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Home My WebLink AboutCCP 05-15-2006 ~ ~HILLS Arden Hills City Council Mayor: Beverly Aplikowski Councilmembers: David Grant Brenda Holden Gregg Larson Vincent Pellegrin 1245 W. Highway 96 Arden Hills, Minnesota 55112 651.634.5120 www;ci.arden-bills.mn.us REGULAR MEETING Monday, Ma 15,2006 City Vision A strong community that values our unique environment, our fiscal soundness, and our tradition as a desirable ci in which to live, work, and la . Agenda City Council Meeting Convenes 5:00 PM Can to Order I, APPROVAL OF AGENDA 2, APPROVAL OF MINUTES 3. CONSENT CALENDAR A. Approve Resolution 06-33: Not Supporting the US Senate and House of Representatives Telecommunications Bill B, Motion to Authorize Staff to Contract with Wiss, Janney, Elstner Assoc, (WJE) for $25,294 to Perform Additional Structure Inspections at City Hall C. Motion to Approve the Rcplacement of ABS Pump for Lift Station #3 D, Claims and Payroll 4. PULLED CONSENT ITEMS 5. PUBLIC INQUlRIESIINFORMA TIONAL 6. PUBLIC HEARINGS Those items listed under the Consent Calendar are considered to be routine by the City Council and will be enacted by one motion under a Consent Calendar format. There will be no sepamtc discussion of these items, unless a Council Member so requests, in which event, the item will be removed from the general order of business and considered separately in its normal sequence on the agenda. Those items that are pulled from the Consent Calendar will be removed from the general order of business and considered separately in ils norrnal sequence on the agenda. Public Inquiries/Informational is an opportunity for citizens to bring to the Council's attention any items not currently on the agenda. In addressing the Council, please state your name and address for the record, and a brief summary ufthe specific item being <lddressed to the Council. To allow adequate time for each person wishing to address the Council, we ask that individuals limit their conunents to three (3) minutes. Written documents may be distributed to the Council prior to the meeting, or as bench copies, to allow a more timely presentation. Arden Hills City Council Agenda May 15, 2006 Page 2 7. NEW BUSINESS 8. UNFINISHED BUSINESS 9. COUNCIL REQUESTS ADJOURN .. 9 ,e Message Page 1 of 1 Jackie Freppert From: Jackie Freppert Sent: Thursday, May 11, 2006 2:09 PM To: timesaver02@aol,com; bob,fletcher@co,ramsey.mn.us; bulletin@lillienews,com; cwilson@ctv15,org; dprobst@mspmac,org; egurnon@pioneerpress.com; focus@mnsun,com; kgprophet@aol,com; kmaitman@msn,com; mlsmith@startribune,com; smccann@startribune,com; sschroeder@smithmicrotech,com Subject: 5115 CC Meeting Agenda There will be a short (5 minute) regular meeting of the City Council, followed by the regular City Council Work Session, Jackie Freppert, Office Support Specialist City of Arden Hills Phone 651.634,5120 Fax 651.634,5137 www.ci.arden-hills.mn.lls 5/11/2006 . ~ ---A~HILLS City of A)'clen Hills Request fOJ" COlUlCiI Action Prepared by: SJ Dept.: Administration Council Mtg, Date: 511512006 Final Action Needed By: 5115/2006 Agenda Item~.A. A Resolution Not SupportinQ the US Senate and House of Representatives Telecommunications Bill Budgeted Amount: Actual Amount: Funding Source: Council Action Request: Review attached resolution, Staff Recommendation: Approval attached Resolution #06-33, Advisory Commission Action: Commission Date Action Not Applicable Not Applicable. Not applicable Planning PTRC Supporting Documents (which are attached to this Action Form): . 0 Memo/letter: IS] Resolution (No, 06-33) o Ordinance (No, o Engineering Recommendation: o Attorney Recommendation: o Other: Financial Implications: AdministratorlStaff Comments: . Page 1 of 1 . . . ~ ~HILLS CITY OF ARDEN HILLS COUNTY OF RAMSEY STATE OF MINNESOTA RESOLUTION NO, 06.33 A RESOLUTION SUPPORTING LOCAL CABLE AND VIDEO PROVIDER FRANCHISING WHEREAS, the City of Arden Hills is committed to ensuring that all of its citizens have access to the most technologically advanced broadband services available in the marketplace today as a means to ensure the competitiveness of the City, as well as its corporate and individual citizens; and WHEREAS, the City, by means of the local cable franchising process, has obtained commitments to meet the cable-related needs and interests of the community, including full access to a wide array of video and broadband services for all citizens of the City; public, educational and government access channels; financial support for facilities and equipment for the production of programming; free cable services to schools and governmental facilities, and an Institutional Network and other services that support important government, educational, and public interests; and WHEREAS, in Congress, bills have either been introduced or drafted and discussed in committee that would hinder or preclude the City from requiring providers of cable and video services that use City rights-of-way to fully meet local community needs; and WHEREAS, these bills - House of Representatives (HR) 5252 and Senate (S) 2686 - would effectively nationalize the franchising of video services, setting a course toward pre-emption of all local authority over the provision of cable and video services within the community; and WHEREAS, HR 5252 and S 2686 would reduce the funding support for public, educational and government access services provided by the North Suburban Access Corporation/CTV North Suburbs by 80%, lowering its income from $1 million to $218,000, thereby decreasing the ability of the community to produce programs about local issues, people, organizations and activities; and WHEREAS, HR 5252 and S 2686 would eliminate any build-out requirements for any video service provider; and . WHEREAS, HR 5252 and S 2686 would permit companies that may not be financially, legally, or technically qualified to get a license or franchise to build and operate a cable system in the City's public rights-of-way; and WHEREAS, HR 5252 and S 2686 would deprive City residents of the ability to address issues locally by removing to the state and federal government all customer service issues and transferring local enforcement of franchise issues to the federal bureaucracies and courts; and WHEREAS, HR 5252 and S 2686 would threaten the ability of the City to manage its public rights-of-way by allowing video service providers with a national license or new cable franchise to appeal the City's regulations to the Federal Communications Commission; and WHEREAS, local cable franchising allows for cities and towns around the country to exercise local authority, decision-making and consumer protection, to establish and support commercial-free community television, and to receive franchise fees that private companies pay as compensation for their use of local public rights-of-way; and . WHEREAS, the City objects to legislation that creates a subsidy to the telecommunications industry at the expense of the City's taxpayers; Now Be It Resolved by the Arden Hills City Council: That the City is opposed to federal legislation thaI: 1, Pre-empts the local franchising process; 2, Limits the City's ability to negotiate local franchises that enable the community to obtain commitments to meet the cable-related needs and interests of the community, 3, Voids existing cable franchises; 4, Limits or pre-empts the City's ability to require any entity that is issued a video provider franchise to fully build out a franchise area such that said services are equally available to all residents in the franchise area; and . f . . . 5, Limits or pre-empts the ability of the City to manage its public rights-of-way in the best interest of its corporate and individual residents, That the City, for the reasons stated above, urges the Minnesota Congressional Delegation and all other members of Congress to oppose HR 5252 and S 2686 and any other bills promoting national franchising and preferential treatment of providers of cable and video services entering the market and to support legislation that encourages fair competition to all areas of the City and that does not reduce the compensation paid by franchised cable operators, including the funding of public, educational and governmental access television, NOW, THEREFORE, BE IT RESOLVED that the City Council directs that this Resolution be forwarded immediately to the members of the Minnesota Congressional Delegation, State Legislators and other members of Congress and House of Representatives as deemed appropriate, ADOPTED by the Council this 15th day of May, 2006, Beverly Aplikowski, MAYOR ATTEST: Michelle A. Wolfe, CITY ADMINISTRATOR . ~ ~HILLS City of AI' dell Hills Request for Council Action Prepared by: OS Depl.: Administration Council Mtg, Date: 5115/2006 Final Action Needed By: 5115/2006 Agenda Item ~~I City Hall Update Budgeted Amount: _ Actual Amount: $25,294,00 Funding Source: . . Council Action Request: Review attached memo in regard to additional testing services for City Hall. Staff Recommendation: Approve additional testing services for City Hall in the amount of $25,294, Advisory Commission Action: Commission Planning PTRC Date Supporting Documents (which are attached to this Action Form): [g] Memo/Letter: Dated May 9, 2006 o Resolution (No, ) o Ordinance (No. ) o Engineering Recommendation: o Attorney Recommendation: o Other: Financial Implications: AdministratorlStaff Comments: Action Not Not applicable Page 1 of 1 ~ ~ EN HILLS . MEMORANDUM DATE: May 9, 2006 Agenda Item 3.B TO: Honorable Mayor and City Council members