2017 CAFR
CITY OF NEW HOPE
NEW HOPE, MINNESOTA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED
DECEMBER 31, 2017
THIS PAGE IS LEFT
BLANK INTENTIONALLY
CITY OF NEW HOPE
HENNEPIN COUNTY, MINNESOTA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED
DECEMBER 31, 2017
KIRK MCDONALD - CITY MANAGER
PREPARED BY: DEPARTMENT OF FINANCE
Member GFOA of U.S. and Canada
THIS PAGE IS LEFT
BLANK INTENTIONALLY
City o f New Hope, Minnesota
Comprehensive Annual Financial Report
Table of Contents
For the Year Ended December 31, 2017
Page No.
Introductory Section
Letter of Transmittal from City Manager 8
Certificate of Achievement for Excellence in Financial Reporting 14
Organizational Chart 15
Elected and Appointed Officials 16
Financial Section
Independent Auditor’s Report 19
Management’s Discussion and Analysis 23
Basic Financial Statements
Government-wide Financial Statements
Statement of Net Position 35
Statement of Activities 36
Fund Financial Statements
Governmental Funds
Balance Sheet 40
Reconciliation of the Balance Sheet to the Statement of Net Position 43
Statement of Revenues, Expenditures and Changes in Fund Balances 44
Reconciliation of the Statement of Revenues, Expenditures and
Changes in Fund Balances to the Statement of Activities 46
General Fund
Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual 47
Economic Development Authority Fund
Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual 49
Proprietary Funds
Statement of Net Position 50
Statement of Revenues, Expenses and Changes in Net Position 54
Statement of Cash Flows 56
Fiduciary Funds
Statement of Fiduciary Net Position 60
Notes to the Financial Statements 61
Required Supplementary Information
Schedule of Employer’s and Non-Employer Contributing Entity’s Share of
Public Employees Retirement Association Net Pension Liability - General Employees Retirement Fund 100
Schedule of Employer’s Public Employees Retirement Association Contributions -
General Employees Retirement Fund 100
Schedule of Employer’s Share of Public Employees Retirement Association Net Pension Liability -
Public Employees Police and Fire Fund 102
Schedule of Employer’s Public Employees Retirement Association Contributions -
Public Employees Police and Fire Fund 102
Schedule of Employer’s Funding Progress for the Other Post-Employment Benefit Plan 103
Combining and Individual Fund Financial Statements and Schedules
Nonmajor Governmental Funds
Combining Balance Sheet 106
Combining Statement of Revenues, Expenditures and Changes in Fund Balances 107
Nonmajor Special Revenue Funds
Subcombining Balance Sheet 110
Subcombining Statement of Revenues, Expenditures and Changes in Fund Balances 111
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual
Solid Waste Management Fund 112
-5-
City o f New Hope, Minnesota
Comprehensive Annual Financial Report
Table of Contents (Continued)
For the Year Ended December 31, 2017
Page No.
Combining and Individual Fund Financial Statements and Schedules (Continued)
Nonmajor Capital Projects Funds
Subcombining Balance Sheet 114
Subcombining Statement of Revenues, Expenditures and Changes in Fund Balances 115
Nonmajor Debt Service Funds
Subcombining Balance Sheet 118
Subcombining Statement of Revenues, Expenditures and Changes in Fund Balances 119
General Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual 121
Internal Service Funds
Combining Statement of Net Position 128
Combining Statement of Revenues, Expenses and Changes in Net Position 129
Combining Statement of Cash Flows 130
Agency Funds
Combining Statement of Fiduciary Net Position 131
Combining Statement of Changes in Assets and Liabilities 132
Statistical Section (Unaudited)
Financial Trends
Summary Financial Report
Revenues and Expenditures for General Operations - Governmental Funds 137
Net Position by Component 138
Changes in Net Position 140
Governmental Activities Tax Revenues by Source 145
Fund Balances of Governmental Funds 146
Changes in Fund Balances of Governmental Funds 148
General Government Tax Revenues by Source 151
Revenue Capacity
Tax Capacity, Market Value and Estimated Actual Value of Taxable Property 152
Property Tax Capacity Rates - Direct and Overlapping Governments 154
Principal Property Taxpayers 156
Property Tax Levies and Collections 159
Debt Capacity
Ratios of Outstanding Debt by Type 160
Ratios of General Bonded Debt Outstanding 162
Computation of Direct and Overlapping Debt 163
Legal Debt Margin Information 164
Pledged Revenue Coverage 166
Demographic and Economic Information
Demographic and Economic Statistics 167
Principal Employers 168
Operating Information
Full-Time Equivalent City Government Employees by Function 170
Operating Indicators by Function 172
Capital Asset Statistics by Function 174
-6-
INTRODUCTORY SECTION
CITY OF NEW HOPE
NEW HOPE, MINNESOTA
FOR THE YEAR ENDED
DECEMBER 31, 2017
-7-
May 14, 2018
Honorable Mayor and City Council
City of New Hope
4401 Xylon Avenue North
New Hope, MN 55428-4898
The Comprehensive Annual Financial Report (CAFR) of the City of New Hope, Minnesota (the City), for the fiscal year ended
December 31, 2017, is submitted herewith. As required by state law, this report is published annually, prior to June 30, and submitted
to the Office of the State Auditor. The form and contents of this report and the accompanying financial statements and statistical tables
are designed to meet the needs of a broad spectrum of financial statement readers, and were prepared in conformance with standards
set forth by:
1.The Governmental Accounting Standards Board (GASB)
2.The American Institute of Certified Public Accountants
3.The United States Office of Management and Budget
4.The State Auditor, State of Minnesota
5.The Government Finance Officers' Association (GFOA) of the United States and Canada
The financial data presented in this report was prepared by the City's finance department staff. The responsibility for the accuracy of
the presented data and the completeness and fairness of the presentation, including all disclosures, rests with the City. We believe the
data as presented is accurate in all material respects and is presented in a manner designed to fairly set forth the financial activity of
the various funds, and that all disclosures necessary to enable the reader to gain the maximum understanding of the City's financial
activity have been included.
Accounting principles generally accepted in the United States of America require that management provide a narrative introduction,
overview, and analysis to accompany the basic financial statements in the form of the Management's Discussion and Analysis
(MD&A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The City's
MD&A can be found immediately following the report of the independent auditors.
PROFILE OF THE GOVERNMENT
The City is a residential suburb of the City of Minneapolis with a population of 21,600. The City is 5.6 square miles in area and is
substantially developed with the exception of just under 12 acres of property which consists primarily of residential zoned property.
The City was incorporated in 1953 and enjoys a diverse commercial and residential tax base.
The City operates under the "Optional Plan B” government structure as defined in Minnesota Statutes. Optional Plan B is known as
the council-manager plan. Under this plan, as specified in the statutes, "The City Council shall exercise the legislative power of the
City and determine all matters of policy. The city manager shall be the head of the administrative branch of the city government and
shall be responsible to the City Council for the proper administration of all affairs relating to the City." The City Council is composed
of five members, including the mayor. The city manager is appointed by the City Council.
CITY O F NEW HOPE
4401 Xylon Avenue North • New Hope, Minnesota 55428-4898 • www.ci.new-hope.rrm.us
City Hall: 763-531-5100 • Police (non-emergency): 763-531-5170 • Public Works: 763-592-6777 • TDD: 763-531-5109
City Hall Fax: 763-531-5136 • Police Fax: 763-531-5174 • Public Works Fax: 763-592-6776
-8-
The City's accounting system is organized and operated on a "fund basis." Each fund is a distinct self-balancing accounting entity. The
City's accounting records for governmental fund types are maintained on the modified accrual basis and the accrual basis is utilized by
proprietary and fiduciary funds, as defined in the notes to basic financial statements.
The City maintains a system of internal control that provides a reasonable assurance of accounting data reliability, and the
safeguarding of assets against loss from unauthorized use or disposition. The concept of reasonable assurance recognizes the cost of
control should not exceed the benefits likely to be derived, and the evaluation of costs and benefits requires estimates and judgments
by management.
Budgets are maintained for the General Fund and certain special revenue funds (as noted in the notes to basic financial statements).
The city manager is directed to submit an annual budget to the City Council. Upon adoption of the annual budget resolution by the
City Council, it becomes the formal budget for city operations. Any changes to the original budget have to be authorized by City
Council action, but must maintain a balanced budget by either recognizing additional receipts, or utilizing fund balances.
Budget controls are maintained through a system of purchase orders and monthly financial statements which compare actual
performance with the budget.
The City has reviewed its reporting entity definition in light of GASB's pronouncements. The entities included in the City's report are
those for which the City has financial accountability.
Blended component units, although legally separate entities, are, in substance, part of the primary government's operations and are
included as part of the primary government. Accordingly, the Economic Development Authority (EDA) is reported as special revenue
fund of the primary government and the Housing and Redevelopment Authority (HRA) reports a debt service fund and a capital
projects fund within the primary government.
The City provides a full range of municipal services, including: police and fire protection, culture and recreation, public
improvements, street maintenance, sanitary and storm sewer collection, water distribution, planning, zoning and building inspection
services, and general administrative services.
ECONOMIC OUTLOOK
The City is a nearly fully developed community with little vacant land available for development. The City has a good mix of
single/multi-family residential housing stock, parks and open space, and a strong commercial/industrial tax base.
There are approximately 470 commercial/industrial/service businesses in the City, and the major employers are listed as follows:
Major Employers Products/Services Employees
Independent School District No. 281 Education 1,852
Saint Therese Home of New Hope Skilled nursing care facility 1,117
Intermediate District 287 Education 943
Hy-Vee Grocery and convenience store 632
Mission Health/North Ridge Care Center Skilled nursing care facility 560
Horwitz Specialty contractor 345
Perrigo Company Pharmaceutical and medicine manufacturing 290
Coborn’s Delivers Direct selling establishments 240
Liberty Diversified International Stationery supplies 200
Parker - Hannifin Oildyne Division Fluid power cylinders and actuators 172
The City has four major industrial park areas including Science Industry Park, 49th and Quebec Avenues, Winnetka Avenue area
between 32nd and 36th Avenues, and north of Medicine Lake Road on Nevada Avenue.
The major shopping centers/areas in the City include: Midland Shopping Center, Winnetka Commons Shopping Center, New Hope
Mall, Winnetka Center, Post Haste Square, and the 42nd Avenue Redevelopment District.
-9-
Business Assistance Programs
Local commercial/industrial businesses are extremely important to the City. The City Council has undertaken programs and initiatives
to address both commercial and industrial properties. These programs focus on: 1} retaining existing businesses, 2} assisting with
expansions, 3} attracting new businesses to vacant available buildings, 4} attracting new construction to a limited number of available
vacant sites, and 5} improving communication with businesses and responding more effectively to business concerns and inquiries.
The City Council has continued the Outstanding Business Award Program initiated in 2006, to recognize the City's businesses'
contributions to the local community.
In 2009, the Business Networking Group forum was established to share information and improve communications between
businesses and the City and the forum continued through 2017. 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 2017, $71,895,249 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 2017:
Alatus Development
The city approved the preliminary plat, rezoning of the property and site plan review approvals for Alatus, LLC, who will construct a
182-unit luxury apartment building located at 8400 Bass Lake Road. The City Council has also approved the Development Agreement
and final plat for the development, including the vacation of the existing easements on the property. The site is currently under
construction and anticipates opening in December 2018. The estimated value of the project is $43 million.
Parkview Development
Centra Homes negotiated with the City to purchase the former Winnetka Learning Center property and was granted a Comprehensive
Plan Amendment to re-guide the area for one and two -family residential. Centra Homes received all necessary approvals, including
the rezoning of the property, and final plat subdivision of the land in 2015. In 2017, they continued construction of the 60-unit
development, and will be completely done with the project in the spring of 2018. On average, the units sold for approximately 13%
more than the estimated price points when the developer first started the project.
Avtec Finishing Systems
The city approved the site plan for a 20,000-square foot addition to the existing building located at 9101 Science Center Drive. Avtec
Finishing Systems specializes in metal plate finishing, and desires to expand their operations. The 20,763-square foot addition
improves workflow through added space and remodeling. The expansion enlarged the shipping and receiving operations and also
included a new two-story office. Along with the building addition, the parking lot was also enlarged to accommodate the minimum
code requirements. Avtec finished all building improvements in 2017 and are now fully operational.
Northwest Church of Christ
The city approved a Conditional Use Permit to allow a 13,400-square foot addition to the existing Northwest Church of Christ. The
church purchased the single-family house to the north of their property in order to accommodate the addition. Construction is now
underway and will be completed by the fall of 2018.
Good Samaritan Society
Good Samaritan Society will be expanding its New Hope campus with the construction of a three-story, 32-unit assisted living facility.
Residents of the new facility will live on-site full time; however, the individual units will not include full kitchen facilities. There will
be separate areas in the building for dining, bathing, exercise, nursing care, activities, and administrative services. The site is currently
under construction and will be completed in the spring of 2019. The expansion has a value of $4.4 million.
-10-
7201 Bass Lake Road Gas Station
Plans for redevelopment of the property located at 7117 Bass Lake Rd as a 5,060 square foot gas station and 3,780-square detached
car wash were approved in 2017. The existing retail building on-site will be demolished in the spring of 2018 and construction will
begin shortly thereafter. The facilities will incorporate significant sustainable design features that will make it one of the most
environmentally friendly gas station/car washes in the country.
Pioneer Metal Finishing
In 2017 Pioneer Metal Finishing moved its Minneapolis operation to New Hope to achieve room for expansion. The company invested
$10 million in the 55,372-square foot facility at 4800 Quebec Avenue North and employs 100+ persons. The company offers a range
of metal finishing techniques to its customers.
Extra Space Storage
A Conditional Use Permit was granted to allow for the conversion of an 83,600-square foot warehouse at 2701 Nevada Avenue North
into a self-storage facility. The majority of the building was divided into 630 climate-controlled storage units, which are available in a
variety of sizes and occupy two floors within the building. The facility opened in August of 2017.
CubeSmart Self Storage
A Conditional Use Permit was granted to allow for the conversion of a 71,000 square foot warehouse at 3216 Winnetka Avenue North
into a self-storage facility. A 23,000 square foot addition to the second floor at the southwest corner of the existing building was
approved as part of the project. It is anticipated that construction will begin in the spring of 2018.
Dakota Growers Pasta
A Conditional Use Permit for Planned Unit Development was approved for the Dakota Growers Pasta site at 7300 36th Avenue North
in March of 2017. The approval will allow for various site improvements, including the realignment of a railway spur and the
construction of two new outbuildings. The railway spur realignment will allow Dakota Growers Pasta to bring more rail cars into the
site with each delivery, in order to maximize the amount of flour that can be delivered each time the plant receives rail cars. A timeline
for the project has yet to be established.
Space Needs Study
The City of New Hope has spent the last three years working with Wold Architects conducting a space needs study for the possibility
of constructing a new police station and city hall. The proposal includes constructing a new facility where the current swimming pool
is located, and relocating the pool to a different location on the property. The space needs analysis indicates that the new police station
and city hall would be increased to 57,592-square feet in area, with the space for the police department doubling in size. This
expansion is needed to accommodate staffing needs. The existing building is 26,740-square feet in comparison. In December of 2017
the City Council authorized issuance of $18,435,000 in G.O. capital improvement plan bonds to fund the project and awarded a
contract to Terra General Contractors for $14,792,500 for construction of a new police station and city hall facility. Construction is
anticipated to be complete by July of 2019.
Housing
The City's commitment to maintaining its housing stock is supported through a variety of cooperative projects and programs.
Approximately $8,922,125 was reinvested in the City's housing stock in 2017 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 2017 continued the expenditure of previously allocated CDBG funds.
ii. The city continued to operate their scattered site housing program by acquiring multiple properties for
demolition and new construction. To date, the Economic Development Authority has acquired 9 properties,
resulting in the creation of 12 lots. The lots purchased by the city are located at 6059 W. Broadway, 5431
Virginia Ave., 9121 – 62nd Ave., 4415 Nevada Ave., 6065 Louisiana Ave., 4511 Boone Ave., 5400 Yukon
Ave., and 3751 Louisiana Ave. Three of the lots in question were large enough to split into two buildable
lots. Two lots were sold to developers in 2017 for the construction of new single-family, owner-occupied
homes valued between $297,000 and $380,000.
-11-
b. Rehabilitation Re-sell:
i. The city purchased one distressed property for rehabilitation in 2017. The home is located at 3984 Zealand
Ave. The city chooses rehabilitation when the unit is too valuable to demolish. 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 end product possible. 3984 Zealand Ave has an expected sales price of $295,000.
2. Housing maintenance programs
a. Code compliance inspections – 1,147 inspections completed in 2017
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 528 single-family rental units are registered with the City.
iii. A total of 3,563 multi-family rental units are registered with the City.
iv. A total of 3,563 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 – annual renewed by the City.
PARKS AND RECREATION
The City provides the residents with a vast array of park amenities and recreation opportunities at an affordable cost. The city
maintains 18 parks, four additional school district parks (summer only), an outdoor swimming pool, two sheets of indoor ice at the ice
arena, a par 3 nine-hole golf course, outdoor theatre and skate park. In addition, the city programs the New Hope Community Gyms
during non-school time.
In 2017, several park projects took place including the replacement of the playground at Fred Sims Park, court resurfacing of the
basketball court at Lions Park and the tennis courts at Meadow Lake School Park, regrading of the left field of the east ballfield at
Northwood Park, Buckthorn removal, and new signage at Northwood and Fred Sims parks. The city also replaced part of the
playground equipment at Hidden Valley Park due to arson. During the 2016-2017 winter season parks staff also continued to plow a
section of trail at Hidden Valley Park and expanded to include a loop at Northwood Park. At the outdoor theatre, the popular Movies
in the Park continued and the musical ran for three weekends.
The outdoor swimming pool continues to be a popular summer destination for many residents and is also rented by local swim teams
for practices during non-public swim time. During the space needs study for a new police station/city hall facility, it was determined
the best site for a new building would be at the site of the Milton C. Honsey Pool. The pool is 50+ years old and is in need of
significant renovations. Construction of a new pool is approximately $6.5 million and the estimated cost to repair the pool is $5.58
million. A resident committee was formed to consider concepts for a new pool. The City Council held a pool listening session on
October 2, 2017, for public input. The City Council has assured the community that a new pool will be constructed at the Civic Center
campus in year 2019. No decision has been made yet regarding the final pool design or size (25-yard pool versus 50-meter pool). The
city is seeking state bonding in 2018, and if successful, a 50-meter pool may be constructed instead of a 25-yard pool.
The ice arena offered year-round use of ice time for youth, adult recreational, league hockey and skating lessons. In addition, the three
compressors were rebuilt, locker room doors and skate tile were replaced, the elevator was modernized, and the concession stand
agreement was renewed for one year with the Armstrong Cooper Youth Hockey Association. The golf course continued to offer
leagues, lessons, tournaments, open golf and picnic rentals. During the non-golf season, the clubhouse continued to be rented to
outside groups. In 2017, the gas grills were replaced and a new greens mower and blower were purchased.
PROPERTY TAX PROCESS
Preliminary tax levies have to be sent to the county auditor by September 15th. This levy can be lowered at a later date, but cannot be
increased. The county sends out notices to all property owners informing them of proposed property taxes and the dates of public
hearings by the various taxing districts. The final budget is adopted by the City in December at a City Council meeting after the public
hearing.
-12-
OTHER PERTINENT INFORMATION
Independent Audit - As required by Minnesota statute, City policy requires an annual audit of all city accounts to be made by
independent certified public accountants selected by the City Council. This requirement has been complied with and the opinion of
MMKR is included with this report.
Claims and Litigation - The City had the usual and customary types of miscellaneous claims pending at year-end, mostly of a minor
nature and entirely covered by insurance carried for that purpose.
Long-term financial planning - Management provided a long-term plan to City Council in 2016 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 Certificate of Achievement for Excellence in Financial Reporting - The GFOA awarded a Certificate of Achievement for
Excellence in Financial Reporting to the City for its CAFR for the fiscal year ended December 31, 2016. In order to be awarded a
Certificate of Achievement for Excellence in Financial Reporting, a government must publish an easily readable and efficiently
organized comprehensive annual financial report. This report must satisfy both accounting principles generally accepted in the United
States of America and applicable legal requirements. A Certificate of Achievement for Excellence in Financial Reporting is valid for a
period of one year only.
Preparation of this report could not have been accomplished without the professional, efficient, and dedicated services of the entire
staff of the Department of Finance, AEM Financial Solutions, LLC (the City’s contracted finance director) other City departments,
and the staff of MMKR.
We wish to express our appreciation to all the contributors for their efforts to complete this report.
Respectfully submitted,
Kirk McDonald
City Manager
-13-
-14-
-15-
City o f New Hope, Minnesota
Elected and Appointed Officials
For the Year Ended December 31, 2017
Name Title Term Expires
Kathi Hemken Mayor 12/31/20
John Elder Council Member 12/31/18
Andrew Hoffe Council Member 12/31/20
Eric Lammle Council Member 12/31/20
Jonathan London Council Member 12/31/18
Name Title
Kirk McDonald City Manager
Bernie Weber Director of Public Works
Jeff Sargent Director of Community Development
Susan Rader Director of Parks and Recreation
Tim Fournier Director of Police
Rich Johnson Director of Human Resources and Administrative Services
Valerie Leone City Clerk/Treasurer
ELECTED
APPOINTED
-16-
FINANCIAL SECTION
CITY OF NEW HOPE
NEW HOPE, MINNESOTA
FOR THE YEAR ENDED
DECEMBER 31, 2017
-17-
THIS PAGE IS LEFT
BLANK INTENTIONALLY
-18-
C ERTIFIED
A CCOUNTANTS
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
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
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, 2017, 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 estimat es
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)
-19-
OPINIONS
In our opinion, the financial statements referred to on the previous page present fairly, in all material
respects, the respective financial position of the governmental activities, the business-type activities, each
major fund, and the aggregate remaining fund information of the City as of December 31, 2017, and the
respective changes in financial position and, where applicable, cash flows thereof, and the budgetary
comparisons for the General Fund and major special revenue fund for the year then ended, in accordance
with accounting principles generally accepted in the United States of America.
OTHER MATTERS
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s
discussion and analysis and the required supplementary information (RSI), as listed in the table of
contents, be presented to supplement the basic financial statements. Such information, although not a part
of the basic financial statements, is required by the Governmental Accounting Standards Board, who
considers it to be an essential part of financial reporting for placing the basic financial statements in an
appropriate operational, economic, or historical context. We have applied certain limited procedures to
the RSI in accordance with auditing standards generally accepted in the United States of America, which
consisted of inquiries of management about the methods of preparing the information and comparing the
information for consistency with management’s responses to our inquiries, the basic financial statements,
and other knowledge we obtained during our audit of the basic financial statements. We do not express an
opinion or provide any assurance on the information because the limited procedures do not provide us
with sufficient evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the City’s basic financial statements. The introductory section, combining and individual fund
financial statements and schedules, and statistical section, as listed in the table of contents, are presented
for purposes of additional analysis and are not required parts of the basic financial statements.
The combining and individual fund financial statements and schedules are the responsibility of
management and were derived from and relate directly to the underlying accounting and other records
used to prepare the basic financial statements. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and certain additional procedures,
including comparing and reconciling such information directly to the underlying accounting and other
records used to prepare the basic financial statements or to the basic financial statements themselves, and
other additional procedures in accordance with auditing standards generally accepted in the United States
of America. In our opinion, the information is fairly stated, in all material respects, in relation to the basic
financial statements as a whole.
The introductory and statistical sections have not been subjected to the auditing procedures applied in the
audit of the basic financial statements and, accordingly, we do not express an opinion or provide any
assurance on them.
(continued)
-20-
OTHER REPORTING REQUIRED BY GOVERNMENT AUDITING STANDARDS
In accordance with Government Auditing Standards, we have also issued our report dated May 14, 2018
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, 2018
-21-
THIS PAGE IS LEFT
BLANK INTENTIONALLY
-22-
Management Discussion & Analysis
As management of the City of New Hope, Minnesota, (the City), we offer readers of the City’s financial statements this narrative
overview and analysis of the financial activities of the City for the fiscal year ended December 31, 2017. We encourage readers to
consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal,
which starts on page 8 of this report.
Financial Highlights
• The assets and deferred outflows of resources of the City exceeded its liabilities and deferred inflows of resources at the close
of the most recent fiscal year by $65,899,568 (net position). Of this amount, $12,248,600 (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 $1,656,578. This was primarily a result of business type activities increasing net
position $1,524,493.
• As of the close of the current fiscal year, the City’s governmental funds reported combined ending fund balances of
$38,329,207, an increase of $16,942,893 in comparison with the prior year. Approximately 7.0 percent of this total amount
($2,692,354) 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 $6,871,038 or 51.7 percent of total
General fund 2017 expenditures and transfers out.
• The City’s total bonded debt increased by $19,445,442 (79.0 percent) during the current fiscal year. The key factor of this
increase was the issuance of the 2017A bond.
Overview of the Financial Statements
This discussion and analysis is intended to serve as an introduction to the City’s basic financial statements. The City’s basic financial
statements are comprised of three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to
the financial statements. This report also contains other supplementary information in addition to the basic financial statements.
The financial statements include notes that explain some of the information in the financial statements and provide more detailed data.
The statements are followed by a section of combining and individual fund financial statements and schedules which further explain
and support the information in the financial statements.
-23-
Figure A-1 shows how the various parts of this annual report are arranged and related to one another.
Figure A-1
Annual Report Format
Government-wide Financial Statements. The government-wide financial statements are designed to provide readers with a broad
overview of the City’s finances in a manner similar to a private-sector business.
The statement of net position presents information on all of the City’s assets and deferred outflows of resources and liabilities and
deferred inflows of resources, with the difference between the four reported as net position. Over time increases or decreases in net
position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating.
The statement of activities presents information showing how the City’s net position changed during the most recent fiscal year. All
changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of
related cash flows. Thus, revenues and expenses are reported in the statement for some items that will only result in cash flows in
future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave).
Both of the government-wide financial statements distinguish functions of the City that are principally supported by taxes and
intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of
their costs through user fees and charges (business-type activities). The governmental activities of the City include general
government, public safety, public works, culture and recreation, economic development, and interest on long-term debt. The business-
type activities of the City include sewer utility, water utility, golf course, ice arena, storm water, and street lighting.
The government-wide financial statements start on page 35 of this report.
Fund Financial Statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been
segregated for specific activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and
demonstrate compliance with finance-related legal requirements. All of the funds of the City can be divided into three categories:
governmental funds, proprietary funds, and fiduciary funds.
-24-
Governmental Funds. Governmental funds are used to account for essentially the same functions reported as governmental activities
in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial
statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at
the end of the fiscal year. Such information may be useful in evaluating a government’s near-term financing requirements.
Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the
information presented for governmental funds with similar information presented for governmental activities in the government-wide
financial statements. By doing so, readers may better understand the long-term impact of the government’s near-term financing
decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in
fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.
The City maintains several individual governmental funds. Information is presented separately in the governmental fund balance sheet
and the governmental fund statement of revenues, expenditures, and changes in fund balances for the General, Economic
Development Authority, HRA Construction, City Hall CIP, Street Infrastructure, 2017 Street Improvement Project, and HRA Bonds
funds, all of which are considered to be major funds. Data from the remaining governmental funds are combined into a single,
aggregated presentation. Individual fund data for each of these non-major governmental funds is provided in the form of combining
statements or schedules elsewhere in this report.
The City adopts annual appropriated budgets for its General fund and the Economic Development Authority and Solid Waste
Management special revenue funds. A budgetary comparison statement has been provided for these funds to demonstrate compliance
with the adopted budgets.
The basic governmental fund financial statements start on page 40 of this report.
Proprietary Fund. The City maintains two different types of proprietary funds. Enterprise funds are used to report the same functions
presented as business-type activities in the government-wide financial statements. The City uses enterprise funds to account for its
sewer utility, water utility, golf course, ice arena, storm water, and street lighting operations. Internal service funds are an accounting
device used to accumulate and allocate costs internally among the City’s various functions. The City uses internal service funds to
account for distribution of vehicle and equipment costs, government-wide costs of insurance coverage and employee leave, and
information technology cost allocation. Because all of these services predominately benefit governmental rather than business-type
functions, they have been included within governmental activities in the governmental-wide financial statements.
Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The
proprietary fund financial statements provide separate information for each of the enterprise funds, all of which are considered to be
major funds of the City. All internal service funds are combined into a single, aggregated presentation in the proprietary fund financial
statements. Individual fund data for the internal service funds is provided in the form of combining statements elsewhere in this report.
The basic proprietary fund financial statements start on page 50 of this report.
Fiduciary Funds. These funds are used to account for resources held for the benefit of parties outside the City. Fiduciary funds are not
reflected in the government-wide financial statements because the resources of those funds are not available to support the City’s own
programs. The accounting used for fiduciary funds is much like that used for proprietary funds.
The basic fiduciary fund financial statements start on page 60 of this report.
Notes to the Financial Statements. The notes provide additional information that is essential to a full understanding of the data
provided in the government-wide and fund financial statements. The notes to the financial statements start on page 61 of this report.
Other Information. In addition to the basic financial statements and accompanying notes, this report also presents certain required
supplementary information concerning the City’s progress in funding its obligation to provide pension and other postemployment
benefits to its employees. Required supplementary information can be found starting on page 100 of this report.
The combining statements referred to earlier, in connection with non-major governmental funds and internal service funds are
presented immediately following the required supplementary information. Combining and individual fund financial statements and
schedules start on page 106 of this report.
The statistical section starting on page 135 of this report presents information as a context for understanding what the information in
the financial statements, note disclosures, and required supplementary information says about the City’s overall financial health. The
information in the statistical section is not audited.
-25-
Government-wide Financial Analysis
As noted earlier, net position may serve over time as a useful indicator of a government’s financial position. In the case of the City,
assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $65,899,568 at the close of the
most recent fiscal year.
A portion of the City’s net position (70.4 percent) reflects its investment in capital assets (e.g., land, buildings, vehicles and
equipment); less any related debt used to acquire those assets that is still outstanding. The City uses these capital assets to provide
services to citizens; consequently, these assets are not available for future spending. Although the City’s investment in its capital
assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other
sources, since the capital assets themselves cannot be used to liquidate these liabilities.
