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Home My WebLink About05-26-2020-RAPPROVAL OF AGENDA PUBLIC INQUIRIES/INFORMATIONAL This is an opportunity for citizens to bring to the Council ’s attention any items not currently on the agenda which are relevant to the City. In addressing the Council, you must first state your name and address for the record. To allow adequate time for each person wishing to address the Council, speakers must limit their comments to three (3) minutes. Written documents may be distributed to the Council prior to the meeting to allow a more timely presentation. Speakers should not use obscene, profane, or threatening language, or make personal attacks. Matters of litigation involving the City shall not be discussed during Public Inquiry by citizens or Council. The Council may not respond to speaker comments, engage in a debate, or take any action on the issues raised by citizens, but may direct City staff to research or follow up on an issue, if desired by Council. If Council directs further review by staff, the results of that review will be presented at a following regular Council meeting. RESPONSE TO PUBLIC INQUIRIES PRESENTATION 2019 Financial Statements Aaron Nielsen / MMKR MEMO.PDF ATTACHMENT A.PDF ATTACHMENT B.PDF ATTACHMENT C.PDF STAFF COMMENTS Rice Creek Commons (TCAAP) And Joint Development Authority (JDA) Update Dave Perrault, City Administrator MEMO.PDF COVID -19 Update Dave Perrault, City Administrator MEMO.PDF Transportation Update Todd Blomstrom, Public Works Director/City Engineer MEMO.PDF APPROVAL OF MINUTES April 27 2020 Regular City Council 04 -27 -20 -R.PDF April 30, 2020 Special City Council Work Session 04 -30 -20 -SWS.PDF May 11, 2020 Regular City Council 05 -11 -20 -R.PDF CONSENT CALENDAR Those items listed under the Consent Calendar are considered to be routine by the City Council and will be enacted by one motion under a Consent Calendar format. There will be no separate discussion of these items, unless a Councilmember so requests, in which event, the item will be removed from the general order of business and considered separately in its normal sequence on the agenda. Motion To Approve Claims And Payroll Gayle Bauman, Finance Director Pang Silseth, Accounting Analyst MEMO.PDF Motion To Approve 2019 City Financial Statements And Audit Gayle Bauman, Finance Director MEMO.PDF Motion To Approve Temporary Layoff Of Recreation Coordinator Dave Perrault, City Administrator MEMO.PDF ATTACHMENT A.PDF Motion To Authorize Prorated Refund Of On -Sale Liquor License Fees Due To COVID -19 Julie Hanson, City Clerk MEMO.PDF Motion To Approve Proposal For Engineering Services –HVAC Replacement/Upgrade Dave Perrault, City Administrator MEMO.PDF ATTACHMENT A.PDF PULLED CONSENT ITEMS Those items that are pulled from the Consent Calendar will be removed from the general order of business and considered separately in its normal sequence on the agenda. PUBLIC HEARINGS NEW BUSINESS Resolution 2020 -022 –Planning Case 20 -008 –3244 Sandeen Road –Variance Joe Hartmann, Associate Planner Mike Mrosla, Community Development Manager/City Planner MEMO.PDF ATTACHMENT A.PDF ATTACHMENT B.PDF ATTACHMENT C.PDF ATTACHMENT D.PDF ATTACHMENT E.PDF ATTACHMENT F .PDF ATTACHMENT G.PDF ATTACHMENT H.PDF ATTACHMENT I.PDF ATTACHMENT J.PDF Resolution 2020 -023 –Planning Case 20 -004 –1741 Venus Avenue –Variance Joe Hartmann, Associate Planner Mike Mrosla, Community Development Manager/City Planner MEMO.PDF ATTACHMENT A.PDF ATTACHMENT B.PDF ATTACHMENT C.PDF ATTACHMENT D.PDF ATTACHMENT E.PDF ATTACHMENT F.PDF ATTACHMENT G.PDF ATTACHMENT H.PDF Resolution 2020 -024 Allowing Flexibility For Local Businesses During Local Emergency For COVID -19 Dave Perrault, City Administrator MEMO.PDF ATTACHMENT A.PDF UNFINISHED BUSINESS COUNCIL/STAFF COMMENTS ADJOURN Mayor: David Grant Councilmembers: Brenda Holden Fran Holmes Dave McClung Steve Scott Regular City Council Agenda May 26, 2020 7:00 p.m. City Hall Address: 1245 W Highway 96 Arden Hills MN 55112 Phone: 651 -792 -7800 Website : www.cityofardenhills.org City Vision Arden Hills is a strong community that values its unique environmental setting, strong residential neighborhoods, vital business community, well -maintained infrastructure, fiscal soundness, and our long -standing tradition as a desirable City in which to live, work, and play. This meeting can be accessed remotely by joining via Zoom T o join the Zoom Meeting via your computer, click this link (or copy and paste it into a new browser): https://us02web.zoom.us/j/87155035112 This meeting will be streamed live on local Cable Channel 16 and available for playback on our website. CALL TO ORDER 1. 2. 3. 4. 4.A. Documents: 5. 5.A. Documents: 5.B. Documents: 5.C. Documents: 6. 6.A. Documents: 6.B. Documents: 6.C. Documents: 7. 7.A. Documents: 7.B. Documents: 7.C. Documents: 7.D. Documents: 7.E. Documents: 8. 9. 10. 10.A. Documents: 10.B. Documents: 10.C. Documents: 11. 12. APPROVAL OF AGENDAPUBLIC INQUIRIES/INFORMATIONALThis is an opportunity for citizens to bring to the Council ’s attention any items not currently on the agenda which are relevant to the City. In addressing the Council, you must first state your name and address for the record. To allow adequate time for each person wishing to address the Council, speakers must limit their comments to three (3) minutes. Written documents may be distributed to the Council prior to the meeting to allow a more timely presentation. Speakers should not use obscene, profane, or threatening language, or make personal attacks. Matters of litigation involving the City shall not be discussed during Public Inquiry by citizens or Council. The Council may not respond to speaker comments, engage in a debate, or take any action on the issues raised by citizens, but may direct City staff to research or follow up on an issue, if desired by Council. If Council directs further review by staff, the results of that review will be presented at a following regular Council meeting.RESPONSE TO PUBLIC INQUIRIESPRESENTATION2019 Financial StatementsAaron Nielsen / MMKR MEMO.PDF ATTACHMENT A.PDF ATTACHMENT B.PDF ATTACHMENT C.PDF STAFF COMMENTS Rice Creek Commons (TCAAP) And Joint Development Authority (JDA) Update Dave Perrault, City Administrator MEMO.PDF COVID -19 Update Dave Perrault, City Administrator MEMO.PDF Transportation Update Todd Blomstrom, Public Works Director/City Engineer MEMO.PDF APPROVAL OF MINUTES April 27 2020 Regular City Council 04 -27 -20 -R.PDF April 30, 2020 Special City Council Work Session 04 -30 -20 -SWS.PDF May 11, 2020 Regular City Council 05 -11 -20 -R.PDF CONSENT CALENDAR Those items listed under the Consent Calendar are considered to be routine by the City Council and will be enacted by one motion under a Consent Calendar format. There will be no separate discussion of these items, unless a Councilmember so requests, in which event, the item will be removed from the general order of business and considered separately in its normal sequence on the agenda. Motion To Approve Claims And Payroll Gayle Bauman, Finance Director Pang Silseth, Accounting Analyst MEMO.PDF Motion To Approve 2019 City Financial Statements And Audit Gayle Bauman, Finance Director MEMO.PDF Motion To Approve Temporary Layoff Of Recreation Coordinator Dave Perrault, City Administrator MEMO.PDF ATTACHMENT A.PDF Motion To Authorize Prorated Refund Of On -Sale Liquor License Fees Due To COVID -19 Julie Hanson, City Clerk MEMO.PDF Motion To Approve Proposal For Engineering Services –HVAC Replacement/Upgrade Dave Perrault, City Administrator MEMO.PDF ATTACHMENT A.PDF PULLED CONSENT ITEMS Those items that are pulled from the Consent Calendar will be removed from the general order of business and considered separately in its normal sequence on the agenda. PUBLIC HEARINGS NEW BUSINESS Resolution 2020 -022 –Planning Case 20 -008 –3244 Sandeen Road –Variance Joe Hartmann, Associate Planner Mike Mrosla, Community Development Manager/City Planner MEMO.PDF ATTACHMENT A.PDF ATTACHMENT B.PDF ATTACHMENT C.PDF ATTACHMENT D.PDF ATTACHMENT E.PDF ATTACHMENT F .PDF ATTACHMENT G.PDF ATTACHMENT H.PDF ATTACHMENT I.PDF ATTACHMENT J.PDF Resolution 2020 -023 –Planning Case 20 -004 –1741 Venus Avenue –Variance Joe Hartmann, Associate Planner Mike Mrosla, Community Development Manager/City Planner MEMO.PDF ATTACHMENT A.PDF ATTACHMENT B.PDF ATTACHMENT C.PDF ATTACHMENT D.PDF ATTACHMENT E.PDF ATTACHMENT F.PDF ATTACHMENT G.PDF ATTACHMENT H.PDF Resolution 2020 -024 Allowing Flexibility For Local Businesses During Local Emergency For COVID -19 Dave Perrault, City Administrator MEMO.PDF ATTACHMENT A.PDF UNFINISHED BUSINESS COUNCIL/STAFF COMMENTS ADJOURN Mayor:David Grant Councilmembers:Brenda Holden Fran HolmesDave McClungSteve Scott Regular City Council Agenda May 26, 20207:00 p.m. City Hall Address:1245 W Highway 96 Arden Hills MN 55112 Phone:651 -792 -7800 Website : www.cityofardenhills.org City VisionArden Hills is a strong community that values its unique environmental setting, strong residential neighborhoods, vital business community, well -maintained infrastructure, fiscal soundness, and our long -standing tradition as a desirable City in which to live, work, and play.This meeting can be accessed remotely by joining via ZoomTo join the Zoom Meeting via your computer, click this link (or copy and paste it into a new browser): https://us02web.zoom.us/j/87155035112This meeting will be streamed live on local Cable Channel 16 and available for playback on our website.CALL TO ORDER1.2.3.4.4.A.Documents: 5. 5.A. Documents: 5.B. Documents: 5.C. Documents: 6. 6.A. Documents: 6.B. Documents: 6.C. Documents: 7. 7.A. Documents: 7.B. Documents: 7.C. Documents: 7.D. Documents: 7.E. Documents: 8. 9. 10. 10.A. Documents: 10.B. Documents: 10.C. Documents: 11. 12. APPROVAL OF AGENDAPUBLIC INQUIRIES/INFORMATIONALThis is an opportunity for citizens to bring to the Council ’s attention any items not currently on the agenda which are relevant to the City. In addressing the Council, you must first state your name and address for the record. To allow adequate time for each person wishing to address the Council, speakers must limit their comments to three (3) minutes. Written documents may be distributed to the Council prior to the meeting to allow a more timely presentation. Speakers should not use obscene, profane, or threatening language, or make personal attacks. Matters of litigation involving the City shall not be discussed during Public Inquiry by citizens or Council. The Council may not respond to speaker comments, engage in a debate, or take any action on the issues raised by citizens, but may direct City staff to research or follow up on an issue, if desired by Council. If Council directs further review by staff, the results of that review will be presented at a following regular Council meeting.RESPONSE TO PUBLIC INQUIRIESPRESENTATION2019 Financial StatementsAaron Nielsen / MMKR MEMO.PDFATTACHMENT A.PDFATTACHMENT B.PDFATTACHMENT C.PDFSTAFF COMMENTSRice Creek Commons (TCAAP) And Joint Development Authority (JDA) UpdateDave Perrault, City Administrator MEMO.PDFCOVID-19 UpdateDave Perrault, City Administrator MEMO.PDFTransportation UpdateTodd Blomstrom, Public Works Director/City Engineer MEMO.PDFAPPROVAL OF MINUTESApril 27 2020 Regular City Council 04 -27 -20 -R.PDFApril 30, 2020 Special City Council Work Session04-30 -20 -SWS.PDFMay 11, 2020 Regular City Council05-11 -20 -R.PDFCONSENT CALENDARThose items listed under the Consent Calendar are considered to be routine by the City Council and will be enacted by one motion under a Consent Calendar format. There will be no separate discussion of these items, unless a Councilmember so requests, in which event, the item will be removed from the general order of business and considered separately in its normal sequence on the agenda. Motion To Approve Claims And Payroll Gayle Bauman, Finance Director Pang Silseth, Accounting Analyst MEMO.PDF Motion To Approve 2019 City Financial Statements And Audit Gayle Bauman, Finance Director MEMO.PDF Motion To Approve Temporary Layoff Of Recreation Coordinator Dave Perrault, City Administrator MEMO.PDF ATTACHMENT A.PDF Motion To Authorize Prorated Refund Of On -Sale Liquor License Fees Due To COVID -19 Julie Hanson, City Clerk MEMO.PDF Motion To Approve Proposal For Engineering Services –HVAC Replacement/Upgrade Dave Perrault, City Administrator MEMO.PDF ATTACHMENT A.PDF PULLED CONSENT ITEMS Those items that are pulled from the Consent Calendar will be removed from the general order of business and considered separately in its normal sequence on the agenda. PUBLIC HEARINGS NEW BUSINESS Resolution 2020 -022 –Planning Case 20 -008 –3244 Sandeen Road –Variance Joe Hartmann, Associate Planner Mike Mrosla, Community Development Manager/City Planner MEMO.PDF ATTACHMENT A.PDF ATTACHMENT B.PDF ATTACHMENT C.PDF ATTACHMENT D.PDF ATTACHMENT E.PDF ATTACHMENT F .PDF ATTACHMENT G.PDF ATTACHMENT H.PDF ATTACHMENT I.PDF ATTACHMENT J.PDF Resolution 2020 -023 –Planning Case 20 -004 –1741 Venus Avenue –Variance Joe Hartmann, Associate Planner Mike Mrosla, Community Development Manager/City Planner MEMO.PDF ATTACHMENT A.PDF ATTACHMENT B.PDF ATTACHMENT C.PDF ATTACHMENT D.PDF ATTACHMENT E.PDF ATTACHMENT F.PDF ATTACHMENT G.PDF ATTACHMENT H.PDF Resolution 2020 -024 Allowing Flexibility For Local Businesses During Local Emergency For COVID -19 Dave Perrault, City Administrator MEMO.PDF ATTACHMENT A.PDF UNFINISHED BUSINESS COUNCIL/STAFF COMMENTS ADJOURN Mayor:David Grant Councilmembers:Brenda Holden Fran HolmesDave McClungSteve Scott Regular City Council Agenda May 26, 20207:00 p.m. City Hall Address:1245 W Highway 96 Arden Hills MN 55112 Phone:651 -792 -7800 Website : www.cityofardenhills.org City VisionArden Hills is a strong community that values its unique environmental setting, strong residential neighborhoods, vital business community, well -maintained infrastructure, fiscal soundness, and our long -standing tradition as a desirable City in which to live, work, and play.This meeting can be accessed remotely by joining via ZoomTo join the Zoom Meeting via your computer, click this link (or copy and paste it into a new browser): https://us02web.zoom.us/j/87155035112This meeting will be streamed live on local Cable Channel 16 and available for playback on our website.CALL TO ORDER1.2.3.4.4.A.Documents:5.5.A.Documents:5.B.Documents:5.C.Documents:6.6.A.Documents:6.B.Documents:6.C.Documents:7. 7.A. Documents: 7.B. Documents: 7.C. Documents: 7.D. Documents: 7.E. Documents: 8. 9. 10. 10.A. Documents: 10.B. Documents: 10.C. Documents: 11. 12. APPROVAL OF AGENDAPUBLIC INQUIRIES/INFORMATIONALThis is an opportunity for citizens to bring to the Council ’s attention any items not currently on the agenda which are relevant to the City. In addressing the Council, you must first state your name and address for the record. To allow adequate time for each person wishing to address the Council, speakers must limit their comments to three (3) minutes. Written documents may be distributed to the Council prior to the meeting to allow a more timely presentation. Speakers should not use obscene, profane, or threatening language, or make personal attacks. Matters of litigation involving the City shall not be discussed during Public Inquiry by citizens or Council. The Council may not respond to speaker comments, engage in a debate, or take any action on the issues raised by citizens, but may direct City staff to research or follow up on an issue, if desired by Council. If Council directs further review by staff, the results of that review will be presented at a following regular Council meeting.RESPONSE TO PUBLIC INQUIRIESPRESENTATION2019 Financial StatementsAaron Nielsen / MMKR MEMO.PDFATTACHMENT A.PDFATTACHMENT B.PDFATTACHMENT C.PDFSTAFF COMMENTSRice Creek Commons (TCAAP) And Joint Development Authority (JDA) UpdateDave Perrault, City Administrator MEMO.PDFCOVID-19 UpdateDave Perrault, City Administrator MEMO.PDFTransportation UpdateTodd Blomstrom, Public Works Director/City Engineer MEMO.PDFAPPROVAL OF MINUTESApril 27 2020 Regular City Council 04 -27 -20 -R.PDFApril 30, 2020 Special City Council Work Session04-30 -20 -SWS.PDFMay 11, 2020 Regular City Council05-11 -20 -R.PDFCONSENT CALENDARThose items listed under the Consent Calendar are considered to be routine by the City Council and will be enacted by one motion under a Consent Calendar format. There will be no separate discussion of these items, unless a Councilmember so requests, in which event, the item will be removed from the general order of business and considered separately in its normal sequence on the agenda.Motion To Approve Claims And PayrollGayle Bauman, Finance DirectorPang Silseth, Accounting Analyst MEMO.PDFMotion To Approve 2019 City Financial Statements And AuditGayle Bauman, Finance Director MEMO.PDFMotion To Approve Temporary Layoff Of Recreation Coordinator Dave Perrault, City Administrator MEMO.PDFATTACHMENT A.PDFMotion To Authorize Prorated Refund Of On -Sale Liquor License Fees Due To COVID -19 Julie Hanson, City Clerk MEMO.PDFMotion To Approve Proposal For Engineering Services –HVAC Replacement/UpgradeDave Perrault, City Administrator MEMO.PDFATTACHMENT A.PDFPULLED CONSENT ITEMSThose items that are pulled from the Consent Calendar will be removed from the general order of business and considered separately in its normal sequence on the agenda.PUBLIC HEARINGS NEW BUSINESS Resolution 2020 -022 –Planning Case 20 -008 –3244 Sandeen Road –Variance Joe Hartmann, Associate Planner Mike Mrosla, Community Development Manager/City Planner MEMO.PDF ATTACHMENT A.PDF ATTACHMENT B.PDF ATTACHMENT C.PDF ATTACHMENT D.PDF ATTACHMENT E.PDF ATTACHMENT F .PDF ATTACHMENT G.PDF ATTACHMENT H.PDF ATTACHMENT I.PDF ATTACHMENT J.PDF Resolution 2020 -023 –Planning Case 20 -004 –1741 Venus Avenue –Variance Joe Hartmann, Associate Planner Mike Mrosla, Community Development Manager/City Planner MEMO.PDF ATTACHMENT A.PDF ATTACHMENT B.PDF ATTACHMENT C.PDF ATTACHMENT D.PDF ATTACHMENT E.PDF ATTACHMENT F.PDF ATTACHMENT G.PDF ATTACHMENT H.PDF Resolution 2020 -024 Allowing Flexibility For Local Businesses During Local Emergency For COVID -19 Dave Perrault, City Administrator MEMO.PDF ATTACHMENT A.PDF UNFINISHED BUSINESS COUNCIL/STAFF COMMENTS ADJOURN Mayor:David Grant Councilmembers:Brenda Holden Fran HolmesDave McClungSteve Scott Regular City Council Agenda May 26, 20207:00 p.m. City Hall Address:1245 W Highway 96 Arden Hills MN 55112 Phone:651 -792 -7800 Website : www.cityofardenhills.org City VisionArden Hills is a strong community that values its unique environmental setting, strong residential neighborhoods, vital business community, well -maintained infrastructure, fiscal soundness, and our long -standing tradition as a desirable City in which to live, work, and play.This meeting can be accessed remotely by joining via ZoomTo join the Zoom Meeting via your computer, click this link (or copy and paste it into a new browser): https://us02web.zoom.us/j/87155035112This meeting will be streamed live on local Cable Channel 16 and available for playback on our website.CALL TO ORDER1.2.3.4.4.A.Documents:5.5.A.Documents:5.B.Documents:5.C.Documents:6.6.A.Documents:6.B.Documents:6.C.Documents:7.7.A.Documents:7.B.Documents:7.C.Documents:7.D.Documents:7.E.Documents:8.9. 10. 10.A. Documents: 10.B. Documents: 10.C. Documents: 11. 12. PUBLIC PRESENTATION – 4A MEMORANDUM DATE: May 26, 2020 TO: Honorable Mayor and City Councilmembers Dave Perrault, City Administrator FROM: Gayle Bauman, Finance Director SUBJECT: 2019 City Financial Statements Budgeted Amount: Actual Amount: Funding Source: N/A N/A N/A Background/Discussion The City’s 2019 Financial Statements have been completed and will be submitted to both the State Auditor and the GFOA. The City’s auditor, Aaron Nielsen from MMKR, will be present at the May 26, 2020, City Council meeting to give an overview and answer questions. Their PowerPoint presentation is included with the city’s slides. The auditors have issued an unmodified (“clean”) opinion on our financial statements for the year ended December 31, 2019. The total general fund balance at December 31, 2019 was $3,215,583 with $2,987,183 of unassigned balance; the new balance equates to a decrease in the General Fund balance of $124,786. The ending unassigned General Fund balance makes up approximately 59.5 percent of next year’s budgeted expenditures. The City’s total net position increased by $1,288,375. The combined ending fund balances for governmental funds was $8,721,679; the combined ending unrestricted net position for the enterprise funds was $2,025,812, and internal service funds was $332,011. We have completed the report in the form prescribed by the Government Finance Officers Association of United States and Canada (GFOA) for their Certificate of Achievement for Excellence in Financial Reporting. In order to qualify for this, the report has to be published in an easily readable and efficiently organized Comprehensive Annual Financial Report (CAFR) that satisfies both accounting principles generally accepted in the United States of America and applicable legal requirements. As a note of information, the Auditing Standards are constantly increasing and changing. With these changes, you may see increased findings. This does not mean that the City has done anything wrong compared to previous years, only that the reporting requirements have become much stricter. Many cities are experiencing these findings, and the findings are expected to increase for all cities as these standards become stricter. One finding was noted in the report related to Segregation of Duties. We are pleased with the outcome of the audit. Attachments A. Management Report B. Comprehensive Annual Financial Report C. Special Purpose Audit Report Management Report for City of Arden Hills, Minnesota December 31, 2019 Attachment A THIS PAGE INTENTIONALLY LEFT BLANK To the City Council and Management City of Arden Hills, Minnesota We have prepared this management report in conjunction with our audit of the City of Arden Hills, Minnesota’s (the City) financial statements for the year ended December 31, 2019. We have organized this report into the following sections: •Audit Summary •Governmental Funds Overview •Enterprise Funds Overview •Government-Wide Financial Statements •Legislative Updates •Accounting and Auditing Updates We would be pleased to further discuss any of the information contained in this report or any other concerns that you would like us to address. We would also like to express our thanks for the courtesy and assistance extended to us during the course of our audit. The purpose of this report is solely to provide those charged with governance of the City, management, and those who have responsibility for oversight of the financial reporting process comments resulting from our audit process and information relevant to city finances in Minnesota . Accordingly, this report is not suitable for any other purpose. Minneapolis, Minnesota April 30, 2020 C E R T I F I E D A C C O U N T A N T S P UBLIC PRINCIPALS Thomas A. Karnowski, CPA Paul A. Radosevich, CPA William J. Lauer, CPA James H. Eichten, CPA Aaron J. Nielsen, CPA Victoria L. Holinka, CPA/CMA Jaclyn M. Huegel, CPA Kalen T. Karnowski, CPA Malloy, Montague, Karnowski, Radosevich & Co., P.A. 5353 Wayzata Boulevard • Suite 410 • Minneapolis, MN 55416 • Phone: 952-545-0424 • Fax: 952-545-0569 • www.mmkr.com Standard Letterhead-r2.qxp_167639 Letterhead-RV1 9/7/18 6:34 PM Page 1 THIS PAGE INTENTIONALLY LEFT BLANK -1- AUDIT SUMMARY The following is a summary of our audit work, key conclusions, and other information that we consider important or that is required to be communicated to the City Council, administration, or those charged with governance of the City. OUR RESPONSIBILITY UNDER AUDITING STANDARDS GENERALLY ACCEPTED IN THE UNITED STATES OF AMERICA AND GOVERNMENT AUDITING STANDARDS We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City as of and for the year ended December 31, 2019. Professional standards require that we provide you with information about our responsibilities under auditing standards generally accepted in the United States of America and Government Auditing Standards, as well as certain information related to the planned scope and timing of our audit. We have communicated such information to you verbally and in our audit engagement letter. Professional standards also require that we communicate the following information related to our audit. PLANNED SCOPE AND TIMING OF THE AUDIT We performed the audit according to the planned scope and timing previously discussed and coordinated in order to obtain sufficient audit evidence and complete an effective audit. AUDIT OPINION AND FINDINGS Based on our audit of the City’s financial statements for the year ended December 31, 2019: • We have issued an unmodified opinion on the City’s basic financial statements. • We reported one matter involving the City’s internal control over financial reporti ng that we consider to be a material weakness as detailed in the Special Purpose Audit Reports. Due to the limited size of the City’s office staff, the City has limited segregation of duties in certain areas. • The results of our testing disclosed no instances of noncompliance required to be reported under Government Auditing Standards. • We reported no findings based on our testing of the City’s compliance with Minnesota laws and regulations. FUND BALANCE/NET POSITION DEFICITS As reported in the City’s Comprehensive Annual Financial Report (CAFR), the EDA TIF District No. 5; Parks Fund; Public Safety Capital Equipment Fund; and TCAAP Fund; had year-end deficit equity balances of $22,000, $5,816, $5,197, and $194,879, respectively. Management has disclosed that these deficits will be eliminated with future contributions, grants, and internal fund transfers, if needed. -2- OTHER OBSERVATIONS AND RECOMMENDATIONS Impact of Novel Coronavirus (COVID-19) Shortly after the end of the 2019 fiscal year, the onset of the novel coronavirus (COVID-19) pandemic caused substantial volatility in economic conditions and tremendous disruption in the way governments, businesses, and individuals function. Minnesota cities may experience the impact of this pandemic in a myriad of financial areas, such as: declines in investment rates of return, cash flow issues, increased utility billing and property tax delinquencies, significant increases in the number and frequency of employees working remotely, challenges in processing general and payroll disbursements, disruption of prescribed internal control procedures, delays in internal and external financial reporting, and new compliance requirements attached to potential federal relief subsidies. As your city adapts to the new normal of municipal operations in a post-COVID-19 world, the assessment of and responses to new risks that may accompany operational changes will be critical to the safeguarding of city resources and sound financial stewardship. We encourage management and governance to include a robust financial risk assessment process when planning responses to these challenges, and to reassess and adapt internal controls over financial transactions and reporting to align with significant changes made to daily operations, even those intended to be temporary. SIGNIFICANT ACCOUNTING POLICIES Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the City are described in Note 1 of the notes to basic financial statements. No new accounting policies were adopted and the application of existing policies was not changed during the year ended December 31, 2019; however, the City implemented the following governmental accounting standards during the fiscal year: • Governmental Accounting Standards Board (GASB) Statement No. 83, Certain Asset Retirement Obligations, which addressed accounting and financial reporting for certain asset retirement obligations, which are legally enforceable liabilities associated with the retirement of a tangible capital asset. • GASB Statement No. 84, Fiduciary Activities, which established new criteria for identifying and reporting fiduciary activities. • GASB Statement No. 88, Certain Disclosures Related to Debt, Including Direct Borrowings and Direct Placements, which improved and clarified the information to be disclosed in notes to government financial statements related to debt, including direct borrowings and direct placements. • GASB Statement No. 90, Majority Equity Interest—an Amendment of GASB Statements No. 14 and No. 61, which improved the consistency and comparability of reporting a government’s majority equity interest in a legally separate organization and the relevance of financial statement information for certain component units. 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. -3- ACCOUNTING ESTIMATES AND MANAGEMENT JUDGMENTS Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates affecting the financial statements were: • Depreciation – Management’s estimates of depreciation expense are based on the estimated useful lives of the assets. • Compensated Absences – Management’s estimate is based on current rates of pay and unused compensated absences balances. • Pension Benefits – The City has recorded amounts and activities for pension benefits. Actuarial estimates of the net pension balances are calculated using actuarial methodologies described in GASB Statement No. 68. The actuarial calculations include significant assumptions, including projected changes, investment returns, retirement ages, proportionate s hare, and employee turnover. We evaluated the key factors and assumptions used by management to develop these estimates in determining that they are reasonable in relation to the basic financial statements taken as a whole. Certain financial statement disclosures are particularly sensitive because of their significance to financial statement users. The disclosures included in the notes to the basic financial statements related to pension benefits are particularly sensitive, due to the materiality of the liabilities, and the large and complex estimates involved in determining the disclosures. The financial statement disclosures are neutral, consistent, and clear. 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 clearly trivial, and communicate them to the appropriate level of management. There were no misstatements detected as a result of audit procedures that were material, either individually or in the aggregate, to each opinion unit’s financial statements taken as a whole. DISAGREEMENTS WITH MANAGEMENT For purposes of this report, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant t o the financial statements or the auditor’s report. We are pleased to report that no such disagreements arose during the course of our audit. -4- MANAGEMENT REPRESENTATIONS We have requested certain representations from management that are included in the management representation letter dated April 30, 2020. MANAGEMENT CONSULTATIONS WITH OTHER INDEPENDENT ACCOUNTANTS In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a “second opinion” on certain situations. If a consultation involves application of an accounting principle to the City’s financial statements or a determination of the type of auditor’s opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consult ant 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’s discussion and analysis (MD&A) and the 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 supplemental information accompanying the financial statements, which are not RSI. With respect to this supplemental information, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America, the method of preparing it has not changed from the prior period, and the information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplemental information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves. We were not engaged to report on the introductory or statistical sections, which accompany the financial statements, but are not RSI. Such information has not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on it. -5- GOVERNMENTAL FUNDS OVERVIEW This section of the report provides you with an overview of the financial trends and activities of the City’s governmental funds, which includes the General, special revenue, debt service, and capital project funds. These funds are used to account for the basic services the City provides to all of its citizens, which are financed primarily with property taxes. The governmental fund information in the City’s financial statements focuses on budgetary compliance and the sufficiency of each governmental fund’s current assets to finance its current liabilities. PROPERTY TAXES Minnesota cities rely heavily on local property tax levies to support their governmental fund activities. For the 2018 fiscal year, local ad valorem property tax levies provided 41.5 percent of the total governmental fund revenues for cities over 2,500 in population, and 36.7 percent for cities under 2,500 in population. Total property taxes levied by all Minnesota cities for taxes payable in 2019 increased 5.6 percent from the prior year. The total tax capacity value of property in Minnesota cities increased about 7.1 percent for the 2019 levy year. The tax capacity values used for levying property taxes are based on the assessed market values for the previous fiscal year (e.g., tax capacity values for taxes levied in 2019 were based on assessed market values as of January 1, 2018), so the trend of change in these tax capacity values lags somewhat behind the housing market and economy in general. The City’s estimated market value increased 7.4 percent for taxes payable in 2018 and increased 4.2 percent for taxes payable in 2019. The following graph shows the City’s changes in estimated market value over the past 10 years: $– $200,000,000 $400,000,000 $600,000,000 $800,000,000 $1,000,000,000 $1,200,000,000 $1,400,000,000 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Estimated Market Value -6- Tax capacity is considered the actual base available for taxation. It is calculated by applying the state’s property classification system to each property’s market value. Each property classification, such as commercial or residential, has a different calculation and uses different rates. Consequently, a city’s total tax capacity will change at a different rate than its total market value, as tax capacity is affected by the proportion of the City’s tax base that is in each property classification from year-to-year, as well as legislative changes to tax rates. The City’s tax capacity increased 7.3 percent for taxes payable in 2018, and increased 4.3 percent for taxes payable in 2019. The following graph shows the City’s change in tax capacities over the past 10 years: $– $2,000,000 $4,000,000 $6,000,000 $8,000,000 $10,000,000 $12,000,000 $14,000,000 $16,000,000 $18,000,000 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Local Tax Capacity The following table presents the average tax rates applied to city residents for each of the last three levy years: 2017 2018 2019 Average tax rate City 27.2 25.5 25.5 County 55.9 54.0 52.9 School 25.3 28.5 26.3 Special taxing 8.6 8.2 8.3 Total 117.0 116.2 113.0 Rates Expressed as a Percentage of Net Tax Capacity City of Arden Hills A slight decrease in the county and school portions contributed to the overall decrease in the average tax rate. -7- GOVERNMENTAL FUND BALANCES The following table summarizes the changes in the fund balances of the City’s governmental funds during the year ended December 31, 2019, presented both by fund balance classification and by fund: Increase 2019 2018 (Decrease) Fund balances of governmental funds Total by classification Nonspendable 22,652$ 25,696$ (3,044)$ Restricted 1,096,484 1,010,521 85,963 Committed 580,243 508,241 72,002 Assigned 4,263,009 3,136,684 1,126,325 Unassigned 2,759,291 2,862,678 (103,387) Total governmental funds 8,721,679$ 7,543,820$ 1,177,859$ Total by fund General 3,215,583$ 3,340,369$ (124,786)$ Permanent Improvement Revolving 3,762,602 2,656,977 1,105,625 Other governmental funds 1,743,494 1,546,474 197,020 Total governmental funds 8,721,679$ 7,543,820$ 1,177,859$ as of December 31, Governmental Fund Change in Fund Balance Fund Balance In total, the fund balances of the City’s governmental funds increased by $1,177,859 during the year ended December 31, 2019. The majority of the increase was in assigned fund balance in the Permanent Improvement Revolving Fund, due to revenues and transfers from other funds exceeding current year spending for street and trail projects. -8- GOVERNMENTAL FUND REVENUES The following table presents the per capita revenue of the City’s governmental funds for the past three years, along with state-wide averages. We have included the most recent comparative state-wide averages available from the Office of the State Auditor to provide a benchmark for interpreting the City’s data. The amounts received from the typical major sources of governmental fund revenue will naturally vary between cities based on factors such as a city’s stage of development, location, size and density of its population, property values, services it provides, and other attributes. It will also differ from year-to-year, due to the effect of inflation and changes in its operation. Also, certain data in these tables may be classified differently than how they appear in the City’s financial statements in order to be more comparable to the state-wide information, particularly in separating capital expenditures from current expenditures. We have designed this section of our management report using per capita data in order to better identify unique or unusual trends and activities of the City. We intend for this type of comparative and trend information to complement, rather than duplicate, information in MD&A. An inherent difficulty in presenting per capita information is the accuracy of the population count, which for most years , is based on estimates. Year 2017 2018 2019 Population 2,500–10,000 10,000–20,000 20,000–100,000 9,969 9,889 9,988 Property taxes 495$ 472$ 493$ 355$ 362$ 380$ Tax increments 28 27 43 30 36 39 Franchise and other taxes 41 48 50 11 10 10 Special assessments 53 40 57 31 74 83 Licenses and permits 38 35 47 73 53 72 Intergovernmental revenues 303 271 157 213 101 60 Charges for services 130 102 112 59 43 44 Other 97 78 49 46 50 64 Total revenue 1,185$ 1,073$ 1,008$ 818$ 729$ 752$ City of Arden Hills Governmental Funds Revenue per Capita With State-Wide Averages by Population Class State-Wide December 31, 2018 The City’s governmental funds have generated significantly less revenue per capita in total than other Minnesota cities in its population class. A city’s stage of development, along with the way a city finances various capital projects, will impact the mix of revenue sources it receives. The City generated $7,509,130 of total revenue in its governmental funds in 2019, an increase of $286,455 (4.0 percent) from the prior year. The City’s per capita governmental fund revenues for 2019 were $752, an increase of $23 (3.2 percent) per capita from the prior year. Intergovernmental revenues decreased $41 per capita, due to one-time reimbursements on joint projects in the prior year. This decrease was more than offset by increases in all remaining categories. An increase in the approved levy contributed to the change in property taxes. The City continued to see an increase in development activity with the increase in licenses and permits. An increase in the “other” category in the table above was due, in part, to improved investment earnings. -9- GOVERNMENTAL FUND EXPENDITURES The expenditures of governmental funds will also vary from state -wide averages and from year-to-year, based on the City’s circumstances. Expenditures are classified into three types as follows: • Current – These are typically the general operating type expenditures occurring on an annual basis, and are primarily funded by general sources, such as taxes and intergovernmental revenues. • Capital Outlay and Construction – These expenditures do not occur on a consistent basis, more typically fluctuating significantly from year-to-year. Many of these expenditures are project-oriented, and are often funded by specific sources that have benefited from the expenditure, such as special assessment improvement projects. • Debt Service – Although the expenditures for debt service may be relatively consistent over the term of the respective debt, the funding source is the important factor. Some debt may be repaid through specific sources, such as special assessments or redevelopment funding, while other debt may be repaid with general property taxes. The City’s expenditures per capita of its governmental funds for the past three years, together with state-wide averages, are presented in the following table: Year 2017 2018 2019 Population 2,500–10,000 10,000–20,000 20,000–100,000 9,969 9,889 9,988 Current 150$ 121$ 104$ 119$ 118$ 120$ 286 272 294 206 211 240 135 125 106 45 59 63 96 115 104 62 66 68 75 74 78 27 33 30 742 707 686 459 487 521 Capital outlay and construction 417 351 307 118 601 145 Debt service 178 153 109 – – – 41 39 29 – – – 219 192 138 – – – Total expenditures 1,378$ 1,250$ 1,131$ 577$ 1,088$ 666$ Governmental Funds Expenditures per Capita With State-Wide Averages by Population Class City of Arden HillsState-Wide All other Principal December 31, 2018 Interest and fiscal General government Public safety Public works Parks and recreation Total expenditures in the City’s governmental funds for 2019 were $6,658,661, a decrease of $4,099,314 (38.1 percent). The City’s per capita governmental funds current expenditures for 2019 were $521, an increase from the per capita expenditures of $487 in the prior year. Capital outlay and construction decreased by $456 per capita, with decreased activity in the City’s Permanent Improvement Revolving Fund, due to significant street and trail projects ongoing in the prior year. -10- GENERAL FUND The City’s General Fund accounts for the financial activity of the basic services provided to the community. The primary services included within this fund are the administration of the municipal operation, police and fire protection, building inspection, street maintenance, parks and recreation, and economic development. The graph below illustrates the change in the General Fund financial position over the last five years. We have also included a line representing annual expenditures and transfers out to reflect the change in the size of the General Fund operation over the same period. 2015 2016 2017 2018 2019 Fund Bal $3,082,410 $2,944,813 $3,639,317 $3,340,369 $3,215,583 Cash Bal $3,752,294 $3,506,967 $3,906,088 $3,850,270 $3,946,278 Exp & Trans Out $3,926,100 $4,940,586 $4,536,636 $5,181,629 $5,549,691 $– $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000 $3,500,000 $4,000,000 $4,500,000 $5,000,000 $5,500,000 $6,000,000 General Fund Financial Position Year Ended December 31, The City’s General Fund cash and investments balance at December 31, 2019 was $3,946,278, an increase of $96,008 from the previous year. Total fund balance at December 31, 2019 was $3,215,583, a decrease of $124,786 from the prior year. This fund balance level represents approximately 67 percent of the City’s annual General Fund expenditures, based on 2019 expenditure levels, which compares to a prior year fund balance level of 77 percent. The overall impact of operations on fund balance was $568,094 better than anticipated in the final budget. As the graph illustrates, the City has generally been able to maintain stable cash and fund balance levels as the volume of financial activity has fluctuated. This is an important factor because a government, like any organization, requires a certain amount of equity to operate. A healthy financial position allows the City to avoid volatility in tax rates; helps minimize the impact of state funding changes; allows for the adequate and consistent funding of services, repairs, and unexpected costs; and is a factor in determining the City’s bond rating and resulting interest costs. Maintaining an adequate fund balance has become increasingly important given the fluctuations in state funding for cities in recent years. A trend that is typical to Minnesota local governments, especially the General Fund of cities, is the unusual cash flow experienced throughout the year. The City’s General Fund cash disbursements are made fairly evenly during the year other than the impact of seasonal services, such as snowplowing, street maintenance, and park activities. Cash receipts of the General Fund are quite a different story. Property taxes comprise approximately 70 percent of the fund’s total annual revenue. Approximately half of these revenues are received by the City in July and the rest in December. Consequently, the City needs to have adequate cash reserves to finance its everyday operations between these payments. -11- GENERAL FUND REVENUES The following graph reflects the City’s General Fund revenues, budget and actual, for 2019: Other Charges for Services Intergovernmental Licenses and Permits Taxes General Fund Revenue Budget to Actual Budget Actual Total General Fund revenues for 2019 were $5,424,905, which was $200,485 (3.8 percent) over the final budget. Licenses and permits ($271,510) and other ($84,264) were over budget, due to conservative budgeting for these sources. Taxes were $124,126 below anticipated levels, due to abatements and adjustments on delinquent balances. The following graph presents the City’s General Fund revenues by source for the last five years. The graph reflects the City’s reliance on property taxes: Taxes Licenses and Permits Intergovernmental Charges for Services Other 2015 $3,203,004 $518,846 $130,023 $496,908 $313,787 2016 $3,260,537 $598,686 $131,914 $577,041 $234,811 2017 $3,541,705 $729,197 $151,425 $590,141 $218,672 2018 $3,578,628 $526,444 $149,097 $427,905 $200,607 2019 $3,795,624 $714,530 $162,041 $440,616 $312,094 $– $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000 $3,500,000 $4,000,000 General Fund Revenue by Source Year Ended December 31, Total General Fund revenues for 2019 were $542,224 (11.1 percent) more than prior year. Taxes increased consistent with the change in the approved levy. Licenses and permits were more than the prior year, due to increased building activity in the current year. The increase in the other category was primarily in improved investment earnings. -12- GENERAL FUND EXPENDITURES The following graph reflects the City’s General Fund expenditures, budget and actual, for 2019: Parks and Recreation Public Works Public Safety General Government General Fund Expenditures Budget Actual Total General Fund expenditures for 2019 were $4,769,691, which was $367,609 (7.2 percent) under the final budget. As presented in the budgetary comparison schedule (within the City’s CAFR), expenditure variances were both favorable and unfavorable within the various functions and departments, while overall, they remained within total appropriations approved by the City Council. The general government function was $133,355 under budget, mainly in TCAAP ($75,037) and finance ($26,102) within personal services other services and charges, respectively. The parks and recreation function was under budget by $178,921, split between park maintenance and recreation. The following graph presents the City’s General Fund expenditures by function for the last five years: General Government Public Safety Public Works Parks and Recreation 2015 $1,015,835 $1,920,280 $336,398 $573,587 2016 $1,082,313 $1,981,506 $479,814 $621,832 2017 $1,076,352 $2,058,037 $443,633 $618,614 2018 $1,039,772 $2,088,345 $579,535 $653,977 2019 $1,058,275 $2,399,296 $632,531 $679,589 $– $250,000 $500,000 $750,000 $1,000,000 $1,250,000 $1,500,000 $1,750,000 $2,000,000 $2,250,000 $2,500,000 General Fund Expenditures by Function Year Ended December 31, Overall, General Fund expenditures increased $408,062 (9.4 percent) from the prior year, with the largest increase in public safety ($310,951). The increase was split between contracted police and fire services and protective inspections. -13- ENTERPRISE FUNDS OVERVIEW The City maintains enterprise funds to account for services the City provides that are financed primarily through fees charged to those utilizing the service. This section of the report provides you with an overview of the financial trends and activities of the City’s enterprise funds, which include the Water, Sewer, Surface Water Management, and Recycling Funds. The utility funds comprise a considerable portion of the City’s activities. These funds help to defray overhead and administrative costs and provide additional support to general government operations by way of annual transfers. We understand that the City is proactive in reviewing these activities on an ongoing basis and we want to reiterate the importance of continually monitoring these operations. Over the years, we have emphasized to our city clients the importance of these utility operations being self-sustaining, preventing additional burdens on general government funds. This would include the accumulation of net assets for future capital improvements and to provide a cushion in the event of a negative trend in operations. ENTERPRISE FUNDS FINANCIAL POSITION The following table summarizes the changes in the financial position of the City’s enterprise funds during the year ended December 31, 2019, presented both by classification and by fund: Increase 2019 2018 (Decrease) Net position of enterprise funds Total by classification Net investment in capital assets 17,452,137$ 17,295,916$ 156,221$ Unrestricted 2,025,812 1,329,268 696,544 Total enterprise funds 19,477,949$ 18,625,184$ 852,765$ Total by fund Water 8,228,211$ 8,179,034$ 49,177$ Sewer 6,412,749 5,875,144 537,605 Surface Water Management 4,718,789 4,447,569 271,220 Nonmajor Recycling 118,200 123,437 (5,237) Total enterprise funds 19,477,949$ 18,625,184$ 852,765$ Enterprise Funds Change in Financial Position Net Position as of December 31, In total, the net position of the City’s enterprise funds increased by $852,765 during the year ended December 31, 2019. The increase in net position is primarily related to positive operating results and improved investment earnings in the current year. -14- WATER FUND The following graph presents five years of operating results for the Water Fund: 2015 2016 2017 2018 2019 Oper Rev $2,099,242 $2,165,773 $2,104,639 $2,256,859 $2,286,542 Oper Exp, Excl Dep $1,579,215 $1,601,171 $1,921,138 $1,812,772 $1,945,021 Oper Inc Before Dep $520,027 $564,602 $183,501 $444,087 $341,521 $– $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000 $1,400,000 $1,600,000 $1,800,000 $2,000,000 $2,200,000 $2,400,000 Water Fund Year Ended December 31, The Water Fund ended 2019 with a net position of $8,228,211, an increase of $49,177 from the prior year. Of total net position, $7,046,791 represents the net investment in capital assets, leaving $1,181,420 of unrestricted net position. Water Fund operating revenues were $2,286,542 for 2019, an increase of $29,683, due to increased rates. Operating expenses (excluding depreciation of $285,246) were $1,945,021, which represents an increase of $132,249. Expenses increased largely due to an increase in other services and charges, and personal services. Consumption will fluctuate from year-to-year based on many factors, including weather patterns and number of utility customers. -15- SEWER FUND The following graph presents five years of operating results for the Sewer Fund: 2015 2016 2017 2018 2019 Oper Rev $1,855,802 $1,989,066 $1,723,699 $1,769,466 $1,892,740 Oper Exp, Excl Dep $1,438,589 $1,362,274 $1,615,427 $1,467,028 $1,442,919 Oper Inc Before Dep $417,213 $626,792 $108,272 $302,438 $449,821 $– $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000 $1,400,000 $1,600,000 $1,800,000 $2,000,000 $2,200,000 Sewer Fund Year Ended December 31, The Sewer Fund ended 2019 with a net position of $6,412,749, an increase of $537,605 from the prior year. Of total net position, $5,792,106 represents the net investment in capital assets, leaving $620,643 of unrestricted net position. Sewer Fund operating revenues for 2019 were $1,892,740, an increase of $123,274 compared to last year, due to increased rates. Operating expenses for 2019 (excluding depreciation of $180,169) were $1,442,919, a decrease of $24,109 from the prior year, due to a decrease in other services and charges. -16- SURFACE WATER MANAGEMENT FUND The following graph presents five years of operating results for the Surface Water Management Fund: 2015 2016 2017 2018 2019 Oper Rev $782,501 $812,044 $834,973 $839,499 $850,971 Oper Exp, Excl Dep $416,945 $390,935 $395,715 $390,882 $405,042 Oper Inc Before Dep $365,556 $421,109 $439,258 $448,617 $445,929 $– $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 $700,000 $800,000 $900,000 Surface Water Management Fund Year Ended December 31, The Surface Water Management Fund ended 2019 with a net position of $4,718,789, an increase of $271,220 from the prior year. Of this, $4,613,240 represents the investment in capital assets, leaving $105,549 of unrestricted net position. Surface Water Management Fund operating revenues for 2019 were $850,971, an increase of $11,472 from last year, due to an increase in rates. Operating expenses for 2019 (excluding depreciation of $108,167) were $405,042, or $14,160 more than the prior year. -17- RECYCLING FUND The following graph presents five years of operating results for the Recycling Fund: 2015 2016 2017 2018 2019 Oper Rev $129,030 $134,739 $151,272 $134,228 $140,149 Oper Exp $239,727 $141,190 $147,919 $168,145 $172,232 Oper Inc (Loss)$(110,697)$(6,451)$3,353 $(33,917)$(32,083) $(125,000) $(75,000) $(25,000) $25,000 $75,000 $125,000 $175,000 $225,000 $275,000 Recycling Fund Year Ended December 31, The Recycling Fund ended 2019 with an unrestricted net position of $118,200, a decrease of $5,237 from the prior year. Recycling Fund operating revenues for 2019 were $140,149, an increase of $5,921 from the prior year, due to an increase in rates. Operating expenses for 2019 were $172,232, an increase of $4,087 from the prior year. The Recycling Fund also received $23,597 of nonoperating intergovernmental revenues that are available for the operation of the City’s Recycling Program. In 2015, intergovernmental revenues included $100,000 received from Ramsey County as a grant to upgrade city residents’ recycling receptacles. This intergovernmental revenue is not reflected in the graph above; however, the expenses related to this grant are included in the operating results presented by the graph above. This one-time grant accounts for the increase in operating expenses in the 2015 fiscal year. THIS PAGE INTENTIONALLY LEFT BLANK -18- GOVERNMENT-WIDE FINANCIAL STATEMENTS In addition to fund-based information, the current reporting model for governmental entities also requires the inclusion of two government-wide financial statements designed to present a clear picture of the City as a single, unified entity. These government-wide financial statements provide information on the total cost of delivering services, including capital assets and long-term liabilities. STATEMENT OF NET POSITION The Statement of Net Position essentially tells you what your city owns and owes at a given point in time, the last day of the fiscal year. Theoretically, net position represents the resources the City has leftover to use for providing services after its debts are settled. However, those resources are not always in spendable form, or there may be restrictions on how some of those resources can be used. Therefore, net position is divided into three components: investment in capital assets, restricted, and unrestricted. The following table presents the components of the City’s net position as of December 31, 2019 and 2018 for governmental activities and business-type activities (utility fund operations): Increase 2019 2018 (Decrease) Net position Governmental activities Net investment in capital assets 26,988,912$ 26,972,898$ 16,014$ Restricted 1,096,698 1,010,521 86,177 Unrestricted 9,070,332 8,736,913 333,419 Total governmental activities 37,155,942 36,720,332 435,610 Business-type activities Net investment in capital assets 17,452,137 17,295,916 156,221 Unrestricted 2,025,812 1,329,268 696,544 Total business-type activities 19,477,949 18,625,184 852,765 Total net position 56,633,891$ 55,345,516$ 1,288,375$ As of December 31, Net position for governmental activities increased by $435,610 in 2019, as presented above. The largest change in governmental activities occurred in unrestricted net position. Positive operations improved unrestricted net position. The change in net position for business-type activities is consistent with our earlier discussion for the utility operations, which are presented under the same, full accrual, basis of accounting. -19- STATEMENT OF ACTIVITIES The Statement of Activities tracks the City’s yearly revenues and expenses, as well as any other transactions that increase or reduce total net position. These amounts represent the full cost of providing services. The Statement of Activities provides a more comprehensive measure than just the amount of cash that changed hands, as reflected in the fund-based financial statements. This statement includes the cost of supplies used, depreciation of long-lived capital assets, and other accrual-based expenses. The following table presents the change in the net position of the City for the years ended December 31, 2019 and 2018: 2018 Program Expenses Revenues Net Change Net Change Governmental activities 1,337,262$ 392,923$ (944,339)$ (1,001,790)$ 2,471,567 960,220 (1,511,347) (1,477,024) 1,416,785 677,860 (738,925) 145,714 798,717 109,531 (689,186) 626,237 369,256 – (369,256) (391,156) Business-type activities 2,295,820 2,412,370 116,550 730,977 1,663,498 2,099,857 436,359 231,795 513,209 851,273 338,064 341,395 172,232 163,746 (8,486) (10,098) Total net (expense) revenue 11,038,346$ 7,667,780$ (3,370,566) (803,950) General revenues Property taxes 3,793,754 3,578,894 Tax increment collections 388,697 351,569 Franchise taxes 100,464 101,237 Unrestricted investment earnings 376,026 199,687 Total general revenues 4,658,941 4,231,387 Change in net position 1,288,375$ 3,427,437$ 2019 Net (expense) revenue General government Public safety Parks and recreation Public works Water Recycling Economic development Sewer Surface water management One of the goals of this statement is to provide a side-by-side comparison to illustrate the difference in the way the City’s governmental and business-type operations are financed. The table clearly illustrates the dependence of the City’s governmental operations on general revenues, such as taxes and unrestricted investment earnings. It also shows that, for the most part, the City’s business-type activities are generating sufficient program revenues (service charges and program -specific grants) to cover expenses. This is critical given the current downward pressures on the general revenue sources. -20- LEGISLATIVE UPDATES The 2019 legislative session began with a projected state general fund surplus of $1.052 billion. The legislative agenda was primarily focused on setting an operating budget for the state’s fiscal 2020-2021 biennium. At the end of the regular session, only a higher education budget bill had been completed. However, after a special session, the Legislature was able to address the 11 remaining budget bills, as well as pass an omnibus tax bill and small pension bill. The following is a brief summary of specific legislative changes from the 2019 session or previous legislative sessions potentially impacting Minnesota cities. Local Government Aid (LGA) – An additional $26 million was added to the appropriation for the city LGA formula beginning in fiscal 2020, bringing the total state-wide appropriation to $560.4 million. An additional $4 million was added to the appropriation beginning in fiscal 2021. The LGA distribution formula for 2020 was altered to provide that a city’s 2020 LGA may not be less than its 2019 aid, and the cap on maximum aid losses in any year thereafter was modified. Bonding Bill – The 2019 bonding bill provided financing for approximately $102 million of projects and funding authorized by the 2018 omnibus bonding bill, which had been legally challenged due to their reliance on the use of the Environment and Natural Resources Trust Fund to generate appropriation bonds. The 2019 Legislature changed the funding source for these projects to general obligation bonds, clearing the way for the projects to go forward. Included in this was $59 million earmarked for city water and wastewater projects through the state Public Facilities Authority. Local Option Sales Tax Process – Effective May 1, 2019, the process for cities to enact a local option sales tax have been modified, requiring special legislation prior to a local referendum vote. Cities must now adopt a resolution specifying the proposed sales tax rate and time frame for the sales tax. The resolution must also include a detailed description of the project or projects (up to five) to be funded by the sales tax, the amount to be raised for each project, and documentation of the regional significance of each project. The resolution