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2017/06/19 - ADMIN - Agenda Packets - City Council - Regular
AGENDA JUNE 19, 2017 (Councilmember Sanger Absent) 6:15 p.m. SPECIAL STUDY SESSION – Community Room Discussion Items 1. 6:15 p.m. Comprehensive Annual Financial Report for the Year Ended December 31, 2016 – Auditors Discussion and Review 2. 6:45 p.m. St. Louis Park Policing Model/Critical Incident Planning 7:30 p.m. CITY COUNCIL MEETING – Council Chambers 1.Call to Order 1a. Pledge of Allegiance 1b. Roll Call 2.Presentations 2a. Comprehensive Annual Financial Report for the Year Ended December 31, 2016 2b. 2016 Police Officer of the Year 2c. Recognition of Donations 3. Approval of Minutes 3a. Special Study Session Meeting Minutes June 5, 2017 3b. City Council Meeting Minutes June 5, 2017 4.Approval of Agenda and Items on Consent Calendar NOTE: The Consent Calendar lists those items of business which are considered to be routine and/or which need no discussion. Consent items are acted upon by one motion. If discussion is desired by either a Councilmember or a member of the audience, that item may be moved to an appropriate section of the regular agenda for discussion. The items for the Consent Calendar are listed on the last page of the Agenda. Recommended Action: Motion to approve the Agenda as presented and items listed on the Consent Calendar; and to waive reading of all resolutions and ordinances. (Alternatively: Motion to add or remove items from the agenda, or move items from Consent Calendar to regular agenda for discussion.) 5. Boards and Commissions -- None 6.Public Hearings 6a. 2016 Annual MS4 Stormwater Pollution Prevention Plan (SWPPP) Meeting Recommended Action: None at this time. Each year the City is required to hold a public meeting to provide an opportunity for residents to review and comment on its Storm Water Pollution Prevention Plan and its storm water management program. This agenda item serves to meet this requirement. After a staff presentation the Mayor is asked to open up the meeting for public comment. 7.Requests, Petitions, and Communications from the Public – None Meeting of June 19, 2017 City Council Agenda 8. Resolutions, Ordinances, Motions and Discussion Items 8a. Resolution Confirming Appointment of Karen Barton to the Position of Community Development Director Recommended Action: Motion to Adopt Resolution confirming the appointment of Karen Barton to the position of Community Development Director. 8b. General Obligation Bonds, Series 2017A Recommended Action: Motion to Adopt Resolution Awarding the Sale of General Obligation Bonds, Series 2017A. 9. Communications – None 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 of June 19, 2017 City Council Agenda CONSENT CALENDAR 4a. Adopt Resolution authorizing the special assessment for the repair of the water service line at 4824 41st Street West, St. Louis Park, MN P.I.D. 07-028-24-24-0044. 4b. Adopt Resolution designating polling places and appointing election judges for the August 8, 2017, Municipal Primary Election and the November 7, 2017, Municipal General Election. 4c. Adopt Resolution authorizing the City to enter into a maintenance agreement with Minnehaha Creek Watershed District (MCWD) for the maintenance of the W. 37th Street Bridge and Road Reconstruction Project (between Boone Avenue and Aquila Avenue) Project No. 4017-1700. 4d. Adopt Resolution authorizing entering into Agency Agreement 1028268 with MnDOT for a grant for the W. 37th Street Bridge and Road Reconstruction Project (between Boone Avenue and Aquila Avenue) Project No. 4017-1700. 4e. Adopt Resolution authorizing the use of 2016 and 2017 Affordable Housing Incentive Funds (AHIF) in St. Louis Park. 4f. Adopt Resolution authorizing entering into a Joint Powers Agreement with Hopkins for the Texas Avenue Reconstruction Project (between Highway 7 and Lake Street) Project No. 4018-1101. 4g. Approve entering into an agreement with the firm of Hammel, Green and Abrahamson, Inc. (HGA) for design and architectural services of the Westwood Hills Nature Center’s Interpretive Center Building and surrounding area. 4h. Adopt Resolution authorizing final payment in the amount of $50,828.11 for Project 4015-2000 Connect the Park sidewalk project with Sunram Construction, Inc., City Contract No. 49-15. 4i. Adopt Resolution approving acceptance of a $3,200 donation from David Litsey to maintain Wolfe Park ($1,000) and for the purchase and installation of a memorial bench in Wolfe Park ($2,200) honoring Merry Litsey. 4j. Adopt Resolution which updates the Joint Cooperation Agreement (JCA) between St. Louis Park and Hennepin County for participation in the Urban Hennepin County Community Development Block Grant (CDBG) Program in Fiscal Years 2018-2020. 4k. Approve for filing Parks and Recreation Advisory Commission Minutes of March 15, 2017. 4l. Approve for filing Parks and Recreation Advisory Commission Minutes of May 3, 2017. St. Louis Park Economic Development Authority and regular City Council meetings are carried live on Civic TV cable channel 17 and replays are frequent; check www.parktv.org for the schedule. The meetings are also streamed live on the internet at www.parktv.org, and saved for Video on Demand replays. The agenda is posted on Fridays on the official city bulletin board in the lobby of City Hall and on the text display on Civic TV cable channel 17. The agenda and full packet are available by noon on Friday on the city’s website. Meeting: Special Study Session Meeting Date: June 19, 2017 Discussion Item: 1 EXECUTIVE SUMMARY TITLE: Comprehensive Annual Financial Report for the Year Ended December 31, 2016 – Auditors Discussion and Review RECOMMENDED ACTION: No action required. The information in this report will assist with the study session discussion. POLICY CONSIDERATION: Is the City Council comfortable with the information contained in the Communication with Those Charged with Governance, Report on Minnesota Legal Compliance, Report on Internal Control over Financial Reporting, and Comprehensive Annual Financial Report (CAFR) for the year ended December 31, 2016 to allow for effective decision making? SUMMARY: The city is required to have an annual independent audit of its financial statements in which the audit firm issues an opinion on the financial statements. The city received a “clean” audit opinion, or unmodified opinion, which means that Redpath and Company believe the financial statements, as presented by city staff, present fairly, in all material respects, the financial position of the City as of December 31, 2016. David J. Mol – Partner from Redpath and Company, will present the information and key financial points with the City Council. For 2016, the city was required to implement Governmental Accounting Standards Board (GASB) Statement No. 77 – which requires disclosures regarding pay-as-you-go tax increment agreements in the notes to the financial statements. Once the City Council reviews the CAFR for 2016, it will be submitted to the Office of the State Auditor as required and also submitted to the Government Finance Officers Association (GFOA) to be considered for the Achievement for Excellence in Financial Reporting certificate program for which the City of St. Louis Park has been recognized for 33 consecutive years. FINANCIAL OR BUDGET CONSIDERATION: This report shows the City of St. Louis Park continues to remain in strong financial condition. VISION CONSIDERATION: Not applicable. SUPPORTING DOCUMENTS: 1) 2016 – Issued Governance Letter 2)2016 – Minnesota Legal Compliance Report 3)2016 – Internal Control over Financial Reporting 4) 2016 – Comprehensive Annual Financial Report Prepared by: Mark Ebensteiner, Finance Manager Reviewed by: Nancy Deno, Deputy City Manager/HR Director Tim Simon, Chief Financial Officer Approved by: Tom Harmening, City Manager 4810 White Bear Parkway, St. Paul, MN, 55110 651.426.7000 www.redpathcpas.com COMMUNICATION WITH THOSE CHARGED WITH GOVERNANCE To the Honorable Mayor and Members of the City 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 for the year ended December 31, 2016. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards, as well as certain information related to the planning scope and timing of our audit. We have communicated such information in our letter to you dated January 3, 2017. Professional standards also require that we communicate to you the following information related to our audit. Significant Audit Results Qualitative Aspects of Accounting Practices Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the City are described in Note 1 to the financial statements. We noted no transactions entered into by the City during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period. No new accounting policies were adopted and the application of existing policies was not changed during 2016. However, the City implemented the following accounting standards during 2016: GASB Statement No. 72, Fair Value Measurements and Application. This standard enhanced disclosures regarding investments. GASB Statement No. 79, Certain External Investment Pools and Pool Participants. This standard enhanced disclosures regarding investments. GASB Statement No. 77, Tax Abatement Disclosures. This standard enhanced disclosures regarding pay-as-you-go tax increment agreements. We noted no transactions entered into by the City during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period. Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 2 City of St. Louis Park, Minnesota Communication With Those Charged With Governance Page 2 Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates affecting the City’s financial statements were management’s estimates of the net OPEB obligation, net pension liability, pension related deferred inflows and outflows of resources, pension expense and value of land held for resale. Management’s estimates relating to the net OPEB obligation, net pension liability, pension related deferred outflows and inflows of resources and pension expense are based on actuarial studies. We evaluated the key factors and assumptions used to develop the estimates in determining that they are reasonable in relations to the financial statements taken as a whole. Certain financial statement disclosures are particularly sensitive because of their significance to financial statement users. Determining sensitivity is subjective, however, we believe the disclosure most likely to be considered sensitive is Note 7 – Defined Benefit Pension Plans. The financial statement disclosures are neutral, consistent, and clear. Difficulties Encountered in Performing the Audit We encountered no significant difficulties in dealing with management in performing and completing our audit. Corrected and Uncorrected 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, none of the misstatements detected as a result of audit procedures and corrected by management were material, either individually or in the aggregate, to each opinion unit’s financial statements taken as a whole. Disagreements with Management For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction that could be significant to the financial statements or the auditor’s report. We are pleased to report that no such disagreements arose during the course of our audit. Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 3 City of St. Louis Park, Minnesota Communication With Those Charged With Governance Page 3 Management Representations We have requested certain representations from management that are included in the management representation letter dated June 7, 2017. Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a “second opinion” on certain situations. If a consultation involves application of an accounting principle to the City’s financial statements or a determination of the type of auditor’s opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants. Other Audit Findings or Issues We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the City’s auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. Other Matters We applied certain limited procedures to the management discussion and analysis, budgetary comparison information, OPEB Schedule of Funding Progress, the Schedules of Proportionate Share of Net Pension Liability, the Schedules of Pension Contributions, and the Notes to Required Supplementary Information, which are required supplementary information (RSI) that supplements the basic financial statements. Our procedures consisted of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We did not audit the RSI and do not express an opinion or provide any assurance on the RSI. We were engaged to report on the combining fund financial statements and schedules, which accompany the financial statements but are not RSI. With respect to this supplementary information, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America, the method of preparing it has not changed from the prior period, and the information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves. Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 4 City of St. Louis Park, Minnesota Communication With Those Charged With Governance Page 4 We are not engaged to report on the introductory and statistical sections, which accompany the financial statements but are not RSI. We did not audit or perform other procedures on this other information and we do not express an opinion or provide any assurance on it. Restriction on Use This information is intended solely for the information and use of the City of St. Louis Park, Minnesota’s City Council and management, and is not intended to be, and should not be, used by anyone other than these specified parties. REDPATH AND COMPANY, LTD. St. Paul, Minnesota June 7, 2017 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 5 4810 White Bear Parkway, St. Paul, MN, 55110 651.426.7000 www.redpathcpas.com MINNESOTA LEGAL COMPLIANCE REPORT To the Honorable Mayor and Members of the City Council City of St. Louis Park, Minnesota We have audited, in accordance with auditing standards generally accepted in the United States of America, and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of St. Louis Park, Minnesota as of and for the year ended December 31, 2016, and the related notes to the financial statements, which collectively comprise the City of St. Louis Park, Minnesota’s basic financial statements, and have issued our report thereon dated June 7, 2017. The Minnesota Legal Compliance Audit Guide for Cities, promulgated by the State Auditor pursuant to Minnesota Statutes Section 6.65, contains seven categories of compliance to be tested: contracting and bidding, deposits and investments, conflicts of interest, public indebtedness, claims and disbursements, miscellaneous provisions, and tax increment financings. Our audit considered all of the listed categories. In connection with our audit, nothing came to our attention that caused us to believe that the City of St. Louis Park, Minnesota failed to comply with the provisions of the Minnesota Legal Compliance Audit Guide for Cities. However, our audit was not directed primarily toward obtaining knowledge of such noncompliance. Accordingly, had we preformed additional procedures, other matters may have come to our attention regarding the City of St. Louis Park, Minnesota’s noncompliance with the above referenced provisions. This report is intended solely for the information and use of those charged with governance and management of City of St. Louis Park, Minnesota and the State Auditor and is not intended to be and should not be used by anyone other than these specified parties. REDPATH AND COMPANY, LTD. St. Paul, Minnesota June 7, 2017 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 6 4810 White Bear Parkway, St. Paul, MN, 55110 651.426.7000 www.redpathcpas.com INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS To the Honorable Mayor and Members of the City Council and Management City of St. Louis Park, Minnesota We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of St. Louis Park, Minnesota, as of and for the year ended December 31, 2016, and the related notes to the financial statements, which collectively comprise the City of St. Louis Park, Minnesota’s basic financial statements, and have issued our report thereon dated June 7, 2017. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the City of St. Louis Park, Minnesota’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City of St. Louis Park, Minnesota’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City of St. Louis Park, Minnesota’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 7 Report on Internal Control over Financial Reporting and on Compliance and Other Matters Page 2 Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Compliance and Other Matters As part of obtaining reasonable assurance about whether the City of St. Louis Park, Minnesota’s financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that is required to be reported under Government Auditing Standards. Purpose of This Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City of St. Louis Park, Minnesota’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City of St. Louis Park, Minnesota’s internal control over compliance. Accordingly, this communication is not suitable for any other purpose. REDPATH AND COMPANY, LTD. St. Paul, Minnesota June 7, 2017 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 8 Proposals are due 4:00 p.m. April 24, 2017 Comprehensive Annual Financial Report For the Year Ended December 31, 2016 St. Louis Park, MN Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 9 CITY OF ST. LOUIS PARK, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED DECEMBER 31, 2016 Thomas Harmening – City Manager Prepared by: Finance Division Member of the Government Finance Officers’ Association Of the United States and Canada Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 10 - This page intentionally left blank - Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 11 CITY OF ST. LOUIS PARK, MINNESOTA TABLE OF CONTENTS Page Reference No. I. INTRODUCTORY SECTION Letter of Transmittal 3 Certificate of Achievement 9 Services Chart 11 Officials of the City of St. Louis Park 13 II. FINANCIAL SECTION Independent Auditor's Report 17 Management's Discussion and Analysis 21 Basic Financial Statements: Government-Wide Financial Statements: Statement of Net Position Statement 1 39 Statement of Activities Statement 2 40 Fund Financial Statements: Balance Sheet - Governmental Funds Statement 3 42 Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds Statement 4 44 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities Statement 5 47 Statement of Net Position - Proprietary Funds Statement 6 48 Statement of Revenues, Expenses and Changes in Net Position - Proprietary Funds Statement 7 50 Statement of Cash Flows - Proprietary Funds Statement 8 52 Notes to Financial Statements 57 Required Supplementary Information: Budgetary Comparison Schedule - General Fund Statement 9 100 Schedule of Funding Progress - Post Employment Benefit Plan Statement 10 104 Schedule of Proportionate Share of Net Pension Liability - General Employees Retirement Fund Statement 11 105 Schedule of Pension Contributions - General Employees Retirement Fund Statement 12 106 Schedule of Proportionate Share of Net Pension Liability - Public Employees Police and Fire Fund Statement 13 107 Schedule of Pension Contributions - Public Employees Police and Fire Fund Statement 14 108 Notes to RSI 109 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 12 CITY OF ST. LOUIS PARK, MINNESOTA TABLE OF CONTENTS Page Reference No. Combining Fund Statements and Schedules: Combining Balance Sheet - Nonmajor Governmental Funds Statement 15 118 Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Governmental Funds Statement 16 119 Special Revenue Funds: Combining Balance Sheet - Nonmajor Special Revenue Funds Statement 17 122 Combining Schedule of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Special Revenue Funds Statement 18 123 Capital Projects Funds: Combining Balance Sheet - Nonmajor Capital Projects Funds Statement 19 126 Combining Schedule of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Capital Projects Funds Statement 20 127 Debt Service Funds: Combining Balance Sheet - Major Debt Service Funds Statement 21 130 Combining Schedule of Revenues, Expenditures and Changes in Fund Balances - Major Debt Service Funds Statement 22 133 Redevelopment District Funds: Combining Balance Sheet - Major Redevelopment District Funds Statement 23 138 Combining Schedule of Revenues, Expenditures and Changes in Fund Balances - Major Redevelopment District Funds Statement 24 142 Internal Service Funds: Combining Statement of Net Position Statement 25 148 Combining Statement of Revenues, Expenditures and Changes in Fund Net Position Statement 26 149 Combining Statement of Cash Flows Statement 27 150 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 13 CITY OF ST. LOUIS PARK, MINNESOTA TABLE OF CONTENTS Page Reference No. III. STATISTICAL SECTION (UNAUDITED) Financial Trends: Net Position by Component Table 1 154 Changes in Net Position Table 2 156 Governmental Activities Tax Revenues by Source Table 3 161 Fund Balances of Governmental Funds Table 4 162 Changes in Fund Balances of Governmental Funds Table 5 164 Revenue Capacity: Assessed Value/Tax Capacity Value and Estimated Market Value of all Taxable Property Table 6 166 Property Tax Rates - Direct and Overlapping Governments Table 7 168 Principal Property Taxpayers Table 8 170 Property Tax Levies and Collections Table 9 171 Debt Capacity: Ratios of Outstanding Debt By Type Table 10 172 Ratios of General Bonded Debt Outstanding Table 11 173 Direct and Overlapping Governmental Activities Debt Table 12 175 Legal Debt Margin Information Table 13 176 Pledged Revenue Bond Coverage Table 14 178 Demographic and Economic Information: Demographic Statistics Table 15 179 Principal Employers Table 16 181 Operating Information: Full-Time Equivalent Employees by Function Table 17 182 Operating Indicators by Function Table 18 184 Capital Asset Statistics by Function Table 19 185 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 14 - This page intentionally left blank - Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 15 I. INTRODUCTORY SECTION 1 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 16 - This page intentionally left blank - 2 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 17 St. Louis Park City Hall • 5005 Minnetonka Blvd., St. Louis Park, MN 55416 www.stlouispark.org • Phone: 952.924.2500 • TTY: 952.924.2518 June 7, 2017 Honorable Mayor and Members of the City Council City of St. Louis Park, Minnesota Minnesota statutes require all cities to issue an annual report on its financial position and activity prepared in accordance with generally accepted accounting principles (GAAP), and audited in accordance with generally accepted auditing standards by a firm of licensed certified public accountants, or the Office of the State Auditor. Pursuant to that requirement, we hereby issue the comprehensive annual financial report of the City of St. Louis Park for the fiscal year ended December 31, 2016. This report consists of management’s representations concerning the finances of the City of St. Louis Park. Consequently, management assumes full responsibility for the completeness and reliability of all of the information presented in this report. To provide a reasonable basis for making these representations, management of the City of St. Louis Park established a comprehensive internal control framework that is designed both to protect the government’s assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation for the City of St. Louis Park’s financial statements in conformity with GAAP. Because the cost of internal controls should not outweigh their benefits, the City of St. Louis Park’s comprehensive framework of internal controls has been designed to provide reasonable rather than absolute assurance that the financial statements will be free from material misstatement. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects. The City of St. Louis Park’s financial statements have been audited by Redpath and Company Ltd., a firm of licensed certified public accountants. The goal of the independent audit was to provide reasonable assurance that the financial statements of the City of St. Louis Park for the fiscal year ended December 31, 2016, are free of any material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditor concluded, based upon the audit, that there was a reasonable basis for rendering an unmodified opinion that the City of St. Louis Park’s financial statements for the fiscal year ended December 31, 2016, are fairly presented in conformity with GAAP. The independent auditor’s report is presented as the first component of the financial section of this report. Management’s Discussion and Analysis (MD&A) immediately follows the independent auditor’s report and provides a narrative introduction, overview, and analysis of the basic financial 3 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 18 St. Louis Park City Hall • 5005 Minnetonka Blvd., St. Louis Park, MN 55416 www.stlouispark.org • Phone: 952.924.2500 • TTY: 952.924.2518 statements. This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. Profile of the Government The City of St. Louis Park, established in 1886, is a first ring community located immediately west of Minneapolis. Thanks to its convenient location, St. Louis Park combines all the cultural amenities of a large metropolitan area with small town friendliness. The City of St. Louis Park currently occupies a land area of 10.8 square miles and serves a population of 48,354. The City of St. Louis Park is empowered to levy a property tax on both real and personal properties located within its boundaries. While it also is empowered by state statutes to extend its corporate limits by annexation, St. Louis Park is a completely developed community and is bordered on all sides by other incorporated communities. St. Louis Park operates under the council/manager form of government. Policy-making and legislative authority are vested in a City Council consisting of a mayor, two at-large council members, and four ward council members. The City Council is responsible, among other things, for passing ordinances, adopting the budget, appointing committees, and hiring the City Manager. The City Manager is responsible for carrying out the policies and ordinances of the council, for overseeing the day-to-day operations of the City government, and for appointing the heads of the various departments. The council is elected on a non-partisan basis. Council members serve four- year staggered terms. The City of St. Louis Park provides a full range of services, including police and fire protection; redevelopment, the construction and maintenance of highways, streets, and other infrastructure; water, sewer, storm water, and refuse services, as well as recreational activities and cultural events. The annual budget serves as the foundation for the City of St. Louis Park’s financial planning and control. All departments and agencies of the City of St. Louis Park submit requests for appropriation to the City Manager in June of each year. The City Manager uses these requests as the starting point for developing a proposed budget. The City Manager then presents this proposed budget to the council for review prior to adoption of a preliminary tax levy by September 30. The council is required to hold a public hearing on the proposed budget and to adopt a final budget no later than December 28. The appropriated budget is prepared by fund, (e.g. General), function (e.g., public safety), and department (e.g., police). Department directors may make transfers of appropriation within a department, but not between personnel and non-personnel categories. Transfers of appropriations between funds, however, require the approval of the City Council. Budget to actual comparisons are provided in this report for the general fund for which an appropriated annual budget has been adopted. These comparisons are presented starting on page 100 as part of the basic financial statements for the governmental funds. 4 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 19 St. Louis Park City Hall • 5005 Minnetonka Blvd., St. Louis Park, MN 55416 www.stlouispark.org • Phone: 952.924.2500 • TTY: 952.924.2518 Factors Affecting Financial Condition The information presented in the financial statements is perhaps best understood when it is considered from the broader perspective of the specific environment within which the City of St. Louis Park operates. Local economy The City of St. Louis Park currently enjoys a durable economic environment and local indicators point to continued stability versus other communities in the Twin City Metro Area. The City of St. Louis Park has a well-diversified tax base, with a sizeable full valuation that includes retail, manufacturing, and health care components, as well as diverse housing stock. Redevelopment and Development efforts remain very strong in St Louis Park. Redevelopment/Development The City of St. Louis Park is committed to evaluating, preserving, and improving the housing stock available within the community. It is important that a wide variety of housing alternatives be available within the community. Redevelopment projects over the past ten years have provided a mix of apartment, co-op, condominium, town-home, and single family units. Many of these housing developments contain a commercial component including both retail and services to support the new housing and create more livable neighborhoods. The City has used its tax increment financing authority in many of these projects in order to meet specific community and economic development objectives. Some of the larger projects include: Central Park West (I-394 and Highway 100): Five more buildings are planned for construction at The West End at I-394 and Highway 100. The new phases include two six-story multiple-family residential buildings, a six-story limited-service hotel, two 11-story office buildings, a 2,534-stall parking ramp and a central gathering space. At full build-out, the multi-phase development consists of 363 apartment units (with 11 affordable units), 126 hotel rooms, and 706,706 sq. feet of Class A office space. The Shoreham (3907 Highway 7): Bader Development is redeveloping a 2.23-acre block at the southwest corner of County Highway 25 and France Avenue. The $45-million, mixed-use project includes a five-story building with 148 apartments (including 30 affordable units) and 20,000 sq. feet of commercial office space. The project will result in retaining one local business, attracting a new medical clinic and creating more than 50 new jobs. The 4800 Excelsior: This mixed-use development under construction at 4900 Excelsior Boulevard at the former site of Bally Total Fitnesswill feature a six-story mixed-use building with 164 apartments (including 18 affordable units) and 28,228 square feet of ground floor commercial space, to be leased to Fresh Thyme grocery, with public art and structured parking. 5 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 20 St. Louis Park City Hall • 5005 Minnetonka Blvd., St. Louis Park, MN 55416 www.stlouispark.org • Phone: 952.924.2500 • TTY: 952.924.2518 Parkway 25 (4001 County Road 25 & 4025 Hwy 7): Sela Group is building a five-story 111-unit mixed-use apartment building that will include 8500 sq. ft. of ground floor commercial space on the sites of the former Vescio’s restaurant and Valu Stay Inn motel. Elmwood Sr. Housing (former American Legion site, West 36th St. and Hwy. 100): Mixed-use apartments are proposed for the one-acre site, with 85 units and 4,400 sq. ft. of first-floor commercial space in a six-story building. Twenty of the units will be affordable units reserved for tenants with incomes of up to 60% of the metro area median income. Redevelopment interest continues to remain strong in St. Louis Park and other proposals and inquiries are being considered for multi-family and mixed use projects. The City also sponsors a comprehensive rehabilitation loan program available to single family and multi-family homeowners. The first programs were started in the mid 1970’s and have evolved into a comprehensive set of programs to ensure the preservation and enhancement of the City’s housing stock. Finally, the City has a Convention and Visitors Bureau, which markets the desirability of St. Louis Park for both business and recreational opportunities. This continues to be a very strong partner with the City of St. Louis Park which has brought increased business and activities to the City. Long-term Financial Planning The City maintains a 10 year Long Range Financial Management Plan that incorporates anticipated revenues, expenditures, capital outlay, and tax impacts for all relevant funds. The plan anticipates opportunities or challenges, allows for changes to then be made, with the goal of achieving long- term sustainability. The plan is used in conjunction with the annual budget process and Capital Improvement Plan, which then allows the City Council to evaluate various budget decisions prior to adoption. This plan has proven its value by playing a significant role in maintaining the City’s AAA bond rating from Standard & Poor’s, which assists in keeping the costs of borrowing for the City of St. Louis Park at a low rate. Awards The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of St. Louis Park for its comprehensive annual financial report for the fiscal year ended December 31, 2015. This was the thirty-third consecutive year that the government received this prestigious award. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized comprehensive annual financial report. The report must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current comprehensive annual financial report continues to meet the Certificate of Achievement Program’s 6 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 21 St. Louis Park City Hall • 5005 Minnetonka Blvd., St. Louis Park, MN 55416 www.stlouispark.org • Phone: 952.924.2500 • TTY: 952.924.2518 requirements and we are submitting it to the GFOA to determine its eligibility for another certificate. Acknowledgements The preparation of this report would not have been possible without the efficient and dedicated services of the entire staff of the Finance Division and other key City of St. Louis Park personnel. We would like to express our appreciation to all members of the organization who assisted and contributed to the preparation of the report. Credit also must be given to the Mayor and the City Council for their unfailing support for maintaining the highest standards of professionalism in the management of the City of St. Louis Park’s finances. Respectfully submitted, Thomas Harmening Timothy Simon City Manager Chief Financial Officer 7 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 22 - This page intentionally left blank - 8 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 23 9Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & ReviewPage 24 - This page intentionally left blank - 10 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 25 SERVICES CHART Citizens City Council City Manager Boards & Commissions Board of Zoning Appeals Human Rights Planning Police Advisory Fire Civil Service Parks & Recreation Telecommunications Advisory Environment & Sustainability ADMINISTRATIVE SERVICES Records General Admin Human Resources Payroll Org Development Elections City Clerk Finance Assessing COMMUNITY DEVELOPMENT Planning/Zoning Economic Development Housing INFORMATION RESOURCES Cable Television Technology Services Support Services WEB Communications & Marketing INSPECTIONS Code Enforcement Building Housing Environmental Health Facility Maintenance Licensing OPERATIONS & RECREATION Rec Ctr & Programs Nature Center Environmental Parks Fleet Utility Operations Streets/Traffic Refuse/Recycling Public Art POLICE Patrol Support Services Crime Prevention 911 Dispatch Animal Control Community Outreach & Neighborhoods ENGINEERING Engineering Projects Water Resources FIRE Fire Prevention Fire Suppression EMS/Rescue Emergency Preparedness Auditors Legal Charter Commission Economic Development Authority Housing Authority 11 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 26 - This page intentionally left blank - 12 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 27 OFFICIALS OF THE CITY OF ST. LOUIS PARK Council Jake Spano Mayor EDA Commissioner Term Expires 1/2020 Steve Hallfin At-Large A Councilmember EDA Vice President Term Expires 1/2020 Thom Miller At-Large B Councilmember EDA Commissioner Term Expires 1/2020 Susan Sanger Ward 1 Councilmember EDA Commissioner Term Expires 1/2018 Anne Mavity Ward 2 Councilmember EDA President Term Expires 1/2018 Gregg Lindberg Ward 3 Councilmember EDA Treasurer Term Expires 1/2018 Tim Brausen Ward 4 Councilmember EDA Commissioner Term Expires 1/2018 Executive Staff Thomas Harmening, City Manager Nancy Deno, Deputy City Manager/Human Resources Director John Luse, Police Chief Steve Koering, Fire Chief Kevin Locke, Community Development Director Brian Hoffman, Inspections Director Timothy Simon, Chief Financial Officer Debra Heiser, Engineering Director Clint Pires, Chief Information Officer Cindy Walsh, Operations & Recreation Director 13 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 28 - This page intentionally left blank - 14 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 29 II. FINANCIAL SECTION 15 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 30 - This page intentionally left blank - 16 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 31 4810 White Bear Parkway, St. Paul, MN, 55110 651.426.7000 www.redpathcpas.com INDEPENDENT AUDITOR'S REPORT To the Honorable Mayor and Members of the City Council City of St. Louis Park, Minnesota Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business- type activities, each major fund, and the aggregate remaining fund information of the City of St. Louis Park, Minnesota, as of and for the year ended December 31, 2016, and the related notes to the financial statements, which collectively comprise the City of St. Louis Park, Minnesota’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. 17 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 32 We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of St. Louis Park, Minnesota, as of December 31, 2016, and the respective changes in financial position, and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Report on Summarized Comparative Information We have previously audited the City of St. Louis Park, Minnesota’s 2015 financial statements, and we expressed an unmodified audit opinion on the respective financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information in our report dated June 7, 2016. In our opinion, the summarized comparative information presented herein as of and for the year ended December 31, 2015 is consistent, in all material respects, with the audited financial statements from which it has been derived. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, the budgetary comparison, the OPEB Schedule of Funding Progress, the Schedules of Proportionate Share of Net Pension Liability, the Schedules of Pension Contributions, and the Notes to the Required Supplementary Information, as listed in the table of contents, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of St. Louis Park, Minnesota’s basic financial statements. The 18 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 33 introductory section, combining fund financial statements and schedules, and statistical section, are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining fund financial statements are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining fund financial statements and schedules, are fairly stated in all material respects in relation to the basic financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated June 7, 2017, on our consideration of the City of St. Louis Park, Minnesota’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City of St. Louis Park, Minnesota’s internal control over financial reporting and compliance. REDPATH AND COMPANY, LTD. St. Paul, Minnesota June 7, 2017 19 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 34 - This page intentionally left blank - 20 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 35 City of St. Louis Park Management’s Discussion and Analysis As management of the City of St. Louis Park, we offer readers of the City’s financial statements this narrative overview and analysis of the financial activities of the City for the fiscal year ended December 31, 2016. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal, which starts on page 3 of this report. Financial Highlights The assets of the City exceeded its liabilities at the close of the most recent fiscal year by $167,749,406 (net position). Of this amount, $37,601,446 (unrestricted net position) may be used to meet the government’s ongoing obligations to citizens and creditors. The City’s total net position increased by $1,813,803 as a result of revenues in excess of expenses. $1,506,306 was a result of an increase of net position within business-type activities, and $307,497 from an increase of net position within governmental activities. As of the close of the current fiscal year, the City’s governmental funds reported combined ending fund balances of $64,303,271, an increase of $1,316,873 in comparison with the prior year. Approximately 17 percent of this total amount, $10,825,676, is either nonspendable or restricted for specific purposes. The remaining fund balance was committed by City Council, assigned or unassigned. At the end of the current fiscal year, unassigned fund balance for the General fund was $16,193,763 (45 percent) of the total subsequent year budgeted General fund expenditures. The City’s total bonded debt increased $5,420,000 during 2016. New debt issued and principal paid during the year was $10,000,000 and $4,580,000, respectively. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the City’s basic financial statements. The City’s basic financial statements comprise three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplemental information in addition to the basic financial statements themselves. The following chart on page 22 shows how the various parts of this annual report are arranged and related to one another. The financial statements also include notes that explain some of the information in the financial statements and provide more detailed data. The statements are followed by a section of combining fund financial statements and schedules that further explains and supports the information in the financial statements. Figure 1 shows how the required parts of this annual report are arranged and relate to one another. In addition to these required elements, we have included a section with combining fund financial statements and schedules that provide details about nonmajor governmental funds, which are added together and presented in single columns in the basic financial statements. Internal service funds statements are also included, reflecting balances prior to their elimination from the government-wide financial statements, to avoid “doubling-up” effect within the governmental and business-type activities columns of said statements. 21 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 36 City of St. Louis Park Management’s Discussion and Analysis Figure 2 summarizes the major features of the City’s financial statements, including the portion of the City government they cover and the types of information they contain. The remainder of this overview section of management’s discussion and analysis explains the structure and contents of each of the statements. 22 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 37 City of St. Louis Park Management’s Discussion and Analysis Government-wide Statements Governmental Funds Proprietary Funds Scope Entire City government and the City’s component units The activities of the City that are not proprietary, such as police, fire and parks Activities the City operates similar to private businesses, such as the water and sewer system Required financial statements • Statement of Net Position • Statement of Activities • Balance Sheet • Statement of Revenues, Expenditures and Changes in Fund Balances • Statement of Net Position • Statement of Revenues, Expenses and Changes in Net Position • Statement of Cash Flows Accounting basis and measurement focus Accrual accounting and economic resources focus Modified accrual accounting and current financial resources focus Accrual accounting and economic resources focus Type of asset/liability information All assets and liabilities, both financial and capital, and short-term and long-term Only assets expected to be used up and liabilities that come due during the year or soon thereafter; no capital assets included All assets and liabilities, both financial and capital, and short-term and long-term Type of deferred outflows/inflows of resources information All deferred outflows/inflows of resources, regardless of when cash is received or paid Only deferred outflows of resources expected to be used up and deferred inflows of resources that come due during the year or soon thereafter; no capital assets included All deferred outflows/inflows of resources, regardless of when cash is received or paid Type of inflow/outflow information All revenues and expenses during the year, regardless of when cash is received or paid Revenues for which cash is received during or soon after the end of the year; expenditures when goods or services have been received and payment is due during the year or soon thereafter All revenues and expenses during the year, regardless of when cash is received or paid Fund Financial Statements Figure 2 Major features of the Government-wide and Fund Financial Statements 23 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 38 City of St. Louis Park Management’s Discussion and Analysis Government-wide financial statements – The government-wide financial statements are designed to provide readers with a broad overview of the City’s finances in a manner similar to a private-sector business. The statement of net position presents information on all of the City’s assets and deferred outflows of resources and liabilities and deferred inflows of resources, with the difference between the two reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. The statement of activities presents information showing how the government’s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in the statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave). Both of the government-wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenue (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the City include general government, public safety, public information, operations and recreation, engineering, housing and rehabilitation, housing maintenance, social and economic development, and interest on long-term debt. The business-type activities of the City include water, sewer, solid waste, and storm water operations. The government-wide financial statements include not only the City itself (known as the primary government), but also a legally separate Economic Development Authority (EDA) for which the City is financially accountable. Financial information for this component unit is not reported separately from the financial information presented for the primary government itself. The government-wide financial statements start on page 39 of this report. Fund financial statements – A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City can be divided into two categories: governmental funds and proprietary funds. Governmental funds – Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near- term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government’s near-term financing requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar 24 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 39 City of St. Louis Park Management’s Discussion and Analysis information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government’s near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The City maintains nine individual major governmental funds. Information is presented separately in the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances for the General Fund, Housing Rehabilitation, Debt Service, Permanent Improvement Revolving, Streets Capital Projects, Development EDA, Sidewalks and Trails, Park Improvement, and Redevelopment District, all of which are considered to be major funds. Data from the other five governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these non-major governmental funds is provided in the form of combining statements elsewhere in this report. The City adopts annual appropriated budgets for the General Fund. Budgetary comparison statements are provided for the General Fund to demonstrate compliance with this budget. The basic governmental fund financial statements start on page 42 of this report. Proprietary funds – The City maintains two different types of proprietary funds. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The City uses enterprise funds to account for its water, sewer, solid waste, and storm water operations. Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for the water, sewer, solid waste and storm water operations, all of which are considered to be major funds of the City. Internal service funds are an accounting device used to accumulate and allocate costs internally among the City’s various functions. The City uses internal service funds to account for maintaining its fleet of vehicles, management information systems, replacement of City equipment, employee administration, compensated absences, pension benefit and uninsured losses. Because all of these services predominately benefit governmental rather than business- type functions, they have been included within governmental activities in the governmental-wide financial statements. All internal service funds are combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data for the internal service funds is provided in the form of combining statements elsewhere in this report. The basic proprietary fund financial statements starts on page 48 of this report. Notes to the financial statements – The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements start on page 57 of this report. Other Supplementary Information - In addition to the basic financial statements and accompanying notes, Required Supplementary Information, presents a detailed budgetary 25 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 40 City of St. Louis Park Management’s Discussion and Analysis comparison schedule for the General Fund to demonstrate compliance with the budget. In accordance with the requirements of GASB Statement No. 45, it also includes other post- employment benefit plan schedule of funding progress. In accordance with the requirements of GASB Statement No. 68, also included is defined benefit pension plan information: a) schedules of the City’s contributions and b) schedules of the City’s proportionate share of net pension liability. These schedules can be found in the Required Supplementary Information section of this report. The combining statements and schedules referred to earlier in connection with nonmajor governmental funds and internal service funds are presented immediately following the required supplementary information starting on page 118 of this report. Government-wide Financial Analysis As noted earlier, net position may serve over time as a useful indicator of a government’s financial position. In the case of the City, assets exceeded liabilities by $167,749,406 at the close of the most recent fiscal year. A portion of the City’s net position (71 percent) reflects its investment in capital assets (e.g., land, buildings, machinery, and equipment); less any related debt used to acquire those assets that is still outstanding. The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City’s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. 26 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 41 City of St. Louis Park Management’s Discussion and Analysis City of St. Louis Park’s Net Position Increase Increase 2016 2015 (Decrease)2016 2015 (Decrease) Assets Current and other assets $87,490,376 $86,237,071 $1,253,305 $7,629,388 $11,257,020 ($3,627,632) Capital assets 127,342,721 116,121,196 11,221,525 33,636,822 31,536,597 2,100,225 Total assets 214,833,097 202,358,267 12,474,830 41,266,210 42,793,617 (1,527,407) Total deferred outflows of resources 28,302,033 3,743,716 24,558,317 - - - Liabilities Other liabilities 7,801,517 14,417,749 (6,616,232) 1,401,159 4,599,063 (3,197,904) Noncurrent liabilities 91,246,133 50,653,169 40,592,964 10,985,117 10,820,926 164,191 Total liabilities 99,047,650 65,070,918 33,976,732 12,386,276 15,419,989 (3,033,713) Total deferred inflows of resources 5,218,008 2,469,090 2,748,918 - - - Net position Net investment in capital assets 96,458,787 96,286,131 172,656 23,030,284 22,753,326 276,958 Restricted 10,658,889 10,608,709 50,180 - - - Unrestricted 31,751,796 31,667,135 84,661 5,849,650 4,620,302 1,229,348 Total net position $138,869,472 $138,561,975 $307,497 $28,879,934 $27,373,628 $1,506,306 Governmental Activities Business-type Activities An additional portion of the City’s net position ($10,658,889) represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net position ($37,601,446) may be used to meet the City’s ongoing obligations to citizens and creditors. At the end of the current fiscal year, the City is able to report positive balances in all three categories of net position, both for the City as a whole, as well as for its separate governmental and business-type activities. 27 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 42 City of St. Louis Park Management’s Discussion and Analysis Analysis of the City’s Operations – The following table provides a summary of the City’s operations for the year ended December 31, 2016. Overall, both the governmental and business- type activities revenue and expenses remained stable. Governmental activities increased the City’s net position by $307,497. Business-type activities increased the City’s net position by $1,506,306. City of St. Louis Park’s Changes in Net Position Increase Increase 2016 2015 (Decrease) 2016 2015 (Decrease) Revenues Program revenues Charges for services $8,026,850 $8,185,586 ($158,736) $17,886,729 $17,540,325 $346,404 Operating grants and contributions 2,512,011 3,586,440 (1,074,429) 181,525 128,610 52,915 Capital grants and contributions 3,960,739 3,178,294 782,445 799,894 - 799,894 General revenues Property taxes and TIF 37,919,392 34,973,518 2,945,874 - - - Franchise fees 3,079,399 2,915,732 163,667 - - - Grants and contributions not restricted to specific programs 584,639 557,671 26,968 - - - Unrestricted investment earnings 388,647 221,408 167,239 65,391 59,330 6,061 Gain on disposal of capital assets 142,713 577,248 (434,535) - - - Miscellaneous 3,201,122 2,985,997 215,125 - - - Total revenues 59,815,512 57,181,894 2,633,618 18,933,539 17,728,265 1,205,274 Expenses General government 11,182,348 10,712,749 469,599 - - - Public safety 20,091,787 15,336,854 4,754,933 - - - Public information 549,940 3,057,509 (2,507,569) - - - Operations and recreation 13,352,637 9,996,885 3,355,752 - - - Engineering 5,091,818 10,185,956 (5,094,138) - - - Housing and rehabilitation 528,467 707,661 (179,194) - - - Housing maintenance 144,204 84,505 59,699 - - - Social and economic development 8,826,281 8,872,479 (46,198) - - - Interest on long-term debt 1,620,489 1,233,107 387,382 - - - Water - - - 4,773,624 4,684,190 89,434 Sewer - - - 6,002,088 5,333,887 668,201 Solid waste - - - 3,256,804 2,917,214 339,590 Storm water - - - 1,514,761 1,400,975 113,786 Total expenses 61,387,971 60,187,705 1,200,266 15,547,277 14,336,266 1,211,011 Increase (decrease) in net position before transfers (1,572,459) (3,005,811) 1,433,352 3,386,262 3,391,999 (5,737) Transfers 1,879,956 3,620,449 (1,740,493) (1,879,956) (3,620,449) 1,740,493 Change in net position 307,497 614,638 (307,141) 1,506,306 (228,450) 1,734,756 Net position, January 1, as previously reported 138,561,975 155,835,398 (17,273,423) 27,373,628 27,602,078 (228,450) Prior period adjustements - (17,888,061) 17,888,061 - - - Net position, January 1 as restated 138,561,975 137,947,337 614,638 27,373,628 27,602,078 (228,450) Net position, December 31 $138,869,472 $138,561,975 $307,497 $28,879,934 $27,373,628 $1,506,306 Governmental Activities Business-type Activities 28 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 43 City of St. Louis Park Management’s Discussion and Analysis Governmental Activities Governmental activities increased the City’s net position by $307,497. Overall the governmental activities in 2016 were stable, with a slight increase in both revenues and expenses. Revenues increased by $2.6 million, primarily related to property tax and TIF general revenues while expenses increased by $1.2 million, with the largest increase in public safety expenses related to the police and fire net pension liability. Net transfers decreased by $1.7 million. Business-type Activities Business-type activities increased the City’s net position by $1,506,306. Both revenues and expenses increased $1.2 million and net transfers decreased by $1.7 million. The increase in revenues was the result of increased utility rates and the increase in expenses was a result of increased operating expenses to provide services. Governmental Activities Revenues - The following chart illustrates the City’s revenue by source for its governmental activities: Revenues by Source - Governmental Activities 29 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 44 City of St. Louis Park Management’s Discussion and Analysis Expenses - The following chart illustrates the City’s expenses and program revenues for its governmental activities: Expenses and Program Revenues - Governmental Activities Business-type Activities Revenues - The following chart illustrates the City’s revenue by source for its business-type activities: Revenue Sources - Business-type Activities 30 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 45 City of St. Louis Park Management’s Discussion and Analysis Expenses - The following chart illustrates the City’s expenses and program revenues for its business-type activities: Expense and Program Revenues - Business-type Activities Financial Analysis of the Government’s Funds As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. In particular, unassigned fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the year. 31 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 46 City of St. Louis Park Management’s Discussion and Analysis Governmental funds – As of the end of the current fiscal year, the City’s governmental funds reported combined ending fund balances of $64,303,271, an increase of $1,316,873 in comparison with the prior year. Approximately 17.1 percent of this total amount, $11,006,424, constitutes unassigned fund balance, which is available for spending at the City’s discretion. The remainder of fund balance ($53,296,847) is not available for new spending because it is either 1) nonspendable ($354,046), 2) restricted ($10,471,630), 3) committed ($466,287) or 4) assigned ($42,004,884) for specific purposes. Increase 2015 2016 (Decrease) General 17,031,136$ 17,874,696$ 843,560$ Housing Rehabilitation 2,743,860$ 3,448,469$ 704,609$ Debt Service 1,881,243$ 2,048,975$ 167,732$ Permanent Improvement Revolving 2,337,942$ 2,577,727$ 239,785$ Streets Capital Projects 1,718,137$ 1,193,411$ (524,726)$ Development EDA 26,416,278$ 26,111,150$ (305,128)$ Sidewalks and Trails 2,581,015$ 1,011,967$ (1,569,048)$ Park Improvement 3,691,530$ 5,030,197$ 1,338,667$ Redevelopment District (2,605,197)$ (1,289,720)$ 1,315,477$ The Redevelopment District fund is comprised of all tax increment districts in the City. The increase in fund balance of $1,315,477 is due to delayed payments on interfund loans. Fund Balances December 31, Major Funds The City’s General Fund balance increased $843,560 during the current fiscal year. A portion of this increase pertains to higher than anticipated license and permit revenue of $823,901. This is primarily related to increased license and permit revenues from more robust construction within the City. Also, intergovernmental revenue was $237,055 over budget which pertains to higher than anticipated highway user tax, and police and fire revenues. Operating expenditures were also approximately $1.1 million under budget for fiscal year 2016. The Housing Rehabilitation fund balance increased $704,609 as a result of special assessment and miscellaneous revenues exceeding expenditures by $900,000 prior to net transfers out of $200,000. The fund balance of the Debt Service fund increased $167,762 due to scheduled bond principal and interest payments. The Permanent Improvement Revolving fund balance increased slightly from prior year. Special assessments of $246,000 were received with minimal expenditures. The Streets Capital Projects fund balance decreased by $524,726 as a result of capital outlay in the current year of $3.6 million, revenue of $1.5 million, and net transfers in of $1.5 million. The Development EDA fund balance decreased $305,128 as a result of expenditures exceeding revenues. Although the fund has $26 million in fund balance, approximately $13.5 million is made up of loans receivable and land held for resale. The decrease in fund balance is attributable to the City's Connect the Park initiative. In 2016 the fund recorded $1.36 million of capital outlay. The Park Improvement fund experienced an increase in fund balance of $1,338,667. The increase is a result of receipt of bond proceeds and additional contributions related to the ROC construction project and $11.5 million in capital outlay. Proprietary funds – The City’s proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail. At the end of the year, unrestricted net position of the Water, Sewer, Solid Waste, and Storm Water funds amounted to $8,397,450. Total net position increased by $2,087,858. This increase was primarily a result of a planned increase in fees to cover infrastructure replacement. 32 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 47 City of St. Louis Park Management’s Discussion and Analysis General Fund Budgetary Highlights Actual revenues were $1,852,907 over budget and expenditures were $1,109,851 under budget; along with transfers and other financing sources, the end result was an increase in fund balance of $843,560. Favorable revenue and expenditure variances accounted for the increase in fund balance. The largest favorable revenue variances included property taxes ($596,078) licenses and permits ($823,901) as well as charges for services ($239,731). The largest expenditure variance was in the operation and recreation function, which was $590,839 under budget. Capital Asset and Debt Administration The City’s investment in capital assets for its governmental and business type activities as of December 31, 2016 was $160,979,543 (net of accumulated depreciation). This investment in capital assets includes land, buildings and system improvements, machinery and equipment, park facilities, roads, highways, and bridges. The total increase in the City’s investment in capital assets for the current fiscal year was 8 percent. Major capital asset events during the current fiscal year included the following: Substantial completion of the indoor/outdoor recreation center projects (approx. $10 million) Substantial completion of water meter replacement project Street rehab projects Connect the park trail, sidewalk and bike improvements Land purchases for storm water and future development Improvements to park infrastructure and aesthetic aspects of the parks Over $1.8 million of capital asset acquisition within the capital replacement fund. For the year ending December 31, 2016, the City has elected to use the modified approach as defined in GASB Statement No. 34 for infrastructure reporting for its Pavement Management Program, which includes streets. Under GASB Statement No. 34, eligible infrastructure capital assets are not required to be depreciated under the following requirements: 1)The City manages the eligible infrastructure capital assets using an asset management system with characteristics of (a) an up to-date inventory; (b) perform condition assessments and summarize the results using a measurement scale; and (c) estimate annual amount to maintain and preserve at the established condition assessment level. 