2019 CAFR
CITY OF NEW HOPE
NEW HOPE, MINNESOTA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED
DECEMBER 31, 2019
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CITY OF NEW HOPE
HENNEPIN COUNTY, MINNESOTA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED
DECEMBER 31, 2019
KIRK MCDONALD - CITY MANAGER
PREPARED BY: DEPARTMENT OF FINANCE
Member GFOA of U.S. and Canada
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City of New Hope, Minnesota
Comprehensive Annual Financial Report
Table of Contents
For the Year Ended December 31, 2019
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
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 102
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
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City of New Hope, Minnesota
Comprehensive Annual Financial Report
Table of Contents (Continued)
For the Year Ended December 31, 2019
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 120
General Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual 123
Internal Service Funds
Combining Statement of Net Position 130
Combining Statement of Revenues, Expenses and Changes in Net Position 131
Combining Statement of Cash Flows 132
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
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INTRODUCTORY SECTION
CITY OF NEW HOPE
NEW HOPE, MINNESOTA
FOR THE YEAR ENDED
DECEMBER 31, 2019
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May 15, 2020
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, 2019, 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 21,790. 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
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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 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 323
Intermediate District 287 Education 266 (943)
City of New Hope Government agency 262 (including seasonal staff)
YMCA Health club 228
Liberty Diversified International Stationery supplies 200
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.
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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 2019. 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 2019, $38,064,766 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 2019:
Police Department & City Hall
A new police department and city hall for the city of New Hope opened in July of 2019. 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 the building was completed in July of 2019.
The pool that was previously located where the new police department and city hall was constructed was demolished and is being
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 included 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 began in August of 2019. It is scheduled to open in June of 2020.
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.
Windsor Ridge
SVK is constructing 32 new single-family homes on an 8.7-acre undeveloped site that was owned by the city for many years. In the
fall of 2018, the city received six proposals from four developers for the site. After careful consideration, SVK was selected as the
preferred developer for the site. SVK is in the process of developing 32 new single-family homes on 65-foot wide lots. The estimated
sales prices for the homes range from the mid-$300,000’s to the low $400,000’s. At the beginning of 2020, eight homes were under
construction or completed. SVK anticipates that the project will be complete sometime in 2021.
Automotive Concepts
In September of 2019, the New Hope City Council approved a Tax Increment Financing (TIF) contract for Automotive Concepts,
located at 2919 Nevada Avenue North, to facilitate the construction of a 22,500 square foot building. Automotive Concepts specializes
in vehicle customization, and the new building will serve as their “clean” facility, focusing on body work, and installation of tires and
wheels, etc. The owner of the business anticipates the building will add about 35 new jobs. The TIF agreement would pay the
developer $150,000 over the next nine years at an interest rate of 4.45%.
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Holy Trinity Church
Holy Trinity Church received approval in October 2018 to expand their school and daycare center at 4240 Gettysburg Avenue North
by approximately 11,123 square feet with a second floor addition over the existing school area. The $1.85 million project also
included a 1,140 square foot expansion of the main floor entryway. The project was completed in the fall of 2019.
Hy-Vee Aisles Online
A 960-square foot drive-through kiosk with three drive-through grocery pick-up lanes was approved for construction in the Hy-Vee
parking lot at 8200 42nd Avenue North in July 2019. The structure includes an overhead canopy and new curbing and landscaping
around the building. The $550,000 addition is intended to reduce congestion and streamline the pick-up process for customers who
purchase groceries online.
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 was 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.
Housing
The City's commitment to maintaining its housing stock is supported through a variety of cooperative projects and programs.
Approximately $6,030,138 was reinvested in the City's housing stock in 2019 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 2019 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 18 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. Four 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. The city acquired another single-family
home for demolition in early 2020 and has two other properties under contract.
b. Rehabilitation Re-sell:
i. The city has purchased two distressed properties for rehabilitation in the last four 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 acquired the property at 3924 Utah Avenue North in 2018 and is coordinating an
$180,000 rehabilitation that will serve as a demonstration project for the neighborhood. 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 – 1,419 inspections completed in 2019
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 504 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.
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PARKS AND RECREATION
The City provides the residents with a vast array of park amenities and recreation opportunities at an affordable cost. In 2019, the city
maintained 18 parks, four additional school district parks (summer only), two sheets of indoor ice at the ice arena, and a par 3 nine-
hole golf course. In addition, the city programs the New Hope Community Gyms during non-school time.
During 2019, several park projects took place including the replacement of the playground at Jaycee Park; court resurfacing of the
basketball court at Civic Center Park, tennis courts at Begin Park and the multi-surface court at Terra Linda Park; and the lighting was
retrofitted to LED at Civic Center Park for the basketball/volleyball courts and tennis courts. Buckthorn removal was continued in
several parks and new signage was installed at Jaycee Park. During the 2018-2019 winter season, parks staff also continued to plow a
section of trail at Hidden Valley, Northwood and Lions parks.
In early 2019, staff worked significantly with Stantec engineers on the final bid documents for the Pool and Park projects. The full
project was broken down into five smaller projects: Pool, Outdoor Theater, Skatepark, Demolition (city hall, theater, shelter), and Park
Improvements/City Hall Bid Pack 2. Bids were received in February and March. The City Council awarded the five contracts at the
March 25 Council Meeting. Pre-construction meetings were held and the projects started in April. Substantial completion for all of the
projects is expected in the summer of 2020.
The outdoor theatre and skate park were demolished in the spring as part of the Civic Center Park and Pool projects. Most activities
typically held at these facilities were located at alternate locations. The popular Movies in the Park shows were held at Northwood
Park, and the theater classes and parent/child story time were held at the Crystal Community Center. The Off Broadway Musical
Theater board did not want to move to an alternative location, so they cancelled performances for 2019.
The ice arena offered year-round use of ice time for youth, adult recreational, league hockey and skating lessons. In addition, two
facility water heaters were replaced and new exterior doors for the front entrance were ordered. The advertising agreement and
concession stand agreement continued with the Armstrong Cooper Youth Hockey Association. The dryland training agreement
continued with Charleston Overspeed.
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 2019, the tables in the clubhouse were replaced, a new 5-year lease for golf
carts started and a Groundsmaster mower was purchased. With the assistance of public works staff, a new patio area was built to the
west of the clubhouse and outdoor tables and chairs were purchased for the patio. A short term parking agreement started with
Ironwood Apartments for the use of 16 spaces during the off-season.
PROPERTY TAX PROCESS
Preliminary tax levies have to be sent to the county auditor by September 30th. 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 2019 that will highlight the tax effect of
major capital and operating decisions. This will also be an important document when preparing future budgets.
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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, 2018. This was the 11th 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
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City Planner Alan Brixius
15 15
City of New Hope, Minnesota
Elected and Appointed Officials
For the Year Ended December 31, 2019
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 Chief 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, 2019
17
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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, 2019, 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
Kalen T. Karnowski, 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, 2019, 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.
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 Governmental Accounting Standards Board, who
considers it to be an essential part of financial reporting for placing the basic financial statements in an
appropriate operational, economic, or historical context. We have applied certain limited procedures to
the RSI in accordance with auditing standards generally accepted in the United States of America, which
consisted of inquiries of management about the methods of preparing the information and comparing the
information for consistency with management’s responses to our inquiries, the basic financial statements,
and other knowledge we obtained during our audit of the basic financial statements. We do not express an
opinion or provide any assurance on the information because the limited procedures do not provide us
with sufficient evidence to express an opinion or provide any assurance.
Other Information
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 themselves, 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, 2020
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, 2020
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BLANK INTENTIONALLY
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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, 2019. We encourage readers to
consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal,
which 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 $77,197,731 (net position). Of this amount, $19,756,329 (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 $8,971,672. This was a result of governmental activities and business type
activities increasing net position by $6,971,615 and $2,000,057, respectively.
• As of the close of the current fiscal year, the City’s governmental funds reported combined ending fund balances of
$29,250,988, a decrease of $8,463,242 in comparison with the prior year. Approximately 15.9 percent of this total amount
($4,641,403) 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 $7,116,723 or 49.6 percent of total
General fund 2019 expenditures and transfers out.
• The City’s total bonded debt increased by $4,026,557 (7.6 percent) during the current fiscal year. The key factor of this
increase was the issuance of $5,235,000 G.O. Tax Abatement Bonds, Series 2019A.
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 two categories:
governmental funds and proprietary 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.
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 $77,197,731 at the close of the
most recent fiscal year.
A portion of the City’s net position (64.1 percent) reflects its investment in capital assets (e.g., land, buildings, vehicles and
equipment); less any related debt used to acquire those assets that is still outstanding. The City uses these capital assets to provide
services to citizens; consequently, these assets are not available for future spending. Although the City’s investment in its capital
assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other
sources, since the capital assets themselves cannot be used to liquidate these liabilities.
City of New Hope’s Summary of Net Position
Increase Increase
2019 2018 (Decrease)2019 2018 (Decrease)
Assets
Current and other assets 46,558,017$ 55,738,883$ (9,180,866)$ 5,932,881$ 4,361,994$ 1,570,887$
Capital assets, net of depreciation 68,293,237 49,203,864 19,089,373 29,058,223 29,051,346 6,877
Total Assets 114,851,254 104,942,747 9,908,507 34,991,104 33,413,340 1,577,764
Deferred Outflows of Resources
Deferred pension resources 4,422,526 5,073,986 (651,460) 73,354 136,143 (62,789)
Deferred other postemployment benefit resources 119,013 - 119,013 24,733 - 24,733
4,541,539 5,073,986 (532,447) 98,087 136,143 (38,056)
Liabilities
Other liabilities 3,763,982 2,639,091 1,124,891 568,736 495,207 73,529
Noncurrent liabilities 54,561,626 49,598,029 4,963,597 10,650,831 11,125,254 (474,423)
Total Liabilities 58,325,608 52,237,120 6,088,488 11,219,567 11,620,461 (400,894)
Deferred Inflows of Resources
Deferred pension resources 5,499,493 6,764,590 (1,265,097) 134,165 194,380 (60,215)
Deferred other postemployment benefit resources 36,169 41,781 (5,612) 7,518 6,758 760
Resources received in advance 2,061,733 2,699,725 (637,992) - - -
Total Deferred Inflows of Resources 7,597,395 9,506,096 (1,908,701) 141,683 201,138 (59,455)
Net Position
Net investment in capital assets 30,139,510 27,888,417 2,251,093 19,315,353 18,783,898 531,455
Restricted 6,628,138 6,000,843 627,295 1,358,401 1,160,680 197,721
Unrestricted 16,702,142 14,384,257 2,317,885 3,054,187 1,783,306 1,270,881
Total Net Position 53,469,790$ 48,273,517$ 5,196,273$ 23,727,941$ 21,727,884$ 2,000,057$
Governmental Activities Business-type Activities
An additional portion of the City’s net position, $7,986,539, represents resources that are subject to external restrictions on how they
may be used. The remaining balance of unrestricted net position, $19,756,329, 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. The increase in capital assets in governmental activities is a result of the City
Hall and police station construction along with City’s new outdoor pool and Civic Center park improvements. The decrease in current
and other within governmental activities is a result of the construction projects. The increase in noncurrent liabilities is a result of the
issuance of $5,235,000 G.O. Tax Abatement Bonds, Series 2019A.
26
The following table indicates the changes in net position for the City’s governmental and business-type activities:
City of New Hope’s Changes in Net Position
Increase Increase
2019 2018 (Decrease)2019 2018 (Decrease)
Revenues
Program Revenues
Charges for services 1,860,001$ 1,984,494$ (124,493)$ 10,587,884$ 10,298,118$ 289,766$
Operating grants and contributions 826,489 967,499 (141,010) 14,308 327,335 (313,027)
Capital grants and contributions 2,819,823 941,212 1,878,611 28,824 14,203 14,621
General Revenues
Taxes
Property taxes 15,265,428 12,941,920 2,323,508 - - -
Tax increments 1,317,803 1,112,753 205,050 - - -
Franchise taxes 957,448 945,244 12,204 - - -
Grants and contributions not
restricted to specific programs 803,035 697,895 105,140 - - -
Unrestricted investment earnings 1,412,308 798,557 613,751 149,296 72,531 76,765
Gain on sale of capital assets 369,163 70,400 298,763 - - -
Total Revenues 25,631,498 20,459,974 5,171,524 10,780,312 10,712,187 68,125
Expenses
General government 1,850,242 1,983,179 (132,937) - - -
Public safety 8,540,198 7,578,150 962,048 - - -
Public works 3,816,417 3,661,766 154,651 - - -
Culture and recreation 2,145,988 2,280,418 (134,430) - - -
Economic development 749,651 1,244,292 (494,641) - - -
Interest on long-term debt 1,412,763 1,074,469 338,294 - - -
Sewer utility - - - 2,834,973 2,631,598 203,375
Water utility - - - 3,762,099 4,038,859 (276,760)
Golf course - 319,871 299,217 20,654
Ice arena - - - 1,003,048 987,912 15,136
Storm water - - - 888,156 736,166 151,990
Street lighting - - - 116,732 119,250 (2,518)
Total Expenses 18,515,259 17,822,274 692,985 8,924,879 8,813,002 111,877
Changes in Net Position Before Transfers 7,116,239 2,637,700 4,478,539 1,855,433 1,899,185 (43,752)
Transfers - Internal Activities (144,624) (48,413) (96,211) 144,624 48,413 96,211
Change in Net Position 6,971,615 2,589,287 4,382,328 2,000,057 1,947,598 52,459
Net Position, January 1 48,273,517 45,684,230 2,589,287 21,727,884 19,780,286 1,947,598
Prior Period Adjustment (1,775,342) - (1,775,342) - - -
Net Position, December 31 53,469,790$ 48,273,517$ 5,196,273$ 23,727,941$ 21,727,884$ 2,000,057$
Governmental Activities Business-type Activities
The decreases in general government, 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 safety relates to increased expenses relating to the pension
liability. 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. The prior period adjustment was made to reallocate land held for resale costs
and related sale proceeds, write off a portion of the Cities land held for resale and record accrued interest on an existing interfund loan.
27
Governmental Activities. Governmental activities increased the City’s net position by $6,971,615.
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 $8,500,000 $9,000,000
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
7.4%
Operating Grants and
Contributions
3.2%
Capital Grants and
Contributions
11.0%
Property Taxes
59.6%
Tax Increments
5.1%
Franchise Taxes
3.7%
Grants and
Contributions
Unrestricted
3.1%
Unrestricted Investment
Earnings
5.5%
Gain on Sale of Capital
Assets
1.4%
28
Business-type Activities. The net position of business-type activities increased by $2,000,057. This increase was primarily the result
of operating net income in the Sewer, Water and Storm Water Utility funds of $537,019, $667,249 and $315,651, respectively.
Below are the graphs showing the business-type activities revenue and expense comparisons.
Expense and Program Revenues - Business-type 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
Sewer Utility Water Utility Golf Course Ice Arena Storm Water Street Lighting
Expenses Program Revenues
Revenue Sources - Business-type Activities
Charges for Services
98.2%
Operating Grants and
Contributions
0.1%
Capital Grants and
Contributions
0.3%
Unrestricted
Investment Earnings
1.4%
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 $29,250,988, a decrease
of $8,463,242 in comparison with the prior year. Approximately 15.9 percent of this total amount, $4,641,403, 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 ($22,980), 2) restricted ($13,304,922),
3) committed ($5,033,555), or 4) assigned ($6,248,128). For further classification refer to Note 3F on page 84 of this report.
Activity in the City’s major funds is discussed below:
Restated Increase
2019 2018 (Decrease)
General 7,139,703$ 7,180,951$ (41,248)$
Economic Development Authority 4,721,758$ 5,390,021$ (668,263)$
HRA Construction 4,655,140$ 3,177,772$ 1,477,368$
City Hall CIP 1,794,294$ 9,527,103$ (7,732,809)$
Street Infrastructure 15,854$ (948,474)$ 964,328$
Park/Pool Improvement Project 5,316,815$ 9,492,781 (4,175,966)$
The decrease in fund balance is due to project expenditures in 2019.
HRA Bonds (2,244,096)$ (2,286,122)$ 42,026$
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 49.6 percent of total 2019 expenditures and transfers out. The decrease in fund balance was
a result of approving an unbudgeted transfer out of $354,000.
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 transfers in of $999,500.
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 approved unbudgeted transfers out of $928,457.
The decrease in fund balance is due to project expenditures in 2019.
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 $3,511,168. 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 $72,388 and expenditures were under budget by $240,364. Revenue line items with significant
budget variances include the following:
• Investment earnings were over budget by $71,033 due to improved interest rate returns.
• Intergovernmental revenue was over budget by $89,471, mostly due to more state and local grants and state police aid than
expected.
• Franchise tax revenue was over budgeted amounts by $60,856 to due additional utility accounts and license and permits were
under budget by $60,872 due to nonbusiness licenses and permits being under budget by $55,275.
Expenditure line items with significant budget variances include the following:
• Public safety expenditures were under budget by $127,032, mostly due to personnel services for the police department
coming in under budget by $139,047 .
• Culture and recreation expenditures were under budget by $76,332 to primarily to personnel services and other services and
charges in the parks department being under budget by $36,867 and $30,651 respectively.
In addition, the General fund transfers out were $354,000 more than budget. The transfers out 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, 2019, was
$97,351,460 (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 24.4 percent.
Major capital asset events during the current fiscal year consisted of:
• Multiple vehicle and equipment purchases were made for a total of $348,001.
• Construction in progress increased in 2019 by $21,881,406 relating to the new City Hall building and police station not being
completed. This amount also includes the City’s new Outdoor Pool and Civic Center Park Improvements.
City of New Hope’s Capital Assets
(Net of Depreciation)
Increase Increase
2019 2018 (Decrease)2019 2018 (Decrease)
Land 994,268$ 994,268$ -$ 485,042$ 485,042$ -$
Buildings and Structures 2,398,188 2,663,755 (265,567) 6,149,377 6,361,559 (212,182)
Vehicles and Equipment 2,325,393 2,603,664 (278,271) 399,978 500,309 (100,331)
Improvements other than
Buildings 30,515,845 32,420,271 (1,904,426) 21,224,875 21,249,254 (24,379)
Construction in Progress 32,059,543 10,521,906 21,537,637 798,951 455,182 343,769
Total 68,293,237$ 49,203,864$ 19,089,373$ 29,058,223$ 29,051,346$ 6,877$
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 $56,758,267. Of this amount
$40,433,000 will be paid from general property taxes and $6,582,397 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 $168,067, of which $2,296,665 is restricted for the payment of debt
service and a deficit of $2,464,732 is unassigned. The City made efforts to shift the philosophy for financing major street
improvements away from debt financing to the pay-as-you-go philosophy. The City established the Street and Park Infrastructure
capital projects funds in 2001 with dedicated portions of the property tax levy, thereby reducing the need for this type of debt issuance.
City of New Hope’s Outstanding Debt
Increase Increase
2019 2018 (Decrease)2019 2018 (Decrease)
G.O. Bonds and Certificates 40,433,000$ 35,323,386$ 5,109,614$ 3,509,802$ 3,727,852$ (218,050)$
G.O. Tax Increment Bonds 6,582,397 7,140,876 (558,479) 1,401,536 1,494,575 (93,039)
Lease Revenue Bonds - - - 3,505,000 3,505,000 -
G.O. Revenue Bonds and Notes - - - 1,326,532 1,540,021 (213,489)
Total 47,015,397$ 42,464,262$ 4,551,135$ 9,742,870$ 10,267,448$ (524,578)$
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 2020 and beyond.
