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2020 CAFR CITY OF NEW HOPE NEW HOPE, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2020 CITY OF NEW HOPE HENNEPIN COUNTY, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2020 KIRK MCDONALD - CITY MANAGER PREPARED BY: DEPARTMENT OF FINANCE Member GFOA of U.S. and Canada THIS PAGE INTENTIONALLY LEFT BLANK Page INTRODUCTORY SECTION LETTER OF TRANSMITTAL FROM CITY MANAGER i–vi GFOA CERTIFICATE OF ACHIEVEMENT vii ORGANIZATIONAL CHART viii CITY COUNCIL AND OTHER OFFICIALS ix FINANCIAL SECTION INDEPENDENT AUDITOR’S REPORT 1–3 MANAGEMENT’S DISCUSSION AND ANALYSIS 4–14 BASIC FINANCIAL STATEMENTS Government-Wide Financial Statements Statement of Net Position 15 Statement of Activities 16–17 Fund Financial Statements Governmental Funds Balance Sheet 18–19 Reconciliation of the Balance Sheet to the Statement of Net Position 20 Statement of Revenue, Expenditures, and Changes in Fund Balances 21–22 Reconciliation of the Statement of Revenue, Expenditures, and Changes in Fund Balances to the Statement of Activities 23 Statement of Revenue, Expenditures, and Changes in Fund Balances – General Fund – Budget and Actual 24 Statement of Revenue, Expenditures, and Changes in Fund Balances – Economic Development Authority Fund – Budget and Actual 25 Proprietary Funds Statement of Net Position 26–29 Statement of Revenue, Expenses, and Changes in Net Position 30–31 Statement of Cash Flows 32–35 Notes to Basic Financial Statements 36–67 REQUIRED SUPPLEMENTARY INFORMATION PERA – General Employees Retirement Fund Schedule of City’s and Nonemployer Proportionate Share of Net Pension Liability 68 Schedule of City Contributions 68 PERA – Public Employees Police and Fire Fund Schedule of City’s and Nonemployer Proportionate Share of Net Pension Liability 69 Schedule of City Contributions 69 Other Post-Employment Benefits Plan Schedule of Changes in the City’s Total OPEB Liability and Related Ratios 70 Notes to Required Supplementary Information 71–76 CITY OF NEW HOPE HENNEPIN COUNTY, MINNESOTA Table of Contents Page SUPPLEMENTAL INFORMATION Nonmajor Governmental Funds Combining Balance Sheet 77 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances 78 Nonmajor Special Revenue Funds Subcombining Balance Sheet 79 Subcombining Statement of Revenues, Expenditures, and Changes in Fund Balances 80 Schedule of Revenues, Expenditures, and Changes in Fund Balances – Solid Waste Management Fund – Budget and Actual 81 Nonmajor Capital Projects Funds Subcombining Balance Sheet 82 Subcombining Statement of Revenues, Expenditures, and Changes in Fund Balances 83 Nonmajor Debt Service Funds Subcombining Balance Sheet 84–85 Subcombining Statement of Revenues, Expenditures, and Changes in Fund Balances 86–87 General Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual 88–92 Internal Service Funds Combining Statement of Net Position 93 Combining Statement of Revenues, Expenses, and Changes in Net Position 94 Combining Statement of Cash Flows 95 STATISTICAL SECTION (UNAUDITED) Financial Trends Net Position by Component 96–97 Changes in Net Position 98–101 Governmental Activities Tax Revenues by Source 102 Fund Balances of Governmental Funds 103–104 Changes in Fund Balances of Governmental Funds 105–106 General Government Tax Revenues by Source 107 Revenue Capacity Tax Capacity, Market Value, and Estimated Actual Value of Taxable Property 108–109 Property Tax Rates – Direct and Overlapping Governments 110 Principal Property Taxpayers 111 Property Tax Levies and Collections 112 Debt Capacity Ratios of Outstanding Debt by Type 113–114 Ratios of General Bonded Debt Outstanding 115 Direct and Overlapping Governmental Activities Debt 116 Legal Debt Margin Information 117–118 Pledged Revenue Coverage 119 Demographic and Economic Information Demographic and Economic Statistics 120 Principal Employers 121 Operating Information Full-Time Equivalent City Government Employees by Function 122–123 Operating Indicators by Function 124–125 Capital Asset Statistics by Function 126–127 CITY OF NEW HOPE HENNEPIN COUNTY, MINNESOTA Table of Contents (continued) INTRODUCTORY SECTION CITY OF NEW HOPE, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2020 THIS PAGE INTENTIONALLY LEFT BLANK 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 May 14, 2021 Honorable Mayor and City Council City of New Hope 4401 Xylon Avenue North New Hope, MN 55428-4898 The Comprehensive Annual Financial Report of the City of New Hope, Minnesota (the City), for the fiscal year ended December 31, 2020, 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 fina ncial 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 22,376. The City is 5.6 square miles in area and is fully developed. 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. -i- -ii- 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 the GASB 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 prim ary 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 No. 281 Education 791 (1,852) Hy-Vee Grocery and 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 and medicine manufacturing 323 Intermediate District No. 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. -iii- 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 20 20. 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 2020, $27,832,249 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 2020: New Hope Aquatic Center A new police department and City Hall for the City opened in July 2019. The pool that was previously located where the new police department and City Hall were constructed was demolished and reconstructed in the area of the former 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 April 2019 and was completed in 2020. The pool is scheduled to open in 2021. Windsor Ridge SVK Development 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 Development was selected as the preferred developer for the site . SVK Development 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. As of early 2021, a total of 12 homes had sold for an average price of $408,000. It is anticipated that all homes will be constructed by the end of 2021. Pocket Square Cocktail Lounge A. Davis Distillery received a conditional use permit in January 2020 to open a micro distillery and cocktail room at 7530 Quebec Avenue North. The distillery plans to serve hand-crafted cocktails and small 750 ml bottles of their handmade liquor. The micro distillery will begin by selling primarily vodka, gin, and possibly rum, all of which will be produced on-site. Although the cocktail room will not offer food, customers will be encouraged to order food from local restaurants and there will be food trucks on location during some occasions . Pocket Square Cocktail Lounge is one of the first cocktail rooms to open in the northwest suburbs. ORIJIN STONE ORIJIN STONE, a direct-to-trade natural stone wholesaler, relocated their operations and staff of 28 people to New Hope in October of 2020. The business is known for its innovation in the stone industry, premium quality, and exclusive natural stone products from around the world. After purchasing the vacant 110,000-square foot building at 5100 Boone Avenue North in February 2020, ORIJIN STONE constructed a state-of-the-art custom fabrication facility for natural stone. The renovated space includes a new showroom, remodeled office space, and a reconfigured warehouse. Interior improvements to the building included new skylights and roofing, mechanical and heating systems, plumbing and bathrooms, breakrooms, overhead doors, cranes, windows and doors, concrete flooring, and significant repairs to the building. Exterior upgrades included the construction of a new 32-stall parking lot, new lighting and fencing, structural repairs, and painting of the building . The family run business started in 2011 and the new location will allow for continued growth and expansion. -iv- Twin City Garage Door Twin City Garage Door completed a $500,000 remodel and expansion of their office and showroom at 5601 Boone Avenue North. The colorful, innovative design showcases Twin City Garage Door ’s products and includes working examples throughout the project showroom . The full-service garage door company has three locations in the Twin Cities. They provide overhead garage door installation and repair services, as well as garage door opener and electrical control device services for commercial, industrial, and residential properties. Housing The City’s commitment to maintaining its housing stock is supported through a variety o f cooperative projects and programs. Approximately $10,640,000 was reinvested in the City’s housing stock in 2020 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 2020 continued the expenditure of previously allocated CDBG funds. The City contributed $76,250 in funds towards the acquisition of 8720 47th Avenue North by Habitat for Humanity. The home will be rehabilitated in 2021. 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 17 properties, resulting in the creation of 21 lots. The lots purchased by the City are located at 7215, 7303, 7311, and 9121 62nd Avenue North, 4511 Boone Avenue North, 3751, 4215, and 6065 Louisiana Avenue North, 3856 Maryland Avenue North, 4415 Nevada Avenue North, 5201 and 5355 Oregon Avenue North, 5213 Pennsylvania Avenue North, 5431 Virginia Avenue North, 6027 and 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 has two other properties under contract for purchase. b. Rehabilitation Re-sell: i. The City has purchased two distressed properties for rehabilitation in the last five 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 coordinated a rehabilitation project valued at more than $180,000. The home sold for $375,000 in 2020. 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 – 971 inspections completed in 2020. 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 545 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. -v- PARKS AND RECREATION The City continues to provide its residents with a vast array of park amenities and recreation opportunities at an affordable cost. In 2020, 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 nonschool time. The year started off strong with registrations, rentals, and use; however, COVID-19 greatly impacted the majority of the year. In mid-March, all programs were cancelled and facilities closed for a couple of months due to the direction of the Governor. When the City was able to start to re-open in early summer, there were guidelines in place that severely limited facility operations and programs. Staff worked to create Preparedness Plans, train staff, and adapt programs and facility operations in order to offer programming, including virtual programs . Due to the stringent guidelines, the aquatic park opening was postponed until 2021 . In mid-November, the Governor once again closed programs and facilities, which lasted through the end of the year . The golf course was the only facility that continued to offer leagues, lessons, a limited number of tournaments, and open golf during the majority of the COVID-19 pandemic. However, most of the clubhouse rentals and picnic pavilion rentals were cancelled due to the limitations. The Governor allowed golf course maintenance to start on April 13 and for courses to open on April 18, if COVID -19 safety plans were in place. It was an extremely busy year for the golf course. The number of golf rounds increased 57 percent from 2019, it was a 15-year high for the number of rounds played and a 20-year high for revenue. In 2020, additional ventilation was added in the concession equipment room, year 2 of the 5-year lease for golf carts continued , and landscaping was added around the new patio. The parking agreement continued with Ironwood Apartments for the use of 16 golf course parking lot spaces overnight . During 2020, several park projects took place including the replacement of the playground at Begin Park, court resurfacing of the tennis courts at Civic Center Park and basketball court at Fred Sims Park, crack filling of the basketball and tennis courts at Hidden Valley Park, replacement of the basketball court at Northwood Park, addition of fencing at Liberty Park hockey rink, and the reclaim and overlay of the trails along the south side of the tennis courts and south parking lot at Civic Center Park. In addition, engineered wood fiber was added to several playgrounds and staff purchased new picnic tables for the Civic Center Park picnic pavilion . Buckthorn removal was continued in several parks and new signage was installed at Begin and Victory parks. During the 2019–2020 winter season, parks staff continued to plow a section of trail at Hidden Valley, Northwood , and Lions parks and maintain outdoor skating areas at Hidden Valley, Lions, and Liberty parks. Work on the Civic Center Park amenities and New Hope Aquatic Park continued. The skatepark components were finalized in early 2020 and available for use most of the year. The performance center was complete by the middle of the summer and some programming took place toward the end of the summer and early fall, including a cou ple of Movies in the Park and a Halloween event. Due to the construction timing, the Off Broadway Musical Theater performances were not scheduled in 2020, but are expected to return in 2021 . Installation of trails, lighting, parking lots, landscaping, grading, and seeding of the park area took place throughout the year. The final work will take place in 2021. Since the Aquatic Park did not open due to COVID-19, work continued through mid-summer with the final punch list items planned for completion by opening day in 2021. When allowed to be open, the ice arena offered ice time for youth, adult recreational, league hockey, open skating , and skating lessons. In addition, the three compressors were rebuilt, system relief valves were replaced, and new skate sharpening machines were purchased. The advertising agreement and concession stand agreement continued with the Armstrong Cooper Youth Hockey Association and the dryland training agreement continued with Charleston Overspeed; however, due to COVID-19 restrictions, these agreements were temporarily suspended from mid -March through December. 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. -vi- OTHER PERTINENT INFORMATION Independent Audit – As required by Minnesota Statutes, 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 Malloy, Montague, Karnowski, Radosevich & Co., P.A. (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. AWARDS AND ACKNOWLEDGEMENTS The 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, 2019. This was the 12th 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 Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting Presented to City of New Hope Minnesota For its Comprehensive Annual Financial Report For the Fiscal Year Ended December 31, 2019 Executive Director/CEO -vii- -viii- -ix- Term Expires Kathi Hemken Mayor 12/31/2020 John Elder Councilmember 12/31/2022 Cedrick Frazier Councilmember 12/31/2020 Andrew Hoffe Councilmember 12/31/2020 Jonathan London Councilmember 12/31/2022 Kirk McDonald City Manager Appointed Bernie Weber Director of Public Works Appointed Jeff Sargent Director of Community Development Appointed Susan Rader Director of Parks and Recreation Appointed Tim Hoyt Chief of Police Appointed Rich Johnson Director of Human Resources and Administrative Services Appointed Valerie Leone City Clerk Appointed CITY COUNCIL CITY OFFICIALS CITY OF NEW HOPE HENNEPIN COUNTY, MINNESOTA City Council and Other Officials Year Ended December 31, 2020 THIS PAGE INTENTIONALLY LEFT BLANK FINANCIAL SECTION CITY OF NEW HOPE, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2020 THIS PAGE INTENTIONALLY LEFT BLANK -1- 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, 2020, 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 and 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 on 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 -2- 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 at December 31, 2020, 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, supplemental information, 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 supplemental information is the responsibility of management and was derived from and relates 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 supplemental 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) -3- OTHER REPORTING REQUIRED BY GOVERNMENT AUDITING STANDARDS In accordance with Government Auditing Standards, we have also issued our report dated May 14, 2021 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 14, 2021 THIS PAGE INTENTIONALLY LEFT BLANK CITY OF NEW HOPE Management’s Discussion and Analysis Year Ended December 31, 2020 -4- As management of the City of New Hope, Minnesota (the City), we have provided readers of the City’s financial statements with this narrative overview and analysis of the financial activities of the City for the fiscal year ended December 31, 2020. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal, located earlier in 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 $85,039,129 (net position). Of this amount, $24,251,116 (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 $7,841,398. This was a result of governmental activities and business type activities increasing net position by $5,347,578 and $2,493,820, respectively. • As of the close of the current fiscal year, the City’s governmental funds reported combined ending fund balances of $27,455,251, a decrease of $1,795,737 in comparison with the prior year. Approximately 24.7 percent of this total amount, $6,781,656, 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 $8,901,587, or 63.0 percent, of total General Fund 2020 expenditures and transfers out. • The City’s total bonded debt decreased by $2,612,989 (4.6 percent) during the current fiscal year. OVERVIEW OF THE FINANCIAL STATEMENTS The management’s discussion and analysis is intended to serve as an introduction to the City’s basic financial statements, which are comprised of three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to basic 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. -5- Figure A shows how the various parts of this annual report are arranged and related to one another. Management’s Discussion and Analysis Basic Financial Statements Required Supplementary Information Government-Wide Financial Statements Fund Financial Statements Notes to Basic Financial Statements Summary Detail Figure A Required Components of the City’s Comprehensive Annual Financial Report 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 private sector businesses. The Statement of Net Position presents information on all of the City’s assets, deferred outflows of resources, liabilities, and deferred inflows of resources, with the difference reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. The Statement of Activities presents information showing how the City’s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (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 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. Fund Financial Statements – A fund is a grouping of related accounts that is used to maintain control over resources segregated for specific activities or objectives. The City, like other 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. -6- Governmental Funds – Governmental funds 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, and the balances of spendable resources available at the fiscal year-end. 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 funds Balance Sheet and Statement of Revenue, Expenditures, and Changes in Fund Balances provide a reconciliation to facilitate the 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 nonmajor 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 Develo pment 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. Proprietary Funds – 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. 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. Notes to Basic Financial Statements – The notes to basic financial statements provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. Other Information – Required supplementary information (RSI) on the City’s other post-employment benefit and pension plans is presented following the notes to basic financial statements. Combining and individual fund statements and schedules for nonmajor funds, along with other city information, are presented as supplemental information immediately following the RSI. Statistical tables are presented as the last section in this report. The statistical section 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. -7- GOVERNMENT-WIDE FINANCIAL ANALYSIS As noted earlier, changes in net position may serve over time as a useful indicator of the City’s financial condition. The City’s assets and deferred outflows of resources exceeded its liabilities and deferred inflows of resources by $85,039,129 at the end of the 2020 fiscal year. A portion of the City’s net position (60.5 percent) reflects its investment in capital assets (e.g., land, buildings, vehicles and equipment); less any related debt used to acquire those assets that is still outstanding. The City uses these capital assets to provide services to citizens; consequent ly, these assets are not available for future spending. Although the City’s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. The following is a summary of the City’s net position at the end of the last two fiscal years: 2020 2019 2020 2019 2020 2019 Current and other assets 42,638,781$ 46,558,017$ 8,102,748$ 5,932,881$ 50,741,529$ 52,490,898$ Capital assets, net of depreciation 73,333,910 68,293,237 29,336,500 29,058,223 102,670,410 97,351,460 Total assets 115,972,691 114,851,254 37,439,248 34,991,104 153,411,939 149,842,358 Deferred outflows of resources Deferred pension resources 2,315,482 4,422,526 99,031 73,354 2,414,513 4,495,880 Deferred other postemployment benefit resources 167,973 119,013 28,471 24,733 196,444 143,746 Total deferred outflows of resources 2,483,455 4,541,539 127,502 98,087 2,610,957 4,639,626 Long-term liabilities (including current portion)53,540,307 54,561,626 10,321,457 10,650,831 63,861,764 65,212,457 Other liabilities 1,762,636 3,763,982 980,838 568,736 2,743,474 4,332,718 Total liabilities 55,302,943 58,325,608 11,302,295 11,219,567 66,605,238 69,545,175 Deferred inflows of resources Deferred pension resources 2,882,251 5,499,493 37,066 134,165 2,919,317 5,633,658 Deferred other postemployment benefit resources 33,203 36,169 5,628 7,518 38,831 43,687 Resources received in advance 1,420,381 2,061,733 – – 1,420,381 2,061,733 Total deferred inflows of resources 4,335,835 7,597,395 42,694 141,683 4,378,529 7,739,078 Net position Net investment in capital assets 31,359,813 30,139,510 20,127,288 19,315,353 51,487,101 49,454,863 Restricted 7,740,859 6,628,138 1,560,053 1,358,401 9,300,912 7,986,539 Unrestricted 19,716,696 16,702,142 4,534,420 3,054,187 24,251,116 19,756,329 Total net position 58,817,368$ 53,469,790$ 26,221,761$ 23,727,941$ 85,039,129$ 77,197,731$ Governmental Activities Business-Type Activities Total An additional portion of the City’s net position, $9,300,912, represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net position, $24,251,116, may be used to meet the City’s ongoing obligations to citizens and creditors. At the end of the current fiscal year, the City is able to report a positive balance in all three categories of net position for both the governmental activities and the business-type activities. This was also the case at the previous year-end. -8- The following table indicates the changes in net position for the City’s governmental and business-type activities: 2020 2019 2020 2019 2020 2019 Revenues Program revenues Charges for services 1,504,128$ 1,860,001$ 11,627,850$ 10,587,884$ 13,131,978$ 12,447,885$ Operating grants and contributions 866,861 826,489 110,331 14,308 977,192 840,797 Capital grants and contributions 1,048,750 2,819,823 12,922 28,824 1,061,672 2,848,647 General revenues Property taxes 16,821,240 15,265,428 – – 16,821,240 15,265,428 Tax increments 1,918,857 1,317,803 – – 1,918,857 1,317,803 Franchise taxes 958,162 957,448 – – 958,162 957,448 Grants and contributions not restricted to specific programs 2,497,630 803,035 – – 2,497,630 803,035 Investment earnings 781,304 1,412,308 137,468 149,296 918,772 1,561,604 Gain on sale of capital assets 22,000 369,163 – – 22,000 369,163 Total revenues 26,418,932 25,631,498 11,888,571 10,780,312 38,307,503 36,411,810 Expenses General government 2,945,625 1,850,242 – – 2,945,625 1,850,242 Public safety 8,968,009 8,540,198 – – 8,968,009 8,540,198 Public works 3,725,075 3,816,417 – – 3,725,075 3,816,417 Culture and recreation 2,270,751 2,145,988 – – 2,270,751 2,145,988 Economic development 1,350,348 749,651 – – 1,350,348 749,651 Interest on long-term debt 1,570,807 1,412,763 – – 1,570,807 1,412,763 Sewer utility – – 3,096,526 2,834,973 3,096,526 2,834,973 Water utility – – 4,195,981 3,762,099 4,195,981 3,762,099 Golf course – – 316,173 319,871 316,173 319,871 Ice arena – – 1,016,296 1,003,048 1,016,296 1,003,048 Storm water – – 877,244 888,156 877,244 888,156 Street lighting – – 133,270 116,732 133,270 116,732 Total expenses 20,830,615 18,515,259 9,635,490 8,924,879 30,466,105 27,440,138 Change in net position before transfers 5,588,317 7,116,239 2,253,081 1,855,433 7,841,398 8,971,672 Transfers – internal activities (240,739) (144,624) 240,739 144,624 – – Change in net position 5,347,578 6,971,615 2,493,820 2,000,057 7,841,398 8,971,672 Net position Beginning 53,469,790 46,498,175 23,727,941 21,727,884 77,197,731 68,226,059 Ending 58,817,368$ 53,469,790$ 26,221,761$ 23,727,941$ 85,039,129$ 77,197,731$ TotalGovernmental Activities Business-Type Activities Governmental activities increased the City’s net position by $5,347,578 in 2020, while business -type activities increased net position by $2,493,820. The increase in general government expense of $1,095,383 was mainly due to a loss on the disposal of the old City Hall building and improvements. The increase in economic development expense of $600,697 was a result of a loss on the sale of remaining land held for resale. Capital grants and contributions decreased from the prior year by $1,771,073, mainly due to the City utilizing about $1.9 million of a $2.0 million grant to cover part of the outdoor pool project costs in the prior year. The decrease in capital grants and contributions was offset by increases in property taxes levied of $1,555,812 and grants and contributions not restricted to specific programs of $1,694,595, primarily from recognition of approximately $1.6 million of federal coronavirus relief funds. -9- Governmental Activities – Governmental activities net position increased by $5,347,578. The following graphs illustrate the City’s revenues and expenses for its governmental activities: Expenses and Program Revenues – Governmental Activities $– $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $7,000,000 $8,000,000 $9,000,000 $10,000,000 General Government Public Safety Public Works Culture and Recreation Economic Development Interest and Fiscal Charges Expenses Program Revenues Revenue by Source – Governmental Activities -10- Business-Type Activities – The net position of business-type activities increased by $2,493,820. This increase was primarily the result of operating net income in the Sewer Utility, Water Utility, and Storm Water Funds of $593,340, $961,383, and $373,686, respectively. Below are the graphs showing the business-type activities revenue and expense comparisons: Expenses 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 $5,500,000 $6,000,000 Sewer Utility Water Utility Golf Course Ice Arena Storm Water Street Lighting Expenses Program Revenues Revenue by Source – Business-Type Activities -11- FINANCIAL ANALYSIS OF THE CITY’S FUNDS 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 $27,455,251, a decrease of $1,795,737 in comparison with the prior year. Approximately 24.7 percent of this total amount, $6,781,656, 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 ($24,499), 2)restricted ($9,016,306), 3) committed ($4,639,390), or 4) assigned ($6,993,400). General Fund – The fund balance of the General Fund increased by $1,786,383 to $8,926,086 at December 31, 2020. Unassigned fund balance represents 63.0 percent of total 2020 expenditures. The increase in fund balance was mainly due to revenues exceeding current year operational costs. Economic Development Authority – Fund balance decreased by $401,302 in 2020, due to the sale of remaining land held for resale at a loss. The fund balance of $4,320,456 was committed for economic development projects. HRA Construction – 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. Fund balance increased by $723,948, which is primarily result of increased in tax increment revenues from improvements. City Hall CIP – The decrease in fund balance of $576,934 is due to project expenditures in 2020. Street Infrastructure – This fund accounts for capital outlay expenditures related to street infrastructure. Fund balance increased $234,843 from the prior year. The increase was a result of revenues exceeding current year project costs. Park/Pool Improvement Project – The decrease in fund balance of $4,666,479 is due to project expenditures in 2020. HRA Bonds – The increase in fund balance of $124,294 is primarily related to tax increment revenues exceeding debt service requirements and other expenditures in the fund. Proprietary Funds – The City’s proprietary funds provide the same information for the business-type activities found in the government-wide financial statements, but in more detail. The City’s enterprise funds had a total net position of $26,479,383 at year-end, of which $4,792,042 was unrestricted. The total net position of these funds improved by $2,294,461 during 2020. Other factors concerning the finances of these funds have already been addressed in the discussion of the City’s business-type activities. -12- 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 $506,822 and expenditures were under budget by $1,279,561. Revenue line items with significant budget variances include the following: •Intergovernmental revenue was over budget by $1,756,383, mostly due to federal funding for COVID-19-related costs. •Charges for services revenue was under budget by $1,144,980, mainly due to budgeting for the City’s new outdoor pool, which was expected to open for 2020, but was closed for the whole year, due to COVID-19. Expenditure line items with significant budget variances include the following: •Public safety expenditures were under budget by $443,090, mostly in personnel services for the police department, due to vacant positions. •Culture and recreation expenditures were under budget by $846,975, primarily in swimming pool budget to actual difference, which contributed to $597,306 of the variance. The pool was not open in 2020 as anticipated. The remaining budget to actual difference was made up of underspending in budgeted culture and recreation expenditures from the cancellation of various city programs and activities, due to COVID-19 restrictions. -13- CAPITAL ASSETS AND LONG-TERM LIABILITIES Capital Assets – The City’s investment in capital assets (net of accumulated depreciation) for its governmental and business-type activities as of December 31, 2020 was $102,670,410, an increase of $5,318,950 from the prior year. The City’s capital assets for the last two years are as follows: 2020 2019 2020 2019 2020 2019 Land 994,268$ 994,268$ 485,042$ 485,042$ 1,479,310$ 1,479,310$ Buildings and structures 25,408,669 9,367,855 10,797,364 10,912,208 36,206,033 20,280,063 Vehicles and equipment 10,531,390 10,839,831 2,505,156 2,635,207 13,036,546 13,475,038 Improvements other than buildings 47,227,137 46,133,939 28,522,699 27,865,215 75,749,836 73,999,154 Construction in progress 19,939,298 32,059,543 1,370,824 798,951 21,310,122 32,858,494 Less accumulated depreciation (30,766,852) (31,102,199) (14,344,585) (13,638,400) (45,111,437) (44,740,599) Net total 73,333,910$ 68,293,237$ 29,336,500$ 29,058,223$ 102,670,410$ 97,351,460$ Governmental Activities Business-Type Activities Total The majority of the increase in capital assets was in building and structures, due to completion of City Hall and police station projects. Additional details of the City’s capital asset activity for the year can be found in Note 5 of the notes to basic financial statements. Long-Term Liabilities – The debt service funds account for the accumulation of resources to finance all of the City’s governmental activity general obligation debt. The revenue sources for these funds include annual tax levies, tax increments, franchise taxes, and special assessments. At year-end, there was $2,845,806 of fund balance restricted for debt service in the governmental funds. The lease revenue bonds and G.O. revenue bonds will be paid from the designated business activity from Ice Arena, Sewer Utility, Water Utility, and Storm Water Funds. The following table presents the City’s long-term liabilities as of the last two year-ends: 2020 2019 2020 2019 2020 2019 GO. bonds and certificates 38,930,476$ 40,433,000$ 3,285,833$ 3,509,802$ 42,216,309$ 43,942,802$ G.O. tax increment bonds 6,005,590 6,582,397 1,307,253 1,401,536 7,312,843 7,983,933 Lease revenue bonds – – 3,505,000 3,505,000 3,505,000 3,505,000 G.O. revenue bonds and notes – – 1,111,126 1,326,532 1,111,126 1,326,532 Total 44,936,066$ 47,015,397$ 9,209,212$ 9,742,870$ 54,145,278$ 56,758,267$ TotalGovernmental Activities Business-Type Activities The City achieved an “AA” rating from Standard & Poor’s. Additional details of long-term liabilities activity for the year can be found in Note 6 of the notes to basic financial statements. -14- ECONOMIC FACTORS AND NEXT YEAR’S BUDGETS AND RATES Economic factors affect the preparation of annual budgets. The following factors were considered in preparing the 2021 budget: • User charges have been increased to account for various utility improvements scheduled for 2021 and beyond. • The overall tax levy was reduced to a 3.4 percent increase for 2021, primarily related to no new bonding for capital projects. • Management provided a long-term plan to City Council in November that highlighted the tax effect of major capital and operating decisions. This will be an important document when preparing future budgets. • The City dealt with the COVID-19 pandemic in a measured and forward-thinking manner, balancing increased costs for public safety and the loss of revenue from fees, licenses, etc. with reductions in spending, programming, and seasonal equipment. The City received approximately $1.6 million in federal Coronavirus Aid, Relief, and Economic Security funding, which was targeted for police and fire public safety costs. REQUESTS FOR INFORMATION This financial report is designed to provide a general overview of the City’s finances for all those with an interest in the City’s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Department of Finance, City of New Hope, 4401 Xylon Avenue North, New Hope, Minnesota 55428. THIS PAGE INTENTIONALLY LEFT BLANK GOVERNMENT-WIDE FINANCIAL STATEMENTS CITY OF NEW HOPE, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2020 THIS PAGE INTENTIONALLY LEFT BLANK City of New Hope, Minnesota Statement of Net Position December 31, 2020 Governmental Business-Type Activities Activities Total Assets Cash and temporary investments 39,764,534$ 5,056,635$ 44,821,169$ Cash held with fiscal agent - 1,560,053 1,560,053 Receivables Taxes 352,003 - 352,003 Accrued interest 65,631 - 65,631 Accounts 369,512 1,437,072 1,806,584 Loans 261,516 - 261,516 Special assessments 577,299 192,210 769,509 Internal balances 414,307 (414,307) - Due from other governments 104,844 60,084 164,928 Inventories 68,035 42,492 110,527 Prepaid items 24,499 - 24,499 Investment in joint ventures 636,601 168,509 805,110 Capital assets Land and construction in progress 20,933,566 1,855,866 22,789,432 Depreciable assets (net of accumulated deprecation)52,400,344 27,480,634 79,880,978 Total Assets 115,972,691 37,439,248 153,411,939 Deferred Outflows of Resources Deferred pension resources 2,315,482 99,031 2,414,513 Deferred other post-employment benefit resources 167,973 28,471 196,444 Total Deferred Outflow of Resources 2,483,455 127,502 2,610,957 Liabilities Accrued salaries payable 434,390 50,626 485,016 Accounts and contracts payable 658,964 325,749 984,713 Due to other governments 15,876 537,976 553,852 Accrued interest payable 625,111 62,931 688,042 Deposits payable 14,495 3,556 18,051 Unearned revenue 13,800 - 13,800 Noncurrent liabilities Due within one year 2,633,231 537,115 3,170,346 Due in more than one year 43,146,291 8,672,097 51,818,388 Net pension liability – due in more than one year 6,650,322 924,026 7,574,348 Other post-employment benefits liability – due in more than one year 1,110,463 188,219 1,298,682 Total Liabilities 55,302,943 11,302,295 66,605,238 Deferred Inflows of Resources Deferred pension resources 2,882,251 37,066 2,919,317 Deferred other post-employment benefit resources 33,203 5,628 38,831 Resources received in advance 1,420,381 - 1,420,381 Total Deferred Inflows of Resources 4,335,835 42,694 4,378,529 Net Position Net investment in capital assets 31,359,813 20,127,288 51,487,101 Restricted for Economic development 5,379,088 - 5,379,088 Debt service 2,220,695 1,560,053 3,780,748 Public safety police expenses 135,571 - 135,571 Ice arena 5,505 - 5,505 Unrestricted 19,716,696 4,534,420 24,251,116 Total Net Position 58,817,368$ 26,221,761$ 85,039,129$ See notes to basic financial statements -15- Expenses Charges for Services Operating Grants and Contributions Capital Grants and Contributions Governmental Activities General government 2,945,625$ 217,183$ 103,086$ -$ Public safety 8,968,009 736,004 438,189 - Public works 3,725,075 234,121 231,733 780,874 Culture and recreation 2,270,751 316,820 17,603 267,876 Economic development 1,350,348 - 76,250 - Interest on long-term debt 1,570,807 - - - Total Governmental Activities 20,830,615 1,504,128 866,861 1,048,750 Business-Type Activities Sewer utility 3,096,526 3,712,613 93,335 - Water utility 4,195,981 5,468,607 15,861 12,922 Golf course 316,173 423,766 129 - Ice arena 1,012,913 601,291 585 - Storm water 877,244 1,259,707 421 - Street lighting 133,270 161,866 - - Total Business-type Activities 9,632,107 11,627,850 110,331 12,922 Total 30,462,722$ 13,131,978$ 977,192$ 1,061,672$ 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 Net Position, December 31 Functions/Programs Program Revenues City of New Hope, Minnesota Statement of Activities For the Year Ended December 31, 2020 See notes to basic financial statements -16- Governmental Activities Business-Type Activities Total (2,625,356)$ -$ (2,625,356)$ (7,793,816) - (7,793,816) (2,478,347) - (2,478,347) (1,668,452) - (1,668,452) (1,274,098) - (1,274,098) (1,570,807) - (1,570,807) (17,410,876) - (17,410,876) - 709,422 709,422 - 1,301,409 1,301,409 - 107,722 107,722 - (411,037) (411,037) - 382,884 382,884 - 28,596 28,596 - 2,118,996 2,118,996 (17,410,876) 2,118,996 (15,291,880) 16,821,240 - 16,821,240 1,918,857 - 1,918,857 958,162 - 958,162 2,497,630 - 2,497,630 781,304 137,468 918,772 22,000 - 22,000 (240,739) 240,739 - 22,758,454 378,207 23,136,661 5,347,578 2,497,203 7,844,781 53,469,790 23,727,941 77,197,731 58,817,368$ 26,225,144$ 85,042,512$ Net (Expenses) Revenues and Changes in Net Position -17- THIS PAGE INTENTIONALLY LEFT BLANK FUND FINANCIAL STATEMENTS CITY OF NEW HOPE, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2020 City of New Hope, Minnesota Balance Sheet Governmental Funds December 31, 2020 9001 9015/9501 9213-9228 9202 Economic Development HRA City Hall General Authority Construction CIP Assets Cash and temporary investments 8,663,198$ 2,004,366$ 5,006,979$ 1,411,332$ Receivables Taxes 346,582 - 2,680 - Accrued interest 65,631 - - - Accounts 231,879 87,128 19,475 - Loans - 240,500 - - Special assessments 46,146 2,985 - - Due from other governments 51,000 - - - Prepaid items 24,499 - - - Due from other funds 156,685 - - Advances to other funds - 2,004,480 2,003,318 - Total Assets 9,585,620$ 4,339,459$ 7,032,452$ 1,411,332$ Liabilities Accrued salaries payable 262,435$ 9,087$ -$ -$ Accounts and contracts payable 109,467 6,931 - 193,972 Due to other governments 15,245 - - - Deposits payable 14,495 - - - Due to other funds - - - Advances from other funds - - 1,653,364 - Unearned revenue - - - - Total Liabilities 401,642 16,018 1,653,364 193,972 Deferred Inflows of Resources Unavailable revenue - taxes 215,426 - - - Unavailable revenue - special assessments 42,466 2,985 - - Resources received in advance - - - - Total Deferred Inflows of Resources 257,892 2,985 - - Fund Balances (Deficit) Nonspendable 24,499 - - - Restricted - - 5,379,088 - Committed - 4,320,456 - - Assigned - -- 1,217,360 Unassigned 8,901,587 - - - Total Fund Balances (Deficit)8,926,086 4,320,456 5,379,088 1,217,360 Total Liabilities, Deferred Inflows of Resources, and Fund Balances 9,585,620$ 4,339,459$ 7,032,452$ 1,411,332$ See notes to basic financial statements -18- 9203 9234 9117-9121 Park/Pool Other Total Street Improvement Governmental Governmental Infrastructure Project HRA Bonds Funds Funds 2,229,491$ 698,398$ 232,407$ 8,353,529$ 28,599,700$ - - 2,741 - 352,003 - - - - 65,631 - - - 23,589 362,071 - - - 21,016 261,516 467,290 - - 60,878 577,299 53,844 - - - 104,844 - - - - 24,499 - - - 75,000 231,685 - - - 375,000 4,382,798 2,750,625$ 698,398$ 235,148$ 8,909,012$ 34,962,046$ -$ -$ -$ -$ 271,522$ 162,517 48,062 516 10,561 532,026 - - - - 15,245 - - - - 14,495 75,000 - - - 75,000 375,000 - 2,354,434 - 4,382,798 - - - 13,800 13,800 612,517 48,062 2,354,950 24,361 5,304,886 - - - - 215,426 467,030 - - 53,621 566,102 1,420,381 - - - 1,420,381 1,887,411 - - 53,621 2,201,909 - - - - 24,499 - 650,336 - 2,986,882 9,016,306 - - - 318,934 4,639,390 250,697 - - 5,525,343 6,993,400 - - (2,119,802) (129) 6,781,656 250,697 650,336 (2,119,802) 8,831,030 27,455,251 2,750,625$ 698,398$ 235,148$ 8,909,012$ 34,962,046$ -19- THIS PAGE INTENTIONALLY LEFT BLANK City of New Hope, Minnesota Reconciliation of the Balance Sheet to the Statement of Net Position Governmental Funds December 31, 2020 Total Fund Balances - Governmental Funds 27,455,251$ 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 91,093,283 Less: accumulated depreciation (20,602,577) 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 (42,346,280) Plus: unamortized bond premium (2,589,786) Pension liability (6,428,510) 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 11,766,990 Internal balances for internal services used by business-type activities 257,622 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 215,426 Special assessments 566,102 Governmental funds do not report long-term amounts related to pensions Deferred outflows of pension resources 2,291,710 Deferred inflows of pension resources (2,873,353) Governmental funds do not report a liability for accrued interest until due and payable.(625,111) 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.636,601 Total Net Position - Governmental Activities 58,817,368$ See notes to basic financial statements -20- City of New Hope, Minnesota Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds For the Year Ended December 31, 2020 9001 9015/9501 9213-9228 9202 Economic Development HRA City Hall General Authority Construction CIP Revenues Taxes Property taxes 10,422,823$ 348,000$ -$ -$ Tax increments - - 1,174,001 - Franchise taxes 518,162 - - - Licenses and permits 393,911 - - - Intergovernmental 3,161,645 76,250 - - Charges for services 704,320 - - - Fines and forfeitures 138,922 - - - Special assessments 110,670 10,384 - - Investment earnings 113,447 105,845 129,625 44,124 Miscellaneous 14,184 12,516 - - Total Revenues 15,578,084 552,995 1,303,626 44,124 Expenditures Current General government 2,062,733 - - - Public safety 8,361,209 - - - Public works 1,622,046 - - - Culture and recreation 2,035,658 - - - Economic development - 918,678 369,029 - Capital outlay General government 674 - - 621,058 Public safety 48,669 - - - Public works - - - - Culture and recreation - - - - Economic development - - 81,785 - Debt service Principal - - - - Interest and fiscal charges - - 128,864 - Total Expenditures 14,130,989 918,678 579,678 621,058 Excess (Deficiency) of Revenues Over Expenditures 1,447,095 (365,683) 723,948 (576,934) Other Financing Sources (Uses) Transfers in 339,288 - - - Transfers out - (35,619) - - Total Other Financing Sources (Uses)339,288 (35,619) - - Net Change in Fund Balances 1,786,383 (401,302) 723,948 (576,934) Fund Balances (Deficit), January 1 7,139,703 4,721,758 4,655,140 1,794,294 Fund Balances (Deficit), December 31 8,926,086$ 4,320,456$ 5,379,088$ 1,217,360$ See notes to basic financial statements -21- 9203 9234 9117-9121 Park/Pool Other Total Street Improvement Governmental Governmental Infrastructure Project HRA Bonds Funds Funds 1,467,333$ -$ -$ 4,517,952$ 16,756,108$ - - 744,856 - 1,918,857 440,000 - - - 958,162 - - - - 393,911 695,197 338,770 - 17,876 4,289,738 - - - 282,567 986,887 - - - - 138,922 104,619 - - 8,592 234,265 62,954 16,297 - 135,198 607,490 - - - - 26,700 2,770,103 355,067 744,856 4,962,185 26,311,040 - - - - 2,062,733 - - - - 8,361,209 - - - 231,349 1,853,395 - - - - 2,035,658 - - 3,643 - 1,291,350 - - - - 621,732 - - - - 48,669 2,513,630 - - - 2,513,630 - 5,021,546 - 382,396 5,403,942 - - - - 81,785 - - 420,725 1,485,165 1,905,890 11,042 - 196,194 1,442,553 1,778,653 2,524,672 5,021,546 620,562 3,541,463 27,958,646 245,431 (4,666,479) 124,294 1,420,722 (1,647,606) - - - 79,373 418,661 (10,588) - - (520,585) (566,792) (10,588) - - (441,212) (148,131) 234,843 (4,666,479) 124,294 979,510 (1,795,737) 15,854 5,316,815 (2,244,096) 7,851,520 29,250,988 250,697$ 650,336$ (2,119,802)$ 8,831,030$ 27,455,251$ -22- THIS PAGE INTENTIONALLY LEFT BLANK 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, 2020 Net Change in Fund Balances - Governmental Funds (1,795,737)$ 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 8,302,379 Capital assets transferred from internal service funds 22,997 Depreciation expense (2,413,980) The Statement of Activities reports gains and losses arising from the trade-in or disposal of existing assets to acquire new capital assets. Conversely, governmental funds simply report proceeds on sale of capital assets. (796,143) 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 (175,588) 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 1,905,890 Amortization of bond premium 173,441 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.34,405 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 65,132 Special assessments (148,588) State aids (88,770) Long-term pension activity is not reported in governmental funds Pension expense (336,542) Direct aid contributions 60,778 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 737,263 Less: the change in internal balances for internal services used by business-type activities (199,359) Change in Net Position - Governmental Activities 5,347,578$ See notes to basic financial statements -23- City of New Hope, Minnesota General Fund Budget and Actual For the Year Ended December 31, 2020 Budgeted Amounts Actual Over (Under) Original Final Amounts Budget Revenues Taxes Property taxes 10,518,931$ 10,518,931$ 10,422,823$ (96,108)$ Franchise taxes 505,244 505,244 518,162 12,918 Licenses and permits 474,025 474,025 393,911 (80,114) Intergovernmental 1,405,262 1,405,262 3,161,645 1,756,383 Charges for services 1,849,300 1,849,300 704,320 (1,144,980) Fines and forfeitures 225,000 225,000 138,922 (86,078) Special assessments 30,000 30,000 110,670 80,670 Investment earnings 60,000 60,000 113,447 53,447 Miscellaneous 3,500 3,500 14,184 10,684 Total Revenues 15,071,262 15,071,262 15,578,084 506,822 Expenditures Current General government 2,034,950 2,034,950 2,062,733 27,783 Public safety 8,804,299 8,804,299 8,361,209 (443,090) Public works 1,620,168 1,620,168 1,622,046 1,878 Culture and recreation 2,882,633 2,882,633 2,035,658 (846,975) Capital outlay - General government 3,500 3,500 674 (2,826) Public safety 65,000 65,000 48,669 (16,331) Total Expenditures 15,410,550 15,410,550 14,130,989 (1,279,561) Excess (Deficiency) of Revenues Over Expenditures (339,288) (339,288) 1,447,095 1,786,383 Other Financing Sources Transfers in 339,288 339,288 339,288 - Net Change in Fund Balances - - 1,786,383 1,786,383 Fund Balances, January 1 7,139,703 7,139,703 7,139,703 - Fund Balances, December 31 7,139,703$ 7,139,703$ 8,926,086$ 1,786,383$ Statement of Revenues, Expenditures, and Changes in Fund Balances – See notes to basic financial statements -24- 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, 2020 Actual Over (Under) Original Final Amounts Budget Revenues Taxes Property taxes 348,000$ 348,000$ 348,000$ -$ Intergovernmental 100,000 100,000 76,250 (23,750) Special assessments 1,600 1,600 10,384 8,784 Investment earnings 76,000 76,000 105,845 29,845 Miscellaneous - - 12,516 12,516 Total Revenues 525,600 525,600 552,995 27,395 Expenditures Current Economic development Personnel services 345,919 345,919 336,358 (9,561) Supplies 300 300 76,250 75,950 Other services and charges 432,886 432,886 506,070 73,184 Total Expenditures 779,105 779,105 918,678 139,573 Excess (Deficiency) of Revenues Over Expenditures (253,505) (253,505) (365,683) (112,178) Other Financing Sources (Uses) Transfers out (35,619) (35,619) (35,619) - Net Change in Fund Balances (289,124) (289,124) (401,302) (112,178) Fund Balances, January 1 4,721,758 4,721,758 4,721,758 - Fund Balances, December 31 4,432,634$ 4,432,634$ 4,320,456$ (112,178)$ Budgeted Amounts See notes to basic financial statements -25- City of New Hope, Minnesota City of New Hope, Minnesota Statement of Net Position (Continued on the Following Pages)Statement of Net Position (Continued) Proprietary Funds Proprietary Funds December 31, 2020 9300 9301 9302 9303 Sewer Utility Water Utility Golf Course Ice Arena Assets Current Assets Cash and temporary investments 1,400,403$ 2,345,370$ 214,545$ 800$ Cash held with fiscal agent - - - 1,560,053 Receivables Accounts 341,662 928,912 4,355 38,296 Special assessments 53,611 120,942 - - Due from other governments - - - 60,084 Inventories - 37,976 4,516 - Total Current Assets 1,795,676 3,433,200 223,416 1,659,233 Noncurrent Assets Investment in joint ventures - 168,509 - - Capital assets Land - - 250,625 - Buildings and structures - - 973,145 9,824,219 Vehicles and equipment 607,475 1,392,767 122,348 382,566 Improvements other than buildings 6,628,754 11,323,137 140,620 - Construction in progress 448,066 796,122 - - Less: accumulated depreciation (3,042,136) (4,222,936) (1,037,058) (4,244,148) Total Capital Assets (Net of Accumulated Depreciation)4,642,159 9,289,090 449,680 5,962,637 Total Noncurrent Assets 4,642,159 9,457,599 449,680 5,962,637 Total Assets 6,437,835 12,890,799 673,096 7,621,870 Deferred Outflows of Resources Deferred pension resources 36,362 17,336 5,149 23,370 Deferred other postemployment benefit resources 11,851 5,502 987 5,964 Total Deferred Outflows of Resources 48,213 22,838 6,136 29,334 Business-Type Activities - Enterprise Funds See notes to basic financial statements -26-(continued) City of New Hope, Minnesota Statement of Net Position (Continued) Proprietary Funds December 31, 2020 Governmental Activities - 9304 9305 Internal Storm Water Street Lighting Totals Service