2)The City documents that the eligible infrastructure capital assets are being preserved approximately at or above the established and disclosed condition assessment level. The City’s policy is to achieve an average rating of good (70) for all streets. Over the course of 2014 and 2015, all areas were assessed, providing a new overall condition rating. Going forward, four areas will be assessed every other year. The City increased the number of areas assessed each year in an effort to get more comparative data and more thoroughly analyze the street infrastructure system. As of the last complete assessment, the City’s street system was rated at an Overall Condition Index (OCI) of 65, which is slightly below the City’s policy level. City staff is 33 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 48 City of St. Louis Park Management’s Discussion and Analysis working with the City Council to develop a plan to increase this number back to the policy level. This plan includes the planned improvements to commercial and industrial roads that were not a part of the plan in the past. The City’s streets are constantly deteriorating resulting from the following factors: (1) traffic using the system; (2) the sun’s ultra-violet rays drying out and breaking down the top layer of pavement; (3) utility company/private development trenching operations; (4) water damage from natural precipitation; and (5) frost heave. The City is continuously taking actions to prolong the life of the system through short-term maintenance activities such as pothole patching, crack sealing, seal coating and overlaying. The City expended $2,731,582 on street maintenance for the year ending December 31, 2016. The physical condition assessment completed in 2012 was the first assessment that reported on the entire system. The City has estimated that the amount of annual expenditures required maintaining the City’s street system at the average OCI rating of good is approximately $3,999,000. The annual expenditures will vary from year to year, depending on the area of the City being targeted that year. The estimate for the year ending December 31, 2016 was $2,622,000, which is lower than the actual expenditures for the year. This was a result of the planning to increase the annual improvements to get condition back to policy level. City of St. Louis Park’s Capital Assets (net of accumulated depreciation) Increase Increase 2016 2015 (Decrease) 2016 2015 (Decrease) Land $16,991,835 $15,682,665 $1,309,170 $515,083 $174,844 $340,239 Permanent easments 1,429,976 1,429,976 - - - - Buildings and structures 33,543,044 34,630,999 (1,087,955) 805,616 933,747 (128,131) Improvements other than buildings 13,666,061 9,666,707 3,999,354 3,908,104 4,192,630 (284,526) Machinery and equipment 4,045,211 4,276,489 (231,278) 6,054,509 2,652,882 3,401,627 Fleet 4,848,540 3,989,448 859,092 - - - Infrastructure - Streets 26,011,544 26,011,544 - - - - Infrastructure - Other 14,709,476 15,653,698 (944,222) 22,102,350 21,234,335 868,015 Construction in progress 12,097,034 4,779,670 7,317,364 251,160 2,348,159 (2,096,999) Total $127,342,721 $116,121,196 $11,221,525 $33,636,822 $31,536,597 $2,100,225 Governmental Activities Business-type Activities Additional information on the City’s capital assets can be found in Note 5 on pages 72-73 of this report. 34 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 49 City of St. Louis Park Management’s Discussion and Analysis Debt administration At the end of the current fiscal year, the City had total bonded debt outstanding of $45,550,000. Of this amount, $31,230,000 comprises debt issued for improvement and capital projects and will be repaid by ad valorem tax levies. In addition, $3,805,000 is general obligation tax increment debt which financed redevelopment projects and will be repaid from the tax increments resulting from increased tax capacity of the redevelopment properties. The remaining $10,515,000 of the City’s bonded debt represents general obligation revenue bonds to be repaid by the Water, Sewer, and Storm Water fund user charges. Furthermore, the City has long-term debt of $2,025,297 for notes payable, $215,619 for capital leases payable, $4,026,371 for compensated absences, $3,187,082 for other post-employment benefits payable and $46,787,244 for the net pension liability. City of St. Louis Park’s Outstanding Debt General Obligation Bonds, Revenue Bonds, and other Debt Increase Increase 2016 2015 (Decrease) 2016 2015 (Decrease) G.O. Revenue Bonds $ - $ - $ - $10,515,000 $13,510,000 ($2,995,000) G.O. Tax Increment 3,805,000 4,175,000 (370,000) - - - G.O. Improvement 31,230,000 22,445,000 8,785,000 - - - Notes payable 2,025,297 2,122,173 (96,876) - - - Capital leases 215,619 24,975 190,644 - - - Compensated absences 3,837,736 3,752,187 85,549 188,635 146,219 42,416 Other postemployment benefits 2,997,138 2,596,202 400,936 189,944 156,399 33,545 Net pension liability 46,787,244 19,874,838 26,912,406 - - - Total $90,898,034 $54,990,375 $35,907,659 $10,893,579 $13,812,618 ($2,919,039) Governmental Activities Business-type Activities Principal payments during 2016 totaled $4,580,000. The City maintains an “AAA” rating from Standard & Poor’s for general obligation debt. State statutes limit the amount of general obligation debt a governmental entity may issue to 3 percent of its total assessed valuation. The current debt limitation for the City is $176,182,830 which is significantly more than the City’s outstanding general obligation debt. Additional information on the City’s long-term debt can be found in Note 6 on pages 74 - 80 of this report. Economic Factors, Subsequent Year Budgets, Rates and Changes in Structure The City estimates that the demand for City services will continue to grow as the economy improves. The property tax levy is set annually and is adjusted as necessary to fund the cost of providing services to our citizens and customers. Charges for services are evaluated each year and adjusted to support operations and capital outlay. All of these factors were considered in preparing the City’s budget for the 2017 fiscal year. 35 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 50 City of St. Louis Park Management’s Discussion and Analysis Requests for Information This financial report is designed to provide our citizens, customers, and creditors with a general overview of the City of St. Louis Park’s finances and to show the City’s accountability for the resources it is entrusted. Questions concerning any of the information provided in the report, or requests for additional financial information, contact the City of St. Louis Park Finance Department at 5005 Minnetonka Boulevard, St. Louis Park, Minnesota, 55416, 952-924-2500, or Tim Simon – Chief Financial Officer at tsimon@stlouispark.org. 36 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 51 BASIC FINANCIAL STATEMENTS 37 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 52 - This page intentionally left blank - 38 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 53 Statement 1CITY OF ST. LOUIS PARK, MINNESOTA STATEMENT OF NET POSITION December 31, 2016 Governmental Business-Type Activities Activities Totals Assets Cash and investments 59,981,647$ 5,241,789$ 65,223,436$ Accrued interest receivable 148,723 19,864 168,587 Due from other governments 1,204,477 66 1,204,543 Accounts receivable 1,245,385 3,455,129 4,700,514 Taxes receivable 666,276 - 666,276 Prepaid items 252,620 355,301 607,921 Inventories 276,414 86,086 362,500 Deposits receivable 31,000 700 31,700 Internal balances 2,547,800 (2,547,800) - Special assessments receivable 7,256,779 1,018,253 8,275,032 Loans receivable 7,423,039 - 7,423,039 Pledges receivable 1,450,000 - 1,450,000 Land held for resale 5,006,216 - 5,006,216 Capital assets Nondepreciable assets 56,530,389 766,243 57,296,632 Depreciable assets (net of accumulated depreciation)70,812,332 32,870,579 103,682,911 Total assets 214,833,097 41,266,210 256,099,307 Deferred outflows of resources - pension related 28,302,033 - 28,302,033 Liabilities Accounts payable 1,289,404 463,356 1,752,760 Salaries payable 1,682,248 137,414 1,819,662 Due to other governments 489,366 74,607 563,973 Contracts payable 1,871,915 301,204 2,173,119 Accrued interest payable 516,701 83,871 600,572 Deposits payable 1,201,084 18,157 1,219,241 Unearned revenue 750,799 322,550 1,073,349 Noncurrent liabilities Due within one year 6,040,857 1,472,911 7,513,768 Due in more than one year 85,205,276 9,512,206 94,717,482 Total liabilities 99,047,650 12,386,276 111,433,926 Deferred inflows of resources - pension related 5,218,008 - 5,218,008 Net position Net investment in capital assets 96,458,787 23,030,284 119,489,071 Restricted for Economic development 4,227,365 - 4,227,365 E-911 purposes 413,787 - 413,787 Park improvement 43,920 - 43,920 Community development 421,984 - 421,984 Debt service 3,146,018 - 3,146,018 Cable TV equipment 573,567 - 573,567 Police and fire purposes 1,832,248 - 1,832,248 Unrestricted 31,751,796 5,849,650 37,601,446 Total net position 138,869,472$ 28,879,934$ 167,749,406$ The accompanying notes are an integral part of these financial statements. 39 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 54 CITY OF ST. LOUIS PARK, MINNESOTA STATEMENT OF ACTIVITIES For The Year Ended December 31, 2016 Operating Capital Charges For Grants and Grants and Functions/Programs Expenses Services Contributions Contributions Governmental activities General government 11,182,348$ 1,184,122$ 85,729$ -$ Public safety 20,091,787 4,354,793 942,323 63,949 Public information 549,940 - - - Operations and recreation 13,352,637 2,122,730 117,788 1,850,000 Engineering 5,091,818 97,688 660,635 1,538,871 Housing and rehabilitation 528,467 7,607 - 332,550 Housing maintenance 144,204 - 143,619 - Social and economic development 8,826,281 259,910 396,584 175,369 Interest on long-term debt 1,620,489 - 165,333 - Total governmental activities 61,387,971 8,026,850 2,512,011 3,960,739 Business-Type activities Water 4,773,624 5,674,239 7,365 465,203 Sewer 6,002,088 6,663,731 - - Solid waste 3,256,804 2,905,899 174,160 334,691 Storm water 1,514,761 2,642,860 - - Total business-type activities 15,547,277 17,886,729 181,525 799,894 Total 76,935,248$ 25,913,579$ 2,693,536$ 4,760,633$ General revenues Taxes Property taxes Tax increment Franchise taxes Grants and contributions not restricted to specific programs Unrestricted investment earnings Gain on sale of capital assets Miscellaneous Transfers Total general revenues and transfers Change in net position Net position - January 1 Net position - December 31 Program Revenues The accompanying notes are an integral part of these financial statements. 40 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 55 Statement 2 Governmental Business-Type Activities Activities Total (9,912,497)$ -$ (9,912,497)$ (14,730,722) - (14,730,722) (549,940) - (549,940) (9,262,119) - (9,262,119) (2,794,624) - (2,794,624) (188,310) - (188,310) (585) - (585) (7,994,418) - (7,994,418) (1,455,156) - (1,455,156) (46,888,371) - (46,888,371) - 1,373,183 1,373,183 - 661,643 661,643 - 157,946 157,946 - 1,128,099 1,128,099 - 3,320,871 3,320,871 (46,888,371) 3,320,871 (43,567,500) 30,185,703 - 30,185,703 7,733,689 - 7,733,689 3,079,399 - 3,079,399 584,639 - 584,639 388,647 65,391 454,038 142,713 - 142,713 3,201,122 - 3,201,122 1,879,956 (1,879,956) - 47,195,868 (1,814,565) 45,381,303 307,497 1,506,306 1,813,803 138,561,975 27,373,628 165,935,603 138,869,472$ 28,879,934$ 167,749,406$ Net (Expense) Revenue and Changes in Net Position The accompanying notes are an integral part of these financial statements. 41 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 56 CITY OF ST. LOUIS PARK, MINNESOTA BALANCE SHEET GOVERNMENTAL FUNDS December 31, 2016 Special Revenue Fund General Housing Rehabilitation Debt Service Assets Cash and investments 20,614,023$ 960,346$ 2,173,306$ Accrued interest receivable 47,148 4,558 3,559 Due from other governments 184,908 - 82,464 Accounts receivable 410,981 29,811 - Taxes receivable - unremitted 324,215 - - Taxes receivable - delinquent 266,621 - - Prepaid items 54,069 - - Inventories 276,414 - - Special assessments receivable - delinquent - 27,699 - Special assessments receivable - deferred - 6,316,577 - Interfund loan receivable - -- Loans receivable - current - 254,500 40,000 Loans receivable - noncurrent - 3,223,460 1,560,000 Pledges receivable - current - -- Pledges receivable - noncurrent - -- Land held for resale - -- Total assets 22,178,379$ 10,816,951$ 3,859,329$ Liabilities Accounts payable 547,578$ 43,087$ -$ Salaries payable 1,630,762 4,961 - Due to other governments 117,193 - - Contracts payable - 15,533 - Interfund loan payable - 969,416 - Deposits payable 1,004,474 - 196,610 Unearned revenue 737,055 - 13,744 Total liabilities 4,037,062 1,032,997 210,354 Deferred inflows of resources Unavailable revenue 266,621 6,335,485 1,600,000 Fund balances Nonspendable 330,483 - - Restricted 413,787 - 2,048,975 Committed - - - Assigned 936,663 3,448,469 - Unassigned 16,193,763 - - Total fund balances 17,874,696 3,448,469 2,048,975 Total liabilities, deferred inflows of resources, and fund balances 22,178,379$ 10,816,951$ 3,859,329$ The accompanying notes are an integral part of these financial statements. 42 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 57 Statement 3 Permanent Improvement Revolving Streets Capital Projects Development EDA Sidewalks and Trails Park Improvement Redevelopment District Other Governmental Funds Total Governmental Funds 2,570,786$ 1,339,917$ 12,554,513$ 1,005,002$ 6,261,031$ 4,681,786$ 5,179,898$ 57,340,608$ 6,895 - 31,915 6,965 11,836 6,001 21,073 139,950 - 899,917 - - - - 37,188 1,204,477 - 1,575 6,129 - 750 2 776,246 1,225,494 - -- - - 65,742 - 389,957 - -- - - 9,698 - 276,319 - -17,063 - - - 6,500 77,632 - -- - - - - 276,414 9,882 - - - - - 6,963 44,544 724,974 - - - - - 170,684 7,212,235 - - 7,381,225 - - - -7,381,225 - - 233,001 - - - -527,501 - - 956,419 - - 718,738 436,921 6,895,538 - - - - 100,000 - - 100,000 - - - - 1,350,000 - - 1,350,000 - - 5,006,216 - - - - 5,006,216 3,312,537$ 2,241,409$ 26,186,481$ 1,011,967$ 7,723,617$ 5,481,967$ 6,635,473$ 89,448,110$ 202$ 188,281$ 30,653$ -$ 250,560$ 3,711$ 113,356$ 1,177,428$ - - 13,419 - - - 18,419 1,667,561 - - 31,259 - - 270,737 2 419,191 - 859,717 - - 992,860 - - 1,868,110 - - - - - 6,411,809 - 7,381,225 - - - - - -- 1,201,084 - - - - - -- 750,799 202 1,047,998 75,331 - 1,243,420 6,686,257 131,777 14,465,398 734,608 - - - 1,450,000 85,430 207,297 10,679,441 - - 17,063 - - - 6,500 354,046 - - 329,746 - 953,704 3,897,619 2,827,799 10,471,630 - - - - - - 466,287 466,287 2,577,727 1,193,411 25,764,341 1,011,967 4,076,493 - 2,995,813 42,004,884 - - - - - (5,187,339) - 11,006,424 2,577,727 1,193,411 26,111,150 1,011,967 5,030,197 (1,289,720) 6,296,399 64,303,271 3,312,537$ 2,241,409$ 26,186,481$ 1,011,967$ 7,723,617$ 5,481,967$ 6,635,473$ 89,448,110$ Total Fund balances reported above 64,303,271$ Amounts reported for governmental activities in the statement of net position are different because: Capital assets used in governmental activities are not financial resources, and therefore, are not reported in the funds 109,274,220 Other long-term assets are not available to pay for current-period expenditures and, therefore, are reported as unavailable revenue in the funds: Receivables not available soon enough to pay for the current period's expenditures 10,679,441 Long-term liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported in the funds: Bonds payable and unamortized bond premium (35,383,099) Note payable (2,025,297) Accrued interest payable (516,701) Internal service funds are used by management to charge the cost of certain services to individual funds. The assets and liabilities are included in the governmental statement of net position (7,462,363) Net position of governmental activities 138,869,472$ Capital Projects Funds The accompanying notes are an integral part of these financial statements. 43 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 58 CITY OF ST. LOUIS PARK, MINNESOTA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS For The Year Ended December 31, 2016 Special Revenue Fund General Housing Rehabilitation Debt Service Revenues Property taxes 24,193,360$ 100,000$ 1,517,667$ Tax increments - - - Franchise taxes - - - License and permits 4,320,078 - - Intergovernmental 1,656,072 - 165,333 Charges for services 3,101,720 7,607 - Fines and forfeits 299,808 - - Special assessments - 771,951 - Interest income 114,956 14,011 6,590 Miscellaneous 122,178 562,976 121,084 Total revenues 33,808,172 1,456,545 1,810,674 Expenditures Current General government 8,188,193 - - Public safety 14,659,588 - - Public information - - - Operations and recreation 9,688,872 - - Engineering 436,233 - - Housing and rehabilitation - 482,313 - Housing maintenance - - - Social economic development - - 607,081 Capital outlay Public safety - - - Public information - - - Operations and recreation - - - Engineering - - - Social and economic development - - - Debt service Principal - - 1,585,000 Interest and other - 67,592 1,047,222 Bond issuance costs - - - Total expenditures 32,972,886 549,905 3,239,303 Revenues over (under) expenditures 835,286 906,640 (1,428,629) Other financing sources (uses) Transfers in 1,881,274 144,000 1,488,027 Transfers out (1,873,000) (346,031) (5,304) Bonds issued - - 113,638 Premium on bonds issued - - - Proceeds from sale of capital assets - - - Total other financing sources (uses)8,274 (202,031) 1,596,361 Net change in fund balances 843,560 704,609 167,732 Fund balances - January 1 17,031,136 2,743,860 1,881,243 Fund balances - December 31 17,874,696$ 3,448,469$ 2,048,975$ The accompanying notes are an integral part of these financial statements. 44 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 59 Statement 4 Permanent Improvement Revolving Streets Capital Projects Development EDA Sidewalks and Trails Park Improvement Redevelopment District Other Governmental Funds Total Governmental Funds -$ -$ 106,653$ -$ 810,000$ 1,006,866$ -$ 27,734,546$ - - - - - 7,733,689 - 7,733,689 - - - - - - 3,079,399 3,079,399 - - - ---- 4,320,078 - 1,539,171 396,584 - 444,702 - 143,620 4,345,482 - -236,732 - 35,604 - 25,301 3,406,964 - -- - - - - 299,808 246,075 - - - - - 174,602 1,192,628 17,714 7,534 79,108 18,163 30,194 20,913 53,013 362,196 1,683 - 1,191,311 - 1,086,380 - 144,778 3,230,390 265,472 1,546,705 2,010,388 18,163 2,406,880 8,761,468 3,620,713 55,705,180 - - - - - - - 8,188,193 6,994 - - - - - 2,669 14,669,251 - - - - - - 477,721 477,721 - - - - - - - 9,688,872 - - - - - - 43,929 480,162 - - - - - - - 482,313 - - - - - - 144,204 144,204 - - 2,365,955 - - 5,445,558 255,044 8,673,638 - - - - - - 521,034 521,034 - - - - - - 223,009 223,009 - - - - 11,495,582 - - 11,495,582 - 3,633,623 - 1,360,860 - - 2,135,842 7,130,325 - - 487,978 - - 36,900 - 524,878 - - 96,876 - - - - 1,681,876 - - 83,124 - - 251,150 - 1,449,088 - - - - 111,922 - - 111,922 6,994 3,633,623 3,033,933 1,360,860 11,607,504 5,733,608 3,803,452 65,942,068 258,478 (2,086,918) (1,023,545) (1,342,697) (9,200,624) 3,027,860 (182,739) (10,236,888) - 2,336,342 715,417 625,591 508,000 - 450,000 8,148,651 (18,693) (774,150) - (851,942) (251,726) (1,712,383) (1,161,316) (6,994,545) - - - - 9,886,362 - - 10,000,000 - - - - 396,655 - - 396,655 - - 3,000 - - - - 3,000 (18,693) 1,562,192 718,417 (226,351) 10,539,291 (1,712,383) (711,316) 11,553,761 239,785 (524,726) (305,128) (1,569,048) 1,338,667 1,315,477 (894,055) 1,316,873 2,337,942 1,718,137 26,416,278 2,581,015 3,691,530 (2,605,197) 7,190,454 62,986,398 2,577,727$ 1,193,411$ 26,111,150$ 1,011,967$ 5,030,197$ (1,289,720)$ 6,296,399$ 64,303,271$ Capital Projects Funds The accompanying notes are an integral part of these financial statements. 45 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 60 - This page intentionally left blank - 46 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 61 Statement 5CITY OF ST. LOUIS PARK, MINNESOTA RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES For The Year Ended December 31, 2016 Amounts reported for governmental activities in the statement of activities (Statement 2) are different because: Net changes in fund balances - total governmental funds (Statement 4)1,316,873$ Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlays exceeded depreciation in the current period. Capital outlay 19,894,828 Capital outlay not capitalized (5,956,995) Depreciation expense (2,911,856) The net effect of various transactions involving capital assets (i.e., sales, trade-ins and donations) is to increase (decrease) net position (11,495) The issuance of long-term debt provides current financial resources to governmental funds, while the repayment of principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net position. Also, governmental funds report the effect of issuance costs, premiums, discounts and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. Proceeds from long term debt (10,000,000) Principal repayments on long term debt 1,681,876 Interest on long-term debt in the statement of activities differs from the amount reported in the governmental fund because interest is recognized as an expenditure in the funds when it is due, and thus requires the use of current financial resources. In the statement of activities, however, interest expense is recognized as the interest accrues, regardless of when it is due.(73,508) Governmental funds report debt issuance premiums and discounts as an other financing source or use at the time of issuance. Premiums and discounts are reported as an unamortized asset or liability in the City-wide financial statements.(377,019) Certain revenues are recognized as soon as they are earned. Under the modified accrual basis of accounting certain revenues cannot be recognized until they are available to liquidate liabilities of the current period. Special assessments (620,760) Property taxes 5,632 Pledges 1,450,000 Loans (23,890) Internal service funds are used by management to charge the costs for equipment, information system, equipment replacement, employee benefits and major losses incurred by individual funds. The net revenue of certain activities of internal service funds is reported with governmental activities.(4,066,189) Change in net position of governmental activities (Statement 2)307,497$ The accompanying notes are an integral part of these financial statements. 47 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 62 CITY OF ST. LOUIS PARK, MINNESOTA STATEMENT OF NET POSITION PROPRIETARY FUNDS December 31, 2016 With Comparative Amounts For Enterprise Funds For December 31, 2015 2016 2015 2016 2015 Assets Current assets Cash and investments 15,523$ 880,701$ 272,392$ 1,253,942$ Cash and investments held in escrow - 1,865,855 - - Accrued interest receivable - 3,553 3,596 4,085 Due from other governments - - 66 1,018 Accounts receivable 1,270,238 973,337 1,098,156 947,206 Prepaid items - 13,667 355,301 361,764 Deposits receivable 700 700 - - Due from other funds - - - - Inventories 86,086 14,881 - - Special assessments receivable - delinquent 102,432 98,930 1,289 946 Special assessments receivable - deferred 737,768 736,011 176,764 179,193 Total current assets 2,212,747 4,587,635 1,907,564 2,748,154 Noncurrent assets Capital assets, at cost Land 114,844 114,844 60,000 60,000 Buildings and structures 4,761,612 4,761,612 6,111 6,111 Improvements other than buildings 951,045 951,045 22,278 22,278 Infrastructure 15,466,976 14,663,244 20,116,999 19,678,304 Machinery, furniture and equipment 8,677,710 4,953,257 262,039 262,039 Fleet - - - - Construction in progress - 2,348,159 - - Total capital assets, at cost 29,972,187 27,792,161 20,467,427 20,028,732 Less: accumulated depreciation (14,495,903) (13,788,810) (16,079,626) (15,965,331) Total noncurrent assets 15,476,284 14,003,351 4,387,801 4,063,401 Total assets 17,689,031 18,590,986 6,295,365 6,811,555 Deferred outflows of resources - pension related - - - - Liabilities Current liabilities Accounts payable 95,132 82,180 111,233 19,482 Salaries payable 61,264 57,664 34,063 16,648 Accrued flex spending - - - - Due to other governments 9,948 31,383 4,643 3,002 Contracts payable 301,204 530,335 - - Due to other funds 500,000 - - - Deposits payable 18,157 34,767 - - Accrued interest payable 73,330 113,282 2,178 2,333 Compensated absences payable - current 72,040 96,289 31,149 73 Capital lease payable - current - - - - Bonds payable - current 1,179,800 2,619,500 17,000 16,500 Unearned revenue 322,550 344,459 - - Total current liabilities 2,633,425 3,909,859 200,266 58,038 Noncurrent liabilities Compensated absences payable 48,477 13,086 20,766 29,451 Capital lease payable - - - - Bonds payable 8,214,899 9,409,648 155,706 172,732 Other postemployment benefits payable 127,850 111,876 31,600 23,613 Net pension liability - - - - Total noncurrent liabilities 8,391,226 9,534,610 208,072 225,796 Total liabilities 11,024,651 13,444,469 408,338 283,834 Deferred inflows of resources - pension related - - - - Net position Net investment in capital assets 6,081,585 6,807,922 4,215,095 3,874,169 Unrestricted 582,795 (1,661,405) 1,671,932 2,653,552 Total net position 6,664,380$ 5,146,517$ 5,887,027$ 6,527,721$ Business-Type Activities Enterprise Funds Water Sewer The accompanying notes are an integral part of these financial statements. 48 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 63 Statement 6 Governmental Activities Internal 2016 2015 2016 2015 2016 2015 Service Funds 1,708,616$ 2,161,295$ 3,245,258$ 2,649,006$ 5,241,789$ 6,944,944$ 2,641,039$ - - - 9,097 - 1,874,952 - 6,416 4,948 9,852 6,972 19,864 19,558 8,773 - - - - 66 1,018 - 677,548 671,489 409,187 366,239 3,455,129 2,958,271 19,891 - - - 18,433 355,301 393,864 174,988 - - - - 700 700 31,000 500,000 - - - 500,000 - - - - - - 86,086 14,881 - - - - - 103,721 99,876 - - - - - 914,532 915,204 - 2,892,580 2,837,732 3,664,297 3,049,747 10,677,188 13,223,268 2,875,691 - - 340,239 - 515,083 174,844 818,094 - - - - 4,767,723 4,767,723 8,521,883 - - 6,182,215 6,182,215 7,155,538 7,155,538 1,130,685 - - 15,865,727 15,588,972 51,449,702 49,930,520 1,313,801 - - 89,099 89,099 9,028,848 5,304,395 7,038,425 - - - - - - 9,076,459 - - 251,160 - 251,160 2,348,159 460,569 - - 22,728,440 21,860,286 73,168,054 69,681,179 28,359,916 - - (8,955,703) (8,390,441) (39,531,232) (38,144,582) (10,291,415) - - 13,772,737 13,469,845 33,636,822 31,536,597 18,068,501 2,892,580 2,837,732 17,437,034 16,519,592 44,314,010 44,759,865 20,944,192 - - - - - - 28,302,033 249,736 181,343 7,255 3,511 463,356 286,516 111,976 17,329 7,633 24,758 8,759 137,414 90,704 - - - - - - - 14,687 50,739 49,144 9,277 3,002 74,607 86,531 70,175 - - - - 301,204 530,335 3,805 - - - - 500,000 - - - - - - 18,157 34,767 - - - 8,363 11,454 83,871 127,069 - 2,341 - 7,381 7,320 112,911 103,682 2,340,872 - - - - - - 49,688 - - 163,200 359,000 1,360,000 2,995,000 - - - - - 322,550 344,459 - 320,145 238,120 220,234 393,046 3,374,070 4,599,063 2,591,203 1,561 - 4,920 - 75,724 42,537 1,496,864 - - - - - - 165,931 - - 875,933 1,039,610 9,246,538 10,621,990 - 6,557 1,765 23,937 19,145 189,944 156,399 2,997,138 - - - - - - 46,787,244 8,118 1,765 904,790 1,058,755 9,512,206 10,820,926 51,447,177 328,263 239,885 1,125,024 1,451,801 12,886,276 15,419,989 54,038,380 - - - - - - 5,218,008 - - 12,733,604 12,071,235 23,030,284 22,753,326 17,852,882 2,564,317 2,597,847 3,578,406 2,996,556 8,397,450 6,586,550 (27,863,045) 2,564,317$ 2,597,847$ 16,312,010$ 15,067,791$ 31,427,734 29,339,876$ (10,010,163)$ Adjustment to reflect consolidation of Internal Service fund activities (2,547,800) Net position of business-type activities 28,879,934$ TotalsSolid Waste Storm Water Business-Type Activities Enterprise Funds The accompanying notes are an integral part of these financial statements. 49 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 64 CITY OF ST. LOUIS PARK, MINNESOTA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION PROPRIETARY FUNDS For The Year Ended December 31, 2016 With Comparative Totals For Enterprise Funds For The Year Ended December 31, 2015 2016 2015 2016 2015 Operating revenues Charges for services 5,268,597$ 4,849,826$ 6,616,115$ 5,991,061$ Other 50,607 54,419 47,590 120,937 Rent 340,086 357,774 - - Total operating revenues 5,659,290 5,262,019 6,663,705 6,111,998 Operating expenses Personal services 1,372,830 1,272,340 778,069 562,701 Supplies 202,193 287,882 36,410 18,363 Professional services 374,665 288,509 89,674 18,648 Insurance 21,429 20,220 66,044 64,526 Utilities 377,267 398,652 41,129 43,459 Repairs and maintenance 1,126,710 662,739 187,484 179,138 Depreciation 707,093 718,198 114,295 129,701 Disposal charges 48,737 63,217 4,177,255 3,692,347 Other 420,359 501,651 205,837 226,671 Total operating expenses 4,651,283 4,213,408 5,696,197 4,935,554 Operating income (loss)1,008,007 1,048,611 967,508 1,176,444 Nonoperating revenues (expenses) Interest income 17,650 27,392 8,144 5,283 Property taxes - - - - Intergovernmental revenue 7,365 10,000 - - Miscellaneous expense (12,781) (15,367) (5,668) (9,494) Amortization of bond premiums 14,949 16,409 26 26 Gain on disposal of capital assets - - - - Interest expense (231,389) (321,505) (5,274) (5,626) Total nonoperating revenues (expenses)(204,206) (283,071) (2,772) (9,811) Income (loss) before contributions and transfers 803,801 765,540 964,736 1,166,633 Capital contributions Connection fees and special assessments 465,203 488,173 - - Capital assets - 72,400 - - Transfers in 926,986 - 75,254 - Transfers out (678,127) (1,292,652) (1,680,684) (1,344,487) Change in net position 1,517,863 33,461 (640,694) (177,854) Net position - January 1 5,146,517 5,113,056 6,527,721 6,705,575 Net position - December 31 6,664,380$ 5,146,517$ 5,887,027$ 6,527,721$ Business-Type Activities Enterprise Funds Water Sewer The accompanying notes are an integral part of these financial statements. 50 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 65 Statement 7 Governmental Activities Internal 2016 2015 2016 2015 2016 2015 Service Funds 3,180,075$ 3,159,426$ 2,642,383$ 2,469,056$ 17,707,170$ 16,469,369$ 3,402,900$ 60,515 30,140 - - 158,712 205,496 425,011 - - - - 340,086 357,774 - 3,240,590 3,189,566 2,642,383 2,469,056 18,205,968 17,032,639 3,827,911 482,774 386,831 542,193 511,933 3,175,866 2,733,805 8,236,843 180,422 71,424 3,783 3,374 422,808 381,043 680,987 11,783 15,987 49,711 52,008 525,833 375,152 125,405 3,810 3,770 14,923 17,848 106,206 106,364 213,546 - - 43,275 23,438 461,671 465,549 - 30,884 - 25,728 5,311 1,370,806 847,188 - - - 565,262 568,563 1,386,650 1,416,462 1,781,619 2,450,485 2,367,972 - - 6,676,477 6,123,536 - 81,989 62,391 122,855 126,956 831,040 917,669 1,509,842 3,242,147 2,908,375 1,367,730 1,309,431 14,957,357 13,366,768 12,548,242 (1,557) 281,191 1,274,653 1,159,625 3,248,611 3,665,871 (8,720,331) 14,478 10,601 25,119 16,054 65,391 59,330 21,073 - - - - - - 2,445,525 174,160 118,610 - - 181,525 128,610 690,039 - - (55,262) (77) (73,711) (24,938) - - - 477 3,078 15,452 19,513 - - - -- - - 184,215 - - (21,190) (46,551) (257,853) (373,682) (5,607) 188,638 129,211 (50,856) (27,496) (69,196) (191,167) 3,335,245 187,081 410,402 1,223,797 1,132,129 3,179,415 3,474,704 (5,385,086) - - - - 465,203 488,173 - - - 334,691 - 334,691 72,400 - - - -- 1,002,240 - 828,760 (220,611) (214,186) (314,269) (841,524) (2,893,691) (3,692,849) (91,415) (33,530) 196,216 1,244,219 290,605 2,087,858 342,428 (4,647,741) 2,597,847 2,401,631 15,067,791 14,777,186 29,339,876 28,997,448 (5,362,422) 2,564,317$ 2,597,847$ 16,312,010$ 15,067,791$ 31,427,734$ 29,339,876$ (10,010,163)$ Adjustment to reflect consolidation of Internal Service fund activities (581,552) Change in net position of business-type activities 1,506,306$ TotalsSolid Waste Storm Water Business-Type Activities Enterprise Funds The accompanying notes are an integral part of these financial statements. 51 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 66 CITY OF ST. LOUIS PARK, MINNESOTA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS For The Year Ended December 31, 2016 With Comparative Totals For Enterprise Funds For The Year Ended December 31, 2015 2016 2015 2016 2015 Cash flows from operating activities Receipts from customers and users 5,268,004$ 5,263,627$ 6,468,203$ 5,933,931$ Receipts from interfund services provided - - - - Other operating cash receipts 50,607 54,419 47,590 120,937 Payments to suppliers (2,866,512) (1,759,566) (4,703,978) (4,289,029) Payments to employees (1,342,114) (1,251,549) (730,276) (557,105) Miscellaneous expense (12,781) (15,367) (5,668) (9,494) Net cash flows provided (used) by operating activities 1,097,204 2,291,564 1,075,871 1,199,240 Cash flows from noncapital financing activities Transfers in - - - - Transfers out (536,555) (1,292,652) (745,483) (1,344,487) Increase in due to other funds 500,000 - -- Increase in due from other funds -- -- Property taxes -- -- Intergovernmental receipts 7,365 10,000 - - Net cash flows provided (used) by noncapital financing activities (29,190) (1,282,652) (745,483) (1,344,487) Cash flows from capital and related financing activities Transfers in 926,986 - 75,254 - Transfers out (141,572) - (935,201) - Connection fees/special assessements received 465,203 488,173 - - Acquisition of capital assets (2,180,026) (2,335,774) (438,695) - Proceeds from sale of capital assets - - - - Transfer of bond proceeds (to)/from escrow account 1,865,855 1,493,353 - - Principal paid Bonds (2,619,500) (2,083,800) (16,500) (16,000) Capital lease - - - - Interest paid Bonds (271,341) (313,422) (5,429) (5,759) Capital lease - - - - Net cash flows provided (used) by capital and related financing activities (1,954,395) (2,751,470) (1,320,571) (21,759) Cash flows from investing activities Interest received 21,203 24,758 8,633 5,576 Net increase (decrease) in cash and cash equivalents (865,178) (1,717,800) (981,550) (161,430) Cash and cash equivalents - January 1 880,701 2,598,501 1,253,942 1,415,372 Cash and cash equivalents - December 31 15,523$ 880,701$ 272,392$ 1,253,942$ Business-Type Activities Enterprise Funds Water Sewer The accompanying notes are an integral part of these financial statements. 52 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 67 Statement 8 Page 1 of 2 Governmental Activities Internal 2016 2015 2016 2015 2016 2015 Service Funds 3,174,016$ 3,178,450$ 2,599,435$ 2,436,132$ 17,509,658$ 16,812,140$ -$ - - - - - - 3,402,900 60,515 30,140 - - 158,712 205,496 485,087 (2,689,385) (2,689,843) (231,823) (232,781) (10,491,698) (8,971,219) (2,749,184) (464,384) (377,433) (516,421) (503,262) (3,053,195) (2,689,349) (2,650,001) - - (55,262) (77) (73,711) (24,938) - 80,762 141,314 1,795,929 1,700,012 4,049,766 5,332,130 (1,511,198) - - - - - - 200,000 (189,737) (214,186) (273,115) (841,524) (1,744,890) (3,692,849) - - - -- 500,000 - - (500,000) - -- (500,000) - - - - ---- 2,445,525 174,160 118,610 - - 181,525 128,610 690,039 (515,577) (95,576) (273,115) (841,524) (1,563,365) (3,564,239) 3,335,564 - - - - 1,002,240 - 628,760 (30,874) - (41,154) - (1,148,801) - (91,415) - - - - 465,203 488,173 - - - (533,463) - (3,152,184) (2,335,774) (1,884,799) - - - - - - 302,501 - - 9,097 678,934 1,874,952 2,172,287 - - - (359,000) (1,090,200) (2,995,000) (3,190,000) - - - -- - - (31,505) - - (24,281) (62,178) (301,051) (381,359) - - - - - - - (5,607) (30,874) - (948,801) (473,444) (4,254,641) (3,246,673) (1,082,065) 13,010 9,719 22,239 14,413 65,085 54,466 18,893 (452,679) 55,457 596,252 399,457 (1,703,155) (1,424,316) 761,194 2,161,295 2,105,838 2,649,006 2,249,549 6,944,944 8,369,260 1,879,845 1,708,616$ 2,161,295$ 3,245,258$ 2,649,006$ 5,241,789$ 6,944,944$ 2,641,039$ Business-Type Activities Enterprise Funds Storm Water TotalsSolid Waste The accompanying notes are an integral part of these financial statements. 53 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 68 CITY OF ST. LOUIS PARK, MINNESOTA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS For The Year Ended December 31, 2016 With Comparative Totals For The Year Ended December 31, 2015 2016 2015 2016 2015 Reconciliation of operating income (loss) to net cash provided (used) by operating activities Operating income (loss)1,008,007$ 1,048,611$ 967,508$ 1,176,444$ Adjustments to reconcile operating income (loss) to net cash flows from operating activities Miscellaneous expense (12,781) (15,367) (5,668) (9,494) Depreciation 707,093 718,198 114,295 129,701 (Increase) decrease in assets/deferred outflows Accounts receivable (296,901) (30,305) (149,998) (16,664) Due from other governments - - - - Special assessments (5,259) 29,052 2,086 (40,466) Prepaid items 13,667 (13,667) 6,463 (54,110) Inventories (71,205) 6,135 - - Deferred outflows of resources - - - - Increase (decrease) in liabilities/deferred inflows Accounts payable (8,483) (26,339) 93,392 8,233 Due to other governments - - - - Contracts payable (229,131) 497,175 - - Deposits payable (16,610) (12,355) - - Accrued salaries payable 3,600 10,809 17,415 2,507 Unearned revenue (21,909) 69,635 - - Accrued flex spending - - - - Compensated absences payable 11,142 (7,665) 22,391 (440) Other postemployment benefits 15,974 17,647 7,987 3,529 Net pension liability - - - - Deferred inflows of resources - - - - Net cash provided (used) by operating activities 1,097,204$ 2,291,564$ 1,075,871$ 1,199,240$ Noncash capital and related financing activities Amortization of bond premiums -$ 16,409$ -$ 26$ Disposal of capital assets - - - - Asset accquired through financing - - - - Water Sewer Business-Type Activities Enterprise Funds The accompanying notes are an integral part of these financial statements. 54 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 69 Statement 8 Page 2 of 2 Governmental Activities Internal 2016 2015 2016 2015 2016 2015 Service Funds (1,557)$ 281,191$ 1,274,653$ 1,159,625$ 3,248,611$ 3,665,871$ (8,720,331)$ - - (55,262) (77) (73,711) (24,938) - - - 565,262 568,563 1,386,650 1,416,462 1,781,619 (6,059) 19,011 (42,948) (32,924) (495,906) (60,882) 5,829 - - - - - - 210 - 13 - - (3,173) (11,401) - - - 18,433 751 38,563 (67,026) 25,239 - - - - (71,205) 6,135 - - - - - - - (24,558,317) 69,988 (168,299) 10,019 (4,223) 164,916 (190,628) (244,643) - - - - - - 54,037 - - - (374) (229,131) 496,801 - - - - - (16,610) (12,355) - 9,696 7,633 15,999 424 46,710 21,373 - - - - - (21,909) 69,635 - - - - - - - (2,650) 3,902 - 4,981 4,718 42,416 (3,387) 85,549 4,792 1,765 4,792 3,529 33,545 26,470 400,936 - - - - - - 26,912,406 - - - - - - 2,748,918 80,762$ 141,314$ 1,795,929$ 1,700,012$ 4,049,766$ 5,332,130$ (1,511,198)$ -$ -$ -$ 3,078$ -$ 19,513$ -$ - - - - - - 1,229,169 - - - - - - 222,149 Solid Waste Storm Water Totals Business-Type Activities Enterprise Funds The accompanying notes are an integral part of these financial statements. 55 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 70 - This page intentionally left blank - 56 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 71 CITY OF ST. LOUIS PARK, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2016 Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The City of St. Louis Park, Minnesota (the City) was incorporated in 1886 and operates a council-manager form of government under the “Home Rule Charter” concept according to applicable Minnesota laws and statutes. The governing body consists of a seven member City Council elected by the voters of the City. The financial statements of the City have been prepared in conformity with accounting principles generally accepted in the United States of America as applied to governmental units by the Governmental Accounting Standards Board (GASB). The following is a summary of the significant accounting policies. A.FINANCIAL REPORTING ENTITY As required by generally accepted accounting principles, the financial statements of the reporting entity include those of the City (the primary government) and its component units, entities for which the City is considered to be financially accountable. Blended component units, although legally separate entities, are in substance, part of the City’s operations and so data from these units are combined with data of the City. BLENDED COMPONENT UNITS The Economic Development Authority (EDA) is an entity legally separate from the City. However, for financial reporting purposes, the EDA is reported as if it were part of the City’s operations because the members of the City Council serve as EDA Board Members and the City has the ability to access EDA resources. Separate financial statements are not prepared for the EDA. The following funds are maintained by the EDA: Debt Service Funds –2008B General Obligation Tax Increment Bonds, and Hoigaard’s 2010A & B TIF Notes; Capital Project Funds – Development EDA and Redevelopment District. RELATED ORGANIZATION The Housing Authority (HA) is an entity legally separate from the City. The HA is governed by a Board of Commissioners appointed by the City Council. However, the City’s accountability for the HA does not extend beyond making the appointments. B.GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. The statement of activities demonstrates the degree to which the direct expenses of a given function or business-type activity is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or business-type activity. Program revenues include: 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or business-type activity and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or business- type activity. Taxes and other items not included among program revenues are reported instead as general revenues. 57 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 72 CITY OF ST. LOUIS PARK, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2016 Separate financial statements are provided for governmental funds and proprietary funds. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. C.MEASUREMENT FOCUS, BASIS OF ACCOUNTING, AND FINANCIAL STATEMENT PRESENTATION The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the City considers all revenues, except reimbursement grants and MSA construction allotments, to be available if they are collected within 60 days of the end of the current fiscal period. Reimbursement grants and MSA construction allotments are considered available if they are collected within one year of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. Property taxes, special assessments, intergovernmental revenue, franchise taxes, licenses, and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Only the portion of special assessments receivable due within the current fiscal period is considered to be susceptible to accrual as revenue of the current period. All other revenue items are considered to be measurable and available only when cash is received by the City. The City reports the following major governmental funds: The General Fund is the City’s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. The Housing Rehabilitation Fund is used to account for revenues from revenue bond fees and expenditures related to preventing deterioration of multi-unit housing. Debt Service Funds account for the resources accumulated and payments made for principal and interest on long- term general obligation debt of the government. The Permanent Improvement Revolving Fund accounts for the resources and expenditures required for the acquisition and construction of capital improvements which will provide a direct or significant indirect benefit to individual property owners. Financing of these projects is provided by shared costs with other organizations, land sales, state allotment from highway user tax collections and assessment proceeds. The Streets Capital Projects Fund accounts for street construction projects. Revenues are provided by the General Fund or by the issuance of General Obligation bonds. The Development EDA Fund accounts for transactions related to redevelopment efforts in the City; financing is provided by investment income, grants, and developer reimbursements. 58 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 73 CITY OF ST. LOUIS PARK, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2016 The Sidewalks and Trails Fund accounts for the City’s 10 year plan to add additional sidewalks, trails, bike lane and bikeway throughout the community. Financing for this plan will occur by issuing General Obligation bonds over several stages throughout the life of the plan. The Park Improvement Fund accounts for the financing of land acquisition and development for park purposes. Revenues are provided by St. Louis Park School District contributions, interest earnings, rent, sale of property and a property tax levy. The Redevelopment District Fund accounts for transactions relative to acquisition and development in the City’s tax increment redevelopment districts; financing is provided by the sale of general obligation tax increment bonds along with tax increment property tax payments. The City reports the following major enterprise funds: The Water Fund accounts for the provisions of water services to residents of the City. All activities necessary to provide such services are accounted for in this fund, including administration, operations, maintenance, billing and collection. The Sewer Fund accounts for the provisions of sewer services to residents of the City. All activities necessary to provide such services are accounted for in this fund, including administration, operations, maintenance, billing and collection. The Solid Waste Fund accounts for the revenue and expense related to collection, disposal, and recycling of residential solid waste. Financing is provided by charging each property owner a predetermined service fee. The Storm Water Fund accounts for the revenue and expenses related to providing storm water to the residents of the City. All activities necessary to provide such services are accounted for in this fund, including administration, operations, construction, maintenance, billing and collection. Additionally, the government reports the following fund types: Internal Service Funds account for the financing of goods or services provided by one department or agency to other departments or agencies of the City, or to other governments on a cost reimbursement basis. The City’s internal service funds account for employee flex spending, uninsured loss, capital replacement, and pensions. As a general rule the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are transactions that would be treated as revenues, expenditures or expenses if they involved external organizations, such as buying goods and services or payments in lieu of taxes, are similarly treated when they involve other funds of the City. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. Amounts reported as program revenues include 1) charges to customers or applicants for goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the water, sewer, solid waste and storm water enterprise funds are charges to customers for sales and services. Operating expenses for enterprise funds include the 59 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 74 CITY OF ST. LOUIS PARK, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2016 cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. D.BUDGETARY INFORMATION Budgets are legally adopted on a basis consistent with generally accepted accounting principles. Annual appropriated budgets are legally adopted for the General Fund. A budget is not presented for the Housing Rehabilitation Fund since the City does not legally require to adopt a budget for the fund. Budgeted amounts are reported as originally adopted, or as amended by the City Council. Budgeted expenditure appropriations lapse at year end. Encumbrance accounting, under which purchase orders, contracts, and other commitments for the expenditure of monies are recorded in order to reserve that portion of the appropriation, is not employed by the City because it is as present not considered necessary to assure effective budgetary control or to facilitate effective cash management. E.LEGAL COMPLIANCE - BUDGETS The City follows these procedures in establishing the budgetary data reflected in the financial statements: 1.The City Manager submits to the City Council a proposed operating budget for the fiscal year commencing the following January 1. The operating budget includes proposed expenditures and the means of financing them. 2.The City Council reviews the proposed budget and makes appropriate changes. 3.Public hearings are conducted to obtain taxpayer comments. 4.The budget is legally enacted through passage of a resolution on a departmental/divisional basis and can be expended by each department based upon detailed budget estimates for individual expenditure accounts in accordance with the provisions of Section 6.05 of the City Charter. 5.After the budget resolution is approved, the City Council can increase the budget only by resolution if actual receipts exceed the estimated, or from accumulated fund balance in the amount of unexpended appropriations from the previous fiscal year. During the year 2016, the budget was not amended. 6.Formal budgetary integration is employed as a management control device during the year for the General Fund. 7.Legal debt obligation indentures determine the appropriation level and debt service tax levies for the Debt Service Funds. Supplementary budgets are adopted for the Proprietary Funds to determine and calculate user charges. These debt service and budget amounts represent general obligation bond indenture provisions and net income for operation and capital maintenance and are not reflected in the financial statements. 8.A capital improvement program is reviewed annually by the City Council for the Capital Project Funds. However, appropriations for major projects are not adopted until the actual bid award of the improvement. The appropriations are not reflected in the financial statements. 60 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 75 CITY OF ST. LOUIS PARK, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2016 9.The legal level of budgetary control is at the fund level. Expenditures may not legally exceed budgeted appropriations at the total fund level. The City Council must approve all expenditures at fund level either by resolution or through the disbursement process. 10.Monitoring of budgets is maintained at the expenditure category level (i.e., personal services, supplies, and other services and charges, and capital outlay) within each program. Management can exceed appropriations at the department level without City Council approval. Approval must be received for exceeding budgeted appropriations at the fund level. 11.The City Council may authorize transfer of budgeted amounts between City funds. F.CASH AND INVESTMENTS Cash and investment balances from all funds are pooled and invested to the extent available in authorized investments. Investment income is allocated to individual funds on the basis of average monthly cash balances. The City’s investment policy dictates that the General fund is to receive the first three percent of all interest earnings as an administrative fee. The administrative fee does not apply to the Economic Development Authority. Investments are stated at fair value, based upon quoted market prices, except for investments in 2a7-like external investment pools, which are stated at amortized cost. Investment income is accrued at the balance sheet date. For purposes of the statement of cash flows, the Proprietary Funds consider all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. All of the cash and investments allocated to the Proprietary Fund types have original maturities of 90 days or less. Therefore the entire balance in such fund types is considered cash equivalents. It is the City’s policy to invest in a manner that seeks to ensure preservation of capital in the overall portfolio. Safety of principal is the foremost objective, but liquidity and yield are also important considerations. The objective will be to mitigate credit risk by purchasing only highly rated securities with adequate collateral and interest rate risk by matching maturities to cash flow needs and holding securities to maturity. G.ACCOUNTS RECEIVABLE Property taxes and special assessment receivables have been reported net of estimated uncollectible accounts (See Note 1 I and J). The City annually certifies delinquent water and sewer accounts to the County for collection in the following year. Because utility bills are considered liens on property, no estimated uncollectible amounts are established. Uncollectible amounts are not material for other receivables and have not been reported. H.INTERFUND RECEIVABLES AND PAYABLES Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either “due to/from other funds” (i.e., the current portion of interfund loans) or “interfund loan receivable/payable” (i.e., the noncurrent portion of interfund loans). Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as “internal balances.” 61 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 76 CITY OF ST. LOUIS PARK, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2016 I.PROPERTY TAX REVENUE RECOGNITION The City Council annually adopts a tax levy and certifies it to the County in December (levy/assessment date) of each year for collection in the following year. The County is responsible for billing and collecting all property taxes for itself, the City, the local School District and other taxing authorities. Such taxes become a lien on January 1 and are recorded as receivables by the City at that date. Real property taxes are payable (by property owners) on May 15 and October 15 of each calendar year. Personal property taxes are payable by taxpayers on February 28 and June 30 of each year. These taxes are collected by the County and remitted to the City on or before July 7 and December 2 of the same year. Delinquent collections for November and December are received the following January. The City has no ability to enforce payment of property taxes by property owners. The County possesses this authority. The City recognizes property tax revenue when it becomes both measurable and available to finance expenditures of the current period. In practice, current and delinquent taxes and State credits received by the City in July, December and January are recognized as revenue for the current year. Taxes collected by the County by December 31 (remitted to the City the following January) and taxes and credits not received at year end are classified as delinquent and due from County taxes receivable. The portion of delinquent taxes not collected by the City in January is fully offset by deferred inflow of resources because they are not available to finance current expenditures. GOVERNMENT-WIDE FINANCIAL STATEMENTS The City recognizes property tax revenue in the period for which the taxes were levied. Uncollectible property taxes are not material and have not been reported. GOVERNMENTAL FUND FINANCIAL STATEMENTS The City’s property tax revenue includes payment from the Metropolitan Revenue Distribution (Fiscal Disparities Formula) per Minnesota Statute 473F. This statute provides a means of spreading a portion of the taxable valuation of commercial/industrial real property to various taxing authorities within the defined metropolitan area. The valuation “shared” is a portion of commercial/industrial property valuation growth since 1971. Property taxes paid to the City through this formula for 2016 and 2015 totaled $2,260,765and $2,194,820, respectively. Receipt of property taxes from this “fiscal disparities pool” does not increase or decrease total tax revenue. J.SPECIAL ASSESSMENT REVENUE RECOGNITION Special assessments are levied against benefited properties for the cost or a portion of the cost of special assessment improvement projects in accordance with State Statutes. These assessments are collectible by the City over a term of years usually consistent with the term of the related bond issue. Collection of annual installments (including interest) is handled by the County Auditor in the same manner as property taxes. Property owners are allowed to (and often do) prepay future installments without interest or prepayment penalties. Once a special assessment roll is adopted, the amount attributed to each parcel is a lien upon that property until full payment is made or the amount is determined to be excessive by the City Council or court action. If special assessments are allowed to go delinquent, the property is subject to tax forfeit sale and the first proceeds of that sale (after costs, penalties and expenses of sale) are remitted to the City in payment of delinquent special assessments. Pursuant to State Statutes, a property shall be subject to a tax forfeit sale after three years unless it is homesteaded, agricultural or seasonal recreational land in which event the property is subject to such sale after five years. GOVERNMENT-WIDE FINANCIAL STATEMENTS The City recognizes special assessment revenue in the period that the assessment roll was adopted by the City Council. Uncollectible special assessments are not material and have not been reported. 62 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 77 CITY OF ST. LOUIS PARK, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2016 GOVERNMENTAL FUND FINANCIAL STATEMENTS Revenue from special assessments is recognized by the City when it becomes measurable and available to finance expenditures of the current fiscal period. In practice, current and delinquent special assessments received by the City are recognized as revenue for the current year. Special assessments that are collected by the County by December 31 (remitted to the City the following January) and are also recognized as revenue for the current year. All remaining delinquent, deferred and special deferred assessments receivable in governmental funding are completely offset by deferred inflow of resources. K.INVENTORIES Inventory is valued at cost using the first-in, first out (FIFO) method. Inventory consists mainly of expendable supplies held for consumption. Inventories of the governmental funds are recorded as expenditures when consumed rather than when purchased. L.PREPAID ITEMS Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements. Prepaid items are reported using the consumption method and recorded as expenditures/expenses at the time of consumption. M.CAPITAL ASSETS Capital assets, which include property, plant, equipment, infrastructure assets (e.g., roads, bridges, sidewalks, and similar items), and intangible assets such as easements and computer software, are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assets are defined by the City as assets with an estimated useful life in excess of three years and an initial individual cost of more than the following: Land $1 Land improvements 5,000 Buildings and building improvements 5,000 Machinery and equipment 10,000 Office equipment 25,000 Vehicle or fleet 10,000 Infrastructure 250,000 Capitalization Threshold Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. The City uses the modified approach for reporting street and trail system capital assets. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. 63 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 78 CITY OF ST. LOUIS PARK, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2016 Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business-type activities is included as part of the capitalized value of the assets constructed. For the year ended December 31, 2016, no interest was capitalized in connection with construction in progress. Property, plant and equipment of the primary government, as well as the component units, is depreciated using the straight line method over the following estimated useful lives: Buildings and structures 5 – 30 years Improvements other than buildings 5 – 30 years Infrastructure 5 – 100 years Machinery, furniture and equipment (including software) 3 – 30 years Fleet 3 – 25 years Temporary easements 3 – 5 years Capital assets of the water utility and sewer utility operations include the water distribution system and sewer collection system. These systems have been wholly (or substantially) financed by non-operating funds (special assessments, general taxes, federal and state grants, and other sources) and contribution to the Water and Sewer operating funds. City policy is to finance these assets by the sources indicated rather than by user charges. Accordingly, the water and sewer user rates are not established at levels sufficient to cover depreciation on these assets. The City implemented GASB 51, Accounting and Financial Reporting for Intangible Assets effective January 1, 2010, which required the City to capitalize and amortize intangible assets. Pursuant to GASB Statement No. 51, the retroactive reporting of permanent easements is not required and therefore, the City has elected not to report permanent easements acquired in years prior to 2010. The City had already accounted for computer software at historical cost and therefore retroactive reporting was not necessary. The City elects to use the modified approach as defined by GASB Statement No. 34 for infrastructure reporting of its streets. The City conducted a physical assessment in the summer of 2015 of the condition of the streets. This condition assessment will be performed every 2 years. Each segment of City owned street was assigned a physical condition based on potential defects. A Overall Condition Index (OCI) was assigned to each segment. The index is expressed in a continuous scale from 0 to 100, where 0 is assigned to the least acceptable physical condition and 100 is assigned to those segments that have the characteristic of a new street. The following conditions were defined: Range Description 86 - 100 Excellent 71 - 85 Very good 56 - 70 Good 41 - 55 Fair 26 - 40 Poor 11 - 25 Very poor 0 - 10 Failed The City’s policy relative to maintaining the street and trail assets is to achieve an average rating of “Good” for all segments. This acceptable rating allows minor cracking and patching of the pavement along with minor roughness that could be noticeable to the users of the system. 64 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 79 CITY OF ST. LOUIS PARK, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2016 N.COMPENSATED ABSENCES It is the City's policy to permit employees to accumulate earned but unused vacation, sick pay and flex leave benefits. No liability is recorded for unpaid accumulated sick leave, except for that portion that is payable as severance. All liabilities for vacation leave, flex leave and severance, both current and long-term, are recorded in the Employee Benefits Fund, an Internal Service Fund for governmental funds, and in the individual enterprise funds when incurred. The personnel ordinance limits the annual accumulation of benefits that can be accumulated from year-to-year. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee resignations and retirements. O.LONG-TERM OBLIGATIONS In the government-wide financial statements and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net position. Bond premiums and discounts are deferred and amortized over the life of the bonds using the effective interest method. In the fund financial statements, governmental fund types recognize bond premiums and discounts during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. P.FUND BALANCE CLASSIFICATIONS In the fund financial statements, governmental funds report fund balance in classifications that disclose constraints for which amounts in those funds can be spent. These classifications are as follows: Nonspendable - consists of amounts that are not in spendable form, such as prepaid items. Restricted - consists of amounts related to externally imposed constraints established by creditors, grantors or contributors; or constraints imposed by state statutory provisions. Committed - consists of amounts that are constrained for specific purposes that are internally imposed by formal action (resolution) of the City Council. Those committed amounts cannot be used for any other purpose unless City Council removes or changes the specified use by taking the same type of action it employed to previously commit those amounts. Assigned - consists of internally imposed constraints. These constraints reflect the specific purpose for which it is the City’s intended use. These constraints are established by the City Council and/or management. Pursuant to City Council Resolution, the City’s Chief Financial Officer and/or City Manager is authorized to establish assignments of fund balance. Unassigned - is the residual classification for the general fund and also reflects negative residual amounts in other funds. When both restricted and unrestricted resources are available for use, it is the City’s policy to first use restricted resources, then use unrestricted resources as they are needed. 65 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 80 CITY OF ST. LOUIS PARK, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2016 When committed, assigned or unassigned resources are available for use, it is the City’s policy to use resources in the following order; 1) committed 2) assigned and 3) unassigned. Q.INTERFUND TRANSACTIONS Interfund services provided and used are accounted for as revenues, expenditures or expenses. Transactions that constitute reimbursements to a fund for expenditures/expenses initially made from it that are properly applicable to another fund, are recorded as expenditures/expenses in the reimbursing fund and as reductions of expenditures/expenses in the fund that is reimbursed. Interfund loans are reported as an interfund loan receivable or payable which offsets the movement of cash between funds. All other interfund transactions are reported as transfers. R.COMPARATIVE TOTALS AND RECLASSIFICATIONS The basic financial statements and required supplementary information, include certain prior-year summarized comparative information in total but not at the level of detail required for a presentation in conformity with generally accepted accounting principles. Accordingly, such information should be read in conjunction with the government’s financial statements for the year ended December 31, 2015, from which the summarized information was derived. In addition, certain prior year amounts have been reclassified to conform to current year presentation. S.NET POSITION Net position represents the difference between assets/deferred outflows and liabilities/deferred inflows. Net position is displayed in three components. a)Net investment in capital assets – consists of capital assets, net of accumulated depreciation reduced by any outstanding debt attributable to acquire capital assets. b)Restricted net position – consist of net position restricted when there are limitations imposed on their use through external restrictions imposed by creditors, grantors, laws or regulations of other governments. c)Unrestricted net position – all other net position that do not meet the definition of “restricted” or “net investment in capital assets”. T.USE OF ESTIMATES The preparation of financial statements in accordance with generally accepted accounting principles (GAAP) requires management to make estimates that affect amounts reported in the financial statements during the reporting period. Actual results could differ from such estimates. U.DEFERRED OUTFLOWS/INFLOWS OF RESOURCES In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The government has one item that qualifies for reporting in this category. It is the pension related deferred outflows of resources reported in the government-wide statement of net position and the proprietary funds statement of net position. 