• The overall tax levy had an 10.08 percent increase in 2020 primarily related to 2018A and 2019A debt service requirements.
• Management provided a long-term plan to City Council in November that highlighted the tax effect of major capital and
operating decisions. This will also be an important document when preparing future budgets.
• In December 2019, a novel strain of coronavirus (COVID-19) surfaced. The spread of COVID-19 around the world in the
first quarter of 2020 has caused significant volatility in U.S. and international markets. There is significant uncertainty around
the breadth and duration of business disruptions related to COVID-19, as well as its impact on the U.S. and international
economies and, as such, the City is unable to determine if it will have a material impact to its operations.
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, 2019
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City of New Hope, Minnesota
Statement of Net Position
December 31, 2019
Governmental Business-type
Activities Activities Total
Assets
Cash and temporary investments 38,998,183$ 4,716,443$ 43,714,626$
Cash held with fiscal agent - 1,358,401 1,358,401
Receivables
Taxes 149,429 - 149,429
Accrued interest 67,902 - 67,902
Accounts 420,284 1,397,843 1,818,127
Loans 611,753 - 611,753
Special assessments 722,497 199,201 921,698
Internal balances 2,006,870 (2,006,870) -
Due from other governments 2,100,592 56,347 2,156,939
Inventories 62,575 43,007 105,582
Prepaid items 22,980 - 22,980
Land held for resale 582,763 - 582,763
Investment in joint ventures 812,189 168,509 980,698
Capital assets
Land and construction in progress 33,053,811 1,283,993 34,337,804
Depreciable assets (net of accumulated deprecation)35,239,426 27,774,230 63,013,656
Total Assets 114,851,254 34,991,104 149,842,358
Deferred Outflows of Resources
Deferred pension resources 4,422,526 73,354 4,495,880
Deferred other postemployment benefit resources 119,013 24,733 143,746
Total Deferred Outflow of Resources 4,541,539 98,087 4,639,626
Liabilities
Accrued salaries payable 346,226 36,296 382,522
Accounts and contracts payable 2,652,280 203,795 2,856,075
Due to other governments 73,774 255,037 328,811
Accrued interest payable 659,516 73,608 733,124
Deposits payable 18,386 - 18,386
Unearned revenue 13,800 - 13,800
Noncurrent liabilities
Due within one year 1,981,278 525,110 2,506,388
Due in more than one year 45,788,000 9,217,760 55,005,760
Net pension liability 5,859,500 714,103 6,573,603
Other postemployment benefits liability 932,848 193,858 1,126,706
Total Liabilities 58,325,608 11,219,567 69,545,175
Deferred Inflows of Resources
Deferred pension resources 5,499,493 134,165 5,633,658
Deferred other postemployment benefit resources 36,169 7,518 43,687
Resources received in advance 2,061,733 - 2,061,733
Total Deferred Inflows of Resources 7,597,395 141,683 7,739,078
Net Position
Net investment in capital assets 30,139,510 19,315,353 49,454,863
Restricted for
Economic development 4,655,140 - 4,655,140
Debt service 1,834,878 1,358,401 3,193,279
Public safety police expenses 132,730 - 132,730
Ice arena 5,390 - 5,390
Unrestricted 16,702,142 3,054,187 19,756,329
Total Net Position 53,469,790$ 23,727,941$ 77,197,731$
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, 2019
Expenses
Charges for
Services
Operating
Grants and
Contributions
Capital Grants
and
Contributions
Governmental Activities
General government 1,850,242$ 223,379$ 131,982$ -$
Public safety 8,540,198 880,634 411,896 -
Public works 3,816,417 226,249 212,664 809,593
Culture and recreation 2,145,988 529,739 69,947 2,010,230
Economic development 749,651 - - -
Interest on long-term debt 1,412,763 - - -
Total Governmental Activities 18,515,259 1,860,001 826,489 2,819,823
Business-type Activities
Sewer utility 2,834,973 3,380,075 404 -
Water utility 3,762,099 4,675,498 12,129 11,324
Golf course 319,871 296,538 97 -
Ice arena 1,003,048 892,740 1,389 -
Storm water 888,156 1,190,058 289 17,500
Street lighting 116,732 152,975 - -
Total Business-type Activities 8,924,879 10,587,884 14,308 28,824
Total 27,440,138$ 12,447,885$ 840,797$ 2,848,647$
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
Prior period adjustment (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
Activities
Business-type
Activities Total
(1,494,881)$ -$ (1,494,881)$
(7,247,668) - (7,247,668)
(2,567,911) - (2,567,911)
463,928 - 463,928
(749,651) - (749,651)
(1,412,763) - (1,412,763)
(13,008,946) - (13,008,946)
- 545,506 545,506
- 936,852 936,852
- (23,236) (23,236)
- (108,919) (108,919)
- 319,691 319,691
- 36,243 36,243
- 1,706,137 1,706,137
(13,008,946) 1,706,137 (11,302,809)
15,265,428 - 15,265,428
1,317,803 - 1,317,803
957,448 - 957,448
803,035 - 803,035
1,412,308 149,296 1,561,604
369,163 - 369,163
(144,624) 144,624 -
19,980,561 293,920 20,274,481
6,971,615 2,000,057 8,971,672
48,273,517 21,727,884 70,001,401
(1,775,342) - (1,775,342)
53,469,790$ 23,727,941$ 77,197,731$
Net (Expenses) Revenues
and Changes in Net Position
The notes to the financial statements are an integral part of this statement.
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FUND FINANCIAL STATEMENTS
CITY OF NEW HOPE
NEW HOPE, MINNESOTA
FOR THE YEAR ENDED
DECEMBER 31, 2019
39
City of New Hope, Minnesota
Balance Sheet
Governmental Funds
December 31, 2019
9001 9015/9018/9501 9213-9228 9202
Economic
Development HRA City Hall
General Authority Construction CIP
Assets
Cash and temporary investments 6,852,266$ 1,284,402$ 4,466,336$ 2,687,163$
Receivables
Taxes 149,429 - - -
Accrued interest 46,250 9,173 - -
Accounts 248,102 93,762 49,616 -
Loans - 587,500 - -
Special assessments 104,673 11,963 - -
Due from other governments 100,592 - - -
Prepaid items 22,980 - - -
Due from other funds 335,515 65,025 - -
Advances to other funds - 2,153,877 2,008,544 -
Land held for resale - 582,763 - -
Total Assets 7,859,807$ 4,788,465$ 6,524,496$ 2,687,163$
Liabilities
Accrued salaries payable 194,313$ 7,388$ -$ -$
Accounts and contracts payable 187,765 43,839 - 892,869
Due to other governments 65,003 3,187 2,482 -
Deposits payable 18,056 330 - -
Due to other funds - - 65,025 -
Advances from other funds - - 1,801,849 -
Unearned revenue - - - -
Total Liabilities 465,137 54,744 1,869,356 892,869
Deferred Inflows of Resources
Unavailable revenue - taxes 150,294 - - -
Unavailable revenue - special assessments 104,673 11,963 - -
Resources received in advance - - - -
Total Deferred Inflows of Resources 254,967 11,963 - -
Fund Balances
Nonspendable 22,980 - - -
Restricted - - 4,655,140 898,182
Committed - 4,721,758 - -
Assigned - - - 896,112
Unassigned 7,116,723 - - -
Total Fund Balances 7,139,703 4,721,758 4,655,140 1,794,294
Total Liabilities, Deferred Inflows
of Resources, and Fund Balances 7,859,807$ 4,788,465$ 6,524,496$ 2,687,163$
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
2,738,612$ 4,642,697$ 118,998$ 6,076,083$ 28,866,557$
- - - - 149,429
- 7,347 - 5,132 67,902
- - - 24,329 415,809
- - - 24,253 611,753
539,257 - - 66,604 722,497
- 2,000,000 - - 2,100,592
- - - - 22,980
- - - 310,725 711,265
- - - 1,659,873 5,822,294
- - - - 582,763
3,277,869$ 6,650,044$ 118,998$ 8,166,999$ 40,073,841$
-$ -$ -$ -$ 201,701$
136,025 1,244,459 - 11,658 2,516,615
- - 2,522 - 73,194
- - - - 18,386
75,000 - - 231,224 371,249
450,000 - 2,360,572 - 4,612,421
- - - 13,800 13,800
661,025 1,244,459 2,363,094 256,682 7,807,366
- - - - 150,294
539,257 - - 58,797 714,690
2,061,733 88,770 - - 2,150,503
2,600,990 88,770 - 58,797 3,015,487
- - - - 22,980
- 5,316,815 - 2,434,785 13,304,922
- - - 311,797 5,033,555
15,854 - - 5,336,162 6,248,128
- - (2,244,096) (231,224) 4,641,403
15,854 5,316,815 (2,244,096) 7,851,520 29,250,988
3,277,869$ 6,650,044$ 118,998$ 8,166,999$ 40,073,841$
The notes to the financial statements are an integral part of this statement.
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42
City of New Hope, Minnesota
Reconciliation of the Balance Sheet
to the Statement of Net Position
Governmental Funds
December 31, 2019
Total Fund Balances - Governmental Funds 29,250,988$
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 86,674,563
Less: accumulated depreciation (21,299,110)
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 (44,252,170)
Plus: unamortized bond premium (2,763,227)
Pension liability (5,673,280)
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 11,029,727
Internal balances for internal services used by business-type activities 456,981
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 150,294
Special assessments 714,690
State aids 88,770
Governmental funds do not report long-term amounts related to pensions
Deferred outflows of pension resources 4,403,397
Deferred inflows of pension resources (5,464,506)
Governmental funds do not report a liability for accrued interest until due and payable.(659,516)
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.812,189
Total Net Position - Governmental Activities 53,469,790$
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, 2019
9001 9015/9018/9501 9213-9228 9202
Economic
Development HRA City Hall
General Authority Construction CIP
Revenues
Taxes
Property taxes 10,297,018$ 300,000$ -$ -$
Tax increments - - 631,355 -
Franchise taxes 533,213 - - -
Licenses and permits 320,438 - - -
Intergovernmental 1,342,543 - - -
Charges for services 1,064,277 - - -
Fines and forfeitures 227,343 - - -
Special assessments 50,034 1,636 - -
Investment earnings (charges)106,033 94,145 173,273 237,508
Miscellaneous 23,326 - - 49,853
Total Revenues 13,964,225 395,781 804,628 287,361
Expenditures
Current
General government 1,900,480 - - -
Public safety 8,427,487 - - -
Public works 1,564,148 - - -
Culture and recreation 2,032,585 - - -
Economic development - 432,136 81,810 -
Capital outlay
General government 3,967 - - 8,458,695
Public safety 55,081 - - -
Public works - - - -
Culture and recreation - - - -
Economic development - - 208,016 -
Debt service
Principal - - - -
Interest - - - 475
Bond issuance costs - - - -
Total Expenditures 13,983,748 432,136 289,826 8,459,170
Excess (Deficiency) of Revenues
Over (Under) Expenditures (19,523) (36,355) 514,802 (8,171,809)
Other Financing Sources (Uses)
Transfers in 332,275 - 999,500 439,000
Bonds issued - - - -
Premium on bonds issued - - - -
Sale of capital assets - 331,299 - -
Transfers out (354,000) (963,207) (36,934) -
Total Other Financing Sources (Uses)(21,725) (631,908) 962,566 439,000
Net Change in Fund Balances (41,248) (668,263) 1,477,368 (7,732,809)
Fund Balances, January 1 7,180,951 5,109,286 5,233,849 9,527,103
Prior Period Adjustment (Note 7)- 280,735 (2,056,077) -
Fund Balances, December 31 7,139,703$ 4,721,758$ 4,655,140$ 1,794,294$
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
1,397,460$ -$ -$ 3,229,202$ 15,223,680$
- - 686,448 - 1,317,803
424,235 - - - 957,448
- - - - 320,438
693,266 1,911,230 - - 3,947,039
- 41,500 - 270,399 1,376,176
- - - - 227,343
136,660 - - 9,236 197,566
70,191 269,224 (1,317) 217,181 1,166,238
- - - 100,500 173,679
2,721,812 2,221,954 685,131 3,826,518 24,907,410
- - - - 1,900,480
- - - 452 8,427,939
- - - 226,567 1,790,715
- - - - 2,032,585
- - - - 513,946
- - - - 8,462,662
- - - - 55,081
1,540,517 - - 492 1,541,009
- 11,898,929 - 323,193 12,222,122
- - 84,460 500 292,976
- - 404,165 564,509 968,674
12,000 475 120,371 1,139,981 1,273,302
- 90,446 - - 90,446
1,552,517 11,989,850 608,996 2,255,694 39,571,937
1,169,295 (9,767,896) 76,135 1,570,824 (14,664,527)
- - 36,934 354,967 2,162,676
- 5,137,669 - 97,331 5,235,000
- 454,261 - - 454,261
- - - - 331,299
(204,967) - (71,043) (351,800) (1,981,951)
(204,967) 5,591,930 (34,109) 100,498 6,201,285
964,328 (4,175,966) 42,026 1,671,322 (8,463,242)
(948,474) 9,492,781 (2,286,122) 6,180,198 39,489,572
- - - - (1,775,342)
15,854$ 5,316,815$ (2,244,096)$ 7,851,520$ 29,250,988$
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, 2019
Net Change in Fund Balances - Governmental Funds (8,463,242)$
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 21,830,632
Depreciation expense (2,414,924)
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 (148,560)
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 968,674
Bond issued (5,235,000)
Premium on bonds issued (454,261)
Amortization of bond premium 169,452
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.(218,467)
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 41,748
Special assessments (81,239)
State aids 88,770
Long-term pension activity is not reported in governmental funds
Pension expense 406,374
Direct aid contributions 46,404
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 581,573
Less: the change in internal balances for internal services used by business-type activities (146,319)
Change in Net Position - Governmental Activities 6,971,615$
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, 2019
Budgeted Amounts Actual Variance with
Original Final Amounts Final Budget
Revenues
Taxes
Property taxes 10,382,448$ 10,382,448$ 10,297,018$ (85,430)$
Franchise taxes 472,357 472,357 533,213 60,856
Licenses and permits 381,310 381,310 320,438 (60,872)
Intergovernmental 1,253,072 1,253,072 1,342,543 89,471
Charges for services 1,084,650 1,084,650 1,064,277 (20,373)
Fines and forfeitures 250,000 250,000 227,343 (22,657)
Special assessments 30,000 30,000 50,034 20,034
Investment earnings 35,000 35,000 106,033 71,033
Miscellaneous 3,000 3,000 23,326 20,326
Total Revenues 13,891,837 13,891,837 13,964,225 72,388
Expenditures
Current
General government 1,914,638 1,914,638 1,900,480 14,158
Public safety 8,554,519 8,554,519 8,427,487 127,032
Public works 1,563,038 1,563,038 1,564,148 (1,110)
Culture and recreation 2,108,917 2,108,917 2,032,585 76,332
Capital outlay
General government 10,000 10,000 3,967 6,033
Public safety 73,000 73,000 55,081 17,919
Total Expenditures 14,224,112 14,224,112 13,983,748 240,364
Excess (Deficiency) of Revenues
Over (Under) Expenditures (332,275) (332,275) (19,523) 312,752
Other Financing Sources (Uses)
Transfers in 332,275 332,275 332,275 -
Transfers out - - (354,000) (354,000)
Total Other Financing
Sources (Uses)332,275 332,275 (21,725) (354,000)
Net Change in Fund Balances - - (41,248) (41,248)
Fund Balances, January 1 7,180,951 7,180,951 7,180,951 -
Fund Balances, December 31 7,180,951$ 7,180,951$ 7,139,703$ (41,248)$
The notes to the financial statements are an integral part of this statement.