Michelle Wolfe, City Administrator FROM: Dave Scherbel, Building Official SUBJECT: City hall update cc: Karen Barton; Community Development Director Jerry Filla; City Attorney Backl!round . On the 30th of January, City Council approved $40,000 for special water testing and investigation (Phase 2) into the ongoing water intrusion problems that City Hall has been experiencing since before the City took occupancy of the building in 2001. The most recent visible water intrusion occurred the last weekend of April 2006, Phase 2 testing revealed improper materials and poor workmanship in each of the five areas that were opened for observation. Because of the numerous deficiencies and defects that were discovered in the materials and installation, we incurred an additional $5,293,66 in testing and assessment costs, beyond the $40,000,00 that was approved, After a meeting with Brian Pashina from Wiss, Janney, Elstner Assoc, (WJE), the investigating engineer, and our City attorney Jerry Filla, along with our Construction Attorney Jeff Coleman, it was determined that the next course of action would be to conduct further testing of the chimney chase construction in an attempt to pinpoint the exact cause, or causes of the continuing water intrusion, It was also determined that additional observation holes should be cut in the stone wall to verify that the construction defects already discovered are typical throughout the building, Staff Recommendation Staff is recommending Council approve $25,294,00 for additional testing to determine the actual . cause of leak in the chimney chase area and to verify construction defects are typical throughout the building, and to pay for additional costs incurred in the Phase 2 testing, Prepared by: SJ ~ Dept: O&M Dept Council Mtg, Date: 511512006 Final Action Needed By: 511512006 ~ ~HILLS City ot Arden HIlls Request for Council Action . Council Action Request: Motion to approve the purchase of a replacement pump for lift station number three from Braun Pump & Controls in the amount of $6,500,00, "..,,"'="," Agenda Iteml.~ Motion to Approve the Purchase of a Replacement Pump for Lift Station Number Three from Braun Pump & Controls in the Amount of $6,500.00 Budgeted Amount: $50,000 Actual Amount: $6,500 Funding Source: Sewer Fund Staff Recommendation: City staff recommends the purchase of a replacement pump for lift station number three from Braun Pump & Controls, Advisory Commission Commission Date Action .l"lanl1if)9... PTRC Not Not . Supporting Documents (which are attached to this Action [2J MemolLetter: From: Schawn Johnson, Assistant City Administrator and Jim Perron, Operations & Maintenance Department Superintendent Dated: May 9, 2006 o Resolution o Ordinance (No, o Engineering Recommendation: o Attorney Recommendation: [2J Other: . Bid Proposal from Braun Pump & Controls Financial Implications: Please see the bid proposal overview for more information, Administrator/Staff Comments: . . . . ~ ~~HILLS MEMORANDUM DATE: Agenda Item 3.C. May 9, 2006 TO: Honorable Mayor and City Council Members Michelle Wolfe, City Administrator Schawn Johnson, Assistant to the City Administrator sr<S Jim Perron, Operations and Maintenance Superintendent FROM: SUBJECT: City Council Approval of a Replacement Pump for Lift Station #3 ENCLOSURES: Braun Pump & Controls Bid Proposals Overview On May 2nd, members of the Operations and Maintenance Department noticed that the pump at lift station number three was not operating properly, Members of the Operations and Maintenance Department contacted Braun Pump & Controls for a service call to investigate the situation, Braun Pumps & Controls conducted a performance test on the existing pump and reported that the propeller and shaft were damaged, The proposed replacement parts and labor costs would exceed the monetary value of purchasing a new pwnp. At this time, members of the Operations & Maintenance Department have borrowed a pump from Braun Pump & Controls to ensure that lift station number three is operating efficiently, Backl!found The existing pump at lift station number three was originally installed in 1998 when the lift station was rebuilt. City staff is proposing the purchase of an ABS Pump Model AFP I 049,5, The proposed ABS pump has a 10 horse power engine and a 5 year non-prorated warranty, Recommendation- City staff recommends the purchase of one (1) ABS Pump Model AFPI049,5 for the purchase cost of $6,500 (including the estimated cost for sales tax and freight charges), City staff would install the new pump at lift station three, 05/02/2006 TUE 15:16 FAX 952 758 7778 ~ 001/004 ';--,';;.".;, ' BRlUJN PUMP & CONTROLS . lIiay 2,2006 Post"W' Fax ~Jole 7671 IT....'......,..':.,.-:.----:..;-...,;'--..:~r:.'---;-..,., IIOMIK(_,~:(tl(tSK\I_ ~DII)"P':/l(di-!'I!:hll..'> ~~::~.~~_':__. ,...,..... .....n.. ""..n..,, m...... l:~"(g':i L:. 212 -7ZI.i!/)_ I."......,......'. .., ..I'm.............,.. DriII'S'-, 'i _ 0 I r~r~;:.~ ~ I J "~,;;j.00(.::i.(..Ifl!".:--;';.,.mn_n . j ,," __ !' )1'(.(' r' 11"""'6.... .... ......., p'':'''''; ..' )((lJ0:CJ., o <!::.l.f-I I"""" "i?5.1-) ..", I .. .... 'm." :,2,_:,j';--L~,:'!'\!lQ(.) I F,1~ ~ ,L....... .............__.,....._.._1 Mike $chilsky City c.fAl"den ;-lills 1245 \Vcst Hwy 96 Arden Hills. MN 55112 D~'lj' iVlikc, We are pleased cO 0I';c<, this revised qcoluLon for the sale of an ABS Pump Model AFPI049,5 M75/4, W" ha'/(' inCluded pump curves for YOllT TOferonc", One (I) ASS Pum" Model AFPI049.5, IOBP, 230/30, 85 Feet Power Cord, 5 Y car Non-Prol'at,:d Warranty . Total $ 6,OI)O,DO Prjcing docs not mcJuJe installation, freight charges, fuel surcharge or sales tax, Note: Avuil:1bihly is 7.10 days. Please feel free to call \vith any questions. Sincerdy, {!, .,~/ 'j,erC () .' , ( )</ r) I L 'oi crt..) !'''.. Dick Bicr1c RBJjh 2Ul 4th Ave, S,\'(! · PO, Box 187 · ~~cw Praglfe, t'vlinnesota 56071 952.758-6600 · F'2X 952.758,7778 . 05:02/2006 TUE 15:16 F!~ 952 758 7778 ~l~2LO<OL_m . r.......---..-- . I I-- I D~nsity ;1lo:gfoml ,_' .. friO\'< i r- I ! . ~:1:3!3i c ."......~_..._-,."._-----"._._... - ..-._'".,........____ i Pump performance curves _l,~~~~4~ ~?~~ .-"'---,---...,--,...,,- --1 I Cur,oenumbe1 I-R~~~Mn~ c-u~~-- - -- I -j~--- 1_ ~~~:.~y .. .- ..j.~~~~B.:O-9" i cos'f"llr"i-Cl"JVF. PUMl"INC I-D'SCh..'l~9-tl- " RatW.sj}tfGti 11715,FiOrpm ..... .....n.......'......... ;.ly,jrVJlic cffiC~hCY 'j I , I \llscosi~'I 1.562 cSt . 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TO'" I 1........._ i l'nfCCilot siZI' I N" or '.Cl".(lS i 'mpQhor Soli"; ~i;;"" :?~.~::?9~.~,:..:".--_._-,-;'.-.---,-....-.- _, .,.,......,_.,.._,j~{)n~~~~i~~".,~~~.I!~r:..l!~D.~ ,-...-," " "" ,n _..J~~~_.__... ',es 'IU'i'l'.'olt'; lI:f,I hl}'), tr. {:!;"r)~ IltJy Cl~'N ~h';C ~i"r'i~r'~~II~ witho'.!l pllI')f I'!tit:co I'II'ld Ciln 1'I01~t' lIll;':; r~4)(l:lolb:c.'fOrVI~ use::( i<)fo'r.-,[I~i),\ col1l(:',rlOd i,. I~i,~ $f;(>wi'fi['. . I"R~'~.~i,~_r.l.... _ _,._....~~~.~~:.~.~~f ABSi;:tF"G 1.7. T " ~004-0:'.\')1jc 05/02/2005 rUE 15:17 FAX 952 758 7778 a:;:; ~~ 01- :;;5: *!; l- w W lL. C <t W :r: oJ r:: o I- 10.0 H.P. 1750 RPM 3~:200,230/460,575V CP/CS-3127 Wastewater Impeller 483 5 I I _.i.....~--L.__ . 'lANE IMPELLER I , I I I I I -t-' I ! I I l 90 I I 5 60 i 70, i 60 I i I 50 t--- I : 40 I , - I i i I 30 20 -b?' 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I w rt V~I)OS I irrpC!icr SI)IIQ ~it,~ !.?S3,.n4..fI:.m _. _ : 1 _ __ .... _. .JCont,~8rOCk imp('ller, 1__van~,,, ,__ __ _. J.1f8" ,....I1S '~~orv"s tl;,.. N,I'II,) :;;~'\ln<;ll:; il('1)< ~'at~ '1m! dimon;.ions Wi!~'Gv.-pi;c:;noili~'f',~!j (:t!n n:;ll 00 helci rli!.p~...;r..;I)I~ i,)i'li1f;\I~),,1 .........-..-.- ''lfo.'malior\ C:,:IfII"iF'lJ'lJ ."lll)j~. ~r.rt!,,<;;:tt,) . !ii;0;,~;, ,o"'we ! , . ~eSEU,iR01':7.1-.r ;:004,0J..0[\' I _J 1 i , 1 I i . Prepared by: Murtuza Siddiqui Dep!.: Finance Council Mtg, Date: May 15, 2006 Final Action Needed By: May 15, 2006 ~ ~HILLS City ot Arden Hills Request for Council Action '''''''~ Agenda Item 3.Q. Claims & Payrolt Budgeted Amount: Across City BudQet - All Funds Actual Amount: See Financial Implications Funding Source: Across City BudQet - All Funds Council Action Request: Review and Approve Consent Agenda Item 3D, - Claims and Payroll Staff Recommendation: Approve Consent Agenda Item 3D, - Claims and Payroll AdYisory Commission Action: Commission Date Action Not Applicable Not Applicable l\Iot,applicable Planning PTRC Supporting Documents (which are attached to this Action Form): . o MemolLetter: o Resolution (No, ) o Ordinance (No, ) o Engineering Recommendation: o Attorney Recommendation: o Other: Payroll and Claims Reports Financial Implications: Payroll #9- $70,493,55 Accounts Payable Claims Since 5/8106 Council Meeting: 1, Paid Claims - Batch 002-05-2006: 2, Paid Claims - Batch 003-05-2006: 3, Unpaid Claims - Batch 004-05-2006: Claims Total AdministratorlStaff Comments: $ 2,931,70 $ 22,518.55 $ 71,680,61 $ 97,130,86 . Page 1 of 1 . . . CITY OF ARDEN HILLS CHECKS DATED 5/512006 (P/R#9) FIRST MAY PAYROLL IWM!'LOYEENAMEII (Hiweekl ,4/]5/06 to 4/28/06) "'E),WLOYEEDEDUCT[ONS"" "AlI'''/ '<:,ITYllENEFIT FIT 4387.48 SIT 1,796.37 PICA Oasdi 2,996.63 L996_63 FICA Medicare 700.85 700.85 ITOTAL TAXES 1 9,881.331 3,697.48 1 Freonert, Jackie Johnson, Schawn Silo5eth, Pang Sweeney, Pamela Wolte, Michelle Barton. Karen Bvl, Sandra Brulev, Michelle !Lehnhoff, James Mennenga, John Scherbel, David Siddiqui, Murtuza Andrews, Aaron Freyberger, Scott Mooney, Joseph Moore, Thomas Perron, James Nowlan, Anthony Saxe, Pete Schifskv. Mike Winkel, David Frid, Jeffrey Olson. Michelle Ritchie, Chelsea Anlikowski, Beverlv Grant, David Holden, Brenda Larson, GTe!!!::' PcHe2:rin, Vincent I 1 FSA Health Premium 1,434.25 12.12800 FSA Dental Premium 283.18 33764 FSA Health Care Rcimb 576.04 'SA Denendent Care Reimb 458.33 ITOTAL F'LEXIBLE SPENDING 1 2,75L801 12,465,64 1 PERA 2,50476 2,732.49 leMA 1,565.76 432.93 Central Pension Fund-Union 614.40 ITOTAL RETIREMENT I 4,684,921 3,[65.421 Affinitv Plus Federal Credit Union 3,906.06 IUOE 49 Dues (Union) 120.00 L TD/STD Insurance 41232 PERA Life Insurance 30.00 Life! AddllDeo Li fe 115.35 100.80 United Way 4.00 Mn Child Sunnort 391.50 rfOTAL VOLUNTARY 1 4,566,911 513,121 Total Emnlovee Deductions 21.884.96 Net Pavrol1 7,868.59 Direct Denosit 24,804.40 Gross Pawoll Tie-Out 50,651.89 Plus c{t"Paid Benefit 19,841.66 leMA BenetIt Held 0.00 TOTAL PAYROLL COST 70,493.55 Gross Pa roll Less Total FSA Plus Employer Match leMA Net PIR Subject to FICA FICA Oasdi a) 6.20% FICA Medicare (il;! 