Funds Assets Current Assets Cash and temporary investments 1,024,563$ 70,954$ 5,056,635$ 11,164,834$ Cash held with fiscal agent - - 1,560,053 - Receivables Accounts 116,960 6,887 1,437,072 7,441 Special assessments 15,355 2,302 192,210 - Due from other governments - - 60,084 - Inventories - - 42,492 68,035 Total Current Assets 1,156,878 80,143 8,348,546 11,240,310 Noncurrent Assets Investment in joint ventures - - 168,509 - Capital assets Land 234,417 - 485,042 85,647 Buildings and structures - - 10,797,364 3,158,296 Vehicles and equipment - - 2,505,156 9,763,536 Improvements other than buildings 10,040,483 389,705 28,522,699 - Construction in progress 126,636 - 1,370,824 - Less: accumulated depreciation (1,778,822) (19,485) (14,344,585) (10,164,275) Total Capital Assets (Net of Accumulated Depreciation)8,622,714 370,220 29,336,500 2,843,204 Total Noncurrent Assets 8,622,714 370,220 29,505,009 2,843,204 Total Assets 9,779,592 450,363 37,853,555 14,083,514 Deferred Outflows of Resources Deferred pension resources 16,814 - 99,031 23,772 Deferred other postemployment benefit resources 4,167 - 28,471 167,973 Total Deferred Outflows of Resources 20,981 - 127,502 191,745 Business-Type Activities - Enterprise Funds See notes to basic financial statements -27-(continued) City of New Hope, Minnesota City of New Hope, Minnesota Statement of Net Position (Continued)Statement of Net Position (Continued) Proprietary Funds Proprietary Funds December 31, 2020 9300 9301 9302 9303 Sewer Utility Water Utility Golf Course Ice Arena Liabilities Current Liabilities Accrued salaries payable 13,478$ 20,062$ 2,143$ 11,003$ Accounts and contracts payable 183,320 76,811 4,522 39,139 Due to other governments - 533,806 187 3,983 Accrued interest payable 8,902 31,881 - 4,790 Due to other funds - - - 156,685 Deposits payable - 3,556 - - Compensated absences payable, current portion - - - - Bonds and notes payable, current portion 57,501 324,780 - - Total Current Liabilities 263,201 990,896 6,852 215,600 Noncurrent Liabilities Other postemployment benefits payable 78,344 36,372 6,530 39,423 Pension liability 339,285 161,761 48,040 218,058 Compensated absences payable - - - - Unamortized premium 19,005 76,797 - - Bonds and notes payable 739,847 2,962,132 - 3,505,000 Total Noncurrent Liabilities 1,176,481 3,237,062 54,570 3,762,481 Total Liabilities 1,439,682 4,227,958 61,422 3,978,081 Deferred Inflows of Resources Deferred pension resources 13,610 6,489 1,927 8,747 Deferred other postemployment benefit resources 2,343 1,088 194 1,179 Total Deferred Inflows of Resources 15,953 7,577 2,121 9,926 Net Position Net investment in capital assets 3,825,806 5,925,381 449,680 2,457,637 Restricted for debt service - - - 1,560,053 Unrestricted 1,204,607 2,752,721 166,009 (354,493) Total Net Position 5,030,413$ 8,678,102$ 615,689$ 3,663,197$ Business-Type Activities - Enterprise Funds See notes to basic financial statements -28-(continued) City of New Hope, Minnesota Statement of Net Position (Continued) Proprietary Funds December 31, 2020 Governmental Activities - 9304 9305 Internal Storm Water Street Lighting Totals Service Funds Liabilities Current Liabilities Accrued salaries payable 3,940$ -$ 50,626$ 162,868$ Accounts and contracts payable 12,548 9,409 325,749 126,938 Due to other governments - - 537,976 631 Accrued interest payable 17,358 - 62,931 - Due to other funds - - 156,685 - Deposits payable - - 3,556 - Compensated absences payable, current portion - - - 84,346 Bonds and notes payable, current portion 154,834 - 537,115 - Total Current Liabilities 188,680 9,409 1,674,638 374,783 Noncurrent Liabilities Other postemployment benefits payable 27,550 - 188,219 1,110,463 Pension liability 156,882 - 924,026 221,812 Compensated absences payable - - - 759,110 Unamortized premium 40,690 - 136,492 - Bonds and notes payable 1,328,626 - 8,535,605 - Total Noncurrent Liabilities 1,553,748 - 9,784,342 2,091,385 Total Liabilities 1,742,428 9,409 11,458,980 2,466,168 Deferred Inflows of Resources Deferred pension resources 6,293 - 37,066 8,898 Deferred other postemployment benefit resources 824 - 5,628 33,203 Total Deferred Inflows of Resources 7,117 - 42,694 42,101 Net Position Net investment in capital assets 7,098,564 370,220 20,127,288 2,843,204 Restricted for debt service - - 1,560,053 - Unrestricted 952,464 70,734 4,792,042 8,923,786 Total Net Position 8,051,028$ 440,954$ 26,479,383$ 11,766,990$ Total Net Position - Enterprise Funds 26,479,383$ Adjustment to reflect the consolidation of internal service fund activities related to the enterprise funds (257,622) Net Position - Business-type Activities 26,221,761$ Business-Type Activities - Enterprise Funds -29- City of New Hope, Minnesota City of New Hope, Minnesota Statement of Revenues, Expenses and Statement of Revenues, Expenses and Changes in Net Position Changes in Net Position (Continued) Proprietary Funds Proprietary Funds For the Year Ended December 31, 2020 For the Year Ended December 31, 2020 9300 9301 9302 9303 Sewer Utility Water Utility Golf Course Ice Arena Operating Revenues Charges for services 3,712,613$ 5,139,616$ 401,666$ 560,316$ Billings to departments - - - - Other - - - - Total Operating Revenues 3,712,613 5,139,616 401,666 560,316 Operating Expenses Cost of goods sold 1,845,989 3,090,013 23,816 - Personnel services 683,595 210,954 130,264 416,763 Supplies 12,287 69,045 24,917 36,154 Utilities 9,505 632 26,983 211,668 Other services and charges 383,807 482,142 82,511 106,389 Depreciation 184,090 325,447 36,503 195,894 Total Operating Expenses 3,119,273 4,178,233 324,994 966,868 Operating Income (Loss)593,340 961,383 76,672 (406,552) Nonoperating Revenues (Expenses) Investment earnings 41,283 47,238 1,983 30,741 Miscellaneous revenues 910 344,852 22,229 41,560 Intergovernmental 92,425 - - - Capital contributions to governmental activities - - - - Gain (loss) on sale of capital assets - - - (3,383) Interest expense (37,701) (86,576) - (58,181) Total Nonoperating Revenues (Expenses)96,917 305,514 24,212 10,737 Income (Loss) Before Contributions and Transfers 690,257 1,266,897 100,884 (395,815) Capital Contributions - 12,922 - - Transfers In - -- 400,000 Transfers Out (55,564) (57,939) (10,769) (10,769) Change in Net Position 634,693 1,221,880 90,115 (6,584) Net Position, January 1 4,395,720 7,456,222 525,574 3,669,781 Net Position, December 31 5,030,413$ 8,678,102$ 615,689$ 3,663,197$ Business-Type Activities - Enterprise Funds See notes to basic financial statements -30- City of New Hope, Minnesota Statement of Revenues, Expenses and Changes in Net Position (Continued) Proprietary Funds For the Year Ended December 31, 2020 Governmental Activities - 9304 9305 Internal Storm Water Street Lighting Totals Service Funds Operating Revenues Charges for services 1,259,707$ 161,866$ 11,235,784$ -$ Billings to departments - - - 3,699,238 Other - - - 23,526 Total Operating Revenues 1,259,707 161,866 11,235,784 3,722,764 Operating Expenses Cost of goods sold - - 4,959,818 - Personnel services 198,352 - 1,639,928 1,030,498 Supplies 6,776 - 149,179 284,174 Utilities - 103,069 351,857 106,343 Other services and charges 439,257 10,605 1,504,711 1,067,124 Depreciation 241,636 19,485 1,003,055 577,571 Total Operating Expenses 886,021 133,159 9,608,548 3,065,710 Operating Income (Loss)373,686 28,707 1,627,236 657,054 Nonoperating Revenues (Expenses) Investment earnings 15,370 853 137,468 173,814 Miscellaneous revenues 421 - 409,972 - Intergovernmental - - 92,425 - Capital contributions to governmental activities - - - (22,997) Gain (loss) on sale of capital assets - - (3,383) 22,000 Interest expense (40,460) - (222,918) - Total Nonoperating Revenues (Expenses)(24,669) 853 413,564 172,817 Income (Loss) Before Contributions and Transfers 349,017 29,560 2,040,800 829,871 Capital Contributions - - 12,922 - Transfers In - - 400,000 - Transfers Out (24,220) - (159,261) (92,608) Change in Net Position 324,797 29,560 2,294,461 737,263 Net Position, January 1 7,726,231 411,394 24,184,922 11,029,727 Net Position, December 31 8,051,028$ 440,954$ 26,479,383$ 11,766,990$ Change in Net Position - Enterprise Funds 2,294,461$ Adjustment to reflect the consolidation of internal service fund activities related to the enterprise funds.199,359 Change in Net Position - Business-Type Activities 2,493,820$ Business-Type Activities - Enterprise Funds -31- City of New Hope, Minnesota City of New Hope, Minnesota Statement of Cash Flows (Continued on the Following Pages)Statement of Cash Flows (Continued) Proprietary Funds Proprietary Funds For the Year Ended December 31, 2020 For the Year Ended December 31, 2020 9300 9301 9302 9303 Sewer Utility Water Utility Golf Course Ice Arena Cash Flows from Operating Activities Receipts from customers and users 3,702,655$ 5,089,495$ 399,031$ 581,514$ Receipts from interfund services provided - - - - Other operating receipts 93,335 344,852 22,229 41,560 Payments to suppliers (2,094,037) (3,336,608) (157,349) (399,706) Payments to employees (524,922) (270,851) (129,716) (399,569) Net Cash From Operating Activities 1,177,031 1,826,888 134,195 (176,201) Cash Flows From Noncapital Financing Activities Receipts on interfund balances - - - 156,685 Payments on interfund balances - - - (104,291) Transfers in - - - 400,000 Transfers out (55,564) (57,939) (10,769) (10,769) Net Cash From Noncapital Financing Activities (55,564) (57,939) (10,769) 441,625 Cash Flows from Capital and Related Financing Activities Acquisition of capital assets (436,835) (745,251) - (36,332) Proceeds from sale of assets - - - - Payment of advance from other funds (875,000) (570,598) - - Capital contributions - 12,922 - - Principal paid on long-term debt (56,116) (321,260) - - Interest paid on long-term debt (39,548) (100,331) - (58,181) Net Cash From Capital and Related Financing Activities (1,407,499) (1,724,518) - (94,513) Cash Flows from Investing Activities Investment earnings 41,283 47,238 1,983 30,741 Net Increase (Decrease) in Cash and Cash Equivalents (244,749) 91,669 125,409 201,652 Cash and Cash Equivalents, January 1 1,645,152 2,253,701 89,136 1,359,201 Cash and Cash Equivalents, December 31 1,400,403$ 2,345,370$ 214,545$ 1,560,853$ Reconciliation to the Proprietary Funds Statement of Net Position Cash and temporary investments 1,400,403$ 2,345,370$ 214,545$ 800$ Cash held with fiscal agent - - - 1,560,053 Total Cash and Cash Equivalents 1,400,403$ 2,345,370$ 214,545$ 1,560,853$ Business-Type Activities - Enterprise Funds See notes to basic financial statements -32-(continued) City of New Hope, Minnesota Statement of Cash Flows (Continued) Proprietary Funds For the Year Ended December 31, 2020 Governmental Activities - 9304 9305 Internal Storm Water Street Lighting Totals Service Funds Cash Flows from Operating Activities Receipts from customers and users 1,263,488$ 163,626$ 11,199,809$ -$ Receipts from interfund services provided - - - 3,696,272 Other operating receipts 421 - 502,397 23,526 Payments to suppliers (455,566) (113,335) (6,556,601) (1,471,777) Payments to employees (224,660) - (1,549,718) (792,031) Net Cash From Operating Activities 583,683 50,291 3,595,887 1,455,990 Cash Flows from Noncapital Financing Activities Receipts on interfund balances - - 156,685 - Payments on interfund balances - - (104,291) - Transfers in - - 400,000 - Transfers out (24,220) - (159,261) (92,608) Net Cash From Noncapital Financing Activities (24,220) - 293,133 (92,608) Cash Flows from Capital and Related Financing Activities Acquisition of capital assets (66,297) - (1,284,715) (525,988) Proceeds from sale of assets - - - 22,000 Payment of advance from other funds - - (1,445,598) - Capital contributions - - 12,922 - Principal paid on long-term debt (147,734) - (525,110) - Interest paid on long-term debt (44,083) - (242,143) - Net Cash From Capital and Related Financing Activities (258,114) - (3,484,644) (503,988) Cash Flows from Investing Activities Investment earnings 15,370 853 137,468 173,814 Net Increase (Decrease) in Cash and Cash Equivalents 316,719 51,144 541,844 1,033,208 Cash and Cash Equivalents, January 1 707,844 19,810 6,074,844 10,131,626 Cash and Cash Equivalents, December 31 1,024,563$ 70,954$ 6,616,688$ 11,164,834$ Reconciliation to the Proprietary Funds Statement of Net Position Cash and temporary investments 1,024,563$ 70,954$ 5,056,635$ 11,164,834$ Cash held with fiscal agent - - 1,560,053 - Total Cash and Cash Equivalents 1,024,563$ 70,954$ 6,616,688$ 11,164,834$ Business-Type Activities - Enterprise Funds See notes to basic financial statements -33-(continued) City of New Hope, Minnesota City of New Hope, Minnesota Statement of Cash Flows (Continued)Statement of Cash Flows (Continued) Proprietary Funds Proprietary Funds For the Year Ended December 31, 2020 For the Year Ended December 31, 2020 9300 9301 9302 9303 Sewer Utility Water Utility Golf Course Ice Arena Reconciliation of Operating Income (Loss) to Net Cash From Operating Activities Operating income (loss)593,340$ 961,383$ 76,672$ (406,552)$ Adjustments to reconcile operating income (loss) to net cash from operating activities Depreciation 184,090 325,447 36,503 195,894 Other income related to operations 93,335 344,852 22,229 41,560 (Increase) decrease in assets Receivables Accounts (9,991) (61,269) (2,635) 30,524 Special assessments 33 5,559 - - Due from other governments - 5,589 - (9,326) Inventories - (701) 1,216 - (Increase) decrease in deferred outflows of resources Deferred pension resources (18,546) 2,952 (841) (5,171) Deferred other postemployment benefit resources (5,741) (561) (288) (1,916) Increase (decrease) in liabilities Accounts and contracts payable 158,617 9,067 (328) (33,706) Accrued salaries payable 5,151 6,844 496 276 Due to other governments (1,066) 296,858 (10) (11,789) Compensated absences payable - - - - Other postemployment benefits payable 30,454 (2,356) 1,054 7,697 Pension liability 165,845 (35,744) 6,099 40,897 Increase (decrease) in deferred inflows of resources Deferred pension resources (18,976) (30,618) (5,953) (24,538) Deferred other postemployment benefit resources 486 (414) (19) (51) Net Cash From Operating Activities 1,177,031$ 1,826,888$ 134,195$ (176,201)$ Schedule of Noncash Capital and Related Financing Activities Amortization of bond discount -$ -$ -$ -$ Amortization of bond premium 1,278$ 5,270$ -$ -$ Net book value of capital asset disposals -$ -$ -$ 3,383$ Capital assets contributed to governmental activities -$ -$ -$ -$ Business-Type Activities - Enterprise Funds See notes to basic financial statements -34-(continued) City of New Hope, Minnesota Statement of Cash Flows (Continued) Proprietary Funds For the Year Ended December 31, 2020 Governmental Activities - 9304 9305 Internal Storm Water Street Lighting Totals Service Funds Reconciliation of Operating Income (Loss) to Net Cash From Operating Activities Operating income (loss)373,686$ 28,707$ 1,627,236$ 657,054$ Adjustments to reconcile operating income (loss) to net cash from operating activities Depreciation 241,636 19,485 1,003,055 577,571 Other income related to operations 421 -502,397 - (Increase) decrease in assets Receivables Accounts 2,570 1,572 (39,229) (2,966) Special assessments 1,211 188 6,991 - Due from other governments - - (3,737) - Inventories - - 515 (5,460) (Increase) Decrease in deferred outflows of resources Deferred pension resources (4,071) -(25,677) (4,643) Deferred other postemployment benefit resources 4,768 -(3,738) (48,960) Increase (decrease) in liabilities Accounts and contracts payable (8,479) 339 125,510 (8,727) Accrued salaries payable 1,563 -14,330 18,343 Due to other governments (1,054) -282,939 51 Compensated absences payable - - - 89,575 Other postemployment benefits payable (42,488) -(5,639) 177,615 Pension liability 32,826 -209,923 35,592 Increase (decrease) in deferred inflows of resources Deferred pension resources (17,014) -(97,099) (26,089) Deferred other postemployment benefit resources (1,892) -(1,890) (2,966) Net Cash From Operating Activities 583,683$ 50,291$ 3,595,887$ 1,455,990$ Schedule of Noncash Capital and Related Financing Activities Amortization of bond discount 803$ -$ 803$ -$ Amortization of bond premium 2,803$ -$ 9,351$ -$ Net book value of capital asset disposals -$ -$ 3,383$ -$ Capital assets contributed to governmental activities -$ -$ -$ 22,997$ Business-Type Activities - Enterprise Funds See notes to basic financial statements -35- THIS PAGE INTENTIONALLY LEFT BLANK CITY OF NEW HOPE, MINNESOTA Notes to Basic Financial Statements December 31, 2020 -36- NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES A. Organization The City of New Hope, Minnesota (the City) operates under “Optional Plan B” as defined in Minnesota Statutes, Chapter 412. Under this plan, the government of the City is run by a council composed of an elected mayor and four councilmembers. The City Council exercises legislative authority and determines all matters of policy. The city manager, who is appointed by the City Council, is responsible for the proper administration of all affairs relating to the City. The accounting policies of the City conform to accounting principles generally accepted in the United States of America as applicable to governmental units. B. Reporting Entity As required by accounting principles generally accepted in the United States of America, these financial statements include the City (the primary government) and its component units. Component units are legally separate entities for which the primary government is financially accountable, or for which the exclusion of the component unit would render the financial statements of the primary government misleading . The criteria used to determine if the primary government is financially accountable for a component unit includes whether or not the primary government appoints the voting majority of the potential component unit’s board, is able to impose its will on the potential component unit, is in a relationship of financial benefit or burden with the potential component unit, or is fiscally depended upon by the potential component unit. As a result of applying these criteria, certain organizations have been included or disclosed in this report as follows: 1. 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 EDA and HRA boards, and funding for 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. 2. Joint Ventures and Jointly Controlled Organization – The City participates in various joint ventures and jointly controlled organizations, which are described later in these notes. C. Government-Wide Financial Statements The government-wide financial statements (Statement of Net Position and Statement of Activities) display information about the reporting government as a whole. These statements include all of the financial activities of the City. Governmental activities, which are normally supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which significantly rely upon sales, fees, and charges for support. -37- NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) The Statement of Activities demonstrates the degree to which the direct expenses o f a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include: 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided b y a given function or segment; 2) operating grants and contributions; and 3) capital grants and contributions, including special assessments that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other internally directed revenues are reported as general revenues. The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes and special assessments are recognized as revenues in the fiscal year for which they are certified for levy. Grants and similar items are recognized when all eligibility requirements imposed by the provider have been met. As a general rule, the effect of interfund activity has been eliminated from the government -wide financial statements. However, charges between the City’s enterprise funds and other functions are not eliminated, as that would distort the direct costs and program revenues reported in those functions. Depreciation expense is included in the direct expenses of each function. Interest on long-term debt is considered an indirect expense and is reported separately on the Statement of Activities. D. Fund Financial Statement Presentation 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 governmental funds is reported in a single column in the fund financial statements. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this basis of accounting, transactions are recorded in the following manner: 1. Revenue Recognition – Revenue is recognized when it becomes measurable and available. “Measurable” means the amount of the transaction can be determined and “available” means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. For this purpose, the City considers revenues to be available if they are coll ected within 60 days after year-end. 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. Grants and similar items are recognized when all eligibility requirements imposed by the provider have been met. Proceeds of long-term debt and acquisitions under capital leases are reported as other financing sources. Major revenue that is susceptible to accrual includes property taxes, special assessments, intergovernmental revenue, charges for services, and interest earned on investments. Major revenue that is not susceptible to accrual includes licenses and permits, fees, and miscellaneous revenue . Such revenue is recorded only when received because it is not measurable until collected. 2. Recording of Expenditures – Expenditures are generally recorded when a liability is incurred, except for principal and interest on long-term debt and other long-term liabilities, which are recognized as expenditures to the extent they have matured. Capital asset acquisitions are reported as capital outlay expenditures in the governmental funds. -38- NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Proprietary fund financial statements are reported using the economic resources measurement focus and accrual basis of accounting, similar to the government-wide financial statements. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the City’s enterprise funds and internal service funds are charges to customers for sales and services. The operating expenses for the enterprise funds and internal service funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses that do not meet this definition are reported as nonoperating revenues and expenses. Aggregated information for the internal service funds is reported in a single column in the proprietary fund financial statements. Because the principal user of the internal services is the City’s governmental activities, the financial statements of the internal service funds are consolidated into the governmental column when presented in the government-wide financial statements. The cost of these services is reported in the appropriate functional activity. Description of Funds The City reports the following major governmental funds: General Fund – This is the general operating fund of the City. It is used to account for all financial resources except those required to be accounted for in another fund. Economic Development Authority Special Revenue Fund – This fund accounts for the activities of the EDA, which controls and operates the housing and redevelopment projects and tax increment districts in the City. Its activities are funded through property tax levies and federal and state aids and grants. HRA Construction Capital Projects Fund – This fund is used to account for redevelopment costs for tax increment districts, which are primarily funded by tax increment bonds and tax increment revenues. City Hall CIP Capital Projects Fund – This fund is used to account for the accumulation of resources for City Hall projects. Street Infrastructure Capital Projects Fund – This fund is used to account for various street projects within the City. Park/Pool Improvement Project Capital Projects Fund – This fund is used to account for park and pool improvements. HRA Bonds Debt Service Fund – This fund is used to account 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: Sewer Utility Fund – This 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. Water Utility Fund – This 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. -39- NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Golf Course Fund – This fund is used to account for the operations of the City’s public golf course. Ice Arena Fund – This fund is used to account for the operation of the City’s indoor ice arena. Storm Water Fund – This fund is used to account for the general operation and maintenance of the City’s storm water system. Street Lighting Fund – This fund is used to account for the operation of the City’s streetlight system. The City also reports the following fund type: Internal Service Funds – These funds are used to account for the City’s vehicle and equipment rental, 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. E. Budgets and Budgetary Accounting Each fall, following a truth in taxation public hearing, the City Council adopts an operating budget for the following fiscal year beginning January 1. The City legally adopts budgets for the General Fund and certain special revenue funds (Economic Development Authority and Solid Waste Management Funds), on a modified accrual basis of accounting. The legal level of budgetary control is at the fund level. The city manager may transfer appropriations within funds, or departments within funds, but needs City Council approval to adjust the total budget of a fund. Appropriations lapse at year-end; however, the City Council may approve the carryover of specific amounts. In 2020, expenditures exceeded budget in the Economic Development Authority Special Revenue Fund by $139,573, and the (nonmajor) Solid Waste Management Special Revenue Fund by $6,114. The excess spending was funded by revenues received in excess of budget and available fund balance. F. Cash, Cash Equivalents, and Investments Cash balances from all funds are combined and invested to the extent available in short-term investments. Earnings from the pooled investments are allocated to the individual funds based on the average monthly cash and investment balances of the respective funds. Certain bond proceeds may be held separately for capital projects. Earnings on these accounts are allocated directly to the respective funds. For purposes of the Statement of Cash Flows, the City considers all highly liquid debt instruments with an original maturity from the time of purchase of three months or less to be cash equivalents. The proprietary funds’ portion of the government-wide cash and investment pool is considered to be cash equivalent, including the cash held with fiscal agent. The City generally reports investments at fair value other than for certain investment pools that are valued at amortized cost. The City categorizes its fair value measurements within the fair value hierarchy established by accounting principles generally accepted in the United States of America. 