66 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 81 CITY OF ST. LOUIS PARK, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2016 In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The government has pension related deferred inflows of resources reported in the government-wide statement of net position and the proprietary funds statement of net position. The government also has a type of item, which arises only under a modified accrual basis of accounting, that qualifies for reporting in this category. Accordingly, the item, unavailable revenue, is reported only in the governmental fund balance sheet. The governmental funds report unavailable revenues from the following sources: property taxes, special assessments, bond reimbursement payments not yet due and other miscellaneaous unavailable revenue. V. DEFINED BENEFIT PENSION PLANS Pensions. For purposes of measuring the net pension liability, deferred outflows/inflows of resources, and pension expense, information about the fiduciary net position of the Public Employees Retirement Association (PERA) and additions to/deductions from PERA’s fiduciary net position have been determined on the same basis as they are reported by PERA except that PERA’s fiscal year end is June 30. For this purpose, plan contributions are recognized as of employer payroll paid dates and benefit payments and refunds are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. Note 2 DEPOSITS AND INVESTMENTS A.DEPOSITS In accordance with Minnesota Statutes, the City maintains deposits at those depository banks authorized by the City Council, all of which are members of the Federal Reserve System. Minnesota Statutes require that securities pledged as collateral be held in safekeeping by the City Treasurer or in a financial institution other than that furnishing the collateral. Authorized collateral includes the following: 1.United States government treasury bills, treasury notes, treasury bonds; 2.Issues of United States government agencies and instrumentalities as quoted by a recognized industry quotation service available to the government entity; 3.General obligation securities of any state or local government with taxing powers which is rated “A” or better by a national bond rating service, or revenue obligation securities of any state or local government with taxing powers which is rated “AA” or better by a national bond rating service; 4.General obligation securities of a local government with taxing powers may be pledged as collateral against funds deposited by that same local government entity; 5.Irrevocable standby letters of credit issued by Federal Home Loan Banks to a municipality accompanied by written evidence that the bank’s public debt is rated “AA” or better by Moody’s Investors Service, Inc. or Standard & Poor’s Corporation; and 6.Time deposits that are fully insured by any federal agency. Custodial Credit Risk - deposits – Custodial credit risk is the risk that in the event of a bank failure, the City’s deposits may not be returned to it. Minnesota Statutes require that insurance, surety bonds or collateral protect all City deposits. The market value of collateral pledged must equal 110% of deposits not covered by insurance or bonds. The City has no additional deposit policies addressing custodial credit risk. As of December 31, 2016, the bank balance of the City’s 67 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 82 CITY OF ST. LOUIS PARK, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2016 deposits was $2,221,059 all of which was covered by federal depository insurance or by collateral pledged and held in the City’s name. B. INVESTMENTS The City is authorized by Minnesota Statute Chapter 118A, and the City’s investment policy, to invest in the following: 1.Direct obligations or obligations guaranteed by the United States or its agencies, its instrumentalities, or organizations created by an act of congress, excluding mortgage-backed securities defined as high risk. 2.Shares of investment companies registered under the Federal Investment Company Act of 1940 and whose only investments are in securities described in (a) above, general obligation tax-exempt securities, or repurchase or reverse repurchase agreements, and is rated one of the two highest rating categories for money market funds by at least one nationally recognized rating organization. 3.State and local securities as follows: a)any security which is a general obligation of any state or local government with taxing powers which is rated “A” or better by a national bond rating service; b)any security which is a revenue obligation of any state or local government with taxing powers which is rated “AA” or better by a national bond rating service; and c)a general obligation of the Minnesota Housing Finance Agency which is a moral obligation of the State of Minnesota and is rated “A” or better by a national bond rating agency. 4.Bankers acceptance of United States banks. 5.Commercial paper, with a maturity of 270 days or less, issued by United States corporations or their Canadian subsidiaries, of the highest quality, and maturing in 270 days or less. 68 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 83 CITY OF ST. LOUIS PARK, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2016 At December 31, 2016, the City had the following investments and maturities: Fair Less Investment Type Rating Value Than 1 1-5 6-10 11-15 4M fund NR 23,339,552$ 23,339,552$ -$ -$ -$ Money market funds NR 1,154,732 1,154,732 - - - Commercial paper NR 2,739,183 2,739,183 - - - Brokered Certificates of Deposit NR 5,487,070 1,644,843 3,842,227 - - Municipal Bonds A - AAA 8,514,385 2,507,335 6,007,050 - - US Treasury AAA 9,214,183 - 9,214,183 - - Federal National Mortgage Association AAA 3,599,074 - 3,599,074 - - Federal Home Loan Bank Notes AAA 9,817,952 - 9,817,952 - - Total 63,866,131$ 31,385,645$ 32,480,486$ -$ -$ Total investments 63,866,131$ Deposits 1,352,420 Petty cash 4,885 Total cash and investments 65,223,436$ Investment Maturities (in Years) The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. The hierarchy has three levels. Level 1 investments are valued using inputs that are based on quoted prices in active markets for identical assets. Level 2 investments are valued using inputs that are based on quoted prices for similar assets or inputs that are observable, either directly or indirectly. Level 3 investments are valued using inputs that are unobservable. The City has the following recurring fair value measurements as of December 31, 2016: Investment Type 12/31/2016 Level 1 Level 2 Level 3 Investments at fair value: Commercial paper 2,739,183$ -$ 2,739,183$ -$ Brokered Certificates of Deposit 5,487,070 - 5,487,070 - Municipal Bonds 8,514,385 - 8,514,385 - US Treasury 9,214,183 - 9,214,183 - Federal National Mortgage Association 3,599,074 - 3,599,074 - Federal Home Loan Bank Notes 9,817,952 - 9,817,952 - Total/Subtotal 39,371,847 -$ 39,371,847$ -$ Investments not categorized: External investment pool - 4M Fund 23,339,552 Money market funds 1,154,732 Total 63,866,131$ Fair Value Measurement Using The City’s external investment pool investment is with the 4M fund which is regulated by Minnesota Statutes and the Board of Directors of the League of Minnesota Cities. The 4M fund is an unrated pool and the fair value of the position in the pool is the same as the value of pool shares. The pool is managed to maintain a portfolio weighted average maturity of no greater than 60 days and seeks to maintain a constant net asset value (NAV) per share of $1. The pool measures their investments in accordance with Government Accounting Standards Board Statement No. 79, at amortized cost. 69 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 84 CITY OF ST. LOUIS PARK, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2016 The 4M Liquid Asset Fund has no redemption requirements. The 4M Plus Fund requires funds to be deposited for a minimum of 14 calendar days. Withdrawals prior to the 14-day restriction period are subject to a penalty equal to 7 days interest on the amount withdrawn. C. INVESTMENT RISKS Custodial credit risk – investments – For investments in securities, custodial credit risk is the risk that in the event of failure of the counterparty to a transaction, the City will not be able to recover the value of its investment securities that are in the possession of an outside party. Investments in investment pools and money markets are not evidenced by securities that exist in physical or book entry form, and therefore are not subject to custodial credit risk disclosures. The City’s investment policy requires the City’s security broker/dealers to provide its audited financial statements, proof of NASD certification, proof of state registration, and certification of having read, understood and agreed to comply with the City’s investment policy. Investments in securities are held by the City’s broker-dealer of which $500,000 is insured through SIPC. Each broker-dealer has provided additional protection by providing additional insurance. This insurance is subject to aggregate limits applied to all of the broker-dealers accounts. Interest rate risk – Interest rate risk is the risk that changes in interest rates of debt investments could adversely affect the fair value of an investment. The City’s investment policy states the investment portfolio will remain sufficiently liquid to enable the City to meet all operating and capital requirements that might be reasonably anticipated. The maximum maturity of investments shall not extend beyond five years, unless related to specific cash flow needs. Credit Risk – Credit risk is the risk that an issuer or other counterparty to an investment will be unable to fulfill its obligation to the holder of the investment. State law limits investments to commercial paper to those rated in the highest quality category by at least two nationally recognized rating agencies; in any security of the State of Minnesota or any of its municipalities which is rated “A” or better by a national bond rating service for general obligation and rated “AA” or better for a revenue obligation; a general obligation of the Minnesota Housing Finance Agency to those rated “A” or better by a national bond rating agency; mutual funds or money market funds whose investments are restricted to securities described in MS 118A.04. The City’s investment policy does not place further restrictions on investment options. Concentration of credit risk – Concentration of credit risk is the risk of loss that may be attributed to the magnitude of a government’s investment in a single issuer. The City’s investment policy states no more than 50% of its investment portfolio can be invested in municipal bonds or MHFA securities. Investments in a single issuer exceeding 5% of the City’s overall cash and investment portfolio are in various holdings as follows: Federal National Mortgage Assn.5.52% Federal Home Loan Bank 15.05% Note 3 RECEIVABLES A.LOANS RECEIVABLE The City has made loans to local businesses and individuals that qualify for various loan programs. The businesses and individuals pay varying installments on the loans. Depending on the loan program, some of the loans are secured by an interest in the property. Also, some of the loans are forgivable after 30 years if certain criteria are met. As of December 31, 2016, any forgiveness of loans would not occur for another 20 – 30 years. At this time, information is not available to develop an 70 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 85 CITY OF ST. LOUIS PARK, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2016 estimate for any loans which may be forgiven. Therefore, no allowance has been recorded. As loan maturity dates approach, the City will evaluate whether an allowance for forgivable loans should be recorded in the financial statements. As of December 31, 2016, the loans receivable balance was $8,873,039. Significant receivable balances not expected to be collected within one year of December 31, 2016 are as follows: Special Interfund Loans Assessments Property Loans Pledges Receivable Receivable Taxes Receivable Receivable Total Major Funds: General Fund -$ -$ 266,621$ -$ -$ 266,621$ Housing Rehabilitation Fund 3,223,460 19,491 9,698 - - 3,252,649 Debt Service Funds 1,560,000 - - - - 1,560,000 Permanent Improvement Revolving Fund - 7,404 - - - 7,404 Development EDA Fund 956,419 - - - - 956,419 Redevelopment District Fund 718,738 - - 5,981,225 - 6,699,963 Park Improvement Fund - - - - 1,350,000 1,350,000 Water Fund - 53,542 - - - 53,542 Sewer Fund - 903 - - - 903 Nonmajor Governmental Funds 436,921 4,870 - - - 441,791 Total 6,895,538$ 86,210$ 276,319$ 5,981,225$ 1,350,000$ 14,589,292$ Note 4 UNAVAILABLE REVENUE Governmental funds report deferred inflows of resources in connection with receivables for revenues that are not considered to be available to liquidate liabilities of the current period. At the end of the current fiscal year, the various components of unavailable revenue reported in the governmental funds were as follows: Unavailable Delinquent property taxes receivable (General Fund) 266,621$ Delinquent property taxes receivable (Redevelopment District) 9,698 Special assessments not yet due (Permanent Improvement Revolving)734,608 Special assessments not yet due (Housing Rehabilitation)6,335,485 Special assessments not yet due (Nonmajor Funds)175,029 Bond reimbursement payments not yet due (Debt Service Funds)1,600,000 Other miscellaneous (Redevelopment District)75,732 Other miscellaneous (Park Improvement Fund)1,450,000 Other miscellaneous (Nonmajor Funds)32,268 Total unavailable revenue for governmental funds 10,679,441$ 71 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 86 CITY OF ST. LOUIS PARK, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2016 Note 5 CAPITAL ASSETS In accordance with GASB Statement No. 34, the City has reported all capital assets including infrastructure in the government- wide statement of net assets. The City has elected to use the modified approach as defined by GASB Statement No. 34 for reporting of street infrastructure. As a result, no accumulated depreciation or depreciation expense has been recorded for street infrastructure. Additional information of the modified approach is presented in the Notes to Required Supplementary Information section of this report. All other capital assets including other infrastructure systems were reported using the basic approach whereby accumulated depreciation and depreciation expense have been recorded. Modified approach adjustments represent the changes due to implementation of the modified approach for infrastructure reporting. Capital asset activity for the year ended December 31, 2016 is as follows: Beginning Ending Balance Increases Decreases Transfers Balance Governmental activities: Capital assets, not being depreciated: Land 15,682,665$ 1,309,170$ -$ -$ 16,991,835$ Infrastructure - streets 26,011,544 - - - 26,011,544 Permanent easements 1,429,976 - - - 1,429,976 Construction in progress 4,779,670 12,535,203 4,883,148 (334,691) 12,097,034 Total capital assets, not being depreciated 47,903,855 13,844,373 4,883,148 (334,691) 56,530,389 Capital assets, being depreciated: Buildings and structures 47,572,475 16,901 - - 47,589,376 Improvements other than buildings 22,035,586 4,642,438 - 323,196 27,001,220 Infrastructure 31,912,725 - - - 31,912,725 Machinery, furniture and equipment 9,622,774 853,695 699,419 - 9,777,050 Fleet 8,111,041 1,693,286 529,750 - 9,274,577 Total capital assets, being depreciated 119,254,601 7,206,320 1,229,169 323,196 125,554,948 Less accumulated depreciation for: Buildings and structures 12,941,476 1,104,856 - - 14,046,332 Improvements other than buildings 12,368,879 966,280 - - 13,335,159 Infrastructure 16,259,027 944,222 - - 17,203,249 Machinery, furniture and equipment 5,346,285 914,841 529,287 - 5,731,839 Fleet 4,121,593 763,276 458,832 - 4,426,037 Total accumulated depreciation 51,037,260 4,693,475 988,119 - 54,742,616 Total capital assets being depreciated - net 68,217,341 2,512,845 241,050 323,196 70,812,332 Governmental activities capital assets - net 116,121,196$ 16,357,218$ 5,124,198$ (11,495)$ 127,342,721$ 72 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 87 CITY OF ST. LOUIS PARK, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2016 Beginning Ending Balance Increases Decreases Transfers Balance Business-type activities: Capital assets, not being depreciated: Land 174,844$ 162,249$ -$ 177,990$ 515,083$ Construction in progress 2,348,159 1,795,827 3,726,331 (166,495) 251,160 Total capital assets, not being depreciated 2,523,003 1,958,076 3,726,331 11,495 766,243 Capital assets, being depreciated: Buildings and structures 4,767,723 - - - 4,767,723 Improvements other than buildings 7,155,538 - - - 7,155,538 Infrastructure 49,930,520 1,519,182 - - 51,449,702 Machinery, furniture and equipment 5,304,395 3,724,453 - - 9,028,848 Total capital assets, being depreciated 67,158,176 5,243,635 - - 72,401,811 Less accumulated depreciation for: Buildings and structures 3,833,976 128,131 - - 3,962,107 Improvements other than buildings 2,962,908 284,526 - - 3,247,434 Infrastructure 28,696,185 651,167 - - 29,347,352 Machinery, furniture and equipment 2,651,513 322,826 - - 2,974,339 Total accumulated depreciation 38,144,582 1,386,650 - - 39,531,232 Total capital assets being depreciated - net 29,013,594 3,856,985 - - 32,870,579 Business-type activities capital assets - net 31,536,597$ 5,815,061$ 3,726,331$ 11,495$ 33,636,822$ Depreciation expense was charged to functions/programs of the primary government as follows: Governmental activities: General government 77,697$ Public safety 482,746 Engineering 8,416 Operations and recreation 2,181,967 Public information 31,021 Social and economic development 130,009 Internal service 1,781,619 Total depreciation expense - governmental activities 4,693,475$ Business-type activities: Water 707,093$ Sewer 114,295 Storm water 565,262 Total depreciation expense - business-type activities 1,386,650$ 73 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 88 CITY OF ST. LOUIS PARK, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2016 Note 6 CITY INDEBTEDNESS The City issues general obligation bonds, to provide funds for the acquisition and construction of major capital facilities. The reporting entity’s long-term debt is segregated between the amounts to be repaid from governmental activities and amounts to be repaid from business-type activities. General obligation bonds are direct obligations and pledge the full faith and credit of the City. As of December 31, 2016, long-term debt of the City consisted of the following: Final Authorized Issue Maturity Interest And Outstanding Date Date Rates Issued 12/31/16 Governmental Activities: General Long-Term Debt: General Improvement Bonds: G.O. Improvement Bonds Series 2010A 5/7/2010 2/1/2031 1.25-5.7% 3,105,000$ 2,535,000$ G.O. Improvement Refunding Bonds Series 2010C 12/29/2010 2/1/2040 3.0-5.65% 1,770,000 1,600,000 G.O. Improvement Bonds Series 2010D (BABS)12/29/2010 2/1/2032 1.25-5.15% 13,025,000 10,890,000 G.O. Improvement Bonds Series 2012A HIA 10/17/2012 2/1/2033 0.75 - 3.90% 1,290,000 1,135,000 G.O. Improvement Bonds Series 2014A 12/18/2014 2/1/2026 2.00%5,070,000 5,070,000 G.O. Improvement Bonds Series 2016A 7/14/2016 2/1/2027 1.375 - 2.375% 10,000,000 10,000,000 Total General Improvement Bonds 34,260,000 31,230,000 Tax Increment Bonds: Tax Increment Refunding Bonds Series 2008B 12/11/2008 2/1/2024 3.25-4.63%5,490,000 3,805,000 Note payable on contract for deed 2/2/2015 3/1/2017 4.00%2,200,000 2,025,297 Capital lease payable - copier 2/14/2014 1/14/2019 0.00%40,500 16,875 Capital lease payable - vehicles 5/1/2016 5/1/2021 4.53%222,149 198,744 Compensated absences payable N/A N/A N/A N/A 3,837,736 Total governmental activities 42,212,649 41,113,652 Business-Type Activities: General Obligation Revenue Bonds: Utility Refunding Revenue Bonds Series 2010B 5/7/2010 2/1/2025 2.0-3.5% 4,090,000 1,725,000 Utility Crossover Refunding Bonds Series 2013A 7/1/2013 8/1/2023 1.0-1.9%4,170,000 3,860,000 Utility Revenue Bonds Series 2014A 12/18/2014 2/1/2026 2.00%4,930,000 4,930,000 Total General Obligation Revenue Bonds 13,190,000 10,515,000 Compensated absences payable N/A N/A N/A N/A 188,635 Total business-type activities 13,190,000 10,703,635 Total City 55,402,649$ 51,817,287$ 74 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 89 CITY OF ST. LOUIS PARK, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2016 GOVERNMENTAL ACTIVITIES Annual debt service requirements to maturity for the governmental activities long-term debt are as follows: Year Ending December 31 Principal Interest Principal Interest Principal Interest 2017 1,230,000$ 1,048,568$ 395,000$ 157,813$ 2,025,297$ 20,253$ 2018 1,640,000 1,000,579 415,000 141,613 - - 2019 2,255,000 947,650 435,000 124,613 - - 2020 2,315,000 883,919 460,000 105,563 - - 2021 2,375,000 816,600 485,000 84,300 - - 2022 2,430,000 746,392 510,000 61,913 - - 2023 2,490,000 673,108 535,000 38,400 - - 2024 2,560,000 594,464 570,000 13,181 - - 2025 2,630,000 516,195 - - - - 2026 2,695,000 440,194 - - - - 2027 2,200,000 365,516 - - - - 2028 1,075,000 302,564 - - - - 2029 1,120,000 246,608 - - - - 2030 1,165,000 187,819 - - - - 2031 1,210,000 126,481 - - - - 2032 1,015,000 69,578 - - - - 2033 160,000 40,290 - - - - 2034 80,000 34,505 - - - - 2035 85,000 30,070 - - - - 2036 90,000 25,323 - - - - 2037 95,000 20,258 - - - - 2038 100,000 14,870 - - - - 2039 105,000 9,155 - - - - 2040 110,000 3,108 - - - - Total 31,230,000$ 9,143,814$ 3,805,000$ 727,396$ 2,025,297$ 20,253$ Note Payable Governmental Activities G.O. Tax Increment Bonds Governmental ActivitiesGovernmental Activities G.O. Improvement Bonds It is not practicable to determine the specific year for payment of long-term accrued compensated absences. 75 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 90 CITY OF ST. LOUIS PARK, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2016 BUSINESS-TYPE ACTIVITIES Annual debt service requirements to maturity for the business-type long-term debt are as follows: Year Ending December 31 Principal Interest 2017 1,360,000$ 194,668$ 2018 1,385,000 173,855 2019 1,410,000 152,393 2020 1,440,000 128,143 2021 945,000 101,630 2022 970,000 81,491 2023 995,000 59,951 2024 725,000 37,540 2025 745,000 19,863 2026 540,000 5,400 Total 10,515,000$ 954,934$ G.O. Revenue Bonds Business-type Activities It is not practicable to determine the specific year for payment of long-term accrued compensated absences. 76 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 91 CITY OF ST. LOUIS PARK, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2016 CHANGE IN LONG-TERM LIABILITIES Long-term liability activity for the year ended December 31, 2016 was as follows: Beginning Ending Due Within Balance Additions Reductions Balance One Year Governmental activities: Bonds payable: G.O. improvement bonds 22,445,000$ 10,000,000$ 1,215,000$ 31,230,000$ 1,230,000$ G.O. tax increment bonds 4,175,000 -370,000 3,805,000 395,000 Add: Premiums on bonds 90,063 396,655 27,173 459,545 - Discounts on bonds (118,983) -(7,537) (111,446) - Total bonds payable 26,591,080 10,396,655 1,604,636 35,383,099 1,625,000 Note Payable 2,122,173 -96,876 2,025,297 2,025,297 Capital lease payable 24,975 222,149 31,505 215,619 49,688 Compensated absences 3,752,187 2,266,376 2,180,827 3,837,736 2,340,872 Total government activity long-term debt 32,490,415$ 12,885,180$ 3,913,844$ 41,461,751$ 6,040,857$ Business-type activities: Bonds payable: G.O. revenue bonds 13,510,000$ -$ 2,995,000$ 10,515,000$ 1,360,000$ Add: Premiums on bonds 106,990 -15,452 91,538 - Total bonds payable 13,616,990 -3,010,452 10,606,538 1,360,000 Compensated absences 146,219 153,113 110,697 188,635 112,911 Total business-type activity long-term debt 13,763,209$ 153,113$ 3,121,149$ 10,795,173$ 1,472,911$ For governmental activities, compensated absences are paid out of the Employee Administrative internal service fund. ADVANCE CROSSOVER REFUNDING On July 10, 2013, the City issued $4,170,000 in General Obligation Refunding Bonds, Series 2013A with an average interest rate of 1.373% to advance refund $2,145,000 of outstanding Series 2007A Bonds with an average interest rate of 4.00% and $1,840,000 of outstanding Series 2008A Bonds with an average interest rate of 4.12%. The net proceeds of $4,106,498 were used to purchase U.S. Government Securities. Those securities were deposited in an irrevocable trust with an escrow agent to provide for the interest on the refunding bonds before the crossover date and called principal on the refunded bonds on August 1, 2015 for Series 2007A Bonds and August 1, 2016 for the Series 2008A Bonds. The City advance refunded the 2007A General Obligation Utility Revenue Bonds and 2008A General Obligation Utility Revenue Bonds to reduce its total debt service payments from 2014 to 2023 by $234,091 and to obtain an economic gain (difference between the present value of the debt service payments on the old and new debt) of $215,954. 77 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 92 CITY OF ST. LOUIS PARK, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2016 CAPITAL LEASE PAYABLE A.COPY MACHINE In 2014, the City entered into a lease purchase agreement for a copier. The agreement calls for monthly payments of $675 maturing on January 14, 2019. Depreciation in the amount of $8,100 has been recorded as depreciation expense during 2016. The net book value of assets under the capital lease at December 31, 2016 is as follows: Equipment 40,500$ Accumulated depreciation (22,990) Net book value 17,510$ The following is a schedule of future minimum lease payments under the capital lease: Year Ending December 31, Payment 2017 8,100$ 2018 8,100 2019 675 Total 16,875$ B.VEHICLES In 2016, the City entered into a lease agreement for ten vehicles. The agreement calls for total monthly payments of $4,145 maturing on May 1, 2021, with an interest rate of 4.53 percent. Depreciation in the amount of $29,776 has been recorded as depreciation expense during 2016. The net book value of assets under the capital lease at December 31, 2016 is as follows: Equipment 222,149$ Accumulated depreciation (29,776) Net book value 192,373$ 78 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 93 CITY OF ST. LOUIS PARK, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2016 The following is a schedule of future minimum lease payments under the capital lease: Year Ending December 31,Payment 2017 49,735$ 2018 49,735 2019 49,735 2020 49,735 2021 20,707 Total minimum lease payments 219,647 Less: amount representing interest (20,903) Present value of minimum lease payments 198,744$ 79 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 94 CITY OF ST. LOUIS PARK, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2016 REVENUE PLEDGED Future revenue pledged for the payment of long-term debt is as follows: Percent of Debt service Remaining Principal Pledged Use of total as a % of Pledged Principal and Interest Revenue Bond Issue Proceeds Type debt service net revenues Through and Interest paid received G.O. Improvement Bonds Series 2012A HIA Housing Improvement Area Fee 100.0% 54.1% 2033 1,485,870.00$ 89,221.00$ 165,070.00$ G.O. Improvement Bonds Series 2010A Housing Improvement Area Fee 100.0% 53.4% 2031 3,663,245 248,625 465,672 Tax Increment Refunding Bonds Series 2008B Street Improvements TIF 100.0% 100.0% 2024 4,532,394 543,100 543,100 G.O. Improvement Refunding Bonds Series 2010C Louisiana Court Project Operating revenues of Louisiana Court 100.0% 99.9% 2040 2,837,890 120,954 121,084 Utility Refunding Revenue Bonds Series 2010B Utility Infrastructure Projects Utility charges/Special Assessments 100.0% 100.0% 2025 1,985,238 488,096 488,096 Utility Crossover Refunding Bonds Series 2013A Utility Infrastructure Projects Utility charges 100.0% 100.0% 2023 4,045,595 362,221 362,221 Utility Revenue Bonds Series 2014A Utility Infrastructure Projects Utility charges 100.0% 100.0% 2026 5,439,100 98,600 98,600 Revenue Pledged Current Year Note 7 DEFINED BENEFIT PENSION PLANS A.PLAN DESCRIPTION The City participates in the following cost-sharing multiple-employer defined benefit pension plans administered by the Public Employees Retirement Association of Minnesota (PERA). PERA’s defined benefit pension plans are established and administered in accordance with Minnesota Statutes, Chapters 353 and 356. PERA’s defined benefit pension plans are tax qualified plans under Section 401 (a) of the Internal Revenue Code. 1. General Employees Retirement Fund (GERF) All full-time (with the exception of employees covered by PEPFF) and certain part-time employees of the City are covered by the General Employees Retirement Fund (GERF). GERF members belong to either the Coordinated Plan or the Basic Plan. Coordinated Plan members are covered by Social Security and Basic Plan members are not. The Basic Plan was closed to new members in 1967. All new members must participate in the Coordinated Plan. 2. Public Employees Police and Fire Fund (PEPFF) The PEPFF, originally established for police officers and firefighters not covered by a local relief association, now covers all police officers and firefighters hired since 1980. Effective July 1, 1999, the PEPFF also covers police officers and firefighters belonging to a local relief association that elected to merge with and transfer assets and administration to PERA. 80 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 95 CITY OF ST. LOUIS PARK, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2016 B.BENEFITS PROVIDED PERA provides retirement, disability, and death benefits. Benefit provisions are established by state statute and can only be modified by the state legislature. Benefit increases are provided to benefit recipients each January. Increases are related to the funding ratio of the plan. Members in plans that are at least 90 percent funded for two consecutive years are given 2.5% increases. Members in plans that have not exceeded 90% funded, or have fallen below 80%, are given 1% increases. The benefit provisions stated in the following paragraphs of this section are current provisions and apply to active plan participants. Vested, terminated employees who are entitled to benefits but are not receiving them yet are bound by the provisions in effect at the time they last terminated their public service. 1.GERF Benefits Benefits are based on a member’s highest average salary for any five successive years of allowable service, age, and years of credit at termination of service. Two methods are used to compute benefits for PERA's Coordinated and Basic Plan members. The retiring member receives the higher of a step-rate benefit accrual formula (Method 1) or a level accrual formula (Method 2). Under Method 1, the annuity accrual rate for a Basic Plan member is 2.2% of average salary for each of the first ten years of service and 2.7% for each remaining year. The annuity accrual rate for a Coordinated Plan member is 1.2 percent of average salary for each of the first ten years and 1.7% for each remaining year. Under Method 2, the annuity accrual rate is 2.7% of average salary for Basic Plan members and 1.7% for Coordinated Plan members for each year of service. For members hired prior to July 1, 1989, a full annuity is available when age plus years of service equal 90 and normal retirement age is 65. For members hired on or after July 1, 1989, normal retirement age is the age for unreduced Social Security benefits capped at 66. 2.PEPFF Benefits Benefits for the PEPFF members first hired after June 30, 2010, but before July 1, 2014, vest on a prorated basis from 50% after five years up to 100% after ten years of credited service. Benefits for PEPFF members first hired after June 30, 2014, vest on a prorated basis from 50% after ten years up to 100% after twenty years of credited service. The annuity accrual rate is 3% of average salary for each year of service. For PEPFF members who were first hired prior to July 1, 1989, a full annuity is available when age plus years of service equal at least 90. C.CONTRIBUTIONS Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions. Contribution rates can only be modified by the state legislature. 1.GERF Contributions Basic Plan members and Coordinated Plan members were required to contribute 9.1% and 6.50%, respectively, of their annual covered salary in calendar year 2016. The City was required to contribute 11.78% of pay for Basic Plan members and 7.50% for Coordinated Plan members in calendar year 2016. The City’s contributions to the GERF for the year ended December 31, 2016, were $1,076,319. The City’s contributions were equal to the required contributions as set by state statute. 81 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 96 CITY OF ST. LOUIS PARK, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2016 2.PEPFF Contributions Plan members were required to contribute 10.8% of their annual covered salary in calendar year 2016. The City was required to contribute 16.20% of pay for PEPFF members in calendar year 2016. The City’s contributions to the PEPFF for the year ended December 31, 2016, were $1,127,487. The City’s contributions were equal to the required contributions as set by state statute. D.PENSION COSTS 1.GERF Pension Costs At December 31, 2016, the City reported a liability of $18,333,840 for its proportionate share of the GERF’s net pension liability. The City’s net pension liability reflected a recution due to the State of Minnesota’s contribution of $6 million to the fund in 2016. The State of Minnesota is considered a non-employer contributing entity and the state’s contribution meets the definition of a special funding situation. The State of Minnesota’s proportionate share of the net pension liability associated with the City totaled $ 239,395. The net pension liability was measured as of June 30, 2016, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The City’s proportion of the net pension liability was based on the City’s contributions received by PERA during the measurement period for employer payroll paid dates from July 1, 2015, through June 30, 2016, relative to the total employer contributions received from all of PERA’s participating employers. At June 30, 2016, the City’s proportion was .2258% which was a decrease of .0005% from its proportion measured as of June 30, 2015. For the year ended December 31, 2016, the City recognized pension expense of $2,429,540 for its proportionate share of the GERF’s pension expense. In addition, the City recognized an additional $71,381 as pension expense (and grant revenue) for its proportionate share of the State of Minnesota’s contribution of $6 million to the General Employees Fund. At December 31, 2016, the City reported its proportionate share of the GERF’s deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Outflows Deferred Inflows of Resources of Resources Differences between expected and actual economic experience -$ 1,489,353$ Changes in actuarial assumptions 3,589,782 - Difference between projected and actual investment earnings 3,479,841 - Changes in proportion - 389,677 Contributions paid to PERA subsequent to the measurement date 547,374 - Total 7,616,997$ 1,879,030$ 82 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 97 CITY OF ST. LOUIS PARK, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2016 $547,374 reported as deferred outflows of resources related to pensions resulting from City contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31, 2017. Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows: Pension Year Ended Expense December 31, Amount 2017 1,382,045$ 2018 1,382,044 2019 1,764,255 2020 662,249 2021 - Thereafter - 2. PEPFF Pension Costs At December 31, 2016, the City reported a liability of $28,453,404 for its proportionate share of the PEPFF’s net pension liability. The net pension liability was measured as of June 30, 2016, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The City’s proportion of the net pension liability was based on the City’s contributions received by PERA during the measurement period for employer payroll paid dates from July 1, 2015, through June 30, 2016, relative to the total employer contributions received from all of PERA’s participating employers. At June 30, 2016, the City’s proportion was .7090% which was a decrease of .0080% from its proportion measured as of June 30, 2015. The City also recognized $63,810 for the year ended December 31, 2016, as revenue (and an offsetting reduction of net pension liability) for its proportionate share of the State of Minnesota’s on-behalf contributions to the PEPFF. Legislation passed in 2013 required the State of Minnesota to begin contributing $9 million to the PEPFF each year, starting in fiscal year 2014. For the year ended December 31, 2016, the City recognized pension expense of $4,941,083 for its proportionate share of the PEPFF’s pension expense. At December 31, 2016, the City reported its proportionate share of the PEPFF’s deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Outflows Deferred Inflows of Resources of Resources Differences between expected and actual economic experience -$ 3,264,143$ Changes in actuarial assumptions 15,659,151 - Difference between projected and actual investment earnings 4,342,189 - Changes in proportion 115,204 74,835 Contributions paid to PERA subsequent to the measurement date 568,492 - Total 20,685,036$ 3,338,978$ 83 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 98 CITY OF ST. LOUIS PARK, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2016 $568,492 reported as deferred outflows of resources related to pensions resulting from City contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31, 2017. Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows: Pension Year Ended Expense December 31,Amount 2017 3,613,851$ 2018 3,613,851 2019 3,613,854 2020 3,362,951 2021 2,673,059 Thereafter - E.ACTUARIAL ASSUMPTIONS The total pension liability in the June 30, 2016, actuarial valuation was determined using the following actuarial assumptions: Inflation 2.50% per year Active Member Payroll Growth 3.25% per year Investment Rate of Return 7.50% Salary increases were based on a service-related table. Mortality rates for active members, retirees, survivors and disabilitants were based on RP-2014 tables for the GERF and RP-2000 tables for the PEPFF for males or females, as appropriate, with slight adjustments. Cost of living benefit increases for retirees are assumed to be 1% per year for all future years for the GERF and the PEPFF. Actuarial assumptions used in the June 30, 2016 valuation were based on the results of actuarial experience studies. The most recent four-year experience study in the General Employees Plan was completed in 2015. The experience study for Police and Fire Plan was for the period July 1, 2004 through June 30, 2009. The most recent fire year experience study for the Police and Fire Plan was completed in 2016, but the results were not adopted at the time of valuation. The following changes in actuarial assumptions occurred in 2016: General Employees Fund The assumed post-retirement benefit increase rate was changed from 1.0% per year through 2035 and 2.5% per year thereafter to 1.0% per year for all future years. The assumed investment return was changed from 7.9% to 7.5%. The single discount rate was changed from 7.9% to 7.5%. Other assumptions were changed pursuant to the experience study dated June 30, 2015. The assumed future salary increases, payroll growth, and inflation were decreased by 0.25% to 3.25% for payroll growth and 2.50% for inflation. Police and Fire Fund The assumed post-retirement benefit increase rate was changed from 1.0% per year through 2037 and 2.5% thereafter to 1.0% per year for all future years. 84 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 99 CITY OF ST. LOUIS PARK, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2016 The assumed investment return was changed from 7.9% to 7.5%. The single discount rate changed from 7.9% to 5.6%. The assumed future salary increases, payroll growth, and inflation were decreased by 0.25% to 3.25% for payroll growth and 2.50% for inflation. The long-term expected rate of return on pension plan investments is 7.5%. The State Board of Investment, which manages the investments of PERA, prepares an analysis of the reasonableness on a regular basis of the long-term expected rate of return using a building-block method in which best-estimate ranges of expected future rates of return are developed for each major asset class. These ranges are combined to produce an expected long-term rate of return by weighting the expected future rates of return by the target asset allocation percentages. The target allocation and best estimates of geometric real rates of return for each major asset class are summarized in the following table: Target Long-Term Expected Asset Class Allocation Real Rate of Return Domestic Stocks 45% 5.50% International Stocks 15% 6.00% Bonds 18% 1.45% Alternative Assets 20% 6.40% Cash 2% 0.50% Total 100% F.DISCOUNT RATE The discount rate used to measure the total pension liability in 2016 was 7.50%, a reduction from 7.9% used in 2015. The projection of cash flows used to determine the discount rate assumed that contributions from plan members and employers will be made at rates set in Minnesota Statutes. Based on these assumptions, the fiduciary net position of the General Employees Fund was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. In the Police and Fire Fund, the fiduciary net position was projected to be available to make all projected future benefit payments of current plan members through June 30, 2056. Beginning in fiscal years ended June 30, 2057 for the Police and Fire Fund, when projected benefit payments exceed the funds’ projected fiduciary net position, benefit payments were discounted at the municipal bond rate of 2.85% based on an index of 20-year general obligation bonds with an average AA credit rating at the measurement date. An equivalent single discount rate of 5.60% for the Police and Fire Fund was determined that produced approximately the same present value of projected benefits when applied to all years of projected benefits as the present value of projected benefits using 7.50% applied to all years of projected benefits through the point of asset depletion and 2.85% after. 85 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 100 CITY OF ST. LOUIS PARK, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2016 G.PENSION LIABILITY SENSITIVITY The following presents the City’s proportionate share of the net pension liability for all plans it participates in, calculated using the discount rate disclosed in the preceding paragraph, as well as what the City’s proportionate share of the net pension liability would be if it were calculated using a discount rate 1 percentage point lower or 1 percentage point higher than the current discount rate: 1% Decrease in 1% Increase in Discount Rate (6.5%) Discount Rate (7.5%) Discount Rate (8.5%) City's proportionate share of the GERF net pension liability 26,039,486$ 18,333,840$ 11,986,485$ 1% Decrease in 1% Increase in Discount Rate (4.6%) Discount Rate (5.6%) Discount Rate (6.6%) City's proportionate share of the PEPFF net pension liability 39,830,989$ 28,453,404$ 19,157,052$ H.PENSION PLAN FIDUCIARY NET POSITION Detailed information about each pension plan’s fiduciary net position is available in a separately-issued PERA financial report that includes financial statements and required supplementary information. That report may be obtained on the Internet at www.mnpera.org. I.PENSION EXPENSE Pension expense recognized by the City for the fiscal year ended December 31, 2016 is as follows: GERF 2,500,921$ PEPFF 4,941,083 Total $7,442,004 Note 8 DEFINED CONTRIBUTION PLAN Four council members of the City of St. Louis Park, Minnesota are covered by the Public Employees Defined Contribution Plan (PEDCP), a multiple-employer deferred compensation plan administered by PERA. The PEDCP is a tax qualified plan under Section 401(a) of the Internal Revenue Code and all contributions by or on behalf of employees are tax deferred until time of withdrawal. Plan benefits depend solely on amounts contributed to the plan plus investment earnings, less administrative expenses. Minnesota Statutes, Chapter 353D.03, specifies plan provisions, including the employee and employer contribution rates for those qualified personnel who elect to participate. An eligible elected official who decides to participate contributes 5% of salary which is matched by the elected official’s employer. For ambulance service personnel, employer contributions are determined by the employer, and for salaried employees must be a fixed percentage of salary. Employer contributions for volunteer personnel may be a unit value for each call or period of alert duty. Employees who are paid for their services may elect to make member contributions in an amount not to exceed the employer share. Employer and employee contributions are combined and used to purchase shares in one or more of the seven accounts of the Minnesota Supplemental Investment Fund. For administering the plan, PERA receives 2% of employer contributions and twenty-five hundredths of 1% (.0025) of the assets in each member’s account annually. 86 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 101 CITY OF ST. LOUIS PARK, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2016 Total contributions made by the City during fiscal year 2016 were: Required Employer Employee (Pension Expense) Employee Employer Rate 2,294$ 2,294$ 5%5%5% Contribution Amount Percentage of Covered Payroll Note 9 OTHER POST-EMPLOYMENT BENEFITS A.PLAN DESCRIPTION In addition to providing the pension benefits described in Note 7, the City provides post-employment health care benefits (as defined in paragraph B) for retired employees through a single-employer defined benefit plan. The City’s OPEB plan is administered by the City. The authority to provide these benefits is established in Minnesota Statutes Sections 471.61 Subd. 2a, and 299A.465. The benefits, benefit levels, employee contributions and employer contributions are governed by the City and can be amended by the City through its personnel manual and collective bargaining agreements with employee groups. The Plan is not accounted for as a trust fund, as an irrevocable trust has not been established to account for the Plan. The Plan does not issue a separate report. B.BENEFITS PROVIDED Retirees The City is required by State Statute to allow retirees to continue participation in the City’s group health insurance plan if the individual terminates service with the City through service retirement or disability retirement. Police officers, firefighters, sergeants, and dispatchers age 50 and over with 3 years of service, or age 65 with 1 year of service may continue medical and dental coverage at their own expense. Non-union and 49ers union employees age 55 with 3 years of service, age 65 with 1 year of service, any age with 30 years of service, or those whose age plus service is at least 90 may continue medical and dental coverage at their own expense. Employees may obtain dependent coverage at retirement only if the employee was receiving dependent coverage immediately prior to retirement. The surviving spouse of an active employee may continue coverage in the group health insurance plan after the employee’s death. All health care coverage is provided through the City’s group health insurance plans. The retiree is required to pay 100% of their premium cost for the City-sponsored group health insurance plan in which they participate. The premium is a blended rate determined on the entire active and retiree population. Since the projected claims costs for retirees exceed the blended premium paid by retirees, the retirees are receiving an implicit rate subsidy (benefit). The coverage levels are the same as those afforded to active employees. Upon a retiree reaching age 65, Medicare becomes the primary insurer and the City’s plan becomes secondary. 87 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 102 CITY OF ST. LOUIS PARK, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2016 C. PARTICIPANTS As of the actuarial valuation dated January 1, 2015, participants consisted of: Retirees and beneficiaries currently purchasing health insurance through the City 17 Active employees 272 Total 289 Participating employers 1 D. FUNDING POLICY The additional cost of using a blended rate for actives and retirees is currently funded on a pay-as-you-go basis. Contribution requirements are negotiated between the City and union representatives and established by Council for nonunion groups. E.ANNUAL OPEB COSTS AND NET OPEB OBLIGATION The City’s annual other post employment benefit (OPEB) cost is calculated based on the annual required contribution (ARC) of the employer, an amount actuarially determined in accordance with the parameters of GASB Statement No. 45.The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed 30 years. The net OPEB obligation as of December 31, 2016, was calculated as follows: Annual required contribution (ARC)740,426$ Interest on net OPEB obligation 110,104 Adjustment to ARC (159,183) Annual OPEB cost 691,347 Contributions made during the year (256,866) Increase (decrease) in net OPEB obligation 434,481 Net OPEB obligation - beginning of year 2,752,601 Net OPEB obligation - end of year 3,187,082$ For governmental activities, the net OPEB obligation has been and is anticipated to be liquidated by the Employee Administrative internal service fund. 88 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 103 CITY OF ST. LOUIS PARK, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2016 The City’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan and the net OPEB obligation for the previous three years was as follows: Percentage of Fiscal Year Annual OPEB Employer Annual OPEB Cost Net OPEB Ended Cost Contributions Contributed Obligation December 31, 2014 583,268$ 253,808$ 43.5%2,274,367$ December 31, 2015 675,521 197,287 29.2%2,752,601 December 31, 2016 691,347 256,866 37.2%3,187,082 F. FUNDED STATUS AND FUNDING PROGRESS The City currently has no assets that have been irrevocably deposited in a trust for future health benefits, therefore, the actuarial value of assets is zero. The funded status of the plan was as follows: Unfunded Actuarial Actuarial UAAL as a Actuarial Actuarial Accrued Accrued Funded Covered Percentage of Valuation Value of Assets Liability (AAL)* Liability (UAAL) Ratio Payroll Covered Payroll Date (a) (b) (b-a) (a/b) (c) ( (b-a) / c) January 1, 2015 -$ 5,257,905$ 5,257,905$ 0.0%21,324,812$ 24.7% *Using the Projected Unit Credit cost method. G. ACTUARIAL METHODS AND ASSUMPTIONS Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality and the health care cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions (ARC) of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to financial statements, presents multi-year trend information that shows whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effect of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. In the January 1, 2015 actuarial valuation, the Projected Unit Credit cost method was used. The actuarial assumptions included a 4.0% investment rate of return (net of administrative expenses) and an initial annual health care cost trend rate of 8% reduced by .5% each year to arrive at an ultimate health care cost trend rate of 5.0%, which includes a 2.75% inflation assumption. The actuarial value of assets was $0. The plan’s unfunded actuarial accrued liability is being amortized using the level dollar over 30 years on an open basis. The remaining amortization period at December 31, 2016 was 30 years. 89 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 104 CITY OF ST. LOUIS PARK, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2016 Note 10 INTERFUND RECEIVABLES, PAYABLES AND TRANSFERS Interfund Loans The City has established interfund loans to finance infrastructure improvements, project reimbursements, housing rehabilitation loans and to provide initial financing for TIF districts. A summary at December 31, 2016 is as follows: Interfund Interfund Loan Loan Receivable Payable Major Funds: Housing Rehabilitation -$ 969,416$ Development EDA 7,381,225 - Redevelopment District - 6,411,809 Water Utility - 500,000 Solid Waste 500,000 - Total 7,881,225$ 7,881,225$ 90 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 105 CITY OF ST. LOUIS PARK, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2016 Interfund Transfers Interfund transfers at December 31, 2016 are as follows: Housing Streets Capital Development Sidewalks General Rehabilitation Debt Service Projects EDA and Trails Transfers out General -$ -$ -$ -$ 715,000$ -$ Housing Rehabilitation 8,185 - 337,846 - -- Debt Service - - - - - - Permanent Improvement Revolving 18,693 - - - - - Streets Capital Projects - - - - - 625,591 Sidewalks and Trails - - - 851,942 - - Park Improvement - - - 251,726 - - Redevelopment District - 144,000 1,150,181 417,785 417 - Nonmajor Governmental 109,506 - - 551,810 - - Water 536,555 - - 110,698 - - Sewer 745,483 - - 50,646 - - Solid Waste 189,737 - - - - - Storm Water 273,115 - - 10,320 - - Internal Service Funds - - - 91,415 - - Total transfers in 1,881,274$ 144,000$ 1,488,027$ 2,336,342$ 715,417$ 625,591$ Park Nonmajor Internal Improvement Governmental Water Sewer Service Funds Total Transfers out General 508,000$ 450,000$ -$ -$ 200,000$ 1,873,000$ Housing Rehabilitation - - - - - 346,031 Debt Service - - - - 5,304 5,304 Permanent Improvement Revolving - - - - - 18,693 Streets Capital Projects - - 73,305 75,254 - 774,150 Sidewalks and Trails - - - - - 851,942 Park Improvement - - - - - 251,726 Redevelopment District - - - - - 1,712,383 Nonmajor Governmental - - - - 500,000 1,161,316 Water - - - - 30,874 678,127 Sewer - - 853,681 - 30,874 1,680,684 Solid Waste - - - - 30,874 220,611 Storm Water - - - - 30,834 314,269 Internal Service Funds - - - - - 91,415 Total transfers in 508,000$ 450,000$ 926,986$ 75,254$ 828,760$ 9,979,651$ Transfers in Fund Transfers in Fund Generally, transfers are used to (1) move revenues from the fund that collects them to the fund that the budget requires to expend them, (2) move receipts restricted to debt service from the funds collecting the receipts to a debt service fund in accordance with bond documents, (3) move funds in accordance with the City’s adopted capital improvement plan to support project costs, and (4) use unrestricted revenues collected in the General Fund to finance various programs accounted for in other funds in accordance with City policy. 91 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 106 CITY OF ST. LOUIS PARK, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2016 Note 11 FUND BALANCE A.CLASSIFICATIONS At December 31, 2016, a summary of the governmental fund balance classifications are as follows: Nonspendable Restricted Committed Assigned General Fund Prepaid items 54,069$ -$ -$ -$ Inventories 276,414 - - - E-911 purposes - 413,787 - - Inspections - - - 550,000 DWI enforcement - - - 173,743 Fire expenditures - - - 43,920 Council programs - - - 109,000 Community development - - - 60,000 Housing Rehabilitation - - - 3,448,469 Debt service - 2,048,975 - - Permanent improvement revolving - - - 2,577,727 Streets capital projects - - - 1,193,411 Development EDA Prepaid items 17,063 - - - Economic development - 329,746 - - Redevelopment efforts - - - 25,764,341 Sidewalks and Trails - - - 1,011,967 Park Improvement Capital improvements - 909,784 - - Park improvements - 43,920 - - Development of parks - -- 4,076,493 Redevelopment districts - 3,897,619 - - Other governmental funds Prepaid items 6,500 - - - Community development - 421,984 - - Cable TV equipment purchases - 573,567 466,287 607,826 Police and fire purposes - 1,832,248 - - Special service districts - -- 223,102 Street rehabilitation - -- 2,164,885 Total 354,046$ 10,471,630$ 466,287$ 42,004,884$ Unless separately displayed, contraints are not more specific than the purpose of the fund. Fund/Description 92 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 107 CITY OF ST. LOUIS PARK, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2016 B.MINIMUM FUND BALANCE POLICY The City Council has formally adopted a fund balance policy for the General Fund. The policy establishes a year-end target of unassigned fund balance amount for cash flow timing needs in the range of 40-50% of the subsequent years budget expenditures. At December 31, 2016, the unassigned fund balance for the General Fund was 45% of the subsequent year’s budgeted expenditures. Note 12 DEFICIT FUND BALANCE/NET POSITION At December 31, 2016, individual funds with deficit fund balance/net position are as follows: Amount Future Financing Source Redevelopment District: HRA Levy 3,057,388$ General property tax levy Elmwood Village 1,982,711 Future tax increment Hard Coat TIF District 113,310 Future tax increment Shoreham TIF District 18,242 Future tax increment Excelsior Blvd TIF District 15,688 Future tax increment Internal Service Funds: Employee Administrative 29,526,162 Future transfers Total 34,713,501$ Note 13 COMMITMENTS AND CONTINGENCIES A.RISK MANAGEMENT The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The City continues to carry commercial insurance for risks of loss, including workers compensation, property and general liability and employee health and accident insurance. There were no significant reductions in insurance from the previous year or settlements in excess of insurance coverage for any of the past three fiscal years. PROPERTY AND CASUALTY INSURANCE Property and casualty insurance coverage is provided through the League of Minnesota Cities Insurance Trust (LMCIT), a public entity risk pool currently operating as a common risk management and insurance program for Minnesota cities: general liability, excess liability property, automobile, marine, crime, employee dishonesty, boiler and open meeting law. The City pays an annual premium to the LMCIT for its insurance coverage. The LMCIT is self-sustaining through member premiums and reinsures through commercial companies for claims in excess of various amounts. The City retains risk for the deductible portions of the insurance policies. The deductible amounts are $50,000 for each occurrence and a $150,000 annual aggregate. 93 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 108 CITY OF ST. LOUIS PARK, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2016 Current State Statute (Minnesota Statute subd. 466.04) provides limits of liability for the City. These limits are that the combination of defense expense and indemnification expense shall not exceed $500,000 in the case of one claimant or $1,500,000 for any number of claims arising out of a single occurrence. B. LITIGATION The City attorney has indicated that existing and pending lawsuits, claims and other actions in which the City is a defendant are either covered by insurance; of an immaterial amount; or, in the judgment of the City attorney, remotely recoverable by plaintiffs. C. FEDERAL AND STATE FUNDS The City receives financial assistance from federal and state governmental agencies in the form of grants. The disbursement of funds received under these programs generally requires compliance with the terms and conditions specified in the grant agreements and is subject to audit by the grantor agencies. Any disallowed claims resulting from such audits could become a liability of the applicable fund. However, in the opinion of management, any such disallowed claims will not have a material effect on any of the financial statements of the individual fund types included herein or on the overall financial position of the City at December 31, 2016. D. TAX ABATEMENTS – PAY-AS-YOU-GO TAX INCREMENT The City EDA provides tax abatements pursuant to Minnesota Statutes 469.174 to 469.1794 (Tax Increment Financing) through a pay-as-you-go note program. Tax increment financing (TIF) can be used to encourage private development, redevelopment, renovation and renewal, growth in low-to-moderate-income housing, and economic development within the City. TIF captures the increase in tax capacity and property taxes from development or redevelopment to provide funding for the related project. 94 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 109 CITY OF ST. LOUIS PARK, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2016 The City has several tax increment pay-as-you-go agreements. The agreements are not a general obligation of the City and are payable solely from available tax increment. Accordingly, these agreements are not reflected in the financial statements of the City. The pay-as-you-go note provides for payment to the developer a percentage of all tax increment received in the prior six months. The payment reimburses the developer for public improvements. Principal and interest shall be paid on February 1 and August 1. Payments are payable solely from available tax increment derived from the developed/redeveloped property and paid to the City. The City shall have no obligation to pay any unpaid balance of principal or accrued interest that may remain after the final payment Details of the pay-as-you-go notes are as follows: Issue Original Interest First Final % TIF 2016 12/31/2016 District Name / Note Description Date Principal Rate Note Pymt Note Pymt Available Payments Balance Zarthan/16th Ave TIF District Rottlund Company 11/06/2000 1,395,547$ 8.00% 08/01/2003 02/01/2023 89.75% 206,919$ 846,670$ CSM - Town Place Suites 10/25/2000 1,101,362 8.00% 08/01/2002 02/01/2022 89.75% 84,360 1,218,476 CSM - Spring Hill Suites 10/25/2000 1,448,088 8.00% 08/01/2003 02/01/2022 89.75% 102,097 1,750,836 Mill City TIF District MSP SLP Apartments 11/20/2000 3,431,137 8.75% 08/1/2002 02/01/2023 94.75% 426,962 3,880,869 Park Commons TIF District Excelsior & Grand Phase I 07/01/2003 3,500,000 8.50% 08/05/2005 02/01/2024 97.00% 737,329 4,314,641 Excelsior & Grand Phase NE 06/05/2006 4,668,633 8.50% 08/01/2006 02/01/2028 97.00% 442,759 4,782,566 Excelsior & Grand Phase NW 06/05/2006 4,079,105 8.50% 08/01/2007 02/01/2028 97.00% 427,443 4,685,254 Excelsior & Grand Phase E 06/05/2006 3,300,715 8.50% 08/01/2006 02/01/2028 97.00% 270,127 3,932,974 Edgewood TIF District Real Estate Recycling / Edgewood Investors 02/01/2004 600,000 1.70% 08/01/2006 02/01/2023 95.00% 47,350 163,671 Wolfe Lake TIF District Belt Line Industrial Park 01/20/2006 996,000 7.50% 08/01/2006 02/01/2023 95.00% 120,721 354,926 Aquila Commons TIF District Stonebridge Development 05/26/2006 1,050,000 5.75% 08/01/2008 02/01/2020 95.00% 154,793 271,579 Elmwood Village TIF District Webster LLC / Adagio 07/29/2013 820,000 4.00% 08/01/2014 02/01/2021 95.00% 207,080 577,723 Medley Row 07/29/2013 200,000 4.00% 08/01/2014 02/01/2023 95.00% 39,397 155,336 Grecco / Towerlight 08/01/2013 490,000 6.50% 02/01/2015 02/01/2021 95.00% 251,915 20,366 Hoigaard Village 2010A TIF Revenue Bonds 10/21/2010 3,495,000 1.5-5% 02/01/2011 02/01/2023 95.00% 346,363 2,150,000 Hoigaard Village 2010B TIF Revenue Note 10/21/2010 935,000 3.99% 02/01/2011 02/01/2018 95.00% 260,169 339,786 Highway 7 Corporate Center TIF District Highway 7 Business Center Note A 07/24/2008 2,100,000 1.00% 08/01/2008 02/01/2034 95.00% 110,531 1,152,852 Highway 7 Business Center Note B 07/24/2008 360,000 1.00% 08/01/2008 02/01/2034 95.00% 18,948 197,632 West End TIF District Duke Realty Limited Partnership 11/01/2010 21,100,000 6.75% 02/01/2012 02/01/2031 95.00% 676,867 20,909,528 Ellipse on Excelsior TIF District Ellipse on Excelsior Note A 08/01/2011 1,230,000 6.00% 08/01/2011 02/01/2025 95.00% 258,410 592,336 Ellipse on Excelsior Note B 08/01/2011 220,000 6.00% 08/01/2011 02/01/2025 95.00% 42,067 123,038 E2 08/01/2015 686,195 5.60% 08/01/2015 02/01/2023 95.00% 121,820 539,272 Eliot Park TIF District Cedar Lake Road Apartments LLC 05/18/2016 1,100,000 5.50% 08/01/2016 02/01/2021 95.00% 30,424 1,082,180 E. LOUISIANA COURT PROJECT The City of St. Louis Park has entered into an agreement with Project for Pride in Living Louisiana Court Limited Partnership to issue $4,505,000 in General Obligation Bonds – Series 2000A for the purpose of acquiring and renovating certain rental housing facilities within the City of St. Louis Park intended primarily for low and moderate income persons and their families. During 2010, the 2000A bonds were refunded by the $1,770,000 General Obligation Refunding Bonds, Series 2010C. The City of St. Louis Park will receive monthly principal and interest payments from Project for Pride in Living Louisiana Court Limited Partnership to cover all debt service obligations of the City of St. 95 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 110 CITY OF ST. LOUIS PARK, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2016 Louis Park on a semi-annual basis. In the event that the City of St. Louis Park does not receive payment from Project for Pride in Living, the City of St. Louis Park is still under obligation to make all debt service payments. At such time, the City of St. Louis Park would pursue collection of above referenced principal and interest payments per the agreement dated May 1, 2000. As of December 31, 2016, the outstanding principal on the bonds is $1,600,000. F. CONSTRUCTION COMMITMENTS The City has active construction projects as of December 31, 2016. The projects include street construction in areas with newly developed housing, widening and construction of existing streets and bridges, and the construction of additional storm sewer and utility improvements. At year end the City’s commitments with contractors are as follows: Remaining Project Commitment 2013 Local Street Rehab (contract 35-13)73,781$ 2014 Local Street Rehab - Area #2 (contract 48-14)110,565 Louisiana Ave Bridge (contract 87-13) 64,667 2015 Local Street Rehab (contract 34-15)100,469 2015 Connect the Park 26,898 Replace Ice System in Rec Center 108,684 2015 Concrete Replacement (contract 143-15)23,809 MSA Project (contract 92-16)32,151 Watermain Replacement (contract 65-16)192,391 Mechanical & Electrical Improvements (contract 148-15)123,332 Mainline Rehab (contract 79-16)20,033 Tensile Membrane Structures (contract 146-16)1,039,343 Electrical Systems (contract 61-16)58,050 Miscellaneous Construction (contract 46-16)23,676 Bleachers (contract 128-16)12,724 Roofing Systems 12,370 Landscaping 74,598 Concrete 33,500 Structural & Miscellaneous Steel Install (contract 77-16)34,192 Glue Laminated Construction (contract 171-16)1,758,320 General Contractor (contract 38-16)137,683 Total commitments 4,061,236$ Note 14 CONDUIT DEBT OBLIGATIONS From time to time, the City has issued industrial, hospital or housing revenue bonds to provide financial assistance to private- sector entities for the acquisition and construction of industrial, commercial or housing facilities deemed to be in the public interest. The bonds are secured by the property financed and are payable solely from payments received on the underlying mortgage loans. Upon repayment of the bonds, ownership of the acquired facilities transfers to the private-sector entity served by the bond issuance. Neither the City, the State, nor any political subdivision thereof is obligated in any manner for repayment of the bonds. Accordingly, the bonds are not reported as liabilities in the accompanying financial statements. As of December 31, 2016, there were 13 revenue bonds issued. The aggregate principal amount payable as of December 31, 2016 is $141,581,908. 