145% Note: Federal and State Payroll Tax obligations are satisfied by means nfutilizing the "Taxtel" Electronic Tax Deposit Service. Trans- fers are typically made t\\'o business days after the payroll date. ; >; >; 'D , >> . . . M n ..c ,~ '" '" '" q U >> . . " N .0 ~ ;;: ;;: ;;: 0 ~ ,'3 0 Q) ell ~ . '- ~ '" -; p:) ::r: CO .0 n <( e u " 0 <;; ro <1) --. a "" 0 ~ ~ ::r: v 4t <( ~ ~ ro co '- 0 ~ " :l.; z 0 'D "" '" ~ " " <( E .c 0 , ~ 0 > 0 " N ~ . 0 rJ) ... u C:' <u <u '" ." ." 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U ~ a 0 "" 0 , .~ 0 ,,' CY " '" CIl " CIl " 0 N " " 0 " - u i:l:l " " a 0 -< E u 0 ~ 0 2? '" E .. ~ E -< CI 'C C '" . " " " "" 0 "" "" CIl z .E :2: '" ~ !~ e .. ~HltLS . . . Ard.lftUsCity C..Deil. WORK SESSION Mayor: Beverly ~ . C~ DavidGmat BrmdaBokkm Greg J..anoll VlDo:eal Peleptll , 5:05 p.m. M.....y, May 15,Z886 Agenda 1. CaD to Onler 2. Ailed. 1..-.- Al 2005 Audit u,.we A2 Accoullt C"Rt.lQ...d1ll'1o B. COOte E.foU HILI:....... C. CIP D&eusioIl D ProposedClumltlS to. ftIe City's Website E. City Coudt Retnat FeDo~..p' 3. AdiounlmeRt StdIPf'eHltters M'Iif1IQQSirldiquil,Steve McDonald.(Abdo. Eick.& Meyers) c~ Delfelopl'ifMlt' JJepartment Kris Giga/Murtuza Si~ James Lehnhoff Michelle- Wolfe.. 4='i w.~ '- .l}M " Jlll!!tti'1ll', r tI.. ' , ". 55112 ,~ ""'" .... ". ." ~ .St30 ~ -Nj 1:3e .. _,,~~,,_______,~-,_"''- ..:...:l,.:,~i.;..:,.,..~.-.:'_.___..':_~;.~ ._,,~-..__.J_'_~ . . . ~ --A~HILLS MEMORANDUM DATE: May 10,2006 AGENDA ITEM: 2.Af TO: Honorable Mayor and City Council FROM: Murtuza Siddiqui, Chief Financial OfficerlTreasurer ""'5' SUBJECT: 2005 Draft Audited Financial Statements Attached are the 2005 Audited Financial Statements ofthe City of Arden Hills, Steve McDonald of Abdo, Eick & Meyers will be presenting the audit. . . . Certified Puhlic Accoumants & ComulUmLs April 14,2006 Grand~.jew Square 5201 Eden AVt::IlIlP. Suite 370 Edina, MN .55436 Honorable Mayor and Council City of Arden HiIls, Minnesota We have audited the financial statements the governmental activities, the business-type activities, each major fund and the aggregate remaining fund information of the City of Arden Hills, Minnesota (the City), for the year ended December 31,2005 and have issued our report thereon dated April 14,2006. Professional standards require that we provide you with the following information related to our audit. OUf Responsibility Under Auditing Standards Generally Accepted in the United States of America As stated in our engagement letter, OUf responsibility, as deSlTIbed 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 ofal! transactions, there is a risk that material errors, fraud or illegal acts may exist and not be detected by us. In planning and performing our audit of the financial statements ofthe City, for the year ended December 31,2005, we considered its internal controlin order to determine our auditing procedures for the purpose of expressing our opinion on the 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 consider to be reportable conditions lll1der 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 ofintemal control that, in our judgment, could advt.'Tsely affect the City's ability to record, process, summarize, and report financial data consistent with the assertions of man agement in the fi.nancial 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 had limited segregation of duties for a portion of2005. Goodintemal control contemplates an adequate segregation of duties so that no one individual handles a transaction from inception to completion. \Vith the prosecution of a fanner City employee for misappropriation of assets and reorganization of job responsibilities, we believe that this issue has been remedied as of year end. ^ 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 financial statements being audited may occur and not be detected within a timely period by employees in the normal course ofperforrning thelr 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 %2.835.3261 www.aelllepas.com ~ r~t r'lL~ City of Arden Hills . April 14, 2006 Page Two As part of obtaining reasonable assurance about whether the financial statements are free ofmatenal misstatement, we perfonned tests of compliance with certain provisions of laws, regulations, contracts and grants_ However, the objective of our tests was not to provide an opinion on compliance with such provisions_ We noted one instances of noncompliance with Minnesota statutes as fa11aws: Declaration for payment Minnesota statute 471.38 requires that each declaration for payment be signed to the effect thatsuch account, claim, or demand is just and correct and that no part of it has bet.'11 paid. The statute is satisfied jf on the hack of City checks is a declaration as defined in Minnesota statute 471.39] reading "I declare under the penalties of law that this account, claim or demand is just and correct and that no pan of it has been paid." The City did not have the required statement on the back of their check in 2005, Management Response Management understands the finding and has slnce taken steps to correct the noncompliance. Significant Accounting Policies Management has the responsibility for selection and use of appropriate accounting policies. In accordance with the tenns of our engagement letter, we will advise management about the appropriateness of accounting policies and thelr application. The significant accounting policies used by the City are described in Note 1 to the financial statements. The City implemented the requirements of GASB Statement No. 40 - Deposit and Investment Risk Disclosures - an amendment of CASB Statement No.3 during 2005. We noted no transactions entered into by the City during the year that were both significant and unusual, and of which, under professional standards, we are required to infonn you, or transactions for which there is a lack of authoritative guid.aiice or consensus. . Accounting Estimates Accounting estimates are an integral pan of the financial statements prepared by management and are based on management's knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibil1ty that future events affecting them may differ significantly from those expected. The most significant estimates affecting the financial statements were capital asset basis and depreciation. Management's estimate of depreciation is based on estimated useful lives of the assets. We evaluated the key factors and assumptions used to develop these accounting estimates in dctcnnining that it is reasonable in relation to the financial statements taken as a whole. Audit Adjustmeuts For purposes of this letter, professional standards define an audit adjustment as a proposed correction of the 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 judgment, 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 financial reporting process. We did propose 3] journal entries, which we considered 22 as 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 reported no uncorrected misstatements. . 952.835.9Q90 . Fax 952.83;).3261 www.aenwpas.eQJH . City of Arden Hills April 14, 2006 Page Three Adjusting Journal Entries .JE # 5 Debit Credit to record alp from December PERA set up against cash 101-00000-10100 Gen Cash & lnvestments $ 4,628,00 101-00000-21741 PERA Withholding $ 4,628,00 Total $ 4,628.00 $ 4,628,00 Adjusting Journal Entries JE # 10 to reallocate interest revenue based on average monthly cash balance 10 1-00000-1 0 100 Gen Cash & Investments $ 4.472.00 225-00000-36210 Interest Income 164,00 227-00000-10100 Geo Cash & Investments 536.00 228-00000-10100 Gcn Cash & Investments 152.00 229-00000-10100 Geo Cash & Investments 857,00 230-00000-10100 Gell Ca"h & Investments 282.00 325-00000- 36210 Investment Interest Income 2,504.00 408-00000-10 I 00 Gen Cash & Investments 36.00 409-00000-10100 Gen Cash & Investments 1,061.00 4] 1-00000-10100 Gen Cash & Investments 99.00 4] 2-00000-1 0 100 Gen Cash & Investments 354,00 . 501-00000-36210 Interest Income 17,021.00 601-00000-36210 Interest Income 193,00 602-00000-10100 Gen Cash & Investments 3,851.00 603-00000-10100 Gen Cash & Investments 72.00 604-00000-36210 Interest Income 524,00 70 1 ~OOOOO~ 1 0 1 00 Gen Cash & Investments 26.00 702-00000-10100 Gen Cash & Investments 280.00 704-00000-10 I 00 Gen Cash & Investments 8,179,00 705-00000-10100 Gen Cash & Investments ]49.00 10 1-00000-3621 0 Interest Income $ 4,472.00 225-00000-10100 Gen Cash & Investments 164,00 227-00000-36210 Interest Income 536.00 228-00000-36210 Interest Income 152,00 229-00000-36210 Interest Income 857,00 230-00000-36210 Interest Income 282,00 325-00000-10100 Gen Cash & Investments 2,504,00 408-00000-36210 Interest Income 36,00 409-00000-36210 Interest Income 1,061.00 4] 1-00000-36210 Interest Income 99,00 4]2-00000-36210 Interest Income 354,00 501-00000-10100 Gen Cash & Investments 17,021.00 601-00000-10 100 Gen Cash & Investments 193,00 602-00000-36210 Interest Income 3,851.00 603-00000-36210 Interest Income 72.00 604-00000-10 I 00 Gen Cash & Investments 524.00 701-00000-36210 Interest Income 26,00 702-00000-36210 Investment Interest Eamings 280,00 . 