must be submitted to the House and Senate tax committee chairs by January 31st to be considered for special legislation by the State Legislature. If special legislation is approved, voter approval must be obtained by referendum at a general election within two years of legislative approval. Wage Theft – The Legislature enacted a number of changes in employment law aimed at reducing wage theft by employers. The changes require employers to provide written notice to new employees of specific wage information including rate of pay, allowances, paid leave, deductions, days in a pay period, and the employer’s legal name, address, and phone number. Employers must also provide an earnings statement that includes similar information. The changes also create new requirements for employer recordkeeping for hours worked each day and each workweek, and imposes penalties for failure to do so and for refusal to make the records available for inspection by the Department of Labor. Written Estimates of Consulting Fees – Effective August 1, 2019, upon request by applicants for a permit, license, or other approval relating to real estate development or construction, cities are required to provide a written, nonbinding estimate of consulting fees to be charged to the applicant based on information available at that time. The related application will not be considered complete until the city has provided the estimate, received the required application fees, and received the applicant’s signed acceptance of the fee estimate along with a signed statement that the app licant has not relied on the fee estimate in its decision to proceed with the application. Contract Retainage – Effective for contracts entered into August 1, 2019 or later, contract retainage must be released no later than 60 days after the related construction project reaches substantial completion as defined by statute. After substantial completion, cities can still withhold amounts equal to, 1) 250 percent of the cost to correct or complete work known at the time of substantial completion, and 2) the greater of $500 or 1 percent of the value of the contract pending the completion of “final paperwork,” including documents required to fulfill contractual obligations such as operating manuals, payroll documents for projects subject to prevailing wage requirements, and contractor payroll tax withholding affidavits. Any resulting reduction in retainage must be passed from the contractor to all subcontractors at the same rate. -21- Driver and Vehicle Registration System (VTRS) – The Legislature selected VTRS, a third party vendor system, to replace the failed Minnesota Licensing and Registration System (MNLARS). Fees from driver’s licenses, license plates, and filing fees were increased and a technology surcharge imposed on vehicle registration renewals to pay for the implementation of VTRS, the decommissioning of MNLARS, and to temporarily increase the capacity of Driver and Vehicle Services to meet public service needs. Included in this is $13 million appropriated in 2019 for reimbursement grants to deputy registrars for costs related to MNLARS. The grants, which would be determined by formula, would require the deputy registrar accepting the grant to release the state from any further liability or claims related to MNLARS. Vaping Ordinance Authority – Effective July 1, 2019, cities are allowed to enact and enforce ordinances with more stringent measures than the Minnesota Clean Indoor Air Act to protect individuals from involuntary exposure to aerosol or vapor from electronic delivery devices. Water Connection Fees – Effective January 1, 2020, the annual water connection fees cities are required to collect on behalf of the Minnesota Department of Health for water testing and support has been increased from $6.36 to $9.72. Military Exception to Open Meeting Law – Effective August 1, 2019, members of a public body that are in the military will be allowed to participate in public meetings via interactive television when they are at a required drill, deployed, or on active duty. The member may participate under this exception up to three times a year. Pension Plan Changes – The 2019 pension bill included several changes to the various pension plans throughout the state: • Changes to plans administered by the Public Employees Retirement Association (PERA) included: o The rights of PERA General Employees Retirement Fund (GERF) plan and Public Employees Police and Fire Fund (PEPFF) plan members to purchase service credit for periods of military leave were expanded. This gives plan members the right to purchase up to five years of service credit for military service leave that is not federally protected because the service occurred prior to public employment or the member did not meet the payment deadlines applicable to federally protected leave service credit purchases. o The Phased Retirement Option (PRO) program, which gives cities an opportunity to retain potentially retiring employees that are GERF plan members aged 62 or over, was altered and made permanent. Under a PRO arrangement, an employee would begin collecting a retirement annuity, but could continue working for their current employer for up to five years if they agree to a work schedule that represents a reduction of at least 25 percent each pay period from their current schedule, up to a maximum of 1,044 hours per year. Employees would not be allowed to contribute to a pension benefit plan or accrue additional service time while working under a PRO. o A process was established for municipalities and joint powers entities to terminate participation in the PERA Statewide Volunteer Firefighter (SVF) plan if, 1) the entity has either eliminated its fire department or ceased using the services of all departing firefighters and any other noncareer or volunteer firefighters, and 2) the entity’s account has assets sufficient to cover all liabilities including the fully vested liabilities for all departing firefighters and administrative expenses. -22- • Changes impacting volunteer firefighter relief associations (VRFAs) included: o Effective January 1, 2020, vesting schedules for defined contribution plans cannot require that a member have more than 20 years of active service to become 100 percent vested in the member’s account, or provide for a larger vesting percentage with respect to the completed years of service than as provided in the statutory schedule. o Effective January 1, 2020, the permitted graded vesting schedule for defined benefit pension plans is reduced from 20 years to 10 years for full vesting. Also, plans cannot require that a member have more than 20 years of active service to become 100 percent vested in the member’s accrued service pension, or provide for a larger vesting percentage with respect to the completed years of service than as provided in the statutory schedule. o Effective January 1, 2020, supplemental benefits are allowed to be paid to designated beneficiaries or estates when plan members have no surviving spouse or children. THIS PAGE INTENTIONALLY LEFT BLANK -23- ACCOUNTING AND AUDITING UPDATES The following is a summary of GASB standards expected to be implemented in the next few years. However, due to the COVID-19 outbreak, the GASB is currently considering a proposal to delay the original implementation dates of these and other standards by a year. At this point, the implementation dates for the standards listed below are tentative and may be subject to change. GASB STATEMENT NO. 87, LEASES A lease is a contract that transfers control of the right to use another entity’s nonfinancial asset as specified in the contract for a period of time in an exchange or exchange-like transaction. Examples of nonfinancial assets include buildings, land, vehicles, and equipment. Any contract that meets this definition should be accounted for under the leases guidance, unless specifically excluded in this statement. Governments enter into leases for many types of assets. Under the previous guidance, leases were classified as either capital or operating depending on whether the lease met any of the four tests. In many cases, the previous guidance resulted in reporting lease transactions differently than similar nonlease financing transactions. The goal of this statement is to better meet the information needs of users by improving accounting and financial reporting for leases by governments. It establishes a singl e model for lease accounting based on the principle that leases are financings of the right to use an underlying asset. This statement increases the usefulness of financial statements by requiring recognition of certain lease assets and liabilities for leases that previously were classified as operating leases and recognized as inflows of resources or outflows of resources based on the payment provisions of the contract. Under this statement, a lessee is required to recognize a lease liability and an intangible right to use lease asset, and a lessor is required to recognize a lease receivable and a deferred inflow of resources, thereby enhancing the relevance and consistency of information about governments’ leasing activities. To reduce the cost of implementation, this statement includes an exception for short -term leases, defined as a lease that, at the commencement of the lease term, has a maximum possible term under the lease contract of 12 months (or less), including any options to extend, regardless of their probability of being exercised. Lessees and lessors should recognize short-term lease payments as outflows of resources or inflows of resources, respectively, based on the payment provisions of the lease contract. The requirements of this statement are effective for reporting periods beginning after December 15, 2019. GASB STATEMENT NO. 91, CONDUIT DEBT OBLIGATIONS The primary objectives of this statement are to provide a single method of reporting conduit debt obligations by issuers and eliminate diversity in practice associated with (1) commitments extended by issuers, (2) arrangements associated with conduit debt obligations, and (3) related note disclosures. This statement achieves those objectives by clarifying the existing definition of a conduit debt obligation; establishing that a conduit debt obligation is not a liability of the issuer; establishing standards for accounting and financial reporting of additional commitments and voluntary commitments extended by issuers and arrangements associated with conduit debt obligations; and improving required note disclosures. -24- A conduit debt obligation is defined as a debt instrument having all of the following characteristics: • There are at least three parties involved: (1) an issuer, (2) a third party obligor, and (3) a debt holder or a debt trustee. • The issuer and the third party obligor are not within the same financial reporting entity. • The debt obligation is not a parity bond of the issuer, nor is it cross -collateralized with other debt of the issuer. • The third party obligor or its agent, not the issuer, ultimately receives the proceeds from the debt issuance. • The third party obligor, not the issuer, is primarily obligated for the payment of all amounts associated with the debt obligation (debt service payments). This statement also addresses arrangements, often characterized as leases, that are associated with conduit debt obligations. In those arrangements, capital assets are constructed or acquired with the proceeds of a conduit debt obligation and used by third party obligors in the course of their activities. This statement requires issuers to disclose general information about their conduit debt obligations, organized by type of commitment, including the aggregate outstanding principal amount of the issuers’ conduit debt obligations and a description of each type of commitment. Issuers that recognize liabilities related to supporting the debt service of conduit debt obligations also should disclose information about the amount recognized and how the liabilities changed during the reporting period. The requirements of this statement are effective for reporting periods beginning after December 15, 2020. Earlier application is encouraged. Attachment B THIS PAGE INTENTIONALLY LEFT BLANK CITY OF ARDEN HILLS RAMSEY COUNTY, MINNESOTA Comprehensive Annual Financial Report Year Ended December 31, 2019 FINANCE DEPARTMENT THIS PAGE INTENTIONALLY LEFT BLANK Page Letter of Transmittal i–iii GFOA Certificate of Achievement iv City Council and Appointed Officials v Organization Chart vi INDEPENDENT AUDITOR’S REPORT 1–3 MANAGEMENT’S DISCUSSION AND ANALYSIS 4–13 BASIC FINANCIAL STATEMENTS Government-Wide Financial Statements Statement of Net Position 14 Statement of Activities 15 Fund Financial Statements Governmental Funds Balance Sheet 16 Statement of Revenues, Expenditures, and Changes in Fund Balances 17 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances to the Statement of Activities 18 Proprietary Funds Statement of Net Position 19 Statement of Revenues, Expenses, and Changes in Net Position 20 Statement of Cash Flows 21 Notes to Basic Financial Statements 22–45 REQUIRED SUPPLEMENTARY INFORMATION PERA – General Employees Retirement Fund Schedule of City’s and Nonemployer Proportionate Share of Net Pension Liability 46 Schedule of City Contributions 46 Budgetary Comparison Schedule General Fund 47–49 Notes to Required Supplementary Information 50–51 SUPPLEMENTAL INFORMATION Combining and Individual Fund Statements and Schedules Nonmajor Governmental Funds Combining Balance Sheet 52 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances 53 INTRODUCTORY SECTION FINANCIAL SECTION CITY OF ARDEN HILLS Table of Contents RAMSEY COUNTY, MINNESOTA Page SUPPLEMENTAL INFORMATION (CONTINUED) Combining and Individual Fund Statements and Schedules (continued) Nonmajor Special Revenue Funds Combining Balance Sheet 54 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances 55 Nonmajor Capital Project Funds Combining Balance Sheet 56 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances 57 Special Revenue Funds Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual Cable Fund 58 EDA Operating Fund 59 EDA TIF District No. 3 Fund 60 EDA TIF District No. 4 Fund 61 Internal Service Funds Combining Statement of Net Position 62 Combining Statement of Revenues, Expenses, and Changes in Net Position 63 Combining Statement of Cash Flows 64 Net Position by Component 65–66 Changes in Net Position 67–70 Governmental Activities Tax Revenues by Source 71 Fund Balances of Governmental Funds 72–73 Changes in Fund Balances of Governmental Funds 74–75 General Governmental Tax Revenues by Source 76 Tax Capacity Value and Estimated Market Value of Taxable Property 77–78 Property Tax Rates – Direct and Overlapping Governments 79 Principal Property Taxpayers 80 Property Tax Levies and Collections 81 Ratios of Outstanding Debt by Type 82 Direct and Overlapping Governmental Activities Debt 83 Legal Debt Margin Information 84–85 Pledged Revenue Coverage 86 Demographic and Economic Statistics 87 Principal Employers 88 Operating Indicators by Function 89–90 Full-Time Equivalent City Government Employees by Function 91–92 Capital Asset Statistics by Function 93–94 STATISTICAL SECTION (UNAUDITED) CITY OF ARDEN HILLS Table of Contents (continued) RAMSEY COUNTY, MINNESOTA INTRODUCTORY SECTION THIS PAGE INTENTIONALLY LEFT BLANK April 30, 2020 To the Honorable Mayor, Members of the City Council, and Citizens of the City of Arden Hills, Minnesota State law requires that every general-purpose local government publish a complete set of audited financial statements. This report is published to fulfill that requirement for the fiscal year ended December 31, 2019. Management assumes full responsibility for the completeness and reliability of the information contained in this report, based upon a comprehensive framework of internal control that it has established for this purpose. Because the cost of internal control should not exceed anticipated benefits, the objective is to provide reasonable, rather than absolute assurance that the financial statements are free of any material misstatements. Malloy, Montague, Karnowski, Radosevich & Co., P.A. (MMKR), Certified Public Accountants, have issued an unmodified (“clean”) opinion on the City of Arden Hills, Minnesota’s (the City) financial statements for the year ended December 31, 2019. The independent auditor’s report is located at the front of the financial section of this report. The 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 statements. The MD&A complements this letter of transmittal and should be read in conjunction with it. PROFILE OF THE GOVERNMENT The City, incorporated in 1951, is a northern suburb of the Minneapolis/St. Paul metropolitan area, situated in Ramsey County. The City occupies 9.65 square miles and serves an estimated population of 9,988. The City is empowered to levy a property tax on both real and personal property located within its boundaries. The City operates under the “Optional Plan A” form of government as defined in Minnesota Statutes. Under this plan, the government of the City is directed by a City Council composed of an elected mayor and four elected councilmembers. The City Council exercises legislative authority and determines all matters of policy. The City Council appoints personnel responsible for the proper administration of all affairs relating to the City. Councilmembers serve four-year terms, with two members elected every two years. The mayor is elected for a four-year term. The mayor and members of the City Council are elected at large. -i- -ii- The City provides a full range of services: the construction and maintenance of streets and other infrastructure; recreational and cultural activities; water, sewer, surface water management, and recycling systems; community development, building inspection, and planning; and general government operations, including administration, finance/accounting, information systems, community information (newsletter), and general government buildings. The City contracts with Ramsey County for police services and Lake Johanna Fire Department for fire services. The City Council is required to adopt a final budget by late December for the subsequent year. The budget is prepared by fund, function (e.g., public safety), and department (e.g., police). Transfers of appropriations between funds require the approval of the City Council. The legal level of budgetary control is the fund level. Budgeted amounts may be amended by the City Council. The City’s capital improvement program (covering five years), the pavement management plan (covering five years), and the Twin Cities Army Ammunition Plant (TCAAP) development plan , along with the annual budget, serve as the foundation for the City’s financial planning, and the annual budget serves as the budget control. LOCAL ECONOMY A number of high-profile leaders in the medical, technology, and business sectors, including Boston Scientific, Land O’ Lakes, IntriCon, Gradient Financial, International Paper, Delkor, and Presbyterian Homes, are located within the City. These leaders of industry provide high-paying jobs to skilled employees, which in turn creates a strong base for economic diversity, quality housing, and an involved citizenry. Because of its location in a region with a varied economic base, unemployment is relatively stable. During the past 10 years, the unemployment rate has fluctuated from a high of 7.5 percent in 2010 to the current rate of 3.0 percent. The Novel Coronavirus is impacting the unemployment rate but the final outcome won’t be known for some time yet. During the past 10 years, property taxes have remained a stable and significant source of total General Fund and special revenue fund revenues. Intergovernmental revenues have declined over this same time period and now make up less than 2 percent of total revenues in the General Fund and special revenue funds for the current fiscal year. LONG-TERM FINANCIAL PLANNING The unassigned General Fund balance of $2,987,183 (59.5 percent of total subsequent year General Fund expenditures budgeted) meets the 50 percent target set by the City Council for budgetary and planning purposes. The total General Fund balance also includes $22,438 of nonspendable equity for prepaid items, $84,372 of assigned equity for compensated absences, and $121,590 assigned equity for subsequent year’s budget. The City’s five-year capital improvement program and pavement management plan serve as the foundation for the City’s long-term financial planning. To ensure the timely replacement of infrastructure, the City prepares long-term cost projections for the replacement of all city assets. Funding needs for capital replacements are reflected in tax levies and special assessments for capital assets, and are reflected in user fees established for the Water, Sewer, Surface Water Management, and Recycling Funds. -iii- Projections for the next 10 years indicate that property tax contributions, user fees, and investment income will need to be reevaluated to support scheduled replacements. In 2012, the City entered into a Joint Powers Agreement with Ramsey County to form a Joint Development Authority (JDA) to acquire and develop a portion of the Army property, formerly known as TCAAP. The county officially acquired this property April 15, 2013, and has cleaned it to residential standards. The City completed the TCAAP Redevelopment Code (TRC) in late 2016, which guides the land use on the site. The development details of the project are now being negotiated by the interested parties. The status of the JDA is currently in question but any future development on the site is expected to add to the City’s tax base and could include commercial/industrial, residential, and civic uses. The site is approximately 430 acres. RELEVANT FINANCIAL POLICIES Trends of the past decade, changes in state tax law, and recent legislation indicate that the City will have a greater reliance on property taxes as a source of financing for city operations in the future and less reliance on intergovernmental revenues (federal and state). Changes in state tax law over the past few years have resulted in funding changes for both schools and local governments. The elimination of the homestead and agricultural credit aids program, and large cuts in both local government aid a nd the market value homestead credit programs resulted in revenue losses to the City. MAJOR INITIATIVES The largest initiative on the City’s horizon is the TCAAP project, as previously mentioned. This project is a joint effort between the City, Ramsey County, and a master developer. When completed, this project will represent almost a 40 percent population increase to the City, as well as a significant increase to the commercial and industrial sectors, too. The TCAAP project is expected to be a destination site for the region and serve as a model for future developments. ACKNOWLEDGEMENTS The Government Finance Officers Association (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City for its Comprehensive Annual Financial Report (CAFR) for the fiscal year ended December 31, 2018. This is the 13th year that the City has received this prestigious award. In order to be awarded a Certificate of Achievement, the City had to publish an easily readable and efficiently organized CAFR that satisfied both accounting principles generally accepted in the United States of America and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current CAFR continues to meet the Certificate of Achievement Program’s requirements and we are submitting it to the GFOA to determine its eligibility for another certificate. The preparation of this report would not have been possible without the efficient and dedicated service of the entire staff of the finance department, and through the helpful guidance and assistance from our auditing firm, MMKR. We wish to express our appreciation to all members of the department who assisted and contributed to the preparation of this report. Credit also must be given to the mayor and City Council for their unfailing support in maintaining the highest standards of professionalism in the management of the City’s finances. Respectfully submitted, Dave Perrault Gayle Bauman City Administrator Finance Director -iv- -v- Term Expires David Grant Mayor December 31, 2022 Brenda Holden Councilmember December 31, 2020 Fran Holmes Councilmember December 31, 2022 Dave McClung Councilmember December 31, 2020 Steve Scott Councilmember December 31, 2022 Dave Perrault City Administrator Gayle Bauman Finance Director Julie Hanson City Clerk Joel Jamnik City Attorney CITY COUNCIL APPOINTED OFFICIALS CITY OF ARDEN HILLS RAMSEY COUNTY, MINNESOTA City Council and Appointed Officials December 31, 2019 2019 City of Arden Hills Organization Chart -vi- FINANCIAL SECTION THIS PAGE INTENTIONALLY LEFT BLANK -1- INDEPENDENT AUDITOR’S REPORT To the City Council and Management City of Arden Hills, 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 Arden Hills, Minnesota (the City) as of and for the year ended December 31, 2019, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as list ed in the table of contents. MANAGEMENT’S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. AUDITOR’S RESPONSIBILITY Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the City’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. (continued) C E R T I F I E D A C C O U N T A N T S P UBLIC PRINCIPALS Thomas A. Karnowski, CPA Paul A. Radosevich, CPA William J. Lauer, CPA James H. Eichten, CPA Aaron J. Nielsen, CPA Victoria L. Holinka, CPA/CMA Jaclyn M. Huegel, CPA Kalen T. Karnowski, CPA Malloy, Montague, Karnowski, Radosevich & Co., P.A. 5353 Wayzata Boulevard • Suite 410 • Minneapolis, MN 55416 • Phone: 952-545-0424 • Fax: 952-545-0569 • www.mmkr.com Standard Letterhead-r2.qxp_167639 Letterhead-RV1 9/7/18 6:34 PM Page 1 -2- OPINIONS In our opinion, the financial statements referred to on the previous page present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City as of December 31, 201 9, 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. OTHER MATTERS Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis and the required supplementary information (RSI), as listed in the table of contents, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the RSI in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The introductory section, supplemental information, and statistical section, as listed in the table of contents, are presented for purposes of additional analysis and are not required parts of the basic financial statements. The supplemental information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the supplemental information is fairly stated, in all material respects, in relation to the basic financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. (continued) -3- OTHER REPORTING REQUIRED BY GOVERNMENT AUDITING STANDARDS In accordance with Government Auditing Standards, we have also issued our report dated April 30, 2020, on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, grant agreements, and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance. Minneapolis, Minnesota April 30, 2020 THIS PAGE INTENTIONALLY LEFT BLANK CITY OF ARDEN HILLS Management’s Discussion and Analysis Year Ended December 31, 2019 -4- As the management of the City of Arden Hills, Minnesota (the City), we offer readers of the City’s Comprehensive Annual Financial Report (CAFR) this narrative overview and analysis of the financial activities of the City for the fiscal year ended December 31, 2019. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal, which is presented in the introductory section of this report. FINANCIAL HIGHLIGHTS •The assets and deferred outflows of resources of the City exceeded liabilities and deferred inflows of resources at the close of the most recent fiscal year by $56,633,891 (net position). Of this amount, $11,096,144 (unrestricted net position) may be used to meet the City’s ongoing obligations to citizens and creditors. •The City’s total net position increased by $1,288,375 in 2019. •As of the close of the current fiscal year, the City’s governmental funds reported combined ending fund balances of $8,721,679. Of this total amount, $22,652 is nonspendable and $1,096,484 is restricted, leaving an unrestricted balance of $7,602,543. •At the end of the current fiscal year, the General Fund has a total fund balance of $3,215,583. At December 31, 2019, the unassigned fund balance of the General Fund was $2,987,183, or 59.5 percent, of the subsequent year’s budgeted expenditures. 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 include three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to basic financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. 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, liabilities, and deferred inflows/outflows of resources, with the difference reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. The Statement of Activities presents information showing how the City’s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave). -5- Both of the government-wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through use r fees and charges (business-type activities). The governmental activities of the City include general government, public safety, public works, parks and recreation, and economic development. The business-type activities of the City include water, sewer, surface water management, and recycling. The government-wide financial statements can be found in the financial section following 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 funds 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 City’s near-term financing requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government -wide financial statements. By doing so, readers may better understand the long-term impact of the government’s near-term financing decisions. Both the governmental funds Balance Sheet and Statement of Revenues, Expenditures, and Changes in Fund Balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The City reports two individual major governmental funds. Information is presented separately in the governmental funds Balance Sheet and Statement of Revenues, Expenditures, and Changes in Fund Balances for the General Fund and Permanent Improvement Revolving Fund, which are considered to be major funds. Data from all other governmental funds are combined into a single, aggregated presentation . Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements elsewhere in this report. The City adopts an annual appropriated budget for its General Fund and most special revenue funds. A budgetary comparison schedule has been provided for these funds to demonstrate compliance with the budget. The basic governmental funds financial statements can be found in the financial section of this report immediately following the government-wide financial statements. -6- Proprietary Funds – The City maintains two different types of proprietary funds. Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. 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, surface water management, and recycling operations. Water, sewer, and surface water management 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 maintains internal service funds for risk management, engineering, central garage, and technology. Because these services predominately benefit governmental rather than business-type functions, they have been included within governmental activities in the government-wide financial statements. The proprietary funds financial statements can be found in the financial section of this report immediately following the governmental funds statements. Notes to Basic Financial Statements – The notes to basic financial statements provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to basic financial statements can be found following the proprietary funds statements within the financial section of this report. Other Information – In addition to the basic financial statements and accompanying notes, the financial section also presents required supplementary information, and the combining and individual fund statements and schedules (presented as supplemental information) referred to earlier in connection with nonmajor governmental funds and internal service funds, which are presented immediately following the basic financial statements. Further, a statistical section has been included as part of the CAFR to facilitate additional analysis, and is the third and final section of the report. GOVERNMENT-WIDE FINANCIAL ANALYSIS An analysis of the City’s financial position begins with a review of the Statement of Net Position and the Statement of Activities. These two statements report the City’s net position and changes in net position. It should be noted that the financial position can also be affected by nonfinancial factors, including economic conditions, population growth, and new regulations. As noted earlier, net position may serve over time as a useful indicator of the City’s financial position. As presented in the following condensed version of the Statement of Net Position, the City’s assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $56,633,891 at December 31, 2019. The largest portion of the City’s net position, $44,441,049, or 78.5 percent, reflects its net investment in capital assets (e.g., land, construction in progress, buildings and structures, infrastructure and improvements, distribution and collection systems, machinery and equipment, office furniture and equipment, and vehicles) less any related debt used to acquire those assets that is still outstanding. The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City’s investment in its capital assets are reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources; since the capital assets themselves cannot be used to liquidate these liabilities. -7- The following table provides the City’s Summary of Net Position: 2019 2018 2019 2018 2019 2018 Assets Current and other assets 12,945,479$ 12,852,671$ 3,151,779$ 3,252,652$ 16,097,258$ 16,105,323$ Capital assets 26,988,912 26,972,898 20,008,531 19,867,868 46,997,443 46,840,766 Total assets 39,934,391$ 39,825,569$ 23,160,310$ 23,120,520$ 63,094,701$ 62,946,089$ Deferred outflows of resources Pension plan deferments – PERA 56,374$ 183,899$ 39,435$ 47,339$ 95,809$ 231,238$ Liabilities Long-term liabilities outstanding 795,864$ 891,506$ 3,104,472$ 3,014,867$ 3,900,336$ 3,906,373$ Other liabilities 1,847,726 2,056,217 483,552 1,336,827 2,331,278 3,393,044 Total liabilities 2,643,590$ 2,947,723$ 3,588,024$ 4,351,694$ 6,231,614$ 7,299,417$ Deferred inflows of resources Pension plan deferments – PERA 191,233$ 318,242$ 133,772$ 190,981$ 325,005$ 509,223$ State aid received for subsequent years – 23,171 – – – 23,171 Total deferred inflows of resources 191,233$ 341,413$ 133,772$ 190,981$ 325,005$ 532,394$ Net position Net investment in capital assets 26,988,912$ 26,972,898$ 17,452,137$ 17,295,916$ 44,441,049$ 44,268,814$ Restricted 1,096,698 1,010,521 – – 1,096,698 1,010,521 Unrestricted 9,070,332 8,736,913 2,025,812 1,329,268 11,096,144 10,066,181 Total net position 37,155,942$ 36,720,332$ 19,477,949$ 18,625,184$ 56,633,891$ 55,345,516$ Summary of Net Position as of December 31, 2019 and 2018 Table 1 Activities Activities Total Governmental Business-Type Restricted net position of $1,096,698 comprises 1.9 percent of net position at the close of the fiscal year ended December 31, 2019. These assets are subject to external restrictions on how they may be used. The balance of unrestricted net position, $11,096,144, or approximately 19.6 percent, may be used to meet the City’s ongoing obligations to citizens and creditors. Certain balances within unrestricted net position may have internally imposed commitments or limitations, which may further limit the purpose for which such net position may be used. At the end of the current fiscal year, the City is able to report positive balances in all three categories of net position, both for the government as a whole, as well as for its separate governmental and business-type activities. The same situation held true for the prior fiscal year. Both governmental activities and business-type activities experienced changes in deferred outflows of resources, deferred inflows of resources, and long-term liabilities as a result of the City’s participation in a state-wide defined benefit pension plan. -8- The following table provides a condensed version of the Statement of Activities for the year ended December 31, 2019, with comparative amounts for the year ended December 31, 2018: 2019 2018 2019 2018 2019 2018 Revenues Program revenues Charges for services 1,179,448$ 954,357$ 5,170,402$ 5,000,052$ 6,349,850$ 5,954,409$ Operating grants and contributions 347,823 840,634 24,752 27,429 372,575 868,063 Capital grants and contributions 613,263 2,494,823 332,092 735,220 945,355 3,230,043 General revenues Property taxes 3,793,754 3,578,894 – – 3,793,754 3,578,894 Tax increment collections 388,697 351,569 – – 388,697 351,569 Franchise taxes 100,464 101,237 – – 100,464 101,237 Unrestricted investment earnings 322,346 159,316 53,680 40,371 376,026 199,687 Total revenues 6,745,795 8,480,830 5,580,926 5,803,072 12,326,721 14,283,902 Expenses General government 1,337,262 1,286,845 – – 1,337,262 1,286,845 Public safety 2,471,567 2,248,540 – – 2,471,567 2,248,540 Public works 1,416,785 1,695,449 – – 1,416,785 1,695,449 Parks and recreation 798,717 765,843 – – 798,717 765,843 Economic development 369,256 391,156 – – 369,256 391,156 Water – – 2,295,820 2,147,359 2,295,820 2,147,359 Sewer – – 1,663,498 1,654,079 1,663,498 1,654,079 Surface water management – – 513,209 499,049 513,209 499,049 Recycling – – 172,232 168,145 172,232 168,145 Total expenses 6,393,587 6,387,833 4,644,759 4,468,632 11,038,346 10,856,465 Increase (decrease) in net position before transfers 352,208 2,092,997 936,167 1,334,440 1,288,375 3,427,437 Transfers 83,402 300,000 (83,402) (300,000) – – Increase in net position 435,610 2,392,997 852,765 1,034,440 1,288,375 3,427,437 Net position – beginning 36,720,332 34,327,335 18,625,184 17,590,744 55,345,516 51,918,079 Net position – ending 37,155,942$ 36,720,332$ 19,477,949$ 18,625,184$ 56,633,891$ 55,345,516$ Activities Activities Total Table 2 Changes in Net Position Years Ended December 31, 2019 and 2018 Governmental Business-Type Governmental Activities – Current year operating results of governmental activities increased net position by $435,610, compared to an increase of $2,392,997 in the prior year. The significant change from the prior year was mainly due to a decrease in operating and capital grants and contributions. The City recognized more operating and capital grants and contributions in the prior year related to joint projects with other governmental entities. Business-Type Activities – Current year operating results of business-type activities increased net position by $852,765, due to positive results of the utility operations of the City. Program revenues exceeded program expenses for each of the City’s business-type activities, except recycling. -9- Below are specific graphs that provide comparisons of the governmental activities’ revenue and expenses: -10- Below are specific graphs that provide comparisons of the business-type activities’ revenue and expenses: -11- FINANCIAL ANALYSIS OF THE GOVERNMENT’S FUNDS As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Governmental Funds – The focus of the City’s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City’s financing requirements. In particular, unassigned fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year. As of the end of the current fiscal year, the City’s governmental funds reported combined ending fund balances of $8,721,679, an increase of $1,177,859 in comparison with the prior year. Committed, assigned, and unassigned fund balance, which are available for spending at the government’s discretion, have a total balance of $7,602,543 at year-end. The remainder of fund balance is nonspendable or restricted to indicate that it is not available for new spending because it has already been obligated : 1) for tax increment purposes ($948,034), 2) for cable TV purposes ($148,450), or 3) is not in spendable form for prepaid items ($22,652). The General Fund is the chief operating fund of the City. At the end of the current fiscal year, unassigned fund balance of the General Fund was $2,987,183, while total fund balance equaled $3,215,583. As a measure of the General Fund’s liquidity, it may be useful to compare the unassigned fund balance to expenditures. Unassigned fund balance represents 59.5 percent of the total subsequent year General Fund expenditures. The City’s General Fund equity decreased by $124,786 during the current fiscal year, compared to a $692,880 decrease approved in the final budget; this was due to favorable revenue and expenditure variances, with several departments spending less than amounts approved in the budget , mainly in personal services and other services and charges. Conservative budgeting for less predictable sources, such as licenses and permits and earnings on investments, contributed to the favorable revenue variance. Fund balance in the Permanent Improvement Revolving Fund increased by $1,105,625 in the current year. Total current year revenues and a transfer from the General Fund exceeded expenditures based on the timing of street and trail projects. Proprietary Funds – The City’s proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail. Unrestricted net position in the respective proprietary funds includes: $1,181,420 for water, $620,643 for sewer, $105,549 for surface water management, and $118,200 for recycling. Water net position increased $49,177, sewer net position increased $537,605, surface water management net position increased $271,220, and recycling net position decreased $5,237 during the year. -12- GENERAL FUND BUDGETARY HIGHLIGHTS Total General Fund revenues were $200,485 more than estimated in the budget. Licenses and permits revenue exceeded budgeted levels by $271,510, with development activity surpassing expected amounts. An unfavorable variance in property taxes partially offset the favorable variance previously discussed. Expenditures within the General Fund were less than budget by $367,609 spread across several functions, but most noticeably in general government and parks and recreation, mainly in personal services and other services and charges. During the year, the City Council approved budget amendments reducing revenues by $68,200 and increasing expenditures and transfers out by $437,710. The largest change was approving $360,000 of additional transfers out, moving available resources to other funds. CAPITAL ASSETS AND LONG-TERM LIABILITIES Capital Assets – The City’s investment in capital assets for its governmental and business-type activities as of December 31, 2019 amounts to $46,997,443 (net of accumulated depreciation). This investment in capital assets includes items, such as land, construction in progress, buildings and structures, infrastructure and improvements, distribution and collection systems, machinery and equipment, office furniture and equipment, and vehicles. 2019 2018 2019 2018 2019 2018 Land 2,679,818$ 2,679,818$ –$ –$ 2,679,818$ 2,679,818$ Construction in progress 5,137,764 5,350,261 3,193,168 3,328,994 8,330,932 8,679,255 Buildings and structures 3,526,203 3,404,870 621,690 663,234 4,147,893 4,068,104 Infrastructure and improvements 14,054,209 13,853,074 – – 14,054,209 13,853,074 Distribution and collection systems – – 15,931,197 15,797,304 15,931,197 15,797,304 Machinery and equipment 344,129 300,821 262,476 78,336 606,605 379,157 Office furniture and equipment 31,416 44,326 – – 31,416 44,326 Vehicles 1,215,373 1,339,728 – – 1,215,373 1,339,728 Total 26,988,912$ 26,972,898$ 20,008,531$ 19,867,868$ 46,997,443$ 46,840,766$ Table 3 Capital Assets (Net of Depreciation) Total Business-Type Activities Governmental Activities Increases in the current year included ongoing projects for streets, related utility infrastructure, and trails, contributing to the changes in the table above as of year-end. Additional information on the City’s capital assets can be found in Note 3 of the notes to basic financial statements. -13- Long-Term Liabilities – At the end of the current fiscal year, the City had total bonded debt outstanding of $2,415,000, which is secured by specified revenue sources. 2019 2018 2019 2018 2019 2018 Utility revenue bonds –$ –$ 2,415,000$ 2,415,000$ 2,415,000$ 2,415,000$ Premium – – 141,394 156,952 141,394 156,952 Compensated absences 86,680 78,302 51,988 46,744 138,668 125,046 Net pension liability 709,184 813,204 496,090 396,171 1,205,274 1,209,375 Total 795,864$ 891,506$ 3,104,472$ 3,014,867$ 3,900,336$ 3,906,373$ Table 4 Outstanding Debt Summary of Long-Term Debt Total Governmental Business-Type Activities Activities State statutes limit the amount of net debt a Minnesota city may issue to 3 percent of total estimated market value. The net pension liability decreased slightly from the prior year for the change in the City’s proportionate share of pension obligations for the Public Employees Retirement Association – General Employees Retirement Fund state-wide pension plan. Additional information on the City’s long-term liabilities can be found in Note 4 of the notes to basic financial statements. ECONOMIC FACTORS AND NEXT YEAR’S BUDGETS AND RATES • Dramatic increases in local government aids and other state sources are not anticipated based on legislation at the time of writing this report. • Property tax collection rates are expected to remain strong, at or near the 2019 level. • Shortly after the end of the 2019 fiscal year, the onset of the novel coronavirus (COVID-19) pandemic caused substantial volatility in economic conditions and tremendous disruption in the way governments, businesses, and individuals function. The extent of the negative impact on the economy and city operations is unknown at this time. REQUESTS FOR INFORMATION This CAFR is designed to provide a general overview of the City’s finances for all those with an interest in the City’s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the finance department, 1245 West Highway 96, Arden Hills, Minnesota 55112. BASIC FINANCIAL STATEMENTS THIS PAGE INTENTIONALLY LEFT BLANK THIS PAGE INTENTIONALLY LEFT BLANK Governmental Business-Type Activities Activities Total Assets Cash and investments 10,416,143$ 1,789,112$ 12,205,255$ Accrued interest receivable 32,468 6,000 38,468 Accounts receivable 551,816 1,315,426 1,867,242 Taxes receivable 227,812 – 227,812 Special assessments receivable 1,523,279 – 1,523,279 Due from other governmental units 171,309 32,960 204,269 Prepaid items 22,652 900 23,552 Inventory – 7,381 7,381 Capital assets Nondepreciable 7,817,582 3,193,168 11,010,750 Depreciable, net of accumulated depreciation 19,171,330 16,815,363 35,986,693 Total assets 39,934,391 23,160,310 63,094,701 Deferred outflows of resources Pension plan deferments – PERA 56,374 39,435 95,809 Liabilities Accounts payable 720,929 48,641 769,570 Salaries payable 54,133 – 54,133 Deposits payable 575,050 – 575,050 Due to other governmental units 394,242 396,994 791,236 Accrued interest payable – 37,917 37,917 Unearned revenue 103,372 – 103,372 Long-term liabilities (bonds and compensated absences) Due within one year 65,011 238,992 304,003 Due in more than one year 21,669 2,369,390 2,391,059 Net pension liability Due in more than one year 709,184 496,090 1,205,274 Total liabilities 2,643,590 3,588,024 6,231,614 Deferred inflows of resources Pension plan deferments – PERA 191,233 133,772 325,005 Net position Net investment in capital assets 26,988,912 17,452,137 44,441,049 Restricted for Tax increment purposes 948,034 – 948,034 Cable TV 148,664 – 148,664 Unrestricted 9,070,332 2,025,812 11,096,144 Total net position 37,155,942$ 19,477,949$ 56,633,891$ CITY OF ARDEN HILLS Statement of Net Position as of December 31, 2019 See notes to basic financial statements -14- Operating Capital Charges for Grants and Grants and Governmental Business-Type Expenses Services Contributions Contributions Activities Activities Total Functions/programs Primary government Governmental activities General government 1,337,262$ 250,643$ 142,253$ 27$ (944,339)$ –$ (944,339)$ Public safety 2,471,567 817,238 109,059 33,923 (1,511,347) – (1,511,347) Public works 1,416,785 5,250 93,297 579,313 (738,925) – (738,925) Parks and recreation 798,717 106,317 3,214 – (689,186) – (689,186) Economic development 369,256 – – – (369,256) – (369,256) Total governmental 6,393,587 1,179,448 347,823 613,263 (4,253,053) – (4,253,053) activities Business-type activities 2,295,820 2,286,542 398 125,430 – 116,550 116,550 Water 1,663,498 1,892,740 455 206,662 – 436,359 436,359 Sewer 513,209 850,971 302 – – 338,064 338,064 Surface water management 172,232 140,149 23,597 – – (8,486) (8,486) Recycling Total business-type activities 4,644,759 5,170,402 24,752 332,092 – 882,487 882,487 Total primary government 11,038,346$ 6,349,850$ 372,575$ 945,355$ (4,253,053) 882,487 (3,370,566) General revenues Property taxes 3,793,754 – 3,793,754 Tax increment collections 388,697 – 388,697 Franchise taxes 100,464 – 100,464 Unrestricted investment earnings 322,346 53,680 376,026 Transfers 83,402 (83,402) – Total general revenues and transfers 4,688,663 (29,722) 4,658,941 Change in net position 435,610 852,765 1,288,375 Net position – beginning 36,720,332 18,625,184 55,345,516 Net position – ending 37,155,942$ 19,477,949$ 56,633,891$ Program Revenues Changes in Net Position Net (Expense) Revenue and CITY OF ARDEN HILLS Statement of Activities Year Ended December 31, 2019 See notes to basic financial statements -15- Permanent Other Total Improvement Governmental Intra-Activity Governmental General Revolving Funds Eliminations Funds Cash and investments 3,946,278$ 4,144,124$ 1,892,876$ –$ 9,983,278$ Accrued interest receivable 12,165 13,791 5,207 – 31,163 Accounts receivable 20,372 500,000 31,444 – 551,816 Taxes receivable 82,692 – 145,120 – 227,812 Special assessments receivable 7,981 1,515,298 – – 1,523,279 Interfund receivable – 204,059 18,000 (222,059) – Due from other governmental units 21,828 149,481 – – 171,309 Prepaid items 22,438 – 214 – 22,652 Total assets 4,113,754$ 6,526,753$ 2,092,861$ (222,059)$ 12,511,309$ Liabilities Accounts payable 94,450$ 414,985$ 124,086$ –$ 633,521$ Salaries payable 54,133 – – – 54,133 Deposits payable 575,050 – – – 575,050 Interfund payable – – 222,059 (222,059) – Due to other governmental units 33,443 348,356 – – 381,799 Unearned revenue 103,372 – – – 103,372 Total liabilities 860,448 763,341 346,145 (222,059) 1,747,875 Deferred inflows of resources Unavailable revenue – taxes 29,742 – 3,222 – 32,964 Unavailable revenue – special assessments 7,981 1,500,810 – – 1,508,791 Unavailable revenue – long-term receivable – 500,000 – – 500,000 Total deferred inflows of resources 37,723 2,000,810 3,222 – 2,041,755 Fund balances (deficits) Nonspendable 22,438 – 214 – 22,652 Restricted – – 1,096,484 – 1,096,484 Committed – – 580,243 – 580,243 Assigned 205,962 3,762,602 294,445 – 4,263,009 Unassigned 2,987,183 – (227,892) – 2,759,291 Total fund balances (deficits)3,215,583 3,762,602 1,743,494 – 8,721,679 Total liabilities, deferred inflows of resources, and fund balances 4,113,754$ 6,526,753$ 2,092,861$ (222,059)$ 12,511,309$ Fund balances reported above 8,721,679$ Amounts reported for governmental activities in the Statement of Net Position are different because: Nondepreciable 7,817,582 Depreciable 19,171,330 332,011 Certain long-term obligations are not payable with current financial resources and, therefore, are not reported in governmental funds. Compensated absences (84,372) Net pension liability (709,184) Deferred outflows of resources – pension plans 56,374 Deferred inflows of resources – pension plans (191,233) Deferred inflows of resources – unavailable revenues 2,041,755 Net position of governmental activities 37,155,942$ Assets Internal service funds are used to allocate costs to individual funds. Net position is included in governmental activities in the Statement of Net Position. Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds. The recognition of certain revenues and expenses/expenditures differ between the full accrual governmental activities financial statements and the modified accrual governmental fund financial statements. CITY OF ARDEN HILLS Balance Sheet Governmental Funds as of December 31, 2019 See notes to basic financial statements -16- Permanent Other Total Improvement Governmental Intra-Activity Governmental General Revolving Funds Eliminations Funds Revenues Taxes General property taxes 3,795,624$ –$ –$ –$ 3,795,624$ Tax increments – – 388,697 – 388,697 Special assessments 772 827,715 – – 828,487 Licenses and permits 714,530 – – – 714,530 Intergovernmental 162,041 441,925 – – 603,966 Charges for services 440,616 – – – 440,616 Fines and forfeits 34,512 – – – 34,512 Earnings on investments 119,231 138,981 52,395 – 310,607 Franchise taxes – – 100,464 – 100,464 Antenna rental fees 134,505 – – – 134,505 Miscellaneous reimbursements 17,714 – – – 17,714 Other 5,360 100,000 34,048 – 139,408 Total revenues 5,424,905 1,508,621 575,604 – 7,509,130 Expenditures Current General government 1,058,275 – 137,060 – 1,195,335 Public safety 2,399,296 – – – 2,399,296 Public works 632,531 – – – 632,531 Parks and recreation 679,589 – – – 679,589 Economic development – – 300,052 – 300,052 Capital outlay General government – – 115,924 – 115,924 Public safety – – 69,666 – 69,666 Public works – 413,309 299,847 – 713,156 Parks and recreation – 549,687 125 – 549,812 Economic development – – 3,300 – 3,300 Total expenditures 4,769,691 962,996 925,974 – 6,658,661 Revenues over (under) expenditures 655,214 545,625 (350,370) – 850,469 Other financing sources (uses) Sale of capital assets – – 27,390 – 27,390 Transfers in – 560,000 520,000 (780,000) 300,000 Transfers out (780,000) – – 780,000 – Total other financing sources (uses)(780,000) 560,000 547,390 – 327,390 Net changes in fund balances (124,786) 1,105,625 197,020 – 1,177,859 Fund balances – beginning 3,340,369 2,656,977 1,546,474 – 7,543,820 Fund balances – ending 3,215,583$ 3,762,602$ 1,743,494$ –$ 8,721,679$ CITY OF ARDEN HILLS Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds Year Ended December 31, 2019 See notes to basic financial statements -17- THIS PAGE INTENTIONALLY LEFT BLANK Net changes in fund balances – total governmental funds 1,177,859$ 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. Capital outlay 878,879 Depreciation expense (859,777) A gain or loss on the disposal of capital assets,including the difference between the carrying value and any related sale proceeds,is included in the change in net position.However,only the sale proceeds are included in the change in fund balances.(3,088) Adjustments are made between the governmental funds and the Statement of Activities for the long-term liability activity of the net pension liability.104,020 The recognition of certain revenues and expenses/expenditures differ between the full accrual governmental activities financial statements and the modified accrual governmental fund financial statements. Deferred outflows of resources – pension plans (127,525) Deferred inflows of resources – pension plans 127,009 Deferred inflows of resources – unavailable revenues (801,029) Internal service funds are used to allocate costs to individual funds.The net revenue of the Internal Service Fund is reported with governmental activities in the government-wide financial statements.