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; and Level 3 inputs are significant unobservable inputs. Debt securities classified in Level 2 of the fair value hierarchy are valued using a matrix pricing technique. Matrix pricing is used to value securities based on the securities’ relationship to benchmark quoted prices. See Note 2 for the City’s recurring fair value measurements as of the current year-end. -40- NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) G. Receivables Accounts receivable include amounts billed for services provided before year-end. Unbilled utility enterprise fund receivables are also included for services provided in the year. The City annually certifies delinquent utility accounts to the county for collection in the following year; therefore, no allowance for doubtful accounts has been established for the delinquent utility receivables. H. Property Taxes Property tax levies are set by the City Council in December of each year and are certified to Hennepin County for collection in the following year. In Minnesota, counties act as collection agents for all property taxes. The county spreads the levies over all taxable property. Such taxes become a lien on January 1 and are recorded as receivables by the City on that date. Property taxes may be paid by taxpayers in two equal installments on May 15 and October 15. The county provides tax settlements to cities and other taxing districts three times a year; in July, December, and January. Property taxes are recognized as revenue in the year levied in the government -wide financial statements and proprietary fund financial statements. In the governmental fund financial statements, taxes are recognized as revenue when received in cash or within 60 days after year-end. Taxes which remain unpaid on December 31 are classified as delinquent taxes receivable and are offset by a deferred inflow of resources in the governmental fund financial statements. I. 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 withou t 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, 2020, the total delinquent special assessment receivable balance was $45,957. 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. -41- NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) J. Interfund Balances and Transfers In the fund financial statements, balances between funds that are representative of lending or borrowing arrangements are reported as either “due to/from other funds” (current portion) or “advances to/from other funds.” All other outstanding balances between funds are reported as “due to/from other funds.” Interfund balances and transfers reported in the fund financial statements are eliminated to the extent possible in the government-wide financial statements. Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as “internal balances.” K. Inventory and Prepaid Items Inventory is valued at cost using the first-in/first-out 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. L. Capital Assets Capital assets, which include property, buildings, improvements, equipment, and infrastructure assets (roads, bridges, sidewalks, and similar items) are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Such assets are capitalized at historical cost or estimated historical cost for assets where actual historical cost is not available . Donated assets are recorded as capital assets at their estimated acquisition value on the date of donation. The City defines capital assets as those with an initial, individual cost of more than $5,000 with an estimated useful life in excess of two years or more. The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend asset lives are not capitalized. Capital assets are recorded in the government-wide and proprietary fund financial statements but are not reported in the governmental fund financial statements. Capital assets are depreciated using the straight-line method over their estimated useful lives. Land and construction in progress are not depreciated. Useful lives vary from 15 to 50 years for buildings and structures, 15 to 50 years for improvements other than buildings, and 3 to 20 years for vehicles and equipment. M. Deferred Outflows/Inflows of Resources In addition to assets and liabilities, statements of net position or balance sheets will sometimes report deferred outflows or inflows of resources. These separate financial statement elements represent a consumption or acquisition of net position that applies to a future period and so will not be recognized as an outflow of resources (expense/expenditure) or an inflow of financial resources (revenue) until then. Deferred outflows and inflows of resources related to pensions or other post-employment benefits (OPEB) are reported in the government-wide and proprietary fund Statements of Net Position. These deferred outflows and inflows of resources result from differences between expected and actual experience, changes in proportion, assumption changes, differences between projected and actual earnings on plan investments, and contributions to the plan subsequent to the measurement date and before the end of the reporting period. These amounts are deferred and amortized as required under pension or OPEB standards. -42- NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Deferred inflows of resources from unavailable revenue arises only under a modified accrual basis of accounting and, therefore, is only reported in governmental fund financial statements. 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. The City also reports deferred inflows or resources for resources received in advance, which is reported in both the governmental fund financial statements and the government -wide financial statements. This item represents amounts received before the applicable time requirements are met, but after all other eligibility requirements have been met. N. Long-Term Liabilities In the government-wide financial statements and proprietary fund financial statements, long-term debt and other long-term obligations are reported as liabilities. 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 recognize 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. O. 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. P. Other Post-Employment Benefits (OPEB) Under Minnesota Statutes Chapter 471.61, Subd. 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 Governmental Accounting Standards Board (GASB) Statement No. 75, at December 31, 2020. The Insurance Reserve Internal Service Fund is typically used to liquidate governmental OPEB payable. Q. State-Wide Pension Plans 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 the PERA’s fiduciary net position have been determined on the same basis as they are reported by the PERA. 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. -43- NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) R. Risk Management The City is exposed to various risks of loss related to torts: theft of, damage to, and destruction of assets; errors and omissions; and natural disasters. The City participates in the League of Minnesota Cities Insurance Trust (LMCIT), a public entity risk pool for its general property and casualty, workers ’ compensation, and other miscellaneous insurance coverage. The LMCIT operates as a common risk management and insurance program for a large number of cities in Minnesota. The City pays an annual premium to the LMCIT for insurance coverage. The LMCIT agreement provides that the trust will be self-sustaining through member premiums and will reinsure through commercial companies for claims in excess of certain limits. The City also carries commercial insurance for certain other risks of loss. Settled claims resulting from these risks did not exceed insurance coverage in any of the last three fiscal years. There were no significant reductions in insurance coverage in the current year. S. Use of Estimates 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 the amounts reported at the date of the financial statements during the reporting period. Actual results could differ from those estimates. T. Fund Balance Classifications In the fund financial statements, governmental funds report fund balance in classifications that disclose constraints for which amounts in those funds can be spent. These classifications are as follows: • Nonspendable – Consists of amounts that are not in spendable form, such as prepaid items, inventory, and other long-term assets. • Restricted – Consists of amounts related to externally imposed constraints established by creditors, grantors, or contributors; or constraints imposed by state statutory provisions. • Committed – Consists of internally imposed constraints established by resolution of the City Council, which cannot be used for any other purpose unless the City Council removes or changes the specified use by taking the same type of action employed to previously commit those amounts. • Assigned – Consists of internally imposed constraints representing amounts intended to be used by the City for specific purposes that do not meet the criteria to be classified as restricted or committed. Assigned amounts represent intended uses established by the governing body 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, which also reflects negative residual amounts in other funds. When both restricted and unrestricted resources are available for use, it is the City’s policy to first use restricted resources, and then use unrestricted resources as needed. When committed, assigned, or unassigned resources are available for use, it is the City’s policy to use resources in the following order: 1) committed, 2) assigned, and 3) unassigned. The City’s fund balance policy includes a fund balance goal in the General Fund of maintaining an unassigned fund balance of 42 percent of the next year’s budgeted General Fund expenditures. -44- NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) U. Net Position In the government-wide and proprietary fund financial statements, net position represents the difference between assets, deferred outflows of resources, liabilities, and deferred inflows of resources. Net position is displayed in three components: • Net Investment in Capital Assets – Consists of capital assets, net of accumulated depreciation, reduced by any outstanding debt attributable to acquire capital assets. • Restricted Net Position – Consists of net position restricted when there are limitations imposed on its use through external restrictions imposed by creditors, grantors, or laws or regulations of other governments. • Unrestricted Net Position – All other elements of net position that do not meet the definition of “restricted” or “net investment in capital assets.” The City applies restricted resources first when an expense is incurred for which both restricted and unrestricted resources are available. V. Deficit Fund Equity The following funds had fund balance or net position deficits at December 31, 2020: Fund Amount HRA Bonds Debt Service Fund 2,119,802$ Nonmajor governmental funds 2010B G.O. Equipment Bonds Debt Service Fund 129$ Internal service funds Insurance Reserve 518,375$ The City plans to fund these deficits with future property taxes, tax increments, or transfers. NOTE 2 – CASH AND INVESTMENTS A. Components of Cash and Investments Cash and investments are presented in the financial statements as follows: Deposits 4,401,207$ Investments 41,977,420 Petty cash 2,595 Total 46,381,222$ Cash and investments at year-end consist of the following: Statement of Net Position Cash and temporary investments 44,821,169$ Cash held with fiscal agent 1,560,053 Total 46,381,222$ -45- NOTE 2 – CASH AND INVESTMENTS (CONTINUED) B. Deposits In accordance with applicable Minnesota Statutes, the City maintains deposits at depository banks authorized by the City Council, including checking accounts and certificates of deposit. The following is considered the most significant risk associated with deposits: Custodial Credit Risk – In the case of deposits, this is the risk that in the event of a bank failure, the City’s deposits may be lost. Minnesota Statutes require that all deposits be protected by federal deposit insurance, corporate surety bond, or collateral. The market value of collateral pledged must equal 110 percent of the deposits not covered by federal deposit insurance or corporate surety bonds. Authorized collateral includes treasury bills, notes, and bonds; issues of U.S. government agencies; general obligations rated “A” or better; revenue obligations rated “AA” or better; irrevocable standard letters of credit issued by the Federal Home Loan Bank; and certificates of deposit. Minnesota Statutes require that securities pledged as collateral be held in safekeeping in a restricted account at the 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 City has no additional deposit policies addressing custodial credit risk. At year-end, the carrying amount of the City’s deposits was $4,401,207, while the balance on the bank records was $4,771,392. At December 31, 2020, all deposits were fully covered by federal deposit insurance or collateral held by the City’s agent in the City’s name. C. Investments The City has the following investments at year-end: Fair Value Measurements Investment Type Rating Agency Using No Maturity Less Than 1 1 to 5 Greater Than 5 Total U.S. agency securities FNMA Level 2 –$ –$ –$ 1,299$ 1,299$ FHLB AA S&P Level 2 – – 1,673,759 – 1,673,759 FFCB AA S&P Level 2 – – 2,103,056 – 2,103,056 State and local government securities AA S&P Level 2 – – 516,880 – 516,880 U.S. Treasury securities Level 1 – – – 1,545,000 1,545,000 Negotiable certificates of deposit Level 2 – 3,701,078 7,681,302 – 11,382,380 Investment pool/mutual funds 4M Fund Not Applicable 2,342,420 – – – 2,342,420 Invesco Government and Agency Fund AAA S&P NAV 17,037,352 – – – 17,037,352 UBS Select Prime Institutional Fund AAA S&P NAV 5,375,274 – – – 5,375,274 Total investments 24,755,046$ 3,701,078$ 11,974,997$ 1,546,299$ 41,977,420$ Not Rated Credit Risk Not Rated Interest Risk – Maturity Duration in Years Not Rated Not Rated All mutual funds currently held by the City reported at net asset value, have no funded commitments, and have daily redemption frequencies with no redemption notice required. The Minnesota Municipal Money Market (4M) Fund is external investment pool regulated by Minnesota Statutes that is not registered with the Securities and Exchange Commission (SEC), but follows the regulatory rules of the SEC. The City’s investment in this fund is measured at the value per share provided by the pool, which is based on an amortized cost method that approximates fair value. There are no restrictions or limitations on withdrawals from the 4M Fund. -46- NOTE 2 – CASH AND INVESTMENTS (CONTINUED) Investments are subject to various risks, the following of which are considered the most significant: Credit Risk – This is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. Minnesota Statutes limit the City’s investments to direct obligations or obligations guaranteed by the United States or its agencies; shares of investment companies registered under the Federal Investment Company Act of 1940 that receive the highest credit rating, are rated in one of the two highest rating categories by a statistical rating agency, and all of the investments have a final maturity of 13 months or less; general obligations rated “A” or better; revenue obligations rated “AA” or better; general obligations of the Minnesota Housing Finance Agency rated “A” or better; bankers’ acceptances of United States banks eligible for purchase by the Federal Reserve System; commercial paper issued by United States corporations or their Canadian subsidiaries, rated of the highest quality category by at least two nationally recognized rating agencies, and maturing in 270 days or le ss; Guaranteed Investment Contracts guaranteed by a United States commercial bank, domestic branch of a foreign bank, or a United States insurance company, and with a credit quality in one of the top two highest categories; repurchase or reverse purchase 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; that are a primary reporting dealer in U.S. government securities to the Federal Reserve Bank of New York; or certain Minnesota securities broker-dealers. The City’s investment policies do not further address credit risk. Custodial Credit Risk – For investments, this is the risk that in the event of a failure of the counterparty to an investment transaction (typically a broker-dealer) the City would not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The City does not have a formal investment policy addressing this risk, but typically limits its exposure by purchasing insured or registered investments, or by control of who holds the securities. Concentration Risk – This is the risk associated with investing a significant portion of the City’s investment (considered 5.0 percent or more) in the securities of a single issuer, excluding U.S. guaranteed investments (such as treasuries), investment pools, and mutual funds. The City’s investment policies do not limit the concentration of investments. As of December 31, 2020, the City had 5.0 percent invested in securities issued by the Federal Farm Credit Bank. 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 the period for which an interest rate is fixed, the greater the risk). The City does not have an investment policy limiting the duration of investments. NOTE 3 – LOAN RECEIVABLES 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 Special Revenue Fund at December 31, 2020 totaled $240,500. Loans receivable in nonmajor governmental funds totaled $21,016. -47- NOTE 4 – INTERFUND BALANCES AND TRANSFERS The composition of internal balances as of December 31, 2020 is as follows: Receivable Fund Payable Fund Amount Purpose Due from/to other funds Governmental Business-type General Fund Ice Arena 156,685$ Cash flow Governmental Governmental Nonmajor governmental Street Infrasturcture 75,000 Finance capital purchase Total due from/to other funds 231,685 Advances to/from other funds Governmental Governmental Economic Development Authority HRA Construction 1,653,364 Finance capital purchase Economic Development Authority HRA Bonds 351,116 Finance capital purchase HRA Construction HRA Bonds 2,003,318 Finance capital purchase Nonmajor governmental Street Infrasturcture 375,000 Finance capital purchase Total advances from/to other funds 4,382,798 Interfund activity eiminated from government-wide statements (4,457,798) Internal service fund activities related to the enterprise funds 257,622 Total internal balances – government-wide statements 414,307$ In 2020, the General Fund loaned the Ice Arena Fund $156,685 for cash flow purposes, the balance on the loan will be paid back in 2021.The Economic Development Authority Special Revenue Fund loaned the HRA Construction Capital Projects 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 4.00 percent. As of December 31, 2020, the balance outstanding was $1,653,364. In 2016, the Temporary Financing Fund loaned the Street Infrastructure Capital Projects 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, 2020, the balance outstanding was $450,000. The Economic Development Authority Special Revenue Fund and the HRA Construction Capital Projects Fund loaned the HRA Bonds Debt Service Fund $351,116 and $2,003,318, respectively, for the purchase of the Hy-Vee property. The interfund loan matures in 2042 and carries an interest rate of 4.00 percent. Interfund transfers during the year ended December 31, 2020 were as follows: Nonmajor Ice Arena General Governmental Enterprise Total Transfer Out Economic Development Authority 35,619$ (1)–$ –$ 35,619$ Street Infrastructure – 10,588 (3)– 10,588 Nonmajor governmental 51,800 (2)68,785 (4)400,000 (5)520,585 Sewer Utility Enterprise 55,564 (2)– – 55,564 Water Utility Enterprise 57,939 (2)– – 57,939 Golf Course Enterprise 10,769 (2)– – 10,769 Ice Arena Enterprise 10,769 (2)– – 10,769 Storm Water Enterprise 24,220 (2)– – 24,220 Internal Service 92,608 (2)– – 92,608 Total 339,288$ 79,373$ 400,000$ 818,661$ (1)Transfer to reimburse the General Fund for the aerial lease payment to West Metro Fire-Rescue District. (2)Transfers to cover administrative charges paid for by the General Fund. (3)Transfer to close nonmajor governmental 2016 Street Improvement Project Capital Projects Fund. (4)Transfer from nonmajor governmental 2010B G.O. Equipment Bonds Debt Service Fund to nonmajor governmental Fire Capital Projects Fund for future fire equipment purchases. (5)Transfer from nonmajor governmental Park Infrastructure Capital Projects Fund to Ice Arena Enterprise Fund for debt service and capital improvements costs. Transfers In Funds -48- NOTE 5 – CAPITAL ASSETS Capital asset activity for the year ended December 31, 2020 was as follows: A. Changes in Capital Assets Used in Governmental Activities Beginning of Year Additions Deletions End of Year Capital assets, not depreciated Land 994,268$ –$ –$ 994,268$ Construction in progress 32,059,543 8,236,837 (20,357,082) 19,939,298 Total capital assets, not depreciated 33,053,811 8,236,837 (20,357,082) 20,933,566 Capital assets, depreciated Buildings and structures 9,367,855 18,774,744 (2,733,930) 25,408,669 Vehicles and equipment 10,839,831 537,758 (846,199) 10,531,390 Improvements other than buildings 46,133,939 1,636,110 (542,912) 47,227,137 Total capital assets, depreciated 66,341,625 20,948,612 (4,123,041) 83,167,196 Less accumulated depreciation on Buildings and structures (6,969,667) (249,252) 1,945,551 (5,273,368) Vehicles and equipment (8,514,438) (517,691) 846,199 (8,185,930) Improvements other than buildings (15,618,094) (2,224,608) 535,148 (17,307,554) Total accumulated depreciation (31,102,199) (2,991,551) 3,326,898 (30,766,852) Net capital assets, depreciated 35,239,426 17,957,061 (796,143) 52,400,344 Total capital assets, net 68,293,237$ 26,193,898$ (21,153,225)$ 73,333,910$ B. Changes in Capital Assets Used in Business-Type Activities Beginning of Year Additions Deletions End of Year Capital assets, not depreciated Land 485,042$ –$ –$ 485,042$ Construction in progress 798,951 1,273,955 (702,082) 1,370,824 Total capital assets, not depreciated 1,283,993 1,273,955 (702,082) 1,855,866 Capital assets, depreciated Buildings and structures 10,912,208 – (114,844) 10,797,364 Vehicles and equipment 2,635,207 55,358 (185,409) 2,505,156 Improvements other than buildings 27,865,215 657,484 – 28,522,699 Total capital assets, depreciated 41,412,630 712,842 (300,253) 41,825,219 Less accumulated depreciation on Buildings and structures (4,762,831) (212,181) 114,844 (4,860,168) Vehicles and equipment (2,235,229) (84,459) 182,026 (2,137,662) Improvements other than buildings (6,640,340) (706,415) – (7,346,755) Total accumulated depreciation (13,638,400) (1,003,055) 296,870 (14,344,585) Net capital assets, depreciated 27,774,230 (290,213) (3,383) 27,480,634 Total capital assets, net 29,058,223$ 983,742$ (705,465)$ 29,336,500$ -49- NOTE 5 – CAPITAL ASSETS (CONTINUED) C. Depreciation Expense by Function Depreciation expense for the year ended December 31, 2020 was charged to the following functions: Governmental activities General government 77,047$ Public safety 64,565 Public works 1,946,363 Culture and recreation 326,005 Internal service 577,571 Total depreciation expense – governmental activities 2,991,551$ Business-type activities Sewer utility 184,090$ Water utility 325,447 Golf course 36,503 Ice arena 195,894 Storm water 241,636 Street lighting 19,485 Total depreciation expense – business-type activities 1,003,055$ NOTE 6 – LONG-TERM LIABILITIES A. 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: Final Balance – Description Original Issue Interest Rate Issue Date Maturity Date End of Year G.O. Street Reconstruction Bonds, Series 2015B 3,825,000$ 2.25–3.00%12/30/2015 02/01/2031 2,970,000$ G.O. Street Reconstruction Bonds, Series 2016A 4,855,000 2.25–3.00%12/29/2016 02/01/2033 4,325,000 G.O. Street Reconstruction Bonds, Series 2017A 18,435,000 3.00–5.00%12/28/2017 02/01/2034 17,530,000 G.O. Street Reconstruction Bonds, Series 2018A 9,520,000 3.25–5.00%12/20/2018 02/01/2035 9,520,000 G.O. Street Reconstruction Bonds, Series 2019A 5,235,000 3.00–4.00%07/18/2019 02/01/2035 5,235,000 Total General Obligation Bonds 39,580,000$ -50- NOTE 6 – LONG-TERM LIABILITIES (CONTINUED) The annual debt service to maturity for G.O. bonds are as follows: Year Ending December 31,Principal Interest Principal Interest Principal Interest 2021 1,964,735$ 1,303,423$ 220,265$ 191,229$ 2,185,000$ 1,494,652$ 2022 2,038,688 1,221,372 231,312 174,469 2,270,000 1,395,841 2023 2,132,217 1,125,983 237,783 159,549 2,370,000 1,285,532 2024 2,233,460 1,028,748 246,540 145,183 2,480,000 1,173,931 2025 2,324,080 938,824 250,920 130,945 2,575,000 1,069,769 2026–2030 13,066,475 3,217,240 1,358,525 424,188 14,425,000 3,641,428 2031–2035 12,652,305 915,598 622,695 55,482 13,275,000 971,080 36,411,960$ 9,751,188$ 3,168,040$ 1,281,045$ 39,580,000$ 11,032,233$ Governmental Activities Business-Type Activities Total B. 