704-00000-362] 0 Investment Interest Eamings 8,179.00 705 -00000- 3621 0 Interest Income 149.00 Total $ 40,812.00 $ 40,812,00 %2.83;).9090 . Fax 952.8,%.32(Jl www.aemcpa::i.r.;mn tI ~~& City of Arden Hill s . April 14, 2006 iL~ Page Four Adjusting Journal Entries JE # 11 Debit Credit To adjust insurance payable amounts ] 0] -00000-2] 730 Lakes Country Coop Hlth PretTI $ 7.636,00 ]0]-00000-21732 IUOE 49 Insurance Pymnts 6,649,00 ] 0] ,00000-21735 Short Term Disability Ins W/H 698,00 101-00000-21739 Fortis L 1D Premium ],125,00 101-00000-21741 PER/\. Withholding 4,612,00 101-00000-21742 leMA Withholding 94,00 ] 0 1-00000-21744 Probationary Emp ICMA Match 149,00 ]01-00000-2]771 lUGE 49 Union Dues W/H 75,00 101-00000-21772 IUOE Central Pension Fund 826,00 10]-00000-2] 791 FSA Health Care Reimb 2,246,00 101-00000-21733 "MN Mutual Life Ins Pynmts $ 535,00 101-00000-21734 PERA Life Insurance WJH 800,00 101-00000-21738 Health Partners Dental Ins Prc ],7]9,00 101-00000-21743 ICMAMatch 94,00 10 1-00000-21792 FSA Dep/Daycare Reimb 3,5]6,00 101-41500-41220 FICA Expense ],580.00 ]01-4]500-41300 Insurance Expense ],581.00 ]01-4]500-41300 Insurance Expense 3,7]4,00 10 1-41910-41300 J nsunmce Expense 1,571.00 10]-4]940-41300 Insurance Expense ]43,00 . ]0]-4]950-4]300 Insurance Expense 428,00 10]-43100-41300 Insurance Expense 3,285,00 ] 0 1-45] 20-41300 Insurance Expense 2,001.00 ] 0 1-45200-41300 Insurance Expense 3,143,00 Tota! $ 24,110.00 $ 24,11 0,00 Adjusting Journal Entries JE # 12 To adjust rctainage accounts to actual 227-00000-20610 Contracts Payable-Retainage $ 15,750,00 501-00000-206] 0 Contracts Payable-Retaitiage 5,576,00 601-49440-44200 Depreciation 9,759,00 602-49490-44200 Depreciation 14,903.00 604-43150-44034 Pvmt Mgmt-Alloc Costs 1,571.00 227-48207-45800 Construction Contract $ 15,750.00 50] -48515-45800 Constmction Contract 5,576,00 60] -00000-20610 Contracts Payable-Rctainage 9,759.00 602-00000-20610 Contracts Payable-Retainagc 14,903,00 604-00000-20610 Contracts Payable.Retainage 1,571.00 Total $ 47,559.00 $ 47,559,00 Adjusting Journal Entries .JE # 18 to adjust accounts receivable to actual 10] -00000-32220 Mechanical Permits $ 4,]45,00 101-00000-36230 Contributions 2,895.00 601-00000-11 500 Accts Receivable-Mise 25.00 101-00000-11500 Accts Receivable-Mise $ 4,]45,00 101-00000-13200 Due from Other Governments 2,895.00 601-00000-36270 Miscellaneous Reimbu 25,00 . Total $ 7,065,00 S 7,065.00 952.8.35.9090 . Fox 952.835-3261 www.,H:"r1)q)ii~.enlfJ . City of Arden Hills April 14, 2006 Page Five Adjusting Journal Entries JE # ]9 Debit Credit To reclass proceeds of1and sale for interfund loan payment 501-00000-36990 Mise Sales $ 796,300,00 70]-00000-21500 Interest Payable ] 87,564,00 701-47300-46]20 Interfund Loan Interest PYlIlllt 41,880,00 704-00000-20704 Due to PIR (Indy Acquisitiol1L 566,856,00 501-00000-10452 Interfund Loan Interest Pynmt S 187,564,00 501-00000-13150 Due from TIF #2-Indy Acq Costs 566,856,00 501-00000-36211 lnterfund Loan Inter 41,880,00 701-00000- 36990 Sale of capital assets 229,444,00 704-00000-36990 Sale of Equipment 566,856,00 Total $ 1,592,600,00 $ t ,592,600,00 Adjusting Journal Entries JE # 21 To reclass expenditures coded to transfers 101-00000-34782 Youth Programs $ 321.00 101-00000-34785 Adu]t Softball ]40,00 411-00000-10 1 00 Gcn Cash & Investments 3.355,00 501-48509-45801 Outside Engineering 3,355,00 101-45120-47212 Transfer Out S 461.00 . 411-48110-47200 Transfer to Gen Fund (I01) 3,355,00 501-00000-10100 Gen Cash & Investments 3,355,00 Total $ 7,171.00 $ 7,171,00 Adjusting JournaJ Entries JE # 26 To allocate waLer and sewer portion of rent expense 101-00000-10] 00 Gen Cash & Investments S 54,666,00 601-49440-47200 Transfer to Gen Fund (10]) 27,333,00 602-49490-47200 Oper Transfer to Gen Fund (101 27,333,00 101-00000-38400 Building Rent S 54,666,00 601-00000-10]00 Gen Cash & Investments 27,333,00 602-00000-10 I 00 Gen Cash & Investments 27,333,00 Total $ 109,332,00 $ 109,332,00 Adjusting Journal Entries JE # 28 To record additional payable to Roseville for water 601-49440-43820 Water Purchases-Roseville S 136,562,00 60] -00000-20820 Due to City of RosevilleAccounts Payahle S 136,562,00 Total $ 136,562,00 $ 136,562.00 . 952,8:>5.9{)l)O . Fax 952.835.3261 www..aemcpw,;.eom m r'l' flL~ City of Arden Hi]]s . April 14, 2006 Page Six Disagreements with Management For purposes of this Jetter, 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 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 Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a ....second opinion" on certain situations. If a consultation involves application of an accounting principle to the City's financial statements or a determination of the type of auditor's opinion that may be expressed on those statements, our professIonal standards require the consulting accountant to check with us to 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 Independent 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 nonnal 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 perfonning our audit. . 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 Fund The General fund is used to account for resources traditionally associated with government, which are not required legally or by sound principal management to be accounted for in another fund. The General fund balance decreased $44,149 tram 2004, The fund balance of $1,270,780 is 40 percent oftbe 2006 budgeted expenditures, We recommend the fund balance be maintained at a level sufficient to fund operations until the major revenue sources are recejved 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. The Minnesota Office of the State Auditor has classified cities' unreserved fund balance levels relative to expenditures as follows: Extremely low Low Acceptable Moderately bigh High Very high Extremely bigh Under 20% 21 - 34 35 - 50 51 - 64 65 - 100 101 - 150 Above 150 The State Auditor does group all General and special revenue funds of the City when making this calculation where Qur calculation is based only on the General fund. Although there is no legislation regulating fund balance, 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. . 952.835.9090 .. Fa);. 952.835.3261 www.aelllcpa.;.n)JJl . City of Arden HiJJs April 14, 2006 Page Seven A table sununarizlng the General fund balance in relation to budget follows: Percent General of Fund Fund Balance Budget Fund Balance to Year December 31 Year Budget Budget 2001 $ 713,704 2002 $ 3,046,509 23 % 2002 753,]72 2003 3,305,546 23 2003 I,] 14,839 2004 2,917,931 38 2004 1,314,929 2005 3,239,930 4] 2005 ],270,780 2006 3,190,800 40 $3,500,000 $3,000,000 . $2,500,000 , $2,000,000 L___ I $] ,500,000 j .... $] ,000,000 1 23% . $500,000 , $- ,- 2001 . $3,046,509 . . $D.Q2,~ ~ _ $3,239,930 $2,9] 7,93] . $3,190,800 41% 40% ~ I I 38% 23% . ~ . ------ . . .._, t 2002 2003 2004 2005 2006 [U ~ Actual Fund Balance ---Budget ----------- . 952.835.9090 . .Fax %2.835.3261 ""w......aeuH:pa,,;...:olll The purposes and benefits of a General fund balance are as follows: Purposes and Benefits City of Arden Hills . April 14, 2006 Page Eight . Expenditures are incurred somewhat evenly throughout the year. However. property tax and state aid revenues are not received until the second half ofthe year. An adequate fund balance will provide the cash flow required to finance the General fund expenditures. . The City is vulnerable to legislative actions at the State and Federal level. The State eliminated HACA aid with the 2001 legislative session and imposed reductions of market value credit aid and local government aid for some cities. Levy limits have also been implemented for municipalities in past legislative sessions. An adequate fund balance will provide a temporary buffer against those aid adjustments and levy limits. . Expenditures not anticipated at the time the annual budget was adopted may need immediate Council action. These would include capital outlay replacement, lawsuits and other items. An adequate fund balance will provide the financing needed for such expenditures. . A strong fund balance will assist the City in maintaining. improving or obtaining a bond rating. The 2005 operations arc summarized as follows: Final Budgeted Amounts Actual Amounts Revenues Expenditures $ 3,200,930 3,303,862 $ 3,062,916 3,135,400 Excess (deficiency) of revenues over (under) expenditures (102,932) (72,484) 39,000 28,335 (177,520) (241,452) (44,149) 1,314,929 1,314,929 $ 1,073,477 $ 1,270,780 $ Other financing sources (uses) Transfers in Transfers out Net change in fund balances Fund balances, January 1 Variance with Final Budget- Positive (Negative) . $ (138,014) 168,462 30,448 ( 10,665) 177,520 197,303 . The largest item of varia nee on the revenue side was licenses and pennits. This item had an unfavorable variance of $158,801 or 115 percent of the total revenue variance. 952.8.%.9090 . Fa, 952.8:}:J.;~261 WWW.