000$ 2.00 - 2.45 %01/11/12 02/01/25 1,795,000$
G.O. Taxable Tax Increment
Refunding Bonds, Series, 2012B 1,330,000 1.35 - 4.65 01/11/12 02/01/31 1,120,000
G.O. Tax Increment
Bonds, Series, 2015A 5,960,000 2.00 - 3.00 06/17/15 02/01/32 5,620,000
Total G.O. Tax Increment Bonds 8,535,000$
Rate
Interest
Description
The annual debt service to maturity for G.O. tax increment bonds are as follows:
Year Ending
December 31,Principal Interest Total Principal Interest Total
2019 553,090$ 176,006$ 729,096$ 91,910$ 34,984$ 126,894$
2020 571,777 164,470 736,247 93,223 33,132 126,355
2021 584,151 152,436 736,587 95,849 31,242 127,091
2022 602,838 139,866 742,704 97,162 29,311 126,473
2023 621,525 126,415 747,940 98,475 27,355 125,830
2024 - 2028 2,503,487 420,987 561,000 526,513 103,285 629,798
2029 - 2032 1,622,320 100,926 122,200 472,680 28,732 501,412
Total 7,059,188$ 1,281,106$ 4,375,774$ 1,475,812$ 288,041$ 1,763,853$
Governmental Activities Business-type Activities
80
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2018
Note 3: Detailed Notes on All Funds (Continued)
Lease Revenue Bonds
The following bonds were issued to finance the Energy Conservation project and will be repaid primarily with energy savings and
revenues pledged from the Ice Arena fund. Annual principal and interest payments on the bonds are expected to require less than 8
percent of revenues from the Ice Arena fund. Principal and interest paid for the current year and total customer revenues for the Ice
Arena fund were $59,179 and $825,531, respectively.
Authorized Issue Maturity Balance at
and Issued Date Date Year End
2011A Taxable Lease
Revenue Bonds 3,505,000$ 5.00 %12/01/11 12/01/28 3,505,000$
Interest
RateDescription
The annual debt service to maturity for all lease revenue bonds are as follows:
Year Ending
December 31,Principal Interest Total
2019 -$ 57,482$ 57,482$
2020 - 57,482 57,482
2021 - 57,482 57,482
2022 - 57,482 57,482
2023 - 287,410 287,410
2024 - 2028 3,505,000 57,482 3,562,482
Total 3,505,000$ 574,820$ 4,079,820$
Business-type Activities
81
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2018
Note 3: Detailed Notes on All Funds (Continued)
G.O. Revenue Bonds and Notes
The following bonds and notes were issued to finance capital improvements in the enterprise funds. They will be repaid from future
revenues pledged from the Sewer Utility, Water Utility, and Storm Water funds and are backed by the taxing power of the City.
Annual principal and interest payments on the bonds are expected to require less than 3, 6, and 12 percent of revenues from the Sewer
Utility, Water Utility, and Storm Water funds, respectively. Principal and interest paid for the current year and total customer revenues
for the Sewer Utility fund were $65,585 and $3,154,709, respectively. Principal and interest paid for the current year and total
customer revenues for the Water Utility fund were $347,066 and $4,391,025, respectively. Principal and interest paid for the current
year and total customer revenues for the Storm Water fund were $155,364 and $1,139,007, respectively.
Authorized Issue Maturity Balance at
and Issued Date Date Year End
2010A G.O. Utility Revenue
Bonds 1,200,000$ 2.00 - 3.25 %05/06/10 02/01/21 250,000$
2010B G.O. Water Revenue
Refunding Bonds 605,000 2.00 - 3.00 11/23/10 02/01/22 240,000
2011 G.O. Public Facilities
Authority Note 411,738 1.70 02/23/11 08/20/29 254,000
2013 G.O. Public Facilities
Authority Note 1,035,000 1.00 07/24/13 08/20/32 795,000
Total G.O. Revenue Bonds and Notes 1,539,000$
Rate
Interest
Description
The annual debt service to maturity for G.O. revenue bonds are as follows:
Year Ending
December 31,Principal Interest Total
2019 214,000$ 24,941$ 238,941$
2020 216,000 19,997 235,997
2021 221,000 14,705 235,705
2022 142,000 10,534 152,534
2023 78,000 8,634 86,634
2024 - 2028 404,000 28,854 432,854
2029 - 2032 264,000 6,434 270,434
Total 1,539,000$ 114,099$ 1,653,099$
Business-type Activities
82
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2018
Note 3: Detailed Notes on All Funds (Continued)
Changes in Long-term Liabilities
Long-term liability activity for the year ended December 31, 2018, was as follows:
Restated
Beginning Ending Due Within
Balance Increases Decreases Balance One Year
Governmental Activities
Bonds Payable
G.O. bonds and certificates 23,665,578$ 9,520,000$ (258,922)$ 32,926,656$ 415,584$
G.O. tax increment bonds 7,600,000 - (540,812) 7,059,188 553,090
Add: premiums on bonds 2,135,378 476,673 (133,633) 2,478,418 -
Total Bonds Payable, Net 33,400,956 9,996,673 (933,367) 42,464,262 968,674
Pension Liability
GERF 2,888,696 2,222,522 (2,524,080) 2,587,138 -
PEPFF 3,807,336 15,250,586 (15,979,611) 3,078,311 -
Compensated Absences Payable 605,567 1,270,439 (1,161,621) 714,385 71,438
Other Postemployment
Benefits Payable 741,111 *76,285 (63,463) 753,933 -
Governmental Activity
Long-term Liabilities 41,443,666$ 28,816,505$ (20,662,142)$ 49,598,029$ 1,040,112$
Business-type Activities
Bonds Payable
G.O. bonds 3,689,422$ -$ (96,078)$ 3,593,344$ 209,415$
G.O. tax increment bonds 1,565,000 - (89,188) 1,475,812 91,910
Lease revenue bonds 3,505,000 - - 3,505,000 -
G.O. revenue bonds and notes 1,748,000 - (209,000) 1,539,000 214,000
Add: premiums on bonds 166,516 - (10,681) 155,835 -
Less: bond discount (2,283) - 740 (1,543) -
Total Bonds Payable, Net 10,671,655 - (404,207) 10,267,448 515,325
Pension liability
GERF 865,057 584,795 (713,984) 735,868 -
Other Postemployment
Benefits Payable 116,023 *11,943 (6,028) 121,938 -
Business-type Activity
Long-term Liabilities 11,652,735$ 596,738$ (1,124,219)$ 11,125,254$ 515,325$
*Beginning balances have been restated due to the implementation of GASB Statement No. 75.
Internal service funds predominantly serve the governmental funds. Accordingly, long-term liabilities for internal service funds are
included as part of the above totals for governmental activities.
83
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2018
Note 3: Detailed Notes on All Funds (Continued)
F. Components of Fund Balance
At December 31, 2018, 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). The following is a
summary of the components of fund balance:
Economic
Development HRA City Hall
General Authority Construction CIP
Nonspendable
Prepaid items 18,763$ -$ -$ -$
Restricted for
Economic development -$ -$ 5,233,849$ -$
Debt service - - - -
Capital improvements - - - 8,712,148
Public safety
Police expenditures - - - -
Ice arena - - - -
Total Restricted -$ -$ 5,233,849$ 8,712,148$
Committed to
Solid waste operations -$ -$ -$ -$
Economic development - 5,109,286 - -
Total Committed -$ 5,109,286$ -$ -$
Assigned to
General improvements -$ -$ -$ -$
Capital equipment - - - -
City hall improvements - - - 814,955
Park improvements - - - -
Total Assigned -$ -$ -$ 814,955$
Purpose
84
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2018
Note 3: Detailed Notes on All Funds (Continued)
Park/Pool Other
Improvement Governmental
Project Funds Total
Nonspendable
Prepaid items -$ -$ 18,763$
Restricted for
Economic development -$ -$ 5,233,849$
Debt service - 1,073,955 1,073,955
Capital improvements 9,492,781 - 18,204,929
Public safety
Police expenditures - 128,872 128,872
Ice arena - 5,215 5,215
Total Restricted 9,492,781$ 1,208,042$ 24,646,820$
Committed to
Solid waste operations -$ 209,368$ 209,368$
Economic development - 96,086 5,205,372
Total Committed -$ 305,454$ 5,414,740$
Assigned to
General improvements -$ 3,100,139$ 3,100,139$
Capital equipment - 668,155 668,155
City hall improvements - - 814,955
Park improvements - 1,112,020 1,112,020
Total Assigned -$ 4,880,314$ 5,695,269$
Purpose
85
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2018
Note 4: Defined Benefit Pension Plans - Statewide
A. Defined Benefit Pension Plan - Public Employees Retirement Association (PERA) - Statewide
1. Plan Description
The City participates in the following cost-sharing multiple-employer defined benefit pension plans administered by the Public
Employees Retirement Association of Minnesota (PERA). PERA’s defined benefit pension plans are established and administered
in accordance with Minnesota statutes, chapters 353 and 356. PERA’s defined benefit pension plans are tax qualified plans under
Section 401(a) of the Internal Revenue Code.
General Employees Retirement Fund (GERF)
All full-time and certain part-time employees of the City, are covered by the General Employees Retirement Fund (GERF).
GERF members belong to the Coordinated Plan. Coordinated Plan members are covered by Social.
Public Employees Police and Fire Fund (PEPFF)
The PEPFF, originally established for police officers and firefighters not covered by a local relief association, now covers all
police officers and firefighters hired since 1980. Effective July 1, 1999, the PEPFF also covers police officers and firefighters
belonging to a local relief association that elected to merge with and transfer assets and administration to PERA.
2. Benefits Provided
PERA provides retirement, disability and death benefits. Benefit provisions are established by Minnesota 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.
GERF Benefits
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 PERA's Coordinated Plan members. Members hired prior to
July 1, 1989 receive the higher of Method 1 or Method 2 formulas. Only Method 2 is used for members hired after June 30, 1989.
Under Method 1, the accrual rate for Coordinated members is 1.2 percent of average salary for each of the first 10 years of service and
1.7 percent of average salary for each additional year. Under Method 2, the accrual rate for Coordinated members is 1.7 percent for
average salary for all years of service. For members hired prior to July 1, 1989 a full annuity is available when age plus years of
service equal 90 and normal retirement age is 65. For members hired on or after July 1, 1989 normal retirement age is the age for
unreduced Social Security benefits capped at 66.
Benefit increases are provided to benefit recipients each January. Increases are related to the funding ratio of the plan. If the General
Employees Plan is at least 90 percent funded for two consecutive years, benefit recipients are given a 2.5 percent increase. If the plan
has not exceeded 90 percent funded, or have fallen below 80 percent, benefit recipients are given a one percent increase. A benefit
recipient who has been receiving a benefit for at least 12 full months as of June 30 will receive a full increase. Members receiving
benefits for at least one month but less than 12 full months as of June 30 will receive a pro rata increase.
86
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2018
Note 4: Defined Benefit Pension Plans - Statewide (Continued)
PEPFF Benefits
Benefits for the PEPFF members first hired after June 30, 2010, but before July 1, 2014, vest on a prorated basis from 50 percent after
five years up to 100 percent after ten years of credited service. Benefits for PEPFF members first hired after June 30, 2014, vest on a
prorated basis from 50 percent after ten years up to 100 percent after twenty years of credited service. The annuity accrual rate is 3
percent of average salary for each year of service. A full, unreduced pension is earned when members are age 55 and vested, or for
members who were first hired prior to July 1, 1989, when age plus years of service equal at least 90.
Benefit increases are provided to benefit recipients each January. Police and Fire Plan benefit recipients receive a future annual 1.0
percent increase. An annual adjustment will equal 2.5 percent any time the plan exceeds a 90 percent funded ratio for two consecutive
years. If the adjustment is increased to 2.5 percent and the funded ratio falls below 80 percent for one year or 85 percent for two
consecutive years, the post-retirement benefit increase will be lowered to one percent. A benefit recipient who has been receiving a
benefit for at least 12 full months as of June 30 will receive a full increase. Members receiving benefits for at least one month but less
than 12 full months as of June 30 will receive a pro rata increase. For retirements after May 31, 2014, the first increase will be delayed
two years.
3. Contributions
Minnesota statutes, chapter 353 sets the rates for employer and employee contributions. Contribution rates can only be modified by
the state legislature.
GERF Contributions
Plan members were required to contribute 6.50 percent of their annual covered salary and the City was required to contribute 7.50
percent of pay for Coordinated Plan members in fiscal year 2018. The City’s contributions to the GERF for the years ending
December 31, 2018, 2017 and 2016 were $310,638, $286,170 and $280,102, respectively. The City’s contributions were equal to the
required contributions for each year as set by Minnesota statute.
PEPFF Contributions
Plan members were required to contribute 10.80 percent of their annual covered salary and the City was required to contribute 16.20
percent of pay for members in fiscal year 2018. The City’s contributions to the PEPFF for the years ending December 31, 2018, 2017
and 2016 were $502,203, $489,202, and $444,511, respectively. The City’s contributions were equal to the required contributions for
each year as set by Minnesota statute.
4. Pension Costs
GERF Pension Costs
At December 31, 2018, the City reported a liability of $3,323,006 for its proportionate share of the GERF’s net pension liability. The
City’s net pension liability reflected a reduction due to the State of Minnesota’s contribution of $16 million to the fund in 2018. 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 net pension liability associated with the City totaled $109,063.
The net pension liability was measured as of June 30, 2018, and the total pension liability used to calculate the net pension liability
was determined by an actuarial valuation as of that date. The City’s proportionate share of the net pension liability was based on the
City’s contributions received by PERA during the measurement period for employer payroll paid dates from July 1, 2017 through
June 30, 2018 relative to the total employer contributions received from all of PERA’s participating employers. At June 30, 2018, the
City’s proportionate share was 0.0599 percent which was an increase of 0.0011 percent from its proportion measured as of
June 30, 2017.
87
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2018
Note 4: Defined Benefit Pension Plans - Statewide (Continued)
City's Proportionate Share of the Net Pension Liability 3,323,006$
State of Minnesota's Proportionate Share of the Net Pension
Liability Associated with the City 109,063
Total 3,432,069$
For the year ended December 31, 2018, the City recognized pension expense of $114,434 for its proportionate share of GERF’s
pension expense. In addition, the City recognized an additional $25,433 as pension expense (and grant revenue) for its proportionate
share of the State of Minnesota’s contribution of $16 million to the GERF.
