HomeMy WebLinkAbout2008/06/09 - ADMIN - Agenda Packets - City Council - Study SessionAGENDA
CITY COUNCIL STUDY SESSION
COUNCIL CHAMBERS
6:30 P.M.
JUNE 9, 2008
Discussion Items
1. 6:30 p.m. Future Study Session Agenda Planning – June 23 2008
2. 6:35 p.m. Presentation of 2007 Consolidated Annual Financial Report (CAFR) – Audit
3. 7:15 p.m. Liquor Licensees - 4 a.m. Closing during Republican National Convention
4. 7:30 p.m. Highway 100 Reconstruction (Full Build) Project Update
5. 8:00 p.m. City/School District Budgets
6. 8:45 p.m. Communications (Verbal)
Written Reports
7. City Sales Tax Audit Report
8. Critical Incident Preparedness Training
9. Highway 7 / Wooddale Avenue Interchange Project Update
9:00 p.m. Adjourn
Auxiliary aids for individuals with disabilities are available upon request. To make arrangements, please call
the Administration Department at 952/924-2525 (TDD 952/924-2518) at least 96 hours in advance of meeting.
Meeting Date: June 9, 2008
Agenda Item #: 1
Regular Meeting Public Hearing Action Item Consent Item Resolution Ordinance
Presentation Other:
EDA Meeting Action Item Resolution Other:
Study Session Discussion Item Written Report Other:
TITLE:
Future Study Session Agenda Planning – June 23, 2008.
RECOMMENDED ACTION:
Council and the City Manager to set the agenda for the June 23, 2008 Study Session.
POLICY CONSIDERATION:
Does the Council agree with the agenda as proposed?
BACKGROUND:
At each study session, approximately five minutes are set aside to discuss the next study session
agenda. For this purpose, attached please find the tentative agenda and proposed discussion items
for the June 23, 2008 canoe ride (5 p.m.) with the Park & Recreation Commission and others and
the study session at approximately 7 p.m.
FINANCIAL OR BUDGET CONSIDERATION:
None.
VISION CONSIDERATION:
None.
Attachment: Future Study Session Agenda Planning for June 23, 2008
Prepared by: Marcia Honold, Management Assistant
Approved by: Tom Harmening, City Manager
Meeting of June 9, 2008 (Item No. 1) Page 2
Subject: Future Study Session Agenda Planning
Future Study Session Agenda Planning
Tentative Discussion Items
Monday, June 23, 2008 - 5 p.m.
Minnehaha Creek Canoe Ride with the Park & Recreation Commission and Others
Study Session – 7 p.m. (box lunches will be served)
1. Future Study Session Agenda Planning – Administrative Services (5 minutes)
2. Minnehaha Creek Watershed District & Three Rivers Park District – (60 minutes)
Minnehaha Creek Watershed District and Three Rivers Park District staff will discuss creek
and park/trail issues with the City Council and staff. Minnetonka city staff may participate
in this discussion as well.
3. Possible Other Item Yet To Be Determined – (approximately 30 to 45 minutes)
4. Communications – Administrative Services (10 minutes)
Time for communications between staff and Council will be set aside on every study session
for the purposes of information sharing.
Reports
May 2008 Monthly Financial Reports
8:45 to 9:00 p.m. End of Meeting
Meeting Date: June 9, 2008
Agenda Item #: 2
Regular Meeting Public Hearing Action Item Consent Item Resolution Ordinance
Presentation Other:
EDA Meeting Action Item Resolution Other:
Study Session Discussion Item Written Report Other:
TITLE:
Presentation of 2007 Consolidated Annual Financial Report (CAFR) – Audit.
RECOMMENDED ACTION:
No action required at this time. Council is asked to provide any comments or questions it might
have regarding the CAFR/Audit.
POLICY CONSIDERATION:
Is the City Council comfortable with the manner in which staff is managing the City’s finances and
recording and presenting financial transaction data?
BACKGROUND:
This presentation will allow Steve McDonald from Abdo Eick & Meyers, LLP (the City’s auditor) to
discuss the audit, preliminary CAFR, management report, and financial highlights with the City
Council. The CAFR has not been finalized, so some figures may still need to be cross-checked. The
final CAFR will be submitted to the Office of State Auditor by June 30 and a final copy will be
distributed to the City Council at that time.
The City is required to have an independent audit performed annually. The auditors work for the
City Council, not the city management team. By state statute they are required to present their
findings within 30 days of completion of the audit.
The audit was completed much more cleanly this year since we were able to hire replacement staff
due to previous vacancies. The audit opinion is “unqualified”, which means that Abdo Eick &
Meyers, LLP believe the financial statements, as presented by city staff, fairly represent the city’s
financial condition as of December 31, 2006. There were three significant deficiencies in internal
controls discovered through the audit process but none of these individually or collectively reach the
level of a material weakness in our financial procedures.
Mr. McDonald will discuss financial highlights in conjunction with his management report.
FINANCIAL OR BUDGET CONSIDERATION:
This report shows the City of St. Louis Park remains in strong financial condition.
Meeting of June 9, 2008 (Item No. 2) Page 2
Subject: Presentation of 2007 Consolidated Annual Financial Report (CAFR) – Audit
VISION CONSIDERATION:
Not Applicable.
Attachments: 2007 Preliminary Consolidated Annual Financial Report
Management Report
Minnesota Legal Compliance Letter
Prepared by: Bruce DeJong, Finance Director
Approved by: Tom Harmening, City Manager
Meeting of June 9, 2008 (Item No. 2)
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CITY OF ST. LOUIS PARK
ST. LOUIS PARK, MINNESOTA
MANAGEMENT LETTER
YEAR ENDED
DECEMBER 31, 2007
Meeting of June 9, 2008 (Item No. 2)
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June 2, 2008
Honorable Mayor and Council
City of St. Louis Park, Minnesota
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 of St. Louis Park, Minnesota (the City) for the year ended December 31, 2007
and have issued our report thereon dated June 2, 2008. Professional standards require that we provide you with the following
information related to our audit.
Our Responsibility under Auditing Standards Generally Accepted in the United States of America
As stated in our engagement letter, our responsibility, as described by professional standards, is to express opinions about
whether the financial statements, prepared by management with your oversight are fairly presented, in all material respects, in
conformity with accounting principles generally accepted in the United States of America. Our audit of the financial statements
does not relieve you or management of your responsibilities.
Our responsibility is to plan and perform the audit to obtain reasonable, but not absolute, assurance that the financial statements
are free of material misstatement. As part of our audit, we considered the internal control of the City. Such considerations were
solely for the purpose of determining our audit procedures and not to provide any assurance concerning such internal control. We
are responsible for communicating significant matters related to the audit that are, in our professional judgment, relevant to your
responsibilities in overseeing the financial reporting process. However, we are not required to design procedures specifically to
identify such matters.
Significant Audit Findings
Our consideration of internal control was for the limited purpose described in the preceding paragraph and would not necessarily
identify all deficiencies in internal control that might be significant deficiencies or material weaknesses. However, as discussed
below, we identified certain deficiencies in internal control over financial reporting that we consider to be significant
deficiencies.
A control deficiency 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 misstatements on a timely basis. A significant deficiency is a
control deficiency, or combination of control deficiencies, that adversely affects the entity’s ability to initiate, authorize, record,
process, or report financial data reliably in accordance with generally accepted accounting principles such that there is more than
a remote likelihood that a misstatement of the entity’s financial statements that is more than inconsequential will not be prevented
or detected by the entity’s internal control. We consider the following deficiency to be a significant deficiency in internal control
over financial reporting.
Meeting of June 9, 2008 (Item No. 2)
Subject: Presentation of 2007 Consolidated Annual Financial Report (CAFR) - Audit Page 141
City of St. Louis Park
June 2, 2008
Page 2
2007-1 Preparation of Financial Statements
Condition: As in prior years, we were requested to draft the audited financial statements and
related footnote disclosures as part of our regular audit services. Recent auditing
standards require auditors to communicate this situation to the Council as an internal
control deficiency. Ultimately, it is management’s responsibility to provide for the
preparation of your statements and footnotes, and the responsibility of the auditor to
determine the fairness of presentation of those statements. It is our responsibility to
inform you that this deficiency could result in a material misstatement to the
financial statements that could have been prevented or detected by your
management. Essentially, the auditors can not be part of your internal control
process.
Criteria: Internal controls should be in place to provide reasonable assurance over financial
reporting.
Cause: From a practical standpoint we do both for you at the same time in connection with
our audit. This is not unusual for us to do with an organization of your size.
Effect: The effectiveness of the internal control system relies on enforcement by
management. The effect of deficiencies in internal controls can result in undetected
errors in financial reporting.
Recommendation: It is your responsibility to make the ultimate decision to accept this degree of risk
associated with this condition because of cost or other considerations. As in prior
years, we have instructed management to review a draft of the auditor prepared
financials in detail for their accuracy; we have answered any questions they might
have, and have encouraged research of any accounting guidance in connection with
the adequacy and appropriateness of classification of disclosure in your statements.
We are satisfied that the appropriate steps have been taken to provide you with the
completed financial statements. While the City is reviewing the financial statements
we recommend that a disclosure checklist be utilized to ensure all required
disclosures are presented and the City should agree its financial software to the
numbers reported in the financial statements.
Management Response: For now, the City’s management accepts the degree of risk associated with this
condition and thoroughly reviews a draft of the financial statements.
Meeting of June 9, 2008 (Item No. 2)
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City of St. Louis Park
June 2, 2008
Page 3
2007-2 Limited segregation of duties over Cash Disbursements, Cash Receipts and Payroll
Condition: During our audit we reviewed procedures over cash disbursements, cash receipts,
and payroll and found the City to have limited segregation of duties related to these
procedures.
Criteria: There are four general categories of duties: authorization, custody, record keeping
and reconciliation. In an ideal system, different employees perform each of these
four major functions. In other words, no one person has control of two or more of
these responsibilities.
Cause: In the cash disbursements cycle, the Accountant Clerk #1 has control over check
stock (custody), prepares the checks, enters transactions into the accounting system,
sets up vendors, maintains accounts payable records (recording), opens mail
(reconciling), and electronically signs checks (authorization). For the cash receipts
cycle, the Account Clerk #1, is a backup for endorsing checks (custody), opens mail
and is backup for preparing deposit (reconciling), generates billing statements and
maintains accounts receivable records (recording). In the payroll cycle, the Payroll
Clerk controls and issues payroll checks to employees (custody), maintains
employment records, runs payroll, and prepares checks (recording), and prepares the
payroll tax returns (reconciling).
Effect: The existence of these limited segregations of duties increases the risk of fraud and
error.
Recommendation: We recommend the City review responsibilities of staff to limit the number of duties
in more than one category one person can perform in each of the major transaction
cycles listed above.
Management Response: Management is aware of the potential risks present and plans to have further
discussion in the current year to reduce the risk and put more efficient controls in
place.
Meeting of June 9, 2008 (Item No. 2)
Subject: Presentation of 2007 Consolidated Annual Financial Report (CAFR) - Audit Page 143
City of St. Louis Park
June 2, 2008
Page 4
2007-3 Limited segregation of duties relating to offsite material transactions.
Condition: During our audit we reviewed procedures over the billing and collection of receipts
at the Rec Center. We noted procedures for scheduling, billing and collecting ice
time and building rental has limited segregation of duties. In addition, there are no
procedures or tracking concession inventory.
