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052620 City Council Meeting Packet NEW HOPE CITY COUNCIL MEETING AGENDA May 26, 2020 7:00 p.m. City Hall – Council Chambers 4401 Xylon Avenue North Mayor Kathi Hemken Council Member John Elder Council Member Cedrick Frazier Council Member Andy Hoffe Council Member Jonathan London The City Council wants and encourages citizen participation at Council Meetings. Your input and opinions count and are valuable. You are encouraged to bring forth your comments and issues at the appropriate point on the agenda. A 15-minute maximum Open Forum is held at the beginning of each Council Meeting. At this time any person may address the Council on any subject pertaining to City business not listed on this agenda or scheduled as a future agenda item. The Council requests that you limit your presentation to 3 minutes. Anyone wishing to address the City Council on a particular item should raise their hand and be recognized by the Mayor. Approach the podium and speak into the microphone by first stating your name and address. Also, please record your name on the roster at the table near the door so that your name will be spelled correctly in the minutes. Individuals should not expect the Mayor or Council to respond to their comments tonight; Council may refer the matter to staff for handling or for consideration at a future meeting. You are welcome to contact the city clerk at 763-531-5117 after the council meeting. COUNCIL MEETING BROADCASTS AND STREAMING Government Access channel 16 programming includes live/taped meeting replays Live on-line meetings and past meetings on-demand are available through www.nwsccc.org. www.newhopemn.gov New Hope Values and Vision City Mission Strong local government that is proactive in responding to the community needs and issues by delivering quality public service to all city residents, businesses, property owners, and organizations in a prudent and e cient manner. Values Excellence and Quality in the Delivery of Services We believe that service to the public is our reason for being and strive to deliver quality services in a highly professional and cost-e ective manner. Fiscal Responsibility We believe that fi scal responsibility and the prudent stewardship of public funds and city assets is essential if residents are to have confi dence in government. Ethics, Integrity and Professionalism We believe that ethics, integrity, and professionalism are the foundation blocks of public trust and confi dence and that all meaningful relationships are built on these values. Respect for the Individual We believe in the uniqueness of every individual, and welcome, appreciate, and respect diversity and the di ering of opinions. Open, Honest, and Respectful Communication We believe that open, honest, and respectful communication is essential for an informed and involved citizenry and to foster a positive environment for those interacting with our city. Cooperation and Teamwork We believe that the public is best served when all work cooperatively. Visionary Leadership and Planning We believe that the very essence of leadership is to be responsive to current goals and needs, and visionary in planning for the future. Vision e city is a great place to grow as a family, individual, or business. All within our city are safe and secure. Essential services will be those that promote a safe and healthy environment for all residents. Essential services and programs will be enhanced and streamlined, and will be provided in an economical manner and with measurable results. e city views residents as its greatest asset and seeks their input and participation. e city will meet the communication needs of citizens, elected o cials, and city sta . Strategic Goals e city will maintain and improve its infrastructure (water distribution, storm water, sewer, roads, parks, lighting, and city facilities). e city will use frugal spending and resourceful fi nancial management to maintain its fi scal health. e city will encourage maintenance, redevelopment, and reinvestment of existing properties to improve or enhance its tax base. e city will provide core services with a professional sta who are equipped with the necessary tools and equipment and given necessary direction. e city will facilitate and improve communications to promote e ective intergovernmental cooperation between sta , citizens, and Council. Adopted by the New Hope City Council, August 2006 Reaffirmed by the New Hope City Council, February 2019 CITY COUNCIL MEETING City Hall, 4401 Xylon Avenue North Tuesday, May 26, 2020 7:00 p.m. Regular Session City Hall will be open to the public for this meeting; however due to the current COVID-19 pandemic, the city will be making its council meeting available via Webex. The public may participate in this meeting by phone by calling 415-655-0001 and entering meeting/access code 288 492 824 followed by the # sign. When prompted for a password, simply press #. Anyone wishing to speak at Open Forum is encouraged to call the city clerk at 763- 531-5117 in advance for instructions. 1. CALL TO ORDER – May 26, 2020 2. ROLL CALL 3. APPROVAL OF MINUTES:  Council Meeting Minutes – May 11, 2020 4. OPEN FORUM 5. PRESENTATIONS 5.1 Motion to accept the 2019 annual financial report 5.2 Awards presentation for the 2019-2020 New Hope Snowman/Snow Sculpture Contest winners 6. CONSENT BUSINESS 6.2 Approval of financial claims through May 26, 2020 6.4 Motion accepting contributions for the 2019-2020 Donut Make You Wonder and Author Series programs 6.5 Resolution approving $400,000 transfer from park infrastructure fund to ice arena operating fund for debt service and capital improvements 6.6 Resolution approving change order no. 3 with the American Liberty Construction, Inc. for the theater construction project (Improvement Project No. 941) 6.7 Resolution approving change order no. 8 in the amount of $1,685 with Donlar Construction Company for the pool construction project (Improvement Project No. 995) 6.8 Resolution approving Change Order No. 1 for G.F. Jedlicki Inc. Contract for 2020 Winnetka Watermain Replacement Project (Improvement Project No. 1027) 6.9 Resolution authorizing the purchase and appropriation of funds in the amount of $7,675 for the cleaning, crack repair and repainting of the basketball court at Fred Sims Park, and the crack repair of the basketball and tennis courts at Hidden Valley Park by Court Surface and Repair, Inc. 7. PUBLIC HEARING 8. DEVELOPMENT AND PLANNING 8.1 Resolution approving Addendum #3 to the engineering services agreement with Stantec Consulting Services Inc. for the additional construction management services for the Civic Center Park improvements (Improvement Project No. 941) and pool (Improvement Project No. 995) 8.2 Resolution approving a joint powers agreement with Hennepin County for the replacement of a failed culvert and removal and replacement of adjacent sidewalk on Canadian Pacific railroad crossing on County State Aid Highway 156 (Winnetka Avenue Railroad Crossing Project No. 1049) 9. PETITIONS AND REQUESTS 10. ORDINANCES AND RESOLUTIONS 10.1 Ordinance 20-08, An ordinance regulating the sale of tobacco and related devices and products within the city of New Hope, Minnesota 10.2 Ordinance 20-09, An interim ordinance establishing New Hope Code Section 1-5(l) suspending the applicable zoning regulations relating to outdoor dining and creating a temporary administrative waiver of expansion of on-sale liquor license sales during the COVID-19 Public Health Emergency 11. UNFINISHED AND ORGANIZATIONAL BUSINESS 12. OTHER BUSINESS 12.1 Exchange of communication between members of the city council 13. ADJOURNMENT Memorandum To: New Hope City Council From: Kirk McDonald, City Manager Date: May 21, 2020 Subject: Agenda Items for Tuesday, May 26, 2020 Open Forum Staff is not aware of anyone planning to address the Council for the Open Forum. Item 5.1 At the May 18 work session the Council reviewed the 2019 Comprehensive Annual Financial Report with Vicki Holthaus, the city’s financial consultant. The Council is being asked to formally accept the 2019 annual financial report. Mr. Bill Lauer of Malloy, Montague, Karnowski, Radosevich & Co. will summarize the audit and their findings. A copy of the PowerPoint is provided with the RFA, and you were previously provided with copies of the audit. After the audit is accepted it will be filed with the state auditor’s office and posted on the city’s website. An application will also be submitted for the 2019 excellence in achievement for financial reporting certificate. Item 5.2 Staff would like Council to recognize the winners of the 2020 New Hope Snowman/Snow Sculpture Contest. The community contest was initiated by the Citizen Advisory Commission in 2018. There were six entries this year, and staff will mail prizes to the contest winners. Director Rader and I support the community contest. Items 6.1, 6.2, and 6.3 Item 6.1 – there are no new business license requests. Item 6.2 - involves routine financial claims. Item 6.3 – there are no new liability claims to report. Item 6.4 Staff requests formal acceptance of contributions from organizations to help pay for speakers’ fees for the Donut Make You Wonder and author series programs. The Donut Make You Wonder program is a cooperative effort of the parks and recreation departments from New Hope, Brooklyn Center, Crystal, Robbinsdale and the Robbinsdale Area Schools. Donations cover speaker fees, supplies and refreshments. Events in March through May were cancelled due to COVID-19 and the donations collected will be used for the upcoming season. Director Rader and I recommend approval. Item 6.5 This item approves a transfer of $400,000 from the park infrastructure fund to the ice arena operating fund. The 2020 budget and tax levy approved last December included an increase in the park infrastructure tax levy for the purpose of transferring the funds to the ice arena fund for debt service and capital improvements. Council discussed the transfer at the May 18 work session and expressed support. Director Rader and I recommend approval of the transfer. Item 6.6 This item approves change order #3 with American Liberty Construction, Inc. for the theater construction project, which was discussed at the May 18 work session. They are requesting to install an irrigation system and sod the high traffic areas of the theater site at no cost to the city, in lieu of a one- year plan establishment period for watering and establishing turf. The system will be located between the theater and the picnic pavilion and will be zoned from the city hall system, and will be controlled by rain sensors. They are also requesting a second, no cost time extension for the substantial completion date to June 15, 2020, and final completion date to July 15, 2020. There is no cost associated with the change order. Director Rader and I recommend approval. Item 6.7 This item approves change order #8 with Donlar Construction for the pool project in the amount of $1,685, as discussed at the May 18 work session. The change order includes additions of $3,172 for power to condensing units and $9,431 for the additions of stanchions and rope at the drop slide and slide tower stairwell, for a total of $12,603. The change order also includes credits in the amount of $9,000 for the elimination of two rows of ice/snow guards due to the seasonal nature of the building and $1,918 for the installation of a wet instead of dry fire sprinkler system, for a total of $10,918. Subtracting the credits from the additions ($12,603-$10,918), the final change order amount is $1,685. The change order increases the contract amount from $11,471,955.84 to $11,473,640.84. Director Rader and I are recommending approval. Item 6.8 This item approves change order # 1 for the Winnetka watermain replacement project with G.F. Jedlicki, Inc. in the amount of $13,818.61. Additional costs were incurred that were associated with COVID-19 and county permitting, including hiring a plumber for home and business connections (so public works staff did not have to enter the homes), signal and electrical work, and removal and patching of the center median area. This change order is lower than the amount discussed at the work session, due to negotiations, and it is estimated that CenterPoint Energy will be reimbursing the city for at least $6,700 of these costs. As the Council is aware, there was also an overage in quantities on this project for removal/restoration related to curb, gutter, sidewalk, and street patching in the amount of $62,879. The neighboring cities of Crystal and Golden Valley will be reimbursing approximately $14,000 of these costs. An overage or underage in quantities on a project is not typically processed as a change order. Director Weber and I recommend approval. Item 6.9 This item approves a quote from Court Surface and Repair, Inc. in the amount of $7,675 for the cleaning, crack repair and repainting of the basketball court at Fred Sims Park and the crack repair of the basketball and tennis courts at Hidden Valley Park. The work is necessary to keep court surfaces safe for users. Staff annually reviews the court surfaces at all parks and prioritizes maintenance based upon need and available funding. Quotes were sought from four companies and the city received quotes from two companies, with Court Surface ad Repair having the low quote. This company has provided court repair services in the past with good results. The budgeted amount for the work is approximately $15,500, so the quote is well below budget. Director Rader and I recommend approval. Item 8.1 This item approves Addendum #3 to the engineering services agreement with Stantec Consulting Services, Inc. for additional construction management services for the Civic Center Park Improvements and pool project in the amount of $214,774.03. The addendum was discussed with the Council at the May 18 work session. The additional services are for restaking in the field, pool deck pour analysis, additional testing, responses on delay claims, winter construction cost analysis, CenterPoint permit issues and general construction administration and observation. Some of these services will be reimbursed by contractors in the amount of $41,872. The addendum also includes design and construction administration for the stormwater chamber and the city will be reimbursed from the Shingle Creek Watershed District in the amount of $4,254.50 for that work. The total reimbursements from others totals $46,126.50, so the actual final cost to the city for the addendum is $168,647.53. The additional engineering costs will be funded with the park and pool bond proceeds and Director Rader and I recommend approval. Item 8.2 This item approve a construction cooperative agreement with Hennepin County for costs to remove and replace the sidewalk to improve accessibility on Winnetka Avenue near the railroad crossing. The work will be undertaken in conjunction with the county’s culvert and railroad crossing projects. The total cost of the project is $229,967.32 and the city’s share of the project is $19,876.51. The city has received numerous complaints regarding the condition of the roadway and sidewalk. The cost is based on estimated quantities for materials and part of the design and construction administration costs. It will be funded by the street operating budget. The county will be entering into a separate agreement with Canadian Pacific Railroad to replace the railroad crossing. The city attorney has reviewed the agreement. Director Weber and I recommend approval. Item 10.1 This is an ordinance amendment relating to tobacco products. Council reviewed the draft ordinance amendment at its May 18 work session. The ordinance amendment has been drafted by the city attorney’s office. Some of the changes include raising the age to purchase tobacco products from 18 to 21, raising the age of those allowed to sell tobacco products to 18, banning the sale of all flavored tobacco products except for mint, menthol and wintergreen, prohibiting the sale of tobacco at any facility that contains an on-site pharmacy and capping the number of tobacco licensees in the city to the total number of licenses held at the beginning of 2021. All tobacco licensees will be notified of the changes. Director Sargent and I recommend approval. Item 12.1 Mayor Hemken will review upcoming meetings and events. If you have any questions regarding items in the agenda packet, please call the city clerk or me before the meeting so that staff can research any issues and be prepared to respond at the meeting. New Hope City Council May 11, 2020 Page 1 City of New Hope 4401 Xylon Avenue North New Hope, Minnesota 55428 City Council Minutes May 11, 2020 Regular Meeting City Hall, 7:00 p.m. CALL TO ORDER The New Hope City Council met in regular session pursuant to due call and notice thereof; Mayor Hemken called the meeting to order at 7:00 p.m. PLEDGE OF ALLEGIANCE The Pledge was not recited since the meeting was not held in the council chambers. ROLL CALL Council present: Staff present: Kathi Hemken, Mayor John Elder, Council Member Cedrick Frazier, Council Member Andy Hoffe, Council Member Jonathan London, Council Member Kirk McDonald, City Manager Jeff Alger, Community Development Specialist Tim Fournier, Director of Police Beth Kramer, Communications Coordinator Valerie Leone, City Clerk Jeff Sargent, Director of Community Development Stacy Woods, Assistant City Attorney APPROVAL OF MINUTES Motion was made by Council Member Hoffe, seconded by Council Member London, to approve the regular meeting minutes of April 27, 2020. Voted in favor thereof: Hemken, Elder, Frazier, Hoffe, London; and the following voted against the same: None; Abstained: None; Absent: None. Motion carried. OPEN FORUM There was no one present desirous of addressing the council. ROTATING VOTES Please note that votes taken on each agenda item are called by the secretary on a rotating basis; however, the written minutes always list the mayor’s name first followed by the council members’ in alphabetical order. CONSENT AGENDA Mayor Hemken introduced the consent items as listed for consideration and stated that all items will be enacted by one motion unless requested that an item be removed for discussion. Mr. Kirk McDonald, city manager, reviewed the consent items. FINANCIAL CLAIMS Item 6.2 Approval of financial claims through May 11, 2020. MOTION Item 6.4 Motion waiving permit fees for temporary signs and tent for Can Do Canines Can Do Woofaroo walk and fundraising event on September 12, 2020. New Hope City Council May 11, 2020 Page 2 RESOLUTION 2020-54 Item 6.5 Resolution proclaiming May 25, 2020, as National Missing and Exploited Children Day in the city of New Hope. RESOLUTION 2020-55 Item 6.6 Resolution proclaiming May 10-16, 2020, as National Police Week in the city of New Hope. MOTION Consent Items Motion was made by Council Member Elder, seconded by Council Member Hoffe, to approve the Consent items. All present voted in favor. Motion carried. PUBLIC HEARING POCKET SQUARE COCKTAIL LOUNGE MICRODISTILLERY COCKTAIL ROOM ON-SALE LICENSE Item 7.1 Mayor Hemken introduced for discussion Item 7.1, Motion approving a microdistillery cocktail room on-sale license to A Davis Distillery LLC dba Pocket Square Cocktail Lounge at 7530 42nd Avenue North. Mr. Kirk McDonald, city manager, explained that A Davis Distillery LLC was granted a conditional use permit for a microdistillery with cocktail room at 7530 42nd Avenue North on January 27, 2020 (Planning Case 20 -04). He noted the applicant has applied for various state and fed eral permits required for operation of a microdistillery. There are three city-issued licenses required for the microdistillery cocktail room (on-sale, off-sale, and Sunday on-sale). The fees would be pro-rated for a mid-year license. Mr. McDonald stated the applicants completed the necessary paperwork for the liquor license and paid a $500 background investigation fee. The background investigation was conducted by Detective Tony Loser. Det. Loser found nothing detrimental in the background investigation which would prohibit issuance of the license. After allowing for public comment, if Council desires to approve the license, a motion should be made to close the hearing followed by another motion to grant the licenses. If Council supports the license approval, paperwork will be submitted to the state requesting license approval effective June 1, 2020. He stated the applicants (Alan Davis and Amy Hotchkiss) are available for questions. Mayor Hemken inquired whether the applicant intends to utilize the outdoor seating. Council Member London inquired of the department of health and CDC’s recommendations relating to microdistilleries. Mr. Alan Davis stated he is excited to open the business in New Hope. He noted in light of COVID-19 that social distancing will take place. Mr. Amy Hotchkiss stated the outdoor area will be used and tables will be spaced to accommodate social distancing of patrons. Ms. Hotchkiss stated the microdistillery is not classified as a restaurant but a common sense approach will be used for social distancing and customer safety. Mayor opened the floor to comments. There were no members of the public desirous of speaking during the public hearing. CLOSE HEARING Item 7.1 Motion was made by Council Member Elder, seconded by Council Member Hoffe, to close the public hearing. All present voted in favor. Motion carried. New Hope City Council May 11, 2020 Page 3 MOTION Item 7.1 Motion was made by Elder, seconded by Council Member Frazier, approving a microdistillery cocktail room on-sale license to A Davis Distillery LLC dba Pocket Square Cocktail Lounge at 7530 42nd Avenue North . Voted in favor thereof: Hemken, Elder, Frazier, Hoffe, London; and the following voted against the same: None; Abstained: None; Absent: None. Motion carried. COOPER ATHLETIC STADIUM CUP PLANNING CASE 19-04 Item 8.1 Mayor Hemken introduced for discussion Item 8.1, Resolution approving permanent amendment to Conditional Use Permit to expand use of outdoor athletic stadium for property at 8230 47th Avenue North as set forth in Resolution No. 2019-60 (New Hope Planning Case 19-04). Mr. Jeff Alger, community development specialist, explained on May 13, 2019, the City Council approved a request for an amendment to a CUP issued to allow for the expanded use of the outdoor athletic stadium at Cooper High School, 8230 47th Avenue North, subject to a one-year trial period. The approval specified that a public hearing to review the expanded use would be scheduled one-year after implementation. The trial period was intended to give the school, city, and residents an opportunity to evaluate how changes affected the neighborhood and evaluate the effectiveness of trash removal plan. The amendment to the CUP allowed youth and adults (from inside and outside of the community) to access and utilize the athletic stadium by implementing the following changes: 1. Eliminating requirement that at least 50% of audience in attendance at events must reside within the Robbinsdale Area School District. 2. Eliminating requirement for groups and organizations that at least 50% of participants reside within the Robbinsdale Area School District. 3. Eliminating requirement limiting use of stadium to youth. Such changes allowed use of the stadium and concession stand for “non -district athletic use” and “non-athletic community events.” Rental of the stadium was subject to the following requirements: 1. Renters are limited in participation to the number of parking stalls located in the parking lot on school property south of the athletic stadium. 2. Renters are required to place a deposit for litter removal. The school - employed site supervisor is responsible for collecting the deposit and checking the grounds after each rental to ensure proper cleanup. 3. All events must conclude by 9:00 p.m. 4. Use of the public address system is l imited to four times per year. It may only be used on Saturdays between June 1 and August 15, between 1:00 p.m. and 6:00 p.m. 5. Renters are not be allowed to use stadium lights. He noted these requirements only applied to renters and did not preclude the school from continuing to use the stadium lights and public address system for school-sponsored events such as football, soccer, lacrosse, etc. The CUP amendment also allowed the city to host one “Movies in the Park” event at the stadium each year and to utilize the city’s audio system for such events. New Hope City Council May 11, 2020 Page 4 Throughout the application review process, residents expressed concerns relating to the public address system, trash, lighting, traffic, and the elimination of restrictions on users. The applicant and City Council made efforts to mitigate some of these concerns by restricting the use of the public address system, developing a trash removal plan, and prohibiting the use of stadium lights by renters. The one - year trial basis was intended to give the school, city, and residents an opportunity to evaluate how the changes affected the neighborhood as well as the effectiveness of the trash removal plan. Mr. Alger stated property owners within 500 feet of Cooper High School were mailed a public hearing notice. He shared the feedback received and stated a couple of neighbors felt the one-year trial was not a true test because of the limited number of events. Another resident suggested the district post every event on the school’s website including contact information. He reported Robbinsdale Area Schools is working to implement a system that will satisfy condition 12 from Resolution 2019-60, which states, “Petitioner shall list a telephone number and e-mail address on the Cooper High School website and the Independent School District #281 where a school employee can be reached at any time, including weekends, for reporting of problems with the use of the stadium by City residents.” Residents with concerns about events are encouraged to contact the school district by email at chs_grounds@rdale.org or by calling 763-504-8533. This contact information can be found on Cooper High School’s website by clicking on “Contact Us” below the “Quick Links” header. The email address and phone number are listed below the “Cooper Facilities & Grounds” header. The school district’s website also features a “Let’s Talk” link that community members can use to voice questions or concerns. Mr. Alger stated the assistant city attorney has prepared a resolution making the 2019 CUP amendments permanent. This eliminates the one-year provision and allows for the expanded use of the outdoor athletic stadium at Cooper High School permanently. He stated at the mayor’s request a second resolution was prepared that extends the trial period for two years. He stated after conducting the public hearing the Council should determine the best course of action and adopt the preferred resolution. He stated representatives of the school district are available for questions. Council discussed the fact that only two events were held during the trial period. Council Member Elder noted the school district did not fulfil its obligation to provide real time contact information during events. He supported the two -year extension of the trial period which will allow the school district to prove to the neighborhood that it will meet all of the conditions. Council Members London and Frazier indicated there may not be a need for an extension as the city can revoke a CUP if the school district violates the conditions. Ms. Kristine Wehrkamp and Mr. John Oelfke of Robbinsdale Area Schools responded to inquiries. Ms. Wehrkamp stated the school is complying with the Governor’s order for the pandemic and is not allowing any events. Mr. Oelfke New Hope City Council May 11, 2020 Page 5 explained the school’s new website will display event and contact information. He also reported the supervisor in charge of the stadium event will have a cell phone to address any calls during an event. Ms. Stacy Woods, city attorney, confirmed that the city has the authority to revoke a CUP if violations take place. Mr. Jeff Sargent, community development director, pointed out that revocation of the CUP would require staff to track potential complaints and determine whether situations warranted revocation. He expressed support for the extension of the trial period to learn how the school district responds to any complaints from residents. Mayor Hemken opened the floor to comments from the audience. There were no members of the public desirous of speaking during the public hearing. CLOSE HEARING Item 8.1 Motion was made by Council Member Elder, seconded by Council Member Hoffe, to close the public hearing. All present voted in favor. Motion carried. RESOLUTION 2020-56 Item 8.1 Council Member Elder introduced the following resolution and moved its adoption: “RESOLUTION APPROVING ADDITIONAL TWO-YEAR EXTENSION TO TRIAL PERIOD FOR AMENDMENT TO CONDITIONAL USE PERMIT TO EXPAND USE OF OUTDOOR ATHLETIC STADIUM FOR PROPERTY AT 8230 47TH AVENUE NORTH AS SET FORTH IN RESOLUTION NO. 2019-60 (NEW HOPE PLANNING CASE 19-04).” The motion for the adoption of the foregoing resolution was seconded by Council Member Hoffe, and upon vote being taken thereon, the following voted in favor thereof: Hemken, Elder, Frazier, Hoffe, London; and the following voted against the same: None; Abstained: None; Absent: None; whereupon the resolution was declared duly passed and adopted, signed by the mayor which was attested to by the city clerk. EXCHANGE OF COMMUNICATION Item 12.1 Mayor Hemken introduced for discussion Item 12.1, Exchange of communication between members of the City Council. Mayor Hemken reported on upcoming events. ADJOURNMENT Motion was made by Council Member Frazier, seconded by Council Member Elder, to adjourn the meeting, as there was no further business to come before the Council. All present voted in favor. Motion carried. The New Hope City Council adjourned at 7:56 p.m. Respectfully submitted, Valerie Leone, City Clerk I:\RFA\City Manager\2020\CAFR\5.1 Q & R - Accept 2019 Annual Financial Report.docx Request for Action May 26, 2020 Approved by: Kirk McDonald, City Manager Originating Department: City Manager By: Kirk McDonald, City Manager Agenda Title Motion to accept the 2019 annual financial report Requested Action Staff requests Council pass a motion to accept the 2019 Annual Financial Report. Upon acceptance, the report will be filed with the Office of the State Auditor, and a summary report will be published in the official newspaper as required by State Statute. The report will also be posted on the city website. The City Council reviewed the audit with the city’s financial consultant, AEM, at the May 18 Council work session. Final bound copies of the Special Purpose Audit Report, Management Report and Comprehensive Annual Financial Report were distributed with this Council packet and are attached in electronic format. MMKR has prepared a presentation, which is attached. Policy/Past Practice In previous years, it has been the policy to review the audit with the financial consultant at the May work session and to formally accept the audit at the following council meeting, after a presentation is made by the auditor. Overall, I feel the audit is a very positive report and AEM and city staff have done a great job preparing the information for the comprehensive annual financial report, which is necessary for the auditor to complete the audit. Total general fund expenditures were under budget by $240,364 primarily in public safety and parks and recreation. Total general fund revenues were over budget by $72,388 due to investment earnings, intergovernmental revenue and franchise fees. The overall fund balance before transfers out approved by the Council was $312,752 ($240,364 + $72,388). The department heads, AEM, and all employees deserve credit for helping to hold down expenses and bring in additional revenue. The Council approved two transfers out during the year: 1) $150,000 transfer to the fire capital projects fund (from the 2018 audit fund balance) and 2) $204,000 transfer to the city hall CIP fund for cable operating equipment in the new council chambers (funds that had been saved for that purpose.) According to accounting standards, those transfers need to be deducted from the fund balance of the 2019 budget, therefore the final fund balance after the transfers out is $312,752 (fund balance) - $354,000 (transfers out) = -$41,248. MMKR reports that the total unassigned fund balance of the general fund at the end of the 2019 fiscal year was $7,116,723, which represents approximately 49.6%. As noted in the Management Report, MMKR did not identify any deficiencies in internal controls that they consider to be material weaknesses, no instances of non-compliance, they reported no findings, and they Agenda Section Presentations Item Number 5.1 encountered no significant difficulties in dealing with management in performing and completing the audit. Staff will be coordinating with AEM to submit an application for the 2019 Excellence in Achievement for Financial Reporting Certificate similar to the award recently received for the 2018 report. The majority of the following attachments are being sent electronically and hard copies delivered to Council members. Attachments  MMKR Power Point Presentation  Management Report  Special Purpose Audit Report  Comprehensive Annual Financial Report Ci t y o f N e w H o p e Au d i t R e p o r t Ye a r E n d e d D e c e m b e r 3 1 , 2 0 1 9 Ma l l o y M o n t a g u e , K a r n o w s k i , Ra d o s e v i c h , & C o . , P . A . Au d i t o r ’ s R o l e Op i n i o n o n B a s i c F i n a n c i a l S t a t e m e n t s Te s t I n t e r n a l C o n t r o l s a n d C o m p l i a n c e – Fi n a n c i a l S t a t e m e n t A u d i t – Mi n n e s o t a L a w s a n d R e g u l a t i o n s Au d i t R e s u l t s Un m o d i f i e d “ C l e a n ” O p i n i o n o n B a s i c F i n a n c i a l St a t e m e n t s – Im p l e m e n t e d G A S B 8 4 – F i d u c i a r y A c t i v i t i e s Re p o r t o n I n t e r n a l C o n t r o l a n d C o m p l i a n c e f o r th e F i n a n c i a l S t a t e m e n t A u d i t – No F i n d i n g s R e p o r t e d f o r t h e C u r r e n t Y e a r Re p o r t o n M i n n e s o t a L e g a l C o m p l i a n c e – No F i n d i n g s R e p o r t e d f o r t h e C u r r e n t Y e a r Go v e r n m e n t a l F u n d s Ch a n g e i n F u n d B a l a n c e s 20 1 9 2 0 1 8 ( R e s t a t e d ) C h a n g e T o t a l b y c l a s s i f i c a t i o n No n s p e n d a b l e 2 2 , 9 8 0 $ 1 8 , 7 6 3 $ 4 , 2 1 7 $ Re s t r i c t e d 1 3 , 3 0 4 , 9 2 2 2 2 , 5 9 0 , 7 4 3 ( 9 , 2 8 5 , 8 2 1 ) Co m m i t t e d 5 , 0 3 3 , 5 5 5 5 , 6 9 5 , 4 7 5 ( 6 6 1 , 9 2 0 ) A s s i g n e d 6 , 2 4 8 , 1 2 8 5 , 6 9 5 , 2 6 9 5 5 2 , 8 5 9 Un a s s i g n e d 4 , 6 4 1 , 4 0 3 3 , 7 1 3 , 9 8 0 9 2 7 , 4 2 3 To t a l g o v e r n m e n t a l f u n d s 2 9 , 2 5 0 , 9 8 8 $ 3 7 , 7 1 4 , 2 3 0 $ ( 8 , 4 6 3 , 2 4 2 ) $ To t a l b y f u n d Ge n e r a l 7 , 1 3 9 , 7 0 3 $ 7 , 1 8 0 , 9 5 1 $ ( 4 1 , 2 4 8 ) $ ED A S p e c i a l R e v e n u e 4 , 7 2 1 , 7 5 8 5 , 3 9 0 , 0 2 1 ( 6 6 8 , 2 6 3 ) HR A C o n s t r u c t i o n C a p i t a l P r o j e c t s 4 , 6 5 5 , 1 4 0 3 , 1 7 7 , 7 7 2 1 , 4 7 7 , 3 6 8 Ci t y H a l l C I P C a p i t a l P r o j e c t s 1 , 7 9 4 , 2 9 4 9 , 5 2 7 , 1 0 3 ( 7 , 7 3 2 , 8 0 9 ) St r e e t I n f r a s t r u c t u r e C a p i t a l P r o j e c t s 1 5 , 8 5 4 ( 9 4 8 , 4 7 4 ) 9 6 4 , 3 2 8 Pa r k / P o o l I m p r o v e m e n t C a p i t a l P r o j e c t s 5 , 3 1 6 , 8 1 5 9 , 4 9 2 , 7 8 1 ( 4 , 1 7 5 , 9 6 6 ) HR A B o n d s D e b t S e r v i c e ( 2 , 2 4 4 , 0 9 6 ) ( 2 , 2 8 6 , 1 2 2 ) 4 2 , 0 2 6 No n m a j o r f u n d s 7 , 8 5 1 , 5 2 0 6 , 1 8 0 , 1 9 8 1 , 6 7 1 , 3 2 2 To t a l g o v e r n m e n t a l f u n d s 2 9 , 2 5 0 , 9 8 8 $ 3 7 , 7 1 4 , 2 3 0 $ ( 8 , 4 6 3 , 2 4 2 ) $ Fu n d B a l a n c e a s o f D e c e m b e r 3 1 , Ge n e r a l F u n d F i n a n c i a l Po s i t i o n 20 1 5 2 0 1 6 2 0 1 7 2 0 1 8 2 0 1 9 F u n d B a l a n c e $6 , 0 8 0 , 4 1 2 $ 6 , 2 7 3 , 6 7 8 $ 6 , 8 8 8 , 6 5 5 $ 7 , 1 8 0 , 9 5 1 $ 7 , 1 3 9 , 7 0 3 C a s h B a l a n c e ( N e t ) $5 , 9 1 9 , 8 7 0 $ 6 , 0 9 0 , 9 9 7 $ 6 , 7 5 0 , 1 0 4 $ 6 , 9 9 2 , 7 4 3 $ 7 , 1 8 7 , 7 8 1 E x p & T r a n s O u t $1 1 , 8 7 9 , 6 2 2 $ 1 2 , 6 2 4 , 2 5 0 $ 1 3 , 2 9 0 ,7 2 9 $ 1 3 , 6 5 2 , 0 5 3 $ 1 4 , 3 3 7 , 7 4 8 $– $ 2 , 0 0 0 , 0 0 0 $ 4 , 0 0 0 , 0 0 0 $ 6 , 0 0 0 , 0 0 0 $ 8 , 0 0 0 , 0 0 0 $ 1 0 , 0 0 0 , 0 0 0 $ 1 2 , 0 0 0 , 0 0 0 $ 1 4 , 0 0 0 , 0 0 0 $ 1 6 , 0 0 0 , 0 0 0 Ye a r E n d e d D e c e m b e r 3 1 , Ge n e r a l F u n d R e v e n u e s – Bu d g e t a n d A c t u a l $– $ 1 $ 2 $ 3 $ 4 $ 5 $ 6 $ 7 $ 8 $ 9 $ 1 0 $ 1 1 Pr o p e r t y T a x e s Fr a n c h i s e T a x e s Li c e n s e s a n d P e r m i t s In t e r g o v e r n m e n t a l Ch a r g e s f o r S e r v i c e s Fi n e s Ot h e r Mi l l i o n s B u d g e t A c t u a l Ge n e r a l F u n d E x p e n d i t u r e s – B u d g e t a n d A c t u a l $– $ 1 $ 2 $ 3 $ 4 $ 5 $ 6 $ 7 $ 8 $ 9 G e n e r a l G o v e r n m e n t P u b l i c S a f e t y P u b l i c W o r k s C u l t u r e a n d R e c r e a t i o n Mi l l i o n s B u d g e t A c t u a l En t e r p r i s e F u n d s – Ch a n g e i n N e t P o s i t i o n 20 1 9 2 0 1 8 C h a n g e To t a l b y c l a s s i f i c a t i o n Ne t i n v e s t m e n t i n c a p i t a l a s s e t s 1 9 , 3 1 5 , 3 5 3 $ 1 8 , 7 8 3 , 8 9 8 $ 5 3 1 , 4 5 5 $ Re s t r i c t e d 1 , 3 5 8 , 4 0 1 1 , 1 6 0 , 6 8 0 1 9 7 , 7 2 1 Un r e s t r i c t e d 3 , 5 1 1 , 1 6 8 2 , 3 8 6 , 6 0 6 1 , 1 2 4 , 5 6 2 To t a l e n t e r p r i s e f u n d s 2 4 , 1 8 4 , 9 2 2 $ 2 2 , 3 3 1 , 1 8 4 $ 1 , 8 5 3 , 7 3 8 $ To t a l b y f u n d Se w e r U t i l i t y 4 , 3 9 5 , 7 2 0 $ 3 , 9 0 8 , 6 9 8 $ 4 8 7 , 0 2 2 $ W a t e r U t i l i t y 7 , 4 5 6 , 2 2 2 6 , 5 7 5 , 6 2 4 8 8 0 , 5 9 8 Go l f C o u r s e 5 2 5 , 5 7 4 5 6 3 , 4 3 3 ( 3 7 , 8 5 9 ) Ic e A r e n a 3 , 6 6 9 , 7 8 1 3 , 4 7 1 , 6 6 9 1 9 8 , 1 1 2 St o r m W a t e r 7 , 7 2 6 , 2 3 1 7 , 4 4 2 , 7 0 3 2 8 3 , 5 2 8 St r e e t L i g h t i n g 4 1 1 , 3 9 4 3 6 9 , 0 5 7 4 2 , 3 3 7 To t a l e n t e r p r i s e f u n d s 2 4 , 1 8 4 , 9 2 2 $ 2 2 , 3 3 1 , 1 8 4 $ 1 , 8 5 3 , 7 3 8 $ Ne t P o s i t i o n a s o f D e c e m b e r 3 1 , Se w e r U t i l i t y O p e r a t i o n 20 1 5 2 0 1 6 2 0 1 7 2 0 1 8 2 0 1 9 O p . R e v . $2 , 4 6 8 , 6 3 8 $ 2 , 6 2 7 , 8 7 5 $ 2 , 8 9 9 , 2 5 7 $ 3 , 1 5 4 , 7 0 9 $ 3 , 3 8 0 , 0 7 5 O p . E x p . $2 , 4 4 7 , 4 2 6 $ 2 , 1 7 5 , 4 8 2 $ 2 , 4 2 0 , 9 9 4 $ 2 , 6 8 4 , 0 3 0 $ 2 , 8 4 3 , 0 5 6 O p . I n c . ( L o s s ) $2 1 , 2 1 2 $ 4 5 2 , 3 9 3 $ 4 7 8 , 2 6 3 $ 4 7 0 , 6 7 9 $ 5 3 7 , 0 1 9 $– $ 5 0 0 , 0 0 0 $ 1 , 0 0 0 , 0 0 0 $ 1 , 5 0 0 , 0 0 0 $ 2 , 0 0 0 , 0 0 0 $ 2 , 5 0 0 , 0 0 0 $ 3 , 0 0 0 , 0 0 0 $ 3 , 5 0 0 , 0 0 0 Ye a r E n d e d D e c e m b e r 3 1 , Wa t e r U t i l i t y O p e r a t i o n 20 1 5 2 0 1 6 2 0 1 7 2 0 1 8 2 0 1 9 O p . R e v . $3 , 5 7 6 , 6 4 3 $ 3 , 8 3 5 , 0 3 1 $ 3 , 9 9 4 , 1 2 2 $ 4 , 3 9 1 , 0 2 5 $ 4 , 3 8 7 , 3 2 1 O p . E x p . $4 , 5 2 2 , 6 6 7 $ 3 , 5 1 9 , 2 3 3 $ 3 , 4 6 2 , 8 5 8 $ 4 , 0 2 9 , 6 0 1 $ 3 , 7 2 0 , 0 7 2 O p . I n c . ( L o s s ) $( 9 4 6 , 0 2 4 ) $ 3 1 5 , 7 9 8 $ 5 3 1 , 2 6 4 $ 3 6 1 , 4 2 4 $ 6 6 7 , 2 4 9 $ ( 1 , 0 0 0 , 0 0 0 ) $ ( 5 0 0 , 0 0 0 ) $– $ 5 0 0 , 0 0 0 $ 1 , 0 0 0 , 0 0 0 $ 1 , 5 0 0 , 0 0 0 $ 2 , 0 0 0 , 0 0 0 $ 2 , 5 0 0 , 0 0 0 $ 3 , 0 0 0 , 0 0 0 $ 3 , 5 0 0 , 0 0 0 $ 4 , 0 0 0 , 0 0 0 $ 4 , 5 0 0 , 0 0 0 $ 5 , 0 0 0 , 0 0 0 Ye a r E n d e d D e c e m b e r 3 1 , St o r m W a t e r F u n d 20 1 5 2 0 1 6 2 0 1 7 2 0 1 8 2 0 1 9 O p . R e v . $9 8 1 , 7 2 3 $ 1 , 0 3 7 , 4 2 9 $ 1 , 0 8 2 , 3 4 8 $ 1 , 1 3 9 , 0 0 7 $ 1 , 1 9 0 , 0 5 8 O p . E x p . $6 9 0 , 5 3 6 $ 7 9 7 , 6 0 4 $ 8 3 4 , 9 6 3 $ 7 3 8 , 3 0 7 $ 8 7 4 , 4 0 7 O p . I n c . ( L o s s ) $2 9 1 , 1 8 7 $ 2 3 9 , 8 2 5 $ 2 4 7 , 3 8 5 $ 4 0 0 , 7 0 0 $ 3 1 5 , 6 5 1 $– $ 1 0 0 , 0 0 0 $ 2 0 0 , 0 0 0 $ 3 0 0 , 0 0 0 $ 4 0 0 , 0 0 0 $ 5 0 0 , 0 0 0 $ 6 0 0 , 0 0 0 $ 7 0 0 , 0 0 0 $ 8 0 0 , 0 0 0 $ 9 0 0 , 0 0 0 $ 1 , 0 0 0 , 0 0 0 $ 1 , 1 0 0 , 0 0 0 $ 1 , 2 0 0 , 0 0 0 Ye a r E n d e d D e c e m b e r 3 1 , St r e e t L i g h t i n g F u n d 20 1 5 2 0 1 6 2 0 1 7 2 0 1 8 2 0 1 9 O p . R e v . $1 2 8 , 8 9 0 $ 1 3 7 , 5 2 5 $ 1 3 7 , 4 9 1 $ 1 4 4 , 5 8 2 $ 1 5 2 , 9 7 5 O p . E x p . $1 0 5 , 4 7 1 $ 1 0 2 , 9 1 2 $ 1 0 1 , 6 2 5 $ 1 1 9 , 1 9 8 $ 1 1 6 , 6 1 2 O p . I n c . ( L o s s ) $2 3 , 4 1 9 $ 3 4 , 6 1 3 $ 3 5 , 8 6 6 $ 2 5 , 3 8 4 $ 3 6 , 3 6 3 $– $ 2 0 , 0 0 0 $ 4 0 , 0 0 0 $ 6 0 , 0 0 0 $ 8 0 , 0 0 0 $ 1 0 0 , 0 0 0 $ 1 2 0 , 0 0 0 $ 1 4 0 , 0 0 0 $ 1 6 0 , 0 0 0 Ye a r E n d e d D e c e m b e r 3 1 , Go l f C o u r s e F u n d 20 1 5 2 0 1 6 2 0 1 7 2 0 1 8 2 0 1 9 O p . R e v . $2 7 2 , 3 1 4 $ 2 9 9 , 8 5 6 $ 2 7 3 , 2 4 7 $ 2 7 4 , 7 3 5 $ 2 8 2 , 3 2 3 O p . E x p . $2 9 0 , 5 0 7 $ 3 3 8 , 9 4 0 $ 3 3 5 , 9 8 3 $ 3 0 9 , 7 5 7 $ 3 2 7 , 4 2 2 O p . I n c . ( L o s s ) $( 1 8 , 1 9 3 ) $ ( 3 9 , 0 8 4 ) $ ( 6 2 , 7 3 6 ) $ ( 3 5 , 0 2 2 ) $ ( 4 5 , 0 9 9 ) $ ( 1 0 0 , 0 0 0 ) $ ( 5 0 , 0 0 0 ) $– $ 5 0 , 0 0 0 $ 1 0 0 , 0 0 0 $ 1 5 0 , 0 0 0 $ 2 0 0 , 0 0 0 $ 2 5 0 , 0 0 0 $ 3 0 0 , 0 0 0 $ 3 5 0 , 0 0 0 Ye a r E n d e d D e c e m b e r 3 1 , Ic e A r e n a F u n d 20 1 5 2 0 1 6 2 0 1 7 2 0 1 8 2 0 1 9 O p . R e v . $7 4 8 , 8 8 6 $ 7 1 3 , 6 4 9 $ 8 1 1 , 6 6 1 $ 8 2 5 , 5 3 1 $ 8 5 2 , 7 6 5 O p . E x p . $8 2 1 , 7 8 6 $ 8 9 0 , 1 4 4 $ 9 5 1 , 4 4 4 $ 9 4 2 , 4 6 6 $ 9 5 3 , 3 5 2 O p . I n c . ( L o s s ) $( 7 2 , 9 0 0 ) $ ( 1 7 6 , 4 9 5 ) $ ( 1 3 9 , 7 8 3 ) $ ( 1 1 6 , 9 3 5 ) $ ( 1 0 0 , 5 8 7 ) $ ( 2 0 0 , 0 0 0 ) $ ( 1 0 0 , 0 0 0 ) $– $ 1 0 0 , 0 0 0 $ 2 0 0 , 0 0 0 $ 3 0 0 , 0 0 0 $ 4 0 0 , 0 0 0 $ 5 0 0 , 0 0 0 $ 6 0 0 , 0 0 0 $ 7 0 0 , 0 0 0 $ 8 0 0 , 0 0 0 $ 9 0 0 , 0 0 0 $ 1 , 0 0 0 , 0 0 0 Ye a r E n d e d D e c e m b e r 3 1 , Go v e r n m e n t – W i d e Ch a n g e i n N e t P o s i t i o n 20 1 9 2 0 1 8 ( R e s t a t e d ) C h a n g e Ne t p o s i t i o n Go v e r n m e n t a l a c t i v i t i e s Ne t i n v e s t m e n t i n c a p i t a l a s s e t s 3 0 , 1 3 9 , 5 1 0 $ 2 7 , 8 8 8 , 4 1 7 $ 2 , 2 5 1 , 0 9 3 $ Re s t r i c t e d 6 , 6 2 8 , 1 3 8 3 , 9 4 4 , 7 6 6 2 , 6 8 3 , 3 7 2 Un r e s t r i c t e d 1 6 , 7 0 2 , 1 4 2 1 4 , 6 6 4 , 9 9 2 2 , 0 3 7 , 1 5 0 To t a l g o v e r n m e n t a l a c t i v i t i e s 5 3 , 4 6 9 , 7 9 0 4 6 , 4 9 8 , 1 7 5 6 , 9 7 1 , 6 1 5 Bu s i n e s s - t y p e a c t i v i t i e s Ne t i n v e s t m e n t i n c a p i t a l a s s e t s 1 9 , 3 1 5 , 3 5 3 1 8 , 7 8 3 , 8 9 8 5 3 1 , 4 5 5 Re s t r i c t e d 1 , 3 5 8 , 4 0 1 1 , 1 6 0 , 6 8 0 1 9 7 , 7 2 1 Un r e s t r i c t e d 3 , 0 5 4 , 1 8 7 1 , 7 8 3 , 3 0 6 1 , 2 7 0 , 8 8 1 T o t a l b u s i n e s s - t y p e a c t i v i t i e s 2 3 , 7 2 7 , 9 4 1 2 1 , 7 2 7 , 8 8 4 2 , 0 0 0 , 0 5 7 T o t a l n e t p o s i t i o n 7 7 , 1 9 7 , 7 3 1 $ 6 8 , 2 2 6 , 0 5 9 $ 8 , 9 7 1 , 6 7 2 $ As o f D e c e m b e r 3 1 , Management Report for City of New Hope, Minnesota December 31, 2019 THIS PAGE INTENTIONALLY LEFT BLANK To the City Council and Management City of New Hope, Minnesota We have prepared this management report in conjunction with our audit of the City of New Hope, Minnesota’s (the City) financial statements for the year ended December 31, 2019. We have organized this report into the following sections: •Audit Summary •Governmental Funds Overview •Enterprise Funds Overview •Government-Wide Financial Statements •Legislative Updates •Accounting and Auditing Updates We would be pleased to further discuss any of the information contained in this report or any other concerns that you would like us to address. We would also like to express our thanks for the courtesy and assistance extended to us during the course of our audit. The purpose of this report is solely to provide those charged with governance of the City, management, and those who have responsibility for oversight of the financial reporting process comments resulting from our audit process and information relevant to city finances in Minnesota . Accordingly, this report is not suitable for any other purpose. Minneapolis, Minnesota May 15, 2020 C E R T I F I E D A C C O U N T A N T S P UBLIC PRINCIPALS Thomas A. Karnowski, CPA Paul A. Radosevich, CPA William J. Lauer, CPA James H. Eichten, CPA Aaron J. Nielsen, CPA Victoria L. Holinka, CPA/CMA Jaclyn M. Huegel, CPA Kalen T. Karnowski, CPA Malloy, Montague, Karnowski, Radosevich & Co., P.A. 5353 Wayzata Boulevard • Suite 410 • Minneapolis, MN 55416 • Phone: 952-545-0424 • Fax: 952-545-0569 • www.mmkr.com Standard Letterhead-r2.qxp_167639 Letterhead-RV1 9/7/18 6:34 PM Page 1 THIS PAGE INTENTIONALLY LEFT BLANK -1- AUDIT SUMMARY The following is a summary of our audit work, key conclusions, and other information that we consider important or that is required to be communicated to the City Council, administration, or those charged with governance of the City. OUR RESPONSIBILITY UNDER AUDITING STANDARDS GENERALLY ACCEPTED IN THE UNITED STATES OF AMERICA AND GOVERNMENT AUDITING STANDARDS We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City as of and for the year ended December 31, 2019. Professional standards require that we provide you with information about our responsibilities under auditing standards generally accepted in the United States of America and Government Auditing Standards, as well as certain information related to the planned scope and timing of our audit. We have communicated such information to you verbally and in our audit engagement letter . Professional standards also require that we communicate the following information related to our audit. PLANNED SCOPE AND TIMING OF THE AUDIT We performed the audit according to the planned scope and timing previously discussed and coordinated in order to obtain sufficient audit evidence and complete an effective audit. AUDIT OPINION AND FINDINGS Based on our audit of the City’s financial statements for the year ended December 31, 2019: • We issued an unmodified opinion on the City’s basic financial statements. • We reported no deficiencies in the City’s internal control over financial reporting tha t we considered to be material weaknesses. • The results of our testing disclosed no instances of noncompliance required to be reported under Government Auditing Standards. • We reported no findings based on our testing of the City’s compliance with Minnesot a laws and regulations. OTHER OBSERVATIONS AND RECOMMENDATIONS – COVID-19 Shortly after the end of the 2019 fiscal year, the onset of the novel coronavirus (COVID-19) pandemic caused substantial volatility in economic conditions and tremendous disruption in the way governments, businesses, and individuals function. Minnesota cities may experience the impact of this pandemic in a myriad of financial areas, such as: declines in investment rates of return, cash flow issues, increased utility billing and property tax delinquencies, significant increases in the number and frequency of employees working remotely, challenges in processing general and payroll disbursements, disruption of prescribed internal control procedures, delays in internal and external financial reporting, and new compliance requirements attached to potential federal relief subsidies. As your city adapts to the new normal of municipal operations in a post-COVID-19 world, the assessment of and responses to new risks that may accompany operational changes will be critical to the safeguarding of city resources and sound financial stewardship. We encourage management and governance to include a robust financial risk assessment process when planning responses to these challenges, and to reassess and adapt internal controls over financial transactions and reporting to align with significant changes made to daily operations, even those intended to be temporary. -2- SIGNIFICANT ACCOUNTING POLICIES Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the City are described in Note 1 of the notes to basic financial statements. No new accounting policies were adopted and the application of existing policies was not changed during the year ended December 31, 2019; however, the City implemented the following governmental accounting standards during the fiscal year: • Governmental Accounting Standards Board (GASB) Statement No. 84, Fiduciary Activities, which established new criteria for identifying and reporting fiduciary activities. • GASB Statement No. 88, Certain Disclosures Related to Debt, Including Direct Borrowings and Direct Placements, which improved and clarified the information to be disclosed in notes to government financial statements related to debt, including direct borrowings and direct placements. We noted no transactions entered into by the City during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period. ACCOUNTING ESTIMATES AND MANAGEMENT JUDGMENTS Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates affecting the financial statements were: • Value of Land Held for Resale – These assets are stated at the lower of cost or acquisition value based on management’s estimates. • Depreciation – Management’s estimates of depreciation expense are based on the estimated useful lives of the assets. • Compensated Absences – Management’s estimate is based on current rates of pay; vacation, wellness, personal, and sick leave balances; and the likelihood that accrued sick leave will ultimately be paid at termination. • Pension and Other Post-Employment Benefit (OPEB) Liabilities – The City has recorded liabilities and activity for pension benefits and other post-employment benefits (OPEB). These obligations are calculated using actuarial methodologies described in GASB Statement Nos. 68 and 75. These actuarial calculations include significant assumptions, including projected changes, healthcare insurance costs, investment returns, retirement ages, proportionate share, and employee turnover. We evaluated the key factors and assumptions used by management in the areas discussed above in determining that they are reasonable in relation to the basic financial statements taken as a whole. Certain financial statement disclosures are particularly sensitive because of their significance to financial statement users. The disclosures included in the notes to the basic financial statements related to OPEB and pension benefits are particularly sensitive, due to the materiality of the liabilities, and the large and complex estimates involved in determining the disclosures. The financial statement disclosures are neutral, consistent, and clear. -3- CORRECTED AND UNCORRECTED MISSTATEMENTS Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are clearly trivial, and communicate them to the appropriate level of management. There were no misstatements detected as a result of audit procedures that were material, either individually or in the aggregate, to each opinion unit’s financial statements taken as a whole. DIFFICULTIES ENCOUNTERED IN PERFORMING THE AUDIT We encountered no significant difficulties in dealing with management in performing and completing our audit. DISAGREEMENTS WITH MANAGEMENT For purposes of this report, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor’s report. We are pleased to report that no such disagreements arose during the course of our audit. MANAGEMENT REPRESENTATIONS We have requested certain representations from management that are included in the management representation letter dated May 15, 2020. MANAGEMENT CONSULTATIONS WITH OTHER INDEPENDENT ACCOUNTANTS In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a “second opinion” on certain situations. If a consultation involves application of an accounting principle to the City’s financial statements or a determination of the type of auditor’s opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants. OTHER AUDIT FINDINGS OR ISSUES We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the City’s auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. -4- OTHER MATTERS We applied certain limited procedures to the management’s discussion and analysis (MD&A) and the pension and OPEB-related required supplementary information (RSI) that supplements the basic financial statements. Our procedures consisted of inquiries of management regarding 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 did not audit the RSI and do not express an opinion or provide any assurance on the RSI. We were engaged to report on the combining and individual fund financial statements and schedules accompanying the financial statements, which are not RSI. With respect to this supplemental information, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America, the method of preparing it has not changed from the prior period, and the information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplemental information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves. We were not engaged to report on the introductory and statistical sections, which accompany the financial statements, but are not RSI. Such information has 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 it. -5- GOVERNMENTAL FUNDS OVERVIEW This section of the report provides you with an overview of the financial trends and activities of the City’s governmental funds, which includes the General, special revenue, debt service, and capital project funds . These funds are used to account for the basic services the City provides to all of its citizens, which are financed primarily with property taxes. The governmental fund information in the City’s financial statements focuses on budgetary compliance and the sufficiency of each governmental fund’s current assets to finance its current liabilities. PROPERTY TAXES Minnesota cities rely heavily on local property tax levies to support their governmental fund activities. For the 2018 fiscal year, local ad valorem property tax levies provided 41.5 percent of the total governmental fund revenues for cities over 2,500 in population, and 36.7 percent for cities under 2,500 in population. Total property taxes levied by all Minnesota cities for taxes payable in 2019 in creased 5.6 percent from the prior year. The total tax capacity value of property in Minnesota cities increased about 7.1 percent for the 2019 levy year. The tax capacity values used for levying property taxes are based on the assessed market values for the previous fiscal year (e.g., tax capacity values for taxes levied in 2019 were based on assessed market values as of January 1, 2018), so the trend of change in these tax capacity values lags somewhat behind the housing market and economy in general. The City’s taxable market value increased 10.6 percent for taxes payable in 2018 and 7.9 percent for taxes payable in 2019. The following graph shows the City’s changes in taxable market value over the past 10 years: $– $300,000,000 $600,000,000 $900,000,000 $1,200,000,000 $1,500,000,000 $1,800,000,000 $2,100,000,000 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Taxable Market Value -6- Tax capacity is considered the actual base available for taxation. It is calculated by applying the state’s property classification system to each property’s market value . Each property classification, such as commercial or residential, has a different calculation and uses different rates . Consequently, a city’s total tax capacity will change at a different rate than its total market value, as tax capacity is affected by the proportion of its tax base that is in each property classification from year-to-year, as well as legislative changes to tax rates. The City’s tax capacity increased 10.1 percent for taxes payable in 2018 and 6.4 percent for taxes payable in 2019. The following graph shows the City’s change in tax capacities over the past 10 years: $– $3,000,000 $6,000,000 $9,000,000 $12,000,000 $15,000,000 $18,000,000 $21,000,000 $24,000,000 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Local Tax Capacity The following table presents the average tax rates applied to city residents for each of the last three levy years: 2017 2018 2019 Average tax rate City 59.9 58.6 68.0 County 44.1 42.8 41.8 School 31.6 32.0 29.9 Special taxing 10.2 9.0 8.9 Total 145.8 142.4 148.6 Rates Expressed as a Percentage of Net Tax Capacity City of New Hope The City’s portion of the tax rate has increased in the current year, mainly due to new debt levies related to the bonds issued by the City to finance its police station/City Hall facility and community pool improvement projects. -7- GOVERNMENTAL FUND BALANCES The following table summarizes the changes in the fund balances of the City’s governmental funds during the year ended December 31, 2019, presented both by fund balance classification and by fund. The fund balances presented in the table below as of December 31, 2018 have been restated for the effect of a prior period adjustment made by the City in 2019 that reduced beginning fund balances by $1,775,342. 2019 2018 (Restated)Change Fund balances of governmental funds Total by classification Nonspendable 22,980$ 18,763$ 4,217$ Restricted 13,304,922 22,590,743 (9,285,821) Committed 5,033,555 5,695,475 (661,920) Assigned 6,248,128 5,695,269 552,859 Unassigned 4,641,403 3,713,980 927,423 Total governmental funds 29,250,988$ 37,714,230$ (8,463,242)$ Total by fund General 7,139,703$ 7,180,951$ (41,248)$ Economic Development Authority Special Revenue 4,721,758 5,390,021 (668,263) HRA Construction Capital Projects 4,655,140 3,177,772 1,477,368 City Hall CIP Capital Projects 1,794,294 9,527,103 (7,732,809) Street Infrastructure Capital Projects 15,854 (948,474) 964,328 Park/Pool Improvement Capital Projects 5,316,815 9,492,781 (4,175,966) HRA Bonds Debt Service (2,244,096) (2,286,122) 42,026 Nonmajor funds 7,851,520 6,180,198 1,671,322 Total governmental funds 29,250,988$ 37,714,230$ (8,463,242)$ as of December 31, Governmental Funds Change in Fund Balance Fund Balance In total, the fund balances of the City’s governmental funds decreased by $8,463,242 during the year ended December 31, 2019. The decrease was primarily in restricted fund balances, which reflects the spend down of bond proceeds in the City Hall CIP Capital Projects Fund for completion of the new police station/City Hall facility, and in the Park/Pool Improvement Capital Projects Fund for the start of construction of a new pool at the previous City Hall location. -8- GOVERNMENTAL FUNDS REVENUE AND EXPENDITURES The following table presents the per capita revenue of the City’s governmental funds for the past three years, along with state-wide averages. We have included the most recent comparative state-wide averages available from the Office of the State Auditor to provide a benchmark for interpreting the City’s data. The amounts received from the typical major sources of governmental fund revenue will naturally vary between cities based on factors such as a city’s stage of development, location, size and density of its population, property values, services it provides, and other attributes. It will also differ from year -to-year, due to the effect of inflation and changes in its operation. Also, certain data on these tables may be classified differently than how they appear in the City’s financial statements in order to be more comparable to the state-wide information, particularly in separating capital expenditures from current expenditures. We have designed this section of our management report usi ng per capita data in order to better identify unique or unusual trends and activities of the City. We intend for this type of comparative and trend information to complement, rather than duplicate, information in the MD&A. An inherent difficulty in presenting per capita information is the accuracy of the population count, which for most years is based on estimates. Year 2017 2018 2019 Population 10,000–20,000 20,000–100,000 21,545 21,790 21,790 Property taxes 472$ 493$ 555$ 592$ 699$ Tax increments 27 43 39 51 60 Franchise and other taxes 48 50 42 43 44 Special assessments 40 57 4 13 9 Licenses and permits 35 47 30 17 15 Intergovernmental revenues 271 157 86 101 181 Charges for services 102 112 80 64 63 Other 78 49 39 42 72 Total revenue 1,073$ 1,008$ 875$ 923$ 1,143$ Governmental Funds Revenue per Capita With State-Wide Averages by Population Class City of New HopeState-Wide December 31, 2018 In total, the City’s governmental fund revenues for 2019 were $24,907,410, an increase of $4,775,609 (23.7 percent) from the prior year, or $220 more per capita than the prior year. Property tax revenue was $107 per capita higher than last year, due to an increase in the City’s levy. Revenue from tax increments was $9 per capita higher than last year, as it was the second year the City collected tax increments from its new Centra Homes and Industrial Equities TIF Districts. Revenue from intergovernmental revenue was $80 per capita higher than last year, due to utilizing about $1.9 million of a $2.0 million grant for construction of the new outdoor pool. Revenue from “other” sources, as presented above, were $30 per capita higher than the prior year, mainly due to improved investment revenue. -9- The expenditures of governmental funds will also vary from state -wide averages and from year-to-year, based on the City’s circumstances. Expenditures are classified into three types as follows: • Current – These are typically the general operating type expenditures occurring on an annual basis, and are primarily funded by general sources, such as taxes and intergovernmental revenues. • Capital Outlay and Construction – These expenditures do not occur on a consistent basis, more typically fluctuating significantly from year-to-year. Many of these expenditures are project-oriented, and are often funded by specific sources that have benefited from the expenditure, such as special assessment improvement projects. • Debt Service – Although the expenditures for debt service may be relatively consistent over the term of the respective debt, the funding source is the important factor . Some debt may be repaid through specific sources, such as special assessments or redevelopment funding, while other debt may be repaid with general property taxes. The City’s expenditures per capita of its governmental funds for the past three years, together with state-wide averages, are presented in the following table: Year 2017 2018 2019 Population 10,000–20,000 20,000–100,000 21,545 21,790 21,790 Current 121$ 104$ 122$ 82$ 87$ 272 294 359 367 387 125 106 78 79 82 115 104 96 93 93 74 78 81 37 24 707 686 736 658 673 Capital outlay and construction 351 307 242 595 1,036 Debt service 153 109 24 37 44 39 29 33 42 63 192 138 57 79 107 Total expenditures 1,250$ 1,131$ 1,035$ 1,332$ 1,816$ Governmental Funds Expenditures per Capita With State-Wide Averages by Population Class City of New Hope All other State-Wide December 31, 2018 Principal Interest and fiscal General government Public safety Public works Culture and recreation The City’s total governmental funds expenditures were $39,571,937 for 2019, an increase of $10,564,096 (36.4 percent) from the prior year, or $484 per capita. Capital outlay expenditures increased $441 per capita, due to the construction of the new police station/City Hall facility and the new pool. Debt service expenditures also increased $28 per capita, due to the debt issued in recent years to finance those improvement projects. -10- GENERAL FUND The City’s General Fund accounts for the financial activity of the basic services provided to the community. The primary services included within this fund are the administration of the municipal operation, police and fire protection, building inspection, streets and highway maintenance, and parks and recreation. The graph below illustrates the change in the General Fund financial position over the last five years. We have also included a line representing annual expenditures and transfers out to reflect the change in the size of the General Fund operation over the same period. 2015 2016 2017 2018 2019 Fund Balance $6,080,412 $6,273,678 $6,888,655 $7,180,951 $7,139,703 Cash Balance (Net)$5,919,870 $6,090,997 $6,750,104 $6,992,743 $7,187,781 Exp & Trans Out $11,879,622 $12,624,250 $13,290,729 $13,652,053 $14,337,748 $– $2,000,000 $4,000,000 $6,000,000 $8,000,000 $10,000,000 $12,000,000 $14,000,000 $16,000,000 General Fund Financial Position Year Ended December 31, The total fund balance of the City’s General Fund decreased $41,248 in 2019, as compared to a breakeven budget. Unassigned fund balance was $7,116,723 at the end of 2019 fiscal year, which represents approximately 49.6 percent of annual expenditures and transfers out based on 2019 levels. As the graph illustrates, the City has generally been able to maintain healthy cash and fund balance levels as the volume of financial activity has grown. This is an important factor because a government, like any organization, requires a certain amount of equity to operate. A healthy financial position allows the City to avoid volatility in tax rates; helps minimize the impact of state funding changes; allows for the adequate and consistent funding of services, repairs, and unexpected costs; and is a factor in determining the City’s bond rating and resulting interest costs. A trend that is typical to Minnesota local governments, especially the General Fund of cities, is the unusual cash flow experienced throughout the year. The City’s General Fund cash disbursements are made fairly evenly during the year other than the impact of seasonal services, such as snowplowing, street maintenance, and park activities. Cash receipts of the General Fund are quite a different story. Property taxes comprise about 74 percent of the fund’s total annual revenue. Approximately half of these revenues are received by the City in June/July and the rest in November/December . Consequently, the City needs to have adequate cash reserves to finance its everyday operations between these payments. -11- The following graph reflects the City’s General Fund revenue sources for 2019 compared to budget: $– $1 $2 $3 $4 $5 $6 $7 $8 $9 $10 $11 Property Taxes Franchise Taxes Licenses and Permits Intergovernmental Charges for Services Fines Other Millions General Fund Revenue Budget to Actual Budget Actual Total General Fund revenue for 2019 was $13,964,225, which was $72,388 (0.5 percent) higher than the final budget. Franchise taxes were $60,856 higher than budget, due mainly to the City’s allocation of these revenues between various funds. Intergovernmental revenue exceeded budget by $89,471, due to a number of small state and local grants. Other revenues were $111,393 over budget, mainly in investment earnings, due to better market performance. The following graph presents the City’s General Fund revenues by source for the last five years . The graph reflects the City’s reliance on property taxes and other local sources of revenue. Property Taxes Intergovernmental Other 2015 $8,308,447 $1,133,965 $2,472,328 2016 $8,954,626 $1,170,180 $2,457,510 2017 $9,541,667 $1,177,400 $2,867,879 2018 $9,971,064 $1,332,638 $2,315,213 2019 $10,297,018 $1,342,543 $2,324,664 $– $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $7,000,000 $8,000,000 $9,000,000 $10,000,000 $11,000,000 General Fund Revenue by Source Year Ended December 31, Total General Fund revenue for 2019 was $345,310 (2.5 percent) higher than the prior year. The majority of the increase was in property tax revenue, which increased $325,954 from last year, due to an increase in the adopted levy. -12- The following graph illustrates the components of General Fund spending for 2019 compared to budget: $– $1 $2 $3 $4 $5 $6 $7 $8 $9 General Government Public Safety Public Works Culture and Recreation Millions General Fund Expenditures Budget to Actual Budget Actual Total General Fund expenditures for 2019 were $13,983,748, which was $240,364 (1.7 percent) under budget, with the variance spread across all categories shown above. Public safety expenditures were $144,951 under budget, primarily in police personal services. Culture and recreation expenditures were $76,332 under budget, mainly in parks department personnel and other service costs. The following graph illustrates the City’s General Fund expenditures by function over the last five years: General Government Public Safety Public Works Culture and Recreation 2015 $1,686,151 $6,975,382 $1,112,092 $1,855,997 2016 $1,750,414 $7,301,852 $1,389,553 $1,932,431 2017 $1,767,879 $7,868,754 $1,435,256 $2,068,840 2018 $1,788,108 $8,107,759 $1,491,045 $2,015,141 2019 $1,904,447 $8,482,568 $1,564,148 $2,032,585 $– $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $7,000,000 $8,000,000 $9,000,000 General Fund Expenditures by Function Year Ended December 31, Total General Fund expenditures were $581,695 (4.3 percent) higher than the previous year. Public safety expenditures increased $374,809, mainly in police department costs. General government expenditures were $116,339 higher than the prior year, mainly in personnel costs for planning and zoning. -13- ENTERPRISE FUNDS OVERVIEW The City maintains several enterprise funds to account for services the City provides that are financed primarily through fees charged to those utilizing the service. This section of the report provides you with an overview of the financial trends and activities of the City’s enterprise funds , which includes the Sewer Utility, Water Utility, Golf Course, Ice Arena, Storm Water, and Street Lighting funds. ENTERPRISE FUNDS FINANCIAL POSITION The following table summarizes the changes in the financial position of the City’s enterprise funds during the year ended December 31, 2019, presented both by classification and by fund: 2019 2018 Change Net position of enterprise funds Total by classification Net investment in capital assets 19,315,353$ 18,783,898$ 531,455$ Restricted 1,358,401 1,160,680 197,721 Unrestricted 3,511,168 2,386,606 1,124,562 Total enterprise funds 24,184,922$ 22,331,184$ 1,853,738$ Total by fund Sewer Utility 4,395,720$ 3,908,698$ 487,022$ Water Utility 7,456,222 6,575,624 880,598 Golf Course 525,574 563,433 (37,859) Ice Arena 3,669,781 3,471,669 198,112 Storm Water 7,726,231 7,442,703 283,528 Street Lighting 411,394 369,057 42,337 Total enterprise funds 24,184,922$ 22,331,184$ 1,853,738$ Enterprise Funds Change in Financial Position Net Position as of December 31, In total, the net position of the City’s enterprise funds increased by $1,853,738 during the year ended December 31, 2019. The net investment in enterprise capital assets increased $531,455. The $1,358,401 of restricted net position represents cash held in an escrow account in the Ice Arena Fund for the future payment of the City’s energy conservation lease revenue bonds. Unrestricted net position increased by $1,124,562, mainly due to positive operating results in the Sewer Utility, Water Utility, and Storm Water Funds. -14- SEWER UTILITY FUND The following graph presents five years of operating results for the City’s Sewer Utility Fund: 2015 2016 2017 2018 2019 Op. Rev.