At December 31, 2018, the City reported its proportionate share of GERF’s deferred outflows of resources and deferred inflows of
resources, and its contributions subsequent to the measurement date, from the following sources:
Deferred Deferred
Outflows Inflows
of Resources of Resources
Differences between Expected and
Actual Economic Experience 87,794$ 104,418$
Changes in Actuarial Assumptions 318,298 373,375
Net Difference between Projected and
Actual Earnings on Plan Investments - 326,560
Changes in Proportion 53,134 73,426
Contributions to GERF Subsequent
to the Measurement Date 155,569 -
Total 614,795$ 877,779$
Deferred outflows of resources totaling $155,569 related to pensions resulting from the City’s contributions to GERF subsequent to
the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31, 2019. Other
amounts reported as deferred outflows and inflows of resources related to GERF pensions will be recognized in pension expense as
follows:
2019 88,348$
2020 (190,582)
2021 (246,979)
2022 (69,340)
PEPFF Pension Costs
At December 31, 2018, the City reported a liability of $3,078,311 for its proportionate share of the PEPFF’s net pension liability. The
net pension liability was measured as of June 30, 2018, 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, 2017 through
June 30, 2018 relative to the total employer contributions received from all of PERA’s participating employers. At June 30, 2018, the
City’s proportionate share was 0.2888 percent which was an increase of 0.0068 percent from its proportion measured as of
June 30, 2017.
For the year ended December 31, 2018, the City recognized pension expense of $150,564 for its proportionate share of PEPFF’s
pension expense. The City also recognized $25,992 for the year ended December 31, 2018, as pension expense (and grant revenue) for
its proportionate share of the State of Minnesota’s on-behalf contributions to the PEPFF. Legislation passed in 2013 required the State
of Minnesota to begin contributing $9 million to the PEPFF each year, starting in fiscal year 2014.
88
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2018
Note 4: Defined Benefit Pension Plans - Statewide (Continued)
At December 31, 2018, the City reported its proportionate share of PEPFF’s deferred outflows of resources and deferred inflows of
resources, and its contributions subsequent to the measurement date, from the following sources:
Deferred Deferred
Outflows Inflows
of Resources of Resources
Differences between Expected and
Actual Economic Experience 124,921$ 790,491$
Changes in Actuarial Assumptions 3,989,977 4,531,675
Net Difference between Projected nd
Actual Earnings on Plan Investments - 618,540
Changes in Proportion 227,063 140,485
Contributions to PEPFF Subsequent
to the Measurement Date 253,373 -
Total 4,595,334$ 6,081,191$
Deferred outflows of resources totaling $253,373 related to pensions resulting from the City’s contributions to PEPFF subsequent to
the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31, 2019. Other
amounts reported as deferred outflows and inflows of resources related to GERF pensions will be recognized in pension expense as
follows:
2018 105,005$
2019 (188,081)
2020 (438,585)
2021 (1,228,236)
2022 10,667
5. Actuarial Assumptions
The total pension liability in the June 30, 2018 actuarial valuation was determined using the following actuarial assumptions:
Inflation 2.50% per year
Active Member Payroll Growth 3.25% per year
Investment Rate of Return 7.50%
Salary increases were based on a service-related table. Mortality rates for active members, retirees, survivors and disabilitants were
based on RP-2014 tables for all plans for males or females, as appropriate, with slight adjustments to fit PERA’s experience. Cost of
living benefit increases after retirement for retirees are assumed to be 1.25 percent per year for GERF and 1.0 percent per year for
PEPFF.
Actuarial assumptions used in the June 30, 2018 valuation were based on the results of actuarial experience studies. The most recent
six-year experience study in the GERF plan was completed in 2015. The most recent four-year experience study for PEPFF was
completed in 2016. Economic assumptions were updated in 2017 based on a review of inflation and investment return assumptions.
89
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2018
Note 4: Defined Benefit Pension Plans - Statewide (Continued)
The following changes in actuarial assumptions occurred in 2018:
GERF
• The mortality projection scale was changed from MP-2015 to MP-2017.
• The assumed benefit increase was changed from 1.0 percent per year through 2044 and 2.50 percent per year thereafter to
1.25 percent per year.
PEPFF
• The mortality projection scale was changed from MP-2016 to MP-2017
• 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.
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 on a regular basis 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:
Asset Class
Domestic Stocks 36.00 %5.10 %
International Stocks 17.00 5.30
Bonds (Fixed Income)20.00 0.75
Alternative Assets (Private Markets)25.00 5.90
Cash 2.00 -
Total 100.00 %
Target Expected Real
Allocation Rate of Return
Long-term
6. Discount Rate
The discount rate used to measure the total pension liability in 2018 was 7.50 percent. 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 GERF and PEPFF were projected to be available to make all projected future
benefit payments of current plan 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.
90
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2018
Note 4: Defined Benefit Pension Plans - Statewide (Continued)
7. Pension Liability Sensitivity
The following presents the City’s proportionate share of the net 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 net pension liability would be
if it were calculated using a discount rate 1 percentage point lower or 1 percentage point higher than the current discount rate:
1 Percent 1 Percent
Decrease (6.50%)Current (7.50%)Increase (8.50%)
GERF 5,400,311$ 3,323,006$ 1,608,251$
PEPFF 6,600,091 3,078,311 165,944
City Proportionate Share of NPL
8. Pension Plan Fiduciary Net Position
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.
B. Defined Contribution Plan
There are five City Council members of the City are covered by the Public Employees Defined Contribution Plan (PEDCP), a
multiple-employer deferred compensation plan administered by PERA. The PEDCP is a tax qualified plan under Section 401(a) of the
Internal Revenue Code and all contributions by or on behalf of employees are tax deferred until time of withdrawal.
The defined contribution plan consists of individual accounts paying a lump-sum benefit. Plan benefits depend solely on amounts
contributed to the plan plus investment earnings, less administrative expenses, therefore, there is no future liability to the employer.
Minnesota statutes, chapter 353d.03, specifies plan provisions, including the employee and employer contribution rates for those
qualified personnel who elect to participate. An eligible elected official who decides to participate contributes 5 percent of salary
which is matched by the elected official's employer. For ambulance service personnel, employer contributions are determined by the
employer, and for salaried employees contributions must be a fixed percentage of salary. Employer contributions for volunteer
personnel may be a unit value for each call or period of alert duty.
Employees who are paid for their services may elect to make member contributions in an amount not to exceed the employer share.
Employer and employee contributions are combined and used to purchase shares in one or more of the seven accounts of the
Minnesota Supplemental Investment Fund. For administering the plan, PERA receives 2 percent of employer contributions and
twenty-five hundredths of 1 percent (.0025) of the assets in each member's account annually.
Pension expense for the year is equal to contributions made. The City’s contributions to the PEDCP for the years ended
December 31, 2018, 2017 and 2016 were $2,525, $2,497, and $2,435, respectively. The City’s contributions were equal to the
contractually required contributions for each year as set by Minnesota statute.
Employee Employer Employee Employer Required Rate
2,525$ 2,525$ 5.00%5.00%5.00%
Contribution Amount
Percentage of
Covered Payroll
91
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2018
Note 5: Postemployment Benefits other than Pensions
A. Plan Description
The City administers a single-employer defined benefit healthcare plan (“the Retiree Health Plan”). The plan provides healthcare
insurance for eligible retirees and their eligible dependents through the City’s group health insurance plan, which covers both active
and retired members. Benefit provisions are discussed and proposed by an insurance committee made up of employees from all
employee groups (both represented and non-union), with the final approval of the plan being given by the City Manager. The benefit
levels, employee contributions, and employer contributions are governed by the City and can be amended by the City. The Retiree
Health Plan does not issue a publicly available financial report.
At December 31, 2018, the following employees were covered by the benefit terms:
Inactive Plan Members or Beneficiaries Currently Receiving Benefit Payments 6
Active Plan Members 88
Total Plan Members 94
B. Funding Policy
All retirees of the City have the option under state law to continue their medical insurance coverage through the City from the time of
retirement until the employee reaches the age of eligibility for Medicare. For members of all employee groups, the retiree must pay the
full premium to continue coverage for medical insurance. The City is legally required to include any retirees for whom it provides
health insurance coverage in the same insurance pool as its active employees. Consequently, participating retirees are considered to
receive a secondary benefit know as an “implicit rate subsidy.” This benefit relates to the assumption that the retiree is receiving a
more favorable premium rate than they would otherwise be able to obtain if purchasing insurance on their own, due to being included
in the same pool with the City’s younger and statistically healthier active employees.
Contribution requirements are set by the City annually on a pay-as-you-go basis. The City contributes none of the cost of current year
premiums for eligible retired plan members and their dependents except for the implicit rate subsidy described above. For fiscal year
2018, the City’s average contribution rate was 0.4 percent of covered payroll. For the year 2018, the City contributed $25,947 to the
Plan.
C. Actuarial Methods and Assumptions
The City’s total OPEB liability of $875,871 was measured as of December 31, 2018, and the total OPEB liability used to calculate the
total OPEB liability was determined by an actuarial valuation as of January 1, 2017 using the entry age normal method. Roll forward
procedures were used to roll forward the total OPEB liability to the measurement date.
The total OPEB liability in the January 1, 2017 actuarial valuation was determined using the following actuarial assumptions, applied
to all periods included in the measurement, unless otherwise specified:
Discount Rate 4.09%
Expected Long-Term Investment Return 4.09%
20-Year Municipal Bond Yield 4.09%
Inflation Rate 2.75%
Salary Increases 3.50%
Medical Premium Trend Rate 8.5% in 2017 grading to 5.0% for 7 years
Claims Cost Trend Rate 4.00%
The discount rate used to measure the total OPEB liability was 4.09%. Assets were projected using expected benefit payments and
expected asset returns. Expected benefit payments by year were discounted using the expected asset return assumption for years in
which the assets were sufficient to pay all benefit payments. Any remaining benefit payments after the trust fund is exhausted are
discounted at the 20-year municipal bond rate. The equivalent single rate is the discount rate.
Mortality rates were based on the RP-2014 with MP 2016 generational improvements.
92
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2018
Note 5: Postemployment Benefits other than Pensions (Continued)
The actuarial assumptions used in the January 1, 2017 valuation were based on input from a variety of published sources of historical
and projected future financial data. Each assumption was reviewed for reasonableness with the source information as well as for
consistency with the other economic assumptions.
D. Changes in the Total OPEB Liability
Total OPEB
Liability
(a)
Balances at December 31, 2017 859,607$
Changes for the Year:
Service cost 64,269
Interest 31,335
Changes in assumptions or other inputs (53,393)
Benefit payments (25,947)
Net Changes 16,264
Balances at December 31, 2018 875,871$
Since the prior measurement date, the following assumptions changed:
• The withdrawal table for all employees and retirement table for only employees eligible to retire with Rule of 90 also were
updated.
• The discount rate was changed from 3.44% to 4.09%.
Since the prior measurement date, there have been no changes in benefit terms.
E. Sensitivity of the Total OPEB Liability
The following presents the total OPEB liability of the City, as well as what the City’s total OPEB liability would be if it were
calculated using a discount rate that is 1-percentage point lower (3.09 percent) or 1-percentage-point higher (5.09 percent) than the
current discount rate:
1 Percent 1 Percent
Decrease (3.09%) Current (4.09%)Increase (5.09%)
959,439$ 875,871$ 800,109$
The following presents the total OPEB liability of the City, as well as what the City’s total OPEB liability would be if it were
calculated using a Healthcare Cost Trent Rates that is 1-percentage point lower (7.50 percent decreasing to 4.00 percent) or 1-
percentage-point higher (9.50 percent increasing to 6.00 percent) than the current healthcare trend rate:
1 Percent Decrease Healthcare Cost 1 Percent Increase
(7.5% Decreasing Trend Rates (9.5% Decreasing
to 4%)(8.5% Decreasing to 5%)to 6%)
766,167$ 875,871$ 1,005,018$
93
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2018
Note 5: Postemployment Benefits other than Pensions (Continued)
F. OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB
For the year ended December 31, 2018, the City recognized OPEB expense of $90,750. At December 31, 2018, the City reported
deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:
Deferred Outflows Deferred Inflows
of Resources of Resources
Changes in Actuarial Assumptions -$ 48,539$
Deferred inflows of resources totaling $48,539 related to pensions relating to the City’s changes in actuarial assumptions will result in
an increase of the OPEB liability in the year ended December 31, 2019. Other amounts reported as deferred outflows and inflows of
resources related to OPEB will be recognized in OEPB will be recognized in OPEB expense as follows:
Year Ended December 31:
2019 (4,854)$
2020 (4,854)
2021 (4,854)
2022 (4,854)
2023 (4,854)
Thereafter (24,269)
Note 6: Other Information
A. Contingencies
Tax Increment Districts
The City’s tax increment districts are subject to review by the State of Minnesota Office of the State Auditor (OSA). Any disallowed
claims or misuse of tax increment could become a liability of an applicable fund. Management has indicated that they are not aware of
any instances of noncompliance which would have a material effect on the financial statements.
Contingent Liabilities
Amounts received or receivable from grant agencies are subject to audit and adjustment by grantor agencies, principally the federal
government. Any disallowed claims, including amounts already collected, may constitute a liability of the applicable funds. The
amount, if any, of expenditures that may be disallowed by the grantor cannot be determined at this time, although the City expects
such amounts, if any, to be immaterial.
The City is a defendant in various lawsuits. Although the outcome of these lawsuits is not presently determinable, in the opinion of the
City’s counsel the resolution of these matters will not have a material adverse effect on the financial condition of the City.
94
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2018
Note 6: Other Information (Continued)
B. Risk M anagement
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. There
were no significant reductions in insurance from the previous year or settlements in excess of insurance coverage for any of the past
three fiscal years.
Liabilities are reported when it is probably 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. Conduit Debt Obligations
At times, the City has issued industrial revenue bonds to provide financial assistance to private sector entities for the acquisition and
construction of industrial and commercial facilities deemed to be in the public interest. The bonds are secured by the property financed
and are payable solely from payments received on the underlying mortgage loans. Upon repayment of the bonds, ownership of the
acquired facilities transfers to the private sector entity served by the bond issuance. The City is not 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, 2018, there were five series of industrial revenue bonds outstanding. The original issue amounts totaled $12,910,000
and have been reduced through annual payments and partial call prepayments. The outstanding balance as of December 31, 2018 is
undetermined.
D. Joint Ventures and Governed Organizations
Joint Ventures
Joint Water Commission
The City is a party to a joint powers agreement through which the Golden Valley, Crystal, and New Hope Joint Water Commission
(JWC) is formed. The agreement provides for the operation and ownership of a water supply, distribution, and support system in and
for the cities of Golden Valley, Crystal, and New Hope. Each member city is entitled to appoint one member to the JWC board. The
City purchases water used by its residents from the JWC and shares in the JWC’s operation, maintenance, repair, and replacement
costs based on its water usage.
As provided for in the joint powers agreement, in the event of termination, all real and personal property and cash held by the JWC
would be divided among the members by unanimous consent. Such division would be based on refunded monetary contributions made
to the JWC by the member cities.
Over the years, the costs of construction have been allocated among the member cities, generally on the basis of water purchased.
These costs were expensed as incurred by the City in the cost of water purchased. The asset recorded in the Water fund as an
investment in the JWC for $168,509 represents the original contributions for working capital; however, the City’s share of subsequent
construction costs are not determinable. Therefore, the City's Water enterprise fund has not recorded any subsequent amounts as an
equity investment or contributed capital related to the JWC.