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 $665,000 and $197,602, respectively. Final Balance – Description Original Issue Interest Rate Issue Date Maturity Date End of Year G.O. Tax Increment Refunding Bonds, Series, 2012A 2,695,000$ 2.00–2.45%01/11/2012 02/01/2025 1,305,000$ G.O. Tax Increment Refunding Bonds, Series, 2012B 1,330,000 1.35–4.65%01/11/2012 02/01/2031 1,005,000 G.O. Tax Increment Refunding Bonds, Series, 2015A 5,960,000 2.00–3.00%06/17/2015 02/01/2032 4,915,000 Total G.O. Tax Increment Bonds 7,225,000$ The annual debt service to maturity for G.O. bonds are as follows: Year Ending December 31,Principal Interest Principal Interest Principal Interest 2021 584,150$ 152,446$ 95,850$ 31,231$ 680,000$ 183,677$ 2022 602,871 139,876 97,129 29,302 700,000 169,178 2023 621,558 126,424 98,442 27,346 720,000 153,770 2024 638,933 111,914 101,067 25,351 740,000 137,265 2025 657,620 96,307 102,380 23,291 760,000 119,598 2026–2030 2,052,412 290,895 552,588 75,987 2,605,000 366,882 2031–2032 776,776 22,840 243,224 7,344 1,020,000 30,184 5,934,320$ 940,702$ 1,290,680$ 219,852$ 7,225,000$ 1,160,554$ Business-Type ActivitiesGovernmental Activities Total -51- NOTE 6 – LONG-TERM LIABILITIES (CONTINUED) C. 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 $57,482 and $560,316, respectively. Final Balance – Description Original Issue Interest Rate Issue Date Maturity Date End of Year 2011A Taxable Lease Revenue Bonds 3,505,000$ 5.00%12/01/2011 12/01/2028 3,505,000$ The annual debt service to maturity for all lease revenue bonds are as follows: Year Ending December 31,Principal Interest 2021 –$ 57,482$ 2022 – 57,482 2023 – 57,482 2024 – 57,482 2025 – 57,482 2026–2028 3,505,000 172,446 3,505,000$ 459,856$ Business-Type Activities D. 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 c ustomer revenues for the Sewer Utility Fund were $95,664 and $3,712,613, respectively. Principal and interest paid for the current year and total customer revenues for the Water Utility Fund were $421,591 and $5,139,616, respectively. Principal and interest paid for the current year and total customer revenues for the Storm Water Fund were $191,817 and $1,259,707, respectively. Final Balance – Description Original Issue Interest Rate Issue Date Maturity Date End of Year 2010A G.O. Utility Revenue Bonds 1,200,000$ 2.00–3.25%05/06/2010 02/01/2021 85,000$ 2010B G.O. Water Revenue Refunding Bonds 605,000 2.00–3.00%11/23/2010 02/01/2022 125,000 2011 G.O. Public Facilities Authority Note 411,738 1.70%02/23/2011 08/20/2029 211,000 2013 G.O. Public Facilities Authority Note 1,035,000 1.00%07/24/2013 08/20/2032 688,000 Total G.O. Revenue Bonds and Notes 1,109,000$ -52- NOTE 6 – LONG-TERM LIABILITIES (CONTINUED) The annual debt service to maturity for G.O. revenue bonds are as follows: Year Ending December 31,Principal Interest 2021 221,000$ 14,705$ 2022 142,000 10,534 2023 78,000 8,634 2024 79,000 7,692 2025 79,000 6,741 2026–2030 389,000 19,036 2031–2032 121,000 1,820 1,109,000$ 69,162$ Business-Type Activities E. Changes in Long-Term Liabilities Long-term liability activity for the year ended December 31, 2020, was as follows: Beginning Due Within of Year Additions Deletions End of Year One Year Governmental activities Bonds payable G.O. bonds 37,746,072$ –$ 1,334,112$ 36,411,960$ 1,964,735$ G.O. tax increment bonds 6,506,098 – 571,778 5,934,320 584,150 Add – premiums on bonds 2,763,227 – 173,441 2,589,786 – Total bonds payable, net 47,015,397 – 2,079,331 44,936,066 2,548,885 Compensated absences 753,881 761,905 672,330 843,456 84,346 Total governmental activities 47,769,278 761,905 2,751,661 45,779,522 2,633,231 Business-type activities Bonds payable G.O. bonds 3,383,928 – 215,888 3,168,040 220,265 G.O. tax increment bonds 1,383,902 – 93,222 1,290,680 95,850 Lease revenue bonds 3,505,000 – – 3,505,000 – G.O. revenue bonds and notes 1,325,000 – 216,000 1,109,000 221,000 Add – premiums on bonds 145,843 – 9,351 136,492 – Less – bond discount (803) – (803) – – Total business-type activities 9,742,870 – 533,658 9,209,212 537,115 Total government-wide 57,512,148$ 761,905$ 3,285,319$ 54,988,734$ 3,170,346$ 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. -53- NOTE 7 – COMPONENTS OF FUND BALANCE At December 31, 2020, the City had the following fund balances: Economic Development HRA City Hall Street General Authority Construction CIP Infrastructure Nonspendable 24,499$ –$ –$ –$ –$ Restricted Economic development – – 5,379,088 – – Capital improvements – – – – – Debt service – – – – – Public safety – police expenditures – – – – – Ice arena – – – – – Total restricted – – 5,379,088 – – Committed Economic development – 4,320,456 – – – Solid waste operations – – – – – Total committed – 4,320,456 – – – Assigned City Hall improvements – – – 1,217,360 – Street improvements – – – – 250,697 General improvements – – – – – Capital equipment – – – – – Park improvements – – – – – Total assigned – – – 1,217,360 250,697 Unassigned 8,901,587 – – – – Total 8,926,086$ 4,320,456$ 5,379,088$ 1,217,360$ 250,697$ Park/Pool Other Improvement Governmental Project HRA Bonds Funds Total Nonspendable –$ –$ –$ 24,499$ Restricted Economic development – – – 5,379,088 Capital improvements 650,336 – – 650,336 Debt service – – 2,845,806 2,845,806 Public safety – police expenditures – – 135,571 135,571 Ice arena – – 5,505 5,505 Total restricted 650,336 – 2,986,882 9,016,306 Committed Economic development – – 97,267 4,417,723 Solid waste operations – – 221,667 221,667 Total committed – – 318,934 4,639,390 Assigned City Hall improvements – – – 1,217,360 Street improvements – – – 250,697 General improvements – – 3,249,809 3,249,809 Capital equipment – – 823,809 823,809 Park improvements – – 1,451,725 1,451,725 Total assigned – – 5,525,343 6,993,400 Unassigned – (2,119,802) (129) 6,781,656 Total 650,336$ (2,119,802)$ 8,831,030$ 27,455,251$ -54- NOTE 8 – DEFINED BENEFIT PENSION PLANS – STATE-WIDE A. Plan Descriptions The City participates in the following cost-sharing, multiple-employer defined benefit pension plans administered by the Public Employees Retirement Association (PERA) of Minnesota. The PERA’s defined benefit pension plans are established and administered in accordance with Minnesota Statutes, Chapters 353 and 356. The PERA’s defined benefit pension plans are tax qualified plans under Section 401(a) of the Internal Revenue Code (IRC). 1. General Employees Retirement Fund (GERF) All full-time and certain part-time employees of the City are covered by the GERF. The GERF members belong to the Coordinated Plan. Coordinated Plan members are covered by Social Security. 2. Public Employees Police and Fire Fund (PEPFF) The Public Employees Police and Fire Fund (PEPFF), originally established for police officers and firefighters not covered by a local relief association, now covers all police officers and firefighters hired since 1980. Effective July 1, 1999, the PEPFF also covers police officers and firefighters belonging to local relief associations that elected to merge with and transfer assets and administration to the PERA. B. Benefits Provided The PERA provides retirement, disability, and death benefits. Benefit provisions are established by state statutes 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. 1. GERF Benefits Benefits are based on a member’s highest average salary for any five successive years of allowable service, age, and years of credit at termination of service. Two methods are used to compute benefits for the 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 Plan members is 1.2 percent of average salary for each of the first 10 years of service, and 1.7 perc ent of average salary for each additional year. Under Method 2, the accrual rate for Coordinated Plan members is 1.7 percent of 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 age 66. -55- NOTE 8 – DEFINED BENEFIT PENSION PLANS – STATE-WIDE (CONTINUED) Annuities, disability benefits, and survivor benefits are increased effective every January 1. Beginning January 1, 2019, the post-retirement increase will be equal to 50.0 percent of the cost of living adjustment (COLA) announced by the Social Security Administration, with a minimum increase of at least 1.0 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. 2. PEPFF Benefits Benefits for the PEPFF members first hired after June 30, 2010 but before July 1, 2014, vest on a prorated basis from 50.0 percent after five years, up to 100.0 percent after 10 years of credited service. Benefits for the PEPFF members first hired after June 30, 2014 vest on a prorated basis from 50.0 percent after 10 years, up to 100.0 percent after 20 years of credited service. The annuity accrual rate is 3.0 percent of average salary for each year of service. For Police and Fire Plan members who were first hired prior to July 1, 1989, a full annuity is available when age plus years of service equal at least 90. Benefit increases are provided to benefit recipients each January. Beginning in 2019, the post-retirement increase will be fixed at 1.0 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 months, but less than 36 months as of the June 30 before the effective date of the increase, will receive a reduced prorated increase. C. Contributions Minnesota Statutes, Chapter 353 sets the rates for employer and employee contributions. Contribution rates can only be modified by the State Legislature. 1. GERF Contributions Coordinated Plan members were required to contribute 6.50 percent of their annual covered salary in fiscal year 2020. The City was required to contribute 7.50 percent for Coordinated Plan members. The City’s contributions to the GERF for the year ended December 31, 2020, were $344,227. The City’s contributions were equal to the required contributions as set by state statutes. 2. PEPFF Contributions Police and fire member’s contribution rates increased from 11.30 percent of pay to 11.80 percent and employer rates increased from 16.95 percent to 17.70 percent on January 1, 2020. The City’s contributions to the PEPFF for the year ended December 31, 2020, were $550,681. The City’s contributions were equal to the required contributions as set by state statutes. -56- NOTE 8 – DEFINED BENEFIT PENSION PLANS – STATE-WIDE (CONTINUED) D. Pension Costs 1. GERF Pension Costs At December 31, 2020, the City reported a liability of $3,753,156 for its proportionate share of the GERF’s net pension liability. The City’s net pension liability reflected a reduction, due to the state of Minnesota’s contribution of $16.0 million. The state of Minnesota is considered a nonemployer contributing entity and the state’s contribution meets the definition of a special funding situation. The net pension liability was measured as of June 30, 2020, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The City’s proportion of the net pension liability was based on the City’s contributions received by the PERA during the measurement period for employer payroll paid dates from July 1, 2019 through June 30, 2020, relative to the total employer contributions received from all of the PERA’s participating employers. The City’s proportionate share was 0.0626 percent at the end of the measurement period and 0.0609 percent for the beginning of the period. The amount recognized by the City as its proportionate share of the net pension liability, the direct aid, and total portion of the net pension liability that was associated with the City were as follows: City’s proportionate share of the net pension liability 3,753,156$ State’s proportionate share of the net pension liability associated with the City 115,680$ For the year ended December 31, 2020, the City recognized pension expense of $182,169 for its proportionate share of the GERF’s pension expense. In addition, the City recognized an additional $10,068 as pension expense (and grant revenue) for its proportionate share of the state of Minnesota’s contribution of $16.0 million to the GERF. At December 31, 2020, the City reported its proportionate share of the GERF’s deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Deferred Outflows Inflows of Resources of Resources Differences between expected and actual economic experience 33,268$ –$ Changes in actuarial assumptions – 14,200 Differences between projected and actual investment earnings 80,934 136,353 Changes in proportion 115,786 – Contributions paid to the PERA subsequent to the measurement date 172,250 – Total 402,238$ 150,553$ -57- NOTE 8 – DEFINED BENEFIT PENSION PLANS – STATE-WIDE (CONTINUED) A total of $172,250 reported as deferred outflows of resources related to pensions resulting from city contributions subsequent to the measurement date that will be recognized as a reduction of the net pension liability in the year ending December 31, 2021. Other amounts reported as deferred outflows and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Pension Year Ending Expense December 31,Amount 2021 (142,842)$ 2022 36,898$ 2023 94,703$ 2024 90,676$ 2. PEPFF Pension Costs At December 31, 2020, the City reported a liability of $3,821,192 for its proportionate share of the PEPFF’s net pension liability. The net pension liability was measured as of June 30, 2020, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The City’s proportion of the net pension liability was based on the City’s contributions received by the PERA during the measurement period for employer payroll paid dates from July 1, 2019 through June 30, 2020, relative to the total employer contributions received from all of the PERA’s participating employers. The City’s proportionate share was 0.2899 percent at the end of the measurement period and 0.3012 percent for the beginning of the period. The state of Minnesota also contributed $13.5 million to the Police and Fire Fund in the plan fiscal year ended June 30, 2020. The contribution consisted of $4.5 million in direct state aid that does meet the definition of a special funding situation and $9.0 million in fire state aid that does not meet the definition of a special funding situation. The $4.5 million direct state was paid on October 1, 2019. Thereafter, by October 1 of each year, the state will pay $9.0 million to the Police and Fire Fund until full funding is reached or July 1, 2048, whichever is earlier. The $9.0 million in fire state aid will continue until the fund is 90.0 percent funded, or until the State Patrol Plan (administered by the Minnesota State Retirement System) is 90.0 percent funded, whichever occurs later. As a result, the state of Minnesota is included as a nonemployer contributing entity in the Police and Fire Retirement Plan Schedule of Employer Allocations and Schedule of Pension Amounts by Employer, Current Reporting Period Only (pension allocation schedules) for the $4.5 million in direct state aid. Police and Fire Plan employers need to recognize their proportionate share of the state of Minnesota’s pension expense (and grant revenue) under GASB Statement No. 68 special funding situation accounting and financial reporting requirements. For the year ended December 31, 2020, the City recognized pension expense of $788,181 for its proportionate share of the Police and Fire Plan’s pension expense. In addition, the City recognized an additional $27,693 as pension expense (and grant revenue) for its proportionate share of the state of Minnesota’s contribution of $4.5 million to the Police and Fire Fund. The amount recognized by the City as its proportionate share of the net pension liability, the direct aid, and total portion of the net pension liability that was associated with the City were as follows: City’s proportionate share of the net pension liability 3,821,192$ State’s proportionate share of the net pension liability associated with the City 90,012$ -58- NOTE 8 – DEFINED BENEFIT PENSION PLANS – STATE-WIDE (CONTINUED) The state of Minnesota is not included as a nonemployer contributing entity in the Police and Fire Pension Plan pension allocation schedules for the $9.0 million in fire state aid. The City also recognized $26,091 for the year ended December 31, 2020, as revenue and an offsetting reduction of net pension liability for its proportionate share of the state of Minnesota ’s on-behalf contributions to the Police and Fire Fund. At December 31, 2020, the City reported its proportionate share of the PEPFF’s deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Deferred Outflows Inflows of Resources of Resources Differences between expected and actual economic experience 168,833$ 184,032$ Changes in actuarial assumptions 1,298,672 2,323,833 Differences between projected and actual investment earnings 126,729 – Changes in proportion 156,743 260,899 Contributions paid to the PERA subsequent to the measurement date 261,298 – Total 2,012,275$ 2,768,764$ A total of $261,298 reported as deferred outflows of resources related to pensions resulting from city contributions subsequent to the measurement date that will be recognized as a reduction of the net pension liability in the year ending December 31, 2021. Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows: Pension Year Ending Expense December 31,Amount 2021 (257,797)$ 2022 (1,093,130)$ 2023 183,128$ 2024 167,398$ 2025 (17,386)$ E. Actuarial Assumptions The total pension liability in the June 30, 2020 actuarial valuation was determined using an individual entry-age normal actuarial cost method and the following actuarial assumptions: GERF PEPFF Inflation 2.25% per year 2.50% per year Active member payroll growth 3.00% per year 3.25% per year Investment rate of return 7.50%7.50% Salary increases were based on a service-related table. Mortality rates for active members, retirees, survivors, and disabilitants for all plans were based on RP-2014 tables for males and females, as appropriate, with slight adjustments to fit the PERA’s experience. Cost of living benefit increases after retirement for retirees are assumed to be 1.25 percent per year for the GERF, and 1.00 percent per year for the PEPFF. -59- NOTE 8 – DEFINED BENEFIT PENSION PLANS – STATE-WIDE (CONTINUED) Actuarial assumptions used in the June 30, 2020 valuation were based on the results of actuarial experience studies. The most recent four-year experience study in the GERF was completed in 2019. The assumption changes were adopted by the Board and become effective with the July 1, 2020 actuarial valuation. The most recent four-year experience study for the PEPFF was completed in 2020. The recommended assumptions for those plans were adopted by the Board and will be effective with the July 1, 2021 actuarial valuations if approved by the State Legislature. The following changes in actuarial assumptions and plan provisions occurred in 2020: 1. GERF CHANGES IN ACTUARIAL ASSUMPTIONS • The price inflation assumption was decreased from 2.50 percent to 2.25 percent. • The payroll growth assumption was decreased from 3.25 percent to 3.00 percent. • Assumed salary increase rates were changed as recommended in the June 30, 2019 experience study. The net effect is assumed rates that average 0.25 percent less than previous rates. • Assumed rates of retirement were changed as recommended in the June 30, 2019 experience study. The changes result in more unreduced (normal) retirements and slightly fewer Rule of 90 and early retirements. • Assumed rates of termination were changed as recommended in the June 30, 2019 experience study. The new rates are based on service and are generally lower than the previous rates for years two through five, and slightly higher thereafter. • Assumed rates of disability were changed as recommended in the June 30, 2019 experience study. The change results in fewer predicted disability retirements for males and females. • The base mortality table for healthy annuitants and employees was changed from the RP-2014 Table to the Pub-2010 General Mortality Table, with adjustments. The base mortality table for disabled annuitants was changed from the RP-2014 Disabled Annuitant Mortality Table to the Pub-2010 General/Teacher Disabled Annuitant Mortality Table, with adjustments. • The mortality improvement scale was changed from MP-2018 to MP-2019. • The assumed spouse age difference was changed from two years older for females to one year older. • The assumed number of married male new retirees electing the 100.00 percent joint and survivor option changed from 35.00 percent to 45.00 percent. The assumed number of married female new retirees electing the 100.00 percent joint and survivor option changed from 15.00 percent to 30.00 percent. The corresponding number of married new retirees electing the life annuity option was adjusted accordingly. CHANGES IN PLAN PROVISIONS • Augmentation for current privatized members was reduced to 2.00 percent for the period July 1, 2020 through December 31, 2023, and zero percent thereafter. Augmentatio n was eliminated for privatizations occurring after June 30, 2020. 2. PEPFF CHANGES IN ACTUARIAL ASSUMPTIONS • The mortality projection scale was changed from MP-2018 to MP-2019. -60- NOTE 8 – DEFINED BENEFIT PENSION PLANS – STATE-WIDE (CONTINUED) The Minnesota State Board of Investment, which manages the investments of the PERA, prepares an analysis of the reasonableness on a regular basis of the long-term expected rate of return using a building-block method in which best-estimate ranges of expected future rates of return are developed for each major asset class. These ranges are combined to produce an expected long-term rate of return by weighting the expected future rates of return by the target asset allocation percentages. The target allocation and best-estimates of geometric real rates of return for each major asset class are summarized in the following table: Asset Class Domestic stocks 35.50 %5.10 % International stocks 17.50 5.30 % Bonds (fixed income)20.00 0.75 % Alternative assets (private markets)25.00 5.90 % Cash 2.00 – % 100.00 % Target Long-Term Expected Allocation Real Rate of Return F. Discount Rate The discount rate used to measure the total pension liability in 2020 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 positions of the GERF and the PEPFF were projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. G. Pension Liability Sensitivity The following table 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% Decrease in 1% Increase in Discount Rate Discount Rate Discount Rate 6.50%7.50%8.50% The City’s proportionate share of the GERF net pension liability 6,015,007$ 3,753,156$ 1,887,310$ The City’s proportionate share of the PEPFF net pension liability 7,616,186$ 3,821,192$ 681,500$ H. 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 PERA website at www.mnpera.org; by writing to the PERA at 60 Empire Drive, Suite 200, St. Paul, Minnesota 55103; or by calling (651) 296-7460 or (800) 652-9026. -61- NOTE 9 – DEFINED CONTRIBUTION PENSION PLAN Councilmembers of the City are covered by the Public Employees Defined Contribution Plan (PEDCP), a multiple-employer deferred compensation plan administered by the PERA. The PEDCP is a tax qualified plan under Section 401(a) of the IRC, 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. 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 5.00 percent of their 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, the PERA receives 2.00 percent of employer contributions and 25 hundredths of 1.00 percent (0.25 percent) of the assets in each member’s account annually. Total contributions made by the City during fiscal year 2020 were: Required Rate for Employees Employee Employer Employee Employer and Employers 2,676$ 2,676$ 5.00%5.00%5.00% Contribution Amount Percentage of Covered Payroll -62- NOTE 10 – OTHER POST-EMPLOYMENT BENEFITS (OPEB) PLAN 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 nonunion), 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, 2020, the following employees were covered by the benefit terms: Retirees and beneficiaries receiving benefits 3 Active plan members 91 Total 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 2020, the City’s average contribution rate was 0.3 percent of covered payroll. For the year 2020, the City contributed $22,038 to the Retiree Health Plan. C. Actuarial Methods and Assumptions The City’s total OPEB liability of $1,298,682 was measured as of December 31, 2020, and the total OPEB liability used to calculate the total OPEB liability was determined by an actuarial valuation as of January 1, 2019, using the entry-age normal method. Roll forward procedures were used to roll forward the total OPEB liability to the measurement date. The total OPEB liability in the January 1, 2019 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified: Discount rate 2.12% Expected long-term investment return 2.12% 20-year municipal bond yield 2.12% Inflation rate 2.75% Payroll growth rate 3.25% Healthcare cost trend rate 7.50% in 2020, grading to 5.00% -63- NOTE 10 – OTHER POST-EMPLOYMENT BENEFITS (OPEB) PLAN (CONTINUED) The discount rate used to measure the total OPEB liability was 2.12 percent. Assets were projected using expected benefit payments and expected asset returns. Expected benefit payments by year were discounted using the expected asset return assumption for years in which the assets were sufficient to pay all benefit payments. Any remaining benefit payments after the Trust Fund is exhausted are discounted at the 20-year municipal bond rate. The equivalent single rate is the discount rate. Mortality rates were based on the RP-2014 with MP 2018 generational improvements. The actuarial assumptions used in the January 1, 2019 valuation were based on input from a variety of published sources of historical and projected future financial data. Each assumption was r eviewed for reasonableness with the source information, as well as for consistency with the other economic assumptions. D. Changes in the Total OPEB Liability Total OPEB Liability Beginning balance – January 1, 2020 1,126,706$ Changes for the year Service cost 89,655 Interest 33,026 Difference between expected and actual experience 27 Changes of assumptions 71,306 Benefit payments (22,038) Total net changes 171,976 Ending balance – December 31, 2020 1,298,682$ Since the prior measurement date, the following assumptions changed: • The discount rate was changed from 2.74 percent to 2.12 percent. • The salary increase was changed from 3.50 percent to 3.25 percent. 