(52,201) Some expenses reported in the Statement of Activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds. Compensated absences (8,537) Change in net position of governmental activities 435,610$ Amounts reported for governmental activities in the Statement of Activities are different because: CITY OF ARDEN HILLS Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances to the Statement of Activities Governmental Funds Year Ended December 31, 2019 See notes to basic financial statements -18- Surface Internal Water Nonmajor Service Water Sewer Management Recycling Totals Funds Assets Current assets Cash and investments 1,220,491$ 388,656$ 33,410$ 146,555$ 1,789,112$ 432,865$ Accrued interest receivable 3,978 1,346 197 479 6,000 1,305 Accounts receivable Customers 526,637 489,678 217,874 17 1,234,206 – Customer accounts certified to county 34,825 35,972 5,820 4,603 81,220 – Due from other governmental units – – 32,960 – 32,960 – Prepaid items 300 300 300 – 900 – Inventory 7,381 – – – 7,381 – Total current assets 1,793,612 915,952 290,561 151,654 3,151,779 434,170 Noncurrent assets Capital assets Buildings and structures 818,476 16,564 – – 835,040 – Distribution and collection systems 11,151,048 9,665,976 4,225,559 – 25,042,583 – Machinery and equipment 230,097 324,386 745 – 555,228 – Office furniture and equipment 5,216 3,199 – – 8,415 – Construction in progress 1,688,686 265,871 1,238,611 – 3,193,168 – Total capital assets 13,893,523 10,275,996 5,464,915 – 29,634,434 – Less accumulated depreciation (4,634,417) (4,139,811) (851,675) – (9,625,903) – Total capital assets (net of accumulated depreciation)9,259,106 6,136,185 4,613,240 – 20,008,531 – Total assets 11,052,718 7,052,137 4,903,801 151,654 23,160,310 434,170 Deferred outflows of resources Pension plan deferments – PERA 13,595 15,521 10,319 – 39,435 – Liabilities Current liabilities Accounts payable 18,628 4,438 17,262 8,313 48,641 87,408 Due to other governmental units 339,955 33,998 17 23,024 396,994 12,443 Accrued interest payable 32,813 5,104 – – 37,917 – Bonds payable 175,000 25,000 – – 200,000 – Compensated absences payable 12,934 14,539 9,931 1,588 38,992 1,731 Total current liabilities 579,330 83,079 27,210 32,925 722,544 101,582 Noncurrent liabilities Bonds payable 2,037,315 319,079 – – 2,356,394 – Compensated absences payable 4,311 4,846 3,310 529 12,996 577 Net pension liability 171,028 195,254 129,808 – 496,090 – Total noncurrent liabilities 2,212,654 519,179 133,118 529 2,865,480 577 Total liabilities 2,791,984 602,258 160,328 33,454 3,588,024 102,159 Deferred inflows of resources Pension plan deferments – PERA 46,118 52,651 35,003 – 133,772 – Net position Net investment in capital assets 7,046,791 5,792,106 4,613,240 – 17,452,137 – Unrestricted 1,181,420 620,643 105,549 118,200 2,025,812 332,011 Total net position 8,228,211$ 6,412,749$ 4,718,789$ 118,200$ 19,477,949$ 332,011$ Business-Type Activities – Enterprise Funds CITY OF ARDEN HILLS Statement of Net Position Proprietary Funds as of December 31, 2019 See notes to basic financial statements -19- Surface Internal Water Nonmajor Service Water Sewer Management Recycling Totals Funds Operating revenues Charges for services 2,282,080$ 1,888,738$ 850,304$ 131,723$ 5,152,845$ 583,134$ Permit fees 1,200 935 – – 2,135 – Miscellaneous 3,262 3,067 667 8,426 15,422 26,201 Total operating revenues 2,286,542 1,892,740 850,971 140,149 5,170,402 609,335 Operating expenses Personal services 318,538 395,202 220,540 34,964 969,244 30,217 Supplies and maintenance 41,043 14,738 7,369 – 63,150 116,493 Other services and charges 477,042 163,077 98,432 7,320 745,871 163,590 Rent 27,415 26,551 13,781 – 67,747 – Insurance 22,650 22,650 22,650 – 67,950 – Utilities 12,258 18,902 – – 31,160 – Purchased services 73,662 40,075 42,270 7,792 163,799 362,975 Purchased water 972,413 – – – 972,413 – Recycling charges – – – 122,156 122,156 – Sewer charges – 761,724 – – 761,724 – Depreciation 285,246 180,169 108,167 – 573,582 – Total operating expenses 2,230,267 1,623,088 513,209 172,232 4,538,796 673,275 Operating income (loss)56,275 269,652 337,762 (32,083) 631,606 (63,940) Nonoperating revenues (expenses) Intergovernmental revenue 398 455 302 23,597 24,752 – Earnings on investments 32,627 10,648 7,156 3,249 53,680 11,739 Loss on disposal of capital assets – (30,218) – – (30,218) – Interest and fiscal charges (65,553)(10,192)– – (75,745) – Total nonoperating revenues (expenses)(32,528) (29,307) 7,458 26,846 (27,531) 11,739 Income (loss) before contributions and transfers 23,747 240,345 345,220 (5,237) 604,075 (52,201) Capital contributions – 281,130 – – 281,130 – Capital contributions – connection fees 125,430 142,130 – – 267,560 – Transfers out (100,000) (126,000) (74,000) – (300,000) – Change in net position 49,177 537,605 271,220 (5,237) 852,765 (52,201) Net position Beginning of year 8,179,034 5,875,144 4,447,569 123,437 18,625,184 384,212 End of year 8,228,211$ 6,412,749$ 4,718,789$ 118,200$ 19,477,949$ 332,011$ Business-Type Activities – Enterprise Funds CITY OF ARDEN HILLS Statement of Revenues, Expenses, and Changes in Net Position Proprietary Funds Year Ended December 31, 2019 See notes to basic financial statements -20- Surface Internal Water Nonmajor Service Water Sewer Management Recycling Totals Funds Cash flows from operating activities Receipts from customers and users 2,251,460$ 1,864,771$ 850,399$ 138,694$ 5,105,324$ 609,335$ Payments to suppliers (1,787,721) (1,046,591) (136,981) (122,489) (3,093,782) (573,579) Payments to employees (304,885) (379,696) (213,937) (35,191) (933,709) (30,864) Payments for interfund services used (58,514) (60,547) (39,756) (4,334) (163,151) – Net cash flows from operating activities 100,340 377,937 459,725 (23,320) 914,682 4,892 Cash flows from noncapital financing activities Grants received 398 455 302 23,597 24,752 – Cash paid to other funds – – (26,268) – (26,268) – Cash received from other funds 26,268 – – – 26,268 – Transfers out (100,000) (126,000) (74,000) – (300,000) – Net cash flows from noncapital financing activities (73,334) (125,545) (99,966) 23,597 (275,248) – Cash flows from capital and related financing activities Proceeds from sales of capital assets – 1,000 – – 1,000 – Acquisition and construction of capital assets (696,781) (100,544) (333,308) – (1,130,633) – Capital contributions 500,000 64,532 – – 564,532 – Capital contributions – connection fees received 125,430 142,130 – – 267,560 – Interest paid (81,594) (12,694) – – (94,288) – Net cash flows from noncapital financing activities (152,945) 94,424 (333,308) – (391,829) – Cash flows from investing activities Earnings on investments 35,704 9,506 6,959 3,454 55,623 12,305 Net change in cash and cash equivalents (90,235) 356,322 33,410 3,731 303,228 17,197 Cash and cash equivalents – beginning 1,310,726 32,334 – 142,824 1,485,884 415,668 Cash and cash equivalents – ending 1,220,491$ 388,656$ 33,410$ 146,555$ 1,789,112$ 432,865$ Reconciliation of operating income (loss) to net cash flows from operating activities Operating income (loss)56,275$ 269,652$ 337,762$ (32,083)$ 631,606$ (63,940)$ Adjustments to reconcile operating income (loss) to net cash flows from operating activities Depreciation 285,246 180,169 108,167 – 573,582 – Decrease (increase) in customer receivables (35,082) (27,969) (572) (1,455) (65,078) – Decrease (increase) in prepaid items (275) (275) (275) – (825) – Decrease (increase) in inventory 1,021 – – – 1,021 – Decrease (increase) in deferred outflows 2,509 2,290 3,105 – 7,904 – Increase (decrease) in accounts payable (32,986) (72,891) 8,202 (2,556) (100,231) 68,087 Increase (decrease) in salaries payable (6,806) (8,091) (4,819) (607) (20,323) (488) Increase (decrease) in due to other governments (187,512) 13,745 (162) 13,001 (160,928) 1,392 Increase (decrease) in net pension liability 35,410 41,506 23,003 – 99,919 – Increase (decrease) in compensated absences payable 1,738 1,890 1,236 380 5,244 (159) Increase (decrease) in deferred inflows (19,198) (22,089) (15,922) – (57,209) – Total adjustments 44,065 108,285 121,963 8,763 283,076 68,832 Net cash flows from operating activities 100,340$ 377,937$ 459,725$ (23,320)$ 914,682$ 4,892$ Noncash investing, capital, and financing activities Capital asset purchased on account (568,808)$ –$ (32,960)$ –$ (601,768)$ –$ Capital contributions – 216,598 – – 216,598 – Due from other governmental units Contribution (500,000) – – – (500,000) – Amortization of bond premium (discount)13,458 2,100 – – 15,558 – Business-Type Activities – Enterprise Funds CITY OF ARDEN HILLS Statement of Cash Flows Proprietary Funds Year Ended December 31, 2019 See notes to basic financial statements -21- CITY OF ARDEN HILLS Notes to Basic Financial Statements December 31, 2019 -22- NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES A. Organization The City of Arden Hills, Minnesota (the City) was incorporated in 1951 and operates under the “Optional Plan A” form of government as defined in Minnesota Statutes. Under this plan, the government of the City is directed by a council composed of an elected mayor and four elected councilmembers. The City Council exercises legislative authority and determines all matters of policy. The City Council appoints personnel responsible for the proper administration of all affairs relating to the City. The City provides the following municipal services: public safety (police, fire, civil defense, protective inspections, and animal control), highways and streets, sanitation and health, parks and recreation, public improvements, community development, and general administrative services. The accounting policies of the City conform to accounting principles generally accepted in the United States of America as applicable to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. B. Reporting Entity As required by accounting principles generally accepted in the United States of America, these financial statements include the City (the primary government) and its component unit. Component units are legally separate entities for which the primary government is financially accountable, or for which the exclusion of the component unit would render the financial statements of the primary government misleading. The criteria used to determine if the primary government is financially accountable for a component unit includes whether or not the primary government appoints the voting majority of the potential component unit’s board, is able to impose its will on the potential component unit, is in a relationship of financial benefit or burden with the potential component unit, or is fiscally depended upon by the potential component unit. Blended component units, although legally separate entities, are, in substance, part of the City’s operations; therefore, data from these units are combined with data of the City. The City’s blended component unit has a December 31 year-end. The City has the following component unit: Arden Hills Economic Development Authority (EDA) – The EDA of the City was created pursuant to Minnesota Statutes § 469.090–469.108 to carryout economic and industrial development and redevelopment consistent with policies established by the City Council. It is composed of the members of the City Council and the City has operational responsibility for the component unit. The EDA’s activities are blended and reported in separate special revenue funds. Separate financial statements are not issued for this component unit. -23- NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) C. Government-Wide Financial Statement Presentation The government-wide financial statements (Statement of Net Position and Statement of Activities) display information about the reporting government as a whole. These statements include all of the financial activities of the City. Governmental activities, which are normally supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which significantly rely upon sales, fees, and charges for support. The Statement of Activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. 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 segment, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other internally directed revenues are reported as general revenues. The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes and special assessments are recognized as revenues in the fiscal year for which they are certified for levy. Grants and similar items are recognized when all eligibility requirements imposed by the provider have been met. As a general rule, the effect of interfund activity has been eliminated from the government -wide financial statements. However, charges between the City’s enterprise funds and other functions are not eliminated, as that would distort the direct costs and program revenues reported in those functions. Depreciation expense is included in the direct expenses of each function. Interest on long-term debt is considered an indirect expense and is reported separately on the Statement of Activities. D. Fund Financial Statement Presentation Separate fund financial statements are provided for governmental and proprietary funds. Major individual governmental and enterprise funds are reported as separate columns in the fund financial statements. Aggregated information for the remaining nonmajor governmental funds is reported in a single column in the fund financial statements. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this basis of accounting, transactions are recorded in the following manner: 1. Revenue Recognition – Revenue is recognized when it becomes measurable and available. “Measurable” means the amount of the transaction can be determined and “available” means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. For this purpose, the City considers revenues to be available if they are collected within 60 days after year-end. Only the portion of special assessments receivable due within the current fiscal period is considered to be susceptible to accrual as revenue of the current period. Grants and similar items are recognized when all eligibility requirements imposed by the provider have been met. Proceeds of long-term debt and acquisitions under capital leases, when applicable, are reported as other financing sources. Major revenue that is susceptible to accrual includes property taxes, special assessments, intergovernmental revenue, charges for services, and interest earned on investments. Major revenue that is not susceptible to accrual includes licenses and permits, fees, and miscellaneous revenue. Such revenue is recorded only when received because it is not measurable until collected. -24- NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 2. Recording of Expenditures – Expenditures are generally recorded when a liability is incurred, except for principal and interest on long-term debt and other long-term obligations, which are recognized as expenditures to the extent they have matured. Capital asset acquisitions are reported as capital outlay expenditures in the governmental funds. Proprietary fund financial statements are reported using the economic resources measurement focus and accrual basis of accounting, similar to the government-wide financial statements. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the City’s enterprise funds and internal service funds are charges to customers for sales and services. The operating expenses for the enterprise funds and internal service funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses that do not meet this definition are reported as nonoperating revenues and expenses. Aggregated information for the internal service funds is reported in a single column in the proprietary fund financial statements. Because the principal user of the internal services is the City’s governmental activities, the financial statements of the internal service funds are consol idated into the governmental column when presented in the government-wide financial statements. The cost of these services is reported in the appropriate functional activity. Description of Funds The City reports the following major governmental funds: General Fund – 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. Permanent Improvement Revolving Fund – The Permanent Improvement Revolving Fund (capital project fund) accounts for the acquisition of capital assets or construction for major capital projects not being financed by proprietary funds. The City reports the following major enterprise funds: Water Fund – The Water Fund accounts for the water service charges, which are used to finance the water system operations. Sewer Fund – The Sewer Fund accounts for the sewer service charges, which are used to finance the sanitary sewer system operations. Surface Water Management Fund – The Surface Water Management Fund accounts for the surface water charges, which are used to finance the surface water system operations. The City reports the following nonmajor enterprise fund: Recycling Fund – The Recycling Fund accounts for the recycling service charges, which are used to finance the City’s recycling operations. -25- NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Additionally, the City reports the following fund type: Internal Service Funds – The 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 risk management, engineering, central garage, and technology services. E. Budgets and Budgetary Accounting Budgets are legally adopted on a basis consistent with accounting principles generally accepted in the United States of America. Annual appropriated budgets are legally adopted for the General Fund and most special revenue funds. Budgeted expenditure appropriations lapse at year-end, but may be adopted in the subsequent year. The City follows these procedures in establishing the budgetary data reflected in the financial statements: 1. The city administrator submits to the City Council a proposed operating budget for the fiscal year commencing the following January 1. The operating budget includes proposed expenditures and the means of financing them. 2. Public hearings are conducted to obtain taxpayer comments. 3. The budget is legally enacted through passage of a resolution. The appropriated budget is prepared by fund, function, and department. The City’s department heads, with the approval of the city administrator, may make transfers of appropriations within a department. Transfers of appropriations between funds require the approval of the City Council. The legal level of budgetary control is the fund level. Budgeted amounts are as amended by the City Council. 4. The city administrator is authorized to transfer appropriations within any fund budget. Adjustments to appropriations between funds, and budget additions and deletions must be authorized by the City Council. 5. Formal budgetary integration is employed as a management control device during the year for the General Fund and special revenue funds. 6. Legal debt obligation indentures determine the appropriation level and debt service tax levies for the Debt Service Fund (if necessary). 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. 7. 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. Budgetary control for capital projects funds is accomplished through the use of project controls, not legally enacted budgets. The appropriations are not reflected in the financial statements. For the year ended December 31, 2019, actual expenditures exceeded budgeted expenditures in the Cable and EDA TIF District No. 4 special revenue funds by $5,297 and $21,445, respectively. These variances were financed by revenues in excess of budget and available fund balance. -26- NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) F. Cash and Investments Cash and investments include balances that are combined and invested to the extent available in various securities as authorized by state law. Allocations of pooled investment earnings to the respective funds is based on participation by each fund. For purposes of the Statement of Cash Flows, the City considers all highly liquid debt instruments with an original maturity from the time of purchase by the City of three months or less to be cash equivalents. The proprietary funds’ portion in the government-wide cash and investment management pool is considered to be cash equivalent. The City generally reports investments at fair value. The Minnesota Municipal Money Market (4M) Fund is an external investment pool regulated by Minnesota Statutes that is not registered with the Securities and Exchange Commission (SEC), but follows the same regulatory rules of the SEC. The fair value of the position in the pool is the same as the value of the pool shares, which is based on an amortized cost method that approximates fair value. The 4M Fund is sponsored by the League of Minnesota Cities. For this investment pool, there are no unfunded commitments, redemption frequency is daily, and there is no redemption notice required for the Liquid Class; the redemption notice period is 14 days for the Plus Class. The City categorizes its fair value measurements within the fair value hierarchy established by accounting principles generally accepted in the United States of America. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; and Level 3 inputs are significant unobservable inputs. Debt securities classified in Level 2 of the fair value hierarchy are valued using a matrix pricing technique. Matrix pricing is used to value securities based on the securities’ relationship to benchmark quoted prices. See Note 2 for the City’s recurring fair value measurements as of year-end. G. Interfund Receivables and Payables During the course of operations, numerous transactions occur between individual funds for goods provided or services rendered. Short-term interfund loans are classified as “interfund receivables/payables.” All short-term interfund receivables and payables at year-end are planned to be eliminated in the subsequent year. Long-term interfund loans are classified as “advances receivable/payable.” Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as “internal balances.” H. Receivables Property taxes and special assessments receivable have been reported net of estimated uncollectible accounts (see Note 1 I. and J.). 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. The only receivables not expected to be collected within one year are property taxes, special assessments, and the long-term receivable in the Permanent Improvement Revolving Fund. -27- NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) I. Property Taxes Property tax levies are set by the City Council in December of each year, and are certified to Ramsey County for collection in the following year. In Minnesota, counties act as collection agents for all property taxes. The county spreads the levies over all taxable property. Such taxes become a lien on January 1 and are recorded as receivables by the City on that date. Real property taxes may be paid by taxpayers in two equal installments on May 15 and October 15. Personal property taxes are due in full on May 15. The county provides tax settlements to cities and other taxing districts three times a year: in July, December, and January. Property taxes are recognized as revenue in the year levied in the government-wide financial statements and proprietary fund financial statements. In the governmental fund financial statements, taxes are recognized as revenue when received in cash or within 60 days after year-end. Taxes which remain unpaid on December 31 are classified as delinquent taxes receivable, and are offset by a deferred inflow of resources in the governmental fund financial statements. J. Special Assessments Special assessments primarily represent the financing for public improvements paid for by benefiting property owners. As previously mentioned under receivables, the City is also generally able to certify delinquent amounts to the county for collection as special assessments. Special assessments are recorded as receivables upon certification to the county. Special assessments are recognized as revenue in the year levied in the government-wide financial statements and proprietary fund financial statements. In the governmental fund financial statements, special assessments are recognized as revenue when received in cash or within 60 days after year-end. Governmental fund special assessments receivable which remain unpaid on December 31 are offset by a deferred inflow of resources in the governmental fund financial statements. K. Inventories The original cost of materials and supplies has been recorded as expenses/expenditures at the time of purchase for both the governmental and proprietary funds, with the exception of water meters in the Water Fund. These funds do not maintain material amounts of materials and supplies . The water meter inventory in the Water Fund is stated at the lower of cost or market on the first-in, first-out method. 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 expenses/expenditures at the time of consumption. M. Capital Assets Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items) are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Such assets are capitalized at historical cost, or estimated historical cost for assets where actual historical cost is not available. Donated assets are recorded as capital assets at their estimated acquisition value on the date of donation. The City defines capital assets with an initial, individual cost of more than $5,000 and an estimated useful life in excess of one year. 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. -28- NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) In the case of the initial capitalization of general infrastructure assets (i.e., those reported by governmental activities), the City chose to include items dating back to June 30, 1980. These assets are reported at historical cost. The City estimated historical cost for the initial reporting of these assets through back trending (estimating the current replacement cost and utilizing an appropriate price -level index to deflate the cost to the acquisition year). As the City constructs or acquires additional infrastructure assets each period, they will be capitalized and reported at historical cost. Capital assets are recorded in the government-wide and proprietary fund financial statements, but are not reported in the governmental fund financial statements. 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. Property, plant, and equipment of the City is depreciated using the straight-line method over the following estimated useful lives: Buildings and structures 7–40 years Infrastructure and improvements 15–50 years Distribution and collection systems 15–50 years Machinery and equipment 5–15 years Office furniture and equipment 5–10 years Vehicles 7–20 years Land and construction in progress are not depreciated. N. Compensated Absences It is the City’s policy to permit employees to accumulate earned, but unused annual leave and sick pay benefits called personal time off (PTO). All PTO is accrued when incurred in the government-wide and proprietary fund financial statements. PTO is payable when used or upon termination of employment. A liability for these amounts is reported in the governmental funds only if they have matured, for example, as a result of employee resignations and retirements. A liability is recognized for that portion of accumulated PTO benefits that is vested as severance pay. PTO is payable when used and, in some cases, upon termination of employment. For regular employees, PTO is payable upon retirement or involuntary termination up to the amount accrued, not to exceed 240 hours , who have served at least 12 consecutive months prior to separation, and have given the City at least two weeks’ notice prior to the effective date of such separation. The recorded portion of PTO (compensated absences) represents the estimated amount expected, based on previous years’ history and those eligible for retirement, to be paid at separation. O. Long-Term Obligations In the government-wide and proprietary fund financial statements, long-term debt and other long-term obligations are reported as liabilities. Bond premiums and discounts, if material, are deferred and amortized over the life of the bonds using the straight-line method. Bond issuance costs are expensed in the period incurred. -29- NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) P. State-Wide Pension Plans For purposes of measuring the net pension liability, deferred outflows/inflows of resources, and pension expense, information about the fiduciary net position of the Public Employees Retirement Association (PERA) and additions to/deductions from the PERA’s fiduciary net position have been determined on the same basis as they are reported by the PERA, except that the PERA’s fiscal year -end is June 30. For this purpose, plan contributions are recognized as of employer payroll paid dates and benefit payments, and refunds are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. The PERA has a special funding situation created by a direct aid contribution made by the state of Minnesota. The direct aid is a result of the merger of the Minneapolis Employees Retirement Fund into the PERA on January 1, 2015. Q. Deferred Outflows/Inflows of Resources In addition to assets and liabilities, statements of financial position or balance sheets, will sometimes report separate sections for deferred outflows or inflows of resources. These separate financial statement elements represent a consumption or acquisition of net position that applies to a future period and so will not be recognized as an outflow of resources (expense/expenditure) or an inflow of financial resources (revenue) until then. The City reports deferred outflows and inflows of resources related to pensions in the government-wide and enterprise funds Statement of Net Position. These deferred outflows and inflows result from differences between expected and actual economic experience, changes in actuarial assumptions, differences between projected and actual investment earnings, changes in proportion, and contributions to the plan subsequent to the measurement date and before the end of the reporting period. These amounts are deferred and amortized as required under pension standards. Unavailable revenue, arises only under the modified accrual basis of accounting and, therefore, is reported only in the governmental funds Balance Sheet. The governmental funds report unavaila ble revenue from three sources: property taxes, special assessments, and long-term receivables. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. R. Net Position Classifications and Flow Assumptions In the government-wide and proprietary fund financial statements, net position represents the difference between assets, deferred outflows of resources, liabilities, and deferred inflows of resources. Net position is displayed in three components: • Net Investment in Capital Assets – Consists of capital assets, net of accumulated depreciation, reduced by any outstanding debt attributable to acquire capital assets. • Restricted Net Position – Consists of net position restricted when there are limitations imposed on its use through external restrictions imposed by creditors, grantors, or laws or regulations of other governments. • Unrestricted Net Position – All other elements of net position that do not meet the definition of “restricted” or “net investment in capital assets.” When both restricted and unrestricted resources are available for use, it is the City’s policy to use restricted resources first, then unrestricted resources as they are needed. -30- NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) S. Fund Balance Classifications and Flow Assumptions In the fund financial statements, governmental funds report fund balance in classifications that disclose constraints for which amounts in those funds can be spent. These classifications are as follows: • Nonspendable – Consists of amounts that are not in spendable form, such as prepaid items, inventory, and other long-term assets. • Restricted – Consists of amounts related to externally imposed constraints established by creditors, grantors, or contributors; or constraints imposed by state statutory provisions. • Committed – Consists of internally imposed constraints that are established by resolution of the City Council. Those committed amounts cannot be used for any other purpose unless the 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 for amounts intended to be used by the City for specific purposes but do not meet the criteria to be classified as restricted or committed . In governmental funds, assigned amounts represent intended uses established by the governing body itself or by an official to which the governing body delegates the authority. Pursuant to City Council resolution, the finance director and/or the city administrator is authorized to establish assignments of fund balance. • Unassigned – The residual classification for the General Fund, which also reflects negative residual amounts in other funds. When both restricted and unrestricted resources are available for use, it is the City’s policy to first use restricted resources, then use unrestricted resources as they are needed. When committed, assigned, or unassigned resources are available for use, it is the City’s policy to use resources in the following order: 1) committed, 2) assigned, and 3) unassigned. T. Use of Estimates The preparation of financial statements, in conformity with accounting principles generally accepted in the United States of America, requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates. -31- NOTE 2 – DEPOSITS AND INVESTMENTS A. Components of Cash and Investments The City had the following cash and investments at year-end: Fair Value Measurements Less Than 1 to 5 6 to 10 Greater Than Investment Type Rating Agency Using 1 Year Years Years 10 Years Total Municipal bonds AAA S&P Level 2 –$ 150,350$ –$ –$ 150,350$ Municipal bonds AAA Moody’s Level 2 – – 219,888 – 219,888 Municipal bonds AA S&P Level 2 – 464,639 1,406,343 – 1,870,982 Municipal bonds AA Moody’s Level 2 – – 394,996 – 394,996 Municipal bonds A S&P Level 2 – 335,323 – – 335,323 Negotiable certificates of deposit N/R N/A Level 2 657,623 3,496,171 649,811 – 4,803,605 Investment pools/mutual funds External investment pool – 4M Fund N/R N/A N/A 4,030,981 – – – 4,030,981 Wells Fargo Money Market Advantage AAA S&P Level 1 6,060 – – – 6,060 Total investments 4,694,664$ 4,446,483$ 2,671,038$ –$ 11,812,185 Deposits 392,570 Petty cash 500 Total cash and investments 12,205,255$ N/R – Not Rated N/A – Not Applicable Interest Risk – Maturity Duration in Years Credit Risk B. Deposits In accordance with applicable Minnesota Statutes, the City maintains deposits at depository banks authorized by the City Council, including checking accounts and certificates of deposit. The following is considered the most significant risk associated with deposits: Custodial Credit Risk – In the case of deposits, this is the risk that in the event of a failure, the City’s deposits may be lost. Minnesota Statutes require that all deposits be protected by federal deposit insurance, corporate surety bond, or collateral. The fair value of collateral pledged must equal 110 percent of the deposits not covered by federal deposit insurance or corporate surety bonds. Authorized collateral includes treasury bills, notes, and bonds; issues of U.S. government agencies; general obligations rated “A” or better; revenue obligations rated “AA” or better; irrevocable standard letters of credit issued by the Federal Home Loan Bank; and certificates of deposit. Minnesota Statutes require that securities pledged as collateral be held in safekeeping in a restricted account at the Federal Reserve Bank or in an account at a trust department of a commercial bank or other financial institution that is not owned or controlled by the financial institution furnishing the collateral. The City has no additional deposit policies addressing custodial credit risk. At year-end, the carrying amount of the City’s deposits and the bank balance was $392,570. The entire bank balance was covered by federal deposit insurance, surety bonds, or by collateral held by the City’s agent in the City’s name. -32- NOTE 2 – DEPOSITS AND INVESTMENTS (CONTINUED) C. Investments Investments are subject to various risks, the following of which are considered the most significant: Custodial Credit Risk – For investments, this is the risk that in the event of a failure of the counterparty to an investment transaction (typically a broker-dealer), the City would not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The City’s investment policies do not further address this risk, but typically limits its exposure by purchasing insured or registered investments, or by the control of who holds the securities. Credit Risk – This is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. Minnesota Statutes limit the City’s investments to direct obligations or obligations guaranteed by the United States or its agencies; shares of investment companies registered under the Federal Investment Company Act of 1940 that receive the highest credit rating, are rated in one of the two highest rating categories by a statistical rating agency, and all of the investments have a final maturity of 13 months or less; general obligations rated “A” or better; revenue obligations rated “AA” or better; general obligations of the Minnesota Housing Finance Agency rated “A” or better; bankers’ acceptances of United States banks eligible for purchase by the Federal Reserve System; commercial paper issued by United States corporations or their Canadian subsidiaries, rated of the highest quality category by at least two nationally recognized rating agencies, and maturing in 270 days or le ss; Guaranteed Investment Contracts guaranteed by a United States commercial bank, domestic branch of a foreign bank, or a United States insurance company, and with a credit quality in one of the top two highest categories; repurchase or reverse purchase agreements and securities lending agreements with financial institutions qualified as a “depository” by the government entity, with banks that are members of the Federal Reserve System with capitalization exceeding $10,000,000; that are a primary reporting dealer in U.S. government securities to the Federal Reserve Bank of New York; or certain Minnesota securities broker-dealers. The City’s investment policies do not further address credit risk. Interest Rate Risk – This is the risk of potential variability in the fair value of fixed rate investments resulting from changes in interest rates (the longer the period for which an interest rate is fixed, the greater the risk). The City’s investment policies do not mandate a limit on the duration of investments. Concentration Risk – This is the risk associated with investing a significant portion of the City’s investment (considered 5 percent or more) in the securities of a single issuer, excluding United States guaranteed investments (such as treasuries), investment pools, and mutual funds. The City’s investment policies state that no more than 5 percent of the overall portfolio may be invested in the securities of a single issuer, except for the securities of the United States government, or a maximum of 25 percent with any individual counterparty in an external investment pool. -33- NOTE 3 – CAPITAL ASSETS Capital asset activity for the year ended December 31, 2019 was as follows: A. Governmental Activities Beginning Completed Ending Balance Increases Decreases Construction Balance Primary government Governmental activities Capital assets, not being depreciated Land 2,679,818$ –$ –$ –$ 2,679,818$ Construction in progress 5,350,261 705,663 – (918,160) 5,137,764 Total capital assets, not being depreciated 8,030,079 705,663 – (918,160) 7,817,582 Capital assets, being depreciated Buildings and structures 6,691,754 – (25,788) 301,808 6,967,774 Infrastructure and improvements 17,720,976 – – 616,352 18,337,328 Machinery and equipment 971,195 112,069 (145,175) – 938,089 Office furniture and equipment 153,553 – – – 153,553 Vehicles 2,022,167 61,147 (55,553) – 2,027,761 Total capital assets, being depreciated 27,559,645 173,216 (226,516) 918,160 28,424,505 Less accumulated depreciation for Buildings and structures 3,286,884 180,475 (25,788) – 3,441,571 Infrastructure and improvements 3,867,902 415,217 – – 4,283,119 Machinery and equipment 670,374 68,761 (145,175) – 593,960 Office furniture and equipment 109,227 12,910 – – 122,137 Vehicles 682,439 182,414 (52,465) – 812,388 Total accumulated depreciation 8,616,826 859,777 (223,428) – 9,253,175 Total capital assets being depreciated – net 18,942,819 (686,561) (3,088) 918,160 19,171,330 Governmental activities capital assets – net 26,972,898$ 19,102$ (3,088)$ –$ 26,988,912$ B. Business-Type Activities Beginning Completed Ending Balance Increases Decreases Construction Balance Primary government Business-type activities Capital assets, not being depreciated Construction in progress 3,328,994$ 521,360$ –$ (657,186)$ 3,193,168$ Capital assets, being depreciated Buildings and structures 835,040 – – – 835,040 Distribution and collection systems 24,385,397 – – 657,186 25,042,583 Machinery and equipment 806,772 224,103 (475,647) – 555,228 Office furniture and equipment 8,415 – – – 8,415 Total capital assets, being depreciated 26,035,624 224,103 (475,647) 657,186 26,441,266 Less accumulated depreciation for Buildings and structures 171,806 41,544 – – 213,350 Distribution and collection systems 8,588,093 523,293 – – 9,111,386 Machinery and equipment 728,436 8,745 (444,429) – 292,752 Office furniture and equipment 8,415 – – – 8,415 Total accumulated depreciation 9,496,750 573,582 (444,429) – 9,625,903 Total capital assets, being depreciated – net 16,538,874 (349,479) (31,218) 657,186 16,815,363 Business-type activities capital assets – net 19,867,868$ 171,881$ (31,218)$ –$ 20,008,531$ -34- NOTE 3 – CAPITAL ASSETS (CONTINUED) C. Depreciation Expense by Function Depreciation expense was charged to the following functions: Governmental activities General government 120,125$ Public safety 11,558 Public works 525,562 Parks and recreation 137,987 Economic development 64,545 859,777$ Business-type activities Water 285,246$ Sewer 180,169 Surface water management 108,167 573,582$ D. Construction Commitments At December 31, 2019, the City had the following construction project commitments: Project Amount Permanent Improvement Revolving Fund Hard court projects 16,615$ Old Snelling trail and watermain 203,613 2018 street project 106,127 Water Fund Utility monitoring and control system 44,217 Highway 10 watermain 5,514 Sewer Fund Lift station 6 rehabilitation 7,613 Surface Water Management Fund Colleen avenue drainage 437 384,136$ -35- NOTE 4 – LONG-TERM LIABILITIES A. General Obligation Bonds Payable The City currently has the following general obligation bonds payable outstanding: Final Maturity Authorized Balance – Issue Date Date and Issued End of Year Business-type activities General Obligation Bonds Utility Revenue Bonds of 2018A 07/18/2018 02/01/2029 3.00–4.00 %2,415,000$ 2,415,000$ Interest Rate These bonds were issued to finance acquisition, construction, and/or improvements of capital facilities. Water and Sewer Enterprise Fund revenues will be used to repay this debt. The liability is recorded in the applicable enterprise fund. B. Other Long-Term Liabilities • Compensated Absences – This liability represents vested benefits earned by employees through the end of the year, which will be paid or used in future periods. The General, Special Revenue, Enterprise, and Internal Service Funds will be used to liquidate this liability. • Net Pension Liability – This liability represents the City’s pension benefit obligations as further described later in these notes. The General, Water, Sewer, and Surface Water Management Funds will be used to liquidate this liability. C. Changes in General Obligation Bonds and Compensated Absences Payable Beginning Ending Due Within Balance Additions Deletions Balance One Year Governmental activities Compensated absences 78,302$ 108,173$ 99,795$ 86,680$ 65,011$ Business-type activities Utility revenue bonds 2,415,000 – – 2,415,000 200,000 Premium 156,952 – 15,558 141,394 – Total bonds 2,571,952 – 15,558 2,556,394 200,000 Compensated absences 46,744 64,617 59,373 51,988 38,992 Total business-type activities 2,618,696 64,617 74,931 2,608,382 238,992 Total government-wide 2,696,998$ 172,790$ 174,726$ 2,695,062$ 304,003$ -36- NOTE 4 – LONG-TERM LIABILITIES (CONTINUED) D. Minimum Debt Payments Minimum annual payments required to retire bonds are as follows: Year Ending December 31,Principal Interest 2020 200,000$ 87,000$ 2021 210,000 78,800 2022 220,000 70,200 2023 225,000 61,300 2024 235,000 52,100 2025–2029 1,325,000 114,050 2,415,000$ 463,450$ Business-Type Activities Utility Revenue Bonds E. Revenue Pledged Future revenue pledged for the payment of long-term debt is as follows: Percent of Remaining Principal Pledged Use of Total Term of Principal and Interest Revenue Debt Issue Proceeds Type Debt Service Pledge and Interest Paid Received Utility Revenue Bonds of 2018A Utility improvements Utility charges 100%2018–2029 2,878,450$ 94,288$ 4,446,842$ Revenue Pledged Current Year -37- NOTE 5 – FUND BALANCES A. Classifications At December 31, 2019, a summary of the City’s governmental fund balance classifications are as follows: Permanent Other Improvement Governmental General Revolving Funds Total Nonspendable Prepaid items 22,438$ –$ 214$ 22,652$ Restricted for Tax increment purposes – – 948,034 948,034 Cable TV – – 148,450 148,450 Total restricted – – 1,096,484 1,096,484 Committed for Economic development authority – – 580,243 580,243 Assigned for Compensated absences 84,372 – – 84,372 Subsequent year’s budget 121,590 – – 121,590 Capital improvements – 3,762,602 294,445 4,057,047 Total assigned 205,962 3,762,602 294,445 4,263,009 Unassigned 2,987,183 – (227,892) 2,759,291 Total 3,215,583$ 3,762,602$ 1,743,494$ 8,721,679$ B. Minimum Unassigned Fund Balance Policy The City Council has formally adopted a fund balance policy regarding the minimum unassigned fund balance for the General Fund. The policy establishes the City will strive to maintain an unassigned General Fund balance of 50.0 percent of the subsequent year’s General Fund budgeted expenditures. At December 31, 2019, the unassigned fund balance of the General Fund was 59.5 percent of the subsequent year’s budgeted expenditures. NOTE 6 – DEFINED BENEFIT PENSION PLAN – STATE-WIDE A. Plan Description The City participates in the following cost-sharing, multiple-employer defined benefit pension plan administered by the Public Employees Retirement Association (PERA) of Minnesota. The PERA’s defined benefit pension plan is established and administered in accordance with Minnesota Statutes, Chapters 353 and 356. The PERA’s defined benefit pension plan is a tax qualified plan under Section 401(a) of the Internal Revenue Code. General Employees Retirement Fund (GERF) All full-time and certain part-time employees of the City are covered by the GERF. The GERF members belong to the Coordinated Plan. Coordinated Plan members are covered by Social Security. -38- NOTE 6 – DEFINED BENEFIT PENSION PLAN – STATE-WIDE (CONTINUED) B. Benefits Provided The PERA provides retirement, disability, and death benefits. Benefit provisions are established by state statutes and can only be modified by the State Legislature. Vested, terminated employees who are entitled to benefits but are not receiving them yet, are bound by the provisions in effect at the time they last terminated their public service. GERF Benefits Benefits are based on a member’s highest average salary for any five successive years of allowable service, age, and years of credit at termination of service. Two methods are used to compute benefits for the PERA’s Coordinated Plan members. Members hired prior to July 1, 1989, receive the higher of Method 1 or Method 2 formulas. Only Method 2 is used for members hired after June 30, 1989. Under Method 1, the accrual rate for Coordinated Plan members is 1.2 percent of average salary for each of the first 10 years of service, and 1.7 percent of average salary for each additional year. Under Method 2, the accrual rate for Coordinated Plan members is 1.7 percent of average salary for all years of service. For members hired prior to July 1, 1989, a full annuity is available when age plus years of service equal 90, and normal retirement age is 65. For members hired on or after July 1, 1989, normal retirement age is the age for unreduced Social Security benefits capped at age 66. Annuities, disability benefits, and survivor benefits are increased effective every January 1. Beginning January 1, 2019, the post-retirement increase will be equal to 50.0 percent of the cost of living adjustment (COLA) announced by the Social Security Administration, with a minimum increase of at least 1.0 percent and a maximum of 1.5 percent. Recipients that have been receiving the annuity or benefit for at least a full year as of June 30 before the effective date of the increase, will receive the full increase. For recipients receiving the annuity or benefit for at least one month, but less than a full year as of the June 30 before the effective date of the increase, will receive a reduced prorated increase. For members retiring on January 1, 2024 or later, the increase will be delayed until normal retirement age (age 65 if hired prior to July 1, 1989, or age 66 for individuals hired on or after July 1, 1989). Members retiring under Rule of 90 are exempt from the delay to normal retirement. C. Contributions Minnesota Statutes, Chapter 353 sets the rates for employer and employee contributions. Contribution rates can only be modified by the State Legislature. GERF Contributions Coordinated Plan members were required to contribute 6.50 percent of their annual covered salary in fiscal year 2019. The City was required to contribute 7.50 percent for Coordinated Plan members. The City’s contributions to the GERF for the year ended December 31, 2019, were $121,063. The City’s contributions were equal to the required contributions as set by state statutes. D. Pension Costs GERF Pension Costs At December 31, 2019, the City reported a liability of $1,205,274 for its proportionate share of the GERF’s net pension liability. The net pension liability was measured as of June 30, 2019, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. -39- NOTE 6 – DEFINED BENEFIT PENSION PLAN – STATE-WIDE (CONTINUED) The City’s proportion of the net pension liability was based on the City’s contributions received by the PERA during the measurement period for employer payroll paid dates from July 1, 2018 through June 30, 2019, relative to the total employer contributions received from all of the PERA’s participating employers. The City’s proportionate share was 0.0218 percent at the end of the measurement period and 0.0218 percent for the beginning of the period. The City’s net pension liability reflected a reduction, due to the state of Minnesota’s contribution of $16 million to the fund in 2019. The state of Minnesota is considered a nonemployer contributing entity and the state’s contribution meets the definition of a special funding situation. The amount recognized by the City as its proportionate share of the net pension liability, the direct aid, and total portion of the net pension liability that was associated with the City were as follows: City’s proportionate share of the net pension liability 1,205,274$ State’s proportionate share of the net pension liability associated with the City 37,332$ For the year ended December 31, 2019, the City recognized pension expense of $68,478 for its proportionate share of the GERF’s pension expense. In addition, the City recognized an additional $2,808 as pension expense (and grant revenue) for its proportionate share of the state of Minnesota’s contribution of $16 million to the GERF. At December 31, 2019, the City reported its proportionate share of the GERF’s deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Deferred Outflows Inflows of Resources of Resources Differences between expected and actual economic experience 34,243$ –$ Changes in actuarial assumptions – 97,296 Difference between projected and actual investment earnings – 114,301 Changes in proportion – 113,408 Contributions paid to the PERA subsequent to the measurement date 61,566 – Total 95,809$ 325,005$ A total of $61,566 reported as deferred outflows of resources related to pensions resulting from city contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ending December 31, 2020. Other amounts reported as deferred outflows and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Pension Year Ending Expense December 31,Amount 2020 (149,153)$ 2021 (119,421)$ 2022 (24,129)$ 2023 1,941$ -40- NOTE 6 – DEFINED BENEFIT PENSION PLAN – STATE-WIDE (CONTINUED) E. Actuarial Assumptions The total pension liability in the June 30, 2019 actuarial valuation was determined using an individual entry-age normal actuarial cost method and the following actuarial assumptions: Inflation 2.50% per year Active member payroll growth 3.25% per year Investment rate of return 7.50% Salary increases were based on a service-related table. Mortality rates for active members, retirees, survivors, and disabilitants for all plans were based on RP-2014 tables for males and females, as appropriate, with slight adjustments to fit the PERA’s experience. Cost of living benefit increases after retirement for retirees are assumed to be 1.25 percent per year for the GERF. Actuarial assumptions used in the June 30, 2019 valuation were based on the results of actuarial experience studies. The most recent four-year experience study in the GERF was completed in 2019. Economic assumptions were updated in 2018 based on a review of inflation and investment return assumptions. The following changes in actuarial assumptions and plan provisions occurred in 2019: GERF – CHANGES IN ACTUARIAL ASSUMPTIONS • The mortality projection scale was changed from MP-2017 to MP-2018. GERF – CHANGES IN PLAN PROVISIONS • The employer supplemental contribution was changed prospectively, decreasing from $31.0 million to $21.0 million per year. The state’s special funding contribution was changed prospectively, requiring $16.0 million due per year through 2031. The Minnesota State Board of Investment, which manages the investments of the PERA, prepares an analysis of the reasonableness on a regular basis of the long-term expected rate of return using a building-block method in which best-estimate ranges of expected future rates of return are developed for each major asset class. These ranges are combined to produce an expected long-term rate of return by weighting the expected future rates of return by the target asset allocation percentages. The target allocation and best-estimates of geometric real rates of return for each major asset class are summarized in the following table: Asset Class Domestic equity 35.5 % 5.10 % Private markets 25.0 5.90 % Fixed income 20.0 0.75 % International equity 17.5 5.90 % Cash equivalents 2.0 – % Total 100.0 % Allocation Target Real Rate of Return Long-Term Expected -41- NOTE 6 – DEFINED BENEFIT PENSION PLAN – STATE-WIDE (CONTINUED) F. Discount Rate The discount rate used to measure the total pension liability in 2019 was 7.50 percent. The projection of cash flows used to determine the discount rate assumed that contributions from plan members and employers will be made at rates set in Minnesota Statutes. Based on these assumptions, the fiduciary net position of the GERF 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. G. Pension Liability Sensitivity The following presents the City’s proportionate share of the net pension liability, calculated using the discount rate disclosed in the preceding paragraph, as well as what the City’s proportionate share of the net pension liability would be if it were calculated using a discount rate 1 percentage point lower or 1 percentage point higher than the current discount rate: 1% Decrease in 1% Increase in Discount Rate Discount Rate Discount Rate 6.50%7.50%8.50% City’s proportionate share of the GERF net pension liability 1,981,404$ 1,205,274$ 564,423$ H. Pension Plan Fiduciary Net Position Detailed information about the GERF’s fiduciary net position is available in a separately issued PERA financial report that includes financial statements and required supplementary information. That report may be obtained on the PERA website at www.mnpera.org; by writing to the PERA at 60 Empire Drive, Suite 200, St. Paul, Minnesota 55103; or by calling (651) 296-7460 or (800) 652-9026. -42- NOTE 7 – INTERFUND RECEIVABLES, PAYABLES, AND TRANSFERS A. Interfund Receivable and Payable Interfund receivable and payable balances at December 31, 2019 are as follows: Fund Receivable Payable Governmental funds Permanent Improvement Revolving 204,059$ –$ Nonmajor – other governmental 18,000 222,059 Intra-activity eliminations (222,059) (222,059) Total governmental funds –$ –$ Interfund receivables and payables are used for temporary cash deficits. These balances will be eliminated with park dedication fees, future charges for services, grants, and other internal fund transfers, if needed. B. Transfers In and Transfers Out Permanent Nonmajor – Improvement Other Transfers Out Revolving Governmental Total Governmental funds General Fund 560,000$ 220,000$ 780,000$ Proprietary funds Water – 100,000 100,000 Sewer – 126,000 126,000 Surface Water Management – 74,000 74,000 Total 560,000$ 520,000$ 1,080,000$ Transfers In Governmental Funds Transfers are made in accordance with budget appropriations or as approved by the City Council for special funding of city activities. -43- NOTE 8 – DEFICIT FUND BALANCES/NET POSITION The City had deficit fund balances/net position at December 31, 2019 as follows: Amount Governmental funds Nonmajor – EDA TIF District No. 5 22,000$ Nonmajor – Parks 5,816 Nonmajor – Public Safety Capital Equipment 5,197 Nonmajor – TCAAP 194,879 227,892$ These fund deficits will be eliminated with future contributions, grants, and internal fund transfers, if needed. NOTE 9 – TAX ABATEMENT AGREEMENTS The City, in order to spur economic development and redevelopment will enter into private development and redevelopment agreements to encourage a developer to construct, expand, or improve new or existing properties and buildings or clean-up and redevelop blighted areas. These agreements may in substance be a tax abatement, but will depend on their individual circumstances. The City currently has two agreements that would be considered a tax abatement under GASB Statement No. 77. In 2013, the City entered into a development agreement with Presbyterian Homes of Arden Hills, Inc. to aid in financing certain public development costs and administrative costs of a project undertaken. For this agreement, the City used an economic development vehicle known as tax increment financing whereby tax increment revenue is generated on the incremental increase in value above a base value established on the date that the tax increment district is created. The City will abate 75 percent of the incremental taxes received through February 2028, through execution of a tax increment revenue note to be retired in 2028. The outstanding principal balance as of December 31, 2019 was $516,678, and the City rebated $212,558 in the current year. In 2016, the City entered into an abatement agreement with Land O’Lakes, Inc. (the Company) to aid in the expansion of its corporate headquarters in the City. Tax abatement assistance is where the City’s portion of the property tax attirbuted to the building expansion will be refunded to the Company over a period of not more than 15 years, beginning in 2020. This agreement is for the increases in taxes above the base year (2017) up to a maximum of $650,000, with limits on the amount of the annual payment. The City did not have any collections or rebate of property tax abatement in the current year. The City is authorized to create a tax increment financing plan under Minnesota Statutes, Chapter 469.175. The criteria that must be met under the statute are that, in the opinion of the municipality: • The proposed development or redevelopment would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future; • The increased market value of the site that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in the market value estimated to result from the proposed development after subtracting the present value of the projected tax increments for the maximum duration of the district permitted by the plan. The requirements of this item do not apply if the district is a housing district; -44- NOTE 9 – TAX ABATEMENT AGREEMENTS (CONTINUED) • The tax increment financing plan conforms to the general plan for the development or redevelopment of the municipality as a whole; and • The tax increment financing plan will afford maximum opportunity, consistent with the sound needs of the municipality as a whole, for the development or redevelopment of the project by private enterprise. NOTE 10 – 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 for which the City carries insurance . The City obtains insurance through participation in the League of Minnesota Cities Insurance Trust (LMCIT), which is a risk-sharing pool with other governmental units. The City pays an annual premium to the LMCIT for its workers’ compensation and property and casualty insurance. The LMCIT is self-sustaining through member premiums and will reinsure for claims above a prescribed dollar amount for each insurance event. There were no significant reductions in insurance from the previous year or settled claims in excess of insurance coverage for any of the past three fiscal years. Liabilities are reported when it is probable that a loss has occurred and the amount of the loss can be reasonably estimated. Liabilities, if any, include an amount for claims that have been incurred, but not reported. The City’s management is not aware of any incurred, but unreported claims. 