96 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 111 CITY OF ST. LOUIS PARK, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2016 Note 15 RECENTLY ISSUED ACCOUNTING STANDARDS The Governmental Accounting Standards Boards (GASB) recently approved the following statements which were not implemented for these financial statements: Statement No. 74 Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans. The provisions in Statement 74 are effective for fiscal years beginning after June 15, 2016. Statement No. 75 Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions. The provisions in Statement 75 are effective for fiscal years beginning after June 15, 2017. Statement No. 80 Blending Requirements for Certain Component Units. The provisions of this Statement are effective for reporting periods beginning after June 15, 2016. Statement No. 81 Irrevocable Split – Interest Agreements. The provisions of this Statement are effective for reporting periods beginning after June 15, 2016. Statement No. 82 Pension Issues – an amendment of GASB Statement No. 67, No. 68 and No. 73. The provisions of this Statement are effective for reporting periods beginning after June 15, 2016. Statement No. 83 Certain Asset Retirement Obligations. The provisions of this Statement are effective for reporting periods beginning after June 15, 2018. Statement No. 84 Fiduciary Activities. The provisions of this Statement are effective for reporting periods beginning after December 15, 2018. Statement No. 85 Omnibus 2017. The provisions of this Statement are effective for reporting periods beginning after June 15, 2017. The effect these standards may have on future financial statements is not determinable at this time, but it is expected that Statement No. 75 will have a material impact. 97 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 112 - This page intentionally left blank - 98 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 113 REQUIRED SUPPLEMENTARY INFORMATION 99 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 114 CITY OF ST. LOUIS PARK, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION Statement 9 BUDGETARY COMPARISON SCHEDULE - GENERAL FUND Page 1 of 4 For The Year Ended December 31, 2016 Budgeted Amounts Original Final Revenues Property taxes 23,597,282$ 23,597,282$ 24,193,360$ 596,078$ Licenses and permits Business regulatory licenses 635,698 635,698 706,684 70,986 Non-business licenses and permits 2,860,479 2,860,479 3,613,394 752,915 Total licenses and permits 3,496,177 3,496,177 4,320,078 823,901 Intergovernmental Federal 1,500 1,500 20,895 19,395 State shared taxes Highway user tax 525,000 525,000 660,636 135,636 Insurance premium tax 630,075 630,075 677,985 47,910 State of Minnesota Other 115,337 115,337 147,387 32,050 PERA 45,205 45,205 45,205 - Police training reimbursement 20,000 20,000 15,633 (4,367) School district 58,700 58,700 58,197 (503) Other local governments 23,200 23,200 30,134 6,934 Total intergovernmental 1,419,017 1,419,017 1,656,072 237,055 Charges for services General government 758,802 758,802 776,739 17,937 Public safety 96,381 96,381 136,956 40,575 Public works - signals/lighting 17,250 17,250 17,250 - Culture and rec 1,087,660 1,087,660 1,149,924 62,264 Rent of City property 847,896 847,896 1,020,851 172,955 Total charges for services 2,807,989 2,807,989 3,101,720 293,731 Fines and forfeits Municipal court 312,000 312,000 245,229 (66,771) Liquor violations 12,000 12,000 12,000 - Property forfeits 15,000 15,000 37,579 22,579 Miscellaneous violations 2,200 2,200 5,000 2,800 Total fines and forfeits 341,200 341,200 299,808 (41,392) Interest income 140,000 140,000 114,956 (25,044) Miscellaneous 153,600 153,600 122,178 (31,422) Total revenues 31,955,265 31,955,265 33,808,172 1,852,907 Actual Amounts Variance with Final Budget 100 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 115 CITY OF ST. LOUIS PARK, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION Statement 9 BUDGETARY COMPARISON SCHEDULE - GENERAL FUND Page 2 of 4 For The Year Ended December 31, 2016 Budgeted Amounts Expenditures Original Final General government Administration Current Personal services 621,307$ 621,307$ 640,591$ (19,284)$ Supplies 3,500 3,500 6,783 (3,283) Other services and charges 442,779 442,779 527,149 (84,370) Total administration 1,067,586 1,067,586 1,174,523 (106,937) General services Supplies 15,000 15,000 53,787 (38,787) Other services and charges 307,610 307,610 176,058 131,552 Total general services 322,610 322,610 229,845 92,765 Human resources Current Personal services 575,618 575,618 574,037 1,581 Supplies 3,800 3,800 1,773 2,027 Other services and charges 169,300 169,300 226,150 (56,850) Total human resources 748,718 748,718 801,960 (53,242) Communications, marketing and community outreach Current Personal services 331,930 331,930 336,111 (4,181) Materials and supplies 27,600 27,600 18,745 8,855 Other services and charges 274,285 274,285 325,681 (51,396) Total communications, etc.633,815 633,815 680,537 (46,722) Technology and support services Current Personal services 896,993 896,993 800,375 96,618 Materials and supplies 7,500 7,500 31,722 (24,222) Other services and charges 659,635 659,635 660,640 (1,005) Total technology and support services 1,564,128 1,564,128 1,492,737 71,391 Accounting Current Personal services 552,448 552,448 487,625 64,823 Materials and supplies 3,000 3,000 3,045 (45) Other services and charges 329,871 329,871 329,505 366 Total accounting 885,319 885,319 820,175 65,144 Assessing Current Personal services 626,313 626,313 596,915 29,398 Materials and supplies 1,500 1,500 1,444 56 Other services and charges 13,225 13,225 9,084 4,141 Total assessing 641,038 641,038 607,443 33,595 Actual Amounts Variance with Final Budget 101 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 116 CITY OF ST. LOUIS PARK, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION Statement 9 BUDGETARY COMPARISON SCHEDULE - GENERAL FUND Page 3 of 4 For The Year Ended December 31, 2016 Budgeted Amounts Expenditures (continued)Original Final General government (continued) Facilities maintenance Current Personal services 437,585$ 437,585$ 434,498$ 3,087$ Materials and supplies 89,000 89,000 99,904 (10,904) Other services and charges 589,292 589,292 565,571 23,721 Total facilities maintenance 1,115,877 1,115,877 1,099,973 15,904 Community development Current Personal services 1,322,986 1,322,986 1,211,531 111,455 Materials and supplies 1,050 1,050 636 414 Other services and charges 61,000 61,000 68,833 (7,833) Total community development 1,385,036 1,385,036 1,281,000 104,036 Total general government 8,364,127 8,364,127 8,188,193 175,934 Public safety Police Current Personal services 7,953,458 7,953,458 7,975,266 (21,808) Materials and supplies 142,055 142,055 163,509 (21,454) Other services and charges 547,907 547,907 503,025 44,882 Total police 8,643,420 8,643,420 8,641,800 1,620 Fire protection Current Personal services 3,566,769 3,566,769 3,416,520 150,249 Materials and supplies 107,174 107,174 111,156 (3,982) Other services and charges 349,950 349,950 405,663 (55,713) Total fire protection 4,023,893 4,023,893 3,933,339 90,554 Inspection services Current Personal services 2,108,945 2,108,945 1,971,545 137,400 Materials and supplies 12,000 12,000 6,774 5,226 Other services and charges 101,390 101,390 106,130 (4,740) Total inspection services 2,222,335 2,222,335 2,084,449 137,886 Total public safety 14,889,648 14,889,648 14,659,588 230,060 Actual Amounts Variance with Final Budget 102 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 117 CITY OF ST. LOUIS PARK, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION Statement 9 BUDGETARY COMPARISON SCHEDULE - GENERAL FUND Page 4 of 4 For The Year Ended December 31, 2016 Budgeted Amounts Expenditures (continued)Original Final Operations and recreation Public works administration Current Personal services 216,304$ 216,304$ 229,140$ (12,836)$ Materials and supplies 6,000 6,000 2,762 3,238 Other services and charges 18,350 18,350 7,559 10,791 Total public works administration 240,654 240,654 239,461 1,193 Public works operations Current Personal services 1,457,057 1,457,057 1,367,799 89,258 Materials and supplies 532,500 532,500 461,075 71,425 Other services and charges 918,224 918,224 870,460 47,764 Total public works operations 2,907,781 2,907,781 2,699,334 208,447 Culture and recreation Current Personal services 4,194,122 4,194,122 4,247,140 (53,018) Materials and supplies 995,499 995,499 815,033 180,466 Other services and charges 1,941,655 1,941,655 1,687,904 253,751 Total culture and recreation 7,131,276 7,131,276 6,750,077 381,199 Total operations and recreation 10,279,711 10,279,711 9,688,872 590,839 Engineering Current Personal services 387,362 387,362 302,861 84,501 Materials and supplies 10,450 10,450 3,298 7,152 Other services and charges 151,439 151,439 130,074 21,365 Total engineering 549,251 549,251 436,233 113,018 Total expenditures 34,082,737 34,082,737 32,972,886 1,109,851 Revenues over (under) expenditures (2,127,472) (2,127,472) 835,286 2,962,758 Other financing sources (uses) Transfers in 1,872,581 1,872,581 1,881,274 8,693 Transfers out - - (1,873,000) (1,873,000) Total other financing sources (uses)1,872,581 1,872,581 8,274 (1,864,307) Net change in fund balances (254,891)$ (254,891)$ 843,560 1,098,451$ Fund balances - January 1 17,031,136 Fund balances - December 31 17,874,696$ Actual Amounts Variance with Final Budget 103 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 118 CITY OF ST. LOUIS PARK, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION Statement 10 SCHEDULE OF FUNDING PROGRESS - POST EMPLOYMENT BENEFIT PLAN For The Year Ended December 31, 2016 Unfunded Actuarial Actuarial Actuarial UAAL as a Actuarial Value of Accrued Accrued Funded Covered Percentage of Valuation Assets Liability (AAL)* Liability (UAAL) Ratio Payroll Covered Payroll Date (a)(b)(b-a)(a/b)(c)( (b-a) / c) January 1, 2009 -$ 3,260,061$ 3,260,061$ 0.0% 16,906,064$ 19.3% January 1, 2011 -$ 3,081,141$ 3,081,141$ 0.0% 16,962,171$ 18.2% January 1, 2013 -$ 5,140,716$ 5,140,716$ 0.0% 17,338,372$ 29.6% January 1, 2015 -$ 5,257,905$ 5,257,905$ 0.0% 21,324,812$ 24.7% *Using the projected unit credit actuarial pay cost method. 104 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 119 CITY OF ST. LOUIS PARK, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION Statement 11 SCHEDULE OF PROPORTIONATE SHARE OF NET PENSION LIABILITY - GENERAL EMPLOYEES RETIREMENT FUND For The Year Ended December 31, 2016 City's Proportionate State's Share of the City's Proportionate Net Pension Proportionate Plan City's City's Share (Amount) Liability and the Share of the Fiduciary Proportionate Proportionate of the Net State's Proportionate Net Pension Net Position Share Share (Amount) Pension Share of the Net Liability as a as a (Percentage) of of the Net Liability Pension Liability Percentage of its Percentage Measurement Fiscal Year the Net Pension Pension Associated with Associated with Covered Covered of the Total Date Ending Liability Liability (a) City (b) City (a+b) Payroll (c) Payroll ((a+b)/c) Pension Liability June 30, 2015 December 31, 2015 0.2263% 11,728,040$ -$ 11,728,040$ 13,317,871$ 88.1%78.2% June 30, 2016 December 31, 2016 0.2258% 18,333,840 239,395 18,573,235 14,027,206 132.4%68.9% The schedule is provided prospectively beginning with the City's fiscal year ended December 31, 2015 and is intended to show a ten year trend. Additional years will be reported as they become available. 105 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 120 CITY OF ST. LOUIS PARK, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION Statement 12 SCHEDULE OF PENSION CONTRIBUTIONS - GENERAL EMPLOYEES RETIREMENT FUND For The Year Ended December 31, 2016 Statutorily Contributions in Contribution Contributions as a Required Relation to the Deficiency Covered Percentage of Fiscal Year Contribution Statutorily Required (Excess)Payroll Covered Ending (a) Contribution (b)(a-b)(c)Payroll (b/c) December 31, 2015 1,026,806$ 1,026,806$ -$ 13,690,747$ 7.5% December 31, 2016 1,076,319 1,076,319 - 14,350,435 7.5% The schedule is provided prospectively beginning with the City's fiscal year ended December 31, 2015 and is intended to show a ten year trend. Additional years will be reported as they become available. 106 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 121 CITY OF ST. LOUIS PARK, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION Statement 13 SCHEDULE OF PROPORTIONATE SHARE OF NET PENSION LIABILITY - PUBLIC EMPLOYEES POLICE AND FIRE FUND For The Year Ended December 31, 2016 Proportionate Share Proportionate of the Net Pension Plan Fiduciary Proportion Share (Amount)Liability as a Net Position as (Percentage) of of the Net Percentage of its a Percentage Measurement Fiscal Year the Net Pension Pension Covered Covered of the Total Date Ending Liability Liability (a) Payroll (b) Payroll (a/b) Pension Liability June 30, 2015 December 31, 2015 0.7170%8,146,798$ 6,568,763$ 124.0%86.6% June 30, 2016 December 31, 2016 0.7090%28,453,404 6,826,711 416.8%63.9% The schedule is provided prospectively beginning with the City's fiscal year ended December 31, 2015 and is intended to show a ten year trend. Additional years will be reported as they become available. 107 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 122 CITY OF ST. LOUIS PARK, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION Statement 14 SCHEDULE OF PENSION CONTRIBUTIONS - PUBLIC EMPLOYEES POLICE AND FIRE FUND For The Year Ended December 31, 2016 Statutorily Contributions in Contribution Contributions as a Required Relation to the Deficiency Covered Percentage of Fiscal Year Contribution Statutorily Required (Excess) Payroll Covered Ending (a) Contribution (b) (a-b) (c) Payroll (b/c) December 31, 2015 1,087,225$ 1,087,225$ -$ 6,711,265$ 16.2% December 31, 2016 1,127,487 1,127,487 - 6,959,796 16.2% The schedule is provided prospectively beginning with the City's fiscal year ended December 31, 2015 and is intended to show a ten year trend. Additional years will be reported as they become available. 108 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 123 CITY OF ST. LOUIS PARK REQUIRED SUPPLEMENTARY INFORMATION NOTES TO RSI December 31, 2016 Note A LEGAL COMPLIANCE – BUDGETS The General Fund budget is legally adopted on a basis consistent with accounting principles generally accepted in the United States of America. The legal level of budgetary control is at the department level for the major funds. Note B MODIFIED APPROACH FOR CITY STREETS AND TRAILS INFRASTRUCTURE CAPITAL ASSETS In accordance with GASB Statement No. 34, the City is required to account for and report infrastructure capital assets. The City defines infrastructure as the basic physical assets including the street and trail system; water treatment and distribution system; wastewater collection system; park and recreation lands and improvement system; storm water conveyance system; and building combined with site amenities such as parking and landscape areas used by the City in the conduct of its business. Each major infrastructure can be divided into subsystems. For example, the street and trail system can be divided into pavement widths, curb type and sidewalk. City owned streets could further be classified as collector or local. Subsystem detail is not presented in these basic financial statements; however, the City maintains detailed information on these subsystems. The City elects to use the modified approach as defined in GASB Statement No. 34 for infrastructure reporting for its Pavement Management Program. Under GASB Statement No. 34, eligible infrastructure capital assets are not required to be depreciated under the following requirements: 1) The City manages the eligible infrastructure capital assets using an asset management system with characteristics of (1) an up to-date inventory; (2) perform condition assessments and summarize the results using a measurement scale; and (3) estimate annual amount to maintain and preserve at the established condition assessment level. 2) The City documents that the eligible infrastructure capital assets are being preserved approximately at or above the established and disclosed condition assessment level. The City’s policy relative to maintaining the street and trail assets is to achieve an average rating of “Good” for all segments. This acceptable rating allows minor cracking and patching of the pavement along with minor roughness that could be noticeable to the users of the system. 109 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 124 CITY OF ST. LOUIS PARK REQUIRED SUPPLEMENTARY INFORMATION NOTES TO RSI December 31, 2016 In the summer of 2015, the City conducted a physical condition assessment of five of eight areas of the City. This assessment will be performed every two years. Each street segment was assigned a physical condition based on potential defects. An Overall Condition Index (OCI) was assigned to each street and expressed in a continuous scale from 0 to 100, where 0 is assigned to the least acceptable physical condition and 100 is assigned the physical characteristics of a new street. The following conditions were defined: Range Description 86 - 100 Excellent 71 - 85 Very good 56 - 70 Good 41 - 55 Fair 26 - 40 Poor 11 - 25 Very poor 0 - 10 Failed As of December 31, 2016, the City’s street and trail system was rated at an OCI index of 65 on the average with detail condition as follows: Condition % of Streets and Trails Excellent to Good 58.3% Fair 15.1% Poor to Substandard 26.7% The City’s streets are constantly deteriorating resulting from the following factors: (1) traffic using the system; (2) the sun’s ultra-violet rays drying out and breaking down the top layer of pavement; (3) utility company/private development trenching operations; (4) water damage from natural precipitation; and (5) frost heave. The City is continuously taking actions to prolong the life of the system through short-term maintenance activities such as pothole patching, crack sealing, seal coating and overlaying. The City expended $2,731,582 on street maintenance for the year ending December 31, 2016. These expenditures delayed deterioration; however, the overall condition of the system was not improved through these maintenance expenditures. The City has estimated that the amount of annual expenditures through 2026 required to maintain the City’s street system at the average OCI rating of “good” is approximately $3,999,000. Year Maintenance Estimate Actual Expenditures OCI Rating 2014 2,300,000$ 2,118,883$ 70% 2015 2,622,000 2,050,904 65% 2016 3,999,000 2,731,582 64% 110 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 125 CITY OF ST. LOUIS PARK REQUIRED SUPPLEMENTARY INFORMATION NOTES TO RSI December 31, 2016 Note C PENSION INFORMATION PERA – General Employees Retirement Fund 2016 Changes Changes in Actuarial Assumptions: -The assumed post-retirement benefit increase rate was changed from 1.0% per year through 2035 and 2.5% per year thereafter to 1.0% per year for all future years. -The assumed investment return was changed from 7.9% to 7.5%. The single discount rate was changed from 7.9% to 7.5%. -Other assumptions were changed pursuant to the experience study dated June 30, 2015. The assumed future salary increases, payroll growth, and inflation were decreased by 0.25% to 3.25% for payroll growth and 2.50% for inflation. PERA – Public Employees Police and Fire Fund 2016 Changes Changes in Actuarial Assumptions: -The assumed post-retirement benefit increase rate was changed from 1.0% per year through 2037 and 2.5% thereafter to 1.0% per year for all future years. -The assumed investment return was changed from 7.9% to 7.5%. The single discount rate changed from 7.9% to 5.6%. -The assumed future salary increases, payroll growth, and inflation were decreased by 0.25% to 3.25% for payroll growth and 2.50% for inflation. 111 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 126 - This page intentionally left blank - 112 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 127 COMBINING FUND STATEMENTS AND SCHEDULES 113 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 128 - This page intentionally left blank - 114 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 129 NONMAJOR GOVERNMENTAL FUNDS 115 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 130 - This page intentionally left blank - 116 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 131 SPECIAL REVENUE FUNDS The Special Revenue Funds are used to account for and report the proceeds of specific revenue sources that are restricted or committed to expenditure for specified purposes other than debt service or capital projects. CAPITAL PROJECTS FUNDS The Capital Projects Funds account for financial resources that are restricted, committed, or assigned to expenditure for capital outlays including the acquisition or construction of capital facilities and other capital assets. 117 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 132 CITY OF ST. LOUIS PARK, MINNESOTA COMBINING BALANCE SHEET Statement 15 NONMAJOR GOVERNMENTAL FUNDS December 31, 2016 Special Capital Revenue Projects Total Assets Cash and investments 1,726,137$ 3,453,761$ 5,179,898$ Accrued interest receivable 4,980 16,093 21,073 Due from other governments 37,188 - 37,188 Accounts receivable 179,795 596,451 776,246 Prepaid items - 6,500 6,500 Special assessments receivable - delinquent 6,963 - 6,963 Special assessments receivable - deferred 170,684 - 170,684 Loans receivable - noncurrent 436,921 - 436,921 Total assets 2,562,668$ 4,072,805$ 6,635,473$ Liabilities Accounts payable 44,184$ 69,172$ 113,356$ Salaries payable 18,419 - 18,419 Due to other governments 2 - 2 Total liabilities 62,605 69,172 131,777 Deferred inflows of resources Unavailable revenue 207,297 - 207,297 Fund balances Nonspendable - 6,500 6,500 Restricted 995,551 1,832,248 2,827,799 Committed 466,287 - 466,287 Assigned 830,928 2,164,885 2,995,813 Total fund balances 2,292,766 4,003,633 6,296,399 Total liabilities, deferred inflows of resources, and fund balances 2,562,668$ 4,072,805$ 6,635,473$ 118 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 133 CITY OF ST. LOUIS PARK, MINNESOTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND Statement 16 CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS For The Year Ended December 31, 2016 Special Capital Revenue Projects Total Revenues Taxes Franchise taxes 686,289$ 2,393,110$ 3,079,399$ Intergovernmental 143,620 - 143,620 Charges for services 25,301 - 25,301 Special assessments 174,602 - 174,602 Interest income 14,044 38,969 53,013 Miscellaneous 144,778 - 144,778 Total revenues 1,188,634 2,432,079 3,620,713 Expenditures Current Public safety - 2,669 2,669 Public information 477,721 - 477,721 Engineering - 43,929 43,929 Housing and maintenance 144,204 - 144,204 Social and economic development 255,044 - 255,044 Capital outlay Public safety - 521,034 521,034 Engineering - 2,135,842 2,135,842 Public information 223,009 - 223,009 Total expenditures 1,099,978 2,703,474 3,803,452 Revenues over (under) expenditures 88,656 (271,395) (182,739) Other financing sources (uses) Transfers in - 450,000 450,000 Transfers out (109,506) (1,051,810) (1,161,316) Total other financing sources (uses)(109,506) (601,810) (711,316) Net change in fund balances (20,850) (873,205) (894,055) Fund balances - January 1 2,313,616 4,876,838 7,190,454 Fund balances - December 31 2,292,766$ 4,003,633$ 6,296,399$ 119 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 134 - This page intentionally left blank - 120 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 135 NONMAJOR SPECIAL REVENUE FUNDS Cable Television Fund – used to account for revenues received from franchise fees and expenditures related to regulation of the privately owned cable television company. Community Development Fund – used to account for funds received under Title I of the Housing and Community Development Act of 1974. Special Service Districts Fund – used to account for the operations of Special Service Districts. Revenues are received from each district’s property owners and are used to provide additional services, primarily snow removal, within each District. 121 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 136 Statement 17CITY OF ST. LOUIS PARK, MINNESOTA COMBINING BALANCE SHEET NONMAJOR SPECIAL REVENUE FUNDS December 31, 2016 Assets Cash and investments 1,482,925$ 16,520$ 226,692$ -$ 1,726,137$ Accrued interest receivable 4,224 161 595 - 4,980 Due from other governments - 37,188 - - 37,188 Accounts receivable 179,795 - - - 179,795 Due from other funds - - 3,521 (3,521) - Special assessments receivable - delinquent - - 6,963 - 6,963 Special assessments receivable - deferred - - 170,684 - 170,684 Loans receivable - noncurrent - 436,921 - - 436,921 Total assets 1,666,944$ 490,790$ 408,455$ (3,521)$ 2,562,668$ Liabilities Accounts payable 843$ 36,538$ 6,803$ -$ 44,184$ Salaries payable 18,419 - - - 18,419 Due to other governments 2 - - - 2 Due to other funds - - 3,521 (3,521) - Total liabilities 19,264 36,538 10,324 (3,521) 62,605 Deferred inflows of resources Unavailable revenue - 32,268 175,029 - 207,297 Fund balances Restricted 573,567 421,984 - - 995,551 Committed 466,287 - - - 466,287 Assigned 607,826 - 223,102 - 830,928 Total fund balances 1,647,680 421,984 223,102 - 2,292,766 Total liabilities, deferred inflows of resources, and fund balances 1,666,944$ 490,790$ 408,455$ (3,521)$ 2,562,668$ Cable Television Community Development Special Service Districts Interfund Eliminations Total 122 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 137 CITY OF ST. LOUIS PARK, MINNESOTA COMBINING SCHEDULE OF REVENUES, Statement 18 EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR SPECIAL REVENUE FUNDS For The Year Ended December 31, 2016 Revenues Taxes Franchise taxes 686,289$ -$ -$ 686,289$ Intergovernmental - 143,620 - 143,620 Charges for services - -25,301 25,301 Special assessments - -174,602 174,602 Interest income 11,799 471 1,774 14,044 Miscellaneous 141,990 - 2,788 144,778 Total revenues 840,078 144,091 204,465 1,188,634 Expenditures Current Public information Personal services 410,511 - - 410,511 Supplies 16,589 - - 16,589 Other services and charges 50,621 - - 50,621 Housing and maintenance Personal services - 7,667 - 7,667 Other services and charges - 136,537 - 136,537 Social and economic development Supplies - - 22,479 22,479 Other services and charges - - 232,565 232,565 Capital outlay Public information 223,009 - - 223,009 Total expenditures 700,730 144,204 255,044 1,099,978 Revenues over (under) expenditures 139,348 (113) (50,579) 88,656 Other financing uses Transfers out (109,506) - - (109,506) Net change in fund balances $29,842 (113) (50,579) (20,850) Fund balances - January 1 1,617,838 422,097 273,681 2,313,616 Fund balances - December 31 1,647,680$ 421,984$ 223,102$ 2,292,766$ Cable Television Community Development Special Service Districts Total 123 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 138 - This page intentionally left blank - 124 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 139 NONMAJOR CAPITAL PROJECTS FUNDS Pavement Management Fund – used to account for the financing of street rehabilitation. Revenues are provided by a franchise fee and transfers from the Sanitary Sewer Utility and Water Utility Funds. Police and Fire Pensions Fund – used to account for the funds received by the Police and Fire department for pension refunds. These funds must be used for specific police and fire purposes. 125 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 140 CITY OF ST. LOUIS PARK, MINNESOTA COMBINING BALANCE SHEET Statement 19 NONMAJOR CAPITAL PROJECTS FUNDS December 31, 2016 Pavement Management Police and Fire Pensions Total Assets Cash and investments 1,557,682$ 1,896,079$ 3,453,761$ Accrued interest receivable 10,752 5,341 16,093 Accounts receivable 596,451 - 596,451 Prepaid items 6,500 - 6,500 Total assets 2,171,385$ 1,901,420$ 4,072,805$ Liabilities Accounts payable -$ 69,172$ 69,172$ Fund balances Nonspendable 6,500 - 6,500 Restricted - 1,832,248 1,832,248 Assigned 2,164,885 - 2,164,885 Total fund balances 2,171,385 1,832,248 4,003,633 Total liabilities and fund balances 2,171,385$ 1,901,420$ 4,072,805$ 126 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 141 CITY OF ST. LOUIS PARK, MINNESOTA COMBINING SCHEDULE OF REVENUES, Statement 20 EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR CAPITAL PROJECTS FUNDS For The Year Ended December 31, 2016 Pavement Management Police and Fire Pensions Total Revenues Taxes Franchise taxes 2,393,110$ -$ 2,393,110$ Interest income 20,678 18,291 38,969 Total revenues 2,413,788 18,291 2,432,079 Expenditures Current Public safety - 2,669 2,669 Engineering 43,929 - 43,929 Capital outlay Public safety - 521,034 521,034 Engineering 2,135,842 - 2,135,842 Total expenditures 2,179,771 523,703 2,703,474 Revenues over (under) expenditures 234,017 (505,412) (271,395) Other financing sources (uses) Transfers in 450,000 - 450,000 Transfers out (551,810) (500,000) (1,051,810) Total other financing sources (uses)(101,810) (500,000) (601,810) Net change in fund balances 132,207 (1,005,412) (873,205) Fund balances - January 1 2,039,178 2,837,660 4,876,838 Fund balances - December 31 2,171,385$ 1,832,248$ 4,003,633$ 127 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 142 - This page intentionally left blank - 128 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 143 MAJOR DEBT SERVICE FUNDS 2010A General Obligation Bond 2012A General Obligation HIA Bonds 2010B General Obligation Bond 2010D General Obligation Fire Station Bond 2014A General Obligation Bonds 2016A General Obligation Bonds 2000 General Obligaiton Bond Reserve 2010C General Obligation Bond 2010C General Obligation Bond Reserve Fund 2005A General Obligation Bond Hoigaard’s 2010 A & B TIF Notes 2008B General Obligation Tax Increment Bond 129 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 144 CITY OF ST. LOUIS PARK, MINNESOTA COMBINING BALANCE SHEET MAJOR DEBT SERVICE FUNDS December 31, 2016 2010D General Obligation Fire Station Bond 2014A General Obligation Bonds 2016A General Obligation Bonds Assets Cash and investments 884,579$ 541,768$ 113,578$ Accrued interest receivable 1,478 1,071 323 Due from other governments 82,464 - - Loans receivable - current - - - Loans receivable - noncurrent - - - Total assets 968,521$ 542,839$ 113,901$ Liabilities Deposits payable -$ -$ -$ Unearned revenue 13,744 - - Total liabilities 13,744 - - Deferred inflows of resources Unavailable revenue - - - Fund balances Restricted 954,777 542,839 113,901 Total liabilities, deferred inflows of resources, and fund balances 968,521$ 542,839$ 113,901$ 130 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 145 Statement 21 2000 General Obligation Bond Reserve 2010C General Obligation Bond 2010C General Obligation Bond Reserve 2005A General Obligation Bond Total 121,105$ 70,799$ 197,456$ 244,021$ 2,173,306$ - - - 687 3,559 - - - - 82,464 - 40,000 - - 40,000 - 1,560,000 - - 1,560,000 121,105$ 1,670,799$ 197,456$ 244,708$ 3,859,329$ -$ -$ 196,610$ -$ 196,610$ - - - - 13,744 - - 196,610 - 210,354 - 1,600,000 - - 1,600,000 121,105 70,799 846 244,708 2,048,975 121,105$ 1,670,799$ 197,456$ 244,708$ 3,859,329$ 131 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 146 - This page intentionally left blank - 132 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 147 CITY OF ST. LOUIS PARK, MINNESOTA COMBINING SCHEDULE OF REVENUES,Statement 22 EXPENDITURES AND CHANGES IN FUND BALANCES Page 1 of 2 MAJOR DEBT SERVICE FUNDS For The Year Ended December 31, 2016 3 2010A General Obligation Bond 2012A General Obligation HIA Bonds 2010B General Obligation Bond 2010D General Obligation Fire Station Bond Revenues Taxes Property taxes -$ -$ -$ 922,947$ Intergovernmental - - - 165,333 Interest income - - 43 2,030 Miscellaneous - - - - Total revenues - - 43 1,090,310 Expenditures Social and economic development Developer assistance - - - - Debt service Principal 120,000 55,000 - 545,000 Interest and other 128,625 34,221 144 516,088 Total expenditures 248,625 89,221 144 1,061,088 Revenues over (under) expenditures (248,625) (89,221) (101) 29,222 Other financing sources (uses) Transfers in 248,625 89,221 - - Transfers out - - (5,304) - Bonds issued - - - - Total other financing sources (uses)248,625 89,221 (5,304) - Net change in fund balances - - (5,405) 29,222 Fund balances - January 1 - - 5,405 925,555 Fund balances - December 31 -$ -$ -$ 954,777$ 133 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 148 CITY OF ST. LOUIS PARK, MINNESOTA COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES MAJOR DEBT SERVICE FUNDS For The Year Ended December 31, 2016 2014A General Obligation Bonds 2016A General Obligation Bonds 2000 General Obligation Bond Reserve 2010C General Obligation Bond Revenues Taxes Property taxes 594,720$ -$ -$ -$ Intergovernmental - - - - Interest income 1,360 395 378 141 Miscellaneous - - - 121,084 Total revenues 596,080 395 378 121,225 Expenditures Social and economic development Developer assistance - - - - Debt service Principal - - - 40,000 Interest and other 103,810 132 - 80,954 Total expenditures 103,810 132 - 120,954 Revenues over (under) expenditures 492,270 263 378 271 Other financing sources (uses) Transfers in - - - 378 Transfers out - - (378) - Bonds issued - 113,638 - - Total other financing sources (uses)- 113,638 (378) 378 Net change in fund balances 492,270 113,901 - 649 Fund balances - January 1 50,569 - 121,105 70,150 Fund balances - December 31 542,839$ 113,901$ 121,105$ 70,799$ 134 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 149 Statement 22 Page 2 of 2 2010C General Obligation Bond Reserve 2005A General Obligation Bond Hoigaard's 2010 A & B TIF Notes 2008B General Obligation Tax Increment Bond Interfund Eliminations Total -$ -$ -$ -$ -$ 1,517,667$ - - - - - 165,333 551 1,692 - - - 6,590 - - - - - 121,084 551 1,692 - - - 1,810,674 - - 607,081 - - 607,081 - 455,000 - 370,000 - 1,585,000 - 10,148 - 173,100 - 1,047,222 - 465,148 607,081 543,100 - 3,239,303 551 (463,456) (607,081) (543,100) - (1,428,629) - - 607,081 543,100 (378) 1,488,027 - - - - 378 (5,304) - - - - - 113,638 - - 607,081 543,100 - 1,596,361 551 (463,456) - - - 167,732 295 708,164 - - - 1,881,243 846$ 244,708$ -$ -$ -$ 2,048,975$ 135 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 150 - This page intentionally left blank - 136 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 151 MAJOR REDEVELOPMENT DISTRICT FUNDS Duke West End TIF Eliot Park TIF Ellipse TIF District HRA Levy HSTI Victoria Ponds Park Center Housing CSM TIF District Mill City TIF District Park Commons TIF District Edgewood TIF District Elmwood Village Wolfe Lake TIF District Aquila Commons Highway 7 Business Center Hard Coat TIF District Shoreham TIF District Excelsior Blvd TIF District 137 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 152 CITY OF ST. LOUIS PARK, MINNESOTA COMBINING BALANCE SHEET MAJOR REDEVELOPMENT DISTRICT FUNDS December 31, 2016 Duke West End TIF Eliot Park TIF Ellipse TIF District HRA Levy Assets Cash and investments 857,172$ 24,360$ 230,191$ 6,499$ Accrued interest receivable 1,110 - 303 264 Accounts receivable - - - - Taxes receivable - unremitted 7,187 - - 11,277 Taxes receivable - delinquent - - - 9,698 Interfund loan receivable - - - - Loans receivable - noncurrent - - - - Total assets 865,469$ 24,360$ 230,494$ 27,738$ Liabilities Accounts payable 519$ 134$ 134$ -$ Due to other governments 2,796 616 1,185 - Interfund loan payable 440,198 19,632 161,919 3,075,428 Total liabilities 443,513 20,382 163,238 3,075,428 Deferred inflows of resources Unavailable revenue - - - 9,698 Fund balances Restricted 421,956 3,978 67,256 - Unassigned - - - (3,057,388) Total fund balances 421,956 3,978 67,256 (3,057,388) Total liabilities, deferred inflows of resources, and fund balances 865,469$ 24,360$ 230,494$ 27,738$ 138 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 153 Statement 23 Page 1 of 2 Victoria Ponds Park Center Housing CSM TIF District Mill City TIF District Park Commons TIF District 518,480$ 198,372$ 629,636$ 334,357$ 906,250$ 1,446 698 1,371 515 - - 2 - - - - - 8,096 - 27,638 - - - - - 115,200 - - - - - 718,738 - - - 635,126$ 917,810$ 639,103$ 334,872$ 933,888$ -$ -$ 134$ 134$ 1,255$ 248,100 719 1,456 1,166 6,066 - - - - - 248,100 719 1,590 1,300 7,321 - 75,732 - - - 387,026 841,359 637,513 333,572 926,567 - - - - - 387,026 841,359 637,513 333,572 926,567 635,126$ 917,810$ 639,103$ 334,872$ 933,888$ 139 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 154 CITY OF ST. LOUIS PARK, MINNESOTA COMBINING BALANCE SHEET MAJOR REDEVELOPMENT DISTRICT FUNDS December 31, 2016 Edgewood TIF District Elmwood Village Wolfe Lake TIF District Aquila Commons Assets Cash and investments 12,215$ 692,266$ 90,540$ 101,579$ Accrued interest receivable - - 136 136 Accounts receivable - - - - Taxes receivable - unremitted - 11,544 - - Taxes receivable - delinquent - -- - Interfund loan receivable - -- - Loans receivable - noncurrent - -- - Total assets 12,215$ 703,810$ 90,676$ 101,715$ Liabilities Accounts payable 134$ 865$ 134$ 134$ Due to other governments 605 4,954 703 1,087 Interfund loan payable - 2,680,702 - - Total liabilities 739 2,686,521 837 1,221 Deferred inflows of resources Unavailable revenue - - - - Fund balances Restricted 11,476 - 89,839 100,494 Unassigned - (1,982,711) - - Total fund balances 11,476 (1,982,711) 89,839 100,494 Total liabilities, deferred inflows of resources, and fund balances 12,215$ 703,810$ 90,676$ 101,715$ 140 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 155 Statement 23 Page 2 of 2 Highway 7 Business Center Hard Coat TIF District Shoreham TIF District Excelsior Blvd TIF District Interfund Eliminations Total 77,455$ 2,414$ -$ -$ -$ 4,681,786$ - 22 - - - 6,001 - - - - - 2 - - - - - 65,742 - - - - - 9,698 - - - - (115,200) - - - - - - 718,738 77,455$ 2,436$ -$ -$ (115,200)$ 5,481,967$ 134$ -$ -$ -$ -$ 3,711$ 738 546 - - - 270,737 - 115,200 18,242 15,688 (115,200) 6,411,809 872 115,746 18,242 15,688 (115,200) 6,686,257 - - - - - 85,430 76,583 - - - - 3,897,619 - (113,310) (18,242) (15,688) - (5,187,339) 76,583 (113,310) (18,242) (15,688) - (1,289,720) 77,455$ 2,436$ -$ -$ (115,200)$ 5,481,967$ 141 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 156 CITY OF ST. LOUIS PARK, MINNESOTA COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES MAJOR REDEVELOPMENT DISTRICT FUNDS For The Year Ended December 31, 2016 Duke West End TIF Eliot Park TIF Ellipse TIF District HRA Levy Revenues Taxes Property taxes -$ -$ -$ 1,006,866$ Tax increments 1,609,013 65,244 477,093 - Interest income 1,660 - 138 4,797 Total revenues 1,610,673 65,244 477,231 1,011,663 Expenditures Current Social and economic development 697,067 41,132 430,004 15,473 Capital outlay Social and economic development 36,900 - - - Debt service Interest and other 19,086 734 8,830 118,707 Total expenditures 753,053 41,866 438,834 134,180 Revenues over (under) expenditures 857,620 23,378 38,397 877,483 Other financing uses Transfers out (543,100) - - (277,196) Net change in fund balances 314,520 23,378 38,397 600,287 Fund balances - January 1 107,436 (19,400) 28,859 (3,657,675) Fund balances - December 31 421,956$ 3,978$ 67,256$ (3,057,388)$ 142 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 157 Statement 24 Page 1 of 2 HSTI Victoria Ponds Park Center Housing CSM TIF District Mill City TIF District Park Commons TIF District Edgewood TIF District -$ -$ -$ -$ -$ -$ -$ - - 146,882 465,522 464,132 2,226,110 65,288 - 8,555 1,683 3,061 694 - - - 8,555 148,565 468,583 464,826 2,226,110 65,288 - 248,555 5,620 401,552 434,315 2,173,480 54,023 - - - - - - - - - - - - - - - 248,555 5,620 401,552 434,315 2,173,480 54,023 - (240,000) 142,945 67,031 30,511 52,630 11,265 (417) - (144,000) - - - - (417) (240,000) (1,055) 67,031 30,511 52,630 11,265 417 627,026 842,414 570,482 303,061 873,937 211 -$ 387,026$ 841,359$ 637,513$ 333,572$ 926,567$ 11,476$ 143 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 158 CITY OF ST. LOUIS PARK, MINNESOTA COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES MAJOR REDEVELOPMENT DISTRICT FUNDS For The Year Ended December 31, 2016 Elmwood Village Wolfe Lake TIF District Aquila Commons Revenues Taxes Property taxes -$ -$ -$ Tax increments 1,735,088 133,411 167,035 Interest income - 181 125 Total revenues 1,735,088 133,592 167,160 Expenditures Current Social and economic development 512,329 127,524 161,978 Capital outlay Social and economic development - - - Debt service Interest and other 97,697 - - Total expenditures 610,026 127,524 161,978 Revenues over (under) expenditures 1,125,062 6,068 5,182 Other financing uses Transfers out (747,670) - - Net change in fund balances 377,392 6,068 5,182 Fund balances - January 1 (2,360,103) 83,771 95,312 Fund balances - December 31 (1,982,711)$ 89,839$ 100,494$ 144 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 159 Statement 24 Page 2 of 2 Highway 7 Business Center Hard Coat TIF District Shoreham TIF District Excelsior Blvd TIF District Total -$ -$ -$ -$ 1,006,866$ 158,123 20,748 - - 7,733,689 - 19 - - 20,913 158,123 20,767 - - 8,761,468 136,284 1,746 3,121 1,355 5,445,558 - - - - 36,900 - 4,963 582 551 251,150 136,284 6,709 3,703 1,906 5,733,608 21,839 14,058 (3,703) (1,906) 3,027,860 - - - - (1,712,383) 21,839 14,058 (3,703) (1,906) 1,315,477 54,744 (127,368) (14,539) (13,782) (2,605,197) 76,583$ (113,310)$ (18,242)$ (15,688)$ (1,289,720)$ 145 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 160 - This page intentionally left blank - 146 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 161 INTERNAL SERVICE FUNDS The City has three Internal Service Funds to account for the financing of goods or services provided by one department or agency to other departments or agencies of the City, or to other governments on a cost reimbursement basis. The City’s internal service funds account for employee flex spending, uninsured loss, capital replacement, and pensions. 147 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 162 CITY OF ST. LOUIS PARK, MINNESOTA COMBINING STATEMENT OF NET POSITION Statement 25 INTERNAL SERVICE FUNDS December 31, 2016 Employee Administrative Uninsured Loss Capital Replacement Total Assets Current assets Cash and investments 952,469$ 677,468$ 1,011,102$ 2,641,039$ Accrued interest receivable 4,229 1,628 2,916 8,773 Accounts receivable - 21,271 (1,380) 19,891 Prepaid items 79,207 74,814 20,967 174,988 Deposits receivable 31,000 - - 31,000 Total current assets 1,066,905 775,181 1,033,605 2,875,691 Noncurrent assets Capital assets, at cost Land - - 818,094 818,094 Building and structures - - 8,521,883 8,521,883 Improvements other than buildings - - 1,130,685 1,130,685 Infrastructure - - 1,313,801 1,313,801 Machinery, furniture and equipment - - 7,038,425 7,038,425 Fleet - - 9,076,459 9,076,459 Construction in progress - - 460,569 460,569 Total capital assets, at cost - - 28,359,916 28,359,916 Less: accumulated depreciation - - (10,291,415) (10,291,415) Total noncurrent assets - - 18,068,501 18,068,501 Total assets 1,066,905 775,181 19,102,106 20,944,192 Deferred outflows of resources - pension related 28,302,033 - - 28,302,033 Liabilities Current liabilities Accounts payable 27,910 32,370 51,696 111,976 Accrued flex spending 14,687 - - 14,687 Due to other governments 12,377 - 57,798 70,175 Contracts payable - - 3,805 3,805 Compensated absences payable - current 2,340,872 - - 2,340,872 Capital lease payable - current - - 49,688 49,688 Total current liabilities 2,395,846 32,370 162,987 2,591,203 Noncurrent liabilities Compensated absences payable 1,496,864 - - 1,496,864 Capital lease payable - - 165,931 165,931 Other postemployment benefits payable 2,997,138 - - 2,997,138 Net pension liability 46,787,244 - - 46,787,244 Total noncurrent liabilities 51,281,246 - 165,931 51,447,177 Total liabilities 53,677,092 32,370 328,918 54,038,380 Deferred inflows of resources - pension related 5,218,008 - - 5,218,008 Net position Net investment in capital assets - - 17,852,882 17,852,882 Unrestricted (29,526,162) 742,811 920,306 (27,863,045) Total net position (29,526,162)$ 742,811$ 18,773,188$ (10,010,163)$ 148 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 163 CITY OF ST. LOUIS PARK, MINNESOTA COMBINING STATEMENT OF REVENUES, EXPENSES AND Statement 26 CHANGES IN FUND NET POSITION INTERNAL SERVICE FUNDS For The Year Ended December 31, 2016 Employee Administrative Uninsured Loss Capital Replacement Total Operating revenues Charges for services 2,203,806$ -$ 1,199,094$ 3,402,900$ Other 169,321 243,690 12,000 425,011 Total operating revenues 2,373,127 243,690 1,211,094 3,827,911 Operating expenses Personal services 8,207,059 29,784 - 8,236,843 Supplies - - 680,987 680,987 Professional services 25,026 - 100,379 125,405 Insurance - 213,546 - 213,546 Depreciation - -1,781,619 1,781,619 Other 85,805 911 1,423,126 1,509,842 Total operating expenses 8,317,890 244,241 3,986,111 12,548,242 Operating income (loss)(5,944,763) (551) (2,775,017) (8,720,331) Nonoperating revenues (expenses) Interest income 14,803 4,688 1,582 21,073 Property taxes 200,000 - 2,245,525 2,445,525 Intergovernmental revenue 150,605 - 539,434 690,039 Gain on disposal of capital assets - - 184,215 184,215 Interest expense - - (5,607) (5,607) Total nonoperating revenues (expenses)365,408 4,688 2,965,149 3,335,245 Income (loss) before transfers (5,579,355) 4,137 190,132 (5,385,086) Transfers in 200,000 - 628,760 828,760 Transfers out - - (91,415) (91,415) Change in net position (5,379,355) 4,137 727,477 (4,647,741) Net position - January 1 (24,146,807) 738,674 18,045,711 (5,362,422) Net position - December 31 (29,526,162)$ 742,811$ 18,773,188$ (10,010,163)$ 149 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 164 CITY OF ST. LOUIS PARK, MINNESOTA COMBINING STATEMENT OF CASH FLOWS Statement 27 INTERNAL SERVICE FUNDS Page 1 of 2 For The Year Ended December 31, 2016 Employee Administrative Uninsured Loss Capital Replacement Total Cash flows from operating activities Receipts from interfund services provided 2,203,806$ -$ 1,199,094$ 3,402,900$ Other operating cash receipts 175,559 222,419 87,109 485,087 Payments to suppliers (215,695) (195,656) (2,337,833) (2,749,184) Payments to employees (2,620,217) (29,784) - (2,650,001) Net cash flows provided (used) by operating activities (456,547) (3,021) (1,051,630) (1,511,198) Cash flows from noncapital financing activities Transfers in 200,000 - - 200,000 Property taxes 200,000 - 2,245,525 2,445,525 Intergovernmental receipts 150,605 - 539,434 690,039 Net cash flows provided (used) by noncapital financing activities 550,605 - 2,784,959 3,335,564 Cash flows from capital and related financing activities Transfers in - - 628,760 628,760 Transfers out - - (91,415) (91,415) Acquisition of capital assets - - (1,884,799) (1,884,799) Proceeds from sale of capital assets - - 302,501 302,501 Principal paid on capital lease - - (31,505) (31,505) Interest paid on capital lease - - (5,607) (5,607) Net cash flows provided (used) by and related financing activities - - (1,082,065) (1,082,065) Cash flows from investing activities Interest received 14,081 4,701 111 18,893 Net increase in cash and cash equivalents 108,139 1,680 651,375 761,194 Cash and cash equivalents - January 1 844,330 675,788 359,727 1,879,845 Cash and cash equivalents - December 31 952,469$ 677,468$ 1,011,102$ 2,641,039$ 150 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 165 CITY OF ST. LOUIS PARK, MINNESOTA COMBINING STATEMENT OF CASH FLOWS Statement 27 INTERNAL SERVICE FUNDS Page 2 of 2 For The Year Ended December 31, 2016 Employee Administrative Uninsured Loss Capital Replacement Total Reconciliation of operating income (loss) to net cash provided (used) by operating activities Operating income (loss)(5,944,763)$ (551)$ (2,775,017)$ (8,720,331)$ Adjustments to reconcile operating income (loss) to net cash flows from operating activities Depreciation - - 1,781,619 1,781,619 (Increase) decrease in assets/deferred outflows Accounts receivable - (21,271) 27,100 5,829 Due from other governments - -210 210 Prepaid items (1,542) 1,057 25,724 25,239 Deferred outflows of resources (24,558,317) - - (24,558,317) Increase (decrease) in liabilities/deferred inflows Accounts payable (103,322) 17,744 (159,065) (244,643) Due to other governments 6,238 - 47,799 54,037 Accrued flex spending (2,650) - -(2,650) Compensated absences payable 85,549 - -85,549 Other postemployment benefits 400,936 - -400,936 Net pension liability 26,912,406 - - 26,912,406 Deferred inflows of resources 2,748,918 - - 2,748,918 Net cash provided (used) by operating activities (456,547)$ (3,021)$ (1,051,630)$ (1,511,198)$ Noncash capital and related financing activities Disposal of capital assets - - 1,229,169 1,229,169 Capital assets acquired through financing -$ -$ 222,149$ 222,149$ 151 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 166 - This page intentionally left blank - 152 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 167 III. STATISTICAL SECTION (UNAUDITED) 153 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 168 CITY OF ST. LOUIS PARK, MINNESOTA STATISTICAL SECTION (UNAUDITED) NET POSITION BY COMPONENT LAST TEN FISCAL YEARS 2007 2008 2009 2010 Governmental activities Net investment in capital assets 74,883,912$ 76,600,774$ 89,252,994$ 94,326,512$ Restricted 13,098,282 - 20,075,976 21,692,426 Unrestricted 46,155,656 65,908,328 40,508,755 40,581,189 Total governmental activities net position 134,137,850$ 142,509,102$ 149,837,725$ 156,600,127$ Business-type activities Net investment in capital assets 25,644,428$ 27,559,942$ 23,977,469$ 21,717,923$ Unrestricted 7,499,935 6,414,768 6,903,776 8,433,915 Total business-type activities net position 33,144,363$ 33,974,710$ 30,881,245$ 30,151,838$ Total primary government Net investment in capital assets 100,528,340$ 104,160,716$ 113,230,463$ 116,044,435$ Restricted 13,098,282 - 20,075,976 21,692,426 Unrestricted 53,655,591 72,323,096 47,412,531 49,015,104 Total primary government 167,282,213$ 176,483,812$ 180,718,970$ 186,751,965$ Note: GASB 65 was implemented in 2013. Net position was restated for 2012 to reflect the expenses of bond issuance costs in the year of issuance. Net position for years prior to 2012 was not restated. GASB 68 was implemented in 2015. Net position was restated for 2014 to reflect the reporting of net pension liability and pension related deferred outflows of resources. Net position for years prior to 2014 was not restated. Fiscal Year 154 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 169 Table 1 2011 2012 2013 2014 2015 2016 99,835,484$ 95,020,700$ 96,480,493$ 94,891,625$ 96,286,131$ 96,458,787$ 17,695,996 18,941,172 13,560,965 10,971,995 10,608,709 10,658,889 43,929,086 46,413,200 45,688,600 49,971,778 31,667,135 31,751,796 161,460,566$ 160,375,072$ 155,730,058$ 155,835,398$ 138,561,975$ 138,869,472$ 22,347,266$ 22,906,086$ 19,127,309$ 22,818,382$ 22,753,326$ 23,030,284$ 8,524,086 9,829,024 11,540,303 4,783,696 4,620,302 5,849,650 30,871,352$ 32,735,110$ 30,667,612$ 27,602,078$ 27,373,628$ 28,879,934$ 122,182,750$ 117,926,786$ 115,607,802$ 117,710,007$ 119,039,457$ 119,489,071$ 17,695,996 18,941,172 13,560,965 10,971,995 10,608,709 10,658,889 52,453,172 56,242,224 57,228,903 54,755,474 36,287,437 37,601,446 192,331,918$ 193,110,182$ 186,397,670$ 183,437,476$ 165,935,603$ 167,749,406$ Fiscal Year 155 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 170 CITY OF ST. LOUIS PARK, MINNESOTA STATISTICAL SECTION (UNAUDITED) CHANGES IN NET POSITION LAST TEN FISCAL YEARS (accrual basis of accounting) 2007 2008 2009 2010 Expenses Governmental activities General government 8,251,341$ 8,216,816$ 8,167,355$ 7,192,652$ Public safety 10,721,803 11,867,403 12,138,185 12,256,272 Public works 5,979,789 6,904,217 6,915,541 19,446,758 Public information 404,074 425,829 457,872 435,050 Culture and recreation 6,916,001 7,352,406 7,456,215 7,792,614 Operations and recreation - - - - Engineering - - - - Housing and rehabilitation 1,079,211 1,615,010 1,544,175 4,150,595 Housing maintenance 121,118 199,757 128,099 241,345 Social and economic development 5,910,149 5,494,634 6,321,623 4,861,518 General services 6,830 2,653 7,662 - Interest on long-term debt 1,301,266 1,329,767 1,543,879 1,453,555 Total governmental activities expenses 40,691,582 43,408,492 44,680,606 57,830,359 Business-type activities Water 3,285,107 3,391,992 4,089,837 3,904,801 Sewer 4,199,659 4,485,386 4,228,680 4,193,191 Solid Waste - - - 2,116,949 Refuse 2,019,595 2,135,677 2,125,540 - Storm Water 1,088,170 1,172,199 1,287,202 1,325,803 Wireless 1,151,751 315,664 151,708 - Total business-type activities expenses 11,744,282 11,500,918 11,882,967 11,540,744 Total expenses 52,435,864$ 54,909,410$ 56,563,573$ 69,371,103$ Program revenues Governmental activities Charges for services General government 978,058$ 955,811$ 888,246$ 1,065,209$ Public safety 2,977,475 4,282,699 2,958,383 2,898,634 Public works 1,483,824 380,452 2,292,287 601,890 Public information - - - - Culture and recreation 2,409,625 2,121,505 2,083,015 1,959,556 Operations and recreation - - - - Engineering - - - - Housing and rehabilitation 527,536 507,163 562,930 8,833 Housing maintenance - - - - Social and economic development 202,110 173,960 184,236 588,757 Interest on long-term debt - - 318,134 - Operating grants and contributions 3,908,485 3,581,092 2,664,563 1,735,926 Capital grants and contributions 2,113,560 2,822,683 2,131,755 14,908,522 Total governmental activities program revenue 14,600,673 14,825,365 14,083,549 23,767,327 Business-type activities Charges for services Water 3,461,301 3,584,384 4,294,962 4,148,394 Sewer 4,820,732 4,506,339 5,153,171 5,277,473 Solid Waste - - - 2,719,376 Refuse 2,395,469 2,348,133 2,458,555 - Storm Water 1,473,746 1,529,180 1,699,557 1,829,792 Wireless 68,959 51,322 16,140 - Operating grants and contributions 208,814 966,053 167,604 103,342 Capital grants and contributions - 1,040,384 - 2,890 Total business-type activities program revenue 12,429,021 14,025,795 13,789,989 14,081,267 Total program revenues 27,029,694$ 28,851,160$ 27,873,538$ 37,848,594$ Fiscal Year 156 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 171 Table 2 Page 1 of 2 2011 2012 2013 2014 2015 2016 7,247,716$ 7,387,354$ 10,085,905$ 9,161,922$ 10,712,749$ 11,182,348$ 12,535,793 13,264,220 13,365,297 13,954,604 15,336,854 20,091,787 7,513,833 ----- 803,885 524,012 466,043 507,928 3,057,509 549,940 7,882,789 ----- -15,209,548 13,487,238 13,318,552 9,996,885 13,352,637 -5,253,969 16,046,665 21,045,392 10,185,956 5,091,818 794,935 3,914,261 1,774,657 909,051 707,661 528,467 79,786 116,949 141,250 130,534 84,505 144,204 6,171,527 7,810,635 9,040,280 8,058,914 8,872,479 8,826,281 ------ 1,695,758 1,245,294 1,295,298 1,185,975 1,233,107 1,620,489 44,726,022 54,726,242 65,702,633 68,272,872 60,187,705 61,387,971 3,839,592 3,890,860 5,747,116 4,609,579 4,684,190 4,773,624 4,572,869 4,593,166 5,272,646 4,885,748 5,333,887 6,002,088 2,319,099 2,562,985 3,614,118 2,813,587 2,917,214 3,256,804 ------ 1,373,546 1,485,390 1,390,235 1,422,645 1,400,975 1,514,761 ------ 12,105,106 12,532,401 16,024,115 13,731,559 14,336,266 15,547,277 56,831,128$ 67,258,643$ 81,726,748$ 82,004,431$ 74,523,971$ 76,935,248$ 1,059,527$ 1,060,679$ 1,024,253$ 1,142,294$ 1,185,881$ 1,184,122$ 2,917,525 3,344,449 3,109,813 3,477,244 4,237,819 4,354,793 315,163 ----- 200,000 ---10,000 - 2,111,348 2,438,841 ---- --2,035,715 2,089,052 2,344,863 2,122,730 --1,032 318,873 144,151 97,688 62,191 8,162 8,606 7,537 6,315 7,607 ---241 -- 316,935 281,002 250,015 224,252 256,557 259,910 ------ 2,065,312 2,360,465 2,709,644 2,024,171 3,586,440 2,512,011 1,878,697 6,290,076 11,881,109 12,066,132 3,178,294 3,960,739 10,926,698 15,783,674 21,020,187 21,349,796 14,950,320 14,499,600 4,475,068 5,109,446 5,037,067 5,188,065 5,766,601 5,674,239 5,768,266 5,959,931 5,822,085 5,841,377 6,112,024 6,663,731 2,894,726 2,858,930 2,912,415 3,179,732 3,189,566 2,905,899 ------ 1,904,587 1,977,663 2,054,915 2,246,201 2,472,134 2,642,860 ------ 103,166 105,976 135,642 127,742 128,610 181,525 -----799,894 15,145,813 16,011,946 15,962,124 16,583,117 17,668,935 18,868,148 26,072,511$ 31,795,620$ 36,982,311$ 37,932,913$ 32,619,255$ 33,367,748$ Fiscal Year 157 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 172 CITY OF ST. LOUIS PARK, MINNESOTA STATISTICAL SECTION (UNAUDITED) CHANGES IN NET POSITION LAST TEN FISCAL YEARS (accrual basis of accounting) 2007 2008 2009 2010 Net (expenses) revenues Governmental activities (26,090,909)$ (28,583,127)$ (30,597,057)$ (34,063,032)$ Business-type activities 684,739 2,524,877 1,907,022 2,540,523 Total primary government (25,406,170)$ (26,058,250)$ (28,690,035)$ (31,522,509)$ General Revenues and Other Changes in Net Position Governmental activities Taxes Property taxes 26,163,519$ 28,523,119$ 29,512,631$ 29,642,090$ Tax increment - - - - Franchise taxes 1,440,034 1,507,994 1,503,075 1,497,178 Grants and contributions not restricted to specific programs 825,327 519,850 153,108 151,624 Unrestricted investment earnings 4,139,689 2,133,858 1,452,176 629,094 Gain on sale of capital assets 378,075 1,842,601 91,149 34,453 Miscellaneous 341,335 470,230 11,229 950,231 Transfers 1,996,291 1,956,727 5,202,312 3,358,921 Total governmental activities expenses 35,284,270 36,954,379 37,925,680 36,263,591 Business-type activities Unrestricted investment earnings 466,923 243,724 201,825 88,991 Miscellaneous - 18,473 - - Transfers (1,996,291) (1,956,727) (5,202,312) (3,358,921) Total business-type activities expenses (1,529,368) (1,694,530) (5,000,487) (3,269,930) Total primary government 33,754,902$ 35,259,849$ 32,925,193$ 32,993,661$ Change in net position Governmental activities 9,193,361$ 8,371,252$ 7,328,623$ 2,200,559$ Business-type activities (844,629) 830,347 (3,093,465) (729,407) Prior period adjustment 143,969 - - - Total primary government 8,492,701$ 9,201,599$ 4,235,158$ 1,471,152$ Note: GASB 65 was implemented in 2013. Governmental and business-type activities expenses were restated for 2012 to reflect the expensing of bond issuance costs in the year of issuance. Expenses for years prior to 2012 were not restated. GASB 68 was implemented in 2015. Pension expense for years prior to 2015 was not restated. Fiscal Year 158 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 173 Table 2 Page 2 of 2 2011 2012 2013 2014 2015 2016 (33,799,324)$ (38,942,568)$ (44,682,446)$ (46,923,076)$ (45,237,385)$ (46,888,371)$ 3,040,707 3,479,545 (61,991) 2,851,558 3,332,669 3,320,871 (30,758,617)$ (35,463,023)$ (44,744,437)$ (44,071,518)$ (41,904,716)$ (43,567,500)$ 23,527,322$ 24,625,789$ 26,963,176$ 27,398,157$ 28,209,567$ 30,185,703$ 7,222,976 6,446,389 6,647,729 7,380,995 6,763,951 7,733,689 1,894,714 1,954,557 2,211,569 2,268,213 2,915,732 3,079,399 156,325 46,422 45,266 504,035 557,671 584,639 1,048,395 663,978 138,899 407,753 221,408 388,647 51,686 60,416 69,237 464,629 577,248 142,713 2,300,478 2,183,685 2,199,629 2,609,539 2,985,997 3,201,122 2,457,867 1,660,035 1,761,927 5,995,095 3,620,449 1,879,956 38,659,763 37,641,271 40,037,432 47,028,416 45,852,023 47,195,868 136,674 113,260 (3,348) 78,003 59,330 65,391 ------ (2,457,867)(1,660,035)(1,761,927)(5,995,095)(3,620,449)(1,879,956) (2,321,193)(1,546,775)(1,765,275)(5,917,092)(3,561,119)(1,814,565) 36,338,570$ 36,094,496$ 38,272,157$ 41,111,324$ 42,290,904$ 45,381,303$ 4,860,439$ (1,301,297)$ (4,645,014)$ 105,340$ 614,638$ 307,497$ 719,514 1,932,770 (1,827,266)(3,065,534)(228,450)1,506,306 ------ 5,579,953$ 631,473$ (6,472,280)$ (2,960,194)$ 386,188$ 1,813,803$ Fiscal Year 159 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 174 - This page intentionally left blank - 160 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 175 CITY OF ST. LOUIS PARK, MINNESOTA STATISTICAL SECTION (UNAUDITED)Table 3 GOVERNMENTAL ACTIVITIES TAX REVENUES BY SOURCE LAST TEN FISCAL YEARS Fiscal Property Franchise Year Tax Tax Total 2007 26,163,519$ 1,440,034$ 27,603,553$ 2008 28,523,119 1,507,993 30,031,112 2009 28,523,119 1,503,075 30,026,194 2010 29,316,753 1,497,178 30,813,931 2011 30,853,927 1,894,714 32,748,641 2012 31,220,365 1,954,557 33,174,922 2013 33,610,905 2,211,569 35,822,474 2014 34,779,152 2,268,213 37,047,365 2015 34,973,518 2,915,732 37,889,250 2016 37,919,392 3,079,399 40,998,791 161 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 176 CITY OF ST. LOUIS PARK, MINNESOTA STATISTICAL SECTION (UNAUDITED) FUND BALANCES OF GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (modified accrual basis of accounting) 2007 2008 2009 2010 General fund Reserved 13,719$ 29,368$ 572,206$ -$ Unreserved 10,100,187 11,697,232 7,326,638 - Nonspendable - - - 80,664 Restricted - - - 425,967 Assigned - - - 124,503 Unassigned - - - 10,399,401 Total General fund 10,113,906$ 11,726,600$ 7,898,844$ 11,030,535$ All other governmental funds Reserved 10,229,125$ 10,610,175$ 7,540,696$ -$ Unreserved, reported in Special revenue funds 9,450,210 7,134,284 7,568,944 - Capital projects funds 38,889,030 43,134,211 40,680,331 - Nonspendable - - - 250,008 Restricted - - - 35,515,318 Committed - - - 466,792 Assigned - - - 33,253,313 Unassigned - - - (7,872,234) Total all other governmental funds 58,568,365$ 60,878,670$ 55,789,971$ 61,613,197$ Note: The City implemented GASB Statement No. 54 for the fiscal year ended December 31, 2010, resulting in significant reclassification of the components of fund balance. Fiscal Year 162 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 177 Table 4 2011 2012 2013 2014 2015 2016 -$ -$ -$ -$ -$ -$ - - - - - - 71,192 70,450 256,251 397,873 566,574 330,483 427,718 458,448 498,922 492,223 464,469 413,787 139,483 690,242 691,171 696,293 758,084 936,663 10,799,829 10,757,776 14,342,422 14,576,348 15,242,009 16,193,763 11,438,222$ 11,976,916$ 15,788,766$ 16,162,737$ 17,031,136$ 17,874,696$ -$ -$ -$ -$ -$ -$ - - - - - - - - - - - - 306,058 426,736 - - - 23,563 21,476,374 20,464,874 15,102,011 12,663,957 12,457,701 10,057,843 511,610 459,160 467,682 483,590 481,009 466,287 34,425,344 35,947,479 33,481,454 38,701,128 39,567,878 41,068,221 (5,042,828) (7,567,117) (7,020,483) (8,819,377) (6,551,326) (5,187,339) 51,676,558$ 49,731,132$ 42,030,664$ 43,029,298$ 45,955,262$ 46,428,575$ Fiscal Year 163 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 178 CITY OF ST. LOUIS PARK, MINNESOTA STATISTICAL SECTION (UNAUDITED) CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (modified accrual basis of accounting) 2007 2008 2009 2010 Revenues Taxes 20,951,991$ 21,563,302$ 21,700,329$ 22,667,190$ Tax increments 6,597,092 8,371,424 7,846,204 6,649,563 Franchise taxes - - 1,503,075 1,497,178 Licenses and permits 2,946,749 4,072,753 2,786,032 2,359,716 Intergovernmental 3,737,619 2,424,119 3,867,795 11,879,601 Charges for services 276,693 324,512 4,228,179 4,051,971 Fines and forfeits 4,482,834 3,894,839 332,694 401,610 Special assessments 840,965 703,484 800,054 1,550,110 Investment earnings 3,851,542 1,990,854 1,358,170 612,098 Miscellaneous 3,038,836 3,591,212 2,615,062 3,050,231 Total revenues 46,724,321 46,936,499 47,037,594 54,719,268 Expenditures General government 6,642,231 6,642,295 6,472,022 6,219,751 Public safety 10,851,256 11,744,656 11,949,612 11,771,246 Public works 4,089,223 4,671,631 4,637,289 15,624,494 Operations and recreation - - - - Engineering - - - - Public information 393,863 415,609 445,146 387,459 Culture and recreation 7,274,375 6,213,945 6,027,059 6,234,938 Housing and rehabilitation 688,062 1,621,099 1,550,264 4,144,378 Housing maintenance 121,118 199,757 128,099 241,170 Social and economic development 5,822,842 5,162,698 6,241,123 4,720,638 General services 6,830 2,653 7,662 - Debt service Principal 4,065,000 4,485,000 4,709,000 2,170,000 Interest 1,304,565 1,365,484 1,322,477 1,170,286 Other charges - - - 453,288 Bond issuance costs - - - - Capital outlay 5,804,342 9,998,748 10,314,002 6,306,083 Total expenditures 47,063,707 52,523,575 53,803,755 59,443,731 Revenues over (under) expenditures (339,386) (5,587,076) (6,766,161) (4,724,463) Other financing sources (uses) Transfers in 8,383,989 11,129,934 9,939,299 11,809,353 Transfers out (7,008,202) (9,233,136) (10,579,081) (14,974,391) Refunding bonds issued - - - 3,615,000 Bonds issued - 5,490,000 2,000,000 20,560,000 Proceeds from long term debt - -- - Premium on bonds issued - -10,202 2,792 Redemption of refunded bonds - -- (1,825,000) Payments to refunded bond escrow agent - - (6,244,425) (4,164,000) Costs paid to refunded bond escrow agent - -- - Proceeds from sale of capital assets 278,662 2,123,277 - 27,412 Total other financing sources (uses)1,654,449 9,510,075 (4,874,005) 15,051,166 Net change in fund balances 1,315,063$ 3,922,999$ (11,640,166)$ 10,326,703$ Debt service as a percentage of noncapital expenditures 13.01% 13.76% 13.87%6.29% Fiscal Year 164 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 179 Table 5 2011 2012 2013 2014 2015 2016 23,336,537$ 24,259,861$ 25,658,762$ 24,361,524$ 26,598,373$ 27,734,546$ 7,222,976 6,446,389 6,647,729 7,380,995 6,763,951 7,733,689 1,894,714 1,954,557 2,211,569 2,268,213 2,915,732 3,079,399 2,797,700 3,241,813 3,069,090 3,413,683 4,312,702 4,320,078 3,105,500 2,983,191 13,887,247 13,216,055 6,017,025 4,345,482 3,897,710 3,547,900 3,052,789 3,476,264 3,608,933 3,406,964 281,047 341,356 311,882 369,546 263,951 299,808 985,912 2,233,715 1,505,568 1,268,539 1,238,873 1,192,628 949,510 622,450 123,306 386,263 199,747 362,196 2,285,608 2,188,262 2,216,820 2,577,300 3,051,946 3,230,390 46,757,214 47,819,494 58,684,762 58,718,382 54,971,233 55,705,180 6,415,318 6,503,965 7,162,588 7,376,380 7,813,046 8,188,193 11,885,577 12,571,356 12,435,341 13,239,729 14,025,463 14,669,251 4,437,939 - - - - - - 13,955,142 10,083,541 10,450,789 9,710,604 9,688,872 - 939,416 15,998,842 21,013,383 10,068,447 480,162 383,586 470,280 408,683 462,341 561,252 477,721 6,546,054 - - - - - 790,918 3,881,500 1,715,540 875,225 538,411 482,313 79,786 116,949 141,250 130,534 84,505 144,204 6,426,013 7,681,176 8,910,821 7,928,905 8,872,479 8,673,638 - - - - - - 5,420,000 1,285,000 3,275,000 1,970,000 1,612,827 1,681,876 1,170,549 1,235,118 1,298,016 1,138,100 1,210,971 1,446,371 1,040 46,435 3,895 54,433 2,640 2,717 - - - - - 111,922 14,295,009 3,930,528 2,089,798 2,271,988 3,486,864 19,894,828 57,851,789 52,616,865 63,523,315 66,911,807 57,987,509 65,942,068 (11,094,575)(4,797,371)(4,838,553)(8,193,425)(3,016,276)(10,236,888) 7,086,529 6,395,355 10,472,534 19,317,129 13,296,241 8,148,651 (5,520,906)(5,580,044)(9,531,189)(15,241,005)(9,462,850)(6,994,545) - 1,290,000 - - - - - -- 5,070,000 - 10,000,000 - -- - 2,200,000 - - - - 98,040 - 396,655 - - - - - - - - - - - - - - - - - - - 885,328 8,590 321,866 777,248 3,000 1,565,623 2,990,639 949,935 9,566,030 6,810,639 11,553,761 (9,528,952)$ (1,806,732)$ (3,888,618)$ 1,372,605$ 3,794,363$ 1,316,873$ 15.13%5.18%7.44%4.81%5.18%6.79% Fiscal Year 165 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 180 CITY OF ST. LOUIS PARK, MINNESOTA STATISTICAL SECTION (UNAUDITED) ASSESSED VALUE/TAX CAPACITY VALUE AND ESTIMATED MARKET VALUE OF ALL TAXABLE PROPERTY LAST TEN FISCAL YEARS 2007 2008 2009 2010 Population 45,216 47,198 47,221 45,250 Real Property Total assessed/tax capacity value 68,025,921$ 68,006,453$ 69,704,858$ 68,386,268$ Less tax increment districts -(7,644,566)(7,639,464) (8,276,993) (6,976,791) Area-wide allocation (net)(1,498,263)(1,498,263) (1,635,724) (1,231,482) Net assessed/tax capacity value 58,883,092$ 58,868,726$ 59,792,141$ 60,177,995$ Estimated market value 5,553,715,600$ 5,552,520,000$ 5,633,028,200$ 5,550,563,700$ Personal Property Assessed/tax capacity value 458,627$ 458,627$ 434,825$ 428,760$ Estimated market value 23,263,700$ 23,263,700$ 22,006,100$ 21,712,100$ Total Real and Personal Property Assessed/tax capacity value 59,341,719$ 59,327,353$ 60,226,966$ 60,606,755$ Estimated market value 5,576,979,300$ 5,575,783,700$ 5,655,034,300$ 5,572,275,800$ Tax Capacity Rate 34.7% 34.8% 36.7% 37.1% Fiscal Year 166 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 181 Table 6 2011 2012 2013 2014 2015 2016 44,665 45,505 46,362 47,411 47,502 48,354 65,611,006$ 62,602,680$ 61,348,576$ 62,068,742$ 65,599,841$ 71,118,692$ (6,379,980) (5,426,995) (5,587,609) (6,130,653) (5,894,025) (6,798,025) (2,775,483) (3,220,881) (2,940,678) (3,670,487) (3,879,478) (3,168,815) 56,455,543$ 53,954,804$ 52,820,289$ 52,267,602$ 55,826,338$ 61,151,852$ 5,302,557,500$ 5,226,900,300$ 5,103,186,900$ 5,123,316,900$ 5,435,136,500$ 5,841,548,800$ 478,864$ 490,122$ 559,718$ 576,427$ 607,025$ 614,793$ 24,363,800$ 24,962,100$ 28,487,900$ 29,320,000$ 30,852,400$ 31,212,200$ 56,934,407$ 54,444,926$ 53,380,007$ 52,844,029$ 56,433,363$ 61,766,645$ 5,326,921,300$ 5,251,862,400$ 5,131,674,800$ 5,152,636,900$ 5,465,988,900$ 5,872,761,000$ 41.5% 43.9% 46.6% 48.6% 47.8% 46.2% Fiscal Year 167 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 182 STATISTICAL SECTION (UNAUDITED) 2007 2008 2009 2010 Operating Rate 32.344 32.504 34.402 34.869 Debt Service Rate 2.394 2.255 2.265 2.247 Total City Direct Rates 34.738 34.759 36.667 37.116 County Operating Rate 39.110 38.571 40.413 42.640 School District Operating Rate 11.704 8.691 9.080 9.295 Debt Service Rate 11.781 10.889 11.257 11.803 Other Taxing Districts St. Louis Park HRA Levy 1.336 1.344 1.759 1.718 Metro Mosquito Control 0.499 0.486 0.489 0.461 Metro Council 0.877 0.812 0.817 0.793 Metro Transit Debt 1.295 1.264 1.273 1.366 Hennepin County HRA - - - 0.241 Hennepin Parks 3.068 3.137 3.334 3.499 Park Museum 0.700 0.719 0.771 0.778 HC Regional Railroad Authority 0.871 0.979 0.470 1.000 Referendum Market Value Based Rate - - - 0.152 Watershed 1.121 1.404 1.489 1.511 Total Overlapping Rates 72.362 68.296 71.152 75.257 Total Direct and Overlapping Rates 107.100 103.055 107.819 112.373 City of St. Louis Park Overlapping Rates CITY OF ST. LOUIS PARK, MINNESOTA PROPERTY TAX RATES - DIRECT AND OVERLAPPING GOVERNMENTS LAST TEN FISCAL YEARS Year 168 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 183 Table 7 2011 2012 2013 2014 2015 2016 39.689 40.303 42.902 45.868 45.234 43.744 1.770 3.563 3.650 2.702 2.520 2.451 41.459 43.866 46.552 48.570 47.754 46.195 45.840 48.231 49.461 49.959 46.398 45.356 12.917 13.324 13.976 16.741 15.642 14.887 13.539 15.946 15.754 15.617 14.698 13.627 1.817 1.806 1.676 1.808 1.679 1.634 0.525 0.537 0.556 0.563 0.507 0.483 0.885 0.940 0.997 1.069 0.976 0.925 1.539 1.607 1.689 1.703 1.523 1.491 0.397 0.403 0.478 0.514 0.471 0.439 3.765 3.943 4.054 4.169 3.789 3.601 0.815 0.799 0.754 0.766 0.702 0.712 1.246 1.294 1.561 1.777 1.817 1.879 0.148 - - - - - 1.606 1.705 1.769 1.806 1.738 1.724 85.039 90.535 92.725 96.492 89.940 86.758 126.498 134.401 139.277 145.062 137.694 132.953 Year 169 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 184 CITY OF ST. LOUIS PARK, MINNESOTA STATISTICAL SECTION (UNAUDITED)Table 8 PRINCIPAL PROPERTY TAXPAYERS CURRENT YEAR AND NINE YEARS AGO Percentage Percentage of Total of Total Taxable Taxable Taxable Taxable Assessed Assessed Assessed Assessed Value Rank Value Value Rank Value Interchange Investors 109,627,000$ 1 1.87 % 85,250,000$ 2 1.53 % ARC WEMPSMN001, LLC 106,623,000 2 1.82 100,432,000 1 1.80 G & I VII 1600 & Moneygram, LLC 95,755,700 3 1.63 Excelsior & Grand, LLC 88,702,000 4 1.51 38,150,000 6 0.68 Gateway Knollwood, LLC 80,134,000 5 1.36 Middleton Park Place Investors, LLC 58,821,000 6 1.00 PNMC Holdings 57,879,100 7 0.99 Ellipse On Excelsior, LLC 44,557,000 8 0.76 WTC No 459 Corp 43,500,000 9 0.74 25,955,000 7 0.47 West End Office MN, LLC 42,953,000 10 0.73 Park Nicollet 62,429,900 3 1.12 Parkdale Property, LLC 56,121,000 4 1.01 Park Place OPCO, LLC 42,468,000 5 0.76 Park Shore Senior Campus, LLC 23,805,000 8 0.43 Target 23,657,000 9 0.42 General Growth/Knollwood Co.21,411,000 10 0.38 Total 728,551,800$ 12.41 % 479,678,900$ 8.60 % Total taxable assessed value $5,872,761,000 $5,576,979,300 Source: Hennepin County Assessor's Office Taxpayer 2016 2007 170 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 185 CITY OF ST. LOUIS PARK, MINNESOTA STATISTICAL SECTION (UNAUDITED)Table 9 PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS Fiscal Year Total Tax Ended Levy for Percentage Percentage December 31 Fiscal Year Amount of Levy Amount of Levy 2007 20,221,086$ 19,965,208$ 98.73 % 20,221,086$ 100.00 % 2008 21,100,651 20,693,403 98.07 21,100,651 100.00 2009 22,204,522 21,796,296 98.16 22,204,522 100.00 2010 22,841,195 22,465,478 98.36 22,841,195 100.00 2011 23,724,816 23,368,028 98.50 23,724,816 100.00 2012 24,746,325 24,435,571 98.74 24,683,758 99.75 2013 25,613,874 25,379,070 99.08 25,593,997 99.92 2014 26,527,267 26,129,048 98.50 26,498,794 99.89 2015 27,938,615 27,590,682 98.75 27,886,958 99.82 2016 29,615,682 29,462,804 99.48 29,462,804 99.48 Collected Within the Fiscal Year of the Levy Total Collections to Date 171 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 186 CITY OF ST. LOUIS PARK, MINNESOTA STATISTICAL SECTION (UNAUDITED)Table 10 RATIOS OF OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS Business Type Activities General Total Percentage Fiscal Obligation Tax Increment Capital Notes Revenue Primary of Personal Per Year Bonds Bonds Leases Payable Bonds Government Income (1) Capita (1) 2007 11,805,000$ 13,900,000$ -$ -$ 5,835,000$ 31,540,000$ 2.07 % 697.54 2008 10,715,000 15,995,000 - - 9,570,000 36,280,000 2.25 768.68 2009 9,590,000 8,405,000 - - 9,185,000 27,180,000 1.54 575.59 2010 26,335,000 7,410,000 - - 11,334,924 45,079,924 2.71 996.24 2011 21,420,000 6,905,000 26,220 - 10,555,000 38,906,220 2.32 871.07 2012 21,730,000 6,600,000 - - 9,600,000 37,930,000 2.17 833.53 2013 20,185,000 4,870,000 - - 12,785,000 37,840,000 2.07 816.19 2014 23,609,091 4,520,700 33,075 - 16,826,503 44,989,369 2.39 948.92 2015 22,445,000 4,175,000 24,975 2,122,173 13,510,000 42,277,148 2.25 890.01 2016 31,230,000 3,805,000 215,619 2,025,297 10,515,000 47,790,916 2.44 988.35 Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements. (1) See the Schedule of Demographic Statistics on page 179 for personal income and population data. Governmental Activities 172 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 187 CITY OF ST. LOUIS PARK, MINNESOTA STATISTICAL SECTION (UNAUDITED)Table 11 RATIOS OF GENERAL BONDED DEBT OUTSTANDING LAST TEN FISCAL YEARS Percentage of Less: Amounts Estimated General Restricted Actual Taxable Fiscal Obligation for Debt Value of Per Year Bonds Service Funds Total Property (1)Capita (2) 2007 11,805,000$ 4,998,282$ 6,806,718$ 0.12 %150.54 2008 10,715,000 5,436,328 5,278,672 0.09 111.84 2009 9,590,000 2,198,070 7,391,930 0.13 156.54 2010 26,335,000 2,765,611 23,569,389 0.42 520.87 2011 21,420,000 2,792,922 18,627,078 0.35 417.04 2012 21,730,000 3,862,611 17,867,389 0.34 392.65 2013 20,185,000 3,703,071 16,481,929 0.32 355.51 2014 23,609,091 3,152,137 20,456,954 0.40 431.48 2015 22,445,000 3,092,198 19,352,802 0.35 407.41 2016 31,230,000 3,146,018 28,083,982 0.48 580.80 (1) See the Schedule of Assessed Value/Tax Capacity Value and Estimated Market Value on page 166 for property value data. (2) Population data can be found in the Schedule of Demographic Statistics on page 179. 173 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 188 - This page intentionally left blank - 174 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 189 CITY OF ST. LOUIS PARK, MINNESOTA STATISTICAL SECTION (UNAUDITED)Table 12 DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT AS OF DECEMBER 31, 2016 Share of Debt Percentage Overlapping Outstanding (1) Applicable (2) Debt Overlapping Debt Hennepin County 811,375,883$ 3.85 % 31,237,971$ St. Louis Park Independent School District 37,433,271 99.46 37,231,131 Hopkins Independent School District 135,244,990 3.36 4,544,232 Edina Independent School District 171,809,849 0.06 103,086 Hennepin County Suburban Park District 47,787,952 5.35 2,556,655 Hennepin Regional RR Authority 32,848,204 5.35 1,757,379 Metropolitan Council 38,874,706 1.95 758,057 Subtotal of Overlapping Debt 1,275,374,855 78,188,511 Direct Debt City of St. Louis Park 28,226,763 100 28,226,763 Total of Direct and Overlapping Debt 1,303,601,618$ 106,415,274$ Source: Hennepin County, Minnesota Note: Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the City of St. Louis Park. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of the City of St. Louis Park. This process recognizes that, when considering the City's ability to issue and repay long-term debt, the entire burden borne by the residents and businesses should be taken into account. However, this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt of each overlapping government. (1) Net debt which excludes revenue and special assessment bonds (2) The percentage applicable to the City of St. Louis Park was determined by dividing the portion of tax capacity within the City by the total tax capacity of the of the taxing jurisdiction. Governmental Unit 175 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 190 CITY OF ST. LOUIS PARK, MINNESOTA STATISTICAL SECTION (UNAUDITED) LEGAL DEBT MARGIN INFORMATION LAST TEN FISCAL YEARS 2007 2008 2009 2010 Debt Limit 111,539,586$ 167,273,511$ 169,651,029$ 167,168,274$ Total Net Debt Applicable to Limit 3,127,988 2,747,414 2,880,000 15,535,000 Legal Debt Margin 108,411,598$ 164,526,097$ 166,771,029$ 151,633,274$ Total Net Debt Applicable to the Limit as a percentage of Debt Limit 2.80% 1.64%1.70%9.29% Legal Debt Margin Calculation for Fiscal Year Estimated Taxable Market Value 5,576,979,300$ 5,575,783,700$ 5,655,034,300$ 5,572,275,800$ Debt Limit (3% of taxable market value)111,539,586$ 167,273,511$ 169,651,029$ 167,168,274$ Debt applicable to limit Total Bonded Debt 31,540,000$ 36,280,000$ 27,180,000$ 45,079,924$ Less: Amount Set Aside for Repayment of G.O. (452,012) (487,586)- - G.O. Revenue Bonds (5,835,000) (9,570,000) (9,185,000) (11,334,924) G.O. Improvement Bonds (8,225,000) (7,480,000) (6,710,000) (10,800,000) G.O. Tax Increment Bonds (13,900,000) (15,995,000) (8,405,000) (7,410,000) Notes payable - - - - Total Net Debt Applicable to Limit:3,127,988 2,747,414 2,880,000 15,535,000 Legal Debt Margin:108,411,598$ 164,526,097$ 166,771,029$ 151,633,274$ Note: Under State of Minnesota law, the City of St. Louis Park's outstanding general obligation debt should not exceed 3 percent of the market value of the taxable property. By law, the general obligation debt subject to the limitation may be offset by amounts set aside for the extinguishment of those obligations. Fiscal Year 176 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 191 Table 13 2011 2012 2013 2014 2015 2016 159,807,639$ 157,555,872$ 153,950,244$ 154,579,107$ 163,979,667$ 176,182,830$ 15,150,000 14,755,000 13,820,000 17,952,166 16,984,975 23,934,703 144,657,639$ 142,800,872$ 140,130,244$ 136,626,941$ 146,994,692$ 152,248,127$ 9.48% 9.36% 8.98% 11.61% 10.36% 13.59% 5,326,921,300$ 5,251,862,400$ 5,131,674,800$ 5,152,636,900$ 5,465,988,900$ 5,872,761,000$ 159,807,639$ 157,555,872$ 153,950,244$ 154,579,107$ 163,979,667$ 176,182,830$ 38,880,000$ 37,930,000$ 37,840,000$ 44,989,369$ 42,277,148$ 45,550,000$ - - - - - - (10,555,000) (9,600,000) (12,785,000) (16,826,503) (13,510,000) (10,515,000) (6,270,000) (6,975,000) (6,365,000) (5,690,000) (5,485,000) (5,270,000) (6,905,000) (6,600,000) (4,870,000) (4,520,700) (4,175,000) (3,805,000) - - - - (2,122,173) (2,025,297) 15,150,000 14,755,000 13,820,000 17,952,166 16,984,975 23,934,703 144,657,639$ 142,800,872$ 140,130,244$ 136,626,941$ 146,994,692$ 152,248,127$ Fiscal Year 177 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 192 CITY OF ST. LOUIS PARK, MINNESOTA STATISTICAL SECTION (UNAUDITED)Table 14 PLEDGED REVENUE BOND COVERAGE LAST TEN FISCAL YEARS Less:Net Fiscal Gross Operating Revenue Year Revenue 2 Expenses 3 Available Principal Interest Coverage 2007 5,025,203$ (4,115,066)$ 910,137$ 195,000$ 103,898$ 3.04 2008 5,200,332 (4,300,290) 900,042 340,000 264,902 1.49 2009 5,985,714 (4,982,093) 1,003,621 385,000 374,208 1.32 2010 5,981,074 (3,851,018) 2,130,056 400,000 327,325 2.93 2011 12,186,180 (8,269,813) 3,916,367 525,000 363,435 4.41 2012 13,079,123 (8,387,329) 4,691,794 1,405,000 375,218 2.64 2013 12,659,936 (10,417,099) 2,242,837 985,000 324,393 1.71 2014 13,277,524 (10,514,981) 2,762,543 1,015,000 352,614 2.02 2015 14,379,975 (9,041,931) 5,338,044 1,045,000 4 381,359 3.74 2016 15,481,494 (10,328,560) 5,152,934 1,155,000 5 301,051 3.54 Note: Details regarding the government's outstanding debt can be found in the notes to the financial statements. 1 Includes Water Utility, Sewer Utility and Storm Water Utility revenue bonds 2 Gross revenue includes investment income and excludes intergovermental and miscellaneous revenues 3 Expenses exclude depreciation, interest on bonds and miscellaneous expenses. 4 Excludes $2,145,000 refunded principal paid through cash with fiscal agent. 5 Excludes $1,840,000 refunded principal paid through cash with fiscal agent. Debt Service Revenue Bonds1 178 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 193 CITY OF ST. LOUIS PARK, MINNESOTA STATISTICAL SECTION (UNAUDITED) DEMOGRAPHIC STATISTICS LAST TEN FISCAL YEARS Personal Income (amounts expressed Per Capita Median School Unemployment Year Population (1) in thousands) Income (1) Age (1) Enrollment (2) Rate (3) 2007 45,216 1,527,170$ 33,775$ 38.3 4,175 3.7 % 2008 47,198 1,613,039 34,176 35.8 4,258 5.6 2009 47,221 1,761,674 37,307 35.7 4,447 5.9 2010 45,250 1,660,539 36,697 35.5 4,347 3.9 2011 44,665 1,680,297 37,620 35.4 4,365 4.4 2012 45,505 1,744,525 38,337 35.4 4,472 4.6 2013 46,362 1,828,193 39,433 35.4 4,545 4.4 2014 47,411 1,884,398 39,746 35.4 4,590 2.6 2015 47,502 1,876,424 39,502 35.5 4,590 2.3 2016 48,354 1,962,641 40,589 35.2 4,627 2.9 Source: (1) Federal Census Bureau data (2)St. Louis Park School District (3) Minnesota Department of Employment and Economic Development Table 15 179 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 194 - This page intentionally left blank - 180 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 195 CITY OF ST. LOUIS PARK, MINNESOTA STATISTICAL SECTION (UNAUDITED)Table 16 PRINCIPAL EMPLOYERS CURRENT YEAR AND NINE YEARS AGO Employees Rank Employees Rank Park Nicollet Health Services and Methodist Hospital 6,286 1 15.2 % 8,116 1 18.8 % Wells Fargo Mortgage 1,450 2 3.5 St. Louis Park Public Schools (I.S.D. No. 283)950 3 2.3 1,200 2 2.8 Japs-Olson Company 659 4 1.6 750 3 1.7 Sholom Home West 650 5 1.6 MoneyGram International (formerly Travelers Express) 409 6 1.0 506 5 1.2 Health Partners 400 7 1.0 Target 377 8 0.9 St. Louis Park, City of 269 9 0.7 253 7 0.6 Epicor Software Corporation 250 10 0.6 Nestle Nutrition (formerly Novartis Nutrition)550 4 1.3 Granite City Brewing 263 6 0.6 Northland Aluminum Products 154 8 0.4 Onvoy 153 9 0.4 Benilde-St. Margret's High School 142 10 0.3 Total 11,700 28.40 % 12,087 28.10 % Total City employment 41,339 43,137 Percentage Percentage 2016 2007 Fiscal Year Fiscal Year of Total City of Total City Employer Employment Employment 181 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 196 CITY OF ST. LOUIS PARK, MINNESOTA STATISTICAL SECTION (UNAUDITED) FULL-TIME EQUIVALENT EMPLOYEES BY FUNCTION LAST TEN FISCAL YEARS 2007 2008 2009 2010 Function General government 123.0 122.5 114.5 105.5 Public safety Police Officers 51.0 51.0 51.0 51.0 Civilians 19.5 18.5 17.0 20.0 Fire Firefighters and officers 25.0 25.0 25.0 25.0 Operations and recreation and Engineering 32.0 32.0 32.0 32.0 Water 10.3 11.4 11.4 9.9 Sewer 3.7 2.7 2.7 3.6 Solid Waste 0.7 1.8 1.8 1.8 Storm Water 2.6 2.6 2.6 3.3 Total Employees 267.8 267.5 258.0 252.0 Fiscal Year 182 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 197 Table 17 2011 2012 2013 2014 2015 2016 95.4 90.3 88.8 88.4 89.4 91.6 51.0 52.0 52.0 53.0 55.0 55.0 23.0 30.0 34.0 35.0 35.0 35.0 24.0 24.0 24.0 24.0 25.0 26.0 32.0 33.0 35.0 34.0 35.0 35.0 11.2 11.2 10.9 11.2 11.5 11.4 4.9 4.9 4.9 5.5 6.0 6.0 3.3 3.3 3.3 4.7 5.8 5.8 4.9 4.8 4.8 6.2 6.7 6.7 249.7 253.5 257.7 262.0 269.4 272.5 Fiscal Year 183 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 198 CITY OF ST. LOUIS PARK, MINNESOTA STATISTICAL SECTION (UNAUDITED)Table 18 OPERATING INDICATORS BY FUNCTION LAST TEN FISCAL YEARS 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Police Medical calls 2,881 3,153 3,110 3,188 3,101 3,152 3,296 2,391 3,756 3,623 Traffic stops 1,981 2,724 2,462 4,236 5,362 7,146 6,674 6,907 6,692 6,939 Other 24,996 24,412 22,562 21,355 21,742 24,354 25,014 27,752 29,299 31,462 Fire Inspections/Medical/All other calls 4,141 4,357 4,429 3,893 3,078 3,117 3,360 4,747 5,118 6,130 Fire calls - residential/structural 61 61 96 107 153 142 66 116 135 53 Fire calls - other 71 46 68 37 53 64 48 91 115 41 Cable TV Hours of new programming 94 294 250 456 535 - 549.5 311 400 400 Inspections Permits 8,616 13,687 8,895 8,397 9,220 9,091 10,254 11,111 9,684 10,099 Inspections 17,797 24,022 27,332 20,204 22,818 23,667 26,902 32,543 23,031 23,372 Culture and recreation Aquatic park attendance 80,347 76,218 67,617 69,825 67,422 70,270 52,557 51,894 68,355 72,439 Hours of ice time 6,574 6,787 6,354 6,493 4,687 5,444 4,701 4,773 4,626 4,125 Water Gallons of water production (billions)2.3 2.4 2.4 2.1 2.1 2.4 2.2 2.09 2.01 1.78 Average watermain breaks per year 30 30 30 30 30 30 27 40 41 20 Public Works Snowplowing hours 1,556 1,672 2,454 3,216 2,543 1,173 6,449 3,752 2,284 3,781 Fiscal Year 184 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 199 CITY OF ST. LOUIS PARK, MINNESOTA STATISTICAL SECTION (UNAUDITED)Table 19 CAPITAL ASSET STATISTICS BY FUNCTION LAST TEN FISCAL YEARS 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Function Public safety Police Stations 1 111111111 Patrol units 26 26 26 26 26 28 26 25 28 28 Fire Stations 2 222222222 Vehicles 13 13 13 13 13 14 13 13 10 14 Fire hydrants 1,699 1,699 1,699 1,699 1,699 1,699 1,699 1,699 1,699 1,772 Culture and recreation Parks 51 53 53 53 57 57 57 57 52 53 Trails 10 10 10 10 10 10 10 10 10 22 Streets Lane miles of streets 290 290 310 311 311 311 311 311 311 311 Miles of streets 117 117 155 156 155 155 155 155 155 155 Water Wells 11 11 11 11 11 11 11 11 10 10 Water treatment plants 6 666666666 Miles of watermain 148 148 148 149 160 160 160 160 160 175 Sanitary Sewer Lift stations 23 23 23 23 23 23 23 23 23 23 Miles of sewermain 138 138 138 139 147 147 147 147 147 143 Storm Sewer Lift stations 10 10 10 10 10 10 10 10 10 10 Ponds and lakes 26 26 26 52 52 52 52 52 52 52 Catch basins 2,943 2,943 3,154 3,731 3,731 3,731 3,731 3,731 3,731 3,885 Fiscal Year 185 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 200 - This page intentionally left blank - 186 Special Study Session Meeting of June 19, 2017 (Item No. 1) Title: Comprehensive Annual Financial Report for Year Ended 12/31/16 – Auditors Discussion & Review Page 201 Meeting: Special Study Session Meeting Date: June 19, 2017 Discussion Item: 2 EXECUTIVE SUMMARY TITLE: St. Louis Park Policing Model/Critical Incident Planning RECOMMENDED ACTION: Staff desires to discuss with Council the idea of conducting a series of four study session discussions regarding the Police Department’s service delivery model, policies and procedures, scenarios faced by officers, and the role of the City Council and staff during a critical incident. POLICY CONSIDERATION: Would undertaking these conversations be useful for the Council? If so, are there additional topics the Council would desire to see covered? SUMMARY: The St. Louis Park Police Department has built community trust through Community Oriented Policing and other efforts. Despite this strong support from the community, trust in the police can be fragile. To assist the Council in answering questions from the community about our department’s operations, particularly during a critical incident, City Manager Harmening and Police Chief Mike Harcey propose to conduct a series of study session discussions with Council. The proposed four discussions would cover the Police Department’s service delivery model, policy and procedures, scenarios faced by officers, and the role of the City Council and staff during a critical incident. FINANCIAL OR BUDGET CONSIDERATION: Not applicable. VISION CONSIDERATION: Not applicable. SUPPORTING DOCUMENTS: Discussion Prepared by: Michael Harcey, Police Chief Approved by: Tom Harmening, City Manager Special Study Session Meeting of June 19, 2017 (Item No. 2) Page 2 Title: St. Louis Park Policing Model/Critical Incident Planning DISCUSSION BACKGROUND: The St. Louis Park Police Department has built community trust through its Community Oriented Policing model. This trust has been built on forging partnerships with the community we serve to prevent crime, solve problems and address quality of life issues. Even though we have strong support from our community, trust in the police can be fragile. How we respond to any call for service, from a minor citizen contact to a critical incident like an officer involved shooting, can affect how the police and the community are perceived. In the event of a critical incident elected officials can be under a great deal of pressure to respond to the incident, and as a result, responses and decisions made by elected officials may be made with a lack of information or misunderstandings about police work. To help prepare the council for questions about our police department in general or during a potential critical incident, City Manager Harmening and the Chief would like to discuss conducting a series of informational meetings with Council. Four main topics would be presented to council. 1.St. Louis Park Police service delivery model. This would include information on how we police our community using Community Oriented Policing. It would also include information about police officer hiring standards, including how we recruit, hire and train our officers. 2. Police policies and procedures on biased policing, when to initiate a stop or detention, arrest and booking procedures, vehicle pursuits, and use of force procedures. 3. Examples of current issues and scenarios facing police officers, challenging citizen contacts, and use-of-force decision making. 4.Examine and discuss the role of the City Council and staff during a high profile/critical police incident. The sessions would include officer presentations, videos, interactive scenarios and time for council questions. Each topic would be presented by officers and command staff whenever possible, thus allowing the council to get to know their police officers. The first three sessions could be 60 to 90 minutes in length with the fourth lasting approximately 2-3 hours. Meeting: City Council Meeting Date: June 19, 2017 Presentation: 2a EXECUTIVE SUMMARY TITLE: Comprehensive Annual Financial Report for the Year Ended December 31, 2016 RECOMMENDED ACTION: No action is required. This information is being provided as part of the presentation by the City’s auditor. POLICY CONSIDERATION: Is the City Council comfortable with the information contained in the Communication with Those Charged with Governance, Report on Minnesota Legal Compliance, Report on Internal Control over Financial Reporting, and Comprehensive Annual Financial Report (CAFR) for the year ended December 31, 2016 to allow for effective decision making? SUMMARY: The city is required to have an annual independent audit of its financial statements in which the audit firm issues an opinion on the financial statements. The City received a “clean” audit opinion, or unmodified opinion, which means that Redpath and Company believe the financial statements, as presented by city staff, present fairly, in all material respects, the financial position of the City as of December 31, 2016. David J. Mol – Partner from Redpath and Company, will make a presentation on the opinion issued and other required forms of communication to the City Council. After City Council reviews the CAFR staff will submit it to the Office of the State Auditor as required and also submit it to the Government Finance Officers Association (GFOA) to be considered for the Achievement for Excellence in Financial Reporting certificate program for which the City of St. Louis Park has been recognized for 33 consecutive years. FINANCIAL OR BUDGET CONSIDERATION: The report shows the City of St. Louis Park continues to remain in a strong financial condition. VISION CONSIDERATION: Not applicable. SUPPORTING DOCUMENTS: 1) 2016 – Issued Governance Letter* 2) 2016 – Minnesota Legal Compliance Report* 3) 2016 – Internal Control over Financial Reporting* 4) 2016 – Comprehensive Annual Financial Report* (* See Special Study Session Report for Attachments.) Prepared by: Mark Ebensteiner, Finance Manager Reviewed by: Tim Simon, Chief Financial Officer Nancy Deno, Deputy City Manager/HR Director Approved by: Tom Harmening, City Manager Meeting: City Council Meeting Date: June 19, 2017 Presentation: 2b EXECUTIVE SUMMARY TITLE: 2016 Police Officer of the Year RECOMMENDED ACTION: Police Chief Mike Harcey will be in attendance to recognize St. Louis Park Police Officer Siar Nadem with the 2016 Police Officer of the Year award. POLICY CONSIDERATION: None at this time. SUMMARY: Since 1989, the St. Louis Park Police Department has presented the Robert Linnell Officer of the Year award to the officer who has demonstrated consistent principles of integrity, fairness and a commitment to service within our community. The Officer of the Year is an example of what a police officer should be or strive to be by demonstrating his/her commitment to the mission and values of the St. Louis Park Police Department and the City of St. Louis Park. The award is held in high regard because the officers are nominated by their peers. At the police department annual meeting, officers select the Officer of the Year by voting on the nominations. On May 18, 2017 department members selected Officer Siar Nadem as the 2016 Officer of the Year recipient. The following is an excerpt from the nomination form for Officer Nadem: “There are a number of singular events that demonstrate Officer Nadem’s outstanding performance over time. What I wish to share is Officer Nadem’s exceptional performance and consistent level of service, which is the standard by which our mission statement is interpreted. One that espouses “Quality service”, “Professional conduct” and “An active partnership with our community”. In less than a four month period, Officer Nadem exhibited an exemplary standard of performance that was consistently and repeatedly observed and acknowledged by his supervisors, peers, citizens and external partners. I believe it is critical as an organization to recognize this performance. The foundation of that which we try to accomplish as a department and a profession is built from examples that Officer Nadem has demonstrated. More than ever in these difficult times in law enforcement, these examples of performance are important as a reminder to ourselves of this fact.” FINANCIAL OR BUDGET CONSIDERATION: Not applicable. VISION CONSIDERATION: Not applicable. SUPPORTING DOCUMENTS: None Prepared by: Lori Dreier, Lieutenant Reviewed by: Michael Harcey, Police Chief Approved by: Tom Harmening, City Manager Meeting: City Council Meeting Date: June 19, 2017 Presentation: 2c EXECUTIVE SUMMARY TITLE: Recognition of Donations RECOMMENDED ACTION: Mayor to announce and express thanks and appreciation for the following donations being accepted at the meeting and listed on the Consent Agenda: From Amount For David Litsey $3,200 Wolfe Park maintenance ($1,000) and the purchase and installation of a memorial bench in Wolfe Park ($2,200) honoring Merry Litsey. Prepared by: Debbie Fischer, Administrative Services Office Assistant Approved by: Tom Harmening, City Manager Meeting: City Council Meeting Date: June 19, 2017 Minutes: 3a UNOFFICIAL MINUTES CITY COUNCIL STUDY SESSION ST. LOUIS PARK, MINNESOTA JUNE 5, 2017 The meeting convened at 6:00 p.m. Councilmembers present: Mayor Jake Spano, Tim Brausen, Steve Hallfin, Gregg Lindberg, Anne Mavity, Thom Miller, and Susan Sanger. Staff present: City Manager (Mr. Harmening), City Attorney (Mr. Mattick), Deputy City Manager/Human Resources Director (Ms. Deno), City Clerk (Ms. Kennedy), and Recording Secretary (Ms. Pappas). Guest: Jeanne Massey, Executive Director, Fair Vote Minnesota; Deb Brinkman, League of Women Voters. 1. Ranked Choice Voting It was noted that the council previously discussed the topic of Ranked Choice Voting (RCV) on several occasions in 2006, 2010 and 2012. Most recently, on April 17, 2017, the city council conducted a public hearing to consider the first reading of an ordinance amending the City Charter by eliminating the need for a municipal primary election and changing the candidate filing requirements. During the public hearing the council took public testimony from a number of residents regarding the topic of RCV. At the conclusion of the public hearing, the council directed staff to schedule a follow-up discussion at a study session. Jeanne Massey, the Executive Director at Fair Vote Minnesota, presented information on RCV to the council. She explained that the process allows voters to rank candidates in order of their preferences. Winners are declared once they have reached a pre-determined threshold of votes, typically 50% +1. She provided an overview of the history of RCV in both Minneapolis and St. Paul and provided examples of voters’ experiences. Ms. Massey pointed out that voter turnout was over 80,000 in Minneapolis in 2013, the highest turnout in 12 years. Additionally, nearly 70% of voters polled in Minneapolis want to continue using RCV. Ms. Massey also noted voters in St. Paul have found it manageable to use both the RCV and non-RCV methods on the same ballot. Councilmember Miller asked if there is data to support voters’ support of RCV in Minneapolis. Ms. Massey said yes, there is exit polling data. Ms. Massey and the council discussed the tabulation of results and the ability for St. Louis Park to export data from the DS200 ballot tabulator. Councilmember Sanger asked what a realistic timeline would be for RCV results to be tabulated in St. Louis Park. Ms. Kennedy stated the time is variable because it is dependent on many factors, including the number of candidates and the number of rounds that are needed to determine a winner. She noted that both Minneapolis and St. Paul have chosen to tabulate in different ways, but neither process is completely automated. She gave an overview of the process Minneapolis used to tabulate results. Ms. Kennedy estimated it could take staff anywhere from 3-5 days to tabulate results, depending on a number of factors. Ms. Kennedy stated she does not want to over-promise to the council about how long the tabulation City Council Meeting of June 19, 2017 (Item No. 3a) Page 2 Title: Special Study Sessions Minutes of June 5, 2017 process would take, but she also noted the decision related to the process that is used would be up to the council, and staff’s role is to implement the process. Councilmember Hallfin asked when races are within a couple of percentage points and a recount is needed, is there data on actual recounts when ranked choice voting is used. Ms. Massey stated she has not seen this data, and this would depend on what the council sets up as the process for St. Louis Park. She added there are rules for recounts, ties and all conditions. She also pointed out there are procedures set up to minimize human error, and there is more integrity in machines today than in the past. Councilmember Lindberg asked who the city’s election officials are who would be administering the process. Ms. Kennedy stated it is her job as St. Louis Park City Clerk. Councilmember Lindberg added that transparency and trust are important in the RCV process and in data verification. He asked how the city would audit this process. Ms. Kennedy stated that would be a policy decision, noting that Minneapolis chose to hire a firm to perform an independent audit of their results. Councilmember Sanger asked if the city could adopt a provision to eliminate someone who mathematically could not possibly win an election. Ms. Kennedy stated yes, the council could choose to include that in the rules related to the administration of RCV. Councilmember Sanger also asked if it would then be helpful to pay election judges to help facilitate the process. Ms. Kennedy stated again that it is up to the council to determine the process and procedures, and staff will do what is necessary to carry out those processes and procedures as effectively and efficiently as possible. Councilmember Miller asked if there might be an app for this process and also if staff knew what expense there might be to the city to change to the RCV method. Ms. Kennedy stated she did not have cost information but noted that voter education and outreach, legal fees, and staff time would be the most costly pieces of the process. Ms. Massey stated that Fair Vote Minnesota helps pay for voter education, which includes videos, brochures and outreach. Ms. Brinkman from League of Women Voters stated they would also partner with the city related to RCV education. Councilmember Hallfin stated that obviously Fair Vote Minnesota is putting the full court press on St. Louis Park for RCV. He asked if there are any other cities implementing it. Ms. Kennedy stated Brooklyn Park considered it last year, but their council voted against implementing. The City of Duluth considered it in 2015, but the question was defeated on the ballot. Hopkins has discussed it and continues to monitor the idea. Ms. Massey stated that Crystal also had considered it, as well as Bloomington. Councilmember Mavity stated St. Louis Park has a really intelligent resident voter population, and people understand the complexity. She added that staff may believe this will be a difficult change, but it is worth the investment in the long term. She stated that this is about enfranchisement. RCV will improve the city’s elections by engaging more residents and keeping the process more civil. Councilmember Mavity noted that staff will have a heavy lift, but they have the capability to do it and do it well. She stated she is fully supportive and would like to move forward with this conceptually. City Council Meeting of June 19, 2017 (Item No. 3a) Page 3 Title: Special Study Sessions Minutes of June 5, 2017 Councilmember Sanger stated she agreed with everything Councilmember Mavity stated. She noted that she would like to send this to the Charter Commission to request their support and to have the ordinance completed and the process in place in time for the 2019 election cycle. She added voters will handle this well, and many residents are in favor of it. She asked Ms. Kennedy and staff to give thought as to what it would take to simplify the administration of this process and make it feasible. Councilmember Brausen agreed with Councilmembers Sanger and Mavity and stated he is in favor of RCV. He noted he would not have a problem spending $5,000-10,000 on voter outreach and education efforts. He added that St. Louis Park has eliminated the primary, and now we would be able to address a four-way race with RCV. He is in favor of it. Councilmember Miller is also in favor, stating it is a more progressive method and encourages better candidates and elections. While he thinks it might be a higher cost, RCV is coming, and it would be best for the city to move in that direction. Councilmember Hallfin stated he has not ever seen a nasty election in St. Louis Park and is not worried about that as an issue. He added RCV seems fine but noted that the council has already voted to eliminate the primary. He stated that they can decide as a council to change the charter or to bring it to the voters. Councilmember Lindberg stated he has more questions and asked what would be enhanced and how it would benefit the community. He stated he appreciates the advocates who presented, but added they have not yet provided the opportunity for everyone in the community to give their opinion. He stated the council needs to provide this opportunity on the front end and guessed it may take a lot more than $5,000-10,000 for a robust voter education and outreach campaign. He stated it will be important to have more conversation about RCV in the community before moving forward with adoption of an ordinance or implementation. Mayor Spano stated he has spent a lot of time reading about RCV, adding he is cautious, but not because it is not a good idea. He agreed with Councilmember Hallfin that St. Louis Park has civil elections, and campaign money is less of an issue in the city. He stated that RCV could change that dynamic but he has not seen enough of a problem in St. Louis Park for RCV to have an impact. He would like to see voter turnout over a couple more election cycles in Minneapolis and St. Paul and discuss how the change could impact elections from a race equity perspective before making a decision. Mayor Spano stated he would like to see data from other cities in the United States that have used RCV for 3-5 election cycles. He stated this is a huge change to the way councilmembers are elected, so he wants to be certain that it is going to benefit all voters. Mayor Spano added he has heard from some people in the community that would not be in favor of this change. Councilmember Miller stated he respects everyone’s comments, adding he would like to move forward with more research and discussion on RCV before proposing any changes to the Charter. Councilmember Sanger referenced Mayor Spano’s concerns about wanting more data and asked Ms. Massey if she could provide voter turnout data from Minneapolis and St. Paul in races that were contested and to see how RCV impacted the turnout. Ms. Massey stated she would provide this data, adding that RCV encourages engagement, as well as voter turnout. She added it also gives more choice to voters and increases rapid diversification of candidates. City Council Meeting of June 19, 2017 (Item No. 3a) Page 4 Title: Special Study Sessions Minutes of June 5, 2017 Councilmember Mavity stated the council has five members who want to move forward in the process and get more information. She added the more specific information the council can get, the more informed they would be. Mr. Harmening suggested this not go directly to the Charter Commission at this time and that it be discussed again by the council. He stated there is no perfect voting system, but elections are fundamental to our community, and we need to think about how to engage people in this conversation. He added that how RCV impacts race equity efforts is something that also needs to be discussed. He stated it will take time but should be a priority to make a decision for the 2019 election, noting he will include RCV as an agenda item in the near future. Mr. Harmening stated additional questions from council on the topic can be directed to staff. The meeting adjourned at 7:28 p.m. ______________________________________ ______________________________________ Melissa Kennedy, City Clerk Jake Spano, Mayor Meeting: City Council Meeting Date: June 19, 2017 Minutes: 3b UNOFFICIAL MINUTES CITY COUNCIL MEETING ST. LOUIS PARK, MINNESOTA JUNE 5, 2017 1. Call to Order Mayor Spano called the meeting to order at 7:35 p.m. Councilmembers present: Mayor Jake Spano, Tim Brausen, Steve Hallfin, Gregg Lindberg, Anne Mavity, Thom Miller, and Susan Sanger. Councilmembers absent: None. Staff present: City Manager (Mr. Harmening), City Attorney (Mr. Mattick), Deputy City Manager/Human Resources Director (Ms. Deno), City Clerk (Ms. Kennedy), and Recording Secretary (Ms. Pappas). Guests: Sam Nestingen, Parkway Pizza 1a. Pledge of Allegiance 1b. Roll Call 2. Presentations – None 3. Approval of Minutes 3a. City Council Meeting Minutes May 1, 2017 Councilmember Sanger noted on page 10, in the 4th paragraph, it reads “Knollwood management proposed bringing it up to code” and it should read “Knollwood management agreed to bring it up to code.” It was moved by Councilmember Mavity, seconded by Councilmember Brausen, to approve the May 1, 2017 Meeting Minutes as amended. The motion passed 7-0. 3b. Special Study Session Minutes May 15, 2017 Councilmember Hallfin noted on page 2, in the 3rd paragraph, he made a statement in much stronger language, and he would request the record show his statement corrected to read, “If an 18 year old can take a bullet for our country, they should be allowed to purchase a cigarette in the city of St. Louis Park.” Councilmember Sanger noted on page 3, in the 3rd paragraph, regarding flavored tobaccos, it should read, “St Louis Park was one of the first communities to try to prohibit smoking in restaurants.” City Council Meeting of June 19, 2017 (Item No. 3b) Page 2 Title: City Council Meeting Minutes of June 5, 2017 It was moved by Councilmember Brausen, seconded by Councilmember Mavity, to approve the May 15, 2017 Special Study Session Meeting Minutes as amended. The motion passed 7-0. 3c. City Council Minutes May 15, 2017 It was moved by Councilmember Hallfin, seconded by Councilmember Lindberg, to approve the May 15, 2017 City Council Meeting Minutes as presented. The motion passed 7-0. 3d. Study Session Meeting Minutes May 22, 2017 It was moved by Councilmember Lindberg, seconded by Councilmember Hallfin, to approve the Study Session May 22, 2017 Meeting Minutes as presented. The motion passed 7-0. 4. Approval of Agenda and Items on Consent Calendar 4a. Accept for filing City Disbursement Claims for the period of April 22, 2017 through May 26, 2017. 4b. Approve a Temporary On-Sale Intoxicating Liquor License for Parktacular Inc., for their celebration Rock the ROC to be held June 16, 2017, at the Recreation Outdoor Center (ROC) in St Louis Park. 4c. Authorize the City Manager to enter into an agreement with Minnehaha Creek Watershed District (MCWD) for the Operations and Maintenance of Minnehaha Preserve. 4d. Adopt Resolution No. 17-101 authorizing the purchase of 0.04 acres of tax forfeited land located at 2109 Parklands Road. 4e. Authorize the Mayor and City Manager to execute the Joint Powers Agreement with the MPCA for the transfer of the 90% project design for Water Treatment Plant #4’s (WTP4) treatment upgrade from the MPCA to the City. 4f. Approve a ground lease with Thai Buddhist Center of Minnesota to lease a portion of the property at 2544 State Highway No. 100 South for a Community Garden. 4g. Adopt Resolution No. 17-102 accepting this report, establishing and approving plans and specifications, and authorizing advertisement for bids for the replacement of the Aquatic Park pool filters and pumps. 4h. Adopt Resolution No. 17-103 establishing traffic controls on France Avenue S. for the Shoreham Development Project. Councilmember Miller requested that Consent Calendar item 4f be removed and placed on the Regular Agenda to 8a. It was moved by Councilmember Brausen, seconded by Councilmember Mavity, to approve the Agenda and items listed on the Consent Calendar as amended, and to move Consent Calendar item 4f to the Regular Agenda as item 8a; and to waive reading of all resolutions and ordinances. The motion passed 7-0. City Council Meeting of June 19, 2017 (Item No. 3b) Page 3 Title: City Council Meeting Minutes of June 5, 2017 5. Boards and Commissions - None 6. Public Hearings 6a. SLP Pizza Company, Inc. dba Parkway Pizza – On Sale Wine & 3.2% Malt Liquor License. Ms. Kennedy presented the staff report. She stated the city received an application from SLP Pizza Company, Inc., dba Parkway Pizza for an On-Sale Wine and 3.2% Malt Liquor license for the property located at 6325 Minnetonka Blvd. The owners intend to open for business in June. Councilmember Brausen asked if the liquor license prohibits the vendor from selling strong beer. Ms. Kennedy stated it does not. State statute provides that strong beer can be served in conjunction with the on-sale wine license. She noted if the business maintains the 60-40 food to liquor ratio requirement the strong beer authorization will continue. Mayor Spano opened the public hearing. No speakers were present. Mayor Spano closed the public hearing. Mayor Spano noted that several emails in support of the application were entered into the public record. Sam Nestingen, 4038 – 38th Ave. S, Minneapolis, announced the soft open will be June 19, with the grand opening sometime around July 1. It was moved by Councilmember Lindberg, seconded by Councilmember Miller, to approve application from SLP Pizza Company, Inc. dba Parkway Pizza, for an On-Sale Wine and 3.2% Malt Liquor License for the premises located at 6325 Minnetonka Blvd., with a license term through May 1, 2018. The motion passed 7-0. 7. Requests, Petitions, and Communications from the Public – None 8. Resolutions, Ordinances, Motions and Discussion Items 8a. Ground Lease with Thai Buddhist Center of Minnesota to Lease a Portion of the Property at 2544 State Highway 100 South for a Community Garden. Councilmember Miller recognized Councilmember Sanger’s efforts in being persistent on the vision to use this parcel for a good purpose, without knowing what the outcome would be. He continued that there are 3 three wins on this property, the building will be retained, the community garden will be kept, and St. Louis Park is embracing ethnic diversity and faith diversity. He added that this proves the council does not always need to approve the first proposed development and sometimes it is better to wait. Councilmember Sanger stated this was not only her vision. In an earlier study session, there was consensus from residents in the neighborhood that they did not want to see the church be torn down for another apartment building. City Council Meeting of June 19, 2017 (Item No. 3b) Page 4 Title: City Council Meeting Minutes of June 5, 2017 It was moved by Councilmember Sanger, seconded by Councilmember Miller, to approve the ground lease with Thai Buddhist Center of Minnesota to lease a portion of the property at 2544 State Hwy. No. 100 south, for a community garden. The motion passed 7-0. 9. Communications Mayor Spano noted the Parktacular Event on June 17 and the Senior Ambassador dinner on June 15 at the Minneapolis Marriot West. Mr. Harmening added that the annual spring clean-up day will be on Saturday from 8 a.m. to 1 p.m. at the MSC on Oxford Street. He also noted that tomorrow night the Human Rights Commission is hosting a meeting on transgender issues, and Thursday MSP Fair Sky’s will share new data on airplane noise at a meeting in council chambers. Councilmember Mavity noted the Fire Department Open House at Station 1 on Tuesday, June 13, at 5:30 p.m. She added that there will a helicopter landing for kids and adults. Mayor Spano added St. Louis Park High School will host an event on immigration rights this Thursday. 10. Adjournment The meeting adjourned at 7:52 p.m. ______________________________________ ______________________________________ Melissa Kennedy, City Clerk Jake Spano, Mayor Meeting: City Council Meeting Date: June 19, 2017 Consent Agenda Item: 4a EXECUTIVE SUMMARY TITLE: Special Assessment - Water Service Line Repair at 4824 41st Street West RECOMMENDED ACTION: Motion to Adopt Resolution authorizing the special assessment for the repair of the water service line at 4824 41st Street West, St. Louis Park, MN P.I.D. 07-028-24-24-0044. POLICY CONSIDERATION: The proposed action is consistent with policy previously established by the City Council. SUMMARY: Ryan McGary and Stephanie Walters, owners of the single family residence at 4824 41st Street West, have requested the City to authorize the repair of the water service line for their home and assess the cost against the property in accordance with the City’s special assessment policy. This is a repair that was made between the home and the curb box and is not impacted by the City’s new waterline ownership policy. Homeowners are still responsible for water lines repairs that occur between their home and the curb box located in the right of way. The City requires the repair of service lines to promote the general public health, safety and welfare within the community. The special assessment policy for the repair or replacement of water or sewer service lines for existing homes was adopted by the City Council in 1996. This program was put into place because sometimes property owners face financial hardships when emergency repairs like this are unexpectedly required. Plans and permits for this service line repair work were completed, submitted, and approved by City staff. The property owners hired a contractor and repaired the water service line in compliance with current codes and regulations. Based on the completed work, this repair qualifies for the City’s special assessment program. The property owners have petitioned the City to authorize the water service line repair and special assess the cost of the repair. The total eligible cost of the repair has been determined to be $3,000. FINANCIAL OR BUDGET CONSIDERATION: The City has funds in place to finance the cost of this special assessment. VISION CONSIDERATION: Not applicable. SUPPORTING DOCUMENTS: Resolution Prepared by: Jay Hall, Utility Superintendent Reviewed by: Mark Hanson, Public Works Superintendent Patricia A. Sulander, Accountant Tim Simon, Chief Financial Officer Cynthia S. Walsh, Director of Operations and Recreation Approved by: Tom Harmening, City Manager City Council Meeting of June 19, 2017 (Item No. 4a) Page 2 Title: Special Assessment - Water Service Line Repair at 4824 41st Street West RESOLUTION NO. 17-____ RESOLUTION AUTHORIZING THE SPECIAL ASSESSMENT FOR THE REPAIR OF THE WATER SERVICE LINE AT 4824 41ST STREET WEST, ST. LOUIS PARK, MN P.I.D. 07-028-24-24-0044 WHEREAS, the Property Owners at 4824 41st Street West, have petitioned the City of St. Louis Park to authorize a special assessment for the repair of the water service line for the single family residence located at 4824 41st Street West, and WHEREAS, the Property Owners have agreed to waive the right to a public hearing, right of notice and right of appeal pursuant to Minnesota Statute, Chapter 429; and WHEREAS, the City Council of the City of St. Louis Park has received a report from the Utility Superintendent related to the repair of the water service line. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of St. Louis Park, Minnesota, that: 1. The petition from the Property Owners requesting the approval and special assessment for the water service line repair is hereby accepted. 2. The water service line repair that was done in conformance with the plans and specifications approved by the Public Works Department and Department of Inspections is hereby accepted. 3. The total cost for the repair of the water service line is accepted at $3,000. 4. The Property Owners have agreed to waive the right to a public hearing, notice and appeal from the special assessment; whether provided by Minnesota Statutes, Chapter 429, or by other statutes, or by ordinance, City Charter, the constitution, or common law. 5. The Property Owners have agreed to pay the City for the total cost of the above improvements through a special assessment over a ten (10) year period at the interest rate of 4.00%. 6. The Property Owners have executed an agreement with the City and all other documents necessary to implement the repair of the water service line and the special assessment of all costs associated therewith. Reviewed for Administration: Adopted by the City Council June 19, 2017 Thomas K. Harmening, City Manager Jake Spano, Mayor Attest: Melissa Kennedy, City Clerk Meeting: City Council Meeting Date: June 19, 2017 Consent Agenda Item: 4b EXECUTIVE SUMMARY TITLE: Designate Polling Places and Appoint Election Judges for 2017 Elections RECOMMENDED ACTION: Motion to Adopt Resolution designating polling places and appointing election judges for the August 8, 2017, Municipal Primary Election and the November 7, 2017, Municipal General Election. POLICY CONSIDERATION: None SUMMARY: MN Statute 204B.21, Subd. 2 and City Charter Section 4.05 provide that election judges for precincts shall be appointed by the governing body of the municipality and that the appointments be made at least 25 days before the election at which the election judges will serve. Election judges are assigned to precincts based on availability, party balance requirements, and the number required for each location to adequately serve voters. Election judges are also allowed to serve without affiliation to a major political party but may be exempt from performing certain tasks at the precinct. The resolution contains the names of those who have indicated a willingness and ability to serve as an election judge. Appointment by the city council will allow judges to serve at both of the 2017 elections. Another resolution will be presented to council in September to appoint additional election judges for the November Election. In July and again in October, the C ity Clerk’s Office will provide two types of election judge training sessions – equipment training and forms & procedures training. Chair and Co-Chair Judges will meet for an additional 1 hour of training the week before each election. FINANCIAL OR BUDGET CONSIDERATION: Election expenses for judges are included in the adopted 2017 budget. Election judge hourly pay is as follows: $9.50 regular election judges; $10.00 absentee ballot judges; $10.00 co-chair judges; $11.00 chair judges. VISION CONSIDERATION: St. Louis Park is committed to being a connected and engaged community. Supporting Documents: Resolution Prepared by: Kay Midura, Assistant – City Clerk’s Office Reviewed by: Melissa Kennedy, City Clerk Approved by: Tom Harmening, City Manager City Council Meeting of June 19, 2017 (Item 4b) Page 2 Title: Designating Polling Places and Appointing Election Judges for 2017 Elections RESOLUTION NO. 17 -____ RESOLUTION DESIGNATING POLLING PLACES AND APPOINTING ELECTION JUDGES FOR THE PRIMARY AND GENERAL ELECTIONS OF 2017 WHEREAS, the Municipal Primary Election will be held on August 8, 2017, at the following precinct polling locations in Ward 1: Ward 1 Precinct 1 – Beth El Synagogue, 5225 Barry St. W. Ward 1 Precinct 2 – Peter Hobart Elementary School, 6500 26th St. W. Ward 1 Precinct 3 – St. Louis Park City Hall, 5005 Minnetonka Blvd. Ward 1 Precinct 4 – Central Community Center, 6300 Walker St. AND WHEREAS, the Municipal General Election will be held on November 7, 2017, at the following precinct polling locations: Ward 1 Precinct 1 – Beth El Synagogue, 5225 Barry St. W. Ward 1 Precinct 2 – Peter Hobart Elementary School, 6500 26th St. W. Ward 1 Precinct 3 – St. Louis Park City Hall, 5005 Minnetonka Blvd. Ward 1 Precinct 4 – Central Community Center, 6300 Walker St. Ward 2 Precinct 5 – Union Congregational Church, 3700 Alabama Ave. S. Ward 2 Precinct 6 – St. Louis Park Recreation Center, 3700 Monterey Dr. Ward 2 Precinct 7 – Susan Lindgren Elementary School, 4801 W 41st St Ward 2 Precinct 8 – Aldersgate United Methodist Church, 3801 Wooddale Ave S Ward 3 Precinct 9 – Prince of Peace Lutheran Church, 8115 State Hwy. No. 7 Ward 3 Precinct 10 – Lenox Community Center, 6715 Minnetonka Blvd. Ward 3 Precinct 11 – St. Louis Park Senior High School, 6425 33rd St. W. Ward 3 Precinct 12 – Aquila Elementary School, 8500 31st St. W. Ward 4 Precinct 13 – Westwood Lutheran Church, 9001 Cedar Lake Road Ward 4 Precinct 14 – Park Assembly Church, 1615 Texas Ave. S. Ward 4 Precinct 15 – Peace Presbyterian Church, 7624 Cedar Lake Road Ward 4 Precinct 16 – St. Louis Park Middle School, 2025 Texas Ave. S. WHEREAS, as authorized by MN Statute 204B.21, Subd. 2, election judges for precincts shall be appointed by the governing body of the municipality no later than 25 days before each election; and NOW, THEREFORE, BE IT RESOLVED, by the St. Louis Park City Council that the following individuals named on Exhibit A and on file in the Office of the City Clerk are hereby appointed to serve as election judges, absentee ballot board judges, or alternate judges for the 2017 Primary and General Elections; and BE IT FURTHER RESOLVED, the St. Louis Park City Council also appoints other individuals, including all members appointed to the Hennepin County Absentee Ballot Board as authorized under Minn. Stat. 204B.21, subd. 2 under direction of the Elections Manager to serve as members of the St. Louis Park Absentee Ballot Board; and BE IT FURTHER RESOLVED, the City Clerk is with this, authorized to make any substitutions or additions as deemed necessary. City Council Meeting of June 19, 2017 (Item 4b) Page 3 Title: Designating Polling Places and Appointing Election Judges for 2017 Elections Reviewed for Administration Adopted by the City Council June 19, 2017 Thomas K. Harmening, City Manager Jake Spano, Mayor Attest: Melissa Kennedy, City Clerk City Council Meeting of June 19, 2017 (Item 4b) Page 4 Title: Designating Polling Places and Appointing Election Judges for 2017 Elections Resolution No. 17 - ___ Exhibit A Appointed 2017 Election judges The following individuals are appointed to serve in the 2017 Municipal Primary and Municipal General Elections. WARD 1 1-1, Beth El Synagogue Enz Mary - Chair Feldman Pam Gormley Tim Huiras Shirley – Co-Chair Israel Joseph Osfar Barb Resnick Barbara Ruttger Theresa Schwartz Mark 1-2, Peter Hobart Elementary School Casey Dianne Dworsky Richard Grose Lawrence Johnson Christine Kloehn Katherine – Co-Chair Marek Margaret - Chair Pappone Carol Scott Ariann 1-3, City Hall Kohler Carol Manuel Eric Maynard Mary – Co-Chair Olson Ann Ruhl Barbara - Chair Showalter Joy Sincheff Mary 1-4, Central Community Center Becker Donald – Co-Chair Bryan Vincent – Co-Chair Cook Judith Manuel Julie - Chair Margolies Robert Martin Paul Rohret Jill Schwartz Lynn Absentee Ballot Board Judges Danovsky Melonie Erickson Richard Hendrix Mary Jacobs Josephine Richards David Ruth Roger Wickersham Mary Alternate Election Judges Capra Sandra Dolan Ziff Lillian Pflipsen Gloria Weaver Tom The following additional individuals are appointed to serve in the 2017 General Municipal Election only: Last Name First Name Adams Ronald Adams Judith Adelmann Peggy Adler Susanne Adler Todd Ahrens Jane Benson Janet Last Name First Name Bergquist Rogene Bleecker Arlene Bobence Amy Botner Loren Brehmer David Buda Jacqueline Campbell Patricia City Council Meeting of June 19, 2017 (Item 4b) Page 5 Title: Designating Polling Places and Appointing Election Judges for 2017 Elections Last Name First Name Desnick Sheila Drache Kay Dunn Sally Anne Erickson Steven Erwin Phillip Evers Carol Fischels Angela Gale Roberta Gerhardson Joan Grose Kathy Hanson A. Stuart Hines Linda Huebner Jeff Huiras Ken Jacobs John Johnson Mary Jones Doug Justesen Kimball Konopliv Kari Kosar Jose Krause Marguerite LaPray Jami Larson David Lee Martin Lilla Amy Mainella Heather Mann Peg Martinez Rita Mattison Susanne McKay Kathy Mueller Denise Murman Gloria Mutchler Sara Nevermann Eric Olson Richard Peltier Kay Person Rick Person Barb Petermeier Josie Plovnick Ross Quinn Clara Ramsperger Angela Richards Margie Richards David Rider Elaine Ruth Roger Sand Eric Last Name First Name Savick Elaine Serrell Judith Shapiro Judy Simmons Judy Sincheff Mary Solmer Henry Soucheray Mary (Gina) Spiden Deanna Stevens Jeanne Struxness Richard Tape William Thompson Jack Thorne Rich Turk Carolyne Tursich Ernest Urness Gay Wells Frank Willhite Suzann Witthuhn Jennifer Wuebker Debra Meeting: City Council Meeting Date: June 19, 2017 Consent Agenda Item: 4c EXECUTIVE SUMMARY TITLE: Approve Maintenance Agreement with MCWD for W. 37th Street Bridge & Road Reconstruction (4017-1700) RECOMMENDED ACTION: Motion to Adopt Resolution authorizing the City to enter into a maintenance agreement with Minnehaha Creek Watershed District (MCWD) for the maintenance of the W. 37th Street Bridge and Road Reconstruction Project (between Boone Avenue and Aquila Avenue) Project No. 4017-1700. POLICY CONSIDERATION: Does the City Council wish to continue to implement our Pavement Management program? SUMMARY: Minnehaha Creek Watershed District is the local governing authority for the bridge crossing of Minnehaha Creek. A permit is required from the Watershed District for the W. 37th Street Bridge and Road Reconstruction Project. The City has met most of the requirements of the watershed district. The final requirement set forth by the watershed district is a maintenance agreement for the structure over the creek. The maintenance agreement states that the City will be responsible for the cost of maintenance for the W. 37th Street Bridge. The City has been maintaining the existing W. 37th Street Bridge and existing pedestrian bridge. Any issues related to erosion on the side slopes of the bridge or debris getting stuck under the bridge are the responsibility of the City. Also any work required for the bridge itself will be the responsibility of the City. The agreement provided by the watershed district will formalize the current process for maintenance. FINANCIAL OR BUDGET CONSIDERATION: The City will be responsible for the cost of maintenance for the new bridge. This maintenance cost should be similar to the cost of maintaining the existing road and pedestrian bridge. VISION CONSIDERATION: Not applicable. SUPPORTING DOCUMENTS: Resolution Maintenance Agreement with MCWD Prepared by: Joseph Shamla, Sr. Engineering Project Manager Reviewed by: Debra M. Heiser, Engineering Director Approved by: Tom Harmening, City Manager City Council Meeting of June 19, 2017 (Item No. 4c) Page 2 Title: Approve Maintenance Agreement with MCWD for W. 37th Street Bridge & Road Reconstruction (4017-1700) RESOLUTION NO. 17-____ RESOLUTION AUTHORIZING THE CITY TO ENTER INTO A MAINTENANCE AGREEMENT WITH MINNEHAHA CREEK WATERSHED DISTRICT FOR THE W. 37TH STREET BRIDGE WHEREAS, The City of St. Louis Park has applied for a watershed district permit; and WHEREAS, Minnehaha Creek Watershed District set forth a requirement in the permit for a maintenance agreement with the City; BE IT FURTHER RESOLVED, the Mayor and the City Manager are hereby authorized and directed for and on behalf of the City to execute and enter into an agreement with Minnehaha Creek Watershed District for the maintenance of the W. 37th Street Bridge over Minnehaha Creek, a copy of which said agreement was before the City Council and which is made a part hereof by reference. Reviewed for Administration: Adopted by the City Council June 19, 2017 Thomas K. Harmening, City Manager Jake Spano, Mayor Attest: Melissa Kennedy, City Clerk City Council Meeting of June 19, 2017 (Item No. 4c) Title: Approve Maintenance Agreement with MCWD for W. 37th Street Bridge & Road Reconstruction (4017-1700)Page 3 City Council Meeting of June 19, 2017 (Item No. 4c) Title: Approve Maintenance Agreement with MCWD for W. 37th Street Bridge & Road Reconstruction (4017-1700)Page 4 City Council Meeting of June 19, 2017 (Item No. 4c) Title: Approve Maintenance Agreement with MCWD for W. 37th Street Bridge & Road Reconstruction (4017-1700)Page 5 City Council Meeting of June 19, 2017 (Item No. 4c) Title: Approve Maintenance Agreement with MCWD for W. 37th Street Bridge & Road Reconstruction (4017-1700)Page 6 Meeting: City Council Meeting Date: June 19, 2017 Consent Agenda Item: 4d EXECUTIVE SUMMARY TITLE: Approve Agency Agreement with MnDOT for W. 37th Street Bridge & Road Reconstruction Project (4017-1700) RECOMMENDED ACTION: Motion to Adopt Resolution authorizing entering into Agency Agreement 1028268 with MnDOT for a grant for the W. 37th Street Bridge and Road Reconstruction Project (between Boone Avenue and Aquila Avenue) Project No. 4017-1700. POLICY CONSIDERATION: Does the City Council wish to receive additional State funding from the Local Bridge Replacement Program? SUMMARY: This summer, W. 37th Street will be reconstructed between Boone Avenue and Aquila Avenue, which includes the reconstruction of the bridge over Minnehaha Creek. The State Transportation Fund for Local Bridge Replacement Program has identified the W. 37th Street Bridge Reconstruction eligible for a grant of $233,418.93. This amount will help offset the amount of funding that the City will need to contribute to construct the bridge. The current City contribution from the Pavement Management Fund is $1,201,003. The attached Agency Agreement between the City of St. Louis Park and MnDOT must be approved by the City Council prior to the award of the contract. Essentially, the agreement states that the City will accept a grant of $233,418.93 from the State Transportation Fund for Local Bridge Replacement Program. Also, the estimate for the bridge includes federal funding of $2,140,914. These funds are pay as you go and will be passed to the City through MnDOT. Bids for this project are scheduled to be opened on June 15, and awarded on June 26. Construction should being in early July. The project will be complete in November of 2017. FINANCIAL OR BUDGET CONSIDERATION: This project is included in the City’s Capital Improvement Program (CIP) for 2017. Funding will be provided by a combination of Federal Aid, State Transportation Fund, Pavement Management funds, Utility funds, and General Obligation Bonds (Connect the Park). VISION CONSIDERATION: Not applicable. SUPPORTING DOCUMENTS: Resolution MnDOT Grant Agreement 1028268 Prepared by: Joseph Shamla, Sr. Engineering Project Manager Reviewed by: Debra M. Heiser, Engineering Director Approved by: Tom Harmening, City Manager City Council Meeting of June 19, 2017 (Item No. 4d) Page 2 Title: Approve Agency Agreement w/ MnDOT for W. 37th Street Bridge & Road Reconstruction Project (4017-1700) RESOLUTION NO. 17-____ RESOLUTION AUTHORIZING THE CITY TO ENTER INTO MnDOT AGENCY AGREEMENT 1028268 FOR STATE TRANSPORTATION FUND LOCAL BRIDGE REPLACEMENT PROGRAM GRANT TERMS AND CONDITIONS SP 163-080-002 WHEREAS, The City of St. Louis Park has applied to the Commissioner of Transportation for a grant from the Minnesota State Transportation Fund for construction of Bridge No. 27C49; and WHEREAS, the Commissioner of Transportation has given notice that funding for this bridge is available; and WHEREAS, the amount of the grant has been determined to be $233,418.93 by reason of the lowest responsible bid; NOW THEREFORE BE IT RESOLVED, be it resolved that The City of St. Louis Park does hereby agree to the terms and conditions of the grant consistent with Minnesota Statutes, section 174.50, subdivision 5, clause (3), and will pay any additional amount by which the cost exceeds the estimate, and will return to the Minnesota State Transportation Fund any amount appropriated for the bridge but not required. The proper county officers are authorized to execute a grant agreement with the Commissioner of Transportation concerning the above-referenced grant. BE IT FURTHER RESOLVED, that whereas federal-aid funds are being used to participate in the cost of the bridge, the Minnesota State Transportation Fund grant shall be deposited directly into the federal-aid agency account and that the records of the City shall so state. BE IT FURTHER RESOLVED, the Mayor and the City Manager are hereby authorized and directed for and on behalf of the City to execute and enter into an agreement with the Commissioner of Transportation prescribing the terms and conditions of said State Transportation Fund for Local Bridge Replacement Program Grant as set forth and contained in “Minnesota Department of Transportation Agency Agreement 1028268, a copy of which said agreement was before the City Council and which is made a part hereof by reference. Reviewed for Administration: Adopted by the City Council June 19, 2017 Thomas K. Harmening, City Manager Jake Spano, Mayor Attest: Melissa Kennedy, City Clerk MnDOT Agreement No. 1028268 S.P. 163-080-002 Revised: 11/9/2015 LOCAL BRIDGE REPLACEMENT PROGRAM (LBRP) GRANT AGREEMENT This Agreement between the Minnesota Department of Transportation (“MnDOT”) and the Grantee named below is made pursuant to Minnesota Statutes Section 174.50. The provisions in that section and the Exhibits attached hereto and incorporated by reference constitute this Agreement and the persons signing below agree to fully comply with all of the requirements of this Agreement. This Agreement will be effective on the date the State obtains all required signatures under Minnesota Statutes §16C.05, subdivision 2. 