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 (1.12 percent) or 1 percentage point higher (3.12 percent) than the current discount rate: Discount rate Total OPEB liability 1,416,000$ 1,191,048$ 1.12%3.12% 1% Decrease in 1% Increase in Discount Rate Discount RateDiscount Rate 1,298,682$ 2.12% -64- NOTE 10 – OTHER POST-EMPLOYMENT BENEFITS (OPEB) PLAN (CONTINUED) 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 trend rate that is 1 percentage point lower (6.50 percent decreasing to 4.00 percent) or 1 percentage point higher (8.50 percent decreasing to 6.00 percent) than the current healthcare cost trend rate: Healthcare cost trend rate Total OPEB liability 1,131,326$ 1,497,538$ 1,298,682$ 1% Decrease in 1% Increase in Cost Trend Rate Cost Trend Rate 6.50%, decreasing to 4.00%8.50%, decreasing to 6.00% Healthcare Cost Trend Rate 7.50%, decreasing to 5.00% Healthcare Healthcare F. OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB For the year ended December 31, 2020, the City recognized OPEB expense of $136,460. At December 31, 2020, the City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources: Deferred Deferred Outflows Inflows of Resources of Resources Differences between expected and actual experience 68,474$ –$ Changes in assumptions 127,970 38,831 Total 196,444$ 38,831$ The amounts reported as deferred outflows and inflows of resources related to OPEB will be recognized in OPEB expense as follows: OPEB Year Ending Expense June 30,Amount 2021 $ 13,780 2022 $ 13,780 2023 $ 13,780 2024 $ 13,780 2025 $ 13,780 Thereafter $ 88,713 -65- NOTE 11 – JOINT POWERS AGREEMENT AND JOINTLY CONTROLLED ORGANIZATION A. Joint Water Commission (JWC) The City is a member of a joint powers agreement, together with the cities of Crystal and New Hope, which established a JWC. The JWC was created in 1963 to provide for the creation and maintenance of a joint water supply, storage, and distribution system through which water purchased from the City of Minneapolis can be supplied to the population of the member cities. Each member city is entitled to appoint one member to the JWC. Original construction costs were allocated to the member cities based on percentages agreed upon in the joint powers agreement. All subsequent operating and maintenance costs are apportioned to and paid by each member city on the basis of water usage. Under the terms of the joint powers agreement, upon termination the accumulated assets of the JWC shall be divided amongst the member cities in a manner to be determined and unanimously approved 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 $168,509 represents the original contributions for working capital; however, the City’s share of subsequent construction costs are not determinable. Therefore, the City’s Water Fund has not recorded any subsequent amounts as an equity investment or contributed capital related to the JWC. The following financial information is from the JWC’s audited financial statements for the year ended December 31, 2020, which are available at Golden Valley City Hall: Total assets 19,788,683$ Total liabilities 1,358,265 Net position 18,430,418 Total revenue 9,155,074 Total expenses 8,327,643 Of the total revenues, $8,987,718 represented assessments paid by member cities. Of the total member assessments, $3,090,099, or 34.38 percent, was paid by the City. B. 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 $374,558. The following financial information is taken from the District’s audited financial statements for the year ended December 31, 2020, the most recent information available at the date of this report: Total assets 3,690,462$ Total deferred outflows of resources 482,860 Total liabilities 2,280,370 Total deferred inflows of resources 630,105 Net position 1,262,847 Total revenue 2,770,349 Total expenses 3,138,404 -66- NOTE 11 – JOINT POWERS AGREEMENT AND JOINTLY CONTROLLED ORGANIZATION (CONTINUED) 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, 2020, the amount reported as investment in joint venture was $636,601. According to a formula in the agreement, the City’s share of the District’s budget is 50.4 percent. Payments to the District in 2020 totaled $1,297,690. The District’s financial statements for the period ended December 31, 2020 are available at the District office located at: 4251 Xylon Avenue North, New Hope, Minnesota 55428. C. 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, 2020 was $28,934, representing 8.0 percent of members’ contributions for the year. D. 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 $12,123 for these services in 2020. E. 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 provi ded to its residents. In 2020, total charges of $230,614 were incurred for these services. F. Bassett 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 the 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 2020 contribution to the BCWMC for its fiscal year ended January 31, 2021 was $28,987, representing 5.3 percent of member’s contributions for the year. -67- NOTE 12 – COMMITMENTS AND CONTINGENCIES A. Legal Claims The City generally follows the practice of recording liabilities resulting from claims and legal actions only when they become fixed or determinable in amount. Management does not anticipate any significant losses that would not be covered by insurance. B. Federal and State Receivables Amounts recorded or receivable from federal and state agencies are subject to agency audit and adjustment . Any disallowed claims, including amounts already collected, may constitute a liability of the applicable funds. The amount, if any, of claims which may be disallowed by the grantor agencies cannot be determined at this time, although the City expects such amounts, if any, to be immaterial. C. Tax Increment Districts The City’s tax increment districts are subject to review by the Office of the State Auditor. Any disallowed claims or misuse of tax increments could become a liability of the applicable fund. Management has indicated that it is not aware of any instances of noncompliance, which would have a material effect on the financial statements. D. Construction Commitments At December 31, 2020, the City is committed to various construction contracts for the improvement of city property. The City’s remaining commitment under these contracts is approximately $887,000 at year-end. E. 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, 2020, 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, 2020 is undetermined. NOTE 13 – SUBSEQUENT EVENTS In February 2021, the City Council approved the sale of $2,020,000 of General Obligation Tax Abatement Bonds, Series 2021A. The proceeds of this issue will be used to refinance the purchase of various energy savings improvements to the New Hope Ice Arena. The bonds have an interest rate of 1.000 percent, and have a final maturity date of December 1, 2028. REQUIRED SUPPLEMENTARY INFORMATION CITY OF NEW HOPE, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2020 Proportionate Share of the City’s Net Pension Proportionate Liability and City’s Share of the the City’s Proportionate Plan Fiduciary State of Share of the Share of the Net Position City’s City’s Minnesota’s State of Net Pension as a PERA Fiscal Proportion Proportionate Proportionate Minnesota’s Liability as a Percentage Year-End Date of the Net Share of the Share of the Share of the City’s Percentage of of the Total (Measurement Pension Net Pension Net Pension Net Pension Covered Covered Pension Date)Liability Liability Liability Liability Payroll Payroll Liability 06/30/2015 0.0617% 3,197,614$ –$ 3,197,614$ 3,627,658$ 88.15% 78.20% 06/30/2016 0.0608% 4,936,658$ 64,481$ 5,001,139$ 3,643,308$ 135.50% 68.90% 06/30/2017 0.0588% 3,753,753$ 47,225$ 3,800,978$ 3,931,388$ 95.48% 75.90% 06/30/2018 0.0599% 3,323,006$ 109,063$ 3,432,069$ 3,998,415$ 83.11% 79.50% 06/30/2019 0.0609% 3,367,025$ 104,662$ 3,471,687$ 4,282,511$ 78.62% 80.20% 06/30/2020 0.0626% 3,753,156$ 115,680$ 3,868,836$ 4,463,850$ 84.08% 79.10% Contributions Contributions in Relation to as a Statutorily the Statutorily Contribution Percentage Required Required Deficiency Covered of Covered Contributions Contributions (Excess)Payroll Payroll 284,367$ 284,367$ –$ 3,791,560$ 7.50% 280,102$ 280,102$ –$ 3,734,693$ 7.50% 286,170$ 286,170$ –$ 3,815,600$ 7.50% 310,638$ 310,638$ –$ 4,141,835$ 7.50% 328,429$ 328,429$ –$ 4,379,059$ 7.50% 344,227$ 344,227$ –$ 4,589,689$ 7.50% Note: City of New Hope, Minnesota PERA – General Employees Retirement Fund Schedule of City’s and Nonemployer Proportionate Share of Net Pension Liability Year Ended December 31, 2020 Year Ended December 31, 2020 PERA – General Employees Retirement Fund Schedule of City Contributions City Fiscal Year-End 12/31/2015 12/31/2016 12/31/2017 City Fiscal 12/31/2018 12/31/2016 12/31/2017 The City implemented GASB Statement No.68 in fiscal 2015 (using a June 30,2015 measurement date).This schedule is intended to present 10-year trend information. Additional years will be added as they become available. 12/31/2018 12/31/2020 12/31/2020 12/31/2019 12/31/2019 Year-End 12/31/2015 -68- Proportionate Share of the City’s Net Pension Proportionate Liability and City’s Share of the the City’s Proportionate Plan Fiduciary State of Share of the Share of the Net Position City’s City’s Minnesota’s State of Net Pension as a PERA Fiscal Proportion Proportionate Proportionate Minnesota’s Liability as a Percentage Year-End Date of the Net Share of the Share of the Share of the City’s Percentage of of the Total (Measurement Pension Net Pension Net Pension Net Pension Covered Covered Pension Date)Liability Liability Liability Liability Payroll Payroll Liability 06/30/2015 0.2820% 3,204,180$ –$ 3,204,180$ 2,579,768$ 124.20% 86.60% 06/30/2016 0.2940% 11,798,732$ –$ 11,798,732$ 2,732,301$ 431.82% 63.90% 06/30/2017 0.2820% 3,807,336$ –$ 3,807,336$ 2,992,514$ 127.23% 85.40% 06/30/2018 0.2888% 3,078,311$ –$ 3,078,311$ 3,043,700$ 101.14% 88.80% 06/30/2019 0.3012% 3,206,578$ –$ 3,206,578$ 3,176,028$ 100.96% 89.30% 06/30/2020 0.2899% 3,821,192$ 90,012$ 3,911,204$ 3,271,692$ 116.80% 87.20% Contributions Contributions in Relation to as a Statutorily the Statutorily Contribution Percentage Required Required Deficiency Covered of Covered Contributions Contributions (Excess)Payroll Payroll 448,029$ 448,029$ –$ 2,765,611$ 16.20% 444,511$ 444,511$ –$ 2,743,893$ 16.20% 489,202$ 489,202$ –$ 3,019,768$ 16.20% 502,203$ 502,203$ –$ 3,100,017$ 16.20% 550,665$ 550,665$ –$ 3,248,759$ 16.95% 550,681$ 550,681$ –$ 3,111,189$ 17.70% Note: 12/31/2018 12/31/2018 12/31/2019 12/31/2020 City of New Hope, Minnesota PERA – Public Employees Police and Fire Fund Schedule of City’s and Nonemployer Proportionate Share of Net Pension Liability Year Ended December 31, 2020 12/31/2020 The City implemented GASB Statement No.68 in fiscal 2015 (using a June 30,2015 measurement date).This schedule is intended to present 10-year trend information. Additional years will be added as they become available. City Fiscal Year-End 12/31/2015 12/31/2016 12/31/2017 City Fiscal Year-End 12/31/2015 12/31/2016 Year Ended December 31, 2020 Schedule of City Contributions PERA – Public Employees Police and Fire Fund 12/31/2017 12/31/2019 -69- 2018 2019 2020 Total OPEB liability Service cost 64,269$ 72,745$ 89,655$ Interest 31,335 38,452 33,026 Differences between expected and actual experience – 81,871 27 Changes in assumptions (53,393) 74,709 71,306 Benefit payments (25,947) (16,942) (22,038) Net change in total OPEB liability 16,264 250,835 171,976 Total OPEB liability – beginning of year 859,607 875,871 1,126,706 Total OPEB liability – end of year 875,871$ 1,126,706$ 1,298,682$ Covered payroll 6,400,000$ 7,100,000$ 7,400,000$ Total OPEB liability as a percentage of covered payroll 13.69%15.87%17.55% Note: The City implemented GASB Statement No. 75 in fiscal 2018. This schedule is intended to present 10-year trend information. Additional years will be added as they become available. City of New Hope, Minnesota Other Post-Employment Benefits Plan Schedule of Changes in the City’s Total OPEB Liability and Related Ratios Year Ended December 31, 2020 Fiscal Year Ended December 31, -70- City of New Hope, Minnesota Notes to Required Supplementary Information December 31, 2020 -71- PERA – GENERAL EMPLOYEES RETIREMENT FUND 2020 CHANGES IN ACTUARIAL ASSUMPTIONS • The price inflation assumption was decreased from 2.50 percent to 2.25 percent. • The payroll growth assumption was decreased from 3.25 percent to 3.00 percent. • Assumed salary increase rates were changed as recommended in the June 30, 2019 experience study. The net effect is assumed rates that average 0.25 percent less than previous rates. • Assumed rates of retirement were changed as recommended in the June 30, 2019 experience study. The changes result in more unreduced (normal) retirements and slightly fewer Rule of 90 and early retirements. • Assumed rates of termination were changed as recommended in the June 30, 2019 experience study. The new rates are based on service and are generally lower than the previous rates for years two through five, and slightly higher thereafter. • Assumed rates of disability were changed as recommended in the June 30, 2019 experience study. The change results in fewer predicted disability retirements for males and females. • The base mortality table for healthy annuitants and employees was changed from the RP-2014 Table to the Pub-2010 General Mortality Table, with adjustments. The base mortality table for disabled annuitants was changed from the RP-2014 Disabled Annuitant Mortality Table to the Pub-2010 General/Teacher Disabled Annuitant Mortality Table, with adjustments. • The mortality improvement scale was changed from MP-2018 to MP-2019. • The assumed spouse age difference was changed from two years older for females to one year older. • The assumed number of married male new retirees electing the 100 percent joint and survivor option changed from 35.00 percent to 45.00 percent. The assumed number of married female new retirees electing the 100.00 percent joint and survivor option changed from 15.00 percent to 30.00 percent. The corresponding number of married new retirees electing the life annuity option was adjusted accordingly. 2020 CHANGES IN PLAN PROVISIONS • Augmentation for current privatized members was reduced to 2.00 percent for the period July 1, 2020 through December 31, 2023, and zero percent thereafter. Augmentation was eliminated for privatizations occurring after June 30, 2020. City of New Hope, Minnesota Notes to Required Supplementary Information (continued) December 31, 2020 -72- PERA – GENERAL EMPLOYEES RETIREMENT FUND (CONTINUED) 2019 CHANGES IN ACTUARIAL ASSUMPTIONS • The mortality projection scale was changed from MP-2017 to MP-2018 2019 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. 2018 CHANGES IN ACTUARIAL ASSUMPTIONS • 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. 2018 CHANGES IN PLAN PROVISIONS • 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 zero percent, effective January 1, 2019. Augmentation that has already accrued for deferred members will still apply. • Contribution stabilizer provisions were repealed. • Post-retirement 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. City of New Hope, Minnesota Notes to Required Supplementary Information (continued) December 31, 2020 -73- PERA – GENERAL EMPLOYEES RETIREMENT FUND (CONTINUED) 2017 CHANGES IN ACTUARIAL ASSUMPTIONS • The Combined Service Annuity (CSA) loads were changed from 0.80 percent for active members and 60.00 percent for vested and nonvested deferred members. The revised CSA loads are now zero percent for active member liability, 15.00 percent for vested deferred member liability, and 3.00 percent for nonvested deferred member liability. • The assumed post-retirement benefit increase rate was changed from 1.00 percent per year for all years, to 1.00 percent per year through 2044, and 2.50 percent per year thereafter. 2017 CHANGES IN PLAN PROVISIONS • The state’s contribution for the Minneapolis Employees Retirement Fund equals $16.0 million in 2017 and 2018, and $6.0 million thereafter. • The Employer Supplemental Contribution for the Minneapolis Employees Retirement Fund changed from $21.0 million to $31.0 million in calendar years 2019 to 2031. The state’s contribution changed from $16.0 million to $6.0 million in calendar years 2019 to 2031. 2016 CHANGES IN ACTUARIAL ASSUMPTIONS • The assumed post-retirement benefit increase rate was changed from 1.00 percent per year through 2035, and 2.50 percent per year thereafter, to 1.00 percent per year for all years. • The assumed investment return was changed from 7.90 percent to 7.50 percent. The single discount rate changed from 7.90 percent to 7.50 percent. • Other assumptions were changed pursuant to the experience study 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 CHANGES IN ACTUARIAL ASSUMPTIONS • The assumed post-retirement benefit increase rate was changed from 1.00 percent per year through 2030, and 2.50 percent per year thereafter, to 1.00 percent per year through 2035, and 2.50 percent per year thereafter. 2015 CHANGES IN PLAN PROVISIONS • 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 $892.0 million. Upon consolidation, state and employer contributions were revised; the state’s contribution of $6.0 million, which meets the special funding situation definition, was due September 2015. City of New Hope, Minnesota Notes to Required Supplementary Information (continued) December 31, 2020 -74- PERA – PUBLIC EMPLOYEES POLICE AND FIRE FUND 2020 CHANGES IN ACTUARIAL ASSUMPTIONS • The mortality projection scale was changed from MP-2018 to MP-2019. 2019 CHANGES IN ACTUARIAL ASSUMPTIONS • The mortality projection scale was changed from MP-2017 to MP-2018. 2018 CHANGES IN ACTUARIAL ASSUMPTIONS • The mortality projection scale was changed from MP-2016 to MP-2017. 2018 CHANGES IN PLAN PROVISIONS • Post-retirement benefit increases were changed to 1.00 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 100.0 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 zero 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. City of New Hope, Minnesota Notes to Required Supplementary Information (continued) December 31, 2020 -75- PERA – PUBLIC EMPLOYEES POLICE AND FIRE FUND (CONTINUED) 2017 CHANGES IN ACTUARIAL ASSUMPTIONS • 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 CSA load was 30.00 percent for vested and nonvested deferred members. The CSA has been changed to 33.00 percent for vested members, and 2.00 percent for nonvested 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 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 5.60 percent per annum to 7.50 percent per annum. City of New Hope, Minnesota Notes to Required Supplementary Information (continued) December 31, 2020 -76- PERA – PUBLIC EMPLOYEES POLICE AND FIRE FUND (CONTINUED) 2016 CHANGES IN ACTUARIAL ASSUMPTIONS • The assumed post-retirement benefit increase rate was changed from 1.00 percent per year through 2037, and 2.50 percent per year thereafter, to 1.00 percent per year for all future years. • The assumed investment return was changed from 7.90 percent to 7.50 percent. • The single discount rate changed from 7.90 percent to 5.60 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 CHANGES IN ACTUARIAL ASSUMPTIONS • The assumed post-retirement benefit increase rate was changed from 1.00 percent per year through 2030, and 2.50 percent per year thereafter, to 1.00 percent per year through 2037, and 2.50 percent per year thereafter. 2015 CHANGES IN PLAN PROVISIONS • The post-retirement benefit increase to be paid after attainment of the 90.00 percent funding threshold was changed from inflation up to 2.50 percent, to a fixed rate of 2.50 percent. OTHER POST-EMPLOYMENT BENEFITS PLAN 2020 CHANGES IN ACTUARIAL ASSUMPTIONS • The discount rate was changed from 2.74 percent to 2.12 percent. • The payroll growth rate was changed from 3.50 percent to 3.25 percent. 2019 CHANGES IN ACTUARIAL ASSUMPTIONS • The discount rate was changed from 4.09 percent to 2.74 percent. 2018 CHANGES IN ACTUARIAL ASSUMPTIONS • The discount rate was changed from 3.44 percent to 4.09 percent. SUPPLEMENTAL INFORMATION CITY OF NEW HOPE, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2020 City of New Hope, Minnesota Nonmajor Governmental Funds Combining Balance Sheet December 31, 2020 Total Nonmajor Special Capital Debt Governmental Revenue Projects Service Funds Assets Cash and temporary investments 408,332$ 5,098,617$ 2,846,580$ 8,353,529$ Receivables Accounts 23,589 - - 23,589 Loans 21,016 - - 21,016 Special assessments 7,257 53,621 - 60,878 Due from other funds - 75,000 - 75,000 Advances to other funds - 375,000 - 375,000 Total Assets 460,194$ 5,602,238$ 2,846,580$ 8,909,012$ Liabilities Accounts and contracts payable 184$ 9,474$ 903$ 10,561$ Unearned revenue - 13,800 - 13,800 Total Liabilities 184 23,274 903 24,361 Deferred Inflows of Resources Unavailable revenue - special assessments - 53,621 - 53,621 Fund Balances (Deficit) Restricted for Debt service - - 2,845,806 2,845,806 Public safety police expenditures 135,571 - - 135,571 Ice arena 5,505 - - 5,505 Committed for Solid waste operations 221,667 - - 221,667 Economic development 97,267 - - 97,267 Assigned for General improvements - 3,249,809 - 3,249,809 Capital equipment - 823,809 - 823,809 Park improvements - 1,451,725 - 1,451,725 Unassigned - -(129) (129) Total Fund Balances 460,010 5,525,343 2,845,677 8,831,030 Total Liabilities, Deferred Inflows of Resources, and Fund Balances 460,194$ 5,602,238$ 2,846,580$ 8,909,012$ -77- City of New Hope, Minnesota Nonmajor Governmental Funds Combining Statement of Revenues, Expenditures, and Changes in Fund Balances For the Year Ended December 31, 2020 Total Nonmajor Special Capital Debt Governmental Revenue Projects Service Funds Revenues Taxes Property taxes -$ 767,290$ 3,750,662$ 4,517,952$ Intergovernmental - 17,876 - 17,876 Charges for services 233,481 49,086 - 282,567 Special assessments - 8,592 - 8,592 Investment earnings 7,961 111,748 15,489 135,198 Total Revenues 241,442 954,592 3,766,151 4,962,185 Expenditures Current Public works 231,349 - - 231,349 Capital outlay Culture and recreation - 382,396 - 382,396 Debt service Principal - - 1,485,165 1,485,165 Interest - - 1,442,553 1,442,553 Total Expenditures 231,349 382,396 2,927,718 3,541,463 Excess of Revenues Over Expenditures 10,093 572,196 838,433 1,420,722 Other Financing Sources (Uses) Transfers in - 79,373 - 79,373 Transfers out - (451,800) (68,785) (520,585) Total Other Financing Sources (Uses)- (372,427) (68,785) (441,212) Net Change in Fund Balances 10,093 199,769 769,648 979,510 Fund Balances, January 1 449,917 5,325,574 2,076,029 7,851,520 Fund Balances, December 31 460,010$ 5,525,343$ 2,845,677$ 8,831,030$ -78- THIS PAGE INTENTIONALLY LEFT BLANK 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. City of New Hope, Minnesota Nonmajor Special Revenue Funds Subcombining Balance Sheet December 31, 2020 9021 9016 9017 9018 Police Solid Waste Ice Arena CEE Revolving Forfeitures Management Endowment Loan Fund Total Assets Cash and temporary investments 135,571$ 191,258$ 5,505$ 75,998$ 408,332$ Receivables Accounts - 23,336 - 253 23,589 Loans - -- 21,016 21,016 Special assessments - 7,257 - - 7,257 Total Assets 135,571$ 221,851$ 5,505$ 97,267$ 460,194$ Liabilities Accounts and contracts payable -$ 184$ -$ -$ 184$ Fund Balances Restricted for Public safety police expenditures 135,571 - - - 135,571 Ice arena - - 5,505 - 5,505 Committed for Solid waste operations - 221,667 - - 221,667 Economic development - -- 97,267 97,267 Total Fund Balances 135,571 221,667 5,505 97,267 460,010 Total Liabilities and Fund Balances 135,571$ 221,851$ 5,505$ 97,267$ 460,194$ -79- 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, 2020 9021 9016 9017 9018 Police Solid Waste Ice Arena CEE Revolving Forfeitures Management Endowment Loan Fund Total Revenues Charges for services -$ 233,481$ -$ -$ 233,481$ Investment earnings 2,841 4,151 115 854 7,961 Total Revenues 2,841 237,632 115 854 241,442 Expenditures Current Public works Other services and charges - 231,349 - - 231,349 Net Change in Fund Balances 2,841 6,283 115 854 10,093 Fund Balances, January 1 132,730 215,384 5,390 96,413 449,917 Fund Balances, December 31 135,571$ 221,667$ 5,505$ 97,267$ 460,010$ -80- 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, 2020 Actual Over (Under) Original Final Amounts Budget Revenues Charges for services 227,000$ 227,000$ 233,481$ 6,481$ Investment earnings 1,500 1,500 4,151 2,651 Total Revenues 228,500 228,500 237,632 9,132 Expenditures Current Public works Other services and charges 225,235 225,235 231,349 6,114 Net Change in Fund Balances 3,265 3,265 6,283 3,018 Fund Balances, January 1 215,384 215,384 215,384 - Fund Balances, December 31 218,649$ 218,649$ 221,667$ 3,018$ Budgeted Amounts -81- 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. 