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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, 2019
Actual Variance with
Original Final Amounts Final Budget
Revenues
Taxes
Property taxes 300,000$ 300,000$ 300,000$ -$
Intergovernmental 85,000 85,000 - (85,000)
Special assessments 1,600 1,600 1,636 36
Investment earnings 57,500 57,500 94,145 36,645
Miscellaneous - - - -
Total Revenues 444,100 444,100 395,781 (48,319)
Expenditures
Economic development
Current
Personnel services 344,100 344,100 300,794 43,306
Supplies 300 300 375 (75)
Other services and charges 367,378 367,378 130,967 236,411
Total Expenditures 711,778 711,778 432,136 279,642
Deficiency of Revenues
Under Expenditures (267,678) (267,678) (36,355) 231,323
Other Financing Sources (Uses)
Sale of capital assets - - 331,299 331,299
Transfers out (34,750) (34,750) (963,207) (928,457)
Total Other
Financing Sources (Uses)(34,750) (34,750) (631,908) (597,158)
Net Change in Fund Balances (302,428) (302,428) (668,263) (365,835)
Fund Balances, January 1 5,109,286 5,109,286 5,109,286 -
Prior Period Adjustment (Note 7)280,735 280,735 280,735 -
Fund Balances, December 31 5,087,593$ 5,087,593$ 4,721,758$ (365,835)$
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, 2019
9300 9301 9302 9303
Sewer Utility Water Utility Golf Course Ice Arena
Assets
Current Assets
Cash and temporary investments 1,645,152$ 2,253,701$ 89,136$ 800$
Cash held with fiscal agent - - - 1,358,401
Receivables
Accounts 331,671 867,643 1,720 68,820
Special assessments 53,644 126,501 - -
Due from other governments - 5,589 - 50,758
Inventories - 37,275 5,732 -
Total Current Assets 2,030,467 3,290,709 96,588 1,478,779
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 11,037,801 130,373 -
Vehicles and equipment 607,475 1,392,767 168,678 466,287
Construction in progress 155,147 336,207 10,247 19,026
Less: accumulated depreciation (2,858,046) (3,897,489) (1,046,885) (4,298,794)
Total Capital Assets
(Net of Accumulated Depreciation)4,389,414 8,869,286 486,183 6,125,582
Total Noncurrent Assets 4,389,414 9,037,795 486,183 6,125,582
Total Assets 6,419,881 12,328,504 582,771 7,604,361
Deferred Outflows of Resources
Deferred pension resources 17,816 20,288 4,308 18,199
Deferred other postemployment benefit resources 6,110 4,941 699 4,048
Total Deferred Outflows of Resources 23,926 25,229 5,007 22,247
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, 2019
9300 9301 9302 9303
Sewer Utility Water Utility Golf Course Ice Arena
Liabilities
Current Liabilities
Accrued salaries payable 8,327$ 13,218$ 1,647$ 10,727$
Accounts and contracts payable 24,703 71,300 4,850 72,845
Due to other governments 1,066 236,948 197 15,772
Accrued interest payable 9,471 40,366 - 4,790
Due to other funds 125,000 110,725 - 104,291
Compensated absences payable, current portion - - - -
Bonds and notes payable, current portion 56,115 321,261 - -
Total Current Liabilities 224,682 793,818 6,694 208,425
Noncurrent Liabilities
Advances from other funds 750,000 459,873 - -
Other postemployment benefits payable 47,890 38,728 5,476 31,726
Pension liability 173,440 197,505 41,941 177,161
Compensated absences payable - - - -
Bonds and notes payable 817,632 3,368,978 - 3,505,000
Total Noncurrent Liabilities 1,788,962 4,065,084 47,417 3,713,887
Total Liabilities 2,013,644 4,858,902 54,111 3,922,312
Deferred Inflows of Resources
Deferred pension resources 32,586 37,107 7,880 33,285
Deferred other postemployment benefit resources 1,857 1,502 213 1,230
Total Deferred Inflows of Resources 34,443 38,609 8,093 34,515
Net Position
Net investment in capital assets 3,515,667 5,179,047 486,183 2,620,582
Restricted for debt service - - - 1,358,401
Unrestricted 880,053 2,277,175 39,391 (309,202)
Total Net Position 4,395,720$ 7,456,222$ 525,574$ 3,669,781$
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, 2019
Governmental
Activities -
9304 9305 Internal
Storm Water Street Lighting Totals Service Funds
Assets
Current Assets
Cash and temporary investments 707,844$ 19,810$ 4,716,443$ 10,131,626$
Cash held with fiscal agent - - 1,358,401 -
Receivables
Accounts 119,530 8,459 1,397,843 4,475
Special assessments 16,566 2,490 199,201 -
Due from other governments - - 56,347 -
Inventories - - 43,007 62,575
Total Current Assets 843,940 30,759 7,771,242 10,198,676
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 9,822,498 389,705 27,865,215 -
Vehicles and equipment - - 2,635,207 9,453,933
Construction in progress 278,324 - 798,951 22,997
Less: accumulated depreciation (1,537,186) - (13,638,400) (9,803,089)
Total Capital Assets
(Net of Accumulated Depreciation)8,798,053 389,705 29,058,223 2,917,784
Total Noncurrent Assets 8,798,053 389,705 29,226,732 2,917,784
Total Assets 9,641,993 420,464 36,997,974 13,116,460
Deferred Outflows of Resources
Deferred pension resources 12,743 - 73,354 19,129
Deferred other postemployment benefit resources 8,935 - 24,733 119,013
Total Deferred Outflows of Resources 21,678 - 98,087 138,142
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, 2019
Governmental
Activities -
9304 9305 Internal
Storm Water Street Lighting Totals Service Funds
Liabilities
Current Liabilities
Accrued salaries payable 2,377$ -$ 36,296$ 144,525$
Accounts and contracts payable 21,027 9,070 203,795 135,665
Due to other governments 1,054 - 255,037 580
Accrued interest payable 18,981 - 73,608 -
Due to other funds - - 340,016 -
Compensated absences payable, current portion - - - 75,388
Bonds and notes payable, current portion 147,734 - 525,110 -
Total Current Liabilities 191,173 9,070 1,433,862 356,158
Noncurrent Liabilities
Advances from other funds - - 1,209,873 -
Other postemployment benefits payable 70,038 - 193,858 932,848
Pension liability 124,056 - 714,103 186,220
Compensated absences payable - - - 678,493
Bonds and notes payable 1,526,150 - 9,217,760 -
Total Noncurrent Liabilities 1,720,244 - 11,335,594 1,797,561
Total Liabilities 1,911,417 9,070 12,769,456 2,153,719
Deferred Inflows of Resources
Deferred pension resources 23,307 - 134,165 34,987
Deferred other postemployment benefit resources 2,716 - 7,518 36,169
Total Deferred Inflows of Resources 26,023 - 141,683 71,156
Net Position
Net investment in capital assets 7,124,169 389,705 19,315,353 2,917,784
Restricted for debt service - - 1,358,401 -
Unrestricted 602,062 21,689 3,511,168 8,111,943
Total Net Position 7,726,231$ 411,394$ 24,184,922$ 11,029,727$
Total Net Position - Enterprise Funds 24,184,922$
Adjustment to reflect the consolidation of internal service fund
activities related to the enterprise funds (456,981)
Net Position - Business-type Activities 23,727,941$
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, 2019
9300 9301 9302 9303
Sewer Utility Water Utility Golf Course Ice Arena
Operating Revenues
Charges for services 3,380,075$ 4,387,321$ 282,323$ 852,765$
Billings to departments - - - -
Other - - - -
Total Operating Revenues 3,380,075 4,387,321 282,323 852,765
Operating Expenses
Cost of goods sold 1,841,838 2,558,681 25,534 -
Personnel services 361,191 338,422 135,027 376,422
Supplies 14,601 80,015 26,839 24,557
Utilities 12,074 707 25,649 234,613
Other services and charges 429,262 385,328 77,871 120,413
Depreciation 184,090 356,919 36,502 197,347
Total Operating Expenses 2,843,056 3,720,072 327,422 953,352
Operating Income (Loss)537,019 667,249 (45,099) (100,587)
Nonoperating Revenues (Expenses)
Investment earnings 45,289 50,767 3,434 26,023
Miscellaneous revenues 404 300,306 14,312 41,364
Gain on sale of capital assets - - - -
Interest expense (41,481) (92,522) - (58,182)
Total Nonoperating
Revenues (Expenses)4,212 258,551 17,746 9,205
Income (Loss) Before Contributions
and Transfers 541,231 925,800 (27,353) (91,382)
Capital Contributions - 11,324 - -
Transfers In - - - 300,000
Transfers Out (54,209) (56,526) (10,506) (10,506)
Change in Net Position 487,022 880,598 (37,859) 198,112
Net Position, January 1 3,908,698 6,575,624 563,433 3,471,669
Net Position, December 31 4,395,720$ 7,456,222$ 525,574$ 3,669,781$
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, 2019
Governmental
Activities -
9304 9305 Internal
Storm Water Street Lighting Totals Service Funds
Operating Revenues
Charges for services 1,190,058$ 152,975$ 10,245,517$ -$
Billings to departments - - - 3,740,890
Other - - - 13,172
Total Operating Revenues 1,190,058 152,975 10,245,517 3,754,062
Operating Expenses
Cost of goods sold - - 4,426,053 -
Personnel services 260,129 - 1,471,191 1,023,483
Supplies 6,295 478 152,785 343,108
Utilities - 104,987 378,030 92,663
Other services and charges 363,988 11,147 1,388,009 994,058
Depreciation 243,995 - 1,018,853 677,762
Total Operating Expenses 874,407 116,612 8,834,921 3,131,074
Operating Income (Loss)315,651 36,363 1,410,596 622,988
Nonoperating Revenues (Expenses)
Investment earnings 17,809 5,974 149,296 246,070
Miscellaneous revenues 289 - 356,675 -
Gain on sale of capital assets - - - 37,864
Interest expense (44,092) - (236,277) -
Total Nonoperating
Revenues (Expenses)(25,994) 5,974 269,694 283,934
Income (Loss) Before Contributions
and Transfers 289,657 42,337 1,680,290 906,922
Capital Contributions 17,500 - 28,824 -
Transfers In - - 300,000 -
Transfers Out (23,629) - (155,376) (325,349)
Change in Net Position 283,528 42,337 1,853,738 581,573
Net Position, January 1 7,442,703 369,057 22,331,184 10,448,154
Net Position, December 31 7,726,231$ 411,394$ 24,184,922$ 11,029,727$
Change in Net Position - Enterprise Funds 1,853,738$
Adjustment to reflect the consolidation of internal service fund activities related to
the enterprise funds.146,319
Change in Net Position - Business-type Activities 2,000,057$
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, 2019
9300 9301 9302 9303
Sewer Utility Water Utility Golf Course Ice Arena
Cash Flows from Operating Activities
Receipts from customers and users 3,370,462$ 4,380,302$ 280,812$ 960,469$
Receipts from interfund services provided - - - -
Other operating receipts - 299,846 14,215 40,951
Payments to suppliers (2,222,978) (2,978,034) (155,557) (347,746)
Payments to employees (363,134) (332,612) (133,038) (364,533)
Net Cash Provided (Used)
by Operating Activities 784,350 1,369,502 6,432 289,141
Cash Flows From Noncapital
Financing Activities
Receipts on interfund balances - - - 104,291
Payments on interfund balances - - - (433,656)
Transfers in - - - 300,000
Transfers out (54,209) (56,526) (10,506) (10,506)
Net Cash Provided (Used) by
Noncapital Financing Activities (54,209) (56,526) (10,506) (39,871)
Cash Flows from Capital
and Related Financing Activities
Acquisition of capital assets (101,743) (375,814) (10,246) (19,390)
Proceeds from sale of assets - - - -
Payment of advance from other funds (125,000) (109,077) - -
Capital contributions - 11,324 - -
Principal paid on long-term debt (54,932) (310,061) - -
Interest paid on long-term debt (43,403) (102,139) - (58,182)
Net Cash Provided (Used) by
Capital and Related
Financing Activities (325,078) (885,767) (10,246) (77,572)
Cash Flows from Investing Activities
Investment earnings 45,289 50,767 3,434 26,023
Net Increase (Decrease)
in Cash and Cash Equivalents 450,352 477,976 (10,886) 197,721
Cash and Cash Equivalents, January 1 1,194,800 1,775,725 100,022 1,161,480
Cash and Cash Equivalents, December 31 1,645,152$ 2,253,701$ 89,136$ 1,359,201$
Reconciliation to the Proprietary Funds
Statement of Net Position
Cash and temporary investments 1,645,152$ 2,253,701$ 89,136$ 800$
Cash held with fiscal agent - - - 1,358,401
Total Cash and Cash Equivalents 1,645,152$ 2,253,701$ 89,136$ 1,359,201$
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, 2019
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)537,019$ 667,249$ (45,099)$ (100,587)$
Adjustments to reconcile operating income (loss)
to net cash provided (used) by operating activities
Depreciation 184,090 356,919 36,502 197,347
Other income related to operations 404 300,306 14,312 41,364
(Increase) decrease in assets
Receivables
Accounts (7,501) (80,576) (1,511) 110,968
Special assessments (2,112) (4,690) - -
Due from other governments - 78,247 - (3,264)
Inventories - 4,801 (502) -
Prepaid items - 340 - -
(Increase) decrease in deferred outflows of resources
Deferred pension resources 16,881 17,608 3,235 13,827
Deferred other postemployment benefit resources (6,110) (4,941) (699) (4,048)
Increase (decrease) in liabilities
Accounts and contracts payable 80,017 (10,350) 1,501 32,853
Accrued salaries payable 623 3,692 489 1,425
Due to other governments 1,066 57,027 133 3,305
Compensated absences payable - - - -
Other postemployment benefits payable 11,203 8,372 (111) 4,609
Pension liability (14,100) (7,324) 1,169 4,056
Increase (decrease) in deferred inflows of resources
Deferred pension resources (16,954) (16,998) (2,890) (12,441)
Deferred other postemployment benefit resources (176) (180) (97) (273)
Net Cash Provided (Used)
by Operating Activities 784,350$ 1,369,502$ 6,432$ 289,141$
Schedule of Noncash Capital and
Related Financing Activities
Amortization of bond discount -$ -$ -$ -$
Amortization of bond premium 1,363$ 5,631$ -$ -$
Capital assets purchased on account -$ 21,783$ -$ 19,206$
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, 2019
Governmental
Activities -
9304 9305 Internal
Storm Water Street Lighting Totals Service Funds
Cash Flows from Operating Activities
Receipts from customers and users 1,176,896$ 153,313$ 10,322,254$ -$
Receipts from interfund services provided - - - 3,741,273
Other operating receipts - - 355,012 12,738
Payments to suppliers (338,151) (115,766) (6,158,232) (1,396,697)
Payments to employees (217,483) - (1,410,800) (881,539)
Net Cash Provided (Used)
by Operating Activities 621,262 37,547 3,108,234 1,475,775
Cash Flows from Noncapital
Financing Activities
Receipts on interfund balances - - 104,291 -
Payments on interfund balances - - (433,656) -
Transfers in - - 300,000 -
Transfers out (23,629) - (155,376) (325,349)
Net Cash Provided (Used) by
Noncapital Financing Activities (23,629) - (184,741) (325,349)
Cash Flows from Capital
and Related Financing Activities
Acquisition of capital assets (313,071) (337,771) (1,158,035) (351,427)
Proceeds from sale of assets - - - 37,864
Payment of advance from other funds - - (234,077) -
Capital contributions 17,500 - 28,824 -
Principal paid on long-term debt (150,333) - (515,326) -
Interest paid on long-term debt (47,949) - (251,673) -
Net Cash Provided (Used) by
Capital and Related
Financing Activities (493,853) (337,771) (2,130,287) (313,563)
Cash Flows from Investing Activities
Investment earnings 17,809 5,974 149,296 246,070
Net Increase (Decrease)
in Cash and Cash Equivalents 121,589 (294,250) 942,502 1,082,933
Cash and Cash Equivalents, January 1 586,255 314,060 5,132,342 9,048,693
Cash and Cash Equivalents, December 31 707,844$ 19,810$ 6,074,844$ 10,131,626$
Reconciliation to the Proprietary Funds
Statement of Net Position
Cash and temporary investments 707,844$ 19,810$ 4,716,443$ 10,131,626$
Cash held with fiscal agent - - 1,358,401 -
Total Cash and Cash Equivalents 707,844$ 19,810$ 6,074,844$ 10,131,626$
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, 2019
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)315,651$ 36,363$ 1,410,596$ 622,988$
Adjustments to reconcile operating income (loss)
to net cash provided (used) by operating activities
Depreciation 243,995 - 1,018,853 677,762
Other income related to operations 289 - 356,675 -
(Increase) decrease in assets
Receivables
Accounts (11,789) 532 10,123 383
Special assessments (1,373) (194) (8,369) -
Due from other governments - - 74,983 -
Inventories - - 4,299 7,570
Prepaid items - - 340 -
(Increase) Decrease in deferred outflows of resources
Deferred pension resources 11,238 - 62,789 9,825
Deferred other postemployment benefit resources (8,935) - (24,733) (119,013)
Increase (decrease) in liabilities
Accounts and contracts payable 38,527 846 143,394 60,158
Accrued salaries payable (230) - 5,999 28,409
Due to other governments 1,054 - 62,585 (48,474)
Compensated absences payable - - - 39,496
Other postemployment benefits payable 47,847 - 71,920 178,915
Pension liability (5,566) - (21,765) 29,720
Increase (decrease) in deferred inflows of resources
Deferred pension resources (10,932) - (60,215) (6,352)
Deferred other postemployment benefit resources 1,486 - 760 (5,612)
Net Cash Provided (Used)
by Operating Activities 621,262$ 37,547$ 3,108,234$ 1,475,775$
Schedule of Noncash Capital and
Related Financing Activities
Amortization of bond discount 740$ -$ 740$ -$
Amortization of bond premium 2,998$ -$ 9,992$ -$
Capital assets purchased on account -$ -$ 40,989$ -$
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.
59
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BLANK INTENTIONALLY
60
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2019
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 and proprietary funds. 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, 2019
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. 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, 2019
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 type:
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.
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, 2019
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 equivalents for purposes of the Statements of Cash Flows, including the cash held
with fiscal agent.
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, 2019
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, 2019:
• U.S. Government Agency Securities of $4,710,990 are valued using a matrix pricing model (Level 2 inputs).
• State and local government securities of $1,013,960 are valued using a matrix pricing model (Level 2 inputs).
• Negotiable certificates of deposit of $5,095,879 are valued using a matrix pricing model (Level 2 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 2019. 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, 2019, the total delinquent special assessment receivable balance was $92,689.
65
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2019
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, 2019
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 two items which
qualify for reporting in this category. Accordingly, the items, deferred pension resources and deferred other postemployment benefit
resources, are reported only in the statement of net position. These items result from actuarial calculations and current year pension
contributions and OPEB contributions made subsequent to the measurement dates.
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 GERP, PEPFP, and PEDCP is as follows:
Public Employees Retirement
Association of Minnesota (PERA)Total All
GERP PEPFP PEDCP Plans
Pension Expense 419,081$ 943,538$ 2,606$ 1,365,225$
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, 2019
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, 2019. 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, 2019
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, 2019
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, 2019, 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
Nonmajor Governmental
Solid Waste Management 224,735$ 225,116$ 381$
Fund
C. Deficit Fund Equity
The following funds had fund balance or net position deficits at December 31, 2019:
Amount
Major Governmental
HRA Bonds 2,244,096$
Nonmajor Governmental
2016 Street Improvement Project 10,588
2018A G.O. Improvement Bonds 220,636
Internal Service
Insurance Reserve 401,097
Fund
The City plans to fund these deficits with future tax increment receipts, transfers, tax levy receipts and special assessment collections.
70
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2019
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.
Minnesota statutes require that all City deposits be protected by insurance, surety bond or collateral. The fair value of collateral
pledged must equal 110 percent of the deposits not covered by insurance or bonds, with the exception of irrevocable standby letters of
credit issued by Federal Home Loan Banks as this type of collateral only requires collateral pledged equal to 100 percent of the
deposits not covered by insurance or bonds.
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 $12,090,661 and the bank balance was $12,154,758. At
December 31, 2019, 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.
71
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2019
Note 3: Detailed Notes on All Funds (Continued)
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.
As of December 31, 2019, 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 1 year 17,173,632$
Broker Money Market Funds N/A Less than 1 year 3,640,310
Total Money Market Funds 20,813,942
Non-pooled Investments at Fair Value
Negotiable Certificates of Deposit N/A Less than 1 year 1,333,362 -$ 1,333,362$ -$
Negotiable Certificates of Deposit N/A 1 to 5 years 3,762,517 - 3,762,517 -
U.S. Government Agency Securities AA+Less than 1 year 1,002,699 - 1,002,699 -
U.S. Government Agency Securities AA+1 to 5 years 3,706,614 - 3,706,614 -
U.S. Government Agency Securities N/A More than 5 years 1,677 - 1,677 -
State and Local Government Securities A+Less than 1 year 500,910 - 500,910 -
State and Local Government Securities AA+1 to 5 years 513,050 - 513,050 -
U.S. Treasury Securities N/A More than 5 years 1,345,000 - - -
Total Investments 32,979,771$ -$ 10,820,829$ -$
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, 2019
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, 2019, except as described in note 3 below for the
Minnesota Municipal Money Market fund:
Unfunded Redemption Redemption
Fair Value Commitments Frequency Notice Period
Broker Money Market Funds
UBS Select Prime Institutional Fund (1)3,155,023$ -$ Daily None Required
Invesco Government and Agency Fund (2)14,018,609 - Daily None Required
Minnesota Municipal Money Market Fund (3)3,640,310 - Daily None Required
20,813,942$ -$
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 12,090,661$
Investments 32,979,771
Petty Cash 2,595
Total 45,073,027$
Statement of Net Position
Cash and temporary investments 43,714,626$
Cash held with fiscal agent 1,358,401
Total 45,073,027$
B. Receivables
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, 2019 totaled $587,500. Loans receivable in nonmajor governmental funds total $24,253.