$2,468,638 $2,627,875 $2,899,257 $3,154,709 $3,380,075 Op. Exp.$2,447,426 $2,175,482 $2,420,994 $2,684,030 $2,843,056 Op. Inc. (Loss)$21,212 $452,393 $478,263 $470,679 $537,019 $– $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000 $3,500,000 Sewer Utility Operating Results Year Ended December 31, The Sewer Utility Fund ended 2019 with a total net position of $4,395,720, of which $3,515,667 represents the net investment in sewer collection system capital assets, leaving an unrestricted balance of $880,053. Net position increased $487,022 in the current year. Operating revenue in the Sewer Utility Fund for 2019 increased $225,366 (7.1 percent) from the previous year, which primarily reflects a 7.5 percent rate increase implemented for the year. Operating costs for 2019 were $159,026 (5.9 percent) more than last year, mainly due to an increase of about $76,000 in disposal charges paid to Metropolitan Council Environmental Services, and higher maintenance costs. -15- WATER UTILITY FUND The following graph presents five years of operating results for the City’s Water Utility Fund: 2015 2016 2017 2018 2019 Op. Rev.$3,576,643 $3,835,031 $3,994,122 $4,391,025 $4,387,321 Op. Exp.$4,522,667 $3,519,233 $3,462,858 $4,029,601 $3,720,072 Op. Inc. (Loss)$(946,024)$315,798 $531,264 $361,424 $667,249 $(1,000,000) $(500,000) $– $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 Water Utility Operating Results Year Ended December 31, The Water Utility Fund ended 2019 with a total net position of $7,456,222, of which $5,179,047 represents the net investment in water distribution system capital assets, leaving an unrestricted balance of $2,277,175. Water Utility Fund net position increased $880,598 in 2019. Operating revenue in the Water Utility Fund for 2019 decreased $3,704 (0.1 percent) from the prior year, as a 5.0 percent rate increase implemented for 2019 was offset by a decrease in consumption. Operating costs for 2019 were $309,529 (7.7 percent) less than the prior year, mainly due to a decrease in maintenance costs and allocated central garage charges. -16- GOLF COURSE FUND The following graph presents five years of operating results for the City’s Golf Course Fund: 2015 2016 2017 2018 2019 Op. Rev.$272,314 $299,856 $273,247 $274,735 $282,323 Op. Exp.$290,507 $338,940 $335,983 $309,757 $327,422 Op. Inc. (Loss)$(18,193)$(39,084)$(62,736)$(35,022)$(45,099) $(100,000) $(50,000) $– $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 Golf Course Fund Year Ended December 31, The Golf Course Fund ended 2019 with a total net position of $525,574, a decrease of $37,859. Of this, $486,183 represents the net investment in golf course capital assets, leaving $39,391 in unrestricted net position. Golf Course Fund operating revenue for 2019 increased $7,588 (2.8 percent) from the prior year. Operating expenses were $17,665 (5.7 percent) higher than the prior year, primarily in personnel services (seasonal wages and pension expense) and allocated information technology charges. -17- ICE ARENA FUND The following graph presents five years of operating results for the City’s Ice Arena Fund: 2015 2016 2017 2018 2019 Op. Rev.$748,886 $713,649 $811,661 $825,531 $852,765 Op. Exp.$821,786 $890,144 $951,444 $942,466 $953,352 Op. Inc. (Loss)$(72,900)$(176,495)$(139,783)$(116,935)$(100,587) $(200,000) $(100,000) $– $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 $700,000 $800,000 $900,000 $1,000,000 Ice Arena Fund Year Ended December 31, The Ice Arena Fund ended 2019 with a total net position of $3,669,781, an increase of $198,112. Of this, $2,620,582 represents the net investment in ice arena capital assets, and $1,358,401 is restricted for debt service, leaving an unrestricted deficit balance of $309,202. Ice Arena Fund operating revenue for 2019 increased $27,234 (3.3 percent) from the prior year. Operating expenses were $10,886 (1.2 percent) higher than the prior year, as increases in personnel costs were partially offset by decreases in depreciation and utility expenses. -18- STORM WATER FUND The following graph presents five years of operating results for the City’s Storm Water Fund: 2015 2016 2017 2018 2019 Op. Rev.$981,723 $1,037,429 $1,082,348 $1,139,007 $1,190,058 Op. Exp.$690,536 $797,604 $834,963 $738,307 $874,407 Op. Inc. (Loss)$291,187 $239,825 $247,385 $400,700 $315,651 $– $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 $700,000 $800,000 $900,000 $1,000,000 $1,100,000 $1,200,000 Storm Water Fund Year Ended December 31, The Storm Water Fund ended 2019 with a total net position of $7,726,231, an increase of $283,528. Of this, $7,124,169 represents the net investment in storm water collection system capital assets, leaving an unrestricted net position of $602,062. Storm Water Fund operating revenues for 2019 increased $51,051 (4.5 percent) from the previous year, mainly due to a 5.0 percent rate increase implemented in 2019. Operating expenses were $136,100 (18.4 percent) higher than last year, mainly due to increases in personnel service costs and depreciation expenses. -19- STREET LIGHTING FUND The following graph presents five years of operating results for the City’s Street Lighting Fund: 2015 2016 2017 2018 2019 Op. Rev.$128,890 $137,525 $137,491 $144,582 $152,975 Op. Exp.$105,471 $102,912 $101,625 $119,198 $116,612 Op. Inc. (Loss)$23,419 $34,613 $35,866 $25,384 $36,363 $– $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 $140,000 $160,000 Street Lighting Fund Year Ended December 31, The Street Lighting Fund ended 2019 with a total net position of $411,394, an increase of $42,337. Of this, $389,705 represents the net investment in street lighting capital assets, leaving an unrestricted net position of $21,689. Street Lighting Fund operating revenue for 2019 increased $8,393 (5.8 percent) from the previous year, which reflects a 5.0 percent rate increase implemented this year. Operating expenses were $2,586 (2.2 percent) lower than the previous year. THIS PAGE INTENTIONALLY LEFT BLANK -20- GOVERNMENT-WIDE FINANCIAL STATEMENTS In addition to fund-based information, the current reporting model for governmental entities also requires the inclusion of two government-wide financial statements designed to present a clear picture of the City as a single, unified entity. These government-wide financial statements provide information on the total cost of delivering services, including capital assets and long-term liabilities. STATEMENT OF NET POSITION The Statement of Net Position essentially tells you what the City owns and owes at a given point in time, the last day of the fiscal year. Theoretically, net position represents the resources the City has leftover to use for providing services after its debts are settled. However, those resources are not always in spendable form, or there may be restrictions on how some of those resources can be used. Therefore, net position is divided into three components: net investment in capital assets, restricted, and unrestricted. The following table presents the components of the City’s net position as of December 31, 2019 and 2018 for governmental activities and business-type activities. The net position presented in the table below as of December 31, 2018 has been restated for the effect of a prior period adjustment made by the City in 2019 that reduced beginning net position by $1,775,342. 2019 2018 (Restated)Change Net position Governmental activities Net investment in capital assets 30,139,510$ 27,888,417$ 2,251,093$ Restricted 6,628,138 3,944,766 2,683,372 Unrestricted 16,702,142 14,664,992 2,037,150 Total governmental activities 53,469,790 46,498,175 6,971,615 Business-type activities Net investment in capital assets 19,315,353 18,783,898 531,455 Restricted 1,358,401 1,160,680 197,721 Unrestricted 3,054,187 1,783,306 1,270,881 Total business-type activities 23,727,941 21,727,884 2,000,057 Total net position 77,197,731$ 68,226,059$ 8,971,672$ As of December 31, The City’s total net position at December 31, 2019 increased $8,971,672 from the previous year-end. Governmental activities net position increased by $6,971,615 overall. The increase in net investment in capital assets is mainly due to construction of the new police station/City Hall facility and the new pool, a portion of which was financed with a grant. The increase in restricted net position was mainly due to resources transferred into the HRA Construction Capital Projects Fund restricted for economic development, and an increase in resources restricted for future debt service. A number of factors contributed to the increase in unrestricted net position, including: the elimination of the fund balance deficit in the Street Infrastructure Capital Projects Fund; reductions in the City’s net Public Employee Retirement Association pension plan liability and deferrals; and improvement in the net position of the Central Garage Internal Service Fund. Business-type activities net position increased $2,000,057, as outlined in the discussion of enterprise fund operations earlier in this report. -21- STATEMENT OF ACTIVITIES The Statement of Activities tracks the City’s yearly revenues and expenses, as well as any other transactions that increase or reduce total net position. These amounts represent the full cost of providing services. The Statement of Activities provides a more comprehensive measure than just the amount of cash that changed hands, as reflected in the fund-based financial statements. This statement includes the cost of supplies used, depreciation of long-lived capital assets, and other accrual-based expenses. The following table presents the change in net position of the City for the years ended December 31, 2019 and 2018: 2018 Program Expenses Revenues Net Change Net Change Governmental activities General government 1,850,242$ 355,361$ (1,494,881)$ (1,608,502)$ Public safety 8,540,198 1,292,530 (7,247,668) (6,233,275) Public works 3,816,417 1,248,506 (2,567,911) (2,277,617) Culture and recreation 2,145,988 2,609,916 463,928 (1,651,848) Economic development 749,651 – (749,651) (1,083,358) Interest on long-term debt 1,412,763 – (1,412,763) (1,074,469) Business-type activities Sewer utility 2,834,973 3,380,479 545,506 524,546 Water utility 3,762,099 4,698,951 936,852 974,041 Golf course 319,871 296,635 (23,236) (209) Ice arena 1,003,048 894,129 (108,919) (102,889) Storm water 888,156 1,207,847 319,691 405,833 Street lighting 116,732 152,975 36,243 25,332 Total net (expense) revenue 27,440,138$ 16,137,329$ (11,302,809) (12,102,415) General revenues Property taxes and tax increments 16,583,231 14,054,673 Franchise taxes 957,448 945,244 Unrestricted grants and contributions 803,035 697,895 Unrestricted investment earnings 1,561,604 871,088 Gain on sale of capital assets 369,163 70,400 Total general revenues 20,274,481 16,639,300 Change in net position 8,971,672$ 4,536,885$ 2019 Net (expense) revenue One of the goals of this statement is to provide a side-by-side comparison to illustrate the difference in the way the City’s governmental and business-type operations are financed. The table clearly illustrates the dependence of the City’s governmental operations on general revenues, such as property taxes. It also shows that, for the most part, the City’s business-type activities are generating sufficient program revenues (service charges and program-specific grants) to cover expenses. This is critical given the current downward pressures on the general revenue sources. The difference in the net change in public safety from year-to-year was mainly due to an increased allocation of Police and Fire pension expense. The difference in net change in culture and recreation was primarily due to the capital grant received for the pool improvement project. -22- LEGISLATIVE UPDATES The 2019 legislative session began with a projected state general fund surplus of $1.052 billion. The legislative agenda was primarily focused on setting an operating budget for the state’s fiscal 2020-2021 biennium. At the end of the regular session, only a higher education budget bill had been completed. However, after a special session, the Legislature was able to address the 11 remaining budget bills, as well as pass an omnibus tax bill and small pension bill. The following is a brief summary of specific legislative changes from the 2019 session or previous legislative sessions potentially impacting Minnesota cities. Local Government Aid (LGA) – An additional $26 million was added to the appropriation for the city LGA formula beginning in fiscal 2020, bringing the total state-wide appropriation to $560.4 million. An additional $4 million was added to the appropriation beginning in fiscal 2021. The LGA distribution formula for 2020 was altered to provide that a city’s 2020 LGA may not be less than its 2019 aid, and the cap on maximum aid losses in any year thereafter was modified. Bonding Bill – The 2019 bonding bill provided financing for approximately $102 million of projects and funding authorized by the 2018 omnibus bonding bill, which had been legally challenged due to their reliance on the use of the Environment and Natural Resources Trust Fund to generate appropriation bonds. The 2019 Legislature changed the funding source for these projects to general obligation bonds, clearing the way for the projects to go forward. Included in this was $59 million earmarked for city water and wastewater projects through the state Public Facilities Authority. Local Option Sales Tax Process – Effective May 1, 2019, the process for cities to enact a local option sales tax have been modified, requiring special legislation prior to a local referendum vote. Cities must now adopt a resolution specifying the proposed sales tax rate and time frame for the sales tax. The resolution must also include a detailed description of the project or projects (up to five) to be funded by the sales tax, the amount to be raised for each project, and documentation of the region al significance of each project. The resolution must be submitted to the House and Senate tax committee chairs by January 31st to be considered for special legislation by the State Legislature. If special legislation is approved, voter approval must be obtained by referendum at a general election within two years of legislative approval. Wage Theft – The Legislature enacted a number of changes in employment law aimed at reducing wage theft by employers. The changes require employers to provide written notice to new employees of specific wage information including rate of pay, allowances, paid leave, deductions, days in a pay period, and the employer’s legal name, address, and phone number. Employers must also provide an earnings statement that includes similar information. The changes also create new requirements for employer recordkeeping for hours worked each day and each workweek, and imposes penalties for failure to do so and for refusal to make the records available for inspection by the Department of Labor. Written Estimates of Consulting Fees – Effective August 1, 2019, upon request by applicants for a permit, license, or other approval relating to real estate development or construction, cities are required to provide a written, nonbinding estimate of consulting fees to be charged to the applicant based on information available at that time. The related application will not be considered complete until the city has provided the estimate, received the required application fees, and received the applicant’s signed acceptance of the fee estimate along with a signed statement that the applicant has not relied on the fee estimate in its decision to proceed with the application. Contract Retainage – Effective for contracts entered into August 1, 2019 or later, contract retainage must be released no later than 60 days after the related construction project reaches substantial completion as defined by statute. After substantial completion, cities can still withhold amounts equal to, 1) 250 percent of the cost to correct or complete work known at the time of substantial completion, and 2) the greater of $500 or 1 percent of the value of the contract pending the completion of “final paperwork,” including documents required to fulfill contractual obligations such as operating manuals, payroll documents for projects subject to prevailing wage requirements, and contractor payroll tax withholding affidavits. Any resulting reduction in retainage must be passed from the contractor to all subcontractors at the same rate. -23- Driver and Vehicle Registration System (VTRS) – The Legislature selected VTRS, a third party vendor system, to replace the failed Minnesota Licensing and Registration System (MNLARS). Fees from driver’s licenses, license plates, and filing fees were increased and a technology surcharge imposed on vehicle registration renewals to pay for the implementation of VTRS, the decommissioning of MNLARS, and to temporarily increase the capacity of Driver and Vehicle Services to meet public service needs. Included in this is $13 million appropriated in 2019 for reimbursement grants to deputy registrars for costs related to MNLARS. The grants, which would be determined by formula, would require the deputy registrar accepting the grant to release the state from any further liability or claims related to MNLARS. Vaping Ordinance Authority – Effective July 1, 2019, cities are allowed to enact and enforce ordinances with more stringent measures than the Minnesota Clean Indoor Air Act to protect individua ls from involuntary exposure to aerosol or vapor from electronic delivery devices. Water Connection Fees – Effective January 1, 2020, the annual water connection fees cities are required to collect on behalf of the Minnesota Department of Health for water testing and support has been increased from $6.36 to $9.72. Military Exception to Open Meeting Law – Effective August 1, 2019, members of a public body that are in the military will be allowed to participate in public meetings via interactive television when they are at a required drill, deployed, or on active duty. The member may participate under this exception up to three times a year. Pension Plan Changes – The 2019 pension bill included several changes to the various pension plans throughout the state: • Changes to plans administered by the Public Employees Retirement Association (PERA) included: o The rights of PERA General Employees Retirement Fund (GERF) plan and Public Employees Police and Fire Fund (PEPFF) plan members to purchase service credit for periods of military leave were expanded. This gives plan members the right to purchase up to five years of service credit for military service leave t hat is not federally protected because the service occurred prior to public employment or the member did not meet the payment deadlines applicable to federally protected leave service credit purchases. o The Phased Retirement Option (PRO) program, which gives cities an opportunity to retain potentially retiring employees that are GERF plan members aged 62 or over, was altered and made permanent. Under a PRO arrangement, an employee would begin collecting a retirement annuity, but could continue working for their current employer for up to five years if they agree to a work schedule that represents a reduction of at least 25 percent each pay period from their current schedule, up to a maximum of 1,044 hours per year. Employees would not be allowed to contribute to a pension benefit plan or accrue additional service time while working under a PRO. o A process was established for municipalities and joint powers entities to terminate participation in the PERA Statewide Volunteer Firefighter (SVF) plan if, 1) the entity has either eliminated its fire department or ceased using the services of all departing firefighters and any other noncareer or volunteer firefighters, and 2) the entity’s account has assets sufficient to cover all liabilities including the fully vested liabilities for all departing firefighters and administrative expenses. -24- • Changes impacting volunteer firefighter relief associations (VRFAs) included: o Effective January 1, 2020, vesting schedules for defined contribution plans cannot require that a member have more than 20 years of active service to become 100 percent vested in the member’s account, or provide for a larger vesting percentage with respect to the completed years of service than as provided in the statutory schedule. o Effective January 1, 2020, the permitted graded vesting schedule for defined benefit pension plans is reduced from 20 years to 10 years for full vesting. Also, plans cannot require that a member have more than 20 years of active service to become 100 percent vested in the member’s accrued service pension, or provide for a larger vesting percentage with respect to the completed years of service than as provided in the statutory schedule. o Effective January 1, 2020, supplemental benefits are allowed to be paid to designated beneficiaries or estates when plan members have no surviving spouse or children. THIS PAGE INTENTIONALLY LEFT BLANK -25- ACCOUNTING AND AUDITING UPDATES The following is a summary of GASB standards expected to be implemented in the next few years. However, due to the COVID-19 outbreak, the GASB is currently considering a proposal to delay the original implementation dates of these and other standards by a year. At this point, the implementat ion dates for the standards listed below are tentative and may be subject to change. GASB STATEMENT NO. 87, LEASES A lease is a contract that transfers control of the right to use another entity’s nonfinancial asset as specified in the contract for a period of time in an exchange or exchange-like transaction. Examples of nonfinancial assets include buildings, land, vehicles, and equipment. Any contract that meets this definition should be accounted for under the leases guidance, unless specifically exclud ed in this statement. Governments enter into leases for many types of assets. Under the previous guidance, leases were classified as either capital or operating depending on whether the lease met any of the four tests. In many cases, the previous guidance resulted in reporting lease transactions differently than similar nonlease financing transactions. The goal of this statement is to better meet the information needs of users by improving accounting and financial reporting for leases by governments. It establishes a single model for lease accounting based on the principle that leases are financings of the right to use an underlying asset. This statement increases the usefulness of financial statements by requiring recognition of certain lease assets and liabilities for leases that previously were classified as operating leases and recognized as inflows of resources or outflows of resources based on the payment provisions of the contract. Under this statement, a lessee is required to recognize a lease liability and an intangible right to use lease asset, and a lessor is required to recognize a lease receivable and a deferred inflow of resources, thereby enhancing the relevance and consistency of information about governments’ leasing activities. To reduce the cost of implementation, this statement includes an exception for short -term leases, defined as a lease that, at the commencement of the lease term, has a maximum possible term under the lease contract of 12 months (or less), including any options to extend, regardless of their probability of being exercised. Lessees and lessors should recognize short-term lease payments as outflows of resources or inflows of resources, respectively, based on the payment provisions of the lease contract. The requirements of this statement are effective for reporting periods beginning after December 15, 2019. GASB STATEMENT NO. 91, CONDUIT DEBT OBLIGATIONS The primary objectives of this statement are to provide a single method of reporting conduit debt obligations by issuers and eliminate diversity in practice associated with (1) commitments extended by issuers, (2) arrangements associated with conduit debt obligations, and (3) related note disclosures. This statement achieves those objectives by clarifying the existing definition of a conduit debt obligation; establishing that a conduit debt obligation is not a liability of the issuer; establishing standards for accounting and financial reporting of additional commitments and voluntary commitments extended by issuers and arrangements associated with conduit debt obligations; and improving required note disclosures. -26- A conduit debt obligation is defined as a debt instrument having all of the following characteristics: • There are at least three parties involved: (1) an issuer, (2) a third party obligor, and (3) a debt holder or a debt trustee. • The issuer and the third party obligor are not within the same financial reporting entity. • The debt obligation is not a parity bond of the issuer, nor is it cross-collateralized with other debt of the issuer. • The third party obligor or its agent, not the issuer, ultimately receives the proceeds from the debt issuance. • The third party obligor, not the issuer, is primarily obligated for the payment of all amounts associated with the debt obligation (debt service payments). This statement also addresses arrangements, often characterized as leases, that are associated with conduit debt obligations. In those arrangements, capital assets are constructed or acquired with the proceeds of a conduit debt obligation and used by third party obligors in the course of their activities. This statement requires issuers to disclose general information about their conduit debt obligations, organized by type of commitment, including the aggregate outstanding principal amount of the issuers’ conduit debt obligations and a description of each type of commitment. Issuers that recognize liabilities related to supporting the debt service of conduit debt obligations also should disclose information about the amount recognized and how the liabilities changed during the reporting period. The requirements of this statement are effective for reporting periods beginning after December 15, 2020. Earlier application is encouraged. CITY OF NEW HOPE HENNEPIN COUNTY, MINNESOTA Special Purpose Audit Reports Year Ended December 31, 2019 THIS PAGE INTENTIONALLY LEFT BLANK Page Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards 1–2 Independent Auditor’s Report on Minnesota Legal Compliance 3 CITY OF NEW HOPE Table of Contents Special Purpose Audit Reports Year Ended December 31, 2019 THIS PAGE INTENTIONALLY LEFT BLANK -1- INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS To the City Council and Management City of New Hope, Minnesota We have audited, 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, the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of New Hope, Minnesota (the City) as of and for the year ended December 31, 2019, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated May 15, 2020. INTERNAL CONTROL OVER FINANCIAL REPORTING In planning and performing our audit of the financial statements, we considered the City’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the City’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. (continued) C E R T I F I E D A C C O U N T A N T S P UBLIC PRINCIPALS Thomas A. Karnowski, CPA Paul A. Radosevich, CPA William J. Lauer, CPA James H. Eichten, CPA Aaron J. Nielsen, CPA Victoria L. Holinka, CPA/CMA Jaclyn M. Huegel, CPA Kalen T. Karnowski, CPA Malloy, Montague, Karnowski, Radosevich & Co., P.A. 5353 Wayzata Boulevard • Suite 410 • Minneapolis, MN 55416 • Phone: 952-545-0424 • Fax: 952-545-0569 • www.mmkr.com Standard Letterhead-r2.qxp_167639 Letterhead-RV1 9/7/18 6:34 PM Page 1 -2- COMPLIANCE AND OTHER MATTERS As part of obtaining reasonable assurance about whether the City’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opi nion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. PURPOSE OF THIS REPORT The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control and compliance. Accordingly, this report is not suitable for any other purpose. Minneapolis, Minnesota May 15, 2020 -3- INDEPENDENT AUDITOR’S REPORT ON MINNESOTA LEGAL COMPLIANCE To the City Council and Management City of New Hope, Minnesota We have audited, 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, the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of New Hope, Minnesota (the City) as of and for the year ended December 31, 2019, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated May 15, 2020. MINNESOTA LEGAL COMPLIANCE In connection with our audit, nothing came to our attention that caused us to believe that the City failed to comply with the provisions of the contracting and bidding, deposits and investments, conflicts of interest, public indebtedness, claims and disbursements, miscellaneous provisions, and tax increment financing sections of the Minnesota Legal Compliance Audit Guide for Cities, promulgated by the State Auditor pursuant to Minnesota Statutes § 6.65, insofar as they relate to accounting matters. However, our audit was not directed primarily toward obtaining knowledge of such noncompliance. Accordingly, had we performed additional procedures, other matters may have come to our attention regarding the City’s noncompliance with the above referenced provisions, insofar as they relate to accounting matters. PURPOSE OF THIS REPORT The purpose of this report is solely to describe the scope of our testing of compliance and the results of that testing, and not to provide an opinion on compliance. Accordingly, this report is not suitable for any other purpose. Minneapolis, Minnesota May 15, 2020 C E R T I F I E D A C C O U N T A N T S P UBLIC PRINCIPALS Thomas A. Karnowski, CPA Paul A. Radosevich, CPA William J. Lauer, CPA James H. Eichten, CPA Aaron J. Nielsen, CPA Victoria L. Holinka, CPA/CMA Jaclyn M. Huegel, CPA Kalen T. Karnowski, CPA Malloy, Montague, Karnowski, Radosevich & Co., P.A. 5353 Wayzata Boulevard • Suite 410 • Minneapolis, MN 55416 • Phone: 952-545-0424 • Fax: 952-545-0569 • www.mmkr.com Standard Letterhead-r2.qxp_167639 Letterhead-RV1 9/7/18 6:34 PM Page 1 THIS PAGE INTENTIONALLY LEFT BLANK CITY OF NEW HOPE NEW HOPE, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2019 THIS PAGE IS LEFT BLANK INTENTIONALLY CITY OF NEW HOPE HENNEPIN COUNTY, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2019 KIRK MCDONALD - CITY MANAGER PREPARED BY: DEPARTMENT OF FINANCE Member GFOA of U.S. and Canada THIS PAGE IS LEFT BLANK INTENTIONALLY City of New Hope, Minnesota Comprehensive Annual Financial Report Table of Contents For the Year Ended December 31, 2019 Page No. Introductory Section Letter of Transmittal from City Manager 8 Certificate of Achievement for Excellence in Financial Reporting 14 Organizational Chart 15 Elected and Appointed Officials 16 Financial Section Independent Auditor’s Report 19 Management’s Discussion and Analysis 23 Basic Financial Statements Government-wide Financial Statements Statement of Net Position 35 Statement of Activities 36 Fund Financial Statements Governmental Funds Balance Sheet 40 Reconciliation of the Balance Sheet to the Statement of Net Position 43 Statement of Revenues, Expenditures and Changes in Fund Balances 44 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances to the Statement of Activities 46 General Fund Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual 47 Economic Development Authority Fund Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual 49 Proprietary Funds Statement of Net Position 50 Statement of Revenues, Expenses and Changes in Net Position 54 Statement of Cash Flows 56 Notes to the Financial Statements 61 Required Supplementary Information Schedule of Employer’s and Non-Employer Contributing Entity’s Share of Public Employees Retirement Association Net Pension Liability - General Employees Retirement Fund 100 Schedule of Employer’s Public Employees Retirement Association Contributions - General Employees Retirement Fund 100 Notes to the Required Supplementary Information - General Employees Retirement Fund 101 Schedule of Employer’s Share of Public Employees Retirement Association Net Pension Liability - Public Employees Police and Fire Fund 102 Schedule of Employer’s Public Employees Retirement Association Contributions - Public Employees Police and Fire Fund 102 Notes to the Required Supplementary Information - Public Employees Police and Fire Fund 102 Schedule of Changes in the City’s Total OPEB Liability and Related Ratios 104 Combining and Individual Fund Financial Statements and Schedules Nonmajor Governmental Funds Combining Balance Sheet 106 Combining Statement of Revenues, Expenditures and Changes in Fund Balances 107 Nonmajor Special Revenue Funds Subcombining Balance Sheet 110 Subcombining Statement of Revenues, Expenditures and Changes in Fund Balances 111 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Solid Waste Management Fund 112 5 City of New Hope, Minnesota Comprehensive Annual Financial Report Table of Contents (Continued) For the Year Ended December 31, 2019 Page No. Combining and Individual Fund Financial Statements and Schedules (Continued) Nonmajor Capital Projects Funds Subcombining Balance Sheet 114 Subcombining Statement of Revenues, Expenditures and Changes in Fund Balances 115 Nonmajor Debt Service Funds Subcombining Balance Sheet 118 Subcombining Statement of Revenues, Expenditures and Changes in Fund Balances 120 General Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual 123 Internal Service Funds Combining Statement of Net Position 130 Combining Statement of Revenues, Expenses and Changes in Net Position 131 Combining Statement of Cash Flows 132 Statistical Section (Unaudited) Financial Trends Summary Financial Report Revenues and Expenditures for General Operations - Governmental Funds 137 Net Position by Component 138 Changes in Net Position 140 Governmental Activities Tax Revenues by Source 145 Fund Balances of Governmental Funds 146 Changes in Fund Balances of Governmental Funds 148 General Government Tax Revenues by Source 151 Revenue Capacity Tax Capacity, Market Value and Estimated Actual Value of Taxable Property 152 Property Tax Capacity Rates - Direct and Overlapping Governments 154 Principal Property Taxpayers 156 Property Tax Levies and Collections 159 Debt Capacity Ratios of Outstanding Debt by Type 160 Ratios of General Bonded Debt Outstanding 162 Computation of Direct and Overlapping Debt 163 Legal Debt Margin Information 164 Pledged Revenue Coverage 166 Demographic and Economic Information Demographic and Economic Statistics 167 Principal Employers 168 Operating Information Full-Time Equivalent City Government Employees by Function 170 Operating Indicators by Function 172 Capital Asset Statistics by Function 174 6 INTRODUCTORY SECTION CITY OF NEW HOPE NEW HOPE, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2019 7 May 15, 2020 Honorable Mayor and City Council City of New Hope 4401 Xylon Avenue North New Hope, MN 55428-4898 The Comprehensive Annual Financial Report (CAFR) of the City of New Hope, Minnesota (the City), for the fiscal year ended December 31, 2019, is submitted herewith. As required by state law, this report is published annually, prior to June 30, and submitted to the Office of the State Auditor. The form and contents of this report and the accompanying financial statements and statistical tables are designed to meet the needs of a broad spectrum of financial statement readers, and were prepared in conformance with standards set forth by: 1. The Governmental Accounting Standards Board (GASB) 2. The American Institute of Certified Public Accountants 3. The United States Office of Management and Budget 4. The State Auditor, State of Minnesota 5. The Government Finance Officers' Association (GFOA) of the United States and Canada The financial data presented in this report was prepared by the City's finance department staff. The responsibility for the accuracy of the presented data and the completeness and fairness of the presentation, including all disclosures, rests with the City. We believe the data as presented is accurate in all material respects and is presented in a manner designed to fairly set forth the financial activity of the various funds, and that all disclosures necessary to enable the reader to gain the maximum understanding of the City's financial activity have been included. Accounting principles generally accepted in the United States of America require that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of the Management's Discussion and Analysis (MD&A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The City's MD&A can be found immediately following the report of the independent auditors. PROFILE OF THE GOVERNMENT The City is a residential suburb of the City of Minneapolis with a population of 21,790. The City is 5.6 square miles in area and is substantially developed with the exception of just under 12 acres of property which consists primarily of residential zoned property. The City was incorporated in 1953 and enjoys a diverse commercial and residential tax base. The City operates under the "Optional Plan B” government structure as defined in Minnesota Statutes. Optional Plan B is known as the council-manager plan. Under this plan, as specified in the statutes, "The City Council shall exercise the legislative power of the City and determine all matters of policy. The city manager shall be the head of the administrative branch of the city government and shall be responsible to the City Council for the proper administration of all affairs relating to the City." The City Council is composed of five members, including the mayor. The city manager is appointed by the City Council. CITY O F NEW HOPE 4401 Xylon Avenue North • New Hope, Minnesota 55428-4898 • www.ci.new-hope.rrm.us City Hall: 763-531-5100 • Police (non-emergency): 763-531-5170 • Public Works: 763-592-6777 • TDD: 763-531-5109 City Hall Fax: 763-531-5136 • Police Fax: 763-531-5174 • Public Works Fax: 763-592-6776 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 funds, as defined in the notes to basic financial statements. The City maintains a system of internal control that provides a reasonable assurance of accounting data reliability, and the safeguarding of assets against loss from unauthorized use or disposition. The concept of reasonable assurance recognizes the cost of control should not exceed the benefits likely to be derived, and the evaluation of costs and benefits requires estimates and judgments by management. Budgets are maintained for the General Fund and certain special revenue funds (as noted in the notes to basic financial statements). The city manager is directed to submit an annual budget to the City Council. Upon adoption of the annual budget resolution by the City Council, it becomes the formal budget for city operations. Any changes to the original budget have to be authorized by City Council action, but must maintain a balanced budget by either recognizing additional receipts, or utilizing fund balances. Budget controls are maintained through a system of purchase orders and monthly financial statements which compare actual performance with the budget. The City has reviewed its reporting entity definition in light of GASB's pronouncements. The entities included in the City's report are those for which the City has financial accountability. Blended component units, although legally separate entities, are, in substance, part of the primary government's operations and are included as part of the primary government. Accordingly, the Economic Development Authority (EDA) is reported as special revenue fund of the primary government and the Housing and Redevelopment Authority (HRA) reports a debt service fund and a capital projects fund within the primary government. The City provides a full range of municipal services, including: police and fire protection, culture and recreation, public improvements, street maintenance, sanitary and storm sewer collection, water distribution, planning, zoning and building inspection services, and general administrative services. ECONOMIC OUTLOOK The City is a nearly fully developed community with little vacant land available for development. The City has a good mix of single/multi-family residential housing stock, parks and open space, and a strong commercial/industrial tax base. There are approximately 480 commercial/industrial/service businesses in the City, and the major employers are listed as follows: Major Employers Products/Services New Hope Based Employees (Total Employees) Independent School District 281 Education 791 (1,852) Hy-Vee Grocery & convenience store 632 Minnesota Masonic Home/ North Ridge Care Center Skilled nursing care facility 560 St. Therese Home of New Hope Skilled nursing care facility 544 (1,117) Horwitz Mechanical contractor 345 Perrigo Company Pharmaceutical & medicine manufacturing 323 Intermediate District 287 Education 266 (943) City of New Hope Government agency 262 (including seasonal staff) YMCA Health club 228 Liberty Diversified International Stationery supplies 200 The City has four major industrial park areas including Science Industry Park, 49th and Quebec avenues, Winnetka Avenue area between 32nd and 36th avenues, and north of Medicine Lake Road on Nevada Avenue. The major shopping centers/areas in the City include: Midland Shopping Center, Winnetka Commons Shopping Center, New Hope Mall, Winnetka Center, Post Haste Square, and the 42nd Avenue Redevelopment District. 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 2019. The City is also a long time member of the TwinWest Chamber of Commerce. The city has also partnered with Hennepin County and Open to Business, a company that provides free business advice and also provides gap financing. In 2019, $38,064,766 of reinvestment was approved in the City in construction permits. The City will work to increase the momentum to continually expand the tax base while continuing to provide the high level of services delivered to the residents, businesses, and property owners of the City. PLANNING AND DEVELOPMENT The following planning and development activities occurred in 2019: Police Department & City Hall A new police department and city hall for the city of New Hope opened in July of 2019. The City Council approved a bid from Terra General Contractors for $14.78 million in December of 2017 for the new building. The sale of $18.435 million in general obligation capital improvement plan bonds at the interest rate of 2.6339% was also approved to pay for project. A ground breaking for the building took place on January 5, 2018, and the building was completed in July of 2019. The pool that was previously located where the new police department and city hall was constructed was demolished and is being reconstructed in the area of the current city hall. In June 2018, the City Council voted on a preferred pool concept and entered into an agreement with Stantec Engineering to provide the final planning and design. The preferred pool concept included a current channel, two body slides, a shallow water area, and a 50-meter, 8-lane pool with diving boards. The original concept had a 25-yard pool; however, during the 2018 legislative session the city received $2 million in order to expand the 25-yard pool concept to 50 meters. Construction on the pool began in August of 2019. It is scheduled to open in June of 2020. IronWood Alatus, LLC constructed a four-story, 182-unit luxury apartment building on the site previously owned by the city, adjacent to the New Hope Village Golf Course. The city completed a market feasibility study in the spring of 2015 to determine what type of redevelopment was best suited for the site and concluded that luxury apartments were the most viable option. The final plat and vacation of easements for the project were approved in February 2017, and construction of the $43 million building began in the summer of 2017. Residents began moving into the building in January 2019. Windsor Ridge SVK is constructing 32 new single-family homes on an 8.7-acre undeveloped site that was owned by the city for many years. In the fall of 2018, the city received six proposals from four developers for the site. After careful consideration, SVK was selected as the preferred developer for the site. SVK is in the process of developing 32 new single-family homes on 65-foot wide lots. The estimated sales prices for the homes range from the mid-$300,000’s to the low $400,000’s. At the beginning of 2020, eight homes were under construction or completed. SVK anticipates that the project will be complete sometime in 2021. Automotive Concepts In September of 2019, the New Hope City Council approved a Tax Increment Financing (TIF) contract for Automotive Concepts, located at 2919 Nevada Avenue North, to facilitate the construction of a 22,500 square foot building. Automotive Concepts specializes in vehicle customization, and the new building will serve as their “clean” facility, focusing on body work, and installation of tires and wheels, etc. The owner of the business anticipates the building will add about 35 new jobs. The TIF agreement would pay the developer $150,000 over the next nine years at an interest rate of 4.45%. 10 Holy Trinity Church Holy Trinity Church received approval in October 2018 to expand their school and daycare center at 4240 Gettysburg Avenue North by approximately 11,123 square feet with a second floor addition over the existing school area. The $1.85 million project also included a 1,140 square foot expansion of the main floor entryway. The project was completed in the fall of 2019. Hy-Vee Aisles Online A 960-square foot drive-through kiosk with three drive-through grocery pick-up lanes was approved for construction in the Hy-Vee parking lot at 8200 42nd Avenue North in July 2019. The structure includes an overhead canopy and new curbing and landscaping around the building. The $550,000 addition is intended to reduce congestion and streamline the pick-up process for customers who purchase groceries online. Now Mart A 5,060-square foot gas station and convenience store opened in December 2018 at 7201 Bass Lake Road. Construction of 3,780- square foot car wash on the same site was completed in the summer of 2019. The $8.471 million project replaced a previously underutilized retail building. The development includes several environmentally conscious improvements, including a stormwater collection system that retains all rainwater onsite and re-uses it for the car wash. A filtration system will recycle and reuse water that is used by the car wash. Housing The City's commitment to maintaining its housing stock is supported through a variety of cooperative projects and programs. Approximately $6,030,138 was reinvested in the City's housing stock in 2019 for private home construction, additions, and/or remodeling projects. 1. Housing rehabilitation programs: a. Community Development Block Grant (CDBG) Housing Rehabilitation Program - administered by Hennepin County: i. CDBG funded activity in 2019 continued the expenditure of previously allocated CDBG funds. ii. The city continued to operate their scattered site housing program by acquiring multiple properties for demolition and new construction. Since 2014, the Economic Development Authority has acquired 14 properties, resulting in the creation of 18 lots. The lots purchased by the city are located at 7215, 7303, 7311, and 9121 62nd Avenue North, 4511 Boone Avenue North, 3751 and 6065 Louisiana Avenue North, 3856 Maryland Avenue North, 4415 Nevada Avenue North, 5355 Oregon Avenue North, 5212 Pennsylvania Avenue North, 5431 Virginia Avenue North, 6059 West Broadway, and 5400 Yukon Avenue North. Four of the lots were large enough to split into two buildable lots and were sold to developers for the construction of two new single-family, owner-occupied homes. The city acquired another single-family home for demolition in early 2020 and has two other properties under contract. b. Rehabilitation Re-sell: i. The city has purchased two distressed properties for rehabilitation in the last four years. The city chose to rehabilitate the home at 3984 Zealand Avenue North as it was too valuable to demolish. It sold for $295,000. The city also acquired the property at 3924 Utah Avenue North in 2018 and is coordinating an $180,000 rehabilitation that will serve as a demonstration project for the neighborhood. The city has a goal of breaking even on such projects and will invest all available resources into the home to create the highest valued product possible. 2. Housing maintenance programs a. Code compliance inspections – 1,419 inspections completed in 2019 b. Rental housing program and inspections: i. A rental registration permit program, which requires the registration and inspection of all rental units in the City, was implemented in 2006 for single-family and 2007 for multi-family units. ii. A total of 504 single-family rental units are registered with the City. iii. A total of 3,776 multi-family rental units are registered with the City. c. Multifamily Property Manager’s Association – quarterly meetings. d. Partnership with Center for Energy and Environment and Hennepin County for fix-up loans and grants. 3. Metropolitan Council Livable Communities Act - annually renewed by the City. 11 PARKS AND RECREATION The City provides the residents with a vast array of park amenities and recreation opportunities at an affordable cost. In 2019, the city maintained 18 parks, four additional school district parks (summer only), two sheets of indoor ice at the ice arena, and a par 3 nine- hole golf course. In addition, the city programs the New Hope Community Gyms during non-school time. During 2019, several park projects took place including the replacement of the playground at Jaycee Park; court resurfacing of the basketball court at Civic Center Park, tennis courts at Begin Park and the multi-surface court at Terra Linda Park; and the lighting was retrofitted to LED at Civic Center Park for the basketball/volleyball courts and tennis courts. Buckthorn removal was continued in several parks and new signage was installed at Jaycee Park. During the 2018-2019 winter season, parks staff also continued to plow a section of trail at Hidden Valley, Northwood and Lions parks. In early 2019, staff worked significantly with Stantec engineers on the final bid documents for the Pool and Park projects. The full project was broken down into five smaller projects: Pool, Outdoor Theater, Skatepark, Demolition (city hall, theater, shelter), and Park Improvements/City Hall Bid Pack 2. Bids were received in February and March. The City Council awarded the five contracts at the March 25 Council Meeting. Pre-construction meetings were held and the projects started in April. Substantial completion for all of the projects is expected in the summer of 2020. The outdoor theatre and skate park were demolished in the spring as part of the Civic Center Park and Pool projects. Most activities typically held at these facilities were located at alternate locations. The popular Movies in the Park shows were held at Northwood Park, and the theater classes and parent/child story time were held at the Crystal Community Center. The Off Broadway Musical Theater board did not want to move to an alternative location, so they cancelled performances for 2019. The ice arena offered year-round use of ice time for youth, adult recreational, league hockey and skating lessons. In addition, two facility water heaters were replaced and new exterior doors for the front entrance were ordered. The advertising agreement and concession stand agreement continued with the Armstrong Cooper Youth Hockey Association. The dryland training agreement continued with Charleston Overspeed. The golf course continued to offer leagues, lessons, tournaments, open golf and picnic rentals. During the non-golf season, the clubhouse continued to be rented to outside groups. In 2019, the tables in the clubhouse were replaced, a new 5-year lease for golf carts started and a Groundsmaster mower was purchased. With the assistance of public works staff, a new patio area was built to the west of the clubhouse and outdoor tables and chairs were purchased for the patio. A short term parking agreement started with Ironwood Apartments for the use of 16 spaces during the off-season. PROPERTY TAX PROCESS Preliminary tax levies have to be sent to the county auditor by September 30th. This levy can be lowered at a later date, but cannot be increased. The county sends out notices to all property owners informing them of proposed property taxes and the dates of public hearings by the various taxing districts. The final budget is adopted by the City in December at a City Council meeting after the public hearing. OTHER PERTINENT INFORMATION Independent Audit - As required by Minnesota statute, City policy requires an annual audit of all city accounts to be made by independent certified public accountants selected by the City Council. This requirement has been complied with and the opinion of MMKR is included with this report. Claims and Litigation - The City had the usual and customary types of miscellaneous claims pending at year-end, mostly of a minor nature and entirely covered by insurance carried for that purpose. Long-term Financial Planning - Management provided a long-term plan to City Council in 2019 that will highlight the tax effect of major capital and operating decisions. This will also be an important document when preparing future budgets. 12 AWARDS AND ACKNOWLEDGEMENTS The Certificate of Achievement for Excellence in Financial Reporting - The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City for its comprehensive annual financial report for the fiscal year ended December 31, 2018. This was the 11th consecutive year that the government has achieved this prestigious award. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized comprehensive annual financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current comprehensive annual financial report continues to meet the Certificate of Achievement Program’s requirements and we are submitting it to GFOA to determine its eligibility for another certificate. Preparation of this report could not have been accomplished without the professional, efficient, and dedicated services of the entire staff of the Department of Finance, AEM Financial Solutions, LLC (the City’s contracted finance director) other City departments, and the staff of MMKR. We wish to express our appreciation to all the contributors for their efforts to complete this report. Respectfully submitted, Kirk McDonald City Manager 13 14 Ci t y  of  New  Hope Pa r k s  & Re c r e a t i o n Re c r e a t i o n Pa r k s Re c r e a t i o n  Fa c i l i t i e s Fo r e s t r y Po l i c e  Pa t r o l  In v e s t i g a t i o n  Co m m u n i t y  Se r v i c e s  An i m a l  Co n t r o l  Cr i m e  Pr e v e n t i o n  Sc h o o l  Li a i s o n  Re s e r v e s  Ex p l o r e r s Public  Works Utility  Billing Utilities Central  Garage Streets Parks  Maintenance Hu m a n  Re s o u r c e s  /  Ad m i n i s t r a t i v e  Se r v i c e s Hu m a n  Re s o u r c e s Sa f e t y In f o  Te c h n o l o g y Co m m u n i c a t i o n s Ri s k  Mg m t / I n s u r a n c e Fi n a n c e / A c c o u n t i n g Pa y r o l l Co m m u n i t y  De v e l o p m e n t In s p e c t i o n s Pe r m i t s Ho u s i n g Ec o n o m i c  De v e l o p m e n t Pl a n n i n g / Z o n i n g Pl a n n i n g  Co m m i s s i o n Ci t i z e n  Ad v i s o r y   Co m m i s s i o n Hu m a n  Ri g h t s  Co m m i s s i o n Pe r s o n n e l  Bo a r d City  Attorney Steve  Sondrall City  Engineer Stantec Fiscal  Advisors AEM Dorsey  and  Whitney Ehlers We s t  Me t r o  Fi r e ‐Re s c u e  Di s t r i c t Fi r e  Su p p r e s s i o n Fi r e  Pr e v e n t i o n Em e r g e n c y  Mg m t .  Co o r d . Re s c u e Ex p l o r e r s Ci t y  Co u n c i l Po l i c y ED A  Bo a r d HR A  Bo a r d Ci t y  Ma n a g e r Ch i e f  Ad m i n i s t r a t o r Go v e r n m e n t  Re l a t i o n s Bu d g e t Co u n c i l  Re l a t i o n s Em e r g e n c y  Ma n a g e m e n t Fi r e  Bo a r d ED A  Ex e c u t i v e  Di r e c t o r HR A  Ex e c u t i v e  Di r e c t o r Au d i t JW C  Co m m i s s i o n HR G  Re p r e s e n t a t i v e AE M  Co n t r a c t Ci t y  Cl e r k / T r e a s u r e r Co u n c i l  Re l a t i o n s El e c t i o n s Li c e n s i n g In s u r a n c e Ci t y  Ha l l  Fa c i l i t y Re s i d e n t s City  Planner Alan  Brixius 15 15 City of New Hope, Minnesota Elected and Appointed Officials For the Year Ended December 31, 2019 Name Title Term Expires Kathi Hemken Mayor 12/31/20 John Elder Council Member 12/31/22 Andrew Hoffe Council Member 12/31/20 Cedrick Frazier Council Member 12/31/20 Jonathan London Council Member 12/31/22 Name Title Kirk McDonald City Manager Bernie Weber Director of Public Works Jeff Sargent Director of Community Development Susan Rader Director of Parks and Recreation Tim Fournier Chief of Police Rich Johnson Director of Human Resources and Administrative Services Valerie Leone City Clerk/Treasurer ELECTED APPOINTED 16 FINANCIAL SECTION CITY OF NEW HOPE NEW HOPE, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2019 17 THIS PAGE IS LEFT BLANK INTENTIONALLY 18 INDEPENDENT AUDITOR’S REPORT To the City Council and Management City of New Hope, Minnesota REPORT ON THE FINANCIAL STATEMENTS We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of New Hope, Minnesota (the City) as of and for the year ended December 31, 2019, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents. MANAGEMENT’S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. AUDITOR’S RESPONSIBILITY Our responsibility is to express opinions on these financial statements based on our audit . We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts a nd disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the City’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion o n the effectiveness of the City’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. (continued) C E R T I F I E D A C C O U N T A N T S P UBLIC PRINCIPALS Thomas A. Karnowski, CPA Paul A. Radosevich, CPA William J. Lauer, CPA James H. Eichten, CPA Aaron J. Nielsen, CPA Victoria L. Holinka, CPA/CMA Jaclyn M. Huegel, CPA Kalen T. Karnowski, CPA Malloy, Montague, Karnowski, Radosevich & Co., P.A. 5353 Wayzata Boulevard • Suite 410 • Minneapolis, MN 55416 • Phone: 952-545-0424 • Fax: 952-545-0569 • www.mmkr.com Standard Letterhead-r2.qxp_167639 Letterhead-RV1 9/7/18 6:34 PM Page 1 19 OPINIONS In our opinion, the financial statements referred to on the previous page present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City as of December 31, 2019, and the respective changes in financial position and, where applicable, cash flows thereof, and the budgetary comparisons for the General Fund and Economic Development Authority Special Revenue Fund for the year then ended, in accordance with accounting principles generally accepted in the United States of America. OTHER MATTERS Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis and the required supplementary information (RSI), as listed in the table of contents, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the RSI in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The introductory section, combining and individual fund financial statements and schedules, and statistical section, as listed in the table of contents, are presented for purposes of additional analysis and are not required parts of the basic financial statements. The combining and individual fund financial statements and schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated, in all material respects, in relation to the basic financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. (continued) 20 OTHER REPORTING REQUIRED BY GOVERNMENT AUDITING STANDARDS In accordance with Government Auditing Standards, we have also issued our report dated May 15, 2020 on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, grant agreements, and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control over financial reporting or on compliance . That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance. Minneapolis, Minnesota May 15, 2020 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, 2019. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal, which starts on page 8 of this report. Financial Highlights • The assets and deferred outflows of resources of the City exceeded its liabilities and deferred inflows of resources at the close of the most recent fiscal year by $77,197,731 (net position). Of this amount, $19,756,329 (unrestricted net position) may be used to meet the City’s ongoing obligations to citizens and creditors. • The City’s total net position increased by $8,971,672. This was a result of governmental activities and business type activities increasing net position by $6,971,615 and $2,000,057, respectively. • As of the close of the current fiscal year, the City’s governmental funds reported combined ending fund balances of $29,250,988, a decrease of $8,463,242 in comparison with the prior year. Approximately 15.9 percent of this total amount ($4,641,403) is available for spending at the City’s discretion (unassigned fund balance). • At the end of the current fiscal year, unassigned fund balance for the General fund was $7,116,723 or 49.6 percent of total General fund 2019 expenditures and transfers out. • The City’s total bonded debt increased by $4,026,557 (7.6 percent) during the current fiscal year. The key factor of this increase was the issuance of $5,235,000 G.O. Tax Abatement Bonds, Series 2019A. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the City’s basic financial statements. The City’s basic financial statements are comprised of three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements. The financial statements include notes that explain some of the information in the financial statements and provide more detailed data. The statements are followed by a section of combining and individual fund financial statements and schedules which further explain and support the information in the financial statements. 23 Figure A-1 shows how the various parts of this annual report are arranged and related to one another. Figure A-1 Annual Report Format Government-wide Financial Statements. The government-wide financial statements are designed to provide readers with a broad overview of the City’s finances in a manner similar to a private-sector business. The statement of net position presents information on all of the City’s assets and deferred outflows of resources and liabilities and deferred inflows of resources, with the difference between the four reported as net position. Over time increases or decreases in net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. The statement of activities presents information showing how the City’s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in the statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave). Both of the government-wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the City include general government, public safety, public works, culture and recreation, economic development, and interest on long-term debt. The business- type activities of the City include sewer utility, water utility, golf course, ice arena, storm water, and street lighting. The government-wide financial statements start on page 35 of this report. Fund Financial Statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City can be divided into two categories: governmental funds and proprietary funds. 24 Governmental Funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government’s near-term financing requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government’s near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The City maintains several individual governmental funds. Information is presented separately in the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances for the General, Economic Development Authority, HRA Construction, City Hall CIP, Street Infrastructure, Park/Pool Improvement Project, and HRA Bonds funds, all of which are considered to be major funds. Data from the remaining governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these non-major governmental funds is provided in the form of combining statements or schedules elsewhere in this report. The City adopts annual appropriated budgets for its General fund and the Economic Development Authority and Solid Waste Management special revenue funds. A budgetary comparison statement has been provided for these funds to demonstrate compliance with the adopted budgets. The basic governmental fund financial statements start on page 40 of this report. Proprietary Fund. The City maintains two different types of proprietary funds. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The City uses enterprise funds to account for its sewer utility, water utility, golf course, ice arena, storm water, and street lighting operations. Internal service funds are an accounting device used to accumulate and allocate costs internally among the City’s various functions. The City uses internal service funds to account for distribution of vehicle and equipment costs, government-wide costs of insurance coverage and employee leave, and information technology cost allocation. Because all of these services predominately benefit governmental rather than business-type functions, they have been included within governmental activities in the governmental-wide financial statements. Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for each of the enterprise funds, all of which are considered to be major funds of the City. All internal service funds are combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data for the internal service funds is provided in the form of combining statements elsewhere in this report. The basic proprietary fund financial statements start on page 50 of this report. Notes to the Financial Statements. The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements start on page 61 of this report. Other Information. In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the City’s progress in funding its obligation to provide pension and other postemployment benefits to its employees. Required supplementary information can be found starting on page 100 of this report. The combining statements referred to earlier, in connection with non-major governmental funds and internal service funds are presented immediately following the required supplementary information. Combining and individual fund financial statements and schedules start on page 106 of this report. The statistical section starting on page 135 of this report presents information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the City’s overall financial health. The information in the statistical section is not audited. 