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HomeMy WebLinkAboutCCP 05-19-2003 Mayor: .Ileverly Aplikowskl Council Members: David Grant Breuda Holden Greg Larsoo Lois Rem ~. ~HnJ.S Arden Hills City Council WORK SESSION 4:45 p.m. Monday, May 19,2003 . Agenda (The times may va" depending upanlength oj discussion.) 1. CaD to Order f)EP"ARTMENT 2. CO~ITYSER~C~ STAFF Aaron Parrish A. 2002 Audit Report: Abdo, Abdo, Eick and Meyer B. Ramsey County Maintenance Facility: Peter Hellegers Exterior Design Discussion 3. OPERATIONS &MAIN1'ENANCE A. Parks, Trails and Recreation Committee Park Comprehensive PJaIi - Long Term Budget . B. 2004 PMP ~ Update 4. ADMINISTRATION A. AssessmentPoIicy CITY COUNCIL REPORTS A. CounciIM~~H~den B. Council M~~ Larson C. Council M~ber R~ D. Council M~ber Grant E. Mayor Aplikowski Thomas J.MolWe YfRC Member, BiD Henry Thollllll\ J. Moore&; (jreg Brown Aaron Parrish Thomas J. M()Ql"eandCynthia Young 1245 w. Jtich..ay 96 AnteD HlIIs, l\""'--esDta 55112 651.634.51%& TIME 4:4~ 6:00 6:45 1:15 . e e ~ EN HILLS MEMORANDUM DATE: Agenda Item 2.A May 14, 2003 TO: Mayor Beverly Aplikowski Council Member David Grant Council Member Brenda Holden Council Member Gregg Larson Council Member Lois Rem Aaron Parrish, Interim City Administrator / Community Services Director /I;P FROM: SUBJECT: 2002 Audit Presentation ENCLOSURES: 1. April 10, 2003 Management Letter 2. Annual Financial Report for the Year Ended December 31, 2002 Overview Enclosed for the Council's review and consideration is the 2002 Annual Financial Report and Management Letter. Steve McDonald from Abdo, Abdo, Eick and Meyer will be in attendance to provide a summary. As previously noted in my weekly update, the only reportable condition aside from the standard segregation of duties notation related to the payment of bonuses inconsistent with an opinion issued by the Attorney General's office. Based on previous Council direction, staff is in the process of developing a policy to address this issue. On a positive note, the audit was fairly seamless given our staffing situation. Hats offto Sandy Berres and Sandy Byl for all their hard work while the auditors were here. Unless the Council would prefer otherwise, staff will place this item on the consent calendar for approval at the May 27th, 2003 Council Meeting. Requested Action Provided for informational purposes Certifkd !'uhlic Accountants & ConsultmUs April 10, 2003 Grandview Square 520t Eden Avenue Suite370 Edina, MN 55436 Members of the City Council City of Arden Hills, Minnesota We have audited the general purpose tinancial statements of the City of AIden Hills for the year ended December 31, 2002 and bave issued our report thereon dated April I 0, 2003. Professional standards require that we provide you with the following information related to our audit. Our Responsibility Under Auditing Standards Generally Accepted in the United States of America . As stated in our engagement letter, our responsibility, as described by professional standards, is to plan and perform our audit to obtain reasonable, but not absolute, assurance that the fInancial statements are free of material misstatement and are fairly presented in accordance with accounting principles generally accepted in the United States of America. Because an audit is designed to provide reasonable, but not absolute, assurance and because we did not perform a detailed examination of all transactions, there is a risk that material errors, fraud or illegal acts may exist and not be detected by us. In planning and perfonning our audit of the general purpose financial statements of the City, for the year ended December 31, 2002, we considered its internal control in order to determine our auditing procedures for the purpose of expressing our opinion on the general purpose financial statements and not to provide assurance on the internal control. However, we noted certain matters involving the internal control and its operation that we cousider to be reportable conditions under standards established by the American Institute of Certified Public Accountants. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of internal control that, in our judgment, could adversely affect the City's ability to record, process, sunuuarize, aud report financial data consistent with the assertions of management in the general purpose financial statements. We noted the following reportable condition. Segregation of Duties Our study and evaluation disclosed that because of the limited size of your office staff, the City has limited segregation of duties. Good intemal control contemplates au adequate segregation of duties so that no one individual handles a transaction from inception to completion. While we recognize that the City is not large enough to pennit au adequate segregation of duties in all respects, it is important, however, that you be aware of this condition, A material weakness is a reportable condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that errors or fraud in amounts that would be material in relation to the general purpose financial statements heing audited may occur and not he detected within a timely period by employees in the normal course of performing their assigned functions. . Our consideration of internal control would not necessarily disclose all matters in internal control that might be reportable .conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses as defined above. However, the reportable condition described above is not believed to be a material weakness, 952.835.9090 Fax 952.835.3261 www.aemcpas.com City of Arden Hills April 10, 2003 Page Two . As part of obtaining reasonable assurance about whether the general purpose financial statements are free of material misstatement, we performed tests of compliance with certain provisions oflaws, regulations, contracts and grants. How"ever, the objective of our tests was not to provide an opinion on compliance with such provisions. We noted one instance of non- compliance with a J\.1innesota Attomey General's opinion. Payment of Bonuses During 2002, the City completed three Personnel Action Fonns authorizing additional payments to employees. These types of payments appear to be bonuses as defIned by the Minnesota Attorney General. Under a Minnesota Attorney General Opinion dated January 22, 1980, these payments would be considered gifts and thus unlawful City expenditures. A City has an option of adopting performance or merit pay systems to acconnnodate what may have been intended, but the City of Arden Hills has not adopted such a policy. Significant Accounting Policies Management has the responsibility for selection and use of appropriate accOlmting policies. In accordance with the tenus of our engagement letter, we will advise management about the appropriateness of accounting policies and their application. The signifIcant acconnting policies used hy the City are described in Note 1 to the general purpose fInancial statements. No new accounting policies were adopted and the application of existing policies was not changed during 2002. We noted no transactions entered into by the City during the year that were botli signifIcant and unusual, and of which, under professional standards, we arc required to inform you, or transactions for which there is a lack of authoritative guidance or consensus. . Accounting Estimates Accounting estimates are an integral part of the combined fInancial statements prepared by management and are based on managemenfs 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 general purpose financial statements and because of the possibility that future events affecting them may differ signifIcantly from those expected. The most signifIcant estimate affecting the financial statements was depreciation on fixed assets. Management's estimate of depreciation is based on estimated useful lives of the assets. We evaluated the key factors and assumptions used to develop this estimate in determining that it is reasonable in relation to the [mancial statements taken as a whole. . . . . City of Arden Hills April 10, 2003 P age Three Audit Adjustments For purposes of this letter, professional standards define an audit adjustment as a proposed correction of the combined financial statements that, in our judgment, may not have been detected except through our auditing procedures. An audit adjustment mayor may not indicate matters that could have a significant effect on the City's financial reporting process (that is, cause future financial statements to be materially misstated). In our jndgment, none of the adjustments we proposed, whether recorded or unrecorded by the City, either individually or in the aggregate, indicate matters that could have a significant effect on the City's fmancial reporting process. We did propose 26 journal entries that are considered year end accounting entries that a City should make in order to have accurate records before an audit begins. We encourage the City to reduce the accounting entries necessary to adjust year end balances. We noted no unconceted misstatements. Disagreements with Management For purposes of this letter, professional standards define a disagreement with management as a matter, whether or not resolved to our satisfaction, concerning a financial accounting, reporting or auditing matter that could be significant to the general purpose financial statements or the auditor's report. We are pleased to report that no such disagreements arose during the course of our audit. Consultations with Other Independent Accountauts 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 general purpose [mandaI statements or a detennination of the type of auditor's opinion that may be expressed on those statements, our professional standards require the consulting accountant to check v:,,rith us to detennine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants. Issues Discussed Prior to Retention of Indcpendcnt Auditors 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. Difficulties Encountered in Performing the Audit We encountered no significant difficulties in dealing with management in performing our audit. . '. . City of Arden Hills April 10, 2003 Page Four Other Matters The following are areas that came to our attention during the audit that we feel should be reviewed: Financial Position and Results of Operations General Fuud The general fund is used to account for resources traditionally associated with government, which are not required legally or by souud priucipal managemenr to be accouuted for in another fund. The general fund fund balance increased $39,468 from 2001. The fund balance of $753, 172 is 23 percent of the 2003 budgeted expenditures. We recommend the fund balance be maintained at a level sufficient to fund operations until the major revenue sources are received in June. We feel a reserve of approximately 40 to 50 percent of planned expenditures and transfers out is adequate to meet working capital and small emergency needs. At the current level, the fund balance is below the range of what is geuerally recommended as a minimum, but the City has significant reserve funds in the capital projects fund to provide for working capital. In a press release on January 31, 2003, the Mimlcsota Office of the State Auditor classified cities' unreserved fund balance levels relative to expenditures as follows: Extremely low Low Acceptable Moderately high High Very high Extremely high Under 20% 21-34% 35 - 50% 51- 64% 65 - 100% 100 - 150% Above 150% The State Auditor elassified 21.2 percent of all Minnesota cities in the high category in 2001. They did group all general, special revenue and debt service ftmds of the city when making this calculation where our calculation is based only on the general funds. If the general and special revenue funds were grouped together, the unreserved fund balance would total $1,412,566 and this would represent 31 percent of the 2003 budgeted expenditures for the general and special revenue funds. Although there is no legislation regulating fund halance, it is a good policy to designate intended use of fund balance. This helps address citizen concerns as to the use of fund balance and tax levels. City of Arden Hills April 10, 2003 Page Five . A table summarizing the general fund balance in relation to budget follows: Fund Following Balance Fund Year as a Percent Year Balance Budget of Budget 2002 $ 753,172 $ 3,305,546 23% 2001 713,704 3,046,509 23 2000 601,394 2,929,590 21 1999 575,223 2,540,460 23 Fund Balance as a Percent of Next Year's Budget $3,500,000 , -- $3,000,000 $3,305,546 I $3,046,509 $2,500,000 $2,540,460 $2,929,590 $2,000,000 . $1,500,000 $1,000,000 I $500,000 i 23% 21% 23% 23% $- 1999 2000 2001 2002 1__ Fund Balance ---- Budget I . . . . City of Arden Hills April I 0, 2003 Page Six Fund balance should be maintained for the following reasons: Pnrposes and Benefits . Expenditures are incurred somewhat evenly throughout the year. However, currently, property tax and state aid revenues are not received until the second half of the year. An adequate fund balance will provide the cash flow required to finance the General Fund expenditures until these revenue sources are received. . The City is vulnerable to legislative actions at the State and Fcderallevel. The State eliminated HACA aid with the 2001 legislative session and has proposed significant reductions in local government aid with the current session. Levy limits have also been implemented for municipalities in past legislative sessions. An adequate fund balance will provide a temporary buffer against those aid adjustments and levy limits. . Expenditures not anticipated at the time the annual budget was adopted may need immediate Council action. These would include capital outlay replacement, lawsuits and other items. An adequate fund balance will provide the fmancing needed for such expenditures. . A strong fund balance will assist the City in obtaining, maintaining or improving its bond rating. The result -will be better interest rates in future bond sales. A summary of the 2002 operations is as follows: Revenue Expenditures Variance - Favorable Budget Actual (Unfavorable ) $ 2,907,378 $ 2,687,660 $ (219,718) 2,736.409 2.578.307 158.102 170.969 109,353 (61.616) 89,839 52,950 (36,889) 1306,100) (122.835) 183,265 (216,261) (69.885) 146.376 Excess (deficiency) of revenue over expenditures Other fmancing sources (uses) Operating transfers in Operating transfers out Total other financing sources (uses) Excess (deficiency) of revenue and other fmancing sources over expenditures and other financing uses Fund balance, January I 39,468 $ 713.704 84760 $ (45292) Fund balance, December 31 $ 753 172 . The largest item of variance on the revenue side was intergovermnentaL This item had an unfavorable variance of $159,163 or 59 percent of the total revenue variance. The State fire aid was budgeted for $165,000, but it is now routed through the City of Shoreview. . The largest item of variance in expenditures was public safety. This item had a favorable variance of $181 ,872 or 71 percent of the total expenditure variance. The change in processing fire aid discussed above accounted for $165,000 of the variance. . . . City of Arden Hills April 10, 2003 Page Seven A comparison between 2002 and 2001 revenue is presented below: Percent Percent Increase of of (Decrease) Revenue source 2002 Total 2001 Total from 2001 Property taxes $ 1,950,496 71.17% $ 2,028,421 64.27% $ (77,925 ) Licenses and permits 299,719 10.94 493,771 15.65 (194,052 ) Intergovernmental 202,990 7.41 346,538 10.98 (143,548 ) Charges for services 67,463 2.46 60,170 1.91 7,293 Fines and forfeitures 41,782 1.52 31,193 .99 10,589 Interest on investments 12,397 .45 28,316 .90 (15,919) Miscellaneous 112,813 4.12 115,286 3.66 (2,473) Operating transfers in 52,950 ....L.'2 51.950 1.64 1.000 Total revenue and transfers $ 2.740,610 100.00% $ 3,155.645 100.00% $ (415.035) A graphical presentation of 2002 revenue totals follows: 2002 Revenue Property taxes 71.1 7% Operating transfers in 1.93% Miscellaneous 4.12% Interest on investments 0.45% Fines and Charges . Intergovernmental forfeitures for services 7.41% 1.52% 2.46% L kense and permits ]0.94% . . . City of Arden Hills April 10, 2003 Page Eight A comparison between 2002 and 2001 expenditures is presented below: Percent Percent Increase of of (Decrease) Programs 2002 Total 2001 Total from 2001 General government $ 768,987 28.47% $ 689,095 22.39% $ 79,892 Public safety 1,007,117 37.28 1,106,927 35.98 (99,810) Public works 338,627 12.54 285,862 9.29 52,765 Culture and recreation 254,711 9.43 288,774 9.39 (34,063 ) Economic development 16,503 .61 14,884 .48 1,619 Capital outlay 192,362 7.12 227,572 7.40 (35,210) Operating transfers out 122,835 4.55 463,750 15.07 (340,915) Total expenditures and transfers $ 2.70 1.142 100.00% $ 3,076,864 100.00% $ (375.722) A graphical presentation of2002 expenditure totals by program follows: 2002 Expenditures Operating transfers