1. Public Entity (Grantee) name, address and contact person: City of St. Louis Park 5005 Minnetonka Blvd St. Louis Park, MN 55416 Contact: Debra M. Heiser 2. Project(s): Name of Project (See Exhibit C for location) Amount of LBRP Funds Amount of Required Matching Funds Completion Date SP 163-080-002 $233,418.93 $1,117,049.17 November 10th, 2017 Old Bridge No. 27067 3. Total Amount of LBRP Grant for all projects under this Agreement: $233,418.93 4. The following Exhibits for each project are attached and incorporated by reference as part of this Agreement: Exhibit A Completed Sources and Uses of Funds Schedule Exhibit B Project Completion Schedule Exhibit C Bond Financed Property Certification Exhibit D Grant Application Exhibit E Grantee Resolution Approving Grant Agreement Exhibit F General Terms and Conditions City Council Meeting of June 19, 2017 (Item No. 4d) Title: Approve Agency Agreement w/ MnDOT for W. 37th Street Bridge & Road Reconstruction Project Page 3 MnDOT Agreement No. 1028268 S.P. 163-080-002 Revised: 11/9/2015 5. Additional requirements, if any: None 6. Any modification of this Agreement must be in writing and signed by both parties. (The remaining portion of this page was intentionally left blank.) City Council Meeting of June 19, 2017 (Item No. 4d) Title: Approve Agency Agreement w/ MnDOT for W. 37th Street Bridge & Road Reconstruction Project Page 4 MnDOT Agreement No. 1028268 S.P. 163-080-002 Revised: 11/9/2015 PUBLIC ENTITY (GRANTEE) By: Debra Heiser Title: City of St. Louis Park Engineering Director Date: 5/11/2017 By: Title: Date:______________________________ DEPARTMENT OF TRANSPORTATION By: Title: State Aid Program Engineer Date: OFFICE OF CONTRACT MANAGEMENT By: _________________________________ Contract Administrator Date:_________________________________ City Council Meeting of June 19, 2017 (Item No. 4d) Title: Approve Agency Agreement w/ MnDOT for W. 37th Street Bridge & Road Reconstruction Project Page 5 MnDOT Agreement No. 1028268 S.P. 163-080-002 Revised: 11/9/2015 EXHIBIT A SOURCES AND USES OF FUNDS SCHEDULE (Complete a different schedule for each project. For the first project label it A-1; for the second project label it A-2; etc.) SOURCES OF FUNDS USES OF FUNDS Entity Supplying Funds Amount Expenses Amount State Funds: Items Paid for with LBRP LBRP Grant $233,418.93 Grant Funds: _Bridge_________ $233,418.93__ Other: ________________ $___________ ______ $ ________________ $___________ ________________ $___________ ________________ $___________ ________________ $___________ ________________ $___________ Subtotal $233,418.93 Subtotal $233,418.93_ Public Entity Funds: Items paid for with Non- Matching Funds $1,117,049.17 LBRP Grant Funds: _Roadway________ $1,325,344.90 Other: _Storm__________ $92,812.00___ __ FED Funds ______ $1,438,400.00_ _Bridge__________ $1,000,937.27_ ________________ $___________ _Non-Par_________ $136,355.00__ ________________ $___________ Subtotal $2,555,449.17_ Subtotal $2,555,449.17 TOTAL FUNDS $2,788,868.10 = TOTAL PROJECT COSTS $2,788,868.10_ City Council Meeting of June 19, 2017 (Item No. 4d) Title: Approve Agency Agreement w/ MnDOT for W. 37th Street Bridge & Road Reconstruction Project Page 6 MnDOT Agreement No. 1028268 S.P. 163-080-002 Revised: 11/9/2015 EXHIBIT B PROJECT COMPLETION SCHEDULE (Provide a different schedule for each project. Label each project to correspond with the project as listed in Exhibit A; e.g., B-1, B-2, etc.) West 37th Street Bridge Replacement and Road Reconstruction over Minnehaha Creek Schedule: July 2017 – Notice to Proceed Substantial Completion – October 20th, 2017 West 37th Street Project Complete – November 10th, 2017 City Council Meeting of June 19, 2017 (Item No. 4d) Title: Approve Agency Agreement w/ MnDOT for W. 37th Street Bridge & Road Reconstruction Project Page 7 MnDOT Agreement No. 1028268 S.P. 163-080-002 Revised: 11/9/2015 EXHIBIT C BOND FINANCED PROPERTY CERTIFICATION (Complete only one Certification for all projects) State of Minnesota General Obligation Bond Financed Property The undersigned states that it has a fee simple, leasehold and/or easement interest in the real property located in the County(ies) of Hennepin County, State of Minnesota that is generally described or illustrated graphically in Attachment 1 attached hereto and all improvements thereon (the “Restricted Property”) and acknowledges that the Restricted Property is or may become State bond-financed property. To the extent that the Restricted Property is or becomes State bond-financed property, the undersigned acknowledges that: A.The Restricted Property is State bond-financed property under Minn. Stat. Sec. 16A.695, is subject to the requirements imposed by that statute, and cannot be sold, mortgaged, encumbered or otherwise disposed of without the approval of the Commissioner of Minnesota Management and Budget; and B.The Restricted Property is subject to the provisions of the Local Bridge Replacement Program Grant Agreement between the Minnesota Department of Transportation and the undersigned dated ________________, 20___; and C.The Restricted Property shall continue to be deemed State bond-financed property for 37.5 years or until the Restricted Property is sold with the written approval of the Commissioner of Minnesota Management and Budget. Date: ________________, 20____ City of St. Louis Park Engineering, a political subdivision of the State of Minnesota By: ________________________________ Name: _______________________________ Title: _______________________________ By: ________________________________ Name: _______________________________ Title: _______________________________ City Council Meeting of June 19, 2017 (Item No. 4d) Title: Approve Agency Agreement w/ MnDOT for W. 37th Street Bridge & Road Reconstruction Project Page 8 MnDOT Agreement No. 1028268 S.P. 163-080-002 Revised: 11/9/2015 Attachment 1 to Exhibit C GENERAL DESCRIPTION OF RESTRICTED PROPERTY (Insert a narrative or graphic description of the Restricted Property for each project. Label each project to correspond with the project as listed in Exhibit A; e.g., C-1, C-2, etc. It need not be a legal description if a legal description is unavailable.) S.P. 163-080-002, West 37th Street Bridge Replacement and Road Reconstruction over Minnehaha Creek is located in the northwest corner of Highway 7 and Aquila Avenue and carries West 37th Street over Minnehaha Creek connecting with Boone Avenue and the Target (T2). City Council Meeting of June 19, 2017 (Item No. 4d) Title: Approve Agency Agreement w/ MnDOT for W. 37th Street Bridge & Road Reconstruction Project Page 9 WSB Filename:Date Printed:10/19/2016K:\02296-000\Cad\Exhibits\02296-00-PREF ALT-COLOR.dwgSHEET OF SHEETS HENNEPIN COUNTY, MINNESOTA WEST 37TH STREET CITY OF ST. LOUIS PARK 1 NOTE: PRELIMINARY SUBJECT TO CHANGE 1 DRAFT LAYOUT DATE: 02/01/2017 SCALE IN FEET 0 300150 City Council Meeting of June 19, 2017 (Item No. 4d) Title: Approve Agency Agreement w/ MnDOT for W. 37th Street Bridge & Road Reconstruction Project Page 10 MnDOT Agreement No. 1028268 S.P. 163-080-002 Revised: 11/9/2015 EXHIBIT D GRANT APPLICATION (Attach the grant application for each project and label each application to correspond with the projects listed in Exhibit A; e.g., D-1, D-2, etc.) City Council Meeting of June 19, 2017 (Item No. 4d) Title: Approve Agency Agreement w/ MnDOT for W. 37th Street Bridge & Road Reconstruction Project Page 11 City Council Meeting of June 19, 2017 (Item No. 4d) Title: Approve Agency Agreement w/ MnDOT for W. 37th Street Bridge & Road Reconstruction Project Page 12 City Council Meeting of June 19, 2017 (Item No. 4d) Title: Approve Agency Agreement w/ MnDOT for W. 37th Street Bridge & Road Reconstruction Project Page 13 MnDOT Agreement No. 1028268 S.P. 163-080-002 Revised: 11/9/2015 EXHIBIT E GRANTEE RESOLUTION APPROVING GRANT AGREEMENT City Council Meeting of June 19, 2017 (Item No. 4d) Title: Approve Agency Agreement w/ MnDOT for W. 37th Street Bridge & Road Reconstruction Project Page 14 For Agreement to State Transportation Fund Local Bridge Replacement Program Grant Terms and Conditions SP 163-080-002 Date June 2, 2017 WHEREAS, The City of St. Louis Park has applied to the Commissioner of Transportation for a grant from the Minnesota State Transportation Fund for construction of Bridge No. 27C49; and WHEREAS, the Commissioner of Transportation has given notice that funding for this bridge is available; and WHEREAS, the amount of the grant has been determined to be $233,418.93 by reason of the lowest responsible bid; NOW THEREFORE, be it resolved that The City of St. Louis Park does hereby agree to the terms and conditions of the grant consistent with Minnesota Statutes, section 174.50, subdivision 5, clause (3), and will pay any additional amount by which the cost exceeds the estimate, and will return to the Minnesota State Transportation Fund any amount appropriated for the bridge but not required. The proper county officers are authorized to execute a grant agreement with the Commissioner of Transportation concerning the above-referenced grant. BE IT FURTHER RESOLVED, that whereas federal-aid funds are being used to participate in the cost of the bridge, the Minnesota State Transportation Fund grant shall be deposited directly into the federal-aid agency account and that the records of the City shall so state. By: Debra Heiser Title: City of St. Louis Park Engineering Director Date: 6/2/2017 By: Title: Date:______________________________ City Council Meeting of June 19, 2017 (Item No. 4d) Title: Approve Agency Agreement w/ MnDOT for W. 37th Street Bridge & Road Reconstruction Project Page 15 MnDOT Agreement No. 1028268 S.P. 163-080-002 Revised: 11/9/2015 EXHIBIT F GENERAL TERMS AND CONDITIONS FOR LOCAL BRIDGE REPLACEMENT PROGRAM (LBRP) GRANTS (Applicable to each project.) Article I DEFINITIONS Section 1.01 Defined Terms. The following terms shall have the meanings set out respectively after each such term (the meanings to be equally applicable to both the singular and plural forms of the terms defined) unless the context specifically indicates otherwise: “Advance(s)” - means an advance made or to be made by MnDOT to the Public Entity and disbursed in accordance with the provisions contained in Article VI hereof. “Agreement” - means the Local Bridge Replacement Program Grant Agreement between the Public Entity and the Minnesota Department of Transportation to which this Exhibit is attached. “Certification” - means the certification, in the form attached as Exhibit C, in which the Public Entity acknowledges that its interest in the Real Property is bond financed property within the meaning of Minn. Stat. Sec. 16A.695 and is subject to certain restrictions imposed thereby. “Code” - means the Internal Revenue Code of 1986, as amended, and all treasury regulations, revenue procedures and revenue rulings issued pursuant thereto. “Commissioner” - means the Commissioner of Minnesota Management & Budget. “Commissioner’s Order” - means the “Fourth Order Amending Order of the Commissioner of Minnesota Management & Budget Relating to Use and Sale of State Bond Financed Property” dated July 30, 2012, as it may be amended or supplemented. “Completion Date” - means the projected date for completion of the Project as indicated in the Agreement. “Construction Contract Documents” - means the document or documents, in form and substance acceptable to MnDOT, including but not limited to any construction plans and specifications and any exhibits, amendments, change orders, modifications thereof or supplements thereto, which collectively form the contract between the Public Entity and the Contractor(s) for the completion of the Construction Items on or before the Completion Date for either a fixed price or a guaranteed maximum price. “Construction Items” - means the work to be performed under the Construction Contract Documents. “Contractor” - means any person engaged to work on or to furnish materials and supplies for the Construction Items including, if applicable, a general contractor. City Council Meeting of June 19, 2017 (Item No. 4d) Title: Approve Agency Agreement w/ MnDOT for W. 37th Street Bridge & Road Reconstruction Project Page 16 MnDOT Agreement No. 1028268 S.P. 163-080-002 Revised: 11/9/2015 “Draw Requisition” - means a draw requisition that the Public Entity, or its designee, submits to MnDOT when an Advance is requested, as referred to in Section 4.02. “G.O. Bonds” - means the state general obligation bonds issued under the authority granted in Article XI, Sec. 5(a) of the Minnesota Constitution, the proceeds of which are used to fund the LBRP Grant, and any bonds issued to refund or replace such bonds. “Grant Application” - means the grant application that the Public Entity submitted to MnDOT which is attached as Exhibit D. “LBRP Grant” - means a grant from MnDOT to the Public Entity under the LBRP in the amount specified in the Agreement, as such amount may be modified under the provisions hereof. “LBRP” - means the Local Bridges Replacement Program pursuant to Minn. Stat. Sec. 174.50 and rules relating thereto. “MnDOT” - means the Minnesota Department of Transportation. “Outstanding Balance of the LBRP Grant” - means the portion of the LBRP Grant that has been disbursed to the Public Entity minus any amounts returned to the Commissioner. “Project” - means the Project identified in the Agreement to be totally or partially funded with a LBRP grant. “Public Entity” - means the grantee of the LBRP Grant and identified as the Public Entity in the Agreement. “Real Property” - means the real property identified in the Agreement on which the Project is located. Article II GRANT Section 2.01 Grant of Monies. MnDOT shall make the LBRP Grant to the Public Entity, and disburse the proceeds in accordance with the terms and conditions herein. Section 2.02 Public Ownership. The Public Entity acknowledges and agrees that the LBRP Grant is being funded with the proceeds of G.O. Bonds, and as a result all of the Real Property must be owned by one or more public entities. The Public Entity represents and warrants to MnDOT that it has one or more of the following ownership interests in the Real Property: (i) fee simple ownership, (ii) an easement that is for a term that extends beyond the date that is 37.5 years from the Agreement effective date, or such shorter term as authorized by statute, and which cannot be modified or terminated early without the prior written consent of MnDOT and the Commissioner; and/or (iii) a prescriptive easement for a term that extends beyond the date that is 37.5 years from the Agreement effective date. Section 2.03 Use of Grant Proceeds. The Public Entity shall use the LBRP Grant solely to reimburse itself for expenditures it has already made, or will make, to pay the costs of one or more of the following activities: (i) constructing or reconstructing a bridge, (ii) preliminary engineering and environmental studies authorized under Minn. Stat. Sec. 174.50, subdiv. 6a, (iii) abandoning an existing bridge that is deficient and in need of replacement, but where no replacement will be made, or (iv) constructing a road to facilitate the abandonment or removal of an existing bridge determined to be City Council Meeting of June 19, 2017 (Item No. 4d) Title: Approve Agency Agreement w/ MnDOT for W. 37th Street Bridge & Road Reconstruction Project Page 17 MnDOT Agreement No. 1028268 S.P. 163-080-002 Revised: 11/9/2015 deficient. The Public Entity shall not use the LBRP Grant for any other purpose, including but not limited to, any work to be done on a state trunk highway or within a trunk highway easement. Section 2.04 Operation of the Real Property. The Real Property must be used by the Public Entity in conjunction with or for the operation of a county highway, county state-aid highway, town road, or city street and for other uses customarily associated therewith, such as trails and utility corridors, and for no other purposes or uses. The Public Entity may have no intention on the effective date of the Agreement to use the Real Property as a trunk highway or any part of a trunk highway. The Public Entity must annually determine that the Real Property is being used for the purposes specified in this Section and, upon written request by either MnDOT or the Commissioner, shall supply a notarized statement to that effect. Section 2.05 Sale or Lease of Real Property. The Public Entity shall not (i) sell or transfer any part of its ownership interest in the Real Property, or (ii) lease out or enter into any c ontract that would allow another entity to use or operate the Real Property without the written consent of both MnDOT and the Commissioner. The sale or transfer of any part of the Public Entity’s ownership interest in the Real Property, or any lease or contract that would allow another entity to use or operate the Real Property, must comply with the requirements imposed by Minn. Stat. Sec. 16A.695 and the Commissioner’s Order regarding such sale or lease. Section 2.06 Public Entity’s Representations and Warranties. The Public Entity represents and warrants to MnDOT that: A.It has legal authority to execute, deliver and perform the Agreement and all documents referred to therein, and it has taken all actions necessary to its execution and delivery of such documents. B.It has the ability and a plan to fund the operation of the Real Property for the purposes specified in Section 2.04, and will include in its annual budget all funds necessary for the operation of the Real Property for such purposes. C. The Agreement and all other documents referred to therein are the legal, valid and binding obligations of the Public Entity enforceable against the Public Entity in accordance with their respective terms. D.It will comply with all of the provisions of Minn. Stat. Sec. 16A.695, the Commissioner’s Order and the LBRP. E.All of the information it has submitted or will submit to MnDOT or the Commissioner relating to the LBRP Grant or the disbursement of the LBRP Grant is and will be true and correct. F.It is not in violation of any provisions of its charter or of the laws of the State of Minnesota, and there are no actions or proceedings pending, or to its knowledge threatened, before any judicial body or governmental authority against or affecting it relating to the Real Property, or its ownership interest therein, and it is not in default with respect to any order, writ, injunction, decree, or demand of any court or any governmental authority which would impair its ability to enter into the Agreement or any document referred to herein, or to perform any of the acts required of it in such documents. City Council Meeting of June 19, 2017 (Item No. 4d) Title: Approve Agency Agreement w/ MnDOT for W. 37th Street Bridge & Road Reconstruction Project Page 18 MnDOT Agreement No. 1028268 S.P. 163-080-002 Revised: 11/9/2015 G.Neither the execution and delivery of the Agreement or any document referred to herein nor compliance with any of the provisions or requirements of any of such documents is prevented by, is a breach of, or will result in a breach of, any provision of any agreement or document to which it is now a party or by which it is bound. H.The contemplated use of the Real Property will not violate any applicable zoning or use statute, ordinance, building code, rule or regulation, or any covenant or agreement of record relating thereto. I.The Project will be completed and the Real Property will be operated in full compliance with all applicable laws, rules, ordinances, and regulations of any federal, state, or local political subdivision having jurisdiction over the Project and the Real Property. J.All applicable licenses, permits and bonds required for the performance and completion of the Project and for the operation of the Real Property as specified in Section 2.04 have been, or will be, obtained. K.It reasonably expects to possess its ownership interest in the Real Property described in Section 2.02 for at least 37.5 years, and it does not expect to sell such ownership interest. L.It does not expect to lease out or enter into any contract that would allow another entity to use or operate the Real Property. M.It will supply whatever funds are needed in addition to the LBRP Grant to complete and fully pay for the Project. N.The Construction Items will be completed substantially in accordance with the Construction Contract Documents by the Completion Date and all such items will be situated entirely on the Real Property. O.It will require the Contractor or Contractors to comply with all rules, regulations, ordinances, and laws bearing on its performance under the Construction Contract Documents. P.It shall furnish such satisfactory evidence regarding the representations and warranties described herein as may be required and requested by either MnDOT or the Commissioner. Section 2.07 Event(s) of Default. The following events shall, unless waived in writing by MnDOT and the Commissioner, constitute an Event of Default under the Agreement upon either MnDOT or the Commissioner giving the Public Entity 30 days’ written notice of such event and the Public Entity’s failure to cure such event during such 30-day time period for those Events of Default that can be cured within 30 days or within whatever time period is needed to cure those Events of Default that cannot be cured within 30 days as long as the Public Entity is using its best efforts to cure and is making reasonable progress in curing such Events of Default; however, in no event shall the time period to cure any Event of Default exceed six (6) months unless otherwise consented to, in writing, by MnDOT and the Commissioner. A.If any representation, covenant, or warranty made by the Public Entity herein or in any other document furnished pursuant to the Agreement, or to induce MnDOT to disburse the LBRP Grant, shall prove to have been untrue or incorrect in any material respect or materially misleading as of the time such representation, covenant, or warranty was made. City Council Meeting of June 19, 2017 (Item No. 4d) Title: Approve Agency Agreement w/ MnDOT for W. 37th Street Bridge & Road Reconstruction Project Page 19 MnDOT Agreement No. 1028268 S.P. 163-080-002 Revised: 11/9/2015 B.If the Public Entity fails to fully comply with any provision, covenant, or warranty contained herein. C.If the Public Entity fails to fully comply with any provision, covenant or warranty contained in Minn. Stat. Sec. 16A.695, the Commissioner’s Order, or Minn. Stat. Sec. 174.50 and all rules related thereto. D.If the Public Entity fails to use the proceeds of the LBRP Grant for the purposes set forth in Section 2.03, the Grant Application, and in accordance with the LBRP. E.If the Public Entity fails to operate the Real Property for the purposes specified in Section 2.04. F.If the Public Entity fails to complete the Project by the Completion Date. G.If the Public Entity sells or transfers any portion of its ownership interest in the Real Property without first obtaining the written consent of both MnDOT and the Commissioner. H.If the Public Entity fails to provide any additional funds needed to fully pay for the Project. I.If the Public Entity fails to supply the funds needed to operate the Real Property in the manner specified in Section 2.04. Notwithstanding the foregoing, any of the above events that cannot be cured shall, unless waived in writing by MnDOT and the Commissioner, constitute an Event of Default under the Agreement immediately upon either MnDOT or the Commissioner giving the Public Entity written notice of such event. Section 2.08 Remedies. Upon the occurrence of an Event of Default and at any time thereafter until such Event of Default is cured to the satisfaction of MnDOT, MnDOT or the Commissioner may enforce any or all of the following remedies. A.MnDOT may refrain from disbursing the LBRP Grant; provided, however, MnDOT may make such disbursements after the occurrence of an Event of Default without waiving its rights and remedies hereunder. B.If the Event of Default involves a sale of the Public Entity’s interest in the Real Property in violation of Minn. Stat. Sec. 16A.695 or the Commissioner’s Order, the Commissioner, as a third party beneficiary of the Agreement, may require that the Public Entity pay the amounts that would have been paid if there had been compliance with such provisions. For other Events of Default, the Commissioner may require that the Outstanding Balance of the LBRP Grant be returned to it. C.Either MnDOT or the Commissioner, as a third party beneficiary of the Agreement, may enforce any additional remedies it may have in law or equity. The rights and remedies specified herein are cumulative and not exclusive of any rights or remedies that MnDOT or the Commissioner would otherwise possess. If the Public Entity does not repay the amounts required to be paid under this Section or under any other provision contained herein within 30 days of demand by the Commissioner, or any amount ordered by a City Council Meeting of June 19, 2017 (Item No. 4d) Title: Approve Agency Agreement w/ MnDOT for W. 37th Street Bridge & Road Reconstruction Project Page 20 MnDOT Agreement No. 1028268 S.P. 163-080-002 Revised: 11/9/2015 court of competent jurisdiction within 30 days of entry of judgment against the Public Entity and in favor of MnDOT and/or the Commissioner, then such amount may, unless precluded by law, be offset against any aids or other monies that the Public Entity is entitled to receive from the State of Minnesota. Section 2.09 Notification of Event of Default. The Public Entity shall furnish to MnDOT and the Commissioner, as soon as possible and in any event within seven (7) days after it has obtained knowledge of the occurrence of each Event of Default, a statement setting forth details of each Event of Default and the action which the Public Entity proposes to take with respect thereto. Section 2.10 Effect of Event of Default. The Agreement shall survive Events of Default and remain in full force and effect, even upon full disbursement of the LBRP Grant, and shall only be terminated under the circumstances set forth in Section 2.11. Section 2.11 Termination of Agreement and Modification of LBRP Grant. A.If the Project is not started within five (5) years after the effective date of the Agreement or the LBRP Grant has not been disbursed within four (4) years after the date the Project was started, MnDOT’s obligation to fund the LBRP Grant shall terminate. In such event, (i) if none of the LBRP Grant has been disbursed by such date, MnDOT shall have no obligation to fund the LBRP Grant and the Agreement will terminate, and (ii) if some but not all of the LBRP Grant has been disbursed by such date, MnDOT shall have no further obligation to provide any additional funding for the LBRP Grant and the Agreement shall remain in force but shall be modified to reflect the amount of the LBRP Grant that was actually disbursed and the Public Entity is still obligated to complete the Project by the Completion Date. B. The Agreement shall terminate upon the Public Entity’s sale of its interest in the Real Property and transmittal of the required portion of the proceeds of the sale to the Commissioner in compliance with Minn. Stat. Sec. 16A.695 and the Commissioner’s Order, or upon the termination of the Public Entity’s ownership interest in the Real Property if such ownership interest is an easement. Article III COMPLIANCE WITH MINN. STAT. SEC. 16A.695 AND THE COMMISSIONER’S ORDER Section 3.01 State Bond Financed Property. The Public Entity acknowledges that its interest in the Real Property is, or when acquired by it will be, “state bond financed property”, as such term is used in Minn. Stat. Sec. 16A.695 and the Commissioner’s Order and, therefore, the provisions contained in such statute and order apply, or will apply, to its interest in the Real Property, even if the LBRP Grant will only pay for a portion of the Project. Section 3.02 Preservation of Tax Exempt Status. In order to preserve the tax-exempt status of the G.O. Bonds, the Public Entity agrees as follows: A.It will not use the Real Property or use or invest the LBRP Grant or any other sums treated as “bond proceeds” under Section 148 of the Code (including “investment proceeds,” “invested sinking funds” and “replacement proceeds”) in such a manner as to cause the G.O. Bonds to be classified as “arbitrage bonds” under Code Section 148. B.It will deposit and hold the LBRP Grant in a segregated non-interest-bearing account until such funds are used for payments for the Project. City Council Meeting of June 19, 2017 (Item No. 4d) Title: Approve Agency Agreement w/ MnDOT for W. 37th Street Bridge & Road Reconstruction Project Page 21 MnDOT Agreement No. 1028268 S.P. 163-080-002 Revised: 11/9/2015 C.It will, upon written request, provide the Commissioner all information required to satisfy the informational requirements set forth in the Code, including Sections 103 and 148, with respect to the G.O. Bonds. D.It will, upon the occurrence of any act or omission by the Public Entity that could cause the interest on the G.O. Bonds to no longer be tax exempt and upon direction from the Commissioner, take such actions and furnish such documents as the Commissioner determines to be necessary to ensure that the interest to be paid on the G.O. Bonds is exempt from federal taxation, which such action may include: (i) compliance with proceedings intended to classify the G.O. Bonds as a “qualified bond” within the meaning of Code Section 141(e), or (ii) changing the nature of the use of the Real Property so that none of the net proceeds of the G.O. Bonds will be deemed to be used, directly or indirectly, in an “unrelated trade or business” or for any “private business use” within the meaning of Code Sections 141(b) and 145(a). E.It will not otherwise use any of the LBRP Grant or take, permit or cause to be taken, or omit to take, any action that would adversely affect the exemption from federal income taxation of the interest on the G.O. Bonds, and if it should take, permit or cause to be taken, or omit to take, as appropriate, any such action, it shall take all lawful actions necessary to correct such actions or omissions promptly upon obtaining knowledge thereof. Section 3.03 Changes to G.O. Compliance Legislation or the Commissioner’s Order. If Minn. Stat. Sec. 16A.695 or the Commissioner’s Order is amended in a manner that reduces any requirement imposed against the Public Entity, or if the Public Entity’s interest in the Real Property becomes exempted from Minn. Stat. Sec. 16A.695 and the Commissioner’s Order, then upon written request by the Public Entity, MnDOT shall execute an amendment to the Agreement to implement such amendment or exempt the Public Entity’s interest in the Real Property from Minn. Stat. Sec. 16A.695 and the Commissioner’s Order. Article IV DISBURSEMENT OF GRANT PROCEEDS Section 4.01 The Advances. MnDOT agrees, on the terms and subject to the conditions set forth herein, to make Advances of the LBRP Grant to the Public Entity from time to time in an aggregate total amount not to exceed the amount of the LBRP Grant. If the amount of LBRP Grant that MnDOT cumulatively disburses hereunder to the Public Entity is less than the amount of the LBRP Grant delineated in Section 1.01, then MnDOT and the Public Entity shall enter into and execute whatever documents MnDOT may request in order to amend or modify this Agreement to reduce the amount of the LBRP Grant to the amount actually disbursed. Provided, however, in accordance with the provisions contained in Section 2.11, MnDOT’s obligation to make Advances shall terminate as of the dates specified in Section 2.11 even if the entire LBRP Grant has not been disbursed by such dates. Advances shall only be for expenses that (i) are for those items of a capital nature delineated in Source and Use of Funds that is attached as Exhibit A, (ii) accrued no earlier than the effective date of the legislation that appropriated the funds that are used to fund the LBRP Grant, or (iii) have otherwise been consented to, in writing, by the Commissioner. It is the intent of the parties hereto that the rate of disbursement of the Advances shall not exceed the rate of completion of the Project or the rate of disbursement of the matching funds required, if any, under Section 5.13. Therefore, the cumulative amount of all Advances disbursed by the State Entity at any point in time shall not exceed the portion of the Project that has been completed and the percentage of the City Council Meeting of June 19, 2017 (Item No. 4d) Title: Approve Agency Agreement w/ MnDOT for W. 37th Street Bridge & Road Reconstruction Project Page 22 MnDOT Agreement No. 1028268 S.P. 163-080-002 Revised: 11/9/2015 matching funds required, if any, under Section 5.13 that have been disbursed as of such point in time. This requirement is expressed by way of the following two formulas: Formula #1: Cumulative Advances < (Program Grant) × (percentage of matching funds, if any, required under Section 5.13 that have been disbursed) Formula #2: Cumulative Advances < (Program Grant) × (percentage of Project completed) Section 4.02 Draw Requisitions. Whenever the Public Entity desires a disbursement of a portion of the LBRP Grant the Public Entity shall submit to MnDOT a Draw Requisition duly executed on behalf of the Public Entity or its designee. Each Draw Requisition with respect to construction items shall be limited to amounts equal to: (i) the total value of the classes of the work by percentage of completion as approved by the Public Entity and MnDOT, plus (ii) the value of materials and equipment not incorporated in the Project but delivered and suitably stored on or off the Real Property in a manner acceptable to MnDOT, less (iii) any applicable retainage, and less (iv) all prior Advances. Notwithstanding anything herein to the contrary, no Advances for materials stored on or off the Real Property will be made by MnDOT unless the Public Entity shall advise MnDOT, in writing, of its intention to so store materials prior to their delivery and MnDOT has not objected thereto. At the time of submission of each Draw Requisition, other than the final Draw Requisition, the Public Entity shall submit to MnDOT such supporting evidence as may be requested by MnDOT to substantiate all payments which are to be made out of the relevant Draw Requisition or to substantiate all payments then made with respect to the Project. The final Draw Requisition shall not be submitted before completion of the Project, including any correction of material defects in workmanship or materials (other than the completion of punch list items). At the time of submission of the final Draw Requisition the Public Entity shall submit to MnDOT: (i)such supporting evidence as may be requested by MnDOT to substantiate all payments which are to be made out of the final Draw Requisition or to substantiate all payments then made with respect to the Project, and (ii) satisfactory evidence that all work requiring inspection by municipal or other governmental authorities having jurisdiction has been duly inspected and approved by such authorities and that all requisite certificates and other approvals have been issued. If on the date an Advance is desired the Public Entity has complied with all requirements of this Agreement and MnDOT approves the relevant Draw Requisition, then MnDOT shall disburse the amount of the requested Advance to the Public Entity. Section 4.03 Additional Funds. If MnDOT shall at any time in good faith determine that the sum of the undisbursed amount of the LBRP Grant plus the amount of all other funds committed to the Project is less than the amount required to pay all costs and expenses of any kind which reasonably may be anticipated in connection with the Project, then MnDOT may send written notice thereof to the Public Entity specifying the amount which must be supplied in order to provide sufficient funds to complete the Project. The Public Entity agrees that it will, within 10 calendar days of receipt of any such notice, supply or have some other entity supply the amount of funds specified in MnDOT's notice. Section 4.04 Condition Precedent to Any Advance. The obligation of MnDOT to make any Advance hereunder (including the initial Advance) shall be subject to the following conditions precedent: City Council Meeting of June 19, 2017 (Item No. 4d) Title: Approve Agency Agreement w/ MnDOT for W. 37th Street Bridge & Road Reconstruction Project Page 23 MnDOT Agreement No. 1028268 S.P. 163-080-002 Revised: 11/9/2015 A.MnDOT shall have received a Draw Requisition for such Advance specifying the amount of funds being requested, which such amount when added to all prior requests for an Advance shall not exceed the amount of the LBRP Grant set forth in Section 1.01. B.No Event of Default under this Agreement or event which would constitute an Event of Default but for the requirement that notice be given or that a period of grace or time elapse shall have occurred and be continuing. C.No determination shall have been made by MnDOT that the amount of funds committed to the Project is less than the amount required to pay all costs and expenses of any kind that may reasonably be anticipated in connection with the Project, or if such a determination has been made and notice thereof sent to the Public Entity under Section 4.03, then the Public Entity has supplied, or has caused some other entity to supply, the necessary funds in accordance with such section or has provided evidence acceptable to MnDOT that sufficient funds are available. D.The Public Entity has supplied to MnDOT all other items that MnDOT may reasonably require. Section 4.05 Processing and Disbursement of Advances. The Public Entity acknowledges and agrees as follows: A.Advances are not made prior to completion of work performed on the Project. B.All Advances are processed on a reimbursement basis. C.The Public Entity must first document expenditures to obtain an Advance. D.Reimbursement requests are made on a partial payment basis or when the Project is completed. E. All payments are made following the “Delegated Contract Process or State Aid Payment Request” as requested and approved by the appropriate district state aid engineer. Section 4.06 Construction Inspections. The Public Entity shall be responsible for making its own inspections and observations regarding the completion of the Project, and shall determine to its own satisfaction that all work done or materials supplied have been properly done or supplied in accordance with all contracts that the Public Entity has entered into regarding the completion of the Project. Article V MISCELLANEOUS Section 5.01 Insurance. If the Public Entity elects to maintain general comprehensive liability insurance regarding the Real Property, then the Public Entity shall have MnDOT named as an additional named insured therein. Section 5.02 Condemnation. If, after the Public Entity has acquired the ownership interest set forth in Section 2.02, all or any portion of the Real Property is condemned to an extent that the Public Entity can no longer comply with Section 2.04, then the Public Entity shall, at its sole option, either: (i) use the condemnation proceeds to acquire an interest in additional real property needed for the Public Entity to continue to comply with Section 2.04 and to provide whatever additional funds that may be City Council Meeting of June 19, 2017 (Item No. 4d) Title: Approve Agency Agreement w/ MnDOT for W. 37th Street Bridge & Road Reconstruction Project Page 24 MnDOT Agreement No. 1028268 S.P. 163-080-002 Revised: 11/9/2015 needed for such purposes, or (ii) submit a request to MnDOT and the Commissioner to allow it to sell the remaining portion of its interest in the Real Property. Any condemnation proceeds which are not used to acquire an interest in additional real property shall be applied in accordance with Minn. Stat. Sec. 16A.695 and the Commissioner’s Order as if the Public Entity’s interest in the Real Property had been sold. If the Public Entity elects to sell its interest in the portion of the Real Property that remains after the condemnation, such sale must occur within a reasonable time period after the date the condemnation occurred and the cumulative sum of the condemnation and sale proceeds applied in accordance with Minn. Stat. Sec. 16A.695 and the Commissioner’s Order. If MnDOT receives any condemnation proceeds referred to herein, MnDOT agrees to or pay over to the Public Entity all of such condemnation proceeds so that the Public Entity can comply with the requirements of this Section. Section 5.03 Use, Maintenance, Repair and Alterations. The Public Entity shall not, without the written consent of MnDOT and the Commissioner, (i) permit or allow the use of any of the Real Property for any purpose other than the purposes specified in Section 2.04, (ii) substantially alter any of the Real Property except such alterations as may be required by laws, ordinances or regulations, or such other alterations as may improve the Real Property by increasing its value or which improve its ability to be used for the purposes set forth in Section 2.04, (iii) take any action which would unduly impair or depreciate the value of the Real Property, (iv) abandon the Real Property, or (v) commit or permit any act to be done in or on the Real Property in violation of any law, ordinance or regulation. If the Public Entity fails to maintain the Real Property in accordance with this Section, MnDOT may perform whatever acts and expend whatever funds necessary to so maintain the Real Property, and the Public Entity irrevocably authorizes MnDOT to enter upon the Real Property to perform such acts as may be necessary to so maintain the Real Property. Any actions taken or funds expended by MnDOT shall be at its sole discretion, and nothing contained herein shall require MnDOT to take any action or incur any expense and MnDOT shall not be responsible, or liable to the Public Entity or any other entity, for any such acts that are performed in good faith and not in a negligent manner. Any funds expended by MnDOT pursuant to this Section shall be due and payable on demand by MnDOT and will bear interest from the date of payment by MnDOT at a rate equal to the lesser of the maximum interest rate allowed by law or 18% per year based upon a 365-day year. Section 5.04 Recordkeeping and Reporting. The Public Entity shall maintain books and records pertaining to Project costs and expenses needed to comply with the requirements contained herein, Minn. Stat. Sec. 16A.695, the Commissioner’s Order, and Minn. Stat. Sec. 174.50 and all rules related thereto, and upon request shall allow MnDOT, its auditors, the Legislative Auditor for the State of Minnesota, or the State Auditor for the State of Minnesota, to inspect, audit, copy, or abstract all of such items. The Public Entity shall use generally accepted accounting principles in the maintenance of such items, and shall retain all of such books and records for a period of six years after the date that the Project is fully completed and placed into operation. Section 5.05 Inspections by MnDOT. The Public Entity shall allow MnDOT to inspect the Real Property upon reasonable request by MnDOT and without interfering with the normal use of the Real Property. Section 5.06 Liability. The Public Entity and MnDOT agree that each will be responsible for its own acts and the results thereof to the extent authorized by law, and neither shall be responsible for the acts of the other party and the results thereof. The liability of MnDOT and the Commissioner is governed by the provisions of Minn. Stat. Sec. 3.736. If the Public Entity is a “municipality” as that term is used in Minn. Stat. Chapter 466, then the liability of the Public Entity is governed by the provisions of Chapter City Council Meeting of June 19, 2017 (Item No. 4d) Title: Approve Agency Agreement w/ MnDOT for W. 37th Street Bridge & Road Reconstruction Project Page 25 MnDOT Agreement No. 1028268 S.P. 163-080-002 Revised: 11/9/2015 466. The Public Entity’s liability hereunder shall not be limited to the extent of insurance carried by or provided by the Public Entity, or subject to any exclusion from coverage in any insurance policy. Section 5.07 Relationship of the Parties. Nothing contained in the Agreement is to be construed as establishing a relationship of co-partners or joint venture among the Public Entity, MnDOT, or the Commissioner, nor shall the Public Entity be considered to be an agent, representative, or employee of MnDOT, the Commissioner, or the State of Minnesota in the performance of the Agreement or the Project. No employee of the Public Entity or other person engaging in the performance of the Agreement or the Project shall be deemed have any contractual relationship with MnDOT, the Commissioner, or the State of Minnesota and shall not be considered an employee of any of those entities. Any claims that may arise on behalf of said employees or other persons out of employment or alleged employment, including claims under the Workers’ Compensation Act of the State of Minnesota, claims of discrimination against the Public Entity or its officers, agents, contractors, or employees shall in no way be the responsibility of MnDOT, the Commissioner, or the State of Minnesota. Such employees or other persons shall not require nor be entitled to any compensation, rights or benefits of any kind whatsoever from MnDOT, the Commissioner, or the State of Minnesota, including tenure rights, medical and hospital care, sick and vacation leave, disability benefits, severance pay and retirement benefits. Section 5.08 Notices. In addition to any notice required under applicable law to be given in another manner, any notices required hereunder must be in writing and personally served or sent by prepaid, registered, or certified mail (return receipt requested), to the address of the party specified below or to such different address as may in the future be specified by a party by written notice to the others: To the Public Entity: At the address indicated on the first page of the Agreement. To MnDOT at: Minnesota Department of Transportation Office of State Aid 395 John Ireland Blvd., MS 500 Saint Paul, MN 55155 Attention: Patti Loken, State Aid Programs Engineer To the Commissioner at: Minnesota Management & Budget 400 Centennial Office Bldg. 658 Cedar St. St. Paul, MN 55155 Attention: Commissioner Section 5.09 Assignment or Modification. Neither the Public Entity nor MnDOT may assign any of its rights or obligations under the Agreement without the prior written consent of the other party. Section 5.10 Waiver. Neither the failure by the Public Entity, MnDOT, or the Commissioner, as a third party beneficiary of the Agreement, in one or more instances to insist upon the complete observance or performance of any provision hereof, nor the failure of the Public Entity, MnDOT, or the Commissioner to exercise any right or remedy conferred hereunder or afforded by law shall be construed as waiving any breach of such provision or the right to exercise such right or remedy thereafter. In addition, no delay by any of the Public Entity, MnDOT, or the Commissioner in exercising any right or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any right or remedy preclude other or further exercise thereof or the exercise of any other right or remedy. City Council Meeting of June 19, 2017 (Item No. 4d) Title: Approve Agency Agreement w/ MnDOT for W. 37th Street Bridge & Road Reconstruction Project Page 26 MnDOT Agreement No. 1028268 S.P. 163-080-002 Revised: 11/9/2015 Section 5.11 Choice of Law and Venue. All matters relating to the validity, interpretation, performance, or enforcement of the Agreement shall be determined in accordance with the laws of the State of Minnesota. All legal actions arising from any provision of the Agreement shall be initiated and venued in the State of Minnesota District Court located in St. Paul, Minnesota. Section 5.12 Severability. If any provision of the Agreement is finally judged by any court to be invalid, then the remaining provisions shall remain in full force and effect and they shall be interpreted, performed, and enforced as if the invalid provision did not appear herein. Section 5.13 Matching Funds. Any matching funds as shown on Page 1 of the Grant Agreement that are required to be obtained and supplied by the Public Entity must either be in the form of (i) cash monies, (ii) legally binding commitments for money, or (iii) equivalent funds or contributions, including equity, which have been or will be used to pay for the Project. The Public Entity shall supply to MnDOT whatever documentation MnDOT may request to substantiate the availability and source of any matching funds. Section 5.14 Sources and Uses of Funds. The Public Entity represents to MnDOT and the Commissioner that the Sources and Uses of Funds Schedule attached as Exhibit A accurately shows the total cost of the Project and all of the funds that are available for the completion of the Project. The Public Entity will supply any other information and documentation that MnDOT or the Commissioner may request to support or explain any of the information contained in the Sources and Uses of Funds Schedule. If any of the funds shown in the Sources and Uses of Funds Schedule have conditions precedent to the release of such funds, the Public Entity must provide to MnDOT a detailed description of such conditions and what is being done to satisfy such conditions. Section 5.15 Project Completion Schedule. The Public Entity represents to MnDOT and the Commissioner that the Project Completion Schedule attached as Exhibit B correctly and accurately sets forth the projected schedule for the completion of the Project. Section 5.16 Public Entity Tasks. Any tasks that the Agreement imposes upon the Public Entity may be performed by such other entity as the Public Entity may select or designate, provided that the failure of such other entity to perform said tasks shall be deemed to be a failure to perform by the Public Entity. Section 5.17 Data Practices. The Public Entity agrees with respect to any data that it possesses regarding the G.O. Grant or the Project to comply with all of the provisions and restrictions contained in the Minnesota Government Data Practices Act contained in Minnesota Statutes Chapter 13, as such may subsequently be amended or replaced from time to time. Section 5.18 Non-Discrimination. The Public Entity agrees to not engage in discriminatory employment practices regarding the Project and it shall fully comply with all of the provisions contained in Minnesota Statutes Chapters 363A and 181, as such may subsequently be amended or replaced from time to time. Section 5.19 Worker’s Compensation. The Public Entity agrees to comply with all of the provisions relating to worker’s compensation contained in Minn. Stat. Secs. 176.181 subd. 2 and 176.182, as they may be amended or replaced from time to time with respect to the Project. Section 5.20 Antitrust Claims. The Public Entity hereby assigns to MnDOT and the Commissioner of MMB all claims it may have for over charges as to goods or services provided with City Council Meeting of June 19, 2017 (Item No. 4d) Title: Approve Agency Agreement w/ MnDOT for W. 37th Street Bridge & Road Reconstruction Project Page 27 MnDOT Agreement No. 1028268 S.P. 163-080-002 Revised: 11/9/2015 respect to the Project that arise under the antitrust laws of the State of Minnesota or of the United States of America. Section 5.21 Prevailing Wages. The Public Entity agrees to comply with all of the applicable provisions contained in Minnesota Statutes Chapter 177, and specifically those provisions contained in Minn. Stat. Secs. 177.41 through 177.435 as they may be amended or replaced from time to time with respect to the Project. By agreeing to this provision, the Public Entity is not acknowledging or agreeing that the cited provisions apply to the Project. Section 5.22 Entire Agreement. The Agreement and all of the exhibits attached thereto embody the entire agreement between the Public Entity and MnDOT, and there are no other agreements, either oral or written, between the Public Entity and MnDOT on the subject matter hereof. Section 5.23 E-Verification. The Public Entity agrees and acknowledges that it is aware of Governor’s Executive Order 08-01 regarding e-verification of employment of all newly hired employees to confirm that such employees are legally entitled to work in the United States, and that it will, if and when applicable, fully comply with such order. (The remaining portion of this page was intentionally left blank.) City Council Meeting of June 19, 2017 (Item No. 4d) Title: Approve Agency Agreement w/ MnDOT for W. 37th Street Bridge & Road Reconstruction Project Page 28 Meeting: City Council Meeting Date: June 19, 2017 Consent Agenda Item: 4e EXECUTIVE SUMMARY TITLE: Resolution Authorizing the Use of Affordable Housing Incentive Funds (AHIF) RECOMMENDED ACTION: Motion to Adopt Resolution authorizing the use of 2016 and 2017 Affordable Housing Incentive Funds (AHIF) in St. Louis Park. POLICY CONSIDERATION: None at this time. SUMMARY: The Hennepin County Redevelopment Authority (HCHRA) approved three resolutions for Affordable Housing Incentive Funds (AHIF) for projects in St. Louis Park. The HCHRA requires the City of St. Louis Park to approve an authorizing resolution for the use of AHIF funds. Resolution 16-HCHRA-0019 for 2016 AHIF funds was approved with $289,000 of AHIF to West Hennepin Affordable Housing Land Trust (WHAHLT)/Homes Within Reach for affordable homeownership. $21,500 of this funding will be used for the 2921 Natchez project in St. Louis Park. The PLACE project received a funding award through the 2017 AHIF, Resolution 17-HCHRA- 0020, at $300,000. In addition, WHAHLT has been awarded funding through the 2017 AHIF in the amount of $200,000 for affordable homeownership in suburban Hennepin County. WHAHLT has not yet identified a home in St. Louis Park for the 2017 funds; however, this resolution will authorize WHAHLT to use a portion of the 2017 AHIF if they purchases another property in St. Louis Park. The county allows all AHIF funding awards to be included in one city resolution. FINANCIAL OR BUDGET CONSIDERATION: Not applicable. VISION CONSIDERATION: St. Louis Park is committed to providing a well-maintained and diverse housing stock. SUPPORTING DOCUMENTS: Resolution Prepared by: Marney Olson, Assistant Housing Supervisor Reviewed by: Michele Schnitker, Housing Supervisor Approved by: Tom Harmening, City Manager City Council Meeting of June 19, 2017 (Item No. 4e) Page 2 Title: Resolution Authorizing the Use of Affordable Housing Incentive Funds (AHIF) RESOLUTION NO. 17-____ RESOLUTION APPROVING THE USE OF AFFORDABLE HOUSING INCENTIVE FUND LOANS (AHIF) FOR WEST HENNEPIN AFFORDABLE HOUSING LAND TRUST (WHAHLT) AKA HOMES WITHIN REACH AND PLACE WHEREAS, the Hennepin County Housing and Redevelopment Authority (HCHRA) in Resolution No. 16-HCHRA-0019 has approved the use of a $289,000 Affordable Housing Incentive Fund (AHIF) loan for WHAHLT to purchase properties for sale to income qualifying homeowners, contingent upon the St. Louis Park City Council’s consent to the HCHRA’s participation in the project; and WHEREAS, the WHAHLT project will increase/preserve the supply of affordable housing in the City of St. Louis Park by providing/preserving at least one unit of affordable housing; and WHEREAS, the Hennepin County Housing and Redevelopment Authority (HCHRA) in Resolution No. 17-HCHRA-0020 has approved the use of a $300,000 Affordable Housing Incentive Fund (AHIF) loan for the PLACE project and a $200,000 AHIF) loan for WHAHLT to purchase properties for sale to income qualifying home owners, contingent upon the St. Louis Park City Council’s consent to the HCHRA’s participation in the project; and WHEREAS, the PLACE project will increase the supply of affordable housing in the City of St. Louis Park by providing 200 units of affordable housing; and WHEREAS, the WHAHLT project will increase/preserve the supply of affordable housing in the City of St. Louis Park by providing/preserving at least one unit of affordable housing; and WHEREAS, the loan from the HCHRA will complete the financing required for the project to go forward. NOW THEREFORE BE IT RESOLVED, that the participation of the Hennepin County Housing and Redevelopment Authority in the project is hereby approved. Reviewed for Administration: Adopted by the City Council June 19, 2017 _____________________________________ ____________________________________ Thomas K. Harmening, City Manager Jake Spano, Mayor Attest: ______________________________________ Melissa Kennedy, City Clerk Meeting: City Council Meeting Date: June 19, 2017 Consent Agenda Item: 4f EXECUTIVE SUMMARY TITLE: Joint Powers Agreement with Hopkins for Texas Ave. Reconstruction Project (4018- 1101) RECOMMENDED ACTION: Motion to Adopt Resolution authorizing entering into a Joint Powers Agreement with Hopkins for the Texas Avenue Reconstruction Project (between Highway 7 and Lake Street) Project No. 4018-1101. POLICY CONSIDERATION: Does the City Council wish to continue to implement our Pavement Management program? SUMMARY: The City of Hopkins has included a number of streets directly adjacent to the South Oak Hill neighborhood in their 2018 street and utility improvements project. Hopkins streets proposed for improvement include Cambridge Street, Oxford Street, Lake Street Northeast, Murphy Avenue, and the alley south of Lake Street. Hopkins staff has also identified Texas Avenue South and Division Street for rehabilitation. St. Louis Park staff has reviewed the condition of these streets and concurs that they are candidates for rehabilitation. Texas Avenue and Division Street are border streets, so maintenance responsibility and jurisdiction is shared between St. Louis Park and Hopkins. In the interest of minimizing inconvenience to the public it is our recommendation that these street segments be wrapped up into the City of Hopkins 2018 Street and Utility Improvement Project. The project engineering will be completed by Bolton and Menk, Inc. In order to proceed with having Hopkins take the lead on this project, we have negotiated a Joint Powers Agreement. Essentially, the Joint Powers Agreement between the City of St. Louis Park and the City of Hopkins states that the City of Hopkins will be the contracting agency for the project. Each city will be responsible for the costs of the project within its corporate boundary. The estimate for the overall project is $3.6 million. The City of St. Louis Park’s cost share is estimated to be $550,000. The attached Joint Powers agreement has been reviewed by the City attorney. FINANCIAL OR BUDGET CONSIDERATION: This project is included in the City’s Capital Improvement Program (CIP) for 2018. The project will be paid for using a combination of Municipal State Aid, Pavement Management funds, Utility funds, and General Obligation Bonds (sidewalk). VISION CONSIDERATION: St. Louis Park is committed to being a connected and engaged community. SUPPORTING DOCUMENTS: Resolution Joint Powers Agreement Location Map Prepared by: Joseph Shamla, Sr. Engineering Project Manager Reviewed by: Debra M. Heiser, Engineering Director Approved by: Nancy Deno, Deputy City Manager/HR Director City Council Meeting of June 19, 2017 (Item No. 4f) Page 2 Title: Joint Powers Agreement with Hopkins for Texas Avenue Reconstruction Project (4018-1101) RESOLUTION NO. 17-___ RESOLUTION APPROVING JOINT POWERS AGREEMENT WITH THE CITY OF HOPKINS FOR CITY PROJECT 4018-1101 WHEREAS, Texas Avenue and Division Street are bisected by the municipal limit between the City of Hopkins and City of St. Louis Park, and WHEREAS, Texas Avenue and Division Street are in disrepair and in need of rehabilitation, and WHEREAS, Texas Avenue and Division Street are included within the scope of the City of Hopkins 2018 Street and Utility Improvements, and; WHEREAS, it is recommended that the City of Hopkins and the City of St. Louis Park enter into an agreement for the rehabilitation of Texas Avenue from State Trunk Highway 7 in St. Louis Park to Lake Street in Hopkins and Division Street west of Texas Avenue, and; WHEREAS, the City Council of the City of St. Louis Park deems it proper and in the public interest to enter into an agreement with the City of Hopkins to complete the work included in City Project 4018-1101, NOW THEREFORE BE IT RESOLVED, the Mayor and the City Manager are hereby authorized and directed for and on behalf of the City to execute and enter into an agreement with the City of Hopkins for City Project 4018-1101. Reviewed for Administration: Adopted by the City Council June 19, 2017 Thomas K. Harmening, City Manager Jake Spano, Mayor Attest: Melissa Kennedy, City Clerk Hopcivil\JointPowersAgreement.final - 1 - 499980v2 AMB HP145-11 192880v1 JOINT POWERS AGREEMENT BETWEEN THE CITY OF ST. LOUIS PARK AND THE CITY OF HOPKINS 2018 STREET AND UTILITY IMPROVEMENTS THIS AGREEMENT (“Agreement”) is entered into between the CITY OF HOPKINS, a Minnesota municipal corporation (hereinafter referred to as "Hopkins") and the CITY OF ST. LOUIS PARK, a Minnesota municipal corporation (hereinafter referred to as "St. Louis Park"), with the parties collectively hereinafter referred to as the "Cities”. WHEREAS, Minn. Stat. § 471.59 authorizes two or more governmental units to enter into agreements to jointly or cooperatively exercise any power common to the contracting parties or any similar power; and WHEREAS, Hopkins has scheduled street and utility improvements to be completed in 2018 along Texas Avenue and Division Street; and WHEREAS, St. Louis Park has scheduled pedestrian and bicycle improvements to be completed in 2018 along Texas Avenue; and WHEREAS, Texas Avenue and Division Street are located along the municipal boundary between Hopkins and St. Louis Park; and WHEREAS, the Cities desire to implement the design and construction of the respective improvements and include the work in the 2018 Street and Utility Improvements in the cities (the “Project”), NOW, THEREFORE, in consideration of their mutual covenants the parties agree as follows: 1.PLANS AND SPECIFICATIONS. Hopkins will prepare plans and specifications for the Project consistent with Hopkins and St. Louis Park design standards for those parts of the Project located within their respective corporate boundaries. 