25 Government-wide Financial Analysis As noted earlier, net position may serve over time as a useful indicator of a government’s financial position. In the case of the City, assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $77,197,731 at the close of the most recent fiscal year. A portion of the City’s net position (64.1 percent) reflects its investment in capital assets (e.g., land, buildings, vehicles and equipment); less any related debt used to acquire those assets that is still outstanding. The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City’s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. City of New Hope’s Summary of Net Position Increase Increase 2019 2018 (Decrease)2019 2018 (Decrease) Assets Current and other assets 46,558,017$ 55,738,883$ (9,180,866)$ 5,932,881$ 4,361,994$ 1,570,887$ Capital assets, net of depreciation 68,293,237 49,203,864 19,089,373 29,058,223 29,051,346 6,877 Total Assets 114,851,254 104,942,747 9,908,507 34,991,104 33,413,340 1,577,764 Deferred Outflows of Resources Deferred pension resources 4,422,526 5,073,986 (651,460) 73,354 136,143 (62,789) Deferred other postemployment benefit resources 119,013 - 119,013 24,733 - 24,733 4,541,539 5,073,986 (532,447) 98,087 136,143 (38,056) Liabilities Other liabilities 3,763,982 2,639,091 1,124,891 568,736 495,207 73,529 Noncurrent liabilities 54,561,626 49,598,029 4,963,597 10,650,831 11,125,254 (474,423) Total Liabilities 58,325,608 52,237,120 6,088,488 11,219,567 11,620,461 (400,894) Deferred Inflows of Resources Deferred pension resources 5,499,493 6,764,590 (1,265,097) 134,165 194,380 (60,215) Deferred other postemployment benefit resources 36,169 41,781 (5,612) 7,518 6,758 760 Resources received in advance 2,061,733 2,699,725 (637,992) - - - Total Deferred Inflows of Resources 7,597,395 9,506,096 (1,908,701) 141,683 201,138 (59,455) Net Position Net investment in capital assets 30,139,510 27,888,417 2,251,093 19,315,353 18,783,898 531,455 Restricted 6,628,138 6,000,843 627,295 1,358,401 1,160,680 197,721 Unrestricted 16,702,142 14,384,257 2,317,885 3,054,187 1,783,306 1,270,881 Total Net Position 53,469,790$ 48,273,517$ 5,196,273$ 23,727,941$ 21,727,884$ 2,000,057$ Governmental Activities Business-type Activities An additional portion of the City’s net position, $7,986,539, represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net position, $19,756,329, may be used to meet the City’s ongoing obligations to citizens and creditors. At the end of the current fiscal year, the City is able to report a positive balance in all three categories of net position for both the governmental activities and the business-type activities. The increase in capital assets in governmental activities is a result of the City Hall and police station construction along with City’s new outdoor pool and Civic Center park improvements. The decrease in current and other within governmental activities is a result of the construction projects. The increase in noncurrent liabilities is a result of the issuance of $5,235,000 G.O. Tax Abatement Bonds, Series 2019A. 26 The following table indicates the changes in net position for the City’s governmental and business-type activities: City of New Hope’s Changes in Net Position Increase Increase 2019 2018 (Decrease)2019 2018 (Decrease) Revenues Program Revenues Charges for services 1,860,001$ 1,984,494$ (124,493)$ 10,587,884$ 10,298,118$ 289,766$ Operating grants and contributions 826,489 967,499 (141,010) 14,308 327,335 (313,027) Capital grants and contributions 2,819,823 941,212 1,878,611 28,824 14,203 14,621 General Revenues Taxes Property taxes 15,265,428 12,941,920 2,323,508 - - - Tax increments 1,317,803 1,112,753 205,050 - - - Franchise taxes 957,448 945,244 12,204 - - - Grants and contributions not restricted to specific programs 803,035 697,895 105,140 - - - Unrestricted investment earnings 1,412,308 798,557 613,751 149,296 72,531 76,765 Gain on sale of capital assets 369,163 70,400 298,763 - - - Total Revenues 25,631,498 20,459,974 5,171,524 10,780,312 10,712,187 68,125 Expenses General government 1,850,242 1,983,179 (132,937) - - - Public safety 8,540,198 7,578,150 962,048 - - - Public works 3,816,417 3,661,766 154,651 - - - Culture and recreation 2,145,988 2,280,418 (134,430) - - - Economic development 749,651 1,244,292 (494,641) - - - Interest on long-term debt 1,412,763 1,074,469 338,294 - - - Sewer utility - - - 2,834,973 2,631,598 203,375 Water utility - - - 3,762,099 4,038,859 (276,760) Golf course - 319,871 299,217 20,654 Ice arena - - - 1,003,048 987,912 15,136 Storm water - - - 888,156 736,166 151,990 Street lighting - - - 116,732 119,250 (2,518) Total Expenses 18,515,259 17,822,274 692,985 8,924,879 8,813,002 111,877 Changes in Net Position Before Transfers 7,116,239 2,637,700 4,478,539 1,855,433 1,899,185 (43,752) Transfers - Internal Activities (144,624) (48,413) (96,211) 144,624 48,413 96,211 Change in Net Position 6,971,615 2,589,287 4,382,328 2,000,057 1,947,598 52,459 Net Position, January 1 48,273,517 45,684,230 2,589,287 21,727,884 19,780,286 1,947,598 Prior Period Adjustment (1,775,342) - (1,775,342) - - - Net Position, December 31 53,469,790$ 48,273,517$ 5,196,273$ 23,727,941$ 21,727,884$ 2,000,057$ Governmental Activities Business-type Activities The decreases in general government, culture and recreation and economic development expenses were a result of a decrease in pension liability and recognition of pension expense. The increase in public safety relates to increased expenses relating to the pension liability. The increase in property taxes were a result of an increase in the debt service and capital levies, which will be used to fund current and future bond payments and street projects. The prior period adjustment was made to reallocate land held for resale costs and related sale proceeds, write off a portion of the Cities land held for resale and record accrued interest on an existing interfund loan. 27 Governmental Activities. Governmental activities increased the City’s net position by $6,971,615. Expenses - The following chart illustrates the City’s expenses and program revenues for its governmental activities: Expenses and Program Revenues - Governmental Activities $- $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000 $3,500,000 $4,000,000 $4,500,000 $5,000,000 $5,500,000 $6,000,000 $6,500,000 $7,000,000 $7,500,000 $8,000,000 $8,500,000 $9,000,000 General Government Public Safety Public Works Culture and Recreation Economic Development Interest on Long-term Debt Expenses Program Revenues Revenues - The following chart illustrates the City’s revenue by source for its governmental activities: Revenues by Source - Governmental Activities Charges for Services 7.4% Operating Grants and Contributions 3.2% Capital Grants and Contributions 11.0% Property Taxes 59.6% Tax Increments 5.1% Franchise Taxes 3.7% Grants and Contributions Unrestricted 3.1% Unrestricted Investment Earnings 5.5% Gain on Sale of Capital Assets 1.4% 28 Business-type Activities. The net position of business-type activities increased by $2,000,057. This increase was primarily the result of operating net income in the Sewer, Water and Storm Water Utility funds of $537,019, $667,249 and $315,651, respectively. Below are the graphs showing the business-type activities revenue and expense comparisons. Expense and Program Revenues - Business-type Activities $- $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000 $3,500,000 $4,000,000 $4,500,000 $5,000,000 Sewer Utility Water Utility Golf Course Ice Arena Storm Water Street Lighting Expenses Program Revenues Revenue Sources - Business-type Activities Charges for Services 98.2% Operating Grants and Contributions 0.1% Capital Grants and Contributions 0.3% Unrestricted Investment Earnings 1.4% 29 Financial Analysis of the Government’s Funds As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Governmental Funds. The focus of the City’s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City’s financing requirements. In particular, unassigned fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year. As of the end of the current fiscal year, the City’s governmental funds had combined ending fund balances of $29,250,988, a decrease of $8,463,242 in comparison with the prior year. Approximately 15.9 percent of this total amount, $4,641,403, constitutes unassigned fund balance, which is available for spending at the City’s discretion. The remainder of fund balance is either not available for new spending, or available for new spending, but limited in use, because it is either 1) nonspendable ($22,980), 2) restricted ($13,304,922), 3) committed ($5,033,555), or 4) assigned ($6,248,128). For further classification refer to Note 3F on page 84 of this report. Activity in the City’s major funds is discussed below: Restated Increase 2019 2018 (Decrease) General 7,139,703$ 7,180,951$ (41,248)$ Economic Development Authority 4,721,758$ 5,390,021$ (668,263)$ HRA Construction 4,655,140$ 3,177,772$ 1,477,368$ City Hall CIP 1,794,294$ 9,527,103$ (7,732,809)$ Street Infrastructure 15,854$ (948,474)$ 964,328$ Park/Pool Improvement Project 5,316,815$ 9,492,781 (4,175,966)$ The decrease in fund balance is due to project expenditures in 2019. HRA Bonds (2,244,096)$ (2,286,122)$ 42,026$ The increase in fund balance is primarily related to tax increment revenues exceeding debt service requirements and other expenditures in the fund. Fund Balance December 31, Major Funds The General fund is the chief operating fund of the City. As a measure of the General fund's liquidity, it may be useful to compare fund balance to total fund expenditures and transfers out. Unassigned fund balance represents 49.6 percent of total 2019 expenditures and transfers out. The decrease in fund balance was a result of approving an unbudgeted transfer out of $354,000. This fund accounts for the activity within the City's Tax Increment Financing (TIF) Districts, less resources accumulated elsewhere for TIF related long-term obligations. The increase in fund balance is primarily a result transfers in of $999,500. This fund accounts for capital outlay expenditures related to street infrastructure. The increase was a result of revenues exceeding current year project costs. The decrease in fund balance is primarily due to approved unbudgeted transfers out of $928,457. The decrease in fund balance is due to project expenditures in 2019. Proprietary Funds. The City’s proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail. At the end of the year, unrestricted net position of the enterprise funds amounted to $3,511,168. Other factors concerning the finances of these funds have already been addressed in the discussion of the City’s business-type activities. 30 General Fund Budgetary Highlights The City’s General fund budget was not amended during the year. Revenues and expenditures provided positive budget variances. Actual revenues were over budget by $72,388 and expenditures were under budget by $240,364. Revenue line items with significant budget variances include the following: • Investment earnings were over budget by $71,033 due to improved interest rate returns. • Intergovernmental revenue was over budget by $89,471, mostly due to more state and local grants and state police aid than expected. • Franchise tax revenue was over budgeted amounts by $60,856 to due additional utility accounts and license and permits were under budget by $60,872 due to nonbusiness licenses and permits being under budget by $55,275. Expenditure line items with significant budget variances include the following: • Public safety expenditures were under budget by $127,032, mostly due to personnel services for the police department coming in under budget by $139,047 . • Culture and recreation expenditures were under budget by $76,332 to primarily to personnel services and other services and charges in the parks department being under budget by $36,867 and $30,651 respectively. In addition, the General fund transfers out were $354,000 more than budget. The transfers out related to the City Council approved transfers to the Fire capital fund and City Hall CIP fund. Capital Asset and Debt Administration Capital Assets. The City’s investment in capital assets for its governmental and business type activities as of December 31, 2019, was $97,351,460 (net of accumulated depreciation). This investment in capital assets includes land, buildings and system improvements, vehicles and equipment, park facilities, roads, highways, and bridges. The total increase in the City’s investment in capital assets for the current fiscal year was 24.4 percent. Major capital asset events during the current fiscal year consisted of: • Multiple vehicle and equipment purchases were made for a total of $348,001. • Construction in progress increased in 2019 by $21,881,406 relating to the new City Hall building and police station not being completed. This amount also includes the City’s new Outdoor Pool and Civic Center Park Improvements. City of New Hope’s Capital Assets (Net of Depreciation) Increase Increase 2019 2018 (Decrease)2019 2018 (Decrease) Land 994,268$ 994,268$ -$ 485,042$ 485,042$ -$ Buildings and Structures 2,398,188 2,663,755 (265,567) 6,149,377 6,361,559 (212,182) Vehicles and Equipment 2,325,393 2,603,664 (278,271) 399,978 500,309 (100,331) Improvements other than Buildings 30,515,845 32,420,271 (1,904,426) 21,224,875 21,249,254 (24,379) Construction in Progress 32,059,543 10,521,906 21,537,637 798,951 455,182 343,769 Total 68,293,237$ 49,203,864$ 19,089,373$ 29,058,223$ 29,051,346$ 6,877$ Business-type ActivitiesGovernmental Activities Additional information on the City’s capital assets can be found in Note 3C starting on page 74 of this report. 31 Long-term Debt. At the end of the current fiscal year, the City had total bonded debt outstanding of $56,758,267. Of this amount $40,433,000 will be paid from general property taxes and $6,582,397 from redevelopment district tax increments. The remaining amount of outstanding bonds at year end were lease revenue bonds and G.O. revenue bonds, for which the City has pledged revenue streams from the ice arena, sewer utility, water utility, and storm water for all principal and interest payments due on these bonds. The Debt Service funds have a combined fund balance deficit of $168,067, of which $2,296,665 is restricted for the payment of debt service and a deficit of $2,464,732 is unassigned. The City made efforts to shift the philosophy for financing major street improvements away from debt financing to the pay-as-you-go philosophy. The City established the Street and Park Infrastructure capital projects funds in 2001 with dedicated portions of the property tax levy, thereby reducing the need for this type of debt issuance. City of New Hope’s Outstanding Debt Increase Increase 2019 2018 (Decrease)2019 2018 (Decrease) G.O. Bonds and Certificates 40,433,000$ 35,323,386$ 5,109,614$ 3,509,802$ 3,727,852$ (218,050)$ G.O. Tax Increment Bonds 6,582,397 7,140,876 (558,479) 1,401,536 1,494,575 (93,039) Lease Revenue Bonds - - - 3,505,000 3,505,000 - G.O. Revenue Bonds and Notes - - - 1,326,532 1,540,021 (213,489) Total 47,015,397$ 42,464,262$ 4,551,135$ 9,742,870$ 10,267,448$ (524,578)$ Governmental Activities Business-type Activities The City achieved an “AA” rating from Standard and Poor’s. Additional information on the City’s long-term debt can be found in Note 3E starting on page 79 of this report. Economic Factors and Next Year’s Budgets and Rates Economic Outlook • User charges have been increased to account for various utility improvements scheduled for 2020 and beyond. • The overall tax levy had an 10.08 percent increase in 2020 primarily related to 2018A and 2019A debt service requirements. • Management provided a long-term plan to City Council in November that highlighted the tax effect of major capital and operating decisions. This will also be an important document when preparing future budgets. • In December 2019, a novel strain of coronavirus (COVID-19) surfaced. The spread of COVID-19 around the world in the first quarter of 2020 has caused significant volatility in U.S. and international markets. There is significant uncertainty around the breadth and duration of business disruptions related to COVID-19, as well as its impact on the U.S. and international economies and, as such, the City is unable to determine if it will have a material impact to its operations. Requests for Information This financial report is designed to provide a general overview of the City’s finances for all those with an interest in the City’s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the finance department, City of New Hope, 4401 Xylon Avenue North, New Hope, Minnesota 55428. 32 GOVERNMENT-WIDE FINANCIAL STATEMENTS CITY OF NEW HOPE NEW HOPE, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2019 33 THIS PAGE IS LEFT BLANK INTENTIONALLY 34 City of New Hope, Minnesota Statement of Net Position December 31, 2019 Governmental Business-type Activities Activities Total Assets Cash and temporary investments 38,998,183$ 4,716,443$ 43,714,626$ Cash held with fiscal agent - 1,358,401 1,358,401 Receivables Taxes 149,429 - 149,429 Accrued interest 67,902 - 67,902 Accounts 420,284 1,397,843 1,818,127 Loans 611,753 - 611,753 Special assessments 722,497 199,201 921,698 Internal balances 2,006,870 (2,006,870) - Due from other governments 2,100,592 56,347 2,156,939 Inventories 62,575 43,007 105,582 Prepaid items 22,980 - 22,980 Land held for resale 582,763 - 582,763 Investment in joint ventures 812,189 168,509 980,698 Capital assets Land and construction in progress 33,053,811 1,283,993 34,337,804 Depreciable assets (net of accumulated deprecation)35,239,426 27,774,230 63,013,656 Total Assets 114,851,254 34,991,104 149,842,358 Deferred Outflows of Resources Deferred pension resources 4,422,526 73,354 4,495,880 Deferred other postemployment benefit resources 119,013 24,733 143,746 Total Deferred Outflow of Resources 4,541,539 98,087 4,639,626 Liabilities Accrued salaries payable 346,226 36,296 382,522 Accounts and contracts payable 2,652,280 203,795 2,856,075 Due to other governments 73,774 255,037 328,811 Accrued interest payable 659,516 73,608 733,124 Deposits payable 18,386 - 18,386 Unearned revenue 13,800 - 13,800 Noncurrent liabilities Due within one year 1,981,278 525,110 2,506,388 Due in more than one year 45,788,000 9,217,760 55,005,760 Net pension liability 5,859,500 714,103 6,573,603 Other postemployment benefits liability 932,848 193,858 1,126,706 Total Liabilities 58,325,608 11,219,567 69,545,175 Deferred Inflows of Resources Deferred pension resources 5,499,493 134,165 5,633,658 Deferred other postemployment benefit resources 36,169 7,518 43,687 Resources received in advance 2,061,733 - 2,061,733 Total Deferred Inflows of Resources 7,597,395 141,683 7,739,078 Net Position Net investment in capital assets 30,139,510 19,315,353 49,454,863 Restricted for Economic development 4,655,140 - 4,655,140 Debt service 1,834,878 1,358,401 3,193,279 Public safety police expenses 132,730 - 132,730 Ice arena 5,390 - 5,390 Unrestricted 16,702,142 3,054,187 19,756,329 Total Net Position 53,469,790$ 23,727,941$ 77,197,731$ The notes to the financial statements are an integral part of this statement. 35 City of New Hope, Minnesota Statement of Activities For the Year Ended December 31, 2019 Expenses Charges for Services Operating Grants and Contributions Capital Grants and Contributions Governmental Activities General government 1,850,242$ 223,379$ 131,982$ -$ Public safety 8,540,198 880,634 411,896 - Public works 3,816,417 226,249 212,664 809,593 Culture and recreation 2,145,988 529,739 69,947 2,010,230 Economic development 749,651 - - - Interest on long-term debt 1,412,763 - - - Total Governmental Activities 18,515,259 1,860,001 826,489 2,819,823 Business-type Activities Sewer utility 2,834,973 3,380,075 404 - Water utility 3,762,099 4,675,498 12,129 11,324 Golf course 319,871 296,538 97 - Ice arena 1,003,048 892,740 1,389 - Storm water 888,156 1,190,058 289 17,500 Street lighting 116,732 152,975 - - Total Business-type Activities 8,924,879 10,587,884 14,308 28,824 Total 27,440,138$ 12,447,885$ 840,797$ 2,848,647$ General Revenues Taxes Property taxes Tax increments Franchise taxes Grants and contributions not restricted to specific programs Unrestricted investment earnings Gain on sale of capital assets Transfers - Internal Activities Total General Revenues and Transfers Change in Net Position Net Position, January 1 Prior period adjustment (Note 7) Net Position, December 31 Functions/Programs Program Revenues The notes to the financial statements are an integral part of this statement. 36 Governmental Activities Business-type Activities Total (1,494,881)$ -$ (1,494,881)$ (7,247,668) - (7,247,668) (2,567,911) - (2,567,911) 463,928 - 463,928 (749,651) - (749,651) (1,412,763) - (1,412,763) (13,008,946) - (13,008,946) - 545,506 545,506 - 936,852 936,852 - (23,236) (23,236) - (108,919) (108,919) - 319,691 319,691 - 36,243 36,243 - 1,706,137 1,706,137 (13,008,946) 1,706,137 (11,302,809) 15,265,428 - 15,265,428 1,317,803 - 1,317,803 957,448 - 957,448 803,035 - 803,035 1,412,308 149,296 1,561,604 369,163 - 369,163 (144,624) 144,624 - 19,980,561 293,920 20,274,481 6,971,615 2,000,057 8,971,672 48,273,517 21,727,884 70,001,401 (1,775,342) - (1,775,342) 53,469,790$ 23,727,941$ 77,197,731$ Net (Expenses) Revenues and Changes in Net Position The notes to the financial statements are an integral part of this statement. 37 THIS PAGE IS LEFT BLANK INTENTIONALLY 38 FUND FINANCIAL STATEMENTS CITY OF NEW HOPE NEW HOPE, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2019 39 City of New Hope, Minnesota Balance Sheet Governmental Funds December 31, 2019 9001 9015/9018/9501 9213-9228 9202 Economic Development HRA City Hall General Authority Construction CIP Assets Cash and temporary investments 6,852,266$ 1,284,402$ 4,466,336$ 2,687,163$ Receivables Taxes 149,429 - - - Accrued interest 46,250 9,173 - - Accounts 248,102 93,762 49,616 - Loans - 587,500 - - Special assessments 104,673 11,963 - - Due from other governments 100,592 - - - Prepaid items 22,980 - - - Due from other funds 335,515 65,025 - - Advances to other funds - 2,153,877 2,008,544 - Land held for resale - 582,763 - - Total Assets 7,859,807$ 4,788,465$ 6,524,496$ 2,687,163$ Liabilities Accrued salaries payable 194,313$ 7,388$ -$ -$ Accounts and contracts payable 187,765 43,839 - 892,869 Due to other governments 65,003 3,187 2,482 - Deposits payable 18,056 330 - - Due to other funds - - 65,025 - Advances from other funds - - 1,801,849 - Unearned revenue - - - - Total Liabilities 465,137 54,744 1,869,356 892,869 Deferred Inflows of Resources Unavailable revenue - taxes 150,294 - - - Unavailable revenue - special assessments 104,673 11,963 - - Resources received in advance - - - - Total Deferred Inflows of Resources 254,967 11,963 - - Fund Balances Nonspendable 22,980 - - - Restricted - - 4,655,140 898,182 Committed - 4,721,758 - - Assigned - - - 896,112 Unassigned 7,116,723 - - - Total Fund Balances 7,139,703 4,721,758 4,655,140 1,794,294 Total Liabilities, Deferred Inflows of Resources, and Fund Balances 7,859,807$ 4,788,465$ 6,524,496$ 2,687,163$ The notes to the financial statements are an integral part of this statement. 40 9203 9234 9117-9121 Park/Pool Other Total Street Improvement Governmental Governmental Infrastructure Project HRA Bonds Funds Funds 2,738,612$ 4,642,697$ 118,998$ 6,076,083$ 28,866,557$ - - - - 149,429 - 7,347 - 5,132 67,902 - - - 24,329 415,809 - - - 24,253 611,753 539,257 - - 66,604 722,497 - 2,000,000 - - 2,100,592 - - - - 22,980 - - - 310,725 711,265 - - - 1,659,873 5,822,294 - - - - 582,763 3,277,869$ 6,650,044$ 118,998$ 8,166,999$ 40,073,841$ -$ -$ -$ -$ 201,701$ 136,025 1,244,459 - 11,658 2,516,615 - - 2,522 - 73,194 - - - - 18,386 75,000 - - 231,224 371,249 450,000 - 2,360,572 - 4,612,421 - - - 13,800 13,800 661,025 1,244,459 2,363,094 256,682 7,807,366 - - - - 150,294 539,257 - - 58,797 714,690 2,061,733 88,770 - - 2,150,503 2,600,990 88,770 - 58,797 3,015,487 - - - - 22,980 - 5,316,815 - 2,434,785 13,304,922 - - - 311,797 5,033,555 15,854 - - 5,336,162 6,248,128 - - (2,244,096) (231,224) 4,641,403 15,854 5,316,815 (2,244,096) 7,851,520 29,250,988 3,277,869$ 6,650,044$ 118,998$ 8,166,999$ 40,073,841$ The notes to the financial statements are an integral part of this statement. 41 THIS PAGE IS LEFT BLANK INTENTIONALLY 42 City of New Hope, Minnesota Reconciliation of the Balance Sheet to the Statement of Net Position Governmental Funds December 31, 2019 Total Fund Balances - Governmental Funds 29,250,988$ Amounts reported for the governmental activities in the statement of net position are different because Capital assets used in governmental activities are not financial resources and therefore are not reported as assets in governmental funds. Cost of capital assets 86,674,563 Less: accumulated depreciation (21,299,110) Noncurrent liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported as liabilities in the funds. Noncurrent liabilities at year-end consist of Bond principal payable (44,252,170) Plus: unamortized bond premium (2,763,227) Pension liability (5,673,280) Internal service funds are used by management to charge certain costs of services to individual funds. The assets and liabilities are included in the statement of net position. Internal service fund net position included in governmental activities 11,029,727 Internal balances for internal services used by business-type activities 456,981 Some receivables are not available soon enough to pay for the current period's expenditures, and therefore are reported as unavailable revenue in the funds. Taxes 150,294 Special assessments 714,690 State aids 88,770 Governmental funds do not report long-term amounts related to pensions Deferred outflows of pension resources 4,403,397 Deferred inflows of pension resources (5,464,506) Governmental funds do not report a liability for accrued interest until due and payable.(659,516) The City's investment in a joint venture is not a current financial resource and, therefore, is not reported as an asset in the governmental funds, but is included in the Statement of Net Position.812,189 Total Net Position - Governmental Activities 53,469,790$ The notes to the financial statements are an integral part of this statement. 43 City of New Hope, Minnesota Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds For the Year Ended December 31, 2019 9001 9015/9018/9501 9213-9228 9202 Economic Development HRA City Hall General Authority Construction CIP Revenues Taxes Property taxes 10,297,018$ 300,000$ -$ -$ Tax increments - - 631,355 - Franchise taxes 533,213 - - - Licenses and permits 320,438 - - - Intergovernmental 1,342,543 - - - Charges for services 1,064,277 - - - Fines and forfeitures 227,343 - - - Special assessments 50,034 1,636 - - Investment earnings (charges)106,033 94,145 173,273 237,508 Miscellaneous 23,326 - - 49,853 Total Revenues 13,964,225 395,781 804,628 287,361 Expenditures Current General government 1,900,480 - - - Public safety 8,427,487 - - - Public works 1,564,148 - - - Culture and recreation 2,032,585 - - - Economic development - 432,136 81,810 - Capital outlay General government 3,967 - - 8,458,695 Public safety 55,081 - - - Public works - - - - Culture and recreation - - - - Economic development - - 208,016 - Debt service Principal - - - - Interest - - - 475 Bond issuance costs - - - - Total Expenditures 13,983,748 432,136 289,826 8,459,170 Excess (Deficiency) of Revenues Over (Under) Expenditures (19,523) (36,355) 514,802 (8,171,809) Other Financing Sources (Uses) Transfers in 332,275 - 999,500 439,000 Bonds issued - - - - Premium on bonds issued - - - - Sale of capital assets - 331,299 - - Transfers out (354,000) (963,207) (36,934) - Total Other Financing Sources (Uses)(21,725) (631,908) 962,566 439,000 Net Change in Fund Balances (41,248) (668,263) 1,477,368 (7,732,809) Fund Balances, January 1 7,180,951 5,109,286 5,233,849 9,527,103 Prior Period Adjustment (Note 7)- 280,735 (2,056,077) - Fund Balances, December 31 7,139,703$ 4,721,758$ 4,655,140$ 1,794,294$ The notes to the financial statements are an integral part of this statement. 44 9203 9234 9117-9121 Park/Pool Other Total Street Improvement Governmental Governmental Infrastructure Project HRA Bonds Funds Funds 1,397,460$ -$ -$ 3,229,202$ 15,223,680$ - - 686,448 - 1,317,803 424,235 - - - 957,448 - - - - 320,438 693,266 1,911,230 - - 3,947,039 - 41,500 - 270,399 1,376,176 - - - - 227,343 136,660 - - 9,236 197,566 70,191 269,224 (1,317) 217,181 1,166,238 - - - 100,500 173,679 2,721,812 2,221,954 685,131 3,826,518 24,907,410 - - - - 1,900,480 - - - 452 8,427,939 - - - 226,567 1,790,715 - - - - 2,032,585 - - - - 513,946 - - - - 8,462,662 - - - - 55,081 1,540,517 - - 492 1,541,009 - 11,898,929 - 323,193 12,222,122 - - 84,460 500 292,976 - - 404,165 564,509 968,674 12,000 475 120,371 1,139,981 1,273,302 - 90,446 - - 90,446 1,552,517 11,989,850 608,996 2,255,694 39,571,937 1,169,295 (9,767,896) 76,135 1,570,824 (14,664,527) - - 36,934 354,967 2,162,676 - 5,137,669 - 97,331 5,235,000 - 454,261 - - 454,261 - - - - 331,299 (204,967) - (71,043) (351,800) (1,981,951) (204,967) 5,591,930 (34,109) 100,498 6,201,285 964,328 (4,175,966) 42,026 1,671,322 (8,463,242) (948,474) 9,492,781 (2,286,122) 6,180,198 39,489,572 - - - - (1,775,342) 15,854$ 5,316,815$ (2,244,096)$ 7,851,520$ 29,250,988$ The notes to the financial statements are an integral part of this statement. 45 City of New Hope, Minnesota Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances to the Statement of Activities Governmental Funds For the Year Ended December 31, 2019 Net Change in Fund Balances - Governmental Funds (8,463,242)$ Amounts reported for governmental activities in the statement of activities are different because Capital outlays are reported in governmental funds as expenditures. However, in the statement of activities, the cost of those assets is allocated over the estimated useful lives as depreciation expense. Capital outlays 21,830,632 Depreciation expense (2,414,924) The City's investment in a joint venture is not a current financial resource and, therefore, is not reported as an asset in the governmental funds, but is included in the Statement of Net Position. Change in investment in joint venture (148,560) The issuance of long-term debt provides current financial resources to governmental funds, while the repayment of principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net position. Also, governmental funds report the effect of premiums, discounts and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. The amounts below are the effects of these differences in the treatment of long-term debt and related items. Principal repayments 968,674 Bond issued (5,235,000) Premium on bonds issued (454,261) Amortization of bond premium 169,452 Interest on long-term debt in the statement of activities differs from the amount reported in the governmental funds because interest is recognized as an expenditure in the funds when it is due, and thus requires the use of current financial resources. In the statement of activities, however, interest expense is recognized as the interest accrues, regardless of when it is due.(218,467) Certain revenues are recognized as soon as they are earned. Under the modified accrual basis of accounting, certain revenues cannot be recognized until they are available to liquidate liabilities of the current period. Property taxes 41,748 Special assessments (81,239) State aids 88,770 Long-term pension activity is not reported in governmental funds Pension expense 406,374 Direct aid contributions 46,404 Internal service funds are used by management to charge the costs for equipment, information system, equipment replacement, employee benefits and major losses incurred by individual funds. The activities of internal service funds is reported in the government-wide financial statements. Change in net position of the internal service funds, net of capital assets transferred 581,573 Less: the change in internal balances for internal services used by business-type activities (146,319) Change in Net Position - Governmental Activities 6,971,615$ The notes to the financial statements are an integral part of this statement. 46 City of New Hope, Minnesota General Fund Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Year Ended December 31, 2019 Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues Taxes Property taxes 10,382,448$ 10,382,448$ 10,297,018$ (85,430)$ Franchise taxes 472,357 472,357 533,213 60,856 Licenses and permits 381,310 381,310 320,438 (60,872) Intergovernmental 1,253,072 1,253,072 1,342,543 89,471 Charges for services 1,084,650 1,084,650 1,064,277 (20,373) Fines and forfeitures 250,000 250,000 227,343 (22,657) Special assessments 30,000 30,000 50,034 20,034 Investment earnings 35,000 35,000 106,033 71,033 Miscellaneous 3,000 3,000 23,326 20,326 Total Revenues 13,891,837 13,891,837 13,964,225 72,388 Expenditures Current General government 1,914,638 1,914,638 1,900,480 14,158 Public safety 8,554,519 8,554,519 8,427,487 127,032 Public works 1,563,038 1,563,038 1,564,148 (1,110) Culture and recreation 2,108,917 2,108,917 2,032,585 76,332 Capital outlay General government 10,000 10,000 3,967 6,033 Public safety 73,000 73,000 55,081 17,919 Total Expenditures 14,224,112 14,224,112 13,983,748 240,364 Excess (Deficiency) of Revenues Over (Under) Expenditures (332,275) (332,275) (19,523) 312,752 Other Financing Sources (Uses) Transfers in 332,275 332,275 332,275 - Transfers out - - (354,000) (354,000) Total Other Financing Sources (Uses)332,275 332,275 (21,725) (354,000) Net Change in Fund Balances - - (41,248) (41,248) Fund Balances, January 1 7,180,951 7,180,951 7,180,951 - Fund Balances, December 31 7,180,951$ 7,180,951$ 7,139,703$ (41,248)$ The notes to the financial statements are an integral part of this statement. 47 THIS PAGE IS LEFT BLANK INTENTIONALLY 48 City of New Hope, Minnesota Economic Development Authority Fund Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Year Ended December 31, 2019 Actual Variance with Original Final Amounts Final Budget Revenues Taxes Property taxes 300,000$ 300,000$ 300,000$ -$ Intergovernmental 85,000 85,000 - (85,000) Special assessments 1,600 1,600 1,636 36 Investment earnings 57,500 57,500 94,145 36,645 Miscellaneous - - - - Total Revenues 444,100 444,100 395,781 (48,319) Expenditures Economic development Current Personnel services 344,100 344,100 300,794 43,306 Supplies 300 300 375 (75) Other services and charges 367,378 367,378 130,967 236,411 Total Expenditures 711,778 711,778 432,136 279,642 Deficiency of Revenues Under Expenditures (267,678) (267,678) (36,355) 231,323 Other Financing Sources (Uses) Sale of capital assets - - 331,299 331,299 Transfers out (34,750) (34,750) (963,207) (928,457) Total Other Financing Sources (Uses)(34,750) (34,750) (631,908) (597,158) Net Change in Fund Balances (302,428) (302,428) (668,263) (365,835) Fund Balances, January 1 5,109,286 5,109,286 5,109,286 - Prior Period Adjustment (Note 7)280,735 280,735 280,735 - Fund Balances, December 31 5,087,593$ 5,087,593$ 4,721,758$ (365,835)$ Budgeted Amounts The notes to the financial statements are an integral part of this statement. 49 City of New Hope, Minnesota Statement of Net Position (Continued on the Following Pages) Proprietary Funds December 31, 2019 9300 9301 9302 9303 Sewer Utility Water Utility Golf Course Ice Arena Assets Current Assets Cash and temporary investments 1,645,152$ 2,253,701$ 89,136$ 800$ Cash held with fiscal agent - - - 1,358,401 Receivables Accounts 331,671 867,643 1,720 68,820 Special assessments 53,644 126,501 - - Due from other governments - 5,589 - 50,758 Inventories - 37,275 5,732 - Total Current Assets 2,030,467 3,290,709 96,588 1,478,779 Noncurrent Assets Investment in joint ventures - 168,509 - - Capital assets Land - - 250,625 - Buildings and structures - - 973,145 9,939,063 Improvements other than buildings 6,484,838 11,037,801 130,373 - Vehicles and equipment 607,475 1,392,767 168,678 466,287 Construction in progress 155,147 336,207 10,247 19,026 Less: accumulated depreciation (2,858,046) (3,897,489) (1,046,885) (4,298,794) Total Capital Assets (Net of Accumulated Depreciation)4,389,414 8,869,286 486,183 6,125,582 Total Noncurrent Assets 4,389,414 9,037,795 486,183 6,125,582 Total Assets 6,419,881 12,328,504 582,771 7,604,361 Deferred Outflows of Resources Deferred pension resources 17,816 20,288 4,308 18,199 Deferred other postemployment benefit resources 6,110 4,941 699 4,048 Total Deferred Outflows of Resources 23,926 25,229 5,007 22,247 Business-type Activities - Enterprise Funds The notes to the financial statements are an integral part of this statement. 50 City of New Hope, Minnesota Statement of Net Position (Continued) Proprietary Funds December 31, 2019 9300 9301 9302 9303 Sewer Utility Water Utility Golf Course Ice Arena Liabilities Current Liabilities Accrued salaries payable 8,327$ 13,218$ 1,647$ 10,727$ Accounts and contracts payable 24,703 71,300 4,850 72,845 Due to other governments 1,066 236,948 197 15,772 Accrued interest payable 9,471 40,366 - 4,790 Due to other funds 125,000 110,725 - 104,291 Compensated absences payable, current portion - - - - Bonds and notes payable, current portion 56,115 321,261 - - Total Current Liabilities 224,682 793,818 6,694 208,425 Noncurrent Liabilities Advances from other funds 750,000 459,873 - - Other postemployment benefits payable 47,890 38,728 5,476 31,726 Pension liability 173,440 197,505 41,941 177,161 Compensated absences payable - - - - Bonds and notes payable 817,632 3,368,978 - 3,505,000 Total Noncurrent Liabilities 1,788,962 4,065,084 47,417 3,713,887 Total Liabilities 2,013,644 4,858,902 54,111 3,922,312 Deferred Inflows of Resources Deferred pension resources 32,586 37,107 7,880 33,285 Deferred other postemployment benefit resources 1,857 1,502 213 1,230 Total Deferred Inflows of Resources 34,443 38,609 8,093 34,515 Net Position Net investment in capital assets 3,515,667 5,179,047 486,183 2,620,582 Restricted for debt service - - - 1,358,401 Unrestricted 880,053 2,277,175 39,391 (309,202) Total Net Position 4,395,720$ 7,456,222$ 525,574$ 3,669,781$ Business-type Activities - Enterprise Funds The notes to the financial statements are an integral part of this statement. 51 City of New Hope, Minnesota Statement of Net Position (Continued) Proprietary Funds December 31, 2019 Governmental Activities - 9304 9305 Internal Storm Water Street Lighting Totals Service Funds Assets Current Assets Cash and temporary investments 707,844$ 19,810$ 4,716,443$ 10,131,626$ Cash held with fiscal agent - - 1,358,401 - Receivables Accounts 119,530 8,459 1,397,843 4,475 Special assessments 16,566 2,490 199,201 - Due from other governments - - 56,347 - Inventories - - 43,007 62,575 Total Current Assets 843,940 30,759 7,771,242 10,198,676 Noncurrent Assets Investment in joint ventures - - 168,509 - Capital assets Land 234,417 - 485,042 85,647 Buildings and structures - - 10,912,208 3,158,296 Improvements other than buildings 9,822,498 389,705 27,865,215 - Vehicles and equipment - - 2,635,207 9,453,933 Construction in progress 278,324 - 798,951 22,997 Less: accumulated depreciation (1,537,186) - (13,638,400) (9,803,089) Total Capital Assets (Net of Accumulated Depreciation)8,798,053 389,705 29,058,223 2,917,784 Total Noncurrent Assets 8,798,053 389,705 29,226,732 2,917,784 Total Assets 9,641,993 420,464 36,997,974 13,116,460 Deferred Outflows of Resources Deferred pension resources 12,743 - 73,354 19,129 Deferred other postemployment benefit resources 8,935 - 24,733 119,013 Total Deferred Outflows of Resources 21,678 - 98,087 138,142 Business-type Activities - Enterprise Funds The notes to the financial statements are an integral part of this statement. 52 City of New Hope, Minnesota Statement of Net Position (Continued) Proprietary Funds December 31, 2019 Governmental Activities - 9304 9305 Internal Storm Water Street Lighting Totals Service Funds Liabilities Current Liabilities Accrued salaries payable 2,377$ -$ 36,296$ 144,525$ Accounts and contracts payable 21,027 9,070 203,795 135,665 Due to other governments 1,054 - 255,037 580 Accrued interest payable 18,981 - 73,608 - Due to other funds - - 340,016 - Compensated absences payable, current portion - - - 75,388 Bonds and notes payable, current portion 147,734 - 525,110 - Total Current Liabilities 191,173 9,070 1,433,862 356,158 Noncurrent Liabilities Advances from other funds - - 1,209,873 - Other postemployment benefits payable 70,038 - 193,858 932,848 Pension liability 124,056 - 714,103 186,220 Compensated absences payable - - - 678,493 Bonds and notes payable 1,526,150 - 9,217,760 - Total Noncurrent Liabilities 1,720,244 - 11,335,594 1,797,561 Total Liabilities 1,911,417 9,070 12,769,456 2,153,719 Deferred Inflows of Resources Deferred pension resources 23,307 - 134,165 34,987 Deferred other postemployment benefit resources 2,716 - 7,518 36,169 Total Deferred Inflows of Resources 26,023 - 141,683 71,156 Net Position Net investment in capital assets 7,124,169 389,705 19,315,353 2,917,784 Restricted for debt service - - 1,358,401 - Unrestricted 602,062 21,689 3,511,168 8,111,943 Total Net Position 7,726,231$ 411,394$ 24,184,922$ 11,029,727$ Total Net Position - Enterprise Funds 24,184,922$ Adjustment to reflect the consolidation of internal service fund activities related to the enterprise funds (456,981) Net Position - Business-type Activities 23,727,941$ Business-type Activities - Enterprise Funds The notes to the financial statements are an integral part of this statement. 53 City of New Hope, Minnesota Statement of Revenues, Expenses and Changes in Net Position Proprietary Funds For the Year Ended December 31, 2019 9300 9301 9302 9303 Sewer Utility Water Utility Golf Course Ice Arena Operating Revenues Charges for services 3,380,075$ 4,387,321$ 282,323$ 852,765$ Billings to departments - - - - Other - - - - Total Operating Revenues 3,380,075 4,387,321 282,323 852,765 Operating Expenses Cost of goods sold 1,841,838 2,558,681 25,534 - Personnel services 361,191 338,422 135,027 376,422 Supplies 14,601 80,015 26,839 24,557 Utilities 12,074 707 25,649 234,613 Other services and charges 429,262 385,328 77,871 120,413 Depreciation 184,090 356,919 36,502 197,347 Total Operating Expenses 2,843,056 3,720,072 327,422 953,352 Operating Income (Loss)537,019 667,249 (45,099) (100,587) Nonoperating Revenues (Expenses) Investment earnings 45,289 50,767 3,434 26,023 Miscellaneous revenues 404 300,306 14,312 41,364 Gain on sale of capital assets - - - - Interest expense (41,481) (92,522) - (58,182) Total Nonoperating Revenues (Expenses)4,212 258,551 17,746 9,205 Income (Loss) Before Contributions and Transfers 541,231 925,800 (27,353) (91,382) Capital Contributions - 11,324 - - Transfers In - - - 300,000 Transfers Out (54,209) (56,526) (10,506) (10,506) Change in Net Position 487,022 880,598 (37,859) 198,112 Net Position, January 1 3,908,698 6,575,624 563,433 3,471,669 Net Position, December 31 4,395,720$ 7,456,222$ 525,574$ 3,669,781$ Business-type Activities - Enterprise Funds The notes to the financial statements are an integral part of this statement. 54 City of New Hope, Minnesota Statement of Revenues, Expenses and Changes in Net Position (Continued) Proprietary Funds For the Year Ended December 31, 2019 Governmental Activities - 9304 9305 Internal Storm Water Street Lighting Totals Service Funds Operating Revenues Charges for services 1,190,058$ 152,975$ 10,245,517$ -$ Billings to departments - - - 3,740,890 Other - - - 13,172 Total Operating Revenues 1,190,058 152,975 10,245,517 3,754,062 Operating Expenses Cost of goods sold - - 4,426,053 - Personnel services 260,129 - 1,471,191 1,023,483 Supplies 6,295 478 152,785 343,108 Utilities - 104,987 378,030 92,663 Other services and charges 363,988 11,147 1,388,009 994,058 Depreciation 243,995 - 1,018,853 677,762 Total Operating Expenses 874,407 116,612 8,834,921 3,131,074 Operating Income (Loss)315,651 36,363 1,410,596 622,988 Nonoperating Revenues (Expenses) Investment earnings 17,809 5,974 149,296 246,070 Miscellaneous revenues 289 - 356,675 - Gain on sale of capital assets - - - 37,864 Interest expense (44,092) - (236,277) - Total Nonoperating Revenues (Expenses)(25,994) 5,974 269,694 283,934 Income (Loss) Before Contributions and Transfers 289,657 42,337 1,680,290 906,922 Capital Contributions 17,500 - 28,824 - Transfers In - - 300,000 - Transfers Out (23,629) - (155,376) (325,349) Change in Net Position 283,528 42,337 1,853,738 581,573 Net Position, January 1 7,442,703 369,057 22,331,184 10,448,154 Net Position, December 31 7,726,231$ 411,394$ 24,184,922$ 11,029,727$ Change in Net Position - Enterprise Funds 1,853,738$ Adjustment to reflect the consolidation of internal service fund activities related to the enterprise funds.146,319 Change in Net Position - Business-type Activities 2,000,057$ Business-type Activities - Enterprise Funds The notes to the financial statements are an integral part of this statement. 55 City of New Hope, Minnesota Statement of Cash Flows (Continued on the Following Pages) Proprietary Funds For the Year Ended December 31, 2019 9300 9301 9302 9303 Sewer Utility Water Utility Golf Course Ice Arena Cash Flows from Operating Activities Receipts from customers and users 3,370,462$ 4,380,302$ 280,812$ 960,469$ Receipts from interfund services provided - - - - Other operating receipts - 299,846 14,215 40,951 Payments to suppliers (2,222,978) (2,978,034) (155,557) (347,746) Payments to employees (363,134) (332,612) (133,038) (364,533) Net Cash Provided (Used) by Operating Activities 784,350 1,369,502 6,432 289,141 Cash Flows From Noncapital Financing Activities Receipts on interfund balances - - - 104,291 Payments on interfund balances - - - (433,656) Transfers in - - - 300,000 Transfers out (54,209) (56,526) (10,506) (10,506) Net Cash Provided (Used) by Noncapital Financing Activities (54,209) (56,526) (10,506) (39,871) Cash Flows from Capital and Related Financing Activities Acquisition of capital assets (101,743) (375,814) (10,246) (19,390) Proceeds from sale of assets - - - - Payment of advance from other funds (125,000) (109,077) - - Capital contributions - 11,324 - - Principal paid on long-term debt (54,932) (310,061) - - Interest paid on long-term debt (43,403) (102,139) - (58,182) Net Cash Provided (Used) by Capital and Related Financing Activities (325,078) (885,767) (10,246) (77,572) Cash Flows from Investing Activities Investment earnings 45,289 50,767 3,434 26,023 Net Increase (Decrease) in Cash and Cash Equivalents 450,352 477,976 (10,886) 197,721 Cash and Cash Equivalents, January 1 1,194,800 1,775,725 100,022 1,161,480 Cash and Cash Equivalents, December 31 1,645,152$ 2,253,701$ 89,136$ 1,359,201$ Reconciliation to the Proprietary Funds Statement of Net Position Cash and temporary investments 1,645,152$ 2,253,701$ 89,136$ 800$ Cash held with fiscal agent - - - 1,358,401 Total Cash and Cash Equivalents 1,645,152$ 2,253,701$ 89,136$ 1,359,201$ Business-type Activities - Enterprise Funds The notes to the financial statements are an integral part of this statement. 56 City of New Hope, Minnesota Statement of Cash Flows (Continued) Proprietary Funds For the Year Ended December 31, 2019 9300 9301 9302 9303 Sewer Utility Water Utility Golf Course Ice Arena Reconciliation of Operating Income (Loss) to Net Cash Provided (Used) by Operating Activities Operating income (loss)537,019$ 667,249$ (45,099)$ (100,587)$ Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities Depreciation 184,090 356,919 36,502 197,347 Other income related to operations 404 300,306 14,312 41,364 (Increase) decrease in assets Receivables Accounts (7,501) (80,576) (1,511) 110,968 Special assessments (2,112) (4,690) - - Due from other governments - 78,247 - (3,264) Inventories - 4,801 (502) - Prepaid items - 340 - - (Increase) decrease in deferred outflows of resources Deferred pension resources 16,881 17,608 3,235 13,827 Deferred other postemployment benefit resources (6,110) (4,941) (699) (4,048) Increase (decrease) in liabilities Accounts and contracts payable 80,017 (10,350) 1,501 32,853 Accrued salaries payable 623 3,692 489 1,425 Due to other governments 1,066 57,027 133 3,305 Compensated absences payable - - - - Other postemployment benefits payable 11,203 8,372 (111) 4,609 Pension liability (14,100) (7,324) 1,169 4,056 Increase (decrease) in deferred inflows of resources Deferred pension resources (16,954) (16,998) (2,890) (12,441) Deferred other postemployment benefit resources (176) (180) (97) (273) Net Cash Provided (Used) by Operating Activities 784,350$ 1,369,502$ 6,432$ 289,141$ Schedule of Noncash Capital and Related Financing Activities Amortization of bond discount -$ -$ -$ -$ Amortization of bond premium 1,363$ 5,631$ -$ -$ Capital assets purchased on account -$ 21,783$ -$ 19,206$ Gain on sale of capital assets -$ -$ -$ -$ Capital assets contributed to governmental activities -$ -$ -$ -$ Business-type Activities - Enterprise Funds The notes to the financial statements are an integral part of this statement. 57 City of New Hope, Minnesota Statement of Cash Flows (Continued) Proprietary Funds For the Year Ended December 31, 2019 Governmental Activities - 9304 9305 Internal Storm Water Street Lighting Totals Service Funds Cash Flows from Operating Activities Receipts from customers and users 1,176,896$ 153,313$ 10,322,254$ -$ Receipts from interfund services provided - - - 3,741,273 Other operating receipts - - 355,012 12,738 Payments to suppliers (338,151) (115,766) (6,158,232) (1,396,697) Payments to employees (217,483) - (1,410,800) (881,539) Net Cash Provided (Used) by Operating Activities 621,262 37,547 3,108,234 1,475,775 Cash Flows from Noncapital Financing Activities Receipts on interfund balances - - 104,291 - Payments on interfund balances - - (433,656) - Transfers in - - 300,000 - Transfers out (23,629) - (155,376) (325,349) Net Cash Provided (Used) by Noncapital Financing Activities (23,629) - (184,741) (325,349) Cash Flows from Capital and Related Financing Activities Acquisition of capital assets (313,071) (337,771) (1,158,035) (351,427) Proceeds from sale of assets - - - 37,864 Payment of advance from other funds - - (234,077) - Capital contributions 17,500 - 28,824 - Principal paid on long-term debt (150,333) - (515,326) - Interest paid on long-term debt (47,949) - (251,673) - Net Cash Provided (Used) by Capital and Related Financing Activities (493,853) (337,771) (2,130,287) (313,563) Cash Flows from Investing Activities Investment earnings 17,809 5,974 149,296 246,070 Net Increase (Decrease) in Cash and Cash Equivalents 121,589 (294,250) 942,502 1,082,933 Cash and Cash Equivalents, January 1 586,255 314,060 5,132,342 9,048,693 Cash and Cash Equivalents, December 31 707,844$ 19,810$ 6,074,844$ 10,131,626$ Reconciliation to the Proprietary Funds Statement of Net Position Cash and temporary investments 707,844$ 19,810$ 4,716,443$ 10,131,626$ Cash held with fiscal agent - - 1,358,401 - Total Cash and Cash Equivalents 707,844$ 19,810$ 6,074,844$ 10,131,626$ Business-type Activities - Enterprise Funds The notes to the financial statements are an integral part of this statement. 58 City of New Hope, Minnesota Statement of Cash Flows (Continued) Proprietary Funds For the Year Ended December 31, 2019 Governmental Activities - 9304 9305 Internal Storm Water Street Lighting Totals Service Funds Reconciliation of Operating Income (Loss) to Net Cash Provided (Used) by Operating Activities Operating income (loss)315,651$ 36,363$ 1,410,596$ 622,988$ Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities Depreciation 243,995 - 1,018,853 677,762 Other income related to operations 289 - 356,675 - (Increase) decrease in assets Receivables Accounts (11,789) 532 10,123 383 Special assessments (1,373) (194) (8,369) - Due from other governments - - 74,983 - Inventories - - 4,299 7,570 Prepaid items - - 340 - (Increase) Decrease in deferred outflows of resources Deferred pension resources 11,238 - 62,789 9,825 Deferred other postemployment benefit resources (8,935) - (24,733) (119,013) Increase (decrease) in liabilities Accounts and contracts payable 38,527 846 143,394 60,158 Accrued salaries payable (230) - 5,999 28,409 Due to other governments 1,054 - 62,585 (48,474) Compensated absences payable - - - 39,496 Other postemployment benefits payable 47,847 - 71,920 178,915 Pension liability (5,566) - (21,765) 29,720 Increase (decrease) in deferred inflows of resources Deferred pension resources (10,932) - (60,215) (6,352) Deferred other postemployment benefit resources 1,486 - 760 (5,612) Net Cash Provided (Used) by Operating Activities 621,262$ 37,547$ 3,108,234$ 1,475,775$ Schedule of Noncash Capital and Related Financing Activities Amortization of bond discount 740$ -$ 740$ -$ Amortization of bond premium 2,998$ -$ 9,992$ -$ Capital assets purchased on account -$ -$ 40,989$ -$ Gain on sale of capital assets -$ -$ -$ -$ Capital assets contributed to governmental activities -$ -$ -$ -$ Business-type Activities - Enterprise Funds The notes to the financial statements are an integral part of this statement. 59 THIS PAGE IS LEFT BLANK INTENTIONALLY 60 City of New Hope, Minnesota Notes to the Financial Statements December 31, 2019 Note 1: Summary of Significant Accounting Policies A. Financial Reporting Entity The City of New Hope (the City) operates under “Optional Plan B” as defined in Minnesota statutes. Optional Plan B is known as the City Council-Manager Plan. Under this plan, as specified in the statutes, “The City Council shall exercise the legislative power of the City and determine all matters of policy. The City manager shall be the head of the administrative branch of the City government and shall be responsible to the City Council for proper administration of all affairs relating to the City.” The City Council is composed of five members including the mayor. The City Council appoints the City manager. The City has considered all potential units for which it is financially accountable, and other organizations for which the nature and significance of their relationship with the City are such that exclusion would cause the City’s financial statements to be misleading or incomplete. The Governmental Accounting Standards Board (GASB) has set forth criteria to be considered in determining financial accountability. These criteria include appointing a voting majority of an organization’s governing body, and (1) the ability of the primary government to impose its will on that organization or (2) the potential for the organization to provide specific benefits to, or impose specific financial burdens on the primary government. Blended component units are, in substance, part of the government’s operations and so are reported as if they were part of the primary government. The City has identified the following component units using the above criteria: Blended Component Unit The New Hope Economic Development Authority (EDA) and Housing and Redevelopment Authority (HRA) are fiscally dependent upon the City, and were developed to control and operate the housing and redevelopment and tax increment districts within the City. Since the City Council makes up the New Hope EDA and HRA boards, and funding for New Hope EDA and HRA activities are provided by the City, both entities are considered to be blended component units of the City, and are reported as special revenue, debt service, and capital projects funds. The City participates in various joint ventures and jointly controlled organizations which are described later in these notes. B. Government-wide and Fund Financial Statements The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the non-fiduciary activities of the primary government and its component units. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Amounts reported as program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, service, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among programs revenue are reported instead as general revenues. Separate fund financial statements are provided for governmental and proprietary funds. Major individual governmental and enterprise funds are reported as separate columns in the fund financial statements. Aggregated information for the remaining nonmajor funds are reported in single columns in the respective fund financial statements. Aggregated information for the internal service funds is presented in a single column in the proprietary fund financial statements. Because the principal users of the internal services are the City’s governmental activities, the financial statements of the internal service funds are consolidated into the governmental activities column when presented in the government-wide financial statements. The cost of these services is reported in the appropriate functional activity. 61 City of New Hope, Minnesota Notes to the Financial Statements December 31, 2019 Note 1: Summary of Significant Accounting Policies (Continued) C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary funds. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the City considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences, pensions, other postemployment benefits, and claims and judgments, are recorded only when payment is due. Property taxes, tax increments, franchise taxes, licenses, and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Only the portion of special assessments receivable due within the current fiscal period is considered to be susceptible to accrual as revenue of the current period. All other revenue items are considered to be measurable and available only when cash is received by the City. Revenue resulting from exchange transactions, in which each party gives and receives essentially equal value, is recorded on the accrual basis when the exchange takes place. On a modified accrual basis, revenue is recorded in the year in which the resources are measurable and become available. Non-exchange transactions, in which the City receives value without directly giving equal value in return, include property taxes, grants, entitlement and donations. On an accrual basis, revenue from property taxes is recognized in the year for which the tax is levied. Revenue from grants, entitlements and donations is recognized in the year in which all eligibility requirements have been satisfied. Eligibility requirements include timing requirements, which specify the year when the resources are required to be used or the year when use is first permitted, matching requirements, in which the City must provide local resources to be used for a specified purpose, and expenditure requirements, in which the resources are provided to the City on a reimbursement basis. On a modified accrual basis, revenue from non-exchange transactions must also be available before it can be recognized. Unearned revenue arises when assets are recognized before revenue recognition criteria have been satisfied. Grants and entitlements received before eligibility requirements are met are also recorded as unearned revenue. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. The City reports the following major governmental funds: The General fund is the City’s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. The Economic Development Authority Special Revenue fund accounts for the activities of the authority which controls and operates the housing and redevelopment projects and tax increment districts in the City. Activities in the fund are funded through property tax levies and Federal and state aids and grants. The HRA Construction Capital Projects fund is used to account for redevelopment costs for tax increment districts, which are primarily funded by tax increment bonds and tax increment revenues. The City Hall CIP Capital Projects fund is used to account for the accumulation of reserves for City Hall projects. 62 City of New Hope, Minnesota Notes to the Financial Statements December 31, 2019 Note 1: Summary of Significant Accounting Policies (Continued) The Street Infrastructure Capital Projects fund is used to account for various street projects within the City. The Park/Pool Improvement Project Capital Projects fund is used to account for park and pool improvements. The HRA Bonds Debt Service fund accounts for revenue from tax increments and interest income to pay for the principal and interest on the City’s tax increment bond issues. The City reports the following major enterprise funds: The Sewer Utility fund accounts for the provisions of sewer services to residents of the City. All activities necessary to provide such services are accounted for in this fund, including administration, operations, maintenance, billing and collection. The Water Utility fund is used to account for the provisions of water services to residents of the City. All activities necessary to provide such services are accounted for in this fund, including administration, operations, maintenance, billing and collection. The Golf Course fund is used to account for the operations of the City’s public golf course. The Ice Arena fund is used to account for the operation of the City’s indoor ice arena. The Storm Water fund accounts for the general operation and maintenance of the City’s storm water system. The Street Lighting fund is used to account for the operation of the City’s streetlight system. Additionally, the City reports the following fund type: Internal service funds are used to account for the City’s vehicle and equipment rental operation, employee leave benefits, insurance, and information technology operations. Internal service funds operate in a manner similar to enterprise funds; however, they provide services primarily to other departments within the City. As a general rule the effect of interfund activity has been eliminated from government-wide financial statements. Exceptions to this general rule are charges between the City’s enterprise fund functions and various other functions of the government. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the enterprise funds and of the City’s internal service funds are charges to customers for sales and services. Operating expenses for enterprise funds and internal service funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non- operating revenues and expenses. 63 City of New Hope, Minnesota Notes to the Financial Statements December 31, 2019 Note 1: Summary of Significant Accounting Policies (Continued) D. Assets, Liabilities, Deferred Inflows of Resources, and Net Position/Fund Balance Deposits and Investments The City’s cash and cash equivalents are considered to be cash on hand, demand deposits, and short-term investments with original maturities of three months or less from date of acquisition. The proprietary funds’ portion of the government-wide cash and temporary investments pool is considered to be cash and cash equivalents for purposes of the Statements of Cash Flows, including the cash held with fiscal agent. Cash balances from all funds are pooled and invested, to the extent available, in certificates of deposit, U.S. government obligations, and other authorized investments. Investments are stated at their estimated fair value. Earnings from such investments are allocated on the basis of applicable participation by each of the funds. For cash held with fiscal agent, interest earned on those investments is allocated directly to that fund. The City may also invest idle funds as authorized by Minnesota statutes, as follows: 1. Direct obligations or obligations guaranteed by the United States or its agencies. 2. Shares of investment companies registered under the Federal Investment Company Act of 1940 and received the highest credit rating, rated in one of the two highest rating categories by a statistical rating agency, and have a final maturity of thirteen months or less. 3. General obligations of a state or local government with taxing powers rated “A” or better; revenue obligations rated “AA” or better. 4. General obligations of the Minnesota Housing Finance Agency rated “A” or better. 5. Obligation of a school district with an original maturity not exceeding 13 months and (i) rated in the highest category by a national bond rating service or (ii) enrolled in the credit enhancement program pursuant to statute section 126C.55. 6. Bankers’ acceptances of United States banks eligible for purchase by the Federal Reserve System. 7. Commercial paper issued by United States banks corporations or their Canadian subsidiaries, of highest quality category by at least two nationally recognized rating agencies, and maturing in 270 days or less. 8. Repurchase or reverse repurchase agreements and securities lending agreements with financial institutions qualified as a “depository” by the government entity, with banks that are members of the Federal Reserve System with capitalization exceeding $10,000,000, a primary reporting dealer in U.S. government securities to the Federal Reserve Bank of New York, or certain Minnesota securities broker-dealers. 9. Guaranteed Investment Contracts (GIC’s) issued or guaranteed by a United States commercial bank, a domestic branch of a foreign bank, a United States insurance company, or its Canadian subsidiary, whose similar debt obligations were rated in one of the top two rating categories by a nationally recognized rating agency. 64 City of New Hope, Minnesota Notes to the Financial Statements December 31, 2019 Note 1: Summary of Significant Accounting Policies (Continued) Broker money market funds operate in accordance with appropriate state laws and regulations. The reported value of the pool is the same as the fair value of the shares. The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. See Note 3A on page 72 for the City’s recurring fair value measurements. The City has the following recurring fair value measurements as of December 31, 2019: • U.S. Government Agency Securities of $4,710,990 are valued using a matrix pricing model (Level 2 inputs). • State and local government securities of $1,013,960 are valued using a matrix pricing model (Level 2 inputs). • Negotiable certificates of deposit of $5,095,879 are valued using a matrix pricing model (Level 2 inputs) Property Taxes The City Council annually adopts a tax levy in December and certifies it to the County for collection in the following year. The County is responsible for collecting all property taxes for the City. These taxes attach an enforceable lien on taxable property within the City on January 1 and are payable by the property owners in two installments. The taxes are collected by the County Treasurer and tax settlements are made to the City during January, July, and December each year. Delinquent taxes receivable include the past six years’ uncollected taxes. Delinquent taxes have been offset by a deferred inflow of resources for taxes not received within 60 days after year end in the fund financial statements. Accounts Receivable Accounts receivable include amounts billed for services provided before year end. Unbilled utility enterprise fund receivables are also included for services provided in 2019. The City annually certifies delinquent water, sewer, storm water, and street lighting accounts to the County for collection in the following year. Therefore, there has been no allowance for doubtful accounts established for the delinquent water and sewer accounts. Special Assessments Special assessments are levied against benefited properties for the cost or a portion of the cost of special assessment improvement projects in accordance with Minnesota statutes. These assessments are collectible by the City over a term of years usually consistent with the term of the related bond issue. Collection of annual installments (including interest) is handled by the County Auditor in the same manner as property taxes. Property owners are allowed to (and often do) prepay future installments without interest or prepayment penalties. In governmental fund financial statements, revenue from special assessments is recognized by the City when it becomes measurable and available to finance expenditures of the current fiscal period. In practice, current and delinquent special assessments received by the City are recognized as revenue for the current year. Special assessments are collected by the County and remitted by December 31 (remitted to the City the following January) and are also recognized as revenue for the current year. All special assessments receivable in governmental funds are completely offset by a deferred inflow of resources for assessments not received within 60 days after year end. In government-wide financial statements, special assessments are recognized as revenues in the year for which they are certified. At December 31, 2019, the total delinquent special assessment receivable balance was $92,689. 65 City of New Hope, Minnesota Notes to the Financial Statements December 31, 2019 Note 1: Summary of Significant Accounting Policies (Continued) Once a special assessment roll is adopted, the amount attributed to each parcel is a lien upon that property until full payment is made or the amount is determined to be excessive by the City Council or court action. If special assessments are allowed to go delinquent, the property is subject to tax forfeit sale and the first proceeds of that sale (after costs, penalties and expenses of sale) are remitted to the City in payment of delinquent special assessments. Generally, the City will collect the full amount of its special assessments not adjusted by City Council or court action. Pursuant to Minnesota statutes, a property shall be subject to a tax forfeit sale after three years unless it is homesteaded, agricultural or seasonal recreational land in which event the property is subject to such sale after five years. Interfund Receivables and Payables Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred “advances to/from other funds”. All other outstanding balances between funds are reported as “due to/from other funds.” Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as “internal balances.” Inventory and Prepaid Items Inventory is valued at cost using the first-in/first-out (FIFO) method. Inventory consists mainly of expendable supplies held for consumption. Certain cash payment to vendors reflects costs applicable to future accounting periods are recorded as prepaid items in both government-wide and fund financial statements. Inventory and prepaid items of the governmental funds are recorded as expenditures when consumed rather than when purchased. Land Held for Resale Land held for resale is valued at the lower of the cost or acquisition of the property. The fair value of the property was determined based on quoted market prices. Investment in Joint Ventures Included in the assets of the government-wide statements and proprietary funds are amounts representing the City’s investment in two joint ventures described later in these notes. Capital Assets Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items), are reported in the applicable governmental or business-type activities columns in the government -wide financial statements. Capital assets are defined by the City as assets with an initial, individual cost of more than $5,000 (amount not rounded) and an estimated useful life of two years or more. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets would be recorded at acquisition value at the date of donation. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business-type activities is included as part of the capitalized value of the assets constructed. Land and Construction in Process are non-depreciable assets. Property, plant, and equipment of the City are depreciated using the straight-line method over the following estimated useful lives: Assets Years Buildings and Structures 15 - 50 Improvements other than Buildings 15 - 50 Vehicles and Equipment 3 - 20 66 City of New Hope, Minnesota Notes to the Financial Statements December 31, 2019 Note 1: Summary of Significant Accounting Policies (Continued) Deferred Outflows of Resources In addition to assets, the statement of net position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The City has two items which qualify for reporting in this category. Accordingly, the items, deferred pension resources and deferred other postemployment benefit resources, are reported only in the statement of net position. These items result from actuarial calculations and current year pension contributions and OPEB contributions made subsequent to the measurement dates. Pensions For purposes of measuring the net pension liability, deferred outflows/inflows of resources, and pension expense, information about the fiduciary net position of the Public Employees Retirement Association (PERA) and additions to/deductions from PERA’s fiduciary net position have been determined on the same basis as they are reported by PERA except that PERA’s fiscal year end is June 30. For this purpose, plan contributions are recognized as of employer payroll paid dates and benefit payments and refunds are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. The General fund is typically used to liquidate the governmental net pension liability. The total pension expense for the GERP, PEPFP, and PEDCP is as follows: Public Employees Retirement Association of Minnesota (PERA)Total All GERP PEPFP PEDCP Plans Pension Expense 419,081$ 943,538$ 2,606$ 1,365,225$ Deferred Inflows of Resources In addition to liabilities, the statement of net position and fund financial statements will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The City has four types of items, unavailable revenue, resources received in advance, deferred pension resources, and deferred other postemployment benefit resources. • Unavailable revenue arises only under a modified accrual basis of accounting that qualifies as needing to be reported in this category. Accordingly, the item, unavailable revenue, is reported only in the governmental funds balance sheet. The governmental funds report unavailable revenues from two sources: property taxes and special assessments. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. • Resources received in advance is reported in both the governmental fund financial statements and within the government- wide financial statements. This item is reported for amounts that have been received before time requirements are met, but after all other eligibility requirements have been met. • Deferred pension resources is reported only in the statements of net position and results from actuarial calculations. • Deferred other postemployment benefit resources is reported only in the statements of net position and results from actuarial calculations involving net differences between projected and actual earnings on plan investments and changes in proportions. 67 City of New Hope, Minnesota Notes to the Financial Statements December 31, 2019 Note 1: Summary of Significant Accounting Policies (Continued) Compensated Absences A liability is recognized for unpaid vacation, sick leave, wellness days, and personal leave earned by employees at the balance sheet date if it is probable the benefit will be paid as time off or at separation of service. The City implemented a personal leave plan in 1994 in which all new employees, other than police officers, participate. Employees who have had five or more years of service at the time of implementation were allowed to choose between the personal leave plan or the vacation/sick leave plan. Under the vacation/sick leave plan, employees are entitled to compensation for unpaid vacation time up to 160 hours and one-third of their accumulated sick leave to a maximum of 320 hours. Under personal leave, employees are entitled to 200 hours of accumulated leave time. The Employee Leave internal service fund is typically used to liquidate governmental compensated absences payable. Other Postemployment Benefits (OPEB) Under Minnesota statute 471.61, subdivision 2b, public employers must allow retirees and their dependents to continue coverage indefinitely in an employer-sponsored health care plan, under the following conditions: 1) Retirees must be receiving (or eligible to receive) an annuity from a Minnesota public pension plan, 2) Coverage must continue in a group plan until age 65, and retirees must pay no more than the group premium, and 3) Retirees are able to add dependent coverage during open enrollment period or qualifying life event prior to retirement. All premiums are funded on a pay-as-you-go basis. The liability was determined, in accordance with GASB Statement No.75, at December 31, 2019. The Insurance Reserve Internal service fund is typically used to liquidate governmental other postemployment benefits payable. Long-term Obligations In the government-wide financial statements, and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net position. The recognition of bond premiums and discounts are delayed and amortized over the life of the bonds using the straight-line method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are reported as an expense in the period incurred. In the fund financial statements, governmental fund types recognized bond premium and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. Fund Balance In the fund financial statements, fund balance is divided into five classifications based primarily on the extent to which the City is bound to observe constraints imposed upon the use of resources reported in the governmental funds. These classifications are defined as follows: Nonspendable - Amounts that cannot be spent because they are not in spendable form, such as prepaid items. Restricted - Amounts related to externally imposed constraints established by creditors, grantors or contributors; or constraints imposed by state statutory provisions. Committed - Amounts constrained for specific purposes that are internally imposed by formal action (resolution) of the City Council, which is the City’s highest level of decision-making authority. Committed amounts cannot be used for any other purpose unless the City Council modifies or rescinds the commitment by resolution. Assigned - Amounts constrained for specific purposes that are internally imposed. In governmental funds other than the General fund, assigned fund balance represents all remaining amounts that are not classified as nonspendable and are neither restricted nor committed. In the General fund, assigned amounts represent intended uses established by the City Council itself or by an official to which the governing body delegates the authority. The City Council has adopted a fund balance policy which delegates the authority to assign amounts for specific purposes to the Finance Manager or City Manager. Unassigned - The residual classification for the General fund and also negative residual amounts in other funds. 68 City of New Hope, Minnesota Notes to the Financial Statements December 31, 2019 Note 1: Summary of Significant Accounting Policies (Continued) The City considers restricted amounts to be spent first when both restricted and unrestricted fund balance is available. Additionally, the City would first use committed, then assigned, and lastly unassigned amounts of unrestricted fund balance when expenditures are made. The City has formally adopted a fund balance policy for the General fund. The City will maintain an unassigned fund balance in the General fund of an amount not less than 42% of the next year’s budgeted expenditures of the General fund. Net Position Net position represents the difference between assets and deferred outflows of resources and liabilities and deferred inflows of resources. Net position is displayed in three components: a. Net investment in capital assets - Consists of capital assets, net of accumulated depreciation reduced by any outstanding debt attributable to acquire capital assets. b. Restricted net position - Consists of net position balances restricted when there are limitations imposed on their use through external restrictions imposed by creditors, grantors, laws or regulations of other governments. c. Unrestricted net position - All other net position that do not meet the definition of “restricted” or “net investment in capital assets”. When both restricted and unrestricted resources are available for use, it is the City’s policy to use restricted resources first, then unrestricted resources as they are needed. Note 2: Stewardship, Compliance and Accountability A. Budgetary Information Budgets are legally adopted on a basis consistent with accounting principles generally accepted in the United States of America. Annual appropriated budgets are legally adopted for the General and certain special revenue funds. Budgeted amounts are reported as originally adopted, or as amended by the City Council. The budget was not amended during the current year. Budgeted expenditure appropriations lapse the year end. The City follows these procedures in establishing the budgetary data reflected in the financial statements: 1. The City Manager submits to the City Council a proposed operating budget for the fiscal year commencing the following January 1. The operating budget includes proposed expenditures and the means of financing them. 2. Public hearings are conducted to obtain taxpayer comments. 3. When adopted through passage of a resolution, the budget becomes the formal appropriation budget. 4. The legal level of budget control is at the fund level. Total fund expenditures may not legally exceed budgeted fund appropriations. Budget appropriations lapse at year-end. 5. The City Manager may make transfers of appropriations within funds, or departments within funds, but cannot adjust the total budget of a fund. 6. Adjustments to budgets at the fund level must be authorized by the City Council. 7. Monitoring of budgets is maintained at the expenditure category level (personnel services, supplies, other services and charges, or capital outlay) within each activity and fund. 69 City of New Hope, Minnesota Notes to the Financial Statements December 31, 2019 Note 2: Stewardship, Compliance and Accountability (Continued) 8. Legally adopted budgets are adopted for the following funds: a. General fund b. Special revenue funds i. Solid Waste Management ii. Economic Development Authority 9. Formal budgetary integration is employed as a management control device during the year for the General fund and special revenue funds. Budgets are not prepared for the Police Forfeitures, Ice Arena Endowment, or CEE Revolving Loan special revenue funds. B. Excess of expenditures Over Appropriations For the year ended December 31, 2019, expenditures exceeded appropriations in the following funds. The excess spending was funded by revenues received in excess of budget and available fund balance. Excess of Expenditures Final Over Budget Actual Appropriations Nonmajor Governmental Solid Waste Management 224,735$ 225,116$ 381$ Fund C. Deficit Fund Equity The following funds had fund balance or net position deficits at December 31, 2019: Amount Major Governmental HRA Bonds 2,244,096$ Nonmajor Governmental 2016 Street Improvement Project 10,588 2018A G.O. Improvement Bonds 220,636 Internal Service Insurance Reserve 401,097 Fund The City plans to fund these deficits with future tax increment receipts, transfers, tax levy receipts and special assessment collections. 70 City of New Hope, Minnesota Notes to the Financial Statements December 31, 2019 Note 3: Detailed Notes on All Funds A. Deposits and Investments Deposits Custodial credit risk for deposits and investments is the risk that in the event of a bank failure, the City’s deposits and investments may not be returned or the City will not be able to recover collateral securities in the possession of an outside party. In accordance with Minnesota statutes and as authorized by the City Council, the City maintains deposits at those depository banks, all of which are members of the Federal Reserve System. Minnesota statutes require that all City deposits be protected by insurance, surety bond or collateral. The fair value of collateral pledged must equal 110 percent of the deposits not covered by insurance or bonds, with the exception of irrevocable standby letters of credit issued by Federal Home Loan Banks as this type of collateral only requires collateral pledged equal to 100 percent of the deposits not covered by insurance or bonds. Authorized collateral in lieu of a corporate surety bond includes: • United States government Treasury bills, Treasury notes, Treasury bonds; • Issues of United States government agencies and instrumentalities as quoted by a recognized industry quotation service available to the government entity, • General obligation securities of any state or local government with taxing powers which is rated “A” or better by a national bond rating service, or revenue obligation securities of any state or local government with taxing powers which is rated “AA” or better by a national bond rating service; • General obligation securities of a local government with taxing powers may be pledged as collateral against funds deposited by that same local government entity; • Irrevocable standby letters of credit issued by Federal Home Loan Banks to a municipality accompanied by written evidence that the bank’s public debt is rated “AA” or better by Moody’s Investors Service, Inc., or Standard & Poor’s Corporation; and • Time deposits that are fully insured by any federal agency. Minnesota statutes require that all collateral shall be placed in safekeeping in a restricted account at a Federal Reserve Bank, or in an account at a trust department of a commercial bank or other financial institution that is not owned or controlled by the financial institution furnishing the collateral. The selection should be approved by the City. At year-end, the carrying amount of the City’s deposits was $12,090,661 and the bank balance was $12,154,758. At December 31, 2019, all deposits were fully covered by federal depository insurance, surety bonds, or by collateral held by the City’s agent in the City’s name. 71 City of New Hope, Minnesota Notes to the Financial Statements December 31, 2019 Note 3: Detailed Notes on All Funds (Continued) Investments The investments of the City are subject to the following risks: • Credit Risk. Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. Ratings are provided by various credit rating agencies and where applicable, indicate associated credit risk. Minnesota statutes limit the City’s investments to the list on page 64 of the notes. The City’s investment policy does not address this risk any further. • Custodial Credit Risk. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty to a transaction, a government will not be able to recover the value of investment or collateral securities that are in the possession of an outside party. The City’s investment policy does not address custodial credit risk, but the City typically limits its exposure by purchasing insured or registered investments. • Concentration of Credit Risk. Concentration of credit risk is the risk of loss attributed to the magnitude of a government’s investment in a single issuer, excluding U.S. guaranteed investments (such as treasuries), investment pools, and mutual funds. The City’s investment policy does not limit the concentration of investments. • Interest Rate Risk. This is the risk of potential variability in the fair value of fixed rate investments resulting from changes in interest rates (the longer period for which an interest rate is fixed, the greater the risk). The City’s investment policy does not limit the duration of investments. As of December 31, 2019, the City had the following investments that are insured or registered, or securities held by the City or its agent in the City’s name: Credit Segmented Quality/Time Ratings (1)Distribution (2)Amount Level 1 Level 2 Level 3 Pooled Investments at Net Asset Value Broker Money Market Funds AAA Less than 1 year 17,173,632$ Broker Money Market Funds N/A Less than 1 year 3,640,310 Total Money Market Funds 20,813,942 Non-pooled Investments at Fair Value Negotiable Certificates of Deposit N/A Less than 1 year 1,333,362 -$ 1,333,362$ -$ Negotiable Certificates of Deposit N/A 1 to 5 years 3,762,517 - 3,762,517 - U.S. Government Agency Securities AA+Less than 1 year 1,002,699 - 1,002,699 - U.S. Government Agency Securities AA+1 to 5 years 3,706,614 - 3,706,614 - U.S. Government Agency Securities N/A More than 5 years 1,677 - 1,677 - State and Local Government Securities A+Less than 1 year 500,910 - 500,910 - State and Local Government Securities AA+1 to 5 years 513,050 - 513,050 - U.S. Treasury Securities N/A More than 5 years 1,345,000 - - - Total Investments 32,979,771$ -$ 10,820,829$ -$ Types of Investments Fair Value Measurement (1) Ratings are provided by various credit rating agencies where applicable to indicate associated credit risk. (2) Interest rate risk is disclosed using the segmented time distribution method. N/A Indicated not applicable or available. 72 City of New Hope, Minnesota Notes to the Financial Statements December 31, 2019 Note 3: Detailed Notes on All Funds (Continued) The following table discloses the nature and risk of investments for which fair value has been estimated using the net asset value per share (NAV) of the investments as a practical expedient as of December 31, 2019, except as described in note 3 below for the Minnesota Municipal Money Market fund: Unfunded Redemption Redemption Fair Value Commitments Frequency Notice Period Broker Money Market Funds UBS Select Prime Institutional Fund (1)3,155,023$ -$ Daily None Required Invesco Government and Agency Fund (2)14,018,609 - Daily None Required Minnesota Municipal Money Market Fund (3)3,640,310 - Daily None Required 20,813,942$ -$ Description (1) This fund includes investments primarily in short-term, high-credit-quality money market instruments. hedge funds that invest domestically and globally in both long and short common stocks across all market capitalizations. The fund aims to preserve capital, maintain liquidity and produce a competitive yield. This is an external investment pool that operates in conformity with the Securities and Exchange Commission’s rules. There are no withdrawal restrictions related to the fund. (2) This fund seeks maximum current income consistent with liquidity and the preservation of capital. The Fund invests in a diversified portfolio of high-quality money market instruments of governmental and private issuers. (3) The Minnesota Municipal Money Market Fund is regulated by Minnesota statutes and the Board of Directors of the League of Minnesota Cities and is an external investment pool not registered with the Securities Exchange Commission (SEC) that follows the regulatory rules of the SEC. In accordance with GASB Statement No. 79, the City’s investment in this pool is valued at amortized cost, which approximates fair value. There are no restrictions or limitations on withdrawals from the 4M Liquid Asset Fund. Investments in the 4M Plus must be deposited for a minimum of 14 calendar days. Withdrawals prior to the 14-day restriction period will be subject to a penalty equal to seven days interest on the amount withdrawn. Seven days' notice of redemption is required for withdrawals of investments in the 4M Term Series withdrawn prior to the maturity date of that series. A penalty could be assessed as necessary to recoup the Series for any charges, losses, and other costs attributable to the early redemption. Financial statements of the 4M Fund can be obtained by contracting RBC Global Management at 100 South Fifth Street, Suite 2300, Minneapolis, MN 55402-1240. A reconciliation of cash and temporary investments as reported on the statement of net position follows: Carrying Amount of Deposits 12,090,661$ Investments 32,979,771 Petty Cash 2,595 Total 45,073,027$ Statement of Net Position Cash and temporary investments 43,714,626$ Cash held with fiscal agent 1,358,401 Total 45,073,027$ B. Receivables Loans Receivable The City has made several business subsidy loans to local businesses, some of which were funded with grant proceeds received from Hennepin County. The terms and periods of repayment vary with each loan. Loans receivable in the Economic Development Authority fund at December 31, 2019 totaled $587,500. Loans receivable in nonmajor governmental funds total $24,253. 73 City of New Hope, Minnesota Notes to the Financial Statements December 31, 2019 Note 3: Detailed Notes on All Funds (Continued) C. Capital Assets Capital asset activity for the year ended December 31, 2019 was as follows: Beginning Ending Balance Increases Decreases Balance Governmental Activities Capital Assets not being Depreciated Land 994,268$ -$ -$ 994,268$ Construction in progress 10,521,906 21,853,628 (315,991) 32,059,543 Total Capital Assets not being Depreciated 11,516,174 21,853,628 (315,991) 33,053,811 Capital Assets, being Depreciated Buildings and structures 9,367,855 - - 9,367,855 Vehicles and equipment 10,734,356 328,431 (222,956) 10,839,831 Improvements other than buildings 45,817,948 315,991 - 46,133,939 Total Capital Assets being Depreciated 65,920,159 644,422 (222,956) 66,341,625 Less Accumulated Depreciation for Buildings and structures (6,704,100) (265,567) - (6,969,667) Vehicles and equipment (8,130,692) (606,702) 222,956 (8,514,438) Improvements other than buildings (13,397,677) (2,220,417) - (15,618,094) Total Accumulated Depreciation (28,232,469) (3,092,686) 222,956 (31,102,199) Total Capital Assets being Depreciated, Net 37,687,690 (2,448,264) - 35,239,426 Governmental Activities Capital Assets, Net 49,203,864$ 19,405,364$ (315,991)$ 68,293,237$ 74 City of New Hope, Minnesota Notes to the Financial Statements December 31, 2019 Note 3: Detailed Notes on All Funds (Continued) Beginning Ending Balance Increases Decreases Balance Business-type Activities Capital Assets not being Depreciated Land 485,042$ -$ -$ 485,042$ Construction in progress 455,182 1,006,160 (662,391) 798,951 Total Capital Assets not being Depreciated 940,224 1,006,160 (662,391) 1,283,993 Capital Assets being Depreciated Buildings and structures 10,912,208 - - 10,912,208 Improvements other than buildings 27,202,824 662,391 - 27,865,215 Vehicles and equipment 2,615,637 19,570 - 2,635,207 Total Capital Assets being Depreciated 40,730,669 681,961 - 41,412,630 Less Accumulated Depreciation for Buildings and structures (4,550,649) (212,182) - (4,762,831) Improvements other than buildings (5,953,570) (686,770) - (6,640,340) Vehicles and equipment (2,115,328) (119,901) - (2,235,229) Total Accumulated Depreciation (12,619,547) (1,018,853) - (13,638,400) Total Capital Assets being Depreciated, Net 28,111,122 (336,892) - 27,774,230 Business-type Activities Capital Assets, Net 29,051,346$ 669,268$ (662,391)$ 29,058,223$ 75 City of New Hope, Minnesota Notes to the Financial Statements December 31, 2019 Note 3: Detailed Notes on All Funds (Continued) Depreciation expense was charged to functions/programs of the City as follows: Governmental Activities General government 85,668$ Public safety 63,825 Public works 1,946,364 Culture and recreation 319,067 Internal service 677,762 Total Depreciation Expense - Governmental Activities 3,092,686$ Business-type Activities Sewer utility 184,090$ Water utility 356,919 Golf course 36,502 Ice arena 197,347 Storm water 243,995 Total Depreciation Expense - Business-type Activities 1,018,853$ Construction Commitments The City has active construction projects as of December 31, 2019. At year-end, the City’s commitments with the contractors are as follows: Spent Remaining to Date Commitment 2011 Street Infrastructure 61,234$ 22,931$ North Water Tower Paint 435,650 28,350 Police Station & City Hall 16,279,229 1,688,052 Watermain replacement 219,210 20,470 Park projects 1,796,180 468,358 Master Pool 8,090,201 3,322,821 Winpark Drive infrastructure improvements 1,440,252 224,651 Total 28,321,956$ 5,775,633$ Project 76 City of New Hope, Minnesota Notes to the Financial Statements December 31, 2019 Note 3: Detailed Notes on All Funds (Continued) D. Interfund Receivables, Payables, and Transfers The composition of internal balances as of December 31, 2019 is as follows: Purpose Amount Due from/to other funds Governmental Governmental General fund Nonmajor governmental Cash deficit coverage 231,224$ Economic Development Authority HRA Construction Finance capital purchase 65,025 Nonmajor governmental Street Infrastructure Finance capital purchase 75,000 Governmental Business-type General fund Ice Arena Cash flow 104,291 Nonmajor governmental Sewer Utility Construction financing 125,000 Nonmajor governmental Water Utility Construction financing 110,725 Total Due From/To Other Funds 711,265$ Advances to/from other funds Governmental Governmental Economic Development Authority HRA Construction Finance capital purchase 1,801,849$ Economic Development Authority HRA Bonds Finance capital purchase 352,028 HRA Construction HRA Bonds Finance capital purchase 2,008,544 Nonmajor governmental Street Infrastructure Finance capital purchase 450,000 Governmental Business-type Nonmajor governmental Sewer Utility Construction financing 750,000 Nonmajor governmental Water Utility Construction financing 459,873 Total Advances To/From Other Funds 5,822,294 Interfund Activity Eliminated From Government-wide Statements (4,983,670) Internal Service Fund Activities Related to the Enterprise Funds 456,981 Total Internal Balances - Government-wide Statements 2,006,870$ Payable FundReceivable Fund The Economic Development Authority fund loaned the HRA Construction fund $2,433,162 in 2008 for the purchase of land at Bass Lake Road. The interfund loan matures in 2028 and carries an interest rate of four percent. As of December 31, 2019, the balance outstanding was $1,801,849. In 2014, the Temporary Financing fund loaned the Water Utility fund $1,100,000 to finance the emergency water supply system project. The loan will be paid back over a 10-year period with a 1.51 percent interest rate. As of December 31, 2019, the balance outstanding was $459,873. In 2016, the Temporary Financing fund loaned the Sewer Utility fund $1,250,000 to fund the 2016 capital improvement plan. The loan will be paid back over a 10-year period with a 2.00 percent interest rate. As of December 31, 2019, the balance outstanding was $750,000. In 2016, the Temporary Financing fund loaned the Street Infrastructure fund $750,000 to fund future capital purchases. The loan will be paid back over a 10-year period with a 2.00 percent interest rate. As of December 31, 2019, the balance outstanding was $450,000. In 2017, the General fund loaned the Ice Arena fund $433,656 for cash flow purposes, the balance on the loan is $104,291 and will be paid back in 2020. The Economic Development Authority fund and the HRA Construction fund loaned the HRA Bonds fund $352,028 and $2,008,544 respectively for the purchase of the Hy-Vee property. The interfund loan matures in 2042 and carries an interest rate of 4.00 percent. 77 City of New Hope, Minnesota Notes to the Financial Statements December 31, 2019 Note 3: Detailed Notes on All Funds (Continued) Interfund transfers at December 31, 2019 are as follows: Transfer In Ice HRA City Hall HRA Nonmajor Arena General Construction CIP Bonds Governmental Enterprise Total Transfer Out General -$ -$ 204,000$ -$ 150,000$ -$ 354,000$ Economic Development Authority 34,750 928,457 - - - - 963,207 HRA Construction - - - 36,934 - - 36,934 Street Infrastructure - - - - 204,967 - 204,967 HRA Bonds - 71,043 - - - - 71,043 Nonmajor Governmental 51,800 - - - - 300,000 351,800 Sewer Utility Enterprise 54,209 - - - - - 54,209 Water Utility Enterprise 56,526 - - - - - 56,526 Golf Course Enterprise 10,506 - - - - - 10,506 Ice Arena Enterprise 10,506 - - - - - 10,506 Storm Water Enterprise 23,629 - - - - - 23,629 Internal Service 90,349 - 235,000 - - - 325,349 Total Transfers 332,275$ 999,500$ 439,000$ 36,934$ 354,967$ 300,000$ 2,462,676$ Fund • The General fund transferred $150,000 to the Nonmajor Governmental funds to fund the Fire Capital Projects fund. The General fund also transferred $204,000 to the City Hall CIP Fund for project expenditures • Transfers were made out of the Economic Development Authority fund, Nonmajor Governmental Fire Capital Projects fund, Sewer Utility Enterprise fund, Water Utility Enterprise fund, Golf Course Enterprise fund, Ice Arena Enterprise fund, Storm Water enterprise fund, and Internal Service fund for $34,750, $51,800, $54,209, $56,526, $10,506, $10,506, $23,629, and $90,349, respectively, to the General fund to cover administrative charges paid for by the General fund. • The Economic Development Authority fund transferred $928,457 to the HRA Construction fund for tax increment interest charges and reimburse tax increment districts. • The HRA Construction fund transferred $36,934 to the HRA Bonds fund to reimburse expenditures. • The Street Infrastructure fund transferred $2,230 to the nonmajor governmental Xylon Avenue Improvements capital projects fund and $202,737 to the nonmajor governmental 2017 Street Improvement Project Capital Projects fund to reimburse project costs. • The HRA Bonds fund transferred $71,043 to the HRA Construction fund to reimburse the funds for tax increment project costs. • The Nonmajor Governmental Park Infrastructure fund transferred $300,000 to the Ice Arena Enterprise fund to reimburse costs. • The Internal Service Fund transferred $235,000 to the City Hall CIP fund to purchase equipment for the new City Hall facility. 78 City of New Hope, Minnesota Notes to the Financial Statements December 31, 2019 Note 3: Detailed Notes on All Funds (Continued) E. Long-term D ebt General Obligation (G.O.) Bonds The City issues G.O. bonds to provide funds for the acquisition and construction of major capital facilities. G.O. bonds have been issued for both governmental and business-type activities. These bonds are reported in the proprietary funds if they are expected to be repaid from proprietary fund revenues. The following G.O. bonds will be repaid from future tax levies. Authorized Issue Maturity Balance at and Issued Date Date Year End 2010B G.O. Certificates of Indebtedness 1,245,000$ 2.00 - 2.60 %11/23/10 02/01/20 150,000$ G.O. Street Reconstruction Bonds, Series 2015B 3,825,000 2.25 - 3.00 12/30/15 02/01/31 3,195,000 G.O. Street Reconstruction Bonds, Series 2016A 4,855,000 2.25 - 3.00 12/29/16 02/01/33 4,595,000 G.O. Capital Improvement Bonds, Series 2017A 18,435,000 3.00 - 5.00 12/28/17 02/01/34 18,435,000 G.O. Tax Abatement Bonds, Series 2018A 9,520,000 3.25 - 5.00 12/20/18 02/01/35 9,520,000 G.O. Tax Abatement Bonds, Series 2019A 5,235,000 3.00 - 4.00 07/18/19 02/01/35 5,235,000 Total General Obligation Bonds 41,130,000$ Interest RateDescription The annual debt service to maturity for G.O. bonds are as follows: Year Ending December 31,Principal Interest Total Principal Interest Total 2020 1,334,113$ 1,374,187$ 2,708,300$ 215,887$ 95,163$ 311,050$ 2021 1,964,734 1,303,423 3,268,157 220,266 88,620 308,886 2022 2,038,688 1,221,372 3,260,060 231,312 81,847 313,159 2023 2,132,218 1,125,983 3,258,201 237,782 74,810 312,592 2024 2,233,459 1,028,748 3,262,207 246,541 67,546 314,087 2025 - 2029 12,596,118 3,694,897 16,291,015 1,323,882 231,978 1,555,860 2030 - 2034 14,211,742 1,333,541 15,545,283 908,258 47,050 955,308 2035 1,235,000 19,525 1,254,525 - - - Total 37,746,072$ 11,101,676$ 48,847,748$ 3,383,928$ 687,014$ 4,070,942$ Governmental Activities Business-type Activities 79 City of New Hope, Minnesota Notes to the Financial Statements December 31, 2019 Note 3: Detailed Notes on All Funds (Continued) G.O. Tax Increment Bonds The following bonds were issued for development purposes. The additional tax increment resulting from the increased tax capacity of the redeveloped properties has been pledged to retire the related debt. Tax increment revenues are projected to produce over 55 percent of the debt service requirements over the life of the bonds. For the current year, principal and interest paid and total related tax increment revenues were $709,096 and $686,448, respectively. Authorized Issue Maturity Balance at and Issued Date Date Year End G.O. Tax Increment Refunding Bonds, Series, 2012A 2,695,000$ 2.00 - 2.45 %01/11/12 02/01/25 1,555,000$ G.O. Taxable Tax Increment Refunding Bonds, Series, 2012B 1,330,000 1.35 - 4.65 01/11/12 02/01/31 1,065,000 G.O. Tax Increment Bonds, Series, 2015A 5,960,000 2.00 - 3.00 06/17/15 02/01/32 5,270,000 Total G.O. Tax Increment Bonds 7,890,000$ Rate Interest Description The annual debt service to maturity for G.O. tax increment bonds are as follows: Year Ending December 31,Principal Interest Total Principal Interest Total 2020 571,777$ 164,470$ 736,247$ 93,223$ 33,132$ 126,355$ 2021 584,151 152,436 736,587 95,849 31,242 127,091 2022 602,838 139,866 742,704 97,162 29,311 126,473 2023 621,525 126,415 747,940 98,475 27,355 125,830 2024 638,899 111,906 750,805 101,101 25,359 126,460 2025 - 2029 2,281,670 355,041 2,636,711 538,330 90,271 628,601 2030 - 2032 1,205,238 54,965 1,260,203 359,762 16,387 376,149 Total 6,506,098$ 1,105,099$ 7,611,197$ 1,383,902$ 253,057$ 1,636,959$ Governmental Activities Business-type Activities 80 City of New Hope, Minnesota Notes to the Financial Statements December 31, 2019 Note 3: Detailed Notes on All Funds (Continued) Lease Revenue Bonds The following bonds were issued to finance the Energy Conservation project and will be repaid primarily with energy savings and revenues pledged from the Ice Arena fund. Annual principal and interest payments on the bonds are expected to require less than 8 percent of revenues from the Ice Arena fund. Principal and interest paid for the current year and total customer revenues for the Ice Arena fund were $58,182 and $852,765, respectively. Authorized Issue Maturity Balance at and Issued Date Date Year End 2011A Taxable Lease Revenue Bonds 3,505,000$ 5.00 %12/01/11 12/01/28 3,505,000$ Interest RateDescription The annual debt service to maturity for all lease revenue bonds are as follows: Year Ending December 31,Principal Interest Total 2020 -$ 57,482$ 57,482$ 2021 - 57,482 57,482 2022 - 57,482 57,482 2023 - 57,482 57,482 2024 - 57,482 57,482 2025 - 2028 3,505,000 229,928 3,734,928 Total 3,505,000$ 517,338$ 4,022,338$ Business-type Activities 81 City of New Hope, Minnesota Notes to the Financial Statements December 31, 2019 Note 3: Detailed Notes on All Funds (Continued) G.O. Revenue Bonds and Notes The following bonds and notes were issued to finance capital improvements in the enterprise funds. They will be repaid from future revenues pledged from the Sewer Utility, Water Utility, and Storm Water funds and are backed by the taxing power of the City. Annual principal and interest payments on the bonds are expected to require less than 3, 6, and 12 percent of revenues from the Sewer Utility, Water Utility, and Storm Water funds, respectively. Principal and interest paid for the current year and total customer revenues for the Sewer Utility fund were $98,335 and $3,380,075, respectively. Principal and interest paid for the current year and total customer revenues for the Water Utility fund were $412,200 and $4,387,321, respectively. Principal and interest paid for the current year and total customer revenues for the Storm Water fund were $198,282 and $1,190,058, respectively. Authorized Issue Maturity Balance at and Issued Date Date Year End 2010A G.O. Utility Revenue Bonds 1,200,000$ 2.00 - 3.25 %05/06/10 02/01/21 170,000$ 2010B G.O. Water Revenue Refunding Bonds 605,000 2.00 - 3.00 11/23/10 02/01/22 180,000 2011 G.O. Public Facilities Authority Note 411,738 1.70 02/23/11 08/20/29 233,000 2013 G.O. Public Facilities Authority Note 1,035,000 1.00 07/24/13 08/20/32 742,000 Total G.O. Revenue Bonds and Notes 1,325,000$ Rate Interest Description The annual debt service to maturity for G.O. revenue bonds are as follows: Year Ending December 31,Principal Interest Total 2020 216,000$ 19,997$ 235,997$ 2021 221,000 14,705 235,705 2022 142,000 10,534 152,534 2023 78,000 8,634 86,634 2024 79,000 7,692 86,692 2025 - 2029 409,000 23,977 432,977 2030 - 2032 180,000 3,619 183,619 Total 1,325,000$ 89,158$ 1,414,158$ Business-type Activities 82 City of New Hope, Minnesota Notes to the Financial Statements December 31, 2019 Note 3: Detailed Notes on All Funds (Continued) Changes in Long-term Liabilities Long-term liability activity for the year ended December 31, 2019, was as follows: Beginning Ending Due Within Balance Increases Decreases Balance One Year Governmental Activities Bonds Payable G.O. bonds and certificates 32,926,656$ 5,235,000$ (415,584)$ 37,746,072$ 1,334,113$ G.O. tax increment bonds 7,059,188 - (553,090) 6,506,098 571,777 Add: premiums on bonds 2,478,418 454,261 (169,452) 2,763,227 - Total Bonds Payable, Net 42,464,262 5,689,261 (1,138,126) 47,015,397 1,905,890 Compensated Absences Payable 714,385 1,270,439 (1,230,943) 753,881 75,388 Governmental Activity Long-term Liabilities 43,178,647$ 6,959,700$ (2,369,069)$ 47,769,278$ 1,981,278$ Business-type Activities Bonds Payable G.O. bonds 3,593,344$ -$ (209,416)$ 3,383,928$ 215,887$ G.O. tax increment bonds 1,475,812 - (91,910) 1,383,902 93,223 Lease revenue bonds 3,505,000 - - 3,505,000 - G.O. revenue bonds and notes 1,539,000 - (214,000) 1,325,000 216,000 Add: premiums on bonds 155,835 - (9,992) 145,843 - Less: bond discount (1,543) - 740 (803) - Business-type Activity Long-term Liabilities 10,267,448$ -$ (524,578)$ 9,742,870$ 525,110$ Internal service funds predominantly serve the governmental funds. Accordingly, long-term liabilities for internal service funds are included as part of the above totals for governmental activities. 83 City of New Hope, Minnesota Notes to the Financial Statements December 31, 2019 Note 3: Detailed Notes on All Funds (Continued) F. Components of Fund Balance At December 31, 2019, portions of the City’s fund balance are not available for appropriation due to not being in spendable form (Nonspendable), legal restrictions (Restricted), City Council action (Committed), policy and/or intent (Assigned). The following is a summary of the components of fund balance: Economic Development HRA City Hall General Authority Construction CIP Nonspendable Prepaid items 22,980$ -$ -$ -$ Restricted for Economic development -$ -$ 4,655,140$ -$ Capital improvements - - - 898,182 Total Restricted -$ -$ 4,655,140$ 898,182$ Committed to Economic development -$ 4,721,758$ -$ -$ Assigned to City hall improvements -$ -$ -$ 896,112$ Purpose 84 City of New Hope, Minnesota Notes to the Financial Statements December 31, 2019 Note 3: Detailed Notes on All Funds (Continued) Park/Pool Other Street Improvement Governmental Infrastructure Project Funds Total Nonspendable Prepaid items -$ -$ -$ 22,980$ Restricted for Economic development -$ -$ -$ 4,655,140$ Debt service - - 2,296,665 2,296,665 Capital improvements - 5,316,815 - 6,214,997 Public safety Police expenditures - - 132,730 132,730 Ice arena - - 5,390 5,390 Total Restricted -$ 5,316,815$ 2,434,785$ 13,304,922$ Committed to Solid waste operations -$ -$ 215,384$ 215,384$ Economic development - - 96,413 4,818,171 Total Committed -$ -$ 311,797$ 5,033,555$ Assigned to Street improvements 15,854$ -$ -$ 15,854$ General improvements - - 3,177,766 3,177,766 Capital equipment - - 790,218 790,218 City hall improvements - - - 896,112 Park improvements - - 1,368,178 1,368,178 Total Assigned 15,854$ -$ 5,336,162$ 6,248,128$ Purpose 85 City of New Hope, Minnesota Notes to the Financial Statements December 31, 2019 Note 4: Defined Benefit Pension Plans - Statewide A. Defined Benefit Pension Plan - Public Employees Retirement Association (PERA) - Statewide 1. Plan Description The City participates in the following cost-sharing multiple-employer defined benefit pension plans administered by the Public Employees Retirement Association of Minnesota (PERA). PERA’s defined benefit pension plans are established and administered in accordance with Minnesota statutes, chapters 353 and 356. PERA’s defined benefit pension plans are tax qualified plans under Section 401(a) of the Internal Revenue Code. General Employees Retirement Plan (GERP) All full-time and certain part-time employees of the City, are covered by the General Employees Retirement Plan (GERP). GERP members belong to the Coordinated Plan. Coordinated Plan members are covered by Social Security. Public Employees Police and Fire Plan (PEPFP) The PEPFP, originally established for police officers and firefighters not covered by a local relief association, now covers all police officers and firefighters hired since 1980. Effective July 1, 1999, the PEPFP also covers police officers and firefighters belonging to a local relief association that elected to merge with and transfer assets and administration to PERA. 2. Benefits Provided PERA provides retirement, disability and death benefits. Benefit provisions are established by state statute and can only be modified by the state legislature. Vested, terminated employees who are entitled to benefits but are not receiving them yet are bound by the provisions in effect at the time they last terminated their public service. GERP Benefits GERP benefits are based on a member’s highest average salary for any five successive years of allowable service, age, and years of credit at termination of service. Two methods are used to compute benefits for PERA's Coordinated Plan members. Members hired prior to July 1, 1989 receive the higher of Method 1 or Method 2 formulas. Only Method 2 is used for members hired after June 30, 1989. Under Method 1, the accrual rate for Coordinated members is 1.2 percent of average salary for each of the first 10 years of service and 1.7 percent of average salary for each additional year. Under Method 2, the accrual rate for Coordinated members is 1.7 percent for average salary for all years of service. For members hired prior to July 1, 1989 a full annuity is available when age plus years of service equal 90 and normal retirement age is 65. For members hired on or after July 1, 1989 normal retirement age is the age for unreduced Social Security benefits capped at 66. Annuities, disability benefits and survivor benefits are increased effective every January 1. Beginning January 1, 2019, the postretirement increase will be equal to 50 percent of the cost-of-living adjustment (COLA) announced by the SSA, with a minimum increase of at least 1 percent and a maximum of 1.5 percent. Recipients that have been receiving the annuity or benefit for at least a full year as of the June 30 before the effective date of the increase will receive the full increase. For recipients receiving the annuity or benefit for at least one month but less than a full year as of the June 30 before the effective date of the increase will receive a reduced prorated increase. For members retiring on January 1, 2024, or later, the increase will be delayed until normal retirement age (age 65 if hired prior to July 1, 1989, or age 66 for individuals hired on or after July 1, 1989). Members retiring under Rule of 90 are exempt from the delay to normal retirement. 86 City of New Hope, Minnesota Notes to the Financial Statements December 31, 2019 Note 4: Defined Benefit Pension Plans - Statewide (Continued) PEPFP Benefits Benefits for the PEPFP members first hired after June 30, 2010, but before July 1, 2014, vest on a prorated basis from 50 percent after five years up to 100 percent after ten years of credited service. Benefits for PEPFP members first hired after June 30, 2014 vest on a prorated basis from 50 percent after ten years up to 100 percent after twenty years of credited service. The annuity accrual rate is 3.0 percent of average salary for each year of service. A full, unreduced pension is earned when members are age 55 and vested, or for members who were first hired prior to July 1, 1989, when age plus years of service equal at least 90. Annuities, disability benefits and survivor benefits are increased effective every January 1. Beginning January 1, 2019, the postretirement increase will be fixed at 1 percent. Recipients that have been receiving the annuity or benefit for at least 36 months as of the June 30 before the effective date of the increase will receive the full increase. For recipients receiving the annuity or benefit for at least 25 one months but less than 36 months as of the June 30 before the effective date of the increase will receive a reduced prorated increase. 3. Contributions Minnesota statutes, chapter 353 sets the rates for employer and employee contributions. Contribution rates can only be modified by the state Legislature. General Employees Fund Contributions Coordinated Plan members were required to contribute 6.50 percent of their annual covered salary and the City was required to contribute 7.50 percent for Coordinated Plan members. The City’s contributions to the General Employees Fund for the years ending December 31, 2019, 2018 and 2017 were $328,429, $310,638 and $286,170, respectively. The City’s contributions were equal to the required contributions for each year as set by state statute. Police and Fire Fund Contributions Police and Fire member’s contribution rates increased from 10.80 percent of pay to 11.30 percent and employer rates increased from 16.20 percent to 16.95 percent on January 1, 2019. The City’s contributions to the Police and Fire Fund for the years ending December 31, 2019, 2018 and 2017 were $550,665, $502,203, and $489,202, respectively. The City’s contributions were equal to the required contributions for each year as set by state statute. 4. Pension Costs General Employees Fund Pension Costs At December 31, 2019, the City reported a liability of $3,367,025 for its proportionate share of the General Employees Fund’s net pension liability. The City’s net pension liability reflected a reduction due to the State of Minnesota’s contribution of $16 million to the fund in 2019. The State of Minnesota is considered a non-employer contributing entity and the State’s contribution meets the definition of a special funding situation. The State of Minnesota’s proportionate share of the net pension liability associated with the City totaled $104,662. The net pension liability was measured as of June 30, 2019, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The City’s proportionate share of the net pension liability was based on the City’s contributions received by PERA during the measurement period for employer payroll paid dates from July 1, 2018 through June 30, 2019 relative to the total employer contributions received from all of PERA’s participating employers. At June 30, 2019, the City’s proportionate share was 0.0609 percent which was an increase of 0.001 percent from its proportion measured as of June 30, 2018. City's Proportionate Share of the Net Pension Liability 3,367,025$ State of Minnesota's Proportionate Share of the Net Pension Liability Associated with the City 104,662 Total 3,471,687$ 87 City of New Hope, Minnesota Notes to the Financial Statements December 31, 2019 Note 4: Defined Benefit Pension Plans - Statewide (Continued) For the year ended December 31, 2019, the City recognized pension expense of $411,243 for its proportionate share of GERF’s pension expense. In addition, the City recognized an additional $7,838 as pension expense (and grant revenue) for its proportionate share of the State of Minnesota’s contribution of $16 million to the GERF. At December 31, 2019, the City reported its proportionate share of the General Employees Plan’s deferred outflows of resources and deferred inflows of resources, and its contributions subsequent to the measurement date, from the following sources: Deferred Deferred Outflows Inflows of Resources of Resources Differences between Expected and Actual Economic Experience 93,546$ 13,645$ Changes in Actuarial Assumptions 7,419 265,361 Net Difference between Projected and Actual Earnings on Plan Investments - 323,097 Changes in Proportion 82,094 30,488 Contributions to GERF Subsequent to the Measurement Date 162,811 - Total 345,870$ 632,591$ Deferred outflows of resources totaling $162,811 related to pensions resulting from the City’s contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31, 2020. Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows: 2020 (174,619)$ 2021 (231,017) 2022 (49,322) 2023 5,426 Police and Fire Fund Pension Costs At December 31, 2019, the City reported a liability of $3,206,578 for its proportionate share of the Police and Fire Fund’s net pension liability. The net pension liability was measured as of June 30, 2019, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The City’s proportionate share of the net pension liability was based on the City’s contributions received by PERA during the measurement period for employer payroll paid dates from July 1, 2018 through June 30, 2019 relative to the total employer contributions received from all of PERA’s participating employers. At June 30, 2019, the City’s proportionate share was 0.3012 percent which was an increase of 0.0124 percent from its proportion measured as of June 30, 2018. For the year ended December 31, 2019, the City recognized pension expense of $902,876 for its proportionate share of the Police and Fire Plan’s pension expense. The City also recognized $40,662 for the year ended December 31, 2019, as revenue and an offsetting reduction of net pension liability for its proportionate share of the State of Minnesota’s on-behalf contributions to the Police and Fire Fund. Legislation passed in 2013 required the State of Minnesota to begin contributing $9 million to the Police and Fire Fund each year until the plan is 90 percent funded or until the State Patrol Plan (administered by the Minnesota State Retirement System) is 90 percent funded, whichever occurs later. In addition, the state will pay $4.5 million on October 1, 2018 and October 1, 2019 in direct state aid. Thereafter, by October 1 of each year, the state will pay $9 million until full funding is reached or July 1, 2048, whichever is earlier. 88 City of New Hope, Minnesota Notes to the Financial Statements December 31, 2019 Note 4: Defined Benefit Pension Plans - Statewide (Continued) At December 31, 2019, the City reported its proportionate share of Police and Fire Plan’s deferred outflows of resources and deferred inflows of resources, and its contributions subsequent to the measurement date, from the following sources: Deferred Deferred Outflows Inflows of Resources of Resources Differences between Expected and Actual Economic Experience 149,177$ 554,606$ Changes in Actuarial Assumptions 2,880,443 3,723,299 Net Difference between Projected nd Actual Earnings on Plan Investments - 617,797 Changes in Proportion 842,959 105,365 Contributions to PEPFF Subsequent to the Measurement Date 277,431 - Total 4,150,010$ 5,001,067$ The $277,431 reported as deferred outflows of resources related to pensions resulting from the City’s contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31, 2020. Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows: 2020 147,643$ 2021 (145,113) 2022 (1,200,829) 2023 37,446 2024 32,365 5. Actuarial Assumptions The total pension liability in the June 30, 2019 actuarial valuation was determined using an individual entry-age normal actuarial cost method and the following actuarial assumptions: Inflation 2.50% per year Active Member Payroll Growth 3.25% per year Investment Rate of Return 7.50% Salary increases were based on a service-related table. Mortality rates for active members, retirees, survivors and disabilitants were based on RP-2014 tables for males or females, as appropriate, with slight adjustments to fit PERA’s experience. Cost of living benefit increases after retirement for retirees are assumed to be 1.25 percent per year for General Employees Plan and 1.0 percent per year for Police and Fire Plan. Actuarial assumptions used in the June 30, 2019 valuation were based on the results of actuarial experience studies. The most recent four-year experience study in the General Employees Plan was completed in 2019. The most recent four-year experience study for the Police and Fire Plan was completed in 2016. Economic assumptions were updated in 2018 based on a review of inflation and investment return assumptions. 89 City of New Hope, Minnesota Notes to the Financial Statements December 31, 2019 Note 4: Defined Benefit Pension Plans - Statewide (Continued) The following changes in actuarial assumptions and plan provisions occurred in 2019: General Employees Fund Changes in Actuarial Assumptions • The mortality projection scale was changed from MP-2017 to MP-2018. Changes in Plan Provisions • The employer supplemental contribution was changed prospectively, decreasing from $31.0 million to $21.0 million per year. The State’s special funding contribution was changed prospectively, requiring $16.0 million due per year through 2031. Police and Fire Fund Changes in Actuarial Assumptions • The mortality projection scale was changed from MP-2017 to MP-2018. Changes in Plan Provisions • There have been no changes since the prior valuation. The State Board of Investment, which manages the investments of PERA, prepares an analysis of the reasonableness on a regular basis of the long-term expected rate of return on a regular basis using a building-block method in which best-estimate ranges of expected future rates of return are developed for each major asset class. These ranges are combined to produce an expected long-term rate of return by weighting the expected future rates of return by the target asset allocation percentages. The target allocation and best estimates of geometric real rates of return for each major asset class are summarized in the following table: Asset Class Domestic Equity 35.5 %5.10 % Private Markets 25.0 5.90 Fixed Income 20.0 0.75 International Equity 17.5 5.90 Cash Equivalents 2.0 - Total 100.00 % Target Expected Real Allocation Rate of Return Long-term 6. Discount Rate The discount rate used to measure the total pension liability in 2019 was 7.50 percent. The projection of cash flows used to determine the discount rate assumed that contributions from plan members and employers will be made at rates set in Minnesota Statutes. Based on these assumptions, the fiduciary net position of the General Employees Fund and Police and Fire Fund were projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. 90 City of New Hope, Minnesota Notes to the Financial Statements December 31, 2019 Note 4: Defined Benefit Pension Plans - Statewide (Continued) 7. Pension Liability Sensitivity The following presents the City’s proportionate share of the net pension liability for all plans it participates in, calculated using the discount rate disclosed in the preceding paragraph, as well as what the City’s proportionate share of the net pension liability would be if it were calculated using a discount rate 1 percentage point lower or 1 percentage point higher than the current discount rate: 1 Percent 1 Percent Decrease (6.50%)Current (7.50%)Increase (8.50%) General Employees Fund 5,535,207$ 3,367,025$ 1,576,759$ Police and Fire Fund 7,008,984 3,206,578 62,050 City Proportionate Share of NPL 8. Pension Plan Fiduciary Net Position Detailed information about each pension plan’s fiduciary net position is available in a separately-issued PERA financial report that includes financial statements and required supplementary information. That report may be obtained on the Internet at www.mnpera.org. B. Defined Contribution Plan There are five City Council members of the City are covered by the Defined Contribution Plan (DCP), a multiple-employer deferred compensation plan administered by PERA. The DCP is a tax qualified plan under Section 401(a) of the Internal Revenue Code and all contributions by or on behalf of employees are tax deferred until time of withdrawal. Plan benefits depend solely on amounts contributed to the plan plus investment earnings, less administrative expenses, therefore, there is no future liability to the employer. Minnesota statutes, chapter 353d.03, specifies plan provisions, including the employee and employer contribution rates for those qualified personnel who elect to participate. An eligible elected official who decides to participate contributes 5 percent of salary which is matched by the elected official's employer. For ambulance service personnel, employer contributions are determined by the employer, and for salaried employees contributions must be a fixed percentage of salary. Employer contributions for volunteer personnel may be a unit value for each call or period of alert duty. Employees who are paid for their services may elect to make member contributions in an amount not to exceed the employer share. Employer and employee contributions are combined and used to purchase shares in one or more of the seven accounts of the Minnesota Supplemental Investment Fund. For administering the plan, PERA receives 2 percent of employer contributions and twenty-five hundredths of 1 percent (0.25) of the assets in each member's account annually. Pension expense for the year is equal to contributions made. The City’s contributions to the DCP for the years ended December 31, 2019, 2018 and 2017 were $2,606, $2,525, and $2,497, respectively. The City’s contributions were equal to the contractually required contributions for each year as set by Minnesota statute. Employee Employer Employee Employer Required Rate 2,606$ 2,606$ 5.00%5.00%5.00% Contribution Amount Percentage of Covered Payroll 91 City of New Hope, Minnesota Notes to the Financial Statements December 31, 2019 Note 5: Postemployment Benefits other than Pensions A. Plan Description The City administers a single-employer defined benefit healthcare plan (“the Retiree Health Plan”). The plan provides healthcare insurance for eligible retirees and their eligible dependents through the City’s group health insurance plan, which covers both active and retired members. Benefit provisions are discussed and proposed by an insurance committee made up of employees from all employee groups (both represented and non-union), with the final approval of the plan being given by the City Manager. The benefit levels, employee contributions, and employer contributions are governed by the City and can be amended by the City. The Retiree Health Plan does not issue a publicly available financial report. At December 31, 2019, the following employees were covered by the benefit terms: Inactive Plan Members or Beneficiaries Currently Receiving Benefit Payments 3 Active Plan Members 91 Total Plan Members 94 B. Funding Policy All retirees of the City have the option under state law to continue their medical insurance coverage through the City from the time of retirement until the employee reaches the age of eligibility for Medicare. For members of all employee groups, the retiree must pay the full premium to continue coverage for medical insurance. The City is legally required to include any retirees for whom it provides health insurance coverage in the same insurance pool as its active employees. Consequently, participating retirees are considered to receive a secondary benefit know as an “implicit rate subsidy.” This benefit relates to the assumption that the retiree is receiving a more favorable premium rate than they would otherwise be able to obtain if purchasing insurance on their own, due to being included in the same pool with the City’s younger and statistically healthier active employees. Contribution requirements are set by the City annually on a pay-as-you-go basis. The City contributes none of the cost of current year premiums for eligible retired plan members and their dependents except for the implicit rate subsidy described above. For fiscal year 2019, the City’s average contribution rate was 0.2 percent of covered payroll. For the year 2019, the City contributed $16,942 to the Plan. C. Actuarial Methods and Assumptions The City’s total OPEB liability of $1,126,706 was measured as of December 31, 2019, and the total OPEB liability used to calculate the total OPEB liability was determined by an actuarial valuation as of January 1, 2019 using the entry age normal method. Roll forward procedures were used to roll forward the total OPEB liability to the measurement date. The total OPEB liability in the January 1, 2019 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified: Discount Rate 2.74% Expected Long-Term Investment Return 2.74% 20-Year Municipal Bond Yield 2.74% Inflation Rate 2.75% Salary Increases 3.50% Medical Premium Trend Rate 8.0% in 2019 grading to 5.0% The discount rate used to measure the total OPEB liability was 2.74%. Assets were projected using expected benefit payments and expected asset returns. Expected benefit payments by year were discounted using the expected asset return assumption for years in which the assets were sufficient to pay all benefit payments. Any remaining benefit payments after the trust fund is exhausted are discounted at the 20-year municipal bond rate. The equivalent single rate is the discount rate. Mortality rates were based on the RP-2014 with MP 2018 generational improvements. 92 City of New Hope, Minnesota Notes to the Financial Statements December 31, 2019 Note 5: Postemployment Benefits other than Pensions (Continued) The actuarial assumptions used in the January 1, 2019 valuation were based on input from a variety of published sources of historical and projected future financial data. Each assumption was reviewed for reasonableness with the source information as well as for consistency with the other economic assumptions. D. Changes in the Total OPEB Liability Total OPEB Liability (a) Balances at December 31, 2018 875,871$ Changes for the Year: Service cost 72,745 Interest 38,452 Differences between expected and actual experience 81,871 Changes in assumptions or other inputs 74,709 Benefit payments (16,942) Net Changes 250,835 Balances at December 31, 2019 1,126,706$ Since the prior measurement date, the following assumptions changed: • The discount rate was changed from 4.09 percent to 2.74 percent. Since the prior measurement date, there have been no changes in benefit terms. E. Sensitivity of the Total OPEB Liability The following presents the total OPEB liability of the City, as well as what the City’s total OPEB liability would be if it were calculated using a discount rate that is 1-percentage point lower (1.74 percent) or 1-percentage-point higher (3.74 percent) than the current discount rate: 1 Percent 1 Percent Decrease (1.74%) Current (2.74%)Increase (3.74%) 1,231,651$ 1,126,706$ 1,030,715$ The following presents the total OPEB liability of the City, as well as what the City’s total OPEB liability would be if it were calculated using a Healthcare Cost Trent Rates that is 1-percentage point lower (7.00 percent decreasing to 4.00 percent) or 1- percentage-point higher (9.00 percent increasing to 6.00 percent) than the current healthcare trend rate: 1 Percent Decrease Healthcare Cost 1 Percent Increase (7.0% Decreasing Trend Rates (9.0% Decreasing to 4.0%)(8.0% Decreasing to 5.0%)to 6.0%) 989,191$ 1,126,706$ 1,289,047$ 93 City of New Hope, Minnesota Notes to the Financial Statements December 31, 2019 Note 5: Postemployment Benefits other than Pensions (Continued) F. OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB For the year ended December 31, 2019, the City recognized OPEB expense of $119,178. At December 31, 2019, the City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources: Deferred Deferred Outflows Inflows of Resources of Resources Net Difference between Projected and Actual Earnings on Plan Investments 75,160$ -$ Changes in Proportion 68,586 43,687 Total 143,746$ 43,687$ The amounts reported as deferred outflows and inflows of resources related to OPEB will be recognized in OPEB will be recognized in OPEB expense as follows: Year Ended December 31: 2020 7,981$ 2021 7,981 2022 7,981 2023 7,981 2024 7,981 Thereafter 60,154 Note 6: Other Information A. Contingencies Tax Increment Districts The City’s tax increment districts are subject to review by the State of Minnesota Office of the State Auditor (OSA). Any disallowed claims or misuse of tax increment could become a liability of an applicable fund. Management has indicated that they are not aware of any instances of noncompliance which would have a material effect on the financial statements. Contingent Liabilities Amounts received or receivable from grant agencies are subject to audit and adjustment by grantor agencies, principally the federal government. Any disallowed claims, including amounts already collected, may constitute a liability of the applicable funds. The amount, if any, of expenditures that may be disallowed by the grantor cannot be determined at this time, although the City expects such amounts, if any, to be immaterial. The City is a defendant in various lawsuits. Although the outcome of these lawsuits is not presently determinable, in the opinion of the City’s counsel the resolution of these matters will not have a material adverse effect on the financial condition of the City. 94 City of New Hope, Minnesota Notes to the Financial Statements December 31, 2019 Note 6: Other Information (Continued) B. Risk M anagement The City is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; injuries to employees; and natural disasters for which the City carries insurance. The City obtains insurance through participation in the League of Minnesota Cities Insurance Trust (LMCIT), which is a risk sharing pool with approximately 800 other governmental units. The City pays an annual premium to LMCIT for its workers compensation and property and casualty insurance. The LMCIT is self- sustaining through member premiums and will reinsure for claims above a prescribed dollar amount for each insurance event. There were no significant reductions in insurance from the previous year or settlements in excess of insurance coverage for any of the past three fiscal years. Liabilities are reported when it is probably that a loss has occurred and the amount of the loss can be reasonably estimated. Liabilities, if any, include an amount for claims that have been incurred but not reported (IBNRs). The City’s management is not aware of any incurred but not reported claims. C. Conduit Debt Obligations At times, the City has issued industrial revenue bonds to provide financial assistance to private sector entities for the acquisition and construction of industrial and commercial facilities deemed to be in the public interest. The bonds are secured by the property financed and are payable solely from payments received on the underlying mortgage loans. Upon repayment of the bonds, ownership of the acquired facilities transfers to the private sector entity served by the bond issuance. The City is not obligated in any manner for repayment of the bonds. Accordingly, the bonds are not reported as liabilities in the accompanying financial statements. As of December 31, 2019, there were five series of industrial revenue bonds outstanding. The original issue amounts totaled $12,910,000 and have been reduced through annual payments and partial call prepayments. The outstanding balance as of December 31, 2019 is undetermined. D. Joint Ventures and Governed Organizations Joint Ventures Joint Water Commission The City is a party to a joint powers agreement through which the Golden Valley, Crystal, and New Hope Joint Water Commission (JWC) is formed. The agreement provides for the operation and ownership of a water supply, distribution, and support system in and for the cities of Golden Valley, Crystal, and New Hope. Each member city is entitled to appoint one member to the JWC board. The City purchases water used by its residents from the JWC and shares in the JWC’s operation, maintenance, repair, and replacement costs based on its water usage. As provided for in the joint powers agreement, in the event of termination, all real and personal property and cash held by the JWC would be divided among the members by unanimous consent. Such division would be based on refunded monetary contributions made to the JWC by the member cities. Over the years, the costs of construction have been allocated among the member cities, generally on the basis of water purchased. These costs were expensed as incurred by the City in the cost of water purchased. The asset recorded in the Water fund as an investment in the JWC for $168,509 represents the original contributions for working capital; however, the City’s share of subsequent construction costs are not determinable. Therefore, the City's Water enterprise fund has not recorded any subsequent amounts as an equity investment or contributed capital related to the JWC. The following financial information is taken from the JWC’s audited financial statements for the year ended December 31, 2019: Total Assets 18,170,639$ Total Liabilities 567,652 Total Net Position 17,602,987 Total Revenue 8,191,350 Total Expenses 7,328,133 95 City of New Hope, Minnesota Notes to the Financial Statements December 31, 2019 Note 6: Other Information (Continued) Of the total revenues, $7,921,496 represented assessments paid by member cities. The City’s share of JWC’s total member assessments for the year ended December 31, 2019 was $2,558,706 or 32.30 percent. JWC financial statements are available from the City of Golden Valley, attention: Finance Department, 7800 Golden Valley Road, Golden Valley, Minnesota, 55427-4508. West Metro Fire-Rescue District By a resolution dated August 25, 1997, the City Council approved entering into an agreement by which a joint powers fire department would be established by merging the fire departments of New Hope and Crystal. A joint and cooperative agreement created the joint powers fire department effective January 2, 1998, and operation began in July 1998, under the name West Metro Fire-Rescue District (the District). The District is governed by a seven-member board of directors that includes one City Council member from each City. As required by the agreement, the City transferred fire department equipment to the District while retaining its rights to these assets in the event of the District’s dissolution. The equipment had a net book value of $374,558. The following financial information is taken from the District’s audited financial statements for the year ended December 31, 2019, the most recent information available at the date of this report: Total Assets 4,062,733$ Total Deferred Outflows of Resources 776,485 Total Liabilities 2,136,515 Total Deferred Inflows of Resources 1,071,801 Total Net Position 1,630,902 Total Revenue 2,594,027 Total Expenses 2,884,624 The City’s equity interest and its share of the net income (loss) of the District are added to the value of the “Investment in Joint Venture” in the government-wide financial statement under governmental activities. As of December 31, 2019, the amount reported as investment in joint venture was $812,189. According to a formula in the agreement, the City’s share of the District’s budget is 50.2 percent. Payments to the District in 2019 totaled $1,216,032. The District’s financial statements for the period ended December 31, 2019 are available at the District office located at: 4251 Xylon Avenue North, New Hope, Minnesota 55428. 