City of New Hope’s Summary of Net Position
Increase Increase
2017 2016 (Decrease)2017 2016 (Decrease)
Assets
Current and other assets 51,987,190$ 35,131,178$ 16,856,012$ 2,661,909$ 2,647,641$ 14,268$
Capital assets, net of depreciation 39,652,935 37,215,771 2,437,164 29,335,527 28,041,607 1,293,920
Total Assets 91,640,125 72,346,949 19,293,176 31,997,436 30,689,248 1,308,188
Deferred Outflows of Resources
Deferred pension resources 6,475,709 9,856,323 (3,380,614) 204,673 388,999 (184,326)
Liabilities
Other liabilities 1,156,973 1,535,425 (378,452) 550,221 538,977 11,244
Noncurrent liabilities 41,068,432 30,191,488 10,876,944 11,592,917 12,103,893 (510,976)
Total Liabilities 42,225,405 31,726,913 10,498,492 12,143,138 12,642,870 (499,732)
Deferred Inflows of Resources
Deferred pension resources 7,657,570 1,802,318 5,855,252 218,867 119,766 99,101
Resources received in advance 2,173,395 2,746,662 (573,267) - - -
Total Deferred Inflows of Resources 9,830,965 4,548,980 5,281,985 218,867 119,766 99,101
Net Position
Net investment in capital assets 27,747,845 29,951,754 (2,203,909) 18,663,872 19,286,134 (622,262)
Restricted 6,207,578 4,893,801 1,313,777 1,031,673 868,853 162,820
Unrestricted 12,104,041 11,081,824 1,022,217 144,559 (1,839,376) 1,983,935
Total Net Position 46,059,464$ 45,927,379$ 132,085$ 19,840,104$ 18,315,611$ 1,524,493$
Governmental Activities Business-type Activities
An additional portion of the City’s net position, $7,239,251, represents resources that are subject to external restrictions on how they
may be used. The remaining balance of unrestricted net position, $12,248,600, may be used to meet the City’s ongoing obligations to
citizens and creditors.
At the end of the current fiscal year, the City is able to report a positive balance in all three categories of net position for the
governmental activities but not for the business-type activities, which reported a deficit balance in unrestricted net position.
-26-
The following table indicates the changes in net position for the City’s governmental and business-type activities:
City of New Hope’s Changes in Net Position
Increase Increase
2017 2016 (Decrease)2017 2016 (Decrease)
Revenues
Program Revenues
Charges for services 2,604,983$ 2,243,516$ 361,467$ 9,541,427$ 8,992,026$ 549,401$
Operating grants and contributions 777,368 1,002,681 (225,313) 27,568 159,898 (132,330)
Capital grants and contributions 1,150,840 711,527 439,313 58,237 1,394,822 (1,336,585)
General Revenues
Taxes
Property taxes 11,929,597 10,843,702 1,085,895 - - -
Tax increments 841,098 492,584 348,514 - - -
Franchise taxes 912,357 447,248 465,109 - - -
Grants and contributions not
restricted to specific programs 628,119 633,056 (4,937) - - -
Unrestricted investment earnings 531,240 377,960 153,280 36,811 44,708 (7,897)
Gain on sale of capital assets 50,456 - 50,456 - - -
Total Revenues 19,426,058 16,752,274 2,673,784 9,664,043 10,591,454 (927,411)
Expenses
General government 2,666,781 1,871,736 795,045 - - -
Public safety 8,257,709 9,463,124 (1,205,415) - - -
Public works 2,975,007 3,143,421 (168,414) - - -
Culture and recreation 2,485,417 2,405,905 79,512 - - -
Economic development 2,163,967 732,106 1,431,861 - - -
Interest on long-term debt 725,982 323,326 402,656 - - -
Sewer utility - - - 2,399,248 2,187,006 212,242
Water utility - - - 3,504,722 3,633,022 (128,300)
Golf course - 322,278 341,776 (19,498)
Ice arena - - - 996,056 949,438 46,618
Storm water - - - 834,688 830,108 4,580
Street lighting - - - 101,668 102,894 (1,226)
Total Expenses 19,274,863 17,939,618 1,335,245 8,158,660 8,044,244 114,416
Changes in Net Position Before Transfers 151,195 (1,187,344) 1,338,539 1,505,383 2,547,210 (1,041,827)
Transfers - Internal Activities (19,110) 121,800 (140,910) 19,110 (121,800) 140,910
Change in Net Position 132,085 (1,065,544) 1,197,629 1,524,493 2,425,410 (900,917)
Net Position, January 1 45,927,379 46,992,923 (1,065,544) 18,315,611 15,890,201 2,425,410
Net Position, December 31 46,059,464$ 45,927,379$ 132,085$ 19,840,104$ 18,315,611$ 1,524,493$
Governmental Activities Business-type Activities
The decrease in public safety expenses was a result of a decrease in the PEPFF pension liability and recognition of pension expense.
The increase in economic development expenses was a result of capital outlay related to housing and redevelopment projects. The
increase in property taxes were a result of an increase in the debt service and capital levies, which will be used to fund current and
future bond payments and street projects.
-27-
Governmental Activities. Governmental activities increased the City’s net position by $132,085.
Expenses - The following chart illustrates the City’s expenses and program revenues for its governmental activities:
Expenses and Program Revenues - Governmental Activities
$- $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000 $3,500,000 $4,000,000 $4,500,000 $5,000,000 $5,500,000 $6,000,000 $6,500,000 $7,000,000 $7,500,000 $8,000,000 $8,500,000 $9,000,000
General government Public safety Public works Culture and recreation Economic
development
Interest on long-term
debt
Expenses Program revenues
Revenues - The following chart illustrates the City’s revenue by source for its governmental activities:
Revenues by Source - Governmental Activities
Charges for services
13.5%Operating grants and
contributions
4.0%
Capital grants and
contributions
5.9%
Property taxes
61.4%
Tax increments
4.3%
Franchise taxes
4.7%
Grants and
contributions
unrestricted
3.2%
Unrestricted investment
earnings
2.7%
Gain on sale of capital
assets
0.3%
-28-
Business-type Activities. The net position of business-type activities increased by $1,524,493. This increase was primarily the result
of operating net income in the Sewer and Water Utility funds of $478,263 and $531,264, respectively.
Below are the graphs showing the business-type activities revenue and expense comparisons.
Expense and Program Revenues - Business-type Activities
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
$4,500,000
$5,000,000
Sewer utility Water utility Golf course Ice arena Storm water Street lighting
Expenses Program revenues
Revenue Sources - Business-type Activities
Charges for services
98.7%
Operating grants and
contributions
0.3%
Capital grants and
contributions
0.6%
Unrestricted
investment earnings
0.4%
-29-
Financial Analysis of the Government’s Funds
As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements.
Governmental Funds. The focus of the City’s governmental funds is to provide information on near-term inflows, outflows, and
balances of spendable resources. Such information is useful in assessing the City’s financing requirements. In particular, unassigned
fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year.
As of the end of the current fiscal year, the City’s governmental funds had combined ending fund balances of $38,329,207, an increase
of $16,942,893 in comparison with the prior year. Approximately 7.0 percent of this total amount, $2,692,354, 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 ($17,617), 2) restricted ($24,605,109),
3) committed ($5,837,809), or 4) assigned ($5,176,318). For further classification refer to Note 3F on page 84 of this report.
Activity in the City’s major funds is discussed below:
Increase
2017 2016 (Decrease)
General 6,888,655$ 6,273,678$ 614,977$
Economic Development Authority 5,634,105$ 5,198,723$ 435,382$
HRA Construction 4,932,405$ 4,581,670$ 350,735$
City Hall CIP 18,764,085$ 363,290$ 18,400,795$
Street Infrastructure (1,867,156)$ (2,274,312)$ 407,156$
2017 Street Improvement Project 41,864$ 2,873,440$ (2,831,576)$
The decrease in fund balance is a result of spending prior year bond proceeds used to finance the project.
HRA Bonds (2,303,670)$ (330,252)$ (1,973,418)$
The decrease in fund balance is primarily the result of transfers out to the HRA Construction fund for unreimbursed TIF costs.
Fund Balance December 31,
Major Funds
The General fund is the chief operating fund of the City. As a measure of the General fund's liquidity, it may be useful to compare fund balance to
total fund expenditures and transfers out. Unassigned fund balance represents 51.7 percent of total 2017 expenditures and transfers out.
This fund accounts for the activity within the City's Tax Increment Financing (TIF) Districts, less resources accumulated elsewhere for TIF related
long-term obligations. The increase in fund balance is primarily a result of transfers from other funds for capital projects.
This fund accounts for capital outlay expenditures related to street infrastructure. The increase was a result of revenues exceeding current year project
costs.
The increase in fund balance is primarily due to transfers in from the HRA Construction and HRA Bonds funds for prior year reimbursable costs.
The increase in fund balance is due to the issuance of the 2017A bonds for the City Hall/Police Station project.
Proprietary Funds. The City’s proprietary funds provide the same type of information found in the government-wide financial
statements, but in more detail. At the end of the year, unrestricted net position of the enterprise funds amounted to $976,652. Other
factors concerning the finances of these funds have already been addressed in the discussion of the City’s business-type activities.
-30-
General Fund Budgetary Highlights
The City’s General fund budget was not amended during the year. Revenues and expenditures provided positive budget variances.
Actual revenues were over budget by $340,230 and expenditures were under budget by $424,747. Revenue line items with significant
budget variances include the following:
• Licenses and permits were over budget by $194,540, due to more than expected building activity.
• Intergovernmental revenue was over budget by $83,671, mostly due to more than expected state and local grants.
• Charges for services was over budget by $101,659 due to more than expected building activity.
Expenditure line items with significant budget variances include the following:
• General Government expenditures was under budget by $109,808, mostly due to personal services for the planning and
zoning department coming in under budget by $84,260.
• Public Safety expenditures were under budget by $121,627, mostly due to personal services for the police department coming
in under budget by $248,711 offset by protective inspection other services and charges coming in over budget by $100,201.
• Public Works and Culture and Recreation expenditures were under budget by $75,707 and $81,418, respectively.
In addition the General fund transfers out were $150,00 more than budget. The transfer out amount related to the City Council
approved transfer to the Fire capital fund.
Capital Asset and Debt Administration
Capital Assets. The City’s investment in capital assets for its governmental and business type activities as of December 31, 2017, was
$68,988,462 (net of accumulated depreciation). This investment in capital assets includes land, buildings and system improvements,
vehicles and equipment, park facilities, roads, highways, and bridges. The total increase in the City’s investment in capital assets for
the current fiscal year was 5.7 percent.
Major capital asset events during the current fiscal year consisted of:
• Multiple vehicle and equipment purchases were made for a total of $713,065.
• Several capital projects were completed in 2017 including Xylon Ave Improvements, 2016 Infrastructure Project (49th Ave),
and the 2016 Northwood South Area Infrastructure Project.
City of New Hope’s Capital Assets
(Net of Depreciation)
Increase Increase
2017 2016 (Decrease)2017 2016 (Decrease)
Land 994,268$ 994,268$ -$ 485,042$ 485,042$ -$
Buildings and Structures 2,930,703 3,181,297 (250,594) 6,479,965 6,693,557 (213,592)
Vehicles and Equipment 2,643,270 2,685,012 (41,742) 585,244 695,772 (110,528)
Improvements other than
Buildings 29,333,450 19,811,943 9,521,507 18,079,881 13,666,790 4,413,091
Construction in Progress 3,751,244 10,543,251 (6,792,007) 3,705,395 6,500,446 (2,795,051)
Total 39,652,935$ 37,215,771$ 2,437,164$ 29,335,527$ 28,041,607$ 1,293,920$
Business-type ActivitiesGovernmental Activities
Additional information on the City’s capital assets can be found in Note 3C starting on page 74 of this report.
-31-
Long-term Debt. At the end of the current fiscal year, the City had total bonded debt outstanding of $44,072,611. Of this amount
$23,665,578 will be paid from general property taxes and $7,600,000 from redevelopment district tax increments. The remaining
amount of outstanding bonds at year end were lease revenue bonds and G.O. revenue bonds, for which the City has pledged revenue
streams from the ice arena, sewer utility, water utility, and storm water for all principal and interest payments due on these bonds.
The Debt Service funds have a combined fund balance deficit of $1,065,623, of which $1,238,047 is restricted for the payment of debt
service and a deficit of $2,303,670 is unassigned. The City made efforts to shift the philosophy for financing major street
improvements away from debt financing to the pay-as-you-go philosophy. The City established the Street and Park Infrastructure
capital projects funds in 2001 with dedicated portions of the property tax levy, thereby reducing the need for this type of debt issuance.
City of New Hope’s Outstanding Debt
Increase Increase
2017 2016 (Decrease)2017 2016 (Decrease)
G.O. Bonds and Certificates 25,713,493$ 5,682,679$ 20,030,814$ 3,833,158$ 3,934,522$ (101,364)$
G.O. Tax Increment Bonds 7,687,463 7,968,655 (281,192) 1,584,964 1,586,242 (1,278)
Lease Revenue Bonds - - - 3,505,000 3,505,000 -
G.O. Revenue Bonds and Notes - - - 1,748,533 1,950,071 (201,538)
Total 33,400,956$ 13,651,334$ 19,749,622$ 10,671,655$ 10,975,835$ (304,180)$
Governmental Activities Business-type Activities
The City achieved an “AA” rating from Standard and Poor’s. Additional information on the City’s long-term debt can be found in
Note 3E starting on page 79 of this report.
Economic Factors and Next Year’s Budgets and Rates
Economic Outlook
• User charges have been increased to account for various utility improvements scheduled for 2017 and beyond.
• The overall tax levy had a 7.9 percent increase in 2018.
• Management provided a long-term plan to City Council in 2017 that will highlight the tax effect of major capital and
operating decisions. This will also be an important document when preparing future budgets.
Requests for Information
This financial report is designed to provide a general overview of the City’s finances for all those with an interest in the City’s
finances. Questions concerning any of the information provided in this report or requests for additional financial information should
be addressed to the finance department, City of New Hope, 4401 Xylon Avenue North, New Hope, Minnesota 55428.
-32-
GOVERNMENT-WIDE FINANCIAL STATEMENTS
CITY OF NEW HOPE
NEW HOPE, MINNESOTA
FOR THE YEAR ENDED
DECEMBER 31, 2017
-33-
THIS PAGE IS LEFT
BLANK INTENTIONALLY
-34-
The notes to the financial statements are an integral part of this statement.
City of New Hope, Minnesota
Statement of Net Position
December 31, 2017
Governmental Business-type
Activities Activities Total
Assets
Cash and temporary investments 43,675,628$ 3,015,822$ 46,691,450$
Cash held with fiscal agent - 1,031,673 1,031,673
Receivables
Taxes 218,219 - 218,219
Accrued interest 61,038 - 61,038
Accounts 426,001 1,263,720 1,689,721
Loans 281,091 - 281,091
Special assessments 823,077 213,248 1,036,325
Internal balances 3,127,150 (3,127,150) -
Due from other governments 113,413 44,885 158,298
Inventories 77,042 51,202 128,244
Prepaid items 17,617 - 17,617
Land held for resale 2,121,620 - 2,121,620
Investment in joint ventures 1,045,294 168,509 1,213,803
Capital assets
Land and construction in progress 4,745,512 4,190,437 8,935,949
Depreciable assets (net of accumulated deprecation)34,907,423 25,145,090 60,052,513
Total Assets 91,640,125 31,997,436 123,637,561
Deferred Outflows of Resources
Deferred pension resources 6,475,709 204,673 6,680,382
Liabilities
Accrued salaries payable 243,780 20,414 264,194
Accounts and contracts payable 509,992 268,207 778,199
Due to other governments 221,422 177,297 398,719
Accrued interest payable 150,808 84,303 235,111
Deposits payable 18,971 - 18,971
Unearned revenue 12,000 - 12,000
Noncurrent liabilities
Due within one year 860,291 394,266 1,254,557
Due in more than one year 40,208,141 11,198,651 51,406,792
Total Liabilities 42,225,405 12,143,138 54,368,543
Deferred Inflows of Resources
Deferred pension resources 7,657,570 218,867 7,876,437
Resources received in advance 2,173,395 - 2,173,395
Total Deferred Inflows of Resources 9,830,965 218,867 10,049,832
Net Position
Net investment in capital assets 27,747,845 18,663,872 46,411,717
Restricted for
Economic development 4,932,405 - 4,932,405
Debt service 1,141,964 1,031,673 2,173,637
Public safety police expenses 128,078 - 128,078
Ice arena 5,131 - 5,131
Unrestricted 12,104,041 144,559 12,248,600
Total Net Position 46,059,464$ 19,840,104$ 65,899,568$
-35-
The notes to the financial statements are an integral part of this statement.
City of New Hope, Minnesota
Statement of Activities
For the Year Ended December 31, 2017
Operating Capital
Charges for Grants and Grants and
Expenses Services Contributions Contributions
Governmental Activities
General government 2,666,781$ 340,421$ 112,888$ -$
Public safety 8,257,709 1,302,551 330,985 -
Public works 2,975,007 234,564 191,089 1,123,040
Culture and recreation 2,485,417 686,335 52,018 27,800
Economic development 2,163,967 41,112 90,388 -
Interest on long-term debt 725,982 ---
Total Governmental Activities 19,274,863 2,604,983 777,368 1,150,840
Business-type Activities
Sewer utility 2,399,248 2,899,257 72 -
Water utility 3,504,722 4,289,255 17,292 11,797
Golf course 322,278 283,375 18 -
Ice arena 996,056 849,701 6,741 -
Storm water 834,688 1,082,348 3,445 46,440
Street lighting 101,668 137,491 --
Total Business-type Activities 8,158,660 9,541,427 27,568 58,237
Total 27,433,523$ 12,146,410$ 804,936$ 1,209,077$
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
-36-
The notes to the financial statements are an integral part of this statement.
See accountant's compilation report.
Governmental Business-type
Activities Activities Total
(2,213,472)$ -$ (2,213,472)$
(6,624,173) - (6,624,173)
(1,426,314) - (1,426,314)
(1,719,264) - (1,719,264)
(2,032,467) - (2,032,467)
(725,982) - (725,982)
(14,741,672) - (14,741,672)
- 500,081 500,081
- 813,622 813,622
- (38,885) (38,885)
- (139,614) (139,614)
- 297,545 297,545
- 35,823 35,823
- 1,468,572 1,468,572
(14,741,672) 1,468,572 (13,273,100)
11,929,597 - 11,929,597
841,098 - 841,098
912,357 - 912,357
628,119 - 628,119
531,240 36,811 568,051
50,456 - 50,456
(19,110) 19,110 -
14,873,757 55,921 14,929,678
132,085 1,524,493 1,656,578
45,927,379 18,315,611 64,242,990
46,059,464$ 19,840,104$ 65,899,568$
Net (Expenses) Revenues
and Changes in Net Position
-37-
THIS PAGE IS LEFT
BLANK INTENTIONALLY
-38-
FUND FINANCIAL STATEMENTS
CITY OF NEW HOPE
NEW HOPE, MINNESOTA
FOR THE YEAR ENDED
DECEMBER 31, 2017
-39-
The notes to the financial statements are an integral part of this statement.
See accountant's compilation report.
City of New Hope, Minnesota
Balance Sheet
Governmental Funds
December 31, 2017
9001 9015/9501 9213-9227 9202
Economic
Development HRA City Hall
General Authority Construction CIP
Assets
Cash and temporary investments 6,367,178$ 418,039$ 5,418,960$ 18,808,531$
Receivables
Taxes 217,252 - - -
Accrued interest 54,296 - - -
Accounts 115,605 142,564 31,990 -
Loans - 281,091 - -
Special assessments 55,085 13,666 - -
Due from other governments 103,565 - - -
Prepaid items 17,617 - - -
Due from other funds 382,926 - - -
Advances to other funds - 2,696,250 1,990,834 -
Land held for resale - 2,121,620 - -
Total Assets 7,313,524$ 5,673,230$ 7,441,784$ 18,808,531$
Liabilities
Accrued salaries payable 141,424$ 5,669$ -$ -$
Accounts and contracts payable 119,284 9,794 - 44,446
Due to other governments 26,911 3,603 162,057 -
Deposits payable 12,578 6,393 - -
Advances from other funds - - 2,347,322 -
Unearned revenue - - - -
Total Liabilities 300,197 25,459 2,509,379 44,446
Deferred Inflows of Resources
Unavailable revenue - taxes 70,923 - - -
Unavailable revenue - special assessments 53,749 13,666 - -
Resources received in advance - - - -
Total Deferred Inflows of Resources 124,672 13,666 - -
Fund Balances
Nonspendable 17,617 - - -
Restricted - - 4,932,405 18,259,584
Committed - 5,634,105 - -
Assigned - - - 504,501
Unassigned 6,871,038 - - -
Total Fund Balances 6,888,655 5,634,105 4,932,405 18,764,085
Total Liabilities, Deferred Inflows
of Resources, and Fund Balances 7,313,524$ 5,673,230$ 7,441,784$ 18,808,531$
-40-
The notes to the financial statements are an integral part of this statement.
9203 9251 9117-9121
2017 Street Other Total
Street Improvement Governmental Governmental
Infrastructure Project HRA Bonds Funds Funds
903,622$ 189,297$ 35,125$ 3,639,466$ 35,780,218$
- - 967 - 218,219
- - - 6,742 61,038
104,975 - - 24,563 419,697
- - - - 281,091
675,683 - - 78,643 823,077
- - - 9,848 113,413
- - - - 17,617
- - - - 382,926
- - - 2,587,131 7,274,215
- - - - 2,121,620
1,684,280$ 189,297$ 36,092$ 6,346,393$ 47,493,131$
-$ -$ -$ -$ 147,093$
43,383 147,433 - 19,369 383,709
- - - 6,190 198,761
- - - -18,971
675,000 - 2,339,762 - 5,362,084
- - - 12,000 12,000
718,383 147,433 2,339,762 37,559 6,122,618
- - - - 70,923
659,658 - - 69,915 796,988
2,173,395 - - - 2,173,395
2,833,053 - - 69,915 3,041,306
- - - - 17,617
- 41,864 - 1,371,256 24,605,109
- -- 203,704 5,837,809
- -- 4,671,817 5,176,318
(1,867,156) - (2,303,670) (7,858) 2,692,354
(1,867,156) 41,864 (2,303,670) 6,238,919 38,329,207
1,684,280$ 189,297$ 36,092$ 6,346,393$ 47,493,131$
-41-
THIS PAGE IS LEFT
BLANK INTENTIONALLY
-42-
The notes to the financial statements are an integral part of this statement.
City of New Hope, Minnesota
Reconciliation of the Balance Sheet
to the Statement of Net Position
Governmental Funds
December 31, 2017
Total Fund Balances - Governmental Funds 38,329,207$
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 52,942,200
Less: accumulated depreciation (16,714,595)
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 (31,265,578)
Plus: unamortized bond premium (2,135,378)
Pension liability (6,504,231)
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 9,992,063
Internal balances for internal services used by business-type activities 832,093
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 70,923
Special assessments 796,988
Governmental funds do not report long-term amounts related to pensions
Deferred outflows of pension resources 6,430,329
Deferred inflows of pension resources (7,609,043)
Governmental funds do not report a liability for accrued interest until due and payable.(150,808)
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.1,045,294
Total Net Position - Governmental Activities 46,059,464$
-43-
The notes to the financial statements are an integral part of this statement.
City of New Hope, Minnesota
Statement of Revenues, Expenditures and Changes in Fund Balances
Governmental Funds
For the Year Ended December 31, 2017
9001 9015/9501 9213-9227 9202
Economic
Development HRA City Hall
General Authority Construction CIP
Revenues
Taxes
Property taxes 9,541,667$ 200,000$ -$ -$
Tax increments - - 266,683 -
Franchise taxes 440,000 - - -
Licenses and permits 641,870 - - -
Intergovernmental 1,177,400 58,055 - -
Charges for services 1,457,459 - - -
Fines and forfeitures 208,909 - - -
Special assessments 30,964 3,271 - -
Investment earnings 53,581 243,734 138,560 4,762
Miscellaneous 35,096 32,333 41,112 -
Total Revenues 13,586,946 537,393 446,355 4,762
Expenditures
Current
General government 1,766,679 - - 855,598
Public safety 7,724,693 - - -
Public works 1,435,256 - - -
Culture and recreation 2,066,488 - - -
Economic development - 557,275 1,180,672 -
Capital outlay
General government 1,200 - - -
Public safety 144,061 - - -
Public works - - - -
Culture and recreation 2,352 - - -
Economic development - 8,738 416,201 -
Debt service
Principal - - - -
Interest - - - -
Bond issuance costs - - - 251,648
Total Expenditures 13,140,729 566,013 1,596,873 1,107,246
Excess (Deficiency) of Revenues
Over (Under) Expenditures 446,217 (28,620) (1,150,518) (1,102,484)
Other Financing Sources (Uses)
Transfers in 318,760 497,077 2,078,892 -
Bonds issued - - - 17,645,670
Premium on bonds issued - - - 1,857,609
Transfers out (150,000) (33,075) (577,639) -
Total Other Financing Sources (Uses)168,760 464,002 1,501,253 19,503,279
Net Change in Fund Balances 614,977 435,382 350,735 18,400,795
Fund Balances, January 1 6,273,678 5,198,723 4,581,670 363,290
Fund Balances, December 31 6,888,655$ 5,634,105$ 4,932,405$ 18,764,085$
-44-
The notes to the financial statements are an integral part of this statement.
9203 9251 9117-9121
2017 Street Other Total
Street Improvement Governmental Governmental
Infrastructure Project HRA Bonds Funds Funds
1,292,150$ -$ -$ 927,894$ 11,961,711$
- - 574,415 - 841,098
472,357 - - - 912,357
- - - - 641,870
573,267 - - 35,926 1,844,648
- - - 270,156 1,727,615
- - - - 208,909
45,487 - - 12,736 92,458
9,611 11,734 (4,353) 29,117 486,746
- - - 29,050 137,591
2,392,872 11,734 570,062 1,304,879 18,855,003
- - - - 2,622,277
- - - 257 7,724,950
- 5,547 - 230,790 1,671,593
- -- 204 2,066,692
- -- - 1,737,947
- - - - 1,200
- - - - 144,061
1,245,776 2,745,510 - 330,326 4,321,612
- - - 323,297 325,649
- - - -424,939
- - 275,000 248,497 523,497
- - 270,150 185,389 455,539
- - - - 251,648
1,245,776 2,751,057 545,150 1,318,760 22,271,604
1,147,096 (2,739,323) 24,912 (13,881) (3,416,601)
- - 428,339 982,193 4,305,261
- - - 789,330 18,435,000
- - - - 1,857,609
(739,940) (92,253) (2,426,669) (218,800) (4,238,376)
(739,940) (92,253) (1,998,330) 1,552,723 20,359,494
407,156 (2,831,576) (1,973,418) 1,538,842 16,942,893
(2,274,312) 2,873,440 (330,252) 4,700,077 21,386,314
(1,867,156)$ 41,864$ (2,303,670)$ 6,238,919$ 38,329,207$
-45-
The notes to the financial statements are an integral part of this statement.
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, 2017
Net Change in Fund Balances - Governmental Funds 16,942,893$
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 4,303,594
Depreciation expense (1,652,399)
Sale of capital assets (6,144)
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 (302,496)
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 523,497
Bond issued (18,435,000)
Premium on bonds issued (1,857,609)
Amortization of bond premium 19,490
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.(38,285)
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 (32,114)
Special assessments 457,315
Long-term pension activity is not reported in governmental funds
Pension expense (319,073)
Direct aid contributions 26,360
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 690,755
Less: the change in internal balances for internal services used by business-type activities (188,699)
Change in Net Position - Governmental Activities 132,085$
-46-
The notes to the financial statements are an integral part of this statement.
City of New Hope, Minnesota
General Fund
Statement of Revenues, Expenditures, and Changes in Fund Balances -
Budget and Actual
For the Year Ended December 31, 2017
Budgeted Amounts Actual Variance with
Original Final Amounts Final Budget
Revenues
Taxes
Property taxes 9,547,357$ 9,547,357$ 9,541,667$ (5,690)$
Franchise taxes 440,000 440,000 440,000 -
Licenses and permits 447,330 447,330 641,870 194,540
Intergovernmental 1,093,729 1,093,729 1,177,400 83,671
Charges for services 1,355,800 1,355,800 1,457,459 101,659
Fines and forfeitures 250,000 250,000 208,909 (41,091)
Special assessments - - 30,964 30,964
Investment earnings 50,000 50,000 53,581 3,581
Miscellaneous 62,500 62,500 35,096 (27,404)
Total Revenues 13,246,716 13,246,716 13,586,946 340,230
Expenditures
Current
General government 1,876,487 1,876,487 1,766,679 109,808
Public safety 7,846,320 7,846,320 7,724,693 121,627
Public works 1,510,963 1,510,963 1,435,256 75,707
Culture and recreation 2,147,906 2,147,906 2,066,488 81,418
Capital outlay
General government 20,000 20,000 1,200 18,800
Public safety 160,300 160,300 144,061 16,239
Culture and recreation 3,500 3,500 2,352 1,148
Total Expenditures 13,565,476 13,565,476 13,140,729 424,747
Excess (Deficiency) of Revenues
Over (Under) Expenditures (318,760) (318,760) 446,217 764,977
Other Financing Sources (Uses)
Transfers in 318,760 318,760 318,760 -
Transfers out - - (150,000) (150,000)
Total Other Financing
Sources (Uses)318,760 318,760 168,760 (150,000)
Net Change in Fund Balances - - 614,977 614,977
Fund Balances, January 1 6,273,678 6,273,678 6,273,678 -
Fund Balances, December 31 6,273,678$ 6,273,678$ 6,888,655$ 614,977$
-47-
THIS PAGE IS LEFT
BLANK INTENTIONALLY
-48-
The notes to the financial statements are an integral part of this statement.