73
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2019
Note 3: Detailed Notes on All Funds (Continued)
C. Capital Assets
Capital asset activity for the year ended December 31, 2019 was as follows:
Beginning Ending
Balance Increases Decreases Balance
Governmental Activities
Capital Assets not being Depreciated
Land 994,268$ -$ -$ 994,268$
Construction in progress 10,521,906 21,853,628 (315,991) 32,059,543
Total Capital Assets not
being Depreciated 11,516,174 21,853,628 (315,991) 33,053,811
Capital Assets, being Depreciated
Buildings and structures 9,367,855 - - 9,367,855
Vehicles and equipment 10,734,356 328,431 (222,956) 10,839,831
Improvements other than buildings 45,817,948 315,991 - 46,133,939
Total Capital Assets
being Depreciated 65,920,159 644,422 (222,956) 66,341,625
Less Accumulated Depreciation for
Buildings and structures (6,704,100) (265,567) - (6,969,667)
Vehicles and equipment (8,130,692) (606,702) 222,956 (8,514,438)
Improvements other than buildings (13,397,677) (2,220,417) - (15,618,094)
Total Accumulated Depreciation (28,232,469) (3,092,686) 222,956 (31,102,199)
Total Capital Assets
being Depreciated, Net 37,687,690 (2,448,264) - 35,239,426
Governmental Activities
Capital Assets, Net 49,203,864$ 19,405,364$ (315,991)$ 68,293,237$
74
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2019
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 455,182 1,006,160 (662,391) 798,951
Total Capital Assets
not being Depreciated 940,224 1,006,160 (662,391) 1,283,993
Capital Assets being Depreciated
Buildings and structures 10,912,208 - - 10,912,208
Improvements other than buildings 27,202,824 662,391 - 27,865,215
Vehicles and equipment 2,615,637 19,570 - 2,635,207
Total Capital Assets
being Depreciated 40,730,669 681,961 - 41,412,630
Less Accumulated Depreciation for
Buildings and structures (4,550,649) (212,182) - (4,762,831)
Improvements other than buildings (5,953,570) (686,770) - (6,640,340)
Vehicles and equipment (2,115,328) (119,901) - (2,235,229)
Total Accumulated
Depreciation (12,619,547) (1,018,853) - (13,638,400)
Total Capital Assets
being Depreciated, Net 28,111,122 (336,892) - 27,774,230
Business-type Activities
Capital Assets, Net 29,051,346$ 669,268$ (662,391)$ 29,058,223$
75
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2019
Note 3: Detailed Notes on All Funds (Continued)
Depreciation expense was charged to functions/programs of the City as follows:
Governmental Activities
General government 85,668$
Public safety 63,825
Public works 1,946,364
Culture and recreation 319,067
Internal service 677,762
Total Depreciation Expense - Governmental Activities 3,092,686$
Business-type Activities
Sewer utility 184,090$
Water utility 356,919
Golf course 36,502
Ice arena 197,347
Storm water 243,995
Total Depreciation Expense - Business-type Activities 1,018,853$
Construction Commitments
The City has active construction projects as of December 31, 2019. 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$
North Water Tower Paint 435,650 28,350
Police Station & City Hall 16,279,229 1,688,052
Watermain replacement 219,210 20,470
Park projects 1,796,180 468,358
Master Pool 8,090,201 3,322,821
Winpark Drive infrastructure improvements 1,440,252 224,651
Total 28,321,956$ 5,775,633$
Project
76
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2019
Note 3: Detailed Notes on All Funds (Continued)
D. Interfund Receivables, Payables, and Transfers
The composition of internal balances as of December 31, 2019 is as follows:
Purpose Amount
Due from/to other funds
Governmental Governmental
General fund Nonmajor governmental Cash deficit coverage 231,224$
Economic Development Authority HRA Construction Finance capital purchase 65,025
Nonmajor governmental Street Infrastructure Finance capital purchase 75,000
Governmental Business-type
General fund Ice Arena Cash flow 104,291
Nonmajor governmental Sewer Utility Construction financing 125,000
Nonmajor governmental Water Utility Construction financing 110,725
Total Due From/To Other Funds 711,265$
Advances to/from other funds
Governmental Governmental
Economic Development Authority HRA Construction Finance capital purchase 1,801,849$
Economic Development Authority HRA Bonds Finance capital purchase 352,028
HRA Construction HRA Bonds Finance capital purchase 2,008,544
Nonmajor governmental Street Infrastructure Finance capital purchase 450,000
Governmental Business-type
Nonmajor governmental Sewer Utility Construction financing 750,000
Nonmajor governmental Water Utility Construction financing 459,873
Total Advances To/From Other Funds 5,822,294
Interfund Activity Eliminated From Government-wide Statements (4,983,670)
Internal Service Fund Activities Related to the Enterprise Funds 456,981
Total Internal Balances - Government-wide Statements 2,006,870$
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, 2019, the balance
outstanding was $1,801,849. 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, 2019, the balance outstanding was $459,873. 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, 2019, the balance outstanding was $750,000. 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, 2019, the balance outstanding was $450,000. In 2017, the General fund loaned the Ice Arena fund
$433,656 for cash flow purposes, the balance on the loan is $104,291 and will be paid back in 2020. The Economic Development
Authority fund and the HRA Construction fund loaned the HRA Bonds fund $352,028 and $2,008,544 respectively for the purchase of
the Hy-Vee property. The interfund loan matures in 2042 and carries an interest rate of 4.00 percent.
77
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2019
Note 3: Detailed Notes on All Funds (Continued)
Interfund transfers at December 31, 2019 are as follows:
Transfer In
Ice
HRA City Hall HRA Nonmajor Arena
General Construction CIP Bonds Governmental Enterprise Total
Transfer Out
General -$ -$ 204,000$ -$ 150,000$ -$ 354,000$
Economic Development Authority 34,750 928,457 - - - - 963,207
HRA Construction - - - 36,934 - - 36,934
Street Infrastructure - - - - 204,967 - 204,967
HRA Bonds - 71,043 - - - - 71,043
Nonmajor Governmental 51,800 - - - - 300,000 351,800
Sewer Utility Enterprise 54,209 - - - - - 54,209
Water Utility Enterprise 56,526 - - - - - 56,526
Golf Course Enterprise 10,506 - - - - - 10,506
Ice Arena Enterprise 10,506 - - - - - 10,506
Storm Water Enterprise 23,629 - - - - - 23,629
Internal Service 90,349 - 235,000 - - - 325,349
Total Transfers 332,275$ 999,500$ 439,000$ 36,934$ 354,967$ 300,000$ 2,462,676$
Fund
• The General fund transferred $150,000 to the Nonmajor Governmental funds to fund the Fire Capital Projects fund. The
General fund also transferred $204,000 to the City Hall CIP Fund for project expenditures
• 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 $34,750, $51,800, $54,209, $56,526, $10,506, $10,506, $23,629, and
$90,349, respectively, to the General fund to cover administrative charges paid for by the General fund.
• The Economic Development Authority fund transferred $928,457 to the HRA Construction fund for tax increment interest
charges and reimburse tax increment districts.
• The HRA Construction fund transferred $36,934 to the HRA Bonds fund to reimburse expenditures.
• The Street Infrastructure fund transferred $2,230 to the nonmajor governmental Xylon Avenue Improvements capital projects
fund and $202,737 to the nonmajor governmental 2017 Street Improvement Project Capital Projects fund to reimburse
project costs.
• The HRA Bonds fund transferred $71,043 to the HRA Construction fund to reimburse the funds for tax increment project
costs.
• The Nonmajor Governmental Park Infrastructure fund transferred $300,000 to the Ice Arena Enterprise fund to reimburse
costs.
• The Internal Service Fund transferred $235,000 to the City Hall CIP fund to purchase equipment for the new City Hall
facility.
78
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2019
Note 3: Detailed Notes on All Funds (Continued)
E. Long-term D ebt
General Obligation (G.O.) Bonds
The City issues G.O. bonds to provide funds for the acquisition and construction of major capital facilities. G.O. bonds have been
issued for both governmental and business-type activities. These bonds are reported in the proprietary funds if they are expected to be
repaid from proprietary fund revenues.
The following G.O. bonds will be repaid from future tax levies.
Authorized Issue Maturity Balance at
and Issued Date Date Year End
2010B G.O. Certificates of
Indebtedness 1,245,000$ 2.00 - 2.60 %11/23/10 02/01/20 150,000$
G.O. Street Reconstruction
Bonds, Series 2015B 3,825,000 2.25 - 3.00 12/30/15 02/01/31 3,195,000
G.O. Street Reconstruction
Bonds, Series 2016A 4,855,000 2.25 - 3.00 12/29/16 02/01/33 4,595,000
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
G.O. Tax Abatement
Bonds, Series 2019A 5,235,000 3.00 - 4.00 07/18/19 02/01/35 5,235,000
Total General Obligation Bonds 41,130,000$
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
2020 1,334,113$ 1,374,187$ 2,708,300$ 215,887$ 95,163$ 311,050$
2021 1,964,734 1,303,423 3,268,157 220,266 88,620 308,886
2022 2,038,688 1,221,372 3,260,060 231,312 81,847 313,159
2023 2,132,218 1,125,983 3,258,201 237,782 74,810 312,592
2024 2,233,459 1,028,748 3,262,207 246,541 67,546 314,087
2025 - 2029 12,596,118 3,694,897 16,291,015 1,323,882 231,978 1,555,860
2030 - 2034 14,211,742 1,333,541 15,545,283 908,258 47,050 955,308
2035 1,235,000 19,525 1,254,525 - - -
Total 37,746,072$ 11,101,676$ 48,847,748$ 3,383,928$ 687,014$ 4,070,942$
Governmental Activities Business-type Activities
79
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2019
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 $709,096 and $686,448, respectively.
Authorized Issue Maturity Balance at
and Issued Date Date Year End
G.O. Tax Increment Refunding
Bonds, Series, 2012A 2,695,000$ 2.00 - 2.45 %01/11/12 02/01/25 1,555,000$
G.O. Taxable Tax Increment
Refunding Bonds, Series, 2012B 1,330,000 1.35 - 4.65 01/11/12 02/01/31 1,065,000
G.O. Tax Increment
Bonds, Series, 2015A 5,960,000 2.00 - 3.00 06/17/15 02/01/32 5,270,000
Total G.O. Tax Increment Bonds 7,890,000$
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
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 638,899 111,906 750,805 101,101 25,359 126,460
2025 - 2029 2,281,670 355,041 2,636,711 538,330 90,271 628,601
2030 - 2032 1,205,238 54,965 1,260,203 359,762 16,387 376,149
Total 6,506,098$ 1,105,099$ 7,611,197$ 1,383,902$ 253,057$ 1,636,959$
Governmental Activities Business-type Activities
80
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2019
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 $58,182 and $852,765, respectively.
Authorized Issue Maturity Balance at
and Issued Date Date Year End
2011A Taxable Lease
Revenue Bonds 3,505,000$ 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
2020 -$ 57,482$ 57,482$
2021 - 57,482 57,482
2022 - 57,482 57,482
2023 - 57,482 57,482
2024 - 57,482 57,482
2025 - 2028 3,505,000 229,928 3,734,928
Total 3,505,000$ 517,338$ 4,022,338$
Business-type Activities
81
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2019
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 $98,335 and $3,380,075, respectively. Principal and interest paid for the current year and total
customer revenues for the Water Utility fund were $412,200 and $4,387,321, respectively. Principal and interest paid for the current
year and total customer revenues for the Storm Water fund were $198,282 and $1,190,058, respectively.
Authorized Issue Maturity Balance at
and Issued Date Date Year End
2010A G.O. Utility Revenue
Bonds 1,200,000$ 2.00 - 3.25 %05/06/10 02/01/21 170,000$
2010B G.O. Water Revenue
Refunding Bonds 605,000 2.00 - 3.00 11/23/10 02/01/22 180,000
2011 G.O. Public Facilities
Authority Note 411,738 1.70 02/23/11 08/20/29 233,000
2013 G.O. Public Facilities
Authority Note 1,035,000 1.00 07/24/13 08/20/32 742,000
Total G.O. Revenue Bonds and Notes 1,325,000$
Rate
Interest
Description
The annual debt service to maturity for G.O. revenue bonds are as follows:
Year Ending
December 31,Principal Interest Total
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 79,000 7,692 86,692
2025 - 2029 409,000 23,977 432,977
2030 - 2032 180,000 3,619 183,619
Total 1,325,000$ 89,158$ 1,414,158$
Business-type Activities
82
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2019
Note 3: Detailed Notes on All Funds (Continued)
Changes in Long-term Liabilities
Long-term liability activity for the year ended December 31, 2019, was as follows:
Beginning Ending Due Within
Balance Increases Decreases Balance One Year
Governmental Activities
Bonds Payable
G.O. bonds and certificates 32,926,656$ 5,235,000$ (415,584)$ 37,746,072$ 1,334,113$
G.O. tax increment bonds 7,059,188 - (553,090) 6,506,098 571,777
Add: premiums on bonds 2,478,418 454,261 (169,452) 2,763,227 -
Total Bonds Payable, Net 42,464,262 5,689,261 (1,138,126) 47,015,397 1,905,890
Compensated Absences Payable 714,385 1,270,439 (1,230,943) 753,881 75,388
Governmental Activity
Long-term Liabilities 43,178,647$ 6,959,700$ (2,369,069)$ 47,769,278$ 1,981,278$
Business-type Activities
Bonds Payable
G.O. bonds 3,593,344$ -$ (209,416)$ 3,383,928$ 215,887$
G.O. tax increment bonds 1,475,812 - (91,910) 1,383,902 93,223
Lease revenue bonds 3,505,000 - - 3,505,000 -
G.O. revenue bonds and notes 1,539,000 - (214,000) 1,325,000 216,000
Add: premiums on bonds 155,835 - (9,992) 145,843 -
Less: bond discount (1,543) - 740 (803) -
Business-type Activity
Long-term Liabilities 10,267,448$ -$ (524,578)$ 9,742,870$ 525,110$
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, 2019
Note 3: Detailed Notes on All Funds (Continued)
F. Components of Fund Balance
At December 31, 2019, 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 22,980$ -$ -$ -$
Restricted for
Economic development -$ -$ 4,655,140$ -$
Capital improvements - - - 898,182
Total Restricted -$ -$ 4,655,140$ 898,182$
Committed to
Economic development -$ 4,721,758$ -$ -$
Assigned to
City hall improvements -$ -$ -$ 896,112$
Purpose
84
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2019
Note 3: Detailed Notes on All Funds (Continued)
Park/Pool Other
Street Improvement Governmental
Infrastructure Project Funds Total
Nonspendable
Prepaid items -$ -$ -$ 22,980$
Restricted for
Economic development -$ -$ -$ 4,655,140$
Debt service - - 2,296,665 2,296,665
Capital improvements - 5,316,815 - 6,214,997
Public safety
Police expenditures - - 132,730 132,730
Ice arena - - 5,390 5,390
Total Restricted -$ 5,316,815$ 2,434,785$ 13,304,922$
Committed to
Solid waste operations -$ -$ 215,384$ 215,384$
Economic development - - 96,413 4,818,171
Total Committed -$ -$ 311,797$ 5,033,555$
Assigned to
Street improvements 15,854$ -$ -$ 15,854$
General improvements - - 3,177,766 3,177,766
Capital equipment - - 790,218 790,218
City hall improvements - - - 896,112
Park improvements - - 1,368,178 1,368,178
Total Assigned 15,854$ -$ 5,336,162$ 6,248,128$
Purpose
85
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2019
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 Plan (GERP)
All full-time and certain part-time employees of the City, are covered by the General Employees Retirement Plan (GERP). GERP
members belong to the Coordinated Plan. Coordinated Plan members are covered by Social Security.
Public Employees Police and Fire Plan (PEPFP)
The PEPFP, 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 PEPFP 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 state statute and can only be modified
by the state legislature. Vested, terminated employees who are entitled to benefits but are not receiving them yet are bound by the
provisions in effect at the time they last terminated their public service.
GERP Benefits
GERP 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.
Annuities, disability benefits and survivor benefits are increased effective every January 1. Beginning January 1, 2019, the
postretirement increase will be equal to 50 percent of the cost-of-living adjustment (COLA) announced by the SSA, with a minimum
increase of at least 1 percent and a maximum of 1.5 percent. Recipients that have been receiving the annuity or benefit for at least a
full year as of the June 30 before the effective date of the increase will receive the full increase. For recipients receiving the annuity or
benefit for at least one month but less than a full year as of the June 30 before the effective date of the increase will receive a reduced
prorated increase. For members retiring on January 1, 2024, or later, the increase will be delayed until normal retirement age (age 65 if
hired prior to July 1, 1989, or age 66 for individuals hired on or after July 1, 1989). Members retiring under Rule of 90 are exempt
from the delay to normal retirement.
86
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2019
Note 4: Defined Benefit Pension Plans - Statewide (Continued)
PEPFP Benefits
Benefits for the PEPFP 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 PEPFP 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
3.0 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.
Annuities, disability benefits and survivor benefits are increased effective every January 1. Beginning January 1, 2019, the
postretirement increase will be fixed at 1 percent. Recipients that have been receiving the annuity or benefit for at least 36 months as
of the June 30 before the effective date of the increase will receive the full increase. For recipients receiving the annuity or benefit for
at least 25 one months but less than 36 months as of the June 30 before the effective date of the increase will receive a reduced
prorated increase.
3. Contributions
Minnesota statutes, chapter 353 sets the rates for employer and employee contributions. Contribution rates can only be modified by
the state Legislature.
General Employees Fund Contributions
Coordinated Plan members were required to contribute 6.50 percent of their annual covered salary and the City was required to
contribute 7.50 percent for Coordinated Plan members. The City’s contributions to the General Employees Fund for the years ending
December 31, 2019, 2018 and 2017 were $328,429, $310,638 and $286,170, respectively. The City’s contributions were equal to the
required contributions for each year as set by state statute.
Police and Fire Fund Contributions
Police and Fire member’s contribution rates increased from 10.80 percent of pay to 11.30 percent and employer rates increased from
16.20 percent to 16.95 percent on January 1, 2019. The City’s contributions to the Police and Fire Fund for the years ending
December 31, 2019, 2018 and 2017 were $550,665, $502,203, and $489,202, respectively. The City’s contributions were equal to the
required contributions for each year as set by state statute.
4. Pension Costs
General Employees Fund Pension Costs
At December 31, 2019, the City reported a liability of $3,367,025 for its proportionate share of the General Employees Fund’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 2019. 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 $104,662. The net pension liability was measured as of June 30, 2019, and the total pension liability used to calculate the
net pension liability was determined by an actuarial valuation as of that date. The City’s proportionate share of the net pension liability
was based on the City’s contributions received by PERA during the measurement period for employer payroll paid dates from
July 1, 2018 through June 30, 2019 relative to the total employer contributions received from all of PERA’s participating employers.
At June 30, 2019, the City’s proportionate share was 0.0609 percent which was an increase of 0.001 percent from its proportion
measured as of June 30, 2018.
City's Proportionate Share of the Net Pension Liability 3,367,025$
State of Minnesota's Proportionate Share of the Net Pension
Liability Associated with the City 104,662
Total 3,471,687$
87
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2019
Note 4: Defined Benefit Pension Plans - Statewide (Continued)
For the year ended December 31, 2019, the City recognized pension expense of $411,243 for its proportionate share of GERF’s
pension expense. In addition, the City recognized an additional $7,838 as pension expense (and grant revenue) for its proportionate
share of the State of Minnesota’s contribution of $16 million to the GERF.
At December 31, 2019, the City reported its proportionate share of the General Employees Plan’s deferred outflows of resources and
deferred inflows of resources, and its contributions subsequent to the measurement date, from the following sources:
Deferred Deferred
Outflows Inflows
of Resources of Resources
Differences between Expected and
Actual Economic Experience 93,546$ 13,645$
Changes in Actuarial Assumptions 7,419 265,361
Net Difference between Projected and
Actual Earnings on Plan Investments - 323,097
Changes in Proportion 82,094 30,488
Contributions to GERF Subsequent
to the Measurement Date 162,811 -
Total 345,870$ 632,591$
Deferred outflows of resources totaling $162,811 related to pensions resulting from the City’s contributions subsequent to the
measurement date will be recognized as a reduction of the net pension liability in the year ended December 31, 2020. Other amounts
reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows:
2020 (174,619)$
2021 (231,017)
2022 (49,322)
2023 5,426
Police and Fire Fund Pension Costs
At December 31, 2019, the City reported a liability of $3,206,578 for its proportionate share of the Police and Fire Fund’s net pension
liability. The net pension liability was measured as of June 30, 2019, 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, 2018
through June 30, 2019 relative to the total employer contributions received from all of PERA’s participating employers. At
June 30, 2019, the City’s proportionate share was 0.3012 percent which was an increase of 0.0124 percent from its proportion
measured as of June 30, 2018.