96 City of New Hope, Minnesota Notes to the Financial Statements December 31, 2019 Note 6: Other Information (Continued) Jointly Controlled Organizations 1. Shingle Creek Watershed Management Commission (SCWMC) The City is one of nine member cities of the SCWMC, a joint powers organization formed to assist its members’ preservation and use of natural water storage and retention systems. The City’s contribution to the SCWMC for its fiscal year ended December 31, 2019 was $29,059, representing 7.27 percent of members’ contributions for the year. 2. Pets Under Police Security (PUPS) The City has entered into a joint and cooperative agreement with five other cities to create an organization which provides efficient and economical impoundment of animals in a jointly owned and operated facility. The City incurred charges of $17,273 for these services in 2019. 3. Hennepin Recycling Group (HRG) The City is party to a joint powers agreement with two other cities to create an organization to collect, recycle, and dispose of solid waste in compliance with the Minnesota Waste Management Act. HRG contracts for collection and recycling activities and the City is billed for services provided to its residents. In 2019, total charges of $224,381 were incurred for these services. 4. Basset Creek Watershed Management Commission (BCWMC) The City is one of nine member cities of the BCWMC, a joint powers organization formed to assist its members’ preservation and use of natural water storage and retention systems. Each member city is entitled to appoint one representative to BCWMC board. The nine-member board develops a budget for the year each July 1. Each member City contributes funds to cover the budgeted costs of operations based half on the assessed valuation of all taxable property, and half on the total area each member city has within the boundaries of the watershed. Any capital costs incurred by the BCWMC are apportioned to the members based half on the real property valuation of each member city within the watershed, and half on the total area each member city has within the boundaries of the watershed. The City’s 2019 contribution to the BCWMC for its fiscal year ended January 31, 2020 was $27,987, representing 5.28 percent of member’s contributions for the year. Note 7: Prior Period Adjustment A prior period adjustment of $1,775,342 was made to reallocate land held for resale costs and related sale proceeds, write off a portion of the Cities land held for resale and record accrued interest on an existing interfund loan. Between 2013 and 2017, land held for resale costs and related sale proceeds were recorded in the Economic Development fund, the transactions should have been recorded in the HRA Construction fund and funded with an interfund loan from the Economic Development fund. In the Economic Development Fund, the prior period adjustment of $280,735 reflects an increase in fund balance through the allocation of previously recorded costs and sale proceeds and the retroactive recognition of accrued interest. In the HRA Construction fund, the prior period adjustment of $2,056,077 reflects a decrease in fund balance through the allocation of costs and sale proceeds from the Economic Development fund, the write-down of land held for resale sold in prior years and the retroactive recognition of accrued interest. The net effect on the governmental activities net position was a decrease of $1,775,342. Note 8: Subsequent Event In December 2019, a novel strain of coronavirus (COVID-19) surfaced. The spread of COVID-19 around the world in the first quarter of 2020 has caused significant volatility in U.S. and international markets. There is significant uncertainty around the breadth and duration of business disruptions related to COVID-19, as well as its impact on the U.S. and international economies and, as such, the City is unable to determine if it will have a material impact to its operations. 97 THIS PAGE IS LEFT BLANK INTENTIONALLY 98 REQUIRED SUPPLEMENTARY INFORMATION CITY OF NEW HOPE NEW HOPE, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2019 99 City of New Hope, Minnesota Required Supplementary Information For the Year Ended December 31, 2019 Schedule of Employer’s and Non-employer Contributing Entity’s Share of PERA Net Pension Liability - General Employees Retirement Fund State's Proportionate City's Share of Proportionate the Net Pension Share of Liability City's Fiscal the Net Pension Associated with Covered Year Liability the City Total Payroll Ending (a)(b)(a+b)(c) 06/30/19 0.0609 %3,367,025$ 104,662$ 3,471,687 $ 4,282,511$ 78.6 %80.2 % 06/30/18 0.0599 3,323,006 109,063 3,432,069 3,998,415 83.1 79.5 06/30/17 0.0588 3,753,753 47,225 3,800,978 3,931,388 95.5 75.9 06/30/16 0.0608 4,936,658 64,481 5,001,139 3,643,308 135.5 68.9 06/30/15 0.0617 3,197,614 - 3,197,614 3,627,658 88.1 78.2 City's Proportionate Share of the Net Pension Plan Fiduciary City's Liability as a Net Position Proportion of Percentage of as a PercentageCovered the Net Pension Payroll of the Total Liability (a/c)Pension Liability Note: Schedule is intended to show 10-year trend. Additional years will be reported as they become available. Schedule of Employer’s PERA Contributions - General Employees Retirement Fund Contributions in Relation to the Statutorily Statutorily Contribution City's Required Required Deficiency Covered Year Contribution Contribution (Excess)Payroll Ending (a)(b)(a-b)(c) 12/31/19 328,429$ 328,429$ -$ 4,379,059$ 7.5 % 12/31/18 310,638 310,638 - 4,141,835 7.5 12/31/17 286,170 286,170 - 3,815,600 7.5 12/31/16 280,102 280,102 - 3,734,693 7.5 12/31/15 284,367 284,367 - 3,791,560 7.5 (b/c) Contributions as a Percentage of Payroll Covered Note: Schedule is intended to show 10-year trend. Additional years will be reported as they become available. 100 City of New Hope, Minnesota Required Supplementary Information (Continued) For the Year Ended December 31, 2019 Notes to the Required Supplementary Information - General Employees Retirement Fund Changes in Actuarial Assumptions 2019 - The mortality projection scale was changed from MP-2017 to MP-2018. 2018 - The mortality projection scale was changed from MP-2015 to MP-2017. The assumed benefit increase was changed from 1.00 percent per year through 2044 and 2.50 percent per year thereafter to 1.25 percent per year. 2017 - The Combined Service Annuity (CSA) loads were changed from 0.8 percent for active members and 60 percent for vested and non-vested deferred members. The revised CSA loads are now 0.0 percent for active memb er liability, 15.0 percent for vested deferred member liability and 3.0 percent for non-vested deferred member liability. The assumed post-retirement benefit increase rate was changed from 1.0 percent per year for all years to 1.0 percent per year through 2044 and 2.5 percent per year thereafter. 2016 - The assumed post-retirement benefit increase rate was changed from 1.0 percent per year through 2035 and 2.5 percent per year thereafter to 1.0 percent per year for all future years. The assumed investment return was changed from 7.9 percent to 7.5 percent. The single discount rate was changed from 7.9 percent to 7.5 percent. Other assumptions were changed pursuant to the experience study dated June 30, 2015. The assumed future salary increases, payroll growth and inflation were decreased by 0.25 percent to 3.25 percent for payroll growth and 2.50 percent for inflation. 2015 - The assumed post-retirement benefit increase rate was changed from 1.0 percent per year through 2030 and 2.5 percent per year thereafter to 1.0 percent per year through 2035 and 2.5 percent per year thereafter. Changes in Plan Provisions 2019 - The employer supplemental contribution was changed prospectively, decreasing from $31.0 million to $21.0 million per year. The state’s special funding contribution was changed prospectively, requiring $16.0 million due per year through 2031. 2018 - The augmentation adjustment in early retirement factors is eliminated over a five-year period starting July 1, 2019, resulting in actuarial equivalence after June 30, 2024. Interest credited on member contributions decreased from 4.00 percent to 3.00 percent, beginning July 1, 2018. Deferred augmentation was changed to 0.00 percent, effective January 1, 2019. Augmentation that has already accrued for deferred members will still apply. Contribution stabilizer provisions were repealed. Postretirement benefit increases were changed from 1.00 percent per year with a provision to increase to 2.50 percent upon attainment of 90.00 percent funding ratio to 50.00 percent of the Social Security Cost of Living Adjustment, not less than 1.00 percent and not more than 1.50 percent, beginning January 1, 2019. For retirements on or after January 1, 2024, the first benefit increase is delayed until the retiree reaches normal retirement age; does not apply to Rule of 90 retirees, disability benefit recipients, or survivors. Actuarial equivalent factors were updated to reflect revised mortality and interest assumptions. 2017 - The State’s contribution for the Minneapolis Employees Retirement Fund equals $16,000,000 in 2017 and 2018, and $6,000,000 thereafter. The Employer Supplemental Contribution for the Minneapolis Employees Retirement Fund changed from $21,000,000 to $31,000,000 in calendar years 2019 to 2031. The state’s contribution changed from $16,000,000 to $6,000,000 in calendar years 2019 to 2031. 2015 - On January 1, 2015, the Minneapolis Employees Retirement Fund was merged into the General Employees Fund, which increased the total pension liability by $1.1 billion and increased the fiduciary plan net position by $892 million. Upon consolidation, state and employer contributions were revised. 101 City of New Hope, Minnesota Required Supplementary Information (Continued) For the Year Ended December 31, 2019 Schedule of Employer’s Share of PERA Net Pension Liability - Public Employees Police and Fire Fund State's Proportionate City's Share of Proportionate the Net Pension Share of Liability City's Fiscal the Net Pension Associated with Covered Year Liability the City Total Payroll Ending (a)(b)(a+b)(c) 06/30/19 0.3012 %3,206,578$ -$ 3,206,578$ 3,176,028$ 101.0 %89.3 % 06/30/18 0.2888 3,078,311 - 3,078,311 3,043,700 101.1 88.8 06/30/17 0.2820 3,807,336 - 3,807,336 2,992,514 127.2 85.4 06/30/16 0.2940 11,798,732 - 11,798,732 2,732,301 431.8 63.9 06/30/15 0.2820 3,204,180 - 3,204,180 2,579,768 124.2 86.6 City's Proportionate Share of the Net Pension Liability as a Plan Fiduciary City's Percentage of Net Position Liability (a/c)Pension Liability Proportion of Covered as a Percentage the Net Pension Payroll of the Total Note: Schedule is intended to show 10-year trend. Additional years will be reported as they become available. Schedule of Employer’s PERA Contributions - Public Employees Police and Fire Fund Contributions in Relation to the Statutorily Statutorily Contribution City's Required Required Deficiency Covered Year Contribution Contribution (Excess)Payroll Ending (a)(b)(a-b)(c) 12/31/19 550,665$ 550,665$ -$ 3,248,759$ 16.95 % 12/31/18 502,203 502,203 - 3,100,017 16.20 12/31/17 489,202 489,202 - 3,019,768 16.20 12/31/16 444,511 444,511 - 2,743,893 16.20 12/31/15 448,029 448,029 - 2,765,611 16.20 (b/c) Contributions as a Percentage of Covered Payroll Note: Schedule is intended to show 10-year trend. Additional years will be reported as they become available. Notes to the Required Supplementary Information - Public Employees Police and Fire Fund Changes in Actuarial Assumptions 2019 - The mortality projection scale was changed from MP-2017 to MP-2018. 2018 - The mortality projection scale was changed from MP-2016 to MP-2017. 102 City of New Hope, Minnesota Required Supplementary Information (Continued) For the Year Ended December 31, 2019 Notes to the Required Supplementary Information - Public Employees Police and Fire Fund (Continued) 2017 - Assumed salary increases were changed as recommended in the June 30, 2016 experience study. The net effect is proposed rates that average 0.34 percent lower than the previous rates. Assumed rates of retirement were changed, resulting in fewer retirements. The Combined Service Annuity (CSA) load was 30 percent for vested and non-vested deferred members. The CSA has been changed to 33 percent for vested members and 2 percent for non-vested members. The base mortality table for healthy annuitants was changed from the RP-2000 fully generational table to the RP-2014 fully generational table (with a base year of 2006), with male rates adjusted by a factor of 0.96. The mortality improvement scale was changed from Scale AA to Scale MP-2016. The base mortality table for disabled annuitants was changed from the RP-2000 disabled mortality table to the mortality tables assumed for healthy retirees. Assumed termination rates were decreased to 3.0 percent for the first three years of service. Rates beyond the select period of three years were adjusted, resulting in more expected terminations overall. Assumed percentage of married female members was decreased from 65 percent to 60 percent. Assumed age difference was changed from separate assumptions for male members (wives assumed to be three years younger) and female members (husbands assumed to be four years older) to the assumption that males are two years older than females. The assumed percentage of female members electing joint and survivor annuities was increased. The assumed post-retirement benefit increase rate was changed from 1.00 percent for all years to 1.00 percent per year through 2064 and 2.50 percent thereafter. The single discount rate was changed from 5.6 percent to 7.5 percent. 2016 - The assumed post-retirement benefit increase rate was changed from 1.0 percent per year through 2037 and 2.5 percent per year thereafter to 1.0 percent per year for all future years. The assumed investment return was changed from 7.9 percent to 7.5 percent. The single discount rate was changed from 7.9 percent to 5.6 percent. The assumed future salary increases, payroll growth and inflation were decreased by 0.25 percent to 3.25 percent for payroll growth and 2.50 percent for inflation. 2015 - The assumed post-retirement benefit increase rate was changed from 1.0 percent per year through 2030 and 2.5 percent per year thereafter to 1.0 percent per year through 2037 and 2.5 percent per year thereafter. Changes in Plan Provisions 2018 - As set by statute, the assumed post-retirement benefit increase was changed from 1.0 percent per year through 2064 and 2.5 percent per year, thereafter, to 1.0 percent for all years, with no trigger. An end date of July 1, 2048 was added to the existing $9.0 million state contribution. New annual state aid will equal $4.5 million in fiscal years 2019 and 2020, and $9.0 million thereafter until the plan reaches 100 percent funding, or July 1, 2048, if earlier. Member contributions were changed from 10.80 percent to 11.30 percent of pay, effective January 1, 2019 and 11.80 percent of pay, effective January 1, 2020. Employer contributions were changed from 16.20 percent to 16.95 percent of pay, effective January 1, 2019 and 17.70 percent of pay, effective January 1, 2020. Interest credited on member contributions decreased from 4.00 percent to 3.00 percent, beginning July 1, 2018. Deferred augmentation was changed to 0.00 percent, effective January 1, 2019. Augmentation that has already accrued for deferred members will still apply. Actuarial equivalent factors were updated to reflect revised mortality and interest assumptions. 2017- Assumed salary increases were changed as recommended in the June 30, 2016 experience study. The net effect is proposed rates that average 0.34 percent lower than the previous rates. Assumed rates of retirement were changed, resulting in fewer retirements. The combined service annuity (CSA) load was 30.00 percent for vested and non-vested, deferred members. The CSA has been changed to 33.00 percent for vested members and 2.00 percent for non-vested members. The base mortality table for healthy annuitants was changed from the RP-2000 fully generational table to the RP-2014 fully generational table (with a base year of 2006), with male rates adjusted by a factor of 0.96. The mortality improvement scale was changed from Scale AA to Scale MP-2016. The base mortality table for disabled annuitants was changed from the RP-2000 disabled mortality table to the mortality tables assumed for healthy retirees. Assumed termination rates were decreased to 3.00 percent for the first three years of service. Rates beyond the select period of three years were adjusted, resulting in more expected terminations overall. Assumed percentage of married female members was decreased from 65.00 percent to 60.00 percent. Assumed age difference was changed from separate assumptions for male members (wives assumed to be three years younger) and female members (husbands assumed to be four years older) to the assumption that males are two years older than females. The assumed percentage of female members electing joint and survivor annuities was increased. The assumed postretirement benefit increase rate was changed from 1.00 percent for all years to 1.00 percent per year through 2064 and 2.50 percent thereafter. The single discount rate was changed from 5.60 percent per annum to 7.50 percent per annum. 2015 - The post-retirement benefit increase to be paid after attainment of the 90 percent funding threshold was changed, from inflation up to 2.5 percent, to a fixed rate of 2.5 percent. 103 City of New Hope, Minnesota Required Supplementary Information (Continued) For the Year Ended December 31, 2019 Schedule of Changes in the City’s Total OPEB Liability and Related Ratios 2019 2018 Total OPEB Liability Service cost 72,745$ 64,269$ Interest 38,452 31,335 Differences between expected and actual experience 81,871 - Changes in assumptions 74,709 (53,393) Benefit payments (16,942) (25,947) Net Change in Total OPEB Liability 250,835 16,264 Total OPEB Liability - Beginning 875,871 859,607 Total OPEB Liability - Ending 1,126,706$ 875,871$ Covered payroll 7,100,000$ 6,400,000$ City's total OPEB liability as a percentage of covered payroll 15.87 %13.69 % 2019 changes to actuarial assumptions: The discount rate was adjusted from 4.09 percent to 2.74 percent from the prior measurement. 2018 changes to actuarial assumptions: The discount rate was adjusted from 3.44 percent to 4.09 percent from the prior measurement There were no other changes in Plan provisions, cost allocation procedures, contribution allocation procedures, or methods from the previous measurement. There were no adjustments of prior measurements or use of approximations which would materially impact the results. Note: Schedule is intended to show 10-year trend. Additional years will be reported as they become available. 104 COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF NEW HOPE NEW HOPE, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2019 105 City of New Hope, Minnesota Nonmajor Governmental Funds Combining Balance Sheet December 31, 2019 Total Nonmajor Special Capital Debt Governmental Revenue Projects Service Funds Assets Cash and temporary investments 393,712$ 3,385,706$ 2,296,665$ 6,076,083$ Receivables Accrued interest - 5,132 - 5,132 Accounts 24,329 - - 24,329 Loans 24,253 - - 24,253 Special assessments 7,807 58,797 - 66,604 Due from other funds - 310,725 - 310,725 Advances to other funds - 1,659,873 - 1,659,873 Total Assets 450,101$ 5,420,233$ 2,296,665$ 8,166,999$ Liabilities Accounts and contracts payable 184$ 11,474$ -$ 11,658$ Due to other funds - 10,588 220,636 231,224 Unearned revenue - 13,800 - 13,800 Total Liabilities 184 35,862 220,636 256,682 Deferred Inflows of Resources Unavailable revenue - special assessments - 58,797 - 58,797 Fund Balances Restricted for Debt service - - 2,296,665 2,296,665 Public safety police expenditures 132,730 - - 132,730 Ice arena 5,390 - - 5,390 Committed for Solid waste operations 215,384 - - 215,384 Economic development 96,413 - - 96,413 Assigned for General improvements - 3,177,766 - 3,177,766 Capital equipment - 790,218 - 790,218 Park improvements - 1,368,178 - 1,368,178 Unassigned - (10,588) (220,636) (231,224) Total Fund Balances 449,917 5,325,574 2,076,029 7,851,520 Total Liabilities, Deferred Inflows of Resources, and Fund Balances 450,101$ 5,420,233$ 2,296,665$ 8,166,999$ 106 City of New Hope, Minnesota Nonmajor Governmental Funds Combining Statement of Revenues, Expenditures, and Changes in Fund Balances For the Year Ended December 31, 2019 Total Nonmajor Special Capital Debt Governmental Revenue Projects Service Funds Revenues Taxes Property taxes -$ 649,800$ 2,579,402$ 3,229,202$ Charges for services 224,794 45,605 - 270,399 Special assessments - 9,236 - 9,236 Investment earnings 11,650 175,700 29,831 217,181 Miscellaneous - 100,500 - 100,500 Total Revenues 236,444 980,841 2,609,233 3,826,518 Expenditures Current Public safety 452 - - 452 Public works 225,116 1,451 - 226,567 Capital outlay Public works - 492 - 492 Culture and recreation - 323,193 - 323,193 Economic development 500 - - 500 Debt service Principal - - 564,509 564,509 Interest - - 1,139,981 1,139,981 Total Expenditures 226,068 325,136 1,704,490 2,255,694 Excess of Revenues Over Expenditures 10,376 655,705 904,743 1,570,824 Other Financing Sources (Uses) Transfers in - 354,967 - 354,967 Bonds issued - - 97,331 97,331 Transfers out - (351,800) - (351,800) Total Other Financing Sources (Uses)- 3,167 97,331 100,498 Net Change in Fund Balances 10,376 658,872 1,002,074 1,671,322 Fund Balances, January 1 439,541 4,666,702 1,073,955 6,180,198 Fund Balances, December 31 449,917$ 5,325,574$ 2,076,029$ 7,851,520$ 107 THIS PAGE IS LEFT BLANK INTENTIONALLY 108 City of New Hope, Minnesota Nonmajor Special Revenue Funds Police Forfeitures Fund - This fund accounts for revenue received mainly from police fines and forfeitures, and is used for special police, fire, and parks/recreation projects. Solid Waste Management Fund - This fund accounts for grants and fees to be used to cover the cost of operations of the City’s solid waste management program. Ice Arena Endowment Fund - This fund is used to account for contributions and other receipts to be used for future capital needs and budget requirements of the New Hope Ice Arena. CEE Revolving Loan Fund - This fund is used account for Center for Energy and Environment revolving loans. 109 City of New Hope, Minnesota Nonmajor Special Revenue Funds Subcombining Balance Sheet December 31, 2019 9021 9016 9017 9018 Police Solid Waste Ice Arena CEE Revolving Forfeitures Management Endowment Loan Fund Total Assets Cash and temporary investments 132,730$ 183,432$ 5,390$ 72,160$ 393,712$ Receivables Accounts - 24,329 - - 24,329 Loans - - - 24,253 24,253 Special assessments - 7,807 - - 7,807 Total Assets 132,730$ 215,568$ 5,390$ 96,413$ 450,101$ Liabilities Accounts and contracts payable -$ 184$ -$ -$ 184$ Fund Balances Restricted for Public safety police expenditures 132,730 - - - 132,730 Ice arena - - 5,390 - 5,390 Committed for Solid waste operations - 215,384 - - 215,384 Economic development - - - 96,413 96,413 Total Fund Balances 132,730 215,384 5,390 96,413 449,917 Total Liabilities and Fund Balances 132,730$ 215,568$ 5,390$ 96,413$ 450,101$ 110 City of New Hope, Minnesota Nonmajor Special Revenue Funds Subcombining Statement of Revenues, Expenditures, and Changes in Fund Balances For the Year Ended December 31, 2019 9021 9016 9017 9018 Police Solid Waste Ice Arena CEE Revolving Forfeitures Management Endowment Loan Fund Total Revenues Charges for services -$ 224,794$ -$ - 224,794$ Investment earnings 4,310 6,338 175 827 11,650 Total Revenues 4,310 231,132 175 827 236,444 Expenditures Current Public safety Supplies 452 - - - 452 Public works Other services and charges - 225,116 - - 225,116 Economic development Other services and charges - - - 500 500 Total Expenditures 452 225,116 - 500 226,068 Net Change in Fund Balances 3,858 6,016 175 327 10,376 Fund Balances, January 1 128,872 209,368 5,215 96,086 439,541 Fund Balances, December 31 132,730$ 215,384$ 5,390$ 96,413$ 449,917$ 111 City of New Hope, Minnesota Special Revenue Fund - Solid Waste Management Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Year Ended December 31, 2019 Actual Variance with Original Final Amounts Final Budget Revenues Charges for services 225,000$ 225,000$ 224,794$ (206)$ Investment earnings 1,000 1,000 6,338 5,338 Total Revenues 226,000 226,000 231,132 5,132 Expenditures Current Public works Other services and charges 224,735 224,735 225,116 (381) Net Change in Fund Balances 1,265 1,265 6,016 4,751 Fund Balances, January 1 209,368 209,368 209,368 - Fund Balances, December 31 210,633$ 210,633$ 215,384$ 4,751$ Budgeted Amounts 112 City of New Hope, Minnesota Nonmajor Capital Project Funds Capital Projects funds account for proceeds from the sale of bonds and other revenue to be used for the purchase or construction of equipment and capital improvement facilities. Fire Capital Projects Fund - This fund accounts for the purchases of fire capital equipment. Xylon Avenue Improvement Fund - This fund accounts for the accumulation of reserves for the Xylon Avenue Improvement project. Park Infrastructure Fund - This fund is used to account for park improvement projects. Temporary Financing Fund - is used to account for various capital project and capital outlay purchases until permanent financing is acquired. 2016 Street Improvement Project Fund - This fund is used to account for the 2016 street improvement project. 2017 Street Improvement Project Fund - This fund is used to account for the 2017 street improvement project. 113 City of New Hope, Minnesota Nonmajor Capital Projects Funds Subcombining Balance Sheet December 31, 2019 9010 9223 9233 9242 9250 9251 2016 Street 2017 Street Fire Xylon Avenue Park Temporary Improvement Improvement Capital Projects Improvement Infrastructure Financing Project Project Total Assets Cash and temporary investments 790,218$ -$ 1,393,452$ 1,202,036$ -$ -$ 3,385,706$ Receivables Accrued interest - - - 5,132 - - 5,132 Special assessments - - - 58,797 - - 58,797 Due from other funds - - - 310,725 - - 310,725 Advances to other funds - - - 1,659,873 - - 1,659,873 Total Assets 790,218$ -$ 1,393,452$ 3,236,563$ -$ -$ 5,420,233$ Liabilities Accounts and contracts payable -$ -$ 11,474$ -$ -$ -$ 11,474$ Due to other funds - - - - 10,588 - 10,588 Unearned revenue - - 13,800 - - - 13,800 Total Liabilities - - 25,274 - 10,588 - 35,862 Deferred Inflows of Resources Unavailable revenue - special assessments - - - 58,797 - - 58,797 Fund Balances Assigned to General improvements - - - 3,177,766 - - 3,177,766 Capital equipment 790,218 - - - - - 790,218 Park improvements - - 1,368,178 - - - 1,368,178 Unassigned - - - - (10,588) - (10,588) Total Fund Balances 790,218 - 1,368,178 3,177,766 (10,588) - 5,325,574 Total Liabilities, Deferred Inflows of Resources, and Fund Balances 790,218$ -$ 1,393,452$ 3,236,563$ -$ -$ 5,420,233$ 114 City of New Hope, Minnesota Nonmajor Capital Projects Funds Subcombining Statement of Revenues, Expenditures, and Changes in Fund Balances For the Year Ended December 31, 2019 9010 9223 9233 9242 9250 9251 2016 Street 2017 Street Fire Xylon Avenue Park Temporary Improvement Improvement Capital Projects Improvement Infrastructure Financing Project Project Total Revenues Taxes Property taxes -$ -$ 649,800$ -$ -$ -$ 649,800$ Intergovernmental Charges for services - - 45,605 - - - 45,605 Special assessments - - - 9,236 - - 9,236 Investment earnings 23,863 - 83,446 68,391 - - 175,700 Miscellaneous - - 100,500 - - - 100,500 Total Revenues 23,863 - 879,351 77,627 - - 980,841 Expenditures Current Public works - 1,451 - - - - 1,451 Capital outlay Public works - - - - 492 - 492 Culture and recreation - - 323,193 - - - 323,193 Total Expenditures - 1,451 323,193 - 492 - 325,136 Excess (Deficiency) of Revenues Over (Under) Expenditures 23,863 (1,451) 556,158 77,627 (492) - 655,705 Other Financing Sources (Uses) Transfers in 150,000 2,230 - - - 202,737 354,967 Transfers out (51,800) - (300,000) - - - (351,800) Total Other Financing Sources (Uses)98,200 2,230 (300,000) - - 202,737 3,167 Net Change in Fund Balances 122,063 779 256,158 77,627 (492) 202,737 658,872 Fund Balances, January 1 668,155 (779) 1,112,020 3,100,139 (10,096) (202,737) 4,666,702 Fund Balances, December 31 790,218$ -$ 1,368,178$ 3,177,766$ (10,588)$ -$ 5,325,574$ 115 THIS PAGE IS LEFT BLANK INTENTIONALLY 116 City of New Hope, Minnesota Nonmajor Debt Service Funds The Debt Service funds are used to account for the payment of principal and interest on the City’s general obligation bonds. Revenues for this purpose include ad valorem property taxes, special assessments, investment income, and other revenue. 2015A G.O. Tax Increment Bonds - This fund accounts for revenue from property taxes and interest income to be used for the payment of principal and interest on the City’s 2015A G.O. Tax Increment Bonds. 2010B G.O. Equipment Bonds Fund - This fund accounts for revenue from property taxes and interest income to be used for the payment of principal and interest on the City’s 2010B G.O. Equipment Bonds. 2016A G.O. Improvement Bonds - This fund accounts for revenue from property taxes and interest income to be used for the payment of principal and interest on the City’s 2016A G.O. Improvement Bonds. 2015B G.O. Improvement Bonds - This fund accounts for revenue from property taxes and interest income to be used for the payment of principal and interest on the City’s 2015B G.O. Improvement Bonds. 2017A G.O. Improvement Bonds - This fund accounts for revenue from property taxes and interest income to be used for the payment of principal and interest on the City’s 2017A G.O. Improvement Bonds. 2018A G.O. Improvement Bonds - This fund accounts for revenue from property taxes and interest income to be used for the payment of principal and interest on the City’s 2018A G.O. Improvement Bonds. 2019A G.O. Improvement Bonds - This fund accounts for revenue from property taxes and interest income to be used for the payment of principal and interest on the City’s 2019A G.O. Improvement Bonds. 117 City of New Hope, Minnesota Nonmajor Debt Service Funds Subcombining Balance Sheet December 31, 2019 9144 9145 9148 9149 2015A 2010B 2016A 2015B G.O.G.O.G.O.G.O. Tax Increment Equipment Improvement Improvement Bonds Bonds Bonds Bonds Assets Cash and temporary investments 239,021$ 219,315$ 250,875$ 125,723$ Liabilities Due to other funds -$ -$ -$ -$ Fund Balances Restricted for debt service 239,021 219,315 250,875 125,723 Unassigned - - - - Total Fund Balances 239,021 219,315 250,875 125,723 Total Liabilities and Fund Balances 239,021$ 219,315$ 250,875$ 125,723$ 118 9150 9151 9152 2017A 2018A 2019A G.O.G.O.G.O. Improvement Improvement Improvement Bonds Bonds Bonds Total 1,364,400$ -$ 97,331$ 2,296,665$ -$ 220,636$ -$ 220,636$ 1,364,400 - 97,331 2,296,665 - (220,636) - (220,636) 1,364,400 (220,636) 97,331 2,076,029 1,364,400$ -$ 97,331$ 2,296,665$ 119 City of New Hope, Minnesota Nonmajor Debt Service Funds Subcombining Statement of Revenues, Expenditures, and Changes in Fund Balances For the Year Ended December 31, 2019 9144 9145 9148 9149 2015A 2010B 2016A 2015B G.O.G.O.G.O.G.O. Tax Increment Equipment Improvement Improvement Bonds Bonds Bonds Bonds Revenues Property taxes 237,118$ 161,595$ 262,397$ 208,840$ Investment earnings 2,374 4,375 4,793 5,282 Total Revenues 239,492 165,970 267,190 214,122 Expenditures Debt service Principal 148,925 145,000 151,238 119,346 Interest 57,160 5,640 82,929 50,567 Total Expenditures 206,085 150,640 234,167 169,913 Excess (Deficiency) of Revenues Over (Under) Expenditures 33,407 15,330 33,023 44,209 Other Financing Sources Bonds issued - - - - Net Change in Fund Balances 33,407 15,330 33,023 44,209 Fund Balances, January 1 205,614 203,985 217,852 81,514 Fund Balances, December 31 239,021$ 219,315$ 250,875$ 125,723$ 120 9150 9151 9152 2017A 2018A 2019A G.O.G.O.G.O. Improvement Improvement Improvement Bonds Bonds Bonds Total 1,709,452$ -$ -$ 2,579,402$ 13,007 - - 29,831 1,722,459 - - 2,609,233 - - - 564,509 723,049 220,636 - 1,139,981 723,049 220,636 - 1,704,490 999,410 (220,636) - 904,743 - - 97,331 97,331 999,410 (220,636) 97,331 1,002,074 364,990 - - 1,073,955 1,364,400$ (220,636)$ 97,331$ 2,076,029$ 121 THIS PAGE IS LEFT BLANK INTENTIONALLY 122 City of New Hope, Minnesota General Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual (Continued on the Following Pages) For the Year Ended December 31, 2019 (With Comparative Actual Amounts for the Year Ended December 31, 2018) 2018 Actual Variance with Actual Original Final Amounts Final Budget Amounts Revenues Taxes Property taxes 10,382,448$ 10,382,448$ 10,297,018$ (85,430)$ 9,971,064$ Franchise taxes 472,357 472,357 533,213 60,856 440,000 Total Taxes 10,854,805 10,854,805 10,830,231 (24,574) 10,411,064 Licenses and permits Business regulatory licenses 76,380 76,380 70,783 (5,597) 77,504 Non-business licenses and permits 304,930 304,930 249,655 (55,275) 290,427 Total Licenses and permits 381,310 381,310 320,438 (60,872) 367,931 Intergovernmental Local government aid 697,864 697,864 697,864 - 693,117 Highway maintenance aid 191,000 191,000 212,664 21,664 214,477 Other federal, state, and local grants 92,208 92,208 120,591 28,383 118,366 State insurance premium tax 272,000 272,000 311,424 39,424 306,678 Total Intergovernmental 1,253,072 1,253,072 1,342,543 89,471 1,332,638 Charges for services General government 188,850 188,850 152,308 (36,542) 171,986 Public safety 373,500 373,500 403,636 30,136 414,032 Public works 5,450 5,450 4,243 (1,207) 4,473 Culture and recreation 516,850 516,850 504,090 (12,760) 512,730 Total Charges for services 1,084,650 1,084,650 1,064,277 (20,373) 1,103,221 Fines and forfeitures 250,000 250,000 227,343 (22,657) 226,757 Special assessments 30,000 30,000 50,034 20,034 39,569 Investment earnings 35,000 35,000 106,033 71,033 103,969 Miscellaneous 3,000 3,000 23,326 20,326 33,766 Total Revenues 13,891,837 13,891,837 13,964,225 72,388 13,618,915 Budgeted Amounts 2019 123 City of New Hope, Minnesota General Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual (Continued) For the Year Ended December 31, 2019 (With Comparative Actual Amounts for the Year Ended December 31, 2018) 2018 Actual Variance with Actual Original Final Amounts Final Budget Amounts Expenditures Current General government Mayor and City Council Personnel services 56,600$ 56,600$ 52,142$ 4,458$ 53,399$ Supplies 2,000 2,000 1,439 561 2,572 Other services and charges 36,328 36,328 34,231 2,097 35,352 Total Mayor and City Council 94,928 94,928 87,812 7,116 91,323 City hall Supplies 23,500 23,500 22,644 856 18,227 Other services and charges 278,002 278,002 279,395 (1,393) 261,142 Total City hall 301,502 301,502 302,039 (537) 279,369 City Manager Personnel services 380,800 380,800 401,782 (20,982) 378,233 Supplies 5,800 5,800 5,340 460 6,150 Other services and charges 16,735 16,735 14,080 2,655 20,227 Total City Manager 403,335 403,335 421,202 (17,867) 404,610 Elections Personnel services - - - - 26,151 Supplies - - - - 1,487 Other services and charges 4,312 4,312 4,185 127 5,373 Total Elections 4,312 4,312 4,185 127 33,011 Finance Personnel services 179,000 179,000 171,471 7,529 160,303 Supplies 1,500 1,500 1,328 172 1,310 Other services and charges 101,712 101,712 134,364 (32,652) 130,779 Total Finance 282,212 282,212 307,163 (24,951) 292,392 Auditing Other services and charges 25,941 25,941 24,441 1,500 24,928 Assessing Other services and charges 154,000 154,000 154,000 - 147,000 Legal Other services and charges 35,000 35,000 16,097 18,903 16,272 Human resources Personnel services 257,300 257,300 263,755 (6,455) 255,342 Supplies 450 450 451 (1) 247 Other services and charges 35,091 35,091 23,020 12,071 30,319 Total Human resources 292,841 292,841 287,226 5,615 285,908 Budgeted Amounts 2019 124 City of New Hope, Minnesota General Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual (Continued) For the Year Ended December 31, 2019 (With Comparative Actual Amounts for the Year Ended December 31, 2018) 2018 Actual Variance with Actual Original Final Amounts Final Budget Amounts Budgeted Amounts 2019 Expenditures (Continued) Current (continued) General government (continued) Planning and zoning Personnel services 134,700$ 134,700$ 112,208$ 22,492$ 30,608$ Supplies 700 700 285 415 151 Other services and charges 37,833 37,833 35,825 2,008 35,543 Total Planning and zoning 173,233 173,233 148,318 24,915 66,302 Communication Personnel services 98,100 98,100 99,606 (1,506) 97,021 Supplies 6,140 6,140 5,463 677 12,404 Other services and charges 43,094 43,094 42,928 166 37,013 Total Communication 147,334 147,334 147,997 (663) 146,438 Total General Government 1,914,638 1,914,638 1,900,480 14,158 1,787,553 Public safety Police Personnel services 5,217,600 5,217,600 5,078,553 139,047 4,839,787 Supplies 90,800 90,800 138,034 (47,234) 80,253 Other services and charges 1,187,910 1,187,910 1,169,754 18,156 1,060,868 Total Police 6,496,310 6,496,310 6,386,341 109,969 5,980,908 Police reserves Personnel services - - 266 (266) - Supplies 2,200 2,200 1,903 297 - Other services and charges 27,023 27,023 30,179 (3,156) 21,632 Total Police reserves 29,223 29,223 32,348 (3,125) 21,632 Fire and safety Supplies 2,000 2,000 41 1,959 - Other services and charges 1,250,894 1,250,894 1,244,756 6,138 1,216,012 Total Fire and safety 1,252,894 1,252,894 1,244,797 8,097 1,216,012 Animal control Personnel services 81,900 81,900 81,838 62 76,300 Supplies 475 475 204 271 - Other services and charges 25,133 25,133 24,830 303 39,668 Total Animal control 107,508 107,508 106,872 636 115,968 125 City of New Hope, Minnesota General Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual (Continued) For the Year Ended December 31, 2019 (With Comparative Actual Amounts for the Year Ended December 31, 2018) 2018 Actual Variance with Actual Original Final Amounts Final Budget Amounts Budgeted Amounts 2019 Expenditures (Continued) Current (continued) Public safety (continued) Protective inspection Personnel services 495,700$ 495,700$ 490,391$ 5,309$ 493,797$ Supplies 2,400 2,400 1,024 1,376 1,403 Other services and charges 170,484 170,484 165,714 4,770 162,404 Total Protective inspection 668,584 668,584 657,129 11,455 657,604 Total Public Safety 8,554,519 8,554,519 8,427,487 127,032 7,992,124 Public works Street maintenance Personnel services 529,700 529,700 607,772 (78,072) 546,460 Supplies 132,000 132,000 90,691 41,309 87,301 Other services and charges 866,338 866,338 812,459 53,879 824,707 Total Street maintenance 1,528,038 1,528,038 1,510,922 17,116 1,458,468 Engineering Other services and charges 35,000 35,000 53,226 (18,226) 32,577 Total Public Works 1,563,038 1,563,038 1,564,148 (1,110) 1,491,045 Culture and recreation Recreation Personnel services 650,200 650,200 646,135 4,065 615,411 Supplies 114,050 114,050 109,784 4,266 123,751 Other services and charges 255,992 255,992 253,962 2,030 243,554 Total Recreation 1,020,242 1,020,242 1,009,881 10,361 982,716 Parks Personnel services 619,300 619,300 582,433 36,867 552,495 Supplies 37,990 37,990 35,450 2,540 38,682 Other services and charges 384,340 384,340 353,689 30,651 395,919 Total Parks 1,041,630 1,041,630 971,572 70,058 987,096 Swimming pool Personnel services 45,900 45,900 45,933 (33) 43,621 Other services and charges 1,145 1,145 5,199 (4,054) 1,708 Total Swimming pool 47,045 47,045 51,132 (4,087) 45,329 Total Culture and Recreation 2,108,917 2,108,917 2,032,585 76,332 2,015,141 Total Current Expenditures 14,141,112 14,141,112 13,924,700 216,412 13,285,863 126 City of New Hope, Minnesota General Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual (Continued) For the Year Ended December 31, 2019 (With Comparative Actual Amounts for the Year Ended December 31, 2018) 2018 Actual Variance with Actual Original Final Amounts Final Budget Amounts Budgeted Amounts 2019 Expenditures (Continued) Capital outlay General government 10,000$ 10,000$ 3,967$ 6,033$ 555$ Public safety 73,000 73,000 55,081 17,919 115,635 Total Capital outlay 83,000 83,000 59,048 23,952 116,190 Total Expenditures 14,224,112 14,224,112 13,983,748 240,364 13,402,053 Excess (Deficiency) of Revenues Over (Under) Expenditures (332,275) (332,275) (19,523) 312,752 216,862 Other Financing Sources (Uses) Transfers in 332,275 332,275 332,275 - 325,434 Transfers out - - (354,000) (354,000) (250,000) Total Other Financing Sources (Uses)332,275 332,275 (21,725) (354,000) 75,434 Net Change in Fund Balances - - (41,248) (41,248) 292,296 Fund Balances, January 1 7,180,951 7,180,951 7,180,951 - 6,888,655 Fund Balances, December 31 7,180,951$ 7,180,951$ 7,139,703$ (41,248)$ 7,180,951$ 127 THIS PAGE IS LEFT BLANK INTENTIONALLY 128 City of New Hope, Minnesota Internal Service Funds Internal service funds are used to account for activities and services performed for other organizational units within the City. Charges to other City agencies are made to support these activities. Central Garage Fund - This fund is used to account for the rental of motor vehicles and other equipment to other departments. Employee Leave Fund - This fund accounts for the cost of providing leave time benefits to employees, which includes vacation, holiday, sick time, and personal leave. Funding is based on chargebacks to department based on a percentage of wages. Insurance Reserve Fund - This fund accounts for all insurance costs for the City. Funding is provided by chargebacks to departments by percentage of wages for health, dental, life, and disability insurance. Funding for general liability and property insurance is provided by chargebacks to departments based on activities and the use of property. Information Technology Fund - This fund accounts for the City’s investment in, and operations of, computer networks, application and system software, Internet access, data storage, and related activities. 129 City of New Hope, Minnesota Internal Service Funds Combining Statement of Net Position December 31, 2019 9402 9408 9407 9410 Central Employee Insurance Information Garage Leave Reserve Technology Totals Assets Current Assets Cash and temporary investments 7,517,443$ 1,469,865$ 594,661$ 549,657$ 10,131,626$ Receivables Accounts - - 4,475 - 4,475 Inventories 62,575 - - - 62,575 Total Current Assets 7,580,018 1,469,865 599,136 549,657 10,198,676 Noncurrent Assets Capital assets Land 85,647 - - - 85,647 Buildings and structures 3,158,296 - - - 3,158,296 Vehicles and equipment 9,060,913 - - 393,020 9,453,933 Construction in progress - - - 22,997 22,997 Less: accumulated depreciation (9,495,628) - - (307,461) (9,803,089) Total Capital Assets (Net of Accumulated Depreciation)2,809,228 - - 108,556 2,917,784 Total Assets 10,389,246 1,469,865 599,136 658,213 13,116,460 Deferred Outflows of Resources Deferred pension resources 19,129 - - - 19,129 Deferred other postemployment benefit resources - - 119,013 - 119,013 Total Deferred Outflows of Resources 19,129 - 119,013 - 138,142 Liabilities Current Liabilities Accrued salaries payable 8,106 42,974 93,445 - 144,525 Accounts and contracts payable 40,084 - 56,784 38,797 135,665 Due to other governments 580 - - - 580 Compensated absences payable, current portion - 75,388 - - 75,388 Total Current Liabilities 48,770 118,362 150,229 38,797 356,158 Noncurrent Liabilities Other postemployment benefits payable - - 932,848 - 932,848 Pension liability 186,220 - - - 186,220 Compensated absences payable - 678,493 - - 678,493 Total Noncurrent Liabilities 186,220 678,493 932,848 - 1,797,561 Total Liabilities 234,990 796,855 1,083,077 38,797 2,153,719 Deferred Inflows of Resources Deferred pension resources 34,987 - - - 34,987 Deferred other postemployment benefit resources - - 36,169 - 36,169 Total Deferred Inflows of Resources 34,987 - 36,169 - 71,156 Net Position Net investment in capital assets 2,809,228 - - 108,556 2,917,784 Unrestricted 7,329,170 673,010 (401,097) 510,860 8,111,943 Total Net Position 10,138,398$ 673,010$ (401,097)$ 619,416$ 11,029,727$ 130 City of New Hope, Minnesota Internal Service Funds Combining Statement of Revenues, Expenses and Changes in Net Position For the Year Ended December 31, 2019 9402 9408 9407 9410 Central Employee Insurance Information Garage Leave Reserve Technology Totals Operating Revenues Billings to departments 2,262,880$ 710,451$ 10,415$ 757,144$ 3,740,890$ Other 9,279 - 3,893 - 13,172 Total Operating Revenues 2,272,159 710,451 14,308 757,144 3,754,062 Operating Expenses Personnel services 371,019 598,174 54,290 - 1,023,483 Supplies 288,803 - - 54,305 343,108 Utilities 62,318 - - 30,345 92,663 Other services and charges 322,268 - 89,873 581,917 994,058 Depreciation 668,467 - - 9,295 677,762 Total Operating Expenses 1,712,875 598,174 144,163 675,862 3,131,074 Operating Income (Loss)559,284 112,277 (129,855) 81,282 622,988 Nonoperating Revenues Investment earnings 228,495 - - 17,575 246,070 Gain on sale of capital assets 37,864 - - - 37,864 Total Nonoperating Revenues 266,359 - - 17,575 283,934 Income (Loss) Before Transfers 825,643 112,277 (129,855) 98,857 906,922 Transfers Out (269,750) - - (55,599) (325,349) Change in Net Position 555,893 112,277 (129,855) 43,258 581,573 Net Position, January 1 9,582,505 560,733 (271,242) 576,158 10,448,154 Net Position, December 31 10,138,398$ 673,010$ (401,097)$ 619,416$ 11,029,727$ 131 City of New Hope, Minnesota Internal Service Funds Combining Statement of Cash Flows For the Year Ended December 31, 2019 9402 9408 9407 9410 Central Employee Insurance Information Garage Leave Reserve Technology Totals Cash Flows from Operating Activities Receipts from interfund services provided 2,262,880$ 710,451$ 10,798$ 757,144$ 3,741,273$ Other operating receipts 8,845 - 3,893 - 12,738 Payments to suppliers (677,771) - (27,091) (691,835) (1,396,697) Payments to employees (336,268) (545,271) - - (881,539) Net Cash Provided (Used) by Operating Activities 1,257,686 165,180 (12,400) 65,309 1,475,775 Cash Flows from Noncapital Financing Activities Transfers out (269,750) - - (55,599) (325,349) Cash Flows from Capital and Related Financing Activities Acquisition capital assets (279,793) - - (71,634) (351,427) Proceeds from sale of assets 37,864 - - - 37,864 Net Cash Used by Capital and Related Financing Activities (241,929) - - (71,634) (313,563) Investment earnings 228,495 - - 17,575 246,070 Net Increase (Decrease) in Cash and Cash Equivalents 974,502 165,180 (12,400) (44,349) 1,082,933 Cash and Cash Equivalents, January 1 6,542,941 1,304,685 607,061 594,006 9,048,693 Cash and Cash Equivalents, December 31 7,517,443$ 1,469,865$ 594,661$ 549,657$ 10,131,626$ Reconciliation of Operating Income (Loss) to Net Cash Provided by Operating Activities Operating income (loss)559,284$ 112,277$ (129,855)$ 81,282$ 622,988$ Adjustments to reconcile operating income (loss) to net cash provided by operating activities Depreciation 668,467 - - 9,295 677,762 (Increase) decrease in assets Accounts receivable - - 383 - 383 Inventories 7,570 - - - 7,570 (Increase) decrease in deferred out flows of resources Deferred pension resources 9,825 - - - 9,825 Deferred other postemployment benefit resources - - (119,013) - (119,013) Increase (decrease) in liabilities Accounts and contracts payable (12,024) - 48,904 23,278 60,158 Accrued salaries payable 1,124 13,407 13,878 - 28,409 Due to other governments 72 - - (48,546) (48,474) Compensated absences payable - 39,496 - - 39,496 Other postemployment benefits payable - - 178,915 - 178,915 Pension liability 29,720 - - - 29,720 Increase (decrease) in deferred inflows of resources Deferred pension resources (6,352) - - - (6,352) Deferred other postemployment benefit resources - - (5,612) - (5,612) Net Cash Provided (Used) by Operating Activities 1,257,686$ 165,180$ (12,400)$ 65,309$ 1,475,775$ Cash Flows from Investing Activities 132 STATISTICAL SECTION (UNAUDITED) CITY OF NEW HOPE NEW HOPE, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2019 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 2019 2018 Revenues Taxes Property taxes 15,223,680$ 12,904,297$ 17.97 % Tax increments 1,317,803 1,112,753 18.43 Franchise taxes 957,448 945,244 1.29 Licenses and permits 320,438 367,931 (12.91) Intergovernmental 3,947,039 2,195,760 79.76 Charges for services 1,376,176 1,399,998 (1.70) Fines and forfeitures 227,343 230,657 (1.44) Special assessments 197,566 282,589 (30.09) Investment earnings 1,166,238 658,606 77.08 Miscellaneous 173,679 33,966 411.33 Total Revenues 24,907,410$ 20,131,801$ 23.72 % Per Capita 1,143$ 934$ 22.33 % Expenditures Current General government 1,900,480$ 1,787,553$ 6.32 % Public safety 8,427,939 7,997,311 5.38 Public works 1,790,715 1,717,815 4.24 Culture and recreation 2,032,585 2,015,729 0.84 Economic development 513,946 815,352 (36.97) Capital outlay 22,573,850 12,956,485 74.23 Debt service Principal 968,674 799,734 21.12 Interest 1,273,302 769,497 65.47 Bond issuance costs 90,446 148,365 (39.04) Total Expenditures 39,571,937$ 29,007,841$ 36.42 % Per Capita 1,816$ 1,346$ 34.92 % Total Long-term Indebtedness (excluding unamortized premiums)44,252,170$ 39,985,844$ 10.67 % Per capita 2,031 1,856 9.43 General Fund Balance - December 31 7,139,703$ 7,180,951$ (0.57) % Per capita 328 333 (1.50) The purpose of this report is to provide a summary of financial information concerning the City of New Hope to interested citizens. The complete financial statements may be examined at City Hall, 4401 Xylon Avenue North, New Hope, Minnesota 55428. Questions about this report should be directed to Kirk McDonald, City Manager at (763) 531-5112. City of New Hope, Minnesota Summary Financial Report Revenues and Expenditures For General Operations Governmental Funds (Decrease) Increase Percent Total For the Year Ended December 31, 2019 137 City of New Hope, Minnesota Statistical Section (Unaudited) Net Position by Component Last Ten Fiscal Years (Accrual Basis of Accounting) 2011 2010 (Restated)2012 2013 Governmental Activities Net investment in capital assets 16,495,175$ 20,628,143$ 26,793,142$ 30,509,373$ Restricted 9,279,142 6,018,734 1,619,696 1,619,394 Unrestricted 21,971,477 21,845,278 22,746,207 23,704,592 Total Governmental Activities Net Position 47,745,794$ 48,492,155$ 51,159,045$ 55,833,359$ Business-type Activities Net investment in capital assets 9,989,405$ 11,114,666$ 12,843,624$ 14,142,276$ Restricted - - 150,000 300,000 Unrestricted 2,541,156 3,978,803 2,735,144 2,496,008 Total Business-type Activities Net Position 12,530,561$ 15,093,469$ 15,728,768$ 16,938,284$ Total Primary Government Net investment in capital assets 26,484,580$ 31,742,809$ 39,636,766$ 44,651,649$ Restricted 9,279,142 6,018,734 1,769,696 1,919,394 Unrestricted 24,512,633 25,824,081 25,481,351 26,200,600 Total Primary Government 60,276,355$ 63,585,624$ 66,887,813$ 72,771,643$ Fiscal Year Note: The City implemented GASB Statement No. 63 and GASB Statement No. 65 in fiscal 2012. Net position information has been restated for 2011 for this accounting change. Years prior to 2011 have not been restated. The City implemented GASB Statement No. 67 and GASB Statement No. 68 in fiscal 2015. Net position information has not been restated for prior years. The City implemented GASB Statement No. 75 in 2018 with retroactive application. The 2017 net position has been restated to reflect the change. 138 (Restated) 2014 2015 2016 2017 2018 2019 26,305,906$ 27,549,276$ 29,951,754$ 27,747,845$ 27,888,417$ 30,139,510$ 5,680,117 5,917,848 4,893,801 6,207,578 6,000,843 6,628,138 23,130,558 14,623,043 11,081,824 11,728,807 14,384,257 16,702,142 55,116,581$ 48,090,167$ 45,927,379$ 45,684,230$ 48,273,517$ 53,469,790$ 14,757,333$ 16,087,559$ 19,286,134$ 18,663,872$ 18,783,898$ 19,315,353$ 455,000 627,939 868,853 1,031,673 1,160,680 1,358,401 1,798,707 (825,297) (1,839,376) 84,741 1,783,306 3,054,187 17,011,040$ 15,890,201$ 18,315,611$ 19,780,286$ 21,727,884$ 23,727,941$ 41,063,239$ 43,636,835$ 49,237,888$ 46,411,717$ 46,672,315$ 49,454,863$ 6,135,117 6,545,787 5,762,654 7,239,251 7,161,523 7,986,539 24,929,265 13,797,746 9,242,448 11,813,548 16,167,563 19,756,329 72,127,621$ 63,980,368$ 64,242,990$ 65,464,516$ 70,001,401$ 77,197,731$ Fiscal Year 139 City of New Hope, Minnesota Statistical Section (Unaudited) Changes in Net Position (Continued on the Following Pages) Last Ten Fiscal Years (Accrual Basis of Accounting) (Restated) 2010 2011 2012 2013 Expenses Governmental Activities General government 2,552,425$ 1,841,145$ 1,931,318$ 1,837,194$ Public safety 5,864,775 6,129,860 6,062,362 6,238,779 Public works 1,625,959 1,795,189 2,126,043 1,790,669 Culture and recreation 1,899,105 1,882,279 1,928,591 1,946,243 Economic development 192,431 536,433 762,202 431,332 Interest on long-term debt 252,224 236,827 407,744 289,009 Total Governmental Activities Expenses 12,386,919 12,421,733 13,218,260 12,533,226 Business-type Activities Sewer utility 1,928,845 2,068,282 2,220,438 2,310,604 Water utility 2,915,757 3,530,521 3,682,602 3,215,714 Golf course 346,345 322,679 298,555 262,894 Ice arena 712,153 844,828 771,628 957,784 Storm water 430,899 485,943 425,112 768,610 Street lighting 104,099 113,753 104,721 117,518 Total Business-type Activities Expenses 6,438,098 7,366,006 7,503,056 7,633,124 Total Expenses 18,825,017$ 19,787,739$ 20,721,316$ 20,166,350$ Program Revenues Governmental Activities Charges for services General government 984,855$ 220,629$ 177,174$ 198,297$ Public safety 218,732 877,159 804,725 880,843 Public works - 219,353 219,548 226,228 Culture and recreation 562,383 637,077 653,293 672,067 Economic development 104,713 98,139 94,664 - Operating grants and contributions 1,356,292 783,382 2,162,263 828,276 Capital grants and contributions 787,047 1,107,042 245,290 3,929,565 Total Governmental Activities Program Revenues 4,014,022 3,942,781 4,356,957 6,735,276 Business-Type Activities Charges for services Sewer utility 2,292,300 2,352,635 2,376,021 2,443,202 Water utility 3,082,771 3,169,859 3,581,225 3,460,008 Golf course 313,941 278,788 296,316 268,133 Ice arena 741,266 752,671 694,702 725,211 Storm water 943,883 947,031 948,650 963,167 Street lighting 121,647 122,742 124,397 125,604 Operating grants and contributions 470,183 24,031 22,340 306,520 Capital grants and contributions 30,739 114,826 106,291 225,300 Total Business-type Activities Program Revenues 7,996,730 7,762,583 8,149,942 8,517,145 Total Program Revenues 12,010,752$ 11,705,364$ 12,506,899$ 15,252,421$ Fiscal Year 140 (Restated) 2014 2015 2016 2017 2018 2019 1,976,377$ 1,700,133$ 1,871,736$ 2,666,781$ 1,983,179$ 1,850,242$ 6,795,836 7,258,504 9,463,124 8,257,709 7,578,150 8,540,198 2,467,618 4,229,077 3,143,421 2,975,007 3,661,766 3,816,417 2,145,224 2,223,152 2,405,905 2,485,417 2,280,418 2,145,988 1,704,010 655,093 732,106 2,163,967 1,244,292 749,651 140,321 269,284 323,326 725,982 1,074,469 1,412,763 15,229,386 16,335,243 17,939,618 19,274,863 17,822,274 18,515,259 1,976,864 2,458,724 2,187,006 2,399,248 2,631,598 2,834,973 4,635,686 4,584,929 3,633,022 3,504,722 4,038,859 3,762,099 304,059 291,695 341,776 322,278 299,217 319,871 877,826 880,581 949,438 996,056 987,912 1,003,048 558,160 713,218 830,108 834,688 736,166 888,156 99,560 105,452 102,894 101,668 119,250 116,732 8,452,155 9,034,599 8,044,244 8,158,660 8,813,002 8,924,879 23,681,541$ 25,369,842$ 25,983,862$ 27,433,523$ 26,635,276$ 27,440,138$ 234,440$ 254,333$ 267,970$ 340,421$ 250,575$ 223,379$ 1,047,721 1,073,079 1,035,725 1,302,551 935,116 880,634 224,790 219,634 220,208 234,564 228,660 226,249 617,459 668,480 699,613 686,335 570,143 529,739 - - 20,000 41,112 - - 1,013,058 845,517 1,002,681 777,368 967,499 826,489 47,917 460,537 711,527 1,150,840 941,212 2,819,823 3,185,385 3,521,580 3,957,724 4,533,191 3,893,205 5,506,313 2,414,482 2,468,638 2,627,875 2,899,257 3,154,709 3,380,075 3,634,873 3,777,108 4,124,346 4,289,255 4,696,593 4,675,498 254,508 287,056 315,162 283,375 298,696 296,538 775,784 745,886 749,689 849,701 864,531 892,740 948,537 981,723 1,037,429 1,082,348 1,139,007 1,190,058 123,060 128,890 137,525 137,491 144,582 152,975 444,484 33,032 159,898 27,568 327,335 14,308 11,469 194,590 1,394,822 58,237 14,203 28,824 8,607,197 8,616,923 10,546,746 9,627,232 10,639,656 10,631,016 11,792,582$ 12,138,503$ 14,504,470$ 14,160,423$ 14,532,861$ 16,137,329$ Fiscal Year 141 City of New Hope, Minnesota Statistical Section (Unaudited) Changes in Net Position (Continued) Last Ten Fiscal Years (Accrual Basis of Accounting) (Restated) 2010 2011 2012 2013 Net Revenues (Expenses) Governmental activities (8,372,897)$ (8,478,952)$ (8,861,303)$ (5,797,950)$ Business-type activities 1,558,632 396,577 646,886 884,021 Total Primary Government Revenues (Expenses)(6,814,265)$ (8,082,375)$ (8,214,417)$ (4,913,929)$ General Revenues and Other Changes in Net Position General Revenues Governmental Activities Taxes Property taxes 8,730,979$ 8,784,948$ 9,129,247$ 9,554,629$ Tax increments 1,408,256 1,400,163 1,343,248 511,924 Franchise taxes 430,494 439,795 440,149 438,834 Grants and contributions not restricted to specific programs 79,529 87,206 47,662 49,005 Unrestricted investment earnings 337,312 745,484 429,595 198,658 Gain on sale of capital assets 22,930 13,568 69,321 37,201 Transfers 91,129 (2,163,781) 68,971 (317,987) Total Governmental Activities General Revenues 11,100,629 9,307,383 11,528,193 10,472,264 Business-type Activities Unrestricted investment earnings 17,400 71,089 57,384 7,508 Transfers (91,129) 2,163,781 (68,971) 317,987 Total Business-type Activities General Revenues (73,729) 2,234,870 (11,587) 325,495 Total Primary Government 11,026,900$ 11,542,253$ 11,516,606$ 10,797,759$ Change in Net Position Governmental activities 2,727,732$ 828,431$ 2,666,890$ 4,674,314$ Business-type activities 1,484,903 2,631,447 635,299 1,209,516 Total Primary Government 4,212,635$ 3,459,878$ 3,302,189$ 5,883,830$ Fiscal Year Note: The City implemented GASB Statement No. 63 and GASB Statement No. 65 in fiscal 2012. Net position information has been restated for 2011 for this accounting change. Years prior to 2011 have not been restated. The City implemented GASB Statement No. 67 and GASB Statement No. 68 in fiscal 2015. The City implented GASB Statement No. 75 in fiscal 2018. Information has not been restated for prior years. 