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, 2017
Actual Variance with
Original Final Amounts Final Budget
Revenues
Taxes
Property taxes 200,000$ 200,000$ 200,000$ -$
Intergovernmental - - 58,055 58,055
Special assessments 3,000 3,000 3,271 271
Investment income 20,000 20,000 243,734 223,734
Miscellaneous - - 32,333 32,333
Total Revenues 223,000 223,000 537,393 314,393
Expenditures
Economic development
Current
Personnel services 255,700 255,700 314,712 (59,012)
Supplies 150 150 321 (171)
Other services and charges 376,450 376,450 242,242 134,208
Capital outlay 20,000 20,000 8,738 11,262
Total Expenditures 652,300 652,300 566,013 86,287
Deficiency of Revenues
Under Expenditures (429,300) (429,300) (28,620) 400,680
Other Financing Sources (Uses)
Transfers in - - 497,077 497,077
Transfers out (33,075) (33,075) (33,075) -
Total Other
Financing Sources (Uses)(33,075) (33,075) 464,002 497,077
Net Change in Fund Balances (462,375) (462,375) 435,382 897,757
Fund Balances, January 1 5,198,723 5,198,723 5,198,723 -
Fund Balances, December 31 4,736,348$ 4,736,348$ 5,634,105$ 897,757$
Budgeted Amounts
-49-
The notes to the financial statements are an integral part of this statement.
City of New Hope, Minnesota
Statement of Net Position (Continued on the Following Pages)
Proprietary Funds
December 31, 2017
9300 9301 9302 9303
Sewer Utility Water Utility Golf Course Ice Arena
Assets
Current Assets
Cash and temporary investments 1,079,506$ 1,105,250$ 87,452$ -$
Cash held with fiscal agent - - - 1,031,673
Receivables
Accounts 285,812 748,526 - 82,383
Special assessments 57,306 134,874 - -
Due from other governments - 881 - 44,004
Inventories - 45,220 5,982 -
Total Current Assets 1,422,624 2,034,751 93,434 1,158,060
Noncurrent Assets
Investment in joint ventures - 168,509 - -
Capital assets
Land - - 250,625 -
Buildings and structures - - 973,145 9,846,887
Improvements other than buildings 6,076,646 10,029,061 130,373 -
Vehicles and equipment 607,475 1,392,767 168,678 401,730
Construction in progress 314,960 877,835 - 49,948
Less: accumulated depreciation (2,498,031) (3,201,307) (973,629) (3,895,678)
Total Capital Assets
(Net of Accumulated Depreciation)4,501,050 9,098,356 549,192 6,402,887
Total Noncurrent Assets 4,501,050 9,266,865 549,192 6,402,887
Total Assets 5,923,674 11,301,616 642,626 7,560,947
Deferred Outflows of Resources
Deferred pension resources 45,801 56,342 11,850 48,069
Business-type Activities - Enterprise Funds
-50-
The notes to the financial statements are an integral part of this statement.
City of New Hope, Minnesota
Statement of Net Position (Continued)
Proprietary Funds
December 31, 2017
9300 9301 9302 9303
Sewer Utility Water Utility Golf Course Ice Arena
Liabilities
Current Liabilities
Accrued salaries payable 4,289$ 4,653$ 1,022$ 7,719$
Accounts and contracts payable 86,317 56,564 4,006 32,855
Due to other governments 389 158,652 809 17,070
Accrued interest payable 16,602 47,529 - 4,790
Due to other funds - - - 382,926
Advances from other funds - current portion 125,000 107,455 - -
Compensated absences payable, current portion - - - -
Bonds and notes payable, current portion 41,048 248,430 - -
Total Current Liabilities 273,645 623,283 5,837 445,360
Noncurrent Liabilities
Advances from other funds 1,000,000 679,676 - -
Other postemployment benefits payable 15,606 15,571 3,482 12,448
Pension Liability 193,580 238,129 50,086 203,164
Compensated absences payable - - - -
Bonds and notes payable 931,498 4,011,949 - 3,505,000
Total Noncurrent Liabilities 2,140,684 4,945,325 53,568 3,720,612
Total Liabilities 2,414,329 5,568,608 59,405 4,165,972
Deferred Inflows of Resources
Deferred pension resources 48,979 60,248 12,672 51,402
Net Position
Net investment in capital assets 3,528,504 4,837,977 549,192 2,897,887
Restricted for debt service - - - 1,031,673
Unrestricted (22,337) 891,125 33,207 (537,918)
Total Net Position 3,506,167$ 5,729,102$ 582,399$ 3,391,642$
Business-type Activities - Enterprise Funds
-51-
The notes to the financial statements are an integral part of this statement.
City of New Hope, Minnesota
Statement of Net Position (Continued)
Proprietary Funds
December 31, 2017
Governmental
Activities -
9304 9305 Internal
Storm Water Street Lighting Totals Service Funds
Assets
Current Assets
Cash and temporary investments 406,610$ 337,004$ 3,015,822$ 7,895,410$
Cash held with fiscal agent - - 1,031,673 -
Receivables
Accounts 139,461 7,538 1,263,720 6,304
Special assessments 18,380 2,688 213,248 -
Due from other governments - - 44,885 -
Inventories - - 51,202 77,042
Total Current Assets 564,451 347,230 5,620,550 7,978,756
Noncurrent Assets
Investment in joint ventures - - 168,509 -
Capital assets
Land 234,417 - 485,042 85,647
Buildings and structures - - 10,820,032 3,158,296
Improvements other than buildings 7,185,965 - 23,422,045 -
Vehicles and equipment - - 2,570,650 9,140,001
Construction in progress 2,462,652 - 3,705,395 -
Less: accumulated depreciation (1,098,992) - (11,667,637) (8,958,614)
Total Capital Assets
(Net of Accumulated Depreciation)8,784,042 - 29,335,527 3,425,330
Total Noncurrent Assets 8,784,042 - 29,504,036 3,425,330
Total Assets 9,348,493 347,230 35,124,586 11,404,086
Deferred Outflows of Resources
Deferred pension resources 42,611 - 204,673 45,380
Business-type Activities - Enterprise Funds
-52-
The notes to the financial statements are an integral part of this statement.
City of New Hope, Minnesota
Statement of Net Position (Continued)
Proprietary Funds
December 31, 2017
Governmental
Activities -
9304 9305 Internal
Storm Water Street Lighting Totals Service Funds
Liabilities
Current Liabilities
Accrued salaries payable 2,731$ -$ 20,414$ 96,687$
Accounts and contracts payable 79,970 8,495 268,207 126,283
Due to other governments 377 - 177,297 22,661
Accrued interest payable 15,382 - 84,303 -
Due to other funds - - 382,926 -
Advances from other funds - current portion - - 232,455 -
Compensated absences payable, current portion - - - 60,557
Bonds and notes payable, current portion 104,788 - 394,266 -
Total Current Liabilities 203,248 8,495 1,559,868 306,188
Noncurrent Liabilities
Advances from other funds - - 1,679,676 -
Other postemployment benefits payable 9,098 - 56,205 365,877
Pension Liability 180,098 - 865,057 191,801
Compensated absences payable - - - 545,010
Bonds and notes payable 1,828,942 - 10,277,389 -
Total Noncurrent Liabilities 2,018,138 - 12,878,327 1,102,688
Total Liabilities 2,221,386 8,495 14,438,195 1,408,876
Deferred Inflows of Resources
Deferred pension resources 45,566 - 218,867 48,527
Net Position
Net investment in capital assets 6,850,312 - 18,663,872 3,425,330
Restricted for debt service - - 1,031,673 -
Unrestricted 273,840 338,735 976,652 6,566,733
Total Net Position 7,124,152$ 338,735$ 20,672,197$ 9,992,063$
Total Net Position - Enterprise Funds 20,672,197$
Adjustment to reflect the consolidation of internal service fund
activities related to the enterprise funds (832,093)
Net Position - Business-type Activities 19,840,104$
Business-type Activities - Enterprise Funds
-53-
The notes to the financial statements are an integral part of this statement.
City of New Hope, Minnesota
Statement of Revenues, Expenses and
Changes in Net Position
Proprietary Funds
For the Year Ended December 31, 2017
9300 9301 9302 9303
Sewer Utility Water Utility Golf Course Ice Arena
Operating Revenues
Charges for services 2,899,257$ 3,994,122$ 273,247$ 811,661$
Billings to departments - - - -
Other - - - -
Total Operating Revenues 2,899,257 3,994,122 273,247 811,661
Operating Expenses
Cost of goods sold 1,535,722 2,394,371 22,695 -
Personnel services 352,799 289,230 136,240 354,756
Supplies 14,465 72,030 27,915 25,345
Utilities 11,467 629 24,246 229,908
Other services and charges 348,458 409,857 87,883 130,976
Depreciation 158,083 296,741 37,004 210,459
Total Operating Expenses 2,420,994 3,462,858 335,983 951,444
Operating Income (Loss)478,263 531,264 (62,736) (139,783)
Nonoperating Revenues (Expenses)
Investment earnings 7,148 6,776 828 15,734
Miscellaneous revenues 72 312,425 10,146 44,781
Gain on sale of capital assets - - - -
Interest expense (29,611) (108,688) - (58,082)
Total Nonoperating
Revenues (Expenses)(22,391) 210,513 10,974 2,433
Income (Loss) Before Contributions
and Transfers 455,872 741,777 (51,762) (137,350)
Capital Contributions - 11,797 - -
Transfers In - -- 167,000
Transfers Out (51,597) (53,802) (10,000) (10,000)
Change in Net Position 404,275 699,772 (61,762) 19,650
Net Position, January 1 3,101,892 5,029,330 644,161 3,371,992
Net Position, December 31 3,506,167$ 5,729,102$ 582,399$ 3,391,642$
Business-type Activities - Enterprise Funds
-54-
The notes to the financial statements are an integral part of this statement.
City of New Hope, Minnesota
Statement of Revenues, Expenses and
Changes in Net Position (Continued)
Proprietary Funds
For the Year Ended December 31, 2017
Governmental
Activities -
9304 9305 Internal
Storm Water Street Lighting Totals Service Funds
Operating Revenues
Charges for services 1,082,348$ 137,491$ 9,198,126$ -$
Billings to departments - - - 3,488,401
Other - - - 24,544
Total Operating Revenues 1,082,348 137,491 9,198,126 3,512,945
Operating Expenses
Cost of goods sold - - 3,952,788 -
Personnel services 297,698 - 1,430,723 821,577
Supplies 7,058 - 146,813 300,325
Utilities - 100,029 366,279 94,639
Other services and charges 376,082 1,596 1,354,852 817,936
Depreciation 154,125 - 856,412 802,812
Total Operating Expenses 834,963 101,625 8,107,867 2,837,289
Operating Income (Loss)247,385 35,866 1,090,259 675,656
Nonoperating Revenues (Expenses)
Investment earnings 3,905 2,420 36,811 44,494
Miscellaneous revenues 3,445 - 370,869 -
Gain on sale of capital assets - - - 56,600
Interest expense (43,111) - (239,492) -
Total Nonoperating
Revenues (Expenses)(35,761) 2,420 168,188 101,094
Income (Loss) Before Contributions
and Transfers 211,624 38,286 1,258,447 776,750
Capital Contributions 46,440 - 58,237 -
Transfers In - - 167,000 -
Transfers Out (22,491) - (147,890) (85,995)
Change in Net Position 235,573 38,286 1,335,794 690,755
Net Position, January 1 6,888,579 300,449 19,336,403 9,301,308
Net Position, December 31 7,124,152$ 338,735$ 20,672,197$ 9,992,063$
Change in Net Position - Enterprise Funds 1,335,794$
Adjustment to reflect the consolidation of internal service fund activities related to
the enterprise funds.188,699
Change in Net Position - Business-type Activities 1,524,493$
Business-type Activities - Enterprise Funds
-55-
The notes to the financial statements are an integral part of this statement.
City of New Hope, Minnesota
Statement of Cash Flows (Continued on the Following Pages)
Proprietary Funds
For the Year Ended December 31, 2017
9300 9301 9302 9303
Sewer Utility Water Utility Golf Course Ice Arena
Cash Flows from Operating Activities
Receipts from customers and users 2,876,335$ 3,948,301$ 273,247$ 800,556$
Receipts from interfund services provided - - - -
Other operating receipts - 312,340 10,128 44,707
Payments to suppliers (1,970,376) (2,905,602) (159,854) (398,271)
Payments to employees (340,092) (294,019) (134,930) (340,651)
Net Cash Provided (Used)
by Operating Activities 565,867 1,061,020 (11,409) 106,341
Cash Flows From Noncapital
Financing Activities
Receipts on interfund balances - - - 382,926
Payments on interfund balances (1,250,000) - - (370,074)
Transfers in - - - 167,000
Transfers out (51,597) (53,802) (10,000) (10,000)
Net Cash Provided (Used) by
Noncapital Financing Activities (1,301,597) (53,802) (10,000) 169,852
Cash Flows from Capital
and Related Financing Activities
Acquisition of capital assets (254,894) (874,049) - (71,025)
Proceeds from sale of assets - - - -
Receipts of advance from other funds 1,125,000 - - -
Payment of advance from other funds - (105,856) - -
Capital contributions - 11,797 - -
Principal paid on long-term debt (10,458) (209,744) - -
Interest paid on long-term debt (22,298) (104,136) - (58,082)
Net Cash Provided (Used) by
Capital and Related
Financing Activities 837,350 (1,281,988) - (129,107)
Cash Flows from Investing Activities
Investment earnings 7,148 6,776 828 15,734
Net Increase (Decrease)
in Cash and Cash Equivalents 108,768 (267,994) (20,581) 162,820
Cash and Cash Equivalents, January 1 970,738 1,373,244 108,033 868,853
Cash and Cash Equivalents, December 31 1,079,506$ 1,105,250$ 87,452$ 1,031,673$
Reconciliation to the Proprietary Funds
Statement of Net Position
Cash and temporary investments 1,079,506$ 1,105,250$ 87,452$ -$
Cash held with fiscal agent - - - 1,031,673
Total Cash and Cash Equivalents 1,079,506$ 1,105,250$ 87,452$ 1,031,673$
Business-type Activities - Enterprise Funds
-56-
The notes to the financial statements are an integral part of this statement.
City of New Hope, Minnesota
Statement of Cash Flows (Continued)
Proprietary Funds
For the Year Ended December 31, 2017
9300 9301 9302 9303
Sewer Utility Water Utility Golf Course Ice Arena
Reconciliation of Operating Income (Loss)
to Net Cash Provided (Used)
by Operating Activities
Operating income (loss)478,263$ 531,264$ (62,736)$ (139,783)$
Adjustments to reconcile operating income (loss)
to net cash provided (used) by operating activities
Depreciation 158,083 296,741 37,004 210,459
Other income related to operations 72 312,425 10,146 44,781
(Increase) decrease in assets
Receivables
Accounts (22,985) (37,518) - (11,401)
Special assessments 63 (8,316) - -
Due from other governments - 13 - 296
Inventories - (1,574) 258 -
Decrease in deferred outflows of resources
Deferred pension resources 43,045 59,551 12,233 45,769
Increase (decrease) in liabilities
Accounts and contracts payable (60,253) (27,964) 2,574 (15,188)
Accrued salaries payable (1,111) (7,389) 208 1,360
Due to other governments (11) 823 53 3,146
Compensated absences payable - -- -
Other postemployment benefits payable 1,975 1,783 319 1,556
Pension liability (52,899) (83,386) (16,725) (57,165)
Increase (decrease) in deferred inflows of resources
Deferred pension resources 21,625 24,567 5,257 22,511
Net Cash Provided (Used)
by Operating Activities 565,867$ 1,061,020$ (11,409)$ 106,341$
Schedule of Noncash Capital and
Related Financing Activities
Amortization of bond discount -$ -$ -$ -$
Amortization of bond premium 1,555$ 6,431$ -$ -$
Capital assets purchased on account 80,443$ 45,510$ -$ -$
Loss on disposal of capital assets -$ -$ -$ -$
Business-type Activities - Enterprise Funds
-57-
The notes to the financial statements are an integral part of this statement.
City of New Hope, Minnesota
Statement of Cash Flows (Continued)
Proprietary Funds
For the Year Ended December 31, 2017
Governmental
Activities -
9304 9305 Internal
Storm Water Street Lighting Totals Service Funds
Cash Flows from Operating Activities
Receipts from customers and users 1,040,422$ 137,794$ 9,076,655$ -$
Receipts from interfund services provided - - - 3,560,175
Other operating receipts 3,380 - 370,555 24,475
Payments to suppliers (380,475) (102,735) (5,917,313) (1,185,948)
Payments to employees (249,603) - (1,359,295) (749,219)
Net Cash Provided (Used)
by Operating Activities 413,724 35,059 2,170,602 1,649,483
Cash Flows from Noncapital
Financing Activities
Receipts on interfund balances - - 382,926 -
Payments on interfund balances - - (1,620,074) -
Transfers in - - 167,000 -
Transfers out (22,491) - (147,890) (85,995)
Net Cash Provided (Used) by
Noncapital Financing Activities (22,491) - (1,218,038) (85,995)
Cash Flows from Capital
and Related Financing Activities
Acquisition of capital assets (860,365) - (2,060,333) (601,826)
Proceeds from sale of assets - - - 63,501
Receipts of advance from other funds - - 1,125,000 -
Payment of advance from other funds - - (105,856) -
Capital contributions 392,336 - 404,133 -
Principal paid on long-term debt (73,301) - (293,503) -
Interest paid on long-term debt (43,626) - (228,142) -
Net Cash Provided (Used) by
Capital and Related
Financing Activities (584,956) - (1,158,701) (538,325)
Cash Flows from Investing Activities
Investment earnings 3,905 2,420 36,811 44,494
Net Increase (Decrease)
in Cash and Cash Equivalents (189,818) 37,479 (169,326) 1,069,657
Cash and Cash Equivalents, January 1 596,428 299,525 4,216,821 6,825,753
Cash and Cash Equivalents, December 31 406,610$ 337,004$ 4,047,495$ 7,895,410$
Reconciliation to the Proprietary Funds
Statement of Net Position
Cash and temporary investments 406,610$ 337,004$ 3,015,822$ 7,895,410$
Cash held with fiscal agent - - 1,031,673 -
Total Cash and Cash Equivalents 406,610$ 337,004$ 4,047,495$ 7,895,410$
Business-type Activities - Enterprise Funds
-58-
The notes to the financial statements are an integral part of this statement.
City of New Hope, Minnesota
Statement of Cash Flows (Continued)
Proprietary Funds
For the Year Ended December 31, 2017
Governmental
Activities -
9304 9305 Internal
Storm Water Street Lighting Totals Service Funds
Reconciliation of Operating Income (Loss)
to Net Cash Provided (Used)
by Operating Activities
Operating income (loss)247,385$ 35,866$ 1,090,259$ 675,656$
Adjustments to reconcile operating income (loss)
to net cash provided (used) by operating activities
Depreciation 154,125 - 856,412 802,812
Other income related to operations 3,445 - 370,869 -
(Increase) decrease in assets
Receivables
Accounts (44,231) 349 (115,786) 71,774
Special assessments 2,305 (46) (5,994) -
Due from other governments - - 309 -
Inventories - - (1,316) 7,734
Decrease in deferred outflows of resources
Deferred pension resources 23,728 - 184,326 56,427
Increase (decrease) in liabilities
Accounts and contracts payable 2,676 (1,110) (99,265) (14,215)
Accrued salaries payable 1,415 - (5,517) 35,788
Due to other governments (11) - 4,000 (541)
Compensated absences payable - -- 38,922
Other postemployment benefits payable 1,690 - 7,323 48,581
Pension liability (3,944) - (214,119) (90,637)
Increase (decrease) in deferred inflows of resources
Deferred pension resources 25,141 - 99,101 17,182
Net Cash Provided (Used)
by Operating Activities 413,724$ 35,059$ 2,170,602$ 1,649,483$
Schedule of Noncash Capital and
Related Financing Activities
Amortization of bond discount 740$ -$ 740$ -$
Amortization of bond premium 3,431$ -$ 11,417$ -$
Capital assets purchased on account 34,805$ -$ 160,758$ -$
Loss on disposal of capital assets -$ -$ -$ 6,901$
Business-type Activities - Enterprise Funds
-59-
The notes to the financial statements are an integral part of this statement.
City of New Hope, Minnesota
Statement of Fiduciary Net Position
Agency Funds
December 31, 2017
Agency
Assets
8,249$
Liabilities
Accounts payable 469$
Deposits payable 7,780
Total Liabilities 8,249$
Cash and temporary investments
-60-
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2017
Note 1: Summary of Significant Accounting Policies
A. Financial Reporting Entity
The City of New Hope (the City) operates under “Optional Plan B” as defined in Minnesota statutes. Optional Plan B is known as the
City Council-Manager Plan. Under this plan, as specified in the statutes, “The City Council shall exercise the legislative power of the
City and determine all matters of policy. The City manager shall be the head of the administrative branch of the City government and
shall be responsible to the City Council for proper administration of all affairs relating to the City.” The City Council is composed of
five members including the mayor. The City Council appoints the City manager. The City has considered all potential units for which
it is financially accountable, and other organizations for which the nature and significance of their relationship with the City are such
that exclusion would cause the City’s financial statements to be misleading or incomplete. The Governmental Accounting Standards
Board (GASB) has set forth criteria to be considered in determining financial accountability. These criteria include appointing a
voting majority of an organization’s governing body, and (1) the ability of the primary government to impose its will on that
organization or (2) the potential for the organization to provide specific benefits to, or impose specific financial burdens on the
primary government. Blended component units are, in substance, part of the government’s operations and so are reported as if they
were part of the primary government. The City has identified the following component units using the above criteria:
Blended Component Unit
The New Hope Economic Development Authority (EDA) and Housing and Redevelopment Authority (HRA) are fiscally dependent
upon the City, and were developed to control and operate the housing and redevelopment and tax increment districts within the City.
Since the City Council makes up the New Hope EDA and HRA boards, and funding for New Hope EDA and HRA activities are
provided by the City, both entities are considered to be blended component units of the City, and are reported as special revenue
funds.
The City participates in various joint ventures and jointly controlled organizations which are described later in these notes.
B. Government-wide and Fund Financial Statements
The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all
of the non-fiduciary activities of the primary government and its component units. Governmental activities, which normally are
supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant
extent on fees and charges for support.
The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program
revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Amounts reported as program
revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, service, or privileges
provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital
requirements of a particular function or segment. Taxes and other items not properly included among programs revenue are reported
instead as general revenues.
Separate fund financial statements are provided for governmental, proprietary, and fiduciary funds, even though the latter are excluded
from the government-wide financial statements. Major individual governmental and enterprise funds are reported as separate columns
in the fund financial statements. Aggregated information for the remaining nonmajor funds are reported in single columns in the
respective fund financial statements.
Aggregated information for the internal service funds is presented in a single column in the proprietary fund financial statements.
Because the principal users of the internal services are the City’s governmental activities, the financial statements of the internal
service funds are consolidated into the governmental activities column when presented in the government-wide financial statements.
The cost of these services is reported in the appropriate functional activity.
-61-
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2017
Note 1: Summary of Significant Accounting Policies (Continued)
C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation
The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of
accounting, as are the proprietary funds. The fiduciary fund financial statements have no measurement focus but utilize the accrual
basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the
timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items
are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.
Governmental fund financial statements are reported using the current financial resources measurement focus and the modified
accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to
be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For
this purpose, the City considers revenues to be available if they are collected within 60 days of the end of the current fiscal period.
Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as
well as expenditures related to compensated absences, pensions, other postemployment benefits, and claims and judgments, are
recorded only when payment is due.
Property taxes, tax increments, franchise taxes, licenses, and interest associated with the current fiscal period are all considered to be
susceptible to accrual and so have been recognized as revenues of the current fiscal period. Only the portion of special assessments
receivable due within the current fiscal period is considered to be susceptible to accrual as revenue of the current period. All other
revenue items are considered to be measurable and available only when cash is received by the City.
Revenue resulting from exchange transactions, in which each party gives and receives essentially equal value, is recorded on the
accrual basis when the exchange takes place. On a modified accrual basis, revenue is recorded in the year in which the resources are
measurable and become available.
Non-exchange transactions, in which the City receives value without directly giving equal value in return, include property taxes,
grants, entitlement and donations. On an accrual basis, revenue from property taxes is recognized in the year for which the tax is
levied. Revenue from grants, entitlements and donations is recognized in the year in which all eligibility requirements have been
satisfied. Eligibility requirements include timing requirements, which specify the year when the resources are required to be used or
the year when use is first permitted, matching requirements, in which the City must provide local resources to be used for a specified
purpose, and expenditure requirements, in which the resources are provided to the City on a reimbursement basis. On a modified
accrual basis, revenue from non-exchange transactions must also be available before it can be recognized.
Unearned revenue arises when assets are recognized before revenue recognition criteria have been satisfied. Grants and entitlements
received before eligibility requirements are met are also recorded as unearned revenue.
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual
results could differ from those estimates.
The City reports the following major governmental funds:
The General fund is the City’s primary operating fund. It accounts for all financial resources of the general government, except
those required to be accounted for in another fund.
The Economic Development Authority Special Revenue fund accounts for the activities of the authority which controls and
operates the housing and redevelopment projects and tax increment districts in the City. Activities in the fund are funded through
property tax levies and Federal and state aids and grants.
The HRA Construction Capital Projects fund is used to account for redevelopment costs for tax increment districts, which are
primarily funded by tax increment bonds and tax increment revenues.
The City Hall CIP fund is used to account for the accumulation of reserves for City Hall projects.
-62-
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2017
Note 1: Summary of Significant Accounting Policies (Continued)
The Street Infrastructure Capital Projects fund is used to account for various street projects within the City.
The 2017 Street Improvement Project fund is used to account for 2017 street improvement capital projects.
The HRA Bonds Debt Service fund accounts for revenue from tax increments and interest income to pay for the principal and
interest on the City’s tax increment bond issues.
The City reports the following major enterprise funds:
The Sewer Utility fund accounts for the provisions of sewer services to residents of the City. All activities necessary to provide
such services are accounted for in this fund, including administration, operations, maintenance, billing and collection.
The Water Utility fund is used to account for the provisions of water services to residents of the City. All activities necessary to
provide such services are accounted for in this fund, including administration, operations, maintenance, billing and collection.
The Golf Course fund is used to account for the operations of the City’s public golf course.
The Ice Arena fund is used to account for the operation of the City’s indoor ice arena.
The Storm Water fund accounts for the general operation and maintenance of the City’s storm water system.
The Street Lighting fund is used to account for the operation of the City’s streetlight system.
Additionally, the City reports the following fund types:
Internal service funds are used to account for the City’s vehicle and equipment rental operation, employee leave benefits,
insurance, and information technology operations. Internal service funds operate in a manner similar to enterprise funds; however,
they provide services primarily to other departments within the City.
Fiduciary funds account for assets held by the City in a trustee capacity or as an agent on behalf of others.
The agency funds are custodial in nature and do not present results of operations or have measurement focuses. The Pass-Through
Grant fund was established to account for pass-through grant funds held by the City as the agent for others. The Flexible
Spending fund was established to account for flexible spending accounts held by the City as the agent for others.
As a general rule the effect of interfund activity has been eliminated from government-wide financial statements. Exceptions to this
general rule are charges between the City’s enterprise fund functions and various other functions of the government. Elimination of
these charges would distort the direct costs and program revenues reported for the various functions concerned.
Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally
result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing
operations. The principal operating revenues of the enterprise funds and of the City’s internal service funds are charges to customers
for sales and services. Operating expenses for enterprise funds and internal service funds include the cost of sales and services,
administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-
operating revenues and expenses.
-63-
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2017
Note 1: Summary of Significant Accounting Policies (Continued)
D. Assets, Liabilities, Deferred Inflows of Resources, and Net Position/Fund Balance
Deposits and Investments
The City’s cash and cash equivalents are considered to be cash on hand, demand deposits, and short-term investments with original
maturities of three months or less from date of acquisition. The proprietary funds’ portion of the government-wide cash and temporary
investments pool is considered to be cash and cash equivalent for purposes of the Statements of Cash Flows.
Cash balances from all funds are pooled and invested, to the extent available, in certificates of deposit, U.S. government obligations,
and other authorized investments. Investments are stated at their estimated fair value. Earnings from such investments are allocated on
the basis of applicable participation by each of the funds. For cash held with fiscal agent, interest earned on those investments is
allocated directly to that fund.
The City may also invest idle funds as authorized by Minnesota statutes, as follows:
1. Direct obligations or obligations guaranteed by the United States or its agencies.
2. Shares of investment companies registered under the Federal Investment Company Act of 1940 and received the highest
credit rating, rated in one of the two highest rating categories by a statistical rating agency, and have a final maturity of
thirteen months or less.
3. General obligations of a state or local government with taxing powers rated “A” or better; revenue obligations rated “AA” or
better.
4. General obligations of the Minnesota Housing Finance Agency rated “A” or better.
5. Obligation of a school district with an original maturity not exceeding 13 months and (i) rated in the highest category by a
national bond rating service or (ii) enrolled in the credit enhancement program pursuant to statute section 126C.55.
6. Bankers’ acceptances of United States banks eligible for purchase by the Federal Reserve System.
7. Commercial paper issued by United States banks corporations or their Canadian subsidiaries, of highest quality category by
at least two nationally recognized rating agencies, and maturing in 270 days or less.
8. Repurchase or reverse repurchase agreements and securities lending agreements with financial institutions qualified as a
“depository” by the government entity, with banks that are members of the Federal Reserve System with capitalization
exceeding $10,000,000, a primary reporting dealer in U.S. government securities to the Federal Reserve Bank of New York,
or certain Minnesota securities broker-dealers.
9. Guaranteed Investment Contracts (GIC’s) issued or guaranteed by a United States commercial bank, a domestic branch of a
foreign bank, a United States insurance company, or its Canadian subsidiary, whose similar debt obligations were rated in
one of the top two rating categories by a nationally recognized rating agency.
-64-
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2017
Note 1: Summary of Significant Accounting Policies (Continued)
Broker money market funds operate in accordance with appropriate state laws and regulations. The reported value of the pool is the
same as the fair value of the shares.