For the year ended December 31, 2019, the City recognized pension expense of $902,876 for its proportionate share of the Police and
Fire Plan’s pension expense. The City also recognized $40,662 for the year ended December 31, 2019, as revenue and an offsetting
reduction of net pension liability for its proportionate share of the State of Minnesota’s on-behalf contributions to the Police and Fire
Fund. Legislation passed in 2013 required the State of Minnesota to begin contributing $9 million to the Police and Fire Fund each
year until the plan is 90 percent funded or until the State Patrol Plan (administered by the Minnesota State Retirement System) is 90
percent funded, whichever occurs later. In addition, the state will pay $4.5 million on October 1, 2018 and October 1, 2019 in direct
state aid. Thereafter, by October 1 of each year, the state will pay $9 million until full funding is reached or July 1, 2048, whichever is
earlier.
88
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2019
Note 4: Defined Benefit Pension Plans - Statewide (Continued)
At December 31, 2019, the City reported its proportionate share of Police and Fire Plan’s deferred outflows of resources and deferred
inflows of resources, and its contributions subsequent to the measurement date, from the following sources:
Deferred Deferred
Outflows Inflows
of Resources of Resources
Differences between Expected and
Actual Economic Experience 149,177$ 554,606$
Changes in Actuarial Assumptions 2,880,443 3,723,299
Net Difference between Projected nd
Actual Earnings on Plan Investments - 617,797
Changes in Proportion 842,959 105,365
Contributions to PEPFF Subsequent
to the Measurement Date 277,431 -
Total 4,150,010$ 5,001,067$
The $277,431 reported as deferred outflows of resources related to pensions resulting from the City’s contributions subsequent to the
measurement date will be recognized as a reduction of the net pension liability in the year ended December 31, 2020. Other amounts
reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows:
2020 147,643$
2021 (145,113)
2022 (1,200,829)
2023 37,446
2024 32,365
5. Actuarial Assumptions
The total pension liability in the June 30, 2019 actuarial valuation was determined using an individual entry-age normal actuarial cost
method and 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 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 General Employees Plan and 1.0 percent per year for
Police and Fire Plan.
Actuarial assumptions used in the June 30, 2019 valuation were based on the results of actuarial experience studies. The most recent
four-year experience study in the General Employees Plan was completed in 2019. The most recent four-year experience study for the
Police and Fire Plan was completed in 2016. Economic assumptions were updated in 2018 based on a review of inflation and
investment return assumptions.
89
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2019
Note 4: Defined Benefit Pension Plans - Statewide (Continued)
The following changes in actuarial assumptions and plan provisions occurred in 2019:
General Employees Fund
Changes in Actuarial Assumptions
• The mortality projection scale was changed from MP-2017 to MP-2018.
Changes in Plan Provisions
• The employer supplemental contribution was changed prospectively, decreasing from $31.0 million to $21.0 million per
year. The State’s special funding contribution was changed prospectively, requiring $16.0 million due per year through
2031.
Police and Fire Fund
Changes in Actuarial Assumptions
• The mortality projection scale was changed from MP-2017 to MP-2018.
Changes in Plan Provisions
• There have been no changes since the prior valuation.
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 Equity 35.5 %5.10 %
Private Markets 25.0 5.90
Fixed Income 20.0 0.75
International Equity 17.5 5.90
Cash Equivalents 2.0 -
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 2019 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 General Employees Fund and Police and Fire Fund 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, 2019
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%)
General Employees Fund 5,535,207$ 3,367,025$ 1,576,759$
Police and Fire Fund 7,008,984 3,206,578 62,050
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 Defined Contribution Plan (DCP), a multiple-employer deferred
compensation plan administered by PERA. The DCP 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.
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 (0.25) 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 DCP for the years ended
December 31, 2019, 2018 and 2017 were $2,606, $2,525, and $2,497, respectively. The City’s contributions were equal to the
contractually required contributions for each year as set by Minnesota statute.
Employee Employer Employee Employer Required Rate
2,606$ 2,606$ 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, 2019
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, 2019, the following employees were covered by the benefit terms:
Inactive Plan Members or Beneficiaries Currently Receiving Benefit Payments 3
Active Plan Members 91
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
2019, the City’s average contribution rate was 0.2 percent of covered payroll. For the year 2019, the City contributed $16,942 to the
Plan.
C. Actuarial Methods and Assumptions
The City’s total OPEB liability of $1,126,706 was measured as of December 31, 2019, and the total OPEB liability used to calculate
the total OPEB liability was determined by an actuarial valuation as of January 1, 2019 using the entry age normal method. Roll
forward procedures were used to roll forward the total OPEB liability to the measurement date.
The total OPEB liability in the January 1, 2019 actuarial valuation was determined using the following actuarial assumptions, applied
to all periods included in the measurement, unless otherwise specified:
Discount Rate 2.74%
Expected Long-Term Investment Return 2.74%
20-Year Municipal Bond Yield 2.74%
Inflation Rate 2.75%
Salary Increases 3.50%
Medical Premium Trend Rate 8.0% in 2019 grading to 5.0%
The discount rate used to measure the total OPEB liability was 2.74%. Assets were projected using expected benefit payments and
expected asset returns. Expected benefit payments by year were discounted using the expected asset return assumption for years in
which the assets were sufficient to pay all benefit payments. Any remaining benefit payments after the trust fund is exhausted are
discounted at the 20-year municipal bond rate. The equivalent single rate is the discount rate.
Mortality rates were based on the RP-2014 with MP 2018 generational improvements.
92
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2019
Note 5: Postemployment Benefits other than Pensions (Continued)
The actuarial assumptions used in the January 1, 2019 valuation were based on input from a variety of published sources of historical
and projected future financial data. Each assumption was reviewed for reasonableness with the source information as well as for
consistency with the other economic assumptions.
D. Changes in the Total OPEB Liability
Total OPEB
Liability
(a)
Balances at December 31, 2018 875,871$
Changes for the Year:
Service cost 72,745
Interest 38,452
Differences between expected and actual experience 81,871
Changes in assumptions or other inputs 74,709
Benefit payments (16,942)
Net Changes 250,835
Balances at December 31, 2019 1,126,706$
Since the prior measurement date, the following assumptions changed:
• The discount rate was changed from 4.09 percent to 2.74 percent.
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 (1.74 percent) or 1-percentage-point higher (3.74 percent) than the
current discount rate:
1 Percent 1 Percent
Decrease (1.74%) Current (2.74%)Increase (3.74%)
1,231,651$ 1,126,706$ 1,030,715$
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 (7.00 percent decreasing to 4.00 percent) or 1-
percentage-point higher (9.00 percent increasing to 6.00 percent) than the current healthcare trend rate:
1 Percent Decrease Healthcare Cost 1 Percent Increase
(7.0% Decreasing Trend Rates (9.0% Decreasing
to 4.0%)(8.0% Decreasing to 5.0%)to 6.0%)
989,191$ 1,126,706$ 1,289,047$
93
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2019
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, 2019, the City recognized OPEB expense of $119,178. At December 31, 2019, the City reported
deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:
Deferred Deferred
Outflows Inflows
of Resources of Resources
Net Difference between Projected and
Actual Earnings on Plan Investments 75,160$ -$
Changes in Proportion 68,586 43,687
Total 143,746$ 43,687$
The amounts reported as deferred outflows and inflows of resources related to OPEB will be recognized in OPEB will be recognized
in OPEB expense as follows:
Year Ended December 31:
2020 7,981$
2021 7,981
2022 7,981
2023 7,981
2024 7,981
Thereafter 60,154
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, 2019
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, 2019, 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, 2019 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 $168,509 represents the original contributions for working capital; however, the City’s share of subsequent
construction costs are not determinable. Therefore, the City's Water enterprise fund has not recorded any subsequent amounts as an
equity investment or contributed capital related to the JWC.
The following financial information is taken from the JWC’s audited financial statements for the year ended December 31, 2019:
Total Assets 18,170,639$
Total Liabilities 567,652
Total Net Position 17,602,987
Total Revenue 8,191,350
Total Expenses 7,328,133
95
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2019
Note 6: Other Information (Continued)
Of the total revenues, $7,921,496 represented assessments paid by member cities. The City’s share of JWC’s total member
assessments for the year ended December 31, 2019 was $2,558,706 or 32.30 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 $374,558.
The following financial information is taken from the District’s audited financial statements for the year ended December 31, 2019,
the most recent information available at the date of this report:
Total Assets 4,062,733$
Total Deferred Outflows of Resources 776,485
Total Liabilities 2,136,515
Total Deferred Inflows of Resources 1,071,801
Total Net Position 1,630,902
Total Revenue 2,594,027
Total Expenses 2,884,624
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, 2019, the amount reported as
investment in joint venture was $812,189.
According to a formula in the agreement, the City’s share of the District’s budget is 50.2 percent. Payments to the District in 2019
totaled $1,216,032. The District’s financial statements for the period ended December 31, 2019 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, 2019
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, 2019 was $29,059, 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 $17,273
for these services in 2019.
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 2019, 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 2019 contribution to the BCWMC for its fiscal year ended January 31, 2020 was
$27,987, representing 5.28 percent of member’s contributions for the year.
Note 7: Prior Period Adjustment
A prior period adjustment of $1,775,342 was made to reallocate land held for resale costs and related sale proceeds, write off a portion
of the Cities land held for resale and record accrued interest on an existing interfund loan. Between 2013 and 2017, land held for
resale costs and related sale proceeds were recorded in the Economic Development fund, the transactions should have been recorded
in the HRA Construction fund and funded with an interfund loan from the Economic Development fund. In the Economic
Development Fund, the prior period adjustment of $280,735 reflects an increase in fund balance through the allocation of previously
recorded costs and sale proceeds and the retroactive recognition of accrued interest. In the HRA Construction fund, the prior period
adjustment of $2,056,077 reflects a decrease in fund balance through the allocation of costs and sale proceeds from the Economic
Development fund, the write-down of land held for resale sold in prior years and the retroactive recognition of accrued interest. The
net effect on the governmental activities net position was a decrease of $1,775,342.
Note 8: Subsequent Event
In December 2019, a novel strain of coronavirus (COVID-19) surfaced. The spread of COVID-19 around the world in the first quarter
of 2020 has caused significant volatility in U.S. and international markets. There is significant uncertainty around the breadth and
duration of business disruptions related to COVID-19, as well as its impact on the U.S. and international economies and, as such, the
City is unable to determine if it will have a material impact to its operations.
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REQUIRED SUPPLEMENTARY INFORMATION
CITY OF NEW HOPE
NEW HOPE, MINNESOTA
FOR THE YEAR ENDED
DECEMBER 31, 2019
99
City of New Hope, Minnesota
Required Supplementary Information
For the Year Ended December 31, 2019
Schedule of Employer’s and Non-employer Contributing Entity’s Share of PERA Net Pension Liability - General Employees
Retirement Fund
State's
Proportionate
City's Share of
Proportionate the Net Pension
Share of Liability City's
Fiscal the Net Pension Associated with Covered
Year Liability the City Total Payroll
Ending (a)(b)(a+b)(c)
06/30/19 0.0609 %3,367,025$ 104,662$ 3,471,687 $ 4,282,511$ 78.6 %80.2 %
06/30/18 0.0599 3,323,006 109,063 3,432,069 3,998,415 83.1 79.5
06/30/17 0.0588 3,753,753 47,225 3,800,978 3,931,388 95.5 75.9
06/30/16 0.0608 4,936,658 64,481 5,001,139 3,643,308 135.5 68.9
06/30/15 0.0617 3,197,614 - 3,197,614 3,627,658 88.1 78.2
City's
Proportionate
Share of the
Net Pension
Plan Fiduciary
City's
Liability as a
Net Position
Proportion of
Percentage of
as a PercentageCovered
the Net Pension Payroll of the Total
Liability (a/c)Pension Liability
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)
12/31/19 328,429$ 328,429$ -$ 4,379,059$ 7.5 %
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, 2019
Notes to the Required Supplementary Information - General Employees Retirement Fund
Changes in Actuarial Assumptions
2019 - The mortality projection scale was changed from MP-2017 to MP-2018.
2018 - The mortality projection scale was changed from MP-2015 to MP-2017. The assumed benefit increase was changed from 1.00
percent per year through 2044 and 2.50 percent per year thereafter to 1.25 percent per year.
2017 - The Combined Service Annuity (CSA) loads were changed from 0.8 percent for active members and 60 percent for vested and
non-vested deferred members. The revised CSA loads are now 0.0 percent for active memb er 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
2019 - The employer supplemental contribution was changed prospectively, decreasing from $31.0 million to $21.0 million per year.
The state’s special funding contribution was changed prospectively, requiring $16.0 million due per year through 2031.
2018 - The augmentation adjustment in early retirement factors is eliminated over a five-year period starting July 1, 2019, resulting in
actuarial equivalence after June 30, 2024. Interest credited on member contributions decreased from 4.00 percent to 3.00 percent,
beginning July 1, 2018. Deferred augmentation was changed to 0.00 percent, effective January 1, 2019. Augmentation that has already
accrued for deferred members will still apply. Contribution stabilizer provisions were repealed. Postretirement benefit increases were
changed from 1.00 percent per year with a provision to increase to 2.50 percent upon attainment of 90.00 percent funding ratio to
50.00 percent of the Social Security Cost of Living Adjustment, not less than 1.00 percent and not more than 1.50 percent, beginning
January 1, 2019. For retirements on or after January 1, 2024, the first benefit increase is delayed until the retiree reaches normal
retirement age; does not apply to Rule of 90 retirees, disability benefit recipients, or survivors. Actuarial equivalent factors were
updated to reflect revised mortality and interest assumptions.
2017 - The State’s contribution for the Minneapolis Employees Retirement Fund equals $16,000,000 in 2017 and 2018, and
$6,000,000 thereafter. The Employer Supplemental Contribution for the Minneapolis Employees Retirement Fund changed from
$21,000,000 to $31,000,000 in calendar years 2019 to 2031. The state’s contribution changed from $16,000,000 to $6,000,000 in
calendar years 2019 to 2031.
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 $892 million. Upon consolidation,
state and employer contributions were revised.
101
City of New Hope, Minnesota
Required Supplementary Information (Continued)
For the Year Ended December 31, 2019
Schedule of Employer’s Share of PERA Net Pension Liability - Public Employees Police and Fire Fund
State's
Proportionate
City's Share of
Proportionate the Net Pension
Share of Liability City's
Fiscal the Net Pension Associated with Covered
Year Liability the City Total Payroll
Ending (a)(b)(a+b)(c)
06/30/19 0.3012 %3,206,578$ -$ 3,206,578$ 3,176,028$ 101.0 %89.3 %
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
City's
Proportionate
Share of the
Net Pension
Liability as a Plan Fiduciary
City's Percentage of Net Position
Liability (a/c)Pension Liability
Proportion of Covered as a Percentage
the Net Pension Payroll of the Total
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)
12/31/19 550,665$ 550,665$ -$ 3,248,759$ 16.95 %
12/31/18 502,203 502,203 - 3,100,017 16.20
12/31/17 489,202 489,202 - 3,019,768 16.20
12/31/16 444,511 444,511 - 2,743,893 16.20
12/31/15 448,029 448,029 - 2,765,611 16.20
(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.
Notes to the Required Supplementary Information - Public Employees Police and Fire Fund
Changes in Actuarial Assumptions
2019 - The mortality projection scale was changed from MP-2017 to MP-2018.
2018 - The mortality projection scale was changed from MP-2016 to MP-2017.
102
City of New Hope, Minnesota
Required Supplementary Information (Continued)
For the Year Ended December 31, 2019
Notes to the Required Supplementary Information - Public Employees Police and Fire Fund (Continued)
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
2018 - As set by statute, the assumed post-retirement benefit increase was changed from 1.0 percent per year through 2064 and 2.5
percent per year, thereafter, to 1.0 percent for all years, with no trigger. An end date of July 1, 2048 was added to the existing $9.0
million state contribution. New annual state aid will equal $4.5 million in fiscal years 2019 and 2020, and $9.0 million thereafter until
the plan reaches 100 percent funding, or July 1, 2048, if earlier. Member contributions were changed from 10.80 percent to 11.30
percent of pay, effective January 1, 2019 and 11.80 percent of pay, effective January 1, 2020. Employer contributions were changed
from 16.20 percent to 16.95 percent of pay, effective January 1, 2019 and 17.70 percent of pay, effective January 1, 2020. Interest
credited on member contributions decreased from 4.00 percent to 3.00 percent, beginning July 1, 2018. Deferred augmentation was
changed to 0.00 percent, effective January 1, 2019. Augmentation that has already accrued for deferred members will still apply.
Actuarial equivalent factors were updated to reflect revised mortality and interest assumptions.
2017- Assumed salary increases were changed as recommended in the June 30, 2016 experience study. The net effect is proposed rates
that average 0.34 percent lower than the previous rates. Assumed rates of retirement were changed, resulting in fewer retirements. The
combined service annuity (CSA) load was 30.00 percent for vested and non-vested, deferred members. The CSA has been changed to
33.00 percent for vested members and 2.00 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 3.00 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 65.00 percent to 60.00 percent. Assumed age difference was changed from separate assumptions for male members
(wives assumed to be three years younger) and female members (husbands assumed to be four years older) to the assumption that
males are two years older than females. The assumed percentage of female members electing joint and survivor annuities was
increased. The assumed postretirement benefit increase rate was changed from 1.00 percent for all years to 1.00 percent per year
through 2064 and 2.50 percent thereafter. The single discount rate was changed from 5.60 percent per annum to 7.50 percent per
annum.
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, 2019
Schedule of Changes in the City’s Total OPEB Liability and Related Ratios
2019 2018
Total OPEB Liability
Service cost 72,745$ 64,269$
Interest 38,452 31,335
Differences between expected and actual experience 81,871 -
Changes in assumptions 74,709 (53,393)
Benefit payments (16,942) (25,947)
Net Change in Total OPEB Liability 250,835 16,264
Total OPEB Liability - Beginning 875,871 859,607
Total OPEB Liability - Ending 1,126,706$ 875,871$
Covered payroll 7,100,000$ 6,400,000$
City's total OPEB liability as a percentage of
covered payroll 15.87 %13.69 %
2019 changes to actuarial assumptions: The discount rate was adjusted from 4.09 percent to 2.74 percent from the prior measurement.