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. City of New Hope, Minnesota Nonmajor Capital Projects Funds Subcombining Balance Sheet December 31, 2020 9010 9233 9242 9250 2016 Street Fire Park Temporary Improvement Capital Projects Infrastructure Financing Project Total Assets Cash and temporary investments 823,809$ 1,474,999$ 2,799,809$ -$ 5,098,617$ Receivables Special assessments - - 53,621 - 53,621 Due from other funds - - 75,000 - 75,000 Advances to other funds - - 375,000 - 375,000 Total Assets 823,809$ 1,474,999$ 3,303,430$ -$ 5,602,238$ Liabilities Accounts and contracts payable -$ 9,474$ -$ -$ 9,474$ Unearned revenue - 13,800 - - 13,800 Total Liabilities - 23,274 - - 23,274 Deferred Inflows of Resources Unavailable revenue - special assessments - - 53,621 - 53,621 Fund Balances Assigned for General improvements - - 3,249,809 - 3,249,809 Capital equipment 823,809 - - - 823,809 Park improvements - 1,451,725 - - 1,451,725 Total Fund Balances 823,809 1,451,725 3,249,809 - 5,525,343 Total Liabilities, Deferred Inflows of Resources, and Fund Balances 823,809$ 1,474,999$ 3,303,430$ -$ 5,602,238$ -82- 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, 2020 9010 9233 9242 9250 2016 Street Fire Park Temporary Improvement Capital Projects Infrastructure Financing Project Total Revenues Taxes Property taxes -$ 767,290$ -$ -$ 767,290$ Intergovernmental County - 17,876 - - 17,876 Charges for services - 49,086 - - 49,086 Special assessments - - 8,592 - 8,592 Investment earnings 16,606 31,691 63,451 - 111,748 Total Revenues 16,606 865,943 72,043 - 954,592 Expenditures Capital outlay Culture and recreation - 382,396 - - 382,396 Excess of Revenues Over Expenditures 16,606 483,547 72,043 - 572,196 Other Financing Sources (Uses) Transfers in 68,785 - - 10,588 79,373 Transfers out (51,800) (400,000) - - (451,800) Total Other Financing Sources (Uses)16,985 (400,000) - 10,588 (372,427) Net Change in Fund Balances 33,591 83,547 72,043 10,588 199,769 Fund Balances (Deficit), January 1 790,218 1,368,178 3,177,766 (10,588) 5,325,574 Fund Balances, December 31 823,809$ 1,451,725$ 3,249,809$ -$ 5,525,343$ -83- THIS PAGE INTENTIONALLY LEFT BLANK 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. City of New Hope, Minnesota Nonmajor Debt Service Funds Subcombining Balance Sheet December 31, 2020 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 277,003$ -$ 274,209$ 164,592$ Liabilities Accounts and contracts payable 129$ 129$ 129$ 129$ Fund Balances (Deficit) Restricted for debt service 276,874 - 274,080 164,463 Unassigned - (129) - - Total Fund Balances (Deficit)276,874 (129) 274,080 164,463 Total Liabilities and Fund Balances 277,003$ -$ 274,209$ 164,592$ -84- 9150 9151 9152 2017A 2018A 2019A G.O.G.O.G.O. Improvement Improvement Improvement Bonds Bonds Bonds Total 1,468,459$ 284,637$ 377,680$ 2,846,580$ 129$ 129$ 129$ 903$ 1,468,330 284,508 377,551 2,845,806 - - - (129) 1,468,330 284,508 377,551 2,845,677 1,468,459$ 284,637$ 377,680$ 2,846,580$ -85- 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, 2020 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 240,162$ -$ 259,142$ 207,663$ Investment earnings 3,594 1,981 2,612 771 Total Revenues 243,756 1,981 261,754 208,434 Expenditures Debt service Principal 151,053 150,000 157,054 122,058 Interest and fiscal charges 54,850 2,640 81,495 47,636 Total Expenditures 205,903 152,640 238,549 169,694 Excess (Deficiency) of Revenue Over Expenditures 37,853 (150,659) 23,205 38,740 Other Financing Sources (Uses) Transfers out - (68,785) - - Net Change in Fund Balances 37,853 (219,444) 23,205 38,740 Fund Balances (Deficit), January 1 239,021 219,315 250,875 125,723 Fund Balances (deficit), December 31 276,874$ (129)$ 274,080$ 164,463$ -86- 9150 9151 9152 2017A 2018A 2019A G.O.G.O.G.O. Improvement Improvement Improvement Bonds Bonds Bonds Total 1,709,190$ 865,627$ 468,878$ 3,750,662$ 5,830 88 613 15,489 1,715,020 865,715 469,491 3,766,151 905,000 - - 1,485,165 706,090 360,571 189,271 1,442,553 1,611,090 360,571 189,271 2,927,718 103,930 505,144 280,220 838,433 - - - (68,785) 103,930 505,144 280,220 769,648 1,364,400 (220,636) 97,331 2,076,029 1,468,330$ 284,508$ 377,551$ 2,845,677$ -87- THIS PAGE INTENTIONALLY LEFT BLANK 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, 2020 (With Comparative Actual Amounts for the Year Ended December 31, 2019) 2019 Actual Over (Under)Actual Original Final Amounts Budget Amounts Revenues Taxes Property taxes 10,518,931$ 10,518,931$ 10,422,823$ (96,108)$ 10,297,018$ Franchise taxes 505,244 505,244 518,162 12,918 533,213 Total Taxes 11,024,175 11,024,175 10,940,985 (83,190) 10,830,231 Licenses and permits Business regulatory licenses 75,575 75,575 64,760 (10,815) 70,783 Non-business licenses and permits 398,450 398,450 329,151 (69,299) 249,655 Total Licenses and permits 474,025 474,025 393,911 (80,114) 320,438 Intergovernmental Local government aid 807,579 807,579 815,623 8,044 697,864 Highway maintenance aid 191,000 191,000 231,733 40,733 212,664 Other federal, state, and local grants 121,683 121,683 1,792,954 1,671,271 120,591 State insurance premium tax 285,000 285,000 321,335 36,335 311,424 Total Intergovernmental 1,405,262 1,405,262 3,161,645 1,756,383 1,342,543 Charges for services General government 186,050 186,050 150,967 (35,083) 152,308 Public safety 398,500 398,500 267,931 (130,569) 403,636 Public works 5,800 5,800 3,596 (2,204) 4,243 Culture and recreation 1,258,950 1,258,950 281,826 (977,124) 504,090 Total Charges for services 1,849,300 1,849,300 704,320 (1,144,980) 1,064,277 Fines and forfeitures 225,000 225,000 138,922 (86,078) 227,343 Special assessments 30,000 30,000 110,670 80,670 50,034 Investment earnings 60,000 60,000 113,447 53,447 106,033 Miscellaneous 3,500 3,500 14,184 10,684 23,326 Total Revenues 15,071,262 15,071,262 15,578,084 506,822 13,964,225 Budgeted Amounts 2020 -88-(continued) 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, 2020 (With Comparative Actual Amounts for the Year Ended December 31, 2019) 2019 Actual Variance with Actual Original Final Amounts Final Budget Amounts Expenditures Current General government Mayor and City Council Personnel services 58,153$ 58,153$ 57,043$ (1,110)$ 52,142$ Supplies 2,000 2,000 678 (1,322) 1,439 Other services and charges 42,280 42,280 36,940 (5,340) 34,231 Total Mayor and City Council 102,433 102,433 94,661 (7,772) 87,812 City hall Supplies 23,500 23,500 20,232 (3,268) 22,644 Other services and charges 310,926 310,926 392,964 82,038 279,395 Total City hall 334,426 334,426 413,196 78,770 302,039 City Manager Personnel services 401,373 401,373 407,779 6,406 401,782 Supplies 6,100 6,100 1,233 (4,867) 5,340 Other services and charges 24,573 24,573 22,602 (1,971) 14,080 Total City Manager 432,046 432,046 431,614 (432) 421,202 Elections Personnel services 55,779 55,779 42,105 (13,674) - Supplies 2,500 2,500 6,738 4,238 - Other services and charges 5,850 5,850 6,873 1,023 4,185 Total Elections 64,129 64,129 55,716 (8,413) 4,185 Finance Personnel services 189,742 189,742 190,816 1,074 171,471 Supplies 1,350 1,350 1,852 502 1,328 Other services and charges 75,791 75,791 93,648 17,857 134,364 Total Finance 266,883 266,883 286,316 19,433 307,163 Auditing Other services and charges 26,276 26,276 24,771 (1,505) 24,441 Assessing Other services and charges 160,000 160,000 160,000 - 154,000 Legal Other services and charges 25,000 25,000 29,429 4,429 16,097 Human resources Personnel services 267,654 267,654 274,087 6,433 263,755 Supplies 450 450 228 (222) 451 Other services and charges 40,982 40,982 25,512 (15,470) 23,020 Total Human resources 309,086 309,086 299,827 (9,259) 287,226 Budgeted Amounts 2020 -89-(continued) 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, 2020 (With Comparative Actual Amounts for the Year Ended December 31, 2019) 2019 Actual Variance with Actual Original Final Amounts Final Budget Amounts Budgeted Amounts 2020 Expenditures (Continued) Current (continued) General government (continued) Planning and zoning Personnel services 106,317$ 106,317$ 118,603$ 12,286$ 112,208$ Supplies 700 700 478 (222) 285 Other services and charges 37,900 37,900 33,942 (3,958) 35,825 Total Planning and zoning 144,917 144,917 153,023 8,106 148,318 Communication Personnel services 111,474 111,474 89,320 (22,154) 99,606 Supplies 6,140 6,140 4,673 (1,467) 5,463 Other services and charges 52,140 52,140 20,187 (31,953) 42,928 Total Communication 169,754 169,754 114,180 (55,574) 147,997 Total General Government 2,034,950 2,034,950 2,062,733 27,783 1,900,480 Public safety Police Personnel services 5,477,174 5,477,174 4,997,575 (479,599) 5,078,553 Supplies 80,030 80,030 134,467 54,437 138,034 Other services and charges 1,155,034 1,155,034 1,091,335 (63,699) 1,169,754 Total Police 6,712,238 6,712,238 6,223,377 (488,861) 6,386,341 Police reserves Personnel services - - - - 266 Supplies 2,100 2,100 1,221 (879) 1,903 Other services and charges 23,626 23,626 22,267 (1,359) 30,179 Total Police reserves 25,726 25,726 23,488 (2,238) 32,348 Fire and safety Supplies 1,000 1,000 - (1,000) 41 Other services and charges 1,330,503 1,330,503 1,414,715 84,212 1,244,756 Total Fire and safety 1,331,503 1,331,503 1,414,715 83,212 1,244,797 Animal control Personnel services 84,934 84,934 84,846 (88) 81,838 Supplies 505 505 99 (406) 204 Other services and charges 22,866 22,866 18,887 (3,979) 24,830 Total Animal control 108,305 108,305 103,832 (4,473) 106,872 -90-(continued) 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, 2020 (With Comparative Actual Amounts for the Year Ended December 31, 2019) 2019 Actual Variance with Actual Original Final Amounts Final Budget Amounts Budgeted Amounts 2020 Expenditures (Continued) Current (continued) Public safety (continued) Protective inspection Personnel services 524,732$ 524,732$ 506,212$ (18,520)$ 490,391$ Supplies 1,750 1,750 1,615 (135) 1,024 Other services and charges 100,045 100,045 87,970 (12,075) 165,714 Total Protective inspection 626,527 626,527 595,797 (30,730) 657,129 Total Public Safety 8,804,299 8,804,299 8,361,209 (443,090) 8,427,487 Public works Street maintenance Personnel services 573,229 573,229 605,084 31,855 607,772 Supplies 142,100 142,100 116,228 (25,872) 90,691 Other services and charges 869,839 869,839 859,892 (9,947) 812,459 Total Street maintenance 1,585,168 1,585,168 1,581,204 (3,964) 1,510,922 Engineering Other services and charges 35,000 35,000 40,842 5,842 53,226 Total Public Works 1,620,168 1,620,168 1,622,046 1,878 1,564,148 Culture and recreation Recreation Personnel services 677,224 677,224 611,920 (65,304) 646,135 Supplies 122,000 122,000 90,638 (31,362) 109,784 Other services and charges 219,321 219,321 156,342 (62,979) 253,962 Total Recreation 1,018,545 1,018,545 858,900 (159,645) 1,009,881 Parks Personnel services 653,391 653,391 595,900 (57,491) 582,433 Supplies 37,650 37,650 33,625 (4,025) 35,450 Other services and charges 429,841 429,841 401,333 (28,508) 353,689 Total Parks 1,120,882 1,120,882 1,030,858 (90,024) 971,572 Swimming pool Personnel services 494,688 494,688 115,135 (379,553) 45,933 Supplies 73,000 73,000 14,886 (58,114) - Other services and charges 175,518 175,518 15,879 (159,639) 5,199 Total Swimming pool 743,206 743,206 145,900 (597,306) 51,132 Total Culture and Recreation 2,882,633 2,882,633 2,035,658 (846,975) 2,032,585 Total Current Expenditures 15,342,050 15,342,050 14,081,646 (1,260,404) 13,924,700 -91-(continued) 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, 2020 (With Comparative Actual Amounts for the Year Ended December 31, 2019) 2019 Actual Variance with Actual Original Final Amounts Final Budget Amounts Budgeted Amounts 2020 Expenditures (Continued) Capital outlay General government 3,500$ 3,500$ 674$ (2,826)$ 3,967$ Public safety 65,000 65,000 48,669 (16,331) 55,081 Total Capital outlay 68,500 68,500 49,343 (19,157) 59,048 Total Expenditures 15,410,550 15,410,550 14,130,989 (1,279,561) 13,983,748 Excess (Deficiency) of Revenues Over Expenditures (339,288) (339,288) 1,447,095 1,786,383 (19,523) Other Financing Sources (Uses) Transfers in 339,288 339,288 339,288 - 332,275 Transfers out - - - - (354,000) Total Other Financing Sources (Uses)339,288 339,288 339,288 - (21,725) Net Change in Fund Balances - - 1,786,383 1,786,383 (41,248) Fund Balances, January 1 7,139,703 7,139,703 7,139,703 - 7,180,951 Fund Balances, December 31 7,139,703$ 7,139,703$ 8,926,086$ 1,786,383$ 7,139,703$ -92- THIS PAGE INTENTIONALLY LEFT BLANK 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. City of New Hope, Minnesota Internal Service Funds Combining Statement of Net Position December 31, 2020 9402 9408 9407 9410 Central Employee Insurance Information Garage Leave Reserve Technology Totals Assets Current Assets Cash and temporary investments 8,282,096$ 1,673,358$ 625,840$ 583,540$ 11,164,834$ Receivables Accounts - - 7,441 - 7,441 Inventories 68,035 - - - 68,035 Total Current Assets 8,350,131 1,673,358 633,281 583,540 11,240,310 Noncurrent Assets Capital assets Land 85,647 - - - 85,647 Buildings and structures 3,158,296 - - - 3,158,296 Vehicles and equipment 9,361,117 - - 402,419 9,763,536 Less: accumulated depreciation (9,843,971) - - (320,304) (10,164,275) Total Capital Assets (Net of Accumulated Depreciation)2,761,089 - - 82,115 2,843,204 Total Assets 11,111,220 1,673,358 633,281 665,655 14,083,514 Deferred Outflows of Resources Deferred pension resources 23,772 - - - 23,772 Deferred other postemployment benefit resources - - 167,973 - 167,973 Total Deferred Outflows of Resources 23,772 - 167,973 - 191,745 Liabilities Current Liabilities Accrued salaries payable 11,474 33,745 117,649 - 162,868 Accounts and contracts payable 59,629 - 58,314 8,995 126,938 Due to other governments 631 - - - 631 Compensated absences payable, current portion - 84,346 - - 84,346 Total Current Liabilities 71,734 118,091 175,963 8,995 374,783 Noncurrent Liabilities Other postemployment benefits payable - - 1,110,463 - 1,110,463 Pension liability 221,812 - - - 221,812 Compensated absences payable - 759,110 - - 759,110 Total Noncurrent Liabilities 221,812 759,110 1,110,463 - 2,091,385 Total Liabilities 293,546 877,201 1,286,426 8,995 2,466,168 Deferred Inflows of Resources Deferred pension resources 8,898 - - - 8,898 Deferred other postemployment benefit resources - - 33,203 - 33,203 Total Deferred Inflows of Resources 8,898 - 33,203 - 42,101 Net Position Net investment in capital assets 2,761,089 - - 82,115 2,843,204 Unrestricted 8,071,459 796,157 (518,375) 574,545 8,923,786 Total Net Position 10,832,548$ 796,157$ (518,375)$ 656,660$ 11,766,990$ -93- City of New Hope, Minnesota Internal Service Funds Combining Statement of Revenues, Expenses and Changes in Net Position For the Year Ended December 31, 2020 9402 9408 9407 9410 Central Employee Insurance Information Garage Leave Reserve Technology Totals Operating Revenues Billings to departments 2,151,996$ 699,992$ 20,014$ 827,236$ 3,699,238$ Other 995 - 22,531 - 23,526 Total Operating Revenues 2,152,991 699,992 42,545 827,236 3,722,764 Operating Expenses Personnel services 327,964 576,845 125,689 - 1,030,498 Supplies 234,580 - - 49,594 284,174 Utilities 57,245 - - 49,098 106,343 Other services and charges 423,963 - 34,134 609,027 1,067,124 Depreciation 564,728 - - 12,843 577,571 Total Operating Expenses 1,608,480 576,845 159,823 720,562 3,065,710 Operating Income (Loss)544,511 123,147 (117,278) 106,674 657,054 Nonoperating Revenues (Expenses) Investment earnings 163,258 - - 10,556 173,814 Capital contributions to governmental activities - - - (22,997) (22,997) Gain on sale of capital assets 22,000 - - - 22,000 Total Nonoperating Revenues (Expenses)185,258 - - (12,441) 172,817 Income (Loss) Before Transfers 729,769 123,147 (117,278) 94,233 829,871 Transfers Out (35,619) - - (56,989) (92,608) Change in Net Position 694,150 123,147 (117,278) 37,244 737,263 Net Position, January 1 10,138,398 673,010 (401,097) 619,416 11,029,727 Net Position, December 31 10,832,548$ 796,157$ (518,375)$ 656,660$ 11,766,990$ -94- City of New Hope, Minnesota Internal Service Funds Combining Statement of Cash Flows For the Year Ended December 31, 2020 9402 9408 9407 9410 Central Employee Insurance Information Garage Leave Reserve Technology Totals Cash Flows from Operating Activities Receipts from interfund services provided 2,151,996$ 699,992$ 17,048$ 827,236$ 3,696,272$ Other operating receipts 995 - 22,531 - 23,526 Payments to suppliers (701,652) - (32,604) (737,521) (1,471,777) Payments to employees (319,736) (496,499) 24,204 - (792,031) Net Cash From Operating Activities 1,131,603 203,493 31,179 89,715 1,455,990 Cash Flows from Noncapital Financing Activities Transfers out (35,619) - - (56,989) (92,608) Cash Flows from Capital and Related Financing Activities Acquisition capital assets (516,589) - - (9,399) (525,988) Proceeds from sale of assets 22,000 - - - 22,000 Net Cash From Capital and Related Financing Activities (494,589) - - (9,399) (503,988) Investment earnings 163,258 - - 10,556 173,814 Net Increase in Cash and Cash Equivalents 764,653 203,493 31,179 33,883 1,033,208 Cash and Cash Equivalents, January 1 7,517,443 1,469,865 594,661 549,657 10,131,626 Cash and Cash Equivalents, December 31 8,282,096$ 1,673,358$ 625,840$ 583,540$ 11,164,834$ Reconciliation of Operating Income (Loss) to Net Cash From Operating Activities Operating income (loss)544,511$ 123,147$ (117,278)$ 106,674$ 657,054$ Adjustments to reconcile operating income (loss) to net cash from operating activities Depreciation 564,728 - - 12,843 577,571 (Increase) decrease in assets Accounts receivable - - (2,966) - (2,966) Inventories (5,460) - - - (5,460) (Increase) decrease in deferred outflows of resources Deferred pension resources (4,643) - - - (4,643) Deferred other postemployment benefit resources - - (48,960) - (48,960) Increase (decrease) in liabilities Accounts and contracts payable 19,545 - 1,530 (29,802) (8,727) Accrued salaries payable 3,368 (9,229) 24,204 - 18,343 Due to other governments 51 - - - 51 Compensated absences payable - 89,575 - - 89,575 Other postemployment benefits payable - - 177,615 - 177,615 Pension liability 35,592 - - - 35,592 Increase (decrease) in deferred inflows of resources Deferred pension resources (26,089) - - - (26,089) Deferred other postemployment benefit resources - - (2,966) - (2,966) Net Cash From Operating Activities 1,131,603$ 203,493$ 31,179$ 89,715$ 1,455,990$ Schedule of Noncash Capital and Related Financing Activities Capital assets contributed to governmental activities -$ -$ -$ 22,997$ 22,997$ Cash Flows from Investing Activities -95- STATISTICAL SECTION (UNAUDITED) CITY OF NEW HOPE, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2020 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 assess the 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 Indicators 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. Source: Unless otherwise noted, the information in these schedules is derived from the Comprehensive Annual Financial Report for the relevant year. 2011 (Restated)2012 2013 2014 Governmental activities Net investment in capital assets 20,628,143$ 26,793,142$ 30,509,373$ 26,305,906$ Restricted 6,018,734 1,619,696 1,619,394 5,680,117 Unrestricted 21,845,278 22,746,207 23,704,592 23,130,558 Total governmental activities net position 48,492,155$ 51,159,045$ 55,833,359$ 55,116,581$ Business-type activities Net investment in capital assets 11,114,666$ 12,843,624$ 14,142,276$ 14,757,333$ Restricted – 150,000 300,000 455,000 Unrestricted 3,978,803 2,735,144 2,496,008 1,798,707 Total business-type activities net position 15,093,469$ 15,728,768$ 16,938,284$ 17,011,040$ Primary government Net investment in capital assets 31,742,809$ 39,636,766$ 44,651,649$ 41,063,239$ Restricted 6,018,734 1,769,696 1,919,394 6,135,117 Unrestricted 25,824,081 25,481,351 26,200,600 24,929,265 Total primary government net position 63,585,624$ 66,887,813$ 72,771,643$ 72,127,621$ Note 1: Note 2: Note 3: City of New Hope, Minnesota The City implemented GASB Statement No.65 in 2012.Net position for 2011 was restated for the effect of implementing this standard. The City implemented GASB Statement No.68 in 2015,resulting in a restatement of beginning net position for the effects of implementing this standard. Net position for previous years has not been restated. The City implemented GASB Statement No.75 in 2018,resulting in a restatement of beginning net position for the effects of implementing this standard. Net position for previous years has not been restated. Fiscal Year Net Position by Component Last Ten Fiscal Years (Accrual Basis of Accounting) -96- 2015 2016 2017 2018 2019 2020 27,549,276$ 29,951,754$ 27,747,845$ 27,888,417$ 30,139,510$ 31,359,813$ 5,917,848 4,893,801 6,207,578 6,000,843 6,628,138 7,740,859 14,623,043 11,081,824 11,728,807 14,384,257 16,702,142 19,716,696 48,090,167$ 45,927,379$ 45,684,230$ 48,273,517$ 53,469,790$ 58,817,368$ 16,087,559$ 19,286,134$ 18,663,872$ 18,783,898$ 19,315,353$ 20,127,288$ 627,939 868,853 1,031,673 1,160,680 1,358,401 1,560,053 (825,297) (1,839,376) 84,741 1,783,306 3,054,187 4,534,420 15,890,201$ 18,315,611$ 19,780,286$ 21,727,884$ 23,727,941$ 26,221,761$ 43,636,835$ 49,237,888$ 46,411,717$ 46,672,315$ 49,454,863$ 51,487,101$ 6,545,787 5,762,654 7,239,251 7,161,523 7,986,539 9,300,912 13,797,746 9,242,448 11,813,548 16,167,563 19,756,329 24,251,116 63,980,368$ 64,242,990$ 65,464,516$ 70,001,401$ 77,197,731$ 85,039,129$ -97- 2011 2012 2013 2014 Expenses Governmental activities General government 1,841,145$ 1,931,318$ 1,837,194$ 1,976,377$ Public safety 6,129,860 6,062,362 6,238,779 6,795,836 Public works 1,795,189 2,126,043 1,790,669 2,467,618 Culture and recreation 1,882,279 1,928,591 1,946,243 2,145,224 Economic development 536,433 762,202 431,332 1,704,010 Interest and fiscal charges 236,827 407,744 289,009 140,321 Total governmental activities expenses 12,421,733 13,218,260 12,533,226 15,229,386 Business-type activities Sewer 2,068,282 2,220,438 2,310,604 1,976,864 Water 3,530,521 3,682,602 3,215,714 4,635,686 Golf course 322,679 298,555 262,894 304,059 Ice arena 844,828 771,628 957,784 877,826 Storm water 485,943 425,112 768,610 558,160 Street lighting 113,753 104,721 117,518 99,560 Total business-type activities expenses 7,366,006 7,503,056 7,633,124 8,452,155 Total primary government expenses 19,787,739$ 20,721,316$ 20,166,350$ 23,681,541$ Program revenues Governmental activities Charges for services General government 220,629$ 177,174$ 198,297$ 234,440$ Public safety 877,159 804,725 880,843 1,047,721 Public works 219,353 219,548 226,228 224,790 Culture and recreation 637,077 653,293 672,067 617,459 Economic development 98,139 94,664 – – Operating grants and contributions 783,382 2,162,263 828,276 1,013,058 Capital grants and contributions 1,107,042 245,290 3,929,565 47,917 Total governmental activities program revenues 3,942,781 4,356,957 6,735,276 3,185,385 Business-type activities Charges for services Sewer utility 2,352,635 2,376,021 2,443,202 2,414,482 Water utility 3,169,859 3,581,225 3,460,008 3,634,873 Golf course 278,788 296,316 268,133 254,508 Ice arena 752,671 694,702 725,211 775,784 Storm water 947,031 948,650 963,167 948,537 Street lighting 122,742 124,397 125,604 123,060 Operating grants and contributions 24,031 22,340 306,520 444,484 Capital grants and contributions 114,826 106,291 225,300 11,469 Total business-type activities program revenues 7,762,583 8,149,942 8,517,145 8,607,197 Total primary government program revenues 11,705,364$ 12,506,899$ 15,252,421$ 11,792,582$ Fiscal Year City of New Hope, Minnesota Changes in Net Position Last Ten Fiscal Years (Accrual Basis of Accounting) -98- 2015 2016 2017 2018 2019 2020 1,700,133$ 1,871,736$ 2,666,781$ 1,983,179$ 1,850,242$ 2,945,625$ 7,258,504 9,463,124 8,257,709 7,578,150 8,540,198 8,968,009 4,229,077 3,143,421 2,975,007 3,661,766 3,816,417 3,725,075 2,223,152 2,405,905 2,485,417 2,280,418 2,145,988 2,270,751 655,093 732,106 2,163,967 1,244,292 749,651 1,350,348 269,284 323,326 725,982 1,074,469 1,412,763 1,570,807 16,335,243 17,939,618 19,274,863 17,822,274 18,515,259 20,830,615 2,458,724 2,187,006 2,399,248 2,631,598 2,834,973 3,096,526 4,584,929 3,633,022 3,504,722 4,038,859 3,762,099 4,195,981 291,695 341,776 322,278 299,217 319,871 316,173 880,581 949,438 996,056 987,912 1,003,048 1,016,296 713,218 830,108 834,688 736,166 888,156 877,244 105,452 102,894 101,668 119,250 116,732 133,270 9,034,599 8,044,244 8,158,660 8,813,002 8,924,879 9,635,490 25,369,842$ 25,983,862$ 27,433,523$ 26,635,276$ 27,440,138$ 30,466,105$ 254,333$ 267,970$ 340,421$ 250,575$ 223,379$ 217,183$ 1,073,079 1,035,725 1,302,551 935,116 880,634 736,004 219,634 220,208 234,564 228,660 226,249 234,121 668,480 699,613 686,335 570,143 529,739 316,820 – 20,000 41,112 – – – 845,517 1,002,681 777,368 967,499 826,489 866,861 460,537 711,527 1,150,840 941,212 2,819,823 1,048,750 3,521,580 3,957,724 4,533,191 3,893,205 5,506,313 3,419,739 2,468,638 2,627,875 2,899,257 3,154,709 3,380,075 3,712,613 3,777,108 4,124,346 4,289,255 4,696,593 4,675,498 5,468,607 287,056 315,162 283,375 298,696 296,538 423,766 745,886 749,689 849,701 864,531 892,740 601,291 981,723 1,037,429 1,082,348 1,139,007 1,190,058 1,259,707 128,890 137,525 137,491 144,582 152,975 161,866 33,032 159,898 27,568 327,335 14,308 110,331 194,590 1,394,822 58,237 14,203 28,824 12,922 8,616,923 10,546,746 9,627,232 10,639,656 10,631,016 11,751,103 12,138,503$ 14,504,470$ 14,160,423$ 14,532,861$ 16,137,329$ 15,170,842$ -99-(continued) 2011 2012 2013 2014 