142 (Restated) 2014 2015 2016 2017 2018 2019 (12,044,001)$ (12,813,663)$ (13,981,894)$ (14,741,672)$ (13,929,069)$ (13,008,946)$ 155,042 (417,676) 2,502,502 1,468,572 1,826,654 1,706,137 (11,888,959)$ (13,231,339)$ (11,479,392)$ (13,273,100)$ (12,102,415)$ (11,302,809)$ 9,732,776$ 10,131,759$ 10,843,702$ 11,929,597$ 12,941,920$ 15,265,428$ 537,871 430,879 492,584 841,098 1,112,753 1,317,803 438,541 442,556 447,248 912,357 945,244 957,448 179,537 600,030 633,056 628,119 697,895 803,035 324,498 331,417 377,960 531,240 798,557 1,412,308 - - - 50,456 70,400 369,163 114,000 68,204 121,800 (19,110) (48,413) (144,624) 11,327,223 12,004,845 12,916,350 14,873,757 16,518,356 19,980,561 31,714 35,700 44,708 36,811 72,531 149,296 (114,000) (68,204) (121,800) 19,110 48,413 144,624 (82,286) (32,504) (77,092) 55,921 120,944 293,920 11,244,937$ 11,972,341$ 12,839,258$ 14,929,678$ 16,639,300$ 20,274,481$ (716,778)$ (808,818)$ (1,065,544)$ 132,085$ 2,589,287$ 6,971,615$ 72,756 (450,180) 2,425,410 1,524,493 1,947,598 2,000,057 (644,022)$ (1,258,998)$ 1,359,866$ 1,656,578$ 4,536,885$ 8,971,672$ Fiscal Year 143 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 2010 8,730,979$ 1,408,256$ 430,494$ 10,569,729$ 2011 8,784,948 1,400,163 439,795 10,624,906 2012 9,129,247 1,343,248 440,149 10,912,644 2013 9,554,629 511,924 438,834 10,505,387 2014 9,732,776 537,871 438,541 10,709,188 2015 10,131,759 430,879 442,556 11,005,194 2016 10,843,702 492,584 447,248 11,783,534 2017 11,929,597 841,098 912,357 13,683,052 2018 12,941,920 1,112,753 945,244 14,999,917 2019 15,265,428 1,317,803 957,448 17,540,679 145 City of New Hope, Minnesota Statistical Section (Unaudited) Fund Balances of Governmental Funds Last Ten Fiscal Years (Modified Accrual Basis of Accounting) (Restated) 2010 2011 2012 2013 General Fund Reserved 63,753$ -$ -$ -$ Unreserved 4,527,847 - - - Nonspendable - 14,366 14,925 15,484 Unassigned - 4,920,846 5,080,812 5,567,933 Total General Fund 4,591,600$ 4,935,212$ 5,095,737$ 5,583,417$ All Other Governmental Funds Reserved 9,043,337$ -$ -$ -$ Unreserved, reported in Special Revenue funds 3,129,062 - - - Capital Project funds 9,771,932 - - - Restricted - 6,114,114 5,657,606 5,550,819 Committed - 4,666,447 5,165,192 4,511,073 Assigned - 6,877,641 6,533,868 8,204,338 Unassigned - - - - Total All Other Governmental Funds 21,944,331$ 17,658,202$ 17,356,666$ 18,266,230$ Total All Governmental Funds 26,535,931$ 22,593,414$ 22,452,403$ 23,849,647$ Note: The City implemented GASB 54 in fiscal year 2011, resulting in significant reclassification of the components of fund balance. Years prior to 2011 have not been restated. Fiscal Year 146 (Restated) 2014 2015 2016 2017 2018 2019 -$ -$ -$ -$ -$ -$ - - - - - - 16,005 16,765 18,242 17,617 18,763 22,980 5,805,289 6,063,647 6,255,436 6,871,038 7,162,188 7,116,723 5,821,294$ 6,080,412$ 6,273,678$ 6,888,655$ 7,180,951$ 7,139,703$ -$ -$ -$ -$ -$ -$ - - - - - - - - - - - - 5,687,949 8,069,238 7,772,782 24,605,109 24,646,820 13,304,922 4,771,304 5,431,288 5,397,075 5,837,809 5,414,740 5,033,555 7,839,792 5,496,484 4,958,094 5,176,318 5,695,269 6,248,128 (134,792) (226,356) (3,015,315) (4,178,684) (3,448,208) (2,475,320) 18,164,253$ 18,770,654$ 15,112,636$ 31,440,552$ 32,308,621$ 22,111,285$ 23,985,547$ 24,851,066$ 21,386,314$ 38,329,207$ 39,489,572$ 29,250,988$ Fiscal Year 147 City of New Hope, Minnesota Statistical Section (Unaudited) Changes in Fund Balances of Governmental Funds Last Ten Fiscal Years (Modified Accrual Basis of Accounting) (Restated) 2010 2011 2012 2013 Revenues Property taxes 8,694,245$ 8,767,959$ 9,199,381$ 9,531,663$ Tax increments 1,408,256 1,400,163 1,343,248 511,924 Franchise taxes 430,494 439,795 440,149 438,834 Licenses and permits 236,378 359,530 238,943 273,117 Intergovernmental 1,765,220 1,599,253 858,816 4,463,113 Charges for services 1,369,904 1,544,369 1,557,898 1,585,964 Fines and forfeitures 238,961 255,329 283,233 239,201 Special assessments 258,392 153,835 305,818 178,335 Investment earnings 393,913 548,548 307,032 178,217 Miscellaneous 87,607 115,183 80,073 111,443 Total Revenues 14,883,370 15,183,964 14,614,591 17,511,811 Expenditures General government 1,883,729 1,560,511 1,567,301 1,571,701 Public safety 5,791,511 5,933,201 5,946,209 5,967,599 Public works 989,734 1,079,884 1,192,760 1,254,201 Culture and recreation 1,599,381 1,560,486 1,599,041 1,613,518 Economic development 192,431 289,650 304,064 582,621 Capital outlay 2,605,724 5,263,935 7,685,819 4,239,938 Debt service Principal 515,000 1,005,000 330,000 340,000 Interest 273,054 247,973 270,613 306,462 Bond issuance costs - 93,820 104,351 - Total Expenditures 13,850,564 17,034,460 19,000,158 15,876,040 Excess (Deficiency) of Revenues Over (Under) Expenditures 1,032,806 (1,850,496) (4,385,567) 1,635,771 Other Financing Sources (Uses) Transfers in 2,596,321 2,477,195 936,188 360,427 Sales of capital assets 1,954 - - 1,460 Bonds issued 1,245,000 - - - Premium on bonds issued 16,173 - 54,006 - Refunding bonds issued - - 4,025,000 - Principal payments to refunded bond escrow agent - - - - Transfers out (2,444,592) (4,569,216) (770,638) (600,414) Total Other Financing Sources (Uses)1,414,856 (2,092,021) 4,244,556 (238,527) Net Change in Fund Balances 2,447,662$ (3,942,517)$ (141,011)$ 1,397,244$ Debt Service as a Percentage of Noncapital Expenditures 9.8%6.4%4.1%5.6% Fiscal Year 148 (Restated) 2014 2015 2016 2017 2018 2019 9,718,800$ 10,145,204$ 10,868,985$ 11,961,711$ 12,904,297$ 15,223,680$ 537,871 430,879 492,584 841,098 1,112,753 1,317,803 438,541 442,556 447,248 912,357 945,244 957,448 353,973 389,957 466,548 641,870 367,931 320,438 818,825 1,359,511 2,063,546 1,844,648 2,195,760 3,947,039 1,663,053 1,601,081 1,571,798 1,727,615 1,399,998 1,376,176 215,585 237,591 191,960 208,909 230,657 227,343 98,617 38,417 173,158 92,458 282,589 197,566 248,013 274,116 304,252 486,746 658,606 1,166,238 129,980 202,057 42,103 137,591 33,966 173,679 14,223,258 15,121,369 16,622,182 18,855,003 20,131,801 24,907,410 1,668,474 1,688,752 1,872,436 2,622,277 1,787,553 1,900,480 6,397,860 6,866,105 7,168,102 7,724,950 7,997,311 8,427,939 1,225,551 1,328,371 1,606,369 1,671,593 1,717,815 1,790,715 1,761,961 1,853,741 1,938,131 2,066,692 2,015,729 2,032,585 298,825 498,479 588,167 1,737,947 815,352 513,946 3,000,518 8,204,694 8,220,964 5,217,461 12,956,485 22,573,850 350,000 405,000 415,000 523,497 799,734 968,674 212,025 131,530 257,661 455,539 769,497 1,273,302 2,200 114,607 58,188 251,648 148,365 90,446 14,917,414 21,091,279 22,125,018 22,271,604 29,007,841 39,571,937 (694,156) (5,969,910) (5,502,836) (3,416,601) (8,876,040) (14,664,527) 669,461 3,209,226 1,630,270 4,305,261 788,458 2,162,676 4,055,382 - - - - 331,299 - - 2,824,075 18,435,000 9,520,000 5,235,000 - 171,339 107,553 1,857,609 476,673 454,261 - 6,470,000 - - - - (3,780,000) - - - - - (477,461) (3,015,226) (1,426,570) (4,238,376) (748,726) (1,981,951) 467,382 6,835,339 3,135,328 20,359,494 10,036,405 6,201,285 (226,774)$ 865,429$ (2,367,508)$ 16,942,893$ 1,160,365$ (8,463,242)$ 4.5%3.5%4.6%5.4%9.2%12.6% Fiscal Year 149 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 2010 8,694,245$ 1,408,256$ 430,494$ 10,532,995$ 2011 8,767,959 1,400,163 439,795 10,607,917 2012 9,199,381 1,343,248 440,149 10,982,778 2013 9,531,663 511,924 438,834 10,482,421 2014 9,718,800 537,871 438,541 10,695,212 2015 10,145,204 430,879 442,556 11,018,639 2016 10,868,985 492,584 447,248 11,808,817 2017 11,961,711 841,098 912,357 13,715,166 2018 12,904,297 1,112,753 945,244 14,962,294 2019 15,223,680 1,317,803 957,448 17,498,931 151 City of New Hope, Minnesota Statistical Section (Unaudited) Tax Capacity, Market Value and Estimated Actual Value of Taxable Property Last Ten Fiscal Years (Shown By Year of Tax Collectability) 2010 2011 2012 2013 Taxable Market Value Real property 1,618,178,200$ 1,492,408,000$ 1,321,463,913$ 1,214,204,483$ Personal property 7,624,400 8,162,100 8,515,600 9,657,700 Total Taxable Market Value 1,625,802,600$ 1,500,570,100$ 1,329,979,513$ 1,223,862,183$ Estimated actual value of taxable property 1,629,433,100$ 1,504,929,000$ 1,438,796,300$ 1,336,539,900$ Taxable Market Value as a Percentage of Estimated Actual Value 99.78 99.71 %92.44 %91.57 % Tax Capacity Real property 19,864,103$ 18,462,796$ 16,686,170$ 15,476,014$ Personal property 148,346 159,492 165,812 188,654 Subtotal 20,012,449 18,622,288 16,851,982 15,664,668 Less: Tax Increment (1,181,390) (1,044,830) (944,560) (366,752) Less: Contribution to Fiscal Disparities (2,596,468) (2,466,459) (2,380,423) (2,255,476) Add: Distribution from Fiscal Disparities 3,946,315 3,896,651 3,605,075 3,448,346 Net Tax Capacity 20,180,906$ 19,007,650$ 17,132,074$ 16,490,786$ Tax levies Revenue 9,053,443$ 9,036,625$ 9,066,928$ 9,406,483$ Bonds and interest 39,268 192,105 161,802 164,325 Total 9,092,711$ 9,228,730$ 9,228,730$ 9,570,808$ Tax capacity rate Revenue 45.542 47.916 %53.842 %57.802 % Bonds and interest 0.199 1.025 0.967 1.010 Sewer district 0.273 0.308 0.387 - Total Direct Tax Rate 46.014 %49.249 %55.196 %58.812 % Source: Hennepin County Auditor/Treasurer Department Note: Property in the county is reassessed annually. Fiscal Year 152 2014 2015 2016 2017 2018 2019 1,224,417,514$ 1,323,173,828$ 1,419,351,117$ 1,522,726,514$ 1,683,833,465$ 1,817,473,851$ 10,849,800 11,343,900 11,588,000 12,327,600 13,258,900 13,963,100 1,235,267,314$ 1,334,517,728$ 1,430,939,117$ 1,535,054,114$ 1,697,092,365$ 1,831,436,951$ 1,346,449,200$ 1,440,652,000$ 1,534,397,300$ 1,636,865,900$ 1,792,927,900$ 1,921,182,700$ 91.74 %92.63 %93.26 %93.78 %94.65 %95.33 % 15,454,712$ 16,638,481$ 17,898,058$ 19,196,854$ 21,143,125$ 22,506,796$ 211,746 221,628 226,510 242,052 260,678 275,032 15,666,458 16,860,109 18,124,568 19,438,906 21,403,803 22,781,828 (377,138) (338,715) (362,633) (604,222) (810,429) (948,691) (2,154,731) (2,144,256) (2,277,639) (2,464,382) (2,655,561) (2,870,420) 3,437,911 3,505,922 3,437,652 3,757,080 4,010,408 4,111,736 16,572,500$ 17,883,060$ 18,921,948$ 20,127,382$ 21,948,221$ 23,074,453$ 9,556,483$ 9,938,265$ 10,617,194$ 11,362,957$ 12,043,578$ 12,722,208$ 161,487 163,902 195,819 604,444 869,164 2,579,402 9,717,970$ 10,102,167$ 10,813,013$ 11,967,401$ 12,912,742$ 15,301,610$ 57.622 %55.073 %56.364 %56.906 %54.643 %56.539 % 0.974 0.905 1.041 3.025 3.946 11.451 - - - - - - 58.596 %55.978 %57.405 %59.931 %58.589 %67.990 % Fiscal Year 153 City of New Hope, Minnesota Statistical Section (Unaudited) Property Tax Capacity Rates - Direct and Overlapping Governments Last Ten Fiscal Years Year Taxes General Debt Sewer District Payable Levy Levy Total 2010 45.542 0.199 0.273 46.014 2011 47.916 1.025 0.308 49.249 2012 53.842 0.967 0.387 55.196 2013 57.802 1.010 - 58.812 2014 57.622 0.974 - 58.596 2015 55.073 0.905 - 55.978 2016 56.364 1.041 - 57.405 2017 56.906 3.025 - 59.931 2018 54.643 3.946 - 58.589 2019 56.539 11.451 - 67.990 Source: Hennepin County Auditor/Treasurer Department Overlapping rates are those of local and county governments that apply to property owners within the City. Not all overlapping rates apply to all City property owners (e.g. the rates for special districts apply only to the proportion of the government's property owners whose property is located within the geographic boundaries of the special district). Levy Direct Rate - City of New Hope 154 County No. 281 Other Total 42.640 28.621 9.098 126.373 45.840 34.387 10.068 139.544 48.231 32.534 10.422 146.383 49.461 32.347 10.933 151.553 49.959 34.777 11.307 154.639 46.398 33.226 10.561 146.163 45.356 33.833 10.432 147.026 44.087 31.612 10.214 145.844 42.808 31.957 9.052 142.406 41.861 29.909 8.885 148.645 Overlapping Rates School District 155 City of New Hope, Minnesota Statistical Section (Unaudited) Principal Property Taxpayers Current Year and Nine Years Ago Tax Taxpayer Capacity Rank STNL (New Hope), LLC 231,170$ 1 1.01 % Allen Group, LLC 204,270 2 0.90 FLS Properties 203,710 3 0.89 Hy-Vee, Inc.193,150 4 0.85 Broadway Lanel/Golle/Holmes 190,700 5 0.84 St. Therese Home, Inc.188,730 6 0.83 Paddock Property Ltd. Partnership 182,740 7 0.80 CI Minn I-A, LLC 182,210 8 0.80 GLP US Management, LLC 181,310 9 0.80 Lang Nelson Association 173,650 10 0.76 Geneva Management Service, LLC - - - New Hope / US Swim Partnership - - - Minnesota Masonic Home/North Ridge Care Center - - - Winnetka Mall, LLC - - - New Hope Distribution Center, LLC - - - Welsh Navarre MN, LLC - - - Totals 1,931,640$ 8.48 % Source: Hennepin County Auditor/Treasurer Department Tax Capacity 2019 Percent of Total 156 Tax Capacity Rank -$ - - % - - - 139,250 9 0.70 - - - - - - 154,438 4 0.77 165,250 2 0.83 - - - - - - 132,188 10 0.66 199,250 1 1.00 159,250 3 0.80 152,275 5 0.76 146,970 6 0.73 145,250 7 0.73 139,250 8 0.70 1,533,371$ 7.68 % Tax Capacity 2010 Percent of Total 157 City of New Hope, Minnesota Statistical Section (Unaudited) Property Tax Levies and Collections Last Ten Fiscal Years (1) Collection Collection Fiscal Total of Current in Subsequent Total Year Levy Year's Levy Years Collections 2010 9,092,711$ 8,983,224$ 98.80 %109,487$ 9,092,711$ 100.00 % 2011 9,228,730 9,063,615 98.21 165,115 9,228,730 100.00 2012 9,228,730 9,102,355 98.63 126,375 9,228,730 100.00 2013 9,570,808 9,429,858 98.53 140,950 9,570,808 100.00 2014 9,717,970 9,619,447 98.99 98,523 9,717,970 100.00 2015 10,102,167 10,017,500 99.16 73,958 10,091,458 99.89 2016 10,813,013 10,756,992 99.48 32,100 10,789,092 99.78 2017 11,967,401 11,895,137 99.40 63,110 11,958,247 99.92 2018 12,912,742 12,834,660 99.40 66,171 12,900,831 99.91 2019 15,301,610 15,172,310 99.15 - 15,172,310 99.15 Source: Hennepin County Auditor/Treasurer Department (1) Includes state paid property tax credits. Collected to Levy Percent Percentage of Total of Levy Collections 158 City of New Hope, Minnesota Statistical Section (Unaudited) Ratios of Outstanding Debt by Type Last Ten Fiscal Years General Special Tax Fiscal Obligation Assessment Increment Year Bonds Bonds Bonds 2010 1,280,000$ 775,000$ 4,605,000$ 2011 1,245,000 - 4,410,000 2012 1,120,000 - 8,230,000 2013 1,000,729 - 8,065,761 2014 863,620 - 4,066,223 2015 2,898,167 - 8,250,291 2016 5,682,679 - 7,968,655 2017 25,713,493 - 7,687,463 2018 35,323,386 - 7,140,876 2019 40,433,000 - 6,582,397 Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements. See Demographic and Economic Statistics on page 167 for personal income and population data. Governmental Activities 159 G.O Lease General G.O.Tax Total Revenue Obligation Revenue Increment Primary Per Bonds Bonds Bonds Bonds Government Capita -$ -$ 2,930,000$ -$ 9,590,000$ 0.83 %472$ 3,505,000 - 2,360,095 - 11,520,095 1.04 562 3,505,000 - 2,033,000 - 14,888,000 1.25 717 3,505,000 - 2,723,628 - 15,295,118 1.24 732 3,505,000 - 2,352,553 - 10,787,396 0.86 518 3,505,000 1,831,607 2,151,635 1,587,602 20,224,302 1.49 953 3,505,000 3,934,522 1,950,071 1,586,242 24,627,169 1.75 1,140 3,505,000 3,833,158 1,748,533 1,584,964 44,072,611 3.03 2,046 3,505,000 3,727,852 1,540,021 1,494,575 52,731,710 3.41 2,420 3,505,000 3,509,802 1,326,532 1,401,536 56,758,267 3.67 2,605 Income of Personal Percentage Business-type Activities 160 City of New Hope, Minnesota Statistical Section (Unaudited) Ratios of General Bonded Debt Outstanding Last Ten Fiscal Years Less Amounts General Available in Net Fiscal Obligation Debt Service Bonded Per Year Bonds Funds Debt Capita 2010 9,590,000$ 4,288,603$ 5,301,397$ 0.325 %261$ 2011 8,015,095 465,243 7,549,852 0.502 369 2012 11,383,000 4,222,494 7,160,506 0.498 345 2013 11,790,118 345,010 11,445,108 0.856 548 2014 7,282,396 614,161 6,668,235 0.495 320 2015 16,719,302 759,386 15,959,916 1.108 752 2016 21,122,169 1,048,498 20,073,671 1.308 929 2017 40,567,611 2,173,637 38,393,974 2.346 1,782 2018 49,226,710 1,793,587 47,433,123 2.646 2,177 2019 53,253,267 3,193,279 50,059,988 2.606 2,297 Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements. See Demographic and Economic Statistics on page 167 for population data. Percentage See Tax Capacity, Market Value and Estimated Actual Value of Taxable Property on page 152 for property value data. of Estimated Actual Value of Taxable Property 161 THIS PAGE IS LEFT BLANK INTENTIONALLY 162 City of New Hope, Minnesota Statistical Section (Unaudited) Computation of Direct and Overlapping Debt December 31, 2019 City's Outstanding Share Debt of Debt Direct Debt City of New Hope (1)40,433,000$ 100.00 %40,433,000$ Overlapping Debt Hennepin County 990,655,000$ 1.08 %10,699,074$ Independent School District #281, Robbinsdale 180,625,000 19.52 35,258,000 Metropolitan Council 265,680,000 0.55 1,461,240 Hennepin Region RR Authority 98,385,000 1.08 1,062,558 Three Rivers Park District 54,325,000 1.52 825,740 Total Overlapping Debt 1,589,670,000$ 3.10 %49,306,612$ Total Direct and Overlapping Debt 1,630,103,000$ 5.51 %89,739,612$ (1) Excludes debt payable from tax increment revenue and enterprise revenue. Note: Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the City. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of the City. This process recognized that, when considering the government's ability to issue and repay long-term debt, the entire debt burden borne by the residents and businesses should be taken into account. However, this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt, of each overlapping government. District * Percentage Applicable to Source : Assessed value data used to estimate applicable percentages and outstanding debt data for overlapping entities was provided by Hennepin County. * The percentage of overlapping debt applicable is estimated using taxable market property values. Applicable percentages were estimated by determining the portion of the county's taxable market value that is within the City's boundaries and dividing it by the county's total taxable market value. 163 City of New Hope, Minnesota Statistical Section (Unaudited) Legal Debt Margin Information Last Ten Fiscal Years 2010 2011 2012 2013 Debt Limit 48,774,078$ 45,017,103$ 39,899,385$ 36,715,865$ Total Net Debt Applicable to Limit 1,246,878 1,072,678 970,908 839,948 Legal Debt Margin 47,527,200$ 43,944,425$ 38,928,477$ 35,875,917$ Total Net Debt Applicable to the Limit as a Percentage of Debt Limit 2.56%2.38%2.43%2.29% Note: Under state law, the City's outstanding general obligation debt should not exceed 3 percent of the market value of taxable property. By law, the general obligation debt subject to the limitation may be offset by amounts set aside for the extinguishment of those obligations. Fiscal Year 164 2014 2015 2016 2017 2018 2019 37,058,019$ 40,035,532$ 42,928,174$ 46,051,623$ 50,912,771$ 54,943,109$ 696,627 2,719,528 5,497,493 25,516,878 34,249,431 38,595,992 36,361,392$ 37,316,004$ 37,430,681$ 20,534,745$ 16,663,340$ 16,347,117$ 1.88%6.79%12.81%55.41%67.27%70.25% Taxable Market Value 1,831,436,951$ Debt Limit (3 Percent of Market Value)54,943,109$ Debt Applicable to Limit General obligation bonds 40,433,000 Less: Amount Available in Debt Service Funds (1,837,008) Total Net Debt Applicable to Limit 38,595,992 Legal Debt Margin 16,347,117$ Fiscal Year Legal Debt Margin Calculation for Fiscal Year 2019 165 City of New Hope, Minnesota Statistical Section (Unaudited) Pledged Revenue Coverage Last Ten Fiscal Years (1)(2)Net Fiscal Gross Operating Revenue Year Revenues Expenses Available Principal Interest 2010 7,131,115$ 5,046,701$ 2,084,414$ 1,520,000$ 168,236$ 123.47 % 2011 6,646,747 5,527,230 1,119,517 981,643 74,418 106.01 2012 7,676,193 6,493,865 1,182,328 334,000 162,686 238.04 2013 7,901,855 6,573,932 1,327,923 344,000 98,588 300.04 2014 7,887,948 7,270,310 617,638 371,000 103,685 130.12 2015 8,039,067 7,925,903 113,164 201,000 97,584 37.90 2016 8,738,270 6,629,232 2,109,038 202,000 172,262 563.52 2017 9,181,674 6,850,851 2,330,823 293,503 228,142 446.82 2018 10,247,826 7,479,247 2,768,579 394,266 232,928 441.42 2019 10,292,470 7,408,536 2,883,934 515,326 251,673 376.00 (1) Gross revenues include interest and other nonoperating revenues. (2) Operating expenses exclude depreciation. (3) Revenues and expenses include the Storm Water, Water Utility, Sewer Utility, and Ice Arena funds. Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements. Coverage Revenue Bonds (3) Debt Service 166 Per Capita Total Fiscal Personal Personal Median School Year Population (1)Income (2)Income (3)Age (4)Enrollment (5) 2010 20,339 56,564$ 1,150,455,196$ 39.4 11,839 7.0 % 2011 20,486 54,008 1,106,407,888 39.4 11,804 5.6 2012 20,764 57,476 1,193,431,664 39.4 12,126 4.8 2013 20,904 58,898 1,231,203,792 39.4 12,126 4.0 2014 20,812 60,601 1,261,228,012 39.4 12,390 2.9 2015 21,225 63,901 1,356,298,725 39.4 12,313 2.8 2016 21,600 65,231 1,408,989,600 39.4 12,404 2.8 2017 21,545 67,427 1,452,714,715 39.4 12,011 3.5 2018 21,790 71,067 1,548,549,515 39.4 12,304 2.7 2019 21,790 71,067 1,548,549,930 39.4 12,237 2.7 (2) Provided by the Bureau of Economic Analysis; US Department of Commerce. This figure is for all of Hennepin County. (3) Calculated by multiplying the estimated population by the per capita personal income figure. (4) US Census Bureau (5) Provided by Independent School District #281, Robbinsdale, MN. (6) Provided by the Bureau of Labor Statistics; US Department of Labor. This figure is for all of Hennepin County. (1) Provided by the Metropolitan Council. The most recent year is an estimate. City of New Hope, Minnesota Demographic and Economic Statistics Last Ten Fiscal Years Unemployment Rate (6) 167 City of New Hope, Minnesota Employees Rank Independent School District No. 281 1,852 1 18.09 % Saint Therese Home of New Hope 1,117 2 10.91 Intermediate District No. 287 943 3 9.21 Hy-Vee 632 4 6.17 Minnesota Masonic Home/North Ridge Care Center 560 5 5.47 Horwitz 345 6 3.37 Perrigo Company 323 7 3.16 YMCA 228 8 2.23 Liberty Diversified International 200 9 1.95 Parker - Hannifin Oildyne Division 172 10 1.68 Paddock Labratories - - Navarre Corporation - - Dakota Growers Pasta - - Waymouth Farms, Inc.- - Total Employment for Top 10 Employers 6,372 62.26 % Total City Employment 10,235 Source: Minnesota Department of Employment and Economic Development. Principal Employers Current Year and Nine Years Ago Employer Employment 2019 Percentage of Total City 168 Employees Rank 2,000 1 18.83 % 602 3 5.67 - - - - 808 2 7.61 - - - - 240 6 2.26 182 8 1.71 190 7 1.79 557 4 5.24 372 5 3.50 150 9 1.41 140 10 1.32 5,241 49.35 % 10,620 Employment 2010 Percentage of Total City 169 City of New Hope, Minnesota Full-time Equivalent City Government Employees by Function Last Ten Fiscal Years 2010 2011 2012 2013 General Government 15 15 15 16 Public Safety Police Officers 30 31 30 31 Civilians 7 6 7 7 Public Works 22 24 24 24 Culture and Recreation 8 7 6 7 Total 82 83 82 85 Source: Various City departments. Function 170 2014 2015 2016 2017 2018 2019 14 13 13 16 17 17 33 35 33 34 34 34 7 9 9 10 11 10 24 23 24 24 24 24 7 7 8 7 7 7 85 87 87 91 93 92 171 City of New Hope, Minnesota Operating Indicators by Function Last Ten Fiscal Years 2010 2011 2012 2013 Function Public works Street resurfacing (miles)2 4 - - Potholes repaired 734 648 687 600 Culture and recreation Program registration - adults 3,796 5,271 5,598 4,565 Program registration - youth 5,287 5,323 7,442 5,924 Attendance at sponsored events 137,199 146,305 148,966 144,000 Golf Course Rounds of golf at the Municipal course 21,686 18,788 19,568 16,782 Ice Arena Hours of ice time rental 3,980 3,903 3,558 3,739 Water Water main breaks 19 32 26 30 Average daily consumption (thousands of gallons)1,746 1,712 1,828 1,682 Sewer Average daily treatment (thousands of gallons)1,895 2,253 2,189 1,500 Sources: Various City departments. Note: Indicators are not available for the general government function. Function 172 2014 2015 2016 2017 2018 2019 - 12 3 3 3 4 1,330 2,882 3,025 2,530 3,000 2,900 3,121 2,746 3,343 3,011 2,603 1,860 5,734 5,815 6,043 5,969 5,413 4,695 122,478 124,777 127,865 127,112 102,659 101,409 16,431 18,175 20,375 18,662 17,800 16,837 3,734 3,683 3,567 4,030 4,151 4,202 27 21 19 12 23 14 1,571 1,559 1,588 1,616 1,616 1,551 2,200 1,670 1,800 1,352 1,405 1,355 173 City of New Hope, Minnesota Capital Asset Statistics by Function Last Ten Fiscal Years 2010 2011 2012 2013 Function Public Safety Police stations 1 1 1 1 Fire stations 3 3 3 3 Public Works City streets (miles)64.0 64.0 64.0 64.0 State and County streets (miles)8.5 8.5 8.5 8.5 Sidewalks (miles)26.4 26.4 26.4 26.4 Street lights 580.0 580.0 580.0 580.0 Railroad bridges 2.0 2.0 2.0 2.0 Pedestrian bridges 4.0 4.0 4.0 4.0 Culture and recreation Parks 23 23 23 23 Swimming pools Olympic 1 1 1 1 Recreational 1 1 1 1 Outdoor theatre 1 1 1 1 Tennis courts 17 17 17 17 Water Water main (miles)63 63 63 63 Fire hydrants 690 690 690 690 Maximum daily capacity (thousands of gallons)21,000,000 21,000,000 21,000,000 21,000,000 Sewer Sanitary sewer main (miles)74 74 74 74 Storm sewer lines (miles)56 56 56 56 Ice Arenas 1 1 1 1 Golf courses 1 1 1 1 Source: Various City departments. Note: No capital asset indicators are available for the general government function. Function 174 2014 2015 2016 2017 2018 2019 1 1 1 1 1 1 3 3 3 3 3 3 64.0 64.0 64.5 64.5 64.5 64.8 8.5 8.5 8.5 8.5 8.5 8.5 26.4 26.4 27.0 27.0 27.0 27.3 580.0 580.0 619.0 619.0 619.0 630.0 2.0 2.0 2.0 2.0 2.0 2.0 4.0 4.0 4.0 4.0 4.0 4.0 23 23 23 23 23 23 1 1 1 1 - - 1 1 1 1 - - 1 1 1 1 1 - 17 17 15 15 12 12 63 63 64 64 64 65 690 690 712 712 712 716 21,000,000 21,000,000 21,000,000 21,000,000 21,000,000 21,000,000 74 74 75 75 75 75 56 56 56 56 56 57 1 1 1 1 1 1 1 1 1 1 1 1 175 I:\RFA\P&R\CAC\2020\Q - Snowman-Snow Sculpture Contest.docx Request for Action May 26, 2020 Approved by: Kirk McDonald, City Manager Originating Department: Parks & Recreation By: Susan Rader, Director Agenda Title Awards presentation for the 2019-20 New Hope Snowman/Snow Sculpture Contest winners Requested Action Staff requests the City Council recognize the New Hope Snowman/Snow Sculpture Contest winners. This contest was sponsored by the Citizen Advisory Commission (CAC). Background The idea for a snowman-building contest was originally discussed at the October 2017 CAC meeting as part of a brainstorming session to generate ideas to bring attention to New Hope. The commissioners quickly agreed that it would be a fun contest to host and that it would encourage people to get outside to enjoy the winter. In order to give people the option of creating a snowman or snow sculpture, the contest was titled the New Hope Snowman/Snow Sculpture Contest. Similar to last year’s contest, the entries could be submitted through the end of March and the contest was open to New Hope individuals, families, neighborhoods or groups. The contest was advertised in In the Pipeline, the city web site, the city electronic sign boards, NextDoor.com, the SunPost and on the recreation department Facebook page. Participants were asked to submit a photo with their name, address and a title for the creation via email. Following the March 31 deadline, six entries were forwarded to the commissioners for voting. Two entries were also received from non-residents and are not eligible for the contest. Last year, a total of thirteen entries were received. The contest winners are given the choice of a cash prize or certificate toward a parks and recreation program. Agenda Section Presentations Item Number 5.2 G:\City Manager\AGENDA\6.2 R-Approval of Claims Merge Doc.docx Request for Action May 26, 2020 Approved by: Kirk McDonald, City Manager Originating Department: City Manager By: Kirk McDonald, City Manager Agenda Title Approval of claims through May 26, 2020 Requested Action Claims for services and commodities purchased through this period are listed on the Check Disbursement Report Attachments x Check Disbursement Report Agenda Section Consent Item Number 6.2 I:\RFA\P&R\MISC\2020\Donut Talk\Q- Donations for 2019-2020 Donut Talk.docx Request for Action May 26, 2020 Approved by: Kirk McDonald, City Manager Originating Department: Parks & Recreation By: Susan Rader, Director of Parks & Recreation Agenda Title Motion accepting contributions for the 2019-2020 Donut Make You Wonder and Author Series Programs Requested Action Staff recommends approval of a motion accepting donations in the amount of $400 from the listed organizations for the 2019-2020 Donut Make You Wonder and Author Series Programs. Background The Parks and Recreation Departments of the cities of New Hope, Brooklyn Center, Crystal, Robbinsdale and the Robbinsdale Area Schools together plan and sponsor monthly Donut Make You Wonder events. This highly successful program attracts many older adults and is supported in part by community donations. These cities also put together an Author Series program, along with the Recreation Department of Golden Valley. This program brings in local authors to share the story of their publications. Donations are used to cover speaker fees as well as program expenses such as refreshments and supplies. New Hope is the fiscal agent for this jointly sponsored program and so Council is asked to accept this donation. Approximately 392 participants attended the 2019-2020 programs. Due to the effects of COVID-19, the March, April and May 2020 Donut Talks and Author Series events were cancelled. The donations will be used for the upcoming season. The list of cash donations for the 2019-2020 Donut Make You Wonder and Author Series Programs: Organization Sponsored Program (date, program name, attendance) Donation Minnesota Medicare Consultants 9/18/19 – Travelogue to Costa Rica (54 people) $50.00 Fairway Independent Mortgage 10/9/19 – Murder in Chisago County (32 people) $50.00 Minnesota Medicare Consultants 10/16/19 – Good Old Days of WCCO Radio (94 people) $50.00 Minnesota Medicare Consultants 11/20/19 – Armistice Day Storm of 1940 (99 people) $50.00 Copperfield Hill 1/15/20 – Habitual Health (46 people) $50.00 Crossings at Brookwood 2/19/20 – The Crossings at Brookwood (67 people) $50.00 Crossings at Brookwood 3/18/20 – Minnesota Twins Scorekeeping $50.00 Crossings at Brookwood 4/15/20 – New Zealand $50.00 Seniors Choice at Home 4/22/20 – Lake Superior Flavors $0.00 Home Instead 5/20/20 – 1936 Berlin Olympics $0.00 Letters of appreciation have been sent for all donations. Attachment  2019-2020 Donut Make You Wonder flyer  2019 Fall Author Series Agenda Section Consent Item Number 6.4 Request for Action, Page 2 I:\RFA\City Manager\2020\Fund Transfers\052620 Council Meeting\Q&R - Transfer from Park Infrastructure to Ice Arena Operating Fund 052620.docx Request for Action May 26, 2020 Approved by: Kirk McDonald, City Manager Originating Department: City Manager By: Kirk McDonald, City Manager Agenda Title Resolution approving $400,000 transfer from park infrastructure fund to ice arena operating fund for debt service and capital improvements Requested Action Staff is recommending that the City Council approve a resolution approving a $400,000 transfer from the park infrastructure fund to the ice arena operating fund for debt service and capital improvements. Policy/Past Practice In 2017, the City Council reviewed the financial operations of the ice arena and agreed to increase the park infrastructure tax levy to make annual transfers to the ice arena operating fund to provide for the required debt service payments on the 2011A bonds and ongoing capital needs of the facility. Background Staff and AEM are recommending that the Council approve a $400,000 transfer from the park infrastructure fund to the ice arena fund for ice arena debt service and capital improvements. The long-term financial plan that was reviewed with the Council in November 2019 included annual transfers from the park infrastructure fund to the ice arena fund to provide funding for the outstanding debt at the facility. The 2020 budget and tax levy approved by the Council in December 2019 included the usual 5% increase in the park infrastructure tax levy and $400,000 for ice arena debt service. A transfer is recommended so the funds can be transferred to the appropriate fund. At the June 19, 2017 work session, staff reviewed the financial operations of the ice arena and reported that the current cash generated from ice arena operations is not adequate to provide for the required debt service payments on the 2011A bonds or the ongoing capital outlay needs of the facility. It was noted that many of the ice arenas in neighboring communities receive funding form internal transfer or tax levies (Champlin, Coon Rapids, Maple Grove, Plymouth and Rogers). The recommendations presented included considering increasing the park infrastructure and/or general fund tax levy when the preliminary budget is reviewed so annual transfers can be made and implementing a long-term financing plan for all parks and recreation facilities/equipment. The City Council agreed that the ice arena is an important community asset and a valuable recreational facility, and supported making the needed capital improvements and adopting a plan to make the required debt service payment to ensure the ongoing viability of the operation. The Council discussed this transfer at the May 18, 2020 work session and was supportive. The attached resolution authorizes the transfer and staff recommends approval of the resolution. Attachments  Resolution  2020 Budget Excerpts  5/20/19 Excerpt Work Session Minutes Agenda Section Consent Item Number 6.5 Request for Action, Page 2  5/21/18 Excerpt Work Session Minutes  6/19/17 Excerpt Work Session Minutes City of New Hope Resolution No. 2020 - Resolution approving $400,000 transfer from park infrastructure fund to ice arena operating fund for debt service and capital improvements WHEREAS, the current cash generated from ice arena operations is not adequate to provide for the required debt service payments on the 2011A bond or the ongoing capital outlay needs of the facility; and WHEREAS, the financial operations and a long term plan to address the issue were discussed with the Council in June 2017, and it was noted that many of the ice arenas in nearby communities received funding form internal transfers on tax levies; and WHEREAS, it was recommended that the Council consider increasing the park infrastructure tax levy so that annual transfers could be made to the ice arena operating fund; and WHEREAS, the City Council was in agreement that the ice arena is an important community asset and a valuable recreational facility, and supported a plan to make needed capital improvements and debt service payments to ensure the ongoing viability of the operation; and WHERAS, the City Council has approved similar transfers that were included in the tax levy and budget in 2018 and 2019; and WHEREAS, the 2020 budget and tax levy approved by the City Council in December 2019 included $400,000 in the park infrastructure tax levy for the purpose of transferring the funds to the ice arena fund. NOW, THEREFORE, BE IT RESOLVED that the New Hope City Council herby approves a $400,000 transfer from the park infrastructure fund to the ice arena operating fund for debt service and capital improvements. Adopted by the City Council of the City of New Hope, Hennepin County, Minnesota, this 26th day of May, 2020. ______________________________ Mayor Attest: ________________________ City Clerk I:\RFA\P&R\Pool and Civic Center Pk Projects\2020\Change Orders\Theater Change Order 3 - 5.26.20\Q&R - Theater Change Order No. 3.docx Request for Action May 26, 2020 Approved by: Kirk McDonald, City Manager Originating Department: Parks & Recreation By: Susan Rader, Director Agenda Title Resolution approving change order no. 3 with American Liberty Construction, Inc. for the theater construction project (Improvement Project No. 941) Requested Action Staff requests that the City Council approve change order no. 3 to the contract for the theater construction project (improvement project no. 941). American Liberty is requesting to install an irrigation system and sod to the high traffic areas of the theater site at no cost, in lieu of a 1-year plan establishment period for watering and establishing turf. They are also asking to revise the substantial completion date from May 15, 2020 to June 15, 2020 and to revise the final completion date from June 12, 2020 to July 15, 2020. The Council reviewed the change order at the May 18, 2020 work session. Dan Boyum will be in attendance to respond to any questions regarding the change order. Policy/Past Practice The City Council considers change orders when unforeseen circumstances arise or changes are recommended for a city project. Background The City Council awarded a construction contract to American Liberty Construction, Inc. at the March 25, 2019 council meeting in the amount of $1,478,790.42. Stantec Engineers are providing oversight and regular construction updates are being presented to Council. Since the start of the project, the following change orders have been approved: Change Order Date Item Amount Change Order #1 – 5/28/19 Risk Insurance, Proposal Request 1 $993.48 Change Order #2 – 11/25/19 Revise the substantial completion date to May 15, 2020 and revise the final completion date to June 12, 2020. $0.00 On April 29, 2020, Stantec received a letter from American Liberty. They are requesting to install an irrigation system and sod to the high traffic areas of the theater site at no cost, in lieu of a 1-year plan establishment period for watering and establishing turf. The system will be zoned from the city hall system, and will be controlled by rain sensors. In addition, they are requesting a second, no-cost time extension for the substantial completion date to June 15, 2020 and final completion date to July 15, 2020. The project time extension request is due to cold weather, site coordination issues and pandemic logistic issues. There is no cost associated with this change order. Agenda Section Consent Item Number 6.6 Request for Action, Page 2 At the May 18, 2020 work session, city engineer Boyum was present for a monthly update and discussed change order no. 3. The theater change order includes the addition, as follows: Project Time Extension $ .00 Add Total Theater Change Order No. 3 $ .00 The change order does not increase the contract amount of $1,479,783.90. Staff recommends approval of the resolution approving the change order. Attachments  Resolution  May 19, 2020 Stantec Engineers Letter re: Change Order No. 3  Theater Change Order No. 3 City of New Hope Resolution No. 2020 - Resolution approving change order no. 3 with American Liberty Construction, Inc. for the theater construction project (Improvement Project No. 941) WHEREAS, the city has received the request for change order no. 3 from Stantec Consulting Services for American Liberty Construction, Inc. relating to the contract for the theater construction project (Improvement Project No. 941); and WHEREAS, the item in change order no. 3 is to install an irrigation system and sod to the high traffic areas of the theater site at no cost, in lieu of a 1-year plan establishment period for watering and establishing turf. It will also revise the substantial completion date from May 15, 2020 to June 15, 2020 and to revise the final completion date from June 12, 2020 to July 15, 2020; and WHEREAS, the City Council reviewed the items in change order no. 3 with city engineer Dan Boyum at the May 18, 2020 work session and directed staff to place the change order on the May 26, 2020 council agenda for formal action; and WHEREAS, the original contract with American Liberty Construction, Inc. was in the amount of $1,478,790.42 and the Stantec budget included a $321,824.98 contingency; and WHEREAS, change order no. 1 increases the contract amount to $1,479,783.90 and the construction contingency is reduced to $309,213.50; and WHEREAS, change order no. 2 did not increase the contract, so the contract amount remains at $1,479,783.90; and WHEREAS, change order no. 3 does not include a cost increase, so the contract amount remains at $1,479,783.90; and WHEREAS, Stantec Consulting Services and staff recommend approval of the change order. NOW, THEREFORE, BE IT RESOLVED by the City Council of the city of New Hope that change order no. 3 to American Liberty Construction, Inc. contract is approved and that all other respects of the contract shall remain in full force and effect according to its terms. Adopted by the City Council of the City of New Hope, Hennepin County, Minnesota, this 26th day of May, 2020. ______________________________ Mayor Attest: ________________________ City Clerk Stantec Consulting Services Inc. 733 Marquette Avenue, Suite 1000 Minneapolis, MN 55402 May 19, 2020 File:193804338 Attention: Susan Rader Director of Parks and Recreation City of New Hope 4401 Xylon Avenue North New Hope, MN 55428 Reference: Change Order No. 3 – New Hope Outdoor Theater City Project No: 941 Dear Susan, The above referenced change order was discussed at the May 18, 2020 City Council Work Session. On April 29, 2020, Stantec received a letter from American Liberty formally requesting a project time extension due to cold weather, site coordination issues, and pandemic logistic issues. They also propose to provide sod and an irrigation system in the high traffic areas of the theater in lieu of the specified seeding and maintenance at no additional project cost. American Liberty is requesting to: ·Revise the substantial completion date from May 15, 2020 to June 15, 2020. ·Revise the final completion date from June 12, 2020 to July 15, 2020. ·Provide sod and irrigation system in the high traffic areas of the theater in lieu of specified seeding and maintenance at no additional cost. We recommend approval of this substantial and final completion dates. If you have any questions or require further information, please call me at (612) 712-2021. Sincerely, STANTEC CONSULTING SERVICES INC. Dan D. Boyum, P.E. Attachments: New Hope Outdoor Theater – Change Order No. 3 and attachments CC: Kirk McDonald, Valorie Leone, Jeff Sargent, Bernie Weber – New Hope; Stacy Woods and Steve Sondrall – City Attorney; Bruce Paulson, Lucas Miller – Stantec. I:\RFA\P&R\Pool and Civic Center Pk Projects\2020\Change Orders\Pool Change Order 8 - 5.26.20\Q&R - Pool Change Order No. 8.docx Request for Action May 26, 2020 Approved by: Kirk McDonald, City Manager Originating Department: Parks & Recreation By: Susan Rader, Director Agenda Title Resolution approving Change Order No. 8 in the amount of $1,685 with Donlar Construction Company for the pool construction project (Improvement Project No. 995) Requested Action Staff requests that the City Council approve change order no. 8 to the contract for the pool construction project (improvement project no. 995) in the amount of $1,685. The City Council discussed the change order details at the May work session. Dan Boyum will be in attendance to respond to any questions regarding the change order. Policy/Past Practice The City Council considers change orders when unforeseen circumstances arise or changes are recommended for a city project. Background The City Council awarded a construction contract to Donlar Construction Company at the March 25, 2019 council meeting in the amount of $11,350,275. Stantec Engineers are providing oversight and regular construction updates are being presented to Council. Since the start of the project, the following change orders have been approved: Change Order Date Item Amount Change Order #1 – 5/28/19 Risk Insurance, Proposal Request 1 $11,618 Change Order #2 – 7/22/19 MN Department of Health Pool code review items (additional exit ladder, transition tile stripe near ramp, floor anchor and cement work near drop slide) $ 6,297 Change Order #3 – 8/26/19 Perimeter fence gates; cemetery fence and gate; bathhouse door closures $11,866 Change Order #4 – 10/14/19 Department of Labor & Industry Review changes (adding downspout storm drainage piping and fittings around the bathhouse and testing, resizing some hot water pipe sizes, replacing some fittings, and resizing some vent pipes) $24,431 Change Order #5 – 10/28/19 Water connections for the concession building; a recirculation line in the bathhouse building $8,535 Change Order #6 – 1/13/20 Concrete footings for added umbrellas; damper access panel; network control cabinet; tree stump removal; delete handholes and data raceway $4,827.35 Agenda Section Consent Item Number 6.7 Request for Action, Page 2 Change Order #7 – 3/23/20 Thicker grade beam at shade structure; rainfall and delay costs; CenterPoint utility delay $54,106.49 At the May work session, city engineer Boyum was present for the monthly update and discussed upcoming change orders including the items for change order no. 8, which totals $1,685. Stantec staff worked with Donlar to obtain quotes to complete the identified work. Power to Condensers: The contractor indicated that a power source was not shown on the plans but was needed for the two exterior condensing units off of the bathhouse. Underground wiring and an exterior GFCI outlet for both condensing units needed power run to them. Due to the time limitations, the city manager approved this change order and directed it to be placed on the May 26, 2020 City Council agenda for formal approval. Stanchions and Rope Additions: In reviewing the plans, the Building Official requested the addition of barriers at select areas by the water slides where the equipment extends over a walking surface at a height greater than 27 inches and less than 80 inches. Once the slides and stairs were installed, these areas were reviewed and recommendations made on the exact locations needed. Ice and Snow Guard: The bathhouse and mechanical buildings are seasonal and not used for the winter. It was determined that two rows of ice and snow guards could be eliminated due to the seasonal nature of the two buildings. Fire Sprinkler System: A dry system was specified for the mechanical building. The sprinkler system contractor reviewed with the deputy fire marshal and a wet system was installed. Pool change order no. 8 includes the addition, as follows: Power to Condensers $3,172 Add Stanchions and Rope Additions $9,431 Add Ice and Snow Guard Reduction $9,000 Deduct Fire Sprinkler System Change $1,918 Deduct Total Pool Change Order No. 8 $1,685 The change order increases the contract amount from $11,471,955.84 to $11,473,640.84. The remaining construction contingency after this change order is approximately $111,978, which takes into account the legal, permit and publication fees to date. Staff recommends approval of the resolution approving the change order. Attachments  Resolution  Letter from Dan Boyum, City Engineer  Change Order No. 8 City of New Hope Resolution No. 2020 - Resolution approving Change Order No. 8 in the amount of $1,685 with Donlar Construction Company for the pool construction project (Improvement Project No. 995) WHEREAS, the city has received the request for change order no. 8 from Stantec Consulting Services for Donlar Construction Company relating to the contract for the pool construction project (Improvement Project No. 995) in the amount of $1,685; and WHEREAS, the items in change order no. 8 includes power to condensers, stanchion and rope additions, ice and snow guard reduction, and a fire sprinkler change; and WHEREAS, the City Council reviewed the upcoming change order items with city engineer Dan Boyum at the May work session; and WHEREAS, the original contract with Donlar Construction Company was in the amount of $11,350,275 and the Stantec budget included a $321,824.98 contingency; and WHEREAS, at the May 28, 2019 city council meeting change order no. 1 was approved in the amount of $11,618, which increased the contract amount to $11,361,893 and decreased the contingency to $310,206.98; and WHEREAS, at the July 22, 2019 city council meeting change order no. 2 was approved in the amount of $6,297, which increased the contract amount to $11,368,190 and decreased the contingency to $302,916.50; and WHEREAS, at the August 26, 2019 city council meeting change order no. 3 was approved in the amount of $11,866, which increased the contract amount to $11,380,056 and decreased the contingency to $291,050.50; and WHEREAS, at the October 14, 2019 city council meeting change order no. 4 was approved in the amount of $24,431, which increased the contract amount to $11,404,487 and decreased the contingency to $266,619.50; and WHEREAS, at the October 28, 2019 city council meeting change order no. 5 was approved in the amount of $8,535, which increased the contract amount to $11,413,022 and decreased the contingency to $258,084.50; and WHEREAS, at the January 13, 2020 city council meeting change order no. 6 was approved in the amount of $4,827.35, which increased the contract amount to $11,417,849.35 and decreased the contingency to $167,900; and WHEREAS, at the March 23, 2020 city council meeting change order no. 7 was approved in the amount of $54,106.49, which increased the contract amount to $11,471,955.84 and decreased the contingency to $112,893.51; and WHEREAS, change order no. 8 increases the contract amount to $11,473,640.84 and the construction contingency is reduced to approximately $111,978.18; and WHEREAS, Stantec Consulting Services and staff recommend approval of the change order. NOW, THEREFORE, BE IT RESOLVED by the City Council of the city of New Hope that change order no. 8 to the Donlar Construction Company contract is approved in the amount of $1,685 and that all other respects of the contract shall remain in full force and effect according to its terms. Adopted by the City Council of the City of New Hope, Hennepin County, Minnesota, this 26th day of May, 2020. ______________________________ Mayor Attest: ________________________ City Clerk I:\RFA\PUBWORKS\2020\Council\5-26 Winnetka Water Main Change Order Request for Action May 26, 2020 Approved by: Kirk McDonald, City Manager Originating Department: Public Works By: Bernie Weber, Director Agenda Title Resolution approving Change Order No. 1 for G.F. Jedlicki Inc. Contract for 2020 Winnetka Watermain Replacement Project (Improvement Project No. 1027) Requested Action Staff recommends approval of change order no. 1 for the Winnetka Watermain Replacement Project in the amount of $13,818.61. The change order was discussed at the May 18 work session. Policy/Past Practice The City Council routinely considers public infrastructure improvement projects to extend the useful life of the infrastructure and/or improve the level of service. Background The replacement of the watermain on Winnetka Avenue between 27th and 29th avenues was identified on the city’s 2020 CIP. The existing watermain was pipe bursted, a process that involved demolishing the pipe in place by boring through the pipe. A new eight-inch plastic water main was bored in the same place as the demolished watermain. The city experienced additional costs associated with COVID-19 and county permitting for this project. These additional costs included furnishing and installing a temporary bituminous patch over portions of the center island that was removed, removal of the island, signal and electrical work, and plumber assistance for home and business connections. The costs are estimated at $13,818.61 and are addressed in change order no. 1. This is lower than the amount discussed at the work session. CenterPoint Energy will be reimbursing the city for at least $6,700 of the costs. Public works and engineering staff also reviewed the status of quantities on this project in late April and identified an increase of removal and restoration quantities related to curb and gutter, sidewalk, and street patching as compared to the estimated quantities in the original bid documents. The review of the increase in removal and restoration quantities is resulting in a $62,879.75 estimated overage in costs from the original bid. There are some watermain costs that will be reimbursed by the neighboring cities of Crystal and Golden Valley (approximately $14,000). An overage or underage in quantities on a project is not typically processed as a change order. The attached correspondence from the city engineer describes the specific details regarding the project overages. Per the attached memo from AEM, the water fund has adequate cash flow to cover the additional expense. Agenda Section Consent Item Number 6.8 Attachments • Resolution • Memorandum by City Engineer • Review of Overages and Additional Construction Costs • AEM Memo re: Funding • Long-Term Plan Excerpt City of New Hope Resolution No. 2020 - Resolution approving Change Order No. 1 for G.F. Jedlicki Inc. Contract for 2020 Winnetka Watermain Replacement Project (Improvement Project No. 1027) WHEREAS, the city has received the request for change order no. 1 from Stantec Consulting Services for G.F. Jedlicki Inc. Contract for 2020 Winnetka Watermain Replacement Project (Improvement Project No. 1027); and WHEREAS, the item in change order no. 1 is to have G.F. Jedlicki Inc. provide a plumber for temporary water connections and disconnections , remove 75 feet of concrete center island, remove an electric handhole and associated wiring in the center island, and place a bituminous patch at this center island location; and WHEREAS, the City Council reviewed the items in change order no. 1 with city engineer Dan Boyum at the May 18, 2020 work session and directed staff to place the change order on the May 26, 2020 council agenda for formal action; and WHEREAS, the original contract with G.F. Jedlicki Inc. was in the amount of $339,906.00; and WHEREAS, change order no. 1 increases the contract amount to $355,468.87; and WHEREAS, Stantec Consulting Services and staff recommend approval of the change order; and NOW, THEREFORE, BE IT RESOLVED by the City Council of the city of New Hope that change order no. 1 to G.F. Jedlicki Inc. contract is approved and that all other respects of the contract shall remain in full force and effect according to its terms. Adopted by the City Council of the City of New Hope, Hennepin County, Minnesota, this 26th day of May, 2020. ______________________________ Mayor Attest: ________________________ City Clerk Stantec Consulting Services Inc. 733 Marquette Avenue, Suite 1000 Minneapolis, MN 55402 May 19, 2020 File: 193804886 Attention: Bernie Weber, Director of Public Works City of New Hope 5500 International Parkway New Hope, MN 55428 Reference: 2020 Winnetka Watermain Improvements Change Order No. 1 City Project No. 1027 Dear Bernie, Change Order No. 1 was discussed at the May 18, 2020 City Council Work Session as well as estimated overages in base bid items due to an increase in removal and restoration quantities. Since that discussion, there was a reduction in the COVID-19 plumber work that resulted in a reduced total change order cost. We have prepared Change Order No. 1 to compensate G. F. Jedlicki, Inc. for the following items: 1.Items 1-3: Hennepin County requested the city's contractor remove 75 feet of concrete center island as part of their permit approval. The center island would be removed as part of future CenterPoint gas main replacement work. A temporary bituminous patch was needed since portions of this removed center island would be used by vehicle traffic until CenterPoint's gas main replacement work started. These Change Order items address the added labor and material costs associated with the contractor removing the concrete center island and furnishing and installing the temporary bituminous patch. 2.Item 4: Signal and Electrical Work - An existing handhole existed in the concrete center island. As part of the Hennepin County request for the city's contractor to remove 75 feet of concrete center island for permit approval, the existing handhole and wiring for the signal needed to be removed and addressed. This Change Order item addresses added labor and material costs associated with the contractor removing the electric handhole and addressing signal wiring per Hennepin County directions. 3.Item 5: COVID-19 Plumber Assistance - COVID-19 protections were in place for Public Works staff when this project started. Public Works staff will typically deal with temporary water connections in homes and businesses. Due to restrictions, the city's contractor hired a plumber to do those connections in homes and businesses. This Change Order item addresses added labor and material costs associated with the contractor hiring a plumber to perform work related to temporary water connections. May 19, 2020 Mr. Bernie Weber Page 2 of 2 Reference: 2020 Winnetka Watermain Improvements – Change Order No. 1 No.Item Total Amount 1 Mobilization $350.00 2 Furnish and Install Temporary Bituminous Patch $3,975.00 3 Concrete Center Island Removal $1,200.00 4 Signal and Electrical Work $6,701.02 5 COVID-19 Plumber Assistance $1,592.59 TOTAL CHANGE ORDER NO.1:$13,818.61 Based on your discussions with the finance department, we understand the water fund has reserves to cover these expenses. If you have any questions or require further information, please call me at (612) 712-2021. Sincerely, Stantec Consulting Services Inc. Dan D. Boyum, P.E. City Engineer dan.boyum@stantec.com Attachment: Change Order No. 1 Cc: Kirk McDonald, Valerie Leone, Andrew Kramer, Dave Lemke, Shawn Markham, Megan Hedstrom, Matt Rowedder – New Hope; Lucas Miller, Ann Dienhart – Stantec. Date May 19, 2020 Bond No: 2295603 Description of Work No.Item Unit Quantity Price Amount CHANGE ORDER NO. 1 1 Mobilization LS 1 $350.00 $350.00 2 Furnish and Install Temporary Bituminous Patch TN 15 $265.00 $3,975.00 3 Concrete Center Island Removal LF 75 $16.00 $1,200.00 4 Signal and Electrical Work LS 1 $6,701.02 $6,701.02 5 COVID-19 Plumber Assistance LS 1 $1,592.59 $1,592.59 TOTAL CHANGE ORDER NO. 1:$13,818.61 Owner: City of New Hope,4401 Xylon Avenue North , New Hope, MN, 55428 Contractor: G. F. Jedlicki, Inc., 2471 Galpin Court, Chanhassen, MN 55317 CHANGE ORDER NO. 1 2020 WINNETKA AVENUE WATERMAIN IMPROVEMENTS CLIENT PROJECT NO. 1027 Item 5:COVID-19 Plumber Assistance - COVID-19 protections were in place for Public Works staff when this project started. Public Works staff will typically deal with temporary water connections in homes and businesses. Due to restrictions, the city's contractor hired a plumber to do those connections in homes and businesses. This Change Order item addresses added labor and material costs associated with the contractor hiring a plumber to perform work related to temporary water connections. STANTEC FILE NO. 193804886 Change Order No. 1 provides for: Bond Co: West Bend Mutual Insurance Company, 1900 South 18th Avenue, West Bend, WI 53095 Item 1-3:Hennepin County requested the city's contractor remove 75 feet of concrete center island as part of their permit approval. The center island would be removed as part of future CenterPoint gas main replacement work. A temporary bituminous patch was needed since portions of this removed center island would be used by vehicle traffic until CenterPoint's gas main replacement work started. These Change Order items address the added labor and material costs associated with the contractor removing the concrete center island and furnishing and installing the temporary bituminous patch. Item 4:Signal and Electrical Work - An existing handhole existed in the concrete center island. As part of the Hennepin County request for the city's contractor to remove 75 feet of concrete center island for permit approval, the existing handhole and wiring for the signal needed to be removed and addressed. This Change Order item addresses added labor and material costs associated with the contractor removing the electric handhole and addressing signal wiring per Hennepin County directions. 193804886CO1.xlsm Original Contract Amount $339,906.00 Previous Change Orders $0.00 This Change Order $13,818.61 Revised Contract Amount (including this change order)$353,724.61 CHANGE IN CONTRACT TIMES Original Contract Times: Substantial Completion (days or date):July 3, 2020 Ready for final Payment (days or date):July 22, 2020 Increase of this Change Order: Substantial Completion (days or date):0 Ready for final Payment (days or date):0 Contract Time with all approved Change Orders: Substantial Completion (days or date): Ready for final Payment (days or date): Recommended for Approval by: STANTEC Date: Approved by Contractor:Approved by Owner: G. F. Jedlicki, Inc.CITY OF NEW HOPE Date Date cc: Owner Contractor Stantec Consulting Services Inc. 193804886CO1.xlsm MEMO TO: KIRK MCDONALD FROM: VICKI HOLTHAUS SUBJECT: FUNDING FOR ADDITIONAL QUANTITIES ON WINNETKA WATERMAIN DATE: MAY 8, 2020 BACKGROUND Recent estimates for the 2020 Winnetka Avenue Watermain Improvement project S.1027 have indicated that higher material quantities will result in project costs that are $70,000 over budget. The City has requested AEM’s review of the water fund cash flow projections to ensure adequate funding is available to cover the additional cost. ANALYSIS The December 2019 long-term plan projects the water fund cash flow now and ten years into the future based on the City’s capital improvement plan and assumptions for future revenue growth (see Appendix A for an excerpt from the long-term plan). The plan illustrates that estimated cash for the years ending 2019 and 2020 will be $2.094M and $1.489M, respectively. These projections include repayment of the interfund loan from the temporary financing fund in 2020. Further, the 2019 CAFR illustrates that the year -end cash balance in the water fund was $2,253,701, which is slightly higher than the year-end cash projected in the long-term plan. Based on our review, the water fund has adequate cash flow to co ver the additional $70,000 expense on the Winnetka Watermain Improvement project. The revised project cost will be included in future iterations of the City’s long -term financial projections. Ci t y o f N e w H o p e , M i n n e s o t a Ca p i t a l I m p r o v e m e n t P l a n - W a t e r F u n d 9 3 0 1 Sc h e d u l e o f P l a n n e d C a p i t a l O u t l a y 2 0 1 9 t o 2 0 2 9 20 1 9 2 0 2 0 2 0 2 1 2 0 2 2 2 0 2 3 2 0 2 4 2 0 2 5 2 0 2 6 2 0 2 7 2 0 2 8 2 0 2 9 Ye a r t o Es t i m a t e d E s t i m a t e d E s t i m a t e d E s t i m a t e d E s t i m a t e d E s t i m a t e d E s t i m a t e d Estimated Estimated Estimated Estimated De p a r t m e n t Su b l e d g er Re p l a c e I t e m C o s t A mo u n t s A mo u n t s A mo u n t s A mo u n t s A mounts A mounts A mounts A mounts A mounts A mounts A mounts Wa t e r S . 1 0 1 9 2 0 1 9 2 0 1 9 I n f r a s t r u c t u r e I m p r o v e m e n t s - W i n p a r k D r i v e 32 5 , 0 0 0 $ 32 5 , 0 0 0 $ - $ - $ - $ - $ - $ -$ -$ -$ -$ -$ Wa t e r S . 1 0 2 9 2 0 1 9 4 2 n d & B o o n e H y d r a n t 15 , 0 0 0 1 5 , 0 0 0 - - - - - - - - - - Wa t e r S . 1 0 0 3 2 0 1 9 Y u k o n w a t e r m a i n 8, 7 8 5 8 , 7 8 5 - - - - - - - - - - Wa t e r S . 1 0 0 8 2 0 1 9 J W C - R e p a i n t N o r t h W a t e r T o w e r 55 0 , 0 0 0 55 0 , 0 0 0 - - - - - - - - - - Wa t e r T B D 2 0 2 0 2 0 2 0 I n f r a s t r u c t u r e I m p r o v e m e n t s - N o r t h w o o d E a s t 47 0 , 6 4 6 - 47 0 , 6 4 6 - - - - - - - - - Wa t e r T B D 2 0 2 0 W i n n e t k a W a t e r m a i n - 2 7 t h t o 2 9 t h 40 0 , 0 0 0 - 40 0 , 0 0 0 - - - - - - - - - Wa t e r T B D 2 0 2 1 2 0 2 1 I n f r a s t r u c t u r e I m p r o v e m e n t s - L i o n ' s P a r k 10 0 , 0 0 0 - - 10 0 , 0 0 0 - - - - - - - - Wa t e r T B D 2 0 2 2 J W C - R e p a i n t S o u t h W a t e r T o w e r 1, 5 0 0 , 0 0 0 - - - 1 , 50 0 , 0 0 0 - - - - - - - Wa t e r T B D 2 0 2 2 2 0 2 2 I n f r a s t r u c t u r e I m p r o v e m e n t s - L i b e r t y P a r k W 20 , 0 0 0 - - - 2 0 , 0 0 0 - - - - - - - Wa t e r T B D 2 0 2 3 2 0 2 3 I n f r a s t r u c t u r e I m p r o v e m e n t s - N o r t h w o o d s E a s t 40 , 0 0 0 - - - - 4 0 , 0 0 0 - - - - - - Wa t e r T B D 2 0 2 3 4 2 n d A v e - G e t t y s b u r g t o B o o n e A v e ( H e n n C o R o c k f o r d R e h a b ) 43 5 , 0 0 0 - - - - 435,000 - - - - - - Wa t e r T B D 2 0 2 4 2 0 2 4 I n f r a s t r u c t u r e I m p r o v e m e n t s - J a y c e e P a r k 50 , 0 0 0 - - - - - 5 0 , 0 0 0 - - - - - Wa t e r T B D 2 0 2 5 2 0 2 5 I n f r a s t r u c t u re I m p r o v e m e n t s - S t. R ap h a e l 55 , 0 0 0 - - - - - - 55,000 - - - - Wa t e r T B D 2 0 2 6 2 0 2 6 I n f r a s t r u c t u r e I m p r o v e m e n t s - N o r t h w o o d s S o u t h 97 5 , 0 0 0 - - - - - - - 975,000 - - - Wa t e r T B D 2 0 2 7 2 0 2 7 I n f r a s t r u c t u r e I m p r o v e m e n t s - N o f B a s s L a k e R d 65 , 0 0 0 - - - - - - - - 65,000 - - Wa t e r T B D 2 0 2 8 2 0 2 8 I n f r a s t r u c t u r e I m p r o v e m e n t s - M e a d o w L a k e N o r t h 65 , 0 0 0 - - - - - - - - - 65,000 - Wa t e r T B D 2 0 2 9 2 0 2 9 I n f r a s t r u c t u r e I m p r o v e m e n t s 70 , 0 0 0 - - - - - - - - - - 70,000 89 8 , 7 8 5 $ 87 0 , 6 4 6 $ 10 0 , 0 0 0 $ 1 , 52 0 , 0 0 0 $ 475,000 $ 5 0 , 0 0 0 $ 55,000 $ 975,000 $ 65,000 $ 65,000 $ 70,000 $ Ci t y o f N e w H o p e , M i n n e s o t a Ca p i t a l I m p r o v e m e n t P l a n - W a t e r F u n d 9 3 0 1 St a t e m e n t o f C a s h F l o w s 20 1 9 2 0 2 0 2 0 2 1 2 0 2 2 2 0 2 3 2 0 2 4 2 0 2 5 2 0 2 6 2 0 2 7 2 0 2 8 2 0 2 9 Es t i m a t e d E s t i m a t e d E s t i m a t e d E s t i m a t e d E s t i m a t e d E s t i m a t e d E s t i m a t e d Estimated Estimated Estimated Estimated Ca s h F l o w s f r o m O p e r a t i n g A c t i v i t i e s R e c e i p t s f r o m c u s t o m e r s a n d u s e r s (5% g ro w t h a s s u m p t i o n ) 4, 6 9 7 , 3 5 7 $ 4 , 9 3 2 , 2 2 5 $ 5 , 1 7 8 , 8 3 6 $ 5 , 4 3 7 , 7 7 8 $ 5 , 7 0 9 , 6 6 6 $ 5 , 9 9 5 , 1 5 0 $ 6,294,907 $ 6,609,653 $ 6,940,135 $ 7,287,142 $ 7,651,499 $ P a y me n t s t o s u p p l i e r s a n d e m p l o y ee s (5% g ro w t h a s s u m p t i o n ) (3 , 5 2 7 , 5 8 2 ) ( 3 , 70 3 , 9 6 1 ) ( 3 , 88 9 , 1 5 9 ) ( 4 , 08 3 , 6 1 7 ) ( 4 , 287,798) ( 4 , 502,188) (4,727,297) (4,963,662) (5,211,845) (5,472,438) (5,746,060) Ne t C a s h P r o v i d e d (Us e d ) b y O p e r a t i n g A c t i v i t i e s 1, 1 6 9 , 7 7 5 1 , 22 8 , 2 6 3 1 , 28 9 , 6 7 6 1 , 35 4 , 1 6 0 1 , 421,868 1 , 492,962 1,567,610 1,645,990 1,728,290 1,814,704 1,905,439 Ca s h F l o w s F r o m C a p i t a l a n d R e l a t e d F i n a n c i n g A c t i v i t i e s A cq u i s i t i o n o f c a p i t a l a s s e t s (8 9 8 , 7 8 5 ) ( 87 0 , 6 4 6 ) ( 10 0 , 0 0 0 ) ( 1 , 52 0 , 0 0 0 ) ( 475,000) ( 50,000) (55,000) (975,000) (65,000) (65,000) (70,000) In t e r g ov e r n m e n t a l (Jo i n t W a t e r C o m m i s s i o n ) 55 0 , 0 0 0 - - 1 , 50 0 , 0 0 0 - - - - - - - In t e r f u n d l o a n p a y me n t s (Fr o m T e m p F i n a n c i n g f o r J W C p r o j ec t s $ 6 7 9 K r e m a i n i n g a t 1 2 / 3 1 / 1 8 ) (11 9 , 3 4 1 ) (57 9 , 2 1 4 ) - - - - - - - - - Ex i s t i n g P r i n c i p a l a n d i n t e r e s t p a i d o n l o n g -t e r m d e b t (4 0 0 , 6 5 1 ) ( 40 3 , 8 9 6 ) ( 39 9 , 1 8 2 ) ( 31 5 , 5 1 1 ) ( 314,905) ( 316,125) (313,409) (314,344) (313,947) (314,812) (313,673) Ne t C a s h U s e d b y C a p i t a l a n d R e l a t e d Fi n a n c i n g A c t i v i t i e s (8 6 8 , 7 7 7 ) ( 1 , 85 3 , 7 5 6 ) ( 49 9 , 1 8 2 ) ( 33 5 , 5 1 1 ) ( 789,905) ( 366,125) (368,409) (1,289,344) (378,947) (379,812) (383,673) Ca s h F l o w s f r o m I n v e s t i n g A c t i v i t i e s In v e s t m e n t e a r n i n g s 17 , 7 5 7 2 0 , 9 4 5 1 4 , 8 9 9 2 2 , 9 5 3 3 3 , 3 6 9 4 0 , 0 2 3 51,691 64,200 68,409 82,586 97,761 Ne t I n c r e a s e (De c r e a s e ) i n C a s h a n d C a s h E q u i v a l e n t s 31 8 , 7 5 5 ( 60 4 , 5 4 7 ) 80 5 , 3 9 4 1 , 04 1 , 6 0 3 665,333 1 , 166,859 1,250,892 420,846 1,417,751 1,517,478 1,619,527 Ca s h a n d C a s h E q u i v a l e n t s , J a n u a r y 1 1, 7 7 5 , 7 2 5 2 , 09 4 , 4 8 0 1 , 48 9 , 9 3 3 2 , 29 5 , 3 2 6 3 , 336,929 4 , 002,261 5,169,121 6,420,013 6,840,859 8,258,610 9,776,089 Ca s h a n d C a s h E q u i v a l e n t s , D e c e m b e r 3 1 2, 0 9 4 , 4 8 0 $ 1 , 4 8 9 , 9 3 3 $ 2 , 2 9 5 , 3 2 6 $ 3 , 3 3 6 , 9 2 9 $ 4 , 0 0 2 , 2 6 1 $ 5 , 1 6 9 , 1 2 1 $ 6,420,013 $ 6,840,859 $ 8,258,610 $ 9,776,089 $ 11,395,616 $ En t e r p r i s e F u n d P r o j e c t e d A c t i v i t y Enterprise Fund Projected Activity I:\RFA\P&R\PARKS\2020\2020 Court Resurfacing\Q&R-Resurface courts 2020.docx Request for Action May 26, 2020 Approved by: Kirk McDonald, City Manager Originating Department: Parks & Recreation By: Susan Rader, Director Agenda Title Resolution authorizing the purchase and appropriation of funds in the amount of $7,675 for the cleaning, crack repair and repainting of the basketball court at Fred Sims Park, and the crack repair of the basketball and tennis courts at Hidden Valley Park by Court Surface and Repair, Inc. Requested Action Staff is recommending that the City Council approve this resolution and award a contract to Court Surface and Repair, Inc. for sport court surface repairs at a cost of $7,675. The work involves cleaning, crack repair and repainting of the basketball court at Fred Sims Park, and the crack repair of the basketball and tennis courts at Hidden Valley. Background Most courts are either resurfaced or have cracks in the court surface repaired every few years to keep them safe for users. Court surfaces that are too worn become slippery and dangerous and cracks that form in the court surface can create a tripping hazard to its users. Depending on the soils beneath the courts, some court surfaces crack more often than others. As courts have been rebuilt, the sub soils have been dealt with in a manner that has improved soil conditions, which has helped reduce the cracking. Limited funds are available each year for maintaining playable court surfaces. Tennis and basketball courts throughout the city are not crack filled or resurfaced on a set schedule, but instead staff annually reviews the court surfaces at all of the parks and prioritizes maintenance based upon need and available budget. Quotes were sought from four companies including Tennis Court Doctor, C & H Sport Surfaces, Court Surfaces and Repair, Inc. and Surface Pro LLC. The city received two quotes for court repair work from Court Surface and Repair, Inc. and the Tennis Court Doctor. The quotes provided by the two companies is as follows: Park Work CSR Tennis Court Rx Fred Sims Park Basketball Court 4350 Nevada Avenue North Clean, crack fill and court resurface $5,250 $8,872 Hidden Valley Park Tennis Court 8800 32nd Avenue North Clean, fill and repaint cracks $1,450 $7,400 Hidden Valley Park Basketball Court 8800 32nd Avenue North Clean, fill and repaint cracks $975 $2,600 Staff recommends approval of the low quote from Court Surface and Repair, Inc. This company has provided court repair services for the city of New Hope in past years, with good results. Agenda Section Consent Item Number 6.9 Funding Funding for court surface repairs is included in the 2020 CIP and the 2020 Park Infrastructure budget as shared with the Council during planning and budget meetings. For 2020, a total of $161,000 was budgeted for 2020 parks maintenance which includes the above court work, rebuilding the basketball court at Northwood Park, the previously approved court work of the Civic Center tennis courts and the purchase of park benches and wood fiber for playgrounds. The estimated cost to perform this work was budgeted at approximately $15,500. The quote of $7,675 is within budget for the 2020 work. Attachments • Resolution • Copy of the low quote • Copy of the 2020 CIP City of New Hope Resolution No. 20- Resolution authorizing the purchase and appropriation of funds in the amount of $7,675 for the cleaning, crack repair and repainting of the basketball court at Fred Sims Park, and the crack repair of the basketball and tennis courts at Hidden Valley Park by Court Surface and Repair, Inc. WHEREAS, the city of New Hope prepares a ten-year Capital Improvement Program (CIP) as a guiding document for equipment acquisition and improvement projects to assist with the preparation of each annual operating budget; and WHEREAS, the CIP is not formally adopted as a budget document, nor does it authorize the acquisition of the individual equipment and/or projects listed therein; and WHEREAS, staff recommends court resurfacing/repairs by Court Surface and Repair, Inc.; and WHEREAS, the funds for these repairs have been provided within the Park Infrastructure Fund. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of New Hope, as follows: 1. That the contract between the city of New Hope and Court Surface and Repair, Inc. in the total amount of $7,675 is approved. 