out 4.55% General government 28.47% Capital outlay 7.12% Economic development 0.61% Culture and recreation 9.43% Public safety 37.28% Public works 12.54% . '. . City of Arden Hills April I 0, 2003 Page Nine Special Revenue Funds A summary of year end fund balances for all special revenue funds follows: Fund Balance (Deficit) Increase 2002 2001 (Decrease ) Community Service $ 1,184 $ 38,843 $ (37,659) Recreation Program (734) 302 (1,036) Park 562,744 557,161 5,583 Cable TV 243,463 207,790 35,673 TCAAP 232,976 231,372 1,604 Risk Management 196,550 181,805 14,745 Economic Development Authority (489.646) (562.006) 72.360 Total $ 746 537 $ 655.267 $ 91270 Community Service This fund will provide for various parks, recreation and public safety needs in the community as determined by the Council and permitted by statute. The large decrease was due to a transfer out of$100,089. Recreation Program The summer playground activities of this fund were reclassified from the general fund in 1998. Expenditures were in excess of revenue by $71 ,098, but the transfer of $70,062 returned operations to near break even. A deficit of $734 exists at year end, Park This fund is used to finance and plan future new park capital improvements. The revenne mainly results trom park dedication fees. Cable TV The fund balance is expected to be used for cable eqnipment and programming activities at the new city hall. TCAAP The fund balance is expected to be used for future development implementation planning activities. Risk Management This fund exists to pay deductible costs on insurance claims. The revenue will come from insurance dividends received from the League of Minnesota Cities Insurance Trust. Economic Development Autbority The Economic Development Authority" had activity for the frrst time in 1997 and will account for tax increments and projects within the TIF districts. The Development/Redevelopment TIF capital projects fund was closed into this fund in 1997. The Guidant loan is also recorded in this fuud and the forgivable portion was written off in 2001 since the terms of the loan are met. The remaining loan component is $14,215. . . . City of Arden Hills April 10, 2003 Page Ten nebt Service Funds The final payment of the G.O. Improvement Bonds of 1977, which were refunded in 1985, was fully paid by the escrow in 1997. The remaining fund balance was tTansferred out in 2003 and the fund was closed, The Tax Increment Bonds of 1998 were issued in 1998. The debt service on the $3,030,000 obligation will be recorded in this fund. Tax increment collections will provide the resources to pay the bonds, which mature in 2015. Capital Projects Funds A summary of year end fund balances for all capital projects funds follows: Municipal Land and Buildings Non-Assessable Road Improvements Capital Equipment Public Safety Capital Equipment Permanent Improvement Revolving Fund Balance (Deficit) Increase 2002 2001 (Decrease ) $ (150,944) $ (107,323) $ (43,621) 1,551,255 1,495,998 55,257 141,626 162,554 (20,928 ) 441,864 423,195 18,669 7.987.497 7,664.289 323.208 $ 9,971298 $ 9638713 $ 332 585 Total Municipal Land and Buildings This fund will be used to improve existing City buildings or provide for new buildings. The deficit should be eliminated by a transfer from other funds. Non-Assessable Road Improvements The fund balance of$I,551,255 at year end exists for the completion of future projects. Capital Equipment Its purpose will be to accumulate resources to finance major equipment purchases. Public Safety Capital Equipment The fund balance of $441 ,864 will be used for equipment replacement. Permanent Improvement Revolving (PIR) Fund The fund balance at year end was $7,987,497, of which $650,000 represents the amount of the unpaid advance to the Economic Development Authority related to the acquisitions of the Indy Kiewicz property. This entire advance is expected to be repaid to the PIR Fund from Ramsey County reimbursement and remnant parcel sale proceeds. Interest income for 2002 was $25,637. City of Arden Hills April 10, 2003 Page Eleven . Enterprise Fuods Water Fund The results ofthe operations and cash position ofthe Water fund for the past three years are as follows: Percent Percent Percent of of of 2002 Total 2001 Total 2000 Total Operating revenue $ 976,107 100.0% $ 1,177,034 100.0% $ 1,142,587 100.0% Operating expenses 951,524 97.5 1.066,811 90.6 1.357.855 ~ Income (loss) from operations 24.583 2.5 110.223 9.4 (2]5268) (18.8) Cash balance, December 31 $ 1.465.220 $ 1 .232.536 $ 997.742 Water Fund . $1,400,000 $1,200,000 $1,000,000 $800,000 $600,000 1'1 Operating revenue $400,000 . Income from operations $200,000 $- $(200,000) $(400,000) 2002 200] 2000 The cash balance and operating margins have been sufficient to meet working capital and major repair needs. . . Sewer Fund City of Arden Hills April 10, 2003 Page Twelve The results of the operations and cash position of the Sewer fund for the past three years are as follows: Percent Percent Percent of of of 2002 Total 2001 Total 2000 Total Operating revenue $ 873,987 100.0% $ 989,253 100.0% $ 1,040,518 100.0% Operating expenses 991.908 ~ 981.246 99.2 1.118.193 107.5 Income (loss) from operations CU7.921) ~) 8,007 D.8 (77.675) ~) Cash and investments $1.562.147 $ ].387150 $ 1.404.465 Sewer Fund $1,200,000 . $1,000,000 $800,000 $600,000 III Operating revenue $400.000 .Income from operations $200,000 $- $(200,000) 2002 2001 2000 The results of operations in the Sewer fund have provided for a good cash reserve. . . - . City of Arden Hills April 10, 2003 P age Thirteen Recycling Fund The results of the operations and cash position of the Recycling fimd for the past three years are as follows: Percent Percent Percent of of of 2002 TotaL 2001 Total 2000 Total Operating revenue $ 43,996 100.0% $ 54,423 100.0% $ 54,145 100.0% Operating expenses 79,030 179.6 66,968 123.1 7 1.650 132.3 Operating loss (35,034 ) (79.6) (12,545) (23.1 ) (17,505) (32.3 ) Non-operating income 20.724 .....fZJ. 23.354 ~ 23,379 43.2 Net income (loss) .... ...l14 310) 32.5 10809 ...19.8 5874 10.9 Cash balance $ 55 049 $ 73 245 $ n_ .1>2,6J.1 Surface Water Mauagement Fund The results of the operations and cash position of the Surface Water Management fund for the past three years are as follows: Percent Percent Percent of of of 2002 Total 2001 Total 2000 Total Operating revenue $ 208,536 100.0% $ 190,621 100.0% $ 190,824 100.0% Operating expenses 94,367 ~ 60,103 --1U 48.258 ...2U Operating income ___lll, 169 54.1 13 Q,s.l1l. .__68.5 142566 74.7 Cash balance L_56~,IHM $ 480584 $ 311.955 Governmental Accounting Standards Board (GASB) Statement No. 34, Basic Financial Statemcnts - and Man.gement's Discussion and Analysis - for State and Local Governments We have discussed GASB 34 in detail in our management letter each of the last two years. This statement is a major overhaul in the way govemment fm.ncial statements look .nd the information contained within. It is intended to make the City's arumal fmancial report more user friendly for citizens, staff, council and those that provide resources to the City. Weare prepared to offer assistance and direction on implementation but staff and council can fmd many resources relating to Statement #34 on GASB's web site (http://accounting.rutgers.edulraw/gasb/repmodel!index.html). Listed below are some key dates and activities: Statement implementation date: Items needing completion by City: Infrastructure asset inventory: Capital asset inventory: Management Discussion and Analysis Letter (MD&A): Year ending, December 31, 2004 Year ending, December 31, 2003 Year ending, December 31, 2003 Year ending, December 31, 2004 The dates above are recommended timelines for completion but the City can complete any of them before the date identified. . . . ~ City of Arden Hills April 10, 2003 Page Fourteen * * * * * This report is intended solely for the infonnation and use of management, Council and the MilUlesota Office of the State Auditor and is not intended to be and should not be used hy anyone other than these specified parties. Our audit would not necessarily disclose all weaknesses in the system because it was based on selected tests of the accounting records and related data, The C011ll1lcnts and recommendations in the report are purely constructive in nature, and should be read in this context. If you have any questions or wish to disclLss any of the items contained in this letter, please feel free to contact US at your convenience. We wish to thank you for the opportunity to be of service and for the courtesy and cooperation extended to us hy your staff April 10, 2003 Minneapolis) Minnesota ~~~&~~~t~~ Certified Public Accountants . I. . I . . . . I Ie . . I I I . I .. I CITY OF ARDEN HILLS ARDEN HILLS, MINNESOTA ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31, 2002 I I. I I I I I I I I. I I I I I I I I. I CITY OF ARDEN HILLS, MINNESOTA TABLE OF CONTENTS DECEMBER 31,2002 Page No. I. INTRODUCTORY SECTION Elected and Appointed Officials II. FINANCIAL SECTION Independent Auditor's Report 2 General Purpose Financial Statements Combined Balance Sheet - All Fund Types and Account Groups Combined Statement of Revenue, Expenditures and Changes in Fund Balance - All Governmental Fund Types Combined Statement of Revenue, Expenditures and Changes in Fund Balance - Budget and Aetual - General, Special Revenue and Debt Service Funds Combined Statement of Revenue, Expenses and Changes in Retained Earnings - All Proprietary Fund Types Comhined Statement of Cash Flows - All Proprietary Fund Types Notes to Financial Statements 3-4 5 - G 7 - 8 9 10 11 - 25 Combining and Individual Fund Financial Statements General Fund Comparative Balance Sheets Statement of Revenue, Expenditures and Changes in Fund Balance - Budget and Actual Special Revenue Funds Comhining Balance Sheet Combining Statement of Revenue, Expenditures and Changes in Fund Balance (Deficit) Debt Service Funds Combining Balance Sheet Combining Statement of Revenue, Expenditures and Changes in Fund Balance (Deficit) Capital Projects Funds Combiillng Balance Sheet Combining Statement of Revenue, Expenditures and Changes in Fund Balance (Deficit) Enterprise Funds Combining Balance Sheet Combining Statement of Revenue, Expenses and Changes in Retained Earnings Combining Statement of Cash Flows Tax Capacity, Tax Levies and Tax Capacity Rates 26 27 - 30 31 - 32 33 - 34 35 36 37 - 38 39-40 41-42 43 -44 45 - 46 47 m OTHER REPORTS Report on Minnesota Legal Compliance Schedule of Findings 48 49 I I. I I I I I I I .- I I I I I I I. I I INTRODUCTORY SECTION CITY OF ARDEN HILLS ARDEN HILLS, MINNESOTA YEAR ENDED DECEMBER 31, 2002 I I. I I Beverly Aplikowski I David Grant Gregg Larson Lois Rem I I Brenda Holden Aaron Parrish Vaeant I Jerome Filla I .e I I I I I I I. I I CITY Of ARDEN HILLS, MINNESOT ^ ELECTED AND APPOINTED OFFICIALS DECEMBER 31, 2002 ELECTED OFFICIALS Term of Office Expires December 3 1. Mayor Council Member Council Member COlillCil Member 2006 2004 2006 2006 APPOINTED OFFICIALS Council Member Acting City Administrator Treasurer City Attorney 2004 -1- I I. I I I I I I I Ie I I I I I I I. I I FINANCIAL SECTION CITY OF ARDEN HILLS ARDEN HILLS, MINNESOTA YEAR ENDED DECEMBER 31,2002 I I I I I I I 1- I I I I I I I ,. I Grandview Square 5201 Eden Avenue Suite 370 Edina,MN554Vl INDEPENDENT AUDITOR'S REPORT Honorable Mayor and City Council City of Arden Hills, Minnesota We have audited the accompanying general purpose financial statements of the City of Arden Hills, Minnesota, as of and for the year ended December 31, 2002 as listed in the table of contents. These general pnrpose fmaneial statements are the responsibility of the City's management. Our responsibility is to express an opinion on these general purpose financial statements based on OUI audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the general purpose financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall general pmpose financial statement presentation, Vl e believe that our audit provides a reasonable basis for our opinion. In our opinion, the general purpose financial statements referred to above present fairly, in all material respects, the financial position of the City as of December 31, 2002, and the results of its operations and cash flows of its proprietary fund type for the year then ended in confonnity with accounting principles generally accepted in the United States of America. Our audit was performed for the purpose of fanning an opinion on the general purpose financial statements taken as a whole. The combining and individual futld financial statements and schednles listed in the table of contents are presented for the purpose of additional analysis and are not a required part of the general purpose financial statements of the City. Sueh information has been subjected to the auditing procedures applied in the audit of the general purpose [mandaI statements and, in our opinion, is fairly stated in all material respects in relation to the general purpose financial statements taken as a whole. April 10, 2003 Minneapolis, Minnesota aJJrlD) I;t.k. ~ ~ ) L Lf ABDO, EICK & MEYERS, LLP Certified Public Accountants 952.835.9090 Fax 952.835.3261 www.aemcpas.com I I. I I I I I I I .e I I I I I I I. I I GENERAL PURPOSE FINANCIAL STATEMENTS CITY OF ARDEN HILLS ARDEN HILLS, MINNESOTA YEAR ENDED DECEMBER 31, 2002 I CITY OF ARDEN HILLS, MINNESOTA COMBINED BALANCE SHEET .- ALL FUND TYPES AND ACCOUNT GROUPS DECEMBER 3 1,2002 (With comparative totals for December 31,2001) I Govemmental Fund Types Special Debt Capital I General Revenue Service Projects ASSETS AND OTHER DEBITS ASSETS I Cash and temporary investments $ 751,042 $ 1,464,585 $ 1,927 $ 9,372,121 Receivables Interest 1,434 7,487 85 36,373 Delinquent taxes 95,246 72,741 I Accounts 3,969 21,040 Special assessments 130,690 Loans 14,215 I Due from other govemrnellts 63,522 36,341 Due from other funds Advance to other funds 650,000 Inventory I Prepaid items 18,495 75 Fixed assets - net OTHER DEBITS I Amount available for compensated absences Amount available for debt retirement Amount to be provided for debt retirement TOTAL ASSETS AND OTHER DEBITS $ 933,708 $ 1,616,484 $ 2,012 $ 10,189,184 e. LIABILITIES, EQUITY AND OTHER CREDITS I LIABILITIES Accounts and contracts payable $ 78,831 $ 115,705 $ $ 94,882 Due to other funds Advance from other funds 650,000 I Due to other governments 7,624 10,227 Accrued salaries and compensated absences payable 34,571 7,731 Deferred revenue 59,510 86,284 123,004 I Bonds payable TOTAL LIABILITIES 180,536 869,947 217,886 EQUITY AND OTHER CREDITS I Investment in general fixed assets Contributed capital I Retained earnings Unreserved Fund balance (deficit) Reserved 87,068 75 2,012 650,000 I Unreserved Designated 666,104 Undesignated 746,462 9,321,298 TOTAL EQUITY AND OTHER CREDITS 753,172 746,537 2,012 9,971,298 I TOTAL LIABILITIES, EQUITY . AND OTHER CREDITS $ 933,708 $ 1,616,484 $ 2,012 $ 10,189,184 I See Notes to Financial Statements. -3- I ------------- I CITY OF ARDEN HILLS, MINNESOTA COMBINED STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE .' ALL GOVERNMENTAL FUND TYPES YEAR ENDED DECEMBER 31, 2002 (\-\lith comparative totals for the year ended December 31,2001) I Special Debt Capital General Revenue Service Projects I REVENUE Taxes $ 1,950,496 $ 397,606 $ $ Licenses and permits 299,719 Intergovernmental 202,990 I Charges for services 67,463 84,522 Fines and forfeitures 41,782 Special assessments 66 70,828 I Interest on investments 12,397 55,168 159 387,078 Miscellaneous 112,813 339,963 TOTAL REVENUE 2,687,660 877,259 225 457,906 I EXPENDITURES Current I General government 768,987 Public safety 1,007,117 Public works 338,627 Culture and recreation 254,711 197,544 I Economic development 16,503 66,314 Miscellaneous 159,944 3,625 Capital outlay 192,362 45,845 244,079 e. Debt service Principal 155,000 Interest and other 131,318 TOTAL EXPENDITURES 2,578,307 469,647 286,318 247,704 I EXCESS (DEFICIENCY) OF REVENUE I OVER EXPENDITURES 109,353 407,612 (286,093) 210,202 OTHER FINANCING SOURCES (USES) Operating transfers in 52,950 70,062 286,315 175,333 I Operating transfers out (122,835) (386,404) (22,471) (52,950) TOTAL OTHER FINANCING SOURCES (USES) (69,885) (3 I 6,342) 263,844 122,383 , EXCESS (DEFICIENCY) OF REVENUE AND OTHER FINANCING SOURCES OVER EXPENDITURES AND OTHER FINANCING USES 39,468 91,270 (22,249) 332,585 I FUND BALANCE, JANUARY I 713,704 655,267 24,261 9,638,713 FUND BALANCE, DECEMBER 31 $ 753,172 $ 746,537 $ 2,012 $ 9,971,298 I .' , See Notes to Financial Statements. -5- I ------- I I. I Totals (Memorandum Only) I 2002 2001 $ 2,348,102 $ 2,604,567 299,719 493,771 I 202,990 366,543 151,985 141,707 41,782 31,193 I 70,894 102,585 454,802 731,729 452,776 335,043 I 4,023,050 4,807,138 I 768,987 703,979 1,007,117 1,106,927 338,627 285,862 I 452,255 505,629 82,8]7 82,124 163,569 28,702 .