Net (expense) revenue Governmental activities (8,478,952)$ (8,861,303)$ (5,797,950)$ (12,044,001)$ Business-type activities 396,577 646,886 884,021 155,042 Total primary government net expense (8,082,375)$ (8,214,417)$ (4,913,929)$ (11,888,959)$ General revenues and other changes in net position Governmental activities Property taxes 8,784,948$ 9,129,247$ 9,554,629$ 9,732,776$ Tax increments 1,400,163 1,343,248 511,924 537,871 Franchise taxes 439,795 440,149 438,834 438,541 Grants and contributions not restricted to specific programs 87,206 47,662 49,005 179,537 Unrestricted investment earnings 745,484 429,595 198,658 324,498 Gain on sale of capital assets 13,568 69,321 37,201 – Transfers (2,163,781) 68,971 (317,987) 114,000 Total governmental activities 9,307,383 11,528,193 10,472,264 11,327,223 Business-type activities Unrestricted investment earnings 71,089 57,384 7,508 31,714 Transfers 2,163,781 (68,971) 317,987 (114,000) Total business-type activities 2,234,870 (11,587) 325,495 (82,286) Total primary government 11,542,253$ 11,516,606$ 10,797,759$ 11,244,937$ Changes in net position Governmental activities 828,431$ 2,666,890$ 4,674,314$ (716,778)$ Business-type activities 2,631,447 635,299 1,209,516 72,756 Total primary government 3,459,878$ 3,302,189$ 5,883,830$ (644,022)$ 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.The City implemented GASB Statement Nos.67 and 68 in fiscal 2015.Information has not been restated for prior years.The City implemented GASB Statement No.75 in fiscal 2018.Information has not been restated for prior years. (Accrual Basis of Accounting) Fiscal Year City of New Hope, Minnesota Changes in Net Position (continued) Last Ten Fiscal Years -100- 2015 2016 2017 2018 2019 2020 (12,813,663)$ (13,981,894)$ (14,741,672)$ (13,929,069)$ (13,008,946)$ (17,410,876)$ (417,676) 2,502,502 1,468,572 1,826,654 1,706,137 2,115,613 (13,231,339)$ (11,479,392)$ (13,273,100)$ (12,102,415)$ (11,302,809)$ (15,295,263)$ 10,131,759$ 10,843,702$ 11,929,597$ 12,941,920$ 15,265,428$ 16,821,240$ 430,879 492,584 841,098 1,112,753 1,317,803 1,918,857 442,556 447,248 912,357 945,244 957,448 958,162 600,030 633,056 628,119 697,895 803,035 2,497,630 331,417 377,960 531,240 798,557 1,412,308 781,304 – – 50,456 70,400 369,163 22,000 68,204 121,800 (19,110) (48,413) (144,624) (240,739) 12,004,845 12,916,350 14,873,757 16,518,356 19,980,561 22,758,454 35,700 44,708 36,811 72,531 149,296 137,468 (68,204) (121,800) 19,110 48,413 144,624 240,739 (32,504) (77,092) 55,921 120,944 293,920 378,207 11,972,341$ 12,839,258$ 14,929,678$ 16,639,300$ 20,274,481$ 23,136,661$ (808,818)$ (1,065,544)$ 132,085$ 2,589,287$ 6,971,615$ 5,347,578$ (450,180) 2,425,410 1,524,493 1,947,598 2,000,057 2,493,820 (1,258,998)$ 1,359,866$ 1,656,578$ 4,536,885$ 8,971,672$ 7,841,398$ -101- THIS PAGE INTENTIONALLY LEFT BLANK Ad Valorem Property Taxes Tax Increments Franchise Taxes Total 8,784,948$ 1,400,163$ 439,795$ 10,624,906$ 9,129,247 1,343,248 440,149 10,912,644 9,554,629 511,924 438,834 10,505,387 9,732,776 537,871 438,541 10,709,188 10,131,759 430,879 442,556 11,005,194 10,843,702 492,584 447,248 11,783,534 11,929,597 841,098 912,357 13,683,052 12,941,920 1,112,753 945,244 14,999,917 15,265,428 1,317,803 957,448 17,540,679 16,821,240 1,918,857 958,162 19,698,259 City of New Hope, Minnesota Governmental Activities Tax Revenues by Source Last Ten Fiscal Years (Accrual Basis of Accounting) Fiscal Year 2016 2011 2012 2013 2014 2015 2017 2018 2019 2020 -102- 2011 2012 2013 2014 General Fund Nonspendable 14,366$ 14,925$ 15,484$ 16,005$ Unassigned 4,920,846 5,080,812 5,567,933 5,805,259 Total General Fund 4,935,212$ 5,095,737$ 5,583,417$ 5,821,264$ All other governmental funds Restricted 6,114,114$ –$ –$ 5,687,949$ Committed 4,666,447 5,657,606 5,550,819 4,771,304 Assigned 6,877,641 5,165,192 4,511,073 7,839,792 Unassigned – 6,533,868 8,204,338 (134,792) Total all other governmental funds 17,658,202$ 17,356,666$ 18,266,230$ 18,164,253$ Total all governmental funds 22,593,414$ 22,452,403$ 23,849,647$ 23,985,517$ Fiscal Year City of New Hope, Minnesota Fund Balances of Governmental Funds Last Ten Fiscal Years (Modified Accrual Basis of Accounting) -103- ` 2015 2016 2017 2018 2019 2020 16,765$ 18,242$ 17,617$ 18,763$ 22,980$ 24,499$ 6,063,647 6,255,436 6,871,038 7,162,188 7,116,723 8,901,587 6,080,412$ 6,273,678$ 6,888,655$ 7,180,951$ 7,139,703$ 8,926,086$ 8,069,238$ 7,772,782$ 24,605,109$ 24,646,820$ 13,304,922$ 9,016,306$ 5,431,288 5,397,075 5,837,809 5,414,740 5,033,555 4,639,390 5,496,484 4,958,094 5,176,318 5,695,269 6,248,128 6,993,400 (226,356) (3,015,315) (4,178,684) (3,448,208) (2,475,320) (2,119,931) 18,770,654$ 15,112,636$ 31,440,552$ 32,308,621$ 22,111,285$ 18,529,165$ 24,851,066$ 21,386,314$ 38,329,207$ 39,489,572$ 29,250,988$ 27,455,251$ -104- 2011 2012 2013 2014 Revenues Property taxes 8,767,959$ 9,199,381$ 9,531,663$ 9,718,800$ Tax increments 1,400,163 1,343,248 511,924 537,871 Franchise taxes 439,795 440,149 438,834 438,541 Licenses and permits 359,530 238,943 273,117 353,973 Intergovernmental 1,599,253 858,816 4,463,113 818,825 Charges for services 1,544,369 1,557,898 1,585,964 1,663,153 Fines and forfeits 255,329 283,233 239,201 215,585 Special assessments 153,835 305,818 178,335 98,617 Investment income 548,548 307,032 178,217 248,013 Miscellaneous 115,183 80,073 111,443 129,980 Total revenues 15,183,964 14,614,591 17,511,811 14,223,358 Expenditures General government 1,560,511 1,567,301 1,571,701 1,668,474 Public safety 5,933,201 5,946,209 5,967,599 6,397,860 Public works 1,079,884 1,192,760 1,254,201 1,225,551 Culture and recreation 1,560,486 1,599,041 1,613,518 1,761,961 Economic development 289,650 304,064 582,621 298,825 Capital outlay 5,263,935 7,685,819 4,239,938 3,000,518 Debt service Principal retirement 1,005,000 330,000 340,000 350,000 Interest 247,973 270,613 306,462 212,025 Bond issuance 93,820 104,351 – 2,200 Total expenditures 17,034,460 19,000,158 15,876,040 14,917,414 Excess of revenues over (under) expenditures (1,850,496) (4,385,567) 1,635,771 (694,056) Other financing sources (uses) Transfers in 2,477,195 936,188 360,427 669,461 Sale of capital assets – – 1,460 4,055,382 Bonds issued – – – – Premiums on debt issues – 54,006 – – Refunding bonds issued – 4,025,000 – – Payments to refunded bond escrow agent – – – (3,780,000) Transfers (out)(4,569,216) (770,638) (600,414) (477,461) Total other financing sources (uses)(2,092,021) 4,244,556 (238,527) 467,382 Net change in fund balances (3,942,517)$ (141,011)$ 1,397,244$ (226,674)$ Debt service as a percentage of noncapital expenditures 6.4%4.1%5.6%4.5% Fiscal Year City of New Hope, Minnesota Changes in Fund Balances of Governmental Funds Last Ten Fiscal Years (Modified Accrual Basis of Accounting) -105- 2015 2016 2017 2018 2019 2020 10,145,204$ 10,868,985$ 11,961,711$ 12,904,297$ 15,223,680$ 16,756,108$ 430,879 492,584 841,098 1,112,753 1,317,803 1,918,857 442,556 447,248 912,357 945,244 957,448 958,162 389,957 466,548 641,870 367,931 320,438 393,911 1,359,511 2,063,546 1,844,648 2,195,761 3,947,039 4,289,738 1,601,081 1,571,798 1,727,615 1,399,998 1,376,176 986,887 237,591 191,960 208,909 230,657 227,343 138,922 38,417 173,158 92,458 282,589 197,566 234,265 274,116 304,252 486,746 658,606 1,166,238 607,490 202,057 42,103 137,591 33,966 173,679 26,700 15,121,369 16,622,182 18,855,003 20,131,802 24,907,410 26,311,040 1,688,752 1,872,436 2,622,277 1,787,553 1,900,480 2,062,733 6,866,105 7,168,102 7,724,950 7,997,311 8,427,939 8,361,209 1,328,371 1,606,369 1,671,593 1,717,815 1,790,715 1,853,395 1,853,741 1,938,131 2,066,692 2,015,729 2,032,585 2,035,658 498,479 588,167 1,737,947 815,352 513,946 1,291,350 8,204,694 8,220,964 5,217,461 12,956,485 22,573,850 8,669,758 405,000 415,000 523,497 799,734 968,674 1,905,890 131,530 257,661 455,539 769,497 1,273,302 1,778,653 114,607 58,188 251,648 148,365 90,446 – 21,091,279 22,125,018 22,271,604 29,007,841 39,571,937 27,958,646 (5,969,910) (5,502,836) (3,416,601) (8,876,039) (14,664,527) (1,647,606) 3,209,226 1,630,270 4,305,261 788,458 2,162,676 418,661 – – – – 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 – – – – – – – – – – – (3,015,226) (1,426,570) (4,238,376) (748,726) (1,981,951) (566,792) 6,835,339 3,135,328 20,359,494 10,036,405 6,201,285 (148,131) 865,429$ (2,367,508)$ 16,942,893$ 1,160,366$ (8,463,242)$ (1,795,737)$ 3.5%4.6%5.4%9.2%12.6%18.7% -106- THIS PAGE INTENTIONALLY LEFT BLANK Ad Valorem Property Tax Tax Increments Franchise Tax Total 8,767,959$ 1,400,163$ 439,795$ 10,607,917$ 9,199,381 1,343,248 440,149 10,982,778 9,531,663 511,924 438,834 10,482,421 9,781,800 537,871 438,541 10,758,212 10,145,204 430,879 442,556 11,018,639 10,868,985 492,584 447,248 11,808,817 11,961,711 841,098 912,357 13,715,166 12,904,297 1,112,753 945,244 14,962,294 15,223,680 1,317,803 957,448 17,498,931 16,756,108 1,918,857 958,162 19,633,127 City of New Hope, Minnesota General Governmental Tax Revenues by Source Last Ten Fiscal Years (Modified Accrual Basis of Accounting) Fiscal Year 2016 2011 2012 2013 2014 2015 2017 2018 2019 2020 -107- 2011 2012 2013 2014 Taxable market value Real property 1,492,408,000$ 1,321,463,913$ 1,214,204,483$ 1,224,417,514$ Personal property 8,162,100 8,515,600 9,657,700 10,849,800 Total taxable market value 1,500,570,100$ 1,329,979,513$ 1,223,862,183$ 1,235,267,314$ Estimated actual value of taxable property 1,504,929,000$ 1,438,796,300$ 1,336,539,900$ 1,346,449,200$ Taxable market value as a percentage of estimated actual value 99.71% 92.44% 91.57% 91.74% Tax capacity Real property 18,462,796$ 16,686,170$ 15,476,014$ 15,454,712$ Personal property 159,492 165,812 188,654 211,746 Subtotal 18,622,288 16,851,982 15,664,668 15,666,458 Less tax increment (1,044,830) (944,560) (366,752) (377,138) Less contribution to fiscal disparities (2,466,459) (2,380,423) (2,255,476) (2,154,731) Add distribution from fiscal disparities 3,896,651 3,605,075 3,448,346 3,437,911 Net tax capacity 19,007,650$ 17,132,074$ 16,490,786$ 16,572,500$ Tax levies Revenue 9,036,625 9,066,928 9,406,483 9,556,483 Bonds and interest 192,105 161,802 164,325 161,487 Total 9,228,730$ 9,228,730$ 9,570,808$ 9,717,970$ Tax capacity rate Revenue 47.92 53.84 57.80 57.62 Bonds and interest 1.03 0.97 1.01 0.97 Sewer district 0.31 0.39 – – Total direct tax rate 49.25 55.20 58.81 58.60 Fiscal Year City of New Hope, Minnesota Tax Capacity, Market Value and Estimated Actual Value of Taxable Property Last Ten Fiscal Years (Accrual Basis of Accounting) -108- 2015 2016 2017 2018 2019 2020 1,323,173,828$ 1,419,351,117$ 1,522,726,514$ 1,683,833,465$ 1,817,473,851$ 2,007,332,223$ 11,343,900 11,588,000 1,232,600 13,258,900 13,963,100 14,049,900 1,334,517,728$ 1,430,939,117$ 1,523,959,114$ 1,697,092,365$ 1,831,436,951$ 2,021,382,123$ 1,440,652,000$ 1,534,397,300$ 1,636,865,900$ 1,792,927,900$ 1,921,182,700$ 2,106,273,300$ 92.63% 93.26% 93.78% 94.65% 95.33% 95.97% 16,638,481$ 17,898,058$ 19,196,854$ 21,143,125$ 22,506,796$ 25,019,326$ 221,628 226,510 242,052 260,678 275,032 276,748 16,860,109 18,124,568 19,438,906 21,403,803 22,781,828 25,296,074 (338,715) (362,633) (604,222) (810,429) (948,691) (1,378,781) (2,144,256) (2,277,639) (2,464,382) (2,655,561) (2,870,420) (2,941,213) 3,505,922 3,437,652 3,757,080 4,010,408 4,111,736 4,385,923 17,883,060$ 18,921,948$ 20,127,382$ 21,948,221$ 23,074,453$ 25,362,003$ 9,938,265 10,617,194 11,362,957 12,043,578 12,722,208 13,094,054 163,902 195,819 604,444 869,164 2,579,402 3,750,662 10,102,167$ 10,813,013$ 11,967,401$ 12,912,742$ 15,301,610$ 16,844,716$ 55.07 56.36 56.91 54.64 56.54 51.37 0.91 1.04 3.03 3.95 11.45 14.72 – – – – – – 55.98 57.41 59.93 58.59 67.99 66.09 -109- Total Direct Sewer and General Debt District City Hennepin ISD No. 281 Special Overlapping Levy Levy Levy Total County Robbinsdale Districts Rates 47.916 1.025 0.308 49.249 45.840 34.387 10.068 139.544 53.842 3.097 0.387 57.326 48.231 32.534 10.422 148.513 57.802 1.010 – 58.812 49.461 32.347 10.933 151.553 57.622 0.977 – 58.599 49.959 34.777 11.307 154.642 55.073 0.905 – 55.978 46.398 33.226 10.561 146.163 56.364 1.041 – 57.405 45.356 33.833 10.432 147.026 56.906 3.025 – 59.931 44.087 31.612 10.214 145.844 54.643 3.946 – 58.589 42.808 31.957 9.052 142.406 56.539 11.451 – 67.990 41.861 29.909 8.885 148.645 51.374 14.715 – 66.089 41.084 26.447 8.376 141.996 Note: Source:Hennepin County/Treasurer Department 2011 2018 2019 City of New Hope, Minnesota Property Tax Rates Direct and Overlapping Governments Last Ten Fiscal Years Year Overlapping RatesDirect Rates – City of New Hope 2012 2017 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). 2013 2014 2015 2016 2020 -110- Net Tax Net Tax Capacity Rank Capacity Rank Alatus New Hope I LLC 352,500$ 1 1.4 %–$ – – % STNL (New Hope), LLC 269,250 2 1.1 – – – Allen Group, LLC 224,770 3 0.9 – – – Paddock Property Ltd. Partnership 220,630 4 0.9 156,730 2 0.8 St. Therese Home, Inc.200,530 5 0.8 148,763 3 0.8 CI Minn I-A, LLC 200,510 6 0.8 – – – Omega Healthcare Investors 200,225 7 0.8 – – – GLP US Management, LLC 199,510 8 0.8 – – – Broadway Lanel/Golle/Holmes 197,650 9 0.8 132,250 8 0.7 FLS Properties LLC 197,050 10 0.8 – – – Geneva Management Service, LLC – – – 159,250 1 0.9 Cobalt Industrial Reit – – – 143,850 4 0.8 New Hope Distribution Center, LLC – – – 139,250 5 0.7 Long Ridge Industrial Portfolio – – – 135,250 6 0.7 Minnesota Masonic Home/ NorthRidge Care Center – – – 133,450 7 0.7 New Hope/U.S. Swim Partnership – – – 131,250 9 0.7 Welsh Corporate Headquarters – – – 129,250 10 0.7 Total 2,262,625$ 8.9 %1,409,293$ 7.6 % Source:Hennepin County/Treasurer Department Applied Tax CapacityTaxpayerCapacity Applied Tax Current Year and Nine Years Ago Principal Property Taxpayers City of New Hope, Minnesota Percentage of 2020 2011 Percentage of -111- THIS PAGE INTENTIONALLY LEFT BLANK Total Tax Collections in Levy for Subsequent Fiscal Year Amount (2)Years (3)Amount 9,228,730$ 9,063,615$ 98.21 %165,115$ 9,228,730$ 100.00 % 9,228,730 9,102,355 98.63 126,375 9,228,730 100.00 9,570,808 9,429,858 98.53 140,950 9,570,808 100.00 9,717,970 9,619,447 98.99 98,523 9,717,970 100.00 10,102,167 10,017,500 99.16 75,335 10,092,835 99.91 10,813,013 10,756,992 99.48 49,626 10,806,618 99.94 11,967,401 11,895,137 99.40 66,405 11,961,542 99.95 12,912,742 12,834,660 99.40 68,017 12,902,677 99.92 15,301,610 15,172,300 99.15 92,796 15,265,096 99.76 16,844,716 16,662,434 98.92 47,340 16,709,774 99.20 (1) (2) (3) Collected Within the City of New Hope, Minnesota Fiscal Year of Levy Percentage Fiscal Year of the Levy 2018 Total Collections to Date Property Tax Levies and Collections (1) 2017 2015 Last Ten Fiscal Years of Levy Ended 2013 2012 2016 2011 2014 December 31, Percentage 2020 Does not include tax increments levied and collected. Includes current year cancellations, abatements, and state paid tax credits. Includes county adjustments for prior year over collections, cancellations, and abatements. 2019 -112- General Tax Lease General Obligation Increment Revenue Obligation Bonds Bonds Total Bonds Bonds 1,245,000$ 4,410,000$ 5,655,000$ 3,505,000$ –$ 1,120,000 8,230,000 9,350,000 3,505,000 – 1,000,729 8,065,761 9,066,490 3,505,000 – 863,620 4,066,223 4,929,843 3,505,000 – 2,898,167 8,250,291 11,148,458 3,505,000 1,831,607 5,682,679 7,968,655 13,651,334 3,505,000 3,934,522 25,713,493 7,687,463 33,400,956 3,505,000 3,833,158 35,323,386 7,140,876 42,464,262 3,505,000 3,757,852 40,433,000 6,582,397 47,015,397 3,505,000 3,509,802 38,930,476 6,005,590 44,936,066 3,505,000 3,285,833 (1) Note: City of New Hope, Minnesota Ratios of Outstanding Debt by Type Last Ten Fiscal Years See the Schedule of Demographic and Economic Statistics for personal income and population data. Details regarding the City’s outstanding debt can be found in the notes to basic financial statements. 2017 2012 2013 2014 2015 2016 2018 2019 2020 Governmental Activities Business-Type Activities Fiscal Year 2011 -113- G.O.G.O. Revenue Tax Increment Total Primary Bonds Bonds Total Government Per Capita (1) 2,360,095$ –$ 5,865,095$ 11,520,095$ 1.04 %562$ 2,033,000 – 5,538,000 14,888,000 1.25 717 2,723,628 – 6,228,628 15,295,118 1.24 732 2,352,553 – 5,857,553 10,787,396 0.86 518 2,151,635 1,587,602 9,075,844 20,224,302 1.49 953 1,950,071 1,586,242 10,975,835 24,627,169 1.75 1,140 1,748,533 1,584,964 10,671,655 44,072,611 3.03 2,046 1,540,021 1,494,575 10,297,448 52,761,710 3.41 2,421 1,326,532 1,401,536 9,742,870 56,758,267 3.57 2,537 1,111,126 1,307,253 9,209,212 54,145,278 3.16 2,420 Ratios of Outstanding Debt by Type Percentage Income (1) of Personal -114- Less Amounts General Restricted for Total Obligation Repaying Net Bonded Bonds Principal Debt Per Capita 8,015,095$ 465,243$ 7,549,852$ 0.502 %369$ 11,383,000 4,222,494 7,160,506 0.498 345 11,790,118 345,010 11,445,108 0.856 548 7,282,396 614,161 6,668,235 0.495 320 16,719,302 759,386 15,959,916 1.108 752 21,122,169 1,048,498 20,073,671 1.308 929 40,567,611 2,173,637 38,393,974 2.346 1,782 49,226,710 1,793,587 47,433,123 2.646 2,177 53,253,267 3,193,279 50,059,988 2.606 2,237 50,640,278 3,780,748 46,859,530 2.225 2,094 Note 1: Note 2: Note 3: City of New Hope, Minnesota Ratios of General Bonded Debt Outstanding Last Ten Fiscal Years Taxable Value Estimated Actual Percentage of Fiscal Year 2011 Details regarding the City’s outstanding debt can be found in the notes to basic financial statements. 2012 2016 2017 2013 of Property Population data can be found in the Schedule of Demographic and Economic Statistics. 2014 2018 2019 2020 2015 See the Schedule of Tax Capacity,Market Value,and Estimated Actual Value of Taxable Property for property value data. -115- Estimated Debt Share of Outstanding Overlapping Debt Direct debt City of New Hope 44,936,066$ 100.00 %44,936,066$ Overlapping debt Hennepin County 998,790,298 1.08 10,786,935 ISD No. 281, Robbinsdale 172,139,921 19.87 34,204,202 Three Rivers Park District 42,954,642 1.55 665,797 Hennepin Regional RR Authority 93,859,422 1.08 1,013,682 Metropolitan Council 103,255,628 0.55 567,741 Total overlapping debt 1,410,999,911$ 47,238,357 Total direct and overlapping debt 92,174,423$ (1) Note: Source: 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 recognizes that,when considering the City’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. Hennepin County Taxpayer Services City of New Hope, Minnesota Direct and Overlapping Governmental Activities Debt as of December 31, 2020 Estimated Percentage Governmental Unit Applicable (1) The percentages 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. -116- 2011 2012 2013 2014 Debt limit 45,017,103$ 39,899,385$ 36,715,865$ 37,058,019$ Total net debt applicable to the limit 1,072,678 970,908 839,948 696,627 Legal debt margin 43,944,425$ 38,928,477$ 35,875,917$ 36,361,392$ Total net debt applicable to the limit as a percentage of the debt limit 2.38% 2.43% 2.29% 1.88% Note:Under state finance law,the City’s outstanding general obligation debt should not exceed 3 percent of total market property value.By law,the general obligation debt subject to the limitation may be offset by amounts set aside for repaying general obligation bonds. City of New Hope, Minnesota Legal Debt Margin Information Last Ten Fiscal Years Fiscal Year -117- 2015 2016 2017 2018 2019 2020 40,035,532$ 42,928,174$ 46,051,623$ 50,912,771$ 54,943,109$ 60,641,464$ 2,719,528 5,497,493 25,516,878 34,249,431 38,595,992 36,361,673 37,316,004$ 37,430,681$ 20,534,745$ 16,663,340$ 16,347,117$ 24,279,791$ 6.79% 12.81% 55.41% 67.27% 70.25% 59.96% Market value 2,021,382,123$ Debt limit (3 percent of market value)60,641,464 Debt applicable to limit General obligation bonds 38,930,476 Less amount available in debt service funds (2,568,803) Total net debt applicable to the limit 36,361,673 Legal debt margin 24,279,791$ Legal Debt Margin Calculation for Fiscal Year 2020 -118- (1)(2)Net Gross Operating Available Revenue Expenses Revenue Principal Interest 6,646,747$ 5,527,230$ 1,119,517$ 981,643$ 74,418$ 106.01 % 7,676,193 6,493,865 1,182,328 334,000 162,686 238.04 7,901,855 6,573,932 1,327,923 344,000 98,588 300.04 7,887,948 7,270,310 617,638 371,000 103,685 130.12 8,039,067 7,925,903 113,164 201,000 97,854 37.87 8,738,270 6,629,232 2,109,038 202,000 172,262 563.52 9,181,674 6,850,851 2,330,823 293,503 228,142 446.82 10,247,826 7,479,247 2,768,579 394,266 232,928 441.42 10,292,470 7,408,536 2,883,934 515,326 251,673 376.00 11,287,052 8,203,328 3,083,724 525,110 245,526 400.15 (1) (2)Operating expenses exclude depreciation. (3) Note:Details regarding the City’s outstanding debt can be found in the notes to basic financial statements.Gross revenue includes investment earnings and intergovernmental grants. Operating expenses do not include interest. Gross revenues include interest and other nonoperating revenues. 2017 2020 Revenues and expense include the Storm Water, Water Utility, Sewer Utility, and Ice Arena Funds. City of New Hope, Minnesota Pledged Revenue Coverage Last Ten Fiscal Years 2011 2019 2018 Fiscal Year Debt Service Coverage Revenue Bonds (3) 2016 2015 2014 2013 2012 -119- Per Capita Total Personal Personal Median School Population (1)Income (2)Income (3)Age (4)Enrollment (5) 20,486 54,008$ 1,106,407,888$ 39.4 11,804 5.6 % 20,764 57,476 1,193,431,664 39.4 12,126 4.8 20,904 58,898 1,231,203,792 39.4 12,126 4.0 20,812 60,601 1,261,228,012 39.4 12,390 2.9 21,225 63,901 1,356,298,725 39.4 12,313 2.8 21,600 65,231 1,408,989,600 39.4 12,404 2.8 21,545 67,427 1,452,714,715 39.4 12,011 3.5 21,790 70,067 1,526,759,930 39.4 12,304 2.7 22,376 71,067 1,590,195,192 39.4 12,237 2.7 22,376 76,552 1,712,927,552 36.4 12,397 8.6 (1)Provided by the Metropolitan Council. The most recent year is an estimate. (2) (3) (4) (5) (6) City of New Hope, Minnesota Rate (6) UnemploymentFiscal Demographic and Economic Statistics Last Ten Fiscal Years Year Sources: Provided by the Bureau of Labor Statistics; U.S. Department of Labor. This figure is for all of Hennepin County. 2014 Calculated by multiplying the estimated population by the per capita personal income figure. 2011 Provided by Independent School District No. 281, Robbinsdale, Minnesota. U.S. Census Bureau. 2012 2013 2015 2016 Provided by the Bureau of Economic Analysis; U.S. Department of Commerce. This figure is for all of Hennpin County. 2017 2018 2019 2020 -120- THIS PAGE INTENTIONALLY LEFT BLANK Employees Rank Employees Rank Independent School District No. 281 791 1 7.6 %2,200 1 21.5 % Hy-Vee 632 2 6.1 – – – Mission Health/North Ridge Care Center 560 3 5.4 789 2 7.7 Saint Therese Home of New Hope 544 4 5.3 650 3 6.4 Horwitz 345 5 3.3 – – – Perrigo Company 323 6 3.1 413 4 4.0 Independent School District No. 287 266 7 2.6 – – – YMCA 228 8 2.2 – – – Liberty Diversified International 200 9 1.9 200 7 2.0 Parker-Hannifin Oildyne Division 172 10 1.7 135 10 1.3 Navarre Corporation – – – 280 5 2.7 Coborn’s Delivers – – – 240 6 2.3 Dakota Growers Pasta – – – 200 8 2.0 Waymouth Farms, Inc.– – – 137 9 1.3 4,061 39.2 %5,244 51.2 % Source:Minnesota Department of Employment and Economic Development Employer Employment City of New Hope, Minnesota Employment of Total City Percentage 2011 Percentage Current Year and Nine Years Ago 2020 of Total City Principal Employers -121- 2011 2012 2013 2014 Function General government 15 15 16 14 Public safety Police Officers 31 30 31 33 Civilians 6 7 7 7 Public works 24 24 24 24 Culture and recreation 7 6 7 7 Total 83 82 85 85 Source: Various city departments City of New Hope, Minnesota Full-Time Equivalent City Government Employees by Function Last Ten Fiscal Years Fiscal Year -122- ` 2015 2016 2017 2018 2019 2020 13 13 16 17 17 17 35 33 34 34 34 34 9 9 10 11 10 10 23 24 24 24 24 24 7 8 7 7 7 8 87 87 91 93 92 93 -123- 2011 2012 2013 2014 Function 4 – – – 648 687 600 1,330 Culture and recreation 5,271 5,598 4,565 3,121 5,287 5,323 7,442 5,734 146,305 148,966 144,000 122,478 Golf course Rounds of golf at the municipal course 18,788 19,568 16,782 16,431 Ice arena Hours of ice time rental 3,903 3,558 3,739 3,734 Water Water main breaks 32 26 30 27 Average daily consumption (thousands of gallons)1,712 1,828 1,682 1,571 Sewer Average daily treatment (thousands of gallons)2,253 2,189 1,500 2,200 Note:Indicators are not available for the general government function. Source:Various city departments City of New Hope, Minnesota Operating Indicators by Function Last Ten Fiscal Years Attendance at sponsored events Street resurfacing (miles) Potholes repaired Program registration – adults Program registration – youth Public works Fiscal Year -124- 2015 2016 2017 2018 2019 2020 12 3 3 3 4 4 2,882 3,025 2,530 3,000 2,900 2,900 2,746 3,343 3,011 2,603 1,860 1,426 5,815 6,043 5,969 5,413 4,695 3,325 124,777 127,865 127,112 102,659 101,409 69,415 18,175 20,375 18,662 17,800 16,837 26,553 3,683 3,567 4,030 4,151 4,202 2,984 21 19 12 23 14 18 1,559 1,588 1,616 1,616 1,551 1,775 1,670 1,800 1,352 1,405 1,355 1,451 -125- 2011 2012 2013 2014 Function Public safety Police stations 1 1 1 1 Fire stations 3 3 3 3 Public works Highways and streets 64.0 64.0 64.0 64.0 City streets (miles)8.5 8.5 8.5 8.5 State and county streets (miles)26.4 26.4 26.4 26.4 Sidewalks (miles)580.0 580.0 580.0 580.0 Streetlights 2.0 2.0 2.0 2.0 Railroad 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 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 Fiscal Year City of New Hope, Minnesota Capital Asset Statistics by Function Last Ten Fiscal Years -126- 2015 2016 2017 2018 2019 2020 1 1 1 1 1 1 3 3 3 3 3 3 64.0 64.0 64.0 64.0 64.0 64.8 8.5 8.5 8.5 8.5 8.5 8.5 26.4 26.4 27.0 27.0 27.0 27.3 580.0 619.0 619.0 619.0 630.0 630.0 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 – – 17 17 17 17 17 12 63 64 64 64 64 65 690 690 690 690 690 716 21,000,000 21,000,000 21,000,000 21,000,000 21,000,000 21,000,000 74 75 75 75 75 75 56 56 56 56 56 57 1 1 1 1 1 1 1 1 1 1 1 1 -127- THIS PAGE INTENTIONALLY LEFT BLANK