2. The mayor and city manager are authorized to sign. Adopted by the City Council of the City of New Hope, Hennepin County, Minnesota this 26th day of May 2020. __________ __________________ Mayor Attest: ________ _________________ City Clerk Year 2020 Total Cost Funding Source Project / Purchase Golf Course Ice Arena Park Infra Central Sewer Storm Water Street Infra Water MSA Grand Total Parks & Recreation Cgyms scoreboards 11,000 11,000 GC cash register 5,000 5,000 GC concession equipment 12,000 12,000 GC golf carts (2 of 5) 8,000 8,000 GC misc equipment 5,000 5,000 GC paint maintenance shop 10,000 10,000 GC parking lot - - GC security cameras 25,000 25,000 IA Levy 400,000 400,000 IA radiant heaters (North rink) 25,000 25,000 IA rebuild compressors 20,000 20,000 IA scoreboard (south rink) 25,000 25,000 IA security cameras 70,000 70,000 IA skate sharpening machine 20,000 20,000 IA system relief valves 5,000 5,000 Parks ballfield fencing 12,000 12,000 Parks Begin Park play equipment project 200,000 200,000 Parks concrete, trail work 75,000 75,000 Parks lighting improvements 75,000 75,000 Parks Lions Park parking lot - - Parks maintenance 161,000 121,000 Public works - CG Equipment - Central Garage Master Asset List 1,080,198 1,080,198 Public works - Sewer 2020 Infrastructure Improvements - Northwood East 100,000 100,000 2020 Line sewer pipes 350,000 350,000 Public works - Storm Water 2020 Infrastructure Improvements - Northwood East 190,000 190,000 Required TMDL projects 100,000 100,000 Public works - Street 169 and 42nd Ave Bridge Replacement 75,000 75,000 2020 Local Projects (Seal Coat & Crack/Fog Seal) 120,828 120,828 2020 Street Reconstruct - NW Parkway East & m/o Hidden Valley 2,218,002 2,218,002 GC parking lot 20,000 20,000 Parks Lion's Park lot seal coat/striping 30,000 30,000 Public works - Water 2020 Street Reconstruct - Northwood East 340,000 340,000 Winnetka Watermain - 27th to 29th 300,000 300,000 Grand Total 65,000 165,000 894,000 1,080,198 450,000 290,000 2,388,830 640,000 75,000 6,048,028 I:\RFA\P&R\Pool and Civic Center Pk Projects\2020\Stantec Addendum\Q&R - Stantec Addendum #3.docx Request for Action May 26, 2020 Approved by: Kirk McDonald, City Manager Originating Department: Parks & Recreation By: Kirk McDonald, City Manager and Susan Rader, Director of Parks & Recreation Agenda Title Resolution approving Addendum #3 to the engineering services agreement with Stantec Consulting Services Inc. for the additional construction management services for the Civic Center Park improvements (Improvement Project No. 941) and pool (Improvement Project No. 995) Requested Action Staff recommends that the City Council approve the attached resolution approving Addendum #3 to the engineering services agreement for the Civic Center Park improvements (Improvement Project No. 941) and pool (Improvement Project No. 995) with Stantec Consulting Services. This addendum for $214,774.03, is for additional engineering construction management and administration services for the pool and park projects. Additional engineering services necessary on the projects including restaking for the park/parking lot contractor, coordination with and field staking for Xcel, deck pour analysis, delay claim/winter construction analysis/CenterPoint permit items. Some of these additional services will be reimbursed by contractors (restaking and deck pour analysis), in the amount of $41,872. Engineering staff reviewed the effects of project delays, completion dates, additional testing, and actual construction administration and observations of the various project contractors as it relates to the overall engineering budget. Also as noted in previous discussions, the addendum will include the design and construction administration for the storm water chamber. Funding for that work, in the amount of $4,254.50, will come from the Shingle Creek Watershed. The total reimbursement from others totals, $46,126.50, so the final cost to the city for additional services is $168,647.53 ($214,774.03-$46,126.50). Staff discussed the update needed for Addendum #3 with the City Council at the May 18, 2020 Work Session. The city engineer will be in attendance at the meeting and available to answer questions. Policy/Past Practice Stantec engineering has been appointed annually as the city engineer for many years and is familiar with the city’s infrastructure. The firm performs special projects for the city on a council-approved basis. Background In order to finalize plans for the pool and Civic Center Park projects, a Scope of Services was approved on June 25, 2018 with Stantec Consulting that included full engineering services for the design and construction of the contracts for the demolition of the park buildings and current city hall, city hall landscaping, city hall and pool parking lots, Civic Center Park amenities, pool, outdoor theater and skatepark. Stantec’s services included preliminary survey/field investigation, schematic design, design – construction documents, bidding, construction survey, construction management and administration, construction materials testing, record plan/base map and Infraseek update, and necessary progress meetings. Agenda Section Development & Planning Item Number 8.1 Request for Action, Page 2 On December 10, 2018, the City Council approved Addendum #1 for the additional design costs which were due to higher than estimated construction costs for the pool and theatre, the inclusion of “future” amenities that were bid as alternates and additional theatre components that were also bid as alternates. Addendum #1 was approved with the understanding that an additional addendum addressing the construction management services would need to be completed, once the project alternates had been decided. Addendum #2 was approved at the May 13, 2019 Council Meeting to cover several additional services including the additional time required to design and construct the pool due to the necessary soil corrections, including pilings, excavation of poor soils, and importing of good soil material; the increased base costs for the theatre (from the original $500,000 amount to approximately $800,000); the addition of the “future” park amenities that were bid as alternates and approved (picnic shelter, trail lighting and a north west loop of trail with lighting); the theater alternates that were approved (expanding the storage area by three feet, increasing the door width to the storage areas and the addition of dressing room space); and conduit for the park cameras and additional receptacles and conduit for theater lighting. Addendum #3 is needed for additional engineering services necessary on the projects including restaking for the park/parking lot contractor, coordination with and field staking for Xcel, deck pour analysis, delay claim/winter construction analysis/CenterPoint permit items. Some of these additional services will be reimbursed by contractors (restaking and deck pour analysis). Engineering staff reviewed the effects of project delays, completion dates, additional testing, and actual construction administration and observations of the various project contractors as it relates to the overall engineering budget. The proposed Stantec addendum includes the construction management costs for the following: Civic Center Projects – Additional Services and Budget Shortfall Item Budgets/Costs Additional Construction Services due to Delays to Date - Pool $5,196.97 Additional Construction Services due to Claims, CenterPoint Energy, and Winter Construction Options - Pool $26,220.00 Donlar Deck Repairs - Pool $5,000.00 Estimated Construction Services from Date to End of Extended Completion Date - Pool $54,854.00 Additional Materials Testing - Pool $5,800.25 Additional Construction Services due to Delays to Date - Theater $2,654.57 Estimated Construction Services from Date to End of Extended Completion Date - Theater $13,261.00 Additional Construction Services due to Delays to Date - Civic Center Pk $20,579.49 Underground Storage Tank Services - Civic Center Park $8,509.00 Estimated Construction Services from Date to End of Extended Completion Date - Civic Center Park $54,120.00 Xcel Coordination and Staking - Civic Center Park $5,642.00 Restaking - Civic Center Park $11,472.00 Additional Materials Testing – Civic Center Park $1,464.75 Budget Shortfall to Complete - Addendum #3 $214,774.03 Request for Action, Page 3 Some additional costs will be reimbursed by contractors or the watershed: Items for Contractor Reimbursement Donlar Reimbursement (AET Testing) $25,400.00 Donlar Reimbursement (Deck Repair) $5,000.00 Sunram Reimbursement (Restake) $11,472.00 Shingle Creek Reimbursement for Underground Chamber (50%) $4,254.50 Total Additional Funding $46,126.50 All of these costs were included in the information that was shared with the Council at the May 18, 2020 Work Session. Funding The original Scope of Services listed a not to exceed amount of $1,737,839.23, which was based upon the estimated construction costs and schedule. In addition to the park and pool projects, this amount included the Bid Pack 2A items that were identified as part of the city hall project and will be paid for as part of the bond that was issued for the police department/city hall improvements. The additional park and pool design costs that were added with Addendum #1 on December 2018 listed a not to exceed amount of $180,991.97. And Addendum #2 on May 2019 listed a not to exceed amount of $179,067.13. With the addition of Addendum #3, the total engineering costs are expected to total $2,312,672.36 for the five projects, which is approximately 14.36% of the total construction costs. The Addendum #3 for additional construction management and administrative services for the park and pool projects would be funded with the park and pool bond proceeds. Attachments  Resolution  Letter of proposed amendment from Stantec for Addendum #3  June 25, 2018 RFA and original Scope of Service  December 10, 2018 RFA and Addendum #1  May 13, 2019 RFA and Addendum #2 City of New Hope Resolution No. 2020- Resolution approving Addendum #3 to the engineering services agreement with Stantec Consulting Services Inc. for the additional construction management services for the Civic Center Park improvements (Improvement Project No. 941) and pool (Improvement Project No. 995) WHEREAS, on June 25, 2018 the City Council approved a proposal with Stantec Engineering Services Inc. engineering and design services which included the city hall landscaping, streetscaping, parking lots Civic Center Park amenities and pool; and, WHEREAS, on December 10, 2018 the City Council approved Addendum #1 for the additional engineering time needed beyond the original scopes of service for the pool and Civic Center Park future amenities; and, WHEREAS, on May 13, 2019 the City Council approved Addendum #2 for the additional construction management services covered several additional services including the additional time required to design and construct the pool due to the necessary soil corrections; due to the increased base costs for the theatre; the addition of the “future” park amenities that were bid as alternates and approved; the theater alternates that were approved; conduit for the park cameras; and additional receptacles and conduit for theater lighting; and, WHEREAS, Addendum #3 is needed for additional engineering services necessary on the projects including restaking, coordination with utilities, deck pour analysis, delay claim/winter construction, as well as the effects of project delays, completion dates, additional testing, and actual construction administration and observations of the various project contractors; and, WHEREAS, staff recommends that the City Council approve Addendum #3 with Stantec Consulting Services Inc. for the additional construction management services; and, WHEREAS, the funding sources for the addendum are the 2018A and 2019 park and pool bond proceeds. NOW, THEREFORE, BE IT RESOLVED the City Council of the city of New Hope, Minnesota approves entering into Addendum #3 for additional construction management services for $214,774.03 with Stantec Consulting Services Inc. Adopted by the City Council of the city of New Hope, Hennepin County, Minnesota, this 26th day of May, 2020. Mayor Attest: City Clerk Stantec Consulting Services Inc. 733 Marquette Avenue, Suite 1000 Minneapolis, MN 55402 April 27, 2020 File: 193804335, 193804336, 193804337, 193804338, 193804646 Attention: Kirk McDonald City Manager City of New Hope 4401 Xylon Avenue North New Hope, MN 55428 Reference: Addendum #3 – Additional Engineering Construction Management Services for City Hall Landscaping, Streetscaping, Parking Lots, Pool, and the Civic Center Park Improvements Dear Kirk, As discussed with city staff and referenced in past City Council Work Session updates, there have been additional engineering construction management and administration services on the above referenced projects. These additional services were not included in the original scope of services proposal dated June 20, 2018, Stantec Addendum #1 for the additional design services dated December 5, 2018, or Stantec Addendum #2 for additional construction management and administration services dated May 7, 2019. Contracts required to complete all the Work associated with the remaining City Hall and Civic Park Improvements were identified in the original scope of services. These contracts were identified in color to better understand and organize the separate project scopes, costs, and schedule of Work. Additional Services The additional services to provide engineering construction management services for the improvements awarded at the March 25, 2019 Council Meeting are identified below and correspond in color to the specific project contracts they are incorporated into. Construction management services include construction survey, construction management and administration, materials testing, and record plan/base map and Infraseek updates. • Pool Improvements: o The rain in 2019 slowed work progress. However, work still continued on site requiring construction observations and administration. This slower progress resulted in additional construction management, administration, and testing services to date than originally anticipated. ($5,196.97) o Additional construction management and administration services were required to address larger claims submitted by the Contractor in October 2019 and January 2020 as well as coordinating the permit processing with CenterPoint Energy and getting gas lines installed to the two pool buildings. Also, there was additional time spent when discussing and reviewing options associated with winter construction in order to get the project completed by the specified completion date. ($26,220.00) April 27, 2020 Mr. Kirk McDonald Page 2 of 5 Reference: Addendum #3 – Additional Engineering Construction Management Services for City Hall Landscaping, Streetscaping, Parking Lots, Pool, and the Civic Center Park Improvements o Donlar requested engineering feedback and review of deck repairs around the 50- meter pool. Those additional construction management and administration services will be reimbursed to the City by Donlar. ($5,000.00) o The Contractor is anticipating work will continue past the original completion date. More construction management and administration time than originally anticipated will be needed to complete the project with an extended construction schedule. The estimated additional time from date to end of project is ($54,854.00). o Additional materials testing. ($5,800.25) o Donlar will be reimbursing the City for testing services that are required to be paid by the contractor under the contract. This amount totals $25,400.00. • Outdoor Theater: o The rain in 2019 slowed work progress, and the contractor requested a contract extension to their completion date with Change Order 2 in November 2019 as follows:  Revise the substantial completion date from October 18, 2019 to May 15, 2020.  Revise the final completion date from November 19, 2019 to June 12, 2020. However, work still continued on site requiring construction observations and administration. This slower progress resulted in additional construction management, administration, and testing services to date than originally anticipated. ($2,654.57) o More construction management and administration time than originally anticipated will be needed to complete the project with an extended construction schedule. The estimated additional time from date to end of project is ($13,261.00). • Civic Center Park – Park Amenities, Parking Lot, and Landscaping o The rain in 2019 slowed work progress. However, work still continued on site requiring construction observations and administration. This slower progress resulted in additional construction management, administration, and testing services than originally anticipated. Also, some projects require more construction observation and administration time based on the General Contractor and Subcontractors working on the project. This project is one of those situations. ($20,579.49) o Zealand Avenue will be reconstructed after 2030 and will need to treat stormwater runoff. Placing an underground stormwater chamber at this time when the park is being disturbed avoids future disturbance and costs. An underground stormwater chamber was added to the project in Change Order No. 1, and the additional design, surveying, and construction management and administration services was not included in past engineering services. Costs for these services ($8,509.00) are split on a 50/50 basis with the Shingle Creek Watershed. o The Contractor is anticipating work will continue past the original completion date. More construction management and administration time than originally anticipated April 27, 2020 Mr. Kirk McDonald Page 3 of 5 Reference: Addendum #3 – Additional Engineering Construction Management Services for City Hall Landscaping, Streetscaping, Parking Lots, Pool, and the Civic Center Park Improvements will be needed to complete the project with an extended construction schedule. The estimated additional time from date to end of project is ($54,120.00). o Xcel Coordination and Staking – Xcel had several project managers change throughout this project. Currently the City is on the 4th project manager. Working with changing Xcel project managers in coordinating transformer locations and power to the various projects took more construction management and administration than anticipated. Also, Xcel required the city to stake the location of the power line in order to get it installed and completed this winter to serve the various projects. That staking was not part of anticipated services. ($5,642.00) o Restaking – Restaking is done at times on projects; however, this project has resulted in more restaking than typical. Those restaking costs will be reimbursed by the Contractor to the City. ($11,472) o Additional materials testing. ($1,464.75) Stantec Engineering and American Engineering and Testing Fees The total proposed fee to provide the additional construction management services and testing at the not-to-exceed amount of $214,774.03. This fee is based upon the scope described above in this Addendum #3. The fee adjustment is around 1.33% of the estimated construction costs of $16,097,984.89 as shown in the tables below. Estimated Construction Budgets Project Project No. Construction Budget (As of 4/17/2020) City Hall Demolition 193804336 $258,100.35 Skatepark 193804646 $249,213.25 Theater/Picnic Shelter 193804338 $1,479,780.90 Parking Lot, Trails, Park Amenities 193804335 $2,897,034.90 Pool 193804337 $11,471,955.84 Totals $16,097,984.89 Percentage of Construction Item Engineering & Testing Budgets/Costs Percentage of Construction Costs Original Contract $1,737,839.23 10.80% Addendum #1 $180,991.97 1.12% Addendum #2 $179,067.13 1.11% Subtotal - Approved Budget to date $2,097,898.33 13.03% Addendum #3 $214,774.03 1.33% Total - Proposed Budget to Date $2,312,672.36 14.36% April 27, 2020 Mr. Kirk McDonald Page 4 of 5 Reference: Addendum #3 – Additional Engineering Construction Management Services for City Hall Landscaping, Streetscaping, Parking Lots, Pool, and the Civic Center Park Improvements The original approved engineering and testing budget including Addendums #1 and #2 is 13.03% of the estimated construction costs. Adding Addendum #3 to these previous numbers, the total engineering and testing fees would result in a fee of 14.36% of the estimated construction costs. Attached is the summary of the additional services and estimated budget shortfall. Addendum #3 is highlighted in yellow. Since some additional costs will be reimbursed by contractors or the watershed, we have included those reimbursements in the bottom part of the table. We estimate approximately 60 hours of staff time per week for construction management and administration services on remaining Civic Center Projects. Each week, we will review that number with City Staff to see if any adjustments are needed in our services. Civic Center Projects – Additional Services and Budget Shortfall Item Budgets/Costs Additional Construction Services due to Delays to Date - Pool $5,196.97 Additional Construction Services due to Claims, CenterPoint Energy, and Winter Construction Options - Pool $26,220.00 Donlar Deck Repairs - Pool $5,000.00 Estimated Construction Services from Date to End of Extended Completion Date $54,854.00 Additional Materials Testing - Pool $5,800.25 Additional Construction Services due to Delays to Date - Theater $2,654.57 Estimated Construction Services from Date to End of Extended Completion Date - Theater $13,261.00 Additional Construction Services due to Delays to Date - Civic Park $20,579.49 Underground Storage Tank Services - Civic Center Park $8,509.00 Estimated Construction Services from Date to End of Extended Completion Date - Civic Center Park $54,120.00 Xcel Coordination and Staking $5,642.00 Restaking - Civic Center Park $11,472.00 Additional Materials Testing – Civic Center Park $1,464.75 Subtotal - Budget Shortfall to Complete - Addendum #3 $214,774.03 Minus Donlar Reimbursement (AET Testing) -$25,400.00 Minus Donlar Reimbursement (Deck Repair) -$5,000.00 Minus Sunram Reimbursement (Restake) -$11,472.00 Minus Shingle Creek Reimbursement for Underground Chamber (50%) -$4,254.50 Total Additional Funding $168,647.53 April 27, 2020 Mr. Kirk McDonald Page 5 of 5 Reference: Addendum #3 – Additional Engineering Construction Management Services for City Hall Landscaping, Streetscaping, Parking Lots, Pool, and the Civic Center Park Improvements If you have any questions or require further information, please call me at (612) 712-2021. Sincerely, STANTEC CONSULTING SERVICES INC. Dan D. Boyum, P.E. The undersigned hereby consents to the Addendum No. 3 Contract as noted above and attached to Stantec Consulting Services Inc. City of New Hope CC: Jeff Sargent, Susan Rader, Bernie Weber, Valorie Leone – New Hope; Stacy Woods – City Attorney; Dave Ahrens, Todd Wichman, Jim Maland, Jeff Ehleringer, Bruce Paulson, Ann Dienhart, Lucas Miller – Stantec. I:\RFA\PUBWORKS\2020\Council\1049 RFA CP Railroad-Hennepin County Agreement Request for Action May 26, 2020 Approved by: Kirk McDonald, City Manager Originating Department: Public Works By: Bernie Weber, Director Agenda Title Resolution approving a joint powers agreement with the city of New Hope and Hennepin County for the replacement of a failed culvert and removal and replacement of adjacent sidewalk on Canadian Pacific railroad crossing on County State Aid Highway 156 (Winnetka Avenue Railroad Crossing Project No. 1049). Requested Action Staff requests the approval of a resolution approving a joint powers agreement between the city of New Hope and Hennepin County for the replacement of a failed culvert and removal and replacement of adjacent sidewalk on Canadian Pacific railroad crossing on County State Aid Highway 156 (Winnetka Avenue Railroad Crossing Project No. 1049). Policy/Past Practice The City Council routinely considers joint powers agreements due to the economics and efficiencies of doing so. The city of New Hope has participated with Hennepin County on street projects, with regards to boundary streets, for many years. Background The attached agreement sets forth the obligations of Hennepin County and New Hope in undertaking the project. The agreement establishes that Hennepin County shall be the lead agency in design, engineering, construction, and construction administration of the project, and will be responsible for acquiring all necessary right of way and/or other governmental agencies-required permits needed for the project. The project generally consists of replacing the failed culvert, and adjacent sidewalk on Canadian Pacific railroad crossing on County State Aid Highway 156 (Winnetka Avenue). Hennepin County will be entering into a separate agreement with Canadian Pacific Railroad to replace the railroad crossing. Funding The total cost of this project is $229,967.32 with Hennepin County funding the majority of the cost. The total cost to New Hope for this project is $ 19,876.51. This project for New Hope will be funded primarily by the city of New Hope street operating budget. Attachments  Resolution  City Attorney Memo re: Construction Cooperative Agreement  Joint Powers Agreement Agenda Section Development & Planning Item Number 8.2 City of New Hope Resolution No. 20- Resolution approving a joint powers agreement between the city of New Hope and Hennepin County for the replacement of a failed culvert and removal and replacement of sidewalk on Canadian Pacific railroad crossing on County State Aid Highway 156 (Winnetka Avenue Railroad Crossing Project No. 1049). WHEREAS, the city of New Hope and Hennepin County have been negotiating to bring improvements to the Canadian Pacific Railroad Crossing and CSAH 156; and, WHEREAS, said improvements include replacement of failed culvert and removal and replacement of adjacent sidewalk; and, WHEREAS, a joint powers agreement has been prepared between the city of New Hope and Hennepin County setting forth the scope of work, terms, and conditions for sharing project costs. NOW, THEREFORE, BE IT RESOLVED, 1. That the above recitals are incorporated herein by reference. 2. That the joint powers agreement between the city of New Hope and Hennepin County for the Winnetka Railroad Crossing Project is approved. 3. The Mayor and City Manager (the “Officers”) are authorized and directed to sign the same on behalf of the city when the following condition is met: Substantial conformance of the joint powers agreement to the form of agreement presented to the Council as of this date, with such additions and/or modifications as the Officers may deem necessary or desirable as evidenced by their execution thereof. Adopted by the City Council of the City of New Hope, Hennepin County, Minnesota, this 26th day of May, 2020. Mayor Attest: City Clerk Writer’s Direct Dial No.: (763) 201-0265 e-mail saw@jspwlaw.com May 21, 2020 Kirk McDonald City Manager of New Hope 4401 Xylon Avenue North New Hope, MN 55428 RE: Construction Cooperative Agreement File No. 99.10030 Dear Kirk: I have reviewed the Construction Cooperative Agreement between Hennepin County and City of New Hope regarding the replacement of the sidewalk in conjunction with the County’s culvert and Railroad crossing project at CSAH 156 (Winnetka Avenue) (“Agreement”). Specifically, the failed culvert located north of the CP railroad crossing on Winnetka Avenue requires replacement. Relating thereto, the adjacent sidewalks are in poor condition and require replacement. The Agreement memorializes the respective financial and maintenance responsibilities between the County and the City relating to the Project. The main provisions in the Agreement are as follows: 1. The County shall be the lead agency in terms of design of the Project. 2. The County Engineer’s Estimate of the City’s responsibility for the Project is $19,876.51. 3. The County will design the plans and seek approval from MnDOT and the City. 4. The County will furnish working copies of any plans to the City at the City’s request. 5. The County will administer the construction contract including all necessary supervision, inspection, and testing. 6. The City will have the right to review any proposed change to the plans and specifications as they relate to the City’s cost participation prior the work being performed. 7. The City shall cooperate with the conveyance of any access rights over the City right of way that may be required by the County for the Project. These access rights are subject to City Council approval and will be granted at no cost to the County. No permits will be required by the City. The language of the Agreement appears to be acceptable. Let me know if you have any questions. Sincerely, /s/ Stacy A. Woods, Assistant City Attorney City of New Hope cc: Kirk McDonald, City Manager of New Hope Steve Sondrall, Bernie Weber P:\Attorney\SAS\1 Client Files\2 City of New Hope\99-10000 City Mgr\Letter to Kirk McDonald re Construction Cooperative Agremeent - CP - CSAH.docx EX H I B I T  A                                                                                                                                                                                              5/ 1 / 2 0 2 0  En g i n e e r ’ s  Es t i m a t e  of  Construction  Costs    QU A N T I T Y A M O U N T Q U A N T I T Y A M O U N T Q U A N T I T Y A M O U N T 1 2 0 2 1 . 5 0 1 / 0 0 0 1 0 2 0 2 1 . 5 0 1 0 0 0 1 0 M O B I L I Z A T I O N L S $ 4 0 , 0 0 0 . 0 0 1 $ 4 0 , 0 0 0 . 0 0 0 . 4 $ 1 6 , 0 0 0 . 0 0 0. 5 5 $ 2 2 , 0 0 0 . 0 0 0.05 $ 2,000.00 21 0 4 . 5 0 2 / 0 1 2 4 0 2 1 0 4 . 5 0 2 0 1 2 4 0 R E M O V E S I G N T Y P E C E A C H $ 5 0 . 0 0 1 1 $ 5 5 0 . 0 0 1 1 $ 5 5 0 . 0 0 $ - $ - 21 0 4 . 5 0 2 / 0 3 3 2 0 2 1 0 4 . 5 0 2 0 3 3 2 0 S A L V A G E S I G N T Y P E C E A C H $ 6 5 . 0 0 1 1 $ 7 1 5 . 0 0 1 1 $ 7 1 5 . 0 0 $ - $ - 3 2 1 0 4 . 5 0 3 / 0 0 1 9 5 2 1 0 4 . 5 0 3 0 0 1 9 5 S A W I N G C O N C R E T E P A V E M E N T ( F U L L D E P T H ) L F $ 9 . 0 0 1 7 9 $ 1 , 6 1 1 . 0 0 1 1 7 $ 1 , 0 5 3 . 0 0 62 $ 5 5 8 . 0 0 $ - 2 2 1 0 4 . 5 0 3 / 0 0 2 8 5 2 1 0 4 . 5 0 3 0 0 2 8 5 R E M O V E S E W E R P I P E ( S T O R M ) L F $ 1 5 0 . 0 0 7 9 $ 1 1 , 8 5 0 . 0 0 $ - 79 $ 1 1 , 8 5 0 . 0 0 $ - 21 0 4 . 5 0 3 / 0 0 3 1 5 2 1 0 4 . 5 0 3 0 0 3 1 5 R E M O V E C U R B & G U T T E R L F $ 8 . 0 0 1 5 9 $ 1 , 2 7 2 . 0 0 2 3 $ 1 8 4 . 0 0 13 6 $ 1 , 0 8 8 . 0 0 $ - 9 2 1 0 4 . 5 0 4 / 0 0 0 1 0 2 1 0 4 . 5 0 4 0 0 0 1 0 R E M O V E C O N C R E T E M E D I A N S Y $ 2 0 . 0 0 2 7 $ 5 4 0 . 0 0 $ - 27 $ 5 4 0 . 0 0 $ - 21 0 4 . 5 0 4 / 0 0 0 5 0 2 1 0 4 . 5 0 4 0 0 0 5 0 R E M O V E C O N C R E T E W A L K S Y $ 2 . 0 0 8 1 $ 1 6 2 . 0 0 $ - 47 $ 9 4 . 0 0 34 $ 68.00 4 2 1 0 4 . 5 0 4 / 0 0 0 7 0 2 1 0 4 . 5 0 4 0 0 0 7 0 R E M O V E P A V E M E N T S Y $ 2 0 . 0 0 4 3 9 $ 8 , 7 8 0 . 0 0 2 6 $ 5 2 0 . 0 0 41 3 $ 8 , 2 6 0 . 0 0 $ - 8 2 1 0 4 . 5 1 8 / 0 0 1 0 0 2 1 0 4 . 5 1 8 0 0 1 0 0 R E M O V E B I T U M I N O U S W A L K S F $ 6 . 0 0 7 9 2 $ 4 , 7 5 2 . 0 0 3 9 6 $ 2 , 3 7 6 . 0 0 $ - 396 $ 2,376.00 5 2 1 0 6 . 5 0 7 / 0 0 0 4 0 2 1 0 6 . 5 0 7 0 0 0 4 0 E X C A V A T I O N - S U B G R A D E C Y $ 5 0 . 0 0 6 3 $ 3 , 1 5 0 . 0 0 $ - 63 $ 3 , 1 5 0 . 0 0 $ - 21 0 6 . 5 0 7 / 0 0 0 8 0 2 1 0 6 . 5 0 7 0 0 0 8 0 S E L E C T G R A N U L A R E M B A N K M E N T ( C V ) C Y $ 7 0 . 0 0 1 4 5 $ 1 0 , 1 5 0 . 0 0 $ - 14 5 $ 1 0 , 1 5 0 . 0 0 $ - 22 1 1 . 5 0 7 / 0 0 1 7 0 2 2 1 1 . 5 0 7 0 0 1 7 0 A G G R E G A T E B A S E ( C V ) C L A S S 5 C Y $ 8 2 . 0 0 9 7 $ 7 , 9 5 4 . 0 0 $ - 97 $ 7 , 9 5 4 . 0 0 $ - 8 2 5 2 1 . 5 1 8 / 0 0 1 4 0 2 5 2 1 . 5 1 8 0 0 1 4 0 4 " B I T U M I N O U S W A L K S F $ 6 . 5 0 5 7 4 $ 3 , 7 3 1 . 0 0 2 8 7 $ 1 , 8 6 5 . 5 0 $ - 287 $ 1,865.50 6 2 2 3 2 . 5 0 4 / 0 0 0 1 0 2 2 3 2 . 5 0 4 0 0 0 1 0 M I L L B I T U M I N O U S S U R F A C E S Y $ 1 2 . 0 0 1 8 6 $ 2 , 2 3 2 . 0 0 1 8 6 $ 2 , 2 3 2 . 0 0 $ - $ - 23 6 0 . 5 0 9 / 2 3 2 0 5 2 3 6 0 . 5 0 9 2 3 2 0 5 T Y P E S P 1 2 . 5 N O N W E A R C O U R S E M I X ( 3 ; B ) T O N $ 9 2 . 0 0 1 3 9 $ 1 2 , 7 8 8 . 0 0 $ - 13 9 $ 1 2 , 7 8 8 . 0 0 $ - 23 6 0 . 5 0 9 / 2 3 3 0 0 2 3 6 0 . 5 0 9 2 3 3 0 0 T Y P E S P 1 2 . 5 W E A R I N G C O U R S E M I X ( 3 ; C ) T O N $ 1 1 0 . 0 0 1 2 8 $ 1 4 , 0 8 0 . 0 0 3 6 $ 3 , 9 6 0 . 0 0 92 $ 1 0 , 1 2 0 . 0 0 $ - 25 0 3 . 5 0 3 / 1 8 0 3 6 2 5 0 3 . 5 0 3 1 8 0 3 6 3 6 " S P A N R C P I P E - A R C H S E W E R C L I I A L F $ 2 0 0 . 0 0 7 9 $ 1 5 , 8 0 0 . 0 0 $ - 79 $ 1 5 , 8 0 0 . 0 0 $ - 1 2 5 0 3 . 6 0 2 / 0 0 3 6 0 2 5 0 3 . 6 0 2 0 0 3 6 0 C O N N E C T I N T O E X I S T I N G D R A I N A G E S T R U C T U R E E A C H $ 2 , 0 0 0 . 0 0 2 $ 4 , 0 0 0 . 0 0 $ - 2 $ 4 , 0 0 0 . 0 0 $ - 1 2 5 0 4 . 6 0 2 / 0 0 0 4 4 2 5 0 4 . 6 0 2 0 0 0 4 4 A D J U S T W A T E R M A N H O L E S E A C H $ 2 5 0 . 0 0 1 $ 2 5 0 . 0 0 1 $ 2 5 0 . 0 0 $ - $ - 10 2 5 2 1 . 5 1 8 / 0 0 0 4 0 2 5 2 1 . 5 1 8 0 0 0 4 0 4 " C O N C R E T E W A L K S F $ 1 2 . 5 0 8 5 1 $ 1 0 , 6 3 7 . 5 0 $ - 42 1 $ 5 , 2 6 2 . 5 0 430 $ 5,375.00 25 3 1 . 5 0 3 / 0 2 3 2 0 2 5 3 1 . 5 0 3 0 2 3 2 0 C O N C R E T E C U R B & G U T T E R D E S I G N B 6 2 4 L F $ 4 5 . 0 0 1 6 8 $ 7 , 5 6 0 . 0 0 3 2 $ 1 , 4 4 0 . 0 0 13 6 $ 6 , 1 2 0 . 0 0 $ - 7 2 5 3 1 . 5 0 4 / 0 0 0 1 0 2 5 3 1 . 5 0 4 0 0 0 1 0 C O N C R E T E M E D I A N S Y $ 8 5 . 0 0 2 4 $ 2 , 0 4 0 . 0 0 $ - 24 $ 2 , 0 4 0 . 0 0 $ - 8, 1 0 2 5 3 1 . 5 0 4 / 0 0 0 6 0 2 5 3 1 . 5 0 4 0 0 0 6 0 6 " C O N C R E T E D R I V E W A Y P A V E M E N T S Y $ 9 0 . 0 0 3 0 $ 2 , 7 0 0 . 0 0 1 5 $ 1 , 3 5 0 . 0 0 $ - 15 $ 1,350.00 1 2 5 3 1 . 6 0 2 / 0 0 1 1 0 2 5 3 1 . 6 0 2 0 0 1 1 0 C O N C R E T E M E D I A N N O S E - S P E C I A L E A C H $ 7 5 0 . 0 0 1 $ 7 5 0 . 0 0 1 $ 7 5 0 . 0 0 $ - $ - 1 2 5 3 1 . 6 1 8 / 0 0 0 1 0 2 5 3 1 . 6 1 8 0 0 0 1 0 T R U N C A T E D D O M E S S F $ 8 0 . 0 0 3 2 $ 2 , 5 6 0 . 0 0 $ - $ - 32 $ 2,560.00 25 3 3 . 5 0 3 / 0 3 0 1 0 2 5 3 3 . 5 0 3 0 3 0 1 0 P O R T A B L E P R E C A S T C O N C B A R R I E R D E S 8 3 3 7 L F $ 1 5 . 0 0 7 5 $ 1 , 1 2 5 . 0 0 7 5 $ 1 , 1 2 5 . 0 0 $ - $ - 25 3 3 . 5 0 3 / 0 3 0 3 0 2 5 3 3 . 5 0 3 0 3 0 3 0 R E L O C A T E P O R T P R E C A S T C O N C B A R D E S 8 3 3 7 L F $ 5 . 0 0 7 5 $ 3 7 5 . 0 0 7 5 $ 3 7 5 . 0 0 $ - $ - 1 2 5 6 3 . 6 0 1 / 0 0 0 0 1 2 5 6 3 . 6 0 1 0 0 0 0 1 T R A F F I C C O N T R O L S U P E R V I S O R L S $ 1 0 , 0 0 0 . 0 0 1 $ 1 0 , 0 0 0 . 0 0 0 . 4 $ 4 , 0 0 0 . 0 0 0. 5 5 $ 5 , 5 0 0 . 0 0 0.05 $ 500.00 1 2 5 6 3 . 6 0 1 / 0 0 0 1 0 2 5 6 3 . 6 0 1 0 0 0 1 0 T R A F F I C C O N T R O L L S $ 1 5 , 0 0 0 . 0 0 1 $ 1 5 , 0 0 0 . 0 0 0 . 4 $ 6 , 0 0 0 . 0 0 0. 5 5 $ 8 , 2 5 0 . 0 0 0.05 $ 750.00 1 2 5 6 3 . 6 1 3 / 0 0 0 0 3 2 5 6 3 . 6 1 3 0 0 0 0 3 T Y P E I I I B A R R I C A D E S U D A Y $ 3 . 5 0 1 0 $ 3 5 . 0 0 1 0 $ 3 5 . 0 0 $ - $ - 1 2 5 6 3 . 6 1 3 / 0 0 0 2 1 2 5 6 3 . 6 1 3 0 0 0 2 1 F L A S H E R T Y P E B ( H I G H I N T E N S I T Y ) U D A Y $ 2 . 5 0 5 $ 1 2 . 5 0 5 $ 1 2 . 5 0 $ - $ - 1 2 5 6 3 . 6 1 3 / 0 1 1 0 0 2 5 6 3 . 6 1 3 0 1 1 0 0 P O R T A B L E C H A N G E A B L E M E S S A G E S I G N U D A Y $ 2 2 5 . 0 0 2 8 $ 6 , 3 0 0 . 0 0 2 8 $ 6 , 3 0 0 . 0 0 $ - $ - 25 6 4 . 5 0 2 / 0 0 2 1 3 2 5 6 4 . 5 0 2 0 0 2 1 3 I N S T A L L S I G N T Y P E C E A C H $ 1 3 0 . 0 0 6 $ 7 8 0 . 0 0 6 $ 7 8 0 . 0 0 $ - $ - 25 6 4 . 5 1 8 / 0 0 1 3 0 2 5 6 4 . 5 1 8 0 0 1 3 0 S I G N P A N E L S T Y P E C S F $ 3 2 . 0 0 1 9 . 5 $ 6 2 4 . 0 0 1 9 . 5 $ 6 2 4 . 0 0 $ - $ - 25 7 3 . 5 0 2 / 0 0 1 1 0 2 5 7 3 . 5 0 2 0 0 1 1 0 S T O R M D R A I N I N L E T P R O T E C T I O N E A C H $ 2 0 0 . 0 0 4 $ 8 0 0 . 0 0 2 $ 4 0 0 . 0 0 2 $ 4 0 0 . 0 0 $ - 25 7 3 . 5 0 3 / 0 0 0 2 0 2 5 7 3 . 5 0 3 0 0 0 2 0 S I L T F E N C E ; T Y P E H I L F $ 9 . 0 0 1 9 8 $ 1 , 7 8 2 . 0 0 4 4 $ 3 9 6 . 0 0 15 4 $ 1 , 3 8 6 . 0 0 $ - 25 7 5 . 5 0 1 / 0 0 0 2 0 2 5 7 5 . 5 0 1 0 0 0 2 0 T U R F E S T A B L I S H M E N T L S $ 1 , 0 0 0 . 0 0 1 $ 1 , 0 0 0 . 0 0 1 $ 1 , 0 0 0 . 0 0 $ - $ - 25 8 2 . 5 0 3 / 1 0 1 2 4 2 5 8 2 . 5 0 3 1 0 1 2 4 2 4 " S O L I D L I N E P A I N T L F $ 5 . 5 0 4 4 $ 2 4 2 . 0 0 4 4 $ 2 4 2 . 0 0 $ - $ - 25 8 2 . 5 0 3 / 1 0 4 0 4 2 5 8 2 . 5 0 3 1 0 4 0 4 4 " D B L E S O L I D L I N E P A I N T L F $ 2 . 9 0 7 8 $ 2 2 6 . 2 0 7 8 $ 2 2 6 . 2 0 $ - $ - 25 8 2 . 5 0 3 / 3 6 2 0 4 2 5 8 2 . 5 0 3 3 6 2 0 4 4 " B R O K E N L I N E M U L T I C O M P G R I N L F $ 1 . 4 5 1 0 0 $ 1 4 5 . 0 0 1 0 0 $ 1 4 5 . 0 0 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - SU B T O T A L 10 % C o n t i n g e n c y TO T A L NO T E S (1 ) S E E S P E C I A L P R O V I S I O N (2 ) R E M O V E S E W E R P I P E ( S T O R M ) I N C L U D E S P R O T E C T I N G E X I S T I N G U T I L I T I E S W I T H I N T R E N C H E X C A V A T I O N . (3 ) S A W I N G C O N C R E T E P A V E M E N T ( F U L L D E P T H ) T Y P I C A L I S 3 I N C H E S B I T U M I N O U S O N 8 I N C H E S C O N C R E T E . (4 ) P A V E M E N T R E M O V A L T Y P I C A L I S 3 I N C H E S B I T U M I N O U S O N 8 I N C H E S C O N C R E T E (5 ) S U B G R A D E E X C A V A T I O N D O E S N O T I N C L U D E P I P E R E M O V A L T R E N C H E X C A V A T I O N . S E E C O N S T R U C T I O N P L A N F O R E S T I M A T E D E X C A V A T I O N L I M I T S BA S E D O N L Y F O R B I D D I N G P U R P O S E S . (6 ) M I L L I N G D E P T H V A R I E S F O R P R O P O S E O F F I X I N G T H E R O A D P R O F I L E . M A X D E P T H O F 3 " A N D M A Y I N C L U D E C O N C R E T E M I L L I N G . (7 ) I N C L U D E S C U R B D E S I G N (8 ) C O S T P A R T I C I P A T I O N S P L I T 5 0 % H E N N E P I N C O U N T Y / 5 0 % N E W H O P E (9 ) P R O P O S E D P L A N S S H O W B 6 1 2 C U R B W I T H 4 M E D I A N (1 0 ) 4 I N C H E S O F A G G R E G A T E B A S E ( C V ) C L A S S 5 I S I N C I N D E N T A L UN I T B A S E B I D UN I T C O S T T O T A L BA S E BA S E B I D ST A T E M E N T O F E S T I M A T E D Q U A N T I T I E S NO T E S CO M B I N E D IT E M N O . IT E M N O . S O R T C O D E $2 0 , 9 0 6 . 1 2 $2 2 9 , 9 6 7 . 3 2 $ 2 0 9 , 0 6 1 . 2 0 $ 5 4 , 9 0 6 . 2 0 $ 1 3 7 , 3 1 0 . 5 0 $ 16,844.50 P R O J E C T ST A T E A I D S. A . P . 0 2 7 - 7 5 6 - 0 2 3 NEW HOPE LOCAL FUNDS HE N N E P I N C O . 22 0 1 3 0 0 HE N N E P I N C O . 41 1 5 6 0 0 Agreement No. PW 28-39-20 County Project No. 2201300/4115600 County State Aid Highway 156 City of New Hope County of Hennepin 1 ___ CONSTRUCTION COOPERATIVE AGREEMENT This Agreement is made between the County of Hennepin, a body politic and corporate under the laws of the State of Minnesota, (hereinafter referred to as the “County”), and the City of New Hope, a body politic and corporate under the laws of the State of Minnesota, hereinafter referred to as the “City.” The County and the City collectively are referred to as the “Parties.” Recitals The following Recitals are incorporated into this Agreement. 1. There exists a failed culvert located north of the Canadian Pacific (CP) railroad crossing on County State Aid Highway (CSAH) 156 (Winnetka Avenue) within the corporate limits of the City, which requires replacement. Additionally, the CP railroad crossing and the adjacent sidewalk are in poor conditions and will need to be removed and replaced. The County has been collaborating with CP Railroad company and will enter into a separate agreement to replace the railroad crossing. 2. The County and the City have agreed to enter into this Agreement to memorialize the partnership and to outline each party’s financial and maintenance responsibilities, and associated costs to remove and replace the sidewalk to improve accessibility under County Project (CP) 2201300/4115600, City Project No. 1049, to be performed in conjunction with the County’s culvert and Railroad crossing projects, and which shall hereinafter be referred to as the “Project.” 3. The County shall be the lead agency in design engineering, construction, and construction administration of the Project, and be responsible for acquiring all necessary right of way and/or other governmental agencies-required permits needed for the Project. 4. The City has indicated its willingness to cost participate in the Project as detailed herein. 5. The County Engineer has heretofore prepared an Engineer’s Estimate of quantities and unit prices for the above described Project in the sum of Sixteen Thousand Eight Hundred Forty Four Dollars and Fifty Cents ($16,844.50), and a copy of the Engineer’s Estimate and an estimated Division of Cost Summary, marked Exhibit “A”, is attached hereto. 6. The Project will be carried out by the Parties under the provisions of Minnesota Statutes, Section 162.17, Subdivision 1, and Section 471.59. Agreement No. PW 28-39-20 CSAH No. 156; C.P 2201300/4115600 2 _____ Agreement NOW, THEREFORE, the Parties agree as follows: 1. Term of Agreement, Survival of Terms, and Exhibit. Effective Date. This Agreement is effective as of the date of the final signature. Expiration Date. This Agreement will expire after the date in which all obligations have been satisfactorily fulfilled. Survival of Terms. Provisions that by their nature are intended to survive the term, cancellation or termination of this Agreement do survive such term, cancellation or termination. Such provisions include but are not limited to: Maintenance Responsibilities, Records/Audits, Indemnification, Insurance, Worker Compensation Claims, Cancellation, Termination, and Minnesota Laws Govern. Exhibit. Engineer’s Estimate of quantities and unit prices and estimated Division of Cost Summary marked Exhibit “A” is attached and incorporated into this Agreement. 2. Construction by the County. Contract Award and Administration. The County or its agents shall prepare the necessary plans, specifications, and proposal; obtain approval of the plans and specifications from MnDOT and the City; advertise for bids for the work and construction; receive and open bids pursuant to the advertisement; enter into a contract with the successful bidder at the unit prices specified in the bid of such bidder; administer the contract; and perform the required engineering and inspection; all in accordance with the plans and specifications set forth below. Plans and Specifications. 2.2.1. Design Work. All design work performed by the County and its agents that is to be incorporated into the bidding documents for the Project shall be prepared and certified by a Professional Engineer licensed in the State of Minnesota. All designs which affect County facilities shall conform to MnDOT Design Standards applicable to County State Aid Highways and to the requirements of the Americans with Disabilities Act (ADA), and be approved by the County Engineer. 2.2.2. Plan Numbers. The plans and specifications are referenced and identified as S.A.P. 027-756-023, and approved by MnDOT. 2.2.3. Request for Copies of Plans. At the request of the City, the County or its agents shall furnish the City with any working copies of any plans, designs or reports at any time during the Project design process. Construction Supervision and Inspection. The County or its agents will administer Agreement No. PW 28-39-20 CSAH No. 156; C.P. 2201300/4115600 3 _____ the construction contract, and perform all necessary engineering, inspection and testing of all the contract work. All work for the Project shall be completed in compliance with the MnDOT and City approved plans and specifications. The City Engineer or a designated representative shall have the right, as the work progresses, to enter upon the job site to make any inspections deemed necessary and shall cooperate with the County Engineer and staff at their request to the extent necessary, but will have no responsibility for the supervision of the work. Plan Changes and Additional Construction. 2.4.1. Plan Changes. The City agrees that the County may make changes in the plans or in the character of the contract construction that are reasonably necessary to cause the construction to be in all things performed and completed in a satisfactory manner. It is further agreed by the City that the County may enter into any change orders or supplemental agreements with the County’s contractor for the performance of any additional construction or construction occasioned by any necessary, advantageous or desirable changes in plans, within the original scope of the Project. 2.4.2. Review Proposed Changes. The City shall have the right to review any proposed changes to the plans and specifications as they relate to the City's cost participation prior to the work being performed, except in emergencies, and in those instances where the proposed changes necessitate a re-engineering of the design and/or specifications, the County shall submit the re-engineered design and/or specifications to the City. The City Engineer or designated representative shall respond to the County’s request for approval to authorize the issuance of any negotiated change orders or supplemental agreements prepared by the County that affect the City's share of the construction cost within a reasonable time frame. Right of Way/Permit 2.5.1. Right of Way Acquisition. The County or its agents shall acquire all additional right of way, permits and/or easements required for the construction of the Project. 2.5.2. Access Rights and Permits. The City shall cooperate with the conveyance of any access rights over the City right of way that may be required by the County for the Project. The Parties understand that any such access rights shall be subject to the City council approval and will be granted at no cost to the County. The City shall not require permits for erosion control, lane use and obstructions, and sidewalk that are necessary for construction of the project. The County shall also obtain, and comply with, any and all permits and approvals required from other governmental or regulatory agencies to accomplish the Project. 2.5.3. Right of Way Cost. For informational purposes only, there is no associated right of way cost due from the City for this Project. 3. Cost Participation. The City shall participate in the costs of the contract construction for the Project as set forth in the estimated Division of Cost Summary in Exhibit "A,” and associated design engineering and construction administration fees. Agreement No. PW 28-39-20 CSAH No. 156; C.P. 2201300/4115600 4 _____ Exhibit “A” Unit Prices. The respective proportionate shares of the pro-rata pay items included in Exhibit "A" shall remain unchanged throughout the life of this Agreement. The estimated amount on Page 1 of this Agreement and as shown in Exhibit "A" is an estimate of the costs for the contract construction on the Project. Therefore, the unit prices set forth in the contract with the successful bidder and the final quantities as measured by the County Engineer's designated representatives shall govern in computing the total final contract construction cost for apportioning the cost of the Project according to the provisions herein, and the final quantities as measured by the County Engineer's designated representatives for contract pay items in which the City is participating shall be subject to the review and approval by the City Engineer. Construction, Design, and Construction Administration Cost Shares. The City also agrees to reimburse the County for the City’s proportionate share of design and construction administration engineering costs for the Project. The City’s share of design engineering costs shall be equal to ten percent (10%) of the total final amount of the City’s share of contract construction costs for the Project. The City’s share of construction engineering costs shall be equal to eight percent (8%) of the total final amount of the City’s share of contract construction costs for the Project. The City’s proportionate shares of design and construction engineering costs as listed in Exhibit “A” are estimated, and the actual City’s proportionate shares of design and construction administration engineering fees will be computed using the total final amount of the City’s share of the contract construction costs for the Project. 4. Payment. Estimated Amount Due. For informational purposes only, as referenced in the Engineer’s Estimate and an estimated Division of Cost Summary, marked Exhibit “A”, the City’s estimated amount to reimburse the County per this Agreement is $19,876.51 The estimated amount due to the County from the City includes estimated costs of contract construction, design engineering (10%), and construction administration (8%). When to Invoice. After an award by the County to the successful bidder on the Project, the County shall invoice the City for ninety five percent (95%) of the estimated City shares in the contract construction costs and construction and design engineering costs for the Project. Pay to the Order of. Payments shall be made to the County, in the name of the Hennepin County Treasurer, by the City for the full amount due stated on the invoices within forty five (45) days of the invoice date. The estimated City shares shall be based on actual contract unit prices applied to the estimated quantities shown in the plans. Where to Send Payment. The payment should include the date, the name of the County’s project manager (Mr. Eric Vogel, P.E.), project name and county project number (C.P. 2201300/4115600). Payment and supporting documentation should be mailed to the following address: Agreement No. PW 28-39-20 CSAH No. 156; C.P. 2201300/4115600 5 _____ OBF/APEX A-12 GC Mail Code 129 300 South 6th St Minneapolis, MN 55487 Supplemental Agreement or Change Order. In the event the County Engineer or the County's staff determines the need to amend the construction contract with a supplemental agreement or change order which results in an increase in the contract amount for the Project, the City hereby agrees to remit within forty five (45) days of notification by the County of the change an amount equal to ninety five percent (95%) of the estimated City shares as documented in the supplemental agreement or change order. Final Amount Due. The remainder of the City’s shares in the engineering and contract construction costs of the Project, including additional costs resulting from supplemental agreements and change orders, will be due the County upon acceptance by the County’s construction engineer of all the construction work performed by the County’s construction contractor and submittal of the County Engineer's final estimate for the Project to the City. Remaining Balance. Upon final payment to the Project contractor by the County, any amount remaining as a balance in the deposit account will be returned to the City, within 45 days, on a proportionate basis based on the City’s initial deposit amount and the City’s final proportionate share of the Project costs. Likewise, any amount due the County from the City upon final payment by the County shall be paid by the City as its final payment for the construction and engineering costs of the Project within forty five (45) days of receipt of an invoice from the County. 5. The City’s Maintenance Responsibilities. In addition to the City’s cost participation as provided elsewhere in this Agreement, upon completion of the Project, the City shall provide the following year-round maintenance at its sole cost as outlined below: Sidewalks and Pedestrian Ramps. Maintenance of sidewalks and pedestrian ramps. Maintenance includes, but is not limited to, winter maintenance, debris removal, patching, crack repair, and any other maintenance activities according to accepted city maintenance practices. 6. The County’s Maintenance Responsibilities. Upon completion of the Project, the County shall provide year-round maintenance at its sole cost as outlined below: Roadways. Maintenance of CSAH 156 reconstructed under the Project. Maintenance includes, but is not limited to, sweeping, debris removal, resurfacing and seal coating, and any other maintenance activities according to accepted County maintenance practices. County Road Pavement Striping: The County shall thereafter maintain and repair all pavement striping for roadway users installed as a part of the Project at the expense of the County. Agreement No. PW 28-39-20 CSAH No. 156; C.P. 2201300/4115600 6 _____ 7. Authorized Representatives. In order to coordinate the services of the County with the activities of the City and vice versa so as to accomplish the purposes of this Agreement, the Hennepin County Highway Engineer or designated representative and the City Engineer or designated representatives shall manage this Agreement on behalf of the County and the City. County of Hennepin: Carla Stueve County Highway Engineer Hennepin County Public Works 1600 Prairie Drive, Medina, MN 55340 Office: 612-596-0356 Carla.Stueve@hennepin.us City of New Hope: Bernie Weber Director of Public Works City Hall 4401 Xylon Ave N, Address: New Hope, MN 55428 Office: 763-592-6772 bweberail@ci.new-hope.mn.us 8. Assignment, Amendments, Default, Waiver, Agreement Complete, Cancellation or Termination. Assignment. The City shall not assign, subcontract, transfer or pledge this Agreement and/or the services to be performed hereunder, whether in whole or in part, without the prior written consent of the County. Amendments. Any alterations, variations, modifications or waivers of provisions of this Agreement shall only be valid when they have been reduced to writing as an amendment to this Agreement and signed by the Parties hereto. Default. If the City fail to perform any of the provisions of this Agreement or so fails to administer the work as to endanger the performance of the Agreement, this shall constitute a default. Unless the City's default is excused by the County, the County may upon written notice immediately cancel this Agreement in its entirety. Waiver. The County's failure to insist upon strict performance of any provision or to exercise any right under this Agreement shall not be deemed a relinquishment or waiver of the same, unless consented to in writing. Such consent shall not constitute a general waiver or relinquishment throughout the entire term of the Agreement. Agreement Complete. The entire Agreement between the Parties is contained herein and that this Agreement supersedes all oral agreements and negotiations between the Parties relating to the subject matter hereof. All items referred to in this Agreement are incorporated or attached and are deemed to be part of this Agreement. Agreement No. PW 28-39-20 CSAH No. 156; C.P. 2201300/4115600 7 _____ Cancellation or Termination. This Agreement may be terminated or cancelled by each party by mutual agreement with or without cause by either party upon thirty (30) day written notice. This Agreement shall be terminated or cancelled by any party upon a material breach by the other party. In the event of a termination or cancellation, the Parties will remain responsible for cost participation as provided in this Agreement for obligations incurred up through the effective date of the termination or cancellation, subject to any equitable adjustment that may be required to account for the effects of a breach. 9. Indemnification. The County and the City agree to defend, indemnify and hold each other harmless, including their officials, officers, agents, volunteers, and employees from any liability, claims, causes of action, judgments, damages, losses, costs or expenses, including reasonable attorneys’ fees, resulting directly or indirectly from any act or omission of either party or either party’s consultant or sub consultant, anyone directly or indirectly employed by them, and/or anyone for whose acts and/or omissions they may be liable in the performance of the services required by this contract, and against all loss by reason of the failure of either party to perform fully, in any respect, all obligations under this contract. The Parties’ liability shall be governed by the provisions of Minnesota Statutes, Chapter 466 or other applicable law. 10. Insurance. The City agrees that any future contract let by the City for the performance of any of the work included hereunder shall include clauses that will: 1) Require the contractor to indemnify and hold the County, its commissioners, officers, agents and employees harmless from any liability, claim, demand, judgments, expenses, action or cause of action of any kind or character arising out of any act or omission of the contractor, its officers, employees, agents or subcontractors; 2) Require the contractor to be an independent contractor for the purposes of completing the work provided for in this Agreement; and 3) Require the Contractor to provide and maintain the following insurance so as to assure the performance of its indemnification and hold harmless obligation: Limits (1) Commercial General Liability on an occurrence Basis with contractual liability coverage: General Aggregate $2,000,000 Products - Completed Operations Aggregate $2,000,000 Personal and Advertising Injury $1,500,000 Each Occurrence - Combined Bodily Injury and Property Damage $1,500,000 Hennepin County shall be named as an additional insured for the Commercial General Liability coverage with respect to operations Covered under this Agreement. (2) Automobile Liability: Combined Single limit each occurrence coverage or the equivalent covering owned, non-owned, and hired automobiles: $1,500,000 Agreement No. PW 28-39-20 CSAH No. 156; C.P. 2201300/4115600 8 _____ (3) Workers’ Compensation and employer’s Liability: Work Workers’ Compensation: Statutory If the Contractor is based outside the State of Minnesota, coverage must apply to Minnesota laws. Employer’s Liability. Bodily injury by: Accident – Each Accident $500,000 Disease – Policy Limit $500,000 Disease - Each Employee $500,000 (4) Professional Liability – Per Claim and Aggregate: $2,000,000 The above listed Professional Liability insurance will not be required in any construction contract let by the City if the City’s Contractors are not required to perform design engineering as part of the construction contract. An umbrella or excess policy over primary liability coverages is an acceptable method to provide the required insurance limits. The above subparagraphs establish minimum insurance requirements. It is the sole responsibility of the City’s Contractors to determine the need for and to procure additional insurance which may be needed in connection with the Project. All insurance policies shall be open to inspection by the County and copies of policies shall be submitted to the County upon written request. 11. Worker Compensation Claims. City’s Employees. Any and all employees of the City and all other persons engaged by the City in the performance of any work or services required or provided for herein to be performed by the City shall not be considered employees of the County, and any and all claims that may or might arise under the Workers' Compensation Act or the Unemployment Compensation Act of the State of Minnesota on behalf of the employees while so engaged and any and all claims made by any third parties as a consequence of any act or omission on the part of the employees while so engaged on any of the work or services provided to be rendered herein shall in no way be the obligation or responsibility of the County. County’s Employees. Any and all employees of the County and all other persons engaged by the County in the performance of any work or services required or provided for herein to be performed by the County shall not be considered employees of the City, and any and all claims that may or might arise under the Workers' Compensation Act or the Unemployment Compensation Act of the State of Minnesota on behalf of the employees while so engaged and any and all claims made by any third parties as a consequence of any act or omission on the part of the employees while so engaged on Agreement No. PW 28-39-20 CSAH No. 156; C.P. 2201300/4115600 9 _____ any of the work or services provided to be rendered herein shall in no way be the obligation or responsibility of the City. 12. Records/Audits. The City agrees that the County, the State Auditor or any of their duly authorized representatives at any time during normal business hours, and as often as they may reasonably deem necessary, shall have access to and the right to examine, audit, excerpt and transcribe any books, documents, papers, records, etc., which are pertinent to the Project and the accounting practices and procedures of the City which involve transactions relating to this Agreement. 13. Nondiscrimination. The provisions of Minnesota Statute Section 181.59 and of any applicable local ordinance relating to civil rights and discrimination and the Affirmative Action Policy statement of Hennepin County shall be considered a part of this Agreement as though fully set forth herein. 14. Minnesota Laws Govern. The laws of the State of Minnesota shall govern all questions and interpretations concerning the validity and construction of this Agreement and the legal relations between the Parties and their performance. The appropriate venue and jurisdiction for any litigation will be those courts located within the County of Hennepin, State of Minnesota. Litigation, however, in the federal courts involving the Parties will be in the appropriate federal court within the State of Minnesota. (This space left intentionally blank) Agreement No. PW 28-39-20 CSAH No. 156; C.P. 2201300/4115600 10 _____ IN TESTIMONY WHEREOF, The Parties hereto have caused this Agreement to be executed by their respective duly authorized officers as of the day and year first above written. CITY OF NEW HOPE (Seal) By:___________________________________ Mayor Date:_________________________________ And:_________________________________ Manager Date:_________________________________ COUNTY OF HENNEPIN ATTEST: By: By:__________________________________ Deputy/Clerk of the County Board Chair of its County Board Date: Date: ________________________________ And: ________________________________ County Administrator Date: ________________________________ REVIEWED BY THE COUNTY ATTORNEY’S OFFICE: And:_________________________________ Assistant County Administrator, Public Works By: Date:________________________________ Assistant County Attorney Date: RECOMMENDED FOR APPROVAL By:_________________________________ County Highway Engineer Date:________________________________ RECOMMENDED FOR APPROVAL By:_________________________________ Department Director, Transportation Agreement No. PW 28-39-20 CSAH No. 156; C.P. 2201300/4115600 11 _____ Operations Date:________________________________ EXHIBIT “A” Engineer’s Estimate of quantities and unit prices and estimated Division of Cost Summary (Exhibit A Continued on next page) QUANTITY AMOUNT QUANTITY AMOUNT QUANTITY AMOUNT 1 2021.501 / 00010 2021.501 00010 MOBILIZATION LS $40,000.00 1 $40,000.00 0.4 $ 16,000.00 0.55 $ 22,000.00 0.05 $ 2,000.00 2104.502 / 01240 2104.502 01240 REMOVE SIGN TYPE C EACH $50.00 11 $550.00 11 $ 550.00 $ - $ - 2104.502 / 03320 2104.502 03320 SALVAGE SIGN TYPE C EACH $65.00 11 $715.00 11 $ 715.00 $ - $ - 3 2104.503 / 00195 2104.503 00195 SAWING CONCRETE PAVEMENT (FULL DEPTH)L F $9.00 179 $1,611.00 117 $ 1,053.00 62 $ 558.00 $ - 2 2104.503 / 00285 2104.503 00285 REMOVE SEWER PIPE (STORM)L F $150.00 79 $11,850.00 $ - 79 $ 11,850.00 $ - 2104.503 / 00315 2104.503 00315 REMOVE CURB & GUTTER L F $8.00 159 $1,272.00 23 $ 184.00 136 $ 1,088.00 $ - 9 2104.504 / 00010 2104.504 00010 REMOVE CONCRETE MEDIAN S Y $20.00 27 $540.00 $ - 27 $ 540.00 $ - 2104.504 / 00050 2104.504 00050 REMOVE CONCRETE WALK S Y $2.00 81 $162.00 $ - 47 $ 94.00 34 $ 68.00 4 2104.504 / 00070 2104.504 00070 REMOVE PAVEMENT S Y $20.00 439 $8,780.00 26 $ 520.00 413 $ 8,260.00 $ - 8 2104.518 / 00100 2104.518 00100 REMOVE BITUMINOUS WALK S F $6.00 792 $4,752.00 396 $ 2,376.00 $ - 396 $ 2,376.00 5 2106.507 / 00040 2106.507 00040 EXCAVATION - SUBGRADE C Y $50.00 63 $3,150.00 $ - 63 $ 3,150.00 $ - 2106.507 / 00080 2106.507 00080 SELECT GRANULAR EMBANKMENT (CV)C Y $70.00 145 $10,150.00 $ - 145 $ 10,150.00 $ - 2211.507 / 00170 2211.507 00170 AGGREGATE BASE (CV) CLASS 5 C Y $82.00 97 $7,954.00 $ - 97 $ 7,954.00 $ - 8 2521.518 / 00140 2521.518 00140 4" BITUMINOUS WALK S F $6.50 574 $3,731.00 287 $ 1,865.50 $ - 287 $ 1,865.50 6 2232.504 / 00010 2232.504 00010 MILL BITUMINOUS SURFACE S Y $12.00 186 $2,232.00 186 $ 2,232.00 $ - $ - 2360.509 / 23205 2360.509 23205 TYPE SP 12.5 NON WEAR COURSE MIX (3;B)TON $92.00 139 $12,788.00 $ - 139 $ 12,788.00 $ - 2360.509 / 23300 2360.509 23300 TYPE SP 12.5 WEARING COURSE MIX (3;C)TON $110.00 128 $14,080.00 36 $ 3,960.00 92 $ 10,120.00 $ - 2503.503 / 18036 2503.503 18036 36" SPAN RC PIPE-ARCH SEWER CL IIA L F $200.00 79 $15,800.00 $ - 79 $ 15,800.00 $ - 1 2503.602 / 00360 2503.602 00360 CONNECT INTO EXISTING DRAINAGE STRUCTURE EACH $2,000.00 2 $4,000.00 $ - 2 $ 4,000.00 $ - 1 2504.602 / 00044 2504.602 00044 ADJUST WATER MANHOLES EACH $250.00 1 $250.00 1 $ 250.00 $ - $ - 10 2521.518 / 00040 2521.518 00040 4" CONCRETE WALK S F $12.50 851 $10,637.50 $ - 421 $ 5,262.50 430 $ 5,375.00 2531.503 / 02320 2531.503 02320 CONCRETE CURB & GUTTER DESIGN B624 L F $45.00 168 $7,560.00 32 $ 1,440.00 136 $ 6,120.00 $ - 7 2531.504 / 00010 2531.504 00010 CONCRETE MEDIAN S Y $85.00 24 $2,040.00 $ - 24 $ 2,040.00 $ - 8,10 2531.504 / 00060 2531.504 00060 6" CONCRETE DRIVEWAY PAVEMENT S Y $90.00 30 $2,700.00 15 $ 1,350.00 $ - 15 $ 1,350.00 1 2531.602 / 00110 2531.602 00110 CONCRETE MEDIAN NOSE-SPECIAL EACH $750.00 1 $750.00 1 $ 750.00 $ - $ - 1 2531.618 / 00010 2531.618 00010 TRUNCATED DOMES S F $80.00 32 $2,560.00 $ - $ - 32 $ 2,560.00 2533.503 / 03010 2533.503 03010 PORTABLE PRECAST CONC BARRIER DES 8337 L F $15.00 75 $1,125.00 75 $ 1,125.00 $ - $ - 2533.503 / 03030 2533.503 03030 RELOCATE PORT PRECAST CONC BAR DES 8337 L F $5.00 75 $375.00 75 $ 375.00 $ - $ - 1 2563.601 / 00001 2563.601 00001 TRAFFIC CONTROL SUPERVISOR LS $10,000.00 1 $10,000.00 0.4 $ 4,000.00 0.55 $ 5,500.00 0.05 $ 500.00 1 2563.601 / 00010 2563.601 00010 TRAFFIC CONTROL LS $15,000.00 1 $15,000.00 0.4 $ 6,000.00 0.55 $ 8,250.00 0.05 $ 750.00 1 2563.613 / 00003 2563.613 00003 TYPE III BARRICADES UDAY $3.50 10 $35.00 10 $ 35.00 $ - $ - 1 2563.613 / 00021 2563.613 00021 FLASHER TYPE B (HIGH INTENSITY)UDAY $2.50 5 $12.50 5 $ 12.50 $ - $ - 1 2563.613 / 01100 2563.613 01100 PORTABLE CHANGEABLE MESSAGE SIGN UDAY $225.00 28 $6,300.00 28 $ 6,300.00 $ - $ - 2564.502 / 00213 2564.502 00213 INSTALL SIGN TYPE C EACH $130.00 6 $780.00 6 $ 780.00 $ - $ - 2564.518 / 00130 2564.518 00130 SIGN PANELS TYPE C S F $32.00 19.5 $624.00 19.5 $ 624.00 $ - $ - 2573.502 / 00110 2573.502 00110 STORM DRAIN INLET PROTECTION EACH $200.00 4 $800.00 2 $ 400.00 2 $ 400.00 $ - 2573.503 / 00020 2573.503 00020 SILT FENCE; TYPE HI L F $9.00 198 $1,782.00 44 $ 396.00 154 $ 1,386.00 $ - 2575.501 / 00020 2575.501 00020 TURF ESTABLISHMENT LS $1,000.00 1 $1,000.00 1 $ 1,000.00 $ - $ - 2582.503 / 10124 2582.503 10124 24" SOLID LINE PAINT L F $5.50 44 $242.00 44 $ 242.00 $ - $ - 2582.503 / 10404 2582.503 10404 4" DBLE SOLID LINE PAINT L F $2.90 78 $226.20 78 $ 226.20 $ - $ - 2582.503 / 36204 2582.503 36204 4" BROKEN LINE MULTI COMP GR IN L F $1.45 100 $145.00 100 $ 145.00 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - SUBTOTAL 10% Contingency TOTAL NOTES (1)SEE SPECIAL PROVISION (2)REMOVE SEWER PIPE (STORM) INCLUDES PROTECTING EXISTING UTILITIES WITHIN TRENCH EXCAVATION. (3)SAWING CONCRETE PAVEMENT (FULL DEPTH) TYPICAL IS 3 INCHES BITUMINOUS ON 8 INCHES CONCRETE. (4)PAVEMENT REMOVAL TYPICAL IS 3 INCHES BITUMINOUS ON 8 INCHES CONCRETE (5)SUBGRADE EXCAVATION DOES NOT INCLUDE PIPE REMOVAL TRENCH EXCAVATION. SEE CONSTRUCTION PLAN FOR ESTIMATED EXCAVATION LIMITS BASED ONLY FOR BIDDING PURPOSES. (6)MILLING DEPTH VARIES FOR PROPOSE OF FIXING THE ROAD PROFILE. MAX DEPTH OF 3" AND MAY INCLUDE CONCRETE MILLING. (7)INCLUDES CURB DESIGN (8)COST PARTICIPATION SPLIT 50% HENNEPIN COUNTY / 50% NEW HOPE (9)PROPOSED PLANS SHOW B612 CURB WITH 4 MEDIAN (10) 4 INCHES OF AGGREGATE BASE (CV) CLASS 5 IS INCINDENTAL $20,906.12 $229,967.32 $ 209,061.20 $ 54,906.20 $ 137,310.50 $ 16,844.50 PROJECT STATE AID S.A.P. 027-756-023 NEW HOPE LOCAL FUNDS 1049HENNEPIN CO. 2201300 HENNEPIN CO. 4115600 NOTES COMBINED ITEM NO.ITEM NO.SORT CODE UNIT BASE BID UNIT COST TOTAL BASE BASE BIDSTATEMENT OF ESTIMATED QUANTITIES Agreement No. PW 28-39-20 CSAH No. 156; C.P. 2201300/4115600 12 _____ EXHIBIT “A” (Continued) Engineer’s Estimate of quantities and unit prices and estimated Division of Cost Summary Culvert Replacement and Pavement Repair Winnetka Avenue (CSAH 156) SAP #027-756-023 CITY # 1049 Sidewalk HC #2201300 Roadway HC #4115600 Culvert City of New Hope Sidewalk Replacement and ADA Estimated Construction Costs 16,844.50$ Design 10%1,684.45$ Construction Administration 8%1,347.56$ Estimated Agreement Total 19,876.51$ EX H I B I T  A                                                                                                                                                                                              5/ 1 / 2 0 2 0  En g i n e e r ’ s  Es t i m a t e  of  Construction  Costs      Cu l v e r t R e p l a c e m e n t a n d P a v e m e n t R e p a i r Wi n n e t k a A v e n u e ( C S A H 1 5 6 ) SA P # 0 2 7 - 7 5 6 - 0 2 3 HC # 2 2 0 1 3 0 0 R o a d w a y HC # 4 1 1 5 6 0 0 C u l v e r t Ci t y o f N e w H o p e S i d e w a l k R e p l a c e m e n t a n d A D A Es t i m a t e d C o n s t r u c t i o n C o s t s $ 1 6 , 8 4 4 . 5 0 De s i g n 10 % $ 1 , 6 8 4 . 4 5 Co n s t r u c t i o n A d m i n i s t r a t i o n 8 % $ 1 , 3 4 7 . 5 6 Es t i m a t e d A g r e e m e n t T o t a l $ 1 9 , 8 7 6 . 5 1     I:\RFA\COMM DEV\2020\City Council\05-26-20 Tobacco Use Ordinance Amendment\Q- Tobacco Use Ordinance Amendment.docx Request for Action May 26, 2020 Approved by: Kirk McDonald, City Manager Originating Department: Community Development By: Brandon Bell, Community Development Assistant & Kirk McDonald, City Manager Agenda Title Ordinance 20-08, An Ordinance Regulating the Sale of Tobacco and Related Devices and Products Within the City of New Hope, Minnesota Requested Action Staff recommends that the City Council approve the attached ordinance regulating the sale of tobacco and related devices and products within the city of New Hope, Minnesota. The ordinance amendment was discussed at the May 18, 2020 work session and the majority of the Council was in support of the ordinance amendment. Policy/Past Practice It is the past practice of the city to provide regulations to govern general and various activities and situations which actually or may occur or exist in the city, and which will or may affect the general welfare and safety of residents of the city; with the intention of promoting and protecting the health, safety and welfare of the citizens of the city. Background At the May 2020 work session staff presented a preliminary tobacco use ordinance amendment. This amendment was created with the help of Mitchell Hamline Public Health Law Center. Mitchell Hamline has helped other cities in the state write new tobacco ordinance amendments free of charge. The proposed amendment was based on the interests of the City Council at the February and May work sessions. Below are the changes that are within the newly proposed tobacco ordinance amendment: 1. Many definitions have either been revised or added to provide or more modern verbiage. 2. Mirrored the newest federal regulations including raising the legal age required to purchase tobacco products, from 18 years of age to 21 years old. Also includes the ban on all flavored cartridge -based e- cigarettes (except for tobacco flavored). 3. Raised the age of those legally allowed to sell tobacco products as a clerk at a licensed retailer to 18. 4. Banned the sales of all flavored tobacco products except for mint, menthol and wintergreen. 5. Possession, use, and purchase laws have been removed that would punish people under the age of 21 who attempted to buy tobacco. 6. Put a cap on the number of tobacco licenses in the city to equal the total amount of licenses held at the beginning of 2021. The current amount is 21, but with a ban on-site pharmacy licenses, the number will be reduced to 19 in 2021. 7. Prohibit the sales of tobacco in any facility that contains an on-site pharmacy. Current license holders will keep these licenses until the end of the year, but will not be eligible for renewal. 