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. No loss has been recorded on the City’s financial statements relating to these claims. C. Federal and State Funds Amounts recorded or receivable from federal and state agencies are subject to agency audit and adjustment. Any disallowed claims, including amounts already collected, may constitute a liability of the applicable funds. The amount, if any, of claims which may be disallowed by the grantor agencies cannot be determined at this time, although the City expects such amounts, if any, to be immaterial. D. Tax Increment Districts The City’s tax increment districts are subject to review by the Minnesota Office of the State Auditor. Any disallowed claims or misuse of tax increments could become a liability of the applicable fund. Management has indicated that they are not aware of any instances of noncompliance which would have a material effect on the financial statements. -45- NOTE 10 – COMMITMENTS AND CONTINGENCIES (CONTINUED) E. Lake Johanna Volunteer Fire Department, Inc. The City receives fire protection under a contract with the Lake Johanna Volunteer Fire Department, Inc . The contract calls for annual payments and expires December 31, 2023, with an extension option through December 31, 2038. The contract cost will be based on the budget submitted by the fire department and approved by the City. Capital costs are billed separately in addition to the contract rate. The amount expended under the contract was $573,680 in 2019. NOTE 11 – CONDUIT DEBT OBLIGATION The City has issued private activity bonds to provide financial assistance to private sector entities for the acquisition and construction of industrial and commercial facilities deemed to be in the public interest. The bonds constitute special obligations of the City, payable solely from revenues of the projects pledged to the payment thereof. The bonds do not constitute a debt of the City and the City has no obligation for repayment. Accordingly, the bonds are not reported as liabilities in the City’s financial statements. Bonds outstanding at December 31, 2019 are as follows: Amount Bond Description Outstanding Commercial Facilities Revenue Note, Series 2008 Office facilities 3,203,363$ Housing Facility Revenue Note, Series 2011A Senior housing 8,257,764 Housing Facility Revenue Note, Series 2011B Senior housing 8,257,764 Housing Facility Revenue Note, Series 2012A Senior housing 8,257,764 Housing Facility Revenue Note, Series 2012B Senior housing 1,645,575 Housing Facility Revenue Note, Series 2015 Senior housing 8,988,332 Total 38,610,562$ NOTE 14 – SUBSEQUENT EVENTS Investment Fair Values – The City generally reports its investments at fair value based on standards described earlier in these notes. Subsequent to year-end, the novel coronavirus (COVID-19) pandemic has caused significant volatility in economic conditions, including substantial reductions in the quoted active-market prices of some investments. The City’s portfolio consists primarily of shorter-term investments, many with guaranteed maturity values. The City does not expect any losses ultimately realized from this market decline to be material. However, the potential negative impact could be heightened if increased demand on City resources and/or a sustained economic downturn hampers the City’s ability to hold such investments to maturity as planned. The potential future impact of these conditions on the fair value of the City’s investment portfolio is not determinable at this time. REQUIRED SUPPLEMENTARY INFORMATION THIS PAGE INTENTIONALLY LEFT BLANK Proportionate Share of the City’s Net Pension Proportionate Liability and City’s Share of the the City’s Proportionate Plan Fiduciary State of Share of the Share of the Net Position City’s City’s Minnesota’s State of Net Pension as a PERA Fiscal Proportion Proportionate Proportionate Minnesota’s Liability as a Percentage Year-End Date of the Net Share of the Share of the Share of the City’s Percentage of of the Total (Measurement Pension Net Pension Net Pension Net Pension Covered Covered Pension Date)Liability Liability Liability Liability Payroll Payroll Liability 06/30/2015 0.0283% 1,466,653$ –$ 1,466,653$ 1,662,826$ 88.20%78.20% 06/30/2016 0.0267% 2,167,909$ 28,367$ 2,196,276$ 1,669,147$ 129.88%68.90% 06/30/2017 0.0230% 1,468,305$ 18,435$ 1,486,740$ 1,479,483$ 99.24%75.90% 06/30/2018 0.0218% 1,209,375$ 39,819$ 1,249,194$ 1,467,987$ 82.38%79.50% 06/30/2019 0.0218% 1,205,274$ 37,332$ 1,242,606$ 1,540,669$ 78.23%80.20% Contributions Contributions in Relation to as a Statutorily the Statutorily Contribution Percentage Required Required Deficiency Covered of Covered Contributions Contributions (Excess)Payroll Payroll 129,774$ 129,774$ –$ 1,731,651$ 7.49% 115,814$ 115,814$ –$ 1,553,950$ 7.45% 106,513$ 106,513$ –$ 1,420,174$ 7.50% 111,628$ 111,628$ –$ 1,488,376$ 7.50% 121,063$ 121,063$ –$ 1,614,175$ 7.50% Note: Year Ended December 31, 2019 12/31/2017 The City implemented GASB Statement No.68 in fiscal 2015 (using a June 30,2015 measurement date).This schedule is intended to present 10-year trend information. Additional years will be added as they become available. Year-End Date City Fiscal 12/31/2016 12/31/2015 12/31/2018 12/31/2019 CITY OF ARDEN HILLS PERA – General Employees Retirement Fund Schedule of City’s and Nonemployer Proportionate Share of Net Pension Liability PERA – General Employees Retirement Fund Schedule of City Contributions Year-End Date City Fiscal 12/31/2016 12/31/2015 Year Ended December 31, 2019 12/31/2017 12/31/2018 12/31/2019 -46- THIS PAGE INTENTIONALLY LEFT BLANK Actual Variance With Original Budget Final Budget Amounts Final Budget Revenues General property taxes 3,919,750$ 3,919,750$ 3,795,624$ (124,126)$ Special assessments 1,220 1,220 772 (448) Licenses and permits Business 55,980 55,980 73,809 17,829 Nonbusiness 387,040 387,040 640,721 253,681 Total licenses and permits 443,020 443,020 714,530 271,510 Intergovernmental State Road maintenance 102,890 102,890 97,965 (4,925) PERA aid 5,180 5,180 5,179 (1) Police aid 45,150 45,150 58,897 13,747 Total intergovernmental 153,220 153,220 162,041 8,821 Charges for services General government 19,150 19,150 17,713 (1,437) Public safety 214,480 214,480 193,019 (21,461) Parks and recreation 125,740 125,740 106,317 (19,423) Administrative charges 189,430 121,230 123,567 2,337 Total charges for services 548,800 480,600 440,616 (39,984) Fines and forfeits 30,420 30,420 34,512 4,092 Earnings on investments 47,230 47,230 119,231 72,001 Antenna rental fees 134,500 134,500 134,505 5 Miscellaneous reimbursements 10,000 10,000 17,714 7,714 Other 4,460 4,460 5,360 900 Total revenues 5,292,620 5,224,420 5,424,905 200,485 Expenditures Current General government City Council Personal services 37,210 37,210 37,203 7 Other services and charges 31,550 31,550 29,785 1,765 Total City Council 68,760 68,760 66,988 1,772 Elections Other services and charges 23,000 23,000 23,777 (777) Administration Personal services 211,100 211,100 194,459 16,641 Materials and supplies 550 550 389 161 Other services and charges 115,160 115,160 123,820 (8,660) Total administration 326,810 326,810 318,668 8,142 CITY OF ARDEN HILLS Required Supplementary Information Budgetary Comparison Schedule – General Fund Year Ended December 31, 2019 -47-(continued) Actual Variance With Original Budget Final Budget Amounts Final Budget Expenditures (continued) Current (continued) General government (continued) Finance Personal services 52,540 52,540 52,839 (299) Materials and supplies 23,100 23,100 12,816 10,284 Other services and charges 106,100 106,100 89,983 16,117 Total finance 181,740 181,740 155,638 26,102 TCAAP Personal services 85,090 85,090 29,443 55,647 Other services and charges 86,100 86,100 66,710 19,390 Total TCAAP 171,190 171,190 96,153 75,037 Planning and zoning Personal services 139,200 139,200 128,979 10,221 Other services and charges 78,120 78,120 71,792 6,328 Total planning and zoning 217,320 217,320 200,771 16,549 General government buildings Personal services 39,960 39,960 42,037 (2,077) Materials and supplies 6,000 6,000 10,829 (4,829) Other services and charges 225,050 156,850 143,414 13,436 Total general government buildings 271,010 202,810 196,280 6,530 Total general government 1,259,830 1,191,630 1,058,275 133,355 Public safety Police and animal control Other services and charges 1,242,250 1,265,150 1,356,029 (90,879) Dispatch Other services and charges 68,500 68,500 51,369 17,131 Fire protection Other services and charges 573,680 573,680 573,680 – Emergency management Personal services 2,810 2,810 4,769 (1,959) Other services and charges 1,100 1,100 892 208 Total emergency management 3,910 3,910 5,661 (1,751) CITY OF ARDEN HILLS Required Supplementary Information Budgetary Comparison Schedule – General Fund (continued) Year Ended December 31, 2019 -48-(continued) Actual Variance With Original Budget Final Budget Amounts Final Budget Expenditures (continued) Current (continued) Public safety (continued) Protective inspections Personal services 260,260 260,260 226,861 33,399 Materials and supplies 750 750 415 335 Other services and charges 72,600 255,610 185,281 70,329 Total protective inspections 333,610 516,620 412,557 104,063 Total public safety 2,221,950 2,427,860 2,399,296 28,564 Public works Street maintenance Personal services 256,030 256,030 267,797 (11,767) Materials and supplies 25,600 25,600 57,622 (32,022) Other services and charges 437,670 377,670 307,112 70,558 Total public works 719,300 659,300 632,531 26,769 Parks and recreation Park maintenance Personal services 271,480 271,480 241,971 29,509 Materials and supplies 44,550 44,550 35,152 9,398 Other services and charges 201,940 201,940 117,573 84,367 Total park maintenance 517,970 517,970 394,696 123,274 Recreation Personal services 233,070 233,070 208,158 24,912 Materials and supplies 26,250 26,250 18,786 7,464 Other services and charges 81,220 81,220 57,949 23,271 Total recreation 340,540 340,540 284,893 55,647 Total parks and recreation 858,510 858,510 679,589 178,921 Total expenditures 5,059,590 5,137,300 4,769,691 367,609 Revenues over expenditures 233,030 87,120 655,214 568,094 Other financing sources (uses) Transfers out (420,000) (780,000) (780,000) – Net change in fund balance (186,970)$ (692,880)$ (124,786) 568,094$ Fund balance – beginning 3,340,369 Fund balance – ending 3,215,583$ Year Ended December 31, 2019 CITY OF ARDEN HILLS Required Supplementary Information Budgetary Comparison Schedule – General Fund (continued) -49- THIS PAGE INTENTIONALLY LEFT BLANK CITY OF ARDEN HILLS Notes to Required Supplementary Information December 31, 2019 -50- NOTE 1 – 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 fund level. Budgeted appropriations lapse at year-end. NOTE 2 – PERA – GENERAL EMPLOYEES RETIREMENT FUND 2019 CHANGES IN ACTUARIAL ASSUMPTIONS • The mortality projection scale was changed from MP-2017 to MP-2018. 2019 CHANGES IN PLAN PROVISIONS • The employer supplemental contribution was changed prospectively, decreasing from $31.0 million to $21.0 million per year. The state’s special funding contribution was changed prospectively, requiring $16.0 million due per year through 2031. 2018 CHANGES IN ACTUARIAL ASSUMPTIONS • The mortality projection scale was changed from MP-2015 to MP-2017. • The assumed benefit increase was changed from 1.00 percent per year through 2044, and 2.50 percent per year thereafter, to 1.25 percent per year. 2018 CHANGES IN PLAN PROVISIONS • The augmentation adjustment in early retirement factors is eliminated over a five-year period starting July 1, 2019, resulting in actuarial equivalence after June 30, 2024. • Interest credited on member contributions decreased from 4.00 percent to 3.00 percent, beginning July 1, 2018. • Deferred augmentation was changed to zero percent, effective January 1, 2019. Augmentation that has already accrued for deferred members will still apply. • Contribution stabilizer provisions were repealed. • Post-retirement benefit increases were changed from 1.00 percent per year with a provision to increase to 2.50 percent upon attainment of 90.00 percent funding ratio to 50.00 percent of the Social Security Cost of Living Adjustment, not less than 1.00 percent and not more than 1.50 percent, beginning January 1, 2019. • For retirements on or after January 1, 2024, the first benefit increase is delayed until the retiree reaches normal retirement age; does not apply to Rule of 90 retirees, disability benefit recipients, or survivors. • Actuarial equivalent factors were updated to reflect revised mortality and interest assumptions. CITY OF ARDEN HILLS Notes to Required Supplementary Information (continued) December 31, 2019 -51- NOTE 2 – PERA – GENERAL EMPLOYEES RETIREMENT FUND (CONTINUED) 2017 CHANGES IN ACTUARIAL ASSUMPTIONS • The Combined Service Annuity (CSA) loads were changed from 0.80 percent for active members and 60.00 percent for vested and nonvested deferred members. The revised CSA loads are now zero percent for active member liability, 15.00 percent for vested deferred member liability, and 3.00 percent for nonvested deferred member liability. • The assumed post-retirement benefit increase rate was changed from 1.00 percent per year for all years, to 1.00 percent per year through 2044, and 2.50 percent per year thereafter. 2017 CHANGES IN PLAN PROVISIONS • The state’s contribution for the Minneapolis Employees Retirement Fund equals $16.0 million in 2017 and 2018, and $6.0 million thereafter. • The Employer Supplemental Contribution for the Minneapolis Employees Retirement Fund changed from $21.0 million to $31.0 million in calendar years 2019 to 2031. The state’s contribution changed from $16.0 million to $6.0 million in calendar years 2019 to 2031. 2016 CHANGES IN ACTUARIAL ASSUMPTIONS • The assumed post-retirement benefit increase rate was changed from 1.00 percent per year through 2035 and 2.50 percent per year thereafter, to 1.00 percent per year for all years. • The assumed investment return was changed from 7.90 percent to 7.50 percent. The single discount rate changed from 7.90 percent to 7.50 percent. • Other assumptions were changed pursuant to the experience study June 30, 2015. The assumed future salary increases, payroll growth, and inflation were decreased by 0.25 percent to 3.25 percent for payroll growth, and 2.50 percent for inflation. 2015 CHANGES IN ACTUARIAL ASSUMPTIONS • The assumed post-retirement benefit increase rate was changed from 1.00 percent per year through 2030 and 2.50 percent per year thereafter, to 1.00 percent per year through 2035, and 2.50 percent per year thereafter. 2015 CHANGES IN PLAN PROVISIONS • On January 1, 2015, the Minneapolis Employees Retirement Fund was merged into the General Employees Fund, which increased the total pension liability by $1.1 billion and increased the fiduciary plan net position by $892.0 million. Upon consolidation, state and employer contributions were revised; the state’s contribution of $6.0 million, which meets the special funding situation definition, was due September 2015. SUPPLEMENTAL INFORMATION THIS PAGE INTENTIONALLY LEFT BLANK NONMAJOR GOVERNMENTAL FUNDS Special Revenue Funds – Special revenue funds are used to account for revenues derived from specific taxes or other earmarked revenue sources. They are usually required by statute, local ordinance, and/or resolution to finance particular functions, activities, or governments. Capital Project Funds – Capital project funds account for financial resources to be used for the acquisition or construction of major capital facilities (other than those financed by proprietary funds). Total Nonmajor Governmental Special Revenue Capital Project Funds Assets Cash and investments 1,598,431$ 294,445$ 1,892,876$ Accrued interest receivable 5,207 – 5,207 Accounts receivable 27,011 4,433 31,444 Taxes receivable 145,120 – 145,120 Interfund receivable 18,000 – 18,000 Prepaid items 214 – 214 Total assets 1,793,983$ 298,878$ 2,092,861$ Liabilities Accounts payable 117,820$ 6,266$ 124,086$ Interfund payable 18,000 204,059 222,059 Total liabilities 135,820 210,325 346,145 Deferred inflows of resources Unavailable revenue – taxes 3,222 – 3,222 Fund balances (deficits) Nonspendable 214 – 214 Restricted 1,096,484 – 1,096,484 Committed 580,243 – 580,243 Assigned – 294,445 294,445 Unassigned (22,000) (205,892) (227,892) Total fund balances (deficits)1,654,941 88,553 1,743,494 Total liabilities, deferred inflows of resources, and fund balances 1,793,983$ 298,878$ 2,092,861$ CITY OF ARDEN HILLS Nonmajor Governmental Funds Combining Balance Sheet as of December 31, 2019 -52- Total Nonmajor Governmental Special Revenue Capital Project Funds Revenues Taxes Tax increments 388,697$ –$ 388,697$ Earnings on investments 52,393 2 52,395 Franchise taxes 100,464 – 100,464 Other – 34,048 34,048 Total revenues 541,554 34,050 575,604 Expenditures Current General government 137,060 – 137,060 Economic development 300,052 – 300,052 Capital outlay General government 85,177 30,747 115,924 Public safety – 69,666 69,666 Public works – 299,847 299,847 Parks and recreation – 125 125 Economic development 3,300 – 3,300 Total expenditures 525,589 400,385 925,974 Revenues over (under) expenditures 15,965 (366,335) (350,370) Other financing sources Sale of capital assets – 27,390 27,390 Transfers in 120,000 400,000 520,000 Total other financing sources 120,000 427,390 547,390 Net change in fund balances 135,965 61,055 197,020 Fund balances – beginning 1,518,976 27,498 1,546,474 Fund balances – ending 1,654,941$ 88,553$ 1,743,494$ CITY OF ARDEN HILLS Nonmajor Governmental Funds Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Year Ended December 31, 2019 -53- THIS PAGE INTENTIONALLY LEFT BLANK NONMAJOR SPECIAL REVENUE FUNDS The City had the following nonmajor special revenue funds during the year: Cable Fund – This fund was established to account for transactions associated with cable television in the City. Revenues are franchise fees from Comcast. Expenditures include the operation of the North Suburban Cable Commission and other costs relating to cable television activity, internet, and other forms of communication. EDA Operating Fund – The EDA Operating Fund accounts for revenue sources, including tax increments and other sources, that are legally restricted or committed to expenditures for specified purposes (not including major capital projects). EDA TIF District No. 3 Fund – This fund was established as a Housing District in 1993. The revenue is derived from tax increment and expenditures are for developer reimbursements and administrative expenses. This tax increment district was decertified in 2019. EDA TIF District No. 4 Fund – This fund was established as a redevelopment plan for Presbyterian Homes of Arden Hills, Inc. in 2010. The revenue is derived from tax increment and expenditures are for developer reimbursements and administrative expenses. EDA TIF District No. 5 Fund – This fund was established in 2019. The revenue is derived from tax increment and expenditures are for economic development and administrative expenses. Total EDA EDA EDA Nonmajor TIF TIF TIF Special EDA District District District Revenue Cable Operating No. 3 No. 4 No. 5 Funds Assets Cash and investments 128,540$ 578,170$ 776,717$ 115,004$ –$ 1,598,431$ Accrued interest receivable 441 1,880 2,521 365 – 5,207 Accounts receivable 27,011 – – – – 27,011 Taxes receivable – 3,415 – 141,705 – 145,120 Interfund receivable – – 18,000 – – 18,000 Prepaid items 214 – – – – 214 Total assets 156,206$ 583,465$ 797,238$ 257,074$ –$ 1,793,983$ Liabilities Accounts payable 7,542$ –$ –$ 106,278$ 4,000$ 117,820$ Interfund payable – – – – 18,000 18,000 Total liabilities 7,542 – – 106,278 22,000 135,820 Deferred inflows of resources Unavailable revenue – taxes – 3,222 – – – 3,222 Fund balances (deficits) Nonspendable 214 – – – – 214 Restricted 148,450 – 797,238 150,796 – 1,096,484 Committed – 580,243 – – – 580,243 Unassigned – – – – (22,000) (22,000) Total fund balances (deficits)148,664 580,243 797,238 150,796 (22,000) 1,654,941 Total liabilities, deferred inflows of resources, and fund balances 156,206$ 583,465$ 797,238$ 257,074$ –$ 1,793,983$ CITY OF ARDEN HILLS Nonmajor Special Revenue Funds Combining Balance Sheet as of December 31, 2019 -54- Total EDA EDA EDA Nonmajor TIF TIF TIF Special EDA District District District Revenue Cable Operating No. 3 No. 4 No. 5 Funds Revenues Taxes Tax increments –$ 386$ 104,900$ 283,411$ –$ 388,697$ Earnings on investments 7,600 17,322 24,394 3,077 – 52,393 Franchise taxes 100,464 – – – – 100,464 Total revenues 108,064 17,708 129,294 286,488 – 541,554 Expenditures Current General government 137,060 – – – – 137,060 Economic development – 62,406 1,571 214,075 22,000 300,052 Capital Outlay General government 85,177 – – – – 85,177 Economic development – 3,300 – – – 3,300 Total expenditures 222,237 65,706 1,571 214,075 22,000 525,589 Revenues over (under) expenditures (114,173) (47,998) 127,723 72,413 (22,000) 15,965 Other financing sources Transfers in – 120,000 – – 120,000 Net changes in fund balances (114,173) 72,002 127,723 72,413 (22,000) 135,965 Fund balances (deficits) – beginning 262,837 508,241 669,515 78,383 – 1,518,976 Fund balances (deficits) – ending 148,664$ 580,243$ 797,238$ 150,796$ (22,000)$ 1,654,941$ CITY OF ARDEN HILLS Nonmajor Special Revenue Funds Combining Statement of Revenues, Expenditures, Year Ended December 31, 2019 and Changes in Fund Balances -55- THIS PAGE INTENTIONALLY LEFT BLANK NONMAJOR CAPITAL PROJECT FUNDS The City had the following nonmajor capital project funds during the year: Equipment, Building, and Replacement Fund – This fund was established for resources designated to be used for the purchase of capital equipment and building repairs. Parks Fund – This fund was established for park/trail acquisition and development. Revenue for this fund comes from developer park dedication fees, contributions, state grants, and investment interest. Public Safety Capital Equipment Fund – This fund was established to account for resources designated to be used for the City’s share of public safety equipment through contracts with the Lake Johanna Volunteer Fire Department, Inc. and Ramsey County Sheriff’s Department. TCAAP Fund – This fund was established to account for resources designated to be used for the City’s share of capital costs related to the approximately 430-acre TCAAP site purchased by Ramsey County. Total Equipment,Public Safety Nonmajor Building, and Capital Capital Replacement Parks Equipment TCAAP Project Funds Assets Cash and investments 294,445$ –$ –$ –$ 294,445$ Accounts receivable – – 4,433 – 4,433 Total assets 294,445$ –$ 4,433$ –$ 298,878$ Liabilities Accounts payable –$ –$ 6,266$ –$ 6,266$ Interfund payable – 5,816 3,364 194,879 204,059 Total liabilities – 5,816 9,630 194,879 210,325 Fund balances (deficits) Assigned 294,445 – – – 294,445 Unassigned – (5,816) (5,197) (194,879) (205,892) Total fund balances (deficits)294,445 (5,816) (5,197) (194,879) 88,553 Total liabilities and fund balances 294,445$ –$ 4,433$ –$ 298,878$ CITY OF ARDEN HILLS Nonmajor Capital Project Funds Combining Balance Sheet as of December 31, 2019 -56- Total Equipment,Public Safety Nonmajor Building, and Capital Capital Replacement Parks Equipment TCAAP Project Funds Revenues Earnings on investments –$ –$ 2$ –$ 2$ Other – 125 33,923 – 34,048 Total revenues – 125 33,925 – 34,050 Expenditures Capital outlay General government – – – 30,747 30,747 Public safety – – 69,666 – 69,666 Public works 299,847 – – – 299,847 Parks and recreation – 125 – – 125 Total expenditures 299,847 125 69,666 30,747 400,385 Revenues over (under) expenditures (299,847) – (35,741) (30,747) (366,335) Other financing sources Sale of capital assets 27,390 – – – 27,390 Transfers in 350,000 – 50,000 – 400,000 Total other financing sources 377,390 – 50,000 – 427,390 Net changes in fund balances 77,543 – 14,259 (30,747) 61,055 Fund balances (deficits) – beginning 216,902 (5,816) (19,456) (164,132) 27,498 Fund balances (deficits) – ending 294,445$ (5,816)$ (5,197)$ (194,879)$ 88,553$ CITY OF ARDEN HILLS Nonmajor Capital Project Funds Combining Statement of Revenues, Expenditures, Year Ended December 31, 2019 and Changes in Fund Balances -57- Variance With Original Budget Final Budget Actual Amounts Final Budget Revenues Earnings on investments 3,000$ 3,000$ 7,600$ 4,600$ Franchise taxes 105,000 105,000 100,464 (4,536) Total revenues 108,000 108,000 108,064 64 Expenditures Current General government Personal services 61,730 61,730 62,900 (1,170) Other services and charges 71,040 71,040 74,160 (3,120) Capital outlay General government 40,000 84,170 85,177 (1,007) Total expenditures 172,770 216,940 222,237 (5,297) Net change in fund balances (64,770)$ (108,940)$ (114,173) (5,233)$ Fund balances – beginning 262,837 Fund balances – ending 148,664$ CITY OF ARDEN HILLS Special Revenue Fund – Cable Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual Year Ended December 31, 2019 -58- Actual Variance With Original Budget Final Budget Amounts Final Budget Revenues Taxes – tax increments –$ –$ 386$ 386$ Earnings on investments 3,500 3,500 17,322 13,822 Total revenues 3,500 3,500 17,708 14,208 Expenditures Economic development Current Personal services 42,910 42,910 31,127 11,783 Materials and supplies 400 400 – 400 Other services and charges 46,970 46,970 31,279 15,691 Capital outlay 40,000 40,000 3,300 36,700 Total expenditures 130,280 130,280 65,706 64,574 Revenues over (under) expenditures (126,780) (126,780) (47,998) 78,782 Other financing sources Transfers in 120,000 120,000 120,000 – Net change in fund balances (6,780)$ (6,780)$ 72,002 78,782$ Fund balance – beginning 508,241 Fund balance – ending 580,243$ CITY OF ARDEN HILLS Special Revenue Fund – EDA Operating Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances Year Ended December 31, 2019 Budget and Actual -59- Variance With Original Budget Final Budget Actual Amounts Final Budget Revenues Taxes Tax increments 99,030$ 99,030$ 104,900$ 5,870$ Earnings on investments 5,500 5,500 24,394 18,894 Total revenues 104,530 104,530 129,294 24,764 Expenditures Current Economic development Other services and charges 2,000 2,000 1,571 429 Net change in fund balances 102,530$ 102,530$ 127,723 25,193$ Fund balances – beginning 669,515 Fund balances – ending 797,238$ CITY OF ARDEN HILLS Special Revenue Fund – EDA TIF District No. 3 Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual Year Ended December 31, 2019 -60- Variance With Original Budget Final Budget Actual Amounts Final Budget Revenues Taxes Tax increments 253,900$ 253,900$ 283,411$ 29,511$ Earnings on investments 1,500 1,500 3,077 1,577 Total revenues 255,400 255,400 286,488 31,088 Expenditures Current Economic development Other services and charges 192,630 192,630 214,075 (21,445) Net change in fund balances 62,770$ 62,770$ 72,413 9,643$ Fund balances – beginning 78,383 Fund balances – ending 150,796$ CITY OF ARDEN HILLS Special Revenue Fund – EDA TIF District No. 4 Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual Year Ended December 31, 2019 -61- THIS PAGE INTENTIONALLY LEFT BLANK INTERNAL SERVICE FUNDS The City had the following internal service funds during the year: Risk Management Fund – This fund was established to account for the payment of property, liability, and workers’ compensation insurance deductibles, and funds wellness activities for all departments. Engineering Fund – This fund was established to account for the costs related to engineering services. All costs are compiled in this fund and charged out to the departments based on usage. Central Garage Fund – This fund was established to account for certain public works department costs related to streets, parks, water, sanitary sewer, and surface water management. All costs are compiled in this fund and charged out to the departments based on usage. Technology Fund – This fund was established to account for costs related to technology. All costs are compiled in this fund and charged out to the departments based on usage. Total Risk Central Internal Management Engineering Garage Technology Service Funds Assets Current assets Cash and investments 408,405$ 2,679$ 17,295$ 4,486$ 432,865$ Accrued interest receivable 1,295 – – 10 1,305 Total assets 409,700 2,679 17,295 4,496 434,170 Liabilities Current liabilities Accounts payable 79,188 1,991 4,371 1,858 87,408 Due to other governmental units – – 11,707 736 12,443 Compensated absences payable – 516 913 302 1,731 Total current liabilities 79,188 2,507 16,991 2,896 101,582 Noncurrent liabilities Compensated absences payable – 172 304 101 577 Total liabilities 79,188 2,679 17,295 2,997 102,159 Net position Unrestricted 330,512$ –$ –$ 1,499$ 332,011$ CITY OF ARDEN HILLS Combining Statement of Net Position Internal Service Funds as of December 31, 2019 -62- Total Risk Central Internal Management Engineering Garage Technology Service Funds Operating revenues Charges for services 126,306$ 50,057$ 202,095$ 204,676$ 583,134$ Miscellaneous 26,201 – – – 26,201 Total operating revenues 152,507 50,057 202,095 204,676 609,335 Operating expenses Personal services 19 9,857 15,295 5,046 30,217 Supplies and maintenance – – 113,894 2,599 116,493 Other services and charges 89,998 2,477 63,840 7,275 163,590 Purchased services 127,346 37,723 9,066 188,840 362,975 Total operating expenses 217,363 50,057 202,095 203,760 673,275 Operating income (loss)(64,856) – – 916 (63,940) Nonoperating revenues (expenses) Earnings (charges) on investments 11,768 – – (29) 11,739 Change in net position (53,088) – – 887 (52,201) Net position – beginning 383,600 – – 612 .384,212 Net position – ending 330,512$ –$ –$ 1,499$ 332,011$ CITY OF ARDEN HILLS Combining Statement of Revenues, Expenses, and Changes in Net Position Internal Service Funds Year Ended December 31, 2019 -63- Total Risk Central Internal Management Engineering Garage Technology Service Funds Cash flows from operating activities Receipts from customers and users 152,507$ 50,057$ 202,095$ 204,676$ 609,335$ Payments to suppliers (138,531) (39,771) (191,430) (203,847) (573,579) Payments to employees (19) (10,144) (15,636) (5,065) (30,864) Net cash flows from operating activities 13,957 142 (4,971) (4,236) 4,892 Cash flows from investing activities Earnings (charges) on investments 12,302 – – 3 12,305 Net change in cash and cash equivalents 26,259 142 (4,971) (4,233) 17,197 Cash and cash equivalents – beginning 382,146 2,537 22,266 8,719 415,668 Cash and cash equivalents – ending 408,405$ 2,679$ 17,295$ 4,486$ 432,865$ Reconciliation of operating income (loss) to net cash flows from operating activities Operating income (loss)(64,856)$ –$ –$ 916$ (63,940)$ Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities Increase (decrease) in accounts payable 78,813 429 (10,577) (578) 68,087 Increase (decrease) in salaries payable – (143) (246) (99) (488) Increase (decrease) in due to other governments – – 5,947 (4,555) 1,392 Increase (decrease) in compensated absences payable – (144) (95) 80 (159) Total adjustments 78,813 142 (4,971) (5,152) 68,832 Net cash flows from operating activities 13,957$ 142$ (4,971)$ (4,236)$ 4,892$ CITY OF ARDEN HILLS Combining Statement of Cash Flows Internal Service Funds Year Ended December 31, 2019 -64- STATISTICAL SECTION (UNAUDITED) THIS PAGE INTENTIONALLY LEFT BLANK STATISTICAL SECTION (UNAUDITED) This part of the City’s Comprehensive Annual Financial Report (CAFR) presents detailed information as a context for understanding this year’s financial statements, note disclosures, and supplementary information. This information has not been audited by the independent auditor. The contents of the statistical section include: Financial Trends – These tables contain trend information that may assist the reader in assessing the City’s current financial performance by placing it in historical perspective. Revenue Capacity – These schedules contain information to assist the reader in assessing the City’s most significant local revenue source—property taxes. Debt Capacity – These tables present information that may assist the reader in analyzing the affordability of the City’s current levels of outstanding debt and the City’s ability to issue additional debt in the future. Demographic and Economic Information – These tables offer economic and demographic indicators that are commonly used for financial analysis and that can assist the reader in understanding the City’s present and ongoing financial status. Operating Information – These tables contain service and infrastructure indicators that can assist the reader in understanding how the information in the City’s CAFR relates to the services the City provides and the activities it performs. Source – Unless otherwise noted, the information in these tables is derived from the CAFR for the relevant year. 2010 2011 2012 2013 Governmental activities Investment in capital assets 16,341,354$ 17,498,478$ 17,167,531$ 17,435,976$ Restricted 1,329,092 1,694,212 1,788,007 896,106 Unrestricted 9,008,528 9,133,279 9,738,832 10,274,835 Total governmental activities net position 26,678,974$ 28,325,969$ 28,694,370$ 28,606,917$ Business-type activities Investment in capital assets 10,530,204$ 10,961,855$ 12,360,674$ 14,356,782$ Unrestricted 2,621,579 3,248,534 2,403,645 1,158,470 Total business-type activities net position 13,151,783$ 14,210,389$ 14,764,319$ 15,515,252$ Primary government Investment in capital assets 26,871,558$ 28,460,333$ 29,528,205$ 31,792,758$ Restricted 1,329,092 1,694,212 1,788,007 896,106 Unrestricted 11,630,107 12,381,813 12,142,477 11,433,305 Total primary government net position 39,830,757$ 42,536,358$ 43,458,689$ 44,122,169$ Note:The City implemented GASB Statement No.68 in fiscal 2015.The City reported a change in accounting principle as a result of implementing this standard that decreased unrestricted net position. Prior year information has not been restated. Fiscal Year CITY OF ARDEN HILLS Net Position by Component Last Ten Fiscal Years (Accrual Basis of Accounting) -65- 2014 2015 2016 2017 2018 2019 18,837,904$ 24,909,453$ 25,178,721$ 22,750,377$ 26,972,898$ 26,988,912$ 917,300 675,052 786,678 898,739 1,010,521 1,096,698 11,472,102 8,765,793 8,249,560 10,678,219 8,736,913 9,070,332 31,227,306$ 34,350,298$ 34,214,959$ 34,327,335$ 36,720,332$ 37,155,942$ 14,464,713$ 16,167,536$ 16,306,381$ 16,292,000$ 17,295,916$ 17,452,137$ 1,793,112 238,381 1,116,957 1,298,744 1,329,268 2,025,812 16,257,825$ 16,405,917$ 17,423,338$ 17,590,744$ 18,625,184$ 19,477,949$ 33,302,617$ 41,076,989$ 41,485,102$ 39,042,377$ 44,268,814$ 44,441,049$ 917,300 675,052 786,678 898,739 1,010,521 1,096,698 13,265,214 9,004,174 9,366,517 11,976,963 10,066,181 11,096,144 47,485,131$ 50,756,215$ 51,638,297$ 51,918,079$ 55,345,516$ 56,633,891$ -66- 2010 2011 2012 2013 Expenses Governmental activities General government 1,232,225$ 1,199,609$ 1,186,404$ 1,133,379$ Public safety 1,585,447 1,736,422 1,900,443 1,956,260 Public works 636,406 614,761 894,954 944,104 Parks and recreation 732,824 811,533 838,138 807,363 Economic development 3,311 6,862 61,770 403,143 Interest on long-term debt 46,470 39,146 31,287 25,767 Total governmental activities 4,236,683 4,408,333 4,912,996 5,270,016 Business-type activities Water 1,678,954 1,573,669 1,983,200 1,843,530 Sewer 1,367,429 1,454,302 1,595,379 1,560,796 Surface water management 321,693 353,330 388,406 453,727 Recycling 129,139 137,622 142,114 144,541 Total business-type activities 3,497,215 3,518,923 4,109,099 4,002,594 Total primary government 7,733,898$ 7,927,256$ 9,022,095$ 9,272,610$ Program revenues Governmental activities Charges for services General government 271,972$ 353,224$ 377,621$ 338,546$ Public safety 207,876 385,133 376,576 341,114 Public works – – – – Parks and recreation 98,395 110,830 118,179 113,374 Operating grants and contributions 275,869 410,228 291,712 343,486 Capital grants and contributions 1,171,451 946,122 134,710 326,213 Total governmental activities 2,025,563 2,205,537 1,298,798 1,462,733 Business-type activities Charges for services Water 1,824,086 1,950,932 2,285,161 2,271,072 Sewer 1,574,493 1,852,364 1,739,123 1,798,889 Surface water management 518,672 531,845 567,361 639,747 Recycling 121,892 142,858 121,688 122,666 Operating grants and contributions 20,114 20,846 19,802 19,694 Capital grants and contributions – 140,428 25,506 156,585 Total business-type activities 4,059,257 4,639,273 4,758,641 5,008,653 Total primary government 6,084,820$ 6,844,810$ 6,057,439$ 6,471,386$ CITY OF ARDEN HILLS Changes in Net Position Last Ten Fiscal Years (Accrual Basis of Accounting) Fiscal Year -67- 2014 2015 2016 2017 2018 2019 1,294,830$ 1,281,557$ 1,384,908$ 1,322,106$ 1,286,845$ 1,337,262$ 1,887,877 1,978,210 2,047,961 2,158,835 2,248,540 2,471,567 852,109 194,667 800,157 3,512,218 1,695,449 1,416,785 711,174 711,181 751,910 759,737 765,843 798,717 522,193 733,528 361,029 276,841 391,156 369,256 11,004 817 – – – – 5,279,187 4,899,960 5,345,965 8,029,737 6,387,833 6,393,587 1,893,217 1,803,405 1,833,468 2,159,874 2,147,359 2,295,820 1,506,927 1,587,808 1,513,219 1,780,260 1,654,079 1,663,498 432,788 489,377 468,965 481,026 499,049 513,209 150,417 239,727 141,190 147,919 168,145 172,232 3,983,349 4,120,317 3,956,842 4,569,079 4,468,632 4,644,759 9,262,536$ 9,020,277$ 9,302,807$ 12,598,816$ 10,856,465$ 11,038,346$ 275,735$ 271,991$ 299,692$ 314,166$ 214,833$ 250,643$ 366,452 628,573 735,730 915,632 619,406 817,238 4,973 5,205 4,535 7,029 6,150 5,250 116,951 119,338 134,579 123,550 113,968 106,317 300,536 389,219 308,900 2,031,474 840,634 347,823 2,302,439 3,080,749 462,105 448,945 2,494,823 613,263 3,367,086 4,495,075 1,945,541 3,840,796 4,289,814 2,140,534 2,132,191 2,099,242 2,165,773 2,127,452 2,256,859 2,286,542 1,857,272 1,855,802 1,989,066 1,796,144 1,769,466 1,892,740 762,884 782,501 812,044 834,973 839,499 850,971 130,369 129,030 134,739 151,272 134,228 140,149 19,611 124,228 26,323 24,655 27,429 24,752 – – 59,248 – 735,220 332,092 4,902,327 4,990,803 5,187,193 4,934,496 5,762,701 5,527,246 8,269,413$ 9,485,878$ 7,132,734$ 8,775,292$ 10,052,515$ 7,667,780$ -68-(continued) 2010 2011 2012 2013 Net (expense) revenue Governmental activities (2,211,120)$ (2,202,796)$ (3,614,198)$ (3,807,283)$ Business-type activities 562,042 1,120,350 649,542 1,006,059 Total primary government (1,649,078)$ (1,082,446)$ (2,964,656)$ (2,801,224)$ General revenues and other changes in net position Governmental activities Taxes Property taxes 2,836,982$ 2,920,078$ 3,095,488$ 3,094,036$ Tax increment collections 566,725 342,109 431,060 466,280 Franchise taxes 85,131 90,123 94,532 96,820 Unrestricted investment earnings 231,340 307,769 218,519 (168,071) Gain on sale of capital assets – 46,712 – – Transfers 143,000 143,000 143,000 230,765 Total governmental activities 3,863,178 3,849,791 3,982,599 3,719,830 Business-type activities Investment earnings 53,455 81,256 47,388 (24,361) Transfers (143,000) (143,000) (143,000) (230,765) Total business-type activities (89,545) (61,744) (95,612) (255,126) Total primary government 3,773,633$ 3,788,047$ 3,886,987$ 3,464,704$ Change in net position Governmental activities 1,652,058$ 1,646,995$ 368,401$ (87,453)$ Business-type activities 472,497 1,058,606 553,930 750,933 Total primary government 2,124,555$ 2,705,601$ 922,331$ 663,480$ Fiscal Year CITY OF ARDEN HILLS Changes in Net Position Last Ten Fiscal Years (continued) (Accrual Basis of Accounting) -69- 2014 2015 2016 2017 2018 2019 (1,912,101)$ (404,885)$ (3,400,424)$ (4,188,941)$ (2,098,019)$ (4,253,053)$ 918,978 870,486 1,230,351 365,417 1,294,069 882,487 (993,123)$ 465,601$ (2,170,073)$ (3,823,524)$ (803,950)$ (3,370,566)$ 3,182,331$ 3,191,426$ 3,278,287$ 3,526,347$ 3,578,894$ 3,793,754$ 565,422 697,898 242,544 295,788 351,569 388,697 103,711 72,837 132,548 109,070 101,237 100,464 450,261 245,540 155,191 139,347 159,316 322,346 – – – – – – 230,765 230,765 230,765 230,765 300,000 83,402 4,532,490 4,438,466 4,039,335 4,301,317 4,491,016 4,688,663 54,360 35,857 17,835 32,754 40,371 53,680 (230,765) (230,765) (230,765) (230,765) (300,000) (83,402) (176,405) (194,908) (212,930) (198,011) (259,629) (29,722) 4,356,085$ 4,243,558$ 3,826,405$ 4,103,306$ 4,231,387$ 4,658,941$ 2,620,389$ 4,033,581$ 638,911$ 112,376$ 2,392,997$ 435,610$ 742,573 675,578 1,017,421 167,406 1,034,440 852,765 3,362,962$ 4,709,159$ 1,656,332$ 279,782$ 3,427,437$ 1,288,375$ -70- THIS PAGE INTENTIONALLY LEFT BLANK Tax Property Increment Franchise Fiscal Year Taxes Collections Taxes Total 2010 2,836,982$ 566,725$ 85,131$ 3,488,838$ 2011 2,920,078 342,109 90,123 3,352,310 2012 3,095,488 431,060 94,532 3,621,080 2013 3,094,036 466,280 96,820 3,657,136 2014 3,182,331 565,422 103,711 3,851,464 2015 3,191,426 697,898 72,837 3,962,161 2016 3,278,287 242,544 132,548 3,653,379 2017 3,526,347 295,788 109,070 3,931,205 2018 3,578,894 351,569 101,237 4,031,700 2019 3,793,754 388,697 100,464 4,282,915 CITY OF ARDEN HILLS Governmental Activities Tax Revenues by Source Last Ten Fiscal Years (Accrual Basis of Accounting) -71- 2010 2011 2012 2013 General Fund Reserved 32,587$ –$ –$ –$ Unreserved 1,730,605 – – – Nonspendable – 29,063 22,326 22,754 Assigned – 106,592 126,134 119,440 Unassigned – 2,015,680 2,202,459 2,223,512 Total General Fund 1,763,192$ 2,151,335$ 2,350,919$ 2,365,706$ All other governmental funds Reserved 1,331,259$ –$ –$ –$ Unreserved, reported in Special revenue funds 468,786 – – – Capital project funds 7,212,442 – – – Nonspendable – – 628 910 Restricted – 1,696,379 1,799,380 888,707 Committed – 264,016 452,496 421,989 Assigned – 6,993,767 6,863,115 7,111,210 Unassigned – (542,821) (303,339) (134,316) Total all other governmental funds 9,012,487$ 8,411,341$ 8,812,280$ 8,288,500$ Note: The City implemented GASB Statement No. 54 in fiscal 2011. Prior year information has not been restated. Fiscal Year CITY OF ARDEN HILLS Fund Balances of Governmental Funds Last Ten Fiscal Years -72- 2014 2015 2016 2017 2018 2019 –$ –$ –$ –$ –$ –$ – – – – – – 21,059 23,983 26,271 288,519 25,482 22,438 139,721 251,497 257,771 285,548 262,805 205,962 2,185,162 2,806,930 2,660,771 3,065,250 3,052,082 2,987,183 2,345,942$ 3,082,410$ 2,944,813$ 3,639,317$ 3,340,369$ 3,215,583$ –$ –$ –$ –$ –$ –$ – – – – – – – – – – – – 395 845 214 664 214 214 917,300 675,052 786,678 898,739 1,010,521 1,096,484 471,161 449,898 450,433 471,996 508,241 580,243 7,346,178 3,902,898 3,872,938 6,138,393 2,873,879 4,057,047 (150,893) (216,521) (217,607) (439,147) (189,404) (227,892) 8,584,141$ 4,812,172$ 4,892,656$ 7,070,645$ 4,203,451$ 5,506,096$ -73- Revenues Taxes General property tax Tax increments Special assessments Licenses and permits Intergovernmental Charges for services Fines and forfeits Earnings on investments Franchise taxes Antenna rental fees Miscellaneous reimbursements/Other Total revenues Expenditures Current General government Public safety Public works Parks and recreation Economic development Capital outlay General government Public safety Public works Parks and recreation Economic development Debt service Principal Interest and paying agent fees Total expenditures Revenues over (under) expenditures Other financing sources (uses) Sale of capital assets Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Debt service as a percentage of noncapital expenditures 7.12 %6.99 %6.21 %5.82 % CITY OF ARDEN HILLS Changes in Fund Balances of Governmental Funds Last Ten Fiscal Years (Modified Accrual Basis of Accounting) 23,520 9,545 5,330 109,761 376,872 8,847 169,894 (85,700)$ 123,668$ 600,523$ (508,993)$ 143,000 189,712 143,000 230,765 (576,791) – – – 6,035,747 5,831,818 4,854,882 5,869,052 328,248 68,493 1,017,328 170,511 230,765 – (228,700) (66,044) 457,523 (739,758) 143,000 – 143,000 46,712 – 719,791 39,325 31,698 46,525 235,000 245,000 255,000 260,000 108,575 18,927 865,334 1,141,300 – 64,923 – 1,063,181 91,579 684,492 2010 Fiscal Year 5,129,294 5,312,405 5,765,774 5,807,047 3,086,064$ 3,087,160$ 2,913,248$ 2,867,028$ 466,280 382,366 382,039 316,859 410,995 32,055 (164,535) 96,820 118,096 365,259 113,974 43,777 1,060,744 1,640,801 273,165 661,746 6,862 1,127,726 1,561,046 322,793 605,210 3,311 1,054,662 1,728,669 377,101 679,282 57,766 1,054,852 1,779,549 391,711 675,073 90,222 76,574 431,060 252,879 415,070 143,085 450,589 33,192 215,119 94,532 75,745 72,351 566,725 388,768 255,265 878,944 322,978 27,013 231,340 85,131 65,759 342,109 561,238 429,991 246,416 419,197 29,593 296,249 90,123 201320122011 -74- 5.73 %6.20 %– %– %– %– % 275,877$ 201920142015201620172018 57,067 249,322 440,616 34,512 310,607 100,464 134,505 3,795,624$ 388,697 828,487 714,530 603,966 3,578,628$ 351,569 735,369 526,444 1,003,685 427,905 37,080 154,369 101,237 123,815 590,141 29,989 133,231 109,070 128,765 3,541,705$ 295,788 308,990 729,197 2,124,414 3,260,537$ 242,544 373,415 598,686 396,275 577,041 31,868 148,679 132,548 496,908 32,792 236,947 72,837 189,534 3,203,004$ 697,898 908,964 518,846 1,396,269 400,224 29,569 433,402 103,711 110,144 3,210,025$ 565,422 304,315 327,727 1,408,240 89,482 7,509,130 7,222,675 8,155,546 5,979,850 7,995,462 6,982,261 94,442 241,463 164,256 157,122 264,905 1,164,657 2,088,345 579,535 653,977 324,548 1,195,335 2,399,296 632,531 679,589 300,052 1,177,859$ (3,166,142)$ 2,872,493$ 717,137$ (3,035,501)$ 1,155,120 1,826,098 580,872 648,214 286,991 1,143,037 1,920,280 336,398 573,587 249,484 1,194,579 1,981,506 479,814 621,832 229,688 1,189,500 2,058,037 443,633 618,614 13,770 233,301 2,916,604 2,783,238 – 115,924 69,666 713,156 549,812 3,300 – 47,880 786,873 – 151,306 – 100,215 734,411 337,808 7,520 5,559 66,079 1,833,535 18,883 231,025 – 52,936 6,198,264 – 502,842 – 230,765 – 230,765 – 230,765 – 45,112 (3,266,266) 486,372 2,400,903 (3,535,300) 850,469 4,900 14,773 11,261,728 6,937,149 270,000 280,000 – – – 230,765 230,765 230,765 471,590 369,158 327,390 – – – – – – – – – 6,658,661 10,757,975 5,754,643 5,493,478 – – 471,590 69,158 300,000 27,390 300,000 -75- THIS PAGE INTENTIONALLY LEFT BLANK Fiscal Year General Tax Increment Franchise Tax Total 2010 2,867,028$ 566,725$ 85,131$ 3,518,884$ 2011 2,913,248 342,109 90,123 3,345,480 2012 3,087,160 431,060 94,532 3,612,752 2013 3,086,064 466,280 96,820 3,649,164 2014 3,210,025 565,422 103,711 3,879,158 2015 3,203,004 697,898 72,837 3,973,739 2016 3,260,537 242,544 132,548 3,635,629 2017 3,541,705 295,788 109,070 3,946,563 2018 3,578,628 351,569 101,237 4,031,434 2019 3,795,624 388,697 100,464 4,284,785 CITY OF ARDEN HILLS General Governmental Tax Revenues by Source Last Ten Fiscal Years (Modified Accrual Basis of Accounting) Property Tax -76- Fiscal Year Less Tax Less Fiscal Ended Real Personal Total Increment Disparity December 31,Property Property Tax Capacity District Contribution 2010 15,659,356$ 164,655$ 15,824,011$ 590,269$ 3,096,380$ 2011 14,606,183 178,841 14,785,024 531,415 2,921,351 2012 13,848,510 190,989 14,039,499 436,893 2,505,319 2013 13,262,619 213,949 13,476,568 438,897 2,474,502 2014 13,413,316 216,679 13,629,995 510,906 2,375,745 2015 14,162,432 224,125 14,386,557 684,465 2,303,582 2016 14,364,828 236,271 14,601,099 207,526 2,280,682 2017 14,671,678 262,904 14,934,582 256,243 2,365,021 2018 15,751,958 276,244 16,028,202 308,152 2,141,470 2019 16,457,522 256,847 16,714,369 345,318 2,174,854 CITY OF ARDEN HILLS Tax Capacity Value and Estimated Market Value of Taxable Property Last Ten Fiscal Years Source: Ramsey County Assessor -77- Adjusted Estimated Tax Capacity Market (ATC) Value Value (EMV) 12,137,362$ 22.67 %1,171,068,100$ 1.04 % 11,332,258 24.19 1,109,327,600 1.02 11,097,287 25.54 1,043,419,700 1.06 10,563,169 27.93 1,035,471,700 1.02 10,743,344 27.95 1,055,153,800 1.02 11,398,510 27.29 1,122,428,000 1.02 12,112,891 26.54 1,144,221,600 1.06 12,313,318 27.21 1,173,397,600 1.05 13,578,580 25.53 1,260,228,800 1.08 14,194,197 25.56 1,313,244,900 1.08 of EMV ATC as a Percentage Direct Tax Rate Total -78- 22.672 %50.248 %24.560 %7.953 %105.433 % 24.187 54.678 25.573 8.354 112.792 25.544 61.316 29.044 9.955 125.859 27.931 65.240 29.444 10.200 132.815 27.950 63.735 29.734 9.825 131.244 27.294 58.922 27.378 9.179 122.773 26.539 58.885 26.245 9.052 120.721 27.211 55.850 25.305 8.558 116.924 25.532 53.962 28.464 8.249 116.207 25.555 52.879 26.330 8.265 113.029 (1) Source: Ramsey County Assessor School Rate Special Ramsey Districts Overlapping RatesDirect Rate Operating Taxing City CITY OF ARDEN HILLS Property Tax Rates Direct and Overlapping (1) Governments Last Ten Fiscal Years Overlapping rates are those of local and county governments that apply to property owners within the City. Not all overlapping rates apply to all city property owners (e.g., the rates for special districts apply only to the proportion of the City’s property owners whose property is located within the geographic boundaries of the special district). Fiscal Year 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 County TotalDistrict -79- Taxable Taxable Capacity Value Rank Capacity Value Rank Cardiac Pacemakers, Inc.1,082,940$ 1 7.63 %1,799,250$ 1 14.82 % Land O’Lakes, Inc.563,520 2 3.97 390,146 3 3.21 Space Center Arden Hills, LLC 497,282 3 3.50 – – – St. Paul Fire and Marine Insurance Company 456,080 4 3.21 – – – Presbyterian Homes, Inc.364,506 5 2.57 – – – NSP 360,920 6 2.54 262,674 9 2.16 CSM Corporation 279,656 7 1.97 369,250 4 3.04 RAM Development, LLC 221,298 8 1.56 – – – LSREF4 Bison, LLC 210,216 9 1.48 – – – SUP I Shannon Square, LLC 197,812 10 1.39 – – – Arden Hills Industrial, LLC – – – 436,234 2 3.59 Inland Shannon Square Cub, LLC – – – 363,602 5 3.00 IRET Properties, LP – – – 359,250 6 2.96 Mutual Service Insurance Company – – – 305,508 7 2.52 Pharmacia Deltec, Inc.– – – 273,250 8 2.25 Northwoods, LLC – – – 229,250 10 1.89 Total 4,234,230$ 29.83 %4,788,414$ 39.45 % Total capacity value 14,194,197$ 12,137,362$ Source:Ramsey County Assessor CITY OF ARDEN HILLS Principal Property Taxpayers Current Year and Nine Years Ago 2019 Capacity 2010 Taxpayer Percentage of Total City Value Percentage of Total City Value Capacity -80- Taxes Collections Fiscal Year Levied in Ended for the Additions/Subsequent December 31,Fiscal Year Amount (Abatements)Years Amount 2010 2,953,128$ 2,890,946$ 97.89 %(29,095)$ 33,087$ 2,953,128$ 100.00 % 2011 3,040,964 3,008,068 98.92 (2,326) 30,570 3,040,964 100.00 2012 3,096,994 3,045,572 98.34 (11,376) 40,046 3,096,994 100.00 2013 3,191,230 3,117,083 97.68 (38,542) 35,605 3,191,230 100.00 2014 3,257,456 3,219,641 98.84 (19,251) 17,175 3,256,067 99.96 2015 3,359,775 3,295,723 98.09 (75,019) (12,416) 3,358,326 99.96 2016 3,478,775 3,408,642 97.98 (79,442) (10,371) 3,477,713 99.97 2017 3,641,290 3,562,166 97.83 (66,924) 11,545 3,640,635 99.98 2018 3,786,942 3,710,786 97.99 (58,021) 14,720 3,783,527 99.91 2019 3,938,420 3,871,967 98.31 (55,679) – 3,927,646 99.73 Source: Ramsey County Assessor CITY OF ARDEN HILLS Last Ten Fiscal Years Property Tax Levies and Collections Collected Within the Fiscal Year of the Levy Percentage of Levy Percentage of Levy Total Collections to Date -81- Governmental Activities General Total Obligation Revenue Primary Per TIF Bonds Bonds Premium Total Government Capita (1) 1,310,000$ –$ –$ –$ 1,310,000$ 0.37 %137$ 1,065,000 – – – 1,065,000 0.30 114 810,000 – – – 810,000 0.24 84 550,000 – – – 550,000 0.17 59 280,000 – – – 280,000 0.08 29 – – – – – – – – – – – – – – – – – – – – – – 2,415,000 156,952 2,571,952 2,571,952 0.71 260 – 2,415,000 141,394 2,556,394 2,556,394 0.69 256 (1) Note: Business-Type Activities See the Schedule of Demographic and Economic Statistics for personal income and population data. Details regarding the City’s outstanding debt can be found in the notes to basic financial statements. 2019 2018 2017 2016 2015 2014 2013 2012 2011 CITY OF ARDEN HILLS Ratios of Outstanding Debt by Type Last Ten Fiscal Years 2010 Fiscal Year Percentage of Personal Income (1) -82- THIS PAGE INTENTIONALLY LEFT BLANK Net Estimated Debt Share of Governmental Unit Outstanding Overlapping Debt Debt repaid with property taxes Ramsey County 94,028,237$ 2.46 %2,315,110$ County library 25,044,690 4.90 1,226,979 Independent School District No. 621 218,628,356 13.39 29,273,333 Independent School District No. 623 172,215,228 0.75 1,295,794 Intermediate School District No. 916 73,357,058 4.98 3,649,535 Metropolitan Council 1,363,814,945 0.36 4,924,569 Metropolitan Council 255,531 11.65 29,772 Total overlapping debt 42,715,092 City of Arden Hills – 100.00 – Total direct and overlapping debt 42,715,092$ (1) Note: Source: The percentage of overlapping debt applicable is estimated using taxable assessed property values. Applicable percentages were estimated by determining the portion of the county’s taxable assessed value that is within the City’s boundaries and dividing it by the county’s total taxable assessed value. Overlapping governments are those that coincide,at least in part, with the geographic boundaries of the City. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of the City. This process recognizes that, when considering the City’s ability to issue and repay long-term debt, the entire debt burden borne by the residents and businesses should be taken into account. However, this does not imply that every taxpayer is a resident and, therefore, responsible for repaying the debt of each overlapping government. Assessed value data used to estimate applicable percentages provided by the Ramsey County Assessor. Debt outstanding data provided by the county. CITY OF ARDEN HILLS Direct and Overlapping Governmental Activities Debt as of December 31, 2019 Estimated Percentage Applicable (1) -83- 2010 2011 2012 2013 35,132,043$ 33,279,828$ 31,302,591$ 31,064,151$ – – – – 35,132,043$ 33,279,828$ 31,302,591$ 31,064,151$ Total net debt applicable to the limit – – – – Note:Under state finance law,the City’s outstanding general obligation debt should not exceed 3 percent of total market value.By law,the general obligation debt subject to the limitation may be offset by amounts set aside for repaying general obligation bonds. Tax increment bonds are not subject to the debt limit; therefore, they are not included. Fiscal Year CITY OF ARDEN HILLS Legal Debt Margin Information Last Ten Fiscal Years Debt limit Total net debt applicable to the limit Legal debt margin as a percentage of debt limit -84- 2014 2015 2016 2017 2018 2019 31,654,614$ 33,672,840$ 34,326,648$ 35,201,928$ 37,806,864$ 39,397,347$ – – – – – – 31,654,614$ 33,672,840$ 34,326,648$ 35,201,928$ 37,806,864$ 39,397,347$ – – – – – – Total estimated market value 1,313,244,900$ Debt limit (3% of market value)39,397,347 Debt applicable to the limit General obligation bonds – Less amount set aside for repayment of general obligation debt – Total net debt applicable to the limit – Legal debt margin 39,397,347$ Legal Debt Margin Calculation for Fiscal Year 2019 -85- Operating Less Operating Net Available Revenues Expenses Revenue Principal Interest 4,026,325$ 3,279,800$ 746,525$ –$ –$ N/A 4,179,282 3,387,940 791,342 – 75,745 10.4 % Note 1: Note 2:2018 represents the first year the City pledged revenue for utility revenue bonds. Debt Service Includes Water and Sewer Funds. Operating expenses do not include interest or depreciation. Fiscal Year Coverage 2018 2019 CITY OF ARDEN HILLS Pledged Revenue Coverage Last Ten Fiscal Years -86- Per Capita Arden Hills Personal Total Personal Median School Population (1)Income (3)Income (4)Age (6)Enrollment (5) 9,552 36,806$ 351,570,912$ 36.2 10,032 7.5 % 9,381 37,371 350,577,351 34.8 10,090 6.6 9,597 35,375 339,493,875 34.8 10,234 5.7 9,359 33,688 315,285,992 34.8 10,480 4.9 9,652 34,481 332,810,612 36.9 10,734 4.0 9,847 35,222 346,831,034 36.0 11,011 3.5 9,966 35,994 358,716,204 36.0 11,401 3.6 9,969 37,723 376,060,587 36.3 11,556 3.2 9,889 36,553 361,472,617 36.3 11,647 2.7 9,988 37,284 372,389,090 36.4 11,957 3.0 Sources: (1) (2) (3) (4) (5) (6) Personal income is calculated based on the population and per capita personal income. Enrollment numbers are based off of Independent School District No.621,Mounds View from the Minnesota Department of Education website. Median age is from www.city-data.com website. CITY OF ARDEN HILLS Demographic and Economic Statistics Last Ten Fiscal Years Unemployment Rate (2) Population data is obtained from the Metropolitan Council website. 2019 is estimated by City staff. Unemployment rate information is from DEED for Ramsey County. Per capita personal income is obtained from the Metropolitan Council website. 2019 is estimated by City staff. Fiscal Year 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 -87- THIS PAGE INTENTIONALLY LEFT BLANK Employees Rank Employees Rank Boston Scientific 3,200 1 29.2 %2,000 1 16.1 % Land O’Lakes, Inc.1,565 2 14.3 800 2 6.5 University of Northwestern 1,020 3 9.3 – – – Bethel University 930 4 8.5 – – – Presbyterian Homes of Arden Hills 500 5 4.6 500 4 4.0 National Recoveries 350 6 3.2 – – – Mounds View Public Schools 275 7 2.5 – – – Gradient Financial 175 8 1.6 – – – 160 9 1.5 – – – International Paper 112 10 1.0 – – – Country and MSI Insurance – – – 300 6 2.4 Fair Isaac & Co.– – – 500 3 4.0 Smiths Medical M.D., Inc.– – – 500 5 4.0 Total 8,287 75.7 %4,600 37.0 % Total city employees 10,969 12,402 (1) (2)Information only readily available for the top six employers. Source:City staff research; Metropolitan Council. Total city employees is based on information available at the time of report issuance and is often on a one-year delay. Delkor 2019 (1) CITY OF ARDEN HILLS Principal Employers Current Year and Nine Years Ago Employees of Total City 2010 (2) Percentage of Total City Percentage Employer Employees -88- 2010 2011 2012 2013 Function Towed vehicles 2 3 7 2 138 96 140 149 Driving impaired/alcohol 9 13 15 23 Traffic stops 332 328 17 78 Traffic investigations 11 24 33 78 Total calls for service N/A N/A N/A N/A Fire 452 559 522 561 1.8 1.9 5.2 4.4 325 250 250 250 Sanitation (residential) Refuse collected (tons/day)7.95 7.85 7.90 8.05 Recyclables collected (tons/day)2.34 2.01 2.20 2.20 Recycling clean up days N/A N/A N/A N/A Tons collected during clean up days N/A N/A N/A N/A Parks and recreation Athletic field permits issued 25 20 19 30 Water New connections 3 2 31 10 Water main breaks 7 2 12 6 Average daily consumption (thousands of gallons)1,162 1,135 1,269 1,162 N/A – Not Applicable Note 1:Indicators are not available for the general city functions. Note 2: Note 3: Note 4: Source:Various city departments Fire information provided by Lake Johanna Fire Department, which is contracted out by the City. Street resurfacing (miles) Number of calls answered Potholes repaired Highways and streets Information provided by the Ramsey County Sheriff’s Department.Starting in 2015,the Sheriff changed reporting standards, and information is no longer easily broken down. Total number of calls is now provided. Recyclables –numbers based off of yearly tonnage total divided into 365 days in the year.Starting in 2018,the refuse collected information is no longer being provided as it is not readily available.Instead,information on recycling clean up days is being provided. Last Ten Fiscal Years Operating Indicators by Function CITY OF ARDEN HILLS Traffic accidents Police (see note 2) Fiscal Year -89- 2014 2015 2016 2017 2018 2019 1 N/A N/A N/A N/A N/A 144 N/A N/A N/A N/A N/A 18 N/A N/A N/A N/A N/A 20 N/A N/A N/A N/A N/A 40 N/A N/A N/A N/A N/A N/A 4,892 4,413 5,152 5,331 5,253 651 804 930 986 1,039 1,138 – 2.84 0.25 0.20 1.00 0.30 250 600 600 700 800 750 8.65 8.76 8.75 8.80 N/A N/A 2.21 2.16 2.06 2.22 2.17 2.20 N/A N/A N/A N/A 2 2 N/A N/A N/A N/A 73.7 44.8 22 22 22 30 25 20 2 7 8 8 6 1 2 10 6 7 8 4 983 857 812 853 869 841 -90- 2010 2011 2012 2013 Function General government 7.30 6.79 6.12 6.11 Public safety General public safety 2.68 2.73 2.66 2.46 Highways and streets General highways and streets 2.23 2.40 3.53 4.49 Parks and recreation 8.09 8.10 7.43 7.02 Water 3.00 3.51 3.56 3.70 Sewer 3.74 4.30 4.25 4.49 Recycling 0.16 0.20 0.21 0.20 Surface water management 1.63 2.24 2.61 2.66 Total 28.83 30.27 30.37 31.13 Note: Source:Finance and Administration Seasonal staff are calculated by total hours worked (2,080 hours per year),added together to total an equivalent. Seasonal hours fluctuate throughout the year. CITY OF ARDEN HILLS Full-Time Equivalent City Government Employees by Function Last Ten Fiscal Years Fiscal Year -91- 2014 2015 2016 2017 2018 2019 6.45 6.37 4.56 4.10 4.61 5.10 2.60 2.70 2.47 2.19 2.39 2.34 4.20 4.22 3.47 2.70 3.08 2.86 6.70 6.74 6.09 5.58 5.96 6.13 3.75 3.69 3.46 3.42 3.24 3.39 4.60 4.43 4.24 4.21 3.99 4.11 0.20 0.18 0.16 0.15 0.23 0.32 2.65 2.64 2.64 2.43 2.30 2.35 31.15 30.97 27.09 24.78 25.80 26.60 -92- 2010 2011 2012 2013 Function Highways and streets Streets (miles)57 57 57 57 Streetlights 250 250 250 250 Traffic signals 18 18 18 18 Parks and recreation* Parks acreage 111 111 111 111 Parks 14 14 14 14 Trails acreage 54 54 54 54 Trails (miles)15 15 15 15 Tennis courts 4 4 4 5 Softball/baseball fields 6 6 6 8 Basketball courts 10 10 10 10 Hockey/skating rinks 5 5 5 6 Permanent restrooms 3 3 3 2 Water Water mains (miles)43 43 43 43 Fire hydrants 520 520 520 537 Maximum daily capacity (thousands of gallons)1,500 1,500 1,500 1,500 Sewer Sanitary sewers (miles)44 44 44 49 Storm sewers (miles)20 20 20 20 * Note: Source: CITY OF ARDEN HILLS Capital Asset Statistics by Function Last Ten Fiscal Years Various city departments No capital asset indicators are available for the general city functions. Fiscal Year Information used for the parks and recreation section was taken from the Arden Hills Parks and Trails Guide from the Parks and Recreation Department. -93- 2014 2015 2016 2017 2018 2019 57 57 57 57 57 57 250 250 250 252 252 254 18 18 18 18 18 18 111 111 111 111 111 111 14 14 14 14 14 14 54 54 54 54 54 54 21 21 21 21 22 22 6 6 5 5 5 5 8 8 8 7 7 7 10 10 10 10 10 10 6 6 6 6 6 6 3 3 3 3 3 4 43 43 43 43 44 44 537 537 537 537 537 537 1,500 1,500 1,500 1,500 1,500 2,160 52 52 52 52 52 52 25 25 25 25 25 25 -94- THIS PAGE INTENTIONALLY LEFT BLANK CITY OF ARDEN HILLS RAMSEY COUNTY, MINNESOTA Special Purpose Audit Reports Year Ended December 31, 2019 $WWDFKPHQW& THIS PAGE INTENTIONALLY LEFT BLANK Page Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards 1–2 Independent Auditor’s Report on Minnesota Legal Compliance 3 Schedule of Findings and Responses 4 Table of Contents CITY OF ARDEN HILLS Year Ended December 31, 2019 RAMSEY COUNTY, MINNESOTA Special Purpose Audit Reports THIS PAGE INTENTIONALLY LEFT BLANK -1- INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS To the City Council and Management City of Arden Hills, 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 Arden Hills, Minnesota (the City) as of and for the year ended December 31, 2019, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated April 30, 2020. INTERNAL CONTROL OVER FINANCIAL REPORTING In planning and performing our audit of the financial statements, we considered the City’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the City’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and, therefore, material weaknesses or significant deficiencies may exist that have not been identified. We did identify one deficiency in internal control, described in the accompanying Schedule of Findings and Responses as item 2019-001, which we consider to be a material weakness. (continued) C E R T I F I E D A C C O U N T A N T S P UBLIC PRINCIPALS Thomas A. Karnowski, CPA Paul A. Radosevich, CPA William J. Lauer, CPA James H. Eichten, CPA Aaron J. Nielsen, CPA Victoria L. Holinka, CPA/CMA Jaclyn M. Huegel, CPA Kalen T. Karnowski, CPA Malloy, Montague, Karnowski, Radosevich & Co., P.A. 5353 Wayzata Boulevard • Suite 410 • Minneapolis, MN 55416 • Phone: 952-545-0424 • Fax: 952-545-0569 • www.mmkr.com Standard Letterhead-r2.qxp_167639 Letterhead-RV1 9/7/18 6:34 PM Page 1 -2- COMPLIANCE AND OTHER MATTERS As part of obtaining reasonable assurance about whether the City’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an 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 are required to be reported under Government Auditing Standards. CITY’S RESPONSE TO FINDING The City’s response to the finding identified in our audit is described in the accompanying Schedule of Findings and Responses. The City’s response was not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on it. PURPOSE OF THIS REPORT The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control and compliance. Accordingly, this report is not suitable for any other purpose. Minneapolis, Minnesota April 30, 2020 -3- INDEPENDENT AUDITOR’S REPORT ON MINNESOTA LEGAL COMPLIANCE To the City Council and Management City of Arden Hills, 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 Arden Hills, Minnesota (the City) as of and for the year ended December 31, 2019, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated April 30, 2020. MINNESOTA LEGAL COMPLIANCE In connection with our audit, nothing came to our attention that caused us to believe that the City failed to comply with the provisions of the contracting and bidding, deposits and investments, conflicts of interest, public indebtedness, claims and disbursements, miscellaneous provisions, and tax increment financing sections of the Minnesota Legal Compliance Audit Guide for Cities, promulgated by the State Auditor pursuant to Minnesota Statutes § 6.65, insofar as they relate to accounting matters. However, our audit was not directed primarily toward obtaining knowledge of such noncompliance. Accordingly, had we performed additional procedures, other matters may have come to our attention regarding the City’s noncompliance with the above referenced provisions, insofar as they relate to accounting matters. PURPOSE OF THIS REPORT The purpose of this report is solely to describe the scope of our testing of compliance and the results of that testing, and not to provide an opinion on compliance. Accordingly, this report is not suitable for any other purpose. Minneapolis, Minnesota April 30, 2020 C E R T I F I E D A C C O U N T A N T S P UBLIC PRINCIPALS Thomas A. Karnowski, CPA Paul A. Radosevich, CPA William J. Lauer, CPA James H. Eichten, CPA Aaron J. Nielsen, CPA Victoria L. Holinka, CPA/CMA Jaclyn M. Huegel, CPA Kalen T. Karnowski, CPA Malloy, Montague, Karnowski, Radosevich & Co., P.A. 5353 Wayzata Boulevard • Suite 410 • Minneapolis, MN 55416 • Phone: 952-545-0424 • Fax: 952-545-0569 • www.mmkr.com Standard Letterhead-r2.qxp_167639 Letterhead-RV1 9/7/18 6:34 PM Page 1 THIS PAGE INTENTIONALLY LEFT BLANK CITY OF ARDEN HILLS Schedule of Findings and Responses Year Ended December 31, 2019 -4- FINDINGS – MATERIAL WEAKNESS IN INTERNAL CONTROL OVER FINANCIAL REPORTING 2019-001 SEGREGATION OF DUTIES Criteria – Internal control over financial reporting. Condition – The City of Arden Hills, Minnesota (the City) has limited segregation of duties in a number of areas. Context – This is a current year and prior year finding. Cause – The limited segregation of duties is primarily caused by the limited size of the City’s finance department staff. Effect – One important element of internal accounting controls is an adequate segregation of duties such that no one individual should have responsibility to execute a transaction, have physical access to the related assets, and have responsibility or authority to record the transaction. A lack of segregation of duties subjects the City to a higher risk that errors or fraud could occur and not be detected in a timely manner in the normal course of business. Recommendation – This condition is common to organizations of your size. We recommend that the City segregate duties as best it can within the limits of the staff available . Any modifications in internal control in this area should be viewed from a cost -benefit perspective. Management Response – There is no disagreement with the audit finding. The City reviews and makes improvements to its internal control structure on an ongoing basis and attempts to maximize the segregation of duties in all areas within the limits of the staff available. However, the City does not consider it cost-beneficial at this time to increase the size of its staff in order to further segregate accounting functions. THIS PAGE INTENTIONALLY LEFT BLANK Page 1 of 1 STAFF COMMENTS – 5A MEMORANDUM DATE: May 26, 2020 TO: Honorable Mayor and City Councilmembers FROM: Dave Perrault, City Administrator SUBJECT: Rice Creek Commons (TCAAP) and Joint Development Authority (JDA) Update Budgeted Amount: Actual Amount: Funding Source: $ $ $ A verbal update will be provided at the City Council meeting. Page 1 of 1 STAFF COMMENTS – 5B MEMORANDUM DATE: TO: FROM: May 26, 2020 Honorable Mayor and City Councilmembers Dave Perrault, City Administrator SUBJECT: COVID-19 Update Budgeted Amount: Actual Amount: Funding Source: $ $ $ A verbal update will be provided at the City Council meeting. Page 1 of 1 STAFF COMMENTS – 5C MEMORANDUM DATE: TO: FROM: May 26, 2020 Honorable Mayor and City Councilmembers Dave Perrault, City Administrator Todd Blomstrom, Public Works Director/City Engineer SUBJECT: Transportation Update Budgeted Amount: Actual Amount: Funding Source: $ $ $ A verbal update will be provided at the City Council meeting. Approved: May 26, 2020 CITY OF ARDEN HILLS, MINNESOTA REGULAR CITY COUNCIL MEETING APRIL 27, 2020 7:00 P.M. - ARDEN HILLS CITY COUNCIL CHAMBERS CALL TO ORDER/ROLL CALL Pursuant to due call and notice thereof, Mayor David Grant called to order the regular City Council meeting at 7:00 p.m. Note: On March 20th, the Mayor signed a determination allowing Councilmembers to participate in City Council meetings via telephone pursuant to State Statute 13D.021 Present via Telephone: Mayor David Grant, Councilmembers Fran Holmes, Dave McClung and Steve Scott Absent: Councilmember Brenda Holden (excused) Also present: City Administrator Dave Perrault; Public Works Director/City Engineer Todd Blomstrom; Finance Director Gayle Bauman; Community Development Manager/City Planner Mike Mrosla; City Attorney Joel Jamnik (via telephone); and City Clerk Julie Hanson 1.APPROVAL OF AGENDA Councilmember Holmes requested item 7B be pulled from the Consent Agenda for discussion as Item 8A. MOTION: Councilmember Holmes moved and Councilmember McClung seconded a motion to approve the meeting agenda as amended. A roll call vote was taken. The motion carried unanimously (4-0). 