2018 changes to actuarial assumptions: The discount rate was adjusted from 3.44 percent to 4.09 percent from the prior measurement
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, 2019
105
City of New Hope, Minnesota
Nonmajor Governmental Funds
Combining Balance Sheet
December 31, 2019
Total
Nonmajor
Special Capital Debt Governmental
Revenue Projects Service Funds
Assets
Cash and temporary investments 393,712$ 3,385,706$ 2,296,665$ 6,076,083$
Receivables
Accrued interest - 5,132 - 5,132
Accounts 24,329 - - 24,329
Loans 24,253 - - 24,253
Special assessments 7,807 58,797 - 66,604
Due from other funds - 310,725 - 310,725
Advances to other funds - 1,659,873 - 1,659,873
Total Assets 450,101$ 5,420,233$ 2,296,665$ 8,166,999$
Liabilities
Accounts and contracts payable 184$ 11,474$ -$ 11,658$
Due to other funds - 10,588 220,636 231,224
Unearned revenue - 13,800 - 13,800
Total Liabilities 184 35,862 220,636 256,682
Deferred Inflows of Resources
Unavailable revenue - special assessments - 58,797 - 58,797
Fund Balances
Restricted for
Debt service - - 2,296,665 2,296,665
Public safety police expenditures 132,730 - - 132,730
Ice arena 5,390 - - 5,390
Committed for
Solid waste operations 215,384 - - 215,384
Economic development 96,413 - - 96,413
Assigned for
General improvements - 3,177,766 - 3,177,766
Capital equipment - 790,218 - 790,218
Park improvements - 1,368,178 - 1,368,178
Unassigned - (10,588) (220,636) (231,224)
Total Fund Balances 449,917 5,325,574 2,076,029 7,851,520
Total Liabilities, Deferred Inflows of
Resources, and Fund Balances 450,101$ 5,420,233$ 2,296,665$ 8,166,999$
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, 2019
Total
Nonmajor
Special Capital Debt Governmental
Revenue Projects Service Funds
Revenues
Taxes
Property taxes -$ 649,800$ 2,579,402$ 3,229,202$
Charges for services 224,794 45,605 - 270,399
Special assessments - 9,236 - 9,236
Investment earnings 11,650 175,700 29,831 217,181
Miscellaneous - 100,500 - 100,500
Total Revenues 236,444 980,841 2,609,233 3,826,518
Expenditures
Current
Public safety 452 - - 452
Public works 225,116 1,451 - 226,567
Capital outlay
Public works - 492 - 492
Culture and recreation - 323,193 - 323,193
Economic development 500 - - 500
Debt service
Principal - - 564,509 564,509
Interest - - 1,139,981 1,139,981
Total Expenditures 226,068 325,136 1,704,490 2,255,694
Excess of Revenues
Over Expenditures 10,376 655,705 904,743 1,570,824
Other Financing Sources (Uses)
Transfers in - 354,967 - 354,967
Bonds issued - - 97,331 97,331
Transfers out - (351,800) - (351,800)
Total Other Financing
Sources (Uses)- 3,167 97,331 100,498
Net Change in Fund Balances 10,376 658,872 1,002,074 1,671,322
Fund Balances, January 1 439,541 4,666,702 1,073,955 6,180,198
Fund Balances, December 31 449,917$ 5,325,574$ 2,076,029$ 7,851,520$
107
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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, 2019
9021 9016 9017 9018
Police Solid Waste Ice Arena CEE Revolving
Forfeitures Management Endowment Loan Fund Total
Assets
Cash and temporary investments 132,730$ 183,432$ 5,390$ 72,160$ 393,712$
Receivables
Accounts - 24,329 - - 24,329
Loans - - - 24,253 24,253
Special assessments - 7,807 - - 7,807
Total Assets 132,730$ 215,568$ 5,390$ 96,413$ 450,101$
Liabilities
Accounts and contracts payable -$ 184$ -$ -$ 184$
Fund Balances
Restricted for
Public safety police expenditures 132,730 - - - 132,730
Ice arena - - 5,390 - 5,390
Committed for
Solid waste operations - 215,384 - - 215,384
Economic development - - - 96,413 96,413
Total Fund Balances 132,730 215,384 5,390 96,413 449,917
Total Liabilities and
Fund Balances 132,730$ 215,568$ 5,390$ 96,413$ 450,101$
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, 2019
9021 9016 9017 9018
Police Solid Waste Ice Arena CEE Revolving
Forfeitures Management Endowment Loan Fund Total
Revenues
Charges for services -$ 224,794$ -$ - 224,794$
Investment earnings 4,310 6,338 175 827 11,650
Total Revenues 4,310 231,132 175 827 236,444
Expenditures
Current
Public safety
Supplies 452 - - - 452
Public works
Other services and charges - 225,116 - - 225,116
Economic development
Other services and charges - - - 500 500
Total Expenditures 452 225,116 - 500 226,068
Net Change in Fund Balances 3,858 6,016 175 327 10,376
Fund Balances, January 1 128,872 209,368 5,215 96,086 439,541
Fund Balances, December 31 132,730$ 215,384$ 5,390$ 96,413$ 449,917$
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, 2019
Actual Variance with
Original Final Amounts Final Budget
Revenues
Charges for services 225,000$ 225,000$ 224,794$ (206)$
Investment earnings 1,000 1,000 6,338 5,338
Total Revenues 226,000 226,000 231,132 5,132
Expenditures
Current
Public works
Other services and charges 224,735 224,735 225,116 (381)
Net Change in Fund Balances 1,265 1,265 6,016 4,751
Fund Balances, January 1 209,368 209,368 209,368 -
Fund Balances, December 31 210,633$ 210,633$ 215,384$ 4,751$
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, 2019
9010 9223 9233 9242 9250 9251
2016 Street 2017 Street
Fire Xylon Avenue Park Temporary Improvement Improvement
Capital Projects Improvement Infrastructure Financing Project Project Total
Assets
Cash and temporary investments 790,218$ -$ 1,393,452$ 1,202,036$ -$ -$ 3,385,706$
Receivables
Accrued interest - - - 5,132 - - 5,132
Special assessments - - - 58,797 - - 58,797
Due from other funds - - - 310,725 - - 310,725
Advances to other funds - - - 1,659,873 - - 1,659,873
Total Assets 790,218$ -$ 1,393,452$ 3,236,563$ -$ -$ 5,420,233$
Liabilities
Accounts and contracts payable -$ -$ 11,474$ -$ -$ -$ 11,474$
Due to other funds - - - - 10,588 - 10,588
Unearned revenue - - 13,800 - - - 13,800
Total Liabilities - - 25,274 - 10,588 - 35,862
Deferred Inflows of Resources
Unavailable revenue - special assessments - - - 58,797 - - 58,797
Fund Balances
Assigned to
General improvements - - - 3,177,766 - - 3,177,766
Capital equipment 790,218 - - - - - 790,218
Park improvements - - 1,368,178 - - - 1,368,178
Unassigned - - - - (10,588) - (10,588)
Total Fund Balances 790,218 - 1,368,178 3,177,766 (10,588) - 5,325,574
Total Liabilities, Deferred
Inflows of Resources,
and Fund Balances 790,218$ -$ 1,393,452$ 3,236,563$ -$ -$ 5,420,233$
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, 2019
9010 9223 9233 9242 9250 9251
2016 Street 2017 Street
Fire Xylon Avenue Park Temporary Improvement Improvement
Capital Projects Improvement Infrastructure Financing Project Project Total
Revenues
Taxes
Property taxes -$ -$ 649,800$ -$ -$ -$ 649,800$
Intergovernmental
Charges for services - - 45,605 - - - 45,605
Special assessments - - - 9,236 - - 9,236
Investment earnings 23,863 - 83,446 68,391 - - 175,700
Miscellaneous - - 100,500 - - - 100,500
Total Revenues 23,863 - 879,351 77,627 - - 980,841
Expenditures
Current
Public works - 1,451 - - - - 1,451
Capital outlay
Public works - - - - 492 - 492
Culture and recreation - - 323,193 - - - 323,193
Total Expenditures - 1,451 323,193 - 492 - 325,136
Excess (Deficiency) of Revenues
Over (Under) Expenditures 23,863 (1,451) 556,158 77,627 (492) - 655,705
Other Financing Sources (Uses)
Transfers in 150,000 2,230 - - - 202,737 354,967
Transfers out (51,800) - (300,000) - - - (351,800)
Total Other Financing
Sources (Uses)98,200 2,230 (300,000) - - 202,737 3,167
Net Change in Fund Balances 122,063 779 256,158 77,627 (492) 202,737 658,872
Fund Balances, January 1 668,155 (779) 1,112,020 3,100,139 (10,096) (202,737) 4,666,702
Fund Balances, December 31 790,218$ -$ 1,368,178$ 3,177,766$ (10,588)$ -$ 5,325,574$
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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.
2018A 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 2018A G.O. Improvement Bonds.
2019A 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 2019A G.O. Improvement Bonds.
117
City of New Hope, Minnesota
Nonmajor Debt Service Funds
Subcombining Balance Sheet
December 31, 2019
9144 9145 9148 9149
2015A 2010B 2016A 2015B
G.O.G.O.G.O.G.O.
Tax Increment Equipment Improvement Improvement
Bonds Bonds Bonds Bonds
Assets
Cash and temporary investments 239,021$ 219,315$ 250,875$ 125,723$
Liabilities
Due to other funds -$ -$ -$ -$
Fund Balances
Restricted for debt service 239,021 219,315 250,875 125,723
Unassigned - - - -
Total Fund Balances 239,021 219,315 250,875 125,723
Total Liabilities and
Fund Balances 239,021$ 219,315$ 250,875$ 125,723$
118
9150 9151 9152
2017A 2018A 2019A
G.O.G.O.G.O.
Improvement Improvement Improvement
Bonds Bonds Bonds Total
1,364,400$ -$ 97,331$ 2,296,665$
-$ 220,636$ -$ 220,636$
1,364,400 - 97,331 2,296,665
- (220,636) - (220,636)
1,364,400 (220,636) 97,331 2,076,029
1,364,400$ -$ 97,331$ 2,296,665$
119
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, 2019
9144 9145 9148 9149
2015A 2010B 2016A 2015B
G.O.G.O.G.O.G.O.
Tax Increment Equipment Improvement Improvement
Bonds Bonds Bonds Bonds
Revenues
Property taxes 237,118$ 161,595$ 262,397$ 208,840$
Investment earnings 2,374 4,375 4,793 5,282
Total Revenues 239,492 165,970 267,190 214,122
Expenditures
Debt service
Principal 148,925 145,000 151,238 119,346
Interest 57,160 5,640 82,929 50,567
Total Expenditures 206,085 150,640 234,167 169,913
Excess (Deficiency) of Revenues
Over (Under) Expenditures 33,407 15,330 33,023 44,209
Other Financing Sources
Bonds issued - - - -
Net Change in Fund Balances 33,407 15,330 33,023 44,209
Fund Balances, January 1 205,614 203,985 217,852 81,514
Fund Balances, December 31 239,021$ 219,315$ 250,875$ 125,723$
120
9150 9151 9152
2017A 2018A 2019A
G.O.G.O.G.O.
Improvement Improvement Improvement
Bonds Bonds Bonds Total
1,709,452$ -$ -$ 2,579,402$
13,007 - - 29,831
1,722,459 - - 2,609,233
- - - 564,509
723,049 220,636 - 1,139,981
723,049 220,636 - 1,704,490
999,410 (220,636) - 904,743
- - 97,331 97,331
999,410 (220,636) 97,331 1,002,074
364,990 - - 1,073,955
1,364,400$ (220,636)$ 97,331$ 2,076,029$
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122
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, 2019
(With Comparative Actual Amounts for the Year Ended December 31, 2018)
2018
Actual Variance with Actual
Original Final Amounts Final Budget Amounts
Revenues
Taxes
Property taxes 10,382,448$ 10,382,448$ 10,297,018$ (85,430)$ 9,971,064$
Franchise taxes 472,357 472,357 533,213 60,856 440,000
Total Taxes 10,854,805 10,854,805 10,830,231 (24,574) 10,411,064
Licenses and permits
Business regulatory licenses 76,380 76,380 70,783 (5,597) 77,504
Non-business licenses and permits 304,930 304,930 249,655 (55,275) 290,427
Total Licenses and permits 381,310 381,310 320,438 (60,872) 367,931
Intergovernmental
Local government aid 697,864 697,864 697,864 - 693,117
Highway maintenance aid 191,000 191,000 212,664 21,664 214,477
Other federal, state, and local grants 92,208 92,208 120,591 28,383 118,366
State insurance premium tax 272,000 272,000 311,424 39,424 306,678
Total Intergovernmental 1,253,072 1,253,072 1,342,543 89,471 1,332,638
Charges for services
General government 188,850 188,850 152,308 (36,542) 171,986
Public safety 373,500 373,500 403,636 30,136 414,032
Public works 5,450 5,450 4,243 (1,207) 4,473
Culture and recreation 516,850 516,850 504,090 (12,760) 512,730
Total Charges for services 1,084,650 1,084,650 1,064,277 (20,373) 1,103,221
Fines and forfeitures 250,000 250,000 227,343 (22,657) 226,757
Special assessments 30,000 30,000 50,034 20,034 39,569
Investment earnings 35,000 35,000 106,033 71,033 103,969
Miscellaneous 3,000 3,000 23,326 20,326 33,766
Total Revenues 13,891,837 13,891,837 13,964,225 72,388 13,618,915
Budgeted Amounts
2019
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, 2019
(With Comparative Actual Amounts for the Year Ended December 31, 2018)
2018
Actual Variance with Actual
Original Final Amounts Final Budget Amounts
Expenditures
Current
General government
Mayor and City Council
Personnel services 56,600$ 56,600$ 52,142$ 4,458$ 53,399$
Supplies 2,000 2,000 1,439 561 2,572
Other services and charges 36,328 36,328 34,231 2,097 35,352
Total Mayor and City Council 94,928 94,928 87,812 7,116 91,323
City hall
Supplies 23,500 23,500 22,644 856 18,227
Other services and charges 278,002 278,002 279,395 (1,393) 261,142
Total City hall 301,502 301,502 302,039 (537) 279,369
City Manager
Personnel services 380,800 380,800 401,782 (20,982) 378,233
Supplies 5,800 5,800 5,340 460 6,150
Other services and charges 16,735 16,735 14,080 2,655 20,227
Total City Manager 403,335 403,335 421,202 (17,867) 404,610
Elections
Personnel services - - - - 26,151
Supplies - - - - 1,487
Other services and charges 4,312 4,312 4,185 127 5,373
Total Elections 4,312 4,312 4,185 127 33,011
Finance
Personnel services 179,000 179,000 171,471 7,529 160,303
Supplies 1,500 1,500 1,328 172 1,310
Other services and charges 101,712 101,712 134,364 (32,652) 130,779
Total Finance 282,212 282,212 307,163 (24,951) 292,392
Auditing
Other services and charges 25,941 25,941 24,441 1,500 24,928
Assessing
Other services and charges 154,000 154,000 154,000 - 147,000
Legal
Other services and charges 35,000 35,000 16,097 18,903 16,272
Human resources
Personnel services 257,300 257,300 263,755 (6,455) 255,342
Supplies 450 450 451 (1) 247
Other services and charges 35,091 35,091 23,020 12,071 30,319
Total Human resources 292,841 292,841 287,226 5,615 285,908
Budgeted Amounts
2019
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, 2019
(With Comparative Actual Amounts for the Year Ended December 31, 2018)
2018
Actual Variance with Actual
Original Final Amounts Final Budget Amounts
Budgeted Amounts
2019
Expenditures (Continued)
Current (continued)
General government (continued)
Planning and zoning
Personnel services 134,700$ 134,700$ 112,208$ 22,492$ 30,608$
Supplies 700 700 285 415 151
Other services and charges 37,833 37,833 35,825 2,008 35,543
Total Planning and zoning 173,233 173,233 148,318 24,915 66,302
Communication
Personnel services 98,100 98,100 99,606 (1,506) 97,021
Supplies 6,140 6,140 5,463 677 12,404
Other services and charges 43,094 43,094 42,928 166 37,013
Total Communication 147,334 147,334 147,997 (663) 146,438
Total General Government 1,914,638 1,914,638 1,900,480 14,158 1,787,553
Public safety
Police
Personnel services 5,217,600 5,217,600 5,078,553 139,047 4,839,787
Supplies 90,800 90,800 138,034 (47,234) 80,253
Other services and charges 1,187,910 1,187,910 1,169,754 18,156 1,060,868
Total Police 6,496,310 6,496,310 6,386,341 109,969 5,980,908
Police reserves
Personnel services - - 266 (266) -
Supplies 2,200 2,200 1,903 297 -
Other services and charges 27,023 27,023 30,179 (3,156) 21,632
Total Police reserves 29,223 29,223 32,348 (3,125) 21,632
Fire and safety
Supplies 2,000 2,000 41 1,959 -
Other services and charges 1,250,894 1,250,894 1,244,756 6,138 1,216,012
Total Fire and safety 1,252,894 1,252,894 1,244,797 8,097 1,216,012
Animal control
Personnel services 81,900 81,900 81,838 62 76,300
Supplies 475 475 204 271 -
Other services and charges 25,133 25,133 24,830 303 39,668
Total Animal control 107,508 107,508 106,872 636 115,968
125
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, 2019
(With Comparative Actual Amounts for the Year Ended December 31, 2018)
2018
Actual Variance with Actual
Original Final Amounts Final Budget Amounts
Budgeted Amounts
2019
Expenditures (Continued)
Current (continued)
Public safety (continued)
Protective inspection
Personnel services 495,700$ 495,700$ 490,391$ 5,309$ 493,797$
Supplies 2,400 2,400 1,024 1,376 1,403
Other services and charges 170,484 170,484 165,714 4,770 162,404
Total Protective inspection 668,584 668,584 657,129 11,455 657,604
Total Public Safety 8,554,519 8,554,519 8,427,487 127,032 7,992,124
Public works
Street maintenance
Personnel services 529,700 529,700 607,772 (78,072) 546,460
Supplies 132,000 132,000 90,691 41,309 87,301
Other services and charges 866,338 866,338 812,459 53,879 824,707
Total Street maintenance 1,528,038 1,528,038 1,510,922 17,116 1,458,468
Engineering
Other services and charges 35,000 35,000 53,226 (18,226) 32,577
Total Public Works 1,563,038 1,563,038 1,564,148 (1,110) 1,491,045
Culture and recreation
Recreation
Personnel services 650,200 650,200 646,135 4,065 615,411
Supplies 114,050 114,050 109,784 4,266 123,751
Other services and charges 255,992 255,992 253,962 2,030 243,554
Total Recreation 1,020,242 1,020,242 1,009,881 10,361 982,716
Parks
Personnel services 619,300 619,300 582,433 36,867 552,495
Supplies 37,990 37,990 35,450 2,540 38,682
Other services and charges 384,340 384,340 353,689 30,651 395,919
Total Parks 1,041,630 1,041,630 971,572 70,058 987,096
Swimming pool
Personnel services 45,900 45,900 45,933 (33) 43,621
Other services and charges 1,145 1,145 5,199 (4,054) 1,708
Total Swimming pool 47,045 47,045 51,132 (4,087) 45,329
Total Culture and Recreation 2,108,917 2,108,917 2,032,585 76,332 2,015,141
Total Current Expenditures 14,141,112 14,141,112 13,924,700 216,412 13,285,863
126
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, 2019
(With Comparative Actual Amounts for the Year Ended December 31, 2018)
2018
Actual Variance with Actual
Original Final Amounts Final Budget Amounts
Budgeted Amounts
2019
Expenditures (Continued)
Capital outlay
General government 10,000$ 10,000$ 3,967$ 6,033$ 555$
Public safety 73,000 73,000 55,081 17,919 115,635
Total Capital outlay 83,000 83,000 59,048 23,952 116,190
Total Expenditures 14,224,112 14,224,112 13,983,748 240,364 13,402,053
Excess (Deficiency) of Revenues
Over (Under) Expenditures (332,275) (332,275) (19,523) 312,752 216,862
Other Financing Sources (Uses)
Transfers in 332,275 332,275 332,275 - 325,434
Transfers out - - (354,000) (354,000) (250,000)
Total Other Financing
Sources (Uses)332,275 332,275 (21,725) (354,000) 75,434
Net Change in Fund Balances - - (41,248) (41,248) 292,296
Fund Balances, January 1 7,180,951 7,180,951 7,180,951 - 6,888,655
Fund Balances, December 31 7,180,951$ 7,180,951$ 7,139,703$ (41,248)$ 7,180,951$
127
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128
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.