Criteria: As previously noted, there are four general categories of duties: authorization,
custody, record keeping and reconciliation. In an ideal system, different employees
perform each of these four major functions. In other words, no one person has
control of two or more of these responsibilities.
Cause: Currently, for ice time rental one person is responsible for taking and scheduling
reservations for ice time and generates billing statements (recording). The same
person opens the mail and receives checks/currency for the ice rentals (custody and
reconciling). The outstanding balances are all maintained by this person as well.
The building rentals are all handled much the same way as the ice time rentals. As
for the inventory within the concession stands, there was not a way to track the
inventory through a point of sale type system.
Effect: The existence of this limited segregation of duties increases the risk of fraud and
error. Possible errors could include billing incorrect amounts or miscoding receipts
for entry into the general ledger. In addition, without improved segregation of
duties, unapproved write offs or misappropriation of receipts could be concealed.
Recommendation: We recommend the City review responsibilities of the Rec Center to limit one person
performing more than one of the categories within segregation of duties. In addition,
we would recommend the Rec Center utilize the finance department for finance
related transactions, such as billing and collecting rentals. The City’s finance
department is charged with responsibility over these funds and should be the ones
managing the billing and collecting through the established documented procedures.
Any processing of finance related transactions outside the finance department adds
additional risks. The City is purchasing a point of sale software package for the Rec
Center. We would encourage the use of the inventory tracking capabilities this
software will allow. Using this type of system can increase efficiencies and reduce
risks of lost inventory.
Management Response: Management is aware of the potential risks present and plans to have further
discussion in the current year to reduce the risk and put more efficient controls in
place.
A material weakness is a significant deficiency, or combination of significant deficiencies, that result in more than a remote
likelihood that a material misstatement of the financial statements will not be prevented or detected by the entity’s internal
control. We do not believe the deficiency above constitutes a material weakness.
Compliance
As part of obtaining reasonable assurance about whether the financial statements are free of material misstatement, we performed
tests of compliance with certain provisions of Minnesota statutes. However, the objective of our tests was not to provide an
opinion on compliance with such provisions. We noted no instances of noncompliance with Minnesota statutes that are required
to be reported.
Planned Scope and Timing of the Audit
We performed the audit according to the planned scope and timing previously communicated to you.
Meeting of June 9, 2008 (Item No. 2)
Subject: Presentation of 2007 Consolidated Annual Financial Report (CAFR) - Audit Page 144
City of St. Louis Park
June 2, 2008
Page 5
Qualitative Aspects of Accounting Practices
Management is responsible for the selection and use of appropriate accounting policies. In accordance with the terms of our
engagement letter, we will advise management about the appropriateness of accounting policies and their application. The
significant accounting policies used by the City are described in Note 1 to the financial statements. No new accounting policies
were adopted and the application of existing policies was not changed during the year. We noted no transaction entered into by
the governmental unit during the year for which there is a lack of authoritative guidance or consensus. There are no significant
transactions that have been recognized in the financial statements in a different period than when the transaction occurred.
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 assumption 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 disclosures in the financial statements are neutral, consistent, and clear. Certain financial statement disclosures are
particularly sensitive because of their significance to financial statement users.
Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with management in performing and completing our audit.
Corrected Misstatements
Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those
that are trivial, and communicate them to the appropriate level of management. Management has corrected all such
misstatements. In addition, we considered the following entries to be audit adjustments, or correction of management decision.
Adjusting Journal Entries JE # 27 Debit Credit
01000-1000-1011-000 CHECKING 5,477$
04890-4889-4012-000 DELINQ AD VALOREM 5,477
01000-1001-4012-000 DELINQ AD VALOREM 5,477$
04890-4890-1011-000 CHECKING 5,477
Total 10,954$ 10,954$
Adjusting Journal Entries JE # 28
01000-1000-1120-000 DELIQUENT TAXES 24,586$
01000-1001-4370-000 MARKET VALUE HOMESTEAD CREDIT 141
01000-1001-4370-000 MARKET VALUE HOMESTEAD CREDIT 24,586
04890-4890-1011-000 CHECKING 24,727
04890-4890-2651-000 UNREALIZED TAXES 24,586
01000-1000-1011-000 CHECKING 24,727$
01000-1000-2651-000 UNREALIZED TAXES 24,586
04890-4890-1120-000 DELIQUENT TAXES 24,586
04890-4891-4370-000 MARKET VALUE HOMESTEAD CREDIT 141
04890-4891-4370-000 MARKET VALUE HOMESTEAD CREDIT 24,586
Total 98,626$ 98,626$
To adjust delinquent revenue reclassed to EDA fund for prior year receivable
balances
To reclass Market Value Credit to EDA fund
Meeting of June 9, 2008 (Item No. 2)
Subject: Presentation of 2007 Consolidated Annual Financial Report (CAFR) - Audit Page 145
City of St. Louis Park
June 2, 2008
Page 6
Adjusting Journal Entries JE # 29 Debit Credit
01000-1102-2377-000 Bass Lake/EDI/UP 8,729$
02700-2722-4368-421 operating grants 20,330
02700-2722-6630-000 OTHER CONTRACTUAL SERVICES 550
02700-2732-6630-000 OTHER CONTRACTUAL SERVICES 54,797
04300-4305-7803-908 Engineering services 17,057
04300-4313-7803-908 Engineering services 10,944
04300-4317-7803-000 IMPROVEMENTS OTHER THAN BUILDI 30,030
01000-1000-2010-000 ACCOUNTS PAYABLE 8,729$
02700-2700-2010-000 ACCOUNTS PAYABLE 20,880
02700-2700-2030-000 CONTRACTS PAYABLE 54,797
04300-4300-2010-000 ACCOUNTS PAYABLE 30,030
04300-4300-2030-000 CONTRACTS PAYABLE 28,001
Total 142,437$ 142,437$
Adjusting Journal Entries JE # 32
04300-4317-7803-000 IMPROVEMENTS OTHER THAN BUILDI 70,204$
04300-4300-2450-000 RETAINED PERCENTAGE 70,204$
Total 70,204$ 70,204$
Adjusting Journal Entries JE # 33
01000-1000-2651-000 UNREALIZED TAXES 4,405$
04890-4890-1120-000 DELIQUENT TAXES 4,405
01000-1000-1120-000 DELIQUENT TAXES 4,405$
04890-4890-2651-000 UNREALIZED TAXES 4,405
Total 8,810$ 8,810$
Adjusting Journal Entries JE # 52
05000-5000-1202-000 UNBILLED 58,234$
05100-5100-1202-000 UNBILLED 92,778
05200-5200-1202-000 UNBILLED 34,196
05300-5300-1202-000 UNBILLED 30,036
05000-5000-2050-101 Sales Tax payable 4$
05000-5001-5001-000 GENERAL CUSTOMERS 58,230
05100-5101-5001-000 GENERAL CUSTOMERS 92,778
05200-5200-2050-101 Sales Tax payable 1,868
05200-5201-5001-000 GENERAL CUSTOMERS 32,328
05300-5301-5004-000 RESIDENTIAL STORM DRAINAGE 30,036
Total 215,244$ 215,244$
To adjust utilities receivable
To record additional accounts & contracts payable
To record additional retainage
To reclass delinquent taxes receivable
Meeting of June 9, 2008 (Item No. 2)
Subject: Presentation of 2007 Consolidated Annual Financial Report (CAFR) - Audit Page 146
City of St. Louis Park
June 2, 2008
Page 7
Disagreements with Management
For purposes of this letter, professional standards define a disagreement with management as 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
June 2, 2008.
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
governmental unit’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 governmental unit’s auditors. However, these discussions occurred in the normal
course of our professional relationship and our responses were not a condition to our retention.
Meeting of June 9, 2008 (Item No. 2)
Subject: Presentation of 2007 Consolidated Annual Financial Report (CAFR) - Audit Page 147
City of St. Louis Park
June 2, 2008
Page 8
Other Matters
The following are areas that came to our attention during the audit that we feel should be reviewed:
Financial Position and Results of Operations
Our principal observations and recommendations are summarized on the following pages. These recommendations resulted
from our observations made in connection with our audit of the City’s financial statements for the year ended
December 31, 2007.
General Fund
The General fund is used to account for resources traditionally associated with government, which are not required legally or
by sound financial management to be accounted for in another fund.
The General fund balance increased $161,791 from 2006. The total fund balance is $10,113,906 which is 44.5 percent of the
2008 budgeted expenditures. We recommend the fund balance be maintained at a level sufficient to fund operations until
the major revenue sources are received in June. We feel a reserve of approximately 40 to 50 percent of planned expenditures
and transfers out is adequate to meet working capital and small emergency needs. At the current level, the fund balance is
within the range of what is generally recommended as a minimum.
The Minnesota Office of the State Auditor has classified cities’ unreserved fund balance levels relative to expenditures as
follows:
Percent of Months
Planned Expenditures
Expenditures on hand
Extremely low Under 20 % Under 2.5
Low 21 - 34 2.5 - 4
Acceptable 35 - 50 4 - 6
Moderately high 51 - 64 6 - 7
High 65 - 100 8 - 12
Very high 100 - 150 12 - 18
Extremely high Above 150 Above 18
The State Auditor does group all General and special revenue funds of the City when making this calculation where our
calculation is based only on the General fund. The Office of the State Auditor (the OSA) has issued a Statement of Position
relating to fund balance stating “a local government should identify fund balance separately between reserved and
unreserved fund balance. The local government may assign and report some or all of the fund balance as designated and
undesignated.” We recommend local governments adopt a formal policy on the level of unreserved fund balance that should
be maintained in the general and special revenue funds. This helps address citizen concerns as to the use of fund balance and
tax levels.
Meeting of June 9, 2008 (Item No. 2)
Subject: Presentation of 2007 Consolidated Annual Financial Report (CAFR) - Audit Page 148
City of St. Louis Park
June 2, 2008
Page 9
Purposes and Benefits of an Adequate Fund Balance
• Expenditures are incurred somewhat evenly throughout the year. However, currently, property tax and state aid
revenues are not received until the second half of the year. An adequate fund balance will provide the cash flow
required to finance the General fund expenditures until these revenue sources are received.
• The City is vulnerable to legislative actions at the State and Federal level. The State eliminated HACA aid with the
2001 legislative session and imposed reductions of market value credit aid and local government aid for some cities.
Levy limits have also been implemented for municipalities in past legislative sessions. An adequate fund balance will
provide a temporary buffer against those aid adjustments and levy limits.
• Expenditures not anticipated at the time the annual budget was adopted may need immediate Council action. These
would include capital outlay replacement, lawsuits and other items. An adequate fund balance will provide the financing
needed for such expenditures.
• A strong fund balance will assist the City in obtaining, maintaining or improving its bond rating. The result will be
better interest rates in future bond sales.