The following financial information is taken from the JWC’s audited financial statements for the year ended December 31, 2018:
Total Assets 17,402,659$
Total Liabilities 662,889
Total Net Position 16,739,770
Total Revenue 8,464,766
Total Expenses 7,820,254
95
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2018
Note 6: Other Information (Continued)
Of the total revenues, $8,238,368 represented assessments paid by member cities. The City’s share of JWC’s total member
assessments for the year ended December 31, 2018 was $2,583,835 or 31.36 percent.
JWC financial statements are available from the City of Golden Valley, attention: Finance Department, 7800 Golden Valley Road,
Golden Valley, Minnesota, 55427-4508.
West Metro Fire-Rescue District
By a resolution dated August 25, 1997, the City Council approved entering into an agreement by which a joint powers fire department
would be established by merging the fire departments of New Hope and Crystal. A joint and cooperative agreement created the joint
powers fire department effective January 2, 1998, and operation began in July 1998, under the name West Metro Fire-Rescue District
(the District). The District is governed by a seven-member board of directors that includes one City Council member from each City.
As required by the agreement, the City transferred fire department equipment to the District while retaining its rights to these assets in
the event of the District’s dissolution. The equipment had a net book value of $374,558.
The following financial information is taken from the District’s audited financial statements for the year ended December 31, 2018,
the most recent information available at the date of this report:
Total Assets 4,265,127$
Total Deferred Outflows of Resources 1,073,617
Total Liabilities 2,041,043
Total Deferred Inflows of Resources 1,376,202
Total Net Position 1,921,499
Total Revenue 2,368,936
Total Expenses 2,671,789
The City’s equity interest and its share of the net income (loss) of the District are added to the value of the “Investment in Joint
Venture” in the government-wide financial statement under governmental activities. As of December 31, 2018, the amount reported as
investment in joint venture was $960,749.
According to a formula in the agreement, the City’s share of the District’s budget is 49.0 percent. Payments to the District in 2018
totaled $1,152,551.The District’s financial statements for the period ended December 31, 2018 are available at the District office
located at: 4251 Xylon Avenue North, New Hope, Minnesota 55428.
96
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2018
Note 6: Other Information (Continued)
Jointly Controlled Organizations
1. Shingle Creek Watershed Management Commission (SCWMC)
The City is one of nine member cities of the SCWMC, a joint powers organization formed to assist its members’ preservation and
use of natural water storage and retention systems. The City’s contribution to the SCWMC for its fiscal year ended
December 31, 2018 was $28,234, representing 7.27 percent of members’ contributions for the year.
2. Pets Under Police Security (PUPS)
The City has entered into a joint and cooperative agreement with five other cities to create an organization which provides
efficient and economical impoundment of animals in a jointly owned and operated facility. The City incurred charges of $16,033
for these services in 2018.
3. Hennepin Recycling Group (HRG)
The City is party to a joint powers agreement with two other cities to create an organization to collect, recycle, and dispose of
solid waste in compliance with the Minnesota Waste Management Act. HRG contracts for collection and recycling activities and
the City is billed for services provided to its residents. In 2018, total charges of $224,381 were incurred for these services.
4. Basset Creek Watershed Management Commission (BCWMC)
The City is one of nine member cities of the BCWMC, a joint powers organization formed to assist its members’ preservation and
use of natural water storage and retention systems. Each member city is entitled to appoint one representative to BCWMC board.
The nine-member board develops a budget for the year each July 1. Each member City contributes funds to cover the budgeted
costs of operations based half on the assessed valuation of all taxable property, and half on the total area each member city has
within the boundaries of the watershed. Any capital costs incurred by the BCWMC are apportioned to the members based half on
the real property valuation of each member city within the watershed, and half on the total area each member city has within the
boundaries of the watershed. The City’s 2018 contribution to the BCWMC for its fiscal year ended January 31, 2019 was
$26,740, representing 5.19 percent of member’s contributions for the year.
97
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2018
Note 7: Change in Accounting Principle
During fiscal year 2018, the City implemented a new accounting pronouncement issued by the Government Accounting Standards
Board (GASB), Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions. These
standards required a retroactive implementation which resulted in the restatement of beginning balances in the December 31, 2018
financial statements. Changes related to these standards are reflected in the financial
statements and schedules and related disclosures are included in Note 1.
As a result of the restatement of beginning balances, the following schedule reconciles the previously reported December 31, 2017
balances to the December 31, 2018 financial statements:
Net Position
January 1, 2018 Net Position
as Previously Prior Period January 1, 2018
Reported Restatement as Restated
Governmental Activities 46,059,464$ (375,234)$ 45,684,230$
Business-type Activities 19,840,104$ (59,818)$ 19,780,286$
Business-type Activities
Sewer 3,506,167$ (18,950)$ 3,487,217$
Water 5,729,102 (10,978) 5,718,124
Golf Course 582,399 403 582,802
Ice Arena 3,391,642 (14,411) 3,377,231
Storm Water 7,124,152 (15,882) 7,108,270
Street Lighting 338,735 - 338,735
Total Business-type Activities 20,672,197$ (59,818)$ 20,612,379$
Internal Service Funds 9,992,063$ (375,234)$ 9,616,829$
Fund
98
REQUIRED SUPPLEMENTARY INFORMATION
CITY OF NEW HOPE
NEW HOPE, MINNESOTA
FOR THE YEAR ENDED
DECEMBER 31, 2018
99
City of New Hope, Minnesota
Required Supplementary Information
For the Year Ended December 31, 2018
Schedule of Employer’s and Non-employer Contributing Entity’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)
06/30/18 0.0599 %3,323,006$ 109,063$ 3,432,069 $ 3,998,415$ 85.8 %79.5 %
06/30/17 0.0588 3,753,753 47,225 3,800,978 3,931,388 96.7 75.9
06/30/16 0.0608 4,936,658 64,481 5,001,139 3,643,308 137.3 68.9
06/30/15 0.0617 3,197,614 - 3,197,614 3,627,658 88.1 78.2
the Net Pension Payroll of the Total
Liability ((a+b)/c)Pension Liability
Plan Fiduciary
City's
Liability as a
Net Position
Proportion of
Percentage of
as a PercentageCovered
City's
Proportionate
Share of the
Net Pension
Note: Schedule is intended to show 10-year trend. Additional years will be reported as they become available.
Schedule of Employer’s PERA Contributions - General Employees Retirement Fund
Contributions in
Relation to the
Statutorily Statutorily Contribution City's
Required Required Deficiency Covered
Year Contribution Contribution (Excess)Payroll
Ending (a)(b)(a-b)(c)
12/31/18 310,638$ 310,638$ -$ 4,141,835$ 7.5 %
12/31/17 286,170 286,170 - 3,815,600 7.5
12/31/16 280,102 280,102 - 3,734,693 7.5
12/31/15 284,367 284,367 - 3,791,560 7.5
(b/c)
Contributions as
a Percentage of
Payroll
Covered
Note: Schedule is intended to show 10-year trend. Additional years will be reported as they become available.
100
City of New Hope, Minnesota
Required Supplementary Information (Continued)
For the Year Ended December 31, 2018
Notes to the Required Supplementary Information - General Employee Retirement Fund
Changes in Actuarial Assumptions
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.
2015 - The assumed post-retirement benefit increase rate was changed from 1.0 percent per year through 2030 and 2.5 percent per
year thereafter to 1.0 percent per year through 2035 and 2.5 percent per year thereafter.
Changes in Plan Provisions
2017 - The State’s special funding contribution increased from $6 million to $16 million.
2015 - On January 1, 2015, the Minneapolis Employees Retirement Fund was merged into the General Employees Fund, which
increased the total pension liability by $1.1 billion and increased the fiduciary plan net position by $892 million. Upon consolidation,
state and employer contributions were revised.
101
City of New Hope, Minnesota
Required Supplementary Information (Continued)
For the Year Ended December 31, 2018
Schedule of Employer’s Share of PERA Net Pension Liability - Public Employees Police and Fire Fund
State's
Proportionate
City's Share of
Proportionate the Net Pension
Share of Liability City's
Fiscal the Net Pension Associated with Covered
Year Liability the City Total Payroll
Ending (a)(b)(a+b)(c)
06/30/18 0.2888 %3,078,311$ -$ 3,078,311$ 3,043,700$ 101.1 %88.8 %
06/30/17 0.2820 3,807,336 - 3,807,336 2,992,514 127.2 85.4
06/30/16 0.2940 11,798,732 - 11,798,732 2,732,301 431.8 63.9
06/30/15 0.2820 3,204,180 - 3,204,180 2,579,768 124.2 86.6
Liability ((a+b)/c)Pension Liability
Proportion of Covered as a Percentage
the Net Pension Payroll of the Total
Liability as a Plan Fiduciary
City's Percentage of Net Position
City's
Proportionate
Share of the
Net Pension
Note: Schedule is intended to show 10-year trend. Additional years will be reported as they become available.
Schedule of Employer’s PERA Contributions - Public Employees Police and Fire Fund
Contributions in
Relation to the
Statutorily Statutorily Contribution City's
Required Required Deficiency Covered
Year Contribution Contribution (Excess)Payroll
Ending (a)(b)(a-b)(c)
12/31/18 502,203$ 502,203$ -$ 3,100,017$ 16.2 %
12/31/17 489,202 489,202 - 3,019,768 16.2
12/31/16 444,511 444,511 - 2,743,893 16.2
12/31/15 448,029 448,029 - 2,765,611 16.2
(b/c)
Contributions as
a Percentage of
Covered
Payroll
Note: Schedule is intended to show 10-year trend. Additional years will be reported as they become available.
102
City of New Hope, Minnesota
Required Supplementary Information (Continued)
For the Year Ended December 31, 2018
Notes to the Required Supplementary Information - Public Employees Police and Fire Fund
Changes in Actuarial Assumptions
2018 - The mortality projection scale was changed from MP-2016 to MP-2017. 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.
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 1.00 percent for all years to 1.00 percent per year
through 2064 and 2.50 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 2.50 percent for inflation.
2015 - The assumed post-retirement benefit increase rate was changed from 1.0 percent per year through 2030 and 2.5 percent per
year thereafter to 1.0 percent per year through 2037 and 2.5 percent per year thereafter.
Changes in Plan Provisions
2015 - The post-retirement benefit increase to be paid after attainment of the 90 percent funding threshold was changed, from inflation
up to 2.5 percent, to a fixed rate of 2.5 percent.
103
City of New Hope, Minnesota
Required Supplementary Information (Continued)
For the Year Ended December 31, 2018
Schedule of Changes in the City’s Total OPEB Liability and Related Ratios
2018
Total OPEB Liability
Service cost 64,269$
Interest 31,335
Changes in assumptions (53,393)
Benefit payments (25,947)
Net Change in Total OPEB Liability 16,264
Total OPEB Liability - Beginning 859,607
Total OPEB Liability - Ending 875,871$
Covered payroll 6,400,000$
City's total OPEB liability as a percentage of
covered payroll 13.69 %
2018 changes to plan Assumptions: The discout rate was adjusted from 3.44 percent to 4.09 percent from the prior measurment
There were no other changes in Plan provisions, cost allocation procedures, contribution allocation procedures,
or methods from the previous measurement. There were no adjustments of prior measurements or use of
approximations which would materially impact the results.
Note: Schedule is intended to show 10-year trend. Additional years will be reported as they become available.
104
COMBINING AND INDIVIDUAL FUND
FINANCIAL STATEMENTS AND SCHEDULES
CITY OF NEW HOPE
NEW HOPE, MINNESOTA
FOR THE YEAR ENDED
DECEMBER 31, 2018
105
City of New Hope, Minnesota
Nonmajor Governmental Funds
Combining Balance Sheet
December 31, 2018
Total
Nonmajor
Special Capital Debt Governmental
Revenue Projects Service Funds
Assets
Cash and temporary investments 429,394$ 2,615,186$ 1,073,955$ 4,118,535$
Receivables
Accrued interest - 5,943 - 5,943
Accounts 24,368 - - 24,368
Loans 16,086 - - 16,086
Special assessments 7,274 62,361 - 69,635
Due from other governments - 4,970 - 4,970
Advances to other funds - 2,279,675 - 2,279,675
Total Assets 477,122$ 4,968,135$ 1,073,955$ 6,519,212$
Liabilities
Accounts and contracts payable 184$ 21,657$ -$ 21,841$
Due to other governments 37,397 90 - 37,487
Due to other funds - 205,324 - 205,324
Unearned revenue - 12,000 - 12,000
Total Liabilities 37,581 239,071 - 276,652
Deferred Inflows of Resources
Unavailable revenue - special assessments - 62,362 - 62,362
Fund Balances
Restricted for
Debt service - - 1,073,955 1,073,955
Public safety police expenditures 128,872 - - 128,872
Ice arena 5,215 - - 5,215
Committed for
Solid waste operations 209,368 - - 209,368
Economic development 96,086 - - 96,086
Assigned for
General improvements - 3,100,139 - 3,100,139
Capital equipment - 668,155 - 668,155
Park improvements - 1,112,020 - 1,112,020
Unassigned - (213,612) - (213,612)
Total Fund Balances 439,541 4,666,702 1,073,955 6,180,198
Total Liabilities, Deferred Inflows of
Resources, and Fund Balances 477,122$ 4,968,135$ 1,073,955$ 6,519,212$
106
City of New Hope, Minnesota
Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
For the Year Ended December 31, 2018
Total
Nonmajor
Special Capital Debt Governmental
Revenue Projects Service Funds
Revenues
Taxes
Property taxes -$ 533,154$ 869,164$ 1,402,318$
Intergovernmental - 42,706 - 42,706
Charges for services 227,772 69,005 - 296,777
Fines and forfeitures 3,900 - - 3,900
Special assessments - 13,338 - 13,338
Investment earnings 5,905 43,785 7,408 57,098
Miscellaneous - 200 - 200
Total Revenues 237,577 702,188 876,572 1,816,337
Expenditures
Current
General government - - - -
Public safety 5,187 - - 5,187
Public works 225,116 1,654 - 226,770
Culture and recreation - 588 - 588
Capital outlay
Public works - 246,542 - 246,542
Culture and recreation - 390,725 - 390,725
Debt service
Principal - - 403,612 403,612
Interest - - 637,052 637,052
Total Expenditures 230,303 639,509 1,040,664 1,910,476
Excess (Deficiency) of Revenues
Over (Under) Expenditures 7,274 62,679 (164,092) (94,139)
Other Financing Sources (Uses)
Transfers in 95,354 150,000 - 245,354
Transfers out - (251,800) - (251,800)
Total Other Financing
Sources (Uses)95,354 (101,800) - (6,446)
Net Change in Fund Balances 102,628 (39,121) (164,092) (100,585)
Fund Balances, January 1 336,913 4,705,823 1,238,047 6,280,783
Fund Balances, December 31 439,541$ 4,666,702$ 1,073,955$ 6,180,198$
107
THIS PAGE IS LEFT
BLANK INTENTIONALLY
108
City of New Hope, Minnesota
Nonmajor Special Revenue Funds
Police Forfeitures Fund - This fund accounts for revenue received mainly from police fines and forfeitures, and is used for special
police, fire, and parks/recreation projects.
Solid Waste Management Fund - This fund accounts for grants and fees to be used to cover the cost of operations of the City’s solid
waste management program.