129
City of New Hope, Minnesota
Internal Service Funds
Combining Statement of Net Position
December 31, 2019
9402 9408 9407 9410
Central Employee Insurance Information
Garage Leave Reserve Technology Totals
Assets
Current Assets
Cash and temporary investments 7,517,443$ 1,469,865$ 594,661$ 549,657$ 10,131,626$
Receivables
Accounts - - 4,475 - 4,475
Inventories 62,575 - - - 62,575
Total Current Assets 7,580,018 1,469,865 599,136 549,657 10,198,676
Noncurrent Assets
Capital assets
Land 85,647 - - - 85,647
Buildings and structures 3,158,296 - - - 3,158,296
Vehicles and equipment 9,060,913 - - 393,020 9,453,933
Construction in progress - - - 22,997 22,997
Less: accumulated depreciation (9,495,628) - - (307,461) (9,803,089)
Total Capital Assets
(Net of Accumulated Depreciation)2,809,228 - - 108,556 2,917,784
Total Assets 10,389,246 1,469,865 599,136 658,213 13,116,460
Deferred Outflows of Resources
Deferred pension resources 19,129 - - - 19,129
Deferred other postemployment benefit resources - - 119,013 - 119,013
Total Deferred Outflows of Resources 19,129 - 119,013 - 138,142
Liabilities
Current Liabilities
Accrued salaries payable 8,106 42,974 93,445 - 144,525
Accounts and contracts payable 40,084 - 56,784 38,797 135,665
Due to other governments 580 - - - 580
Compensated absences payable, current portion - 75,388 - - 75,388
Total Current Liabilities 48,770 118,362 150,229 38,797 356,158
Noncurrent Liabilities
Other postemployment benefits payable - - 932,848 - 932,848
Pension liability 186,220 - - - 186,220
Compensated absences payable - 678,493 - - 678,493
Total Noncurrent Liabilities 186,220 678,493 932,848 - 1,797,561
Total Liabilities 234,990 796,855 1,083,077 38,797 2,153,719
Deferred Inflows of Resources
Deferred pension resources 34,987 - - - 34,987
Deferred other postemployment benefit resources - - 36,169 - 36,169
Total Deferred Inflows of Resources 34,987 - 36,169 - 71,156
Net Position
Net investment in capital assets 2,809,228 - - 108,556 2,917,784
Unrestricted 7,329,170 673,010 (401,097) 510,860 8,111,943
Total Net Position 10,138,398$ 673,010$ (401,097)$ 619,416$ 11,029,727$
130
City of New Hope, Minnesota
Internal Service Funds
Combining Statement of Revenues, Expenses and
Changes in Net Position
For the Year Ended December 31, 2019
9402 9408 9407 9410
Central Employee Insurance Information
Garage Leave Reserve Technology Totals
Operating Revenues
Billings to departments 2,262,880$ 710,451$ 10,415$ 757,144$ 3,740,890$
Other 9,279 - 3,893 - 13,172
Total Operating Revenues 2,272,159 710,451 14,308 757,144 3,754,062
Operating Expenses
Personnel services 371,019 598,174 54,290 - 1,023,483
Supplies 288,803 - - 54,305 343,108
Utilities 62,318 - - 30,345 92,663
Other services and charges 322,268 - 89,873 581,917 994,058
Depreciation 668,467 - - 9,295 677,762
Total Operating Expenses 1,712,875 598,174 144,163 675,862 3,131,074
Operating Income (Loss)559,284 112,277 (129,855) 81,282 622,988
Nonoperating Revenues
Investment earnings 228,495 - - 17,575 246,070
Gain on sale of capital assets 37,864 - - - 37,864
Total Nonoperating Revenues 266,359 - - 17,575 283,934
Income (Loss) Before
Transfers 825,643 112,277 (129,855) 98,857 906,922
Transfers Out (269,750) - - (55,599) (325,349)
Change in Net Position 555,893 112,277 (129,855) 43,258 581,573
Net Position, January 1 9,582,505 560,733 (271,242) 576,158 10,448,154
Net Position, December 31 10,138,398$ 673,010$ (401,097)$ 619,416$ 11,029,727$
131
City of New Hope, Minnesota
Internal Service Funds
Combining Statement of Cash Flows
For the Year Ended December 31, 2019
9402 9408 9407 9410
Central Employee Insurance Information
Garage Leave Reserve Technology Totals
Cash Flows from Operating Activities
Receipts from interfund services provided 2,262,880$ 710,451$ 10,798$ 757,144$ 3,741,273$
Other operating receipts 8,845 - 3,893 - 12,738
Payments to suppliers (677,771) - (27,091) (691,835) (1,396,697)
Payments to employees (336,268) (545,271) - - (881,539)
Net Cash Provided (Used)
by Operating Activities 1,257,686 165,180 (12,400) 65,309 1,475,775
Cash Flows from Noncapital
Financing Activities
Transfers out (269,750) - - (55,599) (325,349)
Cash Flows from Capital
and Related Financing Activities
Acquisition capital assets (279,793) - - (71,634) (351,427)
Proceeds from sale of assets 37,864 - - - 37,864
Net Cash Used by Capital
and Related Financing Activities (241,929) - - (71,634) (313,563)
Investment earnings 228,495 - - 17,575 246,070
Net Increase (Decrease)
in Cash and Cash Equivalents 974,502 165,180 (12,400) (44,349) 1,082,933
Cash and Cash Equivalents, January 1 6,542,941 1,304,685 607,061 594,006 9,048,693
Cash and Cash Equivalents, December 31 7,517,443$ 1,469,865$ 594,661$ 549,657$ 10,131,626$
Reconciliation of Operating Income (Loss)
to Net Cash Provided
by Operating Activities
Operating income (loss)559,284$ 112,277$ (129,855)$ 81,282$ 622,988$
Adjustments to reconcile operating income (loss)
to net cash provided by operating activities
Depreciation 668,467 - - 9,295 677,762
(Increase) decrease in assets
Accounts receivable - - 383 - 383
Inventories 7,570 - - - 7,570
(Increase) decrease in deferred out flows of resources
Deferred pension resources 9,825 - - - 9,825
Deferred other postemployment benefit resources - - (119,013) - (119,013)
Increase (decrease) in liabilities
Accounts and contracts payable (12,024) - 48,904 23,278 60,158
Accrued salaries payable 1,124 13,407 13,878 - 28,409
Due to other governments 72 - - (48,546) (48,474)
Compensated absences payable - 39,496 - - 39,496
Other postemployment benefits payable - - 178,915 - 178,915
Pension liability 29,720 - - - 29,720
Increase (decrease) in deferred inflows of resources
Deferred pension resources (6,352) - - - (6,352)
Deferred other postemployment benefit resources - - (5,612) - (5,612)
Net Cash Provided (Used)
by Operating Activities 1,257,686$ 165,180$ (12,400)$ 65,309$ 1,475,775$
Cash Flows from Investing Activities
132
STATISTICAL SECTION (UNAUDITED)
CITY OF NEW HOPE
NEW HOPE, MINNESOTA
FOR THE YEAR ENDED
DECEMBER 31, 2019
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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
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136
2019 2018
Revenues
Taxes
Property taxes 15,223,680$ 12,904,297$ 17.97 %
Tax increments 1,317,803 1,112,753 18.43
Franchise taxes 957,448 945,244 1.29
Licenses and permits 320,438 367,931 (12.91)
Intergovernmental 3,947,039 2,195,760 79.76
Charges for services 1,376,176 1,399,998 (1.70)
Fines and forfeitures 227,343 230,657 (1.44)
Special assessments 197,566 282,589 (30.09)
Investment earnings 1,166,238 658,606 77.08
Miscellaneous 173,679 33,966 411.33
Total Revenues 24,907,410$ 20,131,801$ 23.72 %
Per Capita 1,143$ 934$ 22.33 %
Expenditures
Current
General government 1,900,480$ 1,787,553$ 6.32 %
Public safety 8,427,939 7,997,311 5.38
Public works 1,790,715 1,717,815 4.24
Culture and recreation 2,032,585 2,015,729 0.84
Economic development 513,946 815,352 (36.97)
Capital outlay 22,573,850 12,956,485 74.23
Debt service
Principal 968,674 799,734 21.12
Interest 1,273,302 769,497 65.47
Bond issuance costs 90,446 148,365 (39.04)
Total Expenditures 39,571,937$ 29,007,841$ 36.42 %
Per Capita 1,816$ 1,346$ 34.92 %
Total Long-term Indebtedness (excluding unamortized premiums)44,252,170$ 39,985,844$ 10.67 %
Per capita 2,031 1,856 9.43
General Fund Balance - December 31 7,139,703$ 7,180,951$ (0.57) %
Per capita 328 333 (1.50)
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, 2019
137
City of New Hope, Minnesota
Statistical Section (Unaudited)
Net Position by Component
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2011
2010 (Restated)2012 2013
Governmental Activities
Net investment in capital assets 16,495,175$ 20,628,143$ 26,793,142$ 30,509,373$
Restricted 9,279,142 6,018,734 1,619,696 1,619,394
Unrestricted 21,971,477 21,845,278 22,746,207 23,704,592
Total Governmental Activities Net Position 47,745,794$ 48,492,155$ 51,159,045$ 55,833,359$
Business-type Activities
Net investment in capital assets 9,989,405$ 11,114,666$ 12,843,624$ 14,142,276$
Restricted - - 150,000 300,000
Unrestricted 2,541,156 3,978,803 2,735,144 2,496,008
Total Business-type Activities Net Position 12,530,561$ 15,093,469$ 15,728,768$ 16,938,284$
Total Primary Government
Net investment in capital assets 26,484,580$ 31,742,809$ 39,636,766$ 44,651,649$
Restricted 9,279,142 6,018,734 1,769,696 1,919,394
Unrestricted 24,512,633 25,824,081 25,481,351 26,200,600
Total Primary Government 60,276,355$ 63,585,624$ 66,887,813$ 72,771,643$
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 2018 with retroactive application. The 2017 net position has been restated to reflect the change.
138
(Restated)
2014 2015 2016 2017 2018 2019
26,305,906$ 27,549,276$ 29,951,754$ 27,747,845$ 27,888,417$ 30,139,510$
5,680,117 5,917,848 4,893,801 6,207,578 6,000,843 6,628,138
23,130,558 14,623,043 11,081,824 11,728,807 14,384,257 16,702,142
55,116,581$ 48,090,167$ 45,927,379$ 45,684,230$ 48,273,517$ 53,469,790$
14,757,333$ 16,087,559$ 19,286,134$ 18,663,872$ 18,783,898$ 19,315,353$
455,000 627,939 868,853 1,031,673 1,160,680 1,358,401
1,798,707 (825,297) (1,839,376) 84,741 1,783,306 3,054,187
17,011,040$ 15,890,201$ 18,315,611$ 19,780,286$ 21,727,884$ 23,727,941$
41,063,239$ 43,636,835$ 49,237,888$ 46,411,717$ 46,672,315$ 49,454,863$
6,135,117 6,545,787 5,762,654 7,239,251 7,161,523 7,986,539
24,929,265 13,797,746 9,242,448 11,813,548 16,167,563 19,756,329
72,127,621$ 63,980,368$ 64,242,990$ 65,464,516$ 70,001,401$ 77,197,731$
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)
2010 2011 2012 2013
Expenses
Governmental Activities
General government 2,552,425$ 1,841,145$ 1,931,318$ 1,837,194$
Public safety 5,864,775 6,129,860 6,062,362 6,238,779
Public works 1,625,959 1,795,189 2,126,043 1,790,669
Culture and recreation 1,899,105 1,882,279 1,928,591 1,946,243
Economic development 192,431 536,433 762,202 431,332
Interest on long-term debt 252,224 236,827 407,744 289,009
Total Governmental Activities Expenses 12,386,919 12,421,733 13,218,260 12,533,226
Business-type Activities
Sewer utility 1,928,845 2,068,282 2,220,438 2,310,604
Water utility 2,915,757 3,530,521 3,682,602 3,215,714
Golf course 346,345 322,679 298,555 262,894
Ice arena 712,153 844,828 771,628 957,784
Storm water 430,899 485,943 425,112 768,610
Street lighting 104,099 113,753 104,721 117,518
Total Business-type Activities Expenses 6,438,098 7,366,006 7,503,056 7,633,124
Total Expenses 18,825,017$ 19,787,739$ 20,721,316$ 20,166,350$
Program Revenues
Governmental Activities
Charges for services
General government 984,855$ 220,629$ 177,174$ 198,297$
Public safety 218,732 877,159 804,725 880,843
Public works - 219,353 219,548 226,228
Culture and recreation 562,383 637,077 653,293 672,067
Economic development 104,713 98,139 94,664 -
Operating grants and contributions 1,356,292 783,382 2,162,263 828,276
Capital grants and contributions 787,047 1,107,042 245,290 3,929,565
Total Governmental Activities Program Revenues 4,014,022 3,942,781 4,356,957 6,735,276
Business-Type Activities
Charges for services
Sewer utility 2,292,300 2,352,635 2,376,021 2,443,202
Water utility 3,082,771 3,169,859 3,581,225 3,460,008
Golf course 313,941 278,788 296,316 268,133
Ice arena 741,266 752,671 694,702 725,211
Storm water 943,883 947,031 948,650 963,167
Street lighting 121,647 122,742 124,397 125,604
Operating grants and contributions 470,183 24,031 22,340 306,520
Capital grants and contributions 30,739 114,826 106,291 225,300
Total Business-type Activities Program Revenues 7,996,730 7,762,583 8,149,942 8,517,145
Total Program Revenues 12,010,752$ 11,705,364$ 12,506,899$ 15,252,421$
Fiscal Year
140
(Restated)
2014 2015 2016 2017 2018 2019
1,976,377$ 1,700,133$ 1,871,736$ 2,666,781$ 1,983,179$ 1,850,242$
6,795,836 7,258,504 9,463,124 8,257,709 7,578,150 8,540,198
2,467,618 4,229,077 3,143,421 2,975,007 3,661,766 3,816,417
2,145,224 2,223,152 2,405,905 2,485,417 2,280,418 2,145,988
1,704,010 655,093 732,106 2,163,967 1,244,292 749,651
140,321 269,284 323,326 725,982 1,074,469 1,412,763
15,229,386 16,335,243 17,939,618 19,274,863 17,822,274 18,515,259
1,976,864 2,458,724 2,187,006 2,399,248 2,631,598 2,834,973
4,635,686 4,584,929 3,633,022 3,504,722 4,038,859 3,762,099
304,059 291,695 341,776 322,278 299,217 319,871
877,826 880,581 949,438 996,056 987,912 1,003,048
558,160 713,218 830,108 834,688 736,166 888,156
99,560 105,452 102,894 101,668 119,250 116,732
8,452,155 9,034,599 8,044,244 8,158,660 8,813,002 8,924,879
23,681,541$ 25,369,842$ 25,983,862$ 27,433,523$ 26,635,276$ 27,440,138$
234,440$ 254,333$ 267,970$ 340,421$ 250,575$ 223,379$
1,047,721 1,073,079 1,035,725 1,302,551 935,116 880,634
224,790 219,634 220,208 234,564 228,660 226,249
617,459 668,480 699,613 686,335 570,143 529,739
- - 20,000 41,112 - -
1,013,058 845,517 1,002,681 777,368 967,499 826,489
47,917 460,537 711,527 1,150,840 941,212 2,819,823
3,185,385 3,521,580 3,957,724 4,533,191 3,893,205 5,506,313
2,414,482 2,468,638 2,627,875 2,899,257 3,154,709 3,380,075
3,634,873 3,777,108 4,124,346 4,289,255 4,696,593 4,675,498
254,508 287,056 315,162 283,375 298,696 296,538
775,784 745,886 749,689 849,701 864,531 892,740
948,537 981,723 1,037,429 1,082,348 1,139,007 1,190,058
123,060 128,890 137,525 137,491 144,582 152,975
444,484 33,032 159,898 27,568 327,335 14,308
11,469 194,590 1,394,822 58,237 14,203 28,824
8,607,197 8,616,923 10,546,746 9,627,232 10,639,656 10,631,016
11,792,582$ 12,138,503$ 14,504,470$ 14,160,423$ 14,532,861$ 16,137,329$
Fiscal Year
141
City of New Hope, Minnesota
Statistical Section (Unaudited)
Changes in Net Position (Continued)
Last Ten Fiscal Years
(Accrual Basis of Accounting)
(Restated)
2010 2011 2012 2013
Net Revenues (Expenses)
Governmental activities (8,372,897)$ (8,478,952)$ (8,861,303)$ (5,797,950)$
Business-type activities 1,558,632 396,577 646,886 884,021
Total Primary Government Revenues (Expenses)(6,814,265)$ (8,082,375)$ (8,214,417)$ (4,913,929)$
General Revenues and Other Changes in Net Position
General Revenues
Governmental Activities
Taxes
Property taxes 8,730,979$ 8,784,948$ 9,129,247$ 9,554,629$
Tax increments 1,408,256 1,400,163 1,343,248 511,924
Franchise taxes 430,494 439,795 440,149 438,834
Grants and contributions not
restricted to specific programs 79,529 87,206 47,662 49,005
Unrestricted investment earnings 337,312 745,484 429,595 198,658
Gain on sale of capital assets 22,930 13,568 69,321 37,201
Transfers 91,129 (2,163,781) 68,971 (317,987)
Total Governmental Activities General Revenues 11,100,629 9,307,383 11,528,193 10,472,264
Business-type Activities
Unrestricted investment earnings 17,400 71,089 57,384 7,508
Transfers (91,129) 2,163,781 (68,971) 317,987
Total Business-type Activities General Revenues (73,729) 2,234,870 (11,587) 325,495
Total Primary Government 11,026,900$ 11,542,253$ 11,516,606$ 10,797,759$
Change in Net Position
Governmental activities 2,727,732$ 828,431$ 2,666,890$ 4,674,314$
Business-type activities 1,484,903 2,631,447 635,299 1,209,516
Total Primary Government 4,212,635$ 3,459,878$ 3,302,189$ 5,883,830$
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. Information has not been restated for prior years.