Meeting of June 9, 2008 (Item No. 2)
Subject: Presentation of 2007 Consolidated Annual Financial Report (CAFR) - Audit Page 149
City of St. Louis Park
June 2, 2008
Page 10
A table summarizing the General fund balance in relation to budget follows:
Fund General
Balance Budget Fund
Year December 31 Year Budget
2003 6,834,716$ 2004 19,392,791$ 35.2 %
2004 8,195,292 2005 20,604,950 39.8
2005 8,740,093 2006 21,697,931 40.3
2006 9,952,115 2007 21,866,416 45.5
2007 10,113,906 2008 22,726,875 44.5
Budget
Balance to
of Fund
Percent
General Fund Balance as Compared to Budget
$19,392,791
$20,604,950
$21,697,931 $21,866,416 $22,726,875
44.5%45.5%
40.3%39.8%
35.2%
$-
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
2003 2004 2005 2006 2007 2008
Actual Fund Balance Budget
Meeting of June 9, 2008 (Item No. 2)
Subject: Presentation of 2007 Consolidated Annual Financial Report (CAFR) - Audit Page 150
City of St. Louis Park
June 2, 2008
Page 11
A summary of General fund revenue and expenditures compared to budget and the prior year follows:
Variance with
Final Budget -
Actual Positive
Original Final Amounts (Negative)
Revenues 19,211,580$ 19,211,580$ 19,548,861$ 337,281$
Expenditures 21,866,416 21,866,416 21,261,602 604,814
Deficiency of revenues
under expenditures (2,654,836) (2,654,836) (1,712,741) 942,095
Other financing sources (uses)
Transfers in 2,654,836 2,654,836 2,659,532 4,696
Transfers out - - (785,000) (785,000)
Total other financing sources (uses)2,654,836 2,654,836 1,874,532 (780,304)
Net change in fund balances - - 161,791 161,791
Fund balances, January 1 9,952,115 9,952,115 9,952,115 -
Fund balances, December 31 9,952,115$ 9,952,115$ 10,113,906$ 161,791$
Budgeted Amounts
• In total, revenue sources provided a favorable variance when compared to budget. The only sources of revenue to fall
short of budgeted expectations were property taxes, charges for services, and fines and forfeits, which had variances of
$194,855, $56,509, and $32,907, respectively. The positive variances in the other revenue sources created a positive
variance in total revenues.
• Most functions of expenditures had favorable actual results when compared with budget. The only negative variance
occurred within general government, which had a variance of $11,230.
Meeting of June 9, 2008 (Item No. 2)
Subject: Presentation of 2007 Consolidated Annual Financial Report (CAFR) - Audit Page 151
City of St. Louis Park
June 2, 2008
Page 12
A comparison of revenues for the last three years follows:
2005 2006 2007
Taxes 12,478,158$ 12,067,368$ 12,332,531$ 55.6 %
Licenses and permits 2,925,914 2,926,785 2,940,449 13.2
Intergovernmental 1,790,230 2,558,652 2,283,250 10.3
Charges of services 1,074,100 1,035,008 1,044,320 4.7
Fines and forfeits 286,003 322,558 276,693 1.2
Special assessments 550 1,356 2,468 -
Interest on investments 206,885 303,165 526,336 2.4
Miscellaneous 108,560 131,857 142,814 0.6
Transfers in 2,319,761 2,609,819 2,659,532 12.0
Total revenues 21,190,161$ 21,956,568$ 22,208,393$ 100.0 %
Source Total
Percent of
Revenues and Transfers
$-
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
$14,000,000
2005 2006 2007
Taxes Licenses and permits Intergovernmental Other
Meeting of June 9, 2008 (Item No. 2)
Subject: Presentation of 2007 Consolidated Annual Financial Report (CAFR) - Audit Page 152
City of St. Louis Park
June 2, 2008
Page 13
A comparison of expenditures for the last three years follows:
2005 2006 2007
General government 5,515,573$ 5,980,358$ 6,630,661$ 30.0 %
Public safety 10,018,174 10,816,723 10,797,256 49.0
Public works 3,772,663 3,924,981 3,826,855 17.4
General services 7,627 22,484 6,830 -
Transfers out 1,331,323 - 785,000 3.6
Total expenditures and transfers 20,645,360$ 20,744,546$ 22,046,602$ 100.0 %
Program Total
Percent of
Expenditures and Transfers
$-
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
2005 2006 2007
General government Public safety Public works General services Transfers out
Meeting of June 9, 2008 (Item No. 2)
Subject: Presentation of 2007 Consolidated Annual Financial Report (CAFR) - Audit Page 153
City of St. Louis Park
June 2, 2008
Page 14
Special Revenue Funds
Special revenue funds are used to account for revenue derived from specific taxes or other earmarked revenue sources. They
are usually required by Minnesota statute or local ordinance to finance particular functions or activities of government. A
summary of fund balances follows:
Increase
2007 2006 (Decrease)
Major
Parks and Recreation 630,327$ 502,402$ 127,925$
Housing Rehabilitation 2,402,328 2,487,080 (84,752)
Nonmajor
Cable Television 1,560,836 1,504,806 56,030
Community Development (2,645) 3,481 (6,126)
Special Service District #1 138,095 112,827 25,268
Special Service District #2 1,406 5,525 (4,119)
Special Service District #3 74,068 56,957 17,111
Special Service District #4 14,169 (97) 14,266
Police and Fire Pensions 6,520,923 6,599,310 (78,387)
Total 11,339,507$ 11,272,291$ 67,216$
Fund
December 31,
Fund Balance (deficits)
Meeting of June 9, 2008 (Item No. 2)
Subject: Presentation of 2007 Consolidated Annual Financial Report (CAFR) - Audit Page 154
City of St. Louis Park
June 2, 2008
Page 15
Capital Projects Funds
The capital projects funds are used to account for the acquisition and construction of major capital facilities other than those
financed by enterprise funds. Included in this group of funds and the fund balance of each at December 31 for 2007 and 2006
is as follows:
Increase
2007 2006 (Decrease)
Major
Permanent Improvement Revolving 8,597,370$ 8,285,222$ 312,148$
Development EDA 26,661,915 25,378,890 1,283,025
Redevelopment District 4,618,469 5,135,282 (516,813)
Nonmajor
Municipal Building 636,385 545,361 91,024
Park Improvement 860,916 336,406 524,510
Louisiana Court Capital Project 1,117 1,064 53
Street Capital Projects (1,256,764) (361,996) (894,768)
2003 G.O. Improvement - (255) 255
2005A G.O. Capital Project - 481,628 (481,628)
Pavement Management 1,678,262 1,616,660 61,602
Total 41,797,670$ 41,418,262$ 379,408$
December 31,
Fund Balances (deficits)
Fund
It appears that most of the capital project funds have sufficient fund balances for working capital. The deficit fund balance
within the Street Capital Projects fund should be closely monitored by the City. The City should annually review capital
projects and close funds whose associated projects have been completed.
Meeting of June 9, 2008 (Item No. 2)
Subject: Presentation of 2007 Consolidated Annual Financial Report (CAFR) - Audit Page 155
City of St. Louis Park
June 2, 2008
Page 16
Debt Service Funds
Debt service funds are a type of governmental fund to account for the accumulation of resources for the payment of interest
and principal on debt (other than enterprise fund debt).
Debt service funds may have one or a combination of the following revenue sources pledged to retire debt as follows:
• Property taxes - Primarily for general City benefit projects such as parks and municipal buildings. Property taxes
may also be used to fund special assessment bonds which are not fully assessed.
• Tax increments - Pledged exclusively for tax increment/economic development districts.
• Capitalized interest portion of bond proceeds - After the sale of bonds, the project may not produce revenue (tax
increments or special assessments) for a period of one to two years. Bonds are issued with this timing difference
considered in the form of capitalized interest.
• Special assessments - Charges to benefited properties for various improvements.
In addition to the above pledged assets, other funding sources may be received by Debt Service funds as follows:
• Residual project proceeds from the related capital projects fund
• Investment earnings
• State or federal grants
• Transfers from other funds
A comparison of the assets of each fund and the remaining bonds outstanding at year end are as follows:
Final
Total Total Remaining Maturity
Cash Assets Bonds Date
Hoigaard's 615,661$ 620,569$ -$ Matured
G.O. Improvements Bond, 2005A 450,698 452,012 3,580,000 02/01/16
G.O. Tax Increment Refunding Bond, 2005B 1,013,687 1,021,087 1,615,000 02/01/09
G.O. Tax Increment Refunding Bond, 2004 1,032,371 1,041,188 6,530,000 02/01/18
G.O. Improvements Bond, 2003 437,765 438,714 3,030,000 02/01/13
G.O. Tax Increment Refunding Bond, 2002A 375,720 382,812 2,510,000 09/01/09
G.O. Tax Increment Refunding Bond, 2001A 644,042 649,886 3,245,000 02/01/11
G.O. Improvement Bond, 2000 - Reserve 324,842 325,000 - Matured
G.O. Improvement Bond, 2000 202,123 4,257,123 4,055,000 02/01/30
G.O. Improvement Bond, 1999 302,025 302,797 1,140,000 02/01/11
Total 5,398,934$ 9,491,188$ 25,705,000$
December 31, 2007
Debt Description
The City’s outstanding debt is required to be funded by various resources such as special assessments, tax increments,
property taxes, transfers from enterprise funds, etc. Special assessments and tax increments are usually certified once to the
County for collection, but tax levies need to be certified annually. The City should review potential uses of remaining net
assets in funds that have completed their purpose. TIF funds need to be used for a purpose consistent with the TIF plan and
remaining resources in G.O. Improvement bonds can be used for whatever the council deems appropriate.
Meeting of June 9, 2008 (Item No. 2)
Subject: Presentation of 2007 Consolidated Annual Financial Report (CAFR) - Audit Page 156
City of St. Louis Park
June 2, 2008
Page 17
Enterprise Funds
The activities of the Enterprise funds include the municipal water utility, sewer utility, refuse, storm water utility and
wireless operations.
Water Utility Fund
A comparison of the past three year’s Water Utility fund operations is as follows:
Amount Amount Amount
Operating revenues 2,317,049$ 100.0 % 2,913,692$ 100.0 % 3,379,920$ 100.0 %
Operating expenses 2,607,123 112.5 2,845,614 97.7 3,172,320 93.9
Operating income (loss) (290,074) (12.5)68,078 2.3 207,600 6.1
Nonoperating revenues 394,382 17.0 93,992 3.2 70,907 2.1
Transfers (839,421) (32.2) (506,965) (17.8) (538,882) (17.0)
Change in net assets (735,113)$ (27.7) % (344,895)$ (12.3) % (260,375)$ (8.8) %
Cash and temporary
investments 1,884,699$ 867,635$ 2,109,647$
Bonds payable -$ -$ 2,440,000$
Revenues
Percent of
Revenues
Percent of
Revenues
2005 2006 2007
Percent of
$(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
$4,000,000
2005 2006 2007
Operating revenues Operating expenses Nonoperating revenues
Change in net assets Cash and temporary investments Bonds payable
The cash balance significantly increased over the prior year. The increase in related to the issuance of a general
obligation revenue bond.
Meeting of June 9, 2008 (Item No. 2)
Subject: Presentation of 2007 Consolidated Annual Financial Report (CAFR) - Audit Page 157
City of St. Louis Park
June 2, 2008
Page 18
Sewer Utility Fund
A comparison of the past three year’s Sewer Utility fund operations is as follows:
Amount Amount Amount
Operating revenues 4,366,924$ 100.0 % 4,584,167$ 100.0 % 4,764,432$ 100.0 %
Operating expenses 3,904,546 89.4 4,255,400 92.8 4,199,659 88.1
Operating income 462,378 10.6 328,767 7.2 564,773 11.9
Nonoperating revenues 79,775 1.8 105,932 2.3 222,501 4.7
Transfers (720,367) (18.4) (746,060) (17.5) (790,849) (18.8)
Change in net assets (178,214)$ (6.0) % (311,361)$ (8.0) % (3,575)$ (2.2) %
Cash and temporary
investments 2,885,801$ 2,832,423$ 2,581,105$
Revenues
Percent of Percent of
Revenues Revenues
2005 2006 2007
Percent of
$(1,000,000)
$-
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
2005 2006 2007
Operating revenues Operating expenses Nonoperating revenues
Change in net assets Cash and temporary investments
The current cash balance was stable when compared with the prior year. It is important to keep an updated cash flow
projection to ensure rates are sufficient to cover increasing costs.