The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting
principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices
in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant
unobservable inputs. See Note 3A on page 72 for the City’s recurring fair value measurements.
The City has the following recurring fair value measurements as of December 31, 2017:
• U.S. Agency securities of $251,813 are valued using quoted market prices (Level 2 inputs).
• U.S. Government Treasury Securities of $7,854,830 are valued using a matrix pricing model (Level 2 inputs).
• State and local government securities of $1,616,516 are valued using a matrix pricing model (Level 2 inputs).
• Negotiable certificates of deposit of $10,892,222 are valued using a matrix pricing model (Level 2 inputs)
Property Taxes
The City Council annually adopts a tax levy in December and certifies it to the County for collection in the following year. The
County is responsible for collecting all property taxes for the City. These taxes attach an enforceable lien on taxable property within
the City on January 1 and are payable by the property owners in two installments. The taxes are collected by the County Treasurer and
tax settlements are made to the City during January, July, and December each year.
Delinquent taxes receivable include the past six years’ uncollected taxes. Delinquent taxes have been offset by a deferred inflow of
resources for taxes not received within 60 days after year end in the fund financial statements.
Accounts Receivable
Accounts receivable include amounts billed for services provided before year end. Unbilled utility enterprise fund receivables are also
included for services provided in 2017. The City annually certifies delinquent water, sewer, storm water, and street lighting accounts
to the County for collection in the following year. Therefore, there has been no allowance for doubtful accounts established for the
delinquent water and sewer accounts.
Special Assessments
Special assessments are levied against benefited properties for the cost or a portion of the cost of special assessment improvement
projects in accordance with Minnesota statutes. These assessments are collectible by the City over a term of years usually consistent
with the term of the related bond issue. Collection of annual installments (including interest) is handled by the County Auditor in the
same manner as property taxes. Property owners are allowed to (and often do) prepay future installments without interest or
prepayment penalties.
In governmental fund financial statements, revenue from special assessments is recognized by the City when it becomes measurable
and available to finance expenditures of the current fiscal period. In practice, current and delinquent special assessments received by
the City are recognized as revenue for the current year. Special assessments are collected by the County and remitted by December 31
(remitted to the City the following January) and are also recognized as revenue for the current year. All special assessments receivable
in governmental funds are completely offset by a deferred inflow of resources for assessments not received within 60 days after year
end. In government-wide financial statements, special assessments are recognized as revenues in the year for which they are certified.
At December 31, 2017, the total delinquent special assessment receivable balance was $56,746.
-65-
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2017
Note 1: Summary of Significant Accounting Policies (Continued)
Once a special assessment roll is adopted, the amount attributed to each parcel is a lien upon that property until full payment is made
or the amount is determined to be excessive by the City Council or court action. If special assessments are allowed to go delinquent,
the property is subject to tax forfeit sale and the first proceeds of that sale (after costs, penalties and expenses of sale) are remitted to
the City in payment of delinquent special assessments. Generally, the City will collect the full amount of its special assessments not
adjusted by City Council or court action. Pursuant to Minnesota statutes, a property shall be subject to a tax forfeit sale after three
years unless it is homesteaded, agricultural or seasonal recreational land in which event the property is subject to such sale after five
years.
Interfund Receivables and Payables
Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred
“advances to/from other funds”. All other outstanding balances between funds are reported as “due to/from other funds.” Any residual
balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial
statements as “internal balances.”
Inventory and Prepaid Items
Inventory is valued at cost using the first-in/first-out (FIFO) method. Inventory consists mainly of expendable supplies held for
consumption.
Certain cash payment to vendors reflects costs applicable to future accounting periods are recorded as prepaid items in both
government-wide and fund financial statements. Inventory and prepaid items of the governmental funds are recorded as expenditures
when consumed rather than when purchased.
Land Held for Resale
Land held for resale is valued at the lower of the cost or acquisition of the property. The fair value of the property was determined
based on quoted market prices.
Investment in Joint Ventures
Included in the assets of the government-wide statements and proprietary funds are amounts representing the City’s investment in two
joint ventures described later in these notes.
Capital Assets
Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, bridges, sidewalks, an similar items),
are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital
assets are defined by the City as assets with an initial, individual cost of more than $5,000 (amount not rounded) and an estimated
useful life of two years or more. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed.
Donated capital assets would be recorded at acquisition value at the date of donation.
The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not
capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the
construction phase of capital assets of business-type activities is included as part of the capitalized value of the assets constructed.
Land and Construction in Process are non-depreciable assets. Property, plant, and equipment of the City are depreciated using the
straight line method over the following estimated useful lives:
Assets Years
Buildings and Structures 15 - 50
Improvements other than Buildings 15 - 50
Vehicles and Equipment 3 - 20
-66-
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2017
Note 1: Summary of Significant Accounting Policies (Continued)
Deferred Outflows of Resources
In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources.
This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a
future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The City has only one item
that qualifies for reporting in this category. Accordingly, the item, deferred pension resources, is reported only in the statements of net
position. This item results from actuarial calculations and current year pension contributions made subsequent to the measurement
date.
Pensions
For purposes of measuring the net pension liability, deferred outflows/inflows of resources, and pension expense, information about
the fiduciary net position of the Public Employees Retirement Association (PERA) and additions to/deductions from PERA’s
fiduciary net position have been determined on the same basis as they are reported by PERA except that PERA’s fiscal year end is
June 30. For this purpose, plan contributions are recognized as of employer payroll paid dates and benefit payments and refunds are
recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. The General fund is
typically used to liquidate the governmental net pension liability.
Deferred Inflows of Resources
In addition to liabilities, the statement of net position and fund financial statements will sometimes report a separate
section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources,represents an
acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that
time. The City has three types of items, unavailable revenue and resources received in advance, and deferred pension resources.
• Unavailable revenue arises only under a modified accrual basis of accounting that qualifies as needing to be
reported in this category. Accordingly, the item, unavailable revenue, is reported only in the governmental funds balance
sheet. The governmental funds report unavailable revenues from two sources: property taxes and special assessments. These
amounts are deferred and recognized as an inflow of resources in the period that the amounts become available.
• Resources received in advance is reported in both the governmental fund financial statements and within the government-
wide financial statements. This item is reported for amounts that have been received before time requirements are met, but
after all other eligibility requirements have been met.
• Deferred pension resources is reported only in the statements of net position and results from actuarial calculations.
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.
-67-
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2017
Note 1: Summary of Significant Accounting Policies (Continued)
Other Postemployment Benefits (OPEB)
Under Minnesota statute 471.61, subdivision 2b, public employers must allow retirees and their dependents to continue coverage
indefinitely in an employer-sponsored health care plan, under the following conditions: 1) Retirees must be receiving (or eligible to
receive) an annuity from a Minnesota public pension plan, 2) Coverage must continue in a group plan until age 65, and retirees must
pay no more than the group premium, and 3) Retirees are able to add dependent coverage during open enrollment period or qualifying
life event prior to retirement. All premiums are funded on a pay-as-you-go basis. The liability was determined, in accordance with
GASB Statement No. 45, at December 31, 2017. The Insurance Reserve Internal service fund is typically used to liquidate
governmental other postemployment benefits payable.
Long-term Obligations
In the government-wide financial statements, and proprietary fund types in the fund financial statements, long-term debt and other
long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund
type statement of net position. The recognition of bond premiums and discounts are delayed and amortized over the life of the bonds
using the straight line method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are
reported as an expense in the period incurred.
In the fund financial statements, governmental fund types recognized bond premium and discounts, as well as bond issuance costs,
during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances
are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether
or not withheld from the actual debt proceeds received, are reported as debt service expenditures.
Fund Balance
In the fund financial statements, fund balance is divided into five classifications based primarily on the extent to which the City is
bound to observe constraints imposed upon the use of resources reported in the governmental funds. These classifications are defined
as follows:
Nonspendable - Amounts that cannot be spent because they are not in spendable form, such as prepaid items.
Restricted - Amounts related to externally imposed constraints established by creditors, grantors or contributors; or constraints
imposed by state statutory provisions.
Committed - Amounts constrained for specific purposes that are internally imposed by formal action (resolution) of the City
Council, which is the City’s highest level of decision-making authority. Committed amounts cannot be used for any other purpose
unless the City Council modifies or rescinds the commitment by resolution.
Assigned - Amounts constrained for specific purposes that are internally imposed. In governmental funds other than the General
fund, assigned fund balance represents all remaining amounts that are not classified as nonspendable and are neither restricted nor
committed. In the General fund, assigned amounts represent intended uses established by the City Council itself or by an official
to which the governing body delegates the authority. The City Council has adopted a fund balance policy which delegates the
authority to assign amounts for specific purposes to the Finance Manager or City Manager.
Unassigned - The residual classification for the General fund and also negative residual amounts in other funds.
The City considers restricted amounts to be spent first when both restricted and unrestricted fund balance is available. Additionally,
the City would first use committed, then assigned, and lastly unassigned amounts of unrestricted fund balance when expenditures are
made.
The City has formally adopted a fund balance policy for the General fund. The City will maintain an unassigned fund balance in the
General fund of an amount not less than 42% of the next year’s budgeted expenditures of the General fund.
-68-
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2017
Note 1: Summary of Significant Accounting Policies (Continued)
Net Position
Net position represents the difference between assets and deferred outflows of resources and liabilities and deferred inflows of
resources. Net position is displayed in three components:
a. Net investment in capital assets - Consists of capital assets, net of accumulated depreciation reduced by any outstanding debt
attributable to acquire capital assets.
b. Restricted net position - Consists of net position balances restricted when there are limitations imposed on their use through
external restrictions imposed by creditors, grantors, laws or regulations of other governments.
c. Unrestricted net position - All other net position that do not meet the definition of “restricted” or “net investment in capital
assets”.
When both restricted and unrestricted resources are available for use, it is the City’s policy to use restricted resources first, then
unrestricted resources as they are needed.
Note 2: Stewardship, Compliance and Accountability
A. Budgetary Information
Budgets are legally adopted on a basis consistent with accounting principles generally accepted in the United States of America.
Annual appropriated budgets are legally adopted for the General and certain special revenue funds.
Budgeted amounts are reported as originally adopted, or as amended by the City Council. The budget was not amended during the
current year. Budgeted expenditure appropriations lapse the year end.
The City follows these procedures in establishing the budgetary data reflected in the financial statements:
1. The City Manager submits to the City Council a proposed operating budget for the fiscal year commencing the following
January 1. The operating budget includes proposed expenditures and the means of financing them.
2. Public hearings are conducted to obtain taxpayer comments.
3. When adopted through passage of a resolution, the budget becomes the formal appropriation budget.
4. The legal level of budget control is at the fund level. Total fund expenditures may not legally exceed budgeted fund
appropriations. Budget appropriations lapse at year-end.
5. The City Manager may make transfers of appropriations within funds, or departments within funds, but cannot adjust the total
budget of a fund.
6. Adjustments to budgets at the fund level must be authorized by the City Council.
7. Monitoring of budgets is maintained at the expenditure category level (personnel services, supplies, other services and
charges, or capital outlay) within each activity and fund.
-69-
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2017
Note 2: Stewardship, Compliance and Accountability (Continued)
8. Legally adopted budgets are adopted for the following funds:
a. General fund
b. Special revenue funds
i. Solid Waste Management
ii. Economic Development Authority
9. Formal budgetary integration is employed as a management control device during the year for the General fund and special
revenue funds. Budgets are not prepared for the Police Forfeitures or Ice Arena Endowment special revenue funds.
B. Excess of expenditures Over Appropriations
For the year ended December 31, 2017, expenditures exceeded appropriations in the nonmajor governmental Solid Waste
Management fund by $2,826. This excess was funded by revenues received in excess of budget.
C. Deficit Fund Equity
The following funds had fund balance deficits at December 31, 2017:
Amount
Major Governmental
Street Infrastructure 1,867,156$
HRA Bonds 2,303,670
Nonmajor Governmental
Xylon Avenue Improvements 2,728
2016 Street Improvements Project 5,130
Fund
The City plans to fund these deficits with future tax increment receipts, transfers, tax levy receipts and special assessment collections.
Note 3: Detailed Notes on All Funds
A. Deposits and Investments
Deposits
Custodial credit risk for deposits and investments is the risk that in the event of a bank failure, the City’s deposits and investments
may not be returned or the City will not be able to recover collateral securities in the possession of an outside party. In accordance
with Minnesota statutes and as authorized by the City Council, the City maintains deposits at those depository banks, all of which are
members of the Federal Reserve System.
Minnesota statutes require that all City deposits be protected by insurance, surety bond or collateral. The market value of collateral
pledged must equal 110 percent of the deposits not covered by insurance, bonds, or irrevocable standby letters of credit from Federal
Home Loan Banks.
Authorized collateral in lieu of a corporate surety bond includes:
• United States government Treasury bills, Treasury notes, Treasury bonds;
• Issues of United States government agencies and instrumentalities as quoted by a recognized industry quotation service
available to the government entity,
-70-
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2017
Note 3: Detailed Notes on All Funds (Continued)
• General obligation securities of any state or local government with taxing powers which is rated “A” or better by a national
bond rating service, or revenue obligation securities of any state or local government with taxing powers which is rated “AA”
or better by a national bond rating service;
• General obligation securities of a local government with taxing powers may be pledged as collateral against funds deposited
by that same local government entity;
• Irrevocable standby letters of credit issued by Federal Home Loan Banks to a municipality accompanied by written evidence
that the bank’s public debt is rated “AA” or better by Moody’s Investors Service, Inc., or Standard & Poor’s Corporation; and
• Time deposits that are fully insured by any federal agency.
Minnesota statutes require that all collateral shall be placed in safekeeping in a restricted account at a Federal Reserve Bank, or in an
account at a trust department of a commercial bank or other financial institution that is not owned or controlled by the financial
institution furnishing the collateral. The selection should be approved by the City.
At year-end, the carrying amount of the City’s deposits was $4,700,656 and the bank balance was $2,790,769. At December 31, 2017,
all deposits were fully covered by federal depository insurance, surety bonds, or by collateral held by the City’s agent in the City’s
name.
Investments
The investments of the City are subject to the following risks:
• Credit Risk. Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. Ratings
are provided by various credit rating agencies and where applicable, indicate associated credit risk. Minnesota statutes limit
the City’s investments to the list on page 64 of the notes. The City’s investment policy does not address this risk any further.
• Custodial Credit Risk. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty
to a transaction, a government will not be able to recover the value of investment or collateral securities that are in the
possession of an outside party. The City’s investment policy does not address custodial credit risk but the City typically limits
its exposure by purchasing insured or registered investments.
• Concentration of Credit Risk. Concentration of credit risk is the risk of loss attributed to the magnitude of a government’s
investment in a single issuer, excluding U.S. guaranteed investments (such as treasuries), investment pools, and mutual funds.
The City’s investment policy does not limit the concentration of investments.
• Interest Rate Risk. This is the risk of potential variability in the fair value of fixed rate investments resulting from changes in
interest rates (the longer period for which an interest rate is fixed, the greater the risk). The City’s investment policy does not
limit the duration of investments.
-71-
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2017
Note 3: Detailed Notes on All Funds (Continued)
As of December 31, 2017, the City had the following investments that are insured or registered, or securities held by the City or its
agent in the City’s name:
Credit Segmented
Quality/Time
Ratings (1)Distribution (2)Amount Level 1 Level 2 Level 3
Pooled Investments at Net Asset Value
Broker Money Market Funds AAA Less than 6 months 22,412,635$
Non-pooled Investments at Fair Value
Negotiable Certificates of Deposit N/A Less than 6 months 4,194,818 -$ 4,194,818$ -$
Negotiable Certificates of Deposit N/A 6 months to 1 year 2,203,031 - 2,203,031 -
Negotiable Certificates of Deposit N/A 1 to 3 years 4,494,373 - 4,494,373 -
U.S. Government Treasury Securities AA+Less than 6 months 1,003,750 - 1,003,750 -
U.S. Government Treasury Securities AA+6 months to 1 year 3,947,587 - 3,947,587 -
U.S. Government Treasury Securities AA+1 to 3 years 2,903,493 - 2,903,493 -
U.S. Government Agency Securities AA+More than 3 years 251,813 - 251,813 -
State and Local Government Securities BBB+6 months to 1 year 501,405 - 501,405 -
State and Local Government Securities A+1 to 3 years 501,775 - 501,775 -
State and Local Government Securities AA-1 to 3 years 101,621 - 101,621 -
State and Local Government Securities AA+More than 3 years 511,715 - 511,715 -
Total Investments 43,028,016$ -$ 20,615,381$ -$
Types of Investments
Fair Value Measurement
(1) Ratings are provided by various credit rating agencies where applicable to indicate associated credit risk.
(2) Interest rate risk is disclosed using the segmented time distribution method.
N/A Indicated not applicable or available.
The following table discloses the nature and risk of investments for which fair value has been estimated using the net asset value per
share (NAV) of the investments as a practical expedient as of December 31, 2017:
Unfunded Redemption Redemption
Fair Value Commitments Frequency Notice Period
Broker Money Market Funds
UBS Select Prime Institutional Fund (1)1,690,204$ -$ Daily None Required
Invesco Government and Agency Fund (2)20,722,431 - Daily None Required
22,412,635$ -$
Description
(1) This fund includes investments primarily in short-term, high-credit-quality money market instruments. hedge funds that invest
domestically and globally in both long and short common stocks across all market capitalizations. The fund aims to preserve
capital, maintain liquidity and produce a competitive yield.
(2) This fund seeks maximum current income consistent with liquidity and the preservation of capital. The Fund invests in a
diversified portfolio of high quality money market instruments of governmental and private issuers.
-72-
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2017
Note 3: Detailed Notes on All Funds (Continued)
A reconciliation of cash and temporary investments as reported on the statement of net position follows:
Carrying Amount of Deposits 4,700,656$
Investments 43,028,016
Petty Cash 2,700
Total 47,731,372$
Statement of Net Position
Cash and temporary investments 46,691,450$
Cash held with fiscal agent 1,031,673
Statement of Fiduciary Net Assets
Cash and temporary investments 8,249
Total 47,731,372$
B. Receivables
Loans Receivable
The City has made several business subsidy loans to local businesses, some of which were funded with grant proceeds received from
Hennepin County. The terms and periods of repayment vary with each loan. Loans receivable in the Economic Development
Authority fund at December 31, 2017 totaled $281,091.
-73-
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2017
Note 3: Detailed Notes on All Funds (Continued)
C. Capital Assets
Capital asset activity for the year ended December 31, 2017 was as follows:
Beginning Ending
Balance Increases Decreases Balance
Governmental Activities
Capital Assets not being Depreciated
Land 994,268$ -$ -$ 994,268$
Construction in progress 10,543,251 4,311,703 (11,103,710) 3,751,244
Total Capital Assets not
being Depreciated 11,537,519 4,311,703 (11,103,710) 4,745,512
Capital Assets, being Depreciated
Buildings and structures 9,350,955 16,900 - 9,367,855
Vehicles and equipment 10,061,274 691,988 (295,099) 10,458,163
Improvements other than buildings 29,778,875 10,988,539 (12,800) 40,754,614
Total Capital Assets
being Depreciated 49,191,104 11,697,427 (307,899) 60,580,632
Less Accumulated Depreciation for
Buildings and structures (6,169,658) (267,494) - (6,437,152)
Vehicles and equipment (7,376,262) (726,829) 288,198 (7,814,893)
Improvements other than buildings (9,966,932) (1,460,888) 6,656 (11,421,164)
Total Accumulated Depreciation (23,512,852) (2,455,211) 294,854 (25,673,209)
Total Capital Assets
being Depreciated, Net 25,678,252 9,242,216 (13,045) 34,907,423
Governmental Activities
Capital Assets, Net 37,215,771$ 13,553,919$ (11,116,755)$ 39,652,935$
-74-
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2017
Note 3: Detailed Notes on All Funds (Continued)
Beginning Ending
Balance Increases Decreases Balance
Business-type Activities
Capital Assets not being Depreciated
Land 485,042$ -$ -$ 485,042$
Construction in progress 6,500,446 2,173,355 (4,968,406) 3,705,395
Total Capital Assets
not being Depreciated 6,985,488 2,173,355 (4,968,406) 4,190,437
Capital Assets being Depreciated
Buildings and structures 10,820,032 - - 10,820,032
Improvements other than buildings 18,497,739 4,924,306 - 23,422,045
Vehicles and equipment 2,549,573 21,077 - 2,570,650
Total Capital Assets
being Depreciated 31,867,344 4,945,383 - 36,812,727
Less Accumulated Depreciation for
Buildings and structures (4,126,475) (213,592) - (4,340,067)
Improvements other than buildings (4,830,949) (511,215) - (5,342,164)
Vehicles and equipment (1,853,801) (131,605) - (1,985,406)
Total Accumulated
Depreciation (10,811,225) (856,412) - (11,667,637)
Total Capital Assets
being Depreciated, Net 21,056,119 4,088,971 - 25,145,090
Business-type Activities
Capital Assets, Net 28,041,607$ 6,262,326$ (4,968,406)$ 29,335,527$
-75-
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2017
Note 3: Detailed Notes on All Funds (Continued)
Depreciation expense was charged to functions/programs of the City as follows:
Governmental Activities
General government 96,029$
Public safety 61,098
Public works 1,142,225
Culture and recreation 353,047
Internal service 802,812
Total Depreciation Expense - Governmental Activities 2,455,211$
Business-type Activities
Sewer utility 158,083$
Water utility 296,741
Golf course 37,004
Ice arena 210,459
Storm water 154,125
Total Depreciation Expense - Business-type Activities 856,412$
Construction Commitments
The City has active construction projects as of December 31, 2017. At year-end, the City’s commitments with the contractors are as
follows:
Spent Remaining
to Date Commitment
2011 Street Infrastructure 61,234$ 22,931$
Northwood Area North 3,679,954 618,260
2017 & 2018 Sanitary Sewer Lining 56,148 230,539
Northwood Softball Field Improvements 54,567 9,926
New Police Station & City Hall - 14,792,500
Total 3,851,903$ 15,674,156$
Project
-76-
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2017
Note 3: Detailed Notes on All Funds (Continued)
D. Interfund Receivables, Payables, and Transfers
The composition of internal balances as of December 31, 2017 is as follows:
Purpose Amount
Due from/to other funds
Governmental Business-type
General fund Ice Arena Cash flow 382,926$
Advances to/from other funds
Governmental Governmental
Economic Development Authority HRA Construction Finance capital purchase 2,347,322$
Economic Development Authority HRA Bonds Finance capital purchase 348,928
HRA Construction HRA Bonds Finance capital purchase 1,990,834
Nonmajor governmental Street Infrastructure Finance capital purchase 675,000
Governmental Business-type
Nonmajor governmental Sewer Utility Construction financing 1,125,000
Nonmajor governmental Water Utility Construction financing 787,131
Total Advances To/From Other Funds 7,274,215
Interfund Activity Eliminated From Government-wide Statements (5,362,084)
Internal Service Fund Activities Related to the Enterprise Funds 832,093
Total Internal Balances - Government-wide Statements 3,127,150$
Payable FundReceivable Fund
The Economic Development Authority fund loaned the HRA Construction fund $2,433,162 in 2008 for the purchase of land at Bass
Lake Road. The interfund loan matures in 2028 and carries an interest rate of four percent. As of December 31, 2017, the balance
outstanding was $2,347,322. In 2014, the Temporary Financing fund loaned the Water Utility fund $1,100,000 to finance the
emergency water supply system project. The loan will be paid back over a 10 year period with a 1.51 percent interest rate. As of
December 31, 2017, the balance outstanding was $787,131. In 2016, the Temporary Financing fund loaned the Sewer Utility fund
$1,250,000 to fund the 2016 capital improvement plan. The loan will be paid back over a 10 year period with a 2.00 percent interest
rate. As of December 31, 2017, the balance outstanding was $1,125,000. In 2016, the Temporary Financing fund loaned the Street
Infrastructure fund $750,000 to fund future capital purchases. The loan will be paid back over a 10 year period with a 2.00 percent
interest rate. As of December 31, 2017, the balance outstanding was $675,000. In 2017, the General fund loaned the Ice Arena fund
$382,926 for cash flow purposes, the loan will be paid back in 2018. The Economic Development Authority fund and the HRA
Construction fund loaned the HRA Bonds fund $348,928 and $1,990,834, respectively for the purchase of the Hy-Vee property. The
interfund loan matures in 2042 and carries an interest rate of 4.00 percent.
-77-
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2017
Note 3: Detailed Notes on All Funds (Continued)
Interfund transfers at December 31, 2017 are as follows:
Economic Ice
Development HRA HRA Nonmajor Arena
General Authority Construction Bonds Governmental Enterprise Total
Transfer Out
General -$ -$ -$ -$ 150,000$ -$ 150,000$
Economic Development Authority 33,075 - - - - - 33,075
HRA Construction - 149,300 - 428,339 - - 577,639
Street Infrastructure - - - - 739,940 - 739,940
2017 Street Improvement Project - - - - 92,253 - 92,253
HRA Bonds - 347,777 2,078,892 - - - 2,426,669
Nonmajor Governmental 51,800 - - - - 167,000 218,800
Sewer Utility Enterprise 51,597 - - - - - 51,597
Water Utility Enterprise 53,802 - - - - - 53,802
Golf Course Enterprise 10,000 - - - - - 10,000
Ice Arena Enterprise 10,000 - - - - - 10,000
Storm Water Enterprise 22,491 - - - - - 22,491
Internal Service 85,995 - - - - - 85,995
Total Transfers 318,760$ 497,077$ 2,078,892$ 428,339$ 982,193$ 167,000$ 4,472,261$
Fund
Transfer In
• The General fund transferred $150,000 to the Nonmajor Governmental funds to fund the Fire Capital Projects fund.
• Transfers were made out of the Economic Development Authority fund, Nonmajor Governmental Fire Capital Projects fund,
Sewer Utility Enterprise fund, Water Utility Enterprise fund, Golf Course Enterprise fund, Ice Arena Enterprise fund, Storm
Water enterprise fund, and Internal Service fund for $33,075, $51,800, $51,597, $53,802, $10,000, $10,000, $22,491, and
$85,995, respectively, to the General fund to cover administrative charges paid for by the General fund.
• The HRA Construction fund transferred $149,300 and $428,339 to the Economic Development Authority fund and HRA
Bonds fund, respectively, to reimburse the fund for tax increment project costs.
• The Street Infrastructure fund transferred $739,940 to Nonmajor Governmental funds to fund cash deficits resulting from
street improvement expenditures.
• The 2017 Street Improvement Project fund transferred $92,253 to the Nonmajor Governmental 2017A G.O. Improvement
Bonds fund to reimburse capitalized interest.
• The HRA Bonds fund transferred $347,777 and $2,078,892 to the Economic Development Authority fund and HRA
Construction fund, respectively, to reimburse the funds for tax increment project costs.
• The Nonmajor Governmental Park Dedication fund transferred $167,000 to the Ice Arena Enterprise fund to reimburse costs.
-78-
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2017
Note 3: Detailed Notes on All Funds (Continued)
E. Long-term D ebt
General Obligation (G.O.) Bonds
The City issues G.O. bonds to provide funds for the acquisition and construction of major capital facilities. G.O. bonds have been
issued for both governmental and business-type activities. These bonds are reported in the proprietary funds if they are expected to be
repaid from proprietary fund revenues.
The following G.O. bonds will be repaid from future tax levies.
Authorized Issue Maturity Balance at
and Issued Date Date Year End
2010B G.O. Certificates of
Indebtedness 1,245,000$ 2.00 - 2.60 %11/23/10 02/01/20 440,000$
G.O. Street Reconstruction
Bonds, Series 2015B 3,825,000 2.25 - 3.00 12/30/15 02/01/31 3,625,000
G.O. Street Reconstruction
Bonds, Series 2016A 4,855,000 2.25 - 3.00 12/29/16 02/01/33 4,855,000
G.O. Capital Improvement
Bonds, Series 2017A 18,435,000 3.00 - 5.00 12/28/17 02/01/34 18,435,000
Total General Obligation Bonds 27,355,000$
Interest
RateDescription
The annual debt service to maturity for G.O. bonds are as follows:
Year Ending
December 31,Principal Interest Total Principal Interest Total
2018 258,922$ 575,056$ 833,978$ 96,078$ 106,125$ 202,203$
2019 415,584 861,235 1,276,819 209,416 101,542 310,958
2020 1,334,113 826,675 2,160,788 215,887 95,163 311,050
2021 1,234,734 779,392 2,014,126 220,266 88,620 308,886
2022 1,273,688 732,016 2,005,704 231,312 81,847 313,159
2023-2027 7,243,505 2,779,715 10,023,220 1,256,495 303,516 1,560,011
2028-2032 8,560,266 1,300,773 9,861,039 1,294,734 115,390 1,410,124
2033-2034 3,344,766 97,571 3,442,337 165,234 2,479 167,713
Total 23,665,578$ 7,952,433$ 31,618,011$ 3,689,422$ 894,682$ 4,584,104$
Governmental Activities Business-type Activities
-79-
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2017
Note 3: Detailed Notes on All Funds (Continued)
G.O. Tax Increment Bonds
The following bonds were issued for development purposes. The additional tax increment resulting from the increased tax capacity of
the redeveloped properties has been pledged to retire the related debt. Tax increment revenues are projected to produce over 55
percent of the debt service requirements over the life of the bonds. For the current year, principal and interest paid and total related tax
increment revenues were $275,000 and $270,150, respectively.