Ice Arena Endowment Fund - This fund is used to account for contributions and other receipts to be used for future capital needs
and budget requirements of the New Hope Ice Arena.
CEE Revolving Loan Fund - This fund is used account for Center for Energy and Environment revolving loans.
109
City of New Hope, Minnesota
Nonmajor Special Revenue Funds
Subcombining Balance Sheet
December 31, 2018
9021 9016 9017 9018
Police Solid Waste Ice Arena CEE Revolving
Forfeitures Management Endowment Loan Fund Total
Assets
Cash and temporary investments 128,872$ 215,307$ 5,215$ 80,000 429,394$
Receivables
Accounts - 24,368 - - 24,368
Loans - -- 16,086 16,086
Special assessments - 7,274 - - 7,274
Total Assets 128,872$ 246,949$ 5,215$ 96,086$ 477,122$
Liabilities
Accounts and contracts payable -$ 184$ -$ -$ 184$
Due to other governments - 37,397 - - 37,397
Total Liabilities - 37,581 - - 37,581
Fund Balances
Restricted for
Public safety police expenditures 128,872 - - - 128,872
Ice arena - - 5,215 - 5,215
Committed for
Solid waste operations - 209,368 - - 209,368
Economic development - -- 96,086 96,086
Total Fund Balances 128,872 209,368 5,215 96,086 439,541
Total Liabilities and
Fund Balances 128,872$ 246,949$ 5,215$ 96,086$ 477,122$
110
City of New Hope, Minnesota
Nonmajor Special Revenue Funds
Subcombining Statement of Revenues, Expenditures, and Changes in Fund Balances
For the Year Ended December 31, 2018
9021 9016 9017 9018
Police Solid Waste Ice Arena CEE Revolving
Forfeitures Management Endowment Loan Fund Total
Revenues
Charges for services -$ 227,772$ -$ - 227,772$
Fines and forfeitures 3,900 - - - 3,900
Investment earnings 2,081 3,008 84 732 5,905
Total Revenues 5,981 230,780 84 732 237,577
Expenditures
Current
Public safety
Supplies 5,187 - - - 5,187
Public works
Other services and charges - 225,116 - - 225,116
Total Expenditures 5,187 225,116 - - 230,303
Excess of Revenues
Over Expenditures 794 5,664 84 732 7,274
Other Financing Sources
Transfers in - - - 95,354 95,354
Net Change in Fund Balances 794 5,664 84 96,086 102,628
Fund Balances, January 1 128,078 203,704 5,131 - 336,913
Fund Balances, December 31 128,872$ 209,368$ 5,215$ 96,086$ 439,541$
111
City of New Hope, Minnesota
Special Revenue Fund - Solid Waste Management Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balances -
Budget and Actual
For the Year Ended December 31, 2018
Actual Variance with
Original Final Amounts Final Budget
Revenues
Charges for services 218,650$ 218,650$ 227,772$ 9,122$
Investment earnings 2,000 2,000 3,008 1,008
Total Revenues 220,650 220,650 230,780 10,130
Expenditures
Current
Public works
Other services and charges 220,735 220,735 225,116 (4,381)
Net Change in Fund Balances (85) (85) 5,664 5,749
Fund Balances, January 1 203,704 203,704 203,704 -
Fund Balances, December 31 203,619$ 203,619$ 209,368$ 5,749$
Budgeted Amounts
112
City of New Hope, Minnesota
Nonmajor Capital Project Funds
Capital Projects funds account for proceeds from the sale of bonds and other revenue to be used for the purchase or construction of
equipment and capital improvement facilities.
Fire Capital Projects Fund - This fund accounts for the purchases of fire capital equipment.
Xylon Avenue Improvement Fund - This fund accounts for the accumulation of reserves for the Xylon Avenue Improvement
project.
Park Infrastructure Fund - This fund is used to account for park improvement projects.
Temporary Financing Fund – is used to account for various capital project and capital outlay purchases until permanent financing is
acquired.
2016 Street Improvement Project Fund - This fund is used to account for the 2016 street improvement project.
2017 Street Improvement Project Fund - This fund is used to account for the 2017 street improvement project.
113
City of New Hope, Minnesota
Nonmajor Capital Projects Funds
Subcombining Balance Sheet
December 31, 2018
9010 9223 9233 9242 9250 9251
2016 Street 2017 Street
Fire Xylon Avenue Park Temporary Improvement Improvement
Capital Projects Improvements Infrastructure Financing Project Project Total
Assets
Cash and temporary investments 668,155$ 1$ 1,132,283$ 814,522$ -$ 225$ 2,615,186$
Receivables
Accrued interest - - - 5,943 - - 5,943
Special assessments - - - 62,361 - - 62,361
Due from other governments - - 4,970 - - - 4,970
Advances to other funds - - - 2,279,675 - - 2,279,675
Total Assets 668,155$ 1$ 1,137,253$ 3,162,501$ -$ 225$ 4,968,135$
Liabilities
Accounts and contracts payable -$ -$ 13,143$ -$ 1,043$ 7,471$ 21,657$
Due to other governments - - 90 - - - 90
Due to other funds - 780 - - 9,053 195,491 205,324
Unearned revenue - -12,000 - - - 12,000
Total Liabilities - 780 25,233 - 10,096 202,962 239,071
Deferred Inflows of Resources
Unavailable revenue - special assessments - - - 62,362 - - 62,362
Fund Balances
Assigned to
General improvements - - - 3,100,139 - - 3,100,139
Capital equipment 668,155 - - - - - 668,155
Park improvements - - 1,112,020 - - - 1,112,020
Unassigned - (779) - - (10,096) (202,737) (213,612)
Total Fund Balances 668,155 (779) 1,112,020 3,100,139 (10,096) (202,737) 4,666,702
Total Liabilities, Deferred
Inflows of Resources,
and Fund Balances 668,155$ 1$ 1,137,253$ 3,162,501$ -$ 225$ 4,968,135$
114
City of New Hope, Minnesota
Nonmajor Capital Projects Funds
Subcombining Statement of Revenues, Expenditures, and Changes in Fund Balances
For the Year Ended December 31, 2018
9010 9223 9233 9242 9250 9251
2016 Street 2017 Street
Fire Xylon Avenue Park Temporary Improvement Improvement
Capital Projects Improvements Infrastructure Financing Project Project Total
Revenues
Taxes
Property taxes -$ -$ 533,154$ -$ -$ -$ 533,154$
Intergovernmental
County - - 42,706 - - - 42,706
Charges for services - - 69,005 - - - 69,005
Special assessments - - - 13,338 - - 13,338
Investment earnings (charges)10,743 (217) 13,855 18,609 1 794 43,785
Miscellaneous - - 200 - - - 200
Total Revenues 10,743 (217) 658,920 31,947 1 794 702,188
Expenditures
Current
Public works - 562 - - - 1,092 1,654
Culture and recreation - -588 - - - 588
Capital outlay
Public works - (2,728) - - 4,967 244,303 246,542
Culture and recreation - -390,725 - - - 390,725
Total Expenditures - (2,166) 391,313 - 4,967 245,395 639,509
Excess (Deficiency) of Revenues
Over (Under) Expenditures 10,743 1,949 267,607 31,947 (4,966) (244,601) 62,679
Other Financing Sources (Uses)
Transfers in 150,000 - - - - - 150,000
Transfers out (51,800) - (200,000) - - - (251,800)
Total Other Financing
Sources (Uses)98,200 - (200,000) - - - (101,800)
Net Change in Fund Balances 108,943 1,949 67,607 31,947 (4,966) (244,601) (39,121)
Fund Balances, January 1 559,212 (2,728) 1,044,413 3,068,192 (5,130) 41,864 4,705,823
Fund Balances, December 31 668,155$ (779)$ 1,112,020$ 3,100,139$ (10,096)$ (202,737)$ 4,666,702$
115
THIS PAGE IS LEFT
BLANK INTENTIONALLY
116
City of New Hope, Minnesota
Nonmajor Debt Service Funds
The Debt Service funds are used to account for the payment of principal and interest on the City’s general obligation bonds. Revenues
for this purpose include ad valorem property taxes, special assessments, investment income, and other revenue.
2015A G.O. Tax Increment Bonds - This fund accounts for revenue from property taxes and interest income to be used for the
payment of principal and interest on the City’s 2015A G.O. Tax Increment Bonds.
2010B G.O. Equipment Bonds Fund - This fund accounts for revenue from property taxes and interest income to be used for the
payment of principal and interest on the City’s 2010B G.O. Equipment Bonds.
2016A G.O. Improvement Bonds - This fund accounts for revenue from property taxes and interest income to be used for the
payment of principal and interest on the City’s 2016A G.O. Improvement Bonds.
2015B G.O. Improvement Bonds - This fund accounts for revenue from property taxes and interest income to be used for the
payment of principal and interest on the City’s 2015B G.O. Improvement Bonds.
2017A G.O. Improvement Bonds - This fund accounts for revenue from property taxes and interest income to be used for the
payment of principal and interest on the City’s 2017A G.O. Improvement Bonds.
117
City of New Hope, Minnesota
Nonmajor Debt Service Funds
Subcombining Balance Sheet
December 31, 2018
9144 9145 9148 9149 9150
2015A 2010B 2016A 2015B 2017A
G.O.G.O.G.O.G.O.G.O.
Tax Increment Equipment Improvement Improvement Improvement
Bonds Bonds Bonds Bonds Bonds Total
Assets
Cash and temporary investments 205,614$ 203,985$ 217,852$ 81,514$ 364,990$ 1,073,955$
Fund Balances
Restricted for debt service 205,614$ 203,985$ 217,852$ 81,514$ 364,990$ 1,073,955$
118
City of New Hope, Minnesota
Nonmajor Debt Service Funds
Subcombining Statement of Revenues, Expenditures, and Changes in Fund Balances
For the Year Ended December 31, 2018
9144 9145 9148 9149 9150
2015A 2010B 2016A 2015B 2017A
G.O.G.O.G.O.G.O.G.O.
Tax Increment Equipment Improvement Improvement Improvement
Bonds Bonds Bonds Bonds Bonds Total
Revenues
Property taxes 239,218$ 159,999$ 260,087$ 209,860$ -$ 869,164$
Investment earnings 647 1,785 1,036 - 3,940 7,408
Total Revenues 239,865 161,784 261,123 209,860 3,940 876,572
Expenditures
Debt service
Principal 144,690 145,000 - 113,922 - 403,612
Interest 60,096 9,414 85,197 54,065 428,280 637,052
Total Expenditures 204,786 154,414 85,197 167,987 428,280 1,040,664
Net Change in Fund Balances 35,079 7,370 175,926 41,873 (424,340) (164,092)
Fund Balances, January 1 170,535 196,615 41,926 39,641 789,330 1,238,047
Fund Balances, December 31 205,614$ 203,985$ 217,852$ 81,514$ 364,990$ 1,073,955$
119
THIS PAGE IS LEFT
BLANK INTENTIONALLY
120
City of New Hope, 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, 2018
(With Comparative Actual Amounts for the Year Ended December 31, 2017)
2017
Actual Variance with Actual
Original Final Amounts Final Budget Amounts
Revenues
Taxes
Property taxes 9,989,509$ 9,989,509$ 9,971,064$ (18,445)$ 9,541,667$
Franchise taxes 440,000 440,000 440,000 - 440,000
Total Taxes 10,429,509 10,429,509 10,411,064 (18,445) 9,981,667
Licenses and permits
Business regulatory licenses 81,480 81,480 77,464 (4,016) 77,584
Non-business licenses and permits 305,800 305,800 290,467 (15,333) 564,286
Total Licenses and permits 387,280 387,280 367,931 (19,349) 641,870
Intergovernmental
Local government aid 693,114 693,114 693,117 3 621,869
Highway maintenance aid 190,000 190,000 214,477 24,477 191,089
Other federal, state, and local grants 84,850 84,850 118,366 33,516 92,929
State insurance premium tax 265,000 265,000 306,678 41,678 271,513
Total Intergovernmental 1,232,964 1,232,964 1,332,638 99,674 1,177,400
Charges for services
General government 181,350 181,350 171,986 (9,364) 261,377
Public safety 393,500 393,500 414,032 20,532 529,396
Public works 5,350 5,350 4,473 (877) 10,809
Culture and recreation 494,375 494,375 512,730 18,355 655,877
Total Charges for services 1,074,575 1,074,575 1,103,221 28,646 1,457,459
Fines and forfeitures 250,000 250,000 226,757 (23,243) 208,909
Special assessments - - 39,569 39,569 30,964
Investment earnings 35,000 35,000 103,969 68,969 53,581
Miscellaneous 3,000 3,000 33,766 30,766 35,096
Total Revenues 13,412,328 13,412,328 13,618,915 206,587 13,586,946
Budgeted Amounts
2018
121
City of New Hope, Minnesota
General Fund
Schedule of Revenues, Expenditures and
Changes in Fund Balances - Budget and Actual (Continued)
For the Year Ended December 31, 2018
(With Comparative Actual Amounts for the Year Ended December 31, 2017)
2017
Actual Variance with Actual
Original Final Amounts Final Budget Amounts
Expenditures
Current
General government
Mayor and City Council
Personnel services 55,000$ 55,000$ 53,399$ 1,601$ 55,545$
Supplies 2,000 2,000 2,572 (572) 2,568
Other services and charges 35,748 35,748 35,352 396 44,631
Total Mayor and City Council 92,748 92,748 91,323 1,425 102,744
City hall
Supplies 23,500 23,500 18,227 5,273 21,356
Other services and charges 283,323 283,323 261,142 22,181 243,743
Total City hall 306,823 306,823 279,369 27,454 265,099
City manager
Personnel services 381,200 381,200 378,233 2,967 371,902
Supplies 4,800 4,800 6,150 (1,350) 5,454
Other services and charges 15,477 15,477 20,227 (4,750) 20,341
Total City manager 401,477 401,477 404,610 (3,133) 397,697
Elections
Personnel services 31,600 31,600 26,151 5,449 -
Supplies 2,000 2,000 1,487 513 -
Other services and charges 5,612 5,612 5,373 239 4,442
Total Elections 39,212 39,212 33,011 6,201 4,442
Finance
Personnel services 168,900 168,900 160,303 8,597 161,795
Supplies 1,500 1,500 1,310 190 951
Other services and charges 124,759 124,759 130,779 (6,020) 131,354
Total Finance 295,159 295,159 292,392 2,767 294,100
Auditing
Other services and charges 22,603 22,603 24,928 (2,325) 21,938
Assessing
Other services and charges 133,000 133,000 147,000 (14,000) 130,000
Legal
Other services and charges 38,000 38,000 16,272 21,728 41,901
Human resources
Personnel services 250,700 250,700 255,342 (4,642) 245,458
Supplies 500 500 247 253 343
Other services and charges 53,225 53,225 30,319 22,906 24,564
Total Human resources 304,425 304,425 285,908 18,517 270,365
Budgeted Amounts
2018
122
City of New Hope, Minnesota
General Fund
Schedule of Revenues, Expenditures and
Changes in Fund Balances - Budget and Actual (Continued)
For the Year Ended December 31, 2018
(With Comparative Actual Amounts for the Year Ended December 31, 2017)
2017
Actual Variance with Actual
Original Final Amounts Final Budget Amounts
Budgeted Amounts
2018
Expenditures (Continued)
Current (continued)