142
(Restated)
2014 2015 2016 2017 2018 2019
(12,044,001)$ (12,813,663)$ (13,981,894)$ (14,741,672)$ (13,929,069)$ (13,008,946)$
155,042 (417,676) 2,502,502 1,468,572 1,826,654 1,706,137
(11,888,959)$ (13,231,339)$ (11,479,392)$ (13,273,100)$ (12,102,415)$ (11,302,809)$
9,732,776$ 10,131,759$ 10,843,702$ 11,929,597$ 12,941,920$ 15,265,428$
537,871 430,879 492,584 841,098 1,112,753 1,317,803
438,541 442,556 447,248 912,357 945,244 957,448
179,537 600,030 633,056 628,119 697,895 803,035
324,498 331,417 377,960 531,240 798,557 1,412,308
- - - 50,456 70,400 369,163
114,000 68,204 121,800 (19,110) (48,413) (144,624)
11,327,223 12,004,845 12,916,350 14,873,757 16,518,356 19,980,561
31,714 35,700 44,708 36,811 72,531 149,296
(114,000) (68,204) (121,800) 19,110 48,413 144,624
(82,286) (32,504) (77,092) 55,921 120,944 293,920
11,244,937$ 11,972,341$ 12,839,258$ 14,929,678$ 16,639,300$ 20,274,481$
(716,778)$ (808,818)$ (1,065,544)$ 132,085$ 2,589,287$ 6,971,615$
72,756 (450,180) 2,425,410 1,524,493 1,947,598 2,000,057
(644,022)$ (1,258,998)$ 1,359,866$ 1,656,578$ 4,536,885$ 8,971,672$
Fiscal Year
143
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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
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
2019 15,265,428 1,317,803 957,448 17,540,679
145
City of New Hope, Minnesota
Statistical Section (Unaudited)
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
(Restated)
2010 2011 2012 2013
General Fund
Reserved 63,753$ -$ -$ -$
Unreserved 4,527,847 - - -
Nonspendable - 14,366 14,925 15,484
Unassigned - 4,920,846 5,080,812 5,567,933
Total General Fund 4,591,600$ 4,935,212$ 5,095,737$ 5,583,417$
All Other Governmental Funds
Reserved 9,043,337$ -$ -$ -$
Unreserved, reported in
Special Revenue funds 3,129,062 - - -
Capital Project funds 9,771,932 - - -
Restricted - 6,114,114 5,657,606 5,550,819
Committed - 4,666,447 5,165,192 4,511,073
Assigned - 6,877,641 6,533,868 8,204,338
Unassigned - - - -
Total All Other Governmental Funds 21,944,331$ 17,658,202$ 17,356,666$ 18,266,230$
Total All Governmental Funds 26,535,931$ 22,593,414$ 22,452,403$ 23,849,647$
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
(Restated)
2014 2015 2016 2017 2018 2019
-$ -$ -$ -$ -$ -$
- - - - - -
16,005 16,765 18,242 17,617 18,763 22,980
5,805,289 6,063,647 6,255,436 6,871,038 7,162,188 7,116,723
5,821,294$ 6,080,412$ 6,273,678$ 6,888,655$ 7,180,951$ 7,139,703$
-$ -$ -$ -$ -$ -$
- - - - - -
- - - - - -
5,687,949 8,069,238 7,772,782 24,605,109 24,646,820 13,304,922
4,771,304 5,431,288 5,397,075 5,837,809 5,414,740 5,033,555
7,839,792 5,496,484 4,958,094 5,176,318 5,695,269 6,248,128
(134,792) (226,356) (3,015,315) (4,178,684) (3,448,208) (2,475,320)
18,164,253$ 18,770,654$ 15,112,636$ 31,440,552$ 32,308,621$ 22,111,285$
23,985,547$ 24,851,066$ 21,386,314$ 38,329,207$ 39,489,572$ 29,250,988$
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)
(Restated)
2010 2011 2012 2013
Revenues
Property taxes 8,694,245$ 8,767,959$ 9,199,381$ 9,531,663$
Tax increments 1,408,256 1,400,163 1,343,248 511,924
Franchise taxes 430,494 439,795 440,149 438,834
Licenses and permits 236,378 359,530 238,943 273,117
Intergovernmental 1,765,220 1,599,253 858,816 4,463,113
Charges for services 1,369,904 1,544,369 1,557,898 1,585,964
Fines and forfeitures 238,961 255,329 283,233 239,201
Special assessments 258,392 153,835 305,818 178,335
Investment earnings 393,913 548,548 307,032 178,217
Miscellaneous 87,607 115,183 80,073 111,443
Total Revenues 14,883,370 15,183,964 14,614,591 17,511,811
Expenditures
General government 1,883,729 1,560,511 1,567,301 1,571,701
Public safety 5,791,511 5,933,201 5,946,209 5,967,599
Public works 989,734 1,079,884 1,192,760 1,254,201
Culture and recreation 1,599,381 1,560,486 1,599,041 1,613,518
Economic development 192,431 289,650 304,064 582,621
Capital outlay 2,605,724 5,263,935 7,685,819 4,239,938
Debt service
Principal 515,000 1,005,000 330,000 340,000
Interest 273,054 247,973 270,613 306,462
Bond issuance costs - 93,820 104,351 -
Total Expenditures 13,850,564 17,034,460 19,000,158 15,876,040
Excess (Deficiency) of Revenues
Over (Under) Expenditures 1,032,806 (1,850,496) (4,385,567) 1,635,771
Other Financing Sources (Uses)
Transfers in 2,596,321 2,477,195 936,188 360,427
Sales of capital assets 1,954 - - 1,460
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 (2,444,592) (4,569,216) (770,638) (600,414)
Total Other Financing
Sources (Uses)1,414,856 (2,092,021) 4,244,556 (238,527)
Net Change in Fund Balances 2,447,662$ (3,942,517)$ (141,011)$ 1,397,244$
Debt Service as a Percentage of
Noncapital Expenditures 9.8%6.4%4.1%5.6%
Fiscal Year
148
(Restated)
2014 2015 2016 2017 2018 2019
9,718,800$ 10,145,204$ 10,868,985$ 11,961,711$ 12,904,297$ 15,223,680$
537,871 430,879 492,584 841,098 1,112,753 1,317,803
438,541 442,556 447,248 912,357 945,244 957,448
353,973 389,957 466,548 641,870 367,931 320,438
818,825 1,359,511 2,063,546 1,844,648 2,195,760 3,947,039
1,663,053 1,601,081 1,571,798 1,727,615 1,399,998 1,376,176
215,585 237,591 191,960 208,909 230,657 227,343
98,617 38,417 173,158 92,458 282,589 197,566
248,013 274,116 304,252 486,746 658,606 1,166,238
129,980 202,057 42,103 137,591 33,966 173,679
14,223,258 15,121,369 16,622,182 18,855,003 20,131,801 24,907,410
1,668,474 1,688,752 1,872,436 2,622,277 1,787,553 1,900,480
6,397,860 6,866,105 7,168,102 7,724,950 7,997,311 8,427,939
1,225,551 1,328,371 1,606,369 1,671,593 1,717,815 1,790,715
1,761,961 1,853,741 1,938,131 2,066,692 2,015,729 2,032,585
298,825 498,479 588,167 1,737,947 815,352 513,946
3,000,518 8,204,694 8,220,964 5,217,461 12,956,485 22,573,850
350,000 405,000 415,000 523,497 799,734 968,674
212,025 131,530 257,661 455,539 769,497 1,273,302
2,200 114,607 58,188 251,648 148,365 90,446
14,917,414 21,091,279 22,125,018 22,271,604 29,007,841 39,571,937
(694,156) (5,969,910) (5,502,836) (3,416,601) (8,876,040) (14,664,527)
669,461 3,209,226 1,630,270 4,305,261 788,458 2,162,676
4,055,382 - - - - 331,299
- - 2,824,075 18,435,000 9,520,000 5,235,000
- 171,339 107,553 1,857,609 476,673 454,261
- 6,470,000 - - - -
(3,780,000) - - - - -
(477,461) (3,015,226) (1,426,570) (4,238,376) (748,726) (1,981,951)
467,382 6,835,339 3,135,328 20,359,494 10,036,405 6,201,285
(226,774)$ 865,429$ (2,367,508)$ 16,942,893$ 1,160,365$ (8,463,242)$
4.5%3.5%4.6%5.4%9.2%12.6%
Fiscal Year
149
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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
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
2019 15,223,680 1,317,803 957,448 17,498,931
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)
2010 2011 2012 2013
Taxable Market Value
Real property 1,618,178,200$ 1,492,408,000$ 1,321,463,913$ 1,214,204,483$
Personal property 7,624,400 8,162,100 8,515,600 9,657,700
Total Taxable Market Value 1,625,802,600$ 1,500,570,100$ 1,329,979,513$ 1,223,862,183$
Estimated actual value of taxable property 1,629,433,100$ 1,504,929,000$ 1,438,796,300$ 1,336,539,900$
Taxable Market Value as a Percentage of
Estimated Actual Value 99.78 99.71 %92.44 %91.57 %
Tax Capacity
Real property 19,864,103$ 18,462,796$ 16,686,170$ 15,476,014$
Personal property 148,346 159,492 165,812 188,654
Subtotal 20,012,449 18,622,288 16,851,982 15,664,668
Less: Tax Increment (1,181,390) (1,044,830) (944,560) (366,752)
Less: Contribution to Fiscal Disparities (2,596,468) (2,466,459) (2,380,423) (2,255,476)
Add: Distribution from Fiscal Disparities 3,946,315 3,896,651 3,605,075 3,448,346
Net Tax Capacity 20,180,906$ 19,007,650$ 17,132,074$ 16,490,786$
Tax levies
Revenue 9,053,443$ 9,036,625$ 9,066,928$ 9,406,483$
Bonds and interest 39,268 192,105 161,802 164,325
Total 9,092,711$ 9,228,730$ 9,228,730$ 9,570,808$
Tax capacity rate
Revenue 45.542 47.916 %53.842 %57.802 %
Bonds and interest 0.199 1.025 0.967 1.010
Sewer district 0.273 0.308 0.387 -
Total Direct Tax Rate 46.014 %49.249 %55.196 %58.812 %
Source: Hennepin County Auditor/Treasurer Department
Note: Property in the county is reassessed annually.
Fiscal Year
152
2014 2015 2016 2017 2018 2019
1,224,417,514$ 1,323,173,828$ 1,419,351,117$ 1,522,726,514$ 1,683,833,465$ 1,817,473,851$
10,849,800 11,343,900 11,588,000 12,327,600 13,258,900 13,963,100
1,235,267,314$ 1,334,517,728$ 1,430,939,117$ 1,535,054,114$ 1,697,092,365$ 1,831,436,951$
1,346,449,200$ 1,440,652,000$ 1,534,397,300$ 1,636,865,900$ 1,792,927,900$ 1,921,182,700$
91.74 %92.63 %93.26 %93.78 %94.65 %95.33 %
15,454,712$ 16,638,481$ 17,898,058$ 19,196,854$ 21,143,125$ 22,506,796$
211,746 221,628 226,510 242,052 260,678 275,032
15,666,458 16,860,109 18,124,568 19,438,906 21,403,803 22,781,828
(377,138) (338,715) (362,633) (604,222) (810,429) (948,691)
(2,154,731) (2,144,256) (2,277,639) (2,464,382) (2,655,561) (2,870,420)
3,437,911 3,505,922 3,437,652 3,757,080 4,010,408 4,111,736
16,572,500$ 17,883,060$ 18,921,948$ 20,127,382$ 21,948,221$ 23,074,453$
9,556,483$ 9,938,265$ 10,617,194$ 11,362,957$ 12,043,578$ 12,722,208$
161,487 163,902 195,819 604,444 869,164 2,579,402
9,717,970$ 10,102,167$ 10,813,013$ 11,967,401$ 12,912,742$ 15,301,610$
57.622 %55.073 %56.364 %56.906 %54.643 %56.539 %
0.974 0.905 1.041 3.025 3.946 11.451
- - - - - -
58.596 %55.978 %57.405 %59.931 %58.589 %67.990 %
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
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
2019 56.539 11.451 - 67.990
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
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
41.861 29.909 8.885 148.645
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 1.01 %
Allen Group, LLC 204,270 2 0.90
FLS Properties 203,710 3 0.89
Hy-Vee, Inc.193,150 4 0.85
Broadway Lanel/Golle/Holmes 190,700 5 0.84
St. Therese Home, Inc.188,730 6 0.83
Paddock Property Ltd. Partnership 182,740 7 0.80
CI Minn I-A, LLC 182,210 8 0.80
GLP US Management, LLC 181,310 9 0.80
Lang Nelson Association 173,650 10 0.76
Geneva Management Service, LLC - - -
New Hope / US Swim Partnership - - -
Minnesota Masonic Home/North Ridge Care Center - - -
Winnetka Mall, LLC - - -
New Hope Distribution Center, LLC - - -
Welsh Navarre MN, LLC - - -
Totals 1,931,640$ 8.48 %
Source: Hennepin County Auditor/Treasurer Department
Tax Capacity
2019
Percent
of Total
156
Tax
Capacity Rank
-$ - - %
- - -
139,250 9 0.70
- - -
- - -
154,438 4 0.77
165,250 2 0.83
- - -
- - -
132,188 10 0.66
199,250 1 1.00
159,250 3 0.80
152,275 5 0.76
146,970 6 0.73
145,250 7 0.73
139,250 8 0.70
1,533,371$ 7.68 %
Tax Capacity
2010
Percent
of Total
157
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
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 98,523 9,717,970 100.00
2015 10,102,167 10,017,500 99.16 73,958 10,091,458 99.89
2016 10,813,013 10,756,992 99.48 32,100 10,789,092 99.78
2017 11,967,401 11,895,137 99.40 63,110 11,958,247 99.92
2018 12,912,742 12,834,660 99.40 66,171 12,900,831 99.91
2019 15,301,610 15,172,310 99.15 - 15,172,310 99.15
Source: Hennepin County Auditor/Treasurer Department
(1) Includes state paid property tax credits.
Collected to Levy
Percent
Percentage of Total
of Levy Collections
158
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
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
2019 40,433,000 - 6,582,397
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
159
G.O
Lease General G.O.Tax Total
Revenue Obligation Revenue Increment Primary Per
Bonds Bonds Bonds Bonds Government Capita
-$ -$ 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 3.41 2,420
3,505,000 3,509,802 1,326,532 1,401,536 56,758,267 3.67 2,605
Income
of Personal
Percentage
Business-type Activities
160
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
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 2,177
2019 53,253,267 3,193,279 50,059,988 2.606 2,297
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
161
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City of New Hope, Minnesota
Statistical Section (Unaudited)
Computation of Direct and Overlapping Debt
December 31, 2019
City's
Outstanding Share
Debt of Debt
Direct Debt
City of New Hope (1)40,433,000$ 100.00 %40,433,000$
Overlapping Debt
Hennepin County 990,655,000$ 1.08 %10,699,074$
Independent School District #281, Robbinsdale 180,625,000 19.52 35,258,000
Metropolitan Council 265,680,000 0.55 1,461,240
Hennepin Region RR Authority 98,385,000 1.08 1,062,558
Three Rivers Park District 54,325,000 1.52 825,740
Total Overlapping Debt 1,589,670,000$ 3.10 %49,306,612$
Total Direct and Overlapping Debt 1,630,103,000$ 5.51 %89,739,612$
(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
2010 2011 2012 2013
Debt Limit 48,774,078$ 45,017,103$ 39,899,385$ 36,715,865$
Total Net Debt Applicable to Limit 1,246,878 1,072,678 970,908 839,948
Legal Debt Margin 47,527,200$ 43,944,425$ 38,928,477$ 35,875,917$
Total Net Debt Applicable to the Limit
as a Percentage of Debt Limit 2.56%2.38%2.43%2.29%
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
2014 2015 2016 2017 2018 2019
37,058,019$ 40,035,532$ 42,928,174$ 46,051,623$ 50,912,771$ 54,943,109$
696,627 2,719,528 5,497,493 25,516,878 34,249,431 38,595,992
36,361,392$ 37,316,004$ 37,430,681$ 20,534,745$ 16,663,340$ 16,347,117$
1.88%6.79%12.81%55.41%67.27%70.25%
Taxable Market Value 1,831,436,951$
Debt Limit (3 Percent of Market Value)54,943,109$
Debt Applicable to Limit
General obligation bonds 40,433,000
Less: Amount Available in
Debt Service Funds (1,837,008)
Total Net Debt Applicable to Limit 38,595,992
Legal Debt Margin 16,347,117$
Fiscal Year
Legal Debt Margin Calculation for Fiscal Year 2019
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
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
2019 10,292,470 7,408,536 2,883,934 515,326 251,673 376.00
(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)
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 21,790 71,067 1,548,549,515 39.4 12,304 2.7
2019 21,790 71,067 1,548,549,930 39.4 12,237 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 323 7 3.16
YMCA 228 8 2.23
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.- -
Total Employment for Top 10 Employers 6,372 62.26 %
Total City Employment 10,235
Source: Minnesota Department of Employment and Economic Development.
Principal Employers
Current Year and Nine Years Ago
Employer Employment
2019
Percentage
of Total City
168
Employees Rank
2,000 1 18.83 %
602 3 5.67
- -
- -
808 2 7.61
- -
- -
240 6 2.26
182 8 1.71
190 7 1.79
557 4 5.24
372 5 3.50
150 9 1.41
140 10 1.32
5,241 49.35 %
10,620
Employment
2010
Percentage
of Total City
169
City of New Hope, Minnesota
Full-time Equivalent City Government Employees by Function
Last Ten Fiscal Years
2010 2011 2012 2013
General Government 15 15 15 16
Public Safety
Police
Officers 30 31 30 31
Civilians 7 6 7 7
Public Works 22 24 24 24
Culture and Recreation 8 7 6 7
Total 82 83 82 85
Source: Various City departments.
Function
170
2014 2015 2016 2017 2018 2019
14 13 13 16 17 17
33 35 33 34 34 34
7 9 9 10 11 10
24 23 24 24 24 24
7 7 8 7 7 7
85 87 87 91 93 92
171
City of New Hope, Minnesota
Operating Indicators by Function
Last Ten Fiscal Years
2010 2011 2012 2013
Function
Public works
Street resurfacing (miles)2 4 - -
Potholes repaired 734 648 687 600
Culture and recreation
Program registration - adults 3,796 5,271 5,598 4,565
Program registration - youth 5,287 5,323 7,442 5,924
Attendance at sponsored events 137,199 146,305 148,966 144,000
Golf Course
Rounds of golf at the Municipal course 21,686 18,788 19,568 16,782
Ice Arena
Hours of ice time rental 3,980 3,903 3,558 3,739
Water
Water main breaks 19 32 26 30
Average daily consumption (thousands of gallons)1,746 1,712 1,828 1,682
Sewer
Average daily treatment (thousands of gallons)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 2019
- 12 3 3 3 4
1,330 2,882 3,025 2,530 3,000 2,900
3,121 2,746 3,343 3,011 2,603 1,860
5,734 5,815 6,043 5,969 5,413 4,695
122,478 124,777 127,865 127,112 102,659 101,409
16,431 18,175 20,375 18,662 17,800 16,837
3,734 3,683 3,567 4,030 4,151 4,202
27 21 19 12 23 14
1,571 1,559 1,588 1,616 1,616 1,551
2,200 1,670 1,800 1,352 1,405 1,355
173
City of New Hope, Minnesota
Capital Asset Statistics by Function
Last Ten Fiscal Years
2010 2011 2012 2013
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
2014 2015 2016 2017 2018 2019
1 1 1 1 1 1
3 3 3 3 3 3
64.0 64.0 64.5 64.5 64.5 64.8
8.5 8.5 8.5 8.5 8.5 8.5
26.4 26.4 27.0 27.0 27.0 27.3
580.0 580.0 619.0 619.0 619.0 630.0
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 -
17 17 15 15 12 12
63 63 64 64 64 65
690 690 712 712 712 716
21,000,000 21,000,000 21,000,000 21,000,000 21,000,000 21,000,000
74 74 75 75 75 75
56 56 56 56 56 57
1 1 1 1 1 1
1 1 1 1 1 1
175