- 482,286 3,175,930 ]55,000 70,000 13 ],3]8 135,668 I 3,581,976 6,094,821 I 441,074 (1,287,683) I 584,660 981,204 (584,660) (981,204) I I 441,074 (1,287,683) 11,031,945 12,319,628 I $ 11,473,019 $ 11,031,945 I. I I -6- -------- - CITY OF ARDEN HILLS, MINNESOTA COMBINED STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE .- BUDGET AND ACTUAL GENERAL, SPECIAL REVENUE AND DEBT SERVICE FUNDS YEAR ENDED DECEMBER 31, 2002 I General Variance - Favorable I Budget Actual (Unfavorable) REVENUE Taxes $ 2,033,355 $ 1,950,496 S (82,859) - Licenses and permits 338,] 50 299,7] 9 (38,43]) Intergovernmental 362,] 53 202,990 (]59,163) Cnarges for services 54,345 67,463 ]3,JJ8 I Fines and forfeitures 26,200 41,782 ]5,582 Special assessments Interest on investments 18,000 ]2,397 (5,603) Miscellaneous 75,175 ] ]2,813 37,638 - TOTAL REVENUE 2,907,378 2,687,660 (219,7]8) EXPENDITURES - Current General government 723,525 768,987 (45,462) Publie safety ],] 88,989 ],007,1 ]7 181,872 - Public works 3 ]4,605 338,627 (24,022) Culture and recreation 279,]05 254,7] ] 24,394 Economic development ]6,985 ]6,503 48~ e. Miscellaneous Capita] outlay 213,200 192,362 20,838 Debt service - TOTAL EXPENDITIJRES 2,736,409 2,578,307 ]58,102 EXCESS (DEFICIENCY) OF REVENUE - OVER EXPENDITURES ] 70,969 ] 09,353 (6],616) OTHER FINANCING SOURCES (USES) - Operating transfers in 89,839 52,950 (36,889) Operating transfers out (306,]00) (122,835) 183,265 TOTAL OTHER FINANCING SOURCES (USES) (216,26]) (69,885) 146,376 I EXCESS (DEFICIENCY) OF REVENUE I AND OiliER FINANCING SOURCES OVER EXPENDITURES AND OTHER FINANCING USES $ (45,292) 39,468 $ 84,760 FUND BALANCE, JANUARY I 713,704 I FUND BALANCE, DECEMBER 31 $ 753,172 .- - See Notes to Financial Statements. -7- I I I- I Special Revenue Debt Service Variance - Variance- I Favorable Favorable Budget Actual (Unfavorable) Budget Actual (Unfavorable) I $ 391,000 S 397,606 $ 6,606 S $ $ I 87,750 84,522 (3,228) 400 66 (334) 62,200 55,168 (7,032) 1,000 159 (841) I 174,063 339,963 165,900 715,013 877 ,259 162,246 1,400 225 (1,175) I I 157,812 197,544 (39,732) .. 101,410 66,314 35,096 122,460 159,944 (37,484) 42,500 45,845 (3,345) I 286,315 286,318 (3) 424,182 469,647 (45,465) 286,3 I 5 286,318 (3) I 290,831 407,612 116,781 (284,915) (286,093) (1,178) I 70,062 70,062 286,315 286,315 (386,404) (386,404) (25,000) (22,471) 2,529 I (316,342) (3 I 6,342) 261,315 263,844 2,529 I $ (25,511) 91,270 $ 116,781 $ (23,600) (22,249) $ 1,351 I 655,267 24,261 $ 746,537 $ 2,012 I. I I -8- 2,116,829 (14,203) e. 18,891 , 137,647 156,538 I 142,335 I 106,011 I 248,346 4,531,721 I $ 4,780,067 I .' , , CITY OF ARDEN HILLS, MINNESOTA COMBINED STATEMENT OF REVENUE, EXPENSES AND CHANGES IN RETAINED EARNINGS ALL PROPRIETARY FUND TYPES YEAR ENDED DECEMBER 31,2002 Enterprise OPERATING REVENUE Charges for services Permit rees Miscellaneous $ 2,084,405 1,183 17,038 TOTAL OPERA.TING REVENUE 2,102,626 OPERATING EXPENSES Personal services Supplies Other services and charges Rent Insurance Utilities Purchased services Purchased water Recycling charges Sewer charges Depreciation 405,678 104,736 168,143 32,300 28,030 32,960 27,375 567,834 59,233 505,188 185,352 TOTAL OPERATING EXPENSES OPERATING LOSS NONOPERATING REVENUE County recycling grant Interest on investments TOTAL NONOPERATING REVENUE NET INCOME CREDIT ARISING FROM REDISTRIBUTION OF DEPRECIATION ON CONTRIBUTED ASSETS NET INCREASE IN RETAINED EARNINGS RETAINED EARNINGS, JANUARY 1 RETAINED EARNINGS, DECEMBER 31 See Notes to Financial Statements. -9- I .- - I I I I I I I I. I I I I I I I .. I I I I I I I. I I CITY OF ARDEN HILLS, MINNESOTA COMBINED STATEMENT OF CASH FLOWS ALL PROPRIETARY FUND TYPES YEAR ENDED DECEMBER 31,2002 CASH FLOWS FROM OPERATING ACTIVITIES Operating loss Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation (Increase) decrease in assets: Accotlllts receivable Special assessments receivable Inventory Prepaid items Increase (decrease) in liabilities: Accounts payable Due to other governments Accrued salaries Deferred revenue Enterprise $ (14,203) 185,352 302,679 (2,678) 590 (375) 48,913 (3,514) 8,048 (12,585) 512,227 18,891 (189,562) 135,149 476,705 3,173,515 $ 3,650,220 NET CASH PROVIDED BY OPERATING ACTIVITIES CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES County recycling grant CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition affixed assets CASH FLOWS FROM INVESTING ACTIVITIES Interest received on investments NET INCREASE IN CASH AND CASH EQUlV ALENTS CASH AND CASH EQUlV ALENTS, JANUARY I CASH AND CASH EQUrv ALENTS, DECEMBER 31 See Notes to Financial Statements. -10- I CITY OF ARDEN HILLS, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 3 I, 2002 .- I Notel: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Reporting Entity The City of Arden Hills operates nnder the "Optional Plan A" form of government as defined in the State of Minnesota statutes. Under this plan, the government of the City is directed by a Council composed of an elected Mayor and four elected Conncil Members. The Council exercises legislative authority and detennines all matters of policy. The Council appoints personnel responsible for the proper administration of all affairs relating to the City. The City has considered all potential nnits for which it is financially accountable, and other organizations for which the nature and significance of their relationship with the City are such that exclusion would cause the City's financial statements to be misleading or incomplete. The Governmental Accounting Standards Board (GASB) has set forth criteria to be considered in determining fmancial accountability. These criteria include appointing a voting majority of an organization's governing body, and (1) the ability of the primary government to impose its will on that organization or (2) the potential for the organization to provide specific benefits ta, or impose specific financial burdens on the primary government. The City has the following component unit. I . . Blended component nnits, although legally separate entities, are, in substance, part of the City's operations and so data from these units are combined witb data of the primary government. The blended component nnit has a December 31 year end. I Blended Component Units I The Economic Development Authority (EDA) of the City was created pursuant to Minnesota statutes 469.090 through 469.108 to carry out economic and industrial development and redevelopment consistent with policies established by the Council. It is comprised of the members of the City Conncil. The EDA activities arc blended and reported in a separate special revenue fund. Separate fll1ancial statements are not issued for this component unit. - -. B. Measurement Focus, Basis of Accounting and Basis of Presentation The accounts of the City are organized and operated on the basis of funds and account groups. A fund is an _ independent fiscal and accounting entity with a self-balancing set of acconnts. Fnnd acconnting segregates funds according to their intended purpose and is used to aid management in demonstrating compliance with finance- related legal and contractual provisions. The minimum number of fimds are maintained consistent with legal and I managerial requirements. Account groups are a reporting device to account for certain assets and liabilities of the govemmental funds not recorded directly in those funds. Revenue resulting from exchange transactions, in which each party gives and receives essentially equal value, is I recorded on the accmal basis when the exchange takes place. On a modified accrual basis, revenue is recorded in the year in which the resources are measurable and become available. Non-exchange transactions, in which the City receives value without directly giving equal value in return, include I property taxes, grants, entitlement and donations. On an accrual basis, revenue from property taxes is recognized in the year for which the tax is levied. Revenue from grants, entitlements and donations is recognized in the year in which all eligibility requirements have been satisfied. Eligibility requirements include timing requirements, I which specify the year when the resources are required to be used or the year when use is first permitted, matching requirements, in which the City must provide local resources to be used for a specified purpose, and expenditure requirements, in which the resources are provided to the City on a reimbursement basis. On a I modified accrual basis, revenue from non-exchange transactions must also be available before it can be recognized. Deferred revenue arises when assets are recognized before revenue recognition criteria have been satisfied. Grants and entitlements received before eligibility requirements are met are also recorded as deferred revenue. On the modified accrual basis, receivables that will not be collected within the available period have also been reported as deferred revenue. .' I -11- , I I. Note 1: I I I I I I I .e I I I I I I I. I I CITY OF ARDEN HILLS, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2002 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED The City has the following fund types and account groups: Governmentalfunds are used to account for the City's general government activities. Governmental fund types use the flow of current [mancial resources measurement focus and the modified accrual basis of accounting. Under the modified accrual basis of accounting, revenues arc recognized when susceptible to accrual (i.e., when they are "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 pay Iiahilities of the current period. The City considers all revenues available if they are collected within 60 days after year end. Expenditures are recorded when the related fund liability is incurred, except for unmatured interest on general long-term debt which is recognized when due, and certain compensated absences and claims and judgments which are recognized when the obligations are expected to be liquidated with expendable available financial resources. Property taxes, franchise taxes, licenses, interest and special assessments are susceptible to accrual. Other receipts and taxes become measurable and available when cash is received by the government and are recognized as revenue at that time. The preparation of general purpose financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and asswnptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. Entitlements and shared revenues are recorded at the time of receipt or earlier if the susceptible to accrual criteria are met. Expenditure driven grants are recognized as revenue when the qualifying expenditures have been incurred and all other grant requirements have been met. Governmental funds include the following fund types: The general fund is the City's primary operating fund. It accounts for all financial resources of the City, except those required to be accounted for in another fund. The special revenue funds account for revenue sources that are legally restricted to expenditures for specified pmposes (not including major capital projects). The debt service funds account for the servicing of general long-term debt not being financed hy proprietary funds. The capital projects funds account for the acquisition of fixed assets or construction of major capital projects not heing financed by proprietary funds. -12- CITY OF ARDEN IIILLS, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 3 I, 2002 I Proprietary funds are accounted for on the flow of economic resources measurement focus and use the accrual basis of accounting. Under this method, revenues are recorded when eamed and expenses are recorded at the time liabilities are incurred. In accordance with the provisions of the GASB Statement No. 20, Accounting and Financial Reporting for Proprietary Frmds and other Governmental Entities that use Proprietary Fund Account, the City applies all applicable GASB pronotillCements plus all Financial Accounting Standards Board (FASB) Statements and Interpretations, Accounting Principles Board opinions, and Accounting Research Bulletins issued on or before November 30, 1989, except for those that conflict with or contradict GASB pronouncements. The City has elected not to apply FASB Statements and Interpretations issued after November 30, 1989. Proprietary funds include the following fund type: .1 I Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED I I Enterprise funds and used to account for those operations that are financed and operated in a manner similar to private business or where the Council has decided that the determination of revenues eanled, costs incurred and/or net income is necessary for management accountability. I Account groups. The general fixed assets account group is used to account for fixed assets not accounted for in proprietary funds. The general long-term debt account group is used to account for general long-term debt and certain other liabilities that are not specific liabilities of proprietary funds. I C. Assets, Liabilities and Equity I Deposits and Investments I The City's cash and cash equivalents are considered to be cash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition. -. Cash balances from all funds are pooled and invested, to the extent available, in certificates of deposit and other authorized investments. Earnings from such investments are allocated on the basis of applicable participation by each of the funds. I Millllesota statutes authorize the City to invest in obligations oftlle U.S. Treasury, corrrrnercial paper, corporate bonds, repurchase agreements and shares of investment companies registered under the Federal Investment Company Act of 1940 and whose only investments are obligations guaranteed by the United States or its agencies. I Investments for the City are reported at fair value. The Minnesota Municipal Money Market Fund investment pool operates in accordance with appropriate State laws and regulations. The reported value ofthe pool is the same as the fair value of the pool shares. I I I I .' I -13- I 1 I. Note 1: 1 1 1 I 1 1 1 .e I I I I I I I. I I CITY OF ARDEN HILLS, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2002 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED Property Taxes The Council annually adopts a lax levy in December and certifies it to the County for collection in the following year. The County is responsible for collecting all property taxes for the City. These taxes attach an enforceable lien on taxable property within the City on January I" and are payable by the property owners in two installments. The taxes are collected by the County Auditor and tax settlements are made to the City during January, July and December each year. Taxes payable on homestead property, as defined by Minnesota statutes, were partially reduced by a market value credit aid. The credit is paid to the City by the State of Minnesota in lieu of taxes levied against the homestead property. The State remits this credit in two equal installments in October and December each year. Delinquent taxes receivable include the past six years' uncollected taxes. Delinquent taxes have been offset by a deferred revenue liability for delinquent taxes not received within 60 days after year end. Accounts Receivable Accounts receivable include amounts billed for services provided before year end. Unbilled utility enterprise fund receivables are also included for services provided in 2002. The City annually certifies delinqueut water and sewer accounts to the County for collection in the following year. Therefore, there has been no allowance for doubtful accounts established. Special Assessments Special assessments represent the flllancing for public improvements paid for by benefiting property owners. These assessments are recorded as receivable upon certification to the County. Special assessments are recognized as revenue when they are received in cash or v..rithin 60 days after year end. All special assessments receivable are offset by a deferred revenue liability. Interfund Receivables and Payables Transactions behveen funds that are representative oflendinglborrowing arrangements outstanding at the end of the fiscal year are referred to as either "interfund receivables/payables" (i.e.) the current portion of inter fund loans) or "advances to/from other funds" (i.e., the non-current portion of interflUld loans). All other outstanding balances between funds are reported as "due to/from other funds". Inventories and Prepaid Items The inventories are stated at the lower of cost or market on the [lIst-in, first-out (FIFO) method. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items. -14- CITY OF ARDEN HILLS, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2002 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED Fixed Assets Fixed assets used in governmental fund types of the City are recorded in the general fixed assets account group at cost or estimated historical cost if purchased or constructed. Donated fixed assets arc recorded at their estimated fair value at the date of donation. Assets in the general fixed assets account group are not depreciated. Interest incurred during construction is not capitalized on general fixed assets. Public domain (infrastructure) general fixed assets (e.g., roads, bridges, sidewalks and other assets that are immovable and afvalue only to the City) are not capitalized. The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend assets' lives are not included in the general fixed assets group or capitalized in the proprietary funds. Property, plant and equipment in the proprietary funds afthe City are recorded at cost. Property, plant and equipment donated to these proprietary fund type operations are recorded at their estimated fair value at the date of donation. Major outlays for capital assets and improvements are capitalized in proprietary funds as projects are constructed. Interest incurred during the construction phase of proprietary fund fixed assets is reflected in the capitalized value of the asset constructed, net of interest earned on the invested proceeds over the same period. Property, plant and equipment are depreciated in the proprietary funds of the City using the straight-line method over the following estimated useful lives: Assets Lives Furniture and equipment Sewer and collection system \Vater distribution system 5 - 10 years 40 - 80 years 40 - 100 years Compensated Absences Employees with at least ten years of service are entitled to receive one-third of their unused sick leave up to a maximum of 800 hours upon tennination in addition to any unused vacation and compensatory time. The accrual of these benefits is recorded as a liability in the enterprise funds and expensed. The accrual in the enterprise funds was $26,997 at December 31, 2002. The liability for the governmental funds is recorded in the general lang-term debt account group and recorded as an expenditure when paid. The liability in the general long-term account group was $75,724 at December 31, 2002. Long-term Obligations The City reports long-term debt of goverlllllental funds at face value in the general lang-term debt account group. Long-term debt and other obligations financed by proprietary funds are reported as liabilities in the appropriate funds. For governmental fund types, bond premiums and discounts, as well as issuance costs are reeogruzed during the current period. Bond proceeds are reported as another financing source net of the applicable premium or discount. Issuance costs, other than those withheld from the actual net proceeds received, are reported as debt service expenditures. For proprietary fund types, bond discounts are deferred and amortized over tbe life of the bonds using the straight-line method. -15- I .- I I I I I I I e. I - - . - I .- - I I . ,- Note 1: , , I , I I Note 2: .e I . I I I I I. I I CITY OF ARDEl\ IIILLS, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 3 L 2002 SUMMARY Of SIGNIFICANT ACCOUNTING POLICIES - CONTINUED Fund Equity Reservations of fund balance represent amounts that are not appropriable or are legally segregated for a specific purpose. Reservations of retained earnings arc limited to outside third-party restrictions. Designations offunct balance represent tentative management plans that are subject to change. The proprietary funds contributed capital represents equity acquired through capital grants and capital contributions from developers, custolllers or other funds. Memorandum Only - Total Columns Total colunms on the general purpose financial statements are captioned as "memorandum only" because they do not represent consolidated financial information and are presented only to facilitate financial analysis. The columns do not present infonnation that reflects financial position, results of operations or cash flows in accordance with accounting principles generally accepted in the United States of America. Interfund eliminations have not been made in the aggregation of this data. Comparative DatalReclassifications Comparative total data for the prior year have been presented in the selected sections ofihe accompanying financial statements in order to provide an llildcrstanding of changes in the City's financial position and operations. Also, certain amounts presented in the prior year data have been reclassified in order to be consistent vrith the current year's presentation. STEWARDSHIP, COMPLIANCE AND ACCOUNT ABILITY A. Budgetary Information Annual budgets are adopted on a basis consistent with accounting principles generally accepted in the United States of America for the general, special revenue and debt service funds. The capital projects funds adopt project length budgets. All al111ual appropriations lapse at fiscal year end. The City does not use encumbrance accounting. In August of each year, all departments of the City submit requests for appropriations to the City Administrator so that a budget may be prepared. Before September 15"', the proposed budget is presented to the Council for review. The Conncil holds public hearings and a final budget is prepared and adopted in December. 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 departments require the approval of the Council. The legal level of budgetary control is the fund level. Budgeted amounts are as amended by the Council. B. Excess of Expenditures over Appropriations For the year ended Deccmber 31, 2002, expenditures exceeded appropriations in the following funds: Fund Budget Actual Excess Special revenue Cable TV $ 20,045 $ 25,239 $ 5,194 TCA_AP 38,415 144,885 106,470 Debt service Tax Increment Bonds of 1998A 286,315 286,318 3 The excess expenditure over appropriations was funded by revenue in excess of budget and available fund balance. -16- CITY OF ARDEN HILLS, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31,2002 I .- I Deficit I $ 734 I 489,646 150,944 I Note 2: STEWARDSHIP, COMPLIA1'1[CE AND ACCOUNTABILITY - CONTINUED C. Deficit Fund Equity The following funds had fund equity deficits at December 3 1,2002: Fund Special revenue Recreation Program Economic Development Authority Capital projects Municipal Land and Buildings The deficits will be eliminated with future revenue sources and transfers from other fimds. I Note 3: DETAILED NOTES ON ALL FUNDS AND ACCOUNTS Cash balances of the City's funds arc combined (pooled) and invested to the extent available in various invesllilents authorized by Minnesota statutes. Each fund's portion of this pool (or pools) is displayed on the financial statements as "cash and temporary investments". For purposes ofidentitying the risk of investing public funds, the balances are categorized as follows: I A. Deposits and Investments . In accordance with Minnesota statutes and as authorized by the Council, the City maintains deposits at those depository banks, all of which arc members of the Federal Reserve System. .. Deposits Mirmesota statutes require that all City deposits be protected by insurance, surety bond or collateral. The market value of collateral pledged must equal 110 percent ofthe deposits not covered by insurance or bonds (140 percent in the case of mortgage notes pledged). . . Authorized collateral includes the legal investments described below, as well as certain first mortgage notes, and certain other State or local goverrunent obligations. Minnesota statutes require that securities pledged as collateral be held in safekeeping by the City or in a financial institution other than that furnishing the collateral. The City has deposits with a bank and a book value of$I,651,000 that are entirely covered with FDIC insurance at December 31, 2002. I Investments I Investments are categorized into these three categories of credit risk: 1. Insured or registered, or securities held by the City or its agent in the City's name. I 2. Uninsured and llIIfegistered, with securities held by the counterparty's trust department or agent in the City's name. I 3. Uninsured and unregistered, with securities held by the counterparty, or by its trust department or agent but I not in the City's name. -. -17- I I I ,- Note 3: , I I I I I .e I I I I I I I. I I --------- CITY OF ARDEN HILLS, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31,2002 DETAILED NOTES ON ALL FUNDS AND ACCOUNTS - CONTINUED At year end, the City's investment balances were as follO\vs: Category 2 Carrying Amount! __,'L-- Fair Value U.S. Govemment Securities $ $ 6,663,482 $ 6 663 482 $ Investments not subjected to categorization: Broker money market funds Minnesota Municipal Money Market Fund 158,030 6,767.383 $ 15 239 895 Total investments A reconciliation of cash and temporary investments as shov.'Il on the Combined Balance Sheet for the City follows: Deposits Investments $ 1,651,000 13,588,895 $ 15239895 Total cash and temporary investments B. Loans Receivable In 1998, the City entered into an agreement with Cardiac Pacemakers, Inc. (CPI) and the Mitmesota Department of Trade and Economic Development (MNDTED). This agreement provides a $300,000 loan to CPI that has a $200,000 forgivable component and a $100,000 loan component at 3 percent payable over 60 months. The forgivable component remains forgivable if cpr meet certain employment criteria over a five-year period beginning September 1998 through August 2003. The outstanding balance at year end for the loan component is $14,215. The forgivable component has been satisfied and no balance is due at year end. C. Due From Other Governments The amount due from other governments at December 31, 2002 is as follows: Special General Revenue Total County $ 62,122 $ $ 62,122 Local 1,400 36.341 37,741 Total $ 63.522 $ 36 341 $ 99 863 D, Fixed Assets A summary of changes in general fixed assets for the year ended December 31, 2002 is as follows: Balance Balance J anuarv I Additions Disoosals December 31 Land $ 2,309,549 $ $ $ 2,309,549 Buildings and structures 3,725,298 1,762 3,727,060 Furniture, fixtures and office equipment 463,282 62,420 525,702 Machinery and equipment 1,209,179 218,587 73,000 1,354,766 Other improvements 14,983,869 16,084 14,999,953 Total $22691177 $ 298.853 $ 73 000 $ 22 917 030 -18- . CITY OF ARDEN HILLS, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2002 . -. Note 3: DETAILED NOTES ON ALL FUNDS AND ACCOUNTS - CONTINUED The following is a summary of enterprise fund fixed assets at Dccember 31, 2002: Surface Water Water Sewer Mgmt Total FUITliture and equipment $ 124,665 $ 361,532 $ 116,575 $ 602,772 Distrihutions and collection system 6,138.562 4,853.783 10.992.345 Total 6,263,227 5,215,315 116,575 11,595,117 Less accumulated depreciation (! ,628.471 ) (2,311.795 ) (50.423 ) (3.990.689 ) Net $ 4 634 756 1..2,903 520 $ 66152 $ 7 604428 E. Interfund Receivables and Payables I I . I Special Revenue Capital Proi ects Amount . $ 650,000 -. . I The composition of interfund balances at December 31, 2002 is as follows: Receivable Fund Pavable Fund Capital projects Permanent improvement revolving Advance to from other fund Special revenue Economic Development Authority F. Deferred Revenue Deferred revenue at December 31, 2002 is comprised of the following: General Enterorise Total 104,659 . 5,780 I 172,000 14,215 26.920 I 323.574 I I .' I I Delinquent taxes Special assessments Delinquent Deferred Loans Licenses and other $ 32,590 $ 72,069 $ $ $ 123,004 5,780 48,996 14,215 26,920 Total $ 59 510 $ 86 284 $ 123 004 $ 54,776 $ -19- . . .- Note3: . . . I . I .e . . . . . I I - .e I CITY OF ARDEN HILLS, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2002 DEI' AILED NOTES ON ALL FUNDS AND ACCOUNTS - CONTINUED G. Long-term Debt General Obligation Bonds. The City issues general obligation bonds to provide funds for the acquisition and constmction of major capital facilities. General obligation bonds have been issued for general government activities. General obligation bonds are direct obligations and pledge the full faith and credit of the government and bonds currently outstanding are as follows: General Long-Term Debt General Obligation Tax Increment Bonds The folloVling bonds were issued for redevelopment projects. The additional tax increments resulting from increased tax capacity of the redeveloped properties will be used to retire the related debt. Authorized and Issued Balance at Year End Issue Date Maturity Date Interest Rate G.O. Tax Increment Bonds, Series 1998A $ 3,100,000 4.00 -4.75% 03/01198 02/01/15 $ 2,875,000 Other Long-term Debt Compensated Absences This liahility represents vested benefits earned by employees through the end of the year 75,724 Total Long Term Debt LI,95_Q,124 Changes in General Long-term Liabilities During the year ended December 31, 2002, the following changes occurred in liabilities reported in the general long-term debt account group: Balance Balance Januarvl Additions Disposals December 31 Compensated absences $ 42,741 $ 32,983 $ $ 75,724 General obligation tax Increment debt 3,030,000 155.000 2,875,000 Total $ 3 072,0;'41 $ 32983 $ 155 000 $ 2.950.724 -20- CITY OF ARDEN HILLS, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31,2002 Notc 3: DETAILED NOTES ON ALL FUNDS AND ACCOUNTS - CONTINUED The alIDual requirements to amortize all debt (excluding compensated absences) outstanding as of December 3 1,2002 is as follows: G.O. Tax Year Increment 2002 $ 285,092 2003 288,450 2004 286,376 2005 288,860 2006 290,783 Thereafter 2,386,625 Total $ 3,826,186 Less interest (951.186) Principal $ 2.875,000 Amount Available for Debt Retirement. Available fund balance in the debt service funds for repayment of bonds totaled $1,983 at year end. The general fund has $68,573 available to pay compensated absences. Amount to be Provided/or Debt Retirement. This represents future revenue to be generated for debt payments, generally including interest earnings, tax increments, scheduled tax levies and deferred (future) special assessment levies. H. Tax Increment Districts The City is the administering authority for the following tax increment financing districts: Type of district Year established Duration of district District No. #2 #3 Redevelopment Housing 1989 1993 25 years 15 years $ 400,600 $ 36,580 28,588 1.706 $ 372 012 $ 34.874 $ 3,100,000 $ 225,000 $ 2.875 000 $ Current tax capacity (payable 2002) Original tax capacity Captured tax capacity retained by authority Total bonds issued Amounts redeemed Outstanding bonds/loans at December 31, 2002 -21- . . -. I I I I I I .. I I I I I I .1 I I . I ,- Note3: I . I . . . .e . I , . , . . '. .. . CITY OF ARDEN HILLS, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2002 DETAILED NOTES ON ALL FUNDS AND ACCOUNTS - CONTINUED I. Fund Equity Reservations and Designations The components of fund equity are described in Note 1. Certain reservations and designations have been made in the following funds: Fund Pumo.sc Amount Reserved General Compensated absences $ 68,573 Prepaid items 18,495 Special revenue Prepaid items 75 Debt service Payment of long-term debt 2,012 Capital projects Interfund advances 650,000 Total $ 739 155 Designated General Working capital $ 666 104 J. Contributed Capital The changes in the City's contributed capital accounts of its enterprise funds were as follows: Sources Water Sewer Total Beginning balance, contributed capital $ 4,137,771 $ 2,480,897 $ 6,618,668 Less depreciation on contributed assets 49,432 56,579 106,011 Ending balance, contribnted capital $ 4,088,332 $ 24243318 $ 6,512657 -22- . CITY OF ARDEN HILLS, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2002 . -. Note 4: DEFINED BENEFIT PENSION PLANS - STATEWIDE A. Plan Description All full-time and certain part-time employees of the City are covered by defined benefit plans administered by the Public Employees Retirement Association ofMinncsola (PERA). PERA administers the Public Employees Retirement Fund (PERF), which is a cost-sharing, multiple-employer retirement plan. This plan is established and administered in accordance with Minnesota statutes, chapters 353 and 356. . PERF members belong to either the Coordinated Plan or the Basic Plan. Coordinated Plan members are covered by Social Security and Basic Plan members are not. All lle\V members must participate in the Coordinated Plan. . PERA provides retirement benefits as well as disability benefits to members, and benefits to survivors upon death of eligible members. Benefits are established by Minnesota statute, and vest after three years of credited service. The defined retirement 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. I . Two methods are used to compute benefits for PERF's Coordinated and Basic Plan members. The retiring member receives the higher of a step-rate benefit accrual formula (Method I) or a level accrual formula (Method 2). Under Method 1, the annuity accrual rate for a Basic Plan member is 2.2 percent of average salary for each of the first 10 years of service and 2.7 percent for each remaining year. The annuity accrual rate for a Coordinated Plan member is 1.2 percent of average salary for each of the first 10 years and 1. 