General government (continued)
Planning and zoning
Personnel services 123,300$ 123,300$ 30,608$ 92,692$ 33,740$
Supplies 800 800 151 649 294
Other services and charges 44,309 44,309 35,543 8,766 58,484
Total Planning and zoning 168,409 168,409 66,302 102,107 92,518
Communication
Personnel services 102,500 102,500 105,135 (2,635) 103,226
Supplies 3,800 3,800 4,290 (490) 3,838
Other services and charges 40,272 40,272 37,013 3,259 38,811
Total Communication 146,572 146,572 146,438 134 145,875
Total General Government 1,948,428 1,948,428 1,787,553 160,875 1,766,679
Public safety
Police
Personnel services 5,007,200 5,007,200 4,839,787 167,413 4,588,189
Supplies 84,050 84,050 80,253 3,797 102,527
Other services and charges 1,044,243 1,044,243 1,060,868 (16,625) 1,131,089
Total Police 6,135,493 6,135,493 5,980,908 154,585 5,821,805
Police reserves
Personnel services - - - - 2,370
Supplies 3,250 3,250 - 3,250 3,647
Other services and charges 21,299 21,299 21,632 (333) 26,081
Total Police reserves 24,549 24,549 21,632 2,917 32,098
Fire and safety
Supplies 5,000 5,000 - 5,000 388
Other services and charges 1,215,799 1,215,799 1,216,012 (213) 1,143,622
Total Fire and safety 1,220,799 1,220,799 1,216,012 4,787 1,144,010
Animal control
Personnel services 77,000 77,000 76,300 700 74,650
Supplies 675 675 - 675 264
Other services and charges 40,543 40,543 39,668 875 43,363
Total Animal control 118,218 118,218 115,968 2,250 118,277
123
City of New Hope, Minnesota
General Fund
Schedule of Revenues, Expenditures and
Changes in Fund Balances - Budget and Actual (Continued)
For the Year Ended December 31, 2018
(With Comparative Actual Amounts for the Year Ended December 31, 2017)
2017
Actual Variance with Actual
Original Final Amounts Final Budget Amounts
Budgeted Amounts
2018
Expenditures (Continued)
Current (continued)
Public safety (continued)
Protective inspection
Personnel services 447,900$ 447,900$ 473,654$ (25,754)$ 372,677$
Supplies 3,300 3,300 1,403 1,897 1,428
Other services and charges 152,074 152,074 182,547 (30,473) 234,398
Total Protective inspection 603,274 603,274 657,604 (54,330) 608,503
Total Public Safety 8,102,333 8,102,333 7,992,124 110,209 7,724,693
Public works
Street maintenance
Personnel services 501,000 501,000 546,460 (45,460) 516,345
Supplies 105,000 105,000 87,301 17,699 96,086
Other services and charges 871,015 871,015 824,707 46,308 810,007
Total Street maintenance 1,477,015 1,477,015 1,458,468 18,547 1,422,438
Engineering
Other services and charges 35,000 35,000 32,577 2,423 12,818
Total Public Works 1,512,015 1,512,015 1,491,045 20,970 1,435,256
Culture and recreation
Recreation
Personnel services 613,500 613,500 615,411 (1,911) 586,125
Supplies 105,650 105,650 123,751 (18,101) 116,311
Other services and charges 246,821 246,821 243,554 3,267 243,552
965,971 965,971 982,716 (16,745) 945,988 Total Recreation
Parks
Personnel services 578,300 578,300 552,495 25,805 528,344
Supplies 37,990 37,990 38,682 (692) 30,129
Other services and charges 422,397 422,397 395,919 26,478 362,506
Total Parks 1,038,687 1,038,687 987,096 51,591 920,979
Swimming pool
Personnel services 42,800 42,800 43,621 (821) 131,493
Supplies - - - - 27,843
Other services and charges 1,428 1,428 1,708 (280) 40,185
Total Swimming pool 44,228 44,228 45,329 (1,101) 199,521
Total Culture and Recreation 2,048,886 2,048,886 2,015,141 33,745 2,066,488
Total Current Expenditures 13,611,662 13,611,662 13,285,863 325,799 12,993,116
124
City of New Hope, Minnesota
General Fund
Schedule of Revenues, Expenditures and
Changes in Fund Balances - Budget and Actual (Continued)
For the Year Ended December 31, 2018
(With Comparative Actual Amounts for the Year Ended December 31, 2017)
2017
Actual Variance with Actual
Original Final Amounts Final Budget Amounts
Budgeted Amounts
2018
Expenditures (Continued)
Capital outlay
General government 15,000$ 15,000$ 555$ 14,445$ 1,200$
Public safety 111,100 111,100 115,635 (4,535) 144,061
Culture and recreation - - - - 2,352
Total Capital outlay 126,100 126,100 116,190 9,910 147,613
Total Expenditures 13,737,762 13,737,762 13,402,053 335,709 13,140,729
Excess (Deficiency) of Revenues
Over (Under) Expenditures (325,434) (325,434) 216,862 542,296 446,217
Other Financing Sources (Uses)
Transfers in 325,434 325,434 325,434 - 318,760
Transfers out - - (250,000) (250,000) (150,000)
Total Other Financing
Sources (Uses)325,434 325,434 75,434 (250,000) 168,760
Net Change in Fund Balances - - 292,296 292,296 614,977
Fund Balances, January 1 6,888,655 6,888,655 6,888,655 - 6,273,678
Fund Balances, December 31 6,888,655$ 6,888,655$ 7,180,951$ 292,296$ 6,888,655$
125
THIS PAGE IS LEFT
BLANK INTENTIONALLY
126
City of New Hope, Minnesota
Internal Service Funds
Internal service funds are used to account for activities and services performed for other organizational units within the City. Charges
to other City agencies are made to support these activities.
Central Garage Fund - This fund is used to account for the rental of motor vehicles and other equipment to other departments.
Employee Leave Fund - This fund accounts for the cost of providing leave time benefits to employees, which includes vacation,
holiday, sick time, and personal leave. Funding is based on chargebacks to department based on a percentage of wages.
Insurance Reserve Fund - This fund accounts for all insurance costs for the City. Funding is provided by chargebacks to departments
by percentage of wages for health, dental, life, and disability insurance. Funding for general liability and property insurance is
provided by chargebacks to departments based on activities and the use of property.
Information Technology Fund - This fund accounts for the City’s investment in, and operations of, computer networks, application
and system software, Internet access, data storage, and related activities.
127
City of New Hope, Minnesota
Internal Service Funds
Combining Statement of Net Position
December 31, 2018
9402 9408 9407 9410
Central Employee Insurance Information
Garage Leave Reserve Technology Totals
Assets
Current Assets
Cash and temporary investments 6,542,941$ 1,304,685$ 607,061$ 594,006$ 9,048,693$
Receivables
Accounts - - 4,858 - 4,858
Inventories 70,145 - - - 70,145
Total Current Assets 6,613,086 1,304,685 611,919 594,006 9,123,696
Noncurrent Assets
Capital assets
Land 85,647 - - - 85,647
Buildings and structures 3,158,296 - - - 3,158,296
Vehicles and equipment 9,004,075 - - 344,383 9,348,458
Less: accumulated depreciation (9,050,116) - - (298,166) (9,348,282)
Total Capital Assets
(Net of Accumulated Depreciation)3,197,902 - - 46,217 3,244,119
Total Assets 9,810,988 1,304,685 611,919 640,223 12,367,815
Deferred Outflows of Resources
Deferred pension resources 28,954 - - - 28,954
Liabilities
Current Liabilities
Accrued salaries payable 6,982 29,567 79,567 - 116,116
Accounts and contracts payable 52,108 - 7,880 15,519 75,507
Due to other governments 508 - - 48,546 49,054
Compensated absences payable, current portion - 71,438 - - 71,438
Total Current Liabilities 59,598 101,005 87,447 64,065 312,115
Noncurrent Liabilities
Other postemployment benefits payable - - 753,933 - 753,933
Pension liability 156,500 - - - 156,500
Compensated absences payable - 642,947 - - 642,947
Total Noncurrent Liabilities 156,500 642,947 753,933 - 1,553,380
Total Liabilities 216,098 743,952 841,380 64,065 1,865,495
Deferred Inflows of Resources
Deferred pension resources 41,339 - - - 41,339
Deferred other postemployment benefit resources - - 41,781 - 41,781
Total Deferred Inflows of Resources 41,339 - 41,781 - 83,120
Net Position
Net investment in capital assets 3,197,902 - - 46,217 3,244,119
Unrestricted 6,384,603 560,733 (271,242) 529,941 7,204,035
Total Net Position 9,582,505$ 560,733$ (271,242)$ 576,158$ 10,448,154$
128
City of New Hope, Minnesota
Internal Service Funds
Combining Statement of Revenues, Expenses and
Changes in Net Position
For the Year Ended December 31, 2018
9402 9408 9407 9410
Central Employee Insurance Information
Garage Leave Reserve Technology Totals
Operating Revenues
Billings to departments 2,212,146$ 675,718$ 15,594$ 708,507$ 3,611,965$
Other 7,108 - 29,555 - 36,663
Total Operating Revenues 2,219,254 675,718 45,149 708,507 3,648,628
Operating Expenses
Personnel services 250,239 627,073 54,603 - 931,915
Supplies 272,278 - - 56,626 328,904
Utilities 59,750 - - 39,445 99,195
Other services and charges 300,282 - 51,093 496,132 847,507
Depreciation 716,728 - -7,583 724,311
Total Operating Expenses 1,599,277 627,073 105,696 599,786 2,931,832
Operating Income (Loss)619,977 48,645 (60,547) 108,721 716,796
Nonoperating Revenues
Investment earnings 101,278 19,824 9,799 9,050 139,951
Gain on sale of capital assets 70,400 - - - 70,400
Total Nonoperating Revenues 171,678 19,824 9,799 9,050 210,351
Income (Loss) Before Contributions
and Transfers 791,655 68,469 (50,748) 117,771 927,147
Capital Contributions to
Governmental Activities - - (7,677) - (7,677)
Transfers Out (33,902) - - (54,243) (88,145)
Change in Net Position 757,753 68,469 (58,425) 63,528 831,325
Net Position, January 1 as restated (Note 7)8,824,752 492,264 (212,817) 512,630 9,616,829
Net Position, December 31 9,582,505$ 560,733$ (271,242)$ 576,158$ 10,448,154$
129
City of New Hope, Minnesota
Internal Service Funds
Combining Statement of Cash Flows
For the Year Ended December 31, 2018
9402 9408 9407 9410
Central Employee Insurance Information
Garage Leave Reserve Technology Totals
Cash Flows from Operating Activities
Receipts from interfund services provided 2,212,146$ 675,718$ 17,040$ 708,507$ 3,613,411$
Other operating receipts 5,911 - 29,555 - 35,466
Payments to suppliers (610,443) - (117,267) (556,851) (1,284,561)
Payments to employees (273,377) (509,085) - - (782,462)
Net Cash Provided (Used)
by Operating Activities 1,334,237 166,633 (70,672) 151,656 1,581,854
Cash Flows from Noncapital
Financing Activities
Transfers out (33,902) - - (54,243) (88,145)
Cash Flows from Capital
and Related Financing Activities
Acquisition capital assets (481,900) - (7,677) - (489,577)
Proceeds from sale of assets 9,200 - -- 9,200
Net Cash Used by Capital
and Related Financing Activities (472,700) - (7,677) - (480,377)
Investment earnings 101,278 19,824 9,799 9,050 139,951
Net Increase (Decrease)
in Cash and Cash Equivalents 928,913 186,457 (68,550) 106,463 1,153,283
Cash and Cash Equivalents, January 1 5,614,028 1,118,228 675,611 487,543 7,895,410
Cash and Cash Equivalents, December 31 6,542,941$ 1,304,685$ 607,061$ 594,006$ 9,048,693$
Reconciliation of Operating Income (Loss)
to Net Cash Provided
by Operating Activities
Operating income (loss)619,977$ 48,645$ (60,547)$ 108,721$ 716,796$
Adjustments to reconcile operating income (loss)
to net cash provided by operating activities
Depreciation 716,728 - - 7,583 724,311
(Increase) decrease in assets
Accounts receivable - - 1,446 - 1,446
Inventories 6,897 - - - 6,897
(Increase) decrease in deferred out flows of resources
Deferred pension resources 16,426 - - - 16,426
Increase (decrease) in liabilities
Accounts and contracts payable 15,740 - (74,686) 8,170 (50,776)
Accrued salaries payable 1,728 9,170 8,531 - 19,429
Due to other governments (770) - (19) 27,182 26,393
Compensated absences payable - 108,818 - -108,818
Other postemployment benefits payable - -12,822 - 12,822
Pension liability (35,301) - - - (35,301)
Increase (decrease) in deferred inflows of resources
Deferred pension resources (7,188) - - - (7,188)
Deferred other postemployment benefit resources - - 41,781 - 41,781
Net Cash Provided (Used)
by Operating Activities 1,334,237$ 166,633$ (70,672)$ 151,656$ 1,581,854$
Schedule of Noncash Capital and
Related Financing Activities
Gain on sale of capital assets 61,200$ -$ -$ -$ 61,200$
Capital assets contributed to governmental activities -$ -$ 7,677$ -$ 7,677$
Cash Flows from Investing Activities
130
City of New Hope, Minnesota
Agency Fund
Statement of Changes in Assets and Liabilities
For the Year Ended December 31, 2018
Balance Balance
January 1 Additions Deductions December 31
Flexible Spending Fund
Assets
Cash and temporary investments 8,249$ 25,679$ (19,682)$ 14,246$
Liabilities
Accounts payable 469$ 19,299$ (19,671)$ 97$
Deposits payable 7,780 25,667 (19,298) 14,149
Total Liabilities 8,249$ 44,966$ (38,969)$ 14,246$
131
THIS PAGE IS LEFT
BLANK INTENTIONALLY
132
STATISTICAL SECTION (UNAUDITED)
CITY OF NEW HOPE
NEW HOPE, MINNESOTA
FOR THE YEAR ENDED
DECEMBER 31, 2018
133
THIS PAGE IS LEFT
BLANK INTENTIONALLY
134
Statistical Section
(Unaudited)
This part of the City’s comprehensive annual 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 City’s overall
financial health.
Financial Trends
These schedules contain trend information to help the reader understand how the City’s financial performance and well-being
have changed over time.
Revenue Capacity
These schedules contain information to help the reader assessthe City’s most significant local revenue source; property taxes.
Debt Capacity
These schedules present information to help the reader assess the affordability of the City’s current levels of outstanding debt and
the City’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
City’s financial activities take place.
Operating Information
These schedules contain service and infrastructure data to help the reader understand how the information in the City’s financial
report relates to the services the City provides and the activities it performs.
Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for
the relevant year.