2.PUBLIC INQUIRIES/INFORMATIONAL None. 3.RESPONSE TO PUBLIC INQUIRIES None. ARDEN HILLS CITY COUNCIL – APRIL 27, 2020 2 4. PUBLIC PRESENTATIONS A. Proclamation Recognizing May 17-23, 2020 as National Public Works Week Mayor Grant read a proclamation in full for the record declaring May 17 through May 23 to be National Public Works Week in the City of Arden Hills. MOTION: Mayor Grant moved and Councilmember Holmes seconded a motion to approve the Proclamation Recognizing May 17-23, 2020 as National Public Works Week. A roll call vote was taken. The motion carried unanimously (4- 0). B. Proclamation Recognizing May 10-16, 2020 as National Police Week Mayor Grant read a proclamation in full for the record declaring May 10 through May 16 to be National Police Week in the City of Arden Hills. MOTION: Mayor Grant moved and Councilmember Holmes seconded a motion to approve the Proclamation Recognizing May 10-16, 2020 as National Police Week. A roll call vote was taken. The motion carried unanimously (4-0). 5. STAFF COMMENTS A. Rice Creek Commons (TCAAP) and Joint Development Authority (JDA) Update City Administrator Perrault provided an update on TCAAP stating litigation with Ramsey County was ongoing. B. COVID-19 Update City Administrator Perrault provided the Council with a COVID-19 update. He encouraged residents to visit the City’s website for the most current and up to date information regarding COVID-19. He reported the Minnesota Department of Health and CDC also had websites with current guidelines and recommendations. He explained the City of Arden Hills remains in a peacetime state of emergency and City Hall will remain closed until Monday, May 4 pending future direction from the Governor and City Council. He noted that a special work session was scheduled for April 30th to discuss any additional guidance from the Governor’s office, and that updated information would be available following the work session on the City’s website. C. Transportation Update Public Works Director/City Engineer Blomstrom reported work had begun on the I-35W MnPASS project. He noted this was the second year of the three year project. He explained most work was completed on the southbound lanes and work would focus on the center portion of the corridor and median, along with construction of the noise walls. He explained MnDOT has a video available for residents to view regarding this project and a link to this video was available on the City’s website. ARDEN HILLS CITY COUNCIL – APRIL 27, 2020 3 Public Works Director/City Engineer Blomstrom stated a MnDOT Open House would be held regarding the temporary closing of the left turn median opening for southbound Highway 51 onto Hamline Avenue. He explained this meeting would be conducted virtually with both website and call in options for questions or comments. He reported staff will place details regarding the MnDOT Open House meeting on the City’s website when details are finalized. He commented MnDOT would be sending mailings to residents that live near the project area. Staff has provided MnDOT with a list of 180 property owners for notifications. Councilmember McClung asked how pothole patching was going this spring. Public Works Director/City Engineer Blomstrom indicated staff has been through the street system to cover some of the worst potholes and noted every street will be inspected for pothole patching. He encouraged residents to contact staff with any pothole concerns. 6. APPROVAL OF MINUTES A. April 13, 2020, Special City Council Work Session B. April 13, 2020, Regular City Council MOTION: Councilmember Holmes moved and Councilmember McClung seconded a motion to approve the April 13, 2020, Special City Council Work Session meeting minutes; and April 13, 2020, Regular City Council meeting minutes as amended. A roll call vote was taken. The motion carried unanimously (4- 0). 7. CONSENT CALENDAR A. Motion to Approve Consent Agenda Item - Claims and Payroll B. Motion to Approve First Quarter Financials C. Motion to Approve 2021 Budget Calendar D. Motion to Approve Resolution 2020-020 Ordering the Preparation of Feasibility Report – 2021 Pavement Management Program (PMP) E. Motion to Approve Professional Services Agreement with Ulteig Engineering – Karth Lake Runoff Control MOTION: Councilmember Holmes moved and Councilmember McClung seconded a motion to approve the Consent Calendar as amended and to authorize execution of all necessary documents contained therein. A roll call vote was taken. The motion carried unanimously (4-0). 8. PULLED CONSENT ITEMS A. Motion to Approve First Quarter Financials Councilmember Holmes stated she would like to better understand how COVID-19 was impacting the City of Arden Hills financials. ARDEN HILLS CITY COUNCIL – APRIL 27, 2020 4 Finance Director Bauman commented the water and sewer balances showed a negative balance because the first quarter revenue was not booked until April. She explained this occurs every year. She indicated recreation programs would show the biggest decrease in revenues. She noted licenses and permits were up over last year and stated charges for services were close to last year. She indicated the City would not know the impact COVID-19 has had on property taxes until July. Mayor Grant recommended this item be further discussed by the Council at a future meeting. MOTION: Councilmember Holmes moved and Councilmember Scott seconded a motion to approve First Quarter Financials. Councilmember Scott requested clarification on the Mayor and Council expenditures as it was already at 57%. Finance Director Bauman reported these expenses were for annual dues and were paid during the first quarter of each year. A roll call vote was taken. The motion carried (4-0). 9. PUBLIC HEARINGS A. Planning Case 19-014 – Planned Unit Development Amendment – 1900 Lake Valentine Road – Mounds View High School Community Development Manager/City Planner Mrosla stated on May 22, 2019, the City Council approved Planning Case #18-014 for the Mounds View High School Planned Unit Development (PUD), subject to several conditions. The terms of the PUD approval requires the Mounds View School District to implement safety improvements on Lake Valentine Road to address traffic and increased pedestrian crossings between the school building and the north parking lot, including installation of turn lanes and other access improvements, trail and sidewalk improvements, pedestrian signal, signage and striping modifications, and drainage and utility improvements. Following approval of Planning Case #18-014, the School District and City proceeded with a study to identify specific traffic and pedestrian improvements for Lake Valentine Road. The traffic and pedestrian study was recently completed and reviewed by City and School District staff. Staff reviewed the traffic study evaluation in detail with the Council, along with the proposed recommendations and recommended the Council hold a public hearing. Community Development Manager/City Planner Mrosla continued his presentation by relaying comments received prior to the meeting via telephone and email. Community Development Manager/City Planner Mrosla read a statement from a resident on Janet Court wherein the resident expressed concern with traffic enforcement in regards to parents parking on Lake Valentine Road during arrival and dismissal times. Community Development Manager/City Planner Mrosla reviewed an email received from Jennifer Mohlenhoff expressing concerns that the parking lot configuration and construction ARDEN HILLS CITY COUNCIL – APRIL 27, 2020 5 traffic would disrupt traffic flow. Ms. Mohlenhoff expressed concern with the undersized parent drop off area and encouraged the City to assist the school district with improving the safety of this roadway for all residents of Arden Hills. Community Development Manager/City Planner Mrosla read a comment from Elizabeth Garski at 1795 Lake Valentine Road stating the resident was happy a traffic study had been completed and recommended improvements along Lake Valentine Road. Ms. Garski feared that too many signs and flashing lights would be distracting. Ms. Garski hoped the centralized pedestrian crossing would be a big improvement. Ms. Garski suggested the parent drop off area be placed in a different area because the current location was causing backups all the way to I- 35W. Community Development Manager/City Planner Mrosla read a comment from Emelia Rogers stating she supported the proposed changes. Ms. Rogers believed for the safety of the students and residents that live on the road she recommended the City Council approve the proposed improvements. Councilmember McClung asked if more than just signage can be done to discourage parent drop-offs and pickups where they should not be taking place. Public Works Director/City Engineer Blomstrom stated this matter was discussed by the Planning Commission and staff was directed to identify signage that could be posted stating “No Drop Off” to be added to the “No Parking” signs. Councilmember McClung questioned when negotiations between the school district and the State would be completed for the entrance to the bus parking lot. He inquired what would happen if the school district was not able to obtain a portion of land from the State. Community Development Manager/City Planner Mrosla explained this has been discussed with the school district and the fall back would be to construct the entrance on property owned by the school district at a length shorter than originally proposed. Councilmember McClung asked if a condition should be added to state: If the acquisition of the State land falls through the City will require the school district to move the entrance to the far west on school district land. Public Works Director/City Engineer Blomstrom supported the Council adding this condition. Further discussion ensued regarding the land acquisition negotiations. Mayor Grant questioned if there was a sidewalk on the north side of the roadway all the way down to Janet Court. Community Development Manager/City Planner Mrosla reported this was included in the original PUD. Mayor Grant opened the public hearing at 7:46 p.m. ARDEN HILLS CITY COUNCIL – APRIL 27, 2020 6 Mayor Grant closed the public hearing at 7:47 p.m. B. Planning Case 20-001 – 2040 Comprehensive Plan Text Amendment (Land Use Chapter) Community Development Manager/City Planner Mrosla stated Minnesota state law requires that all communities within the Minneapolis-St. Paul metropolitan area update their Comprehensive Plans every ten years. The purpose of the Comprehensive Plan is to establish the policies that guide the future physical and community development of Arden Hills. It is also a reference document for the Planning Commission and City Council when evaluating private development projects, such as Summit Development’s Parkshore proposal (see Planning Case 19- 002). Community Development Manager/City Planner Mrosla reported the Comprehensive Plan and all its amendments must reflect the adopted regional policies in the Metropolitan Council’s system and policy plans. Local planning efforts are linked to the larger regional infrastructure of parks and trails, road networks, and wastewater infrastructure, and the City’s plan must conform to the regional vision. An amendment to the Comprehensive Plan requires a recommendation from the Planning Commission following a public hearing. The Planning Commission reviewed this item at its April 15, 2020 meeting and at that time the Commission recommend approval by a 7-0 vote. Community Development Manager/City Planner Mrosla explained at its July 22, 2019 meeting, the City Council approved Site Plan Review, Final Planned Unit Development, Rezoning, Comprehensive Plan Amendment, Conditional Use Permit, Preliminary Plat, and Vacation of existing easements for Summit Development at 1718, 1720, and 1722 Parkshore Drive and 4177 Old Highway 10. The Applicant is requesting to construct a three (3) story, 120- unit senior housing building which will include independent living, assisted living, memory care and skilled nursing. The proposed development site is approximately 5.32 acres and has a net density of 21.78 units per acre. However, when the plans were reviewed by the Metropolitan Council they were denied over concern that the City’s recently approved 2040 Comprehensive Plan does not have language supporting increasing the densities above the maximum permitted in a specific land use district. In order to move the project forward a minor text amendment to the 2040 Comprehensive Plan is required. Staff reviewed the proposed language further and requested the Council hold a public hearing. Mayor Grant questioned if the area defined within the text amendment should be south of County Road 96 and west of Highway 10. Community Development Manager/City Planner Mrosla stated he would investigate this further and would report back to the Council. Mayor Grant opened the public hearing at 7:56 p.m. With no one coming forward to speak, Mayor Grant closed the public hearing at 7:57 p.m. ARDEN HILLS CITY COUNCIL – APRIL 27, 2020 7 10. NEW BUSINESS A. Planning Case 18-014 – Planned Unit Development Amendment – 1900 Lake Valentine Road – Mounds View High School Community Development Manager/City Planner Mrosla stated on May 22, 2019, the City Council approved Planning Case #18-014 for the Mounds View High School Planned Unit Development (PUD), subject to several conditions. The terms of the PUD approval requires the Mounds View School District to implement safety improvements on Lake Valentine Road to address traffic and increased pedestrian crossings between the school building and the north parking lot. The School District and City have completed a study to identify specific traffic and pedestrian improvements for Lake Valentine Road. At this time the original approved PUD requires amending to include conditions based on the findings contained within the traffic study, an evaluation of existing site conditions and as recommended by the Planning Commission. Community Development Manager/City Planner Mrosla explained the Planning Commission offers the following Findings of Fact: 1. The properties located at 1900 and 1901 Lake Valentine Road are located in the R-1 Single Family Residential District. 2. The proposed conditions when implemented will create a safer environment for pedestrian movement across Lake Valentine Road. 3. The proposed roadway improvements will improve traffic flow through the road section adjacent to the school. 4. With the applied conditions, the application is not anticipated to create a negative impact on the immediate area or the community as a whole. 5. The proposed school zone speed limit, the effective hours, and the extent of the school zone are recommended by City staff and Mounds View School District staff. 6. The traffic and pedestrian study was reviewed by City and School District staff. 7. The City and School District staff concur on the proposed conditions and recommended improvements. Community Development Manager/City Planner Mrosla reported the Planning Commission recommended approval of Planning Case 18-014 for an Amended PUD at 1900 and 1901 Lake Valentine Road, based on the findings of fact and recommendations based on the findings contained within the traffic study, an evaluation of existing site conditions, and the Planned Unit Development Agreement, and as amended by the following conditions: 1. Realignment of the west parking lot entrance to align with the west school site entrance on the south side of Lake Valentine Road (Pick-up / Drop-off Access) to be completed prior to the start of the 2021-2022 school year. The School District will need to negotiate in good faith to complete easement or property acquisition from the adjacent parcel owned by State of Minnesota to accommodate the realignment of the west parking lot entrance. 2. Elimination of eastbound left turn movements at the east parking lot access upon completing the realignment of the west parking lot entrance noted above. ARDEN HILLS CITY COUNCIL – APRIL 27, 2020 8 3. Installation of perimeter fencing along the southwest portion of the parking lot upon completing the relocation of the west parking lot entrance noted above. Proposed fencing shall be four (4) tall decorative fencing. 4. Installation of a centralized traffic signal controlled pedestrian crossing at the location generally depicted on Figure 8 in the study report. 5. Installation of a small raised median and pedestrian refuge adjacent to the signal controlled pedestrian crossing as determined by the City Engineer during design of the signal. 6. Installation of sidewalk on the south side of Lake Valentine Road to route pedestrians from the signal controlled pedestrian crossing to the front entrance of the school building. 7. Installation of an additional street light at the signal controlled pedestrian crossing, in addition to the street lights previously installed at the east and west parking lot entrances. 8. Installation of School Zone Speed Limit signage as previously authorized by the City Council. 9. Installation of a 150-ft long exclusive right turn lane for eastbound Lake Valentine Road at the pick-up / drop-off access (south side of street). 10. Installation of a 150-ft long exclusive right turn lane for westbound Lake Valentine Road at the east parking lot access (north side of street). 11. Installation of sidewalk along the north side of Lake Valentine Road between the east parking lot entrance and Janet Court. 12. Installation of a 2-inch mill and overlay along Lake Valentine Road between the construction limits of right turn lane construction (#9 and #10 above) to repair the existing pavement as a result of improvements noted above and utility crossings associated with the site improvements, as well as accommodating new pavement and crosswalk markings. 13. Signage identifying no student drop-off or pickup shall be added where necessary. 14. Permanent roadway markings shall be added to delineate the turn lanes at the western school entrance. Councilmember Holmes asked if the dedicated lane into the parent pickup area (Area 2) would be available for stacking. Public Works Director/City Engineer Blomstrom reported the intent for this area would be to have a right turn lane for vehicles traveling east bound. He commented as traffic saturates the parent pickup area there would be 150 foot space for queued vehicles without blocking the through lanes of Lake Valentine Road. Councilmember Holmes questioned if Area 6 was a stacking area for a dedicated right turn lane. Public Works Director/City Engineer Blomstrom stated this was the case. Councilmember Holmes inquired why a raised median was being proposed in Area 4. Public Works Director/City Engineer Blomstrom explained this was for safety purposes as it would be a short refuge for students. Councilmember Holmes asked if the school speed zone sign at Area 4 could be modified and who could modify this sign. ARDEN HILLS CITY COUNCIL – APRIL 27, 2020 9 Public Works Director/City Engineer Blomstrom explained this sign would be managed by the City’s Public Works Department. He noted the City Council would have the discretion to change the hours if adjustments were necessary. Councilmember Holmes believed the school should have access to the sign as well. She reported she heard from a resident recommending that the school speed limit be set at 25 miles per hour at all times and not just during the school day. She supported the 25 miles per hour speed limit being set at all times as well. Mayor Grant questioned who made the recommendation for the school speed zone. Public Works Director/City Engineer Blomstrom reported the hours of operation were discussed during the traffic study. He noted the terms of the school speed zone were set by the City Council under separate action. Councilmember Scott asked if the proposed speed sign was similar to the sign being used at Valentine Hills Elementary. Public Works Director/City Engineer Blomstrom indicated this was the case. Councilmember Scott commented he would like to go with the proposed traffic plan and noted changes could be made in the future. Councilmember McClung stated the more he hears Councilmember Holmes speak about the speed zone, the more he supports the expansion of the time limit for the school speed zone. He discussed how the amount of activity differed between the high school and the elementary school. Mayor Grant agreed the traffic levels for the high school and elementary school were different. He reported the speed zone hours of operations for the high school could be revisited by the Council in the future. Public Works Director/City Engineer Blomstrom reported this was the case and noted staff would be happy to support additional discussion regarding this matter. Mayor Grant questioned what change staff was proposing for this item. Community Development Manager/City Planner Mrosla proposed an amendment to Item 1 that would read: Realignment of the west parking lot entrance to align with the west school site entrance on the south side of Lake Valentine Road (Pick-up / Drop-off Access) to be completed prior to the start of the 2021-2022 school year. The School District will need to negotiate in good faith to complete easement or property acquisition from the adjacent parcel owned by State of Minnesota to accommodate the realignment of the west parking lot entrance. In the event an agreement is not reached the School District shall construct an entrance on their property owned by the School District. ARDEN HILLS CITY COUNCIL – APRIL 27, 2020 10 Public Works Director/City Engineer Blomstrom indicated the likelihood of the School District obtaining an easement from the State was good. He was optimistic the School District would receive the easement. Councilmember Holmes supported staff’s recommendation. She questioned if Condition 8 should be amended to address the school speed zone hours. Mayor Grant stated this could be addressed through an amendment to the motion. However, he supported the language remaining as is noting changes could be made in the future. City Attorney Jamnik advised the Council should wait to receive a recommendation from the Sheriff’s Department prior to changing the school speed zone timeframe. MOTION: Councilmember Holmes moved and Councilmember Scott seconded a motion to approve Planning Case 18-014 for an Amended PUD at 1900 and 1901 Lake Valentine Road, based on the findings of fact and submitted plans, and the fourteen (14) conditions amending Condition 1 as proposed by staff. A roll call vote was taken. The motion carried (4-0). B. Resolution 2020-021 – Planning Case 20-001 – 2040 Comprehensive Plan Text Amendment (Land Use Chapter) Community Development Manager/City Planner Mrosla stated at its July 22, 2019 meeting, the City Council approved Site Plan Review, Final Planned Unit Development, Rezoning, Comprehensive Plan Amendment, Conditional Use Permit, Preliminary Plat, and Vacation of existing easements for Summit Development at 1718, 1720, and 1722 Parkshore Drive and 4177 Old Highway 10. The Applicant is requesting to construct a three (3) story, 120-unit senior housing building which will include independent living, assisted living, memory care and skilled nursing. The proposed development site is approximately 5.32 acres and has a net density of 21.78 units per acre. However, when the plans were reviewed by the Metropolitan Council they were denied over concern that the City’s recently approved 2040 Comprehensive Plan does not have language supporting increasing the densities above the maximum permitted in a specific land use district. In order to move the project forward a minor text amendment to the 2040 Comprehensive Plan is required. Community Development Manager/City Planner Mrosla reported the Planning Commission offers the following findings of fact for consideration: 1. Minnesota state law requires that all communities within the Minneapolis-St. Paul metropolitan area update their Comprehensive Plans every ten years. 2. The purpose of the Comprehensive Plan is to establish the policies that guide the future physical and community development of Arden Hills. 3. The Metropolitan Council has previously denied the Comprehensive Plan Amendment citing that it does not have language supporting increasing the densities above the maximum permitted in a specific land use district. 4. The proposed amendment only affects the High Density Land Uses. ARDEN HILLS CITY COUNCIL – APRIL 27, 2020 11 5. The proposed amendment only effects land guided for High Density south of Highways 96 and 10. 6. The proposed amended language has been vetted and is supported by the Metropolitan Council. Community Development Manager/City Planner Mrosla explained the Planning Commission recommended the City Council submit the amendments to the Metropolitan Council for review and approval. Mayor Grant asked if staff investigate the language regarding the location of the affected land. Community Development Manager/City Planner Mrosla stated he had done an investigation and explained “west” was not included in the original wording. He commented staff could add “West of County Road 10” in order to clarify the affected land. Mayor Grant supported this recommendation. Councilmember McClung asked if the “West of County Road 10” language would include the triangle parcel for Arden Manor. Community Development Manager/City Planner Mrosla reported this would be the case. Further discussion ensued regarding the land that would be included within the Comprehensive Plan Text Amendment. Councilmember McClung explained the language was trying to get at is the City exclusive of the TCAAP parcel. Community Development Manager/City Planner Mrosla stated this was correct. Councilmember McClung suggested the language read south of County Road 96 or west of County Road 10. Community Development Manager/City Planner Mrosla commented this would be the most clear language to use. City Administrator Perrault explained this text amendment would only allow for PUD’s within land guided for High Density. Councilmember McClung questioned land in the City would be impacted by the proposed text amendment. Community Development Manager/City Planner Mrosla reported the only land that would be impacted would be the Summit Development project. ARDEN HILLS CITY COUNCIL – APRIL 27, 2020 12 Councilmember Holmes questioned if the language should be revised to state for land south of County Road 96 and west of County Road 10. She supported the language being made more specific. Community Development Manager/City Planner Mrosla reported the amendment does allow Summit Development to move forward while also allowing for other PUD’s on High Density land. He explained when this was previously discussed the Council was in favor of omitting the TCAAP area because it already had guiding language. For this reason, staff was recommending areas south of County Road 96 and/or west of County Road 10. Councilmember McClung commented the original language was sent to the Met Council. He indicated there must have been some push back on the original language. Community Development Manager/City Planner Mrosla stated this was the case. Councilmember McClung questioned if a smaller area, such as the area south of County Road 96 or west of County Road 10 would be supported by the Met Council. Community Development Manager/City Planner Mrosla believed this would be supported by the Met Council. Councilmember Holmes commented she did not want to go through this process again or hold up the Summit Development. She questioned if the Council could change the language or if this would muddy up the hearing that was held tonight. City Attorney Jamnik explained this would depend on the Council’s intent. He indicated there may be a difference of opinion on the original intent was. He reported the Council has the jurisdictional right to take the recommendation and shape it the way the Council deems appropriate for the Met Council’s consideration and approval. Mayor Grant recommended the language read south of County Road 96 and south of County Road 10. Community Development Manager/City Planner Mrosla recommended the language read south of County Road 96 or County Road 10 density may be increased. Councilmember McClung commented another way to narrow the area would be to state the land west of County Road 10 and north of I-694. Councilmember Scott supported this language change. Mayor Grant agreed. Councilmember Holmes stated she would like to see just the Summit property listed. ARDEN HILLS CITY COUNCIL – APRIL 27, 2020 13 Community Development Manager/City Planner Mrosla stated this would limit the amount of redevelopment that could occur on any other parcels without another Comprehensive Plan Text Amendment. Councilmember McClung suggested the language read the land west of County Road 10, east of I-35W and north of I-694. Mayor Grant supported the clarity in this language. Councilmember Holmes did not support this language as she did not believe Arden Manor should be included within the land area. Councilmember Scott supported Councilmember McClung’s language. Councilmember McClung stated to address Councilmember Holmes’ concerns the language could be amended to read east of I-35W, north of I-694, south of County Road 96 and west of County Road 10. Mayor Grant supported this recommendation as it was a well-defined area. Councilmember Holmes agreed. MOTION: Councilmember McClung moved and Mayor Grant seconded a motion to adopt Resolution No. 2020-021, recommended submittal of the 2040 Comprehensive Plan Text Amendment with the land guided for high density to include the area east of Interstate 35W, south of County State Aid Highway 96, west of US Trunk Highway 10 and north of interstate 694. Councilmember Scott asked if it was critical to include south of County Road 96. Councilmember Holmes stated it was important to her to have County Road 96 included. She supported the final language from Councilmember McClung. Mayor Grant agreed stating this created a clear area of land. Councilmember Scott stated with the new language Arden Manor, Welch’s and Scherer Brothers was being omitted. Mayor Grant reported this was the case. Councilmember Scott explained he could support the motion on the table. A roll call vote was taken. The motion carried (4-0). 11. UNFINISHED BUSINESS None. ARDEN HILLS CITY COUNCIL – APRIL 27, 2020 14 12. COUNCIL COMMENTS Councilmember Holmes thanked the Public Works Department and Sheriff’s Department for their tremendous service to the community. Councilmember Holmes recommended the City consider placing more garbage bins along the city’s trails and sidewalks given the high number of people using the sidewalks and trails at this time. She suggested these bins also be emptied more frequently. Mayor Grant stated this morning he met with seven mayors to discuss the financial impact of COVID-19 on area cities. He explained Arden Hills was getting off lightly compared to other communities. Mayor Grant reported he was contacted by a 2020 Census worker and learned the City of Arden Hills was doing quite well in its response rates. He encouraged all residents to be counted by completing their census information. ADJOURN MOTION: Mayor Grant moved and Councilmember Holmes seconded a motion to adjourn. A roll call vote was taken. The motion carried unanimously (4-0). Mayor Grant adjourned the Regular City Council Meeting at 9:08 p.m. __________________________ __________________________ Julie Hanson David Grant City Clerk Mayor Approved: May 26, 2020 CITY OF ARDEN HILLS, MINNESOTA SPECIAL CITY COUNCIL WORK SESSION APRIL 30, 2020 5:30 P.M. - ARDEN HILLS CITY COUNCIL CHAMBERS CALL TO ORDER/ROLL CALL Pursuant to due call and notice thereof, Mayor Grant called to order the Special City Council Work Session at 5:30 p.m. Note: On March 20th, the Mayor signed a determination allowing Councilmembers to participate in City Council meetings via telephone pursuant to State Statute 13D.021 Present via Telephone: Mayor David Grant; Councilmembers Brenda Holden, Fran Holmes, Dave McClung and Steve Scott Absent: None Also present: City Administrator Dave Perrault; Public Works Director/City Engineer Todd Blomstrom; Finance Director Gayle Bauman; and City Clerk Julie Hanson; via telephone: Community Development Manager/City Planner Mike Mrosla and Recreation Coordinator Sara Grant 1. AGENDA ITEMS A. COVID-19 and City Operations City Administrator Perrault stated that the Governor’s most recent guidance extended the stay at home order through May 18 with slight modifications for retail businesses and that staff was encouraged to continue to work from home. He indicated that City Hall had been closed to the public since March 17 and there have been some modifications at City Hall to accommodate social distancing that include the installation of plexiglass on the public facing portion of the front desk area as well as a section behind the front desk due to it being a high traffic area. He stated that a COVID-19 preparedness plan had been drafted that follows the League of Minnesota’s template. Mayor Grant asked the Council if City Hall’s doors should remain closed. The Councilmembers agreed. ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION – APRIL 30, 2020 2 Mayor Grant asked the Council if it wanted to continue to conduct Council meetings remotely. The Councilmembers agreed. Mayor Grant asked the Council about whether or not the City should observe summer hours. A discussion ensued about whether or not to have summer hours, as well as the Public Works staff schedules and duties clarification. The Council agreed that a discussion regarding summer hours would be deferred pending further guidance from the Governor. Mayor Grant asked the Council to discuss utility bills and liquor licenses. Councilmember Scott stated that he would like to suspend the utility bill fees. Councilmember Holden stated she was not convinced to suspend or waive the fees as there generally are not a significant number of delinquent utility bills. She asked if waiving the fees could be applicable to just one group, such as the small businesses. City Administrator Perrault stated that it would be difficult to separate one entity from another. The discussion turned to refunding a portion of the 2020 liquor license fees. Mayor Grant clarified that a refund of fees would pertain to restaurants that have been affected by the stay at home order and not Cub Liquor as they had been open and operating per usual. Councilmember Holmes stated that some restaurants were selling liquor with takeout orders. Councilmember Holden said that since some restaurants were selling liquor with takeout orders during the eight week time period, if the Council refunded a portion of their license fees then technically that business did not hold a license during that same time period. Discussion ensued about whether or not to refund a portion of on-sale liquor license fees and for what time period should any refund apply. The Council agreed to refund a portion of on-sale liquor license fees for a period of time that occurred during the stay at home order. The Council resumed its discussion regarding waiving utility fees. Councilmember Holden stated that those hit the hardest such as restaurants and businesses were not the ones using water. She asked when the current quarterly bill was due. Councilmember Holmes said it is not just businesses that have been affected and the Council needs to consider residents that could be unemployed. ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION – APRIL 30, 2020 3 City Administrator Perrault clarified that the consideration was to waive just the late charge, which is a fee that is 8% of the total amount due. He stated the bills were due on May 1 and a more accurate projected dollar figure could be calculated after the due date. Mayor Grant asked if the dollar figure in question is $5,000. Finance Director Bauman stated the $5,000 estimate was based on the same period in a normal year and that it was unknown what the total would be this year. She suggested the option of postponing billing of the late fees until the end of May, prior to starting the assessment process for delinquents. She said this would give customers another three to four weeks to pay the bill. Councilmember Scott stated he would like to proceed with waiving the late fee. Councilmembers Holden, McClung and Holmes indicated they agreed with Finance Director Bauman’s approach of waiting until the end of the month before making a decision. Mayor Grant stated he too was in favor of deferring a decision until the end of May. City Administrator Perrault apologized, noting the Zoom meeting experienced a 20 second technical difficulty. Mayor Grant asked if City Administrator Perrault had received clear direction. City Administrator Perrault confirmed the Council’s direction to revisit waiving utility bill late fees until the end of May. The discussion turned to Parks and Recreation programs. Mayor Grant asked what could be done to accommodate social distancing and what other cities were considering. City Administrator Perrault said that offering activities such as playground activities, basketball, softball and baseball were difficult. He stated there were programs that better allow social distancing such as tennis, pickle ball and golf, but these activities had been placed on hold per previous Council direction. He said the City could consider hosting art camps in the parks if adequate social distancing could be achieved. He stated that most cities have not made a decision regarding cancelling or postponing summer programming yet, so there was not sufficient background for a comparison. Public Works Director/City Engineer Blomstrom stated that staff polled the cities of Roseville, Shoreview, Vadnais Heights, Little Canada, Mounds View and New Brighton, and that these cities have not yet made a clear long-term decision in terms of what they can and cannot do. Mayor Grant stated that due to the pandemic, the City Council shut down the parks and recreation programs, and he was interested in learning what potential programs could be offered. He said that if there are no programs that can be offered, then there may be other decisions that Council must make. ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION – APRIL 30, 2020 4 Councilmember Holden asked how kids programming would operate and keep socially distanced as it is hard to keep kids away from one another. Public Works Director/City Engineer Blomstrom stated this certainly would be difficult, and that he and Recreation Coordinator Knoll have discussed this challenge. Recreation Coordinator Knoll said one option would be tennis lessons as social distancing can be achieved with between two and four participants at a time on the tennis court. She stated that another option would be an art camp outdoors in the parks with eight children maximum. She explained that each child would have their own table and own art supplies that they would bring home at the end of camp. Councilmember Holmes asked if it would be cost effective to have one instructor for such a small number of kids. Recreation Coordinator Knoll agreed that some activities would not be as cost effective as others. Mayor Grant pointed out that generally the City does not make money on recreation programs but more so breaks even. Councilmember Holmes asked for more information about the cost effectiveness of offering these types of programs. Public Works Director/City Engineer Blomstrom stated that staff would put together information pertaining to costs and anticipated revenues for tennis and arts and crafts camps. Councilmember Holden asked what would happen if it rains and whether or not holding the class using a video would be an option. She stated that she provided information to Recreation Coordinator Knoll about offering classes or sing-a-longs via video conferencing. Recreation Coordinator Knoll indicated that she received information about an online theater camp that is being offered by other cities. She stated she could provide more information regarding this opportunity. Mayor Grant asked for a written report of the recreation information. He stated that there would be no decision made at this meeting as additional information was necessary in order to make a decision in the future. Councilmember Holmes stated she would like staff to present a social distancing plan. Councilmember McClung noted there were many specifics and concerns to work through. He commented that when the Governor was asked about summer camps, he said that “we are not there yet”. He said it is premature in terms of what the City might actually be able to accomplish. The Council agreed to continue discussions regarding recreation programming at an upcoming meeting upon further review of the details and costs. ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION – APRIL 30, 2020 5 Councilmember Holmes asked how many Public Works seasonal workers would be hired. Public Works Director/City Engineer Blomstrom stated that the City has budgeted for eight seasonals but this year there would be four hired that would focus on mowing. A short discussion ensued regarding the Public Works full time and seasonal workers. Public Works Director/City Engineer Blomstrom stated that he would prepare an outline of tasks generally performed by Public Works during the summer. He said that staff would cover all services that are normally covered with the exception of recreation tasks, and he noted it was challenging with staff being split into two shifts. Public Works Director/City Engineer Blomstrom also stated that it generally has been a challenge in previous years to establish turf on the athletic fields, but that there is the unique opportunity this year to get the fields in good repair and establish the turf. B. COVID-19 and Business Outreach Follow Up Mayor Grant stated that he would need to leave the meeting. He asked if the Councilmembers would be willing to call five to ten, small to medium-sized Arden Hills businesses to ask how they are doing and to provide a list of resources. The Council agreed to contact the local businesses and Mayor Grant stated he would work with staff to put something together and that staff would coordinate this task with Council. Mayor Grant was excused from the meeting at 6:04 p.m. Mayor Pro Tem Holden continued the meeting, asking if there were any additional questions or items to be discussed. City Administrator Perrault asked the Council if it would be comfortable accessing the electronic agenda packet versus receiving a PDF via email in order to avoid inadvertent errors in the PDF compilation process. He explained there are three choices for accessing the agenda packets in the Agenda Center: HTML, PDF and Packet. The Council agreed to continue to access the agenda packets digitally on the City’s website and asked that they be notified via email when the packet has been published. Councilmember McClung stated that when there are planning case items, he would like a paper copy of those items provided to him. City Administrator Perrault asked if the Council would like to continue to receive a copy of the PowerPoint presentation in advance of the Council meetings. He noted that slides pertaining to planning cases are to be included in the packet as attachments to the corresponding item. ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION – APRIL 30, 2020 6 Councilmember Holmes stated she found the PowerPoint to be helpful because it highlight certain aspects of the planning cases. 2. COUNCIL/STAFF COMMENTS None. ADJOURN Mayor Pro Tem Holden adjourned the City Council Special Work Session at 6:50 p.m. __________________________ __________________________ Julie Hanson David Grant City Clerk Mayor __________________________ Brenda Holden Mayor Pro Tem Approved: May 26, 2020 CITY OF ARDEN HILLS, MINNESOTA REGULAR CITY COUNCIL MEETING MAY 11, 2020 7:00 P.M. - ARDEN HILLS CITY COUNCIL CHAMBERS CALL TO ORDER/ROLL CALL Pursuant to due call and notice thereof, Mayor David Grant called to order the regular City Council meeting at 7:00 p.m. Note: On March 20th, the Mayor signed a determination allowing Councilmembers to participate in City Council meetings via telephone pursuant to State Statute 13D.021 Present via Telephone: Mayor David Grant, Councilmembers Brenda Holden, Fran Holmes, Dave McClung and Steve Scott Absent: None Also present: City Administrator Dave Perrault; Public Works Director/City Engineer Todd Blomstrom; Community Development Manager/City Planner Mike Mrosla; Finance Director Gayle Bauman; Assistant City Engineer, Engineer in Training David Swearingen; and City Clerk Julie Hanson PLEDGE OF ALLEGIANCE Mayor Grant announced that the Pledge of Allegiance would not be recited this evening as remote connections present difficulties in doing so. He noted if not for the virtual meeting setting at this time, the Pledge of Allegiance would be recited. 1.APPROVAL OF AGENDA MOTION: Councilmember Holden moved and Councilmember Holmes seconded a motion to approve the meeting agenda as presented. A roll call vote was taken. The motion carried unanimously (5-0). 2.PUBLIC INQUIRIES/INFORMATIONAL None. ARDEN HILLS CITY COUNCIL – MAY 11, 2020 2 3. RESPONSE TO PUBLIC INQUIRIES None. 4. STAFF COMMENTS A. Rice Creek Commons (TCAAP) and Joint Development Authority (JDA) Update City Administrator Perrault provided an update on TCAAP stating litigation with Ramsey County was ongoing. B. COVID-19 Update City Administrator Perrault provided Council with a COVID-19 update. He encouraged residents to visit the City’s website for the most current and up to date information regarding COVID-19. He also urged residents to visit the Minnesota Department of Health and CDC websites for additional information on current guidelines and recommendations. He stated that the City of Arden Hills remains in a peacetime state of emergency and City Hall will remain closed to the public until at least Monday, May 18 but normal operations are continuing and staff can be contacted by telephone or email. He stated that staff was awaiting additional guidance from the Governor’s office regarding whether or not the order would be extended past May 18, lifted or modified. Additional information will be placed on the City’s website as it becomes available. He reminded the public that the Ramsey County Sheriff’s Office has a COVID help team to assist those in the community most at risk and urged those that need assistance to call 651-448-3874 or check the City’s website. C. Transportation Update Public Works Director/City Engineer Blomstrom reported work has begun on the I-35W MNPASS project. He explained work this year would focus on the center section of the corridor. He stated major work items would be the replacement of the County Road C and County Road I bridges, along with noise wall installation. He indicated additional information regarding the I- 35W MNPASS project was available on the MnDOT website. Public Works Director/City Engineer Blomstrom stated City crews began street patching in preparation for crack sealing and sealcoating. He indicated sealcoating work would begin in mid- July and affected residents would be notified once the dates are established. Public Works Director/City Engineer Blomstrom provided the Council with an update on the City’s 2020 and 2021 street improvement projects. He reported construction on Lexington Avenue would begin as soon as road restrictions were lifted in the spring of 2021. Councilmember Holden explained she had received several calls from residents living in the Glen Paul area that have concerns regarding the 2021 street improvement project. Public Works Director/City Engineer Blomstrom discussed the letter that was sent to these residents in further detail with the Council. ARDEN HILLS CITY COUNCIL – MAY 11, 2020 3 5. APPROVAL OF MINUTES A. April 20, 2020, City Council Work Session Councilmember Holden stated she sent staff a minor correction to the minutes. MOTION: Councilmember Holden moved and Councilmember Holmes seconded a motion to approve the April 20, 2020, City Council Work Session meeting minutes as amended. A roll call vote was taken. The motion carried unanimously (5-0). 6. CONSENT CALENDAR A. Motion to Approve Consent Agenda Item - Claims and Payroll B. Motion to Authorize Appointment of Public Works Maintenance Worker C. Motion to Approve Joint Powers Agreement with the Minnesota Department of Military Affairs – Sanitary Sewer Lift Stations and Related Facilities Maintenance D. Motion to Approve Purchase of Replacement Pressure Reducing Valve (PRV) – Arden Manor MOTION: Councilmember Holden moved and Councilmember Holmes seconded a motion to approve the Consent Calendar as presented and to authorize execution of all necessary documents contained therein. A roll call vote was taken. The motion carried unanimously (5-0). 7. PULLED CONSENT ITEMS None. 8. PUBLIC HEARINGS None. 9. NEW BUSINESS None. 10. UNFINISHED BUSINESS None. 11. COUNCIL COMMENTS Councilmember Scott welcomed Matthew Seifert to the City of Arden Hills. ARDEN HILLS CITY COUNCIL – MAY 11, 2020 4 Councilmember McClung thanked City staff for all of their efforts on behalf of Arden Hills. He also thanked residents for staying properly distanced while out walking in the community. Mayor Grant stated this week was National Skilled Nursing Care Week. He thanked all nurses for playing an essential role in caring for elderly and ailing individuals. Mayor Grant stated he appreciated seeing so many people walking out and about in the community. He indicated he looked forward to hearing from the Governor later this week. City Administrator Perrault apologized for the feedback that occurred during the meeting. ADJOURN MOTION: Councilmember Holden moved and Councilmember Holmes seconded a motion to adjourn. A roll call vote was taken. The motion carried unanimously (5-0). Mayor Grant adjourned the Regular City Council Meeting at 7:17 p.m. __________________________ __________________________ Julie Hanson David Grant City Clerk Mayor CONSENT ITEM 7A MEMORANDUM DATE: May 26, 2020 TO: Honorable Mayor and City Councilmembers Dave Perrault, City Administrator FROM: Gayle Bauman, Finance Director Pang Silseth, Accounting Analyst SUBJECT: Budgeted Amount: Actual Amount: Funding Source: N/A N/A N/A Council Should Consider A. Approve Claims and Payroll or B. Reject Claims and Payroll Background Payroll is processed biweekly and accounts payable is processed weekly. Budget Impact NA Attachments 2020 Payroll #10 ……………………………………………………………. $84,148.78 Total Payroll $84,148.78 Paid Claims---04/30/2020 through 05/15/2020 (ACH Checks) $ 10,241.30 (Check Nos. 49292-49312 and ACH Checks) ……………………………... $392,367.23 Total Accounts Payable $402,608.53 Total Claims $486,757.31 CITY OF ARDEN HILLS PAYROLL # 10 CHECKS DATED: 05/15/20 Biweekly: 04/25/20 - 05/08/20 EMPLOYEE DEDUCTIONS AMT.Payment Method FIT 6,263.32 EFT SIT 2,865.06 EFT FICA Oasdi 4,361.93 EFT FICA Medicare 1,020.14 EFT TOTAL TAXES 14,510.45 Health Premium 1,573.81 A/P Check* Dental Premium 313.54 A/P Check* FSA Health Care Reimb. 0.00 A/P Check* FSA Dependent Care Reimb. 208.33 A/P Check* TOTAL FLEXIBLE SPENDING 2,095.68 HSA Health Saving 428.33 Health Care Savings Plan-Retirement 0.00 EFT Health Care Savings Plan-2% 449.13 EFT Health Care Savings Plan-4% 315.23 EFT TOTAL HEALTH SAVINGS 1,192.69 PERA 4,390.52 EFT ICMA 2,715.93 EFT Central Pension Fund-Union 460.80 A/P Check* MN State Retirement System 750.00 EFT TOTAL RETIREMENT 8,317.25 IUOE 49 Dues (Union) 105.00 A/P Check* LTD/STD Insurance 0.00 A/P Check* PERA Life Insurance 32.00 A/P Check* Life/Addl/Dep Life 132.94 A/P Check* Life/Addl non-tax 35.70 A/P Check* UNUM 19.51 A/P Check* AFLAC 22.76 EFT TOTAL VOLUNTARY 347.91 Total Employee Deductions 26,463.98 Net Payroll 0.00 Direct Deposit 46,835.28 EFT Gross Payroll Tie-Out 73,299.26 Plus City Paid Benefit 10,849.52 TOTAL PAYROLL COST 84,148.78 FICA TIE-OUT Gross Payroll 73,299.26 Less Total FSA 2,095.68 Less Total H.SA 1,192.69 Less Voluntary Ins 58.46 Plus ICMA Employer 401.46 Net P/R Subject to FICA 70,353.89 FICA Oasdi @ 6.20% 4,361.93 FICA Medicare @ 1.45% 1,020.14 Note: Federal and State Payroll Tax obligations are satisfied by means of utilizing the US Bank Easy Tax Deposit Service. Transfers are typically made up to two days after the payroll date. * A/P Checks can be found on the ACCOUNTS PAYABLE Check Approval report. Checks may be paid this week or the following week. CITY BENEFIT 4,361.93 1,020.14 5,382.07 0.00 0.00 0.00 0.00 0.00 5,065.99 401.46 5,467.45 0.00 0.00 Accounts Payable User: Printed: Pang.Silseth 5/19/2020 11:29 AM Checks by Date - Detail by Check Date Check No Check DateVendor NameVendor No Check Amount Invoice No ReferenceDescription ACH001 US Bank 04/30/2020ACH ARVIM42020 CUB FOODS #1641 88.13 BAUMG42020 AMAZON.COM*C87819EK3 AMZN 298.67 BAUMG42020 U OF M CONTLEARNING -70.00 BAUMG42020 WILLIAMS SCOTSMAN RPO 467.00 BAUMG42020 AMZN MKTP US*B587V3EW3 158.01 BLOMT42020 NATL SOC OF PROF ENGINEER 264.00 BLOMT42020 NATL SOC OF PROF ENGINEER 270.00 CHRIM42020 COSTCO WHSE #1021 43.97 FRIDJ42020 MNAWWA -290.00 FRIDJ42020 AMAZON PRIME*YO2AE3MD3 13.95 FRIDJ42020 DOLLAR GENERAL #10816 8.05 FRIDJ42020 AMAZON.COM*NT8S009W3 35.59 FRIDJ42020 DOLLAR TREE 7.50 FRIDJ42020 AMAZON PRIME*DB8OV6HC3 13.95 FRIDJ42020 MNAWWA -290.00 FRIDJ42020 AMZN MKTP US*HR21H6V93 176.02 GEBAM42020 FLEET FARM 3100 73.98 HANSJ42020 FINANCE AND COMMERCE 139.00 HANSJ42020 JIMMY JOHNS - 1532 - E 67.38 HANSJ42020 FACEBK *H9XT2SW6P2 7.32 HANSJ42020 HIGHTAIL PRO PLAN 96.00 KNOLS42020 BCS*MOUNDS VIEW PUBLIC SC 34.00 MIKAT42020 APPLE.COM/BILL 0.99 MIKAT42020 THE HOME DEPOT #2828 17.17 MROSM42020 TWIN CITIES NORTH CHAMBER 35.00 MROSM42020 WWW.DOODLE.COM 71.88 1,737.56Total for this ACH Check for Vendor ACH001: ACH002 Aflac 04/30/2020ACH 347262 Insurance Premiums- Apr 2020 45.52 45.52Total for this ACH Check for Vendor ACH002: ACH003 Pitney Bowes Inc.04/30/2020ACH 3232020 MarPostage - fee 259.99 3232020 Mar Postage - Park-Rec brochure 733.14 993.13Total for this ACH Check for Vendor ACH003: ACH004 Further 04/30/2020ACH 3302020 Dep Care FSA 1,249.98 1,249.98Total for this ACH Check for Vendor ACH004: ACH005 Minnesota Revenue-Sales & Use Tax 04/30/2020ACH 32020 Mar Sales/Use Tax 14.25 32020 Mar Sales/Use Tax -0.25 Page 1AP Checks by Date - Detail by Check Date (5/19/2020 11:29 AM) Check No Check DateVendor NameVendor No Check Amount Invoice No ReferenceDescription 14.00Total for this ACH Check for Vendor ACH005: ACH006 MN Dept of Labor-Building Permit Surcharge04/30/2020ACH 32020 Q1 Building Surcharge 6,459.56 32020 Q1 Building Surcharge -258.45 6,201.11Total for this ACH Check for Vendor ACH006: 10,241.30Total for 4/30/2020: Report Total (6 checks): 10,241.30 Page 2AP Checks by Date - Detail by Check Date (5/19/2020 11:29 AM) Accounts Payable User: Printed: Pang.Silseth 5/19/2020 10:28 AM Checks by Date - Detail by Check Date Check No Check DateVendor NameVendor No Check Amount Invoice No ReferenceDescription 0285 Xcel Energy 05/08/2020ACH 682556678 3/17/20-4/15/20 1,861.82 682556678 3/17/20-4/15/20 1,693.66 682556678 3/17/20-4/15/20 845.18 682556678 3/17/20-4/15/20 46.24 682556678 3/17/20-4/15/20 208.55 682556678 3/17/20-4/15/20 1,429.68 682556678 3/17/20-4/15/20 950.30 7,035.43Total for this ACH Check for Vendor 0285: 0319 City of Roseville 05/08/2020ACH 0228916 Q1 2020 Water 181,054.89 181,054.89Total for this ACH Check for Vendor 0319: 1330 MN CLN SERVICES Inc.05/08/2020ACH 0520NN01 April Janitorial 2,005.58 2,005.58Total for this ACH Check for Vendor 1330: 1785 EcoEnvelopes LLC 05/08/2020ACH 1842 April 2020 UB 301.16 1842 April 2020 UB 301.16 1842 April 2020 UB 301.16 903.48Total for this ACH Check for Vendor 1785: 7501 Kelly & Lemmons, P.A.05/08/2020ACH 52991 April Prosecution 2,404.45 2,404.45Total for this ACH Check for Vendor 7501: TOII Tokle Inspections, Inc 05/08/2020ACH 050420 April Electrical Inspections 2,605.60 2,605.60Total for this ACH Check for Vendor TOII: 10218 HR Green Inc.05/08/202049292 134781 Hamline Ave Ped Crosswalk-April 181.25 181.25Total for Check Number 49292: 0447 I.U.O.E Local 49 Benefit Fund-Insurance 05/08/202049293 0620BP3 June Insurance 7,590.00 0620NB4 June Insurance 1,527.00 9,117.00Total for Check Number 49293: 0390 INT'L Union Operating Engineers-Union Dues05/08/202049294 050420 May Dues 210.00 Page 1AP Checks by Date - Detail by Check Date (5/19/2020 10:28 AM) Check No Check DateVendor NameVendor No Check Amount Invoice No ReferenceDescription 210.00Total for Check Number 49294: 10330 Klein Underground, LLC 05/08/202049295 50236 Arden Oaks Ct 719.00 50253 Watermain-County Rd E 7,500.00 8,219.00Total for Check Number 49295: 0282 Republic Services Inc. #899 05/08/202049296 0899-003543347 April Recycling 8,242.96 8,242.96Total for Check Number 49296: 221,979.64Total for 5/8/2020: 0189 Gopher State One-Call, Inc.05/15/2020ACH 0040185 April Locates 122.40 0040185 April Locates 122.40 0040185 April Locates 122.40 367.20Total for this ACH Check for Vendor 0189: 0192 Grainger, Inc 05/15/2020ACH 9518040184 Supplies 105.08 9519065032 Supplies 55.38 9520399933 Supplies 61.02 221.48Total for this ACH Check for Vendor 0192: 0243 Metropolitan Council-Waste Water 05/15/2020ACH 0001109389 June Wastewater 67,355.40 67,355.40Total for this ACH Check for Vendor 0243: 0319 City of Roseville 05/15/2020ACH 00228920 May IT Support 5,862.00 5,862.00Total for this ACH Check for Vendor 0319: 0320 Health Partners Inc.05/15/2020ACH 97174366 June Dental 1,312.35 1,312.35Total for this ACH Check for Vendor 0320: 0327 Staples, Inc.05/15/2020ACH 3445652619 Supplies 17.01 3445938905 Supplies-Chair 218.49 3446228764 Supplies 45.88 281.38Total for this ACH Check for Vendor 0327: 0381 ICMA Retirement Corporation 05/15/2020ACH 43966 Q2 2020 Plan Fee 250.00 250.00Total for this ACH Check for Vendor 0381: 0382 ICMA Retirement Trust - 106944 05/15/2020ACH PR 20-10 PR Batch 00200.05.2020 ICMA Employer Percent 401PR Batch 00200.05.2020 ICMA Employer Percent 401 401.46 PR 20-10 PR Batch 00200.05.2020 ICMA Employee Percent 401PR Batch 00200.05.2020 ICMA Employee Percent 401 347.93 Page 2AP Checks by Date - Detail by Check Date (5/19/2020 10:28 AM) Check No Check DateVendor NameVendor No Check Amount Invoice No ReferenceDescription 749.39Total for this ACH Check for Vendor 0382: 0387 ICMA Retirement Trust- #302482 05/15/2020ACH PR 20-10 PR Batch 00200.05.2020 ICMA Employee DeductionPR Batch 00200.05.2020 ICMA Employee Deduction 2,128.54 PR 20-10 PR Batch 00200.05.2020 ICMA Employee PercentPR Batch 00200.05.2020 ICMA Employee Percent 239.46 2,368.00Total for this ACH Check for Vendor 0387: 0453 Continental Research Corp.05/15/2020ACH 0013758 Disinfectant Supplies 186.00 186.00Total for this ACH Check for Vendor 0453: 0638 Bro-Tex, Inc 05/15/2020ACH 531274 Supplies 445.92 445.92Total for this ACH Check for Vendor 0638: 0761 Electric Pump, Inc 05/15/2020ACH 0067997-IN Pump #1 Repair 751.95 751.95Total for this ACH Check for Vendor 0761: 10363 Minute Maker Secretarial 05/15/2020ACH M1061 April PC Meeting 183.50 M1061 April CC Meeting 674.38 857.88Total for this ACH Check for Vendor 10363: 10365 Jennifer Shull 05/15/2020ACH 5082020 Mileage Reimbursement 14.95 14.95Total for this ACH Check for Vendor 10365: 1223 Adam's Pest Control, Inc.05/15/2020ACH 3134083 Pest Control-May 71.59 71.59Total for this ACH Check for Vendor 1223: 5180 The Tessman Company LLC 05/15/2020ACH S311277-IN Lawn Care Supplies 724.50 S311277-IN Lawn Care Supplies 241.50 966.00Total for this ACH Check for Vendor 5180: 5587 CES Imaging Inc.05/15/2020ACH INV113785 April Rental 60.00 60.00Total for this ACH Check for Vendor 5587: 6060 Batteries Plus 05/15/2020ACH P26240616 Supplies 32.85 32.85Total for this ACH Check for Vendor 6060: 8029 MMKR & Corp, PA 05/15/2020ACH 48167 2019 Audit Services 1,138.00 48167 2019 Audit Services 1,138.00 48167 2019 Audit Services 596.00 48167 2019 Audit Services 1,138.00 48167 2019 Audit Services 1,287.00 48167 2019 Audit Services 1,138.00 Page 3AP Checks by Date - Detail by Check Date (5/19/2020 10:28 AM) Check No Check DateVendor NameVendor No Check Amount Invoice No ReferenceDescription 6,435.00Total for this ACH Check for Vendor 8029: 5593 American Legal Publishing Corp.05/15/202049297 46 Internet Renewal thru 5/15/21 495.00 495.00Total for Check Number 49297: 0131 Beisswenger's Do It Best 05/15/202049298 292767 Supplies 17.98 17.98Total for Check Number 49298: 6200 Flaherty's Arden Bowl 05/15/202049299 04262020 Refund Park Rental-Perry Park 270.08 04262020 Refund Park Rental-Perry Park 19.92 290.00Total for Check Number 49299: 1193 Further Inc.05/15/202049300 15472325 May Participant Fees 63.55 63.55Total for Check Number 49300: 9045 Happy Feet Dance Company LLC 05/15/202049301 42220 Winter/Spring Dance 1,566.00 1,566.00Total for Check Number 49301: 10218 HR Green Inc.05/15/202049302 134810 City Hall Parking Lot-April 13,037.50 134810 Shorewood Dr-April 12,247.00 25,284.50Total for Check Number 49302: 0447 I.U.O.E Local 49 Benefit Fund-Insurance 05/15/202049303 5132020 May & June Insurance 2,530.00 2,530.00Total for Check Number 49303: 1058 MIDC Enterprises Inc.05/15/202049304 10044819 Supplies 80.25 80.25Total for Check Number 49304: 10271 MN PEIP 05/15/202049305 967398 June Insurance 10,365.76 10,365.76Total for Check Number 49305: 1208 Premium Waters, Inc 05/15/202049306 610207-04-20 April Water 23.34 613317-04-20 April Water 112.58 135.92Total for Check Number 49306: 10373 Quadient Finance USA, Inc 05/15/202049307 6418.0420 Postage 1,000.00 1,000.00Total for Check Number 49307: 0811 Ramsey County 05/15/202049308 EMCOM-008468 Dispatch Service-April 3,181.94 Page 4AP Checks by Date - Detail by Check Date (5/19/2020 10:28 AM) Check No Check DateVendor NameVendor No Check Amount Invoice No ReferenceDescription EMCOM-008485 CAD Service-April 616.26 PRRRV-001323 Reports 95.00 3,893.20Total for Check Number 49308: 10396 SealMaster of MN 05/15/202049309 3541 Crack Sealant 767.82 767.82Total for Check Number 49309: 10354 St. Paul Pioneer Press 05/15/202049310 0420572589 Legal Notice PC 18-014 80.41 0420572589 Legal Notice Comp Plan 104.06 184.47Total for Check Number 49310: 0925 T-Mobile 05/15/202049311 841463567.0420 April Service 28.70 28.70Total for Check Number 49311: 3099 Tri-State Bobcat, Inc.