7 percent for each remaining year. Under Method 2, the annuity accrual rate is 2.7 percent of average salary for Basic Plan members and 1.7 percent for Coordinated Plan melnbers for each year of service. A reduced retirement annuity is also available to eligible members seeking early retirement. There are different types of annuities available to members upon retirement. A single-life annuity is a lifetime e. annuity that ceases upon the death of the retiree - - no survivor annuity is payable. There are also various types of joint and survivor annuity options available which will be payable over joint lives. Members may also leave their . contributions in the fund upon termination of public service in order to qualify for a deferred annuity at retirement age. Refunds of contributions are available at any time to members who leave public service, but before retirement benefits begin. . . The benefit provisions stated in the previous paragraphs of this section are current provisions and apply to active plan participants. Vested, terminated employees who are entitled to benefits but are not receiving them yet are bound by the provisions in effect at the time they last terminated their public service. . PERA issues a publicly available financial report that includes [maneial statements and required supplementary infonnation for PERF and PEPFF. That report may be obtained on the web at www.lnnpcra.com. by writing to PERA, 60 Empire Drive, Suite 200, St. Paul, Minnesota 55103-1855 or by calling 651-296-7460 or 800-652-9026. . . B, Funding Policy . Minnesota statutes, chapter 353 sets the rates for employer and employee contributions. These statutes are established and amended by the State legislature. The City makes annual contributions to the pension plans equal to the amount required by Minnesota statutes. PERF Basic Plan members and Coordinated Plan members are required to contribute 9.10 percent and 5.10 percent, respectively, of their annual covered salary. The City is required to eontribute the following percentages of arumal covered payroll: 11.78 percent for Basic Plan PERF members, and 5.53 percent for Coordinated Plan PERF members. The City's contributions to the PERF for the . years ending December 31, 2002, 2001, and 2000 were $52,340, $43,560, and $42,624, respectively. The City's contrIbutIons were equal to the contractually required contributions for each year as set by Minnesota statute. . . . -23- . . I .- . . . . . . .- . . . . . . . .- I Note 5: CITY OF ARDEN HILLS, MINNESOTA NOTES TO FINA!--:CIAL STATEMENTS DECEMBER 31,2002 OTHER INFORMA nON A. Risk Management The City is exposed to various risks ofloss 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 insmancc throngh participation in the League of Minnesota Cities Insmancc Trust (LMCiT), which is a risk sharing pool with approximately 800 other governmental units. The City pays an annnal premium to LMCIT for its workers compensation and property and casualty insurance. The LMCIT is self-sustaining through member premiums and will reinsure for claims above a prescribed dollar amount for each insurance event. Settled claims have not exceeded the City's coverage in 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 (IBNRs). The City's management is not aware of any incurred but not reported claims. B. Segment Information for Enterprise Funds The City provides services} which are accounted for in four enterprise funds. The segment information for these enterprise funds for the year cnded December 31, 2002 is as follows: Surface Water Water Sewer Recvcline: Manae:ement Total Operating revenue $ 976,107 $ 873,987 $ 43,996 $ 208,536 $ 2,102,626 Depreciation expense 87,808 94,714 2,830 185,352 Operating income (loss) 24,583 (117,92 I) (35,034 ) 114, I 69 (14,203) Operating grants 18,891 18,891 Net income (loss) 80,849 (60,128) (14,310) 135,924 142,335 Acquisition of fixed assets 59,405 63,656 66,501 189,562 Net working capital 1,437,196 1,597,123 54,113 599,864 3,688,296 Total assets 6,226,977 4,596,918 105,532 672,979 11,602,406 Total equity 6,071,952 4,500,643 54,113 666,016 11,292,724 C. Legal Debt Margin The City's statutory debt limit is computed as two percent of the taxable market value of property within the City. Long-term debt issned and financed partially or entirely by special assessments or the net revennes of enterprise flUld operations is excluded from the debt limit computation. There is no ontstanding debt at year end that is applied against the statutory deht limit. D. New Reporting Standard In JlUle 1999, the Governmental AeeolUlting Standards Board (GASB) issned Statement 34 "Basic Financial Statement and Management's Discussion and Analysis for State and Local Govennnents." This Statement establishes new financial reporting requirements for state and local govennnents throughout the United States. When implemented, it will require new information and restructure much of the infonnation that governments have presented in the past. Comparability \"-vith reports issued in all prior years 'Nill be affected. The Cit<j is required to implement this standard for the fiscal year ending December 3 I, 2004. The City has not yet determined the full impact that the adoption of GASB Statement 34 will have on the financial statements. These fmancial statements are presented in accordance with the financial reporting model in effect prior to that descrihed in GASB Statement No. 34. -24- . CITY OF ARDEN HILLS, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2002 I -. Note 6: COMMITTMENTS Ice Arena Financing The City, along with three other cities and Ramsey County, entered into an agreement January 1,1997 with the . Minnesota Amateur Sports Commission to provide financing of a four sheet ice arena. The agreement provides for rental income to cover principal, interest and operating expenses. In the case of default, each City will be responsible for a specific portion of the debt. Arden Hills' percentage is 15.5 percent of one of the four sheets and the amount of the debt will not exceed $9,000,000 for all four sheets in the complex. No expenditures were incurred under this . cOfIUnitment in 2002. 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, 2003 and allows renewal for three additional five-year periods. The contract cost will be based on the hudget submitted hy 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 $188,212 in 2002. . Note 7: LAKE JOHANNA VOLUNTEER FIRE DEPARTMENT, INC. . I . -. . I . I . . .1 . -25- . I I I- I I I I I I .e I I I I . I I. I I COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS CITY OF ARDEN HILLS ARDEN HILLS, MINNESOTA YEAR ENDED DECEMBER 31, 2002 I I I- I I I I I I .e I I I I I I I. I I ASSETS Cash and temporary investments Receivables Interest Delinquent taxes Accounts Due from other govemments Prepaid items TOTAL ASSETS LIABILITIES AND FUND BALANCE LIABILITIES Accounts payable Due to other governn1cnts Accrued salaries payable Deferred revenue TOTAL LIABILITIES FUND BALANCE Reserved for: Prepaid items Compensated absences Unreserved Designated for working capital TOTAL FUND BALANCE CITY OF ARDEN HILLS, M~ESOTA GENERAL FUND COMP ARA TIVE BALANCE SHEETS DECEMBER 31,2002 AND 20C)] TOTAL LIABILITIES AND FUND BALANCE -26- 2002 2001 $ 751,042 $ 767,699 1,434 3,377 95,246 49,677 3,969 4,228 63,522 54,612 18,495 17,555 $ 933.708 $ 897,148 $ 78,831 $ 57,786 7,624 31,540 34,571 23,435 59,510 70,683 180,536 183,444 18,495 17,555 68,573 21,652 666, I 04 674,497 753,172 713,704 933,708 $ 897,148 $ 2002 2001 Variance - Favorable Budget Actual (Unfavorable) Actual $ 2,033,355 $ 1,950,496 $ (82,859) $ 2,028,421 52,400 50,315 (2,085) 52,886 285,750 249,404 (36,346) 440,885 338,150 299,719 (38,431) 493,771 CITY OF ARDE~ HILLS, MII\'NESOTA GENERAL FUND STATEMENT OF REVENUE, EXPENDlTLiRES AND CHANGES IN FUND BALANCE- BUDGET AND ACTUAL YEAR ENDED DECEMBER 31, 2002 (With comparative actual amounts for the year ended December 31,200 I) REVENUE General property taxes Licenses and permits Business Nonbusiness Total Intergovernmental revenue State Street aid Property tax credits Firefighter's relief aid Other Total 62,500 68,149 5,649 129,374 129,374 165,000 (165,000) 5,279 5,467 188 362,153 202,990 (159,163) 49,645 59,405 9,760 2,900 6,810 3,910 1,800 1,248 (552) 54,345 67,463 13,118 26,200 41,782 15,582 18,000 12,397 (5,603) 9,000 7,584 (1,416) 900 986 86 25,475 60,900 35,425 7,500 11,043 3,543 32,300 32,300 75,175 112,813 37,638 2,907,378 2,687,660 (219,718) Total Charges for services General government Public safety Culture and recreation Fines and forfeitures Interest on investments Miscellaneous State building code surcharges City building code surcharges Refunds and reimbursements Sale of assets Building rent Total TOTAL REVENUE -27- . . -. . . . . 62,271 115,419 163,574 5,274 . 346,538 . 52,523 e. 5,927 1,720 60,170 . 31,193 28,316 . 16,891 . 964 50,152 15,779 . 31,500 115,286 . 3,103,695 I .. . . I I ,- I I I , I I .a I I I , I I I. , I CITY OF ARDEN HILLS, MINNESOTA GENERAL FUND STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE- BUDGET AND ACTUAL - CONTINUED YEAR ENDED DECEMBER 31, 2002 (With comparative actual amounts for the year ended December 31,2001) 2002 2001 Variance - Favorable Budget Actual (Unfavorable) Actual EXPENDITURES Current expenditures General government Mayor and Council Personal services $ 17,570 $ 17,569 $ 1 $ 17,568 Supplies 2,500 3,119 (619) 2,119 Other services and charges 72,550 92,032 (19,482) 103,427 Total 92,620 ] 12,720 (20,100) 123,114 Elections and voter registration Personal services 8,000 983 7,017 Supplies 1,250 1,428 (178) Other services and charges 30,600 30,448 152 252 Total 39,850 32,859 6,991 252 Administration Personal services 277,825 271 ,899 5,926 223,026 Supplies 9,050 12,169 (3,119) 10,431 Other services and charges 72,675 84,920 (12,245) 84,029 Total 359,550 368,988 (9,438) 317,486 Legal Other services 65,000 59,129 5,871 65,614 Planning and zoning Personal services 67,620 57,770 9,850 39,101 Supplies 2,190 2,761 (571) 1,623 Other services and charges 16,800 15,520 1,280 30,753 Total 86,610 76,051 10,559 71,477 Building Personal services 10,565 22,123 (11,558) 14,064 Supplies 2,600 5,868 (3,268) 3,920 Other services and changes 66,730 91,249 (24,519) 93,168 Total 79,895 119,240 (39,345) 111,152 Total general government 723,525 768,987 (45,462) 689,095 -28- I CITY OF ARDEN HILLS, yllNNESOTA GENERAL FUND I STATEMENT OF REVENUE, EXPENDITURES AND CHANGES TN FUND BALANCE- BUDGET AND ACTUAL - CONTINUED YEAR ENDED DECEMBER 31,2002 -. (Vlith comparative actual amounts for the year ended December 31, 200 l) 2002 2001 Variance ~ Favorable . Budget Actual (Unfavorable) Actual EXPENDITURES - CONTINUED Current expenditures - Continued I Public safety Police and animal contra] Other services and charges $ 653,095 $ 647,155 S 5,940 $ 637,102 Fire protection I 2% fire relief aid 165,000 165,000 163,574 Other services and charges 219,839 188,212 31,627 177,084 I Total 384,839 188,212 196,627 340,658 Protective inspection I Personal services 124,055 121,942 2,113 95,531 Supplies 650 568 82 855 Other services and charges 26,350 49,240 (22,890) 32,781 I Total 151,055 171,750 (20,695) 129,167 Total public safety 1,188,989 1,007,117 181,872 1,106,927 a. Public works Streets Personal services 120,180 127,770 (7,590) 116,761 I Supplies 41,475 54,435 (12,960) 44,630 Other services and charges 152,950 156,422 (3,472) 124,471 Total public works 314,605 338,627 (24,022) 285,862 I Culture and recreation Park maintenance I Personal services 204,750 177,03 I 27,719 213,986 Supplies 32,805 43,341 (10,536) 30,671 Other services and charges 41,550 34,339 7,211 44,117 . Total culture and recreation 279,105 254,711 24,394 288,774 Economic development . Personal services 3,845 4,146 (301) 3,683 Supplies 510 Other services and charges 13,140 12,357 783 10,691 I Total economic development 16,985 16,503 482 14,884 Total current expenditures 2,523,209 2,385,945 137,264 2,385,542 I -. -29- I I I ,- I I I I I I .e I I I I I I I. I I CITY OF ARDEN HILLS, MINNESOTA GENERAL FUND STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN HIND BALANCE - BUDGET AND ACTUAL - CONTINUED YEAR ENDED DECEMBER 3 1,2002 C\Vith comparative actual amounts fOT the year ended December 31, 2(01) EXPENDITURES - CONTINUED Capital outlay General government Public safety Public works Culture and recreation 2002 2001 V ariance ~ Favorable Budget Actual (Unfavorable) Actual $ 58,200 $ 24,310 S 33,890 $ 37,399 30,000 55,806 (25,806) 51,583 55,000 55,298 (298) 54,097 70,000 56,948 13,052 84,493 213,200 192,362 20,838 227,572 2,736,409 2,578,307 158,102 2,613,114 170,969 109,353 (61,616) 490.581 89,839 52,950 (36,889) 51,583 (306,100) (122,835) 183,265 (463,750) (216,261) (69,885) 146,376 (412,167) Total capital outlay TOTAL EXPENDITllRES EXCESS (DEFICIENCY) OF REVENUE OVER EXPENDITURES OTHER FINANCING SOURCES (USES) Operating transfers in Operating transfers out TOTAL OTHER FINANCING SOURCES (USES) EXCESS (DEFICIENCY) OF REVENUE AND OTHER FINANCING SOURCES OVER EXPENDITURES AND OTHER FINANCING USES $ 84,760 78,414 $ (45,292) 39,468 FUND BALANCE, JANUARY 1 713,704 635,290 FUND BALANCE, DECEMBER 31 $ 713,704 $ 753,172 -30- I CITY OF ARDEN HILLS, MINNESOTA SPECIAL REVENUE FUNDS I COMBINING BALANCE SHEET DECEMBER 31,2002 .. (With comparative totals for December 31, 2001) Community Recreation I Service Program Park ASSETS Cash and temporary investments $ (6,968) $ 3,387 $ 560,893 Receivables I Interest 333 2,961 Delinquent taxes Accounts 7,819 I Loans Due from other govemments Prepaid items 75 I TOTAL ASSETS $ 1,184 $ 3,462 $ 563,854 LIABILITIES AND FUND BALANCE (DEFICIT) I LIABILITIES Accounts payable $ $ 227 $ 1,110 I Due to other funds Advance from other fund Due to other govenunents 227 Accrued salaries payable 3,742. e. Deferred revenue TOTAL LIABILITIES 4,196 1,110 I FUND BALANCE (DEFICIT) Reserved for prepaid items 75 I Umeserved Undesignated 1,184 (809) 562,744 TOTAL FUND BALANCE (DEFICIT) 1,184 (734) 562,744 I TOTAL LIABILITIES AND I FUND BALANCE (DEFICIT) $ 1,184 $ 3,462 $ 563,854 I I .1 I -31- I . I .- Economic I Risk Development Totals Cable TV TCAAP Management Authority 2002 2001 S 229)18 289,139 $ 228,086 $ 160,730 $ 1,464,585 $ 1,357,252 I 1,089 1,290 1,048 766 7,487 7,504 72,741 72,741 82,277 I 13,221 21,040 22,554 14,215 14,215 35,011 36,341 36,341 I 75 $ 243,628 S 326,770 $ 229,134 S 248,452 S 1,616,484 $ 1,504,598 I I s $ 81,539 S 32,584 $ 245 $ 115,705 S 31,973 60,050 650,000 650,000 650,000 .e 10,000 10,227 1,071 165 2,255 1,569 7,731 2,985 86,284 86,284 103,252 I 165 93,794 32,584 738,098 869,947 849,331 I 75 243,463 232,976 196,550 (489,646) 746,462 655,267 I 243,463 232,976 196,550 (489,646) 746,537 655,267 I S 243,628 $ 326,770 S 229,134 $ 248,452 $ 1,616,484 $ 1,504,598 I I I. I I -32- , CITY OF ARDEN HILLS, MINNESOTA SPECIAL REVENUE FUNDS COMBINING STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE (DEFICIT) YEAR ENDED DECEMBER 31,2002 (With comparative totals for the year ended December 31, 2001) I -, Community Recreation Service Program Park $ $ $ 84,522 23,805 2,582 20,887 59,848 422 22,999 62,430 84,944 67,691 I REVENUE Tax increments Intergovernmental Charges for services Park dedication fees Interest on investments Miscellaneous I I , TOTAL REVENUE EXPENDITURES Current Personal services Supplies Other services and charges Capital outlay , 18,223 43,885 I 62,108 8' 5,583 , I , 5,583 I 557,161 562,744 , , .1 I I TOTAL EXPENDITURES EXCESS (DEFICIENCY) OF REVENUE OVER EXPENDITURES OTHER FINANCING SOURCES (USES) Operating transfers in Operating transfers out TOTAL OTHER FINANCING SOURCES (USES) EXCESS (DEFICIENCY) OF REVENUE AND OTHER FINANCING SOURCES OVER EXPENDITURES AND OTHER FINANCING USES (37,659) (l,036) FUND BALANCE (DEFICIT), JANUARY I 38,843 302 FUND BALANCE (DEFICIT), DECEMBER 31 $ 1,184 s (734) $ -33- CITY OF ARDEN HILLS, MINNESOTA DEBT SERVICE FUNDS COMBINING BALANCE SHEET DECEMBER 31, 2002 (With comparative totals for December 31, 2001) Tax Advance Increment Refunding Bonds ofl985 of 1998A ASSETS Cash and temporary investments (deficit) $ (85) S 2,012 $ Receivables Interest 85 TOTAL ASSETS (DEFICIT) S $ 2,012 $ FUND BALANCE (DEFICIT) Reserved for debt service $ $ 2,012 $ Unreserved - undesignated TOTAL FUND BALANCE (DEFICIT) $ $ 2,012 $ -35- , I -, Totals I 2002 2001 1,927 $ 24,141 I 85 120 2,012 $ 24,261 , 2,012 $ 2,015 I 22,246 2,012 $ 24,261 , , 8' . , I I I . .' I I I I. I I I I I I I Ie I I I I I I I. I I CITY Of ARDEN HILLS, MINNESOTA DEBT SERVICE FUNDS COMBINING STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE (DEFICIT) YEAR ENDED DECEMBER 3 1,2002 (\-Vith comparative totals for the year ended December 31, 2001) REVENUE Special assessments Interest on investments Tax Advance Increment Refunding Bonds Totals of I 985 ofI998A 2002 2001 $ 66 $ $ 66 S 96 159 159 4,894 225 225 4,990 TOTAL REVENUE EXPENDITURES Debt service Principal Interest and other EXCESS (DEFICIENCY) OF REVENUE OVER EXPENDITURES ] 55,000 [ 55,000 70,000 131,318 [31,318 135,668 286,3 [8 286,318 205,668 225 (286,3] 8) (286,093) (200,678) 286,3 [5 286,315 205,668 (22,471) (22,471) (J 00,000) (22,471) 286,3] 5 263,844 ] 05,668 TOTAL EXPENDITURES OTHER F[NANCING SOURCES (USES) Operating transfers in Operating transfers out TOTAL OTHER FINANCING SOURCES (USES) EXCESS (DEFICIENCY) OF REVENUE AND OTHER FINANCING SOURCES OVER EXPENDITURES AND OTHER FINANCING USES (22,246) (3) (22,249) (95,0]0) FUND BALANCE, JANUARY 1 2,015 24,261 119,271 22,246 FUND BALANCE (DEFICIT), DECEMBER 31 $ $ $ 24,261 2,012 2,012 S -36- CITY OF ARDEN HILLS, MINNESOTA CAPITAL PROJECTS FUNDS COMBINING BALANCE SHEET DECEMBER 3],2002 (With comparative totals for December 31, 2001) - .