135
THIS PAGE IS LEFT
BLANK INTENTIONALLY
136
2018 2017
Revenues
Taxes
Property taxes 12,904,297$ 11,961,711$ 7.88 %
Tax increments 1,112,753 841,098 32.30
Franchise taxes 945,244 912,357 3.60
Licenses and permits 367,931 641,870 (42.68)
Intergovernmental 2,195,760 1,844,648 19.03
Charges for services 1,399,998 1,727,615 (18.96)
Fines and forfeitures 230,657 208,909 10.41
Special assessments 282,589 92,458 205.64
Investment earnings 658,606 486,746 35.31
Miscellaneous 33,966 137,591 (75.31)
Total Revenues 20,131,801$ 18,855,003$ 6.77 %
Per Capita 934$ 873$ 7.04 %
Expenditures
Current
General government 1,787,553$ 2,622,277$ (31.83) %
Public safety 7,997,311 7,724,950 3.53
Public works 1,717,815 1,671,593 2.77
Culture and recreation 2,015,729 2,066,692 (2.47)
Economic development 815,352 1,737,947 (53.09)
Capital outlay 12,956,485 5,217,461 148.33
Debt service
Principal 799,734 523,497 52.77
Interest 769,497 455,539 68.92
Bond issuance costs 148,365 251,648 (41.04)
Total Expenditures 29,007,841$ 22,271,604$ 30.25 %
Per Capita 1,346$ 1,031$ 30.55 %
Total Long-term Indebtedness (excluding unamortized premiums)39,985,844$ 31,265,578$ 27.89 %
Per capita 1,856 1,447 28.27
General Fund Balance - December 31 7,180,951$ 6,888,655$ 4.24 %
Per capita 333 319 4.39
The purpose of this report is to provide a summary of financial information concerning the City of New Hope to
interested citizens. The complete financial statements may be examined at City Hall, 4401 Xylon Avenue North, New Hope,
Minnesota 55428. Questions about this report should be directed to Kirk McDonald, City Manager at (763) 531-5112.
City of New Hope, Minnesota
Summary Financial Report
Revenues and Expenditures For General Operations
Governmental Funds
(Decrease)
Increase
Percent
Total
For the Year Ended December 31, 2018
137
City of New Hope, Minnesota
Statistical Section (Unaudited)
Net Position by Component
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2011
2009 2010 (Restated)2012
Governmental Activities
Net investment in capital assets 16,411,454$ 16,495,175$ 20,628,143$ 26,793,142$
Restricted 19,454,696 9,279,142 6,018,734 1,619,696
Unrestricted 9,151,912 21,971,477 21,845,278 22,746,207
Total Governmental Activities Net Position 45,018,062$ 47,745,794$ 48,492,155$ 51,159,045$
Business-type Activities
Net investment in capital assets 9,395,068$ 9,989,405$ 11,114,666$ 12,843,624$
Restricted - - - 150,000
Unrestricted 1,650,590 2,541,156 3,978,803 2,735,144
Total Business-type Activities Net Position 11,045,658$ 12,530,561$ 15,093,469$ 15,728,768$
Total Primary Government
Net investment in capital assets 25,806,522$ 26,484,580$ 31,742,809$ 39,636,766$
Restricted 19,454,696 9,279,142 6,018,734 1,769,696
Unrestricted 10,802,502 24,512,633 25,824,081 25,481,351
Total Primary Government 56,063,720$ 60,276,355$ 63,585,624$ 66,887,813$
Fiscal Year
Note: The City implemented GASB Statement No. 63 and GASB Statement No. 65 in fiscal 2012. Net position information has been
restated for 2011 for this accounting change. Years prior to 2011 have not been restated. The City implemented GASB Statement No.
67 and GASB Statement No. 68 in fiscal 2015. Net position information has not been restated for prior years. The City implemented
GASB Statement No. 75 in 2017 with retroactive application. The 2017 net position has been restated to reflect the change.
138
(Restated)
2013 2014 2015 2016 2017 2018
30,509,373$ 26,305,906$ 27,549,276$ 29,951,754$ 27,747,845$ 27,888,417$
1,619,394 5,680,117 5,917,848 4,893,801 6,207,578 6,000,843
23,704,592 23,130,558 14,623,043 11,081,824 11,728,807 14,384,257
55,833,359$ 55,116,581$ 48,090,167$ 45,927,379$ 45,684,230$ 48,273,517$
14,142,276$ 14,757,333$ 16,087,559$ 19,286,134$ 18,663,872$ 18,783,898$
300,000 455,000 627,939 868,853 1,031,673 1,160,680
2,496,008 1,798,707 (825,297) (1,839,376) 84,741 1,783,306
16,938,284$ 17,011,040$ 15,890,201$ 18,315,611$ 19,780,286$ 21,727,884$
44,651,649$ 41,063,239$ 43,636,835$ 49,237,888$ 46,411,717$ 46,672,315$
1,919,394 6,135,117 6,545,787 5,762,654 7,239,251 7,161,523
26,200,600 24,929,265 13,797,746 9,242,448 11,813,548 16,167,563
72,771,643$ 72,127,621$ 63,980,368$ 64,242,990$ 65,464,516$ 70,001,401$
Fiscal Year
139
City of New Hope, Minnesota
Statistical Section (Unaudited)
Changes in Net Position (Continued on the Following Pages)
Last Ten Fiscal Years
(Accrual Basis of Accounting)
(Restated)
2009 2010 2011 2012
Expenses
Governmental Activities
General government 2,244,977$ 2,552,425$ 1,841,145$ 1,931,318$
Public safety 6,218,996 5,864,775 6,129,860 6,062,362
Public works 1,291,983 1,625,959 1,795,189 2,126,043
Culture and recreation 2,053,788 1,899,105 1,882,279 1,928,591
Economic development - 192,431 536,433 762,202
Interest on long-term debt 275,532 252,224 236,827 407,744
Total Governmental Activities Expenses 12,085,276 12,386,919 12,421,733 13,218,260
Business-type Activities
Sewer utility - 1,928,845 2,068,282 2,220,438
Water utility 5,265,147 2,915,757 3,530,521 3,682,602
Golf course 369,579 346,345 322,679 298,555
Ice arena 694,039 712,153 844,828 771,628
Storm water 393,118 430,899 485,943 425,112
Street lighting 126,983 104,099 113,753 104,721
Total Business-type Activities Expenses 6,848,866 6,438,098 7,366,006 7,503,056
Total Expenses 18,934,142$ 18,825,017$ 19,787,739$ 20,721,316$
Program Revenues
Governmental Activities
Charges for services
General government 1,048,549$ 984,855$ 220,629$ 177,174$
Public safety 134,680 218,732 877,159 804,725
Public works - - 219,353 219,548
Culture and recreation 527,079 562,383 637,077 653,293
Economic development - 104,713 98,139 94,664
Operating grants and contributions 586,508 1,356,292 783,382 2,162,263
Capital grants and contributions 117,544 787,047 1,107,042 245,290
Total Governmental Activities Program Revenues 2,414,360 4,014,022 3,942,781 4,356,957
Business-Type Activities
Charges for services
Sewer utility - 2,292,300 2,352,635 2,376,021
Water utility 5,141,131 3,082,771 3,169,859 3,581,225
Golf course 345,550 313,941 278,788 296,316
Ice arena 723,975 741,266 752,671 694,702
Storm water 933,828 943,883 947,031 948,650
Street lighting 149,339 121,647 122,742 124,397
Operating grants and contributions 66,609 470,183 24,031 22,340
Capital grants and contributions 75,209 30,739 114,826 106,291
Total Business-type Activities Program Revenues 7,435,641 7,996,730 7,762,583 8,149,942
Total Program Revenues 9,850,001$ 12,010,752$ 11,705,364$ 12,506,899$
Fiscal Year
140
(Restated)
2013 2014 2015 2016 2017 2018
1,837,194$ 1,976,377$ 1,700,133$ 1,871,736$ 2,666,781$ 1,983,179$
6,238,779 6,795,836 7,258,504 9,463,124 8,257,709 7,578,150
1,790,669 2,467,618 4,229,077 3,143,421 2,975,007 3,661,766
1,946,243 2,145,224 2,223,152 2,405,905 2,485,417 2,280,418
431,332 1,704,010 655,093 732,106 2,163,967 1,244,292
289,009 140,321 269,284 323,326 725,982 1,074,469
12,533,226 15,229,386 16,335,243 17,939,618 19,274,863 17,822,274
2,310,604 1,976,864 2,458,724 2,187,006 2,399,248 2,631,598
3,215,714 4,635,686 4,584,929 3,633,022 3,504,722 4,038,859
262,894 304,059 291,695 341,776 322,278 299,217
957,784 877,826 880,581 949,438 996,056 987,912
768,610 558,160 713,218 830,108 834,688 736,166
117,518 99,560 105,452 102,894 101,668 119,250
7,633,124 8,452,155 9,034,599 8,044,244 8,158,660 8,813,002
20,166,350$ 23,681,541$ 25,369,842$ 25,983,862$ 27,433,523$ 26,635,276$
198,297$ 234,440$ 254,333$ 267,970$ 340,421$ 250,575$
880,843 1,047,721 1,073,079 1,035,725 1,302,551 935,116
226,228 224,790 219,634 220,208 234,564 228,660
672,067 617,459 668,480 699,613 686,335 570,143
- - - 20,000 41,112 -
828,276 1,013,058 845,517 1,002,681 777,368 967,499
3,929,565 47,917 460,537 711,527 1,150,840 941,212
6,735,276 3,185,385 3,521,580 3,957,724 4,533,191 3,893,205
2,443,202 2,414,482 2,468,638 2,627,875 2,899,257 3,154,709
3,460,008 3,634,873 3,777,108 4,124,346 4,289,255 4,696,593
268,133 254,508 287,056 315,162 283,375 298,696
725,211 775,784 745,886 749,689 849,701 864,531
963,167 948,537 981,723 1,037,429 1,082,348 1,139,007
125,604 123,060 128,890 137,525 137,491 144,582
306,520 444,484 33,032 159,898 27,568 327,335
225,300 11,469 194,590 1,394,822 58,237 14,203
8,517,145 8,607,197 8,616,923 10,546,746 9,627,232 10,639,656
15,252,421$ 11,792,582$ 12,138,503$ 14,504,470$ 14,160,423$ 14,532,861$
Fiscal Year
141
City of New Hope, Minnesota
Statistical Section (Unaudited)
Changes in Net Position (Continued)
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2011
2009 2010 (Restated)2012
Net Revenues (Expenses)
Governmental activities (9,670,916)$ (8,372,897)$ (8,478,952)$ (8,861,303)$
Business-type activities 586,775 1,558,632 396,577 646,886
Total Primary Government Revenues (Expenses)(9,084,141)$ (6,814,265)$ (8,082,375)$ (8,214,417)$
General Revenues and Other Changes in Net Position
General Revenues
Governmental Activities
Taxes
Property taxes 8,760,482$ 8,730,979$ 8,784,948$ 9,129,247$
Tax increments 1,262,598 1,408,256 1,400,163 1,343,248
Franchise taxes 438,744 430,494 439,795 440,149
Grants and contributions not
restricted to specific programs 755,762 79,529 87,206 47,662
Unrestricted investment earnings 723,565 337,312 745,484 429,595
Gain on sale of capital assets - 22,930 13,568 69,321
Miscellaneous 146,680 - - -
Transfers - 91,129 (2,163,781) 68,971
Total Governmental Activities General Revenues 12,087,831 11,100,629 9,307,383 11,528,193
Business-type Activities
Unrestricted investment earnings 27,234 17,400 71,089 57,384
Transfers - (91,129) 2,163,781 (68,971)
Total Business-type Activities General Revenues 27,234 (73,729) 2,234,870 (11,587)
Total Primary Government 12,115,065$ 11,026,900$ 11,542,253$ 11,516,606$
Change in Net Position
Governmental activities 2,416,915$ 2,727,732$ 828,431$ 2,666,890$
Business-type activities 614,009 1,484,903 2,631,447 635,299
Total Primary Government 3,030,924$ 4,212,635$ 3,459,878$ 3,302,189$
Fiscal Year
Note: The City implemented GASB Statement No. 63 and GASB Statement No. 65 in fiscal 2012. Net position information has been
restated for 2011 for this accounting change. Years prior to 2011 have not been restated. The City implemented GASB Statement No. 67
and GASB Statement No. 68 in fiscal 2015. The City implented GASB Statement No. 75 in fiscal 2018. Net position information has not
been restated for prior years.
142
2013 2014 2015 2016 2017 2018
(5,797,950)$ (12,044,001)$ (12,813,663)$ (13,981,894)$ (14,741,672)$ (13,929,069)$
884,021 155,042 (417,676) 2,502,502 1,468,572 1,826,654
(4,913,929)$ (11,888,959)$ (13,231,339)$ (11,479,392)$ (13,273,100)$ (12,102,415)$
9,554,629$ 9,732,776$ 10,131,759$ 10,843,702$ 11,929,597$ 12,941,920$
511,924 537,871 430,879 492,584 841,098 1,112,753
438,834 438,541 442,556 447,248 912,357 945,244
49,005 179,537 600,030 633,056 628,119 697,895
198,658 324,498 331,417 377,960 531,240 798,557
37,201 - - - 50,456 70,400
- - - - - -
(317,987) 114,000 68,204 121,800 (19,110) (48,413)
10,472,264 11,327,223 12,004,845 12,916,350 14,873,757 16,518,356
7,508 31,714 35,700 44,708 36,811 72,531
317,987 (114,000) (68,204) (121,800) 19,110 48,413
325,495 (82,286) (32,504) (77,092) 55,921 120,944
10,797,759$ 11,244,937$ 11,972,341$ 12,839,258$ 14,929,678$ 16,639,300$
4,674,314$ (716,778)$ (808,818)$ (1,065,544)$ 132,085$ 2,589,287$
1,209,516 72,756 (450,180) 2,425,410 1,524,493 1,947,598
5,883,830$ (644,022)$ (1,258,998)$ 1,359,866$ 1,656,578$ 4,536,885$
Fiscal Year
143
THIS PAGE IS LEFT
BLANK INTENTIONALLY
144
City of New Hope, Minnesota
Statistical Section (Unaudited)
Governmental Activities Tax Revenues by Source
Last Ten Fiscal Years
(Accrual Basis of Accounting)
Fiscal Property Tax Franchise
Year Tax Increments Tax Total
2009 8,760,482$ 1,262,598$ 438,744$ 10,461,824$
2010 8,730,979 1,408,256 430,494 10,569,729
2011 8,784,948 1,400,163 439,795 10,624,906
2012 9,129,247 1,343,248 440,149 10,912,644
2013 9,554,629 511,924 438,834 10,505,387
2014 9,732,776 537,871 438,541 10,709,188
2015 10,131,759 430,879 442,556 11,005,194
2016 10,843,702 492,584 447,248 11,783,534
2017 11,929,597 841,098 912,357 13,683,052
2018 12,941,920 1,112,753 945,244 14,999,917
145
City of New Hope, Minnesota
Statistical Section (Unaudited)
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
2011
2009 2010 (Restated)2012
General Fund
Reserved -$ 63,753$ -$ -$
Unreserved 4,354,351 4,527,847 - -
Nonspendable - - 14,366 14,925
Unassigned - - 4,920,846 5,080,812
Total General Fund 4,354,351$ 4,591,600$ 4,935,212$ 5,095,737$
All Other Governmental Funds
Reserved 4,699,636$ 9,043,337$ -$ -$
Unreserved, reported in
Special Revenue funds 3,266,399 3,129,062 - -
Debt Service funds 6,450,295 - - -
Capital Project funds 5,317,588 9,771,932 - -
Restricted - - 6,114,114 5,657,606
Committed - - 4,666,447 5,165,192
Assigned - - 6,877,641 6,533,868
Unassigned - - - -
Total All Other Governmental Funds 19,733,918$ 21,944,331$ 17,658,202$ 17,356,666$
Total All Governmental Funds 24,088,269$ 26,535,931$ 22,593,414$ 22,452,403$
Note: The City implemented GASB 54 in fiscal year 2011, resulting in significant reclassification of the components of fund balance.