-Little Canada 05/15/202049312 S27629 Bobcat 5600 Toolcat 52,595.10 S27629 Bobcat 5600 Toolcat -17,500.00 35,095.10Total for Check Number 49312: 170,387.59Total for 5/15/2020: Report Total (46 checks): 392,367.23 Page 5AP Checks by Date - Detail by Check Date (5/19/2020 10:28 AM) CONSENT ITEM – 7B MEMORANDUM DATE: May 26, 2020 TO: Honorable Mayor and City Councilmembers Dave Perrault, City Administrator FROM: Gayle Bauman, Finance Director SUBJECT: Approve 2019 City Financial Statements and Audit Budgeted Amount: Actual Amount: Funding Source: N/A N/A N/A Council Should Consider Motion to accept the 2019 City of Arden Hills financial report and audit results as presented. Background/Discussion The 2019 financial statements and audit results are completed and a presentation was made to the City Council by the City’s auditor, Aaron Neilson of MMKR, earlier this evening. Budget Impact None. DATE: May 26, 2020 TO: Honorable Mayor and City Councilmembers FROM: Dave Perrault, City Administrator SUBJECT: Approval of Temporary Layoff for the Recreation Coordinator Budgeted Amount: Actual Amount: Funding Source: N/A N/A N/A Council Should Consider The Council should consider approving the temporary layoff of the Recreation Coordinator position until further notice. Background The Personnel Committee directed staff to bring forward to Council information regarding on- going recreation staffing and COVID-19 implications. At a previous meeting, the City Council directed staff to cancel all recreation programming through the summer season due to COVID-19 concerns. Due to the nature of the recreation programs, it is anticipated proper social distancing cannot be accomplished and therefore would unnecessarily create exposure risks for COVID-19 to both staff and participants. Also, cancelling these programs in-advance allows participants and seasonal staff to make alternate plans for their summer needs. The decision to cancel the programs was not an easy one, but necessary to protect the health and well-being of our community. With the decision to cancel summer programming, the Personnel Committee directed staff to bring forward a discussion on recreation staffing duties during COVID-19. Staff discussed different options from augmenting recreation staff with additional duties to a temporary reduction in recreation staffing. Council directed staff to bring forward a recommendation to temporarily layoff one of the two recreation employees. Following internal discussions, it is recommended to temporarily layoff the Recreation Coordinator position until further notice. It was determined that the proposed recreation duties (see Attachment A) for this summer more closely align with the Recreation Programmer position and do not require the level of experience, coordination and knowledge associated with the CONSENT ITEM – 7C MEMORANDUM higher-level Recreation Coordinator position. The core duties over the summer months will involve limited or minimal planning and implementation of recreational programs, coordination of facility and field rentals, and supervision of recreation instructors, class lists and participant registrations. Budget Impact The impact of altering the current recreation staffing model will depend on how long the position is on layoff, but the current monthly cost for the Recreation Coordinator is $7,152. This amount may be partially offset by any unemployment charges incurred by this decision. Attachment Attachment A: Revised Recreation Duties for Summer 2020 OPTION 2 STAFFING LEVELPark and Recreation StaffDRAFTRev. May 12, 2020May 25 June 1 June 8 June 15 June 22 June 29 July 6 July 13 July 20 July 27 Aug 3 Aug 10 Aug 17 Aug 24RECREATION STAFF MEMBERPark Asset Inventory ‐ In Office/Field Work 30 30 10ADA Transition Plan ‐ In Office/Field Work 7 32 32 17 28 28Tree Inspections and EAB Mgmt ‐ Field Work 4 4 4 4 4 8 8 8 4 4Park/Trail Boundary Inspections ‐ Field Work 21 24Park & Rec Admin Duties5555444 44On‐Line Rec Programming 5 5Fall Programing1540 28 32 32 40Grant Opportunities Research and Database44440 40 40 40 40 40 40 40 40 40 40 40 40 40 Attachment A Page 1 of 2 CONSENT ITEM – 7D MEMORANDUM DATE: May 26, 2020 TO: Honorable Mayor and City Councilmembers Dave Perrault, City Administrator FROM: Julie Hanson, City Clerk SUBJECT: Prorated Refund of On-Sale Liquor License Fees due to COVID-19 Budgeted Amount: Actual Amount: Funding Source: $39,870 See budget impact below General Fund Council Should Consider The Council should consider refunding a prorated amount, five weeks totaling $3,723.25, for on- sale liquor licenses held by restaurants that have been impacted by the COVID-19 pandemic (see below for affected restaurants). Background/Discussion On March 16, Governor Walz signed Executive Order 20-04 ordering the temporary closure of restaurants to dine-in customers, and local restaurants closed their doors to the public on Tuesday, March 17. While doors were shuttered, many restaurants continued to provide takeout, curbside or delivery services. On April 17, Governor Walz signed an executive order revising Minnesota Statute Chapter 75-S.F. No 4489 allowing certain on-sale licensees to make off-sales of liquor (beer, wine, hard seltzer and cider) with specific criteria and restrictions. On April 20, 2020, the City Council expressed support of this provision and staff subsequently reached out to the local restaurants that hold on-sale licenses to inform they could sell off-sale liquor in accordance with the Governor’s order. Following discussion at its April 30 special work session and May 18 work session, the City Council directed staff to calculate refunds of on-sale licenses based on the period during which local restaurants did not have the option to sell liquor. Based on this guidance, staff calculated refund amounts for a five week period beginning March 17 and ending April 20. Pending Council approval, the nine (9) businesses that will receive a refund of a portion of the 2020 liquor license fees are: Big Ten Supper Club, Davanni’s, Flaherty’s Arden Bowl, Great China, Jimmie’s Old Southern BBQ, Lindey’s Steakhouse, Namaste India, Orchid Bar and Grill and Tavern Grill. Page 2 of 2 It is important to note that Cub Foods will not qualify for a partial refund as it holds an off-sale liquor license and was not closed to the public. This is the only establishment in the city that currently holds an off-sale liquor license. Budget Impact The nine (9) businesses as listed above will receive a five-week, prorated refund of their 2020 on- sale liquor license fee based on the specific amount paid by each licensee. The total refund amount for these establishments combined is $3,723.75. The city has collected $37,262 in revenue so far from on-sale liquor licenses (budgeted $39,870), this will result in a reduction of $3,723.75 in revenue leaving the revenue collections at $33,538.25. Upon Council approval, staff will move forward with issuing these refunds. Attachments N/A Page 1 of 2 DATE: May 26, 2020 TO: Honorable Mayor and City Councilmembers FROM: Dave Perrault, City Administrator SUBJECT: Approval of Proposal for Engineering Services - HVAC Replacement/Upgrade Budgeted Amount: Actual Amount: Funding Source: $350,000 $46,200 - $59,360 (design portion only) Equipment and Building Fund Council Should Consider The Council should consider approving the proposal for Engineering Services for HVAC Replacement/Upgrade with Paulson and Clark. Background The City previously discussed the proposal with Paulson and Clark at their May 18, 2020 work session and directed staff to bring forward the proposal for approval on the consent calendar at their next regular meeting. Further background on the project is below. At its February work session, the City Council directed staff to seek out Request for Proposals to have an independent consultant assist the City with its HVAC replacement. This was following a proposal by Johnson Controls to handle the entire project. Staff reached out to six different firms for proposals and received proposals from five of the six. The request for the firms was to assist the City with the design and project management of the HVAC replacement. The proposals received do not estimate a cost for the purchase and installation of the equipment, but for the design and project management. The proposals range from $46,200 to $99,780. The table below illustrates the firms that submitted proposals, the cost for the design and project management to replace current equipment with similar equipment, the cost for the design and project management if during the review a different design is recommended, and the total cost range for each proposal. CONSENT ITEM – 7E MEMORANDUM Page 2 of 2 Firm Like Replacement Additional Cost for Alternative 2 Total Cost Range Paulson and Clark $46,200 $13,160 $46,200 - $59,360 BKV $83,520 $4,000 $83,520 - $87,520 IMEG $49,500 No additional $49,500 Nelson Rudie $65,570 No additional $65,570 HGA $69,590 $30,190 $69,590 - $99,780 Below is the average total score for each firm: Firm Average Total Points Paulson and Clark 82 BKV 79 IMEG 76 Nelson-Rudie 74 HGA 71 Engineering staff and myself reviewed the proposals based on cost, experience, schedule, and understanding of the project. Based on those criteria, Staff’s recommendation is to move forward with Paulson and Clark for a cost of between $46,200 and $59,360. This firm was the least expensive for replacing the equipment with similar equipment, but was not the cheapest should another design be recommended; however, based on the proposals we thought they are the best option for the City. Their proposal for the City is attached (see Attachment A). Budget Impact The City currently has $350,000 budgeted for this project in the Equipment, Building, Replacement Fund. The total cost of the project is unclear, but if the design were to cost $59,360, this would leave $290,640 for equipment and installation. The original estimate from Johnson Controls for the project, depending on Council direction, ranged from $243,000 to $470,109. The table below, which includes $350,000 budgeted for HVAC replacement in 2020 and $299,000 for the parking lot project in 2021, shows the estimated balance of the Equipment Building Replacement Fund at the end of 2020 as $61,445, and the projected ending balance of the fund in 2025 as $600,445. The main source of funding for this fund is a $300,000 transfer from the utility funds and a $50,000 property tax levy. These numbers may change as the CIP is further developed throughout the budget process. 2020 2021 2022 2023 2024 2025 Beginning Balance 294,445 61,445 (178,555)50,445 270,445 400,445 Revenues 350,000 350,000 350,000 350,000 350,000 350,000 Expenditures 583,000 590,000 121,000 130,000 220,000 150,000 Ending Balance 61,445 (178,555)50,445 270,445 400,445 600,445 Attachment Attachment A: Paulson and Clark Proposal for Engineering Services Page 1 of 4 May 1, 2020 Dave Perrault City Administrator City of Arden Hills RE: Proposal for Engineering Services for HVAC Replacement/Upgrades City Hall - Arden Hills, MN Dear Dave, Paulson & Clark Engineering, Inc. is pleased to submit the following proposal for mechanical (HVAC) engineering services for your consideration on the above referenced project. This proposal is based on our Project Understanding & Basic Services, as identified below per the RFP. PROJECT UNDERSTANDING: The project consists of reviewing existing HVAC equipment, providing recommendations for replacement, assembling bid documents, assisting with the solicitation of bids and conducting construction administration including commissioning. COMPANY INFORMATION: Paulson & Clark Engineering, Inc. (PAC) is a multi-discipline, professional engineering firm committed to excellence in design, on-schedule project completion & exceptional customer service. Paulson & Clark’s extensive design expertise in a wide range of project types is built on the conviction that a proactive relationship between design team members is crucial to bringing about a coordinated, functional building for the owner. PAC’s core team members average 25+ years’ experience in their fields, & have a long history working together prior to joining the company. Year Established: 1998 Legal Status: “S” Corporation Ownership: Dan Paulson, John Paul Gille, John Mooney Staffing: 7 Structural; 8 Mechanical; 6 Electrical; 2 Security/Low Voltage Attachment A Page 2 of 4 PROJECT TEAM: Jake Strum, P.E., Senior Mechanical Engineer, Minnesota License No. 41841 Travis Willemssen, P.E., Senior Mechanical Engineer, Minnesota License No. 47945 Refer to attached resumes for additional information and relevant project involvement. BASIC SERVICES TO BE PROVIDED The project is broken up into the following 6 tasks - 1. Interview staff and conduct an on-site review of building HVAC equipment to determine condition, function and remaining usable life. A summary report will be provided. 2. Prepare two reports for equipment replacement. First report will be for a like-for-like replacement with cost estimate. Second report will be for an alternative design to increase energy efficiency and reliability. 3. Attend one meeting with the City Staff to review recommendations. Attend one meeting with City Council to also review recommendations. 4. Assemble construction documents (drawings and specifications) to be used for bidding and construction. Provide a 60% review set and attend meeting with City Staff to review. 5. Assist in bid solicitation including responding to bid questions, attending a pre-bid meeting, issuing addenda and attending bid opening. After bid opening, review proposals, prepare bid tabulation and make a recommendation on the lowest responsible bidder. 6. Conduct construction administration services including attending a contractor kickoff meeting, periodic inspections of work, responses to RFIs, preparation of progress payments, change orders, final punch list, equipment commissioning and contract closeout. PROPOSED PROJECT TIMELINE Assessment & report: Mid – Late June CD Documents: July – Mid August Bid Solicitation: September Construction Start: October COMPENSATION Our compensation for Basic Services on this project will be invoiced on a lump sum basis, as follows (refer to table below for task breakout). o Like-For-Like Equipment Replacement: $46,200 o Add-on Alternative Design Replacement (Task 4, Alt 2): $13,160 Total with alternate design $59,360 Page 3 of 4 Proposed Fee Summary Table Task Hours Staff Rate ($/hr) Total 1 20 Sr. Engineer $140 $2800 2 64 Sr. Engineer $140 $8960 3 12 Sr. Engineer $140 $1680 4 – Like for like Replacement 40 Sr. Engineer $140 $5600 40 Engineer $105 $4200 16 Sr. Engineer (Electrical) $140 $2240 4 Alt 2 – Alt. Design (in lieu of Task 4 - Like for like replacement) 80 Sr. Engineer $140 $11200 80 Engineer $105 $8400 40 Sr. Engineer (Electrical) $140 $5600 5 20 Sr. Engineer $140 $2800 6 Construction Admin 40 Sr. Engineer $140 $5600 6 Commissioning 88 Sr. Engineer $140 $12320 Billing will be based on the anticipated fees & will be invoiced per project schedule on a monthly basis. After 45 days, any unpaid balances on invoices submitted shall be assessed an interest rate of 1.5% per month (18% APR) to cover additional handling charges. Any service in addition to tasks indicated above will be billed hourly at the rate indicated above. REIMBURSABLE EXPENSES Reimbursable expenses are not included under fees for Basic Services. Reimbursable expenses include, but are not limited to, the following items: 1. Expense of transportation in connection with the project. 2. Reproduction costs. 3. Special delivery, courier, & postage costs. COMPENSATION FOR REIMBURSABLE EXPENSES Reimbursable expenses will be billed at the rates listed below (effective through December 2020): Mileage Per IRS Standard Mileage Rate Vellum Sheets $1.25/sq. ft. Reproducible Bond Sheets $0.70/sq. ft. Photo Copies $0.05/sheet Page 4 of 4 Reimbursable expense other than those listed above (i.e.- deliveries, out of town travel expenses, outsourced reproduction services) will be billed at cost times a factor of 1.15. MISCELLANEOUS 1. The following shall be submitted to Paulson & Clark Engineering, Inc.: A. Copy of existing building documentation, if available. B. Architectural backgrounds compatible with AutoCAD 2018. 2. Paulson & Clark Engineering, Inc. & associated consultants shall not be responsible for the means, methods, procedures or sequences of construction, safety on the job or have direct control of the contractor during this project. 3. Inasmuch as the remodeling &/or rehabilitation of an existing structure requires that certain assumptions be made regarding existing conditions, & because some of these assumptions may not be verifiable without additional expenditures of money or destroying otherwise adequate or serviceable portions of the structure, the Client agrees to bear all costs, losses, & expenses, including the expense of Additional Services by Paulson & Clark Engineering, Inc., arising or allegedly arising from the discovery of concealed or unknown conditions in the existing structure. 4. The standard of care for all professional services performed or furnished by Consultant under this Agreement will be the skill & care used by members of Consultant’s profession practicing under similar circumstances at the same time & in the same locality. Consultant makes no warranties, express or implied, under this Agreement or otherwise, in connection with Consultant’s services. 5. It is acknowledged by both parties that Paulson & Clark Engineering, Inc. services do not include any services related to asbestos, lead paint, or hazardous or toxic materials. 6. All claims, disputes, & controversies arising out of or in relation to the performance, interpretation, application, or enforcement of the Agreement, including but not limited to breach thereof, shall be referred for mediation under the then current construction industry mediation rules of the American Arbitration Association, prior to any recourse to arbitration or litigation. 7. All claims, disputes, & controversies arising out of or in relation to the performance, interpretation, application, or enforcement of the Agreement shall be decided in accordance with the laws of the State of Minnesota. ______________________ 05/01/2020 Signature Date John Paul Gille - President Paulson & Clark Engineering, Inc. ______________________ City of Arden Hills City Council Meeting for May 26, 2020 P:\Planning\Planning Cases\2020\20-008 3244 Sandeen Road Variance\CC Packet Page 1 of 6 NEW BUSINESS – 10A MEMORANDUM DATE: May 26th, 2020 TO: Honorable Mayor and City Councilmembers Dave Perrault, City Administrator FROM: Joe Hartmann, Associate Planner Mike Mrosla, Community Development Manager/City Planner SUBJECT: Planning Case #20-008 Applicant: Richard Priore Property Location: 3244 Sandeen Road Request: Variance Budgeted Amount: Actual Amount: Funding Source: N/A N/A N/A Council Should Consider the Following Motion to adopt Resolution 2020-022 approving Planning Case 20-008 for a variance at 3244 Sandeen Road (“Subject Property”), based on the findings of fact and the submitted plans in the May 26, 2020 Report to the City Council. Background Richard Priore (“Applicant”) is requesting flexibility with the floor area ratio requirement (FAR) to build a house with a FAR of 0.34. The maximum FAR allowed under City ordinance for properties in the Subject Property’s district is 0.30. The Subject Property is zoned R-2, Single and Two Family Residential District and is guided as Low Density Residential in the 2040 Comprehensive Plan. The Subject Property is currently a vacant lot on Lake Johanna. The former owners demolished the existing house on 3244 Sandeen Road prior to selling the property to the current owner. The current owners previously received approval to build a single family home with a 30 foot front setback. At its January 27, 2020 meeting, the City Council approved a 10 foot front yard setback variance for the subject property. City of Arden Hills City Council Meeting for May 26, 2020 P:\Planning\Planning Cases\2020\20-008 3244 Sandeen Road Variance\CC Packet Page 2 of 6 The Subject Property is a legal non-conforming lot as it is 50 feet in width and has a gross lot area of 9,900 square feet. The R2 district standards require a minimum lot width of 85 feet and 11,000 square feet. In addition, a bluff is located on the Lake Johanna side of the Subject Property that further restricts the buildable area on the parcel. The proposed variance will not impact any setback requirements and the property will otherwise conform to all of the provisions for the R-2 district. Plan Evaluation According to the Applicant, the proposed house could be built through the building permit process without a variance. The proposed home has been designed in such a way that it can capture an additional 396 square feet that the Applicant requests without changing the appearance of the home from the exterior. The proposed home would be built into the existing hillside outside of the bluff impact zone. The Applicants are requesting to incorporate additional livable space above the proposed garage and in the basement. The image below illustrates where the proposed additional living space would be located inside the dwelling. The proposed spaces would be otherwise used for storage and would meet applicable building codes to not be included within the FAR Calculation. City of Arden Hills City Council Meeting for May 26, 2020 P:\Planning\Planning Cases\2020\20-008 3244 Sandeen Road Variance\CC Packet Page 3 of 6 Calculating FAR is an effective way to manage the bulk or mass of building volume on a development site. The FAR is obtained by dividing the sum of a building's floor area by the amount of lot area. Floor area is defined in City Code Section 1305.04 to mean the sum of the area of all floors of a building measured from the exterior faces of the exterior walls (for habitable spaces). According to our Zoning code, this definition excluding decks, garages, covered porches, attics, crawl spaces and basements that do not meet the minimum ceiling height per Minnesota State Building Code requirement. The maximum permitted FAR in the R-2 District is 0.3. The table below show proposed FAR with and without the variance. Without Variance With Variance Proposed Building Area 2,970 Sq. Ft. 3,366 Sq. Ft. Lot Area 9,900 Sq. Ft. 9,900 Sq. Ft. Proposed FAR 0.30 0.34 Following the decision by Planning Commission, the Applicant provided City Staff with additional plans shown above (attachment E) and information in light of the comments received from the Planning Commission and their neighbors regarding their FAR request that better highlights where the proposed extra livable space would be situated within the envelope of the house. At their May 6, 2020 meeting, the Planning Commission heard testimony from the Applicants and neighbors regarding their request. Upon hearing the testimony, the Planning Commission motioned to recommend to approve the request (7-0). The staff report to the Planning Commission on this case is provided in Attachment F. The draft minutes from the May 6th, 2020 meeting are included in Attachment I. Variance Requirements – Section 1355.04, Subd. 4 1. Purpose and Intent. The variance request shall comply with the purpose and intent of the provisions of the City’s Zoning Regulations and with the policies of the City’s Comprehensive Plan. The variance request for 3244 Sandeen Road is consistent with the purpose and intent of the R-2 Zoning District and with the policies within the City’s Comprehensive Plan; 2. Practical Difficulties. The Applicant for a variance shall establish that there are practical difficulties in complying with the provisions of the Arden Hills Zoning Regulations. The term “Practical Difficulties” as used in the granting of a variance means: a. Reasonable Use. The property owner proposes to use the property in a reasonable manner not permitted by the Zoning Ordinance. According to the Applicants’ application, additional living space for a single family home is a reasonable use of the Subject Property in the R-2 Zoning District as the proposed home can be constructed by right and was designed in such a way that it can capture the City of Arden Hills City Council Meeting for May 26, 2020 P:\Planning\Planning Cases\2020\20-008 3244 Sandeen Road Variance\CC Packet Page 4 of 6 additional 396 sq. ft. that the Applicant requests without changing the envelope or appearance of the home from the exterior; b. Unique Circumstances. The plight of the property owner is due to circumstances unique to the property not created by the landowner. According to the Applicants’ application, the nonconforming nature of the lot due to overall area and width as well as the bluff feature which puts the allowable FAR significantly lower than a typical conforming lot; c. Character of Neighborhood. The variance, if granted, will not alter the essential character of the neighborhood. According to the Applicants’ application, the proposed variance will not alter the character of the neighborhood because the house could be constructed by right and additional floor area is entirely internal to the site and invisible to the neighborhood; 3. Economic Consideration. Economic consideration alone does not constitute a practical difficulty. The proposed variance is not based on economic consideration. 4. Access to Sunlight. Inadequate access to direct sunlight for solar energy systems shall be considered a practical difficulty. A solar energy system is not proposed. Findings of Fact The Planning Commission reviewed this application at their May 6, 2020, meeting and have offered the following findings of fact for your consideration: 1. City Staff received a land use application for a variance request to increase the allowable FAR on a single family dwelling at the Subject Property 3244 Sandeen Road. 2. A single-family detached dwelling is a permitted use in the R-2 district. 3. The Subject Property is non-conforming with the R-2 districts standards for minimum lot width and area requirements. 4. The proposed additional floor area would be below grade and wholly within the principal structure of the house. 5. The proposed development of the subject parcel would conform to all other requirements and standards of the R-2 district. 6. A variance may be granted if enforcement of a provision in the zoning ordinance would cause the landowner practical difficulties. City of Arden Hills City Council Meeting for May 26, 2020 P:\Planning\Planning Cases\2020\20-008 3244 Sandeen Road Variance\CC Packet Page 5 of 6 7. Variances are only permitted when they are in harmony with the general purposes and intent of the ordinance. Additional Review Residential Building Inspector The Residential Building Inspector has reviewed the plans and has no additional comments at this time. A Building Permit will be required prior to any construction taking place. Public Works Director/City Engineer Engineering staff has reviewed the plans and has no additional comments at this time. Recommendation The Planning Commission recommended approval by a 7-0 vote of Planning Case 20-008 for a Variance at 3244 Sandeen Road, based on the findings of fact and the submitted plans in the May 6, 2020 Report to the Planning Commission, as amended by the following conditions: 1. A Building Permit shall be issued prior to commencement of construction. 2. The proposed building shall conform to all other standards and regulations in the City Code. Motion Language Options The following are motion language options for the City Council to consider: 1. Recommend a motion to adopt Resolution 2020-022 approving Planning Case 20-008 for a Variance at 3244 Sandeen, based on the findings of fact and the submitted plans, as amended by the two (2) conditions in the May 6, 2020, Report to the City Council. 2. Recommend a motion to adopt Resolution 2020-022 approving Planning Case 20-008 for a Variance at 3244 Sandeen as Submitted, based on the findings of fact and the submitted plans in May 6, 2020, Report to the City Council. 3. Recommend Denial: Motion to recommend denial of Planning Case 20-008 for a Variance at 3244 Sandeen, based on the following findings of fact: findings to deny should specifically reference the reasons for denial. 4. Table: Motion to table Planning Case 20-008 for a Variance at 3244 Sandeen: a specific reason and/or information request should be included with a motion to table. City of Arden Hills City Council Meeting for May 26, 2020 P:\Planning\Planning Cases\2020\20-008 3244 Sandeen Road Variance\CC Packet Page 6 of 6 Public Notice and Comments Although a variance does not require a public hearing, a public meeting notice was prepared by the City and mailed to properties within 500 feet of the subject property. At the time of writing this staff has not received any comments about the proposed variance request since May 6, 2020 Planning Commission meeting. Comments received prior to Planning Commission are included in attachment G. Deadline for Agency Actions A public meeting notice was sent to residents on April 26, 2020. Pursuant to Minnesota State Statute, the City must act on this request by June 24, 2020 (60 days), unless the City provides the petitioner with written reasons for an additional 60-day review period. With consent of the Applicant, the City may extend the review period beyond the initial 120 days. Budget Impact: NA Attachments A. Land Use Application B. Location Map C. Variance Request Letter D. Site Survey E. Floor Area Exhibit and Elevations F. Planning Commission Report, May 6th, 2020 G. Public Comments H. Draft Planning Commission Minutes, May 6th, 2020 I. Resolution 20-022 J. City Council PowerPoint Presentation Attachment A Disclaimer: This map is intended for reference purposes only and is not a legally recorded map or survey. The City of Arden Hills shall not be liable for any damages or claims that arise due to accuracy,availability, use or misuse of the information herein pursuant to MNStatute 466.03 Subd 21. Location Map Lake Johanna BoulevardSa n d e e n R o a d ± Park and Open Space Subject Parcel §¨¦35W §¨¦694 £¤10 Attachment B 3 April 2020 DESCRIPTION OF FAR VARIANCE REQUEST – 3244 SANDEEN ROAD The applicant is requesting a variance from the FAR requirement for the property located at 3244 Sandeen Road. 3244 Sandeen Road is located in the R- 2 Single and Two Family Residential District (with Shoreland Overlay) on the southwest corner of Lake Johanna. The previous house has been torn down. On January 13, 2020, the current homeowners were awarded a 10’ front yard setback variance. This allow ed the homeowners to properly assess the feasibility of the lot prior to asking for this FAR variance. This application requests for an additional .04 percent to the current .3 FAR requirement totaling .34 FAR. That would allow 3,366 total livable square feet for the home. This lot is non-conforming, which puts the allowable FAR significantly lower than a typical conforming lot. The home has been designed in such a way that it can capture the additional 396 sq. ft. that the applicant requests without changing the envelope or appearance of the home from the exterior; which could be built without this request. The additional square footage could be captured above the garage, or in the basement (below grade). This would allow the family to have a more comfortable layout for their family of six, and more importantly allow their son with down syndrome to have an essential indoor therapy space. $WWDFKPHQW& LAKE JOHANNASANDEEN ROADN:\Projects Current\17-0310.00 Toffoli\dwg\17-0310COS 12-14-18 final.dwg, 12/14/2018 9:47:15 AM $WWDFKPHQW' L1 -TO SUB FLR 9' -6" L2 -TO SUB FLR 21' -0" L0 -TO FLOOR 0' -0" BO FLOOR -0' -4" ROOF PLAN 29' -0" TO FDN WALL 4' -0" 1' - 6" TO FDN WALL 2 7' -10 1/2" 1' - 6" L1 -TO SUB FLR 9' -6" L2 -TO SUB FLR 21' -0" L0 -TO FLOOR 0' -0" BO FLOOR -0' -4" ROOF PLAN 29' -0" TO FDN WALL 4' -0"34' - 7 13/32"TO FDN WALL 2 7' -10 1/2" SCALE DESIGN DEVELOPMENT SET (NOT FOR CONSTRUCTION) REVISIONS 1/4" = 1'-0"2/25/20 12:12:50 PMA2.1 EAST AND WEST ELEVATIONSPRIORE RESIDENCE3244 SANDEEN RD | ARDEN HILLS1/4" = 1'-0"1 East 1/4" = 1'-0"2 West Attachment E L1 -TO SUB FLR 9' -6" L2 -TO SUB FLR 21' -0" BO FLOOR -0' -4" ROOF PLAN 29' -0" TO FDN WALL 4' -0" TO FDN WALL 2 7' -10 1/2" SCALE DESIGN DEVELOPMENT SET (NOT FOR CONSTRUCTION) REVISIONS 1/4" = 1'-0"2/25/20 12:13:50 PMA2.2 NORTH ELEVATIONPRIORE RESIDENCE3244 SANDEEN RD | ARDEN HILLS1/4" = 1'-0"1 North L1 -TO SUB FLR 9' -6" L2 -TO SUB FLR 21' -0" L0 -TO FLOOR 0' -0" ROOF PLAN 29' -0" TO FDN WALL 4' -0" TO FDN WALL 2 7' -10 1/2" 1' - 3" SCALE DESIGN DEVELOPMENT SET (NOT FOR CONSTRUCTION) REVISIONS 1/4" = 1'-0"2/25/20 12:15:44 PMA2.3 SOUTH ELEVATIONPRIORE RESIDENCE3244 SANDEEN RD | ARDEN HILLS1/4" = 1'-0"1 South UP2' - 0"24' - 0"8' - 0"16' - 2"20' - 6" - --- - --- - ---10' - 2"3' - 5 1/2"3' - 10 3/4" - ---5' - 0"10' - 0"30' - 0"23' - 6"GARAGE GARAGE MECH. RM STORAGE? FOYER/MUDRM STORAGE 3' - 0" 8' - 0" N32' - 4"9' - 2"19' - 7 1/2"523 SF.789 SF. 256 SF. FLAT ROOF ABOVE SCALE DESIGN DEVELOPMENT SET (NOT FOR CONSTRUCTION) REVISIONS 1/4" = 1'-0"4/23/20 9:50:55 AMA1.1 ENTRY LEVEL PLANPRIORE RESIDENCE3244 SANDEEN RD | ARDEN HILLS1/4" = 1'-0"2 L0 - TO FLOOR DNUP OVEN RefrigeratorDW- --- 1 A3.1 14' - 6"3' - 5 3/4"12' - 0"6' - 0" 3' - 6" 2' - 0"3' - 6"10' - 0"34' - 0"11' - 6"2' - 5 1/32"6' - 0"2' - 6 31/32"11' - 6"2 A3.1 1' - 3"3' - 7"1' - 3"2' - 0"4' - 0"2' - 0"1' - 0"3' - 7 1/4"7' - 2 1/4" 3' - 3"8' - 0"BUILT-IN CABINETRY2-SIDED FIREPLACE BUILT-IN CABINETRY - --- GARAGE STORAGE BEDRM 1 FAMILY RM DINING RM KITCHEN PANTRYWORK SPACE BATH 1 OPEN TO BELOW DESK LINEN 6' - 0"39' - 0"3' - 3" 42' - 3"6' - 1"423 SF.18' - 0"23' - 5 1/2" 1,354 SF. 6' - 6"2' - 9"PAVER PATIO FLAT ROOF RETAINING WALL BELOW 8' - 0"14' - 0"6' - 0"14' - 0"34' - 8"12' - 0"1' - 3"SHELVING SHELVING SCALE DESIGN DEVELOPMENT SET (NOT FOR CONSTRUCTION) REVISIONS 1/4" = 1'-0"5/6/20 12:27:04 PMA1.2 MAIN LEVEL PLANPRIORE RESIDENCE3244 SANDEEN RD | ARDEN HILLS1/4" = 1'-0"1 L1 - TO SUB FLR City of Arden Hills Planning Commission Meeting for May 6th, 2020 P:\Planning\Planning Cases\2020\20-008 3244 Sandeen Road Variance\Memos Reports Page 1 of 6 MEMORANDUM DATE: May 6th, 2020 PC Agenda Item 3.A TO: Planning Commission Chair and Commissioners FROM: Joe Hartmann, Associate Planner Mike Mrosla, Community Development Manager/City Planner SUBJECT: Planning Case #20-008 – No Public Hearing Required Applicant: Richard Priore Property Location: 3244 Sandeen Road Request: Variance Requested Action Richard Priore (“Applicant”) has requested a variance to increase the allowable Floor Area Ratio (FAR) of their single-family detached dwelling located at 3244 Sandeen (“Subject Property”). Background 1. Overview of Request The Applicants are requesting a variance to increase the FAR of their single-family detached dwelling on the Subject Property from 0.30 to 0.34. The Applicants were previously approved for a front yard setback variance at the January 27th 2020 City Council meeting. The Subject Property is currently a vacant lot, zoned R-2, Single and Two Family Residential District, and is guided as Low Density Residential on the land use plan. According to the Applicants’ narrative submitted as a part of their application, the home has been designed in such a way that it can capture the additional 396 sq. ft. that the Applicant requests without changing the envelope or appearance of the home from the exterior; which could be built by right. The Applicants are requesting to incorporate more livable space above the garage and in the basement. The proposed spaces would be otherwise used for storage and would meet applicable building codes to not be included within the FAR Calculation. Without the variance the space above the garage would be accessible from the garage via a drop down stair. There will no changes required to the exterior of the property to meet their request for a greater FAR. The Planning Commission is being asked to determine if a variance request for flexibility with the FAR requirement should be approved. The sketches that have been submitted show that the extra livable space would be wholly within the principle structure. The evaluation of the proposal should $WWDFKPHQW) City of Arden Hills Planning Commission Meeting for May 6th, 2020 P:\Planning\Planning Cases\2020\20-008 3244 Sandeen Road Variance\Memos Reports Page 2 of 6 be based on the District Provisions in Section 1320 and the Requirements for a Variance in Section 1355.04, Subd. 4. Plan Evaluation Chapter 13, Zoning Regulations Review 1. District Provisions (R-2 Single and Two Family Residential District) – Section 1320.06 Lot Size and Dimensions The Subject Property is 50 feet in width and has a lot area of 9,900 square feet (Attachment D). The R-2 district standards require a minimum lot width of 85 feet and 11,000 square feet. The Subject Property is a legal non-conforming lot with encumbrances; in addition, a bluff is located on the Lake Johanna side of the Subject Property that further restrict the buildable area. Structure Setbacks In the R-2 District, the minimum front and rear setback requirements for a property are forty (40) feet and thirty (30) feet, respectively. As previously stated, the Applicant was granted a variance for a thirty (30) foot front setback. The minimum side yard setback is five (5) feet and the combined side yard setbacks shall total fifteen (15) feet or more. The proposed variance will not impact any setback requirements. According to the Applicant, the proposed dwelling will meet all other district provisions for the R-2 district. City of Arden Hills Planning Commission Meeting for May 6th, 2020 P:\Planning\Planning Cases\2020\20-008 3244 Sandeen Road Variance\Memos Reports Page 3 of 6 Floor Area Ratio – Flexibility Required An informational handout from the Metropolitan Council regarding FAR is included in attachment E. Floor area is defined in City Code Section 1305.04 to mean the sum of the area of all floors of a building measured from the exterior faces of the exterior walls (for habitable spaces). According to our Zoning code, this definition excluding decks, garages, covered porches, attics, crawl spaces and basements that do not meet the minimum ceiling height per Minnesota State Building Code requirement. The FAR is obtained by dividing the sum of a building's floor area by the amount of lot area. The maximum permitted FAR in the R-2 District is 0.3. Without Variance With Variance Proposed Building Area 2,970 Sq. Ft. 3,366 Sq. Ft. Lot Area 9,900 Sq. Ft. 9,900 Sq. Ft. Proposed FAR 0.30 0.34 Renovating an attic, garage, crawl space or basement triggers a zoning review of FAR if the proposal expands the floor area that counts towards the FAR, which is an increase in habitable space. The storage space above the garage as previously proposed doesn’t count towards the FAR because it’s not habitable space and it does not meet the minimum requirements for habitable. However, if the storage area were converted to a therapy room to meet the requirements of the state building code as the Applicants are now proposing, then its floor area would count towards the FAR. According to the Applicants, this request for an increased FAR would have no impact on the neighborhood character because the area proposed for renovation is not visible to anyone in the neighborhood. In their application, they cite the challenges of building on a conforming lot as a practical difficulty and argue that the space will be used in a reasonable manner consistent with the purposed and intent of the City Code. 2. Variance Review The role of the Planning Commission is to determine and consider how the facts presented to them compare with the city’s articulated standards. The Commission should base their decision on the facts presented and then apply those facts to the legal standards contained in city ordinances and relevant state law. Neighborhood opinion alone is not a valid basis for granting or denying a variance request. While the Planning Commission may feel their decision should reflect the overall will of the residents, the task in considering a variance request is limited to evaluating how the variance application meets the statutory practical difficulties factors. Residents can often provide important facts that may help in addressing these factors, however, unsubstantiated opinions and reactions to a request do not form a legitimate basis for a variance decision. The Planning Commission may impose conditions when granting variances as long as the conditions are directly related and bear a rough proportionality to the impact created by the variance. For instance, if a variance is granted to exceed the front setback limit, any conditions attached should presumably relate to mitigating the effect of the encroachment. City of Arden Hills Planning Commission Meeting for May 6th, 2020 P:\Planning\Planning Cases\2020\20-008 3244 Sandeen Road Variance\Memos Reports Page 4 of 6 3. Variance Requirements – Section 1355.04, Subd. 4 The Applicant requests a variance to construct a replacement deck on the front of their residential dwelling unit that would encroach into the front yard setback. The Planning Commission will need to make a determination utilizing the following variance findings and criteria on whether there are practical difficulties with complying with the zoning regulations. If the applicant does not meet all the factors of the statutory test, then a variance should not be granted. Variances are only permitted when they are in harmony with the general purposes and intent of the ordinance. 1. Purpose and Intent. The variance request shall comply with the purpose and intent of the provisions of the City’s Zoning Regulations and with the policies of the City’s Comprehensive Plan. The variance request for 3244 Sandeen Road is consistent with the purpose and intent of the R-2 Zoning District and with the policies within the City’s Comprehensive Plan; 2. Practical Difficulties. The Applicant for a variance shall establish that there are practical difficulties in complying with the provisions of the Arden Hills Zoning Regulations. The term “Practical Difficulties” as used in the granting of a variance means: a. Reasonable Use. The property owner proposes to use the property in a reasonable manner not permitted by the Zoning Ordinance. According to the Applicants’ application, additional living space for a single family home is a reasonable use of the Subject Property in the R-2 Zoning District as the proposed home can be constructed by right and was designed in such a way that it can capture the additional 396 sq. ft. that the Applicant requests without changing the envelope or appearance of the home from the exterior; b. Unique Circumstances. The plight of the property owner is due to circumstances unique to the property not created by the landowner. According to the Applicants’ application, the nonconforming nature of the lot due to overall area and width as well as the bluff feature which puts the allowable FAR significantly lower than a typical conforming lot; c. Character of Neighborhood. The variance, if granted, will not alter the essential character of the neighborhood. According to the Applicants’ application, the proposed variance will not alter the character of the neighborhood because the house could be constructed by right and additional floor area is entirely internal to the site and invisible to the neighborhood; 3. Economic Consideration. Economic consideration alone does not constitute a practical difficulty. The proposed variance is not based on economic consideration. City of Arden Hills Planning Commission Meeting for May 6th, 2020 P:\Planning\Planning Cases\2020\20-008 3244 Sandeen Road Variance\Memos Reports Page 5 of 6 4. Access to Sunlight. Inadequate access to direct sunlight for solar energy systems shall be considered a practical difficulty. A solar energy system is not proposed. Findings of Fact The Planning Commission must make a finding as to whether or not the proposed application would adversely affect the surrounding neighborhood or the community as a whole based on the aforementioned factors. Staff offers the following findings for consideration: General Findings: 1. City Staff received a land use application for a variance request to increase the allowable FAR on a single family dwelling at the Subject Property 3244 Sandeen Road. 2. A single-family detached dwelling is a permitted use in the R-2 district. 3. The Subject Property is non-conforming with the R-2 districts standards for minimum lot width and area requirements. 4. The proposed additional floor area would be below grade and wholly within the principal structure of the house. 5. The proposed development of the subject parcel would conform to all other requirements and standards of the R-2 district. 6. A variance may be granted if enforcement of a provision in the zoning ordinance would cause the landowner practical difficulties. 7. Variances are only permitted when they are in harmony with the general purposes and intent of the ordinance. Options and Motion Language Staff has provided the following options and motion language for this case. The Planning Commission should consider providing additional findings of fact as part of the motion to support their recommendation for approval or denial. • Recommend Approval with Conditions: Motion to recommend approval of Planning Case 20-008 for a Variance at 3244 Sandeen Road, based on the findings of fact and the submitted plans, as amended by the conditions below: 1. A Building Permit shall be issued prior to commencement of construction. 2. The proposed building shall conform to all other standards and regulations in the City Code. • Recommend Approval as Submitted: Motion to recommend approval of Planning Case 20- 008 for a Variance at 3244 Sandeen Road, based on the findings of fact and the submitted materials. • Recommend Denial: Motion to recommend denial Planning Case 20-008 for a Variance at 3244 Sandeen Road, based on the following findings: findings to deny should specifically reference the reasons for denial and why those reasons cannot be mitigated. City of Arden Hills Planning Commission Meeting for May 6th, 2020 P:\Planning\Planning Cases\2020\20-008 3244 Sandeen Road Variance\Memos Reports Page 6 of 6 • Table: Motion to table Planning Case 20-008 for a Variance at 3244 Sandeen Road: a specific reason and information request should be included with a motion to table. Notice Although a variance does not require a public hearing, a public meeting notice was prepared by the City and mailed to properties within 500 feet of the Subject Property. Minnesota statute does not clearly require a public hearing before a variance is granted or denied, however, after consulting with the City Attorney, staff agree that the best practice is to allow public forum on all variance requests. A public forum allows the city to establish a record and elicit facts to help determine if the application meets the practical difficulties factors. Public Comments Staff have not received written comments in regards to this proposal as of May 1st, 2020. One (1) resident contacted city staff over-the-phone inquiring about proposed floors plans. Deadline for Agency Actions The City of Arden Hills received the completed application for this request on April 24th, 2020. Pursuant to Minnesota State Statute, the City must act on this request by June 23rd, 2020 (60 days), unless the City provides the petitioner with written reasons for an additional 60-day review period. With consent of the Applicant, the City may extend the review period beyond the initial 120 days. Attachments A. Land Use Application B. Location Map C. Variance Request Letter D. Site Survey E. Metropolitan Council Handout on Calculating FAR ATTACHMENT A - Emailed to Jim Day April 28, 2020 3 April 2020 DESCRIPTION OF FAR VARIANCE REQUEST – 3244 SANDEEN ROAD The applicant is requesting a variance from the FAR requirement for the property located at 3244 Sandeen Road. 3244 Sandeen Road is located in the R2 Single and Two Family Residential District (with Shoreland Overlay) on the southwest corner of Lake Johanna. The previous house has been torn down. On January 13, 2020, the current homeowners were awarded a 10’ front yard setback variance. This allowed the homeowners to properly assess the feasibility of the lot prior to asking for this FAR variance. This application requests for an additional .04 percent to the current .3 FAR requirement totaling .34 FAR. That would allow 3,366 total livable square feet for the home. This lot is non- conforming, which puts the allowable FAR significantly lower than a typical conforming lot. The home has been designed in such a way that it can capture the additional 396 sq. ft. that the applicant requests without changing the envelope or appearance of the home from the exterior; which could be built without this request. The additional square footage could be captured above the garage, or in the basement (below grade). This would allow the family to have a more comfortable layout for their family of six, and more importantly allow their son with down syndrome to have an essential indoor therapy space. Attachment G Date: April 30, 2020 To: Planning Commission Chair and Commissioners of the City of Arden Hills, MN Subject: Concerns Regarding Planning Case #20-008: 3244 Sandeen Road Variance Request From: Stephen and Susan Campbell, 3248 Sandeen Road, Arden Hills, MN (adjacent to the North) Jim and Faye Day, 3242 Sandeen Road, Arden Hills, MN (adjacent to the South) Paul and Amy Wallin, 3254 Sandeen Road, Arden Hills, MN Mark Montillon, 3249 Sandeen Road, Arden Hills, MN Paul and Eugenie Rolvaag, 3260 Sandeen Road, Arden Hills, MN Kim and Kathy Klawiter, 3262 Sandeen Road, Arden Hills, MN We have serious concerns about the proposed variance. Here we briefly summarize some of these: 1) We are concerned about how the space is being measured for the FAR calculation. The property owners are looking for a variance of 396 sf above the FAR limit of 0.30. At the December 2019 planning meeting, the last time the proposed construction was reviewed, Joe Hartman emphasized that the house would not be larger than some others in the neighborhood and that the house could be built if the lot were larger. While true, the argument sidesteps the point that this is a nonconforming lot and there is a code for this size lot which is a .30 FAR equaling 2970 sf. (.30 x 9900 sf lot = 2970 sf). Furthermore, it seemed from the discussion at the November 6th, 2019 meeting they were not including all of the basement level in the FAR calculation. We are concerned that this miscalculation continues and this is why they are making this variance request for basement space. DETERMINING FAR Perhaps we could say: The manner in which the FAR is calculated varies. The Metropolitan Council FAR information, which exempts basements in the calculation, seems to speak mostly to commercial development projects. Indeed, they go on to say that “Your community may choose to measure floor area and land area differently based upon local standards, policies, and other considerations. The Arden Hills website explains Floor Area Ratio (FAR) as “The sum of the gross horizontal area of all floors of a building as measured in square feet from the exterior sides of the exterior walls. The ratio is obtained by dividing the sum of a building's floor area by the amount of lot area. Not including covered porches that meet the requirements in Section 1325.03 Subd 2.D; decks; any space where the average floor-to-ceiling height is less than six feet; attached or detached garages; and other detached accessory structures.” Note that basements are not excluded. ATTACHMENT A: a document titled “3 April 2020 DESCRIPTION OF FAR VARIANCE REQUEST -- 3244 SANDEEN ROAD”. This was emailed to Jim Day April 28, 2020 from Joe Hartman. Referring to the 396 sf in part it states, “The additional square footage could be captured above the garage or in the basement”. “In the basement” is confusing because that area of the structure should already be included in the calculation for the FAR of this structure. So, why is a variance being requested? For this structure, to be .30 FAR code compliant, the total square footage of the three floors would need to be 2970sf. (.30 x 9900sf lot = 2970 sf.) We have asked the property owner and Mr. Hartman for more information, specifically the square footage on each floor to provide a verification of their calculation. In spite of repeated assurances from the property owner that he would be open with us and show us the plans, all we have been given is an elevation diagram. This makes us very concerned that the calculation is omitting livable areas that may be converted into occupied space once the planning commission is no longer involved in the process and only sympathetic city officials are involved. 2) The requested square footage above code is simply excessive. The FAR increase from .30 to .34 seems small looking at the numbers, but that equates to an increase in square footage of 13% above code. a. The Code- allowed house square footage is 2970. (.30 x 9900 sf. Lot = 2970) b. The requested variance is 396 square feet. (396/2970 = 13%) 3) Question: If the square footage exceeding code is not visible from the exterior, is that a justification for a variance? We raise this question after getting Joe Hartmann’s statement in a letter sent to affected property owners ( dated April 24, 2020) announcing the May 6th Planning Commission meeting. In part it says “…the proposed home has been designed in such a way that it can capture the additional 396 sq. ft. that the applicant requests without changing the envelope or appearance of the home from the exterior…” Where does a “can’t see it” approval end? At … 1,000, 1500 sf.? How can the planning commission deny future requests after this precedent is established? 4) Are all parties acting in good faith? We remain very concerned about this planned construction. The owner does not seem to be negotiating in good faith. At the December meeting of the Planning Commission, the new architect said that detailed drawings could not be made until the constraints on the design were understood. At that meeting the Planning Commission stated that the design must be in substantial compliance with the FAR. Yet, even after replacing the architect, the proposed FAR variation remains what is was when the house was first proposed six months ago. Finally, we are extremely concerned with a process that would approve a variance when the design remains so vague, or is being concealed. At this point why is there no more detail available on the design? 