<lt::lHqla....cum . . . . I t'lL~ City of Arden Hills April 14, 2006 Page Nine A comparison between 2005 and 2004 revenues and transfers is presented below: Percent Increase of (Decrease) Source 2005 Total 2004 From 2004 Taxes $ 2,344,878 75,9 % $ 2,244,078 $ 100,800 Licenses and permits 325,109 10,5 510,963 (185,854) Intergovernmental 80,746 2,6 77,631 3,115 Charges for services 157,694 5.1 144,869 12,825 Fines and forfeitures 45,993 L5 43,055 2,938 Interest on investments 9,109 0,3 23,376 (14,267) Miscellaneous 99,387 3.2 97,048 2,339 Transfers in 28,335 0.9 42,000 (13,665) Total revenues and transfers $ 3,09 I ,25 1 100,0 % $ 3,183,020 $ (9],769) A graphical presentation of2005 revenues and transfers by source follows: 2005 Rcvcnucs Taxes /r75.9% Transfers in 0.9% Licenses and permits 10.5% , '---- Miscellaneous 3.2% -- -~ ---~- ~.. ~"''--- Intergovernmental Charges for services 2.6% 5.1% Interest on investments 0.3% Fines and forfeitures ~ 1.5% 952.835.9090 . Fax 952.83:).3261 11'.... .....aern<.:pas. eom ~ l~t f'lL~ City of Arden HiIls April 14,2006 Page Ten . A comparison between 2005 and 2004 expenditures and transfers is presented below: Percent Increase of (Decrease) Program 2005 Total 2004 From 2004 General government $ 861,906 27.5 % $ 823,980 $ 37,926 Public safety 1,137,742 36.2 1,130,919 6,823 Public works 494,668 15,8 386,427 108,241 Culture and recreation 551,720 17,6 374,473 177,247 Economic development 42,744 1.4 42,207 537 Capital outlay 46,620 1.5 63,234 (16,614) Transfers out 161,690 (16],690) Total expenditures and transfers $ 3,135,400 100,0 % $ 2,982,930 $ 152,470 A graphical presentation of 2005 expenditures and transfers by program follows: 2005 Expenditures . Capitai outiay 1.5% -\ Economic development 1.4% ------------- General government 27.50/0 Culture and recreation 17,6% --- ____ Public safety 36.2% . 952.835.9090 . Fax 952.83;;.3261 www..WJrlCpus.com . ~ I~?;t FlL~ City of Arden Hills Apri] 14,2006 Page Eleven Debt Service Funds Debt service funds are used to account for the payment of long-term debt principal and interest. Government accounting docs not report the outstanding debt as a liability of the fund except for debt paid from enterprise funds. The following is a summary of the assets accumulated in each Debt Service fund and the related long.tenn debt at year end. December 3], 2005 Final Total Total Bonds Maturity Cash Assets Outstanding Date $ 1,962 $ 1,962 S 2,395,000 2015 Debt Description G,O. Tax Increment Bonds Tax Increment Bonds of 1998A Special Revenue Funds A comparative summary afyear end fund balances (deficits) for all special revenue funds follows: Fund Balance (Deficit) December 31, Increase Fund 2005 2004 (Decrease) . Major Economic Development Authority $ 403,117 $ (454,660) $ 857,777 Nonmajor Communily service 4,022 (14,870) 18,892 Park 187,882 231,048 (43,166) Cable TV 296,911 275,653 21,258 TCAAP 8,341 147,532 (139,191) Risk Management 245,718 248.425 (2,707) Total nonmajor 742,874 887,788 (144,9]4) Total $ 1,145,991 $ 43::<128 $ 712,863 . %2.8;1.5.9090 . Fax 952.13:35.3261 www,aeJll(;pa~.f:()fTl City of Arden HiIJs April 14, 2006 Page Twelve Economic Development Authority The Economic Development Authority had activity for the first 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, Community Service This fund will provide for various parks, recreation and public safety needs in the community as detennined by the Council and pennitted by :vIinncsota statute. Park This fund is used to finance and plan future new park capital improvements. The revenue mainly results from park dedication fees. Cable TV The fund balance is expected to be used for cable equipment and programming activities at the City hall. TCAAP The fund balance is expected to be used for future development implementation planning activities. Risk Management This fund exists to pay deductlble costs on insurance claims. The revenue will come from insurance dividends received from the League of Minnesota Cities Insurance Trust. 952.835.9{]90 . Fax 952.835.3261 www.aerlJcpa";.COJ1] . . . . City of Arden Hins April 14, 2006 Page Thirteen Capital Projects Funds These funds accumulate resources to finance major capital acquisition and construction projects, A recap of each fund and fund balances follows: Fund Balances December 31, Increase Fund 2005 2004 (Decrease) Major Permanent Improvement Revolving $ 6,213,340 $ 4,798,560 $ 1,414,780 Nonmajor 1\:1unicipal Land and Buildings 16,945 (16,945) Non-Assessable Road Improvements 1,557,065 ( 1,557,065) Capital Equipment 148,206 ( 148,206) Publi\.: Safety Capital Equipment 521,370 500,260 21,110 TOlal nonmajor 521,370 2,222,476 (1,701,106) . Total $ 6,734,710 $ 7,021,036 $ (286,326) As projects afe completed, the City should transfer the remaining resources to the original funding source or to the Pcnnancnt Improvement Revolving (PIR) fund. The City chose to close the funds with a zero fund balance to the PIR fund at year end. Permanent Improvement Revolving (PIR) Fund The fund balance at year end was $6,213,340, of which - 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 from the loan for 2005 was $4] ,880, Municipal Land and Buildings This fund was closed at year end and its remaining resources were transfcTIcd to the PIR fund. Non-Assessable Road Improvements This fund was closed at year end and its remaining resources were transfe1Ted to the FIR fund. Capital Equipment This fund was closed at year end and its remaining resources were transferred to the PIR fund. Public Safely Capital Equipment . The fund balance will be used for equipment replacement. %2.8:l;1.9090 ~ Fax 952.8.,}5.:)261 www.alCmCI)a~.(~0111 ~ r~! ~lL~ City of Arden Hills . April 14, 2006 Page Fourteen Enterprise Funds Water Fund The following is a summary of operations in the Water fund for the past three years: 2003 2004 2005 Amount Percent Amount Percent Amount Percent Operating revenues $L115,163 ]00,0 % $ ] ,000,507 100,0 % $ 1,139,980 100,0 % Operating expenses 1.093,342 98,0 1,201,108 120,0 1,321,076 115,9 Operating income (loss) 21,82] 2,0 (200,601) (20,0) (181,096) (15.9) Nonoperating revenues 30,456 2,7 42,136 4.2 32.365 2,8 Transfers in 49.432 4.4 Change in net assets $ 101.709 9,) % $ (158,465) (15,8) % $ (148,73]) (13.1)% Cash and . cash equivalents $ 1.569,978 $ L104,910 $ 988.758 WateT Fund Operations Summary $1,600.000 $1,400,000 $ I ,200.000 $1,000,000 $800,000 $600,000 $400,000 $200,000 $- $(200,000) 2003 2004 2005 . Operating revenues ,0 Change in net assets . Operating expens.es III Nonoperating revenues rJ Cash and cash equivaknts The cash balance and operating margins have been sufficient to meet working capital and major repair needs. The \Vater fund increased its rates by 15 percent in 2005. Another rate increase is planned in 2006 to cover operating expenses. . 952.835.9090 . Fax 952.835.3261 www.aemcpas.eollJ .1 Fi,~ City of Arden Hills April 1, 2004 Page Fit1een Sen'er Fund The folJowing is a summary of operations in the Sewer fund for the past three years: 2003 2004 2005 Amount Percent Amount Percent Amount Percent Operating revenues $ 848,976 100,0 % $ 935,207 100.0 % $ 1,055,670 100,0 % Operating expenses 1,096,590 129.2 1,081,068 ]]5,6 1,]]3,189 105.4 Operating loss (247,614) (29.2) (145,861) (15,6) (57,519) (5.4) Nonoperating revenues 9,527 Ll 32,656 3,5 ]] ,986 Ll Transfers in 56,578 6,7 Change in net assets $ (181.509) (21.4) % $ (113.205) (12,1) % $ (45.533) (4.3) % Cash and . cash equivalents $ 958,132 $ 620.489 $ 422,764 Sewer Fund Operations Summary $ J ,200,000 $- $1,000,000 $800,000 $600,000 5400,000 $200,000 $(200,000) . 2003 2004 2005 i. Operating revenues ! 0 Change in net assets . Operating expenses ImNonopcrating revenues Ii] Cash and cash equivalents I ,I . The Sewer fund increased its rates by 15 percent in 2005. Another rate increase in 2006 is planned in order to cover operating expenses. 952.835.9090 .. Fax 952.835.3261 www.acmCjJd::;.Cllltl I flL~ City of Arden Hills April ]4,2006 Page Sixteen . Recycling Fund The following is a summary of operations in the Recychng fund for the past three years: 2003 2004 2005 Amount Percent Amount Percent Amount Percent Operating revenues $ 107,986 100,0 % $ 73,492 100,0 % $ 73,454 100,0 % Operating expenses 97,471 90,3 78,76] 107.2 78,538 106,9 Operating income (loss) 10,515 9.7 (5,269) (7,2) (5,084) (6,9) Nonoperating revenues ]6.536 153 18,493 25.2 18,162 24,7 Change in nct assets $ 27JJ5] 25,0 % $ 13 ,224 18,0 % $ 13,078 ]7,8 % Cash and cash equivalents $ 21.544 $ 23,854 $ 37.008 Recycling Fund Operations Snmmary . $120,000 $80,000 $100,000 $60,000 $40,000 $20,000 $- 2003 I_ Operali~g re;cnues lo Change in net assets 2004 2005 . Operating expenses II Nonoperating revenues EiI Cash and cash equivalents Nonoperating revenues of the Recycling fund are represented primarily by a County recycling grant for $] 7,869. . 