2. BIDDING. Hopkins will advertise for bids for the construction of the Project in accordance with Minnesota Law and will provide St. Louis Park with an analysis of the bids received. Hopkins must obtain St. Louis Park’s concurrence with the award of the bid to a contractor. Hopkins shall not enter into the contract with the approved bidder or proceed with the Project until St. Louis Park’s approval and concurrence with the award of the bid and contract has been established by resolution approved by the St. Louis Park City Council. City Council Meeting of June 19, 2017 (Item No. 4f) Title: Joint Powers Agreement with Hopkins for Texas Avenue Reconstruction Project (4018-1101)Page 3 Hopcivil\JointPowersAgreement.final - 2 - 499980v2 AMB HP145-11 192880v1 3.CONTRACT AWARD. Hopkins shall prepare contract documents and enter into a contract with the approved bidder. 4.COST ALLOCATION. Relevant project costs shall be paid 100% by each party for the portion of the project located within its corporate boundaries. Project costs are: engineering, inspection, testing, construction costs and other costs payable under the contract entered into by Hopkins with the approved bidder. 5.CONTRACT ADMINISTRATION. Hopkins shall exercise all authority related to contract administration with the Contract under this Agreement. 6. OWNERSHIP. Each party shall own the portion of the Project located within its corporate boundaries. 7. PAYMENT. Hopkins will act as the paying agent for all payments to the Contractor. Payments will be made as the Project work progresses and when certified by the Hopkins Engineer. Hopkins, in turn, will bill St. Louis Park for its share of the project costs. Upon presentation of such an itemized bill, St. Louis Park shall reimburse Hopkins for its share of the costs incurred in accordance with this agreement within 30 days from the presentation of the claim. If any portion of an itemized bill is questioned by St. Louis Park, the remainder of the claim shall be promptly paid, and accompanied by a written explanation of the amounts in question. Payment of any amounts in dispute will be made following good faith negotiation and documentation of actual costs incurred in carrying out the work. 8.CHANGE ORDERS AND SUPPLEMENTAL AGREEMENTS. Any change orders or supplemental agreements that affect the project cost payable by St. Louis Park and any changes to the plans must be approved by St. Louis Park prior to execution of work. 9.RULES AND REGULATIONS. Hopkins shall abide by Minnesota Department of Transportation standard specifications, rules and contract administration procedures. 10. INDEMNIFICATION. Hopkins agrees to defend, indemnify, and hold harmless St. Louis Park against any and all claims, liability, loss, damage, or expense arising under the provisions of this Agreement for which Hopkins is responsible, including future operation and maintenance of facilities owned by Hopkins and caused by or resulting from negligent acts or omissions of Hopkins and/or those of Hopkins employees or agents. St. Louis Park agrees to defend, indemnify, and hold harmless Hopkins against any and all claims, liability, loss, damage, or expense arising under the City Council Meeting of June 19, 2017 (Item No. 4f) Title: Joint Powers Agreement with Hopkins for Texas Avenue Reconstruction Project (4018-1101)Page 4 Hopcivil\JointPowersAgreement.final - 3 - 499980v2 AMB HP145-11 192880v1 provisions of this Agreement for which St. Louis Park is responsible, including future operation and maintenance of facilities owned by St. Louis Park and caused by or resulting from negligent acts or omissions of St. Louis Park and/or those of St. Louis Park employees or agents. A party’s agreement and obligation to defend, indemnify and hold the other party harmless shall not apply to any claims, liability, loss, damage or expense resulting from the acts or omissions of the contractor that is awarded the contract for the Project or any of the contractor’s employees, subcontractors, independent contractors or agents. The contract shall require that the contractor defend, indemnify, and hold harmless St. Louis Park to the same extent as Hopkins. St. Louis Park shall be named as an additional insured on all policies of insurance required under the contract. All insurance policies must be open to the inspection by St. Louis Park and copies of policies must be submitted to St. Louis Park’s authorized representative upon written request. Under no circumstances, however, shall a party be required to pay on behalf of itself and the other party any amounts in excess of the limits on liability established in Minnesota Statutes Chapter 466 applicable to any one party. The limits of liability for both parties may not be added together to determine the maximum amount of liability for either party. The intent of this paragraph is to impose on each party a limited duty to defend and indemnify each other subject to the limits of liability under Minnesota Statutes Chapter 466. The purpose of creating this duty to defend and indemnify is to simplify the defense of claims by eliminating conflicts among the parties and to permit liability claims against both parties from a single occurrence to be defended by a single attorney. 11. WAIVER. Any and all persons engaged in the work to be performed by Hopkins shall not be considered employees of St. Louis Park for any purpose, including Worker’s Compensation, or any and all claims that may or might arise out of said employment context on behalf of said employees while so engaged. Any and all claims made by any third party as a consequence of any act or omission on the part of said Hopkins employees while so engaged on any of the work contemplated herein shall not be the obligation or responsibility of St. Louis Park. A reciprocal disclaimer and waiver shall also apply: Hopkins shall not be responsible under the Worker’s Compensation Act for any claims that might arise out of said employment context for any employees of St. Louis Park. 12. AUDITS. Pursuant to Minnesota Statutes § 16C.05, Subd. 5, any books, records, documents, and accounting procedures and practices of Hopkins and St. Louis Park relevant to the Agreement are subject to examination by Hopkins, St. Louis Park, and either the Legislative Auditor or the State Auditor as appropriate. Hopkins and St. Louis Park agree to maintain these records for a period of six years from the date of performance of all services covered under this agreement. 13. INTEGRATION. The entire and integrated agreement of the parties contained in this Agreement shall supersede all prior negotiations, representations, or City Council Meeting of June 19, 2017 (Item No. 4f) Title: Joint Powers Agreement with Hopkins for Texas Avenue Reconstruction Project (4018-1101)Page 5 Hopcivil\JointPowersAgreement.final - 4 - 499980v2 AMB HP145-11 192880v1 agreements between Hopkins and St. Louis Park regarding the Project; whether written or oral. 14.NOTICES. Any n otice, request or other communication that may be required under this Agreement, including payment requests under Paragraph 6, shall be delivered by first class United States mail or by facsimile transmission to Hopkins and St. Louis Park at the following addresses and facsimile numbers: If to Hopkins City of Hopkins 1010 First Street South Hopkins, MN 55343 Attention: Nate Stanley, City Engineer Facsimile: 952-935-1834 If to St. Louis Park City of St. Louis Park 5005 Minnetonka Boulevard St. Louis Park, MN 55416 Attention: Debra Heiser, Engineering Director Facsimile: 952-924-2662 Notices that are mailed shall be deemed to have been delivered one business day after being deposited with the United States Postal Service. Notices that are delivered by facsimile shall be deemed to have been delivered upon confirmation of facsimile transmission. IN WITNESS THEREOF, the parties have caused this agreement to be executed by their duly authorized officials. CITY OF ST. LOUIS PARK CITY OF HOPKINS BY: __________________________ BY: __________________________ Jake Spano, Mayor Molly Cummings, Mayor AND _________________________ AND _________________________ Tom Harmening, City Manager Mike Mornson, City Manager City Council Meeting of June 19, 2017 (Item No. 4f) Title: Joint Powers Agreement with Hopkins for Texas Avenue Reconstruction Project (4018-1101)Page 6 37 8.0 © Bolton & Menk, Inc - Web GIS 0 Legend 2018 Project Area Map This drawing is neither a legally recorded map nor a survey and is not intended to be used as one. This drawing is a compilation of records, information, and data located in various city, county, and state offices, and other sources affecting the area shown, and is to be used for reference purposes only. The City of Hopkins is not responsible for any inaccuracies herein contained. Disclaimer: 6/9/2017 3:40 PM 265 Feet City Limits Protected Waters Public Water Basin Public Water Wetland Protected Waters - Watercourse Parcels (3-1-2017) Lot Lines City Council Meeting of June 19, 2017 (Item No. 4f) Title: Joint Powers Agreement with Hopkins for Texas Avenue Reconstruction Project (4018-1101)Page 7 Meeting: City Council Meeting Date: June 19, 2017 Consent Agenda Item: 4g EXECUTIVE SUMMARY TITLE: Architecutural Services for Westwood Hills Nature Center Project RECOMMENDED ACTION: Motion to approve entering into an agreement with the firm of Hammel, Green and Abrahamson, Inc. (HGA) for design and architectural services of the Westwood Hills Nature Center’s Interpretive Center Building and surrounding area. POLICY CONSIDERATION: Is HGA qualified to provide the services the City is seeking? SUMMARY: Staff solicited proposals from architectural firms to design the Westwood Hills Nature Center’s Interpretive Center Building and surrounding areas. Through a thorough vetting and interviewing process, staff and PRAC recommends HGA as the selected architect firm. HGA has eight branches located throughout the country and has been headquartered in the Twin Cities since 1953. On June 7, staff recommended HGA to the Parks and Recreation Advisory Commission because of their vast experience with unique architectural design as well as specific expertise in animal exhibit design and visitor experience. The PRAC made the following recommendation: Commissioner Cantor made a motion to recommend the City Council enter into a contract with HGA to provide architectural services for the Westwood Hills Nature Center project. Commissioner Foulkes seconded the motion. The motion passed on a vote of 6 – 0. Staff and HGA presented the proposal at the City Council Study Session on June 12 where it was met favorably. FINANCIAL OR BUDGET CONSIDERATION: The total contract amount is $1.3 million which includes schematic design, design development, construction documents and continual work on the project. The City’s CIP has funding in 2017 to begin preliminary design for the construction of a new Nature Center building, and additional funding in 2018 for advanced design, constructions documents, etc. The current CIP estimates an $11 million construction project in 2019. NEXT STEPS: Staff will provide the City Council an update at the completion of each step below to check in and affirm direction to move to the next step: 1. 2017 & 2018: Public input, schematic and design development 2. Early October 2018: Construction Documents 3. 2019 – 2020: Construction with completion in 2020. VISION CONSIDERATION: St. Louis Park is committed to being a connected and engaged community. St. Louis Park is committed to being a leader in environmental stewardship. SUPPORTING DOCUMENTS: None Prepared by: Jason T. West, Recreation Superintendent Mark Oestreich, Westwood Hills Nature Center Manager Reviewed by: Cynthia S. Walsh, Director of Operations and Recreation Brian Hoffman, Inspections Director Approved by: Tom Hamening, City Manager Meeting: City Council Meeting Date: June 19, 2017 Consent Agenda Item: 4h EXECUTIVE SUMMARY TITLE: Approve Final Payment for Contract No. 49-15 for Connect the Park Sidewalk Project No. 4015-2000 RECOMMENDED ACTION: Motion to Adopt Resolution authorizing final payment in the amount of $50,828.11 for Project 4015-2000 Connect the Park sidewalk project with Sunram Construction, Inc., City Contract No. 49-15. POLICY CONSIDERATION: Not applicable. SUMMARY: On May 4, 2015, the City Council awarded the bid for this contract to Sunram Construction, Inc. The work for this contract was finalized this spring and the contractor has requested final payment. The project consisted of sidewalk at the following locations throughout town: •Morningside Road from the Edina City limits to Wooddale Avenue •Quentin Avenue from 40th Street to Excelsior Boulevard •Texas Avenue from Cedar Lake Road to Franklin Avenue •22nd Street from Texas Avenue to Quebec Drive •Glenhurst Avneue from 39th Street to 3830 Glenhurst Avenue •Oregon Avenue from 32nd Street to 3149 Oregon Avenue •Vallacher Avenue from Quentin Avenue to 4915 Vallacher Avenue •40th Street from Quentin Avenue to 4001 Quentin Avenue The Contractor completed this work according to approved plans and specifications. The final contract cost, $973,405.51, is 13.2% more than the original contract amount of $859,854.00. The contract increase accounts for additional work necessary to construct sidewalks through established neighborhoods and for unforeseen construction challenges. FINANCIAL OR BUDGET CONSIDERATION: The final contract cost for the work performed under Contract No. 49-15 has been calculated as follows: Original Contract Price (based on plan quantities) $859,854.00 Change Orders 1- 9 +$ 89,621.54 Final Contract Amount $949,475.54 Actual Amount Due (based on actual quantities) $973,405.51 Previous Payments -$922,577.40 Balance Due $50,828.11 This project was included in the City’s Capital Improvement Program. The work was funded using General Obligation bonds. VISION CONSIDERATION: St. Louis Park is committed to being a connected and engaged community. SUPPORTING DOCUMENTS: Resolution Prepared by: Jack Sullivan, Sr. Engineering Project Manager Reviewed by: Debra Heiser, Engineering Director Approved by: Tom Harmening, City Manager City Council Meeting of June 19, 2017 (Item No. 4h) Page 2 Title: Approve Final Payment for Contract No. 49-15 for Connect the Park Sidewalk Project No. 4015-2000 RESOLUTION NO. 17-____ RESOLUTION AUTHORIZING FINAL PAYMENT AND ACCEPTING THE WORK ON CONNECT THE PARK SIDEWALK PROJECT CITY PROJECT NO. 4015-2000 CONTRACT NO. 49-15 NOW THEREFORE BE IT RESOLVED by the City Council of the City of St. Louis Park, Minnesota, as follows: 1.Pursuant to a written contract with the City dated May 4, 2015, Sunram Construction, Inc. has satisfactorily completed Project 4015-2000 Connect the Park, as per Contract No. 49- 15. 2.The Engineering Director has filed her recommendations for final acceptance of the work. 3. The work completed under this contract is accepted and approved. The final contract cost is $973,405.51. 4.The City Manager is directed to make final payment in the amount of $50,828.11 on the contract, taking the contractor's receipt in full. Reviewed for Administration: Adopted by the City Council June 19, 2017 Thomas K. Harmening, City Manager Jake Spano, Mayor Attest: Melissa Kennedy, City Clerk Meeting: City Council Meeting Date: June 19, 2017 Consent Agenda Item: 4i EXECUTIVE SUMMARY TITLE: Accept Donations from David Litsey for Memorial Bench Honoring Merry Litsey & to Maintain Wolfe Park RECOMMENDED ACTION: Motion to Adopt Resolution approving acceptance of a $3,200 donation from David Litsey to maintain Wolfe Park ($1,000) and for the purchase and installation of a memorial bench in Wolfe Park ($2,200) honoring Merry Litsey. POLICY CONSIDERATION: Does the City Council wish to accept the gift with restrictions on its use? SUMMARY: State statute requires City Council’s acceptance of donations. This requirement is necessary in order to make sure the City Council has knowledge of any restrictions placed on the use of each donation prior to it being expended. David Litsey graciously donated $3,200 for the purchase and installation of a memorial bench and to assist in maintaining Wolfe Park. The donation is given with the restriction that the memorial bench ($2,200) be placed in Wolfe Park honoring Merry Litsey and the $1,000 donation be used to maintain Wolfe Park. FINANCIAL OR BUDGET CONSIDERATION: This donation will be used to purchase and install a bench in Wolfe Park and to maintain Wolfe Park. VISION CONSIDERATION: St. Louis Park is committed to being a connected and engaged community. SUPPORTING DOCUMENTS: Resolution Prepared by: Stacy M. Voelker, Senior Office Assistant Reviewed by: Rick Beane, Park Superintendent Cynthia S. Walsh, Director of Operations and Recreation Approved by: Tom Harmening, City Manager City Council Meeting of June 19, 2017 (Item No. 4i) Page 2 Title: Accept Donations from David Litsey for Memorial Bench Honoring Merry Litsey & to Maintain Wolfe Park RESOLUTION NO. 17-____ RESOLUTION APPROVING ACCEPTANCE OF DONATION IN THE AMOUNT OF $3,200 FOR THE MAINTENANCE OF WOLFE PARK AND A MEMORIAL BENCH TO BE PLACED IN WOLFE PARK HONORING MERRY LITSEY WHEREAS, The City of St. Louis Park is required by State statute to authorize acceptance of any donations; and WHEREAS, the City Council must also ratify any restrictions placed on the donation by the donor; and WHEREAS, David Litsey donated $3,200 to assist with maintaining Wolfe Park and to purchase and install a memorial bench in Wolfe Park honoring Merry Litsey; and NOW THEREFORE BE IT RESOLVED, by the City Council of the City of St. Louis Park that the gift is hereby accepted with thanks to David Litsey with the understanding that it must be used to purchase and install a bench, along with general park maintenance, in Wolfe Park. Reviewed for Administration Adopted by the City Council June 19, 2017 Thomas K. Harmening, City Manager Jake Spano, Mayor Attest: Melissa Kennedy, City Clerk Meeting: City Council Meeting Date: June 19, 2017 Consent Agenda Item: 4j EXECUTIVE SUMMARY TITLE: Joint Cooperation Agreement Between St. Louis Park and Hennepin County RECOMMENDED ACTION: Motion to Adopt Resolution which updates the Joint Cooperation Agreement (JCA) between St. Louis Park and Hennepin County for participation in the Urban Hennepin County Community Development Block Grant (CDBG) Program in Fiscal Years 2018- 2020. POLICY CONSIDERATION: None at this time. SUMMARY: CDBG funds are Housing and Urban Development (HUD) funds distributed annually through Hennepin County. The city currently has a Joint Cooperation Agreement with Hennepin County for the purposes of qualifying as an Urban County under the HUD CDBG, Emergency Solutions Grants (ESG) Program, and HOME Investment Partnerships (HOME) Programs. In order to continue to qualify as an Urban County for purposes of the CDBG, ESG and HOME Programs the city and county need to execute a new Joint Cooperation Agreement and the city must authorize a resolution authorizing the execution of the agreement. The 2018-2020 JCA incorporates the following changes from the previous version: •Clarification of Affirmatively Furthering Fair Housing requirements, including that cooperating units may lose some or all CDBG funding if they fail to comply with fair housing requirements •Creation of a process for pooled, competitive funding awards for public service activities •Clarification of funding allocation process for cities that qualify for “metropolitan city” status as defined by HUD •Adjustments to thresholds with regard to determining “direct allocation” and “consolidated pool” funding allocations •Clarification of language with regard to planning and administrative costs FINANCIAL OR BUDGET CONSIDERATION: Not applicable. VISION CONSIDERATION: St. Louis Park is committed to providing a well-maintained and diverse housing stock. SUPPORTING DOCUMENTS: Resolution Prepared by: Marney Olson, Assistant Housing Supervisor Reviewed by: Michele Schnitker, Housing Supervisor Approved by: Tom Harmening, City Manager City Council Meeting of June 19, 2017 (Item No. 4j) Page 2 Title: Joint Cooperation Agreement Between St. Louis Park and Hennepin County RESOLUTION NO. 17-____ RESOLUTION AUTHORIZING THE EXECUTION OF A JOINT COOPERATION AGREEMENT BETWEEN THE CITY OF ST. LOUIS PARK AND HENNEPIN COUNTY FOR PARTICIPATION IN THE URBAN HENNEPIN COUNTY COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM IN FISCAL YEARS 2018-2020 WHEREAS, the City of St. Louis Park, Minnesota and the County of Hennepin have in effect a Joint Cooperation Agreement for purposes of qualifying as an Urban County under the United States Department of Housing and Urban Development Community Development Block Grant (CDBG), Emergency Solutions Grants (ESG) Program, and HOME Investment Partnerships (HOME) Programs ; and WHEREAS, the city and county wish to execute a new Joint Cooperation Agreement in order to continue to qualify as an Urban County for purposes of the Community Development Block Grant, ESG and HOME Programs. NOW THEREFORE BE IT RESOLVED that a new Joint Cooperation Agreement between the city and county be executed effective October 1, 2017 and that the Mayor and the City Manager be authorized and directed to sign the Agreement on behalf of the city. Reviewed for Administration: Adopted by the City Council June 19, 2017 _____________________________________ ____________________________________ Thomas K. Harmening, City Manager Jake Spano, Mayor Attest: ______________________________________ Melissa Kennedy, City Clerk Meeting: City Council Meeting Date: June 19, 2017 Consent Agenda Item: 4k OFFICIAL MINUTES Parks & Recreation Advisory Commission March 15, 2017 6 p.m. – Tour of Minnehaha Creek Trail 6:30 p.m. - Meeting in MSC 1st Floor Conference Room MEMBERS PRESENT: Rich Bluma, George Foulkes, Elizabeth Griffin, George Hagemann, Edward Halvorson, Tiffany Hoffmann MEMBERS ABSENT: Sarah Foulkes, Peter May GUEST PRESENT: Rebecca Schaar STAFF PRESENT: Rick Beane, Park Superintendent, Meg McMonigal, Planning and Zoning Supervisor, Stacy Voelker, Recording Secretary and Cindy Walsh, Director of Operations and Recreation 1. Call to Order Commissioner Hoffman, Vice Chair, called the meeting to order at 6:24 p.m. 2. Presentations None. 3. Approval of Minutes a. January 18, 2016 Commissioner Griffin made a motion to approve the minutes of January 18, 2017. Commissioner Hagemann seconded the motion. The motion passed on a vote of 6 – 0. 4. New Business a. PLACE Development (36th Street & Wooddale) – Park & Trail Dedication Fees (Meg McMonigal) Meg McMonigal, Planning and Zoning Supervisor, explained the city received an application from PLACE E-Generation One, LLC for a proposed PLACE development. The city has worked with PLACE, a non-profit developer, over three years. The proposed development will be located at West 36th Street and Wooddale Avenue, near the proposed light rail station. The proposal is a “transit oriented” development which would include 299 units (200 affordable, 99 market-rate), 110-room hotel, café, coffee house, more residential units with parking garage, 100 live/work units for artists and an urban forest. The sidewalks and trails would like to the regional trail, which will go under Wooddale City Council Meeting of June 19, 2017 (Item No. 4k) Page 2 Title: Parks & Recreation Advisory Commission Meeting Minutes of March 15, 2017 Avenue. The proposal is environmentally sustaining and would include several green roofs, solar panels and an e-generation facility (food scraps from development turn into energy). They may place a helical wind turbine on north side of property. The proposal includes mobility plan with car/bike sharing, shuttle and 90 units of car-free living incentives. Ms. McMonigal recommended cash-in-lieu since no new parks are designated for the area. Dedication can only be collected from non-platted land. This would equal a total dedication of $532,738 for both park and trail fees. Commissioner Bluma inquired if this project was contingent on the light rail going through. Ms. McMonigal explained it is not contingent upon the light rail project. PLACE expects to be open before light rail is operational. Commissioner Hagemann inquired if plans include the Wooddale bridge (over Highway 7) to accommodate traffic. Ms. McMonigal indicated staff is working with a consultant to return the Wooddale Avenue Bridge to four lanes, which would improve use for walkers and bikers, and create a safer environment. Ms. McMonigal indicated the light rail project is waiting for one more approval by Federal Government for funding, then construction can begin. All engineering plans are complete. The light rail runs from downtown Minneapolis to Eden Prairie and expected to be operational by 2021. There will be three stations in St. Louis Park: Louisiana Avenue, Wooddale and Beltline Boulevard. Greenery will be removed from the parts of the trail that are wooded. Commissioner Hagemann made a motion to approve acceptance of cash-in-lieu of land in the estimated amount of $532,738 for Park and Trail dedication from the PLACE E- Generation One, LLC proposal. Commissioner G. Foulkes seconded the motion. The motion passed on a vote of 6 – 0. 5. Old Business a. Fastpitch Softball Task Force Update (Rick Beane) Ms. Walsh provided an update on the progress of the Fastpitch Softball Task Force discussions. The hired consultant is reviewing cost estimates of the top three locations chosen and will present to the Task Force in April. The Task Force’s recommendation will be made to the Parks and Recreation Advisory Commission then will be presented to the City Council. b. Skate Park Update (Rick Beane) Mr. Beane indicated Request for Proposals were sent out to various bidders for the skate park which will be located in the southwest corner of Carpenter Park. Three bidders submitted proposals: California Skateparks, Grindline and Spohn Ranch. The Task Force chose California Skateparks, whose bid was for $200,000. A $100,000 grant was approved from the Hennepin County Youth Sports Facility for this project. The bid summary will go to the City Council March 20. Staff hopes to build the skate park in City Council Meeting of June 19, 2017 (Item No. 4k) Page 3 Title: Parks & Recreation Advisory Commission Meeting Minutes of March 15, 2017 conjunction with Engineering’s Storm water project. The skate park will be maintenance friendly as it will be all concrete. Commissioner Bluma indicated the size of the skate park will be 55 x 120. Commissioner Hagemann inquired on the parking concern. Mr. Beane advised there is adequate parking with City Hall parking lot and parking on the road. There is room to add 10-12 parking spaces if needed in the future. The Little League Baseball Association is aware of the construction and fields will remain playable, advised Mr. Beane. Staff thanked Commissioner Bluma for his time and assistance on this project. Bluma complimented Mark from 3rd Lair as he’s been very helpful and provided great input in the process. c. ROC Update (Cindy Walsh) Ms. Walsh provided the Commission with an update on the installation of the roof on the ROC. Two of the large glulam beams were installed via two large cranes. All eight of the beams will be installed by the end of next week, followed by cross beams. One sheet of fabric will be stretched and affixed to all areas of the beams. The grand opening of the ROC will be held on Sunday, May 21, with the Children First Ice Cream Social. The ROC will be available for rental this summer. Staff may add turf for a couple weeks in October to get it fitted for spring of 2018. Mr. Beane advised the outside refrigeration system cooled the indoor rinks for a huge cost savings over the winter. Broomball league finished on the ice at the ROC, advised Ms. Walsh, when the weather was warmer and the other outdoor rinks were unusable. The City Council approved a first and second reading of an ordinance change regarding the allowance of alcohol at the Rec Center, Ms. Walsh indicated. The ordinance now reads that alcoholic beverages are allowed in the ROC. Commissioner Hagemann inquired if there are reciprocities with the ROC. Ms. Walsh indicated there are none at this time but it is a good idea. d. Confirm Date for Creek Clean Up and Arbor Day Ms. Walsh reminded members the Minnehaha Creek clean-up is scheduled for Saturday, April 29 from 9 – 11 a.m. Volunteers can meet at the parking lot of Izaak Walton Creekside Park for assignments. Arbor Day tree planting will be held Saturday, May 6 from 9 a.m. – noon at Wolfe Park. Encouraged volunteers attend. Mr. Halvorson indicated the High School has a community service program for unexcused absences that would be a good fit for these type of events. City Council Meeting of June 19, 2017 (Item No. 4k) Page 4 Title: Parks & Recreation Advisory Commission Meeting Minutes of March 15, 2017 6. Staff Communication A Request for Proposals was sent out to numerous firms for architectural services for the Westwood Hills Nature Center project, advised Ms. Walsh. Staff searched nation-wide for firms, mailed to numerous firms and advertised the project. Requests for Proposals are due April 24. Staff will interview architects and present their recommendation to the City Council in June. Ms. Walsh invited a Commission member to be on the interview panel. Once an architect is chosen, more public processes will take place. The Commission will see renditions of the drafts as they happen. The Nature Center building will be located closer to the parking lot, will have a great deal of emphasis on sustainability and will have a fun environment. Mr. Beane advised four playground meetings were held as four playgrounds are due for replacement. The community is invited to view and chose the playground for each park. Twin Lakes had 105 people attend the meeting to choose a playground. Generally there are 10 – 15 people that attend the playground meetings. There were eight different playground designs for viewing. Recently staff hosted a meeting for the potential of security lights added to the dog park at Cedar Knoll Park. Out of the 12 people that attended the meeting, there was only one individual opposed to security lights. Mr. Hagemann advised people to contact the police department with issues arise. The security lights will be installed in late April, Mr. Beane indicated. The Cedar Knoll dog park users are forming a group similar to the Dakota dog Park and will assist with spreading of woodchips, etc. A common theme that originated from the meeting is that users stay later than 8:30 p.m. Staff reiterated to users the dog park closes at 8:30 p.m. as a courtesy to neighbors. 7. Member Communication None. 8. Other / Future Agenda Items Staff and members discussed: decided on May 3, 2017 (combine April and May meetings), begin at 6 p.m. 9. Adjournment It was moved by Commission member Hagemann and seconded by Commission member Griffin to adjourn at 7:36 p.m. The motion passed 6 - 0. Respectfully submitted, Stacy Voelker Stacy Voelker Recording Secretary Meeting: City Council Meeting Date: June 19, 2017 Consent Agenda Item: 4l OFFICIAL MINUTES Parks & Recreation Advisory Commission May 03, 2017 6 p.m. – Meeting in MSC 1st Floor Conference Room MEMBERS PRESENT: Rich Bluma, George Foulkes, Elizabeth Griffin, George Hagemann, Tiffany Hoffmann, Sarah Foulkes, Peter May (6:07 p.m.) MEMBERS ABSENT: Edward Halvorson GUEST(S) PRESENT: Charlie Gross, Sara Collins and Amy Burns, (SLP Fastpitch Association) Candace Amberg (WSB & Associates) STAFF PRESENT: Rick Beane, Park Superintendent, Jason West, Recreation Superintendent, Cindy Walsh, Director of Operations and Recreation, Carrie Mandler, Recording Secretary 1. Call to Order Commissioner Hoffman, called the meeting to order at 6:04 p.m. 2. Presentations None. 3. Approval of Minutes a. March 15, 2017 Commissioner G. Foulkes made a motion to approve the minutes of March 15, 2017. Commissioner Hoffman seconded the motion. The motion passed on a vote of 7 – 0. 4. New Business a. Fastpitch Softball Task Force Presentation Commissioner Griffin discussed the background behind the Task Force Study. The City Council requested the creation of a Task Force to explore options for providing additional field space for Fastpitch Softball. The City hired Candace Amberg from WSB & Associates to study and research available options in St. Louis Park. The Task Force Study and discussion tonight should address the following questions for City Council: 1) Is there a need for an all-in-one location? 2) If yes, a location recommendation from the Commission. 3) Recommendations for funding sources. City Council Meeting of June 19, 2017 (Item No. 4l) Page 2 Title: Parks & Recreation Advisory Commission Meeting Minutes of May 3, 2017 The recommendations will be presented to the City Council at a study session on June 12. Ms. Walsh also indicated if June 12 is not a good date for the discussion it can be changed. Fastpitch members indicated that June 12 works for them. Commissioner Griffin introduced Candace Amberg from WSB & Associates. Ms. Amberg provided an overview of her research and briefly covered each page of the document. She cited specific information on each page which included covered field needs and projected growth, an inventory of existing fields and future trends, how current field users will be displaced by some of the potential changes and cost estimates and/or potential loss of revenue. Each of the five options were reviewed and discussed. Option 1A. This option would provide a pinwheel layout which has a central location with four fields at Aquila Park. All four fields require regrading in this option. There are considerable costs involved with this option. Ms. Walsh advised these costs are rough estimates. There would be two permanently fenced 200’ fields and two 275’ fields. One adult field will be lost with this option. Option 1B. Two permanently fenced 200’ fields at Aquila Park. Fields are not regraded to form the wheel configuration. Fields stay in their currently lay out. One adult field will be lost with this option. Option 2A. Three fields at the Middle School. Two permanently fenced 200’ fields and a third field fenced temporarily during the season. (Fence added during the season to minimize the impact on school PE programs. Commissioner Griffin advised this option will require a partnership with the School District. The City and School District have a history or partnering. Ms. Burns mentioned there is still a concern for the relocation of football and other sport teams currently using the field. Mr. Gross inquired if the School District has been contacted by the City. Andy Ewald and Tom Bravo from the district have been involved in this task force. Commissioner Griffin advised if this option becomes the #1 recommendation, additional conversations will be had with school staff. Option 2B. Similar to Option 2A, there could be two permanently fenced 200’ fields and one field fenced temporarily during the season. An additional field could be construction of land was purchased from the adjacent property owner to the east. Coordination with the school district along with the purchase of property is needed with this options. This would allow for growth of the program and the property could be purchased in the future as the program grows. Option 3. Three permanently fenced 200’ fields at Dakota. This option will require regrading and dealing with contaminated subsoil. There is considerable expense to this option and two adult fields will be lost. In response to a question from Ms. Collins, Ms. Amberg advised that the fast pitch association had indicated that the length of the playing season is 12 weeks for summer and five for fall. The events at each site are based on the info that was supplied by the association. Fields are limited in April and May due to High School use. Since the High School doesn’t have fields, they play their Varsity, JV and B Squad games in the park. During the high school season, the teams compete City Council Meeting of June 19, 2017 (Item No. 4l) Page 3 Title: Parks & Recreation Advisory Commission Meeting Minutes of May 3, 2017 against the association for field space. Ms. Amberg advised that was taken into account in the study. Commissioner Griffin inquired if there were any further questions for Ms. Amberg. No further questions to the study were presented. The SLP Fastpitch Association provided a list of bullet points supporting Option 1A at Aquila Park. Ms. Burns stated Option 1A is their preferred option and the option they request. It would give the Fastpitch Association a presence in St. Louis Park and room to grow. She stated nearly every surrounding community has a complex for fastpitch. When teams switch to various locations it is difficult to achieve support and unity. She acknowledged the Aquila complex is currently used for tournaments. Ms. Burns emphasized a central location is the best option for their organization. She noted the additional benefits of reconfiguring the fields at Aquila. The field drainage issues can be addressed. Kickball can have additional room to play. She also mentioned Option 1A will help girls gain more support toward equity in sports. She mentioned there are no covered dugouts and pitching areas on other fields. Many of their players feel second class without a home field. A central home location would show support for Fastpitch. Mr. Gross commented a perfect scenario for fastpitch would be a pinwheel configuration with all four fences 200 feet. He described it like a freeway. Adding lanes will encourage traffic to flow onto the freeway. By adding quality facilities, more girls will begin to participate. He mentioned boys have had a long time to establish their programs, now the girls have to catch up. He mentioned if there is any revenue loss it can be recovered within a year from tournament revenue. He also stated the fields can be used for growing kickball leagues and that slow pitch demand is decreasing. Mr. Gross also mentioned the current situation doesn’t take into account fastpitch is limited to specific nights due to a traveling league. Fields need to be available every night. Late practices are hard on younger players. Staff mentioned that our adult softball program is not declining and we do have a kickball league. Commissioner Foulkes inquired how many nights are required for practice and questioned if the teams can use local fields when other teams have their ‘away’ games. Ms. Collins stated there are 75, 8-10 year-olds and they generally have two practices and one game per week. She added by including the younger K-1 players there are approximately 85 – 90 girls. Commissioner Hoffman mentioned fastpitch is not the only sport where players have limited practice space with challenging schedules noting hockey as an example. In response to a question from Commissioner Hoffman, Ms. Collins stated there are 125 girls in their program not including the High School girls. Mr. G. Foulkes commented not all the numbers will transfer to High School suggesting there is a percentage that will quit. He inquired about the carryover history. Ms. Collins stated last year was the first year they were able to field two U-12 teams. Ms. Burns added last year they could only field two high school level teams and now they have three with 10-11 girls per team. Mr. Gross stated they will consider adding a U-16 team this year. Ms. Burns also mentioned last year was the first in many years the High School team had a 500 record. The SLP High School has three teams. City Council Meeting of June 19, 2017 (Item No. 4l) Page 4 Title: Parks & Recreation Advisory Commission Meeting Minutes of May 3, 2017 Ms. Walsh advised little league has 440 players with 35 teams, baseball has 110 players and 10 teams. The older baseball teams also compete with the association in the spring due to the High School team’s use of the City fields. Commissioner Griffin stated she and Commissioner Hoffman have a different recommendation. Both agree it would be beneficial to have all fields in one location. However, they would like first to explore the 2A recommendation which allows for three fields at the Middle School, two of the fields will be permanently fenced. This recommendation will require a partnership with the School District. Ms. Burns commented never once has a school official shown support for giving up that land. Commissioner S. Foulkes inquired if that is the only objection to the Middle School option. Mr. Gross responded it is not the only objection. They want full complete fields. Commissioner G. Foulkes inquired if 2A will correct the quality of the fields. Ms. Amberg stated the fields would be regraded and built to be quality fields. Commissioner Hoffman commented the space we have can be better utilized. Commissioner Griffin and Commissioner Hoffman also stated that they do not believe there is a gender equity issue. The facts stated in all of these options show there is adequate fields. It is misleading to call this a gender equity issue. Ms. Griffin stated exploring the 2A option is a starting point and she noted the School District uses city fields. Ms. Burns stated all school officials have told her no. Commissioner Griffin suggested moving forward with the 2A option following the established process until there is an official rejection. Commissioner Griffin inquired why she was having conversations with the district before the process is complete. Commissioner Bluma requested Fastpich list a first, second and third choice option. Ms. Collins stated Dakota Park is a mess and a last choice for Fastpitch. Commissioner G. Foulkes suggested option 2B. Ms. Collins commented it is a better choice than 2A. Mr. Gross commented according to Ms. Amberg’s draft, Pennsylvania is not used in 2B. Ms. Amberg stated Fastpitch asked to have it taken off. Commissioner Griffin advised it can certainly be added back in to the design. Commissioner G. Foulkes suggested the 2B option with Pennsylvania Field added back in. Commissioner Griffin directed the meeting back to Commissioner Bluma’s request to rank the top three options. The SLP Fastpitch Association ranking order was as follows: option 1A, 2B then 2A. Commissioner S. Foulkes inquired if all of the fields need to be close, then recommended 2A with Pennsylvania added back in. Ms. Collins commented the middle school fields have no bathrooms or concession stand. She added there is not a suitable facility to store maintenance vehicles. Ms. Walsh advised storage, pitching and bathrooms are not in any of the designs. Commissioner Griffin advised the primary objective is to meet the needs and accommodate some of wants for Fastpitch. City Council Meeting of June 19, 2017 (Item No. 4l) Page 5 Title: Parks & Recreation Advisory Commission Meeting Minutes of May 3, 2017 Commissioner Griffin inquired if three fields, at this time, are acceptable for Fastpitch. Ms. Collins advised not for tournaments. Aquila is the best option for tournaments. Following a brief discussion Commissioner Griffin summarized Aquila can still be used for tournaments. She advised it is acceptable to give City Council the SLP Fastpitch Association request, along with the Parks and Recreation Advisory Commission recommendation, even if they disagree. Commissioner Hagemann inquired about participation numbers and how many teams surrounding communities are able to field. Ms. Collins stated Hopkins, Minnetonka and Edina all have a large number of teams using their fields. Commissioner Bluma recommended Option 2A, stating it will build community and leave room for future growth. Commissioner Hagemann agreed with Option 2A stating it is scalable and can be built upon in the future with no displacement of other teams who use the other fields. Commissioner S. Foulkes and Commissioner G. Foulkes agreed with Option 2A. Commissioner May inquired if Option 2A could potentially add the 4th field shown in 2B to meet future needs. After a brief discussion there was agreement that adding the 4th field is a possibility to explore in the future. Commissioner May then agreed to start with Option 2A. Commissioner Hoffman agreed Option 2A is the best choice to meet the need and desire for the SLP Fastpich Association to have one location. Councilmember Hageman added there is a value in providing quality facilities and agrees to moving forward with a recommendation. Presenting 2A to City Council will support the desire for the SLP Fastpitch Association to have all their fields in one location. Commissioner Griffin agreed with Option 2A. Commissioner Hagemann made a motion to move forward presenting Option 2A to City Council. Commissioner May seconded the motion. The motion passed on a vote of 7 – 0. Mr. Gross inquired about changing the placement of the fields. After limited discussion Ms. Walsh advised further questions can be a part of future discussions with the School District regarding how the layout can have the least amount if impact to school facilities. Discussion can also include finding a central location for storage, concessions and other related requests. Commissioner Griffin advised all parties to kindly respect the established process and allow it to unfold in the proper order. City Council will discuss this issue with the School District. Commissioner Hoffman inquired how the project will be funded. There was a discussion about City, School and grants along with contributions from individual organizations. In the past, organizations have funded projects from tournament revenue and increased participation fees. The Fastpitch Association recently contributed to some improvements at Pennsylvania Park. Many other projects involved financial partnerships with the city also. Ms. Walsh advised a contribution from Fastpitch will be requested should the process continue to move forward. Commissioner Griffin confirmed the next step will be the June 12, City Council Study Session. The Commission and Fastpitch Association members agreed to the June 12 date. Ms. Amberg also confirmed she can attend the June 12 meeting. Ms. Walsh stated she will confirm the meeting by early June. City Council Meeting of June 19, 2017 (Item No. 4l) Page 6 Title: Parks & Recreation Advisory Commission Meeting Minutes of May 3, 2017 In response to a question from Ms. Collins, Ms. Walsh advised the minutes from tonight’s meeting will be available after they are approved. Mr. Beane advised the golf cart ordered requested by the Fastpitch Association has been ordered. He also stated fences are up at Pennsylvania Park and a drinking fountain is ready for use. Ms. Walsh stated a storage location should be discussed with Mr. Beane. In response to a question from Ms. Burns, there was a brief discussion about the Commission’s second and third option choice. Commissioner May indicated Dakota would be a last choice. Commissioner Griffin agreed, although the draft looks like a good option, it is not feasible. Commissioner Hagemann mentioned 1A as a potential 3rd Option. 5. Old Business a. ROC Update • Grand Opening: Sunday, May 21, 2 – 5 p.m. (Conjunction with Ice Cream Social) Mr. West distributed ROC magnets to the Commission Members. He stated the magnets will be given to the first thousand attendees at the ROC Grand Opening Event on May 21. The Grand Opening will be in conjunction with the Children First Ice Cream Social. He distributed copies of the layout of activity locations. He stated entertainment will include dance groups, singing groups and vendors, along with ice cream and the kid’s garage sale. There will be an official Mayor ribbon cutting at 2:35 p.m. please try to attend and arrive by 2:15. The rooftop of the ROC is in the process of installation. It must be stretched every day. The electric work is complete. In fact, the lights will be on until 9:30 p.m. tonight. He also mentioned the sound system is going in this week. The facility will be ready by May 21. There are already birthdays and a wedding booked. The Float and Flick event will be using the ROC. b. Minnehaha Creek Clean-up Recap Jim Vaughan (Natural Resources Coordinator) provided a recap and thank you note for Ms. Walsh to read to the Commission. Over 75 people attended. The boys and girls lacrosse teams were especially helpful. There were lots of items pulled from the creek. 6. Staff Communication Ms. Walsh reminded the Commission Arbor Day is Saturday, May 6. There is a tree planting event at the ROC at 9 a.m. Tree Trust will lead and train volunteers. Ms. Walsh provided an update on the Request for Proposals for architectural services for the Westwood Hills Nature Center building project. There were eleven architectural firms from various states who responded to the Request for Proposals. The proposals have been narrowed down to six. Commissioner Griffin asked if there is an estimated opening date. Ms. Walsh advised sometime in 2019. Mr. West, Sean Walther (Planning/Zoning Supervisor), City Council Meeting of June 19, 2017 (Item No. 4l) Page 7 Title: Parks & Recreation Advisory Commission Meeting Minutes of May 3, 2017 Commissioner G. Foulkes and Mark Oestreich (Nature Center Manager) will interview representatives from six of the firms. The Commission will make a recommendation to Council and will have the best choice attend a Commission meeting. They plan to have a recommendation by the end of next week. Mr. West stated California Skate Parks was selected for the new skate park project. He will send out an e-mail regarding a user group meeting. Commissioner Bluma is on the task force. Mr. Beane mentioned he received a request for a Gaga pit at the Junior High School. Mr. Beane explained a Gaga pit is used for a game. The Girl Scouts will submit a petition. 7. Member Communication Commissioner Hagemann requested the Commission members submit a comment for the Vision Board before leaving tonight if they were unable to write one at the Minnehaha Creek clean up. He would like each Commission member to write down one wish for St. Louis Park. Ms. Walsh mentioned it is her understanding there will be a Vision Board at the ice cream social as well. Commissioner Foulkes commented on the nature art pictures by Chelsey Bahe at the nature center. He stated the pictures are fantastic. Ms. Walsh mentioned they are on the website. Commissioner Hagemann stated Chelsey will be at the Children First Ice Cream Social creating nature art with children. Commissioner Hoffmann mentioned the name change for Lake Calhoun and inquired if there are potential offensive names in St. Louis Park. Ms. Walsh stated she is not aware of any. 8. Other / Future Agenda Items • Ms. Walsh suggested late May or Early June for the next Commission meeting. The Commission agreed to June 7 at 6 p.m. • Ms. Walsh advised this is the last meeting for Commissioner S. Foulkes. She is resigning from her Commission position. She will be missed. 9. Adjournment It was moved by Commissioner G. Foulkes and seconded by Commissioner S. Foulkes to adjourn at 8:12 p.m. The motion passed 7 - 0. Respectfully submitted, Carrie Mandler Carrie Mandler Recording Secretary Meeting: City Council Meeting Date: June 19, 2017 Public Hearing Agenda Item: 6a EXECUTIVE SUMMARY TITLE: 2016 Annual MS4 Stormwater Pollution Prevention Plan (SWPPP) Meeting RECOMMENDED ACTION: None at this time. Each year the City is required to hold a public meeting to provide an opportunity for residents to review and comment on its Storm Water Pollution Prevention Plan and its storm water management program. This agenda item serves to meet this requirement. After a staff presentation the Mayor is asked to open up the meeting for public comment. POLICY CONSIDERATION: Does the City Council have questions or concerns regarding the City’s Stormwater Pollution Prevention Plan? SUMMARY: The purpose of this report is to provide the Council with a summary of stormwater activities conducted in 2016 and to solicit comments from the public on the operation and management of the storm water system throughout the City of St. Louis Park as a part of the City’s Municipal Separate Stormwater System (MS4) permit. The City of St. Louis Park has a permit with the Minnesota Pollution Control Agency (MPCA) for the discharge of stormwater from the city. This permit is required based on the 1987 amendment to the Environmental Protection Agency (EPA) Clean Water Act, through the National Pollutant Discharge Elimination System (NPDES). St Louis Park, along with over 200 other Minnesota cities, is permitted as a Municipal Separate Stormwater System (MS4). As a part of the MS4 permit, the City is required to hold a public meeting in which residents have an opportunity to review the City’s Storm Water Pollution Prevention Plan (SWPPP) and comment on its stormwater management program. These comments are then recorded and considered for incorporation in the City’s SWPPP. This meeting is held at a regular City Council meeting to increase awareness of this important initiative. FINANCIAL OR BUDGET CONSIDERATION: Not applicable at this time. VISION CONSIDERATION: St. Louis Park is committed to being a leader in environmental stewardship. We will increase environmental consciousness and responsibility in all areas of city business. SUPPORTING DOCUMENTS: Discussion 2016 SWPPP Stormwater Activity Highlights 2017 SWPPP Stormwater Initiatives Prepared by: Erick Francis, Water Resources Manager Reviewed by: Debra M. Heiser, Engineering Director Approved by: Nancy Deno, Deputy City Manager/HR Director City Council Meeting of June 19, 2017 (Item No. 6a) Page 2 Title: 2016 Annual MS4 Stormwater Pollution Prevention Plan (SWPPP) Meeting DISCUSSION Each year the City of St. Louis Park is required to prepare an annual report, which discusses the status of compliance with NPDES MS4 Stormwater Permit Conditions. Cities use programmatic requirements to reduce pollutants discharged to the “maximum extent practicable” through the implementation of Best Management Practices. The City’s Stormwater Pollution Prevention Plan (SWPPP) exceeds the MPCA’s minimum permit requirements. Best Management Practices (BMPs) are practices, techniques, and measures that prevent or reduce water pollution from nonpoint sources by using the most effective and practicable means of achieving water quality goals. BMPs include, but are not limited to, official controls, structural and nonstructural controls, and operation and maintenance procedures. The information requested by the MPCA is meant to provide the basis for an assessment of the appropriateness of the BMPs and the progress that has been made toward achieving the identified goals for each of the minimum control measures. This assessment is based on results collected and analyzed from inspection findings and public input received during the reporting period. The City continues to move forward with the Minimum Control Measures (MCM) identified in the city’s SWPPP. The following outlines a few of the 2017 Initiatives: •High Priority for 2017 is the implementation of the new Rainwater Rewards Program, which includes the following: o Grant funding program to promote implementation of private stormwater management projects on residential properties. o Education on stormwater BMPs for residents of the city o Educate the public on the importance of managing stormwater •Host an additional public open house on June 14, 2017 to receive comments on the city’s SWPPP •Continue partnership with Clean Water Minnesota Collaborative to include focused messaging to single family homeowners and trackable results •Start updating of the city’s Local Stormwater Management Plan While we are always continuing to refine our process to reduce pollutants from entering our surface waters and record keeping procedures, we do not anticipate any significant changes or modifications to the SWPPP in 2017. St. Louis Park Engineering Department • 5005 Minnetonka Blvd., St. Louis Park, MN 55416 www.stlouispark.org • Phone: 952.924.2656 • Fax: 952.924.2662 • TTY: 952.924.2518 Highlight of Activities for the 2016 City of St. Louis Park Stormwater Pollution Prevention Program Outlined below are the stormwater management responsibilities that have been accomplished during the 2016 calendar year. These responsibilities are required and were completed in conjunction with the City of St. Louis Park’s National Pollution Discharge Elimination System (NPDES) Small Municipal Separate Storm Sewer System (MS4) permit is issued by the Minnesota Pollution Control Agency (MPCA) MCM‐1 Public Education and Outreach Activities Permit Requirement: Permittee’s shall implement a public education program that informs the public of the impact that stormwater discharges have on water bodies and to include actions that citizens can take to reduce the discharge of pollutants into stormwater and surface waters. Activities Competed: Selected a high priority stormwater related issue for review and updating Illicit Discharge Detection and Elimination Refine existing program by developing webpage and provide training to city staff on Illicit Discharge Detection and Elimination Distributed other stormwater management related educational materials Park Perspective (circulation of 46,000 residents) City website (1,535 clicks) School presentations (42,506 students educated at Westwood Hills Nature Center) Sun Sailor (27,350 people) Participate in Clean Water Minnesota Outreach Program Social media outreach on stormwater management Participated in 23 workshops and educational forums related to stormwater management and the environment City Council Meeting of June 19, 2017 (Item No. 6a) Title: 2016 Annual MS4 Stormwater Pollution Prevention Plan (SWPPP) Meeting Page 3 Description of Activity Date Westwood Nature Center Environmental Programs 2016 Ready and Resilient Guide 2/1/2016 Green Step Cities Workshop 2/1/2016 Home Remodeling Fair 4/13/2016 Organic Living Workshop 4/16/2016 Parktacular 4/19/2016 SWPPP Public Open House 4/19/2016 Beatify the Park 4/22/2016 Minnehaha Creek Clean 5/7/2016 Compost Bin and Rain Barrel sale 5/7 & 5/9/16 Arbor Day 5/14/2016 Ice Cream Social 5/15/2016 Rain Garden Workshop 5/25/2016 Learning with Trees 5/25/2016 SWPPP Annual Report Presentation to City Council 6/6/2016 Spring City Clean-ups 6/11/16, 9/24/16 Fire Station Open House 6/14/2016 Park the Street 2 7/1/2016 National Night Out 8/2/2016 Fall City Clean Up 9/24/2016 Woman's Environmental Network 10/1/2016 Community Tree Plantings at Minikahda Vista and Pennsylvania Parks 10/5, 7/2016 Great River Greening Buckthorn Bust at Westwood Hills Nature Center 10/15/2016 MCM‐2 Public Involvement and Participation Permit Requirement: Permittee’s shall implement Public Participation/Involvement program to solicit public input on the Storm Water Pollution Prevention Plan (SWPPP). Activities Competed: Held additional public open house on June 14, 2019 to receive comments on the city’s SWPPP Held Public meeting to receive comments on the SWPPP on June 19, 2017 City Council Meeting of June 19, 2017 (Item No. 6a) Title: 2016 Annual MS4 Stormwater Pollution Prevention Plan (SWPPP) Meeting Page 4 MCM‐3 Illicit Discharge Detection and Elimination Permit Requirement: Permittee’s shall implement and enforce a program to detect and eliminate illicit discharges into the City’s storm sewer system. Activities Competed: Observed 16 Illicit Discharges and responded with verbal warnings and letters of warning on Illicit Discharge Monitored identified areas and storm sewer outfalls for illicit stormwater discharges as part of performing routine duties Developed comprehensive training program for City Staff and Developed webpage for Illicit Discharge Detection and Elimination to education and response plans MCM‐4 Construction Site Storm Water Run‐off Control Permit Requirement: Permittee’s shall implement and enforce a Construction Site Stormwater Runoff Control program that reduces pollutants in stormwater runoff related to construction activity. Activities Competed: Performed 7 plan reviews on projects greater than one acre Performed 44 plan reviews on projects less than one acre Issued 51 erosion and sediment control permits Performed 140 inspections on 17 projects greater than one acre Performed 389 compliance inspections on 69 projects Issued 122 notices of violation for noncompliance o No monetary fines or site shutdowns were issued MCM‐5 Post Construction Runoff Control Permit Requirement: Permittee’s shall implement and enforce a Post-Construction Stormwater Management Program that prevents or reduces water pollution after construction activity is completed. Activities Competed: o Provided stormwater management plan review for 5 projects greater than one acre o Provided stormwater management plan review for 6 projects less than one acre o BMPs included underground treatment cells, ponds, and biofiltraiton basins City Council Meeting of June 19, 2017 (Item No. 6a) Title: 2016 Annual MS4 Stormwater Pollution Prevention Plan (SWPPP) Meeting Page 5 MCM‐6 Pollution Prevention/Good Housekeeping for Municipal Operations Permit Requirement: Permittee’s shall develop and implement an operations and maintenance program that prevents or reduces the discharge of pollutants from permittee owned and operated facilities. Activities Competed: Implement stormwater best management practices as part of the 2017 Pavement Management Project and Municipal State Project (Texas Avenue), including: Pervious Pavement Tree Trench’s SAFL Baffle and Sump Manholes Reduction in impervious surfaces Inspected over 37 outfalls within the City of St. Louis Park Inspected over 19 ponds within the City of St. Louis Park Inspected 145 catch basins Televised 1,532 feet of storm sewer Swept over 620 miles of streets (155 miles within City 4 times) Removed approximately 6,681 cubic yards of material from city streets Inspected stockpile and storage areas quarterly Continued to evaluate operations policies and practices and to look for areas to improve process and reduce pollution Residents of the City of St. Louis Park are encouraged to review and comment on the City’s SWPPP, which can be found on the City’s Stormwater Page: http://www.stlouispark.org/storm-water/pollution-prevention-plan.html For additional information on the Small Municipal Separate Storm Sewer System (MS4) Permit, which provides the guidance for the aforementioned items, can be found on the Minnesota Pollution Control Agency’s website: http://www.pca.state.mn.us/index.php/water/water-types-and- programs/stormwater/municipal-stormwater/municipal-separate-storm-sewer-systems- ms4.html If you have further questions on the stormwater pollution prevention program and stormwater management within the City of St. Louis Park, feel free to contact Erick Francis, Water Resources Manager, at 952-924-2690 or at efrancis@stlouispark.org. City Council Meeting of June 19, 2017 (Item No. 6a) Title: 2016 Annual MS4 Stormwater Pollution Prevention Plan (SWPPP) Meeting Page 6 St. Louis Park Engineering Department • 5005 Minnetonka Blvd., St. Louis Park, MN 55416 www.stlouispark.org • Phone: 952.924.2656 • Fax: 952.924.2662 • TTY: 952.924.2518 Stormwater Initiatives for the 2017 City of St. Louis Park Stormwater Pollution Prevention Program Outlined below are the stormwater management initiatives that will be proposed during the 2017 calendar year. These responsibilities are required and were completed in conjunction with the City of St. Louis Park’s National Pollution Discharge Elimination System (NPDES) Small Municipal Separate Storm Sewer System (MS4) permit is issued by the Minnesota Pollution Control Agency (MPCA) MCM‐1 Public Education and Outreach Activities Permit Requirement: Permittee’s shall implement a public education program that informs the public of the impact that stormwater discharges have on water bodies and to includes actions that citizens