Meeting of June 9, 2008 (Item No. 2)
Subject: Presentation of 2007 Consolidated Annual Financial Report (CAFR) - Audit Page 158
City of St. Louis Park
June 2, 2008
Page 19
Refuse Fund
A comparison of the past three year’s Refuse fund operations is as follows:
Amount Amount Amount
Operating revenues 1,857,808$ 100.0 % 2,124,203$ 100.0 % 2,395,469$ 100.0 %
Operating expenses 2,019,204 108.7 2,029,302 95.5 2,019,595 84.3
Operating income (loss) (161,396) (8.7)94,901 4.5 375,874 15.7
Nonoperating revenues 174,886 9.4 184,023 8.7 215,984 9.0
Transfers (345,492) (17.1) (335,617) (16.5) (348,866) (17.3)
Change in net assets (332,002)$ (16.4) % (56,693)$ (3.3) % 242,992$ 7.4 %
Cash and temporary
investments 2,098,728$ 2,018,712$ 2,191,412$
Revenues
Percent of Percent of
Revenues Revenues
2005 2006 2007
Percent of
$(500,000)
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
2005 2006 2007
Operating revenues Operating expenses Nonoperating revenues
Change in net assets Cash and temporary investments
Meeting of June 9, 2008 (Item No. 2)
Subject: Presentation of 2007 Consolidated Annual Financial Report (CAFR) - Audit Page 159
City of St. Louis Park
June 2, 2008
Page 20
Storm Water Utility Fund
A comparison of the past three year’s Storm Water Utility fund operations is as follows:
Amount Amount Amount
Operating revenues 914,051$ 100.0 % 1,169,915$ 100.0 % 1,470,529$ 100.0 %
Operating expenses 657,004 71.9 904,916 77.3 942,746 64.1
Operating income 257,047 28.1 264,999 22.7 527,783 35.9
Nonoperating
revenues 809,184 88.5 245,002 20.9 49,032 3.3
Transfers (190,241) (29.0) (335,118) (37.0) (317,694) (33.7)
Change in net assets 875,990$ 87.6 % 174,883$ 6.6 % 259,121$ 5.5 %
Cash and temporary
investments 586,531$ 609,679$ 924,907$
Bonds payable 2,550,000$ 2,365,000$ 3,395,000$
Revenues
Percent of Percent of
Revenues Revenues
2005 2006 2007
Percent of
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
2005 2006 2007
Operating revenues Operating expenses Nonoperating
Change in net assets Cash and temporary investments Bonds payable
The cash balance significantly increased over the prior year. The increase in related to the issuance of a general
obligation revenue bond.
Meeting of June 9, 2008 (Item No. 2)
Subject: Presentation of 2007 Consolidated Annual Financial Report (CAFR) - Audit Page 160
City of St. Louis Park
June 2, 2008
Page 21
Wireless Fund
A summary of the past two year’s Wireless fund operations is as follows:
Amount Amount
Operating revenues 41,057$ 100.0 % 68,606$ 100.0 %
Operating expenses 397,697 968.6 1,151,751 1678.8
Operating loss (356,640) (868.6) (1,083,145) (1578.8)
Nonoperating expenses (4,986) (12.1)353 0.5
Change in net assets (361,626)$ (880.7) % (1,082,792)$ (1578.3) %
of Sales of Sales
2006 2007
Percent Percent
$(1,500,000)
$(1,000,000)
$(500,000)
$-
$500,000
$1,000,000
$1,500,000
2006 2007
Operating revenues Operating expenses Nonoperating expenses Change in net assets
The first year of operations was reported in 2006. It will be important to monitor the balance in this fund and establish a
plan for recovering the deficit balance.
Meeting of June 9, 2008 (Item No. 2)
Subject: Presentation of 2007 Consolidated Annual Financial Report (CAFR) - Audit Page 161
City of St. Louis Park
June 2, 2008
Page 22
Ratio Analysis
The following captures a few ratios from the City’s financial statements that give some additional information for trend and peer
group analysis. The peer group average consists of an average of Abdo, Eick & Meyers’ client base plus other selected cities of
similar size and geographic location. The majority of these ratios facilitate the use of economic resources focus and accrual
basis of accounting at the government-wide level. A combination of liquidity (ability to pay its most immediate obligations),
solvency (ability to pay its long-term obligations), funding (comparison of financial amounts and economic indicators to measure
changes in financial capacity over time) and common-size (comparison of financial data with other cities regardless of size) ratios
are shown below.
Calculation Source 2004 2005 2006 2007
Debt to assets Total liabilities/total assets Government-wide 23% 23% 20% 19%
27% 26% 27% N/A
Debt service coverage Net cash provided by operations/ Enterprise funds 215% 215% 192% 339%
enterprise fund debt payments 210% 192% 210% N/A
Debt per capita Bonded debt/population Government-wide 819$ 872$ 723$ 708$
1,230$ 1,228$ 1,278$ N/A
Taxes per capita Tax revenues/population Government-wide 484$ 368$ 473$ 439$
306$ 336$ 381$ N/A
Capital assets % left to Net capital assets/Government-wide 75% 68% 67% 66%
depreciate - Governmental gross capital assets 67% 66% 66% N/A
Capital assets % left to Net capital assets/Government-wide 51% 52% 51% 53%
depreciate - Business-type gross capital assets 64% 61% 61% N/A
Represents the City of St. Louis Park
Peer Group ratio
Ratio
Meeting of June 9, 2008 (Item No. 2)
Subject: Presentation of 2007 Consolidated Annual Financial Report (CAFR) - Audit Page 162
City of St. Louis Park
June 2, 2008
Page 23
Debt-to-Assets Leverage Ratio (Solvency Ratio)
The debt-to-assets leverage ratio is a comparison of a city’s total liabilities to its total assets or the percentage of total assets that
are provided by creditors. It indicates the degree to which the City’s assets are financed through borrowings and other long-term
obligations (i.e. a ratio of 50 percent would indicate half of the assets are financing with outstanding debt).
20%
23%23%
19%
26%
27%27%
16%
18%
20%
22%
24%
26%
28%
30%
32%
2004 2005 2006 2007
City ratio Peer group average
Debt Service Coverage Ratio (Solvency Ratio)
The debt coverage ratio is a comparison of cash generated by operations to total debt service payments (principal and interest) of
enterprise funds. This ratio indicates if there are sufficient cash flows from operations to meet debt service obligations. Except
in cases where other nonoperating revenues (i.e. taxes, assessments, transfers from other funds, etc.) are used to fund debt service
payments, an acceptable ratio would be above 100 percent.
215%
339%
215%
192%
210%
210%192%
100%
150%
200%
250%
300%
350%
400%
2004 2005 2006 2007
City ratio Peer group average
Meeting of June 9, 2008 (Item No. 2)
Subject: Presentation of 2007 Consolidated Annual Financial Report (CAFR) - Audit Page 163
City of St. Louis Park
June 2, 2008
Page 24
Bonded Debt per Capita (Funding Ratio)
This dollar amount is arrived at by dividing the total bonded debt by the population of the city and represents the amount of
bonded debt obligation for each citizen of the City at the end of the year. The higher the amount, the more resources are needed
in the future to retire these obligations through taxes, assessments or user fees.
$1,278
$819
$708$723
$872
$1,228$1,230
$-
$200
$400
$600
$800
$1,000
$1,200
$1,400
2004 2005 2006 2007
City ratio Peer group average
Taxes per Capita (Funding Ratio)
This dollar amount is arrived at by dividing the total tax revenues by the population of the city and represents the amount of taxes
for each citizen of the city for the year. The higher this amount is, the more reliant the City is on taxes to fund its operations. Of
the total taxes, 21 percent is related to tax increments or approximately $120 per capita.
$439$484 $368 $473
$381
$336$306
$200
$250
$300
$350
$400
$450
$500
2004 2005 2006 2007
City ratio Peer group average
Meeting of June 9, 2008 (Item No. 2)
Subject: Presentation of 2007 Consolidated Annual Financial Report (CAFR) - Audit Page 164
City of St. Louis Park
June 2, 2008
Page 25
Capital Assets Percentage (Common-size Ratio)
This percentage represents the percent of governmental or business-type capital assets that are left to be depreciated. The lower
this percentage, the older the city’s capital assets are and may need major repairs or replacements in the near future. A higher
percentage may indicate newer assets being constructed or purchased and may coincide with higher debt ratios or bonded debt
per capita.
Governmental Activities
75%
67%
66%
68%
67%
66%66%
58%
60%
62%
64%
66%
68%
70%
72%
74%
76%
78%
2004 2005 2006 2007
City ratio Peer group average
Business-type Activities
51%52%51%53%
61%
64%
61%
40%
45%
50%
55%
60%
65%
70%
75%
2004 2005 2006 2007
City ratio Peer group average
Meeting of June 9, 2008 (Item No. 2)
Subject: Presentation of 2007 Consolidated Annual Financial Report (CAFR) - Audit Page 165
City of St. Louis Park
June 2, 2008
Page 26
Future Accounting Standard Changes
The following Governmental Accounting Standards Board (GASB) Statements have been issued and may have an impact on
future City financial statements:
GASB Statement No. 43 - Financial Reporting for Postemployment Benefit Plans Other than Pension Plans
This statement is effective one year prior to the effective date of Statement No. 45 for the employer or largest participating
employer in the benefit plan for multiple-employer plans. According to Statement No. 43, “The objective of this Statement is to
establish uniform standards of financial reporting by State and local governmental entities for other postemployment benefit plans
(OPEB plans). The term other postemployment benefits (OPEB) refers to postemployment benefits other than pension benefits
and includes (a) postemployment healthcare benefits and (b) other types of postemployment benefits (for example, life insurance)
if provided separately from a pension plan. The term plans, in this context, refers to trust or other funds through which assets are
accumulated to finance OPEB, and benefits are paid as they come due. This Statement provides standards for measurement,
recognition, and display of the assets, liabilities, and, where applicable, net assets and changes in net assets of such funds and for
related disclosures. The requirements of this Statement apply whether an OPEB plan is reported as a trust or agency fund or a
fiduciary component unit of a participating employer or plan sponsor, or the plan is separately reported by a public employee
retirement system (PERS) or other entity that administers the plan.”
GASB Statement No. 45 - Accounting and Financial Reporting by Employers for Post employment Benefits Other Than
Pensions
This statement is effective in three phases based on a government’s total annual revenues in the first fiscal year ending after
June 15, 1999:
• Governments that were phase 1 governments for the purpose of implementation of Statement No. 34 - those with
annual revenues of $100 million or more - are required to implement this Statement in financial statements for
periods beginning after December 15, 2006.
• Governments that were phase 2 governments for the purpose of implementation of Statement No. 34 - those with
total annual revenues of $10 million or more but less than $100 million - are required to implement this Statement in
financial statements for periods beginning after December 15, 2007.
• Governments that were phase 3 governments for the purpose of implementation of Statement No. 34 - those with
total annual revenues of less than $10 million - are required to implement this Statement in financial statements for
periods beginning after December 15, 2008.