- - Munic-ipal Non~Assessable Land and Road Capital Buildings Improvements Equipment $ (111 ,306) S 1,543,562 $ 140,802 53 7,693 824 I ASSETS Cash and temporary investments (deficit) Receivables Interest Special assessments Delinquent Deferred Due trom other funds Advance to other fund Due from other governments I - I TOTAL ASSETS $ (111,253) $ 1,551,255 $ 141,626 I LIABILITIES AND FUND BALANCE (DEFICIT) LIABILITIES Accounts and contracts payable Due to other governments Deferred revenue $ 39,691 $ $ I 81 - 141,626 - 141,626 - 141,626 - I I .- I I TOTAL LIABILITIES 39,691 FUND BALANCE (DEFICIT) Reserved for interfund receivable Unreserved Undesignatcd (150,944) 1,551,255 TOTAL FUND BALANCE (DEFICIT) (150,944) 1,551,255 TOTAL LIABILITIES AND FUND BALANCE (DEFICIT) $ (111,253) $ 1,551,255 $ -37- CITY OF ARDEN HILLS, MINNESOTA I ENTERPRISE FUNDS COMBINING BALANCE SHEET . DECEMBER 31, 2002 (With comparative totals for December 31 , 2001) -. Surface Water Water Sewer Recycling Management ASSETS I CURRENT ASSETS Cash and temporary investments $ 1,465,220 $ 1,562,147 $ 55,049 S 567,804 Receivables . Interest 7,301 7,718 299 2,885 Accounts 103,834 110,090 36,138 Special assessments 13,256 13,256 50,184 Inventory 2,422 I Prepaid items 188 187 TOTAL CURRENT ASSETS 1,592,221 1,693,398 105,532 606,827 . FIXED ASSETS Furniture and equipment 124,665 361,532 116,575 Collection and distribution system 6.138.562 4,853,783 I TOTAL FIXED ASSETS 6,263,227 5,215,315 116,575 LESS ACCUMULATED DEPRECIATION (1,628,471) (2,311,795) (50,423) I TOTAL FIXED ASSETS, NET 4,634,756 2,903,520 66,152 TOTAL ASSETS $ 6,226,977 $ 4,596,918 $ 105,532 $ 672,979 .. LIABILITIES AND FUND EQUITY LIABILITIES . Accounts payable $ 2,669 $ 72,182 $ $ 467 Due to other governments 130,51 I 390 973 Accrued salaries and compensated absences payable 19,125 20,983 1,110 6,496 Deferred revenue 2,720 2,720 49,336 I TOTAL LIAl3lLITIES 155,025 96,275 51,419 6,963 FUND EQUITY I Contributed capital 4,088,339 2,424,318 Retained earnings Unreserved 1,983,613 2,076,325 54,113 666,016 . TOTAL FUND EQUITY 6,071,952 4,500,643 54,113 666,016 TOTAL LIABILITIES AND FUND EQUITY $ 6,226,977 $ 4,596,9 I 8 $ 105,532 $ 672,979 . I .- I -41- - I CITY OF ARDEN InLLS, M]NNESOTA ENTERPR]SE FUNDS I COMBINING STATEMENT OF CASH FLOWS YEAR ENDED DECEMBER 3],2002 .. (With comparative totals for the year ended December 31, 2001) Surface I Water 'vVater Sewer Recycling Management I CASH FLOWS FROM OPERATING ACTIVITIES Operating income (loss) $ 24,583 $ (117,921) $ (35,034) $ 114,169 Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: . Depreciation 87,808 94,714 2,830 (Increase) decrease in assets: Accounts receivable ]53,220 141,392 (4,808) 12,875 Special assessments receivable (1,339) (1,339) . Due from other governments Inventory 590 Prepaid items (] 88) (] 87) I Increase (decrease) in liabilities: Accounts payable (21,699) 70,293 319 Due to other governments 1,254 (23) (4,745) Accrued salaries and I compensated absences payable ],610 3,609 551 2,278 Deferred revenue (8,822) (8,822) 5,059 NET CASH PROVIDED (USED) BY I OPERATING ACTIVITIES 237,017 181,716 (38,977) 132,47] CASH FLOWS FROM NONCAPIT AL -. FINANCING ACTIVITIES Community development block grant County recycling grant 18,891 I NET CASH PROVIDED BY NONCAPITAL FINANCING ACTIVITIES 18,891 CASH FLOWS FROM CAPITAL AND I RELATED FINANCING ACTIVITIES Acquisition of fixed assets (59,405) (63,656) (66,501) I CASH FLOWS FROM INVESTING ACTIVITIES Interest received on investments 55,072 56,937 1,890 21,250 NET INCREASE (DECREASE) I IN CASH AND CASH EQUIVALENTS 232,684 174,997 (18,196) 87,220 CASH AND CASH EQUIVALENTS, JANUARY 1 1,232,536 1,387,150 73,245 480,584 I CASH AND CASH EQUIVALENTS, DECEMBER 31 $ 1,465,220 $ 1,562,147 $ 55,049 $ 567,804 I I ~, I -45- . . .- Totals . 2002 2001 S (14,203) $ 236,203 . 185,352 196,295 I 302,679 (12,372) (2,678) 18,615 57,783 590 29,954 . (375) 48,913 (75,169) . (3,514) (1,321) 8,048 (1,965) (12,585) ( 18,256) . 512,227 429,767 .- 51,305 . 18,891 19,418 18,891 70,723 . . (189,562) (290,532) 135,149 186,718 . 476,705 396,676 . 3,173,515 2,776,839 $ 3,650,220 $ 3,173,515 1 I. I - I -46- CITY OF ARDEN HILLS, MINNESOTA TAX CAPACITY, TAX LEVIES AND TAX CAP ACITY RATES (Shown by year of tax collectibilily) 2002 TAX CAPACITY Real estate $ 9,498,705 $ Personal property 146,814 TOTAL 9,645,519 FISCAL DISPARITY ADJUSTMENT Contribution (1,637,508) Distribution 655,063 ADJUSTED TOTAL TAX CAP AClTY $ 8,663,074 $ TAX LEVIES General fund $ 2,201,002 $ TAX CAPACITY RATES General fund 25.407% -47- I I 2001 . 12,785,079 I 244,875 13,029,954 I . - . - . -. I - - - . . .- - . . (2,340,500) 977,124 11,666,578 2,025,092 17.358% I . . I I I . I . I .- I I I I I I . .. I OTHER REPORTS CITY OF ARDEN HILLS ARDEN HILLS, MINNESOTA YEAR ENDED DECEMBER 31, 2002 . e. II. 1. 2. 3. 4. 5. 6. 7. . Page I of I Gritz, Jackie From: Gritz, Jackie Sent: Tuesday, May 13, 2003 2:29 PM To: Moore, Tom; Bill Henry; Bonnie Sullivan (Recording Secretary); Don Messerly; Jim Crassweller; Joani Werner; Olson, Michelle; Rich Straumann; Roberta Thompson; Steve Zilmer Subject: May 19 PTRC Presentation to CC Discussion points for May 19 (Monday) PTRC presentation to City Council. The presentation will begin at 6:00 p.m. 2003 P"'(RC Long Range Planning Discussion Points I. Premises The Comprehensive Plan ("the Plan") on parks, trails, and open space was developed by the PTRC and adopted by the City Council. The Plan envisions improvement and expansion of parks and trails in Arden Hills over the next 20 years that will require something approaching $20 million in expenditures. The only money currently available to support those anticipated expenditures is the approximately $400,000 in the park fund. If there are no plans to develop the funds necessary to carry out this Plan, improvements in Arden Hills parks and trails will occur on an ad-hoc basis, negating the purpose of the Plan. . . . Questions for Discussion How will the features of the Plan be funded? To what extent are new taxes, bonding, and use of existing city funds options that should be considered? How can we strengthen the city's ability to incorporate the features of the Plan in future decision-making? How can we develop opportunities for collaborative efforts with other cities, the county, and/or the state? How much lead time does the Council require to allocate funds to the major capital expenditures in the Plan? As the PTRC and Council begin to identify priorities in implementing the Plan, what level of annual revenues should we anticipate being dedicated to the Plan? How much of the current park fund does the Council wish the PTRC to allocate to implementation of the Plan, as opposed to recurring upkeep, repair, etc.? 5/13/2003 . . . ~. EN HILLS MEMORANDUM DATE: Agenda Item 3.B May 15,2003 TO: Mayor and City Council Pctcr nen",,, CIty Pl~",@ Case #03-08 Ramsey County / Partners Public Works Facility Hamline Avenue and Highway 96 Special Use Permit FROM: SUBJECT: Requested Action Ramsey County has requested to appear before the Council at this work session and discuss the design of the Cold Storage/Front Wing of the Ramsey County Public Works Facility. Materials will be provided by BWBR Architects and Ramsey County at the work session. PC #03-08- CC Memo 05/15/2003 - Page 1 of 1 e . . ~ EN HILLS MEMORANDUM Date: AGENDA ITEM No. 4.A May 15,2003 To: Mayor and Council From: Staff Management T earn Thomas J. Moore, Aaron Parrish, Cynthia Young 1ifm I ()fJ / ~ ~ Subject: Arden Hills Assessment Policy Enc. DRAFT Assessment Policy BACKGROUND: The Mayor and Council reeendy directed Staff to revisit the current assessment policy. The Management Team met several times to discuss, amend, and compare and contrast the currcnt Arden Hills Assessment Policy with the assessment policies provided by the City of New Brighton, City of Roseville, City of Vadnais Heights, City of Blaine, City of Litde Canada, and City of Shoreview. URS Engineers Greg Brown and Nick Landwer have also reviewed the document. For Council's review, Staff has attached a working draft of an Arden Hills Assessment Policy. \Vhile the attached draft incorporates many of the provisions found in the existing policy, this version indicates a "unit based" method for calculating assessments, and the current policy calculates assessments based upon frontage footage. e . . City of Ardcn Hills I. GENERAL ASSESSMENT POLICIES The purpose of this assessment policy manual is to establish procedures to be utilized by the City of Arden Hills when preparing assessment rolls, so as to assure uniform and consistent treatment ofthe affected properties. Minnesota State Law, Chapter 429.01 0 to 429.111 provides that a municipality shall have the power to make public improvements such as sanitary sewers, storm sewers, water source and distribution facilities, street improvements including grading, curb and gutter, surfacing, sidewalks, street lighting and recreational facilities, ctc. The various procedures that the municipality must follow including reports, notices and public hearings are well defined within the law. The Statute further defines that the cost of any improvement may be assessed upon property benefited by the improvement based upon the benefits received whether or not the property abuts on the improvement and whether or not any part of the cost of the improvement is paid from other funding sources. The law is not specific on how these benefits are to be measured or how the costs are to be apportioned, but rather makes it incumbent upon the municipality to determine with assistance of the City Engineer, City Attorney, appraisers or other qualified personnel, a fair and equitable method of cost-sharing among the properties involved. Throughout this policy manual, the total cost of an improvement shall include the construction cost, plus all associated overhead costs. The total cost of the associated overhead for a public improvement project would typically include the following as a percentage of the construction costs: City Administration Engineering Legal Fiscal Interest During Construction Assessment Roll Preparation Contingencies TOTAL 2.5% 15.0% 2.0% 3.0% 4.5% 1.0% 4.0% 32.0% These ovcrhead costs are estimates only. The actual costs incurred will be tracked and charged to the project. Any contributing funds from outside sources (i.e., Municipal State Aid, water or sanitary sewer operating funds, connection charges, other governmental agencies) may be deducted from the total improvement cost to determine the assessable costs. The initiation of public improvement projects may happen in two (2) different methods. The first method is by a petition of the affected property owners. The petition must be signed by the owners of not less than thirty-five percent (35%) of the frontage of the real property 2003 Assessment Policy Manual- Page I e . . City of Arden Hills abutting the proposed improvemcnts. The second method is to initiate the proceedings by City Council direction, in which case no petition is needed. Any reference to land zoning in this policy manual shall mean the most current approved City Zoning Map available at the time. It should be emphasized that the special assessment methods and policies summarized herein cannot be considered as all-inclusive and that unusual circumstances may at times justify special consideration, Also, any fixed cost data and rates presented herein will be adjusted from ycar to year so as to reflect current costs. The City Council shall retain the right to review each project on its own merit and to deviate from any portion of this Assessment Policy Manual, as it deems proper. These deviations may occur in unique situations or where application of the policy produces unfair or undesirable results. A. Definitions 1. Assessment Rate The assessment rate for any special assessment district is computed by dividing the total assessable costs of such improvement by the total number of assessment units. (e.g. Total Project Cost = $1,000.00 divided by 100 property owners = $100.00 assessment each) 2. Assessable Costs The assessable cost of an improvement shall be defined as those costs that, in the opinion of the City Council, are attributable to the need for service in the area served by the improvement. Assessments shall be based on estimated costs. 3. Petition Petition shall mean a written document presented to the City Council for purposed of initiating a public improvement project. The address of each signatory, the date of the signature and a printing of each signatory's name shall accompany all signatures. 4. Total Proiect Cost Total project cost shall mean the final construction cost plus all associated overhead costs. Overhead costs shall include, but not be limited to, City administration, engineering, legal, fiscal, and interest during construction and land acquisition. 5. Assessment Period The length of payment period of various types of improvement projects shall be as follows: Mill and Overlay Storm Sewer 5 years 5 -10 years 2003 Assessment Policy Manual - Page 2 City of Arden Hills - Street Reconstruction Sanitary Sewer Water Main 10 years 10 - 15 years 10 - 15 years In the case where several areas of the improvements listed above are included in the same project, the assessment period shall be determined by the City Council. In no event shall an assessment period exceed twenty (20) years. 6. Municipal State-Aid Streets Municipal State-Aid Streets are routes designated by the City Council and approved by the Commissioner of Transportation for inclusion in the City's State-Aid system. All routes typically begin and end on another municipal state-aid road, county state-aid road or trunk highway. Thc criteria used in selecting such routes is as follows: a. The route is projected to carry a relatively heavier traffic volume or is functionally classified as collector or arterial as identified on the City's functional plan as approved by the City Council; and, e b. The route connects the points of a major traffic interest within the City; and, c. The route provides an integrated street system affording, within practical limits, a state-aid street network consistent with projected traffic demands. 7. Municipal State-Aid Construction Funds Municipal State-Aid construction funds are monies apportioned to the City from the State to be used for the construction of routes designated on the Municipal State-Aid system. All construction funded with these monies must be in accordance with the Minnesota Department of Transportation (MnDOT) Office of State-Aid design criteria. Municipal State Aid (MSA) Funds will not be credited to offset assessmcnts as they will be utilized to offset total reconstruction program costs. e S. Interest Rate on Unpaid Balance The interest rate used over the life of the assessment shall be designated at the prime rate plus two (2) percentage points. It shall be calculated based upon the cost of financing over the life of the assessment, plus any associated overhead costs. This amount shall be expressed as a percentage. 2003 Assessment Policy Manual - Page 3 City of Arden Hills e 9. Land Not Included in Assessment The City may reserve the right to delete land within the assessable area from the assessment roles if, in its opinion, the land cannot be developed and/or the improvement does not provide benefit. No development of that property shall be permitted, nor shall any physical connection to the City's utility or drainage facilities be made by any development on that property until the assessment or connection fees are paid. 10. Service District A service district is the area, as determined by the City Engineer and approved by the City Council, which will receive benefit from a proposed improvement project. This type of approach for assessment purposes is typically used for trunk and subtrunk sanitary sewer projects; trunk, sub trunk, source, storage and treatment water proj ects; and trunk storm sewer projects. . ] 1. Certification of Assessment Roll At the time the assessment rolls are adopted by the City Council by resolution (refer to Appendix for a sample resolution), the property owner may pay the entire assessment against their property in full at Arden Hills City Hall, 1245 W. Highway 96, for thirty (30) days without interest being charged. Beyond thirty (30) days, payment may be made at the Ramsey County Government Center, 50 Kellogg Boulevard, St. Paul. A property owner may pay the total assessment against their property with accrued interest at any time during the life of the project assessment period. . If paid before November 15'\ interest is calculated to December 31 st ofthe year the payment is made. . If paid after November 15th, interest will be calculated through December 31s' of the next year. 12. Ad Valorem Tax The City Council may, at their discretion, utilize ad valorem tax to fund portions of the project cost of any public improvement. This shall be done in accordance with the appropriate Minnesota State Statutes. . 