5.) The height of the house is not compatible with the neighborhood. The proposed dwelling will alter the character of the neighborhood and is not consistent with the other dwellings on Sandeen road. Please refer to the Planning Commission packet of November 6th 2019 where you will see street view pictures of every house fronting Sandeen Road. None of them are three stories above the street. In fact for some, the main floor is below street level. DRAFTApproved: CITY OF ARDEN HILLS, MINNESOTA PLANNING COMMISSION WEDNESDAY, MAY 6, 2020 6:30 P.M. - ARDEN HILLS CITY HALL CALL TO ORDER/ROLL CALL Pursuant to due call and notice thereof, Chair Nick Gehrig called to order the regular Planning Commission meeting at 6:30 p.m. ROLL CALL Present were: Chair Nick Gehrig, Commissioners Marcie Jefferys, Steven Jones, James Lambeth, Subbaya Subramanian, Paul Vijums, and Jonathan Wicklund. Excused Absences: Commissioners Kurtis Weber Also present were:Community Development Manager Mike Mrosla, Associate Planner Joe Hartmann, Councilmember Steve Scott, and Planning Commission Alternate Clayton Zimmerman. APPROVAL OF AGENDA – MAY 6, 2020 Chair Gehrig stated the agenda will stand as amended changing Planning Case 3B to Planning Case 20-004. APPROVAL OF MINUTES April 15, 2020 – Planning Commission Regular Meeting Commissioner Lambeth moved, seconded by Commissioner Jefferys, to approve the April 15, 2020, Planning Commission Regular Meeting as presented. A roll call vote was taken. The motion carried unanimously (7-0). PLANNING CASES A.Planning Case 20-008; 3244 Sandeen Road – Variance Request – No Public Hearing Required Associate Planner Hartmann stated the Applicants are requesting a variance to increase the FAR of their single-family detached dwelling on the Subject Property from 0.30 to 0.34. The $WWDFKPHQW+ DRAFTARDEN HILLS PLANNING COMMISSION – May 6, 2020 2 Applicants were previously approved for a front yard setback variance at the January 27th 2020 City Council meeting. The Subject Property is currently a vacant lot, zoned R-2, Single and Two Family Residential District, and is guided as Low Density Residential on the land use plan. Associate Planner Hartmann reported according to the Applicants’ narrative submitted as a part of their application, the home has been designed in such a way that it can capture the additional 396 sq. ft. that the Applicant requests without changing the envelope or appearance of the home from the exterior; which could be built by right. The Applicants are requesting to incorporate more livable space above the garage and in the basement. The proposed spaces would be otherwise used for storage and would meet applicable building codes to not be included within the FAR Calculation. Without the variance the space above the garage would be accessible from the garage via a drop down stair. There will no changes required to the exterior of the property to meet their request for a greater FAR. Associate Planner Hartmann explained the Planning Commission is being asked to determine if a variance request for flexibility with the FAR requirement should be approved. The sketches that have been submitted show that the extra livable space would be wholly within the principle structure. The evaluation of the proposal should be based on the District Provisions in Section 1320 and the Requirements for a Variance in Section 1355.04, Subd. 4. Associate Planner Hartmann reviewed the surrounding area, the Plan Evaluation and provided the Findings of Fact for review: 1. City Staff received a land use application for a variance request to increase the allowable FAR on a single family dwelling at the Subject Property 3244 Sandeen Road. 2. A single-family detached dwelling is a permitted use in the R-2 district. 3. The Subject Property is non-conforming with the R-2 districts standards for minimum lot width and area requirements. 4. The proposed additional floor area would be below grade and wholly within the principal structure of the house. 5. The proposed development of the subject parcel would conform to all other requirements and standards of the R-2 district. 6. A variance may be granted if enforcement of a provision in the zoning ordinance would cause the landowner practical difficulties. 7. Variances are only permitted when they are in harmony with the general purposes and intent of the ordinance. Associate Planner Hartmann stated staff recommends approval of Planning Case 20-008 for a Variance at 3244 Sandeen Road, based on the findings of fact and the submitted plans, as amended by the conditions below: 1. A Building Permit shall be issued prior to commencement of construction. 2. The proposed building shall conform to all other standards and regulations in the City Code. Associate Planner Hartmann reviewed the options available to the Planning Commission on this matter: DRAFTARDEN HILLS PLANNING COMMISSION – May 6, 2020 3 1. Recommend Approval with Conditions 2. Recommend Approval as Submitted 3. Recommend Denial 4. Table Chair Gehrig opened the floor to Commissioner comments. Commissioner Jefferys asked if the City has previously approved a FAR request over .3 in the past. Community Development Manager/City Planner Mrosla stated it was his understanding the City has received one other request for a FAR variance and this was for another unique lot. He explained the majority of lots in the City meet all zoning requirements, but older lakefront lots were unique. Commissioner Jefferys questioned if an architect would be aware of the City’s FAR requirements. Community Development Manager/City Planner Mrosla deferred this question to the architect. Andrew Peterson, architect for the Applicants, explained he understood the requirements ahead of time. However, he stated it took time to lay out the space and to fully understand how the Applicants would want the building to be laid out. Commissioner Jones commented on the Met Council information that was provided to the Commission. He supported the City reviewing how FAR was measured. He noted this was the third time this home has been before the Commission. He inquired if the Applicants were planning to raise the floor in the basement while also adding space above the garage. Mr. Peterson explained this was a new construction home and the house has been designed with flexibility to where additional space could be captured. He indicated the space above the garage and in the lower level could accommodate the therapy room. He reported if the FAR variance was not approved, he would need to revise the plans. Commissioner Jones questioned if the .34 FAR included both the basement and space above the garage. Mr. Peterson stated nothing has been approved yet. He commented in the lower level the floor would be raised for a crawl space. He indicated the exterior envelope of the home would not be altered if the FAR variance was not approved. He described how the home was built into a hillside and a portion would be useable space and the remainder would be crawl space. He reported the crawl space had to not be livable space because of the City’s FAR requirements. Commissioner Lambeth commented on the information that was provided to the Commission in November of 2019. He asked what the lot size was for this property noting there were three different numbers included in the materials. He discussed the history of this Planning Case noting the previous requests from the Applicants. He understood the Applicants were requesting extra DRAFTARDEN HILLS PLANNING COMMISSION – May 6, 2020 4 space for special needs programming for their child, but indicated the Applicants were now requesting even more space than was previously approved on a 9,400 square foot lot. He stated the Applicants were proposing to increase the FAR from .36 to .4. He explained the new plan includes some questionable data. He reviewed the lot area numbers further and expressed concerns that the facts were a moving target. He questioned why the City would assign an FAR calculation to this lot that does not meet the square footage minimums of the zoning requirements. Associate Planner Hartmann referenced the packet from November and noted a different architect had provided the City with those FAR numbers. He noted the size of the lot was estimated to be 9,400 square feet. He reported the current Applicant has gone with a different architect and a certified survey of the lot was provided to the City stating the lot was 9,900 square feet in size. He reported this number was more accurate than the previous information taken from an aerial photo. Commissioner Lambeth stated it was important for the City to have a clear lot size in order to have this number as the denominator for the FAR equation. He feared that at this time the City had three or four numbers out there. Associate Planner Hartmann clarified the correct and most accurate number was 9,900 square feet based on the certified survey. Further discussion ensued regarding the change in the plans. Commissioner Lambeth expressed concern with the fact revised, detailed plans had not been provided to the Planning Commission. Mr. Peterson commented a simple plan diagram had been provided to staff detailing the locations of the two spots where additional space would be used if the FAR variance were approved. He explained elevations had been provided to staff. Commissioner Lambeth stated it was concerning that this information was not provided to the Commission. He reported the Commission was running blind and had no actual revised drawings to review. Community Development Manager/City Planner Mrosla apologized for not having this information in the presentation. He noted he just received the information from the architect via email this afternoon. He stated the diagram shows the additional FAR was in the basement and above the garage. He explained if the FAR variance was not approved by the Commission these spaces would remain storage. Commissioner Lambeth asked if the change was to move the rehabilitation space to above the garage. Community Development Manager/City Planner Mrosla reported the plans before the Commission were different from the previous plans. DRAFTARDEN HILLS PLANNING COMMISSION – May 6, 2020 5 Commissioner Lambeth questioned if there was any finished area adjacent to the garage in the lowest level. Mr. Peterson explained there was a very small amount of finished square footage on the entry level which would act as an entry/mudroom and houses stairs to go up to the main level, along with a mechanical room. Commissioner Vijums asked how basements that don’t meet minimum ceiling height was considered within the FAR requirements. Associate Planner Hartmann discussed the Minnesota State Building Code Requirements. He reported the minimum was seven feet. Commissioner Vijums questioned if the crawl space was less than seven feet. Community Development Manager/City Planner Mrosla stated according to the applicant this was correct. Commissioner Vijums inquired where the therapy room would be located. Mr. Peterson indicated the occupational therapy room would be located either above the garage or in the lower level. He stated his clients have yet to make this decision. It was noted the exterior of the building would not change if this space were used for occupational therapy. Chair Gehrig reported this Planning Case does not require a Public Hearing. However, he opened the meeting for public comments. Steven Campbell, 3248 Sandeen Road, stated he lives adjacent to the property in question. He noted he submitted a letter on behalf of the residents in the neighborhood that have concerns about the property. He explained he attended the previous Planning Commission meetings. He indicated this was a unique lot that was non-conforming. He stated he had concerns with how the FAR was being calculated. He expressed concern with the fact he has not been given information from the City when it has been requested. He reported the proposed home was much too large for the size of the property and he recommended the Planning Commission deny the variance request. Jim Day, 3242 Sandeen Road, stated he lived south of the property in question. He discussed State Code and reported in order for basement space to not be counted as livable it had to be under six feet in height. He believed the square footage on the proposed home was too high. He was of the opinion a variance was not justified simply because the applicant had not changed the envelope of the home. He indicated the proposed home would be three stories from the street and reported all other homes on Sandeen Road were one or two stories. He stated the proposed home would be inconsistent with the character of the neighborhood. He recommended the Planning Commission deny the variance request. Commissioner Zimmerman stated he was listening to the meeting as an alternate. DRAFTARDEN HILLS PLANNING COMMISSION – May 6, 2020 6 Richard Priore, applicant, explained the house as presented meet all City Code requirements. He indicated he could build this home tomorrow without needing a variance. However, because he was requesting additional space for a therapy room, he needed to come before the Planning Commission. He questioned why the neighbors were struggling with the additional space given the fact the envelope of the home would not change. He understood the neighbors wanted to preserve the neighborhood, but stated he would be dramatically improving the lot. He explained the height of the house was within City Code. He stated he was having a hard time understanding why the neighbors were objecting to the project when the home would be built per the plans whether or not the FAR was approved. Chair Gehrig thanked the public for their comments and brought the discussion back to the Planning Commissioners. Chair Gehrig explained the request before the Commission was for a FAR variance. He reported the home itself did not require any variances to City Code. He stated because the exterior footprint of the home would not be increased and because the additional space was for a good use, he supported the proposed request. Commissioner Jones agreed with Chair Gehrig and reiterated that the structure itself required no variances to City Code. Commissioner Jefferys explained she had concerns with the fact the home plans were of a new design. She indicated if the home had been built with a .3 FAR it would have a smaller envelope and would not have the capacity for the therapy room. Chair Gehrig reported the home could be built per the plans today and the extra spaces could be used as storage. However, the applicant was asking to convert the space into useable space in order to provide a therapy room for their special needs son. Commissioner Wicklund stated he supported the FAR increase. He believed this was a reasonable request and the lot was unique. He explained he could support the FAR increase because the essential character of the property would not be altered because the envelope meets City Code. Commissioner Lambeth reported he did not believe the Commission could review and approve this request because it did not have adequate information. He believed the Commission needed to be able to review a complete package that demonstrates compliance with all applicable State, County and local statutes and codes. Chair Gehrig indicated the Planning Commission’s scope was to review variances requests per City Code. He explained the Commission does not review every building request if there were no variance requests. Commissioner Lambeth stated he could support this variance in order to move forward but noted in doing this without the required documentation was a concern to him. Community Development Manager/City Planner Mrosla apologized to the Planning Commission for not including the house elevations within the packet. He noted this information DRAFTARDEN HILLS PLANNING COMMISSION – May 6, 2020 7 was included in the information that was emailed within the PowerPoint presentation. He stated if the Commission believes they need additional time to review the elevations the item could be tabled. Chair Gehrig thanked Commissioner Lambeth for clarifying the disconnect. He asked how the Commission would like to proceed. Commissioner Jones stated he supported moving the item forward. Commissioner Wicklund was in agreement. Commissioner Wicklund moved and Commissioner Jones seconded a motion to recommend approval of Planning Case 20-008 for a Variance at 3244 Sandeen Road based on the findings of fact and the submitted plans, as amended by the two (2) conditions in the May 6, 2020, report to the Planning Commission. Commissioner Lambeth stated he supported this project moving forward. However, he requested in the future that all variance requests include all information submitted by the applicant so the item can be properly considered by the Planning Commission. A roll call vote was taken. The motion carried unanimously (7-0). B. Planning Case 20-004; 1741 Venus Avenue – Variance Requested – No Public Hearing Required Associate Planner Hartmann stated the Applicants are requesting a variance to replace a deck in the front yard of their single-family detached dwelling on the Subject Property that also serves as the front door entrance to the house given the unique topography of the parcel. The front yard property line is 40 feet from the house and thus the proposed deck is 28 feet from the property line. The Subject Property is zoned R-1, Single Residential District and is guided as Low Density Residential on the land use plan. Associate Planner Hartmann reported the Applicants are proposing to replace the design instead of repairing the current structure. According to the Applicants’ narrative submitted as a part of their application, the proposed plan is to replace the deck and walkway which is original to the house. The decking is failing due to rotting wood after over 50 years in service and some of the current two-by-four support structure is not up to current state building code standards for decks. Associate Planner Hartmann explained the Applicants argue that the deck is an essential feature of the house, as it provides the only access to the front door and the plan they propose does not extend any farther toward the front lot line than the current deck and adjoining stone stairs, nor is the proposed deck any higher than the current deck, which would preserve neighborhood character. The proposal also removes a section of the deck to the west of the front door which partially blocks of the egress window on the ground level. The Applicants’ plan increases the area in front of the front door to make the front door more accessible and to create a space in the front of the house they argue will support neighborly engagement. DRAFTARDEN HILLS PLANNING COMMISSION – May 6, 2020 8 Associate Planner Hartmann commented the Planning Commission is being asked to determine if a variance request for flexibility with the front setback requirement should be approved for the deck and “bridge” walkway. The sketches that have been submitted show that the replacement walkway would be the same size and length as the current walkway, but the replacement deck would exceed the area of the deck currently in place. The Applicant could replace the deck with a new deck of the same size without a variance, but they are asking for a variance to build a larger deck than would be allowed by code. The evaluation of the proposal should be based on the District Provisions in Section 1320 and the Requirements for a Variance in Section 1355.04, Subd. 4. Associate Planner Hartmann reviewed the surrounding area, the Plan Evaluation and provided the Findings of Fact for review: 1. City Staff received a land use application for a request to build a replacement deck for a single family dwelling at the Subject Property 1741 Venus Avenue. 2. A deck on a single-family detached dwelling is a permitted use in the R-1 district. 3. The proposed walkway is necessary as the means of egress out the front door of the house. 4. The Subject Property is non-conforming with the R-1 districts standards for minimum lot length and area requirements. 5. The Subject Property is also nonconforming for topography due to the sunken elevation of the front yard. 6. The proposed deck and walkway would encroach into the front yard setback a combined 28 feet. 7. The proposed development of the subject parcel would conform to all other requirements and standards of the R-1district. 8. A variance may be granted if enforcement of a provision in the zoning ordinance would cause the landowner practical difficulties. 9. Variances are only permitted when they are in harmony with the general purposes and intent of the ordinance. Associate Planner Hartmann stated staff recommends approval of Planning Case 20-004 for a Variance at 1741 Venus Avenue, based on the findings of fact and the submitted plans, as amended by the conditions below: 1. Prior to issuance of a Building Permit, engineering department staff shall review a revised landscaping plan to ensure no impacts to the right-of-way. 2. A Building Permit shall be issued prior to commencement of construction. 3. The proposed building shall conform to all other standards and regulations in the City Code. Associate Planner Hartmann reviewed the options available to the Planning Commission on this matter: 1. Recommend Approval with Conditions 2. Recommend Approval as Submitted 3. Recommend Denial 4. Table DRAFTARDEN HILLS PLANNING COMMISSION – May 6, 2020 9 Chair Gehrig opened the floor to Commissioner comments. Commissioner Jones indicated this was a wonderful project. Commissioner Subramanian stated he appreciated the fact the neighbors were supportive. Commissioner Vijums asked if access to the egress windows below the deck would be hindered. Community Development Manager/City Planner Mrosla reported the far left egress window would be upgraded to meet egress and building code requirements. He stated the other windows would remain as is. Commissioner Wicklund questioned what the square footage of the deck was currently and asked what the square footage would be of the new deck. William Tourdot, 1741 Venus Avenue, reported proposed deck was 375 square feet, noting the deck would be 20’ by 12’ and would have a 17’ by 5’ bridge. He commented further on the egress windows in the basement and reported he was not required to replace the egress windows in the laundry room. Commissioner Wicklund asked why the deck was being proposed to come straight out from the house versus having the main entrance off the driveway. Mr. Tourdot reported this matches the existing deck and the neighbors know the house by this feature. In addition, this would provide access into the main entrance of the house. Commissioner Wicklund questioned if the City has approved any other variances for residents that want to put decks in the front yard. Community Development Manager/City Planner Mrosla reported there were not a whole lot of decks in front yards. He stated residents could place structures in the front yard so long as it does not exceed 30” in height and meets appropriate setbacks. He indicated once structures were above 30” railings were required, along with a permit. He explained this was a unique request given the topography of the lot and there was an existing deck. Chair Gehrig asked if this property had a backyard that supports a patio or deck. Community Development Manager/City Planner Mrosla stated the back of the home has a walkout entry with a patio. Chair Gehrig commented he was understanding of the existing sunk in front yard and structure in place with the bridge that extends to the front door. He understood that the existing structure was 50 years old and was in need of replacement. He stated he was struggling with the fact the replacement deck would exceed the requirements by double for the porch section. He questioned what about the parcel was unique that a deck should be built on the front of the house when there was space in the back of the home. DRAFTARDEN HILLS PLANNING COMMISSION – May 6, 2020 10 Mr. Tourdot indicated there were many homes in his neighborhood that had front porches and patios. Jennifer Granick, 1741 Venus Avenue, reported in her neighborhood there were a lot of front patios but because of the elevation of her home she could not have a patio. She discussed the topography of property and noted some of the new deck space would be used as a walkway into the home, which would be unusable space. She explained the deck would be used to visit with neighbors while kids were playing, which was consistent with the feel of the neighborhood. Chair Gehrig asked if the topography of this property was more traditional with a deck in the front, how far the deck could extend into the front yard setback. Community Development Manager/City Planner Mrosla stated per City Ordinance, decks and covered porches may extend six feet into the front and rear setback. Commissioner Lambeth requested further information on how the deck was supported and questioned what portions of the deck were failing. Mr. Tourdot reported the main portion of the deck that was failing was the bridge. He stated the bridge was canted to one side and the 2’x4’s on the walkway were becoming soft. He explained the existing deck structure could not be rebuilt as it was because it was cantilevered out from the house. He commented further about how the deck was supported by joists that were cantilevered out from the house, four feet on center. He discussed how construction of decks had changed in the past 50 years. Commissioner Lambeth reported 2’x4’s was not the typical material used for decks. He asked what the applicants would be using for deck material. Mr. Tourdot indicated he would be using recycled decking material. Commissioner Lambeth questioned what would happen to the cantilevered supports. Mr. Tourdot explained this would be addressed during the building permit phase but he anticipated a ledger would have to be installed in order to support the deck, along with posts and footings to support the joists. Commissioner Lambeth inquired what the scope of work would be for this project. Mr. Tourdot stated he was proposing to remove the existing deck and to build a new deck in the the front of his home. Chair Gehrig commented the variance request before the Commission was for the size of the structure. He reported the scope of the building materials was not under consideration and would be reviewed by staff through the building permit process. Commissioner Lambeth indicated what he was trying to get at was that the applicant was proposing to build a maintenance free deck that would last for some time into the future. DRAFTARDEN HILLS PLANNING COMMISSION – May 6, 2020 11 Commissioner Vijums explained he was constructing a deck at his cabin. He commented further on the building requirements and anticipated the proposed deck would last 50+ years. Commissioner Jones discussed the cantilevered decks he had built and stated he supported the project as proposed. Chair Gehrig agreed this was a fantastic project but stated he was struggling with the three factor test. He understood this was a unique parcel but stated City Code did not allow people to put large decks on the front of their home. For this reason, he would rather see a porch structure built within the six foot requirement. Commissioner Jones moved and Commissioner Vijums seconded a motion to recommend approval of Planning Case 20-004 for a Variance at 1741 Venus Avenue based on the findings of fact and the submitted plans, as amended by the three (3) conditions in the May 6, 2020, report to the Planning Commission. A roll call vote was taken. The motion carried 4-2 (Commissioner Jefferys and Chair Gehrig opposed). Commissioner Lambeth lost his connection to the meeting prior to the vote, but subsequently informed staff that his intent was to vote aye. UNFINISHED AND NEW BUSINESS None. REPORTS A. Report from the City Council Councilmember Scott provided the Commission with an update from the City Council. He explained the City Council was meeting virtually due to COVID-19. He reported the Council appointed two new members to the PTRC in April. He indicated a feasibility report was ordered for the 2021 Pavement Management Plan and approved an agreement for the Karth Lake runoff control project. He stated the first quarter financials were also approved. He reported construction continues for the 34th Infantry headquarters was progressing and would have a grand opening later this summer. He explained a national grocer was interested in moving into the Pace building. He noted the City Council had canceled all summer park and recreation programs due to the COVID-19 crisis. B. Planning Commission Comments and Requests None. ADJOURN Commissioner Jones moved, seconded by Commissioner Jefferys, to adjourn the May 6, 2020, Planning Commission Meeting at 8:35 p.m. A roll call vote was taken. The motion carried unanimously (6-0, Commissioner Lambeth was not available for the vote.) 1 CITY OF ARDEN HILLS COUNTY OF RAMSEY STATE OF MINNESOTA RESOLUTION NO. 2020-022 RESOLUTION APPROVING A VARIANCE FOR THE SUBJECT PROPERTY 3244 SANDEEN ROAD WHEREAS, City Staff received a land use application for a variance request to increase the Floor Area Ratio to .34 by adding additional 396 square feet of livable space above the garage and in the basement at 3244 Sandeen Road (“Subject Property”); WHEREAS, the Subject Property is a non-conforming vacant lot that does not meet the R-2 district standards for minimum lot width and area requirements; WHEREAS, a variance may be granted when it is in harmony with the general purposes and intent of the zoning ordinance if enforcement of a provision in the ordinance would cause the landowner practical difficulties; WHEREAS, the City Council directed Staff to prepare a Land Use Application Public Policy Notification to notify all property owners within 500 feet of Subject Property when a request for the Planning Commission is to occur related to a land use application that does not require a public hearing; WHEREAS, the City’s obligation has been met where the Arden Hills Planning Commission duly held a hearing on May 6, 2020. All persons present at said meeting were given an opportunity to be heard and present written statements; WHEREAS the Planning Commission considered the recommendation of the City Staff that this request be approved and, as such voted 7-0 in favor of the request; and, NOW, THEREFORE, BE IT RESOLVED THAT THE CITY COUNCIL OF THE CITY OF ARDEN HILLS: Hereby adopts Resolution 2020-022 approving Planning Case 20-008 for a variance request at the Subject Property 3244 Sandeen Road to enable a Floor Area Ratio of 0.34. BE IT FURTHER RESOLVED that City Council approves Planning Case 20-008 for a variance request at the Subject Property 3244 Sandeen Road, based on the findings of fact and the Attachment I 2 submitted plans in the May 6, 2020 Report to the Planning Commission, as amended by the following conditions: 1. A Building Permit shall be issued prior to commencement of construction. 2. The proposed building shall conform to all other standards and regulations in the City Code. PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF ARDEN HILLS THIS 26th DAY OF MAY, 2020. ________________________________ Mayor Attest: ______________________________ City Clerk •Planning Case #20-008 –No Public Hearing Required •Applicant: Richard and Kristen Priore •Property Location: 3244 Sandeen Road •Request: Variance Attachment J Background •R-2 Single and Two Family Residential District •Currently Vacant Lot •Nonconforming Parcel •30 foot front yard setback from the property line Subject Lot R2 District Minimum Standards Lot area 9,900 Sq. Ft.11,000 Sq. Ft. Lot width 50 Ft. 85 Ft. Overview Request: •Applicant requests flexibility for FAR requirement •The sum of a building's floor area by the lot area •Excludes decks, garages, covered porches, attics, crawl spaces and basements that do not meet the minimum ceiling height •FAR limit is 0.30 •Applicant requests a FAR 0.34 •Additional 396 square feet is entirely within the envelope the house Variance Requirements –Section 1355.04, Subd. 4 1.Purpose and Intent. The variance request shall comply with the purpose and intent of the provisions of the City’s Zoning Regulations and with the policies of the City’s Comprehensive Plan. •The variance request for 3244 Sandeen Road would comply with the purpose and intent of the R-2 Zoning District and with the policies within the City’s Comprehensive Plan. Variance Requirements –Section 1355.04, Subd. 4 2.Practical Difficulties. The applicant for a variance shall establish that there are practical difficulties in complying with the provisions of the Arden Hills Zoning Regulations. The term “Practical Difficulties” as used in the granting of a variance means: •Reasonable Use. The property owner proposes to use the property in a reasonable manner not permitted by the Zoning Ordinance. •Unique Circumstances. The plight of the property owner is due to circumstances unique to the property not created by the landowner. •Character of Neighborhood. The variance, if granted, will not alter the essential character of the neighborhood. Variance Requirements –Section 1355.04, Subd. 4 3.Economic Consideration. Economic consideration alone does not constitute a practical difficulty. •The proposed variance is not based on economic consideration . Public Notice A public notice was mailed to nearby property owners in advance of the Planning Commission meeting on May 6th as per the Land use Application Public Notification Policy on April 24th. A public notice was mailed to nearby property owners on May 22nd in advance of the City Council meeting. Prior to the Planning Commission meeting on May 6th, city staff have received two (2) comments about the variance request as it is proposed. No comments have been received since the Planning Commission meeting on May 6th Conditions of Approval 1.A Building Permit shall be issued prior to commencement of construction. 2.The proposed building shall conform to all other standards and regulations in the City Code. Proposed Motion Language: •Recommend Approval with Conditions: Motion to approve Planning Case 20-008 for a Variance at 3244 Sandeen Road, based on the findings of fact and the submitted plans, as amended by the two (2) conditions in the May 6th, 2020 Report to the Planning Commission •Recommend Approval as Submitted: Motion to approve Planning Case 20-008 for a Variance at 3244 Sandeen Road, based on the findings of fact and the submitted plans in the May 6th, 2020 Report to the Planning Commission. Proposed Motion Language: •Recommend Denial: Motion to deny Planning Case Planning Case 20- 008 for a Variance at 3244 Sandeen Road, based on the following findings: findings to deny should specifically reference the reasons for denial and why those reasons cannot be mitigated. •Table: Motion to table Planning Case Planning Case 20-008 for a Variance at 3244 Sandeen Road: a specific reason and information request should be included with a motion to table. City of Arden Hills City Council Meeting for May 26th, 2020 P:\Planning\Planning Cases\2020\20-004 1741 Venus Avenue Tourdot Variance\CC Packet Page 1 of 6 NEW BUSINESS – 10B MEMORANDUM DATE: May 26, 2020 TO: Honorable Mayor and City Councilmembers Dave Perrault, City Administrator FROM: Joe Hartmann, Associate Planner Mike Mrosla, Community Development Manager/City Planner SUBJECT: Planning Case #20-004 Applicant: William Tourdot and Jennifer Granick Property Location: 1741 Venus Avenue Request: Variance Budgeted Amount: Actual Amount: Funding Source: N/A N/A N/A Council Should Consider the Following Motion to adopt Resolution 2020-023 approving Planning Case 20-004 for a variance at 1741 Venus Avenue, based on the findings of fact and the submitted plans in the May 26, 2020 Report to the City Council. Background The Applicants are requesting a variance to build a deck and walkway structure in the front of a single-family detached dwelling on the Subject Property that would encroach into the front yard setback. The Subject Property is zoned R-1, Single Family Residential District and is guided as a Low Density Residential use in the 2040 Comprehensive Plan. The existing walkway and deck is original to the Subject Property and predates the adoption of the Zoning Code. The Applicants are requesting flexibility on the front setback requirement to build a larger deck that would exceed the dimensions of the current deck. The Subject Property is a legal non-conforming lot. The Subject Property is 120 feet in length and has a lot area of 12,500 square feet. The R1 district standards require a minimum lot length of 130 feet and a minimum size of 14,000 square feet. In addition, the topography of the front yard is City of Arden Hills City Council Meeting for May 26th, 2020 P:\Planning\Planning Cases\2020\20-004 1741 Venus Avenue Tourdot Variance\CC Packet Page 2 of 6 unique due to the courtyard designed by the original owner. The proposed variance will not impact any other setback requirements besides the front setback flexibility requested and the property will otherwise conform to all provisions for the R-1 district. Plan Evaluation The Applicants are proposing to replace instead of repair the existing structure. According to the Applicants the decking and bridge is failing due to rotting wood after over 50 years in service and some of the current two-by-four support structure is not up to current state building code standards. The Applicants are requesting a variance to build a twelve (12) foot wide deck to replace the existing three foot, nine inch wide deck. Under City Code Section 1325.03, Subd. 2, the deck is permitted to encroach six (6) feet into the required front yard setback. Sketches that have been submitted show that the replacement walkway would be the same size and length as the current walkway, but the replacement deck would exceed the area of the deck currently in place. The Applicant could replace the deck with a new deck of the same size without a variance, but they are asking for a variance to build a larger deck than would be allowed by code. City Code section 1325.03, Subd. 2 permits decks to encroach six (6) feet into the required front yard setback. In addition, according to City Code Section 1325.03 Subdivision 2, D, covered City of Arden Hills City Council Meeting for May 26th, 2020 P:\Planning\Planning Cases\2020\20-004 1741 Venus Avenue Tourdot Variance\CC Packet Page 3 of 6 porches, unlike decks, are permitted to encroach from the front lot line and side yard corner at least the number of feet for the current principal structure setback multiplied by a factor of 0.75. The front setback for the principle structure is 40 feet, meaning that it is possible for a covered porch/deck to be built on the property without a variance if it doesn’t exceed 10 feet in width. The proposed deck is 12 feet wide and does not meet the cover front porch design guidelines. The Applicants’ plan increases the area outside the front door to make the front more accessible and to create a space that they argue will support more neighborly engagement. The Applicants argue that the deck is an essential feature of the house, as it provides the only access to the front door and the plan they propose does not extend farther toward the front lot line any more than the current deck and adjoining stone stairs, nor is the proposed deck any higher than the current deck, which would preserve neighborhood character. The proposal also removes a section of the deck to the west of the front door which partially blocks of the egress window on the ground level. At their May 6, 2020 meeting, the Planning Commission heard testimony from the Applicants regarding their request. Upon hearing the testimony, the Planning Commission motioned to recommend to approve the request (4-2). However, prior to the vote Commissioner Lambeth lost his connection to the meeting, but subsequently informed staff that his/her intent was to vote aye. The two dissenting votes had concerns about allowing a larger deck in the front yard. The staff report to the Planning Commission on this case is provided in Attachment D. The draft minutes from the May 6, 2020 meeting are included in Attachment F. Variance Requirements – Section 1355.04, Subd. 4 1. Purpose and Intent. The variance request shall comply with the purpose and intent of the provisions of the City’s Zoning Regulations and with the policies of the City’s Comprehensive Plan. The variance request for 1741 Venus Avenue is consistent with the purpose and intent of the R-2 Zoning District and with the policies within the City’s Comprehensive Plan. 2. Practical Difficulties. The Applicant for a variance shall establish that there are practical difficulties in complying with the provisions of the Arden Hills Zoning Regulations. The term “Practical Difficulties” as used in the granting of a variance means: a. Reasonable Use. The property owner proposes to use the property in a reasonable manner not permitted by the Zoning Ordinance. A deck for a single family home is a reasonable use of the Subject Property in the R-1 Zoning District. The walkway is necessary as the means of egress out the front door. b. Unique Circumstances. The plight of the property owner is due to circumstances unique to the property not created by the landowner. City of Arden Hills City Council Meeting for May 26th, 2020 P:\Planning\Planning Cases\2020\20-004 1741 Venus Avenue Tourdot Variance\CC Packet Page 4 of 6 According to the Applicants’ application, the sunken topography of the front yard is unique to the property 1741 Venus Avenue as well as the nonconforming nature of the lot’s size and length. The previous owner designed and landscaped the front yard for aesthetic reasons prior to the adoption of the zoning code. c. Character of Neighborhood. The variance, if granted, will not alter the essential character of the neighborhood. According to the Applicants’ application, the existing neighborhood has homes with a variety of different front yard decks, porches, and patios and the proposed variance will not alter the character of the neighborhood. The sunken courtyard has been a neighborhood feature for many years. 3. Economic Consideration. Economic consideration alone does not constitute a practical difficulty. The proposed variance is not based on economic consideration. 4. Access to Sunlight. Inadequate access to direct sunlight for solar energy systems shall be considered a practical difficulty. A solar energy system is not proposed. Findings of Fact The Planning Commission reviewed this application at their May 6, 2020, meeting and have offered the following findings of fact for your consideration: 1. City Staff received a land use application for a request to build a replacement deck for a single family dwelling at the Subject Property 1741 Venus Avenue. 2. A deck on a single-family detached dwelling is a permitted use in the R-1 district. 3. The proposed walkway is necessary as the means of egress out the front door of the house. 4. The Subject Property is non-conforming with the R-1 districts standards for minimum lot length and area requirements. 5. The Subject Property is nonconforming due to the sunken elevation of the front yard. 6. The proposed deck and walkway would encroach into the front setback a combined 28 feet. 7. The proposed development of the subject parcel would conform to all other requirements and standards of the R-1district. 8. A variance may be granted if enforcement of a provision in the zoning ordinance would cause the landowner practical difficulties. 9. Variances are only permitted when they are in harmony with the general purposes and intent of the ordinance. City of Arden Hills City Council Meeting for May 26th, 2020 P:\Planning\Planning Cases\2020\20-004 1741 Venus Avenue Tourdot Variance\CC Packet Page 5 of 6 Additional Review Residential Building Inspector The Residential Building Inspector has reviewed the plans and has no additional comments at this time. A Building Permit will be required prior to any construction taking place. Public Works Director/City Engineer The Public Works Director/City Engineer has reviewed the plans and has asked that the Applicants redesign their landscaping plan to minimize their encroachment next to the right-of-way. Recommendation The Planning Commission recommended approval by a 4-2 vote of Planning Case 20-004 for a variance at 1741 Venus Avenue, based on the findings of fact and the submitted plans in the May 6, 2020 Report to the Planning Commission, as amended by the following conditions: 1. Prior to issuance of a Building Permit, engineering department staff shall review a revised landscaping plan to ensure no impacts to the right-of-way. 2. A Building Permit shall be issued prior to commencement of construction. 3. The proposed building shall conform to all standards and regulations in the City Code. Motion Language Options The following motion language options for the City Council to consider: 1. Recommend a motion to adopt Resolution 2020-023 approving Planning Case 20-004 for a variance at 1741 Venus Avenue with Conditions, based on the findings of fact and the submitted plans, as amended by the three (3) conditions in the May 6, 2020, Report to the City Council. 2. Recommend a motion to adopt Resolution 2020-023 approving Planning Case 20-004 for a variance at 1741 Venus Avenue as Submitted, based on the findings of fact and the submitted plans. 3. Recommend Denial: Motion to recommend denial of Planning Case 20-004 for a variance at 1741 Venus Avenue, based on the following findings of fact: findings to deny should specifically reference the reasons for denial. 4. Table: Motion to table Planning Case 20-004 for a variance at 1741 Venus Avenue: a specific reason and/or information request should be included with a motion to table. Public Notice and Comments Although a variance does not require a public hearing, a public meeting notice was prepared by the City and mailed to properties within 500 feet of the subject property. At the time of writing City of Arden Hills City Council Meeting for May 26th, 2020 P:\Planning\Planning Cases\2020\20-004 1741 Venus Avenue Tourdot Variance\CC Packet Page 6 of 6 this staff has not received any comments about the proposed variance request since the May 6, 2020 Planning Commission meeting. Deadline for Agency Actions The City of Arden Hills received the completed application for this request on April 7, 2020. Pursuant to Minnesota State Statute, the City must act on this request by June 6th, 2020 (60 days), unless the City provides the petitioner with written reasons for an additional 60-day review period. With consent of the Applicant, the City may extend the review period beyond the initial 120 days. Budget Impact: NA Attachments A. Land Use Application B. Location Map C. Variance Request Letter D. Planning Commission Report, May 6, 2020 E. Public Comments F. Draft Planning Commission Minutes, May 6, 2020 G. Resolution 2020-023 H. City Council PowerPoint Presentation Page 1 of 3 1245 West Highway 96 Arden Hills, Minnesota 55112 Telephone (651) 792-7800 Fax (651) 634-5137 www.cityofardenhills.org For Office Use Only Planning Case No. 20- Submittal Date Application Completed Date Accepted by Receipt Number Council Decision Council Decision Date 2020 LAND USE APPLICATION Applicant Information Applicant: Address: Telephone No.: Other: Fax No.: Email Address: Property Information Property Owner: Owner Address: Owner Telephone No. Other: Address of Property Involved: Legal Description: Property ID No.: Type of Use: Zone: Property Acreage: Type of Request  Comprehensive Plan Amendment (Fee: $500 + Escrow: $2,500)  Conditional Use or Interim Use Permit/CUP or IUP Amendment (Fee: $400 + Escrow: $1,500)  Preliminary Plat (Fee: $500 + Escrow: $2,500)  Final Plat (Fee: $500 + Escrow: $1,500)  Concept Plan Review (Fee: $150 + Escrow: $1,000)  Master Planned Unit Development or Master Special Development Plan (Fee: $500 + Escrow: $2,500)  Final Planned Unit Development or Final Special Development Plan (Fee: $350 + Escrow: $1,500)  Planned Unit Development Amendment or Special Development Plan Amendment (Fee: $400 + Escrow: $1,500)  Site Plan Review (Fee: $400 + Escrow: $1,500)  Rezoning or TCAAP Regulating Plan Amendment (Fee: $500 + Escrow: $1,500)  Zoning Code or TCAAP Redevelopment Code Amendment (Fee: $400 + Escrow: $1,500)  City Code Amendment (Fee: $350 + Escrow: $1,500)  Lot Split/Minor Subdivision (R-1 and R-2 Districts Only) (Fee: $350 + Escrow: $1,000)  Variance or Permitted Adjustment (Fee: $350 + Escrow: $1,000)  Vacation of Easement or Right-of-Way (Fee: $150 + Escrow: $1,000)  Appeal of Administrative Decision (Fee: $150 + Escrow: $1,000)  Land Use Requests – Not Already Specified (Fee: $150 + Escrow: $1,000 1741 Venus Avenus, Arden Hill, MN 55112 William Tourdot and Jennifer Granick 608-770-9455 jwgrandot@hotmail.com William Tourdot and Jennifer Granick 1741 Venus Avenus, Arden Hill, MN 55112 Block 11 Lot 11 SubdivisionCd 02803, SubdivisionName: Shorewood Hills NO. 2 1741 Venus Avenus, Arden Hill, MN 55112 608-770-9455 283023130045 Residential R-1 - Single Family Residential District Attachment A Page 2 of 3 Brief Description of Request (please also include a typed, detailed letter explaining the project): Filing & Information Requirements The City requests that you make a pre-application meeting with the City Planner to discuss the application process, requirements, and deadlines. Unless waived by the City Planner or Planning Commission, a certified survey of the property is required for all applications. A checklist with additional application requirements can be found at www.cityofardenhills.org/landuseapplications. Complete/Incomplete Applications Under Minnesota Statute, Chapter 15.99, cities have 15 business days to review all plans and application materials to ensure they satisfy City requirements. During the 15 day review period, planning staff will provide written comments on the application and may request plan revisions. If the application is determined to be complete, Minnesota State Statute then requires the City to approve or deny the application within 60 days, up to 120 days. If not complete, the City may require plan revisions and/or additional information before the application is scheduled for Planning Commission review and/or City Council action. Project will not be scheduled for any meeting until the application submittal is found to be complete by the City Planner. Payment of Fees and Escrows The undersigned acknowledges that she/he understands that before a land use application can be deemed complete, all required fees and escrows must be paid to the City. The applicant is responsible for all costs incurred by the City related to the processing of this application. Each separate land use request shall be charged a separate administrative fee and escrow even if submitted on the same application. Costs expended in reviewing and processing an application will be charged against the cash escrow and credited to the City. Charges to the escrow may include planning and engineering staff time, City Attorney and consulting fees, and mailing costs. If, at any time, a required cash escrow is depleted to less than 20 percent of its original amount, the applicant shall deposit additional funds in the cash escrow account as determined by the City. The City may withhold final action on a land use application, withhold building permits, and/or rescind prior action until all fees have been paid. Unused portions of an escrow are returned to the applicant upon successful implementation of an approved plan. The escrow may be reduced or increased by the City Planner on a project by project basis. Notice of Meeting Attendance In order for the Planning Commission and the City Council to consider any application, the applicant or a designated representative must be present at the scheduled meeting. If not, the matter may be tabled until the next available agenda. *IMPORTANT* • Certain applications are subject to review and approval by the Rice Creek Watershed District. Contact RCWD directly at 763-398-3070 for additional information. • The land use application fees do not cover building, sign, or other permit fees that may be required upon approval of a land use application. • All applications will be subject to additional fees for reimbursement of consultant costs associated with filing, reviewing, and processing of application in the form of an escrow to the City. We are seeking approval of our plan to replace the deck in the front of our house. Proposed design is reasonable, as it allows us to access our front door that is 52" above grade, and is replacing a similar structure original to the house. The circumstance requiring the deck is the recessed area in our front yard that has existed since the original construction of the house, well before we owned it. Both the existing and proposed decks are within the character of the neighborhood, as 7 of 16 houses on our street have front yard seating areas, several of which are decks. We are seeking approval of our plan to replace the deck in the front of our house. Proposed design is reasonable, as it allows us to access our front door that is 52" above grade, and is replacing a similar structure original to the house. The circumstance requiring the deck is the recessed area in our front yard that has existed since the original construction of the house, well before we owned it. Both the existing and proposed decks are within the character of the neighborhood, as 7 of 16 houses on our street have front yard seating areas, several of which are decks. Page 3 of 3 Meeting Schedule Planning Commission meetings are typically held on the first Wednesday after the first Monday of each month at 6:30 PM, though please contact City Hall to verify the meeting date and time. City Council meetings are held typically the last Monday of the same month at 7:00 PM. Meetings are held in the Council Chambers at the City of Arden Hills, 1245 West Highway 96, Arden Hills, Minnesota 55112, unless otherwise stated. The schedules below are for reference purposes only. Project will not be scheduled for any meeting until the application submittal is found to be complete by the City Planner. 2019 Planning Commission and City Council Schedule (*subject to change) TENTATIVE PLANNING COMMISSION MEETING DATE* (Generally held on the first Wednesday after the first Monday at 6:30 p.m.) TENTATIVE CITY COUNCIL MEETING DATE* (Generally held on the fourth Monday at 7:00 p.m.) January 8 January 27 February 5 February 24 March 4 March 23 April 8 April 27 May 6 May 25 June 3 June 22 July 8 July 27 August 5 August 24 September 9 September 28 October 7 October 26 November 11 November 23 December 9 January 11 (2021) January 6 (2021) January 25 (2021) Acknowledgement and Signature I hereby apply for the above consideration and declare that the information and materials submitted with this application are complete and accurate per city code and ordinance requirements. I fully understand that I am responsible for all costs incurred by the City related to the processing of this application. __________________________________________________ ________________ Property Owner Signature (Required) Date ________________________________________________ ________________ Applicant Signature (If different than the property owner) Date Please contact the City Planner at 651-792-7800 if you have any questions regarding this application. Additional copies of this application form are available on the City’s website: www.cityofardenhills.org/landuseapplications Disclaimer: This map is intended for reference purposes only and is not a legally recorded map or survey. The City of Arden Hills shall not be liable for any damages or claims that arise due to accuracy,availability, use or misuse of the information herein pursuant to MNStatute 466.03 Subd 21. Location Map Glenview Avenue Venus Avenue County Road E 2 W e stDellview AvenueLakeview CourtFairview Avenue North± City of Shoreview Subject Parcel Attachment B Dear Mr. Mrosla, Community Development Manager/City Planner, Please consider this attachment to our Land Use Application containing a detailed explanation of our plan to replace the deck in the front of our house. Our proposed plan largely follows the current structure, which is original to the house. This deck is an essential feature of the house, as it provides the only access to our front door. The plan does not extend any farther toward the lot boundary than the current deck and adjoining stone stairs, nor is it any higher than the current deck. Our plan has increased the area in front of our front door to make the front door more accessible and to create a space in the front or our house for neighborly engagement. It has also removed a section to the west of the front door. Our house was designed and built by the previous owner, who is an architect. The home has architectural details that are part of what drew us to the home (along with the neighborhood and city). One of these details is the deck (and “bridge”) in the front over the sunken courtyard. We would like to maintain this original design intent of the deck while making it more structurally sound and more functional. The reasons the deck needs to be replaced are as follows: • The current structure is original to the house and some of the decking is failing due to rotting wood after over 50 years in service. • Some of the current support structure is not up to current standards for newly built decks. • The current decking is 2X4 lumber which is not commonly used for decking anymore. Modern decking material are thinner and require closer joist spacing. • The small area around the front door makes it difficult to maneuver in around the out-swung door. The reasons for the proposed design are as follows: • We want to maintain the design intent and feel of the original house plan. • Maintain the recessed “courtyard” that is original to the lot and house design. • Promote neighborhood engagement by creating an inviting front-porch atmosphere. • Improve functionality of the deck without substantially altering the original intent of the house plan. • No part of the proposed design of the deck, including the “Bridge” section and adjoining steps will extend beyond the current location of the end of the bridge and adjoining wooden and stone steps. • The new design would improve sight lines through the area by reducing visual size of deck because of the more open railing system. • The new design would use sustainable recycled decking material. (Current decking is 2X4 which is no longer standard and is not available in recycled material). • Incorporate into an updated landscape design that also replaces the failing flag stone wall. • Overall landscape design will replace some sections of grass with mulch and native, pollinator- friendly plantings and new trees. The Impacts of the design change are as follows: • The proposed design does not extend any further toward the properly line than the current structure of the “bridge” and the adjoining wooden and stone stairs. • The height of the proposed structure will be the same as the current structure. The height of the deck above the grade of the adjacent driveway near the house is only about 10 inches. The height of the deck above the grade immediately below it is due to the recessed “courtyard”. • The change in railing should improve sight lines, as the existing railing system is very "opaque" and boxy feeling. $WWDFKPHQW& The proposed design satisfies the three requirements of the variance procedure that we were told apply to our situation: • The proposed deck is a reasonable use of the land, as it is required to access our front door (which is 52” above grade), and it is replacing a substantially similar structure that is original to the house. Expanding the deck around the door and maintaining the “bridge” that extends from the front door towards the street will also improve access for emergency responders, creating more room to maneuver around the front entry and preserving straight line entry to that area. • The front door elevation 52” above grade creates a unique circumstance that was not of our creation and requires some sort of structure to reach the front door. The grade and existing deck are original to the house. Therefore, this unique condition existed well before we owned the house. While the front door is slightly above street grade, the general slope of the yard is downward away from the street, with the rear property line approximately 7 feet below street grade. Additionally, there are two large trees that are much older than the house, whose bases are at a similar level to the grade below the front door, indicating that this grade likely existed prior to the house being built. • The proposed deck will not alter the essential character of the neighborhood. It is substantially similar the current deck that is original to the house. Our house was built in 1963, in the same time period as others on our street, so its original design is inherently part of the character of the neighborhood. Currently, 7 of 16 houses on our block of Venus avenue have front yard seating areas, 4 of which are decks. There are many more on the remainder of Venus Avenue and throughout the rest of larger neighborhood. Additionally, when we moved into the house, we learned that many neighbors referred to our house fondly as “the bridge house”. I have added three renderings of the proposed design below for your reference. I have also added two photos of our house illustrating the “bridge”, “courtyard”, and the height of the deck relative to the street level (Note: In the photos, most of our previously existing plantings have been removed.). The post for the bird feeder indicates approximately where the corner of the proposed deck would be. Finally, I have attached the plan that we had discussed earlier to the email as well, for your reference. We thank you for your consideration of this variance proposal and look forward to hearing from you. Please let us know if you have any questions. We can be contacted via email or by phone at 608-770-9455. Sincerely, Will Tourdot and Jennifer Granick. City of Arden Hills Planning Commission Meeting for May 6th, 2020 P:\Planning\Planning Cases\2020\20-004 1741 Venus Avenue Tourdot Variance\Memos Reports Page 1 of 8 MEMORANDUM DATE: May 6th, 2020 PC Agenda Item 3.B TO: Planning Commission Chair and Commissioners FROM: Joe Hartmann, Associate Planner SUBJECT: Planning Case #20-004 – No Public Hearing Required Applicant: William Tourdot and Jennifer Granick Property Location: 1741 Venus Avenue Request: Variance Requested Action William Tourdot and Jennifer Granick (“Applicants”) have requested a variance in order to construct a replacement deck in the front yard of their single-family detached dwelling located at 1741 Venus Avenue (“Subject Property”). Background 1. Overview of Request The Applicants are requesting a variance to replace a deck in the front yard of their single-family detached dwelling on the Subject Property that also serves as the front door entrance to the house given the unique topography of the parcel. The front yard property line is 40 feet from the house and thus the proposed deck is 28 feet from the property line. The Subject Property is zoned R-1, Single Residential District and is guided as Low Density Residential on the land use plan. The Applicants are proposing to replace the design instead of repairing the current structure. According to the Applicants’ narrative submitted as a part of their application, the proposed plan is to replace the deck and walkway which is original to the house. The decking is failing due to rotting wood after over 50 years in service and some of the current two-by-four support structure is not up to current state building code standards for decks. $WWDFKPHQW' City of Arden Hills Planning Commission Meeting for May 6th, 2020 P:\Planning\Planning Cases\2020\20-004 1741 Venus Avenue Tourdot Variance\Memos Reports Page 2 of 8 The Applicants argue that the deck is an essential feature of the house, as it provides the only access to the front door and the plan they propose does not extend any farther toward the front lot line than the current deck and adjoining stone stairs, nor is the proposed deck any higher than the current deck, which would preserve neighborhood character. The proposal also removes a section of the deck to the west of the front door which partially blocks of the egress window on the ground level. The Applicants’ plan increases the area in front of the front door to make the front door more accessible and to create a space in the front of the house they argue will support neighborly engagement. The Planning Commission is being asked to determine if a variance request for flexibility with the front setback requirement should be approved for the deck and “bridge” walkway. The sketches that have been submitted show that the replacement walkway would be the same size and length as the current walkway, but the replacement deck would exceed the area of the deck currently in place. The Applicant could replace the deck with a new deck of the same size without a variance, but they are asking for a variance to build a larger deck than would be allowed by code. The evaluation of the proposal should be based on the District Provisions in Section 1320 and the Requirements for a Variance in Section 1355.04, Subd. 4. Plan Evaluation Chapter 13, Zoning Regulations Review 1.District Provisions (R-1 Single Family Residential District) – Section 1320.06 Lot Size and Dimensions The Subject Property does not meet the minimum lot size and length requirements for the R-1 District's 14,000 square foot minimum lot size or the 130 foot long dimension requirements. Overall, the Subject Property is 12,500 square feet or 0.29 acres in size and only 120 feet long, which makes it a nonconforming parcel. City of Arden Hills Planning Commission Meeting for May 6th, 2020 P:\Planning\Planning Cases\2020\20-004 1741 Venus Avenue Tourdot Variance\Memos Reports Page 3 of 8 Structure Setbacks - Flexibility Requested In the R-1 District, the minimum front and rear setback requirements for a property are forty (40) feet and thirty (30) feet, respectively. The minimum side yard setback is ten (10) feet and the combined side yard setbacks should total twenty-five (25) feet or more. As previously stated, the Applicant is requesting flexibility to encroach into the front yard setback for the deck walkway. Otherwise, the proposed development would meet setback requirements for the R-1 district. If granted a variance for flexibility with the front setback, the Applicant’s proposal would meet all other district provisions for building structures. City Code Section 1325.03 Subd. 2 establishes that certain parts of the principle structure are permitted to encroachment on setbacks as long as they meet certain criteria. This code section reads that: “Decks, uncovered porches, ramps, and steps may extend six (6) feet into the required front, side, and rear setbacks but in no case shall these encroachments be less than six (6) feet from any lot line.” The replacement deck that the Applicants are requesting is larger than the previous deck.. The previous deck was a landing approximately 4 feet wide that ran along the front façade of the house, which would be permitted by City Code Section 1325.03 Subd. 2 without the need for a variance. The proposed replacement would extend twelve (12) feet out from the front façade of the house, but would not extend as far west as the current deck does. The Applicants have cited in their narrative provided as a part of their application that the height of the proposed structure will be the same as the current structure. The height of the deck above the grade of the adjacent driveway near the house would only be about 10 inches above the due to the recessed “courtyard”, which matches the height of the existing deck. City of Arden Hills Planning Commission Meeting for May 6th, 2020 P:\Planning\Planning Cases\2020\20-004 1741 Venus Avenue Tourdot Variance\Memos Reports Page 4 of 8 The walkway that the Applicants are proposing would extend from the front of the deck towards the front property line by 16 feet. As a part of their request, the Applicants are requesting a combined 28 foot encroachment into the front yard for the proposed deck and walkway. The proposed walkway is a replacement of an existing walkway that pre-dates the zoning code. However this walkway is necessary because it serves as the primary means of egress for the front door of the house. Lot Characteristics - Topography The Subject Property has a unique topography with the elevation of the front yard sloping downward at a steep angle. The front courtyard is essentially a basin with the walkway of the deck serving as the primary means of egress for the property as shown in the pictures above. This basin was dug out by the previous owner when the property was built. In addition, the previous property owner added windows that look out into the courtyard that provides natural lighting into the basement as shown below. City of Arden Hills Planning Commission Meeting for May 6th, 2020 P:\Planning\Planning Cases\2020\20-004 1741 Venus Avenue Tourdot Variance\Memos Reports Page 5 of 8 The Applicants cite the sunken courtyard in the front of their property fits into the character of the neighborhood because it has been a longstanding feature of the neighborhood and predates their purchase of the house. Landscaping The Applicants are not proposing to remove any significant trees from the site, but have provided an outline of additional plantings and landscaping that they feel would accent the proposed deck and walkway and make the property better blend into the character of the neighborhood. There are no tree replacements required for this property under the Tree Preservation Ordinance 1325.055 and the proposed hardscape would not exceed the maximum impervious surface coverage allowed under City Code Section 1330.03. 