Statement No. 45 gives the following summary, “In addition to pensions, many state and local governmental employers provide
other post employment benefits (OPEB) as part of the total compensation offered to attract and retain the services of qualified
employees. OPEB includes post employment healthcare, as well as other forms of post employment benefits (for example, life
insurance) when provided separately from a pension plan. This Statement establishes standards for the measurement,
recognition, and display of OPEB expense/expenditures and related liabilities (assets), note disclosures, and, if applicable,
required supplementary information (RSI) in the financial reports of state and local governmental employers.”
Meeting of June 9, 2008 (Item No. 2)
Subject: Presentation of 2007 Consolidated Annual Financial Report (CAFR) - Audit Page 166
City of St. Louis Park
June 2, 2008
Page 27
GASB Statement No. 49 - Accounting and Financial Reporting for Pollution Remediation Obligations
This statement was issued November 2007 and is effective for periods beginning after December 15, 2007, but liabilities should
be measured at the beginning of that period so that beginning net assets can be restated.
This standard is intended to ensure that certain cost and long-term obligations related to pollution clean up not specifically
addressed by current governmental accounting standards will be included in financial reports. The standards set forth the key
circumstances under which a government would be required to report a liability related to pollution remediation. A government
would have to determine whether one or more components of a pollution remediation liability are recognizable if any of the
following five obligating events or triggers occurs:
• A government is compelled to take remediation action because pollution creates an imminent endangerment to the
public health or welfare or environment, leaving it little or no discretion to avoid remediation action.
• A government is in violation of a pollution prevention-related permit or license.
• The government is named, or evidence indicates it will be named, by a regulator that has identified the government
as a responsible party or potentially responsible party for remediation, or as a government responsible for sharing
costs.
• A government is named, or evidence indicates that it will be named, in a lawsuit to compel the government to
participate in remediation.
• A government commences or legally obligates itself to commence clean up activities or monitoring or operation and
maintenance of the remediation effort.
If any of the above bullets are met, the pollution remediation liabilities should be measured at their current value using the
expected cash flow technique, which measures the liability as a sum of probability-weighted amounts in a range of possible
estimated amounts. Expected recoveries from other responsible parties and from insurers reduce the amount of remediation
expense. Statement No. 49 also specifies criteria for capitalization of some pollution remediation outlays.
Meeting of June 9, 2008 (Item No. 2)
Subject: Presentation of 2007 Consolidated Annual Financial Report (CAFR) - Audit Page 167
City of St. Louis Park
June 2, 2008
Page 28
GASB Statement No. 50 - Pension Disclosures
This statement was issued May 2007 and is effective for periods beginning after June 15, 2007, except for requirements related to
the use of the entry age actuarial cost method for the purpose of reporting a surrogate funded status and funding progress of plans
that use the aggregate actuarial cost method, which are effective for periods for which the financial statements and RSI contain
information resulting from actuarial valuations as of June 15, 2007 or later.
This statement more closely aligns the financial reporting requirements for pensions with those for OPEB and, in doing so,
enhances information disclosed in notes to financial statements or presented as required supplementary information (RSI) by
pension plans and by employers that provide pension benefits. The reporting changes required by this statement amend applicable
note disclosure and RSI requirements of Statement No. 25 , Financial Reporting for Defined Benefit Pension Plans and Note
Disclosures for Defined Contribution Plans, and No. 27 , Accounting for Pensions by State and Local Governmental Employers,
to conform with requirements of Statement No. 43 , Financial Reporting for Postemployment Benefit Plans Other Than Pension
Plans, and 45 , Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions. This
statement requires defined benefit pension plans and sole and agent employers present the following information related to note
disclosures:
• Notes to financial statements should disclose the funded status of the plan as of the most recent actuarial valuation
date. Defined benefit pension plans also should disclose actuarial methods and significant assumptions used in the
most recent actuarial valuation in notes to financial statements instead of in notes to RSI.
• If the aggregate actuarial cost method is used to determine the annual required contribution of the employer (ARC),
notes to financial statements should disclose the funded status of the plan, and a schedule of funding progress
should be presented as RSI, using the entry age actuarial cost method. Plans and employers also should disclose that
the purpose of doing so is to provide information that serves as a surrogate for the funded status and funding
progress of the plan.
• Notes to financial statements should include a reference linking the funded status disclosure in the notes to financial
statements to the required schedule of funding progress in RSI.
• If applicable, notes to financial statements should disclose legal or contractual maximum contribution rates. In
addition, if relevant, they should disclose that the maximum contribution rates have not been explicitly taken into
consideration in the projection of pension benefits for financial accounting measurement purposes.
• If an actuarial assumption is different for successive years, notes to financial statements should disclose the initial
and ultimate rates.
Meeting of June 9, 2008 (Item No. 2)
Subject: Presentation of 2007 Consolidated Annual Financial Report (CAFR) - Audit Page 168
City of St. Louis Park
June 2, 2008
Page 29
GASB Statement No. 51 - Accounting and Financial Reporting for Intangible Assets
This statement was issued in June 2007 and is effective for periods beginning after June 15, 2009.
The new standard characterizes an intangible asset as an asset that lacks physical substance, is nonfinancial in nature, and has an
initial useful life extending beyond a single reporting period. Examples of intangible assets include easements, computer
software, water rights, timber rights, patents, and trademarks.
This statement requires that intangible assets be classified as capital assets (except for those explicitly excluded from the scope of
the new standard, such as capital leases). Relevant authoritative guidance for capital assets should be applied to these intangible
assets. The statement provides additional guidance that specifically addresses the unique nature of intangible assets, including:
• Requiring that an intangible asset be recognized in the statement of net assets only if it is considered identifiable
• Establishing a specified-conditions approach to recognizing intangible assets that are internally generated (for
example, patents and copyrights)
• Providing guidance on recognizing internally generated computer software
• Establishing specific guidance for the amortization of intangible assets.
* * * * *
This report is intended solely for the information and use of Council, management and the Minnesota Office of the State Auditor
and is not intended to be and should not be used by anyone other than these specified parties.
Our audit would not necessarily disclose all weaknesses in the system because it was based on selected tests of the accounting
records and related data. The comments and recommendations in the report are purely constructive in nature, and should be read
in this context.
If you have any questions or wish to discuss any of the items contained in this letter, please feel free to contact us at your
convenience. We wish to thank you for the continued opportunity to be of service and for the courtesy and cooperation extended
to us by your staff.
June 2, 2008 ABDO, EICK & MEYERS, LLP
Minneapolis, Minnesota Certified Public Accountants
Meeting of June 9, 2008 (Item No. 2)
Subject: Presentation of 2007 Consolidated Annual Financial Report (CAFR) - Audit Page 169
CITY OF ST. LOUIS PARK
ST. LOUIS PARK, MINNESOTA
MINNESOTA LEGAL COMPLIANCE
YEAR ENDED
DECEMBER 31, 2007
Meeting of June 9, 2008 (Item No. 2)
Subject: Presentation of 2007 Consolidated Annual Financial Report (CAFR) - Audit Page 170
REPORT ON MINNESOTA LEGAL COMPLIANCE
Honorable Mayor and Council
City of St. Louis Park, Minnesota
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 of St. Louis Park, Minnesota (the City), as of and for the year ended
December 31, 2007, which collectively comprise the City’s basic financial statements as listed in the table of contents and have
issued our report thereon dated June 2, 2008.
We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the
provisions of the Minnesota Legal Compliance Audit Guide for Local Government, promulgated by the Minnesota Office of the
State Auditor pursuant to Minnesota statute, section 6.65. Accordingly, the audit included such tests of the accounting records
and such other auditing procedures as we considered necessary in the circumstances.
The Minnesota Legal Compliance Audit Guide for Local Government covers seven main categories of compliance to be tested:
contracting and bidding, deposits and investments, conflicts of interest, public indebtedness, claims and disbursements, tax
increment financing and miscellaneous provisions. Our study included all of the listed categories.
The results of our tests indicate that for the items tested, the City complied with the material terms and conditions of applicable
legal provisions.
This report is intended solely for the information and use of the Council, management, others within the City and the Minnesota
Office of the State Auditor and is not intended to be and should not be used by anyone other than these specifies parties.
June 2, 2008 ABDO, EICK & MEYERS, LLP
Minneapolis, Minnesota Certified Public Accountants
Meeting of June 9, 2008 (Item No. 2)
Subject: Presentation of 2007 Consolidated Annual Financial Report (CAFR) - Audit Page 171
Meeting Date: June 9, 2008
Agenda Item #: 3
Regular Meeting Public Hearing Action Item Consent Item Resolution Ordinance
Presentation Other:
EDA Meeting Action Item Resolution Other:
Study Session Discussion Item Written Report Other:
TITLE:
Liquor Licensees - 4 a.m. Closing during Republican National Convention.
RECOMMENDED ACTION:
Council to discuss whether to allow interested on-sale liquor licensees a temporary permit to serve
alcohol until 4:00 a.m. from the period of September 1–5 during the 2008 Republican National
Convention.
POLICY CONSIDERATION:
Does the Council wish to allow the temporary 4:00 a.m. closing time to interested on-sale
intoxicating liquor licensed establishments during this time period of the Republican National
Convention?
BACKGROUND:
The Minnesota Legislature has recently enacted special and temporary legislation allowing local
licensing jurisdictions within the seven-county metropolitan area, at their discretion, to issue special
permits for serving alcohol until 4:00 a.m. each day during the Republican National Convention
(September 1 – 5, 2008). Only holders of an existing on-sale intoxicating liquor license or a 3.2
malt liquor license are eligible for later closing hours.
Staff has conducted a survey of interest with the 26 on-sale licensees. The following licensees have
shown an interest:
Establishment Interested License Types
Bennigan’s
6475 Wayzata Blvd
YES Intoxicating On-Sale, Sunday, 2 a.m. closing
Doubletree Park Place Hotel
1500 Park Place Blvd
YES Intoxicating On-Sale, Sunday, 2 a.m. closing
Marriott Mpls West
9970 Wayzata Blvd
YES Intoxicating On-Sale, Sunday
Santorini’s
9920 Wayzata Blvd
YES Intoxicating On-Sale, Sunday, 2 a.m. closing
Granite City Food & Brewery
5500 Excelsior Blvd
MAYBE Intoxicating On-Sale, Sunday
TGI Friday’s
5875 Wayzata Blvd
MAYBE Intoxicating On-Sale, Sunday, 2 a.m. closing
Meeting of June 9, 2008 (Item No. 3) Page 2
Subject: Liquor Licensees 4 a.m. Closing during Republican Convention
Police Chief John Luse has reviewed the new legislation and although additional police staffing
would be required, he felt allowing the few interested establishments to remain open until 4:00
during the convention would have a minimal affect on the city. The Marriot and Doubletree Hotels
are serving as host hotels for participants in the convention and have indicated they would like to
hire off-duty police officers during this four day time period to assist with security and safety related
matters. The hotels would be billed for this time under the police departments’ additional duty
procedures. This would be in addition to a proposed fee which would partially be used to add patrol
officer staffing between 2:00 a.m. and 6:00 a.m. for these four days.
The statute authorizes that licensing jurisdictions may limit approval to specified geographic, zoning,
or license classifications within its jurisdiction, or to specific days within the time period described.