Authorized Issue Maturity Balance at
and Issued Date Date Year End
G.O. Tax Increment Refunding
Bonds, Series, 2012A 2,695,000$ 2.00 - 2.45 %01/11/12 02/01/25 2,030,000$
G.O. Taxable Tax Increment
Refunding Bonds, Series, 2012B 1,330,000 1.35 - 4.65 01/11/12 02/01/31 1,175,000
G.O. Tax Increment
Bonds, Series, 2015A 5,960,000 2.00 - 3.00 06/17/15 02/01/32 5,960,000
Total G.O. Tax Increment Bonds 9,165,000$
Rate
Interest
Description
The annual debt service to maturity for G.O. tax increment bonds are as follows:
Year Ending
December 31,Principal Interest Total Principal Interest Total
2018 540,812$ 187,041$ 727,853$ 89,188$ 36,796$ 125,984$
2019 553,090 176,006 729,096 91,910 34,984 126,894
2020 571,777 164,470 736,247 93,223 33,132 126,355
2021 584,151 152,436 736,587 95,849 31,242 127,091
2022 602,838 139,866 742,704 97,162 29,311 126,473
2023-2027 2,715,304 488,474 561,000 514,696 115,226 629,922
2028-2032 2,032,028 159,852 122,200 582,972 44,146 627,118
Total 7,600,000$ 1,468,145$ 4,355,687$ 1,565,000$ 324,837$ 1,889,837$
Business-type ActivitiesGovernmental Activities
-80-
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2017
Note 3: Detailed Notes on All Funds (Continued)
Lease Revenue Bonds
The following bonds were issued to finance the Energy Conservation project and will be repaid primarily with energy savings and
revenues pledged from the Ice Arena fund. Annual principal and interest payments on the bonds are expected to require less than 8
percent of revenues from the Ice Arena fund. Principal and interest paid for the current year and total customer revenues for the Ice
Arena fund were $58,082 and $811,661, respectively.
Authorized Issue Maturity Balance at
and Issued Date Date Year End
2011A Taxable Lease
Revenue Bonds 3,505,000$ 5.00 %12/01/11 12/01/28 3,505,000$
Interest
RateDescription
The annual debt service to maturity for all lease revenue bonds are as follows:
Year Ending
December 31,Principal Interest Total
2018 -$ 57,482$ 57,482$
2019 - 57,482 57,482
2020 - 57,482 57,482
2021 - 57,482 57,482
2022 - 57,482 57,482
2023-2027 - 287,410 287,410
2028 3,505,000 57,482 3,562,482
Total 3,505,000$ 632,302$ 4,137,302$
Business-type Activities
-81-
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2017
Note 3: Detailed Notes on All Funds (Continued)
G.O. Revenue Bonds and Notes
The following bonds and notes were issued to finance capital improvements in the enterprise funds. They will be repaid from future
revenues pledged from the Sewer Utility, Water Utility, and Storm Water funds and are backed by the taxing power of the City.
Annual principal and interest payments on the bonds are expected to require less than 3, 6, and 12 percent of revenues from the Sewer
Utility, Water Utility, and Storm Water funds, respectively. Principal and interest paid for the current year and total customer revenues
for the Sewer Utility fund were $32,756 and $2,899,257, respectively. Principal and interest paid for the current year and total
customer revenues for the Water Utility fund were $313,880 and $3,994,122, respectively. Principal and interest paid for the current
year and total customer revenues for the Storm Water fund were $116,927 and $1,082,348, respectively.
Authorized Issue Maturity Balance at
and Issued Date Date Year End
2010A G.O. Utility Revenue
Bonds 1,200,000$ 2.00 - 3.25 %05/06/10 02/01/21 330,000$
2010B G.O. Water Revenue
Refunding Bonds 605,000 2.00 - 3.00 11/23/10 02/01/22 295,000
2011 G.O. Public Facilities
Authority Note 411,738 1.70 02/23/11 08/20/29 275,000
2013 G.O. Public Facilities
Authority Note 1,035,000 1.00 07/24/13 08/20/32 848,000
Total G.O. Revenue Bonds and Notes 1,748,000$
Rate
Interest
Description
The annual debt service to maturity for G.O. revenue bonds are as follows:
Year Ending
December 31,Principal Interest Total
2018 209,000$ 29,580$ 238,580$
2019 214,000 24,941 238,941
2020 216,000 19,997 235,997
2021 221,000 14,705 235,705
2022 142,000 10,534 152,534
2023-2027 399,000 33,666 432,666
2028-2032 347,000 10,257 357,257
Total 1,748,000$ 143,680$ 1,891,680$
Business-type Activities
-82-
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2017
Note 3: Detailed Notes on All Funds (Continued)
Changes in Long-term Liabilities
Long-term liability activity for the year ended December 31, 2017, was as follows:
Beginning Ending Due Within
Balance Increases Decreases Balance One Year
Governmental Activities
Bonds Payable
G.O. bonds and certificates 5,479,075$ 18,435,000$ (248,497)$ 23,665,578$ 258,922$
G.O. tax increment bonds 7,875,000 - (275,000) 7,600,000 540,812
Add: premiums on bonds 297,259 1,857,609 (19,490) 2,135,378 -
Total Bonds Payable, Net 13,651,334 20,292,609 (542,987) 33,400,956 799,734
Pension Liability
GERF 3,857,482 1,555,294 (2,524,080) 2,888,696 -
PEPFF 11,798,731 7,988,216 (15,979,611) 3,807,336 -
Compensated Absences Payable 566,645 1,055,656 (1,016,734) 605,567 60,557
Other Postemployment
Benefits Payable 317,296 76,450 (27,869) 365,877 -
Governmental Activity
Long-term Liabilities 30,191,488$ 30,968,225$ (20,091,281)$ 41,068,432$ 860,291$
Business-type Activities
Bonds Payable
G.O. bonds 3,780,925$ -$ (91,503)$ 3,689,422$ 96,078$
G.O. tax increment bonds 1,565,000 - - 1,565,000 89,188
Lease revenue bonds 3,505,000 - - 3,505,000 -
G.O. revenue bonds and notes 1,950,000 - (202,000) 1,748,000 209,000
Add: premiums on bonds 177,933 - (11,417) 166,516 -
Less: bond discount (3,023) - 740 (2,283) -
Total Bonds Payable, Net 10,975,835 - (304,180) 10,671,655 394,266
Pension liability
GERF 1,079,176 499,865 (713,984) 865,057 -
Other Postemployment
Benefits Payable 48,882 11,778 (4,455) 56,205 -
Business-type Activity
Long-term Liabilities 12,103,893$ 511,643$ (1,022,619)$ 11,592,917$ 394,266$
Internal service funds predominantly serve the governmental funds. Accordingly, long-term liabilities for internal service funds are
included as part of the above totals for governmental activities.
-83-
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2017
Note 3: Detailed Notes on All Funds (Continued)
F. Components of Fund Balance
At December 31, 2017, portions of the City’s fund balance are not available for appropriation due to not being in spendable form
(Nonspendable), legal restrictions (Restricted), City Council action (Committed), policy and/or intent (Assigned). The following is a
summary of the components of fund balance:
Economic
Development HRA City Hall
General Authority Construction CIP
Nonspendable
Prepaid items 17,617$ -$ -$ -$
Restricted for
Economic development -$ -$ 4,932,405$ -$
Debt service - - - -
Capital improvements - - - 18,259,584
Public safety
Police expenditures - - - -
Ice arena - - - -
Total Restricted -$ -$ 4,932,405$ 18,259,584$
Committed to
Solid waste operations -$ -$ -$ -$
Economic development - 5,634,105 - -
Total Committed -$ 5,634,105$ -$ -$
Assigned to
General improvements -$ -$ -$ -$
Capital equipment - - - -
City hall improvements - - - 504,501
Park improvements - - - -
Total Assigned -$ -$ -$ 504,501$
Purpose
-84-
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2017
Note 3: Detailed Notes on All Funds (Continued)
2017 Street Other
Improvement Governmental
Project Funds Total
Nonspendable
Prepaid items -$ -$ 17,617$
Restricted for
Economic development -$ -$ 4,932,405$
Debt service - 1,238,047 1,238,047
Capital improvements 41,864 - 18,301,448
Public safety
Police expenditures - 128,078 128,078
Ice arena - 5,131 5,131
Total Restricted 41,864$ 1,371,256$ 24,605,109$
Committed to
Solid waste operations -$ 203,704$ 203,704$
Economic development - - 5,634,105
Total Committed -$ 203,704$ 5,837,809$
Assigned to
General improvements -$ 3,068,192$ 3,068,192$
Capital equipment - 559,212 559,212
City hall improvements - - 504,501
Park improvements - 1,044,413 1,044,413
Total Assigned -$ 4,671,817$ 5,176,318$
Purpose
-85-
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2017
Note 4: Other Information
A. Defined Benefit Pension Plan - Public Employees Retirement Association (PERA) - Statewide
1. Plan Description
The City participates in the following cost-sharing multiple-employer defined benefit pension plans administered by the Public
Employees Retirement Association of Minnesota (PERA). PERA’s defined benefit pension plans are established and administered
in accordance with Minnesota statutes, chapters 353 and 356. PERA’s defined benefit pension plans are tax qualified plans under
Section 401(a) of the Internal Revenue Code.
General Employees Retirement Fund (GERF)
All full-time and certain part-time employees of the City, are covered by the General Employees Retirement Fund (GERF).
GERF members belong to either the Coordinated Plan or the Basic Plan. Coordinated Plan members are covered by Social
Security and Basic Plan members are not. The Basic Plan was closed to new members in 1967. All new members must participate
in the Coordinated Plan.
Public Employees Police and Fire Fund (PEPFF)
The PEPFF, originally established for police officers and firefighters not covered by a local relief association, now covers all
police officers and firefighters hired since 1980. Effective July 1, 1999, the PEPFF also covers police officers and firefighters
belonging to a local relief association that elected to merge with and transfer assets and administration to PERA.
2. Benefits Provided
PERA provides retirement, disability and death benefits. Benefit provisions are established by Minnesota statute and can only be
modified by the state legislature.
Benefit increases are provided to benefit recipients each January. Increases are related to the funding ratio of the plan. Members
in plans that are at least 90 percent funded for two consecutive years are given 2.5 percent increases. Members in plans that have
not exceeded 90 percent funded, or have fallen below 80 percent, are given 1 percent increases.
The benefit provisions stated in the following paragraphs of this section are current provisions and apply to active plan
participants. Vested, terminated employees who are entitled to benefits but are not receiving them yet are bound by the provisions
in effect at the time they last terminated their public service.
GERF Benefits
Benefits are based on a member’s highest average salary for any five successive years of allowable service, age, and years of
credit at termination of service. Two methods are used to compute benefits for PERA's Coordinated and Basic Plan members. The
retiring member receives the higher of a step-rate benefit accrual formula (Method 1) or a level accrual formula (Method 2).
Under Method 1, the annuity accrual rate for a Basic Plan member is 2.2 percent of average salary for each of the first ten years of
service and 2.7 percent for each remaining year. The annuity accrual rate for a Coordinated Plan member is 1.2 percent of average
salary for each of the first ten years and 1.7 percent for each remaining year. Under Method 2, the annuity accrual rate is 2.7
percent of average salary for Basic Plan members and 1.7 percent for Coordinated Plan members for each year of service. For
members hired prior to July 1, 1989, a full annuity is available when age plus years of service equal 90 and normal retirement age
is 65. For members hired on or after July 1, 1989, normal retirement age is the age for unreduced Social Security benefits capped
at 66.
-86-
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2017
Note 4: Other Information (Continued)
PEPFF Benefits
Benefits for the PEPFF members first hired after June 30, 2010, but before July 1, 2014, vest on a prorated basis from 50 percent
after five years up to 100 percent after ten years of credited service. Benefits for PEPFF members first hired after June 30, 2014,
vest on a prorated basis from 50 percent after ten years up to 100 percent after twenty years of credited service. The annuity
accrual rate is 3 percent of average salary for each year of service.
For PEPFF 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.
3. Contributions
Minnesota statutes, chapter 353 sets the rates for employer and employee contributions. Contribution rates can only be modified
by the state legislature.
GERF Contributions
Basic Plan members and Coordinated Plan members were required to contribute 9.10 percent and 6.50 percent,
respectively, of their annual covered salary in calendar year 2017. The City was required to contribute 11.78 percent of pay for
Basic Plan members and 7.50 percent for Coordinated Plan members in calendar year 2017. The City’s contributions to the GERF
for the years ending December 31, 2017, 2016 and 2015 were $286,170, $280,102 and $284,367, respectively. The City’s
contributions were equal to the contractually required contributions for each year as set by Minnesota statute.
PEPFF Contributions
Plan members were required to contribute 10.8 percent of their annual covered salary in calendar year 2017. The City was
required to contribute 16.20 percent of pay for PEPFF members in calendar year 2017. The City’s contributions to the PEPFF for
the years ending December 31, 2017, 2016 and 2015 were $489,202, $444,511, and $448,029, respectively. The City’s
contributions were equal to the contractually required contributions for each year as set by Minnesota statute.
4. Pension Costs
GERF Pension Costs
At December 31, 2017, the City reported a liability of $3,753,753 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 $6 million to the fund in
2017. The State of Minnesota is considered a non-employer contributing entity and the State’s contribution meets the definition of
a special funding situation. The State of Minnesota’s proportionate share of the net pension liability associated with the City
totaled $47,225. The net pension liability was measured as of June 30, 2017, and the total pension liability used to calculate the
net pension liability was determined by an actuarial valuation as of that date. The City’s proportion of the net pension liability
was based on the City’s contributions received by PERA during the measurement period for employer payroll paid dates from
July 1, 2016 through June 30, 2017 relative to the total employer contributions received from all of PERA’s participating
employers. At June 30, 2017, the City’s proportionate share was 0.0588 percent which was a decrease of 0.002 percent from its
proportion measured as of June 30, 2016.
For the year ended December 31, 2017, the City recognized pension expense of $386,133 for its proportionate share of GERF’s
pension expense. In addition, the City recognized an additional $1,364 as pension expense (and grant revenue) for its
proportionate share of the State of Minnesota’s contribution of $6 million to the GERF.
-87-
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2017
Note 4: Other Information (Continued)
At December 31, 2017, the City reported its proportionate share of GERF’s deferred outflows of resources and deferred inflows
of resources, and its contributions subsequent to the measurement date, from the following sources:
Deferred Deferred
Outflows Inflows
of Resources of Resources
Differences between Expected and
Actual Experience 123,247$ 239,168$
Changes in Actuarial Assumptions 620,083 376,314
Net Difference between Projected and
Actual Earnings on Plan Investments - 161,079
Changes in Proportion - 173,175
Contributions to GERF Subsequent
to the Measurement Date 144,814 -
Total 888,144$ 949,736$
Deferred outflows of resources totaling $144,814 related to pensions resulting from the City’s contributions to GERF subsequent
to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31, 2018. Other
amounts reported as deferred outflows and inflows of resources related to GERF pensions will be recognized in pension expense
as follows:
2018 (125,774)$
2019 178,815
2020 (100,115)
2021 (159,332)
PEPFF Pension Costs
At December 31, 2017, the City reported a liability of $3,807,336 for its proportionate share of the PEPFF’s net pension liability.
The net pension liability was measured as of June 30, 2017, and the total pension liability used to calculate the net pension
liability was determined by an actuarial valuation as of that date. The City’s proportion of the net pension liability was based on
the City’s contributions received by PERA during the measurement period for employer payroll paid dates from July 1, 2016
through June 30, 2017 relative to the total employer contributions received from all of PERA’s participating employers. At
June 30, 2017, the City’s proportionate share was 0.282 percent which was a decrease of 0.012 percent from its proportion
measured as of June 30, 2016.
For the year ended December 31, 2017, the City recognized pension expense of $733,545 for its proportionate share of PEPFF’s
pension expense. The City also recognized $25,380 for the year ended December 31, 2017, as pension expense (and grant
revenue) for its proportionate share of the State of Minnesota’s on-behalf contributions to the PEPFF. Legislation passed in 2013
required the State of Minnesota to begin contributing $9 million to the PEPFF each year, starting in fiscal year 2014.
The total aggregate pension expense recognized under both plans was $1,119,678.
-88-
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2017
Note 4: Other Information (Continued)
At December 31, 2017, the City reported its proportionate share of PEPFF’s deferred outflows of resources and deferred inflows
of resources, and its contributions subsequent to the measurement date, from the following sources:
Deferred Deferred
Outflows Inflows
of Resources of Resources
Differences between Expected and
Actual Experience 89,281$ 1,051,090$
Changes in Actuarial Assumptions 5,287,228 5,405,472
Net Difference between Projected nd
Actual Earnings on Plan Investments - 294,532
Changes in Proportion 171,480 175,607
Contributions to PEPFF Subsequent
to the Measurement Date 244,249 -
Total 5,792,238$ 6,926,701$
Deferred outflows of resources totaling $244,249 related to pensions resulting from the City’s contributions to PEPFF subsequent
to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31, 2018. Other
amounts reported as deferred outflows and inflows of resources related to GERF pensions will be recognized in pension expense
as follows:
2018 (142,625)$
2019 233,090
2020 (59,996)
2021 (310,500)
2022 (1,098,681)
5. Actuarial Assumptions
The total pension liability in the June 30, 2017 actuarial valuation was determined using the following actuarial assumptions:
Inflation 2.50% per year
Active Member Payroll Growth 3.25% per year
Investment Rate of Return 7.50%
Salary increases were based on a service-related table. Mortality rates for active members, retirees, survivors and disabilitants
were based on RP-2014 tables for all plans for males or females, as appropriate, with slight adjustments to fit PERA’s experience.
Cost of living benefit increases for retirees are assumed to be: 1 percent per year for the GERF through 2044 and PEPFF though
2064 and then 2.5 percent thereafter for both plans.
Actuarial assumptions used in the June 30, 2017 valuation were based on the results of actuarial experience studies. The most
recent four-year experience study in the GERF was completed in 2015. The most recent five-year experience study for PEPFF
was completed in 2016.
-89-
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2017
Note 4: Other Information (Continued)
The following changes in actuarial assumptions occurred in 2017:
GERF
• The Combined Service Annuity (CSA) loads were changed from 0.8 percent for active members and 60 percent for
vested and non-vested deferred members. The revised CSA loads are now 0.0 percent for active member liability, 15.0
percent for vested deferred member liability and 3.0 percent for non-vested deferred member liability.
• The assumed post-retirement benefit increase rate was changed from 1.0 percent per year for all years to 1.0 percent per
year through 2044 and 2.5 percent per year thereafter.
PEPFF
• Assumed salary increases were changed as recommended in the June 30, 2016 experience study. The net effect is
proposed rates that average 0.34 percent lower than the previous rates.
• Assumed rates of retirement were changed, resulting in fewer retirements.
• The Combined Service Annuity (CSA) load was 30 percent for vested and non-vested deferred members. The CSA has
been changed to 33 percent for vested members and 2 percent for non-vested members.
• The base mortality table for healthy annuitants was changed from the RP-2000 fully generational table to the RP-2014
fully generational table (with a base year of 2006), with male rates adjusted by a factor of 0.96. The mortality
improvement scale was changed from Scale AA to Scale MP-2016. The base mortality table for disabled annuitants was
changed from the RP-2000 disabled mortality table to the mortality tables assumed for healthy retirees.
• Assumed termination rates were decreased to 3.0 percent for the first three years of service. Rates beyond the select
period of three years were adjusted, resulting in more expected terminations overall.
• Assumed percentage of married female members was decreased from 65 percent to 60 percent.
• Assumed age difference was changed from separate assumptions for male members (wives assumed to be three years
younger) and female members (husbands assumed to be four years older) to the assumption that males are two years
older than females.
• The assumed percentage of female members electing joint and survivor annuities was increased.
• The assumed post-retirement benefit increase rate was changed from 1.00 percent for all years to 1.00 percent per year
through 2064 and 2.50 percent thereafter.
• The single discount rate was changed from 5.6 percent to 7.5 percent.
-90-
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2017
Note 4: Other Information (Continued)
The State Board of Investment, which manages the investments of PERA, prepares an analysis of the reasonableness on a regular
basis of the long-term expected rate of return on a regular basis using a building-block method in which best-estimate ranges of
expected future rates of return are developed for each major asset class. These ranges are combined to produce an expected long-
term rate of return by weighting the expected future rates of return by the target asset allocation percentages. The target allocation
and best estimates of geometric real rates of return for each major asset class are summarized in the following table:
Asset Class
Domestic Stocks 39.00 %5.10 %
International Stocks 19.00 5.30
Bonds 20.00 0.75
Alternative Assets 20.00 5.90
Cash 2.00 -
Total 100.00 %
Target Expected Real
Allocation Rate of Return
Long-term
6. Discount Rate
The discount rate used to measure the total pension liability in 2017 was 7.50 percent. The projection of cash flows used to
determine the discount rate assumed that contributions from plan members and employers will be made at rates set in Minnesota
statutes. Based on these assumptions, the fiduciary net position of the GERF and PEPFF was 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.
7. Pension Liability Sensitivity
The following presents the City’s proportionate share of the net pension liability for all plans it participates in, calculated using
the discount rate disclosed in the preceding paragraph, as well as what the City’s proportionate share of the net pension liability
would be if it were calculated using a discount rate 1 percentage point lower or 1 percentage point higher than the current
discount rate:
1 Percent 1 Percent
Decrease (6.50%)Current (7.50%)Increase (8.50%)
GERF 5,822,350$ 3,753,753$ 2,060,231$
1 Percent 1 Percent
Decrease (6.50%)Current (7.50%)Increase (8.50%)
PEPFF 7,170,324$ 3,807,336$ 1,031,003$
City Proportionate Share of NPL
8. Pension Plan Fiduciary Net Position
Detailed information about each pension plan’s fiduciary net position is available in a separately-issued PERA financial report
that includes financial statements and required supplementary information. That report may be obtained on the Internet at
www.mnpera.org.
-91-
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2017
Note 4: Other Information (Continued)
B. Defined Contribution Plan
There are five City Council members of the City are covered by the Public Employees Defined Contribution Plan (PEDCP), a
multiple-employer deferred compensation plan administered by PERA. The PEDCP is a tax qualified plan under Section 401(a) of the
Internal Revenue Code and all contributions by or on behalf of employees are tax deferred until time of withdrawal.
The defined contribution plan consists of individual accounts paying a lump -sum benefit. Plan benefits depend solely on amounts
contributed to the plan plus investment earnings, less administrative expenses, therefore, there is no future liability to the employer.
Minnesota statutes, chapter 353d.03, specifies plan provisions, including the employee and employer contribution rates for those
qualified personnel who elect to participate. An eligible elected official who decides to participate contributes 5 percent of salary
which is matched by the elected official's employer. For ambulance service personnel, employer contributions are determined by the
employer, and for salaried employees contributions must be a fixed percentage of salary. Employer contributions for volunteer
personnel may be a unit value for each call or period of alert duty.
Employees who are paid for their services may elect to make member contributions in an amount not to exceed the employer share.
Employer and employee contributions are combined and used to purchase shares in one or more of the seven accounts of the
Minnesota Supplemental Investment Fund. For administering the plan, PERA receives 2 percent of employer contributions and
twenty-five hundredths of 1 percent (.0025) of the assets in each member's account annually.
Pension expense for the year is equal to contributions made. The City’s contributions to the PEDCP for the years ended
December 31, 2017, 2016 and 2015 were $2,497, $2,435, and $2,478, respectively. The City’s contributions were equal to the
contractually required contributions for each year as set by Minnesota statute.
Employee Employer Employee Employer Required Rate
2,497$ 2,497$ 5.00%5.00%5.00%
Contribution Amount
Percentage of
Covered Payroll
C. Postemployment Benefits Other Than Pensions
1. 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. There are 88 active participants and 6 retired participants. Benefit provisions are discussed and
proposed by an insurance committee made up of employees from all employee groups (both represented and non-union), with the
final approval of the plan being given by the City Manager. The benefit levels, employee contributions, and employer
contributions are governed by the City and can be amended by the City. The Retiree Health Plan does not issue a publicly
available financial report.
2. 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 2017, the City contributed $32,324 to the plan.
-92-
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2017
Note 4: Other Information (Continued)
3. Annual Other Postemployment Benefit Cost and Net Other Postemployment Benefit Obligation
The City’s annual other postemployment benefit (OPEB) cost (expense) is calculated based on the annual required contribution
of the employer (ARC). The City has elected to calculate the ARC and related information using the alternative measurement
method permitted by GASB Statement No. 45 for employers in plans with fewer than one hundred total plan members. The ARC
represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and to amortize any
unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. The following table shows the
components of the City’s annual OPEB cost for the year, the amount actually contributed to the plan, and changes in the City’s
net OPEB obligation:
Annual Required Contribution 87,182$
Interest on Net OPEB Obligation 14,647
Adjustment to Annual Required Contribution (13,601)
Annual OPEB Cost (Expense)88,228
Contributions Made (32,324)
Increase in Net OPEB Obligation 55,904
Net OPEB Obligation - January 1, 2017 366,178
Net OPEB Obligation - December 31, 2017 422,082$
The City’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for fiscal
year 2017 and the preceding two fiscal years are as follows:
Year Annual Net OPEB
Ending OPEB Cost Obligation
12/31/17 88,228$ 36.6 %422,082$
12/31/16 99,013 43.9 366,178
12/31/15 99,179 55.6 310,665
Three Year Trend Information
Percentage
Annual OPEB
Contributed
4. Funded Status and Funding Progress
As of December 31, 2017, the actuarial accrued liability for benefits was $759,472, all of which was unfunded. The covered
payroll (annual payroll of active employees covered by the plan) was $6,176,197, and the ratio of the unfunded actuarial accrued
liability to the covered payroll was 12.0 percent.
The projection of future benefit payments for an ongoing plan involves estimates of the value of reported amounts and
assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future
employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual
required contributions of the employer are subject to continual revision as actual results are compared with past expectations and
new estimates are made about the future. The Schedule of Funding Progress, presented as required supplementary information
following the notes to the financial statements, presents multi-year trend information about whether the actuarial value of plan
assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits.
5. Methods and Assumptions
Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer
and plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of
benefit costs between the employer and plan members to that point. The methods and assumptions used include techniques that
are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets,
consistent with the long-term perspective of the calculations.
-93-
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2017
Note 4: Other Information (Continued)
The following simplified assumptions were used for the Alternative Measurement Period:
Retirement Age for Active Employees – Age 55 for police and fire, age 63 for all others (based on PERA’s average rates). In
addition, spouses of retired employees were assumed to discontinue coverage on the plan when the retired employee reaches
Medicare age.
Marital Status - Marital status of members at the calculation date was assumed to continue throughout retirement.
Mortality – Life expectancies were based on RP-2014 with MP-2016 generational improvements.
Turnover - Non-group-specific age-based turnover data from GASB Statement No. 45 were used as the basis for assigning
active members a probability of remaining employed until the assumed retirement age and for developing an expected future
working lifetime assumption for purposes of allocating to periods the present value of total benefits to be paid.
Healthcare Cost Trend Rate - A rate increase of 8.5 percent in 2017 decreasing 0.50 percent per year to an ultimate rate of
5.00 percent.
Health Insurance Premiums - 2013, 2014, and 2015 health insurance premiums for retirees were used as the basis for
calculation of the present value of total benefits to be paid.
Inflation Rate - The expected long-term inflation assumption of 2.75 percent was based on average changes over the past ten
years in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) in The 2013 Annual Report of the
Board of Trustees of the Federal Old-Age and Survivors Insurance and Disability Insurance Trust Funds for an intermediate
growth scenario.
Payroll Growth Rate - The expected long-term payroll growth rate was assumed to be 3.5 percent.
Based on the historical and expected returns of the City's short-term investment portfolio, a discount rate of 4.0 percent was used.
In addition, a simplified version of the entry age actuarial cost method was used. The unfunded actuarial accrued liability is being
amortized as a level percentage of projected payroll on an open basis. The remaining amortization period at December 31, 2017
was thirty years.
D. Contingencies
Tax Increment Districts
The City’s tax increment districts are subject to review by the State of Minnesota Office of the State Auditor (OSA). Any disallowed
claims or misuse of tax increment could become a liability of an applicable fund. Management has indicated that they are not aware of
any instances of noncompliance which would have a material effect on the financial statements.
Contingent Liabilities
Amounts received or receivable from grant agencies are subject to audit and adjustment by grantor agencies, principally the federal
government. Any disallowed claims, including amounts already collected, may constitute a liability of the applicable funds. The
amount, if any, of expenditures that may be disallowed by the grantor cannot be determined at this time, although the City expects
such amounts, if any, to be immaterial.
The City is a defendant in various lawsuits. Although the outcome of these lawsuits is not presently determinable, in the opinion of the
City’s counsel the resolution of these matters will not have a material adverse effect on the financial condition of the City.
-94-
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2017
Note 4: Other Information (Continued)
E. Risk M anagement
The City is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; injuries
to employees; and natural disasters for which the City carries insurance. The City obtains insurance through participation in the
League of Minnesota Cities Insurance Trust (LMCIT), which is a risk sharing pool with approximately 800 other governmental units.
The City pays an annual premium to LMCIT for its workers compensation and property and casualty insurance. The LMCIT is self-
sustaining through member premiums and will reinsure for claims above a prescribed dollar amount for each insurance event. There
were no significant reductions in insurance from the previous year or settlements in excess of insurance coverage for any of the past
three fiscal years.
Liabilities are reported when it is probably that a loss has occurred and the amount of the loss can be reasonably estimated. Liabilities,
if any, include an amount for claims that have been incurred but not reported (IBNRs). The City’s management is not aware of any
incurred but not reported claims.
F. 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, 2017, 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, 2017 is
undetermined.
G. Joint Ventures and Governed Organizations
Joint Ventures
Joint Water Commission
The City is a party to a joint powers agreement through which the Golden Valley, Crystal, and New Hope Joint Water Commission
(JWC) is formed. The agreement provides for the operation and ownership of a water supply, distribution, and support system in and
for the cities of Golden Valley, Crystal, and New Hope. Each member city is entitled to appoint one member to the JWC board. The
City purchases water used by its residents from the JWC and shares in the JWC’s operation, maintenance, repair, and replacement
costs based on its water usage.
As provided for in the joint powers agreement, in the event of termination, all real and personal property and cash held by the JWC
would be divided among the members by unanimous consent. Such division would be based on refunded monetary contributions made
to the JWC by the member cities.
Over the years, the costs of construction have been allocated among the member cities, generally on the basis of water purchased.
These costs were expensed as incurred by the City in the cost of water purchased. The asset recorded in the Water fund as an
investment in the JWC for $168,509 represents the original contributions for working capital; however, the City’s share of subsequent
construction costs are not determinable. Therefore, the City's Water enterprise fund has not recorded any subsequent amounts as an
equity investment or contributed capital related to the JWC.