13. Petition for Non-Programmed Proiects The City of Arden Hills has established a formal capital improvement program for street reconstruction and rehabilitation projects. It is the intent of the City to generally follow this established program. The Arden Hills City Council will accept petitions from property owners requesting non-programmed projects. Generally, the assessment rate for non- programmed improvement projects initiated by petition of the affected 2003 Assessment Policy Manual- Page 4 . . . City of Arden Hills property owners shall be one-hundred percent (100%) of the total project cost. 14. Improvements to Roadwavs Not Under City Jurisdiction The City may assess properties that abut roadways not under City jurisdiction, but receiving reconstruction or bituminous overlay improvements. The assessment rate levied against these properties shall be the same as those established for City reconstruction or bituminous overlay projects. B. Assessment Units The City shall levy special assessments on adjacent benefiting properties for street improvement projects. The assessment rate shall be computed on a per-lot unit basis, with a lot unit being defined as a platted single-family residential lot or equivalent, which, according to current Arden Hills Municipal Code cannot be further subdivided for R-I and R-2 residential use. All properties other than R-I and R-2 residential lots (e.g. parks, churches, schools, offices, commercial and industrial) shall be subdivided to determine the assessable lot units or part thereof. Corner lots shall be assessed on the primary driveway entrance only. If a street improvement project is requested to be constructed to a greater width and/or thickness than the standard by the abutting property owners, the excess cost above that of the standard reconstruction cost shall be assessed one hundred percent (100%) to those properties. If a property has been assessed on a lot unit basis for a public improvement, and subsequently a property division is made creating additional lot units, then a supplemental charge shall be made to the property at the same rate which applied under the original assessments. The assessment process shall be carried out in accordance with Minnesota Statutes Chapter 429. The assessment rate shall be on a per-lot unit basis and shall be calculated and processed in accordance with the current Arden Hills Pavement Management Program and Assessment Policy. II. ASSESSMENT POLICY FOR NEW DEVELOPMENTS The assessment policy for anyone who wishes to make public improvements within the City of Arden Hills, as part of a proposed development shall conform to the policies established herein and as modified below. 2003 Assessment Policy Manual - Page 5 City of Arden Hills e Prior to any action on the part of the City to determine the feasibility of providing public improvements, the developer shall deposit such amount as determined by the City Administrator to adequately reimburse the City for all engineering, legal and planning, and other consultant fees for work performed in regard to such improvements. In addition, the developer shall be required prior the City ordering the installation of any City financed improvements, to enter into a Development Contract insuring compliance with the policies set out herein and all subdivision requirements of the City. The developer shall also be required to post all cash deposits, and/or letters of credit prior to such action by the City Council. In all projects that the City constructs and fmances, the following security provisions shall apply. A. For single family, two family or townhouse residential developments, the developer shall deposit with the City a cash escrow or an irrevocable letter of credit of not less than one hundred twenty-five percent (125%) ofthe estimated project cost as determined by the City Engineer. If the estimated project cost, as determined after receipt of bids for construction, exceeds the Engineer's estimate by ten percent (10%) or more, the deposit shall be increased proportionately. The total proj ect costs shall be assessed in equal annual installments according to the assessment period. e C. In the case where the improvements benefit not only the property being developed, but other areas within the City, the developer shall provide to the City a security deposit in accordance with paragraphs described above for the portion of the estimated project costs that represent the benefit to the proposed development. Such portion shall be assessed against the properties benefited. 1. For all other types of development, the developer shall deposit with the City a cash escrow or irrevocable letter of credit of not less than one hundred twenty-five percent (125%) of the estimated project cost as determined by the City Engineer. If the estimated project cost as determined after receipt of bids for construction exceeds the Engineer's estimate by ten percent (10%) or more, the deposit shall be increased proportionately. The total project costs shall be assessed in equal annual installments according to the assessment period. 2. The security deposit shall be irrevocable for the full term of any assessments for which given. The agreement shall be so conditioned as to guarantee payment of the assessments as due or to pay for the cost of all improvements that the developer agreed to install. . 3. The required security deposit may consist of a cash escrow deposit or irrevocable letter of credit, in form acceptable to the City Attorney, and with firms authorized to do business in the State of Minnesota. 2003 Assessment Policy Manual- Page 6 . . . III. City of Arden Hills SANITARY SEWER IMPROVEMENTS A. Definitions 1. Sanitary Sewer Interceptors A network of relatively large diameter, deep sewer pipe and associated pumping stations and appurtenances. The interceptors are designed as collectors for large areas within the sanitary scwcr service area. 2. Sanitary Sewer Trunks and Subtrunks Sanitary sewer pumping stations, including associated forcemain and/or a network of gravity pipes ranging in size generally from ten inch (10") through eighteen inch (18") and extending away from respective interceptor mains. Pumping station, forcemains, trunks and subtrunks are designed as collectors for areas usually less than three hundred (300) acres. Because sewer lines flow by gravity, the pipes can become quite deep at some locations and very costly to install. A trunk or subtrunk assessment is, in certain cases, utilized so that costs due to extra depth (and/or oversizing) will be spread over the entire service district rather than becoming a burden on just those properties abutting that portion of the pipe network constructed. 3. Sanitary Sewer Laterals A network of pipes, usually eight inch (8") in size that are installed eight (8) to twenty (20) feet deep and are designed to serve those buildings abutting a given street or easement. The laterals drain to trunks, subtrunks or directly to interceptors. 4. Sanitary Sewer Building Services Those pipes, usually four-inch (4") or six-inch (6") in size leading from laterals (or sometimes from trunks, subtrunks and interceptors) that serve individual buildings. The services are plugged at the property line until such time that a building is connected to the sewer system. The property owner must make arrangements with a licensed, bonded plumber to complete the service connection. 5. Sanitary Sewer Availability Charge (SAC) This is a charge billed to all properties at the time of connection to the sanitary sewer system. The charge is the individual property share of the cost of the interceptor trunk and treatment facilities that make sewer service available. The charge is based on an equivalent unit basis. The method used to calculate the total number of units for any specific property and the current unit charge are based on the Metropolitan Council Environmental Services (MCES) for expected sewage flow from various dwellings or businesses. A listing of the MCES sewer availability charges is available on the Metropolitan Council website: www.metrocouncil.org 2003 Assessment Policy Manual - Page 7 City of Arden Hills . This charge may not be assessed against the property. 6. Sanitary Sewer Lateral Benefits Lateral benefit may be provided by connection to trunk, subtrunk or lateral pipes. The calculation oflateral benefit from a trunk or subtrunk pipe will be based on the cost of an eight inch (8") pipe along the same alignment at a depth adequate to provide services to the abutting properties. 7. Infrastructure Rehabilitation Proiects Any project or portion of a project that reconstructs an existing sanitary sewer facility. A rehabilitation project may occur on the existing alignment of the sewer line or on a new alignment, thus allowing the existing line to be abandoned or its status downgraded (i.e., trunk or subtrunk to lateral). B. Determining Sanitary Sewer Assessment Rates 1. Sanitary Sewer Interceptor Rates All properties that lie within the approved Servicc District shall bear the cost of sanitary sewer interceptor projects. The costs shall be spread equally, based on a gross area basis within the Service District, and will be known as an interceptor assessment. . 2. Sanitary Sewer TrunklSubtrunk Rates The lateral and building service assessments described below will be deducted from the total improvement cost to be assessed. The amount remaining after said deductions will be assessed on a gross area basis to all propertied within the Service District, and will be known as a trunk assessment and/or subtrunk assessment. 3. Sanitary Sewer Lateral Rates The building service assessments described below will be deducted from the total improvement cost to be assessed. The amount remaining after said deductions will be assessed by the following method. The resulting assessment will be known as a lateral benefit assessment. Each assessable unit shall be assessed as follows: . R-] and R-2 residential lots at 50% of the total proiect cost . All other land uses at 100% of the total proiect cost . 4. Sanitary Sewer Buildinl! Service The assessmcnt rate for each size of building service; four inch (4"), six inch (6"), or eight inch (8") shall be determined by adding all the costs associated with each size of service and dividing by the total number of 2003 Assessment Policy Manual- Page 8 . e . IV. City of Arden Hills services constructcd. Each unit will be assessed at the determined rate for each size and number of serviccs installed. This will be known as the building service assessment. WATER DISTRIBUTION SYSTEM IMPROVEMENTS A. Definitions 1. Water Source and Treatment Facilities The City of Arden Hills purchases water from the City of Roseville to supply the water distribution system. Water enters the system at three (3) separate meter stations. The water purchased from Roseville is treated, and Arden Hill does not add any water treatment to the distribution system. 2. Water Storage Facilities The City of Arden Hills has a total water storage capacity of 1.5 million gallons comprised by two (2) elevated storage tanks. One tank has a capacity of 1.0 million gallons and is located south of 1-694 along Red Fox Road. The other storage tank has a capacity of 0.5 million gallons and is located north ofI-694 along Femwood Avenue. 3. Water Trunk and Subtrunk Distribution Mains A network of pipes and related appurtenances usually in the size range of ten inch (10") to sixteen inch (16"). These pipes are designed to carry large volumes of water and interconnect various point sources of water supply and storage reservoirs. Appurtenances to these facilities would include valves and fittings, but not fire hydrants. 4, Water Main Laterals A network of water pipes and related appurtenances usually six inches (6") or eight inches (8") in size that are installed with approximately eight feet (8') of ground cover to retard freezing and are designed to serve those buildings abutting a given street or easement. Lateral mains are "looped" whercver possible to balance pressures and to provide water from at least two (2) directions so that continuous water service is maintained for most people during a water main break. Looping of lateral mains eliminates dead end water mains that cause a variety of distribution and stagnation problems. Appurtenances to these facilities would include valves, fittings and fire hydrants. 5. Water Main Buildinl! Service These pipes lead from laterals (or sometimes from trunk and subtrunk mains) and serve individual buildings abutting thereon. The size of the service usually ranges from three-quarter inch (3/4") to six-inch (6"), 2003 Assessment Policy Manual- Page 9 . e City of Arden Hills depending upon the type of building served. The lines terminate at the property line with a shut off valve and are plugged until such time that the building is connected to the water system. The property owner must make arrangements with a licensed, bonded plumber to complete the service connection. 6. Water Connection Charge This is a charge billed to all properties at the time of connection to the water system. The charge is the individual property share of the cost of the trunk, source, and storage facilities that make water service available. The charge is based on the size of the connection, plus the material and installation cost of a water meter. The current charges are outlined in the City Fee Schedule. Neither of these charges may be assessed against the property. 7. Water Main Lateral Benefits The benefit resulting to a property abutting or utilizing a water main where a direct connection to that water main via a building service is reasonably possible without additional lateral pipes. Lateral benefit may be provided by connection to trunk, subtrunk or lateral pipes. The calculation oflateral benefit from a trunk or subtrunk pipe will be based on the cost of an eight inch (8") pipe along the same alignment for commercial or industrial zoned property and a six inch (6") pipe for all other areas. 8. Infrastructure Rehabilitation Proiects Any project or portion of a project that reconstructs an eXlstmg water system facility. A rehabilitation project may occur on the existing alignment of the water line or on a new alignment, thus allowing the existing line to be abandoned or its status downgraded (i.e., trunk or subtrunk to lateral). B. Determining Water Main Assessment Rates . 1. Trunk, Subtrunk, Storage and Treatment Facilitv Rates Any lateral and building service assessments described below will be deducted from the total improvement cost to be assessed. The remaining costs shall be spread equally to all properties that lie within the approved Service District. The costs shall be spread on a gross area basis and will be known as all or any of the following as appropriate: trunk, subtrunk, source, storage, and treatment assessment. 2. Water Main Lateral Rates 2003 Assessment Policy Manual - Page] 0 . . . City of Arden Hills The building service assessments described below will be deducted from the total improvement cost to be assessed. The amount remaining after said deductions will be assessed by the following method. . R-l and R-2 residential lots at 50% oftbe total proiect cost . All other land uses at 100% of tbe total proiect cost 3. Water Main Building Service The assessment rate for each size of building service three-quarter inch (3/4") to eight inch (8") inch shall be determined by adding all the costs associated with each size of service and dividing by the total number of services constructed. Each unit will be assessed at the determined rate for each size and number of services installed. This will be known as the building service assessment. V. STORM SEWER IMPROVEMENTS A. Definitions 1. Storm Sewer Improvement District The City Council may, at its discretion, construct and finance storm sewer improvements by utilizing a storm sewer tax district, pursuant to Minnesota Statute 444.16 through 444.21. 