Jurisdictions may also charge a fee of up to $2,500 for issuing this special permit. If the City
Council desired to allow the 4 a.m. closing staff would recommend a $300 fee to cover necessary
expenses for additional staff time needed by the Police Department and City Clerk
If the City Council was comfortable in allowing this later closing time, staff would bring this item to
the June 16th Council Meeting with the following action :
• Council to adopt Resolution allowing on-sale liquor licensees a temporary permit to
serve alcohol until 4:00 a.m. from the period of September 1–5 during the 2008
Republican National Convention with a fee set at $300 per establishment.
FINANCIAL OR BUDGET CONSIDERATION:
Not Applicable.
VISION CONSIDERATION:
Not applicable.
Attachments: Draft Resolution
Prepared by: Nancy Stroth, City Clerk
Reviewed by: John Luse, Police Chief
Approved by: Tom Harmening, City Manager
Meeting of June 9, 2008 (Item No. 3) Page 3
Subject: Liquor Licensees 4 a.m. Closing during Republican Convention
DRAFT RESOLUTION
RESOLUTION NO. 08-___
RESOLUTION ALLOWING ISSUANCE OF
TEMPORARY SPECIAL PERMITS TO
ON-SALE INTOXICATING LIQUOR ESTABLISHMENTS
IN THE CITY OF ST. LOUIS PARK
FOR SERVING ALCOHOL UNTIL 4:00 A.M.
FOR THE PERIOD OF SEPTEMBER 1-5, 2008
DURING THE NATIONAL REPUBLICAN CONVENTION
WHEREAS, Minnesota Legislature has enacted special and temporary legislation allowing
local licensing jurisdictions in the metropolitan area to extend the hours of alcohol service until 4:00
a.m. during the 2008 National Republican Convention held in St. Paul, Minnesota, and
WHEREAS, the extended hours would apply only during the period from Monday,
September 1, 2008 through Friday, September 5, 2008, and
WHEREAS, the temporary special permits would only be allowed to existing on-sale
intoxicating liquor licensees for a fee of $300.00, and
NOW THEREFORE BE IT RESOLVED the City Council of the City of St. Louis does
hereby support authorization to allow the issuance of temporary special permits to existing on-sale
intoxicating liquor licensees in the City of St. Louis Park for the serving of alcohol until 4:00 a.m.
during the period of September 1-5, 2008.
Reviewed for Administration: Adopted by the City Council June 16, 2008
City Manager Mayor
Attest:
__________________________________
City Clerk
Meeting Date: June 9, 2008
Agenda Item #: 4
Regular Meeting Public Hearing Action Item Consent Item Resolution Ordinance
Presentation Other:
EDA Meeting Action Item Resolution Other:
Study Session Discussion Item Written Report Other:
TITLE:
Highway 100 Reconstruction (Full Build) Project Update.
RECOMMENDED ACTION:
The purpose of this Report is to update the Council on the current project status, project schedule,
and next steps.
POLICY CONSIDERATION:
Does the City Council wish staff to undertake any specific follow-up action given the possible
project scenario outlined below?
BACKGROUND:
History
On May 14, 2007 and again on September 24, 2007 staff met and discussed with Council
Mn/DOT’s proposal to reconstruct Highway 100 from W36th Street to Cedar Lake Road (reports
attached). Since then staff has retained a consultant (SEH, Inc.) and recently completed a modeling
effort aimed at evaluating the Mn/DOT proposed Hwy 100 improvements and options as well as
key north – south transportation routes in the City. Modeling results indicate that the proposed
Hwy 100 improvements and options, even though related, can be considered separately from the
Vision Strategic Direction “Evaluating and investigating additional north/south transportation
options for the community”. The next steps contemplated in this process were to be a review of the
results with Council and then public information meetings discussing options, impacts, and
recommendations.
Recent Events
Recent oral communications with Mn/DOT staff suggest the proposed Hwy 100 project is
undergoing an internal agency review with the explicit intent of minimizing the project and its cost.
Even though state transportation funding was increased by the legislature this year, Mn/DOT staff
indicate they do not have adequate funding available to meet all needs and are minimizing projects
to the maximum extent possible. In particular, it has been suggested the following major changes are
being considered for this project:
1. the project will be changed from an improvement project to an infrastructure replacement
project
2. project will be shortened to end at about W26th Street
3. the underpass relocation option (to the W25 ½ Street area) will be eliminated from the
project
4. the exit ramp at W25 ½ Street will remain open
5. as a result, project costs will be cut by approximately 50%
Meeting of June 9, 2007 (Item No. 4) Page 2
Subject: Highway 100 Reconstruction (Full Build) Project Update
If these changes are implemented, it appears the City will have very little, if any, opportunity to
improve local transportation connections in conjunction with this project. Mn/DOT staff still
appears committed to reconstruction occurring in 2015 and 2016.
Next Steps
Staff has halted all work on this project pending official communications from Mn/DOT regarding
possible changes to their proposed project. Once Mn/DOT project changes are known, if any, next
steps will be determined and the Council will be informed.
Staff would be interested in knowing if the City Council desires staff to undertake any specific action
as a result of this new information from MnDOT e.g. contact state legislators
It appears that modeling work on the Vision Strategic Direction “Evaluating and investigating
additional north/south transportation options for the community” can be finalized and results
shared with Council in the near future.
FINANCIAL OR BUDGET CONSIDERATION:
Not applicable.
VISION CONSIDERATION:
This modeling effort and proposed highway project complement the following areas of the City’s
Vision process:
St. Louis Park is committed to being a connected and engaged community.
Focus areas:
• Developing an expanded and organized network of sidewalks and trails.
• Promoting regional transportation issues and related dedicated funding
sources affecting St. Louis Park including but not limited to Hwy. 100 and
SWLRT.
• Evaluating and investigating additional north/south transportation options
for the community.
• Increasing use of new and existing gathering places and ensuring accessibility
throughout the community.
Attachments: Study Session Reports of May 14 and September 24, 2007
Prepared by: Mike Rardin, Public Works Director
Reviewed by: Scott Brink, City Engineer
Kevin Locke, Community Development Director
John Luse, Police Chief
Approved by: Tom Harmening, City Manager
Meeting of June 9, 2007 (Item No. 4) Page 3
Subject: Highway 100 Reconstruction (Full Build) Project Update
From Study Session September 24, 2007 - Item No. 4
TITLE:
Highway 100 Reconstruction (Full Build) Project Update
RECOMMENDED ACTION:
The purpose of this discussion will be to provide the City Council information regarding traffic
volume changes and shifts in usage of the existing street / highway systems since the Hwy 100
Interim Project was completed and to allow Council an opportunity to provide input on anticipated
Phase 2 traffic study tasks and public involvement activities.
POLICY CONSIDERATION:
Should staff continue forwarding the evaluation and proposed public discussion of the Mn/DOT
Hwy 100 project design options?
BACKGROUND:
History and Recent Activities
On May 14, 2007, staff presented Council an update on this project and was directed to implement
Phase I of a proposed traffic study aimed at understanding what neighborhood traffic patterns and
volumes may result depending on underpass and ramp location options being offered by Mn/DOT.
Staff contracted with Short Elliott Hendrickson, Inc (SEH) on June 1st for the Phase I activities
which have just been completed. Phase I study activities were aimed at obtaining base information
regarding traffic volume changes and shifts in usage of the existing street / highway systems since the
Hwy 100 Interim Project was completed. Our consultant will attend the study session to provide a
brief summary of their Phase I findings and answer questions.
Traffic Study Completion
Phase II study activities are expected to complete the traffic study and are planned to consist of:
• Transportation Sketch Planning (system possibilities)
• Future System(s) Evaluation
Phase II activities will be aimed at evaluating the impacts of underpass and ramp location options
earlier provided by Mn/DOT as related to the local and county transportation systems in the city.
Auto, transit, bicycle, and pedestrian traffic will be considered in this evaluation. In addition, the
proposed Southwest Corridor LRT Project as well as the Vision St. Louis Park goal of “Evaluating
and investigating additional north/south transportation options for the community” will also need to
be considered in this evaluation. As a part of the study session, we intend to do a “Transportation
Sketch Planning” exercise to obtain Council member input into possible future transportation
system(s). Based on this input, our consultant will create and model a variety of local transportation
networks to project probable traffic impacts or changes.
Meeting of June 9, 2007 (Item No. 4) Page 4
Subject: Highway 100 Reconstruction (Full Build) Project Update
Next Steps and Schedule
Staff has identified possible next steps and schedule to move the Hwy 100 reconstruction project
forward:
1. Complete Phase II traffic study activities:
• This technical work should be completed with results back to Council before the end of
November. It is possible additional modeling and evaluation may be necessary based on
future Council and resident input or questions during the public involvement process.
2. Create a list of advantages/disadvantages associated with each of the Hwy 100 design options
Mn/DOT has given the city:
• This work should be completed in conjunction with the completion of the Phase II
activities.
3. Conduct a public involvement process to obtain input on transportation network options
and associated impacts. Possible steps and schedule being considered by staff are:
• Provide information on Mn/DOT options, possible north/south community
transportation options, and associated impacts via various citywide communications
beginning in October
• Conduct a project open house in December or January to provide information on the
proposed design
• Conduct area or neighborhood meetings beginning in January or February to explain
options and impacts and obtain associated resident input
• Conclude the public process in the spring or summer of 2008 with a public meeting or
open house to present staff recommendations for a local transportation system and
options to the public and Council
4. Upon completion of the above described public involvement process, Council discusses and:
• Selects or designates a preferred Mn/DOT design (ramp and underpass locations)
• Provides direction on a future local transportation system for this northeast area of the
city
Mn/DOT will have to be consulted with and involved to some degree in the various steps described
above.
FINANCIAL OR BUDGET CONSIDERATION:
This entire study is estimated to cost about $60,000. Phase I activities were estimated at nearly
$25,000 with the balance of the study costs attributed to Phase II activities. Specific funds for this
work / project are in the process of being identified.
Meeting of June 9, 2007 (Item No. 4) Page 5
Subject: Highway 100 Reconstruction (Full Build) Project Update
VISION CONSIDERATION:
This traffic study and proposed highway project complement the following areas of the recently
completed Vision process:
St. Louis Park is committed to being a connected and engaged community.
Focus areas:
• Developing an expanded and organized network of sidewalks and trails.
• Promoting regional transportation issues and related dedicated funding
sources affecting St. Louis Park including but not limited to Hwy. 100 and
SWLRT.
• Evaluating and investigating additional north/south transportation options
for the community.
• Increasing use of new and existing gathering places and ensuring accessibility
throughout the community.
Attachments: Study Session Report of May 14, 2007
Prepared by: Mike Rardin, Public Works Director
Approved by: Nancy Gohman, Deputy City Manager/HR Director
Meeting of June 9, 2007 (Item No. 4) Page 6
Subject: Highway 100 Reconstruction (Full Build) Project Update
From Study Session May 14, 2007 – Item No. 3
3. Highway 100 Reconstruction (Full Build) Project Update Public Works
PURPOSE OF DISCUSSION:
The purpose of this discussion is to provide the City Council a brief oral update on the progress of
this project and to request the Council reconsider beginning a traffic study at this time as described
at the April 9 Study Session.