952.83.5.9090 ~ hIX 952.83:i.il261 ww.....aemcpas,cQJll m . If~?;t ~lL~ City of Arden Hills April 14, 2006 Page Seventeen Surface Water Management Fund The following is a summary of operations in the Surface \Vater Management fund for the past three years: 2003 2004 2005 Amount Percent Amount Percent Amount Percent Operating revenues $ 178,782 100,0 % S 191,346 100,0 % $ 372,683 100,0 % Operating expenses 97,656 54,6 97.515 51.0 110,022 295 Operating income 81,126 45.4 93,83] 49.0 262,661 705 Nonoperating revenues 8,068 4,5 14,910 7,8 7,133 1.9 Change in net assets S 89.194 49,9 % $ 108,741 56,8 % $ 269.794 72.4 % Cash and Cash equivalents (deficits) $ 334342 $ 139,911 $ (]07.508) . Surface Water Management Fund Operations Summary $450,000 S50,000 $350,000 $250.000 $] 50,000 $(50,000) - $( 150,000) 2003 i. Operating revenues , ! m Nonoperating revenues 2004 2005 I I I . Operating expenses o Change in net assets i 1m Cash and cash equivalents (deficits) . The Surface Water Management fund increased its rates by 15 percent in 2005. The negatjve cash balance is the result of capital asset acquisitions. Future resources should be sufficient to cover this cash deficit. %2.8H5.9090 . Fax 952.835.3261 www.aemepa".eom rfj r'61,~ City of Arden Hills April 14, 2006 Page Eighteen . Future Accounting Standard Changes The following Governmental Accounting Standards Board (GASB) Statements have been issued and may have an impact on future City financial statements: GASB Statement No. 42 - Accounting and Financial Reportingfor Impairment afCapital Assets andfor Insurance Recoveries This starement is effectjve for periods beginning after December 15~ 2004 and deals with the accounting and financial reporting for impairment of capita] assets. According to the GASB, "This Statement improves financial reporting because it requires governments to report the effects of capital asset impairments in their financial statements when they occur rather than as a part of the ongoing depreciation expense for the capital asset or upon disposal of the capital asset. Users of financial statements will better understand when impairments have occurred and what their financial Impact is on the City. This statement also enhances comparability offi.nanclal statemen.ts bemeen govemments by requiring all govemments to account for insurance recoveries in the same manner!' GASB Statement No. 43 - Financial Reportingfor Post employment Benefit Plans Other than Pension Plans This statement is effective one year prior to the effective date of Statement No. 45 for the employer or largest pal1icipating employer in the benefit plan for multiple-employer plans. Accordingto Statement No. 43, "The objective of this statement is to establish unifonn standards of financial reporting by State and local governmental entities for other post employment benefit plans (OPEB plans), The term other post employment benefits (OPEB) refers to post employment benefits other than pension benefits and includes (a) post employment healthcare benefits and (b) other types of post employment benefits (for example, life insurance) if provided separately from a pension plan. The term plans, in this context, refers to trust or other funds through which assets are accumulated to finance OPEB, and benefits are paid as they come due. This Statement provides standards for measurement, recognition. and display of the assets, liabilities, and, where appllcable, net assets and changes in net assets of such funds and for related disclosures. The requirements of this statement apply whether an OPEB plan is reponed as a trust or agency fund or a fiduciary component unit of a participating employer or plan sponsor, or the plan is separately repol1ed by a public employee retirement system (PERS) or other entity that administers the plan." . GASB Statement No. 44 - Economic Condition Reporting: The Statistical Section an amendment ofNCGA Statement 1 This statement only applies to 5tatistica1 sections of financial statements. It is effective for periods beginning after lune 15,2005. The City currently docs not prepare a statistical section. . %2.835.9090 . Fax %2.835.3261 www.aemcpaS.l:Olll m . I~t ~lL~ City of Arden Hills April 14, 2006 Page Nineteen GASB Statement No. 45 - Accounting and Financial Reporting by Employers for Post employment Benefits Other Than Pensions This statement is effective in three phases based on a government's total annual revenues in the first fiscal year ending after June 15, ] 999: . Governments that were phase 1 governments for the purpose ofimplementation of Statement No. 34 - those with annual revenues of $] 00 minion or more - arc required to implement this Statement in financial statements for periods beginning aftt.T December 15, 2006. . Governments that were phase 2 governments for the purpose of implementation of Statement No. 34 ~ those with total annual revenues of$1 0 million or more but less than $100 milIlon - are required to implement this Statement in financial statements forpenods beginning after December 15,2007. . Governments that were phase 3 governments for the purpose of implementation of Statement No. 34 - those with total annual revenues of less than $10 mllJion - are required to implement this Statement in financial statements for periods beginning after December 15,2008. . Statement No. 45 gives the feHewing summary, "In addition to pensions, many state and local governmental employers provide other post employment benefits (OPEB) as part of the total compensation offered to attract and retain the services of qualified employees. OPEB includes post employment hcalthcare, as well as other forms of post employment benefits (for example, hfe insurance) when provided separately from a pension plan. This Statement establishes standards for the measurement, recognition, and display of OPEB expense/expenditures and related liabilities (assets), note disclosures, and, if applicable, required supplementary information (RSI) in the financial reports of state and local gove111mental employers." GASB Statement No. 46 - Net Assets Restricted by Legislation an amendment ofCASB Statement No. 34 This statement is effective for periods beginning after June 15,2005. Statement No. 46 gives the folJowing summary "'GASB Statement No. 34, Basic Financial Statements - and Management's Discussion and Analysis - for State and Local Gove111ments, requires that limitations on the use of net assets imposed by enabling legislation be reported as restricted net assets. In the process of applying this provision, some governments have had difficulty interpreting the n.:quirement that those restrictions be "legally enforceable." The confusion over this phrase has resulted in a diversity of practice that has diminished comparability. This Statement clarifies that a legally enforceable enabling legislation restriction is one that a party external to a government - such as citizens, public interest groups, or the judiciary - can compel a government to honor. The Statement states that the legal enforceability of an enabling legislation restriction should be reevaluated if any of the resources raised by the enabling legislation are used for a purpose not specified by the enabling legislation or if a government has other cause for reconsideration. Although the determination that a particular restriction is not legally enforceable may cause a government to review the enforceability of other restrictions, it should not necessarily lead a government to the same conclusion for all enabling legislation restrictions. This Statement also specifies the accounting and financial reporting requirements ifnew enabhng legislation replaces existing enabling legislation or ifIegal enforceability is reevaluated. Finally, this Statement requires governments to disclose the portion of total net assets that is restricted by enabling legislation." . 952.835.9090 . fax 952.835.3261 www.atcl[ICpa~.<:O/l1 City of Arden Hills . April 14,2006 Page Twenty GASB Statement No. 47 - Accountingfor Termination Benefits In general, Statement No. 47 is effective for financial statements for periods beginning after June 15, 2005. However, for termination benefits that affect defined benefit post employment benefits other than pensions, governments should implement Statement No. 47 simultaneously with Statement No. 45, Accounting and Financial Reporting by Employers for Post employment Benefits Other Than Pensions. The Statement provides accounting and reporting guidance for state and local governments that offer benefits such as early retirement incentives or severance to employees that are involuntarily terminated. The Statement requires that similar forms of termination benefits be accounted for in the same manner and is intended to enhance both the consistency of reporting for termination benefits and the comparability of financial statements. ***** This report is intended solely for the information and use of the Council, management, others within the City and the Minnesota Office of the State Auditor, and is not intended to be and should not be used by anyone other than these specified parties. Our audit would not necessarily disclose all weaknesses in the system because it was based on selected tests of the accounting records and related data. The comments 3l1d recommendations in the report are purely constructive in nature, and should be read in this context. If you have any questions or wish to discuss any of the items contained in this letter, please feel free to contact us at your convemence. We wish to thank you for the opportunity to be of service and for the courtesy and cooperation extended to us by your staff, April 14,2006 Minneapolis, Minnesota ABDO, E1CK & MEYERS, LLP Certified Public Accountants 952.835.9090 . Fax 9.52.835.3261 www.aeJllf;f)a~.com . . . . . , t.rn Vi ,If'd 5-~~lN DRAFT CITY OF ARDEN HILLS ARDEN HILLS, MINNESOTA ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31,2005 . I. . . CITY OF ARDEN HILLS, MINNESOTA ANNU,A.L FINA,'-'1CAL REPORT T~=~;;~D RAFT!. INTRODUCTORY SECTION Elected and Appointed Officials II. FINANCIAL SECTION Independent Auditor's Report Management's Discussion and Analysis Basic Financial Statements Government-Mde Financial Statements Statement of Net Assets Statement of Activities Fund Financial Statements Governmental Funds Balance Sheet Reconciliation of the Balance Sheet to the Statement of Net Assets Statement of Revenues, Expenditures and Changes in Fund