Years prior to 2011 have not been restated.
Fiscal Year
146
2013 2014 2015 2016 2017 2018
-$ -$ -$ -$ -$ -$
- - - - - -
15,484 16,005 16,765 18,242 17,617 18,763
5,567,933 5,805,289 6,063,647 6,255,436 6,871,038 7,162,188
5,583,417$ 5,821,294$ 6,080,412$ 6,273,678$ 6,888,655$ 7,180,951$
-$ -$ -$ -$ -$ -$
- - - - - -
- - - - - -
- - - - - -
5,550,819 5,687,949 8,069,238 7,772,782 24,605,109 24,646,820
4,511,073 4,771,304 5,431,288 5,397,075 5,837,809 5,414,740
8,204,338 7,839,792 5,496,484 4,958,094 5,176,318 5,695,269
- (134,792) (226,356) (3,015,315) (4,178,684) (3,448,208)
18,266,230$ 18,164,253$ 18,770,654$ 15,112,636$ 31,440,552$ 32,308,621$
23,849,647$ 23,985,547$ 24,851,066$ 21,386,314$ 38,329,207$ 39,489,572$
Fiscal Year
147
City of New Hope, Minnesota
Statistical Section (Unaudited)
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
2011
2009 2010 (Restated)2012
Revenues
Property taxes 9,898,968$ 8,694,245$ 8,767,959$ 9,199,381$
Tax increments - 1,408,256 1,400,163 1,343,248
Franchise taxes 438,744 430,494 439,795 440,149
Licenses and permits 226,303 236,378 359,530 238,943
Intergovernmental 1,401,010 1,765,220 1,599,253 858,816
Charges for services 1,166,302 1,369,904 1,544,369 1,557,898
Fines and forfeitures 236,173 238,961 255,329 283,233
Special assessments 157,581 258,392 153,835 305,818
Investment earnings - 393,913 548,548 307,032
Miscellaneous 791,039 87,607 115,183 80,073
Total Revenues 14,316,120 14,883,370 15,183,964 14,614,591
Expenditures
General government 1,726,566 1,883,729 1,560,511 1,567,301
Public safety 5,933,364 5,791,511 5,933,201 5,946,209
Public works 740,014 989,734 1,079,884 1,192,760
Culture and recreation 1,698,807 1,599,381 1,560,486 1,599,041
Economic development - 192,431 289,650 304,064
Capital outlay 1,137,776 2,605,724 5,263,935 7,685,819
Debt service
Principal 885,000 515,000 1,005,000 330,000
Interest 273,100 273,054 247,973 270,613
Bond issuance costs - - 93,820 104,351
Total Expenditures 12,394,627 13,850,564 17,034,460 19,000,158
Excess (Deficiency) of Revenues
Over (Under) Expenditures 1,921,493 1,032,806 (1,850,496) (4,385,567)
Other Financing Sources (Uses)
Transfers in 1,236,793 2,596,321 2,477,195 936,188
Sales of capital assets - 1,954 - -
Bonds issued - 1,245,000 - -
Premium on bonds issued - 16,173 - 54,006
Refunding bonds issued - -- 4,025,000
Principal payments to refunded bond escrow agent - -- -
Transfers out (984,125) (2,444,592) (4,569,216) (770,638)
Total Other Financing
Sources (Uses)252,668 1,414,856 (2,092,021) 4,244,556
Net Change in Fund Balances 2,174,161$ 2,447,662$ (3,942,517)$ (141,011)$
Debt Service as a Percentage of
Noncapital Expenditures 9.7%9.8%6.4%4.1%
Fiscal Year
148
2013 2014 2015 2016 2017 2018
9,531,663$ 9,718,800$ 10,145,204$ 10,868,985$ 11,961,711$ 12,904,297$
511,924 537,871 430,879 492,584 841,098 1,112,753
438,834 438,541 442,556 447,248 912,357 945,244
273,117 353,973 389,957 466,548 641,870 367,931
4,463,113 818,825 1,359,511 2,063,546 1,844,648 2,195,760
1,585,964 1,663,053 1,601,081 1,571,798 1,727,615 1,399,998
239,201 215,585 237,591 191,960 208,909 230,657
178,335 98,617 38,417 173,158 92,458 282,589
178,217 248,013 274,116 304,252 486,746 658,606
111,443 129,980 202,057 42,103 137,591 33,966
17,511,811 14,223,258 15,121,369 16,622,182 18,855,003 20,131,801
1,571,701 1,668,474 1,688,752 1,872,436 2,622,277 1,787,553
5,967,599 6,397,860 6,866,105 7,168,102 7,724,950 7,997,311
1,254,201 1,225,551 1,328,371 1,606,369 1,671,593 1,717,815
1,613,518 1,761,961 1,853,741 1,938,131 2,066,692 2,015,729
582,621 298,825 498,479 588,167 1,737,947 815,352
4,239,938 3,000,518 8,204,694 8,220,964 5,217,461 12,956,485
340,000 350,000 405,000 415,000 523,497 799,734
306,462 212,025 131,530 257,661 455,539 769,497
- 2,200 114,607 58,188 251,648 148,365
15,876,040 14,917,414 21,091,279 22,125,018 22,271,604 29,007,841
1,635,771 (694,156) (5,969,910) (5,502,836) (3,416,601) (8,876,040)
360,427 669,461 3,209,226 1,630,270 4,305,261 788,458
1,460 4,055,382 - - - -
- - - 2,824,075 18,435,000 9,520,000
- - 171,339 107,553 1,857,609 476,673
- - 6,470,000 - - -
- (3,780,000) - - - -
(600,414) (477,461) (3,015,226) (1,426,570) (4,238,376) (748,726)
(238,527) 467,382 6,835,339 3,135,328 20,359,494 10,036,405
1,397,244$ (226,774)$ 865,429$ (2,367,508)$ 16,942,893$ 1,160,365$
5.6%4.5%3.5%4.6%5.4%9.2%
Fiscal Year
149
THIS PAGE IS LEFT
BLANK INTENTIONALLY
150
City of New Hope, Minnesota
Statistical Section (Unaudited)
General Government Tax Revenues by Source
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
Fiscal Property Tax Franchise
Year Tax Increments Tax Total
2009 8,636,370$ 1,262,598$ 438,744$ 10,337,712$
2010 8,694,245 1,408,256 430,494 10,532,995
2011 8,767,959 1,400,163 439,795 10,607,917
2012 9,199,381 1,343,248 440,149 10,982,778
2013 9,531,663 511,924 438,834 10,482,421
2014 9,718,800 537,871 438,541 10,695,212
2015 10,145,204 430,879 442,556 11,018,639
2016 10,868,985 492,584 447,248 11,808,817
2017 11,961,711 841,098 912,357 13,715,166
2018 12,904,297 1,112,753 945,244 14,962,294
151
City of New Hope, Minnesota
Statistical Section (Unaudited)
Tax Capacity, Market Value and Estimated Actual Value of Taxable Property
Last Ten Fiscal Years
(Shown By Year of Tax Collectability)
2009 2010 2011 2012
Taxable Market Value
Real property 1,618,178,200$ 1,492,408,000$ 1,321,463,913$
Personal property 7,624,400 8,162,100 8,515,600
Total Taxable Market Value 1,625,802,600$ 1,500,570,100$ 1,329,979,513$
Estimated actual value of taxable property 1,732,235,700$ 1,629,433,100$ 1,504,929,000$ 1,438,796,300$
Taxable Market Value as a Percentage of
Estimated Actual Value 99.78 %99.71 %92.44 %
Tax Capacity
Real property 21,095,335$ 19,864,103$ 18,462,796$ 16,686,170$
Personal property 146,456 148,346 159,492 165,812
Subtotal 21,241,791 20,012,449 18,622,288 16,851,982
Less: Tax Increment (1,365,233) (1,181,390) (1,044,830) (944,560)
Less: Contribution to Fiscal Disparities (2,518,620) (2,596,468) (2,466,459) (2,380,423)
Add: Distribution from Fiscal Disparities 3,821,605 3,946,315 3,896,651 3,605,075
Net Tax Capacity 21,179,543$ 20,180,906$ 19,007,650$ 17,132,074$
Tax levies
Revenue 9,053,443$ 9,036,625$ 9,066,928$
Bonds and interest 39,268 192,105 161,802
Total 9,092,711$ 9,228,730$ 9,228,730$
Tax capacity rate
Revenue 45.542 %47.916 %53.842 %
Bonds and interest 0.199 1.025 0.967
Sewer district 0.273 0.308 0.387
Total Direct Tax Rate 41.342 %46.014 %49.249 %55.196 %
Source: Hennepin County Auditor/Treasurer Department
Note: Property in the county is reassessed annually.
Note: The City changed the format of this table for 2010, and will be updating on a go-forward basis.
Fiscal Year
152
2013 2014 2015 2016 2017 2018
1,214,204,483$ 1,224,417,514$ 1,323,173,828$ 1,419,351,117$ 1,522,726,514$ 1,683,833,465$
9,657,700 10,849,800 11,343,900 11,588,000 12,327,600 13,258,900
1,223,862,183$ 1,235,267,314$ 1,334,517,728$ 1,430,939,117$ 1,535,054,114$ 1,697,092,365$
1,336,539,900$ 1,346,449,200$ 1,440,652,000$ 1,534,397,300$ 1,636,865,900$ 1,792,927,900$
91.57 %91.74 %92.63 %93.26 %93.78 %94.65 %
15,476,014$ 15,454,712$ 16,638,481$ 17,898,058$ 19,196,854$ 21,143,125$
188,654 211,746 221,628 226,510 242,052 260,678
15,664,668 15,666,458 16,860,109 18,124,568 19,438,906 21,403,803
(366,752) (377,138) (338,715) (362,633) (604,222) (810,429)
(2,255,476) (2,154,731) (2,144,256) (2,277,639) (2,464,382) (2,655,561)
3,448,346 3,437,911 3,505,922 3,437,652 3,757,080 4,010,408
16,490,786$ 16,572,500$ 17,883,060$ 18,921,948$ 20,127,382$ 21,948,221$
9,406,483$ 9,556,483$ 9,938,265$ 10,617,194$ 11,362,957$ 12,043,578$
164,325 161,487 163,902 195,819 604,444 869,164
9,570,808$ 9,717,970$ 10,102,167$ 10,813,013$ 11,967,401$ 12,912,742$
57.802 %57.622 %55.073 %56.364 %56.906 %54.643 %
1.010 0.974 0.905 1.041 3.025 3.946
- - - - - -
58.812 %58.596 %55.978 %57.405 %59.931 %58.589 %
Fiscal Year
153
City of New Hope, Minnesota
Statistical Section (Unaudited)
Property Tax Capacity Rates - Direct and Overlapping Governments
Last Ten Fiscal Years
Year
Taxes General Debt Sewer District
Payable Levy Levy Total
2009 39.131 %1.931 %0.280 %41.342 %
2010 45.542 0.199 0.273 46.014
2011 47.916 1.025 0.308 49.249
2012 53.842 0.967 0.387 55.196
2013 57.802 1.010 - 58.812
2014 57.622 0.974 - 58.596
2015 55.073 0.905 - 55.978
2016 56.364 1.041 - 57.405
2017 56.906 3.025 - 59.931
2018 54.643 3.946 - 58.589
Source: Hennepin County Auditor/Treasurer Department
Overlapping rates are those of local and county governments that apply to property owners within the City. Not all overlapping
rates apply to all City property owners (e.g. the rates for special districts apply only to the proportion of the government's property
owners whose property is located within the geographic boundaries of the special district).
Levy
Direct Rate - City of New Hope
154
County No. 281 Other Total
40.410 %27.210 %7.400 %116.362 %
42.640 28.621 9.098 126.373
45.840 34.387 10.068 139.544
48.231 32.534 10.422 146.383
49.461 32.347 10.933 151.553
49.959 34.777 11.307 154.639
46.398 33.226 10.561 146.163
45.356 33.833 10.432 147.026
44.087 31.612 10.214 145.844
42.808 31.957 9.052 142.406
Overlapping Rates
School
District
155
City of New Hope, Minnesota
Statistical Section (Unaudited)
Principal Property Taxpayers
Current Year and Nine Years Ago
Tax
Taxpayer Capacity Rank
STNL (New Hope), LLC 231,170$ 1 1.08 %
Allen Group, LLC 204,270 2 0.95
FLS Properties 203,710 3 0.95
Hy-Vee, Inc.193,150 4 0.90
Paddock Property Ltd. Partnership 182,650 5 0.85
CI Minn I-A, LLC 182,210 6 0.85
GLP US Management, LLC 181,310 7 0.85
Broadway Lanel/Golle/Holmes 178,500 8 0.83
St. Therese Home, Inc.177,870 9 0.83
Winnetka Mall, LLC 168,490 10 0.79
Geneva Management Service, LLC - - -
New Hope / US Swim Partnership - - -
Minnesota Masonic Home/North Ridge Care Center - - -
New Hope Distribution Center, LLC - - -
Welsh Navarre MN, LLC - - -
Lang Nelson Association - - -
Totals 1,903,330$ 8.88 %
Source: Hennepin County Auditor/Treasurer Department
Tax Capacity
2018
Percent
of Total
156
Tax
Capacity Rank
-$ - - %
- - -
139,250 9 0.66
- - -
165,250 2 0.78
- - -
- - -
- - -
154,438 4 0.73
146,970 6 0.69
199,250 1 0.94
159,250 3 0.75
152,275 5 0.72
145,250 7 0.68
139,250 8 0.66
132,188 10 0.62
1,533,371$ 7.23 %
Tax Capacity
2009
Percent
of Total
157
THIS PAGE IS LEFT
BLANK INTENTIONALLY
158
City of New Hope, Minnesota
Statistical Section (Unaudited)
Property Tax Levies and Collections
Last Ten Fiscal Years
(1)
Collection Collection
Fiscal Total of Current in Subsequent Total
Year Levy Year's Levy Years Collections
2009 8,457,346$ 8,382,201$ 99.11 %75,145$ 8,457,346$ 100.00 %
2010 9,092,711 8,983,224 98.80 109,487 9,092,711 100.00
2011 9,228,730 9,063,615 98.21 165,115 9,228,730 100.00
2012 9,228,730 9,102,355 98.63 126,375 9,228,730 100.00
2013 9,570,808 9,429,858 98.53 140,950 9,570,808 100.00
2014 9,717,970 9,619,447 98.99 87,814 9,707,261 99.89
2015 10,102,167 10,017,500 99.16 60,746 10,078,246 99.76
2016 10,813,013 10,756,992 99.48 46,867 10,803,859 99.92
2017 11,967,401 11,895,137 99.40 60,353 11,955,490 99.90
2018 12,912,742 12,834,660 99.40 - 12,834,660 99.40
Source: Hennepin County Auditor/Treasurer Department
(1)Includes state paid property tax credits.