BACKGROUND:
On April 9th staff proposed the need to conduct a study to understand what neighborhood traffic
patterns and volumes may result depending upon underpass locations offered by Mn/DOT. Such a
study would cost approximately $60,000 and would determine at a system level the needs for local
arterials / collectors and for neighborhood connectivity. Included in this would be the
identification, discussion, and evaluation of the following:
• opportunities and constraints
• community assets/values
• minor arterial routing plans
• transit, pedestrian and bicycle needs
Traffic changes and volumes would be projected for local arterials / collectors looking at
neighborhood connectivity. A study like this will take several months to complete and is expected to
provide traffic information to be used in answering the following questions:
1. Where does the City desire an underpass under Hwy 100 north of Minnetonka Blvd?
2. Where does the City desire the Southbound Hwy 100 on-ramp to be located?
3. What possible traffic implications in the area neighborhoods may be expected in relation
to the respective underpass options?
4. To what extent will planned LRT affect the regional highways and local street facilities in
the future? Will regional State and County highways and the local transportation system
work in conjunction with the planned Southwest LRT?
DISCUSSION:
Council expressed a concern over the need for this work now when state funding for this project is
not specifically available at this time. Council also expressed concern over unnecessarily starting a
public involvement process if the project is delayed beyond 2014. Staff believes it is necessary to
begin this work as soon as reasonably possible as it will take quite some time to do this type of study.
In addition, there is no need to begin a public involvement process at this time; actually, that effort
should wait until the funding / scheduling issue has been resolved and relevant information
regarding underpass options and impacts is available. And, the first part of this study will be to
obtain base information regarding traffic volume changes and shifts in usage of the existing system
since the Hwy 100 Interim Project was completed. This base work will be needed to aid in our
comprehensive planning process even if the Hwy 100 project ultimately ends up being delayed for
any reason.
Meeting of June 9, 2007 (Item No. 4) Page 7
Subject: Highway 100 Reconstruction (Full Build) Project Update
NEXT STEPS:
To provide neighborhood traffic information to aid Council in considering Mn/DOT design
options, a study as described above should be conducted. In that regard, the following general steps
have been identified:
1. Determine Hennepin County role and respective cost participation in this effort (April -
June)
2. Retain a consultant for this proposed study (May)
3. Perform the proposed study (June - October)
4. Evaluate the project funding and scheduling situation (May - June)
5. Develop a public involvement plan / process to consider Mn/DOT options assuming project
funds become available (June - July)
Prepared by: Michael P. Rardin, P.E., Public Works Director
Approved by: Tom Harmening, City Manager
Meeting Date: June 9, 2008
Agenda Item #: 5
Regular Meeting Public Hearing Action Item Consent Item Resolution Ordinance
Presentation Other:
EDA Meeting Action Item Resolution Other:
Study Session Discussion Item Written Report Other:
TITLE:
City/School District Budgets.
RECOMMENDED ACTION:
No action is requested at this time. Staff desires to continue conversations with the City Council
regarding how the City might assist the School District with their budget challenges.
POLICY CONSIDERATION:
What role should the City play in assisting the School District with their budget related issues?
BACKGROUND:
During the recent joint meeting between the City Council and School Board, the Council invited
the School District to submit a list of items that the City could possibly assist with to help ease the
budget difficulties the School District is experiencing. This list was submitted on May 19 and the
Council discussed this matter briefly at its study session on May 27. From this discussion the
Council asked staff to further explore with the School District the ideas presented to the City. The
Council also asked staff to bring back for Council consideration relieving the School District of
paying for its share of the cost of the two Police Liaison officers assigned to the District.
Staff would like to update the Council on where things stand with this matter and to discuss other
policy related considerations as we move forward. Examples include:
• How do recently enacted levy limits impact this issue?
• Would any assistance the City might provide be permanent/long term or short term and
subject to being revisited? For example, if the School District were successful with a levy
referendum, would this change the complexion of assistance the City might provide?
• Should we look at capital improvements identified by the District differently than
operational items?
• Others??
Discussing these policy questions will be helpful as staff moves forward with the City’s own
budgeting process.
Meeting of June 9, 2008 (Item No. 5) Page 2
Subject: City/School District Budgets
FINANCIAL OR BUDGET CONSIDERATION:
Yet to be determined.
VISION CONSIDERATION:
Not applicable at this time.
Attachments: Letters from School District
Prepared by: Tom Harmening, City Manager
Meeting of June 9, 2008 (Item No. 5)
Subject: City/School District Budgets Page 3
Meeting of June 9, 2008 (Item No. 5)
Subject: City/School District Budgets Page 4
Meeting of June 9, 2008 (Item No. 5)
Subject: City/School District Budgets Page 5
Meeting Date: June 9, 2008
Agenda Item #: 6
Regular Meeting Public Hearing Action Item Consent Item Resolution Ordinance
Presentation Other:
EDA Meeting Action Item Resolution Other:
Study Session Discussion Item Written Report Other:
TITLE:
Communications (verbal).
RECOMMENDED ACTION:
Not Applicable.
POLICY CONSIDERATION:
Not Applicable.
BACKGROUND:
At every Study Session, verbal communications will take place between staff and Council for the
purpose of information sharing.
FINANCIAL OR BUDGET CONSIDERATION:
Not Applicable.
VISION CONSIDERATION:
Not Applicable.
Attachments: None
Prepared and Approved by: Tom Harmening, City Manager
Meeting Date: June 9, 2008
Agenda Item #: 7
Regular Meeting Public Hearing Action Item Consent Item Resolution Ordinance
Presentation Other:
EDA Meeting Action Item Resolution Other:
Study Session Discussion Item Written Report Other:
TITLE:
City Sales Tax Audit Report.
RECOMMENDED ACTION:
No action required at this time. This is a written report for information sharing purposes. Council
is asked to provide staff with any comments or questions it might have
POLICY CONSIDERATION:
None.
BACKGROUND:
The Minnesota Department of Revenue conducted a sales tax audit of the City in February 2008.
The period audited covered three years from November 1, 2004 through October 31, 2007. The
two auditors assigned to our review looked at both city purchases and our sales to the public.
The total assessed amount due has been determined to be $61,252.88 for the three year period.
This consists of sales tax due of $53,859.83 and interest of $7,393.05. No penalty was assessed due
to the fact that this was the first time the City has been audited and that no intentional disregard for
proper procedure was found. When staff met with the auditors to discuss the audit findings, they
stated that this is very typical assessment for a three year period for a metro city of our size.
There were three main areas where additional tax was found to be due:
• Sales tax had not been collected by the City on some sales transactions, mainly facility room
rentals and picnic shelter rentals through Parks & Recreation. Other minor sales items were
identified as well, such as photocopies and Cable TV DVD copies. The portion of the tax
liability for these sales transactions is $19,022.39. Tax is now being paid to the Department
of Revenue each month on these sales.
• Effective January 1, 2007, an additional County Stadium tax of .15% went into effect. The
auditor identified additional County tax that should have been collected on sales after
January 1, 2007 of $1,372.73. This has been corrected and the full 6.65% is now being
remitted on all sales.
Meeting of June 9, 2008 (Item No. 7) Page 2
Subject: City Sales Tax Audit Report
• The auditors reviewed the full year of purchases from January, 2006 through December,
2006. They then applied those findings to the entire period under audit and came up with a
total of $44,468.31 in use tax that was not assessed and paid by the City. If vendors do not
charge MN sales tax on invoices, it is the City’s responsibility to self-assess use tax and remit
it each month. A new procedure has been put in place in May 2008 through the JD
Edwards Financial System to assess use tax on future taxable purchases where sales tax has
not been charged by the vendor.
• After discussions with the auditors, the City was eligible to apply for a refund of use tax that
had been assessed over the three year period on Minnesota contractor invoices. Contractors
doing business in Minnesota are required to include tax in the cost of their materials, and
even if tax is not separately stated on their invoices, the purchaser is not liable for any
additional tax. The refund resulted in a reduction of the audit liability of $11,003.60.
The total amount levied of $61,252.88 is due to the Minnesota Department of Revenue on or
before July 28, 2008. It is likely that the City will be audited again in three years to ensure that
corrective actions have been put in place. Staff has gone to additional training since the audit to
ensure that proper procedures are followed.
The Final Sales Tax and Audit Report is on file in the Finance Department office. Please let staff
know if you would like a copy of it.
FINANCIAL OR BUDGET CONSIDERATION:
It is recommended that the audit liability be paid from General Fund reserves.
VISION CONSIDERATION:
Not Applicable.
Attachments: None
Prepared by: Darla Monson, Senior Accountant
Reviewed by: Bruce DeJong, Finance Director
Approved by: Tom Harmening, City Manager
Meeting Date: June 9, 2008
Agenda Item #: 8
Regular Meeting Public Hearing Action Item Consent Item Resolution Ordinance
Presentation Other:
EDA Meeting Action Item Resolution Other:
Study Session Discussion Item Written Report Other:
TITLE:
Critical Incident Preparedness Training.
RECOMMENDED ACTION:
No action required. The purpose of this report is to inform and update Council on the current
status of the planning process related to a critical incident training exercise which will be held during
the afternoon and evening of Monday, July 28, 2008, at St. Louis Park High School.
Staff would also like to make Council aware of the opportunity to attend and observe in the
following ways:
• Tour new communications van staged at site;
• Observe training exercise or a portion of it with narration to assist in understanding; and
• Learn about and observe the performance of the Emergency Operations Center (EOC
including expectations for Councilmembers.
POLICY CONSIDERATION:
Not applicable.
BACKGROUND:
At the time Council approved the joint purchase of the new communications van (with Golden
Valley), staff discussed plans to conduct a large scale training exercise to introduce the new
communications van and test our preparedness for a large scale incident. On July 28, 2008, a
training and exercise will be conducted at St. Louis Park Senior High School. The training exercise
being conducted will relate to a scenario involving an active shooter inside the high school. The
training portion will be conducted from 2:00 p.m. to 6:00 p.m., and the scenario/exercise will be
conducted from 7:00 p.m. to 11:00 p.m.
The training objectives are as follows:
• Police response to neutralize threat
• Police and fire removal and treatment of victims
• Fire and EMS triage and transport of victims
• Student evacuation and transportation
• Communications van operation and utilization
• Callback and utilization of staff from Public Works and Parks and Recreation Departments
• Opening and utilizing Emergency Operations Center
Meeting of June 9, 2008 (Item No. 8) Page 2
Subject: Critical Incident Preparedness Training
Evaluation objectives are as follows:
• Evaluate the capabilities of police officers and firefighters to respond to an active shooter
inside a school, identify and remove live victims, and eliminate any threats to responders,
students, staff and residents.
• Evaluate the ability of Police, Fire and EMS to apply the Incident Command System and
operate in a Unified Command environment.
• Evaluate the capability of the City of St. Louis Park to activate staff and utilize an Emergency
Operations Center (EOC) to coordinate and support the response to an active shooter
incident at the school.
• Evaluate the ability of City staff to work in partnership with the School District in response
to a major incident at the school.
Participants:
• St. Louis Park Police Department
• St. Louis Park Fire Department
• St. Louis Park Parks and Recreation Department
• St. Louis Park Public Works Department
• St. Louis Park staffing for EOC
• Golden Valley Police Department
• Golden Valley Fire Department
• Hopkins Fire Department
• Minnetonka Fire Department
• Edina Fire Department
• HCMC Paramedics/Ambulance
• St. Louis Park School District
• Hennepin County Emergency Management
Observers:
• St. Louis Park City Council
• Methodist Hospital
• JCRC
The Mayor and Councilmembers interested in observing on site at the high school should be in the
lobby of the police department at 4:00 p.m. Deputy Chief Kirk DiLorenzo will transport them to
the high school and provide them with the opportunity to observe the training and tour the
Communications van. Deputy Chief DiLorenzo will then transport them back to City Hall where
they will be met by Fire Chief Luke Stemmer. Chief Stemmer and his staff will be responsible for the
opening and operation of the EOC and will be briefing the Mayor and Councilmembers on their
role as City officials when the EOC is open.