Balances Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances to the Statement of Activities General and Economic Development Authority Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances (Deficits) - Budget and Actual Proprietary Funds Statements of Net Assets Statements of Revenues. Expenses and Changes in Fund Net Assets Statements of Cash Flows Notes to the Financial Statements Combining and Individual Fund Financial Statements and Schedules Nonmajor Governmental Funds Combining Balance Sheet Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonrnajor Special Revenue Funds Combining Balance Sheet Combining Schedule of Revenues, Expenditures and Changes in Fund Balances Nonmajor Capital Projects Funds Combining Balance Sheet Combining Schedule of Revenues, Expenditures and Changes in Fund Balances General Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Summary Financial Report Revenues and Expenditures for General Operations - Governmental Funds Tax Capacity, Tax Levies and Tax Capacity Rates IlL OTHER REPORTS Report on Minnesota Legal Compliance Report on Internal Control Over Financial Reporting Based on an Audit of Financial Statements Schedule of Findings 2-3 I -XI 4 5 - 6 7 - 8 9 10- II 12 13 - 14 15 - 16 17 - 18 19 - 22 23 - 38 39 40 41- 42 43 -44 45 - 46 47 - 48 49 - 52 53 54 55 56 57 . D INTRODUCTORY SECTION CITY OF ARDEN HllLS ARDEN HILLS, MINNESOTA YEAR ENDED DECEMBER 31, 2005 . . AFT . . . CTIY OF ARDEN HILLS, MINNESOTA ELECTED AND APPOINTED OFFICIALS DECEMBER 31 j) Name ELECTED OF1C Title Mayor I Council Member Council Member Council Member Council Member Bev Aplikowski David Grant Brenda Holden Gregg Larson Vincent Pellegrin APPOINTED OFFICIALS Michelle Wolfe Murtuza Siddiqui Jerome Filla City Administrator Finance Director City A !lomey -1- R Re:r~ 12/31~06 I lL.f;:)l~ 12/31/08 12/31/06 12/31/06 . DRAFT FINANCIAL SECTION CITY OF ARDEN HILLS ARDEN HILLS, MINNESOTA YEAR ENDED DECEMBER 31, 2005 . e DRAFT Grandview Square 5201 Eden Avenue Suite 370 Edina., MN 55436 l I INDEPENDENT AUDITOR'S REPORT Honorable Mayor and Council City of Arden Hills Arden Hills, Minnesota We have audited the accompanying financial statements of the govermnental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Arden I'Iills, Minnesota (the City), as of and for the year ended December 31,2005, which collectively comprise the City's basic financial statements as listed in the table of contents, These fInancial statements are the responsibility of the City's management. Our responsibility is to express opinions on these fmanciaI statements based on our 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 [mandaI statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the [mandaI statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, the fInancial statements referred to above present fairly, in all material respects, the respective fmancial position of the governmental activities, tbe business-type activities, each major fund, and the aggregate remaining fllild information of the City as of December 31, 2005, and the respective changes in fmaneial position and cash flows, where applicable, thereof and the respective budgetary comparison for the General and Economic Development Authority funds for the year then ended in confonnity with accounting principles generally accepted in the United States of America, The management's discussion and analysis on pages I through XI is not a required part of the basic financial statements but is supplementary information reguired by accounting principles generally accepted in the United States of America, We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it. . 952.835.9090 . Fax 952.835.3261 wwv.'.aerncpas,corn Page Two Our audit was conducted for the purpose of fomnng opitrions on the fi D II liT c 's basic financIal statements, The introductory secllon, and combming .Ji individual fund financial statements and scheduIts are presented for purposes of additional analySIS and are not a required p~",_nt,_n>p--"".m.b.inindand individual fund financial statements and schedules have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opitriotr, are fairly stated in all material respects in relation to the basic financial statements taken as a whole, The introductory section has not been subjected to the auditing procedures applied in the audit of the basic financial statement and., accordingly, we express no opinion on it. April 14,2006 Minneapolis, Minnesota ABDO, EICK & MEYERS, LLP Certified Public Accountants . . 952.835.9090 . Fax 952.835.3261 \o\'ww.aemcpas.com . . . Management's Discussion and Anatysis As management of the City of Arden Hills, Minnesota, (the City), we offer readers of the City's financial statements this narrative overview and analysis of the fmancial activities of the City for the fiscal year ended December 31, 2005, Financial Highlights . The assets of the City exceeded its liabilities at the close of the most recent fiscal yearby $31,358,740 (net assets), Of this amount, $11,083,682 (unrestricted net assets) may he used to meet the City's ongoing obligations to citizens and creditors. . As of the close oflhe current fiscal year, the City's governmental funds reported combined ending fund balances of $9,153,443, a decrease of$I,989,439 ill comparison with the prior year. . At the end of the curreut fiscal year, unreserved fund balance for the General fund was $1,264,272, or 40 percent of total 2006 General fund budgeted expenditures, While these funds are not legally reserved, they are designated for future purposes, . The City's total debt decreased by $2,545,000 during the curtent fiscal year, The key factor in this decrease was that $2,545,000 of bonds that were refunded in 2004 were called in 2005, Overview of the Financial Statements Tbis discussion and analysis is intended to serve as an introduction to the City's basic fmancial statements. The City's basic financial statements comprise three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. Tills report also contains other supplemental information in addition to the basic financial statements themselves. -1- . . . Management Discussion and Analysis - Continued April 14, 2006 The financial statements also include notes that explain some of the information in the financial statements and provide more detailed data, The statements are followed by a section of combining and individual fund statements and schedules that further explains and supports the infonnation in the fmancial statements, Figure 1 shows how the required parts of this annual report are arranged and relate to one another. In addition to these required elements, we have included a section with combining and individual fund statements and schedules that provide details about nonmajor governmental funds, which are added together and presented in single columns in the basic fmaucial statements, Figure 1 Required Compouents ofthe City's Annual Financial Report Management's Discussion and Analysis Basic Financial Statements Government-wide Financial Statements Fund -Financial Statements Summary ( -lI- RequiTed Supplementary Information Notes to the Financial Statements ) Detail Management Discussion and Analysis - Continued April 14, 2006 . Figure 2 summarizes the major features of the City's fInancial statements, including the portion of the City government they cover and the types of information they contain. The remainder of this overview section ofrnanagemenfs discussion and analysis explains the structure and contents of each of the statements. Figure 2 Major features ofthe Government-wide and Fund Financial Statements . Fund Financial Statements Government-wide Governmental Funds Proprietary Funds Statements Scope Entire City government The activities of the City that Activities the City operates (except fiduciary funds) and are not proprietary or similar to private businesses, the City's component units fiduciary, such as police, fIre such as the water and sewer and narks system Required financial . Statement of Net Assets . Balance Sheet . Statement of Net Assets statements . Statement of Activities . Statement of Revenues, . Statement of Revenues, Expenditures, and Expenses and Changes in Changes in Fund Fund Net Assets Balances . Statement of Cash Flows Accounting Basis and - Accrual accOlll1ting and Accrual accounting and Modified accrual accounting measurement focus economic resources focus and current financial economic resources focus resources focus Type of asset/liability All assets and liabilities, both Only assets expected to be All assets and liabilities, both information financial and capital, and used up and liabilities that financial and capital, and short-term and long-term come due during the year or sbort-term and long-term soon thereafter; DO capital assets included Type of in flow/out flow All revenues and expenses Revenues for which cash is All revenues and expenses information during year, regardless of received during or soon after during the year, regardless of when cash is received or paid the end of the year; when cash is received or paid expenditures when goods or services have been received and payment is due during the year or soon thereafter Government-wide Financial Statements The government-widejinancial statements aTe designed to provide readers with a broad overview of the City's finances, in a manner similar to a private-sector business. The statement of net assets presents information on all of the City's assets and liabilities, with the difference between the two reported as net assets. Over time} increases or