8. Change the age of those allowed to conduct compliance checks from 15-17 to 17-20 to align with new state policies. Agenda Section Ordinances & Resolutions Item Number 10.1 Request for Action, Page 2 At the February work session Council inquired how a ban on pharmacy sales would affect the three licenses that Hy-Vee holds. Only one of Hy-Vee’s licenses (grocery store license) would be affected since the other two (liquor store and gas station) are in other facilities that do not have direct access to a pharmacy. Walgreens at 4200 Winnetka Ave, would also be impacted by this amendment. The other store that will be greatly impacted by these new regulations is the E-Cig Vape Lounge at 9430 36th Ave N. It is anticipated that any new tobacco regulations would greatly affect their business, as tobacco and nicotine products are their main source of revenue. Staff has sent notices to the tobacco license address listed on file to keep them informed on the status of the ordinance. Staff finds all of these proposed changes to be reasonable and to align with many of the changes that other cities in the area have made to their tobacco ordinances. Many of the businesses that staff has been in contact with, and that attended the CAC meeting in February, also seemed to find these changes acceptable. Recommendation Staff recommends that the City Council approves the proposed tobacco use ordinance amendment. Attachments: •Ordinance 20-08, Tobacco Ordinance Amendment •Summary Ordinance •Correspondence with city attorney •List of 2019 tobacco licenses •Letter sent to tobacco license holders •Tobacco PUP Law Handout •Letters of Support ORDINANCE NO. 20-08 AN ORDINANCE AMENDING SECTION 8-7 OF THE NEW HOPE CITY CODE REGULATING SALE OF TOBACCO & RELATED PRODUCTS THE CITY COUNCIL OF THE CITY OF NEW HOPE ORDAINS: Section 1. Section 8-7, Tobacco and related products is hereby amended to repeal the strikeouts and add the underlined text as follows: (a) Definitions and interpretations. (1) Child-resistant packaging. Packaging that meets the definition set forth in Code of Federal Regulations, title 16, section 1700.15(b), as in effect on January 1, 2015, and was tested in accordance with the method described in Code of Federal Regulations, title 16, section 1700.20, as in effect on January 1, 2015. (2) Cigar. Any roll of tobacco that is wrapped in tobacco leaf or in any other substance containing tobacco, with or without a tip or mouthpiece, which is not a cigarette as defined in Minn. Stat. §297F.01, subd. 3, as may be amended from time to time. (3) Compliance checks. The system the city uses to investigate and ensure that those authorized to sell licensed products are following and complying with the requirements of this ordinance. Compliance checks involve the use of persons under the age of 21 who purchase or attempt to purchase licensed products. Compliance checks may also be conducted by the city or other units of government for educational, research, and training purposes or for investigating or enforcing federal, state, or local laws and regulations relating to licensed products. (4) Electronic delivery devices. Any product containing or delivering nicotine, lobelia, or any other substance, whether natural or synthetic, intended for human consumption through the inhalation of aerosol or vapor from the product. Electronic delivery device includes, but is not limited to, devices manufactured, marketed, or sold as e-cigarettes, e- cigars, e-pipes, vape pens, mods, tank systems, or under any other product name or descriptor. Electronic delivery device includes any component part of a product, whether or not marketed or sold separately. Electronic delivery device does not include any product that has been approved or certified by the U.S. Food and Drug Administration for sale as a tobacco-cessation product, as a tobacco-dependence product, or for other medical purposes, and is marketed and sold for such an approved purpose. (5) Flavored product. Any licensed product that contains a taste or smell, other than the taste or smell of tobacco, that is distinguishable by an ordinary consumer either prior to or during the consumption of the product, including, but not limited to, any taste or smell relating to chocolate, cocoa, vanilla, honey, fruit, or any candy, dessert, alcoholic beverage, herb, or spice. A public statement or claim, whether express or implied, made or disseminated by the manufacturer of a licensed product, or by any person authorized or permitted by the manufacturer to make or disseminate public statements concerning such products, that a product has or produces a taste or smell other than a taste or smell of tobacco will constitute presumptive evidence that the product is a flavored product. (6) Indoor area. All space between a floor and a ceiling that is bounded by walls, doorways, or windows, whether open or closed, covering more than 50 percent of the combined surface area of the vertical planes constituting the perimeter of the area. A wall includes any retractable divider, garage door, or other physical barrier, whether temporary or permanent. (7) Licensed products. The term that collectively refers to any tobacco, tobacco-related device, electronic delivery device, or nicotine or lobelia delivery product. (8) Loosies. The common term used to refer to single cigarettes, cigars, and any other licensed product that have been removed from their original retail packaging and offered for sale. Loosies does not include premium cigars that are hand-constructed, have a wrapper made entirely from whole tobacco leaf, and have a filler and binder made entirely of tobacco, except for adhesives or other materials used to maintain size, texture, or flavor. (9) Moveable place of business. Any form of business that is operated out of a kiosk, truck, van, automobile or other type of vehicle or transportable shelter and not a fixed address store front or other permanent type of structure authorized for sales transactions. (10) Nicotine or lobelia delivery product. Any product containing or delivering nicotine or lobelia intended for human consumption, or any part of such a product, that is not a tobacco or an electronic delivery device as defined in this section. NICOTINE OR LOBELIA DELIVERY PRODUCT does not include any product that has been approved or otherwise certified for legal sale by the U.S. Food and Drug Administration as a tobacco-cessation product, a tobacco-dependence product, or for other medical purposes, and is being marketed and sold solely for that approved purpose. (11) Pharmacy. A place of business at which prescription drugs are prepared, compounded, or dispensed by or under the supervision of a pharmacist and from which related clinical pharmacy services are delivered. (12) Retail establishment. Any place of business where licensed products are available for sale to the general public. The phrase includes but is not limited to grocery stores, tobacco products shops, convenience stores, gasoline service stations, bars, and restaurants. (13) Sale. Any transfer of goods for money, trade, barter or other consideration. (14) Self-service display. The open display of licensed products in any manner where any person has access to the licensed products without the assistance or intervention of the licensee or the licensee’s employee. The assistance or intervention shall entail the actual physical exchange of the licensed product between the customer and the licensee or employee. (15) Smoking. Inhaling, exhaling, burning, or carrying any lighted or heated cigar, cigarette, or pipe, or any other lighted or heated product containing, made, or derived from nicotine, tobacco, marijuana, or other plant, whether natural or synthetic, that is intended for inhalation. Smoking also includes carrying or using an activated electronic delivery device. (16) Tobacco. Any product containing, made, or derived from tobacco that is intended for human consumption, whether chewed, smoked, absorbed, dissolved, inhaled, snorted, sniffed, or ingested by any other means, or any component, part, or accessory of a tobacco product including but not limited to cigarettes; cigars; cheroots; stogies; perique; granulated, plug cut, crimp cut, ready rubbed, and other smoking tobacco; snuff; snuff flour; cavendish; plug and twist tobacco; fine cut and other chewing tobaccos; shorts; refuse scraps, clippings, cuttings and sweepings of tobacco; and other kinds and forms of tobacco. Tobacco does not include any product that has been approved by the U.S. Food and Drug Administration for sale as a tobacco-cessation product, as a tobacco- dependence product, or for other medical purposes, and is being marketed and sold solely for such an approved purpose. (17) Tobacco-related device. Any rolling papers, wraps, pipes, or other device intentionally designed or intended to be used with tobacco products. Tobacco-related device includes components of tobacco-related devices or tobacco products, which may be marketed or sold separately. Tobacco-related devices may or may not contain tobacco. (18) Vending machine. Any mechanical, electric or electronic, or other type of device that dispenses licensed products upon the insertion of money, tokens, or other form of payment directly into the machine by the person seeking to purchase the licensed product. (ba) License required. (1) License required. No person shall sell or offer to sell any licensed product without first having obtained a license to do so from the city pursuant to this ordinance. (2) Application. An application for a license to sell licensed products must be made on a form provided by the city. The application must contain the full name of the applicant, the applicant’s residential and business addresses and telephone numbers, the name of the business for which the license is sought, and any additional information the city deems necessary. Upon receipt of a completed application, the City Clerk will forward the application to the City Council for action at its next regularly scheduled meeting. If the City Clerk determines that an application is incomplete, it will be returned to the applicant with notice of the information necessary to make the application complete. directly, by coin machine, or otherwise, keep for retail sale, sell at retail, or otherwise dispose of, any cigarettes, cigarette wrapper, tobacco, or tobacco products at any place in the city unless he shall have obtained a license therefor as provided in section 8-2 of this Code. (3) Action. The City Council may approve or deny the application for a license, or it may delay action for a reasonable period of time to complete any investigation of the application or the applicant deemed necessary. If the City Council approves the application, the City Clerk will issue the license to the applicant. If the City Council denies the application, notice of the denial will be given to the applicant along with notice of the applicant’s right to appeal the decision. (4) Term. All licenses issued are valid for one calendar year from the date of issue. (5) Revocation or suspension. Any license issued may be suspended or revoked following the procedures set forth in subsection (i). (6) Transfers. All licenses issued are valid only on the premises for which the license was issued and only for the person to whom the license was issued. The transfer of any license to another location or person is prohibited. (7) Display. All licenses must be posted and displayed at all times in plain view of the general public on the licensed premises. (8) Renewals. The renewal of a license issued under this ordinance will be handled in the same manner as the original application. The request for a renewal must be made at least 30 days, but no more than 60 days, before the expiration of the current license. (9) Issuance as privilege and not a right. The issuance of a license is a privilege and does not entitle the license holder to an automatic renewal of the license. (10) Minimum clerk age. Individuals employed by a licensed retail establishment under this ordinance must be at least 18 years of age to sell licensed products. (11) Maximum number of licenses. The maximum number of licenses issued by the city at any time is limited to 19. When the maximum number of licenses has been issued, the city may place persons seeking licensure on a waiting list and allow them to apply on a first-come, first-served basis, as licenses are not renewed or are revoked. A new applicant who has purchased a business location holding a valid city license will be entitled to first priority, provided the new applicant meets all other application requirements in accordance with this ordinance. (12) Pharmacies ineligible for licensure. No existing license will be eligible for renewal to any pharmacy, including any retail establishment that operates or contains an on-site pharmacy, and no pharmacy or any retail establishment that operates an on-site pharmacy will be granted a new license. (13) Smoking prohibited. Smoking, including smoking for the purpose of the sampling of licensed products, is prohibited within the indoor area of any retail establishment licensed under this ordinance. (14) Samples prohibited. No person shall distribute samples of any licensed product free of charge or at a nominal cost. (c) License fee. No license will be issued under this ordinance until the appropriate license fees are paid in full. The annual fee for such tobacco license shall be as set forth in the city's fee schedule and may be amended from time to time. (d) Basis for denial of license. (1) Grounds for denying the issuance or renewal of a license include, but are not limited to, the following: a. The applicant is under 21 years of age. b. The applicant has been convicted within the past five years of any violation of a federal, state, or local law, ordinance provision, or other regulation relating to licensed products. c. The applicant has had a license to sell licensed products suspended or revoked within the preceding 12 months of the date of application. d. The applicant fails to provide any of the information required on the licensing application, or provides false or misleading information. e. The retail establishment for which the license is requested is a moveable place of business. Only fixed-location businesses are eligible to be licensed. f. The applicant is prohibited by federal, state, or other local law, ordinance, or other regulation from holding a license. (2) Except as may otherwise be provided by law, the existence of any particular g round for denial does not compel the city to deny the license. (3) If a license is mistakenly issued or renewed to a person, it will be revoked upon the discovery that the person was ineligible for the license under this ordinance. The city will provide the license holder with notice of the revocation, along with information on the right to appeal. (eb) Prohibited ActsRestrictions. (1) In general. No person shall sell or offer to sell any licensed product: a. By means of any type of vending machine. b. By means of loosies as defined. c. Containing opium, morphine, jimson weed, bella donna, strychnos, cocaine, marijuana, or other deleterious, hallucinogenic, toxic, or controlled substances except nicotine and other substances found naturally in tobacco or added as part of an otherwise lawful manufacturing process. It is not the intention of this provision to ban the sale of lawfully manufactured cigarettes or other products subject to this ordinance. d. By any other means, to any other person, or in any other manner or form prohibited by federal, state, or other local law, ordinance provision, or other regulation. (2) Legal age. No person shall sell any licensed product to any person under the age of 21. a. Age verification. Licensees must verify by means of government-issued photographic identification that the purchaser is at least 21 years of age. Verification is not required for a person over the age of 30. That the person appeared to be 30 years of age or older does not constitute a defense to a violation of this subsection. b. Signage. Notice of the legal sales age and age verification requirement must be posted prominently and in plain view at all times at each location where licensed products are offered for sale. The required signage, which will be provided to the licensee by the city, must be posted in a manner that is clearly visible to anyone who is or is considering making a purchase. (1) Minors. No person shall sell, give away, or otherwise furnish any cigarette, cigarette paper, tobacco, or tobacco product to any person under the age of 18 years. (2) Narcotic drugs. No person shall keep for sale, sell, or dispose of any cigarette, or ot her tobacco product containing opium, morphine, jimson weed, belladonna, strychnia, cocaine, marijuana, or any other deleterious or poisonous drug, except nicotine. (3) Vending machine. No person shall sell or dispense any tobacco product through the use of a vending machine unless the vending machine is in a nonpublic area with no minor access as verified by a premises survey conducted by the police department. (34) Self-service merchandising. No person shall allow the sale of licensed products offer for sale or dispense any tobacco product by means of self-service displaymerchandising. All licensed products must be stored behind the sales counter, in a locked case, in a storage unit, or in another area not freely accessible to the general public. Any retailer selling licensed products at the time this ordinance is adopted must comply with this section within 90 days of the effective date of this ordinance.This section shall not apply to retail stores which derive at least 90 percent of their revenue from tobacco and tobacco- related products and which cannot be entered at any time by persons younger than 18 years of age. Prior to offering for sale any tobacco product by self-service merchandising, a licensee must file with the city clerk a statement from a certified public accountant that shows both total gross sales and total sales from tobacco or related products. Said statement must also be filed with the city clerk yearly on or before the renewal date of the license. (4) Flavored products. No person shall sell or offer for sale any flavored products. This prohibition does not apply to the sale of flavored products that contain a taste or smell of menthol, mint or wintergreen, distinguishable by an ordinary consumer either prior to or during the consumption of the product. (5) Liquid Packaging. No person shall sell or offer to sell any liquid, whether or not such liquid contains nicotine, which is intended for human consumption and use in an electronic delivery service, in packaging that is not child-resistant. Upon request by the city, a licensee must provide a copy of the certificate of compliance or full laboratory testing report for the packaging used. (f) (5) ResponsibilityEmployee violations. Every licensee shall be responsible for the conduct of its employees in while on the licensed premises and regard to the any sale, offer to sell, and furnishing of licensed products on the licensed premises. The sale, offer to sell, or furnishing of any licensed product or other disposition of tobacco products by an employee to a person under 18 years of age shall be considered an act of the licensee for purposes of imposing an administrative fine, license suspension or revocation. Nothing in this section shall be construed as prohibiting the city from also subjecting the employee to any civil penalties that the city deems to be appropriate under this ordinance, state or federal law, or other applicable law or regulation. (6) Federal regulations. The Code of Federal Regulations, title 21, part 897.16(c) is incorporated by reference into this Code. Notwithstanding these regulations, all sales of tobacco products by vending machines and self-service merchandising must be in compliance with subsections (c) and (d) herein if said New Hope Code sections are inconsistent with the federal regulations. (c) License fee . The annual fee for such tobacco license shall be as set forth in the city's fee schedule. (d) Display of license. Every such license shall be openly displayed in the place of business for which it is issued. (ge) Compliance monitoring. The police department shall conduct unannounced compliance checks at least once each calendar year at each location where tobacco products licensed products are sold within the city. All licensed premises must be open to inspection by law enforcement officials during regular business hours. In accordance with state law, the city will conduct at least one compliance check that involves the participation of one person between the ages of 17 and 20 to enter licensed premises to attempt to purchase licensed products. Prior written consent is required for any person under the age of 18 to participate in a compliance check. Persons used for the purpose of compliance checks will be supervised by law enforcement or other designated personnel. Licensees and applicants shall be informed of this policy at the time of license application and renewal. Violators of these regulations will be subject to more frequent compliance monitoring than non-violating licensees. The police department shall make an annual report to the city council on the compliance checks conducted pursuant to this section. (h) Other prohibited acts. (1) Prohibited furnishing or procurement. It is a violation of this ordinance for any person 21 years of age or older to purchase or otherwise obtain any licensed product on behalf of a person under the age of 21. It is also a violation for any person 21 years of age and older to coerce or attempt to coerce a person under the age of 21 to illegally purchase or attempt to purchase any licensed product. (2) Use of false identification. It is a violation of this ordinance for any person to use any form of false identification, whether the identification is that of another person or has been modified or tampered with to represent an age older than the actual age of the person using that identification. (i) Exceptions and defenses. (1) Religious, spiritual, or cultural ceremonies or practices. Nothing in this ordinance prevents the provision of tobacco or tobacco-related devices to any person as part of an indigenous practice or a lawfully recognized religious, spiritual, or cultural ceremony or practice. (2) Reasonable reliance. It is an affirmative defense to a violation of this ordinance for a person to have reasonably relied on proof of age as described by state law. (jf) Violations and penalties. In addition to being guilty of a misdemeanor, any person violating subsection (b) of this section shall be subject to the following penalties: (1) (1) Violations a. Notice. A person violating this ordinance may be issued, either personally or by mail, a citation from the city that sets forth the alleged violation and that informs the alleged violator of his or her right to a hearing on the matter and how and where a hearing may be requested, including a contact address and phone number b. Hearings. 1. Upon issuance of a citation, a person accused of violating this ordinance may request in writing a hearing on the matter. Hearing requests must be made within 10 business days of the issuance of the citation and delivered to the City Clerk or other designated city officer. Failure to properly request a hearing within 10 business days of the issuance of the citation will terminate the person’s right to a hearing. 2. The City Clerk or other designated city officer will set the time and place for the hearing. Written notice of the hearing time and place will be mailed or delivered to the accused violator at least 10 business days prior to the hearing. c. Hearing officer. The City Council will designate a hearing officer. The hearing officer will be an impartial employee of the city or an impartial person retained by the city to conduct the hearing. d. Decision. A decision will be issued by the hearing officer within 10 business days of the hearing. If the hearing officer determines that a violation of this ordinance did occur, that decision, along with the hearing officer’s reasons for finding a violati on and the penalty to be imposed, will be recorded in writing, a copy of which will be provided to the city and the accused violator by in-person delivery or mail as soon as practicable. If the hearing officer finds that no violation occurred or finds grounds for not imposing any penalty, those findings will be recorded and a copy will be provided to the city and the acquitted accused violator by in-person delivery or mail as soon as practicable. The decision of the hearing officer is final, subject to an appeal as described in subsection (i)(1)(f) of this section. e. Costs. If the citation is upheld by the hearing officer, the city’s actual expenses in holding the hearing up to a maximum of $1,000 must be paid by the person requesting the hearing. f. Appeals. Appeals of any decision made by the hearing officer must be filed in Hennepin County district court within 10 business days of the date of the decision. g. Continued violation. Each violation, and every day in which a violation occurs or continues, shall constitute a separate offense. h. Revocation. The city council has the authority to revoke any license as set out in section 8-2 of this Code notwithstanding the provisions of this section regarding violations. (2) Administrative civil penalties.: a. individuals. Any person who sells any tobacco product to a person under the age of 18 years is subject to an administrative penalty; and any person under the age of 18 years who attempts to purchase a tobacco product is subject to an administrative penalty. The city council may impose administrative penalties as follows: a. First violation. The city council shall impose a civil fine of at least $50.00 but not to exceed $500.00. b. Second violation. The city council shall impose a civil fine of at least $75.00 but not to exceed $750.00 for a second violation within 24 months of the initial violation. c. Third violation. The city council shall impose a civil fine of at least $100.00 but not to exceed $1,000.00 for a third violation within 24 months of the initial violation. d. Hearing required. No civil penalty shall take effect until the individual has received notice served personally or by mail, of the alleged violation and is given an opportunity for a hearing before a person authorized by the city co uncil to conduct the hearing. A decision that a violation has occurred and a civil penalty is warranted must be in writing. In the event the individual is found to have violated the regulations of this Code, the cost of any hearing, including the hearing examiner's fees and the city's reasonable attorney's fees, shall be assessed against the individual in addition to the civil penalty. a. (2) Administrative civil penalties: Llicensees. If a licensee or an employee of a licensee is found to have sold tobacco to a person under the age of 18 years, violated this ordinance, the licensee shall be subject to the administrative sanctions described in the following matrix. In all cases the council shall select which days a suspension will be served. Other mandatory requirements may be imposed on the licensee, including, but not limited to, meetings with the police department to present a plan of action to assure that problems will not continue, mandatory education sessions involving all employees and employers with the police department or other actions that the city council deems appropriate. On a first and second violation, the licensee may elect training in proper identification procedures in lieu of the license suspension. The license suspension and training requirements shall be governed by and are subject to the conditions set out in subsection (if)(2)a.b. of this section. Fine and License Suspension 1st Violation 2nd Violation (within 24 months of prior violation) 3rd Violation (within 24 months of two prior violations) 4th Violation (within 24 months of three prior violations) $300250.00 plus 3 days suspension $750.00 plus 15 days suspension $1,500.00 plus 30 days suspension Revocation a. Hearing required. No civil penalty shall take effect until the licensee has received notice, served personally or by regular mail, of the alleged violation and is given an opportunity for a hearing before a person authorized by the city council to conduct the hearing. A decision that a violation has occurred and a civil penalty is warranted must be in writing. In the event the licensee is found to have violated the regulations of this Code, the cost of any hearing, including the hearing examiner's fees and the city's reasonable attorney's fees, shall be assessed against the licensee in addition to the civil penalty. 1. b. Training in lieu of suspension. After the first and second violation within a 24- month period, a licensee may request training from the New Hope Police Department in proper identification procedures. Said training shall be at the expense of the licensee, shall be in lieu of the entire three-day license suspension for a first violation and ten of the 15-day license suspension for the second violation required by subsection (if)(2)a. of this section, and shall be conducted per the following conditions: i. 1. Training for all employees of a licensee must be completed within two training sessions at the discretion of the New Hope Police Department. ii. 2. If more than one licensee is requesting the training, the New Hope Police Department retains control in deciding how many training sessions are necessary to accommodate the number of employees taking the training. iii. 3. It shall be the responsibility of the licensee to make certain that all employees successfully complete the required training. Failure to do so means the licensee has failed to meet the "training in lieu of suspension" requirement of the administrative penalty and will be subject to the entire license suspension. iv. 4. The licensee shall pay for all of the following costs for the training: supplies and materials, any facility costs, the personnel expenses for the trainer, all administrative costs of the training and any other costs staff deems necessary to conduct the training. Payment for the training must be made to the city clerk prior to the commencement of the training. Failure to make the payment will result in the cancellation of the training and the immediate imposition of the appropriate license suspension. (3) Other individuals. Individuals, other than persons under the age of 21 regulated by subsection (i)(3) of this section, who are found to be in violation of this ordinance will be subject to an administrative penalty of $50.00. (4) Persons under the age of 21. Persons under the age of 21 who use a false identification to purchase or attempt to purchase licensed products may only be subject to non-criminal, non- monetary civil penalties such as tobacco-related education classes, diversion programs, community services, or another penalty that the city determines to be appropriate. The City Council will consult with court personnel, educators, parents, children and other interested parties to determine an appropriate penalty for persons under the age of 21 in the city. The penalty may be established by ordinance and amended from time to time. (5) Misdemeanor prosecution. Nothing in this section prohibits the city from seeking prosecution as a misdemeanor for any alleged violation of this ordinance by a person 21 years of age or older. (k)Severability. If any section or provision of this ordinance is held invalid, such invalidity will not affect other sections or provisions that can be given force and effect without the invalidated section or provision. (l)Effective date. This ordinance becomes effective on the date of its publication, or upon the publication of a summary of the ordinance as provided by Minn. Stat. § 412.191, subd. 4, as it may be amended from time to time, which meets the requirements of Minn. Stat. § 331A.01, subd. 10, as it may be amended from time to time. (3)Defense. It is a defense to the charge of selling tobacco to a person under the age of 18 years that the licensee or individual, in making the sale reasonably and in good faith relied upon representation of proof of age described in Minn. Stat. § 340A.503, subd. 6, par. (a). (4)Exemption. Only persons ages 16 or 17 years old may be enlisted to assist in the tests of compliance provided that written consent from the person's parent or guardian has been obtained and that the person shall at all times act only under the direct supervision of a law enforcement officer or an employee of the licensing department or in conjunction with an in-house program that has been preapproved by the police department. A person who purchases or attempts to purchase tobacco-related products while in this capacity is exempt from the penalties imposed by this section. (5)Revocation. The city council has the authority to revoke any license as set out in section 8-2 of this Code notwithstanding the provisions of this section regarding violations. Section 2. Effective Date. This ordinance shall be effective upon passage and publication. APPROVED by the New Hope City Council this 26th day of May, 2020. ATTEST Kathi Hemken, Mayor _____________________________________ Valerie Leone, City Clerk P:\Attorney\SAS\1 Client Files\2 City of New Hope\99-82008 Tobacco Ordinance\Ordinance No. 20-08 - Tobacco Ordinance Amendment.docx 1 SUMMARY OF ORDINANCE NO. 20-08 AN ORDINANCE AMENDING SECTION 8-7 OF THE NEW HOPE CITY CODE REGULATING SALE OF TOBACCO & RELATED PRODUCTS Ordinance No. 20-08 amends Section 8-7 of the New Hope City Code to: (1) add electronic delivery devices to the regulations; (2) impose a maximum number of licenses of 19; (3) prohibit pharmacies from selling tobacco products; (4) prohibit sales to persons under age of 21; and (5) prohibit all flavored tobacco products except for menthol, mint and wintergreen, among other revisions. The full version of Ordinance No. 20-08 is posted at www.newhopemn.gov and is available for inspection at the City Clerk’s office, 4401 Xylon Avenue North, New Hope, Minnesota. The above Ordinance was adopted by the New Hope City Council on May 26, 2020, and shall become effective upon publication. Valerie Leone City Clerk (published in the New Hope – Golden Valley Sun Post on June 4, 2020) Writer’s Direct Dial No.: (763) 201-0265 e-mail saw@jspwlaw.com May 11, 2020 Kirk McDonald City Manager City of New Hope 4401 Xylon Avenue North New Hope, MN 55428 Via E-mail Re: Code §8-7 Ordinance 20-08 Our File No.: 99.82008 Dear Kirk: This letter is regarding the Draft Ordinance 20-08 which amends the City’s existing Tobacco sales provisions . The proposed draft is by Mitchell Hamline Public Health Law Center but has been reviewed and revised by myself and Brandon Bell. The purpose of this proposed Ordinance is to modernize the tobacco provisions in the City Code to reflect the change in the federal law increasing the age for legal sale of tobacco products to 21. On December 20, 2019, the President signed legislation amending the Federal Food, Drug, and Cosmetic Act, and raising the federal minimum age for sale of tobacco products from 18 to 21 years. This federal legislation (known as “Tobacco 21” or “T21”) is effective immediately, and it is now illegal for a retailer to sell any tobacco product—including cigarettes, cigars, and e-cigarettes—to anyone under 21. The new federal minimum age of sale applies to all retail establishments and persons with no exceptions. Other notable provisions of the proposed Ordinance include:  A definition for “Electronic delivery device” has been added to include e- cigarettes.  The definition of “Tobacco” has been revised to include any product containing tobacco.  The minimum age of a clerk who is allowed to sell tobacco products has been increased to 18.  Setting a cap on number of licenses that can be issued (understand this is Page 2 something the Council will be discussing)  Prohibiting sale of tobacco products at pharmacies (again, this is something the Council will be discussing)  Prohibiting the sale of most of the flavored tobacco products that tend to appeal to young people, with the exception of some flavors such as menthol, mint and wintergreen.  Removing the Purchase, Use and Possession (“PUP”) language, provisions and penalties. The rationale is that youth purchase, use or possession laws are not an effective approach to reducing youth tobacco use and inappropriately shift he blame for underage tobacco use form the tobacco industry and retailers, to young people. PUP laws also present enforcement challenges. See the attached handout from the Campaign for Tobacco-Free Kids, September 20, 2018, which takes this position.  The proposed Ordinance keeps the provision that use of false identification is still a prohibited act but that the penalty would be a non-criminal, non-monetary civil penalty such as tobacco-related education classes, diversion programs, community services, or another penalty that the city determines to be appropriate. The feedback from Chief Fournier would be helpful on this provision.  Providing that compliance monitoring may be done either once or twice a year. This is something regarding which we need Chief Fournier’s opinion. Current state law requires compliance checks at least once a year using minors over the age of 15 but under the age of 18. The police could have the option to perform a second compliance check using a person between the age of 18 and 20, which is not yet required by State law. Please call me if you have any questions. Sincerely, /s/ Stacy A. Woods, Assistant City Attorney, City of New Hope Attachment cc: Steven A. Sondrall, City Attorney Chief Tim Fournier P:\Attorney\SAS\1 Client Files\2 City of New Hope\99-82008 Tobacco Ordinance\Letter to Kirk McDonald re tobacco ordinance - 5-11- 20.docx Re p o r t N a m e : B u s i n e s s S e a r c h Printed: 10/22/2019 Page: 1 Bu s i n e s s S e a r c h Ci t y o f N e w H o p e Ad d r e s s Complex Li c e n s e # ID Council Li c e n s e T y p e Co m p a n y St a t u s Is s u e d Ex p i r e s DB A Ta p d a E n t e r p r i s e s To b a c c o Pr o d u c t s 12/10/2018 00 0 1 2 4 0 1 94 0 0 4 9 t h A v e N New Hope Fuel & Wash 14 9 A 1 2 / 1 1 / 2 0 1 8 1 2 / 3 1 / 2 0 1 9 Ne w H o p e F u e l & W a s h (S h e l l ) Wa l g r e e n C o m p a n y To b a c c o Pr o d u c t s 12/10/2018 00 0 1 2 4 1 5 42 0 0 W i n n e t k a A v e N Walgreens #05882 15 4 A 1 2 / 1 1 / 2 0 1 8 1 2 / 3 1 / 2 0 1 9 Wa l g r e e n s # 0 5 8 8 2 Ja d e I n c To b a c c o Pr o d u c t s 12/10/2018 00 0 1 2 4 0 2 79 0 0 B a s s L a k e R d Winnetka Shell 17 7 A 1 2 / 1 1 / 2 0 1 8 1 2 / 3 1 / 2 0 1 9 Wi n n e t k a S h e l l No r t h e r n T i e r R e t a i l L L C To b a c c o Pr o d u c t s 12/10/2018 00 0 1 2 4 0 3 61 4 4 W e s t B r o a d w a y Speedway #4375 19 1 A 1 2 / 1 1 / 2 0 1 8 1 2 / 3 1 / 2 0 1 9 Sp e e d w a y # 4 3 7 5 Br o o k l y n C e n t e r S e r v i c e , I n c . To b a c c o Pr o d u c t s 12/10/2018 00 0 1 2 4 0 4 94 0 0 3 6 t h A v e N Brooklyn Center Service 21 7 A 1 2 / 1 1 / 2 0 1 8 1 2 / 3 1 / 2 0 1 9 Br o o k l y n C e n t e r S e r v i c e (S u p e r A m e r i c a ) Ne d d a T o b a c c o To b a c c o Pr o d u c t s 12/10/2018 00 0 1 2 4 0 5 27 6 7 W i n n e t k a A v e N New Hope Smoke Shop 82 3 A 1 2 / 1 1 / 2 0 1 8 1 2 / 3 1 / 2 0 1 9 Ne w H o p e S m o k e S h o p AM R I T L L C To b a c c o Pr o d u c t s 12/10/2018 00 0 1 2 3 8 1 79 1 0 B a s s L a k e R d New Hope Liquor 12 7 5 A 1 2 / 1 1 / 2 0 1 8 1 2 / 3 1 / 2 0 1 9 Ne w H o p e L i q u o r JB K E n t e r p r i s e s To b a c c o Pr o d u c t s 12/10/2018 00 0 1 2 4 0 7 78 0 0 2 7 t h A v e N New Hope BP 18 4 7 A 1 2 / 1 1 / 2 0 1 8 1 2 / 3 1 / 2 0 1 9 Bi g B ' s B P BC D H O L D I N G S L L C To b a c c o Pr o d u c t s 12/10/2018 00 0 1 2 4 1 0 71 8 0 4 2 n d A v e N Holiday Stationstore #3586 18 9 5 A 1 2 / 1 1 / 2 0 1 8 1 2 / 3 1 / 2 0 1 9 Ho l i d a y S t a t i o n s t o r e # 3 5 8 6 Ho l i d a y S t a t i o n s t o r e s , L L C To b a c c o Pr o d u c t s 12/10/2018 00 0 1 2 4 1 8 94 5 6 2 7 t h A v e N Holiday Stationstores, Inc. 19 6 2 A 1 2 / 1 1 / 2 0 1 8 1 2 / 3 1 / 2 0 1 9 Ho l i d a y S t a t i o n s t o r e LM Q H o l d i n g s L L C To b a c c o Pr o d u c t s 12/10/2018 00 0 1 2 4 1 2 71 4 1 4 2 n d A v e N V i k i n g L i q u o r W i n e & Tobacco 19 6 6 A 1 2 / 1 1 / 2 0 1 8 1 2 / 3 1 / 2 0 1 9 Vi k i n g L i q u o r W i n e & To b a c c o M & M G r o c e r y C o r p o r a t i o n To b a c c o Pr o d u c t s 12/10/2018 00 0 1 2 4 2 2 79 1 4 B a s s L a k e R d LaPicante Market & Meat 20 6 8 A 1 2 / 1 1 / 2 0 1 8 1 2 / 3 1 / 2 0 1 9 La P i c a n t e M a r k e t & M e a t Fa m i l y D o l l a r I n c To b a c c o Pr o d u c t s 12/10/2018 00 0 1 2 4 2 3 27 3 3 W i n n e t k a A v e N Family Dollar #27676 21 3 0 A 1 2 / 1 1 / 2 0 1 8 1 2 / 3 1 / 2 0 1 9 Fa m i l y D o l l a r # 2 7 6 7 6 / 29 3 0 6 Fa m i l y D o l l a r I n c To b a c c o Pr o d u c t s 12/10/2018 00 0 1 2 4 2 8 80 0 1 B a s s L a k e R d Family Dollar #29306 21 3 0 A 1 2 / 1 1 / 2 0 1 8 1 2 / 3 1 / 2 0 1 9 Fa m i l y D o l l a r # 2 7 6 7 6 / 29 3 0 6 E- C I G V A P E L O U N G E L L P To b a c c o Pr o d u c t s 12/10/2018 00 0 1 2 4 2 7 94 3 0 3 6 t h A v e N E-Cig Vape Lounge 22 0 6 A 1 2 / 1 1 / 2 0 1 8 1 2 / 3 1 / 2 0 1 9 E- C i g V a p e L o u n g e Hy - V e e , I n c . To b a c c o Pr o d u c t s 12/10/2018 00 0 1 2 4 3 5 83 0 0 4 2 n d A v e N Hy-Vee Gas 23 9 1 A 1 2 / 1 1 / 2 0 1 8 1 2 / 3 1 / 2 0 1 9 Hy - V e e Hy - V e e , I n c . To b a c c o Pr o d u c t s 12/10/2018 00 0 1 2 4 3 6 82 0 2 4 2 n d A v e N Hy-Vee Wine & Spirits 23 9 1 A 1 2 / 1 1 / 2 0 1 8 1 2 / 3 1 / 2 0 1 9 Hy - V e e Hy - V e e , I n c . To b a c c o Pr o d u c t s 12/10/2018 00 0 1 2 4 3 7 82 0 0 4 2 n d A v e N Hy-Vee Grocery 23 9 1 A 1 2 / 1 1 / 2 0 1 8 1 2 / 3 1 / 2 0 1 9 Hy - V e e Ne w H o p e P u m p & M u n c h To b a c c o Pr o d u c t s 12/10/2018 00 0 1 2 4 5 6 35 3 5 W i n n e t k a A v e N New Hope Pump & Munch 24 8 7 A 1 2 / 1 1 / 2 0 1 8 1 2 / 3 1 / 2 0 1 9 Ne w H o p e P u m p & M u n c h 72 0 1 B a s s L a k e I N C To b a c c o Pr o d u c t s 12/10/2018 00 0 1 2 7 4 7 72 0 1 B a s s L a k e R d Now Mart 25 8 2 A 1 2 / 1 1 / 2 0 1 8 1 2 / 3 1 / 2 0 1 9 No w M a r t GN S E n t e r p r i s e , L L C To b a c c o Pr o d u c t s 04/08/2019 00 0 1 2 7 6 9 35 4 4 W i n n e t k a A v e N Winnetka Liquor 25 9 6 A 0 4 / 1 1 / 2 0 1 9 1 2 / 3 1 / 2 0 1 9 Wi n n e t k a L i q u o r May 21, 2020 To Whom It May Concern, This letter is to inform you that the New Hope City Council will be discussing potential changes to New Hope’s tobacco ordinances at the City Council work session meeting on May 18, 2020 at 6:30 p.m. A preliminary draft tobacco ordinance amendment will be presented to the City Council by staff at this meeting. The changes in this ordinance amendment include: 1. Many definitions have either been revised or added to provide or more modern verbiage. 2. Mirroring the newest federal regulations including raising the legal age required for customers to be to sell to them, from 18 years of age to 21 years old. Also includes the ban on all flavored cartridge-based e-cigarettes (except for tobacco flavored). 3. Raising the age of those legally allowed to sell tobacco products as a clerk at a licensed retailer to 18. 4. Banning the sales of all flavored tobacco products except for mint, menthol and wintergreen. 5. Possession, use, and purchase laws have been removed that would punish people under the age of 21 who attempted to buy tobacco. 6. Wrote in verbiage to potentially put a cap on the number of tobacco licenses in the city. The current amount is 21. 7. Wrote in verbiage to potentially ban the sales of tobacco in any facility that contains an on-site pharmacy. These meetings do not contain an open forum, so it is advised that it you would like to speak to the Council Members regarding this matter that you do so through written correspondence or via telephone beforehand. This meeting will be available to be viewed live online via WebX. The link will be on in the May 18 City Council Work Session tab on the right side of the front page of the website on the day of the meeting. CITY OF NEW HOPE 4401 Xylon Avenue North  New Hope, Minnesota 55428-4898  www.ci.new-hope.mn.us City Hall: 763-531-5100  Police (non-emergency): 763-531-5170  Public Works: 763-592-6777 City Hall Fax: 763-531-5136  Police Fax: 763-531-5174  Public Works Fax: 763-592-6776 If you have any questions regarding this letter or would like more details on the meeting, please feel free to contact me at 763-531-5114. Sincerely, Brandon Bell Community Development Assistant 763-531-5114 bbell@newhopemn.gov CC: Kirk McDonald, City Manager Jeff Sargent, Director of Community Development Valerie Leone, City Clerk CITY OF NEW HOPE 4401 Xylon Avenue North  New Hope, Minnesota 55428-4898  www.ci.new-hope.mn.us City Hall: 763-531-5100  Police (non-emergency): 763-531-5170  Public Works: 763-592-6777 City Hall Fax: 763-531-5136  Police Fax: 763-531-5174  Public Works Fax: 763-592-6776 An equal opportunity employer. P rotecting, Maintaining and Improving the Health of All Minnesotans May 21, 2020 Kathi Hemken City of New Hope 4401 Xylon Avenue North New Hope, MN 55428 Dear Mayor Hemken and Council Members: As Commissioner of Health, I strongly support all the proposed restrictions, in particular limitations to the sale of flavored tobacco as well as increasing the minimum tobacco sales age to 21 to align with state and federal laws. The proposals will have a powerful deterrent effect on youth initiation, will reduce youth tobacco use, and protect youth from a lifetime of addiction. I am very concerned about the dramatic increases in youth use of e-cigarettes, cigars, and other tobacco products. According to the 2019 Minnesota Student Survey, students are using e-cigarettes at a rate five times that of conventional cigarettes. 8th grade e-cigarette use nearly doubled from 2016 to 2019, and one in four 11th graders now use e-cigarettes. The vast majority of youth enter into tobacco and nicotine use with a flavored tobacco product. With thousands of flavored e-cigarette and tobacco products on the market in stores where young people shop, we are deeply concerned about the role that flavors play in contributing to teen addiction. Flavoring that masks the harsh taste of tobacco, combined with calculated marketing strategies have served to target, attract and addict far too many young people in Minnesota. Young smokers report choosing flavored tobacco products because they taste better and are perceived to be safer. This is quite alarming as nearly all e-cigarettes contain nicotine, which we know is highly addictive. Research shows youth who use e-cigarettes are four times more likely to start smoking combustible cigarettes. In September 2018, the Minnesota Department of Health issued a health advisory on nicotine and the escalating risk of addiction for youth. No amount is safe for youth as there are negative implications for learning, memory, attention, and future addiction. Teens are especially susceptible to nicotine addiction and the harmful effects it has on the brain as they grow. Raising the minimum tobacco sales age to 21 would limit youth access to tobacco until the portion of the brain responsible for rational decision-making is more fully developed. I applaud New Hope for considering this bold action to protect youth from a lifetime of addiction. For more information, contact Laura Oliven, Tobacco Prevention Control Program Manager, at 651-201-5442. Sincerely, Jan K. Malcolm Commissioner P.O. Box 64975 St. Paul, MN 55164-0975 www.health.state.mn.us American Heart Association I 2750 Blue Water Road I Suite 250 I Eagan I Minnesota I 55121 May 26, 2020 Dear Mayor Hemken and members of the New Hope City Council: I am writing on behalf of the American Heart Association to express our support and thank the city of New Hope for raising the minimum sales age for tobacco products from 18 to 21, prohibiting the sale of all flavored tobacco products, and capping the amount of licenses the city has. I do ask that you not forget about mint, menthol and wintergreen, and urge you to include them in the flavor prohibition Flavored cigarettes including mint, wintergreen and menthol are peddled to our nation’s youth with the intent of addicting a new generation, luring them into a deadly habit and sets them on the road to early hardening of the arteries and coronary artery disease in adulthood. We need to continue to do everything we can to protect the health of our young people. By prohibiting the sale of all flavored tobacco products including mint, evergreen and menthol, will help decrease the appeal and access to youth from purchasing these deadly products. New Hope has the opportunity to and pass lifesaving policies and prevent another generation from becoming lifelong tobacco users. Thank you for your leadership. Sincerely, Jess Nolan Community Advocacy Director Jess.Nolan@heart.org I:\RFA\COMM DEV\2020\City Council\05-26-20 Outdoor Dining Interim ORD\Q- Outdoor Dining Interim ORD.docx Request for Action May 26, 2020 Approved by: Kirk McDonald, City Manager Originating Department: Community Development By: Jeff Sargent, Director Agenda Title Ordinance 20-09, An Interim Ordinance establishing New Hope Code Section 1-5(l) suspending the applicable zoning regulations relating to outdoor dining and creating a temporary administrative waiver of expansion of on-sale liquor license sales during the COVID-19 Public Health Emergency Requested Action Staff recommends that the City Council approve the attached interim ordinance suspending the applicable zoning regulations relating to outdoor dining and creating a temporary administrative waiver of expansion of on-sale liquor license sales during the COVID-19 Public Health Emergency. Policy/Past Practice It is the past practice of the city to adopt interim ordinances in response to emergency needs of the city. The proposed interim ordinance is in response to Governor Walz’s Executive Orders that outlines plans for bars and restaurants to open on June 1, 2020, for outdoor service so long as certain conditions, including social distancing, are maintained to prevent the spread of COVID-19. Background On June 1, 2020, Governor Walz’s Executive Order No. 20-56 will go into effect, which outlines plans for bars and restaurants to open for outdoor service , so long as certain conditions, including social distancing, are maintained to prevent the spread of COVID-19. In a response to this order, staff has created an interim ordinance that would temporarily suspended the applicable zoning regulations relating to outdoor dining and create a temporary administrative waiver of expansion of on-sale liquor license sales. The city will require a Temporary Outdoor Dining Permit, at no cost, which would be reviewed and approved administratively. The permit requires a site plan showing where the intended outdoor dining area would be, along with the number of tables and chairs, fences, barricades, etc. to be used for during the business operations. Staff will also require that the business supply the city their COVID-19 Preparedness Plan and representation that the applicant intends to comply with the Governor’s orders. The permit application will also require the signature of the property owner if different than the applicant. Recommendation Staff feels that it is imperative to be as flexible as possible in allowing eating establishments to start to re-open, as long as all Governor’s orders and city regulations are met. Staff recommends that the City Council approve the proposed interim ordinance suspending the applicable zoning regulations relating to outdoor dining and creating a temporary administrative waiver of expansion of on-sale liquor license sales during the COVID-19 Public Health Emergency. Agenda Section Ordinances & Resolutions Item Number 10.2 Request for Action, Page 2 Attachments:  Ordinance 20-09, Interim Outdoor Dining Ordinance  Draft Temporary Outdoor Dining Permit ORDINANCE NO. 20-09 AN INTERIM ORDINANCE ESTABLISHING NEW HOPE CODE SECTION 1-5(l) SUSPENDING THE APPLICABLE ZONING REGULATIONS RELATING TO OUTDOOR DINING AND CREATING A TEMPORARY ADMINISTRATIVE WAIVER OF EXPANSION OF ON-SALE LIQUOR LICENSE SALES DURING THE COVID-19 PUBLIC HEALTH EMERGENCY THE CITY COUNCIL OF THE CITY OF NEW HOPE ORDAINS: The City Council of the City of New Hope ordains: Section 1. Section 1-5(l) “Temporary suspension of applicable zoning regulations relating to outdoor dining and creating temporary administrative waiver of expansion of on-sale liquor license sales during the COVID-19 public health emergency” of the New Hope City Code is hereby added to Section 1-5 “Interim Ordinances” to read as follows: (l) Temporary suspension of applicable zoning regulations relating to outdoor dining and creating temporary administrative waiver of expansion of on-sale liquor license sales during the COVID-19 public health emergency. (1) Purpose. This interim ordinance establishing a temporary suspension of applicable zoning regulations relating to outdoor dining is intended to assist businesses that have been impacted by the temporary business closures relating to COVID-19 pandemic. Minnesota Governor Walz issued Executive Order 20-01 declaring an emergency due to the COVID-19 pandemic, which has been extended by Executive Orders 20-35, 20-53 and 20-56 (collectively, the “Governor’s Orders”). The City Council declared a local emergency due to COVID-19 pandemic on March 23, 2020 by adopting Resolution No. 2020- 42. The Governor’s Orders have prohibited sit-down, dine-in service at restaurants, which has threatened the economic health of many hospitality businesses and the vitality of New Hope’s businesses. Executive Order No. 20-56 outlines plans for bars and restaurants to open on June 1, 2020, for outdoor service so long as certain conditions, including social distancing, are maintained to prevent the spread of COVID-19. The city administers zoning within the city and may regulate land use as part of the city’s zoning authority. Minn. Stat. §462.355, Subd. 4, provides the city with authority to adopt an interim ordinance to temporarily regulate activity. Under the current city Zoning Code, parking signage, and other standards are imposed based upon characteristics of the use. Reduced occupancy capacities will result in excess parking supplies under the city Zoning Code. The city wishes to provide dining establishments with added flexibility to establish temporary outside seating in available parking areas, sidewalks or other adjacent open spaces. The city will examine the effects of additional outdoor dining and modified parking supplies as a goal of this Interim Ordinance. The temporary expansion of outdoor dining has the potential to create impacts on circulation and traffic, firefighting, alcohol sales and consumption, and various other areas of local regulation. There is a need for an interim ordinance to be adopted for the purpose of protecting the planning process and the health, safety, and welfare of the citizens of the City until such a study has been completed. (2) Scope of interim ordinance. The Interim Ordinance shall be applicable to bowling alleys and restaurants located in the R-B, residential-business district, CB, community business district, and CC, city center district as well as licensees holding On-Sale Liquor Licenses including a Bowling Center License and a Restaurant License for the sale of intoxicating liquor. This Interim Ordinance temporarily suspends zoning regulations related to parking supply, temporary signage, and the need to seek zoning permits (such as variances or conditional use permits) for temporary outdoor dining areas, subject to the terms of this Interim Ordinance, and administrative regulations which the City finds necessary for the protection of public health, safety, and welfare. (3) Temporary outdoor dining permit. Temporary Outdoor Dining Permits (“TODP”) to be granted allowing expansion of outdoor dining onto sidewalks and/or parking lots. Business owners and licensees holding on-sale liquor licenses shall submit an application to the City Clerk and shall be accompanied with the following: i. Site Plan showing the premises, including the location of the existing indoor facility, as well as the space proposed to be occupied by the temporary outdoor dining. The temporary outdoor dining area shall be physically enclosed with a temporary fence. The location of the dining area shall not interfere with safe on-site traffic circulation. ii. Site Plan shall illustrate table and seating areas, pedestrian access ways, staff access ways, wait stations , trash receptacles and other uses of the outdoor spaces. The pedestrian access ways shall be designed to be disability accessible. iii. Operations plan that describes the means of complying with the State of Minnesota guidelines for social distancing and sanitation as set forth in Section (10), and hours of operation. iv. Seating capacity, in numbers of patrons that the TODP will serve, not to exceed fifty (50) people. v. Structures, temporary or otherwise, proposed as a part of the TODP operation. vi. Barrier placement and materials. vii. Parking spaces remaining after establishment of the TODP that are typically available for use of the business. viii. Available disability parking locations, maintaining compliance with disability parking requirements of the State. ix. Location of building fire connection, and evidence of continued access. x. Trash handling equipment and process. xi. Authorization from property owner, if different from business owner. xii. Representation that applicant intends to comply with Governor’s Orders. xiii. Applicant with liquor license must provide the city with proof that their liquor liability insurance covers alcohol sales in any expanded outdoor spaces which, under Minnesota law, must be “compact and contiguous” to the main structure. (4) Procedure. The City Manager or Manager’s designee shall review the application against the criteria of this Interim Ordinance. If approved, the City Manager or Manager’s designee shall provide two (2) copies of the written TODP outlining conditions of approval. Said TODP shall be signed by both the City Manager or Manager’s designee and the applicant as an understanding of approval. One (1) copy shall be given to the applicant and one (1) copy shall be kept on record at the city. (5) Denial. In the event the application fails to meet the purpose and intent or the performance standards of this Interim Ordinance, the City Manager or Manager’s designee shall provide the applicant a written notice of denial. The applicant may appeal any administrative denial to the City Council or pursue other available remedies through this Code. (6) Expanded liquor service area. The city may administratively approve a temporary expansion of liquor license to allow for an expanded liquor service area to on-site liquor licensee with an approved TODP consistent with the limits and terms of this Interim Ordinance. (7) Performance standards. The City Council authorizes the City Manager to promulgate regulations for applications for TODP and operational requirements related to temporary outdoor dining areas authorized under this Interim Ordinance including but not limited to: a. The regulations shall address alterations to the use of the subject property, including the use of private parking spaces, green spaces, or other potential use areas, and the provision of support facilities that may be appropriate under the temporary conditions applying to the property. b. The regulations shall address additional temporary signage to be allowed during the period this Interim Ordinance is in effect. c. The regulations shall take into account other applicable codes and public health and safety considerations, including alcohol licensing, fire codes and protections, and other related building and zoning regulations. d. The regulations may account for potential use of public spaces for TODP’s, including public parking lots, rights of way, and open spaces, and how the city may accommodate and regulate the private use of those spaces, if deemed reasonable and appropriate. e. Except where specifically noted herein, this Interim Ordinance shall not be construed to waive or suspend any portions of the applicable Building, Electrical, Plumbing, Fire, or Liquor Sales ordinances currently in effect. (8) Process and Standards for review of a TODP application. a. The applicant’s request shall be consistent with the allowances and intent of the Governor’s Orders. b. The applicant shall provide evidence of continued firefighting access, and any requirements of State or local public safety recommendations. c. Each TODP location shall be entitled to up to two additional temporary signs during the duration of the TODP, each sign to be located on the premises of the applicant, and up to 32 square feet in area. d. Each TODP applicant shall cooperate with public safety officials in the application for said permit, and any modifications or changes recommended as a part of the Permit review process. e. If the applicant for a TODP is seeking the use of public land, the city will balance the request against other competing uses, including other applicant requests, to ensure reasonable access to public and private facilities, public safety, and other public uses, including parking, open space, or public improvements. The city reserves the right to consider requests for public property use at its sole discretion. f. The city will expedite review and consideration of each TODP application, understanding the nature of the current emergency, and the need for local businesses to recover economically as soon as possible. (9) Compliance with all other applicable laws. Any business in receipt of an approved TODP under this Interim Ordinance shall be separately responsible for obtaining any other permits or licenses necessary to legally operate said business as proposed, including liquor licensing, Health Department approvals, or any other approval. (10) Compliance with Governor’s Orders. Business owners shall comply with the terms of the Governor’s Orders, including, but not limited to, the following provisions: a. Develop and implement a COVID-19 Preparedness Plan; b. Open for outdoor dining or curbside pickup/delivery only. c. Ensure at least 6 feet of distance with maximum on-premises capacity to no more than 50 persons. d. Limit table service to 4 persons, or 6 if part of one family unit. e. Require reservations; do not allow walk-in customers. f. Require masks or face shields to be worn by workers and strongly recommend masks for all customers. g. Establish regular disinfection routine and train workers. (11) Authority to amend regulations. The City Council retains the authority to modify or amend the regulations as a matter of course as they pertain to properties in general, or on a case-by-case basis to ensure equitable application of the purposes of this Interim Ordinance. (12) Authority to amend TODP. The City Council shall have the authority to modify or amend any approved TODP to promote the public health, safety, and welfare, including termination of said TODP. (13) Authority to terminate TODP. The City Council shall have the authority to terminate this Interim Ordinance at any time and for any purpose, including changes to the State of Minnesota’s Emergency Order. (14) Duration. This Interim Ordinance shall remain in effect until the adoption of the official controls contemplated herein or until further Executive Order from the Governor which will allow bars and restaurants to re-start indoor food and beverage services, whichever occurs first, after which occurrence this ordinance shall lapse, unless properly extended pursuant to state law. Section 2. Effective Date. This Interim Ordinance shall be effective after its passage and publication. APPROVED by the New Hope City Council this 26th day of May, 2020. _______________________________ Kathi Hemken, Mayor ATTEST: ______________________________ Valerie Leone, City Clerk P:\Attorney\SAS\1 Client Files\2 City of New Hope\99-82009 Interim Ordinance re outdoor dining during covid-19 emergency\Ordinance No. 20-09 - Interim Ordinance re Outdoor Dining - Covid-19.docx City of New Hope 4401 Xylon Ave N • New Hope MN 55428 • Phone: 763-531-5127 • newhopemn.gov Temporary Outdoor Dining The purpose of this application is to coordinate the approval of temporary outdoor dining allowed through the state’s “Stay Safe Minnesota” order. Property Address: _____________________________________________________ Anticipated Attendance: _________ Contact Name: ____________________________ Cell: _________________ Email: _____________________________ Alternate Name: ___________________________ Cell: _________________ Email: _____________________________ SITE PLAN & NARRATIVE  Submit a site plan showing the location of proposed seating access, fire connections, fire exiting (single exist allowed when occupancy load is 49 or less), any structural elements (e.g. tents, pergolas/gazebos, etc.), pedestrian circulation, traffic circulation, and staff access between kitchen and seating areas. Denote how seating area will be defined and separated from other areas, such as parking. PARKING LOT MODIFICATIONS: Are you planning on blocking off any parking stalls or drive aisles? Yes No  Denote proposed plans on site plan and narrative.  Do not block handicapped parking stalls or access. PERMISSION: Do you own the property where the outdoor seating is proposed? Yes No  If no, property owner must approve proposed site plan and sign application. SIGNS: Are you posting temporary sign(s)? Yes No  If yes, contact Community Development at 763-531-5127 for temporary sign regulations and permit application. TENTS/CANOPIES: Are you erecting a temporary tent/canopy larger than 200 square feet? Yes No  If yes, contact Community Development at 763-531-5127 to see if a Special Hazard Permit Application is required.  Contact West Metro Fire-Rescue District at 763-230-7000 for installation requirements. ALCOHOL: Will alcoholic beverages be consumed? Yes No  Must have existing liquor license through city. RESTROOMS: Will portable restrooms be provided? Yes No  If yes, vendor name/phone: __________________________________________________ # of units ________ (and illustrate location of portable toilets on site plan). TRASH: Will trash receptacles and trash removal be provided? Yes No  Illustrate location of trash receptacles on site plan. Applicant agrees to comply at all times with all applicable laws, ordinances, and regulations, whether they are federal, state, county or municipal. I declare that the information I have provided in this permit application is truthful, and I authorize the city of New Hope to investigate the information provided. I understand if a complaint is received regarding noise, traffic, behaviors or any other activity associated with this event, the event may be discontinued or altered at the city’s discretion. GOVERNMENT DATA PRACTICES ACT – TENNESSEN WARNING: The data you supply on this form will be used to assess your qualifications for the special event application. You are not legally required to provide this data, but the city cannot approve the event without it. Applicant Name: ________________________ Signature: __________________________ Date: ___________ Property Owner Name: ________________________ Signature: __________________________ Date: ___________ I:\RFA\COMM DEV\2020\City Council\05-26-20 Outdoor Dining Interim ORD\Restaurant Permit 05 2020.docx Distribution: Community Dev. Approved by: ______________________________ Date:__________________ Police Approved by: ______________________________ Date:__________________ Fire Approved by: ______________________________ Date:__________________ Comments: _________________________________________________________________________________________________ ___________________________________________________________________________________________________________ Internal Use Only: Received by: Date _ Referred to appropriate departments on _ Approved and Completed on: _ Comments: _ I:\RFA\City Manager\2020\12.1 Q - Upcoming Events.docx Request for Action May 26, 2020 Approved by: Kirk McDonald, City Manager Originating Department: City Manager By: Kirk McDonald, City Manager Agenda Title Exchange of communication between members of the city council Upcoming meetings and events: May 28 3:15 p.m. – District 281 Bi-Monthly Update Meeting (Virtual) June 1 7 p.m. – Human Rights Commission Meeting (Virtual) June 2 City Council Candidate Filing Closes 7 p.m. – Planning Commission Meeting (Virtual) June 3 1:30 p.m. – Joint Water Commission Meeting (Virtual) June 6 Virtual Vehicle Fair (Full details available at newhopemn.gov/rec) June 8 7 p.m. – City Council Meeting (Virtual) Agenda Section Other Business Item Number 12.1