The following financial information is taken from the JWC’s audited financial statements for the year ended December 31, 2017:
Total Assets 16,667,382$
Total Liabilities 572,124
Total Net Position 16,095,258
Total Revenue 7,893,535
Total Expenses 7,417,031
-95-
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2017
Note 4: Other Information (Continued)
Of the total revenues, $7,749,748 represented assessments paid by member cities. The City’s share of JWC’s total member
assessments for the year ended December 31, 2017 was $2,394,371 or 30.9 percent.
JWC financial statements are available from the City of Golden Valley, attention: Finance Department, 7800 Golden Valley Road,
Golden Valley, Minnesota, 55427-4508.
West Metro Fire-Rescue District
By a resolution dated August 25, 1997, the City Council approved entering into an agreement by which a joint powers fire department
would be established by merging the fire departments of New Hope and Crystal. A joint and cooperative agreement created the joint
powers fire department effective January 2, 1998, and operation began in July 1998, under the name West Metro Fire-Rescue District
(the District). The District is governed by a seven-member board of directors that includes one City Council member from each City.
As required by the agreement, the City transferred fire department equipment to the District while retaining its rights to these assets in
the event of the District’s dissolution. The equipment had a net book value of $374,558.
The following financial information is taken from the District’s audited financial statements for the year ended December 31, 2017,
the most recent information available at the date of this report:
Total Assets 4,654,116$
Total Deferred Outflows of Resources 1,396,046
Total Liabilities 2,382,915
Total Deferred Inflows of Resources 1,533,993
Total Net Position 2,133,254
Total Revenue 2,298,692
Total Expenses 2,916,030
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, 2017, the amount reported as
investment in joint venture was $1,045,294.
According to a formula in the agreement, the City’s share of the District’s budget is 49.0 percent. Payments to the District in 2017
totaled $1,097,066.The District’s financial statements for the period ended December 31, 2017 are available at the District office
located at: 4251 Xylon Avenue North, New Hope, Minnesota 55428.
-96-
City of New Hope, Minnesota
Notes to the Financial Statements
December 31, 2017
Note 4: Other Information (Continued)
Jointly Controlled Organizations
1. Shingle Creek Watershed Management Commission (SCWMC)
The City is one of nine member cities of the SCWMC, a joint powers organization formed to assist its members’ preservation and
use of natural water storage and retention systems. The City’s contribution to the SCWMC for its fiscal year ended
December 31, 2017 was $27,414, representing 8.1 percent of members’ contributions for the year.
2. Pets Under Police Security (PUPS)
The City has entered into a joint and cooperative agreement with five other cities to create an organization which provides
efficient and economical impoundment of animals in a jointly owned and operated facility. The City incurred charges of $17,416
for these services in 2017.
3. Hennepin Recycling Group (HRG)
The City is party to a joint powers agreement with two other cities to create an organization to collect, recycle, and dispose of
solid waste in compliance with the Minnesota Waste Management Act. HRG contracts for collection and recycling activities and
the City is billed for services provided to its residents. In 2017, total charges of $222,826 were incurred for these services.
4. Basset Creek Watershed Management Commission (BCWMC)
The City is one of nine member cities of the BCWMC, a joint powers organization formed to assist its members’ preservation and
use of natural water storage and retention systems. Each member city is entitled to appoint one representative to BCWMC board.
The nine-member board develops a budget for the year each July 1. Each member City contributes funds to cover the budgeted
costs of operations based half on the assessed valuation of all taxable property, and half on the total area each member city has
within the boundaries of the watershed. Any capital costs incurred by the BCWMC are apportioned to the members based half on
the real property valuation of each member city within the watershed, and half on the total area each member city has within the
boundaries of the watershed. The City’s 2017 contribution to the BCWMC for its fiscal year ended January 31, 2018 was
$25,917, representing 5.2 percent of member’s contributions for the year.
-97-
THIS PAGE IS LEFT
BLANK INTENTIONALLY
-98-
REQUIRED SUPPLEMENTARY INFORMATION
CITY OF NEW HOPE
NEW HOPE, MINNESOTA
FOR THE YEAR ENDED
DECEMBER 31, 2017
-99-
City of New Hope, Minnesota
Required Supplementary Information
For The Year Ended December 31, 2017
Schedule of Employer’s and Non-employer Contributing Entity’s Share of PERA Net Pension Liability - General Employees
Retirement Fund
State's
Proportionate
City's Share of
Proportionate the Net Pension
Share of Liability City's
Fiscal the Net Pension Associated with Covered-Employee
Year Liability the City Total Payroll
Ending (a)(b)(a+b)(c)
06/30/17 0.0588 %3,753,753$ 47,225$ 3,800,978 $ 3,931,388$ 96.7 %75.9 %
06/30/16 0.0608 4,936,658 64,481 5,001,139 3,643,308 137.3 68.9
06/30/15 0.0617 3,197,614 - 3,197,614 3,627,658 88.1 78.2
Required Supplementary Information
City's
Proportionate
Share of the
Net Pension
Plan Fiduciary
City's
Liability as a
Net Position
Proportion of
Percentage of
as a PercentageCovered-Employee
the Net Pension Payroll of the Total
Liability ((a+b)/c)Pension Liability
Note: Schedule is intended to show 10-year trend. Additional years will be reported as they become available.
Schedule of Employer’s PERA Contributions - General Employees Retirement Fund
Contributions in
Relation to the
Statutorily Statutorily Contribution City's
Required Required Deficiency Covered-Employee
Year Contribution Contribution (Excess)Payroll
Ending (a)(b)(a-b)(c)
12/31/17 286,170$ 286,170$ -$ 3,815,600$ 7.5 %
12/31/16 280,102 280,102 - 3,734,693 7.5
12/31/15 284,367 284,367 - 3,791,560 7.5
(b/c)
Required Supplementary Information
Contributions as
a Percentage of
Payroll
Covered-Employee
Note: Schedule is intended to show 10-year trend. Additional years will be reported as they become available.
-100-
City of New Hope, Minnesota
Required Supplementary Information (Continued)
For The Year Ended December 31, 2017
Notes to the Required Supplementary Information - General Employee Retirement Fund
Changes in Actuarial Assumptions
2017 - The Combined Service Annuity (CSA) loads were changed from 0.8 percent for active members and 60 percent for vested and
non-vested deferred members. The revised CSA loads are now 0.0 percent for active member liability, 15.0 percent for vested deferred
member liability and 3.0 percent for non-vested deferred member liability. The assumed post-retirement benefit increase rate was
changed from 1.0 percent per year for all years to 1.0 percent per year through 2044 and 2.5 percent per year thereafter.
2016 - The assumed post-retirement benefit increase rate was changed from 1.0 percent per year through 2035 and 2.5 percent per
year thereafter to 1.0 percent per year for all future years. The assumed investment return was changed from 7.9 percent to 7.5 percent.
The single discount rate was changed from 7.9 percent to 7.5 percent. Other assumptions were changed pursuant to the experience
study dated June 30, 2015. The assumed future salary increases, payroll growth and inflation were decreased by 0.25 percent to 3.25
percent for payroll growth and 2.50 percent for inflation.
2015 - The assumed post-retirement benefit increase rate was changed from 1.0 percent per year through 2030 and 2.5 percent per
year thereafter to 1.0 percent per year through 2035 and 2.5 percent per year thereafter.
Changes in Plan Provisions
2015 - On January 1, 2015, the Minneapolis Employees Retirement Fund was merged into the General Employees Fund, which
increased the total pension liability by $1.1 billion and increased the fiduciary plan net position by $892 million. Upon consolidation,
state and employer contributions were revised.
-101-
City of New Hope, Minnesota
Required Supplementary Information (Continued)
For The Year Ended December 31, 2017
Schedule of Employer’s Share of PERA Net Pension Liability - Public Employees Police and Fire Fund
State's
Proportionate
City's Share of
Proportionate the Net Pension
Share of Liability City's
Fiscal the Net Pension Associated with Covered-Employee
Year Liability the City Total Payroll
Ending (a)(b)(a+b)(c)
06/30/17 0.2820 %3,807,336$ -$ 3,807,336$ 2,992,514$ 127.2 %85.4 %
06/30/16 0.2940 11,798,732 - 11,798,732 2,732,301 431.8 63.9
06/30/15 0.2820 3,204,180 - 3,204,180 2,579,768 124.2 86.6
Required Supplementary Information
City's
Proportionate
Share of the
Net Pension
Liability as a Plan Fiduciary
City's Percentage of Net Position
Liability ((a+b)/c)Pension Liability
Proportion of Covered-Employee as a Percentage
the Net Pension Payroll of the Total
Note: Schedule is intended to show 10-year trend. Additional years will be reported as they become available.
Schedule of Employer’s PERA Contributions - Public Employees Police and Fire Fund
Contributions in
Relation to the
Statutorily Statutorily Contribution City's
Required Required Deficiency
Year Contribution Contribution (Excess)Payroll
Ending (a)(b)(a-b)(c)
12/31/17 489,202$ 489,202$ -$ 3,019,768$ 16.2 %
12/31/16 444,511 444,511 - 2,743,893 16.2
12/31/15 448,029 448,029 - 2,765,611 16.2
(b/c)
Required Supplementary Information
Contributions as
a Percentage of
Covered-Employee
Payroll
Covered-Employee
Note: Schedule is intended to show 10-year trend. Additional years will be reported as they become available.
-102-
City of New Hope, Minnesota
Required Supplementary Information (Continued)
For The Year Ended December 31, 2017
Notes to the Required Supplementary Information - Public Employees Police and Fire Fund
Changes in Actuarial Assumptions
2017 - Assumed salary increases were changed as recommended in the June 30, 2016 experience study. The net effect is proposed
rates that average 0.34 percent lower than the previous rates. Assumed rates of retirement were changed, resulting in fewer
retirements. The Combined Service Annuity (CSA) load was 30 percent for vested and non-vested deferred members. The CSA has
been changed to 33 percent for vested members and 2 percent for non-vested members. The base mortality table for healthy
annuitants was changed from the RP-2000 fully generational table to the RP-2014 fully generational table (with a base year of 2006),
with male rates adjusted by a factor of 0.96. The mortality improvement scale was changed from Scale AA to Scale MP-2016. The
base mortality table for disabled annuitants was changed from the RP-2000 disabled mortality table to the mortality tables assumed for
healthy retirees. Assumed termination rates were decreased to 3.0 percent for the first three years of service. Rates beyond the select
period of three years were adjusted, resulting in more expected terminations overall. Assumed percentage of married female members
was decreased from 65 percent to 60 percent. Assumed age difference was changed from separate assumptions for male members
(wives assumed to be three years younger) and female members (husbands assumed to be four years older) to the assumption that
males are two years older than females. The assumed percentage of female members electing joint and survivor annuities was
increased. The assumed post-retirement benefit increase rate was changed from 1.00 percent for all years to 1.00 percent per year
through 2064 and 2.50 percent thereafter. The single discount rate was changed from 5.6 percent to 7.5 percent.
2016 - The assumed post-retirement benefit increase rate was changed from 1.0 percent per year through 2037 and 2.5
percent per year thereafter to 1.0 percent per year for all future years. The assumed investment return was changed from 7.9 percent to
7.5 percent. The single discount rate was changed from 7.9 percent to 5.6 percent. The assumed future salary increases, payroll
growth and inflation were decreased by 0.25 percent to 3.25 percent for payroll growth and 2.50 percent for inflation.
2015 - The assumed post-retirement benefit increase rate was changed from 1.0 percent per year through 2030 and 2.5 percent per
year thereafter to 1.0 percent per year through 2037 and 2.5 percent per year thereafter.
Changes in Plan Provisions
2015 - The post-retirement benefit increase to be paid after attainment of the 90 percent funding threshold was changed, from inflation
up to 2.5 percent, to a fixed rate of 2.5 percent.
Schedule of Employer’s Funding Progress for the Other Postemployment Benefit Plan
Unfunded
Actuarial
Actuarial Actuarial Actuarial Accrued
Valuation Value of Accrued Liability Covered
Date Assets Liability (UAAL)Payroll
12/31/17 -$ 759,472$ 759,472$ - %6,176,197$ 12.0 %
01/01/14 - 974,843 974,843 - 4,810,392 20.3
01/01/11 - 1,001,568 1,001,568 - 4,266,321 23.5
Funded
Ratio
UAAL as a
Percentage
of Covered
Payroll
-103-
THIS PAGE IS LEFT
BLANK INTENTIONALLY
-104-
COMBINING AND INDIVIDUAL FUND
FINANCIAL STATEMENTS AND SCHEDULES
CITY OF NEW HOPE
NEW HOPE, MINNESOTA
FOR THE YEAR ENDED
DECEMBER 31, 2017
-105-
City of New Hope, Minnesota
Nonmajor Governmental Funds
Combining Balance Sheet
December 31, 2017
Total
Nonmajor
Special Capital Debt Governmental
Revenue Projects Service Funds
Assets
Cash and temporary investments 309,996$ 2,091,423$ 1,238,047$ 3,639,466$
Receivables
Accrued interest - 6,742 - 6,742
Accounts 24,563 - - 24,563
Special assessments 8,728 69,915 - 78,643
Due from other governments - 9,848 - 9,848
Advances to other funds - 2,587,131 - 2,587,131
Total Assets 343,287$ 4,765,059$ 1,238,047$ 6,346,393$
Liabilities
Accounts and contracts payable 184$ 19,185$ -$ 19,369$
Due to other governments 6,190 - - 6,190
Unearned revenue - 12,000 - 12,000
Total Liabilities 6,374 31,185 - 37,559
Deferred Inflows of Resources
Unavailable revenue - special assessments - 69,915 - 69,915
Fund Balances
Restricted for
Debt service - - 1,238,047 1,238,047
Public safety police expenditures 128,078 - - 128,078
Ice arena 5,131 - - 5,131
Committed to solid waste operations 203,704 - - 203,704
Assigned to
General improvements - 3,068,192 - 3,068,192
Capital equipment - 559,212 - 559,212
Park improvements - 1,044,413 - 1,044,413
Unassigned - (7,858) - (7,858)
Total Fund Balances 336,913 4,663,959 1,238,047 6,238,919
Total Liabilities, Deferred Inflows of
Resources, and Fund Balances 343,287$ 4,765,059$ 1,238,047$ 6,346,393$
-106-
City of New Hope, Minnesota
Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
For the Year Ended December 31, 2017
Total
Nonmajor
Special Capital Debt Governmental
Revenue Projects Service Funds
Revenues
Taxes
Property taxes -$ 323,450$ 604,444$ 927,894$
Intergovernmental - 35,926 - 35,926
Charges for services 227,675 42,481 - 270,156
Special assessments - 12,736 - 12,736
Investment earnings 2,218 26,179 720 29,117
Miscellaneous - 29,050 - 29,050
Total Revenues 229,893 469,822 605,164 1,304,879
Expenditures
Current
Public safety 257 - - 257
Public works 223,561 7,229 - 230,790
Culture and recreation - 204 - 204
Capital outlay
Public works - 330,326 - 330,326
Culture and recreation - 323,297 - 323,297
Debt service
Principal - - 248,497 248,497
Interest - - 185,389 185,389
Total Expenditures 223,818 661,056 433,886 1,318,760
Excess (Deficiency) of Revenues
Over (Under) Expenditures 6,075 (191,234) 171,278 (13,881)
Other Financing Sources (Uses)
Transfers in - 889,940 92,253 982,193
Bonds issued - -789,330 789,330
Transfers out - (218,800) - (218,800)
Total Other Financing
Sources (Uses)- 671,140 881,583 1,552,723
Net Change in Fund Balances 6,075 479,906 1,052,861 1,538,842
Fund Balances, January 1 330,838 4,184,053 185,186 4,700,077
Fund Balances, December 31 336,913$ 4,663,959$ 1,238,047$ 6,238,919$
-107-
THIS PAGE IS LEFT
BLANK INTENTIONALLY
-108-
City of New Hope, Minnesota
Nonmajor Special Revenue Funds
Police Forfeitures Fund - This fund accounts for revenue received mainly from police fines and forfeitures, and is used for special
police, fire, and parks/recreation projects.
Solid Waste Management Fund - This fund accounts for grants and fees to be used to cover the cost of operations of the City’s solid
waste management program.
Ice Arena Endowment Fund - This fund is used to account for contributions and other receipts to be used for future capital needs
and budget requirements of the New Hope Ice Arena.
-109-
City of New Hope, Minnesota
Nonmajor Special Revenue Funds
Subcombining Balance Sheet
December 31, 2017
9021 9016 9017
Police Solid Waste Ice Arena
Forfeitures Management Endowment Total
Assets
Cash and temporary investments 128,078$ 176,787$ 5,131$ 309,996$
Receivables
Accounts - 24,563 - 24,563
Special assessments - 8,728 - 8,728
Total Assets 128,078$ 210,078$ 5,131$ 343,287$
Liabilities
Accounts and contracts payable -$ 184$ -$ 184$
Due to other governments - 6,190 - 6,190
Total Liabilities - 6,374 - 6,374
Fund Balances
Restricted for
Public safety police expenditures 128,078 - - 128,078
Ice arena - - 5,131 5,131
Committed to solid waste operations - 203,704 - 203,704
Total Fund Balances 128,078 203,704 5,131 336,913
Total Liabilities and
Fund Balances 128,078$ 210,078$ 5,131$ 343,287$
-110-
City of New Hope, Minnesota
Nonmajor Special Revenue Funds
Subcombining Statement of Revenues, Expenditures, and Changes in Fund Balances
For the Year Ended December 31, 2017
9021 9016 9017
Police Solid Waste Ice Arena
Forfeitures Management Endowment Total
Revenues
Charges for services -$ 227,675$ -$ 227,675$
Investment earnings 943 1,238 37 2,218
Total Revenues 943 228,913 37 229,893
Expenditures
Current
Public safety
Supplies 257 - - 257
Public works
Other services and charges - 223,561 - 223,561
Total Expenditures 257 223,561 - 223,818
Net Change in Fund Balances 686 5,352 37 6,075
Fund Balances, January 1 127,392 198,352 5,094 330,838
Fund Balances, December 31 128,078$ 203,704$ 5,131$ 336,913$
-111-
City of New Hope, Minnesota
Special Revenue Fund - Solid Waste Management Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balances -
Budget and Actual
For the Year Ended December 31, 2017
Actual Variance with
Original Final Amounts Final Budget
Revenues
Charges for services 218,650$ 218,650$ 227,675$ 9,025$
Investment earnings 1,700 1,700 1,238 (462)
Total Revenues 220,350 220,350 228,913 8,563
Expenditures
Current
Public works
Other services and charges 220,735 220,735 223,561 (2,826)
Net Change in Fund Balances (385) (385) 5,352 5,737
Fund Balances, January 1 198,352 198,352 198,352 -
Fund Balances, December 31 197,967$ 197,967$ 203,704$ 5,737$
Budgeted Amounts
-112-
City o f New Hope, Minnesota
Nonmajor Capital Project Funds
Capital Projects funds account for proceeds from the sale of bonds and other revenue to be used for the purchase or construction of
equipment and capital improvement facilities.
Fire Capital Projects Fund - This fund accounts for the purchases of fire capital equipment.
Xylon Avenue Improvement Fund - This fund accounts for the accumulation of reserves for the Xylon Avenue Improvement
project.
Park Infrastructure Fund - This fund is used to account for park improvement projects.
Temporary Financing Fund – is used to account for various capital project and capital outlay purchases until permanent financing is
acquired.
2016 Street Improvement Project Fund - This fund is used to account for the 2016 street improvement project.
-113-
City of New Hope, Minnesota
Nonmajor Capital Projects Funds
Subcombining Balance Sheet
December 31, 2017
9010 9223 9233 9242 9250
2016 Street
Fire Xylon Avenue Park Temporary Improvement
Capital Projects Improvements Infrastructure Financing Project Total
Assets
Cash and temporary investments 559,212$ -$ 1,057,892$ 474,319$ -$ 2,091,423$
Accrued interest - - - 6,742 - 6,742
Special assessments - - - 69,915 - 69,915
Due from other governments - - 9,848 - - 9,848
Advances to other funds - - - 2,587,131 - 2,587,131
Total Assets 559,212$ -$ 1,067,740$ 3,138,107$ -$ 4,765,059$
Liabilities
Accounts and contracts payable -$ 2,728$ 11,327$ -$ 5,130$ 19,185$
Unearned revenue - - 12,000 - - 12,000
TOTAL LIABILITIES - 2,728 23,327 - 5,130 31,185
Deferred Inflows of Resources
Unavailable revenue - special assessments - - - 69,915 - 69,915
Fund Balances
Assigned to
General improvements - - - 3,068,192 3,068,192
Capital equipment 559,212 - - - - 559,212
Park improvements - - 1,044,413 - - 1,044,413
Unassigned - (2,728) - (5,130) (7,858)
Total Fund Balances 559,212 (2,728) 1,044,413 3,068,192 (5,130) 4,663,959
Total Liabilities, Deferred
Inflows of Resources,
and Fund Balances 559,212$ -$ 1,067,740$ 3,138,107$ -$ 4,765,059$
-114-
City of New Hope, Minnesota
Nonmajor Capital Projects Funds
Subcombining Statement of Revenues, Expenditures, and Changes in Fund Balances
For the Year Ended December 31, 2017
9010 9223 9233 9242 9250
2016 Street
Fire Xylon Avenue Park Temporary Improvement
Capital Projects Improvements Infrastructure Financing Project Total
Revenues
Taxes
Property taxes -$ -$ 323,450$ -$ -$ 323,450$
Intergovernmental
County - - 35,926 - - 35,926
Charges for services - - 42,481 - - 42,481
Special assessments - - - 12,736 - 12,736
Investment earnings 4,209 508 6,919 14,543 - 26,179
Miscellaneous - - 29,050 - - 29,050
Total Revenues 4,209 508 437,826 27,279 -469,822
Expenditures
Current
Public works - 1,113 - - 6,116 7,229
Culture and recreation - -204 - - 204
Capital outlay
Public works - 7,370 - - 322,956 330,326
Culture and recreation - -323,297 - - 323,297
Total Expenditures - 8,483 323,501 - 329,072 661,056
Excess (Deficiency) of Revenues
Over (Under) Expenditures 4,209 (7,975) 114,325 27,279 (329,072) (191,234)
Other Financing Sources (Uses)
Transfers in 150,000 271,550 --468,390 889,940
Transfers out (51,800) -(167,000)--(218,800)
Total Other Financing
Sources (Uses)98,200 271,550 (167,000) -468,390 671,140
Net Change in Fund Balances 102,409 263,575 (52,675) 27,279 139,318 479,906
Fund Balances, January 1 456,803 (266,303) 1,097,088 3,040,913 (144,448) 4,184,053
Fund Balances, December 31 559,212$ (2,728)$ 1,044,413$ 3,068,192$ (5,130)$ 4,663,959$
-115-
THIS PAGE IS LEFT
BLANK INTENTIONALLY
-116-
City o f New Hope, Minnesota
Nonmajor Debt Service Funds
The Debt Service funds are used to account for the payment of principal and interest on the City’s general obligation bonds. Revenues
for this purpose include ad valorem property taxes, special assessments, investment income, and other revenue.
2015A G.O. Tax Increment Bonds - This fund accounts for revenue from property taxes and interest income to be used for the
payment of principal and interest on the City’s 2015A G.O. Tax Increment Bonds.
2010B G.O. Equipment Bonds Fund - This fund accounts for revenue from property taxes and interest income to be used for the
payment of principal and interest on the City’s 2010B G.O. Equipment Bonds.
2016A G.O. Improvement Bonds - This fund accounts for revenue from property taxes and interest income to be used for the
payment of principal and interest on the City’s 2016A G.O. Improvement Bonds.
2015B G.O. Improvement Bonds - This fund accounts for revenue from property taxes and interest income to be used for the
payment of principal and interest on the City’s 2015B G.O. Improvement Bonds.
2017A G.O. Improvement Bonds - This fund accounts for revenue from property taxes and interest income to be used for the
payment of principal and interest on the City’s 2017A G.O. Improvement Bonds.
-117-
City of New Hope, Minnesota
Nonmajor Debt Service Funds
Subcombining Balance Sheet
December 31, 2017
9144 9145 9148 9149 9150
2015A 2010B 2016A 2015B 2017A
G.O.G.O.G.O.G.O.G.O.
Tax Increment Equipment Improvement Improvement Improvement
Bonds Bonds Bonds Bonds Bonds Total
Assets
Cash and temporary investments 170,535$ 196,615$ 41,926$ 39,641$ 789,330$ 1,238,047$
Fund Balances
Restricted for debt service 170,535$ 196,615$ 41,926$ 39,641$ 789,330$ 1,238,047$
-118-
City of New Hope, Minnesota
Nonmajor Debt Service Funds
Subcombining Statement of Revenues, Expenditures, and Changes in Fund Balances
For the Year Ended December 31, 2017
9144 9145 9148 9149 9150
2015A 2010B 2016A 2015B 2017A
G.O.G.O.G.O.G.O.G.O.
Tax Increment Equipment Improvement Improvement Improvement
Bonds Bonds Bonds Bonds Bonds Total
Revenues
Property taxes 235,857$ 163,272$ -$ 205,315$ -$ 604,444$
Investment earnings - 505 15 200 - 720
Total Revenues 235,857 163,777 15 205,515 - 605,164
Expenditures
Debt service
Principal - 140,000 - 108,497 - 248,497
Interest 65,322 12,348 50,342 57,377 - 185,389
Total Expenditures 65,322 152,348 50,342 165,874 - 433,886
Excess (Deficiency) of Revenues
Over (Under) Expenditures 170,535 11,429 (50,327) 39,641 - 171,278
Other Financing Sources
Transfers in - - 92,253 - - 92,253
Bonds issued - - - - 789,330 789,330
Total Other Financing
Sources - - 92,253 - 789,330 881,583
Net Change in Fund Balances 170,535 11,429 41,926 39,641 789,330 1,052,861
Fund Balances, January 1 - 185,186 - - - 185,186
Fund Balances, December 31 170,535$ 196,615$ 41,926$ 39,641$ 789,330$ 1,238,047$
-119-
THIS PAGE IS LEFT
BLANK INTENTIONALLY
-120-
City of New Hope, Minnesota
General Fund
Schedule of Revenues, Expenditures and
Changes in Fund Balances - Budget and Actual (Continued on the Following Pages)
For the Year Ended December 31, 2017
(With Comparative Actual Amounts for the Year Ended December 31, 2016)
2016
Actual Variance with Actual
Original Final Amounts Final Budget Amounts
Revenues
Taxes
Property taxes 9,547,357$ 9,547,357$ 9,541,667$ (5,690)$ 8,954,626$
Franchise taxes 440,000 440,000 440,000 - 447,248
Total Taxes 9,987,357 9,987,357 9,981,667 (5,690) 9,401,874
Licenses and permits
Business regulatory licenses 80,830 80,830 77,584 (3,246) 84,663
Non-business licenses and permits 366,500 366,500 564,286 197,786 381,885
Total Licenses and permits 447,330 447,330 641,870 194,540 466,548
Intergovernmental
Local government aid 621,879 621,879 621,869 (10) 616,161
Highway maintenance aid 185,000 185,000 191,089 6,089 191,424
Other federal, state, and local grants 31,850 31,850 92,929 61,079 87,657
State insurance premium tax 255,000 255,000 271,513 16,513 274,938
Total Intergovernmental 1,093,729 1,093,729 1,177,400 83,671 1,170,180
Charges for services
General government 181,900 181,900 261,377 79,477 182,857
Public safety 527,500 527,500 529,396 1,896 461,920
Public works 4,850 4,850 10,809 5,959 5,574
Culture and recreation 641,550 641,550 655,877 14,327 674,273
Total Charges for services 1,355,800 1,355,800 1,457,459 101,659 1,324,624
Fines and forfeitures 250,000 250,000 208,909 (41,091) 188,285
Special assessments - - 30,964 30,964 11,751
Investment earnings 50,000 50,000 53,581 3,581 18,421
Miscellaneous 62,500 62,500 35,096 (27,404) 633
Total Revenues 13,246,716 13,246,716 13,586,946 340,230 12,582,316
Budgeted Amounts
2017
-121-
City of New Hope, Minnesota
General Fund
Schedule of Revenues, Expenditures and
Changes in Fund Balances - Budget and Actual (Continued)
For the Year Ended December 31, 2017
(With Comparative Actual Amounts for the Year Ended December 31, 2016)
2016
Actual Variance with Actual
Original Final Amounts Final Budget Amounts
Expenditures
Current
General government
Mayor and City Council
Personnel services 53,200$ 53,200$ 55,545$ (2,345)$ 52,183$
Supplies 2,000 2,000 2,568 (568) 1,784
Other services and charges 44,992 44,992 44,631 361 44,059
Total Mayor and City Council 100,192 100,192 102,744 (2,552) 98,026
City hall
Supplies 24,500 24,500 21,356 3,144 21,649
Other services and charges 263,608 263,608 243,743 19,865 201,279
Total City hall 288,108 288,108 265,099 23,009 222,928
City manager
Personnel services 365,500 365,500 371,902 (6,402) 369,991
Supplies 1,000 1,000 5,454 (4,454) 2,485
Other services and charges 15,451 15,451 20,341 (4,890) 25,623
Total City manager 381,951 381,951 397,697 (15,746) 398,099
Elections
Personnel services - - - - 31,353
Supplies - - - - 2,626
Other services and charges 4,100 4,100 4,442 (342) 5,432
Total Elections 4,100 4,100 4,442 (342) 39,411
Finance
Personnel services 163,800 163,800 161,795 2,005 160,048
Supplies 1,500 1,500 951 549 1,454
Other services and charges 125,562 125,562 131,354 (5,792) 142,081
Total Finance 290,862 290,862 294,100 (3,238) 303,583
Auditing
Other services and charges 21,941 21,941 21,938 3 21,600
Assessing
Other services and charges 130,000 130,000 130,000 - 125,201
Legal
Other services and charges 38,000 38,000 41,901 (3,901) 38,887
Human resources
Personnel services 243,600 243,600 245,458 (1,858) 239,978
Supplies 1,000 1,000 343 657 331
Other services and charges 61,579 61,579 24,564 37,015 27,065
Total Human resources 306,179 306,179 270,365 35,814 267,374
Budgeted Amounts
2017
-122-
City of New Hope, Minnesota
General Fund
Schedule of Revenues, Expenditures and
Changes in Fund Balances - Budget and Actual (Continued)
For the Year Ended December 31, 2017
(With Comparative Actual Amounts for the Year Ended December 31, 2016)
2016
Actual Variance with Actual
Original Final Amounts Final Budget Amounts
Budgeted Amounts
2017
Expenditures (Continued)
Current (continued)
General government (continued)
Planning and zoning
Personnel services 118,000$ 118,000$ 33,740$ 84,260$ 43,022$
Supplies 800 800 294 506 103
Other services and charges 49,699 49,699 58,484 (8,785) 41,961
Total Planning and zoning 168,499 168,499 92,518 75,981 85,086
Communication
Personnel services 99,800 99,800 103,226 (3,426) 99,724
Supplies 4,500 4,500 3,838 662 1,582
Other services and charges 42,355 42,355 38,811 3,544 34,463
Total Communication 146,655 146,655 145,875 780 135,769
Total general government 1,876,487 1,876,487 1,766,679 109,808 1,735,964
Public safety
Police
Personnel services 4,836,900 4,836,900 4,588,189 248,711 4,242,907
Supplies 88,250 88,250 102,527 (14,277) 95,776
Other services and charges 1,112,370 1,112,370 1,131,089 (18,719) 1,094,522
Total Police 6,037,520 6,037,520 5,821,805 215,715 5,433,205
Police reserves
Personnel services - - 2,370 (2,370) 10,629
Supplies 3,805 3,805 3,647 158 1,215
Other services and charges 23,802 23,802 26,081 (2,279) 15,811
Total Police reserves 27,607 27,607 32,098 (4,491) 27,655
Fire and safety
Supplies 5,000 5,000 388 4,612 713
Other services and charges 1,143,829 1,143,829 1,143,622 207 1,078,474
Total Fire and safety 1,148,829 1,148,829 1,144,010 4,819 1,079,187
Animal control
Personnel services 75,200 75,200 74,650 550 72,963
Supplies 675 675 264 411 1,610
Other services and charges 42,742 42,742 43,363 (621) 36,682
Total Animal control 118,617 118,617 118,277 340 111,255
-123-
City of New Hope, Minnesota
General Fund
Schedule of Revenues, Expenditures and
Changes in Fund Balances - Budget and Actual (Continued)
For the Year Ended December 31, 2017
(With Comparative Actual Amounts for the Year Ended December 31, 2016)
2016
Actual Variance with Actual
Original Final Amounts Final Budget Amounts
Budgeted Amounts
2017
Expenditures (Continued)
Current (continued)
Public safety (continued)
Protective inspection
Personnel services 376,100$ 376,100$ 372,677$ 3,423$ 357,210$
Supplies 3,450 3,450 1,428 2,022 2,041
Other services and charges 134,197 134,197 234,398 (100,201) 152,019
Total Protective inspection 513,747 513,747 608,503 (94,756) 511,270
Total public safety 7,846,320 7,846,320 7,724,693 121,627 7,162,572
Public works
Street maintenance
Personnel services 505,400 505,400 516,345 (10,945) 521,860
Supplies 132,000 132,000 96,086 35,914 122,786
Other services and charges 838,563 838,563 810,007 28,556 711,248
Total Street maintenance 1,475,963 1,475,963 1,422,438 53,525 1,355,894
Engineering
Other services and charges 35,000 35,000 12,818 22,182 33,659
Total public works 1,510,963 1,510,963 1,435,256 75,707 1,389,553
Culture and recreation
Recreation
Personnel services 581,800 581,800 586,125 (4,325) 560,936
Supplies 106,700 106,700 116,311 (9,611) 114,047
Other services and charges 237,617 237,617 243,552 (5,935) 229,127
Total Culture and recreation 926,117 926,117 945,988 (19,871) 904,110
Parks
Personnel services 577,200 577,200 528,344 48,856 534,566
Supplies 38,590 38,590 30,129 8,461 29,440
Other services and charges 384,304 384,304 362,506 21,798 259,098
Total Parks 1,000,094 1,000,094 920,979 79,115 823,104
Swimming pool
Personnel services 138,100 138,100 131,493 6,607 132,194
Supplies 37,900 37,900 27,843 10,057 32,497
Other services and charges 45,695 45,695 40,185 5,510 40,526
Total Swimming pool 221,695 221,695 199,521 22,174 205,217
Total culture and recreation 2,147,906 2,147,906 2,066,488 81,418 1,932,431
Total current expenditures 13,381,676 13,381,676 12,993,116 388,560 12,220,520
-124-
See accountant's compilation report.