can take to reduce the discharge of pollutants into stormwater and surface waters. Activities to Initiate: Select high priority stormwater related issue o Rainwater Rewards Program Continue to promote stormwater pollution prevention throughout the city including o Sun Sailor o Partner with Clean Water Minnesota Outreach Program o Park Perspective o Social media o Refine webpages as part of new website o Partner with other city’s, watershed, and other orginizations activities and workshops o Continue Westwood Hills Nature Center educational programs o Update Surface Water Management Plan City Council Meeting of June 19, 2017 (Item No. 6a) Title: 2016 Annual MS4 Stormwater Pollution Prevention Plan (SWPPP) Meeting Page 7 MCM‐2 Public Involvement and Participation Permit Requirement: Permittee’s shall implement Public Participation/Involvement program to solicit public input on the Storm Water Pollution Prevention Plan (SWPPP). Activities to Initiate: Hold public open house to receive comments in March 2018 Hold annual public meeting to present SWPPP to City Council in March 2018 MCM‐3 Illicit Discharge Detection and Elimination Permit Requirement: Permittee’s shall implement and enforce a program to detect and eliminate illicit discharges into the City’s storm sewer system. Activities to Initiate: Continue Illicit Discharge Detection and Elimination Program o Refine mapping o Increase inspection frequency o Provide city staff training program on Illicit Discharge o Maintain to refine web page for public education and reporting of Illicit Discharge MCM‐4 Construction Site Storm Water Run‐off Control Permit Requirement: Permittee’s shall implement and enforce a Construction Site Stormwater Runoff Control program that reduces pollutants in stormwater runoff related to construction activity. Activities to Initiate: Implement a Damage Deposit Collection for the issuance of erosion and sediment control permits of $3,000 an acre Continue erosion control site plan review, site inspection, and enforcement Continue to educate city staff and the public about the importance of construction stormwater management and erosion and sediment control MCM‐5 Post Construction Runoff Control Permit Requirement: Permittee’s shall implement and enforce a Post-Construction Stormwater Management Program that prevents or reduces water pollution after construction activity is completed. Activities to Initiate: Continue to review plans and work with local watersheds to maintain compliance City Council Meeting of June 19, 2017 (Item No. 6a) Title: 2016 Annual MS4 Stormwater Pollution Prevention Plan (SWPPP) Meeting Page 8 MCM‐6 Pollution Prevention/Good Housekeeping for Municipal Operations Permit Requirement: Permittee’s shall develop and implement an operations and maintenance program that prevents or reduces the discharge of pollutants from permittee owned and operated facilities. Activities to Initiate: Review 2018 projects and identify potential stormwater best management practices that would reduce runoff on local street projects Continue routine inspections and maintenance practices, i.e. street sweeping, storm sewer inspection, and maintenance work in 2017 Continue the use of Cartegraph in 2017, which is an asset management software, that categorically identifies, documents, and tracks inspection findings and communicates suggested maintenance Residents of the City of St. Louis Park are encouraged to review and comment on the City’s SWPPP, which can be found on the City’s Stormwater Page: http://www.stlouispark.org/storm-water/pollution-prevention-plan.html For additional information on the Small Municipal Separate Storm Sewer System (MS4) Permit, which provides the guidance for the afore mentioned items, can be found on the Minnesota Pollution Control Agency’s website: http://www.pca.state.mn.us/index.php/water/water-types-and- programs/stormwater/municipal-stormwater/municipal-separate-storm-sewer-systems- ms4.html If you have further questions on the stormwater pollution prevention program and stormwater management within the City of St. Louis Park, feel free to contact Erick Francis, Water Resources Manager, at 952-924-2690 or at efrancis@stlouispark.org. City Council Meeting of June 19, 2017 (Item No. 6a) Title: 2016 Annual MS4 Stormwater Pollution Prevention Plan (SWPPP) Meeting Page 9 Meeting: City Council Meeting Date: June 19, 2017 Action Agenda Item: 8a EXECUTIVE SUMMARY TITLE: Resolution Confirming Appointment of Karen Barton to the Position of Community Development Director RECOMMENDED ACTION: Motion to Adopt Resolution confirming the appointment of Karen Barton to the position of Community Development Director. POLICY CONSIDERATION: None at this time. SUMMARY: With the phased retirement of Kevin Locke, a vacancy has been created in the position of Community Development Director. Following an extensive recruitment and selection process, the City Manager has selected Karen Barton to fill this position. City Charter Section 5.04: Powers and Duties of the City Manager, states that with the consent of the Council, the City Manager may appoint all department heads and other officers of the City. At this time, the City Manager is seeking confirmation from the Council of the appointment of Karen Barton as Community Development Director. Ms. Barton has over 20 years of experience working in the public sector. Most recently, Ms. Barton has been the Assistant Community Development Director for the City of Richfield for the past nine years. In addition to Richfield, she has worked for other cities and counties in various positions in the planning and economic development areas. The City of St. Louis Park will be fortunate to have her bring her many talents and abilities to our community. Upon approval of the City Council, Ms. Barton will begin work at St. Louis Park on July 17, 2017. FINANCIAL OR BUDGET CONSIDERATION: Not applicable. VISION CONSIDERATION: Not applicable. SUPPORTING DOCUMENTS: Resolution Prepared by: Ali Timpone, HR Manager Reviewed by: Nancy Deno, Deputy City Manager/HR Director Approved by: Tom Harmening, City Manager City Council Meeting of June 19, 2017 (Item No. 8a) Page 2 Title: Resolution Confirming Appointment of Karen Barton to the Position of Community Development Director RESOLUTION NO. 17-____ RESOLUTION OF THE CITY COUNCIL OF ST. LOUIS PARK, MINNESOTA, CONFIRMING THE APPOINTMENT OF KAREN BARTON TO THE POSITION OF COMMUNITY DEVELOPMENT DIRECTOR WHEREAS, St. Louis Park City Charter Section 5.04 grants authority to the City Manager to control and direct the administration of the City’s affairs and to appoint, with the consent of the Council, all Department Heads; and WHEREAS, the phased retirement of Kevin Locke has resulted in a vacancy in the position of Community Development Director; and WHEREAS, the City Manager has conducted an extensive recruitment and selection process and as a result of that process, now wishes to appoint Karen Barton to the position of Community Development Director; NOW THEREFORE BE IT RESOLVED that the City Council of the City of St. Louis Park, Minnesota confirms the decision of the City Manager to appoint Ms. Barton to the position of Community Development Director. Reviewed for Administration: Adopted by the City Council June 19, 2017 Thomas K. Harmening, City Manager Jake Spano, Mayor Attest: Melissa Kennedy, City Clerk Meeting: City Council Meeting Date: June 19, 2017 Action Agenda Item: 8b EXECUTIVE SUMMARY TITLE: General Obligation Bonds, Series 2017A RECOMMENDED ACTION: Motion to Adopt Resolution Awarding the Sale of General Obligation Bonds, Series 2017A. POLICY CONSIDERATION: Does the City Council desire to approve the resolution awarding the sale of General Obligation Bonds, Series 2017A? SUMMARY: At the May 1st study session, staff and Council reviewed the 2017 bond issue and future issues with our debt model. In addition, on May 15th the Council approved a resolution authorizing the sale of the bonds. The Charter General Obligations Bonds of $3,430,000 will fund the current year Sidewalk and Trails projects, fiber installation, and a portion of the City’s SWLRT obligation. The G.O. Revenue Bonds of $4,985,000 will finance all or a portion of capital projects within the Water and Sewer funds this year including a portion for the WTP #4 project in 2017, with the remaining financing for this project occurring in 2018. The refunding bonds of $1,585,000 will refinance the 2010B bonds for interest rate saving purposes. On June 9th, City staff conducted a credit review with Standard and Poor’s and at the time of writing the staff report S&P has not released its report. The competitive bids for the bonds will be received and tabulated by the City’s municipal advisor, Ehlers & Associates, Inc. on Monday June 19th at 11:00am. Ehlers will present the competitive bids received and recommendation to the City Council at the June 19th Council meeting. FINANCIAL OR BUDGET CONSIDERATION: The Charter G.O. Bonds, which are 10 years and repaid with tax levy are estimated at a True Interest Cost (TIC) of 2.24% and annual Principal and Interest repayment of ($382,222 to $386,770). The G.O. Revenue Bonds, which are 15 years and repaid with water and sewer rates are estimated at a TIC of 2.57% and annual Principal and Interest repayment of ($398,278 to $407,478). VISION CONSIDERATION: Not applicable. SUPPORTING DOCUMENTS: Resolution Prepared by: Tim Simon, Chief Financial Officer Reviewed by: Nancy Deno, Deputy City Manager/HR Director Approved by: Tom Harmening, City Manager City Council Meeting of June 19, 2017 (Item No. 8b) Page 2 Title: General Obligation Bonds, Series 2017A Extract of Minutes of Meeting of the City Council of the City of St. Louis Park, Hennepin County, Minnesota Pursuant to due call and notice thereof, a regular meeting of the City Council of the City of St. Louis Park, Minnesota, was duly held in the City Hall in said City on Monday, June 19, 2017, commencing at 7:30 P.M. The following members were present: and the following were absent: * * * * * * * * * The Mayor announced that the next order of business was consideration of the proposals which had been received for the purchase of the City’s General Obligation Bonds, Series 2017A, to be issued in the original aggregate principal amount of $________. The City Manager presented a tabulation of the proposals which had been received in the manner specified in the Terms of Proposal for the Bonds. The proposals were as set forth in EXHIBIT A attached. After due consideration of the proposals, Member ____________ then introduced the following written resolution, the reading of which was dispensed with by unanimous consent, and moved its adoption: City Council Meeting of June 19, 2017 (Item No. 8b) Page 3 Title: General Obligation Bonds, Series 2017A RESOLUTION NO. 17-_____ A RESOLUTION AWARDING THE SALE OF GENERAL OBLIGATION BONDS, SERIES 2017A, IN THE ORIGINAL AGGREGATE PRINCIPAL AMOUNT OF $________; FIXING THEIR FORM AND SPECIFICATIONS; DIRECTING THEIR EXECUTION AND DELIVERY; PROVIDING FOR THEIR PAYMENT; AND PROVIDING FOR THE REDEMPTION OF BONDS REFUNDED THEREBY BE IT RESOLVED By the City Council of the City of St. Louis Park, Hennepin County, Minnesota (the “City”) as follows: Section 1. Sale of Bonds. 1.01. Charter Bonds. (a) Pursuant to Section 6.15 of the City Charter (the “Charter”) and Minnesota Statutes, Chapter 475, as amended (the “Municipal Debt Act”), the City is authorized to issue general obligation bonds for any purpose permitted by state law upon a vote of at least six (6) members of the City Council. (b) The City has determined to finance the construction of projects related to sidewalks, trails, SWLRT, and fiber extension in the City (the “Capital Projects”), and on May 15, 2017, the City authorized the issuance of general obligation bonds for the Capital Projects by a vote of 7-0. (c) It is necessary and expedient to the sound financial management of the affairs of the City to issue its obligations in the aggregate principal amount of $_____________ (the “Charter Bonds”), pursuant to the City Charter and the Municipal Debt Act, to provide financing for the Capital Projects. 1.02. Utility Revenue Bonds. (a) The City engineer has recommended the construction of various improvements to the City’s water and sewer systems (the “Utility Improvements”), pursuant to Minnesota Statutes, Chapters 444 and 475, as amended (collectively, the “Utility Revenue Act”). (b) It is necessary and expedient to the sound financial management of the affairs of the City to issue general obligations in the aggregate principal amount of $____________ (the “Utility Revenue Bonds”), pursuant to the Utility Revenue Act, to provide financing for the Utility Improvements. 1.0.3 Refunding Bonds. (a) On May 7, 2010, the City issued its General Obligation Bonds, Series 2010B (the “Refunded Bonds”), in the original aggregate principal amount of $5,935,000, which are currently outstanding in the principal amount of $1,555,000 and may be called for redemption on or after February 1, 2017. The Refunded Bonds were issued, in part, pursuant to the Utility Revenue Act to finance and refinance City Council Meeting of June 19, 2017 (Item No. 8b) Page 4 Title: General Obligation Bonds, Series 2017A improvements to the water and sewer systems of the City (the “Prior Utility Improvements”). (b) The City is authorized by Section 475.67, subdivision 3 of the Municipal Debt Act to issue and sell its general obligation bonds to refund obligations and the interest thereon before the due date of the obligations, if consistent with covenants made with the holders thereof, when determined by the City Council to be necessary or desirable for the reduction of debt service costs to the City or for the extension or adjustment of maturities in relation to the resources available for their payment. (c) It is necessary and desirable for the reduction of debt service costs to the City to issue general obligations in the aggregate principal amount of $____________ (the “Refunding Bonds”), pursuant to the Municipal Debt Act, specifically Section 475.67, subdivision 3, to refund the outstanding Refunded Bonds and refinance the Prior Utility Improvements. 1.04. Issuance of General Obligation Bonds. (a) It is necessary and expedient to the sound financial management of the affairs of the City to issue its General Obligation Bonds, Series 2017A (the “Bonds”), in the original aggregate principal amount of $________, pursuant to the Municipal Debt Act and the Utility Revenue Act (together, the “Act”) and the City Charter, in order to provide financing for the Capital Projects and the Utility Improvements and to refund the outstanding Refunded Bonds. (b) The City is authorized by Section 475.60, subdivision 2(9) of the Act to negotiate the sale of the Bonds, it being determined that the City has retained an independent municipal advisor in connection with such sale. The actions of the City staff and municipal advisor in negotiating the sale of the Bonds are ratified and confirmed in all aspects. 1.05. Award to the Purchaser and Interest Rates. The proposal of ________________ (the “Purchaser”) to purchase the Bonds is hereby found and determined to be a reasonable offer and is hereby accepted, the proposal being to purchase the Bonds at a price of $___________ (par amount of $________, [plus original issue premium of $_________,] [less original issue discount of $__________,] less underwriter’s discount of $____________), plus accrued interest to date of delivery, if any, for Bonds bearing interest as follows: Year Interest Rate Year Interest Rate 2018 % 2026 % 2019 2027 2020 2028 2021 2029 2022 2030 2023 2031 2024 2032 2025 2033 True interest cost: ________________% City Council Meeting of June 19, 2017 (Item No. 8b) Page 5 Title: General Obligation Bonds, Series 2017A 1.06. Purchase Contract. The amount proposed by the Purchaser in excess of the minimum bid shall be credited to the accounts in the Debt Service Fund hereinafter created, deposited in the accounts in the Construction Fund hereinafter created, or deposited in the Redemption Fund hereinafter created, as determined by the Chief Financial Officer of the City in consultation with the City’s municipal advisor. The Chief Financial Officer is directed to retain the good faith check of the Purchaser, pending completion of the sale of the Bonds, and to return the good faith checks of the unsuccessful proposers. The Mayor and City Manager are directed to execute a contract with the Purchaser on behalf of the City. 1.07. Terms and Principal Amounts of the Bonds. The City will forthwith issue and sell the Bonds pursuant to the Act, in the total principal amount of $________, originally dated July 13, 2017, in the denomination of $5,000 each or any integral multiple thereof, numbered No. R-1, upward, bearing interest as above set forth, and maturing serially on February 1 in the years and amounts as follows: Year Amount Year Amount 2018 $ 2026 $ 2019 2027 2020 2028 2021 2029 2022 2030 2023 2031 2024 2032 2025 2033 (a) $_____________ of the Bonds, constituting the Charter Bonds, maturing on February 1 in the years and in the amounts set forth below, are being used to finance the Capital Projects: Year Amount Year Amount 2019 $ 2024 $ 2020 2025 2021 2026 2022 2027 2023 2028 (b) $___________ of the Bonds, constituting the Utility Revenue Bonds, maturing on February 1 in the years and in the amounts set forth below, are being used to finance the Utility Improvements: City Council Meeting of June 19, 2017 (Item No. 8b) Page 6 Title: General Obligation Bonds, Series 2017A Year Amount Year Amount 2019 $ 2027 $ 2020 2028 2021 2029 2022 2030 2023 2031 2024 2032 2025 2033 2026 (c) The remainder of the Bonds in the principal amount of $____________, constituting the Refunding Bonds, maturing on February 1 in the years and in the amounts set forth below, are being used to refund the outstanding Refunded Bonds and finance the Prior Utility Improvements: Year Amount Year Amount 2018 $ 2022 $ 2019 2023 2020 2024 2021 2025 1.08. Optional Redemption. The City may elect on February 1, 2026, and on any day thereafter to prepay Bonds due on or after February 1, 2027. Redemption may be in whole or in part and if in part, at the option of the City and in such manner as the City will determine. If less than all Bonds of a maturity are called for redemption, the City will notify DTC (as defined in Section 8 hereof) of the particular amount of such maturity to be prepaid. DTC will determine by lot the amount of each participant’s interest in such maturity to be redeemed and each participant will then select by lot the beneficial ownership interests in such maturity to be redeemed. Prepayments will be at a price of par plus accrued interest. [1.09. Mandatory Redemption; Term Bonds. To be completed if Term Bonds are requested by the Purchaser.] Section 2. Registration and Payment. 2.01. Registered Form. The Bonds will be issued only in fully registered form. The interest thereon and, upon surrender of each Bond, the principal amount thereof, is payable by check or draft issued by the Registrar described herein. 2.02. Dates; Interest Payment Dates. Each Bond will be dated as of the last interest payment date preceding the date of authentication to which interest on the Bond has been paid or made available for payment, unless (i) the date of authentication is an interest payment date to which interest has been paid or made available for payment, in which case the Bond will be dated as of the date of authentication, or (ii) the date of authentication is prior to the first interest payment date, in which case the Bond will be dated as of the date of original issue. The interest on the Bonds is payable on February 1 and August 1 of each year, commencing February 1, 2018, to the registered owners of record thereof as of the close of business on the fifteenth day of the immediately preceding month, whether or not such day is a business day. City Council Meeting of June 19, 2017 (Item No. 8b) Page 7 Title: General Obligation Bonds, Series 2017A 2.03. Registration. The City will appoint a bond registrar, transfer agent, authenticating agent and paying agent (the “Registrar”). The effect of registration and the rights and duties of the City and the Registrar with respect thereto are as follows: (a) Register. The Registrar must keep at its principal corporate trust office a bond register in which the Registrar provides for the registration of ownership of Bonds and the registration of transfers and exchanges of Bonds entitled to be registered, transferred or exchanged. (b) Transfer of Bonds. Upon surrender for transfer of a Bond duly endorsed by the registered owner thereof or accompanied by a written instrument of transfer, in form satisfactory to the Registrar, duly executed by the registered owner thereof or by an attorney duly authorized by the registered owner in writing, the Registrar will authenticate and deliver, in the name of the designated transferee or transferees, one or more new Bonds of a like aggregate principal amount and maturity, as requested by the transferor. The Registrar may, however, close the books for registration of any transfer after the fifteenth day of the month preceding each interest payment date and until that interest payment date. (c) Exchange of Bonds. When Bonds are surrendered by the registered owner for exchange the Registrar will authenticate and deliver one or more new Bonds of a like aggregate principal amount and maturity as requested by the registered owner or the owner’s attorney in writing. (d) Cancellation. Bonds surrendered upon transfer or exchange will be promptly cancelled by the Registrar and thereafter disposed of as directed by the City. (e) Improper or Unauthorized Transfer. When a Bond is presented to the Registrar for transfer, the Registrar may refuse to transfer the Bond until the Registrar is satisfied that the endorsement on the Bond or separate instrument of transfer is valid and genuine and that the requested transfer is legally authorized. The Registrar will incur no liability for the refusal, in good faith, to make transfers which it, in its judgment, deems improper or unauthorized. (f) Persons Deemed Owners. The City and the Registrar may treat the person in whose name a Bond is registered in the bond register as the absolute owner of the Bond, whether the Bond is overdue or not, for the purpose of receiving payment of, or on account of, the principal of and interest on the Bond and for all other purposes, and payments so made to a registered owner or upon the owner’s order will be valid and effectual to satisfy and discharge the liability upon the Bond to the extent of the sum or sums so paid. (g) Taxes, Fees and Charges. The Registrar may impose a charge upon the owner thereof for a transfer or exchange of Bonds sufficient to reimburse the Registrar for any tax, fee or other governmental charge required to be paid with respect to the transfer or exchange. (h) Mutilated, Lost, Stolen or Destroyed Bonds. If a Bond becomes mutilated or is destroyed, stolen or lost, the Registrar will deliver a new Bond of like amount, number, maturity date and tenor in exchange and substitution for and upon cancellation of the mutilated Bond or in lieu of and in substitution for any Bond destroyed, stolen or lost, upon City Council Meeting of June 19, 2017 (Item No. 8b) Page 8 Title: General Obligation Bonds, Series 2017A the payment of the reasonable expenses and charges of the Registrar in connection therewith; and, in the case of a Bond destroyed, stolen or lost, upon filing with the Registrar of evidence satisfactory to it that the Bond was destroyed, stolen or lost, and of the ownership thereof, and upon furnishing to the Registrar an appropriate bond or indemnity in form, substance and amount satisfactory to it and as provided by law, in which both the City and the Registrar must be named as obligees. Bonds so surrendered to the Registrar will be cancelled by the Registrar and evidence of such cancellation must be given to the City. If the mutilated, destroyed, stolen or lost Bond has already matured or been called for redemption in accordance with its terms it is not necessary to issue a new Bond prior to payment. (i) Redemption. In the event any of the Bonds are called for redemption, notice thereof identifying the Bonds to be redeemed will be given by the Registrar by mailing a copy of the redemption notice by first class mail (postage prepaid) to the registered owner of each Bond to be redeemed at the address shown on the registration books kept by the Registrar and by publishing the notice if required by law. Failure to give notice by publication or by mail to any registered owner, or any defect therein, will not affect the validity of the proceedings for the redemption of Bonds. Bonds so called for redemption will cease to bear interest after the specified redemption date, provided that the funds for the redemption are on deposit with the place of payment at that time. 2.04. Appointment of Initial Registrar. The City appoints Bond Trust Services Corporation, Roseville, Minnesota, as the initial Registrar. The Mayor and the City Manager are authorized to execute and deliver, on behalf of the City, a contract with the Registrar. Upon merger or consolidation of the Registrar with another corporation, if the resulting corporation is a bank or trust company authorized by law to conduct such business, the resulting corporation is authorized to act as successor Registrar. The City agrees to pay the reasonable and customary charges of the Registrar for the services performed. The City reserves the right to remove the Registrar upon thirty (30) days’ notice and upon the appointment of a successor Registrar, in which event the predecessor Registrar must deliver all cash and Bonds in its possession to the successor Registrar and must deliver the bond register to the successor Registrar. On or before each principal or interest due date, without further order of the City Council, the Chief Financial Officer must transmit to the Registrar moneys sufficient for the payment of all principal and interest then due. 2.05. Execution, Authentication and Delivery. The Bonds will be prepared under the direction of the City Manager and executed on behalf of the City by the signatures of the Mayor and the City Manager, provided that those signatures may be printed, engraved or lithographed facsimiles of the originals. If an officer whose signature or a facsimile of whose signature appears on the Bonds ceases to be such officer before the delivery of a Bond, that signature or facsimile will nevertheless be valid and sufficient for all purposes, the same as if the officer had remained in office until delivery. Notwithstanding such execution, a Bond will not be valid or obligatory for any purpose or entitled to any security or benefit under this resolution unless and until a certificate of authentication on the Bond has been duly executed by the manual signature of an authorized representative of the Registrar. Certificates of authentication on different Bonds need not be signed by the same representative. The executed certificate of authentication on a Bond is conclusive evidence that it has been authenticated and delivered under this resolution. When the Bonds have been so prepared, executed and authenticated, the City Manager will deliver the same to the Purchaser upon payment of the purchase price in accordance with the contract of sale heretofore made and executed, and the Purchaser is not obligated to see to the application of the purchase price. City Council Meeting of June 19, 2017 (Item No. 8b) Page 9 Title: General Obligation Bonds, Series 2017A 2.06. Temporary Bonds. The City may elect to deliver in lieu of printed definitive Bonds one or more typewritten temporary Bonds in substantially the form set forth in EXHIBIT B attached hereto with such changes as may be necessary to reflect more than one maturity in a single temporary bond. Upon the execution and delivery of definitive Bonds the temporary Bonds will be exchanged therefor and cancelled. Section 3. Form of Bond. 3.01. Execution of the Bonds. The Bonds will be printed or typewritten in substantially the form set forth in EXHIBIT B. 3.02. Approving Legal Opinion. The City Manager is authorized and directed to obtain a copy of the proposed approving legal opinion of Kennedy & Graven, Chartered, Minneapolis, Minnesota, which is to be complete except as to dating thereof and cause the opinion to be printed on or accompany each Bond. Section 4. Payment; Security; Pledges and Covenants. 4.01. Debt Service Fund. The Bonds will be payable from the General Obligation Bonds, Series 2017A Debt Service Fund (the “Debt Service Fund”) hereby created. The Debt Service Fund shall be administered and maintained by the Chief Financial Officer as a bookkeeping account separate and apart from all other funds maintained in the official financial records of the City. The City will maintain the following accounts in the Debt Service Fund: the “Capital Projects Account” and “Utility Improvements Account.” Amounts in the Capital Projects Account are irrevocably pledged to the Charter Bonds, and amounts in the Utility Improvements Account are irrevocably pledged to the Utility Revenue Bonds and the Refunding Bonds. (a) Capital Projects Account. The Chief Financial Officer shall timely deposit in the Capital Projects Account of the Debt Service Fund the ad valorem taxes levied hereunder (the “Taxes”) and allocated to the payment of debt service on the Charter Bonds, which Taxes are pledged to the Capital Projects Account. There is also appropriated to the Capital Projects Account a pro rata portion of (i) capitalized interest financed from the proceeds of the Charter Bonds and the Utility Revenue Bonds, if any; and (ii) amounts over the minimum purchase price paid by the Purchaser, to the extent designated for deposit in the Debt Service Fund in accordance with Section 1.06 hereof. (b) Utility Improvements Account. The City will continue to maintain and operate its Water Fund and Sewer Fund, to which will be credited all gross revenues of the water system and sewer system, respectively, and out of which will be paid all normal and reasonable expenses of current operations of such systems. Any balances therein are deemed net revenues (the “Net Revenues”) and will be transferred, from time to time, to the Utility Improvements Account of the Debt Service Fund, which Utility Improvements Account will be used only to pay principal of and interest on the Utility Revenue Bonds and the Refunding Bonds and any other bonds similarly authorized. There will always be retained in the Utility Improvements Account a sufficient amount to pay principal of and interest on all the Utility Revenue Bonds and the Refunding Bonds, and the Chief Financial Officer must report any current or anticipated deficiency in the Utility Improvements Account to the City Council. There is also appropriated to the Utility Improvements Account a pro rata portion of (i) capitalized interest financed from the City Council Meeting of June 19, 2017 (Item No. 8b) Page 10 Title: General Obligation Bonds, Series 2017A proceeds of the Charter Bonds and the Utility Revenue Bonds, if any; and (ii) amounts over the minimum purchase price paid by the Purchaser, to the extent designated for deposit in the Debt Service Fund in accordance with Section 1.06 hereof. 4.02. Construction Fund. The City hereby creates the General Obligation Bonds, Series 2017A Construction Fund (the “Construction Fund”). The City will maintain the following accounts in the Construction Fund: the “Capital Projects Account” and “Utility Improvements Account.” Amounts in the Capital Projects Account are irrevocably pledged to the Charter Bonds, and amounts in the Utility Improvements Account are irrevocably pledged to the Utility Revenue Bonds. (a) Capital Projects Account. Proceeds of the Charter Bonds, less the appropriations made in Section 4.01(a), together with Taxes and any other funds appropriated for the Capital Projects collected during the construction of the Capital Projects, will be deposited in the Capital Projects Account of the Construction Fund to be used solely to defray expenses of the Capital Projects and the payment of principal and interest on the Charter Bonds prior to the completion and payment of all costs of the Capital Projects. When the Capital Projects are completed and the cost thereof paid, the Capital Projects Account of the Construction Fund is to be closed and any funds remaining may be deposited in the Capital Projects Account of the Debt Service Fund. (b) Utility Improvements Account. Proceeds of the Utility Revenue Bonds, less the appropriations made in Section 4.01(b) hereof, will be deposited in the Utility Improvements Account of the Construction Fund to be used solely to defray expenses of the Utility Improvements. When the Utility Improvements are completed and the cost thereof paid, the Utility Improvements Account of the Construction Fund is to be closed and any funds remaining may be deposited in the Utility Improvements Account of the Debt Service Fund. 4.03. Redemption Fund. Proceeds of the Refunding Bonds, less the appropriations made in Section 4.01(b) hereof and the costs of issuance of the Refunding Bonds, will be deposited in a separate fund (the “Redemption Fund”) to be used solely to redeem and prepay the outstanding Refunded Bonds on August 15, 2017 (the “Redemption Date”). Any balance remaining in the Redemption Fund after the redemption of the Refunded Bonds on the Redemption Date shall be deposited in the Utility Improvements Account of the Debt Service Fund herein created. 4.04. City Covenants with Respect to the Utility Revenue Bonds. The City Council covenants and agrees with the holders of the Bonds that so long as any of the Bonds remain outstanding and unpaid, it will keep and enforce the following covenants and agreements: (a) The City will continue to maintain and efficiently operate the water system and sewer system as public utilities and conveniences free from competition of other like municipal utilities and will cause all revenues therefrom to be deposited in bank accounts and credited to the Water Fund and Sewer Fund, respectively, as hereinabove provided, and will make no expenditures from those accounts except for a duly authorized purpose and in accordance with this resolution. (b) The City will also maintain the Utility Improvements Account of the Debt Service Fund as a separate account and will cause money to be credited thereto from time City Council Meeting of June 19, 2017 (Item No. 8b) Page 11 Title: General Obligation Bonds, Series 2017A to time, out of Net Revenues from the water system and sewer system in sums sufficient to pay principal of and interest on the Utility Revenue Bonds when due. (c) The City will keep and maintain proper and adequate books of records and accounts separate from all other records of the City in which will be complete and correct entries as to all transactions relating to the water system and sewer system and which will be open to inspection and copying by any Bondholder, or the Bondholder’s agent or attorney, at any reasonable time, and it will furnish certified transcripts therefrom upon request and upon payment of a reasonable fee therefor, and said account will be audited at least annually by a qualified public accountant and statements of such audit and report will be furnished to all Bondholders upon request. (d) The City Council will cause persons handling revenues of the water system and sewer system to be bonded in reasonable amounts for the protection of the City and the Bondholders and will cause the funds collected on account of the operations of such systems to be deposited in a bank whose deposits are guaranteed under the Federal Deposit Insurance Law. (e) The City Council will keep the water system and sewer system insured at all times against loss by fire, tornado and other risks customarily insured against with an insurer or insurers in good standing, in such amounts as are customary for like plants, to protect the holders, from time to time, of the Bonds and the City from any loss due to any such casualty and will apply the proceeds of such insurance to make good any such loss. (f) The City and each and all of its officers will punctually perform all duties with reference to the water system and sewer system as required by law. (g) The City will impose and collect charges of the nature authorized by Section 444.075 of the Utility Revenue Act, at the times and in the amounts required to produce Net Revenues adequate to pay all principal and interest when due on the Utility Revenue Bonds and to create and maintain such reserves securing said payments as may be provided herein. (h) The City Council will levy general ad valorem taxes on all taxable property in the City when required to meet any deficiency in Net Revenues. 4.05. Prior Debt Service Fund. The debt service fund heretofore established for the Refunded Bonds pursuant to the resolution providing for the issuance and sale of the Refunded Bonds (the “Prior Resolution”) shall be closed following the redemption of the Refunded Bonds, and all monies therein shall be transferred to the Utility Improvements Account of the Debt Service Fund herein created. 4.06. Pledges in Prior Resolution. The pledges and covenants of the City made by the Prior Resolution relating to the ownership, protection of and other particulars governing the operation and management of the water and sewer systems of the City and the improvements thereto are restated and confirmed in all respects. The provisions of the Prior Resolution are hereby supplemented to the extent necessary to give full effect to the provisions hereof. 4.07. General Obligation Pledge. For the prompt and full payment of the principal of and interest on the Bonds, as the same respectively become due, the full faith, credit and taxing powers City Council Meeting of June 19, 2017 (Item No. 8b) Page 12 Title: General Obligation Bonds, Series 2017A of the City will be and are hereby irrevocably pledged. If the balance in the Debt Service Fund is ever insufficient to pay all principal and interest then due on the Bonds and any other bonds payable therefrom, the deficiency will be promptly paid out of monies in the general fund of the City which are available for such purpose, and such general fund may be reimbursed with or without interest from the Debt Service Fund when a sufficient balance is available therein. 4.08. Pledge of Taxes. For the purpose of paying the principal of and interest on the Charter Bonds, there is levied a direct annual irrepealable ad valorem tax upon all of the taxable property in the City, which will be spread upon the tax rolls and collected with and as part of other general taxes of the City. The Taxes will be credited to the Capital Projects Account of the Debt Service Fund above provided and will be in the years and amounts as attached hereto as EXHIBIT C. 4.09. Certification to Taxpayer Services Division Manager as to Debt Service Fund Amount. It is hereby determined that the estimated collection of the foregoing Taxes and Net Revenues will produce at least five percent (5%) in excess of the amount needed to meet when due the principal and interest payments on the Bonds. The tax levy herein provided is irrepealable until all of the Bonds are paid, provided that at the time the City makes its annual tax levies the Chief Financial Officer may certify to the Taxpayer Services Division Manager of Hennepin County, Minnesota (the “Taxpayer Services Division Manager”) the amount available in the Debt Service Fund to pay principal and interest due during the ensuing year, and the Taxpayer Services Division Manager will thereupon reduce the levy collectible during such year by the amount so certified. 4.10. Registration of Resolution. The City Manager is authorized and directed to file a certified copy of this resolution with the Taxpayer Services Division Manager and to obtain the certificate required by Section 475.63 of the Act. Section 5. Refunding of Refunded Bonds; Findings; Redemption of Refunded Bonds. 5.01. Purpose of Refunding. The Refunded Bonds will be called for redemption on the Redemption Date in the principal amount of $1,555,000. It is hereby found and determined that based upon information presently available from the City’s municipal advisor, the issuance of the Bonds, a portion of which will be used to redeem and prepay the Refunded Bonds, is consistent with covenants made with the holders of the Refunded Bonds and is necessary and desirable for the reduction of debt service costs to the City. 5.02. Application of Proceeds of Bonds. It is hereby found and determined that the proceeds of the Bonds deposited in the Redemption Fund, along with any other funds on hand in the debt service funds established pursuant to the Prior Resolution, will be sufficient to prepay all of the principal of, interest on and redemption premium (if any) on the Refunded Bonds. 5.03. Redemption; Date of Redemption; Notice of Call for Redemption. The Refunded Bonds maturing after the Redemption Date will be redeemed and prepaid on the Redemption Date. The Refunded Bonds will be redeemed and prepaid in accordance with their terms and in accordance with the terms and conditions set forth in the form of Notice of Call for Redemption attached hereto as EXHIBIT D, which terms and conditions are hereby approved and incorporated herein by reference. The registrar for the Refunded Bonds is authorized and directed to send a copy of each Notice of Call for Redemption to each registered holder of the Refunded Bonds at least thirty (30) days prior to the Redemption Date. City Council Meeting of June 19, 2017 (Item No. 8b) Page 13 Title: General Obligation Bonds, Series 2017A Section 6. Authentication of Transcript. 6.01. City Proceedings and Records. The officers of the City are authorized and directed to prepare and furnish to the Purchaser and to the attorneys approving the Bonds certified copies of proceedings and records of the City relating to the Bonds and to the financial condition and affairs of the City, and such other certificates, affidavits and transcripts as may be required to show the facts within their knowledge or as shown by the books and records in their custody and under their control, relating to the validity and marketability of the Bonds, and such instruments, including any heretofore furnished, will be deemed representations of the City as to the facts stated therein. 6.02. Certification as to Official Statement. The Mayor, the City Manager, and the Chief Financial Officer are authorized and directed to certify that they have examined the Official Statement prepared and circulated in connection with the issuance and sale of the Bonds and that to the best of their knowledge and belief the Official Statement is a complete and accurate representation of the facts and representations made therein as of the date of the Official Statement. 6.03. Other Certificates. The Mayor, the City Manager, and the Chief Financial Officer are hereby authorized and directed to furnish to the Purchaser at the closing such certificates as are required as a condition of sale. Unless litigation shall have been commenced and be pending questioning the Bonds or the organization of the City or incumbency of its officers, at the closing the Mayor, the City Manager, and the Chief Financial Officer shall also execute and deliver to the Purchaser a suitable certificate as to absence of material litigation, and the Chief Financial Officer shall also execute and deliver a certificate as to payment for and delivery of the Bonds. 6.04. Payment of Costs of Issuance. The City authorizes the Purchaser to forward the amount of Bond proceeds allocable to the payment of issuance expenses to KleinBank, Chaska, Minnesota on the closing date for further distribution as directed by the City’s municipal advisor, Ehlers & Associates, Inc. Section 7. Tax Covenant. 7.01. Tax -Exempt Bonds. The City covenants and agrees with the holders from time to time of the Bonds that it will not take or permit to be taken by any of its officers, employees or agents any action which would cause the interest on the Bonds to become subject to taxation under the Internal Revenue Code of 1986, as amended (the “Code”), and the Treasury Regulations promulgated thereunder, in effect at the time of such actions, and that it will take or cause its officers, employees or agents to take, all affirmative action within its power that may be necessary to ensure that such interest will not become subject to taxation under the Code and applicable Treasury Regulations, as presently existing or as hereafter amended and made applicable to the Bonds. 7.02. Rebate. The City will comply with requirements necessary under the Code to establish and maintain the exclusion from gross income of the interest on the Bonds under Section 103 of the Code, including without limitation requirements relating to temporary periods for investments, limitations on amounts invested at a yield greater than the yield on the Bonds, and the rebate of excess investment earnings to the United States. 7.03. Not Private Activity Bonds. The City further covenants not to use the proceeds of the Bonds or to cause or permit them or any of them to be used, in such a manner as to cause the City Council Meeting of June 19, 2017 (Item No. 8b) Page 14 Title: General Obligation Bonds, Series 2017A Bonds to be “private activity bonds” within the meaning of Sections 103 and 141 through 150 of the Code. 7.04. Qualified Tax-Exempt Obligations. In order to qualify the Bonds as “qualified tax- exempt obligations” within the meaning of Section 265(b)(3) of the Code, the City makes the following factual statements and representations: (a) the Bonds are not “private activity bonds” as defined in Section 141 of the Code; (b) the City designates the Bonds as “qualified tax-exempt obligations” for purposes of Section 265(b)(3) of the Code; (c) the reasonably anticipated amount of tax-exempt obligations (other than private activity bonds that are not qualified 501(c)(3) bonds) which will be issued by the City (and all subordinate entities of the City) during calendar year 2017 will not exceed $10,000,000; and (d) not more than $10,000,000 of obligations issued by the City during calendar year 2017 have been designated for purposes of Section 265(b)(3) of the Code. 7.05. Procedural Requirements. The City will use its best efforts to comply with any federal procedural requirements which may apply in order to effectuate the designations made by this section. Section 8. Book-Entry System; Limited Obligation of City. 8.01. DTC. The Bonds will be initially issued in the form of a separate single typewritten or printed fully registered Bond for each of the maturities set forth in Section 1.07 hereof. Upon initial issuance, the ownership of each Bond will be registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York, and its successors and assigns (“DTC”). Except as provided in this section, all of the outstanding Bonds will be registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of DTC. 8.02. Participants. With respect to Bonds registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of DTC, the City, the Registrar and the Paying Agent will have no responsibility or obligation to any broker dealers, banks and other financial institutions from time to time for which DTC holds Bonds as securities depository (the “Participants”) or to any other person on behalf of which a Participant holds an interest in the Bonds, including but not limited to any responsibility or obligation with respect to (i) the accuracy of the records of DTC, Cede & Co. or any Participant with respect to any ownership interest in the Bonds, (ii) the delivery to any Participant or any other person (other than a registered owner of Bonds, as shown by the registration books kept by the Registrar), of any notice with respect to the Bonds, including any notice of redemption, or (iii) the payment to any Participant or any other person, other than a registered owner of Bonds, of any amount with respect to principal of, premium, if any, or interest on the Bonds. The City, the Registrar and the Paying Agent may treat and consider the person in whose name each Bond is registered in the registration books kept by the Registrar as the holder and absolute owner of such Bond for the purpose of payment of principal, premium and interest with respect to such Bond, for the purpose of registering transfers with respect City Council Meeting of June 19, 2017 (Item No. 8b) Page 15 Title: General Obligation Bonds, Series 2017A to such Bonds, and for all other purposes. The Paying Agent will pay all principal of, premium, if any, and interest on the Bonds only to or on the order of the respective registered owners, as shown in the registration books kept by the Registrar, and all such payments will be valid and effectual to fully satisfy and discharge the City’s obligations with respect to payment of principal of, premium, if any, or interest on the Bonds to the extent of the sum or sums so paid. No person other than a registered owner of Bonds, as shown in the registration books kept by the Registrar, will receive a certificated Bond evidencing the obligation of this resolution. Upon delivery by DTC to the City Manager of a written notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co., the words “Cede & Co.” will refer to such new nominee of DTC; and upon receipt of such a notice, the City Manager will promptly deliver a copy of the same to the Registrar and Paying Agent. 8.03. Representation Letter. The City has heretofore executed and delivered to DTC a Blanket Issuer Letter of Representations (the “Representation Letter”) which will govern payment of principal of, premium, if any, and interest on the Bonds and notices with respect to the Bonds. Any Paying Agent or Registrar subsequently appointed by the City with respect to the Bonds will agree to take all action necessary for all representations of the City in the Representation Letter with respect to the Registrar and Paying Agent, respectively, to be complied with at all times. 8.04. Transfers Outside Book-Entry System. In the event the City, by resolution of the City Council, determines that it is in the best interests of the persons having beneficial interests in the Bonds that they be able to obtain Bond certificates, the City will notify DTC, whereupon DTC will notify the Participants, of the availability through DTC of Bond certificates. In such event the City will issue, transfer and exchange Bond certificates as requested by DTC and any other registered owners in accordance with the provisions of this resolution. DTC may determine to discontinue providing its services with respect to the Bonds at any time by giving notice to the City and discharging its responsibilities with respect thereto under applicable law. In such event, if no successor securities depository is appointed, the City will issue and the Registrar will authenticate Bond certificates in accordance with this resolution and the provisions hereof will apply to the transfer, exchange and method of payment thereof. 8.05. Payments to Cede & Co. Notwithstanding any other provision of this resolution to the contrary, so long as a Bond is registered in the name of Cede & Co., as nominee of DTC, payments with respect to principal of, premium, if any, and interest on the Bond and all notices with respect to the Bond will be made and given, respectively in the manner provided in DTC’s Operational Arrangements, as set forth in the Representation Letter. Section 9. Continuing Disclosure. 9.01. Execution of Continuing Disclosure Certificate. “Continuing Disclosure Certificate” means that certain Continuing Disclosure Certificate executed by the Mayor and City Manager and dated the date of issuance and delivery of the Bonds, as originally executed and as it may be amended from time to time in accordance with the terms thereof. 9.02. City Compliance with Provisions of Continuing Disclosure Certificate. The City hereby covenants and agrees that it will comply with and carry out all of the provisions of the Continuing Disclosure Certificate. Notwithstanding any other provision of this resolution, failure of the City to comply with the Continuing Disclosure Certificate is not to be considered an event of default with respect to the Bonds; however, any Bondholder may take such actions as may be City Council Meeting of June 19, 2017 (Item No. 8b) Page 16 Title: General Obligation Bonds, Series 2017A necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City to comply with its obligations under this section. Section 10. Defeasance. When all Bonds and all interest thereon have been discharged as provided in this section, all pledges, covenants and other rights granted by this resolution to the holders of the Bonds will cease, except that the pledge of the full faith and credit of the City for the prompt and full payment of the principal of and interest on the Bonds will remain in full force and effect. The City may discharge all Bonds which are due on any date by depositing with the Registrar on or before that date a sum sufficient for the payment thereof in full. If any Bond should not be paid when due, it may nevertheless be discharged by depositing with the Registrar a sum sufficient for the payment thereof in full with interest accrued to the date of such deposit. (The remainder of this page is intentionally left blank) City Council Meeting of June 19, 2017 (Item No. 8b) Page 17 Title: General Obligation Bonds, Series 2017A The motion for the adoption of the foregoing resolution was duly seconded by City Council Member _______________________ and, after full discussion thereof and upon a vote being taken thereon, the following City Council Members voted in favor thereof: Reviewed for Administration: Adopted by the City Council June 19, 2017 Thomas K. Harmening, City Manager Jake Spano, Mayor Attest: Melissa Kennedy, City Clerk City Council Meeting of June 19, 2017 (Item No. 8b) Page 18 Title: General Obligation Bonds, Series 2017A EXHIBIT A PROPOSALS City Council Meeting of June 19, 2017 (Item No. 8b) Page 19 Title: General Obligation Bonds, Series 2017A EXHIBIT B FORM OF BOND No. R-_____ UNITED STATES OF AMERICA $_________ STATE OF MINNESOTA COUNTY OF HENNEPIN CITY OF ST. LOUIS PARK GENERAL OBLIGATION BOND SERIES 2017A Rate Maturity Date of Original Issue CUSIP February 1, 20__ July 13, 2017 Registered Owner: Cede & Co. The City of St. Louis Park, Minnesota, a duly organized and existing municipal corporation in Hennepin County, Minnesota (the “City”), acknowledges itself to be indebted and for value received hereby promises to pay to the Registered Owner specified above or registered assigns, the principal sum of $__________ on the maturity date specified above, with interest thereon from the date hereof at the annual rate specified above (calculated on the basis of a 360 day year of twelve 30 day months), payable February 1 and August 1 in each year, commencing February 1, 2018, to the person in whose name this Bond is registered at the close of business on the fifteenth day (whether or not a business day) of the immediately preceding month. The interest hereon and, upon presentation and surrender hereof, the principal hereof are payable in lawful money of the United States of America by check or draft by Bond Trust Services Corporation, Roseville, Minnesota, as Bond Registrar, Paying Agent, Transfer Agent and Authenticating Agent, or its designated successor under the Resolution described herein. For the prompt and full payment of such principal and interest as the same respectively become due, the full faith and credit and taxing powers of the City have been and are hereby irrevocably pledged. The City may elect on February 1, 2026, and on any day thereafter to prepay Bonds due on or after February 1, 2027. Redemption may be in whole or in part and if in part, at the option of the City and in such manner as the City will determine. If less than all Bonds of a maturity are called for redemption, the City will notify The Depository Trust Company (“DTC”) of the particular amount of such maturity to be prepaid. DTC will determine by lot the amount of each participant’s interest in such maturity to be redeemed and each participant will then select by lot the beneficial ownership interests in such maturity to be redeemed. Prepayments will be at a price of par plus accrued interest. This Bond is one of an issue in the aggregate principal amount of $________ all of like original issue date and tenor, except as to number, maturity date, redemption privilege, and interest rate, all issued pursuant to a resolution adopted by the City Council on June 19, 2017 (the “Resolution”), for the purpose of providing money to aid in financing certain capital projects and improvements to the City’s water system and sewer system and in refunding certain general obligations of the City, pursuant to and in full conformity with the home rule charter of the City and the Constitution and laws of the State of Minnesota, including Minnesota Statutes, Chapters 475 and Chapter 444, as amended, including Minnesota Statutes, Section 475.67, subdivision 3, and the principal hereof and interest hereon are payable in part from ad valorem taxes and in part from net revenues from the water system and sewer system of the City, as set forth in the Resolution to which reference is made for a full statement of rights and powers thereby conferred. The full faith and credit of the City are irrevocably pledged for payment of this Bond and the City Council Meeting of June 19, 2017 (Item No. 8b) Page 20 Title: General Obligation Bonds, Series 2017A City Council has obligated itself to levy additional ad valorem taxes on all taxable property in the City in the event of any deficiency in taxes and net revenues pledged, which taxes may be levied without limitation as to rate or amount. The Bonds of this series are issued only as fully registered Bonds in denominations of $5,000 or any integral multiple thereof of single maturities. The City Council has designated the issue of Bonds of which this Bond forms a part as “qualified tax-exempt obligations” within the meaning of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended (the “Code”) relating to disallowance of interest expense for financial institutions and within the $10 million limit allowed by the Code for the calendar year of issue. IT IS HEREBY CERTIFIED AND RECITED That in and by the Resolution, the City has covenanted and agreed that it will continue to own and operate the water system and sewer system free from competition by other like municipal utilities; that adequate insurance on said systems and suitable fidelity bonds on employees will be carried; that proper and adequate books of account will be kept showing all receipts and disbursements relating to the Water Fund and Sewer Fund, into which it will pay all of the gross revenues from the water system and sewer system, respectively; that it will also create and maintain a Utility Improvements Account within the General Obligation Bonds, Series 2017A Debt Service Fund, into which it will pay, out of the net revenues from the water system and sewer system, a sum sufficient to pay principal of the Utility Revenue Bonds and the Refunding Bonds (as defined in the Resolution) and interest on the Utility Revenue Bonds and the Refunding Bonds when due; and that it will provide, by ad valorem tax levies, for any deficiency in required net revenues of the water system and sewer system. As provided in the Resolution and subject to certain limitations set forth therein, this Bond is transferable upon the books of the City at the principal office of the Bond Registrar, by the registered owner hereof in person or by the owner’s attorney duly authorized in writing upon surrender hereof together with a written instrument of transfer satisfactory to the Bond Registrar, duly executed by the registered owner or the owner’s attorney; and may also be surrendered in exchange for Bonds of other authorized denominations. Upon such transfer or exchange the City will cause a new Bond or Bonds to be issued in the name of the transferee or registered owner, of the same aggregate principal amount, bearing interest at the same rate and maturing on the same date, subject to reimbursement for any tax, fee or governmental charge required to be paid with respect to such transfer or exchange. The City and the Bond Registrar may deem and treat the person in whose name this Bond is registered as the absolute owner hereof, whether this Bond is overdue or not, for the purpose of receiving payment and for all other purposes, and neither the City nor the Bond Registrar will be affected by any notice to the contrary. IT IS HEREBY CERTIFIED, RECITED, COVENANTED AND AGREED that all acts, conditions and things required by the home rule charter of the City and the Constitution and laws of the State of Minnesota to be done, to exist, to happen and to be performed preliminary to and in the issuance of this Bond in order to make it a valid and binding general obligation of the City in accordance with its terms, have been done, do exist, have happened and have been performed as so required, and that the issuance of this Bond does not cause the indebtedness of the City to exceed any constitutional, charter, or statutory limitation of indebtedness. This Bond is not valid or obligatory for any purpose or entitled to any security or benefit under the Resolution until the Certificate of Authentication hereon has been executed by the Bond Registrar by manual signature of one of its authorized representatives. IN WITNESS WHEREOF, the City of St. Louis Park, Hennepin County, Minnesota, by its City Council, has caused this Bond to be executed on its behalf by the facsimile or manual signatures of the Mayor and City Manager and has caused this Bond to be dated as of the date set forth below. City Council Meeting of June 19, 2017 (Item No. 8b) Page 21 Title: General Obligation Bonds, Series 2017A Dated: July 13, 2017 CITY OF ST. LOUIS PARK, MINNESOTA (Facsimile) (Facsimile) Mayor City Manager ______________________________________ CERTIFICATE OF AUTHENTICATION This is one of the Bonds delivered pursuant to the Resolution mentioned within. BOND TRUST SERVICES CORPORATION By Authorized Representative ______________________________________ ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this Bond, will be construed as though they were written out in full according to applicable laws or regulations: TEN COM -- as tenants in common UNIF GIFT MIN ACT _________ Custodian _________ (Cust) (Minor) TEN ENT -- as tenants by entireties under Uniform Gifts or Transfers to Minors Act, State of _______________ JT TEN -- as joint tenants with right of survivorship and not as tenants in common Additional abbreviations may also be used though not in the above list. ________________________________________ ASSIGNMENT For value received, the undersigned hereby sells, assigns and transfers unto ________________________________________ the within Bond and all rights thereunder, and does hereby irrevocably constitute and appoint _________________________ attorney to transfer the said Bond on the books kept for registration of the within Bond, with full power of substitution in the premises. Dated: Notice: The assignor’s signature to this assignment must correspond with the name as it appears upon the face of the within Bond in every particular, without alteration or any change whatever. City Council Meeting of June 19, 2017 (Item No. 8b) Page 22 Title: General Obligation Bonds, Series 2017A Signature Guaranteed: NOTICE: Signature(s) must be guaranteed by a financial institution that is a member of the Securities Transfer Agent Medallion Program (“STAMP”), the Stock Exchange Medallion Program (“SEMP”), the New York Stock Exchange, Inc. Medallion Signatures Program (“MSP”) or other such “signature guarantee program” as may be determined by the Registrar in addition to, or in substitution for, STEMP, SEMP or MSP, all in accordance with the Securities Exchange Act of 1934, as amended. The Registrar will not effect transfer of this Bond unless the information concerning the assignee requested below is provided. Name and Address: (Include information for all joint owners if this Bond is held by joint account.) Please insert social security or other identifying number of assignee ________________________________________ PROVISIONS AS TO REGISTRATION The ownership of the principal of and interest on the within Bond has been registered on the books of the Registrar in the name of the person last noted below. Date of Registration Registered Owner Signature of Officer of Registrar Cede & Co. Federal ID #13-2555119 City Council Meeting of June 19, 2017 (Item No. 8b) Page 23 Title: General Obligation Bonds, Series 2017A EXHIBIT C TAX LEVY SCHEDULE YEAR * TAX LEVY 2018 $ 2019 2020 2021 2022 2023 2024 2025 2026 2027 __________________________________ * Year tax levy collected. City Council Meeting of June 19, 2017 (Item No. 8b) Page 24 Title: General Obligation Bonds, Series 2017A STATE OF MINNESOTA ) ) COUNTY OF HENNEPIN ) SS. ) CITY OF ST. LOUIS PARK ) I, the undersigned, being the duly qualified and acting City Clerk of the City of St. Louis Park, Hennepin County, Minnesota (the “City”), do hereby certify that I have carefully compared the attached and foregoing extract of minutes of a regular meeting of the City Council of the City held on June 19, 2017, with the original minutes on file in my office and the extract is a full, true and correct copy of the minutes insofar as they relate to the issuance and sale of the City’s General Obligation Bonds, Series 2017A, in the original aggregate principal amount of $________. WITNESS My hand officially as such City Clerk and the corporate seal of the City this ____ day of __________, 2017. City Clerk City of St. Louis Park, Minnesota (SEAL)