2. Storm Sewer Trunk Facilities a. Ponds A basin or wetland constructed or naturally located within a permanent easement for the purpose of containing storm runoff. May be a retention (permanent) pond; detention (temporary) pond; or a combination of both. Arden Hills is within the Rice Creek Watershed District (RCWD), which may require additional improvement to control flow discharge from the ponds. The RCWD has a formal permitting process governing pond construction. b. Pipe Network A network of pipes ranging in size generally from thirty inches (30") through seventy-two inches (72"). The trunk pipe networks are designed to collect stormwater runoff from an area generally larger than forty (40) acres. c. Channels, Ditcbes and Swales Conveyance network constructed within permanent easements for the purposes of transporting stormwater runoff. 2003 Assessment Policy Manual - Page 11 City of Arden Hills . 3. Storm Sewer Lateral Facilities A network of pipes ranging in size generally from twelve inches (12") to twenty-seven inches (27") designed to collect stormwater runoff from a specified small area to a trunk facility. The lateral facilities also include street overland flow and inlet structures such as catch basins, manholes and flared end sections. 4. Storm Sewer Taxinl! District A drainage area determined by using topographical maps and surveys that mutually benefit from storm sewer improvements in conformance with Minnesota Statute, Section 444.16 through 444.21 5. Watersbed District A formally established area and Board that protects and controls the water management aspects of subdivisions and developments within the region. B. Determining Storm Sewer Assessment Rates . 1. Storm Sewer Trunk Rates a. Design and estimate the total improvement cost of the ultimate trunk system needed to provide complete service to each property in the Service District considered. Also, include the total cost of any existing facilities and/or previous storm sewer assessments to be credited. b. Determine the base assessment rate by dividing the ultimate system cost described above by the sum total of the following: I) Gross area oflow-density residential properties times 1.0. 2) Gross area of medium and high density residential, church and school properties times 1.25. 3) Gross area of commercial property times 1.5. 4) Gross area of industrial property times 2.0. c. Assessment rates would be set as follows: . The base rate shall apply to low density residential properties. . The base rate times 1.25 shall apply to medium and high-density residential, church and school properties. . The base rate times 1.5 shall apply to commercial property. . The base rate times 2.0 shall apply to industrial property. d. Credits may be given for previous storm sewer assessments, existing systems and any future additional construction that may be necessary as determined by the City Engineer for complete service to each property. Credit rates for future construction shall be based on current pnces. . 2003 Assessment Policy Manual- Page 12 . I. \C. . City of Arden Hills e. The City may determine that storm sewer trunk cost be assessed to all properties within a respective storm sewer taxing district under Minnesota Statute 444.16 through 444.21 2. Storm Sewer Lateral Rates The lateral storm sewer project costs will be assessed by one of the following methods as determined by the City Council after the project feasibility study. I. Lot/Equivalent Lot Basis Determine the total number of lots and equivalent lot units receiving lateral benefit and divide the project cost equally among them. . R-l and R-2 residential lots at 50% ofthe total proiect cost . All otber land uses at 100% ofthe total proiect cost 3. Municipal State-Aid Construction Fund Contributions When a Municipal State-Aid Street project includes either trunk or lateral storm sewer, which the Minnesota Department of Transportation (MnDOT) determines may be funded by Municipal State-Aid construction funds, the amount determined to be actually funded by MnDOT may be deducted from the total improvement costs to be assessed. 4. Infrastructure Reconstruction Proiects Any project or portion of a project that reconstructs an eXlstmg storm sewer system facility. A reconstruction project may occur in the existing alignment of the storm sewer pipe or on a new alignment, thus allowing the existing line to be abandoned or its status downgraded (i.e., trunk to lateral) . VI. STREET IMPROVEMENTS A. Definitions 1. Federal, State and County Highwavs These streets are classified as expressways, freeways, and principal arterials constructed and maintained by the State or County Highway Departments. They will carry large volumes of traffic at peak loading times. 2. Minnesota State-Aid (MSA) Streets These are termed collector streets that interconnect other collector streets, State or County highways, or with Minnesota State-Aid streets in the municipality. Municipal State-Aid funds, apportioned from the gasoline tax, are used to help finance the cost of Minnesota State-Aid Street. The 2003 Assessment Policy Manual - Page 13 . . . City of Arden Hills design for a Minnesota State-Aid road is dependent on traffic volumes and the urban setting. 3. Commercial/Industrial Streets These are streets that generally serve commercial/industrial property. They would typically have a projected traffic volume higher than a residential street. A typical design would be thirty-six feet (36') wide with concrete curb and gutter, and nine (9) tone design in accordance with current MnDOT standards. 4. Residential Streets Primarily serve adjoining residents with little or no through traffic. Almost all trips have either an origin or destination on that street. (18.5 miles throughout the City) Street width: Minimum of28 feet. 5. Neigbborbood Streets Provide access to residences on that street and provide a route through neighborhood for residents on other streets. A large proportion of trips have neither an origin or destination on that street. (4.5 miles throughout the City) Street width: Minimum of30 feet. 6. Community Street Provide access to the residences, institutions and businesses on that street, providing a route through the neighborhood or business district for residents of other neighborhoods. (6.0 miles throughout the City) Street width: Case specific, 32 foot minimum. 7. Special Cases Streets which do not fir into any of the above descriptions and have a very low usage, (1-3 residences); streets which provide secondary access (i.e. alleys); or, streets defined by extreme limitations due to narrow right-of- way, topography, etc. 8. Appurtenances a. Sidewalks The City may require sidewalks or trails on or adjacent to selected streets or in selected subdivisions. b. Street Ligbting The City has a separate plan that indicates where lights are typically installed. Additional street lights or ornamental lights may be installed at the written request of the abutting property owners. c. Trees Trees and other types of landscaping may be required on selected streets. 2003 Assessment Policy Manual- Page 14 . . . City of Arden Hills d. Seeding/Sod Boulevard restoration by seeding/sodding may be required to prevent erosJOn. 9. Existing Street Reconstruction Proiects Projects that reconstruct existing City streets shall be to the minimum applicable standards for the type of street classification, consistent with the Arden Hills Pavement Management Program (PMP) (as found in the Appendix) 10. MaintenancelRebabilitation Proiects a. Cold in Place Recycling and Repaving (CIRlRepaving) Recycling of existing deteriorated pavements by pulverizing, mixing with new asphaltic oils and compacting in place. New paving materials are then placed over the cold recycled pavement similar to a standard overlay. b. Bituminous Overlay Placement of an additional bituminous layer, generally one inch (I ") to two inches (2 ") thick, over an existing bituminous surfaced street. c. Concrete Pavement Restoration Replacement of existing concrete panels that have deteriorated, mudjacking panels to improve rideability, and the filling of joints and cracks with a petroleum based material to eliminate flow water to the base below the surface. d. Crack Sealing Placement of petroleum based material in the cracks of a bituminous surfaced street for the purpose of eliminating the flow of water from the surface to the aggregate base material blow. e. Bituminous Seal Coating Placement of petroleum based material and aggregate on an existing bituminous surfaced street for the purpose of filling cracks and covering mild wear. f. Bituminous Surfacing Patcbing Repair or replacement of existing bituminous surfacing that has deteriorated. B. Determining Street Assessment Rates The following section identifies methods for determine street assessment rates for residential and commercial/industrial property abutting various types of 2003 Assessment Policy Manual - Page 15 . . . City of Arden Hills street improvements. These types of street improvements include mill and overlay, storm sewer, street reconstruction, sanitary sewer and water main. All properties with tax exempt status and abutting new street reconstruction, street reconstruction, or bituminous overlay improvements shall be assessed at one hundred percent (100%) of the cost of the improvement. 1. New Street Construction a. Residential Property All residentially zoned properties with frontage abutting construction of a new street shall be assessed on a per unit basis for one hundred percent (100%) of the cost ofthe street construction plus all associated overhead costs. This one hundred percent (100%) assessment rate shall apply, regardless of the street's classification (local, collector, arterial, trunk highway); designation (County State-Aid Highway, Municipal State-Aid Street); or jurisdiction (State, County or City). 2. Street Reconstruction a. Residential Equivalent Assessment Rate All R-l and R-2 residentially zoned properties with frontage abutting a street that is reconstructed shall be assessed on a per unit basis at the residential equivalent assessment rate. This rate shall apply, regardless of the street's classification (local, collector, arterial, trunk highway); designation (County State-Aid Highway, Municipal State-Aid Street); or jurisdiction (State, County or City). The residential equivalent assessment rate shall be based on fifty percent (50%) of the cost of street reconstruction plus all associated overhead costs for a typical residential street section. This residential equivalent assessment rate shall be determined by the City Council, and established by resolution on an annual basis, based upon comparable project data available to the City. b. All Otber Zoning Classifications Assessment Rate All other zoned properties with frontage abutting a street that is reconstructed shall be assessed on a per unit basis at the commerciallindustrial equivalent assessment rate. This rate shall apply, regardless of the street's classification (local, collector, arterial, trunk highway); designation (County State-Aid Highway, Municipal State-Aid Street); or jurisdiction (State, County or City). 2003 Assessment Policy Manual - Page 16 . . . City of Arden Hills The commercial/industrial equivalent assessment rate shall be based on seventy percent (70%) of the cost of street reconstruction plus all associated overhead costs for a typical commercial street section. This commercial/industrial equivalent assessment rate shall be detennined by the City Council, and established by resolution on an annual basis, based upon comparable project data available to the City. 3. Mill and Overlav Improvements Mill and overlay improvements are placed as a cost-effective measure to extend the useful street life of a particular roadway and to delay strect reconstruction needs. As bituminous mill and overlays are constructed as long-term rehabilitation improvements, the cost of these improvements shall be assessed as described below. From time to time, however, the City's Operations and Maintenance Department may determine that small street areas need immediate bituminous overlay improvements for short-term maintenance purposes. These types of bituminous overlays, determined to be "stop gap" maintenance needs rather than long-term street rehabilitation improvements, shall not be assessed to abutting properties and shall be funded by the City. a. Residential Equivalent Assessment Rate All R-l and R-2 residentially zoned properties with frontage abutting a street that is overlaid with bituminous surfacing shall be assessed on a per unit basis at the residential equivalent assessment rate. This rate shall apply, regardless of the street's classification (local, collector, arterial, trunk highway); designation (County State-Aid Highway, Municipal State-Aid Street); or jurisdiction (State, County or City). The residential equivalent assessment rate shall be based on fifty percent (50%) of the cost of bituminous overlay plus all associated overhead costs for a typical residential street section. This residential equivalent assessment rate shall be determined by the City Council, and established by resolution on an annual basis, based upon comparable project data available to the City. b. Commercial/Industrial Eqnivalent Assessment Rate All commercially or industrially zoned properties with frontage abutting a street that is overlaid with bituminous surfacing shall be assessed on a front foot basis at the commercial/industrial equivalent assessment rate. 2003 Assessment Policy Manual - Page 17 City of Arden Hills . This rate shall apply, regardless of the street's classification (local, collector, arterial, trunk highway); designation (County State-Aid Highway, Municipal State-Aid Street); or jurisdiction (State, County or City). The commercial/industrial equivalent assessment rate shall be based on seventy percent (70%) of the cost of a bituminous overlay plus all associated overhead costs for a typical commercial street section. This commercial/industrial equivalent assessment rate shall be determined by the City Council, and established by resolution on an annual basis, based upon comparable project data available to the City. 4. Allev All new alley construction or reconstruction shall be 100% assessed to the abutting properties. The assessment shall be on a per unit basis for the property frontage on the alley. . 5. Appnrtenances Appurtenances such as sidewalks, street lighting, trees or other landscaping features are often encountered during street improvement projects. Appurtenances to new street construction, street reconstruction or bituminous overlay improvements that are either existing or needed by the City shall be included in the cost ofthe street improvement project. Appurtenances constructed or provided in areas along an improvement project where they do not currently exist, shall be one hundred percent (100%) assessed to the benefiting properties on a per unit basis. The cost of these appurtenances shall be separated from the cost of the street improvement project. All costs of ornamental street lighting and/or any lighting shall be one hundred percent (100%) assessed to the benefiting properties on a per unit basis. 6. MaintenancelRehabilitation Proiects a. Concrete Pavement Restoration Concrete pavement restoration is a maintenance procedure funded by the City. b. Crack Sealing Crack sealing is a maintenance procedure funded by the city. c. Bituminous Seal Coating Bituminous seal coating is a maintenance procedure funded by the City. . d. Bituminous Surface Patcbing 2003 Assessment Policy Manual- Page 18 e e . City of Arden Hills Bituminous surfacing patching is a maintenance procedure funded by the City. VIII. HARDSHIP DEFERRALS Minnesota Statute No. 435.193 allows the City, at its own discretion, to defer the payment of any assessment for any homcstead property owned by a person sixty-five (65) years of age or older, or retired by virtue of a permanent and total disability for which it would be a hardship to make the payments. In order to receive such a deferment, the affected person must establish the economic hardship that would be incurred to the reasonable satisfaction of the Arden Hills City Council by providing documentation showing an annual adjusted gross income less than thirty percent (30%) of the metropolitan area median household income, as determined by the most recent census. The deferral will last for a period of not more than ten (10) years, and will terminate before ten (10) years if any one of the following conditions is present: A. The owner of the property dies and the spouse is not eligible for a deferment; B. The property is sold; C. The property is no longer homestead; D. The City Council determines that there is no longer hardship incurred in immediately requiring either full or partial payment ofthe assessment. The City reserves the right to periodically request verification of continued eligibility for a hardship deferral. . This deferment must be made by either adoption of an ordinance or a resolution. An application for deferment of special assessments is provided in the Appendix of this Assessment Policy Manual. Also provided in the Appendix is a sample rcsolution approving an assessment deferment and an application for delayed payment of tax on special assessments for senior citizens' homestead property. 2003 Assessment Policy Manual - Page 19