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, 2017
(With Comparative Actual Amounts for the Year Ended December 31, 2016)
2016
Actual Variance with Actual
Original Final Amounts Final Budget Amounts
Budgeted Amounts
2017
Expenditures (Continued)
Capital outlay
General government 20,000$ 20,000$ 1,200$ 18,800$ 14,450$
Public safety 160,300 160,300 144,061 16,239 139,280
Culture and recreation 3,500 3,500 2,352 1,148 -
Total Capital outlay 183,800 183,800 147,613 36,187 153,730
Total Expenditures 13,565,476 13,565,476 13,140,729 424,747 12,374,250
Excess (Deficiency) of Revenues
Over (Under) Expenditures (318,760) (318,760) 446,217 764,977 208,066
Other Financing Sources (Uses)
Transfers in 318,760 318,760 318,760 - 235,200
Transfers out - - (150,000) (150,000) (250,000)
Total Other Financing
Sources (Uses)318,760 318,760 168,760 (150,000) (14,800)
Net Change in Fund Balances - - 614,977 614,977 193,266
Fund Balances, January 1 6,273,678 6,273,678 6,273,678 - 6,080,412
Fund Balances, December 31 6,273,678$ 6,273,678$ 6,888,655$ 614,977$ 6,273,678$
-125-
THIS PAGE IS LEFT
BLANK INTENTIONALLY
-126-
City o f New Hope, Minnesota
Internal Service Funds
Internal service funds are used to account for activities and services performed for other organizational units within the City. Charges
to other City agencies are made to support these activities.
Central Garage Fund - This fund is used to account for the rental of motor vehicles and other equipment to other departments.
Employee Leave Fund - This fund accounts for the cost of providing leave time benefits to employees, which includes vacation,
holiday, sick time, and personal leave. Funding is based on chargebacks to department based on a percentage of wages.
Insurance Reserve Fund - This fund accounts for all insurance costs for the City. Funding is provided by chargebacks to departments
by percentage of wages for health, dental, life, and disability insurance. Funding for general liability and property insurance is
provided by chargebacks to departments based on activities and the use of property.
Information Technology Fund - This fund accounts for the City’s investment in, and operations of, computer networks, application
and system software, Internet access, data storage, and related activities.
-127-
City of New Hope, Minnesota
Internal Service Funds
Combining Statement of Net Position
December 31, 2017
9402 9408 9407 9410
Central Employee Insurance Information
Garage Leave Reserve Technology Totals
Assets
Current Assets
Cash and temporary investments 5,614,028$ 1,118,228$ 675,611$ 487,543$ 7,895,410$
Receivables
Accounts - - 6,304 - 6,304
Inventories 77,042 - - - 77,042
Total Current Assets 5,691,070 1,118,228 681,915 487,543 7,978,756
Noncurrent Assets
Capital assets
Land 85,647 - - - 85,647
Buildings and structures 3,158,296 - - - 3,158,296
Vehicles and equipment 8,795,618 - - 344,383 9,140,001
Less: accumulated depreciation (8,668,031) - - (290,583) (8,958,614)
Total Capital Assets
(Net of Accumulated Depreciation)3,371,530 - - 53,800 3,425,330
Total Assets 9,062,600 1,118,228 681,915 541,343 11,404,086
Deferred Outflows of Resources
Deferred pension resources 45,380 - - - 45,380
Liabilities
Current Liabilities
Accrued salaries payable 5,254 20,397 71,036 - 96,687
Accounts and contracts payable 36,368 - 82,566 7,349 126,283
Due to other governments 1,278 - 19 21,364 22,661
Compensated absences payable, current portion - 60,557 - - 60,557
Total Current Liabilities 42,900 80,954 153,621 28,713 306,188
Noncurrent Liabilities
Other postemployment benefits payable - - 365,877 - 365,877
Pension liability 191,801 - - - 191,801
Compensated absences payable - 545,010 - - 545,010
Total Noncurrent Liabilities 191,801 545,010 365,877 - 1,102,688
Total Liabilities 234,701 625,964 519,498 28,713 1,408,876
Deferred Inflows of Resources
Deferred pension resources 48,527 - - - 48,527
Net Position
Net investment in capital assets 3,371,530 - - 53,800 3,425,330
Unrestricted 5,453,222 492,264 162,417 458,830 6,566,733
Total Net Position 8,824,752$ 492,264$ 162,417$ 512,630$ 9,992,063$
-128-
City of New Hope, Minnesota
Internal Service Funds
Combining Statement of Revenues, Expenses and
Changes in Net Position
For the Year Ended December 31, 2017
9402 9408 9407 9410
Central Employee Insurance Information
Garage Leave Reserve Technology Totals
Operating Revenues
Billings to departments 2,129,010$ 627,386$ 17,489$ 714,516$ 3,488,401$
Other 69 - 24,475 - 24,544
Total Operating Revenues 2,129,079 627,386 41,964 714,516 3,512,945
Operating Expenses
Personnel services 257,564 515,432 48,581 - 821,577
Supplies 248,599 - - 51,726 300,325
Utilities 52,727 - - 41,912 94,639
Other services and charges 274,926 - 87,046 455,964 817,936
Depreciation 779,151 - -23,661 802,812
Total Operating Expenses 1,612,967 515,432 135,627 573,263 2,837,289
Operating Income (Loss)516,112 111,954 (93,663) 141,253 675,656
Nonoperating Revenues
Investment earnings 29,308 7,594 4,464 3,128 44,494
Gain on sale of capital assets 56,600 - - - 56,600
Total Nonoperating Revenues 85,908 7,594 4,464 3,128 101,094
Income (Loss) Before Transfers 602,020 119,548 (89,199) 144,381 776,750
Transfers Out (33,075) - - (52,920) (85,995)
Change in Net Position 568,945 119,548 (89,199) 91,461 690,755
Net Position, January 1 8,255,807 372,716 251,616 421,169 9,301,308
Net Position, December 31 8,824,752$ 492,264$ 162,417$ 512,630$ 9,992,063$
-129-
City of New Hope, Minnesota
Internal Service Funds
Combining Statement of Cash Flows
For the Year Ended December 31, 2017
9402 9408 9407 9410
Central Employee Insurance Information
Garage Leave Reserve Technology Totals
Cash Flows from Operating Activities
Receipts from interfund services provided 2,129,010$ 627,386$ 89,263$ 714,516$ 3,560,175$
Other operating receipts - - 24,475 - 24,475
Payments to suppliers (557,114) - (23,543) (605,291) (1,185,948)
Payments to employees (274,208) (475,011) - - (749,219)
Net Cash Provided
by Operating Activities 1,297,688 152,375 90,195 109,225 1,649,483
Cash Flows from Noncapital
Financing Activities
Transfers out (33,075) - - (52,920) (85,995)
Cash Flows from Capital
and Related Financing Activities
Acquisition capital assets (601,826) - - - (601,826)
Proceeds from sale of assets 63,501 - - - 63,501
Net Cash Used by Capital
and Related Financing Activities (538,325) - - - (538,325)
Investment earnings 29,308 7,594 4,464 3,128 44,494
Net Increase
in Cash and Cash Equivalents 755,596 159,969 94,659 59,433 1,069,657
Cash and Cash Equivalents, January 1 4,858,432 958,259 580,952 428,110 6,825,753
Cash and Cash Equivalents, December 31 5,614,028$ 1,118,228$ 675,611$ 487,543$ 7,895,410$
Reconciliation of Operating Income (Loss)
to Net Cash Provided
by Operating Activities
Operating income (loss)516,112$ 111,954$ (93,663)$ 141,253$ 675,656$
Adjustments to reconcile operating income (loss)
to net cash provided by operating activities
Depreciation 779,151 - - 23,661 802,812
(Increase) decrease in assets
Accounts receivable - - 71,774 - 71,774
Inventories 7,734 - - - 7,734
(Increase) decrease in deferred inflows of resources
Deferred pension resources 56,427 - - - 56,427
Increase (decrease) in liabilities
Accounts and contracts payable 11,401 - 29,510 (55,126) (14,215)
Accrued salaries payable 315 1,499 33,974 - 35,788
Due to other governments 3 - 19 (563) (541)
Compensated absences payable - 38,922 - - 38,922
Other postemployment benefits payable - -48,581 - 48,581
Pension liability (90,637) - - - (90,637)
Increase (decrease) in deferred outflows of resources
Deferred pension resources 17,182 - - - 17,182
Net Cash Provided
by Operating Activities 1,297,688$ 152,375$ 90,195$ 109,225$ 1,649,483$
Schedule of Noncash Capital and
Related Financing Activities
Loss on disposal of capital assets 6,901$ -$ -$ -$ 6,901$
Cash Flows from Investing Activities
-130-
City of New Hope, Minnesota
Combining Statement of Fiduciary Net Position
Agency Funds
December 31, 2017
9503 9504
Pass-Through Flexible
Grant Fund Spending Fund Total
Assets
-$ 8,249$ 8,249$
Liabilities
Accounts payable -$ 469$ 469$
Deposits payable - 7,780 7,780
Total Liabilities -$ 8,249$ 8,249$
Cash and temporary investments
-131-
City of New Hope, Minnesota
Agency Funds
Combining Statement of Changes in Assets and Liabilities
For the Year Ended December 31, 2017
Balance Balance
January 1 Additions Deductions December 31
Pass-through Grant Fund
Assets
Cash and temporary investments 69,749$ 16,046$ (85,795)$ -$
Liabilities
Deposits payable 69,749$ 16,046$ (85,795)$ -$
Flexible Spending Fund
Assets
Cash and temporary investments 5,146$ 21,497$ (18,394)$ 8,249$
Liabilities
Accounts payable -$ 469$ -$ 469$
Deposits payable 5,146 21,028 (18,394) 7,780
Total Liabilities 5,146$ 21,497$ (18,394)$ 8,249$
Total - All Funds
Assets
Cash and temporary investments 74,895$ 37,543$ (104,189)$ 8,249$
Liabilities
Accounts payable -$ 469$ -$ 469$
Deposits payable 74,895 37,074 (104,189) 7,780
Total Liabilities 74,895$ 37,543$ (104,189)$ 8,249$
-132-
STATISTICAL SECTION (UNAUDITED)
CITY OF NEW HOPE
NEW HOPE, MINNESOTA
FOR THE YEAR ENDED
DECEMBER 31, 2017
-133-
THIS PAGE IS LEFT
BLANK INTENTIONALLY
-134-
Statistical Section
(Unaudited)
This part of the City’s comprehensive annual financial report presents detailed information as a context for understanding what the
information in the financial statements, note disclosures, and required supplementary information says about the City’s overall
financial health.
Financial Trends
These schedules contain trend information to help the reader understand how the City’s financial performance and well-being
have changed over time.
Revenue Capacity
These schedules contain information to help the reader assessthe City’s most significant local revenue source; property taxes.
Debt Capacity
These schedules present information to help the reader assess the affordability of the City’s current levels of outstanding debt and
the City’s ability to issue additional debt in the future.
Demographic and Economic Information
These schedules offer demographic and economic indicators to help the reader understand the environment within which the
City’s financial activities take place.
Operating Information
These schedules contain service and infrastructure data to help the reader understand how the information in the City’s financial
report relates to the services the City provides and the activities it performs.
Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for
the relevant year.
-135-
THIS PAGE IS LEFT
BLANK INTENTIONALLY
-136-
2017 2016
Revenues
Taxes
Property taxes 11,961,711$ 10,868,985$ 10.05 %
Tax increments 841,098 492,584 70.75
Franchise taxes 912,357 447,248 103.99
Licenses and permits 641,870 466,548 37.58
Intergovernmental 1,844,648 2,063,546 (10.61)
Charges for services 1,727,615 1,571,798 9.91
Fines and forfeitures 208,909 191,960 8.83
Special assessments 92,458 173,158 (46.60)
Investment earnings 486,746 304,252 59.98
Miscellaneous 137,591 42,103 226.80
Total Revenues 18,855,003$ 16,622,182$ 13.43 %
Per Capita 873$ 783$ 11.46 %
Expenditures
Current
General government 2,622,277$ 1,872,436$ 40.05 %
Public safety 7,724,950 7,168,102 7.77
Public works 1,671,593 1,606,369 4.06
Culture and recreation 2,066,692 1,938,131 6.63
Economic development 1,737,947 588,167 195.49
Capital outlay 5,217,461 8,220,964 (36.53)
Debt service
Principal 523,497 415,000 26.14
Interest 455,539 257,661 76.80
Bond issuance costs 251,648 58,188 332.47
Total Expenditures 22,271,604$ 22,125,018$ 0.66 %
Per Capita 1,031$ 1,042$ (1.06) %
Total Long-term Indebtedness 31,265,578$ 13,354,075$ 134.13 %
Per capita 1,447 629 130.05
General Fund Balance - December 31 6,888,655$ 6,273,678$ 9.80 %
Per capita 319 296 7.77
The purpose of this report is to provide a summary of financial information concerning the City of New Hope to
interested citizens. The complete financial statements may be examined at City Hall, 4401 Xylon Avenue North, New Hope,
Minnesota 55428. Questions about this report should be directed to Kirk McDonald, City Manager at (763) 531-5112.
City of New Hope, Minnesota
Summary Financial Report
Revenues and Expenditures For General Operations
Governmental Funds
(Decrease)
Increase
Percent
Total
For the Year Ended December 31, 2017
-137-
City of New Hope, Minnesota
Statistical Section (Unaudited)
Net Position by Component
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2011
2008 2009 2010 (Restated)
Governmental Activities
Net investment in capital assets 16,099,860$ 16,411,454$ 16,495,175$ 20,628,143$
Restricted 17,857,296 19,454,696 9,279,142 6,018,734
Unrestricted 8,643,991 9,151,912 21,971,477 21,845,278
Total Governmental Activities Net Position 42,601,147$ 45,018,062$ 47,745,794$ 48,492,155$
Business-type Activities
Net investment in capital assets 9,008,538$ 9,395,068$ 9,989,405$ 11,114,666$
Restricted - - - -
Unrestricted 1,423,111 1,650,590 2,541,156 3,978,803
Total Business-type Activities Net Position 10,431,649$ 11,045,658$ 12,530,561$ 15,093,469$
Total Primary Government
Net investment in capital assets 25,108,398$ 25,806,522$ 26,484,580$ 31,742,809$
Restricted 17,857,296 19,454,696 9,279,142 6,018,734
Unrestricted 10,067,102 10,802,502 24,512,633 25,824,081
Total Primary Government 53,032,796$ 56,063,720$ 60,276,355$ 63,585,624$
Note: The City implemented GASB Statement No. 63 and GASB Statement No. 65 in fiscal 2012. Net position information has been
restated for 2011 for this accounting change. Years prior to 2011 have not been restated. The City implemented GASB Statement No.
67 and GASB Statement No. 68 in fiscal 2015. Net position information has not been restated for prior years.
Fiscal Year
-138-
2012 2013 2014 2015 2016 2017
26,793,142$ 30,509,373$ 26,305,906$ 27,549,276$ 29,951,754$ 27,747,845$
1,619,696 1,619,394 5,680,117 5,917,848 4,893,801 6,207,578
22,746,207 23,704,592 23,130,558 14,623,043 11,081,824 12,104,041
51,159,045$ 55,833,359$ 55,116,581$ 48,090,167$ 45,927,379$ 46,059,464$
12,843,624$ 14,142,276$ 14,757,333$ 16,087,559$ 19,286,134$ 18,663,872$
150,000 300,000 455,000 627,939 868,853 1,031,673
2,735,144 2,496,008 1,798,707 (825,297) (1,839,376) 144,559
15,728,768$ 16,938,284$ 17,011,040$ 15,890,201$ 18,315,611$ 19,840,104$
39,636,766$ 44,651,649$ 41,063,239$ 43,636,835$ 49,237,888$ 46,411,717$
1,769,696 1,919,394 6,135,117 6,545,787 5,762,654 7,239,251
25,481,351 26,200,600 24,929,265 13,797,746 9,242,448 12,248,600
66,887,813$ 72,771,643$ 72,127,621$ 63,980,368$ 64,242,990$ 65,899,568$
Fiscal Year
-139-
City of New Hope, Minnesota
Statistical Section (Unaudited)
Changes in Net Position (Continued on the Following Pages)
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2011
2008 2009 2010 (Restated)
Expenses
Governmental Activities
General government 2,492,386$ 2,244,977$ 2,552,425$ 1,841,145$
Public safety 5,988,010 6,218,996 5,864,775 6,129,860
Public works 1,381,386 1,291,983 1,625,959 1,795,189
Culture and recreation 1,967,129 2,053,788 1,899,105 1,882,279
Economic development - - 192,431 536,433
Interest on long-term debt 340,081 275,532 252,224 236,827
Total Governmental Activities Expenses 12,168,992 12,085,276 12,386,919 12,421,733
Business-type Activities
Sewer - - 1,928,845 2,068,282
Water 4,915,929 5,265,147 2,915,757 3,530,521
Golf course 383,521 369,579 346,345 322,679
Ice arena 780,816 694,039 712,153 844,828
Storm water 361,542 393,118 430,899 485,943
Street lighting 121,912 126,983 104,099 113,753
Total Business-type Activities Expenses 6,563,720 6,848,866 6,438,098 7,366,006
Total Expenses 18,732,712$ 18,934,142$ 18,825,017$ 19,787,739$
Program Revenues
Governmental Activities
Charges for services
General government 1,164,394$ 1,048,549$ 984,855$ 220,629$
Public safety 151,180 134,680 218,732 877,159
Public works - - - 219,353
Culture and recreation 579,694 527,079 562,383 637,077
Economic development - - 104,713 98,139
Operating grants and contributions 388,166 586,508 1,356,292 783,382
Capital grants and contributions 63,947 117,544 787,047 1,107,042
Total Governmental Activities Program Revenues 2,347,381 2,414,360 4,014,022 3,942,781
Business-Type Activities
Charges for services
Sewer utility - - 2,292,300 2,352,635
Water utility 5,175,878 5,141,131 3,082,771 3,169,859
Golf course 330,782 345,550 313,941 278,788
Ice arena 659,377 723,975 741,266 752,671
Storm water 951,699 933,828 943,883 947,031
Street lighting 133,634 149,339 121,647 122,742
Operating grants and contributions 16,250 66,609 470,183 24,031
Capital grants and contributions 16,353 75,209 30,739 114,826
Total Business-type Activities Program Revenues 7,283,973 7,435,641 7,996,730 7,762,583
Total Program Revenues 9,631,354$ 9,850,001$ 12,010,752$ 11,705,364$
Fiscal Year
-140-
2012 2013 2014 2015 2016 2017
1,931,318$ 1,837,194$ 1,976,377$ 1,700,133$ 1,871,736$ 2,666,781$
6,062,362 6,238,779 6,795,836 7,258,504 9,463,124 8,257,709
2,126,043 1,790,669 2,467,618 4,229,077 3,143,421 2,975,007
1,928,591 1,946,243 2,145,224 2,223,152 2,405,905 2,485,417
762,202 431,332 1,704,010 655,093 732,106 2,163,967
407,744 289,009 140,321 269,284 323,326 725,982
13,218,260 12,533,226 15,229,386 16,335,243 17,939,618 19,274,863
2,220,438 2,310,604 1,976,864 2,458,724 2,187,006 2,399,248
3,682,602 3,215,714 4,635,686 4,584,929 3,633,022 3,504,722
298,555 262,894 304,059 291,695 341,776 322,278
771,628 957,784 877,826 880,581 949,438 996,056
425,112 768,610 558,160 713,218 830,108 834,688
104,721 117,518 99,560 105,452 102,894 101,668
7,503,056 7,633,124 8,452,155 9,034,599 8,044,244 8,158,660
20,721,316$ 20,166,350$ 23,681,541$ 25,369,842$ 25,983,862$ 27,433,523$
177,174$ 198,297$ 234,440$ 254,333$ 267,970$ 340,421$
804,725 880,843 1,047,721 1,073,079 1,035,725 1,302,551
219,548 226,228 224,790 219,634 220,208 234,564
653,293 672,067 617,459 668,480 699,613 686,335
94,664 - - - 20,000 41,112
2,162,263 828,276 1,013,058 845,517 1,002,681 777,368
245,290 3,929,565 47,917 460,537 711,527 1,150,840
4,356,957 6,735,276 3,185,385 3,521,580 3,957,724 4,533,191
2,376,021 2,443,202 2,414,482 2,468,638 2,627,875 2,899,257
3,581,225 3,460,008 3,634,873 3,777,108 4,124,346 4,289,255
296,316 268,133 254,508 287,056 315,162 283,375
694,702 725,211 775,784 745,886 749,689 849,701
948,650 963,167 948,537 981,723 1,037,429 1,082,348
124,397 125,604 123,060 128,890 137,525 137,491
22,340 306,520 444,484 33,032 159,898 27,568
106,291 225,300 11,469 194,590 1,394,822 58,237
8,149,942 8,517,145 8,607,197 8,616,923 10,546,746 9,627,232
12,506,899$ 15,252,421$ 11,792,582$ 12,138,503$ 14,504,470$ 14,160,423$
Fiscal Year
-141-
City of New Hope, Minnesota
Statistical Section (Unaudited)
Changes in Net Position (Continued)
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2011
2008 2009 2010 (Restated)
Net Revenues (Expenses)
Governmental activities (9,821,611)$ (9,670,916)$ (8,372,897)$ (8,478,952)$
Business-type activities 720,253 586,775 1,558,632 396,577
Total Primary Government Revenues (Expenses)(9,101,358)$ (9,084,141)$ (6,814,265)$ (8,082,375)$
General Revenues and Other Changes in Net Position
General Revenues
Governmental Activities
Taxes
Property taxes 8,416,466$ 8,760,482$ 8,730,979$ 8,784,948$
Tax increments 1,835,749 1,262,598 1,408,256 1,400,163
Franchise taxes 441,133 438,744 430,494 439,795
Grants and contributions not
restricted to specific programs 666,543 755,762 79,529 87,206
Unrestricted investment earnings 992,673 723,565 337,312 745,484
Gain on sale of capital assets - - 22,930 13,568
Miscellaneous 96,911 146,680 - -
Transfers (30,067) - 91,129 (2,163,781)
Total Governmental Activities General Revenues 12,419,408 12,087,831 11,100,629 9,307,383
Business-type Activities
Unrestricted investment earnings 37,481 27,234 17,400 71,089
Transfers 30,067 - (91,129) 2,163,781
Total Business-type Activities General Revenues 67,548 27,234 (73,729) 2,234,870
Total Primary Government 12,486,956$ 12,115,065$ 11,026,900$ 11,542,253$
Change in Net Position
Governmental activities 2,597,797$ 2,416,915$ 2,727,732$ 828,431$
Business-type activities 787,801 614,009 1,484,903 2,631,447
Total Primary Government 3,385,598$ 3,030,924$ 4,212,635$ 3,459,878$
Fiscal Year
Note: The City implemented GASB Statement No. 63 and GASB Statement No. 65 in fiscal 2012. Net position
information has been restated for 2011 for this accounting change. Years prior to 2011 have not been restated. The City
implemented GASB Statement No. 67 and GASB Statement No. 68 in fiscal 2015. Net position information has not
been restated for prior years.
-142-
2012 2013 2014 2015 2016 2017
(8,861,303)$ (5,797,950)$ (12,044,001)$ (12,813,663)$ (13,981,894)$ (14,741,672)$
646,886 884,021 155,042 (417,676) 2,502,502 1,468,572
(8,214,417)$ (4,913,929)$ (11,888,959)$ (13,231,339)$ (11,479,392)$ (13,273,100)$
9,129,247$ 9,554,629$ 9,732,776$ 10,131,759$ 10,843,702$ 11,929,597$
1,343,248 511,924 537,871 430,879 492,584 841,098
440,149 438,834 438,541 442,556 447,248 912,357
47,662 49,005 179,537 600,030 633,056 628,119
429,595 198,658 324,498 331,417 377,960 531,240
69,321 37,201 - - - 50,456
- - - - - -
68,971 (317,987) 114,000 68,204 121,800 (19,110)
11,528,193 10,472,264 11,327,223 12,004,845 12,916,350 14,873,757
57,384 7,508 31,714 35,700 44,708 36,811
(68,971) 317,987 (114,000) (68,204) (121,800) 19,110
(11,587) 325,495 (82,286) (32,504) (77,092) 55,921
11,516,606$ 10,797,759$ 11,244,937$ 11,972,341$ 12,839,258$ 14,929,678$
2,666,890$ 4,674,314$ (716,778)$ (808,818)$ (1,065,544)$ 132,085$
635,299 1,209,516 72,756 (450,180) 2,425,410 1,524,493
3,302,189$ 5,883,830$ (644,022)$ (1,258,998)$ 1,359,866$ 1,656,578$
Fiscal Year
-143-
THIS PAGE IS LEFT
BLANK INTENTIONALLY
-144-
City of New Hope, Minnesota
Statistical Section (Unaudited)
Governmental Activities Tax Revenues by Source
Last Ten Fiscal Years
(Accrual Basis of Accounting)
Fiscal Property Tax Franchise
Year tax increments tax Total
2008 8,416,466$ 1,835,749$ 441,133$ 10,693,348$
2009 8,760,482 1,262,598 438,744 10,461,824
2010 8,730,979 1,408,256 430,494 10,569,729
2011 8,784,948 1,400,163 439,795 10,624,906
2012 9,129,247 1,343,248 440,149 10,912,644
2013 9,554,629 511,924 438,834 10,505,387
2014 9,732,776 537,871 438,541 10,709,188
2015 10,131,759 430,879 442,556 11,005,194
2016 10,843,702 492,584 447,248 11,783,534
2017 11,929,597 841,098 912,357 13,683,052
-145-
City of New Hope, Minnesota
Statistical Section (Unaudited)
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
2011
2008 2009 2010 (Restated)
General Fund
Reserved -$ -$ 63,753$ -$
Unreserved 3,952,477 4,354,351 4,527,847 -
Nonspendable - - - 14,366
Unassigned - - - 4,920,846
Total General Fund 3,952,477$ 4,354,351$ 4,591,600$ 4,935,212$
All Other Governmental Funds
Reserved 2,433,162$ 4,699,636$ 9,043,337$ -$
Unreserved, reported in
Special Revenue funds 2,993,986 3,266,399 3,129,062 -
Debt Service funds 6,571,884 6,450,295 - -
Capital Project funds 5,962,599 5,317,588 9,771,932 -
Restricted - - - 6,114,114
Committed - - - 4,666,447
Assigned - - - 6,877,641
Unassigned - - - -
Total All Other Governmental Funds 17,961,631$ 19,733,918$ 21,944,331$ 17,658,202$
Total All Governmental Funds 21,914,108$ 24,088,269$ 26,535,931$ 22,593,414$
Note: The City implemented GASB 54 in fiscal year 2011, resulting in significant reclassification of the components of fund balance.