2. Variance Review The role of the Planning Commission is to determine and consider how the facts presented to them compare with the city’s articulated standards. The Commission should base their decision on the facts presented and then apply those facts to the legal standards contained in city ordinances and relevant state law. Neighborhood opinion alone is not a valid basis for granting or denying a variance request. While the Planning Commission may feel their decision should reflect the overall will of the residents, the task in considering a variance request is limited to evaluating how the variance application meets the statutory practical difficulties factors. Residents can often provide important facts that may help in addressing these factors, however, unsubstantiated opinions and reactions to a request do not form a legitimate basis for a variance decision. The Planning Commission may impose conditions when granting variances as long as the conditions are directly related and bear a rough proportionality to the impact created by the variance. For instance, if a variance is granted to exceed the front setback limit, any conditions attached should presumably relate to mitigating the effect of the encroachment. 3. Variance Requirements – Section 1355.04, Subd. 4 The Applicant requests a variance to construct a replacement deck on the front of their residential dwelling unit that would encroach into the front yard setback by 12 feet and a walkway that bridges the span of the sunken front yard by an additional 16 feet. The Planning Commission will need to make a determination utilizing the following variance findings and criteria on whether there are practical difficulties with complying with the zoning regulations. If the applicant does not meet all the factors of the statutory test, then a variance should not be granted. Variances are only permitted when they are in harmony with the general purposes and intent of the ordinance. 1. Purpose and Intent. The variance request shall comply with the purpose and intent of the provisions of the City’s Zoning Regulations and with the policies of the City’s Comprehensive Plan. The variance request for 1741 Venus Avenue is consistent with the purpose and intent of the R-2 Zoning District and with the policies within the City’s Comprehensive Plan. 2. Practical Difficulties. The Applicant for a variance shall establish that there are practical difficulties in complying with the provisions of the Arden Hills Zoning Regulations. The term “Practical Difficulties” as used in the granting of a variance means: City of Arden Hills Planning Commission Meeting for May 6th, 2020 P:\Planning\Planning Cases\2020\20-004 1741 Venus Avenue Tourdot Variance\Memos Reports Page 6 of 8 a. Reasonable Use. The property owner proposes to use the property in a reasonable manner not permitted by the Zoning Ordinance. A deck for a single family home is a reasonable use of the Subject Property in the R-1 Zoning District. The walkway is necessary as the means of egress out the front door. b. Unique Circumstances. The plight of the property owner is due to circumstances unique to the property not created by the landowner. According to the Applicants’ application, the sunken topography of the front yard is unique to the property 1741 Venus Avenue as well as the nonconforming nature of the lot’s size and length. The previous owner designed and landscaped the front yard for aesthetic reasons prior to the adoption of the zoning code. c. Character of Neighborhood. The variance, if granted, will not alter the essential character of the neighborhood. According to the Applicants’ application, the existing neighborhood has homes with a variety of different front yard decks, porches, and patios and the proposed variance will not alter the character of the neighborhood. The sunken courtyard has been a neighborhood feature for many years. 3. Economic Consideration. Economic consideration alone does not constitute a practical difficulty. The proposed variance is not based on economic consideration. 4. Access to Sunlight. Inadequate access to direct sunlight for solar energy systems shall be considered a practical difficulty. A solar energy system is not proposed. Findings of Fact The Planning Commission must make a finding as to whether or not the proposed application would adversely affect the surrounding neighborhood or the community as a whole based on the aforementioned factors. Staff offers the following findings for consideration: General Findings: 1. City Staff received a land use application for a request to build a replacement deck for a single family dwelling at the Subject Property 1741 Venus Avenue. 2. A deck on a single-family detached dwelling is a permitted use in the R-1 district. 3. The proposed walkway is necessary as the means of egress out the front door of the house. 4. The Subject Property is non-conforming with the R-1 districts standards for minimum lot length and area requirements. 5. The Subject Property is also nonconforming for topography due to the sunken elevation of the front yard. City of Arden Hills Planning Commission Meeting for May 6th, 2020 P:\Planning\Planning Cases\2020\20-004 1741 Venus Avenue Tourdot Variance\Memos Reports Page 7 of 8 6. The proposed deck and walkway would encroach into the front yard setback a combined 28 feet. 7. The proposed development of the subject parcel would conform to all other requirements and standards of the R-1district. 8. A variance may be granted if enforcement of a provision in the zoning ordinance would cause the landowner practical difficulties. 9. Variances are only permitted when they are in harmony with the general purposes and intent of the ordinance. Additional Review Residential Building Inspector The Residential Building Inspector has reviewed the plans and has no additional comments at this time. A Building Permit will be required prior to construction. Engineering Staff Engineering Staff reviewed the proposal and asked that the Applicants consider amending the landscaping proposed in the right-of-way. In the event Public Works staff needs to do necessary maintenance within the right-of-way, the proposed landscaping could be removed. Options and Motion Language Staff has provided the following options and motion language for this case. The Planning Commission should consider providing additional findings of fact as part of the motion to support their recommendation for approval or denial. • Recommend Approval with Conditions: Motion to recommend approval of Planning Case 20-004 for a Variance at 1741 Venus Avenue, based on the findings of fact and the submitted plans, as amended by the conditions below: 1. Prior to issuance of a Building Permit, engineering department staff shall review a revised landscaping plan to ensure no impacts to the right-of-way. 2. A Building Permit shall be issued prior to commencement of construction. 3. The proposed building shall conform to all other standards and regulations in the City Code. • Recommend Approval as Submitted: Motion to recommend approval of Planning Case 20- 004 for a Variance at 1741 Venus Avenue, based on the findings of fact and the submitted materials. • Recommend Denial: Motion to recommend denial Planning Case 20-004 for a Variance at 1741 Venus Avenue, based on the following findings: findings to deny should specifically reference the reasons for denial and why those reasons cannot be mitigated. • Table: Motion to table Planning Case 20-004 for a Variance at 1741 Venus Avenue: a specific reason and information request should be included with a motion to table. City of Arden Hills Planning Commission Meeting for May 6th, 2020 P:\Planning\Planning Cases\2020\20-004 1741 Venus Avenue Tourdot Variance\Memos Reports Page 8 of 8 Notice Although a variance does not require a public hearing, a public meeting notice was prepared by the City and mailed to properties within 500 feet of the Subject Property. Minnesota statute does not clearly require a public hearing before a variance is granted or denied, however, after consulting with the City Attorney, staff agree that the best practice is to allow public forum on all variance requests. A public forum allows the city to establish a record and elicit facts to help determine if the application meets the practical difficulties factors. Public Comments As of May 1, 2020 staff has received three (3) written comments in regards to this proposal (Attachment D). The written comments were in support of the proposed variance. Deadline for Agency Actions The City of Arden Hills received the completed application for this request on April 24th, 2020. Pursuant to Minnesota State Statute, the City must act on this request by June 23rd, 2020 (60 days), unless the City provides the petitioner with written reasons for an additional 60-day review period. With consent of the Applicant, the City may extend the review period beyond the initial 120 days. Attachments A. Land Use Application B. Location Map C. Variance Request Letter D. Comments Received From: To:AH Planning Subject:William Tourdot and Jennifer Granick variance Date:Friday, April 24, 2020 4:09:08 PM Caution: This email originated outside our organization; please use caution. Hello, I live on the same block. We have some other neighbors that have patios and small decks on the front of their houses. I think the variance to their existing deck would look nice. To have decks and patios on the front of the houses creates a neighborly feeling like older houses with porches on the front. Sincerely, Karrie and Matt Holz Attachment E From:Margaret To:Joseph Hartmann Subject:Re: PC# 20-004: 1471 Venus Ave Variance Request Date:Friday, April 24, 2020 1:37:55 PM Caution: This email originated outside our organization; please use caution. Thanks Joe - I walk by the house frequently so I know what address you are referring to. Margaret Thor Sent from my iPad > On Apr 24, 2020, at 1:22 PM, Joseph Hartmann <JHartmann@cityofardenhills.org> wrote: > > Thank you for your comment. We will add your comment to the report submitted to the Planning Commission. And just to be clear, the address where the variance is being requested is 1741 Venus Avenue, which is the Tourdot residence. I apologize for the error. It was printed incorrectly on your letter. > > Joe Hartmann > Associate Planner > 1245 West Highway 96 | Arden Hills, MN 55112 > 651-792-7810 direct |651-792-7800 main | > > > -----Original Message----- > From: Margaret <margaretcthor@gmail.com> > Sent: Friday, April 24, 2020 1:11 PM > To: Joseph Hartmann <JHartmann@cityofardenhills.org> > Subject: PC# 20-004: 1471 Venus Ave Variance Request > > Caution: This email originated outside our organization; please use caution. > > > >> Joe and Fran - thanks for the notification. The variance request is very reasonable and carefully thought out. It will add beauty and neighborliness to our neighborhood. I vote that the variance be approved. >> >> Margaret Thor >>1707 Glenview Ave >> >> Sent from my iPad From: To:AH Planning Subject:PC# 20-004: 1741 Venus Ave Variance Request Date:Tuesday, April 28, 2020 3:53:34 PM Caution: This email originated outside our organization; please use caution. Hi Joe, We live near Will and Jen and fully support their request to replace their existing from decking system. I would ask the Planning Commission please grant them the variance. Best Regard, Rob Merrill From:Yonke, Scott To:Joseph Hartmann Subject:PC#20-004: City of Arden Hills Variance Req Date:Wednesday, April 29, 2020 2:09:31 PM Caution: This email originated outside our organization; please use caution. Hi Joe, Ramsey County Parks and Recreation does not have any objections to the variance request. Scott Yonke, PLA | Director of Planning and Development Ramsey County Parks and Recreation Department 2015 Van Dyke Street Maplewood, MN 55109-3796 DD: 651-363-3786 www.co.ramsey.mn.us DRAFTApproved: CITY OF ARDEN HILLS, MINNESOTA PLANNING COMMISSION WEDNESDAY, MAY 6, 2020 6:30 P.M. - ARDEN HILLS CITY HALL CALL TO ORDER/ROLL CALL Pursuant to due call and notice thereof, Chair Nick Gehrig called to order the regular Planning Commission meeting at 6:30 p.m. ROLL CALL Present were: Chair Nick Gehrig, Commissioners Marcie Jefferys, Steven Jones, James Lambeth, Subbaya Subramanian, Paul Vijums, and Jonathan Wicklund. Excused Absences: Commissioners Kurtis Weber Also present were:Community Development Manager Mike Mrosla, Associate Planner Joe Hartmann, Councilmember Steve Scott, and Planning Commission Alternate Clayton Zimmerman. APPROVAL OF AGENDA – MAY 6, 2020 Chair Gehrig stated the agenda will stand as amended changing Planning Case 3B to Planning Case 20-004. APPROVAL OF MINUTES April 15, 2020 – Planning Commission Regular Meeting Commissioner Lambeth moved, seconded by Commissioner Jefferys, to approve the April 15, 2020, Planning Commission Regular Meeting as presented. A roll call vote was taken. The motion carried unanimously (7-0). PLANNING CASES A.Planning Case 20-008; 3244 Sandeen Road – Variance Request – No Public Hearing Required Associate Planner Hartmann stated the Applicants are requesting a variance to increase the FAR of their single-family detached dwelling on the Subject Property from 0.30 to 0.34. The $WWDFKPHQW) DRAFTARDEN HILLS PLANNING COMMISSION – May 6, 2020 2 Applicants were previously approved for a front yard setback variance at the January 27th 2020 City Council meeting. The Subject Property is currently a vacant lot, zoned R-2, Single and Two Family Residential District, and is guided as Low Density Residential on the land use plan. Associate Planner Hartmann reported according to the Applicants’ narrative submitted as a part of their application, the home has been designed in such a way that it can capture the additional 396 sq. ft. that the Applicant requests without changing the envelope or appearance of the home from the exterior; which could be built by right. The Applicants are requesting to incorporate more livable space above the garage and in the basement. The proposed spaces would be otherwise used for storage and would meet applicable building codes to not be included within the FAR Calculation. Without the variance the space above the garage would be accessible from the garage via a drop down stair. There will no changes required to the exterior of the property to meet their request for a greater FAR. Associate Planner Hartmann explained the Planning Commission is being asked to determine if a variance request for flexibility with the FAR requirement should be approved. The sketches that have been submitted show that the extra livable space would be wholly within the principle structure. The evaluation of the proposal should be based on the District Provisions in Section 1320 and the Requirements for a Variance in Section 1355.04, Subd. 4. Associate Planner Hartmann reviewed the surrounding area, the Plan Evaluation and provided the Findings of Fact for review: 1. City Staff received a land use application for a variance request to increase the allowable FAR on a single family dwelling at the Subject Property 3244 Sandeen Road. 2. A single-family detached dwelling is a permitted use in the R-2 district. 3. The Subject Property is non-conforming with the R-2 districts standards for minimum lot width and area requirements. 4. The proposed additional floor area would be below grade and wholly within the principal structure of the house. 5. The proposed development of the subject parcel would conform to all other requirements and standards of the R-2 district. 6. A variance may be granted if enforcement of a provision in the zoning ordinance would cause the landowner practical difficulties. 7. Variances are only permitted when they are in harmony with the general purposes and intent of the ordinance. Associate Planner Hartmann stated staff recommends approval of Planning Case 20-008 for a Variance at 3244 Sandeen Road, based on the findings of fact and the submitted plans, as amended by the conditions below: 1. A Building Permit shall be issued prior to commencement of construction. 2. The proposed building shall conform to all other standards and regulations in the City Code. Associate Planner Hartmann reviewed the options available to the Planning Commission on this matter: DRAFTARDEN HILLS PLANNING COMMISSION – May 6, 2020 3 1. Recommend Approval with Conditions 2. Recommend Approval as Submitted 3. Recommend Denial 4. Table Chair Gehrig opened the floor to Commissioner comments. Commissioner Jefferys asked if the City has previously approved a FAR request over .3 in the past. Community Development Manager/City Planner Mrosla stated it was his understanding the City has received one other request for a FAR variance and this was for another unique lot. He explained the majority of lots in the City meet all zoning requirements, but older lakefront lots were unique. Commissioner Jefferys questioned if an architect would be aware of the City’s FAR requirements. Community Development Manager/City Planner Mrosla deferred this question to the architect. Andrew Peterson, architect for the Applicants, explained he understood the requirements ahead of time. However, he stated it took time to lay out the space and to fully understand how the Applicants would want the building to be laid out. Commissioner Jones commented on the Met Council information that was provided to the Commission. He supported the City reviewing how FAR was measured. He noted this was the third time this home has been before the Commission. He inquired if the Applicants were planning to raise the floor in the basement while also adding space above the garage. Mr. Peterson explained this was a new construction home and the house has been designed with flexibility to where additional space could be captured. He indicated the space above the garage and in the lower level could accommodate the therapy room. He reported if the FAR variance was not approved, he would need to revise the plans. Commissioner Jones questioned if the .34 FAR included both the basement and space above the garage. Mr. Peterson stated nothing has been approved yet. He commented in the lower level the floor would be raised for a crawl space. He indicated the exterior envelope of the home would not be altered if the FAR variance was not approved. He described how the home was built into a hillside and a portion would be useable space and the remainder would be crawl space. He reported the crawl space had to not be livable space because of the City’s FAR requirements. Commissioner Lambeth commented on the information that was provided to the Commission in November of 2019. He asked what the lot size was for this property noting there were three different numbers included in the materials. He discussed the history of this Planning Case noting the previous requests from the Applicants. He understood the Applicants were requesting extra DRAFTARDEN HILLS PLANNING COMMISSION – May 6, 2020 4 space for special needs programming for their child, but indicated the Applicants were now requesting even more space than was previously approved on a 9,400 square foot lot. He stated the Applicants were proposing to increase the FAR from .36 to .4. He explained the new plan includes some questionable data. He reviewed the lot area numbers further and expressed concerns that the facts were a moving target. He questioned why the City would assign an FAR calculation to this lot that does not meet the square footage minimums of the zoning requirements. Associate Planner Hartmann referenced the packet from November and noted a different architect had provided the City with those FAR numbers. He noted the size of the lot was estimated to be 9,400 square feet. He reported the current Applicant has gone with a different architect and a certified survey of the lot was provided to the City stating the lot was 9,900 square feet in size. He reported this number was more accurate than the previous information taken from an aerial photo. Commissioner Lambeth stated it was important for the City to have a clear lot size in order to have this number as the denominator for the FAR equation. He feared that at this time the City had three or four numbers out there. Associate Planner Hartmann clarified the correct and most accurate number was 9,900 square feet based on the certified survey. Further discussion ensued regarding the change in the plans. Commissioner Lambeth expressed concern with the fact revised, detailed plans had not been provided to the Planning Commission. Mr. Peterson commented a simple plan diagram had been provided to staff detailing the locations of the two spots where additional space would be used if the FAR variance were approved. He explained elevations had been provided to staff. Commissioner Lambeth stated it was concerning that this information was not provided to the Commission. He reported the Commission was running blind and had no actual revised drawings to review. Community Development Manager/City Planner Mrosla apologized for not having this information in the presentation. He noted he just received the information from the architect via email this afternoon. He stated the diagram shows the additional FAR was in the basement and above the garage. He explained if the FAR variance was not approved by the Commission these spaces would remain storage. Commissioner Lambeth asked if the change was to move the rehabilitation space to above the garage. Community Development Manager/City Planner Mrosla reported the plans before the Commission were different from the previous plans. DRAFTARDEN HILLS PLANNING COMMISSION – May 6, 2020 5 Commissioner Lambeth questioned if there was any finished area adjacent to the garage in the lowest level. Mr. Peterson explained there was a very small amount of finished square footage on the entry level which would act as an entry/mudroom and houses stairs to go up to the main level, along with a mechanical room. Commissioner Vijums asked how basements that don’t meet minimum ceiling height was considered within the FAR requirements. Associate Planner Hartmann discussed the Minnesota State Building Code Requirements. He reported the minimum was seven feet. Commissioner Vijums questioned if the crawl space was less than seven feet. Community Development Manager/City Planner Mrosla stated according to the applicant this was correct. Commissioner Vijums inquired where the therapy room would be located. Mr. Peterson indicated the occupational therapy room would be located either above the garage or in the lower level. He stated his clients have yet to make this decision. It was noted the exterior of the building would not change if this space were used for occupational therapy. Chair Gehrig reported this Planning Case does not require a Public Hearing. However, he opened the meeting for public comments. Steven Campbell, 3248 Sandeen Road, stated he lives adjacent to the property in question. He noted he submitted a letter on behalf of the residents in the neighborhood that have concerns about the property. He explained he attended the previous Planning Commission meetings. He indicated this was a unique lot that was non-conforming. He stated he had concerns with how the FAR was being calculated. He expressed concern with the fact he has not been given information from the City when it has been requested. He reported the proposed home was much too large for the size of the property and he recommended the Planning Commission deny the variance request. Jim Day, 3242 Sandeen Road, stated he lived south of the property in question. He discussed State Code and reported in order for basement space to not be counted as livable it had to be under six feet in height. He believed the square footage on the proposed home was too high. He was of the opinion a variance was not justified simply because the applicant had not changed the envelope of the home. He indicated the proposed home would be three stories from the street and reported all other homes on Sandeen Road were one or two stories. He stated the proposed home would be inconsistent with the character of the neighborhood. He recommended the Planning Commission deny the variance request. Commissioner Zimmerman stated he was listening to the meeting as an alternate. DRAFTARDEN HILLS PLANNING COMMISSION – May 6, 2020 6 Richard Priore, applicant, explained the house as presented meet all City Code requirements. He indicated he could build this home tomorrow without needing a variance. However, because he was requesting additional space for a therapy room, he needed to come before the Planning Commission. He questioned why the neighbors were struggling with the additional space given the fact the envelope of the home would not change. He understood the neighbors wanted to preserve the neighborhood, but stated he would be dramatically improving the lot. He explained the height of the house was within City Code. He stated he was having a hard time understanding why the neighbors were objecting to the project when the home would be built per the plans whether or not the FAR was approved. Chair Gehrig thanked the public for their comments and brought the discussion back to the Planning Commissioners. Chair Gehrig explained the request before the Commission was for a FAR variance. He reported the home itself did not require any variances to City Code. He stated because the exterior footprint of the home would not be increased and because the additional space was for a good use, he supported the proposed request. Commissioner Jones agreed with Chair Gehrig and reiterated that the structure itself required no variances to City Code. Commissioner Jefferys explained she had concerns with the fact the home plans were of a new design. She indicated if the home had been built with a .3 FAR it would have a smaller envelope and would not have the capacity for the therapy room. Chair Gehrig reported the home could be built per the plans today and the extra spaces could be used as storage. However, the applicant was asking to convert the space into useable space in order to provide a therapy room for their special needs son. Commissioner Wicklund stated he supported the FAR increase. He believed this was a reasonable request and the lot was unique. He explained he could support the FAR increase because the essential character of the property would not be altered because the envelope meets City Code. Commissioner Lambeth reported he did not believe the Commission could review and approve this request because it did not have adequate information. He believed the Commission needed to be able to review a complete package that demonstrates compliance with all applicable State, County and local statutes and codes. Chair Gehrig indicated the Planning Commission’s scope was to review variances requests per City Code. He explained the Commission does not review every building request if there were no variance requests. Commissioner Lambeth stated he could support this variance in order to move forward but noted in doing this without the required documentation was a concern to him. Community Development Manager/City Planner Mrosla apologized to the Planning Commission for not including the house elevations within the packet. He noted this information DRAFTARDEN HILLS PLANNING COMMISSION – May 6, 2020 7 was included in the information that was emailed within the PowerPoint presentation. He stated if the Commission believes they need additional time to review the elevations the item could be tabled. Chair Gehrig thanked Commissioner Lambeth for clarifying the disconnect. He asked how the Commission would like to proceed. Commissioner Jones stated he supported moving the item forward. Commissioner Wicklund was in agreement. Commissioner Wicklund moved and Commissioner Jones seconded a motion to recommend approval of Planning Case 20-008 for a Variance at 3244 Sandeen Road based on the findings of fact and the submitted plans, as amended by the two (2) conditions in the May 6, 2020, report to the Planning Commission. Commissioner Lambeth stated he supported this project moving forward. However, he requested in the future that all variance requests include all information submitted by the applicant so the item can be properly considered by the Planning Commission. A roll call vote was taken. The motion carried unanimously (7-0). B. Planning Case 20-004; 1741 Venus Avenue – Variance Requested – No Public Hearing Required Associate Planner Hartmann stated the Applicants are requesting a variance to replace a deck in the front yard of their single-family detached dwelling on the Subject Property that also serves as the front door entrance to the house given the unique topography of the parcel. The front yard property line is 40 feet from the house and thus the proposed deck is 28 feet from the property line. The Subject Property is zoned R-1, Single Residential District and is guided as Low Density Residential on the land use plan. Associate Planner Hartmann reported the Applicants are proposing to replace the design instead of repairing the current structure. According to the Applicants’ narrative submitted as a part of their application, the proposed plan is to replace the deck and walkway which is original to the house. The decking is failing due to rotting wood after over 50 years in service and some of the current two-by-four support structure is not up to current state building code standards for decks. Associate Planner Hartmann explained the Applicants argue that the deck is an essential feature of the house, as it provides the only access to the front door and the plan they propose does not extend any farther toward the front lot line than the current deck and adjoining stone stairs, nor is the proposed deck any higher than the current deck, which would preserve neighborhood character. The proposal also removes a section of the deck to the west of the front door which partially blocks of the egress window on the ground level. The Applicants’ plan increases the area in front of the front door to make the front door more accessible and to create a space in the front of the house they argue will support neighborly engagement. DRAFTARDEN HILLS PLANNING COMMISSION – May 6, 2020 8 Associate Planner Hartmann commented the Planning Commission is being asked to determine if a variance request for flexibility with the front setback requirement should be approved for the deck and “bridge” walkway. The sketches that have been submitted show that the replacement walkway would be the same size and length as the current walkway, but the replacement deck would exceed the area of the deck currently in place. The Applicant could replace the deck with a new deck of the same size without a variance, but they are asking for a variance to build a larger deck than would be allowed by code. The evaluation of the proposal should be based on the District Provisions in Section 1320 and the Requirements for a Variance in Section 1355.04, Subd. 4. Associate Planner Hartmann reviewed the surrounding area, the Plan Evaluation and provided the Findings of Fact for review: 1. City Staff received a land use application for a request to build a replacement deck for a single family dwelling at the Subject Property 1741 Venus Avenue. 2. A deck on a single-family detached dwelling is a permitted use in the R-1 district. 3. The proposed walkway is necessary as the means of egress out the front door of the house. 4. The Subject Property is non-conforming with the R-1 districts standards for minimum lot length and area requirements. 5. The Subject Property is also nonconforming for topography due to the sunken elevation of the front yard. 6. The proposed deck and walkway would encroach into the front yard setback a combined 28 feet. 7. The proposed development of the subject parcel would conform to all other requirements and standards of the R-1district. 8. A variance may be granted if enforcement of a provision in the zoning ordinance would cause the landowner practical difficulties. 9. Variances are only permitted when they are in harmony with the general purposes and intent of the ordinance. Associate Planner Hartmann stated staff recommends approval of Planning Case 20-004 for a Variance at 1741 Venus Avenue, based on the findings of fact and the submitted plans, as amended by the conditions below: 1. Prior to issuance of a Building Permit, engineering department staff shall review a revised landscaping plan to ensure no impacts to the right-of-way. 2. A Building Permit shall be issued prior to commencement of construction. 3. The proposed building shall conform to all other standards and regulations in the City Code. Associate Planner Hartmann reviewed the options available to the Planning Commission on this matter: 1. Recommend Approval with Conditions 2. Recommend Approval as Submitted 3. Recommend Denial 4. Table DRAFTARDEN HILLS PLANNING COMMISSION – May 6, 2020 9 Chair Gehrig opened the floor to Commissioner comments. Commissioner Jones indicated this was a wonderful project. Commissioner Subramanian stated he appreciated the fact the neighbors were supportive. Commissioner Vijums asked if access to the egress windows below the deck would be hindered. Community Development Manager/City Planner Mrosla reported the far left egress window would be upgraded to meet egress and building code requirements. He stated the other windows would remain as is. Commissioner Wicklund questioned what the square footage of the deck was currently and asked what the square footage would be of the new deck. William Tourdot, 1741 Venus Avenue, reported proposed deck was 375 square feet, noting the deck would be 20’ by 12’ and would have a 17’ by 5’ bridge. He commented further on the egress windows in the basement and reported he was not required to replace the egress windows in the laundry room. Commissioner Wicklund asked why the deck was being proposed to come straight out from the house versus having the main entrance off the driveway. Mr. Tourdot reported this matches the existing deck and the neighbors know the house by this feature. In addition, this would provide access into the main entrance of the house. Commissioner Wicklund questioned if the City has approved any other variances for residents that want to put decks in the front yard. Community Development Manager/City Planner Mrosla reported there were not a whole lot of decks in front yards. He stated residents could place structures in the front yard so long as it does not exceed 30” in height and meets appropriate setbacks. He indicated once structures were above 30” railings were required, along with a permit. He explained this was a unique request given the topography of the lot and there was an existing deck. Chair Gehrig asked if this property had a backyard that supports a patio or deck. Community Development Manager/City Planner Mrosla stated the back of the home has a walkout entry with a patio. Chair Gehrig commented he was understanding of the existing sunk in front yard and structure in place with the bridge that extends to the front door. He understood that the existing structure was 50 years old and was in need of replacement. He stated he was struggling with the fact the replacement deck would exceed the requirements by double for the porch section. He questioned what about the parcel was unique that a deck should be built on the front of the house when there was space in the back of the home. DRAFTARDEN HILLS PLANNING COMMISSION – May 6, 2020 10 Mr. Tourdot indicated there were many homes in his neighborhood that had front porches and patios. Jennifer Granick, 1741 Venus Avenue, reported in her neighborhood there were a lot of front patios but because of the elevation of her home she could not have a patio. She discussed the topography of property and noted some of the new deck space would be used as a walkway into the home, which would be unusable space. She explained the deck would be used to visit with neighbors while kids were playing, which was consistent with the feel of the neighborhood. Chair Gehrig asked if the topography of this property was more traditional with a deck in the front, how far the deck could extend into the front yard setback. Community Development Manager/City Planner Mrosla stated per City Ordinance, decks and covered porches may extend six feet into the front and rear setback. Commissioner Lambeth requested further information on how the deck was supported and questioned what portions of the deck were failing. Mr. Tourdot reported the main portion of the deck that was failing was the bridge. He stated the bridge was canted to one side and the 2’x4’s on the walkway were becoming soft. He explained the existing deck structure could not be rebuilt as it was because it was cantilevered out from the house. He commented further about how the deck was supported by joists that were cantilevered out from the house, four feet on center. He discussed how construction of decks had changed in the past 50 years. Commissioner Lambeth reported 2’x4’s was not the typical material used for decks. He asked what the applicants would be using for deck material. Mr. Tourdot indicated he would be using recycled decking material. Commissioner Lambeth questioned what would happen to the cantilevered supports. Mr. Tourdot explained this would be addressed during the building permit phase but he anticipated a ledger would have to be installed in order to support the deck, along with posts and footings to support the joists. Commissioner Lambeth inquired what the scope of work would be for this project. Mr. Tourdot stated he was proposing to remove the existing deck and to build a new deck in the the front of his home. Chair Gehrig commented the variance request before the Commission was for the size of the structure. He reported the scope of the building materials was not under consideration and would be reviewed by staff through the building permit process. Commissioner Lambeth indicated what he was trying to get at was that the applicant was proposing to build a maintenance free deck that would last for some time into the future. DRAFTARDEN HILLS PLANNING COMMISSION – May 6, 2020 11 Commissioner Vijums explained he was constructing a deck at his cabin. He commented further on the building requirements and anticipated the proposed deck would last 50+ years. Commissioner Jones discussed the cantilevered decks he had built and stated he supported the project as proposed. Chair Gehrig agreed this was a fantastic project but stated he was struggling with the three factor test. He understood this was a unique parcel but stated City Code did not allow people to put large decks on the front of their home. For this reason, he would rather see a porch structure built within the six foot requirement. Commissioner Jones moved and Commissioner Vijums seconded a motion to recommend approval of Planning Case 20-004 for a Variance at 1741 Venus Avenue based on the findings of fact and the submitted plans, as amended by the three (3) conditions in the May 6, 2020, report to the Planning Commission. A roll call vote was taken. The motion carried 4-2 (Commissioner Jefferys and Chair Gehrig opposed). Commissioner Lambeth lost his connection to the meeting prior to the vote, but subsequently informed staff that his intent was to vote aye. UNFINISHED AND NEW BUSINESS None. REPORTS A. Report from the City Council Councilmember Scott provided the Commission with an update from the City Council. He explained the City Council was meeting virtually due to COVID-19. He reported the Council appointed two new members to the PTRC in April. He indicated a feasibility report was ordered for the 2021 Pavement Management Plan and approved an agreement for the Karth Lake runoff control project. He stated the first quarter financials were also approved. He reported construction continues for the 34th Infantry headquarters was progressing and would have a grand opening later this summer. He explained a national grocer was interested in moving into the Pace building. He noted the City Council had canceled all summer park and recreation programs due to the COVID-19 crisis. B. Planning Commission Comments and Requests None. ADJOURN Commissioner Jones moved, seconded by Commissioner Jefferys, to adjourn the May 6, 2020, Planning Commission Meeting at 8:35 p.m. A roll call vote was taken. The motion carried unanimously (6-0, Commissioner Lambeth was not available for the vote.) CITY OF ARDEN HILLS COUNTY OF RAMSEY STATE OF MINNESOTA RESOLUTION NO. 2020-023 RESOLUTION APPROVING A VARIANCE FOR THE SUBJECT PROPERTY 1741 VENUS AVENUE WHEREAS, City Staff received a land use application for a variance request to build a deck that encroaches 12 feet into the front yard setback and replace the existing deck walkway on a single family detached dwelling in the R-1 district at 1741 Venus Avenue (“Subject Property”); WHEREAS, the Subject Property is a non-conforming lot that does not meet the R-1 district standards for minimum lot width and area requirements; WHEREAS, a variance may be granted when it is in harmony with the general purposes and intent of the zoning ordinance if enforcement of a provision in the ordinance would cause the landowner practical difficulties; WHEREAS, the City Council directed Staff to prepare a Land Use Application Public Policy Notification to notify all property owners within 500 feet of Subject Property when a request for the Planning Commission is to occur related to a land use application that does not require a public hearing; WHEREAS, the City’s obligation has been met where the Arden Hills Planning Commission duly held a hearing on May 6, 2020. All persons present at said meeting were given an opportunity to be heard and present written statements; WHEREAS the Planning Commission considered the recommendation of the City Staff that this request be approved and, as such voted 4-2 in favor of the request; and, NOW, THEREFORE, BE IT RESOLVED THAT THE CITY COUNCIL OF THE CITY OF ARDEN HILLS: Hereby adopts Resolution 2020-023 approving Planning Case 20-004 for a variance request at the Subject Property 1741 Venus Avenue to deck that encroaches 12 feet into the front yard setback and replace the existing deck walkway. Attachment G BE IT FURTHER RESOLVED that City Council approves Planning Case 20-004 for a variance request at the Subject Property 1741 Venus Avenue, based on the findings of fact and the submitted plans in the May 6, 2020 Report to the Planning Commission, as amended by the following conditions: 1. Prior to issuance of a Building Permit, engineering department staff shall review a revised landscaping plan to ensure no impacts to the right-of-way. 2. A Building Permit shall be issued prior to commencement of construction. 3. The proposed building shall conform to all other standards and regulations in the City Code. PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF ARDEN HILLS THIS 26th DAY OF MAY, 2020. Mayor Attest: Clerk •Planning Case #20-004 –No Public Hearing Required •Applicant: William Tourdot and Jennifer Granick •Property Location: 1741 Venus Avenue •Request: Variance $WWDFKPHQW+ Background •R-1 Single Family Residential •Nonconforming Parcel •Sunken courtyard in front yard requires deck and walkway is original to the property Subject Lot R1 District Minimum Standards Lot area 12,500 Sq. Ft. 14,000 Sq. Ft. Lot length 120 Ft. 130 Ft. Overview Request: •The Applicant plans to replace the deck/walkway in the front of the property •Applicant requests flexibility for front setback requirement for the replacement deck and walkway Background •City Code Section 1325.03 Subd. 2 permits a six (6) foot encroachment into the required front yard setback •The Applicants are requesting flexibility for a 12 foot wide deck, a 17 foot walkway, and 3.5 feet of stairs to extend a combined 32.5 feet over the sunken courtyard and connect to the other side at grade •Because the deck proposed is larger than the original, a variance is required for the expanded structure Landscaping •City Code Section 1325.05 Subd. 1 outlines design standards for landscaping •Overall landscape design will replace some sections of grass with mulch and native, pollinator-friendly plantings and new trees. •Incorporates an updated landscape design that also replaces the failing flag stone wall. Variance Requirements –Section 1355.04, Subd. 4 1.Purpose and Intent. The variance request shall comply with the purpose and intent of the provisions of the City’s Zoning Regulations and with the policies of the City’s Comprehensive Plan. •The variance request for 1741 Venus Avenue would comply with the purpose and intent of the R-1 Zoning District and with the policies within the City’s Comprehensive Plan. Variance Requirements –Section 1355.04, Subd. 4 2.Practical Difficulties. The applicant for a variance shall establish that there are practical difficulties in complying with the provisions of the Arden Hills Zoning Regulations. The term “Practical Difficulties” as used in the granting of a variance means: •Reasonable Use. The property owner proposes to use the property in a reasonable manner not permitted by the Zoning Ordinance. •Unique Circumstances. The plight of the property owner is due to circumstances unique to the property not created by the landowner. •Character of Neighborhood. The variance, if granted, will not alter the essential character of the neighborhood. Variance Requirements –Section 1355.04, Subd. 4 3.Economic Consideration. Economic consideration alone does not constitute a practical difficulty. •The proposed variance is not based on economic consideration. Public Notice A public notice was mailed to nearby property owners in advance of the May 6th Planning Commission meeting as per the Land use Application Public Notification Policy on April 24th. A public notice was mailed out on May 22nd in advance of the City Council meeting. Prior to the Planning Commission meeting, city staff have received three (3) comments about the variance request. Staff have not received any comments regarding the variance request since the May 6th meeting. Conditions of Approval 1.Prior to issuance of a Building Permit, engineering department staff shall review a revised landscaping plan to ensure no impacts to the right -of-way. 2.A Building Permit shall be issued prior to commencement of construction. 3.The proposed structure shall conform to all other standards and regulations in the City Code. Proposed Motion Language: •Recommend Approval with Conditions: Motion to approve Planning Case 20-004 for a Variance at 1741 Venus Avenue, based on the findings of fact and the submitted plans, as amended by the two (2) conditions in the May 6 th, 2020 Report to the Planning Commission •Recommend Approval as Submitted: Motion to approve Planning Case 20-004 for a Variance at 1741 Venus Avenue, based on the findings of fact and the submitted plans in the May 6th, 2020 Report to the Planning Commission. Proposed Motion Language: •Recommend Denial: Motion to deny Planning Case Planning Case 20- 004 for a Variance at 1741 Venus Avenue, based on the following findings: findings to deny should specifically reference the reasons for denial and why those reasons cannot be mitigated. •Table: Motion to table Planning Case Planning Case 20-004 for a Variance at 1741 Venus Avenue : a specific reason and information request should be included with a motion to table. DATE: May 26, 2020 TO: Honorable Mayor and City Councilmembers FROM: Dave Perrault, City Administrator SUBJECT: Flexibility for Local Businesses During Local Emergency for COVID-19 Budgeted Amount: Actual Amount: Funding Source: N/A N/A N/A Council Should Consider The Council may discuss and provide direction to staff regarding any additional flexibility they would like to allow businesses during the COVID-19 related local emergency. A draft resolution has been prepared should Council want to act tonight, however, Council could also defer action to its special meeting on May 28, 2020. Background By the Governor’s Executive Order, bars, restaurants, and other places of public accommodation were ordered closed on March 17, 2020. Since the Governor’s order in March, a gradual loosening of the restrictions have taken place. During his May 20, 2020 press conference, Governor Walz did encourage cities to work with their local businesses on how they can assist in re-opening while complying with his directives. The question most frequently brought up is how this will impact restaurants and bars. As of June 1st, restaurants and bars are allowed to offer outdoor dining under certain conditions, to include but not limited to, (a) no more than four persons, or six if a family unit, at a table, (b) reservations are required, (c) masks or shields must be worn by staff, (d) and no more than fifty persons. The City Council may want to temporarily give staff the discretion to administratively review business requests to utilize additional space outside of their building that they would not normally be allowed to use without a variance or otherwise prohibited by City Code. Upon initial review of City Code, flexibility would be needed under section 1325 Subd. 6 J regarding Site Furnishing and Seating Areas; also, flexibility may be needed if businesses will fall below their parking requirements outlined by applicable uses and/or development agreements. Additional uses requested by businesses could include outdoor seating, pick up or drive up service, or other customer service areas. Should the City Council decide to move this forward, below are options to consider: NEW BUSINESS – 10C MEMORANDUM -Allow businesses to utilize outdoor space adjacent to their typical location if the business: -Complies with all the Governor’s guidance regarding safe business operations including a social distancing plan. -ADA guidelines are observed. -Safe pedestrian flow must be maintained. -Cannot conflict with any building codes or requirements. -If portions of a parking lot are being used, safe pedestrian and traffic flow must be maintained. Adequate parking spaces must be maintained. A substantial barrier must divide outdoor space being used for customers and traffic flow. -Public Safety response must not be infringed upon. -The proposed outdoor space will not be on City property or right-of-way. -If the business is not the property owner, the business must receive consent to use the proposed space. -Expansion or use of outdoor space is on a case-by-case basis and will be reviewed by City Staff. -If a restaurant or bar wants to utilize outdoor space and serve alcohol it must comply with the above requirements and: -Alcoholic drinks must be consumed on premise. -The outdoor area must be contiguous to the building and contained, an updated map must be provided to City Staff showing where the consumption would take place. -Must provide an updated certificate of insurance regarding liability coverage extending to an outdoor space. -Must comply with all other local and state regulations regarding alcohol sales and consumption. A draft resolution is attached for Council review should Council want to vote on it or give further guidance for its meeting on May 28, 2020. The temporary authority given to staff to review any requests that come in would be until restaurants can resume normal operations or further Council direction is received. Budget Impact N/A Attachment Attachment A: Resolution 2020-024 CITY OF ARDEN HILLS COUNTY OF RAMSEY STATE OF MINNESOTA RESOLUTION NO. 2020-024 RESOLUTION ALLOWING FLEXIBILITY FOR LOCAL BUSINESSES DURING LOCAL EMERGENCY FOR COVID-19 WHEREAS, on March 17, 2020, the Governor’s Executive Order 20-04 temporarily closed restaurants, bars, and other places of public accommodation; and WHEREAS, the Governor is beginning to loosen restrictions on businesses, restaurants, bars and other places of public accommodation; and WHEREAS, the City wants to make temporary accommodations for businesses that can open in compliance with the Governor’s directives; and WHEREAS, these temporary accommodations may include allowing flexibility with respect to the City Code or other regulations; NOW THEREFORE, BE IT RESOLVED by the City Council of the City of Arden Hills, Minnesota, that local businesses may request temporary approval from the City Administrator, or their designee, to operate in outdoor spaces adjacent to their normal location that would normally be prohibited by City Code or require a variance if the following conditions are met by the business: -Compliance with all the Governor’s guidance regarding safe business operations including a social distancing plan. -Safe pedestrian flow must be maintained. -ADA guidelines are observed. -Cannot conflict with any building codes or requirements. -If portions of a parking lot are being used, safe pedestrian and traffic flow must be maintained. Adequate parking spaces must be maintained. A substantial barrier must divide outdoor space being used for customers and traffic flow. -Public Safety response must not be infringed upon. -The proposed outdoor space will not be on City property or right-of-way. -If the business is not the property owner, the business must receive consent to use the proposed space. -Expansion or use of outdoor space is on a case-by-case basis and will be reviewed by City Staff. Attachment A If a restaurant or bar wants to utilize outdoor space and serve alcohol it must comply with the above requirements and: -Alcoholic drinks must be consumed on premise. -The outdoor area must be contiguous to the building and contained, an updated map must be provided to City Staff showing where the consumption would take place. -Must provide an updated certificate of insurance regarding liability coverage extending to an outdoor space. -Must comply with all other local and state regulations regarding alcohol sales and consumption. The temporary authority given to staff to review any requests that come in would be until restaurants can resume normal operations or further Council direction is received. ADOPTED BY THE CITY COUNCIL OF THE CITY OF ARDEN HILLS THIS 26TH DAY OF MARCH, 2020. _________________________________ DAVID GRANT, MAYOR ATTEST: __________________________________________ JULIE HANSON, CITY CLERK