Collected to Levy
Percent
Percentage of Total
of Levy Collections
159
City of New Hope, Minnesota
Statistical Section (Unaudited)
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
General Special Tax
Fiscal Obligation Assessment Increment
Year Bonds Bonds Bonds
2009 225,000$ 910,000$ 4,795,000$
2010 1,280,000 775,000 4,605,000
2011 1,245,000 - 4,410,000
2012 1,120,000 - 8,230,000
2013 1,000,729 - 8,065,761
2014 863,620 - 4,066,223
2015 2,898,167 - 8,250,291
2016 5,682,679 - 7,968,655
2017 25,713,493 - 7,687,463
2018 35,323,386 - 7,140,876
Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements.
See Demographic and Economic Statistics on page 167 for personal income and population data.
Governmental Activities
160
G.O
Lease General G.O.Tax Total
Revenue Obligation Revenue Increment Primary Per
Bonds Bonds Bonds Bonds Government Capita
-$ -$ 2,265,000$ -$ 8,195,000$ 0.79 %396$
- - 2,930,000 - 9,590,000 0.83 472
3,505,000 - 2,360,095 - 11,520,095 1.04 562
3,505,000 - 2,033,000 - 14,888,000 1.25 717
3,505,000 - 2,723,628 - 15,295,118 1.24 732
3,505,000 - 2,352,553 - 10,787,396 0.86 518
3,505,000 1,831,607 2,151,635 1,587,602 20,224,302 1.49 953
3,505,000 3,934,522 1,950,071 1,586,242 24,627,169 1.75 1,140
3,505,000 3,833,158 1,748,533 1,584,964 44,072,611 3.03 2,046
3,505,000 3,727,852 1,540,021 1,494,575 52,731,710 3.44 2,448
Income
of Personal
Percentage
Business-type Activities
161
City of New Hope, Minnesota
Statistical Section (Unaudited)
Ratios of General Bonded Debt Outstanding
Last Ten Fiscal Years
Less
Amounts
General Available in Net
Fiscal Obligation Debt Service Bonded Per
Year Bonds Funds Debt Capita
2009 8,195,000$ 6,450,295$ 1,744,705$ 0.101 %84$
2010 9,590,000 4,288,603 5,301,397 0.325 261
2011 8,015,095 465,243 7,549,852 0.502 369
2012 11,383,000 4,222,494 7,160,506 0.498 345
2013 11,790,118 345,010 11,445,108 0.856 548
2014 7,282,396 614,161 6,668,235 0.495 320
2015 16,719,302 759,386 15,959,916 1.108 752
2016 21,122,169 1,048,498 20,073,671 1.308 929
2017 40,567,611 2,173,637 38,393,974 2.346 1,782
2018 49,226,710 1,793,587 47,433,123 2.646 2,202
Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements.
See Demographic and Economic Statistics on page 167 for population data.
Percentage
See Tax Capacity, Market Value and Estimated Actual Value of Taxable Property on page 152 for property value data.
of Estimated
Actual Value
of Taxable
Property
162
City of New Hope, Minnesota
Statistical Section (Unaudited)
Computation of Direct and Overlapping Debt
December 31, 2018
City's
Outstanding Share
Debt of Debt
Direct Debt
City of New Hope (1)35,323,386$ 100.00 %35,323,386$
Overlapping Debt
Hennepin County 1,225,230,000$ 1.12 %13,722,576$
Independent School District #281, Robbinsdale 193,065,906 19.42 37,493,399
Metropolitan Council 1,549,087,966 0.53 8,210,166
Hennepin Region RR Authority 29,865,000 1.57 468,881
Three Rivers Park District 66,300,000 1.57 1,040,910
Total Overlapping Debt 3,063,548,872$ 1.99 %60,935,932$
Total Direct and Overlapping Debt 3,098,872,258$ 3.11 %96,259,318$
(1)Excludes debt payable from tax increment revenue and enterprise revenue.
Note: Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the City. This
schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and
businesses of the City. This process recognized that, when considering the government's ability to issue and repay long-term
debt, the entire debt burden borne by the residents and businesses should be taken into account. However, this does not
imply that every taxpayer is a resident, and therefore responsible for repaying the debt, of each overlapping government.
District *
Percentage
Applicable to
Source : Assessed value data used to estimate applicable percentages and outstanding debt data for overlapping entities was provided
by Hennepin County.
*The percentage of overlapping debt applicable is estimated using taxable market property values. Applicable percentages were
estimated by determining the portion of the county's taxable market value that is within the City's boundaries and dividing it by the
county's total taxable market value.
163
City of New Hope, Minnesota
Statistical Section (Unaudited)
Legal Debt Margin Information
Last Ten Fiscal Years
2009 2010 2011 2012
Debt Limit 51,967,071$ 48,774,078$ 45,017,103$ 39,899,385$
Total Net Debt Applicable to Limit 37,561 1,246,878 1,072,678 970,908
Legal Debt Margin 51,929,510$ 47,527,200$ 43,944,425$ 38,928,477$
Total Net Debt Applicable to the Limit
as a Percentage of Debt Limit 0.07%2.56%2.38%2.43%
Note: Under state 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
164
2013 2014 2015 2016 2017 2018
36,715,865$ 37,058,019$ 40,035,532$ 42,928,174$ 46,051,623$ 50,912,771$
839,948 696,627 2,719,528 5,497,493 25,516,878 34,249,431
35,875,917$ 36,361,392$ 37,316,004$ 37,430,681$ 20,534,745$ 16,663,340$
2.29%1.88%6.79%12.81%55.41%67.27%
Taxable Market Value 1,697,092,365$
Debt Limit (3 Percent of Market Value)50,912,771$
Debt Applicable to Limit
General obligation bonds 35,323,386
Less: Amount Available in
Debt Service Funds (1,073,955)
Total Net Debt Applicable to Limit 34,249,431
Legal Debt Margin 16,663,340$
Fiscal Year
Legal Debt Margin Calculation for Fiscal Year 2018
165
City of New Hope, Minnesota
Statistical Section (Unaudited)
Pledged Revenue Coverage
Last Ten Fiscal Years
(1)(2)Net
Fiscal Gross Operating Revenue
Year Revenues Expenses Available Principal Interest
2009 6,524,839$ 5,535,015$ 989,824$ 355,000$ 121,865$ 207.57 %
2010 7,131,115 5,046,701 2,084,414 1,520,000 168,236 123.47
2011 6,646,747 5,527,230 1,119,517 981,643 74,418 106.01
2012 7,676,193 6,493,865 1,182,328 334,000 162,686 238.04
2013 7,901,855 6,573,932 1,327,923 344,000 98,588 300.04
2014 7,887,948 7,270,310 617,638 371,000 103,685 130.12
2015 8,039,067 7,925,903 113,164 201,000 97,584 37.90
2016 8,738,270 6,629,232 2,109,038 202,000 172,262 563.52
2017 9,181,674 6,850,851 2,330,823 293,503 228,142 446.82
2018 10,247,826 7,479,247 2,768,579 394,266 232,928 441.42
(1)Gross revenues include interest and other nonoperating revenues.
(2)Operating expenses exclude depreciation.
(3)Revenues and expenses include the Storm Water, Water Utility, Sewer Utility, and Ice Arena funds.
Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements.
Coverage
Revenue Bonds (3)
Debt Service
166
Per Capita Total
Fiscal Personal Personal Median School
Year Population (1)Income (2)Income (3)Age (4)Enrollment (5)
2009 20,718 49,789$ 1,031,528,502$ 38.3 12,000 7.2 %
2010 20,339 56,564 1,150,455,196 39.4 11,839 7.0
2011 20,486 54,008 1,106,407,888 39.4 11,804 5.6
2012 20,764 57,476 1,193,431,664 39.4 12,126 4.8
2013 20,904 58,898 1,231,203,792 39.4 12,126 4.0
2014 20,812 60,601 1,261,228,012 39.4 12,390 2.9
2015 21,225 63,901 1,356,298,725 39.4 12,313 2.8
2016 21,600 65,231 1,408,989,600 39.4 12,404 2.8
2017 21,545 67,427 1,452,714,715 39.4 12,011 3.5
2018 21,545 71,067 1,531,138,515 39.4 12,304 2.7
(2)Provided by the Bureau of Economic Analysis; US Department of Commerce. This figure is for all of Hennepin County.
(3)Calculated by multiplying the estimated population by the per capita personal income figure.
(4)US Census Bureau
(5)Provided by Independent School District #281, Robbinsdale, MN.
(6)Provided by the Bureau of Labor Statistics; US Department of Labor. This figure is for all of Hennepin County.
(1)Provided by the Metropolitan Council. The most recent year is an estimate.
City of New Hope, Minnesota
Demographic and Economic Statistics
Last Ten Fiscal Years
Unemployment
Rate (6)
167
City of New Hope, Minnesota
Employees Rank
Independent School District No. 281 1,852 1 18.09 %
Saint Therese Home of New Hope 1,117 2 10.91
Intermediate District No. 287 943 3 9.21
Hy-Vee 632 4 6.17
Minnesota Masonic Home/North Ridge Care Center 560 5 5.47
Horwitz 345 6 3.37
Perrigo Company 290 7 2.83
Coborn's Delivers 240 8 2.34
Liberty Diversified International 200 9 1.95
Parker - Hannifin Oildyne Division 172 10 1.68
Paddock Labratories - -
Navarre Corporation - -
Dakota Growers Pasta - -
Waymouth Farms, Inc.- -
InnoFlex Corporation (I-Corp)- -
Total Employment for Top 10 Employers 6,351 62.05 %
Total City Employment 10,235
Source: Minnesota Department of Employment and Economic Development.
Principal Employers
Current Year and Nine Years Ago
Employer Employment
2018
Percentage
of Total City
168
Employees Rank
- - %
602 2 5.42
- -
- -
808 1 7.27
- -
- -
165 9 1.48
244 5 2.20
173 7 1.56
557 3 5.01
372 4 3.35
184 6 1.66
170 8 1.53
149 10 1.34
3,424 30.81 %
11,112
Employment
2009
Percentage
of Total City
169
City of New Hope, Minnesota
Full-time Equivalent City Government Employees by Function
Last Ten Fiscal Years
2009 2010 2011 2012
General Government 18 15 15 15
Public Safety
Police
Officers 31 30 31 30
Civilians 7 7 6 7
Public Works 21 22 24 24
Culture and Recreation 8 8 7 6
Total 85 82 83 82
Source: Various City departments.
Function
170
2013 2014 2015 2016 2017 2018
16 14 13 13 16 17
31 33 35 33 34 34
7 7 9 9 10 11
24 24 23 24 24 24
7 7 7 8 7 7
85 85 87 87 91 93
171
City of New Hope, Minnesota
Operating Indicators by Function
Last Ten Fiscal Years
2009 2010 2011 2012 2013
Function
Public works
Street resurfacing (miles)2 2 4 - -
Potholes repaired 349 734 648 687 600
Culture and recreation
Program registration - adults 3,313 3,796 5,271 5,598 4,565
Program registration - youth 6,360 5,287 5,323 7,442 5,924
Attendance at sponsored events 139,318 137,199 146,305 148,966 144,000
Golf Course
Rounds of golf at the Municipal course 23,917 21,686 18,788 19,568 16,782
Ice Arena
Hours of ice time rental 4,027 3,980 3,903 3,558 3,739
Water
Water main breaks 37 19 32 26 30
Average daily consumption (thousands of gallons)1,921 1,746 1,712 1,828 1,682
Sewer
Average daily treatment (thousands of gallons)1,740 1,895 2,253 2,189 1,500
Sources: Various City departments.
Note: Indicators are not available for the general government function.
Function
172
2014 2015 2016 2017 2018
- 12 3 3 3
1,330 2,882 3,025 2,530 3,000
3,121 2,746 3,343 3,011 2,603
5,734 5,815 6,043 5,969 5,413
122,478 124,777 127,865 127,112 102,659
16,431 18,175 20,375 18,662 17,800
3,734 3,683 3,567 4,030 4,151
27 21 19 12 23
1,571 1,559 1,588 1,616 1,616
2,200 1,670 1,800 1,352 1,405
173
City of New Hope, Minnesota
Capital Asset Statistics by Function
Last Ten Fiscal Years
2009 2010 2011 2012
Function
Public Safety
Police stations 1 1 1 1
Fire stations 3 3 3 3
Public Works
City streets (miles)64.0 64.0 64.0 64.0
State and County streets (miles)8.5 8.5 8.5 8.5
Sidewalks (miles)26.4 26.4 26.4 26.4
Street lights 580.0 580.0 580.0 580.0
Railroad bridges 2.0 2.0 2.0 2.0
Pedestrian bridges 4.0 4.0 4.0 4.0
Culture and recreation
Parks 23 23 23 23
Swimming pools
Olympic 1 1 1 1
Recreational 1 1 1 1
Outdoor theatre 1 1 1 1
Tennis courts 17 17 17 17
Water
Water main (miles)63 63 63 63
Fire hydrants 690 690 690 690
Maximum daily capacity (thousands of gallons)21,000,000 21,000,000 21,000,000 21,000,000
Sewer
Sanitary sewer main (miles)74 74 74 74
Storm sewer lines (miles)56 56 56 56
Ice Arenas 1 1 1 1
Golf courses 1 1 1 1
Source: Various City departments.
Note: No capital asset indicators are available for the general government function.
Function
174
2013 2014 2015 2016 2017 2018
1 1 1 1 1 1
3 3 3 3 3 3
64.0 64.0 64.0 64.5 64.5 64.5
8.5 8.5 8.5 8.5 8.5 8.5
26.4 26.4 26.4 27.0 27.0 27.0
580.0 580.0 580.0 619.0 619.0 619.0
2.0 2.0 2.0 2.0 2.0 2.0
4.0 4.0 4.0 4.0 4.0 4.0
23 23 23 23 23 23
1 1 1 1 1 -
1 1 1 1 1 -
1 1 1 1 1 1
17 17 17 15 15 12
63 63 63 64 64 64
690 690 690 712 712 712
21,000,000 21,000,000 21,000,000 21,000,000 21,000,000 21,000,000
74 74 74 75 75 75
56 56 56 56 56 56
1 1 1 1 1 1
1 1 1 1 1 1
175