Years prior to 2011 have not been restated.
Fiscal Year
-146-
2012 2013 2014 2015 2016 2017
-$ -$ -$ -$ -$ -$
- - - - - -
14,925 15,484 16,005 16,765 18,242 17,617
5,080,812 5,567,933 5,805,289 6,063,647 6,255,436 6,871,038
5,095,737$ 5,583,417$ 5,821,294$ 6,080,412$ 6,273,678$ 6,888,655$
-$ -$ -$ -$ -$ -$
- - - - - -
- - - - - -
- - - - - -
5,657,606 5,550,819 5,687,949 8,069,238 7,772,782 24,605,109
5,165,192 4,511,073 4,771,304 5,431,288 5,397,075 5,837,809
6,533,868 8,204,338 7,839,792 5,496,484 4,958,094 5,176,318
- - (134,792) (226,356) (3,015,315) (4,178,684)
17,356,666$ 18,266,230$ 18,164,253$ 18,770,654$ 15,112,636$ 31,440,552$
22,452,403$ 23,849,647$ 23,985,547$ 24,851,066$ 21,386,314$ 38,329,207$
Fiscal Year
-147-
City of New Hope, Minnesota
Statistical Section (Unaudited)
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
2011
2008 2009 2010 (Restated)
Revenues
Property taxes 9,910,002$ 9,898,968$ 8,694,245$ 8,767,959$
Tax increments - - 1,408,256 1,400,163
Franchise taxes 441,133 438,744 430,494 439,795
Licenses and permits 415,012 226,303 236,378 359,530
Intergovernmental 1,038,461 1,401,010 1,765,220 1,599,253
Charges for services 1,125,819 1,166,302 1,369,904 1,544,369
Fines and forfeitures 285,255 236,173 238,961 255,329
Special assessments 203,199 157,581 258,392 153,835
Investment earnings - - 393,913 548,548
Miscellaneous 906,365 791,039 87,607 115,183
Total Revenues 14,325,246 14,316,120 14,883,370 15,183,964
Expenditures
General government 1,949,002 1,726,566 1,883,729 1,560,511
Public safety 5,880,729 5,933,364 5,791,511 5,933,201
Public works 830,900 740,014 989,734 1,079,884
Culture and recreation 1,687,171 1,698,807 1,599,381 1,560,486
Economic development - - 192,431 289,650
Capital outlay 2,444,825 1,137,776 2,605,724 5,263,935
Debt service
Principal 820,000 885,000 515,000 1,005,000
Interest 357,991 273,100 273,054 247,973
Bond issuance costs - - - 93,820
Total Expenditures 13,970,618 12,394,627 13,850,564 17,034,460
Excess (Deficiency) of Revenues
Over (Under) Expenditures 354,628 1,921,493 1,032,806 (1,850,496)
Other Financing Sources (Uses)
Transfers in 653,787 1,236,793 2,596,321 2,477,195
Sales of capital assets - - 1,954 -
Bonds issued - - 1,245,000 -
Premium on bonds issued - - 16,173 -
Refunding bonds issued - - - -
Principal payments to refunded bond escrow agent - - - -
Transfers out (653,787) (984,125) (2,444,592) (4,569,216)
Total Other Financing
Sources (Uses)- 252,668 1,414,856 (2,092,021)
Net Change in Fund Balances 354,628$ 2,174,161$ 2,447,662$ (3,942,517)$
Debt Service as a Percentage of
Noncapital Expenditures 15.1%9.7%9.8%6.4%
Fiscal Year
-148-
2012 2013 2014 2015 2016 2017
9,199,381$ 9,531,663$ 9,718,800$ 10,145,204$ 10,868,985$ 11,961,711$
1,343,248 511,924 537,871 430,879 492,584 841,098
440,149 438,834 438,541 442,556 447,248 912,357
238,943 273,117 353,973 389,957 466,548 641,870
858,816 4,463,113 818,825 1,359,511 2,063,546 1,844,648
1,557,898 1,585,964 1,663,053 1,601,081 1,571,798 1,727,615
283,233 239,201 215,585 237,591 191,960 208,909
305,818 178,335 98,617 38,417 173,158 92,458
307,032 178,217 248,013 274,116 304,252 486,746
80,073 111,443 129,980 202,057 42,103 137,591
14,614,591 17,511,811 14,223,258 15,121,369 16,622,182 18,855,003
1,567,301 1,571,701 1,668,474 1,688,752 1,872,436 2,622,277
5,946,209 5,967,599 6,397,860 6,866,105 7,168,102 7,724,950
1,192,760 1,254,201 1,225,551 1,328,371 1,606,369 1,671,593
1,599,041 1,613,518 1,761,961 1,853,741 1,938,131 2,066,692
304,064 582,621 298,825 498,479 588,167 1,737,947
7,685,819 4,239,938 3,000,518 8,204,694 8,220,964 5,217,461
330,000 340,000 350,000 405,000 415,000 523,497
270,613 306,462 212,025 131,530 257,661 455,539
104,351 - 2,200 114,607 58,188 251,648
19,000,158 15,876,040 14,917,414 21,091,279 22,125,018 22,271,604
(4,385,567) 1,635,771 (694,156) (5,969,910) (5,502,836) (3,416,601)
936,188 360,427 669,461 3,209,226 1,630,270 4,305,261
- 1,460 4,055,382 - - -
- - - - 2,824,075 18,435,000
54,006 - - 171,339 107,553 1,857,609
4,025,000 - - 6,470,000 - -
- - (3,780,000) - - -
(770,638) (600,414) (477,461) (3,015,226) (1,426,570) (4,238,376)
4,244,556 (238,527) 467,382 6,835,339 3,135,328 20,359,494
(141,011)$ 1,397,244$ (226,774)$ 865,429$ (2,367,508)$ 16,942,893$
4.1%5.6%4.5%3.5%4.6%5.4%
Fiscal Year
-149-
THIS PAGE IS LEFT
BLANK INTENTIONALLY
-150-
City of New Hope, Minnesota
Statistical Section (Unaudited)
General Government Tax Revenues by Source
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
Fiscal Property Tax Franchise
Year tax increments tax Total
2008 8,074,253$ 1,835,749$ 441,133$ 10,351,135$
2009 8,636,370 1,262,598 438,744 10,337,712
2010 8,694,245 1,408,256 430,494 10,532,995
2011 8,767,959 1,400,163 439,795 10,607,917
2012 9,199,381 1,343,248 440,149 10,982,778
2013 9,531,663 511,924 438,834 10,482,421
2014 9,718,800 537,871 438,541 10,695,212
2015 10,145,204 430,879 442,556 11,018,639
2016 10,868,985 492,584 447,248 11,808,817
2017 11,961,711 841,098 912,357 13,715,166
-151-
City of New Hope, Minnesota
Statistical Section (Unaudited)
Tax Capacity, Market Value and Estimated Actual Value of Taxable Property
Last Ten Fiscal Years
(Shown By Year of Tax Collectability)
2008 2009 2010 2011
Taxable Market Value
Real property 1,618,178,200$ 1,492,408,000$
Personal property 7,624,400 8,162,100
Total Taxable Market Value 1,625,802,600$ 1,500,570,100$
Estimated actual value of taxable property 1,750,807,800$ 1,732,235,700$ 1,629,433,100$ 1,504,929,000$
Taxable Market Value as a Percentage of
Estimated Actual Value 99.78 %99.71 %
Tax Capacity
Real property 21,248,319$ 21,095,335$ 19,864,103$ 18,462,796$
Personal property 151,679 146,456 148,346 159,492
Subtotal 21,399,998 21,241,791 20,012,449 18,622,288
Less: Tax Increment (1,646,615) (1,365,233) (1,181,390) (1,044,830)
Less: Contribution to Fiscal Disparities (2,292,166) (2,518,620) (2,596,468) (2,466,459)
Add: Distribution from Fiscal Disparities 3,398,192 3,821,605 3,946,315 3,896,651
Net Tax Capacity 20,859,409$ 21,179,543$ 20,180,906$ 19,007,650$
Tax levies
Revenue 9,053,443$ 9,036,625$
Bonds and interest 39,268 192,105
Total 9,092,711$ 9,228,730$
Tax capacity rate
Revenue 45.542 %47.916 %
Bonds and interest 0.199 1.025
Sewer district 0.273 0.308
Total Direct Tax Rate 41.995 %41.342 %46.014 %49.249 %
Source: Hennepin County Auditor/Treasurer Department
Note: Property in the county is reassessed annually.
Note: The City changed the format of this table for 2010, and will be updating on a go-forward basis.
Fiscal Year
-152-
2012 2013 2014 2015 2016 2017
1,321,463,913$ 1,214,204,483$ 1,224,417,514$ 1,323,173,828$ 1,419,351,117$ 1,522,726,514$
8,515,600 9,657,700 10,849,800 11,343,900 11,588,000 12,327,600
1,329,979,513$ 1,223,862,183$ 1,235,267,314$ 1,334,517,728$ 1,430,939,117$ 1,535,054,114$
1,438,796,300$ 1,336,539,900$ 1,346,449,200$ 1,440,652,000$ 1,534,397,300$ 1,636,865,900$
92.44 %91.57 %91.74 %92.63 %93.26 %93.78 %
16,686,170$ 15,476,014$ 15,454,712$ 16,638,481$ 17,898,058$ 19,196,854$
165,812 188,654 211,746 221,628 226,510 242,052
16,851,982 15,664,668 15,666,458 16,860,109 18,124,568 19,438,906
(944,560) (366,752) (377,138) (338,715) (362,633) (604,222)
(2,380,423) (2,255,476) (2,154,731) (2,144,256) (2,277,639) (2,464,382)
3,605,075 3,448,346 3,437,911 3,505,922 3,437,652 3,757,080
17,132,074$ 16,490,786$ 16,572,500$ 17,883,060$ 18,921,948$ 20,127,382$
9,066,928$ 9,406,483$ 9,556,483$ 9,938,265$ 10,617,194$ 11,362,957$
161,802 164,325 161,487 163,902 195,819 604,444
9,228,730$ 9,570,808$ 9,717,970$ 10,102,167$ 10,813,013$ 11,967,401$
53.842 %57.802 %57.622 %55.073 %56.364 %56.906 %
0.967 1.010 0.974 0.905 1.041 3.025
0.387 - - - - -
55.196 %58.812 %58.596 %55.978 %57.405 %59.931 %
Fiscal Year
-153-
City of New Hope, Minnesota
Statistical Section (Unaudited)
Property Tax Capacity Rates - Direct and Overlapping Governments
Last Ten Fiscal Years
Year
Taxes General Debt Sewer District
Payable Levy Levy Total
2008 39.308 %2.386 %0.301 %41.995 %
2009 39.131 1.931 0.280 41.342
2010 45.542 0.199 0.273 46.014
2011 47.916 1.025 0.308 49.249
2012 53.842 0.967 0.387 55.196
2013 57.802 1.010 - 58.812
2014 57.622 0.974 - 58.596
2015 55.073 0.905 - 55.978
2016 56.364 1.041 - 57.405
2017 56.906 3.025 - 59.931
Source: Hennepin County Auditor/Treasurer Department
Overlapping rates are those of local and county governments that apply to property owners within the City. Not all overlapping
rates apply to all City property owners (e.g. the rates for special districts apply only to the proportion of the government's property
owners whose property is located within the geographic boundaries of the special district).
Levy
Direct Rate - City of New Hope
-154-
County No. 281 Other Total
38.570 %27.240 %7.820 %115.625 %
40.410 27.210 7.400 116.362 %
42.640 28.621 9.098 126.373
45.840 34.387 10.068 139.544
48.231 32.534 10.422 146.383
49.461 32.347 10.933 151.553
49.959 34.777 11.307 154.639
46.398 33.226 10.561 146.163
45.356 33.833 10.432 147.026
44.087 31.612 10.214 145.844
Overlapping Rates
School
District
-155-
City of New Hope, Minnesota
Statistical Section (Unaudited)
Principal Property Taxpayers
Current Year and Nine Years Ago
Tax
Taxpayer Capacity Rank
STNL (New Hope), LLC 231,170$ 1 1.19 %
Allen Group, LLC 204,270 2 1.05
FLS Properties 203,710 3 1.05
Hy-Vee, Inc.193,150 4 0.99
Paddock Property Ltd. Partnership 182,650 5 0.94
CI Minn I-A, LLC 182,210 6 0.94
GLP US Management, LLC 181,310 7 0.93
Broadway Lanel/Golle/Holmes 178,500 8 0.92
St. Therese Home, Inc.177,870 9 0.92
Winnetka Mall, LLC 168,490 10 0.87
Geneva Management Service, LLC - - -
Minn Masonic Home North Ridge - - -
New Hope Distribution Center, LLC - - -
Welsh Navarre MN, LLC - - -
Lang Nelson Association - - -
New Hope / US Swim Partnership - - -
Totals 1,903,330$ 9.80 %
Source: Hennepin County Auditor/Treasurer Department
Tax Capacity
2017
Percent
of Total
-156-
Tax
Capacity Rank
-$ - - %
- - -
136,450 8 0.64
-
165,250 2 0.77
- - -
- - -
-
153,375 3 0.72
136,750 7 0.64
199,250 1 0.93
152,275 4 0.71
142,330 5 0.67
139,250 6 0.65
132,188 9 0.62
129,250 10 0.60
1,486,368$ 6.95 %
Tax Capacity
2008
Percent
of Total
-157-
THIS PAGE IS LEFT
BLANK INTENTIONALLY
-158-
City of New Hope, Minnesota
Statistical Section (Unaudited)
Property Tax Levies and Collections
Last Ten Fiscal Years
(1)
Collection Collection
Fiscal Total of Current in subsequent Total
Year Levy Year's Levy years Collections
2008 8,452,126$ 8,343,629$ 98.72 %108,497$ 8,452,126$ 100.00 %
2009 8,457,346 8,382,201 99.11 75,145 8,457,346 100.00
2010 9,092,711 8,983,224 98.80 109,487 9,092,711 100.00
2011 9,228,730 9,063,615 98.21 165,115 9,228,730 100.00
2012 9,228,730 9,102,355 98.63 126,375 9,228,730 100.00
2013 9,570,808 9,429,858 98.53 139,481 9,569,339 99.98
2014 9,717,970 9,619,447 98.99 86,566 9,706,013 99.88
2015 10,102,167 10,017,500 99.16 59,489 10,076,989 99.75
2016 10,813,013 10,756,992 99.48 45,067 10,802,059 99.90
2017 11,967,401 11,895,137 99.40 - 11,895,137 99.40
Source: Hennepin County Auditor/Treasurer Department
(1) Includes state paid property tax credits.
Collected to Levy
Percent
Percentage of Total
of Levy Collections
-159-
City of New Hope, Minnesota
Statistical Section (Unaudited)
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
General Special Tax
Fiscal Obligation Assessment Increment
Year Bonds Bonds Bonds
2008 605,000$ 1,045,000$ 5,360,000$
2009 225,000 910,000 4,795,000
2010 1,280,000 775,000 4,605,000
2011 1,245,000 - 4,410,000
2012 1,120,000 - 8,230,000
2013 1,000,729 - 8,065,761
2014 863,620 - 4,066,223
2015 2,898,167 - 8,250,291
2016 5,682,679 - 7,968,655
2017 25,713,493 - 7,687,463
Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements.
See Demographic and Economic Statistics on page 167 for personal income and population data.
Governmental Activities
-160-
Lease General Tax Total
Revenue Obligation Revenue Increment Primary Per
Bonds Bonds Bonds Bonds Government Capita
-$ -$ 2,620,000$ -$ 9,630,000$ 0.87 %462$
- - 2,265,000 - 8,195,000 0.79 396
- - 2,930,000 - 9,590,000 0.83 472
3,505,000 - 2,360,095 - 11,520,095 1.04 562
3,505,000 - 2,033,000 - 14,888,000 1.25 717
3,505,000 - 2,723,628 - 15,295,118 1.24 732
3,505,000 - 2,352,553 - 10,787,396 0.86 518
3,505,000 1,831,607 2,151,635 1,587,602 20,224,302 1.49 953
3,505,000 3,934,522 1,950,071 1,586,242 24,627,169 1.75 1,140
3,505,000 3,833,158 1,748,533 1,584,964 44,072,611 3.03 2,040
Income
of Personal
Percentage
Business-type Activities
-161-
City of New Hope, Minnesota
Statistical Section (Unaudited)
Ratios of General Bonded Debt Outstanding
Last Ten Fiscal Years
Less
Amounts
General Available in Net
Fiscal Obligation Debt Service Bonded Per
Year Bonds Funds Debt Capita
2008 7,010,000$ 6,571,884$ 438,116$ 0.025 %21$
2009 5,930,000 6,450,295 (520,295) (0.030) (25)
2010 6,660,000 4,288,603 2,371,397 0.146 117
2011 5,655,000 465,243 5,189,757 0.345 253
2012 9,350,000 4,222,494 5,127,506 0.356 247
2013 9,066,490 345,010 8,721,480 0.653 417
2014 4,929,843 614,161 4,315,682 0.321 207
2015 11,148,458 759,386 10,389,072 0.721 489
2016 13,651,334 1,048,498 12,602,836 0.821 583
2017 33,400,956 2,173,637 31,227,319 1.908 1,446
Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements.
See Demographic and Economic Statistics on page 167 for population data.
Percentage
See Tax Capacity, Market Value and Estimated Actual Value of Taxable Property on page 152 for property value data.
of Estimated
Actual Value
of Taxable
Property
-162-
City of New Hope, Minnesota
Statistical Section (Unaudited)
Computation of Direct and Overlapping Debt
December 31, 2017
City's
Outstanding Share
Debt of Debt
Direct Debt
City of New Hope (1)33,400,956$ 100.00 %33,400,956$
Overlapping Debt
Hennepin County 1,110,220,000$ 1.14 %12,656,508$
Independent School District #281, Robbinsdale 196,919,204 19.60 38,596,164
Metropolitan Council 1,484,038,432 0.53 7,865,404
Hennepin Region RR Authority 31,535,000 1.56 491,946
Three Rivers Park District 68,265,000 1.56 1,064,934
Total Overlapping Debt 2,890,977,636$ 2.10 %60,674,956$
Total Direct and Overlapping Debt 2,924,378,592$ 3.22 %94,075,912$
(1)Excludes debt payable from tax increment revenue and enterprise revenue.
Note: Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the City. This
schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and
businesses of the City. This process recognized that, when considering the government's ability to issue and repay long-term
debt, the entire debt burden borne by the residents and businesses should be taken into account. However, this does not
imply that every taxpayer is a resident, and therefore responsible for repaying the debt, of each overlapping government.
District *
Percentage
Applicable to
Source : Assessed value data used to estimate applicable percentages and outstanding debt data for overlapping entities was provided
by Hennepin County.
*The percentage of overlapping debt applicable is estimated using taxable market property values. Applicable percentages were
estimated by determining the portion of the county's taxable market value that is within the City's boundaries and dividing it by the
county's total taxable market value.
-163-
City of New Hope, Minnesota
Statistical Section (Unaudited)
Legal Debt Margin Information
Last Ten Fiscal Years
2008 2009 2010 2011
Debt Limit 52,524,234$ 51,967,071$ 48,774,078$ 45,017,103$
Total Net Debt Applicable to Limit 72,562 37,561 1,246,878 1,072,678
Legal Debt Margin 52,451,672$ 51,929,510$ 47,527,200$ 43,944,425$
Total Net Debt Applicable to the Limit
as a Percentage of Debt Limit 0.14%0.07%2.56%2.38%
Note: Under state law, the City's outstanding general obligation debt should not exceed 3 percent of the market value of
taxable property. Prior to 2008, state law provided that general obligation debt should not exceed 2 percent. By law, the
general obligation debt subject to the limitation may be offset by amounts set aside for the extinguishment of those obligations.
Fiscal Year
-164-
2012 2013 2014 2015 2016 2017
39,899,385$ 36,715,865$ 37,058,019$ 40,035,532$ 42,928,174$ 46,051,623$
970,908 839,948 696,627 2,719,528 5,497,493 25,516,878
38,928,477$ 35,875,917$ 36,361,392$ 37,316,004$ 37,430,681$ 20,534,745$
2.43%2.29%1.88%6.79%12.81%55.41%
Taxable Market Value 1,535,054,114$
Debt Limit (3 Percent of Market Value)46,051,623$
Debt Applicable to Limit
General obligation bonds 25,713,493
Less: Amount Available in
Debt Service Funds (196,615)
Total Net Debt Applicable to Limit 25,516,878
Legal Debt Margin 20,534,745$
Fiscal Year
Legal Debt Margin Calculation for Fiscal Year 2016
-165-
City of New Hope, Minnesota
Statistical Section (Unaudited)
Pledged Revenue Coverage
Last Ten Fiscal Years
(1)(2)Net
Fiscal Gross Operating Revenue
Year Revenues Expenses Available Principal Interest
2008 6,520,685$ 5,153,960$ 1,366,725$ 345,000$ 139,000$ 282.38 %
2009 6,524,839 5,535,015 989,824 355,000 121,865 207.57
2010 7,131,115 5,046,701 2,084,414 1,520,000 168,236 123.47
2011 6,646,747 5,527,230 1,119,517 981,643 74,418 106.01
2012 7,676,193 6,493,865 1,182,328 334,000 162,686 238.04
2013 7,901,855 6,573,932 1,327,923 344,000 98,588 300.04
2014 7,887,948 7,270,310 617,638 371,000 103,685 130.12
2015 8,039,067 7,925,903 113,164 201,000 97,584 37.90
2016 8,738,270 6,629,232 2,109,038 202,000 172,262 563.52
2017 9,181,674 6,850,851 2,330,823 293,503 228,142 446.82
(1)Gross revenues include interest and other nonoperating revenues.
(2)Operating expenses exclude depreciation.
(3)Revenues and expenses include the Storm Water, Water Utility, Sewer Utility, and Ice Arena funds.
Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements.
Coverage
Revenue Bonds (3)
Debt Service
-166-
Per Capita Total
Fiscal Personal Personal Median School
Year Population (1)Income (2)Income (3)Age (4)Enrollment (5)
2008 20,860 52,905$ 1,103,598,300$ 38.3 12,600 6.9 %
2009 20,718 49,789 1,031,528,502 38.3 12,000 7.2
2010 20,339 56,564 1,150,455,196 39.4 11,839 7.0
2011 20,486 54,008 1,106,407,888 39.4 11,804 5.6
2012 20,764 57,476 1,193,431,664 39.4 12,126 4.8
2013 20,904 58,898 1,231,203,792 39.4 12,126 4.0
2014 20,812 60,601 1,261,228,012 39.4 12,390 2.9
2015 21,225 63,901 1,356,298,725 39.4 12,313 2.8
2016 21,600 65,231 1,408,989,600 39.4 12,404 2.8
2017 21,600 67,427 1,456,423,200 39.4 12,011 3.5
(2)Provided by the Bureau of Economic Analysis; US Department of Commerce. This figure is for all of Hennepin County.
(3)Calculated by multiplying the estimated population by the per capita personal income figure.
(4)US Census Bureau
(5)Provided by Independent School District #281, Robbinsdale, MN.
(6)Provided by the Bureau of Labor Statistics; US Department of Labor. This figure is for all of Hennepin County.
(1)Provided by the Metropolitan Council.
City of New Hope, Minnesota
Demographic and Economic Statistics
Last Ten Fiscal Years
Unemployment
Rate (6)
-167-
City of New Hope, Minnesota
Employees Rank
Independent School District No. 281 1,852 1 18.09 %
Saint Therese Home of New Hope 1,117 2 10.91
Intermediate District No. 287 943 3 9.21
Hy-Vee 632 4 6.17
Mission Health/North Ridge Care Cener 560 5 5.47
Horwitz 345 6 3.37
Perrigo Company 290 7 2.83
Corborn's Delivers 240 8 2.34
Liberty Diversified International 200 9 1.95
Parker - Hannifin Oildyne Division 172 10 1.68
Navarre Corporation - -
Paddock Labratories - -
Simon Deliveries - -
Dakota Growers Pasta - -
Waymouth Farms, Inc.- -
InnoFlex Corporation (I-Corp)- -
Total Employment for Top 10 Employers 6,351 62.05 %
Total City Employment 10,235
Source: Minnesota Department of Employment and Economic Development.
Principal Employers
Current Year and Nine Years Ago
Employer Employment
2017
Percentage
of Total City
-168-
Employees Rank
- - %
539 2 4.85
- -
- -
900 1 8.10
- -
- -
- -
244 6 2.20
173 8 1.56
500 3 4.50
277 4 2.49
250 5 2.25
184 7 1.66
170 9 1.53
149 10 1.34
3,386 30.47 %
11,112
Employment
2008
Percentage
of Total City
-169-
City of New Hope, Minnesota
Full-time Equivalent City Government Employees by Function
Last Ten Fiscal Years
2008 2009 2010 2011
General Government 18 18 15 15
Public Safety
Police
Officers 31 31 30 31
Civilians 7 7 7 6
Public Works 23 21 22 24
Culture and Recreation 8 8 8 7
Total 87 85 82 83
Source: Various City departments.
Function
-170-
2012 2013 2014 2015 2016 2017
15 16 14 13 13 16
30 31 33 35 33 34
7 7 7 9 9 10
24 24 24 23 24 24
6 7 7 7 8 7
82 85 85 87 87 91
-171-
City of New Hope, Minnesota
Operating Indicators by Function
Last Ten Fiscal Years
2008 2009 2010 2011 2012
Function
Public works
Street resurfacing (miles)2 2 2 4 -
Potholes repaired 150 349 734 648 687
Culture and recreation
Program registration - adults 3,874 3,313 3,796 5,271 5,598
Program registration - youth 5,747 6,360 5,287 5,323 7,442
Attendance at sponsored events 140,600 139,318 137,199 146,305 148,966
Golf Course
Rounds of golf at the Municipal course 22,900 23,917 21,686 18,788 19,568
Ice Arena
Hours of ice time rental 3,905 4,027 3,980 3,903 3,558
Water
Water main breaks 33 37 19 32 26
Average daily consumption (thousands of gallons)2,003 1,921 1,746 1,712 1,828
Sewer
Average daily treatment (thousands of gallons)2,360 1,740 1,895 2,253 2,189
Sources: Various City departments.
Note: Indicators are not available for the general government function.
Function
-172-
2013 2014 2015 2016 2017
- - 12 3 3
600 1,330 2,882 3,025 2,530
4,565 3,121 2,746 3,343 3,011
5,924 5,734 5,815 6,043 5,969
144,000 122,478 124,777 127,865 127,112
16,782 16,431 18,175 20,375 18,662
3,739 3,734 3,683 3,567 4,030
30 27 21 19 12
1,682 1,571 1,559 1,588 1,616
1,500 2,200 1,670 1,800 1,352
-173-
City of New Hope, Minnesota
Capital Asset Statistics by Function
Last Ten Fiscal Years
2008 2009 2010 2011
Function
Public Safety
Police stations 1 1 1 1
Fire stations 3 3 3 3
Public Works
City streets (miles)64.0 64.0 64.0 64.0
State and County streets (miles)8.5 8.5 8.5 8.5
Sidewalks (miles)26.4 26.4 26.4 26.4
Street lights 580.0 580.0 580.0 580.0
Railroad bridges 2.0 2.0 2.0 2.0
Pedestrian bridges 4.0 4.0 4.0 4.0
Culture and recreation
Parks 23 23 23 23
Swimming pools
Olympic 1 1 1 1
Recreational 1 1 1 1
Outdoor theatre 1 1 1 1
Tennis courts 17 17 17 17
Water
Water main (miles)63 63 63 63
Fire hydrants 690 690 690 690
Maximum daily capacity (thousands of gallons)21,000,000 21,000,000 21,000,000 21,000,000
Sewer
Sanitary sewer main (miles)74 74 74 74
Storm sewer lines (miles)56 56 56 56
Ice Arenas 1 1 1 1
Golf courses 1 1 1 1
Source: Various City departments.
Note: No capital asset indicators are available for the general government function.
Function
-174-
2012 2013 2014 2015 2016 2017
1 1 1 1 1 1
3 3 3 3 3 3
64.0 64.0 64.0 64.0 64.5 64.5
8.5 8.5 8.5 8.5 8.5 8.5
26.4 26.4 26.4 26.4 27.0 27.0
580.0 580.0 580.0 580.0 619.0 619.0
2.0 2.0 2.0 2.0 2.0 2.0
4.0 4.0 4.0 4.0 4.0 4.0
23 23 23 23 23 23
1 1 1 1 1 1
1 1 1 1 1 1
1 1 1 1 1 1
17 17 17 17 15 15
63 63 63 63 64 64
690 690 690 690 712 712
21,000,000 21,000,000 21,000,000 21,000,000 21,000,000 21,000,000
74 74 74 74 75 75
56 56 56 56 56 56
1 1 1 1 1 1
1 1 1 1 1 1
-175-