Meeting of June 9, 2008 (Item No. 8) Page 3
Subject: Critical Incident Preparedness Training
Jamie Zwilling will be drafting a letter to be sent to the neighborhood prior to the event. This letter
will explain the training and its impact on the neighborhood. Staff at access points will have
additional copies of the letter the night of the event. Message boards will also be utilized at Dakota
and Lake, 33rd St. and Dakota, and 33rd St. and Jersey the night of the training.
The active shooter scenario was selected because of incidents that have occurred in environments
such as schools, shopping malls and universities in recent years. We have no specific or credible
reason to believe this type of incident will happen in St. Louis Park.
We have also been working with our schools for several years in policy development and training
related to incidents of this nature. This exercise will allow us to test and critique the work we have
been doing with our schools.
If you have any questions, comments or concerns regarding this training, please do not hesitate to
contact me by e-mail (jluse@stlouispark.org) or phone (952-924-2602).
FINANCIAL OR BUDGET CONSIDERATION:
The expense for this training exercise is nominal and will be covered by the Fire Department
budget.
VISION CONSIDERATION:
Not applicable.
Attachments: None
Prepared by: John D. Luse, Chief of Police
Approved by: Tom Harmening, City Manager
Date: June 9, 2008
Agenda Item #: 9
Regular Meeting Public Hearing Action Item Consent Item Resolution Ordinance
Presentation Other:
EDA Meeting Action Item Resolution Other:
Study Session Discussion Item Written Report Other:
TITLE:
Highway 7 / Wooddale Avenue Interchange Project Update.
RECOMMENDED ACTION:
The purpose of this Report is to update the Council on the current project status, proposed funding,
project schedule, and next steps. Please contact staff with any questions for comments you might
have.
POLICY CONSIDERATION:
None have been identified at this time.
BACKGROUND:
History:
As part of the Elmwood Land Use and Transportation Study, conducted in 2002 and 2003, the
Highway 7/Wooddale Avenue/W. 36th Street area was identified for redevelopment. Consistent
with this study, redevelopment projects proceeded to move forward in this area. The City's traffic
consultant, SRF Consulting Group, Inc. (SRF) completed several traffic studies for the Highway
7/Wooddale Avenue/W. 36th Street area at that time. SRF and City staff then participated in
discussions with Mn/DOT staff regarding potential grade-separated concepts for the intersection of
Highway 7/Wooddale Avenue. As a result of those discussions, the City submitted a request for
federal funding during the Regional STIP Solicitation process in 2005. From this solicitation, the
City of St. Louis Park was successful in obtaining about $5.9 million in federal funds to aid in
constructing a proposed grade-separated intersection at Highway 7/Wooddale Avenue.
Shortly after receiving notice of being awarded federal funds for the project, Council directed staff to
tentatively schedule this project for construction starting in 2009. To aid the City in the
development of this project, SRF developed a planning guide to meet that timeline. The SRF
planning guide proposed four phases to move this project to the construction stage. Phase I and
Phase II (described below) have been completed and staff is currently working with SRF on Phase III
activities.
Phase I Services
During October of 2006, the City entered into a contract with SRF for Phase I of this process, an
areawide traffic study, which was necessary to prepare for the analysis and modeling necessary to
evaluate interchange concepts plus lay the foundation for the eventual preparation of project design
layouts. SRF completed Phase I work in March of 2007.
Meeting of June 9, 2008 (Item No. 9) Page 2
Subject: Highway 7 / Wooddale Avenue Interchange Project Update
Phase II Services
Phase II services began in April of 2007 and essentially consisted of the process for the
technical/public development and comparison of the proposed interchange concepts. Activities
consisted of:
Concept Design Work / Project Management
Traffic Operations Analysis
Environmental Inventory/Investigation
Public Involvement
As part of the Phase II process, two round-a-bout concepts (Concepts A and B) as developed in the
initial funding application were presented at a public informational meeting on June 5, 2007.
Several traffic, safety, operational, and other related concerns and comments were expressed with the
proposed concepts. As a result, additional concepts were developed and reviewed by the project
management team. A second public informational meeting was subsequently held on December 6,
2007. At this meeting, a tight diamond interchange (identified as Concept D) was presented and
was well received by the public. In developing Concept D, several critical design components were
taken into account, including the following:
1. Traffic efficiency and flow for projected future traffic levels, particularly during the peak hour
periods.
2. Bicycle and pedestrian access and safety between the north and south sides of Highway 7.
3. Operating efficiency with the adjacent railroad facilities, particularly with a future Light Rail
Transit (LRT) station at Wooddale Avenue.
4. Minimization of Right of Way impacts to adjacent properties.
In addition to being well received by the general public, Concept D was also viewed favorably by
other project stakeholders, including Mn/DOT, Hennepin County Regional Railroad Authority
(HCRRA), Three Rivers Park District, and other agencies that have been involved in the process.
Phase II activities generally concluded in December of 2007 with the adoption of preferred design
Concept D.
Phase III Services
In December of 2007 SRF was authorized to begin Phase III activities. Phase III can generally be
best described as the preliminary detail design and environmental study / documentation phase of
the project. The following is a list of the activities associated with this phase of the project:
• An Environmental Assessment (EA)
• Geometric layout development
• Development of a preliminary cost estimate
• A more detailed determination of right of way needs
• Preparation of the required state / federal Design Memorandum and Design Study
Report
• Public involvement activities
• Project management activities
Meeting of June 9, 2008 (Item No. 9) Page 3
Subject: Highway 7 / Wooddale Avenue Interchange Project Update
SRF has been developing preliminary construction plans and has just recently completed a draft
Environmental Assessment (EA) for the project. Meetings with city staff, Mn/DOT, the Minnehaha
Creek Watershed District, and the HCRRA were conducted to develop the preliminary design for
the preferred concept.
The draft Environmental Assessment (EA) has just been distributed to the various agency
stakeholders and is currently undergoing their review and comment. The draft EA will be presented
at an informational meeting and public update of the project, scheduled for later this month or early
July. No significant environmental concerns have been identified with this project.
Preliminary Design Info
Based on the earlier adopted concept, agency input, and known environmental considerations, the
following preliminary design features are being incorporated into the proposed project:
1. Concept D (attached) – A tight diamond interchange is proposed. This design allows ease of
access and movement of traffic efficiency without the confusion that was felt by many with
the round-a-bout proposals. The ramp intersections at Wooddale and the south frontage
road intersection will not initially require signalization. However, design provisions are
being made so signals may be easily added if future conditions warrant their need. This
design, even with extensive use of retaining walls, will still require the removal / demolition
of the Soomhek Rug / STEP building.
2. Drainage – As a result of discussions with Mn/DOT, the Minnehaha Creek Watershed
District, and City staff, the southwest corner of the interchange area is proposed to be
utilized as a stormwater detention area. The small size of this area negates its use as a
developable parcel. The intent is to design and construct the detention area in a manner
that will not only serve storm water needs, but will provide an aesthetic amenity as well.
3. Public Art – As design of the interchange continues to move forward, project aesthetics as
well as the possible use of public art will be considered. Use of the stormwater detention area
and/or other spaces in the project area will be considered in this regard.
4. Noise Walls – The EA process has determined that noise walls are required along the north
side of Highway 7 as part of the project construction. This will be further discussed with the
neighborhood and Council as the public involvement and design processes continue to move
forward.
5. Light Rail and Regional Trail – At this time, the future routing status of light rail and heavy
rail traffic is not known. Therefore, the exact location of the future crossings (rail and trail),
as well as the specific rail uses cannot be reliably assumed as part of the design. However, the
Concept D design provides flexibility for future adaptation based on the current conditions
and what information is known at this time.
Meeting of June 9, 2008 (Item No. 9) Page 4
Subject: Highway 7 / Wooddale Avenue Interchange Project Update
Project Schedule
As previously directed, staff is continuing to proceed with a process that will allow for construction
to commence in 2009. As shown below, Phase III services provided by SRF will extend into late
October of this year. However, Phase IV services, (which are essentially the preparation of plans and
specifications for construction) will need to commence prior to completion of the Phase III services
in order to meet the 2009 construction start. This is consistent with the planning guide and schedule
that SRF assembled early last year.
Completion of the following steps/milestones by the proposed dates will be necessary to allow for a
2009 construction start:
Public Informational Meeting and Update Late June/Early July, 2008
Authorize Phase IV Services Late June/Early July, 2008
Commence Right of Way Acquisition and Proceedings July 2008
Public Hearing (Environmental Assessment (EA)) Late August, 2008
Approval of EA FONSI (Finding of No Significant Impact) Late September, 2008
by City Council
Approval of EA/Negative Declaration Late October, 2008
by Mn/DOT and FHWA
Finalize the Right of Way Acquisition process Early January, 2009
Public Informational Meeting and Update February 2009
Present Plans to City Council for Approval and March 2009
authorize advertisement for bids
Award Construction Contract May 2009
Commence Construction June 2009
FINANCIAL OR BUDGET CONSIDERATION:
While federal and some local funds are known to be available for a share of the project costs, staff is
working with other agencies to identify and secure other funding sources to assist in paying for the
project. Based upon on a preliminary construction estimate provided by SRF, the following cost and
funding breakdown is provided, based upon known and anticipated sources at this time:
Estimated Costs:
Project Development $214,304
Preliminary Engineering $500,000
Right of Way $3,500,000
Construction Engineering $1,700,000
Construction $13,200,000
Contingencies (Construction) $3,500,000
Total $22,614,304
Known Revenues:
Development Agreement $69,000
Federal Funds $5,885,000
Municipal State Aid (MSA) $1,500,000
Total $7,454,000
Meeting of June 9, 2008 (Item No. 9) Page 5
Subject: Highway 7 / Wooddale Avenue Interchange Project Update
Possible Revenue Sources:
Development Fund/HRA Levy
Elmwood TIF
Hennepin County
Mn/DOT (Contribution & Const. Eng. Services)
Mn/DOT (Municipal Agreement Program)
Land Sale (Soomhek Rug / STEP building parcel)
Staff will continue to work with Mn/DOT, Hennepin County, and other agencies over the next
several months to secure additional funding. Further updates will be provided to Council as
progress is made and key milestones are reached.
VISION CONSIDERATION:
The following Strategic Direction and focus area was identified by Council in 2007:
St. Louis Park is committed to being a connected and engaged community.
Focus will be on:
• Promoting regional transportation issues and related dedicated funding sources
affecting St. Louis Park including but not limited to Hwy. 100 and SWLRT.
Attachments: Concept D (3)
Prepared by: Scott Brink, City Engineer
Reviewed by: Mike Rardin, Director of Public Works
Approved by: Tom Harmening, City Manager
Meeting of June 9, 2008 (Item No. 9)
Subject: Highway 7 / Wooddale Avenue Interchange Project Update Page 6
Meeting of June 9, 2008 (Item No. 9)
Subject: Highway 7 / Wooddale Avenue Interchange Project Update Page 7
Meeting of June 9, 2008 (Item No. 9)
Subject: Highway 7 / Wooddale Avenue Interchange Project Update Page 8