decreases in net assets may serve as a useful indicator of whether the flllancial position of the City is improving or deteriorating, The statement of activities presents information showing how the City's net assets changed during the most recent fiscal year. An changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that "Will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave). Both of the government-wide financial statements distinguish functions of the City that are principally supported by taxes and intergovermnental revenue (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the City include general government, public safety, public works, culture and recreation, economic development and miscellaneous. The business-type activities of the City include water, sewer, recycling and surface water management. . -III- Management Discussion and Analysis - Continued April 14, 2006 . The government-wide financial statements include not only tbe City itself (known as tbe primary government), but also a legally separate Econonric Development Authority (EDA) for whicb the City is fiuancially accountable, The EDA, althougb legally separate, functions for all practical purposes as a department of tbe City, and therefore bas been included as an integral part of the primary government. The government-wide financial statements can be found on pages 4 - 6 of this report, Fund Financial Statements A fund is a grouping of related accounts that is used to maintain control over resources tbat have been segregated for specific activities or objectives. The City) like other State and local governments, uses fund accOlUltmg to ensure and demonstrate compliance witb [mance-related legal requirements, All of the funds of the City can be divided into two categories: governmental funds and proprietary funds, Governmental funds. Governmental fimds are used to account for essentially the same functions reported as governmental activities in the government-wide fmancial statements. However, unlike the government-wide fmancial statements, governmental fund [mandaI statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near-term financing requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the infonnation presented for governmental funds with similar information presented for governmental activities in the government-wide fmancial statements. By doing so, readers may better understand the long-term impact by the government's near-term fmancing decisions. Both the govenunental fund balance sheet and the governmental fund statement of revenues, expenditures and changes in fund balances provide a reconciliation to facilitate this comparison between governmental fUnds and governmental activities. . The City maintains 13 individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures and changes in fund balances for the General fund, Tax Increment Bonds of 1998A, Economic Development Authority and the Permanent Improvement Revolving fund, all of whicb are considered to be major funds. Data from the other 9 governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements or schedules elsewbere in this report TIle City adopts an ammal appropriated budget for all funds, A budgetary comparison statement has been provided for the General fund to demonstrate compliance with this budget The basic governmental fund fmancial statements can be found on pages 7 - 14 of this report. Proprietary funds, Tbe City maintains one type of proprietary fund Enterprise funds are used to report tbe same functions presented as business-type activities in the government-wide fmancial statements. The City uses enterprise funds to account for water, sewer, recycling and surface water management activities. Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. Tbe proprietary fund [mandaI statements provide separate information for the water, sewer, recycling and surface water management funds, all of which are considered to be major funds of the City, The basic proprietary fund financial statements can be found on pages 15 - 38 of this report. . -IV- Management Discussion and Analysis - Continued April 14, 2006 . Notes to Financial Statements The notes provide additional information that is essential to a fun understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found on pages 39 - 54 of this report. Other Information The combining statements referred to earlier in connection with nonmajor governmental funds are presented following the notes to [maneial statements, CombinIDg and individnal fund statements and schedules can be found on pages 38 - 51 of this report Government-wide Financial Analysis As noted earlier, net assets may serve over time as a useful indicator of a government's financial position. In the case of the City, assets exceeded liabilities by $31,358,740, at the close of the most recent fiscal year, By far, the largest portion of the City's net assets (65 percent) reflect, its investment in capital assets (e,g" land, bnildings, machinery and equipment), less any related debt used to acquire those assets that are still outstanding. The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City's investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. Total assets Summary of Net Assets Governmental Activities Business-type Activities Increase Increase 2005 2004 (Decrease) 2005 2004 (Decrease) S 11,421,159 $ 13,183,816 s (1,762,657) $ ],814,5]4 $ 2.268,807 $ (454,293) 12,250,386 11,156,374 1,094,012 10,393,723 9,444,977 948,746 23,671,545 24,340,190 (668,645) 12,208,237 11,713,784 494.453 . Assets Current and other assets Capital assets (net of depreciation) Liabi]ities Long-tenn liabilities outstanding Otherliabiiities 2,478,353 1,391,631 5,033,157 1.484,624 (2,554,804) (92,993) 60,130 590,928 52.8]2 192,401 7,318 398,527 3,869,984 6,517,781 (2,647,797) 651,058 245)13 405,845 Total liabilities Net assets Invested in capital assets, net of related debt Restricted for debt service Unrestricted Total net assets 9,88],335 6,245,206 3,636,129 LO,393,723 9,444,977 948,746 2,342,323 (2,342,323) 9,920,226 9,234,880 685,346 1,163,456 2,023,594 (860,138) $ 19,801,561 $ 17,822,409 $ 1,979,152 $ 11,557,179 $ ] 1.468,571 $ 88,608 The remaining balance of unrestricted net assets ($11,083,682) may be nsed to meet the City's ongoing obligations to citizens and creditors. At the end of the current fiscal year, the City is able to report positive balances in all three categories of net assets, both for the City as a whole, as well as for its separate governmental and business-type activities. . The City's net assets increased by $2,067,760 during the current fiscal year, $90],778 of this increase was due to a prior period adjustment. -v- Management Discussion and Analysis - Continued April 14,2006 . Governmental activities, Governmental activities increased the City's net assets by $1,077,374, thereby accounting for 92 percent of the total increase in the net assets of the City. Key elements of this increase are as follows: Changes in Net Assets Governmental Activities Business-type Activities Increase Increase 2005 2004 (Decrease) 2005 2004 (Decrease) Revenues Program Revenues Charges for services S 640,723 S 811,754 S (171,031) S 2,604,087 S 2,095,252 S 508,835 Operating grants and contributions 65,649 ]83,727 (118,078) 17.869 18,489 (620) Capita] grants and contributions 803,339 260,058 543,281 37,700 37,700 General Revenues Taxes Property taxes 2,303,598 2,260,261 43,337 Tax increments 449,274 597,477 (148,203) Franchise taxes 63,428 56,593 6,835 Grants and contributions not restricted to specific programs 33,300 31,146 2,154 Unrestricted investment earnings 265,029 283,525 (18,496) 51,777 58,944 (7,167) Gain on sale of capital assets 274,508 274,508 . Total revenues 4,898,848 4.484,541 414,307 2,711,433 2,172,685 538,748 Expenses General government 978.463 934,322 44,!41 Public safety 1,]53,493 1,147,225 6,268 Public works 536,829 1,677.910 (1,141,081) Culture and recreation 668,885 467,154 201,731 Economic development 215,467 213,804 1,663 M isccllancous ]:\1,257 269,111 (87,854) Interest on long-term debt 87,080 122,259 (35,179) Vlater 1,321,076 1,201,108 119,968 Sewcr 1,113,189 975,768- 137,421 Recycling 78,538 78,76] (223) Surface water management 110,022 97.515 ]2,507 Total expenses 3,82],474 4,831,785 (1,010,311) 2,622,825 2,353,152 269,673 Change in net assets before transfers 1,077,374 (347,244) 1,424,618 88.608 (180,467) 269,075 Transfers (30,762) 30,762 30,762 (30,762) Change in nct assets 1,077,374 (378,006) 1,455,380 88,608 (149.705) 238,313 Net assets, January ] ] 7,822,409 18,200.415 (378,006) 11,468,571 11.910,895 (442,324) Prior period adjustment 901,778 90],778- (292,619) 292,619 Net assets, December 31 $ 19,801.561 $ 17,822,409 S ],979,152 $ 11,557,179 $ 1 ],468,571 S 88,608 . -VI- Management Discussion and Analysis - Continued April 14, 2006 . Th~ ~o.l1owing graph depicts various governmental activities and shows the revenue and expenses directly related to those actIvItles. Expenses and Program Revenues - Govennnental Activities $] ,200,000 I $1,000,000 L I I $800,000 $600,000 $400,000 $200,000 $- L .u___ ceneral govemrrrnt Public safety Public works Culture and recreation Economic deve1opn:ent Miscellaneous Interest on long-tenTI debt . I_ Bpcnses . Programrevenuesi Revenues by Source - Govennnental Activities Taxes 157,5% I ----~ '-- Gants and contnbutions unres mcted 0,7% .I C.apita1 grants and con tlib utions 16.4% -- Operating grants and contributions 1.3% C.barges for services 13.1% Investrrent earnings ~u,_ f' 5.4% LillI] on sale 0 capItal assets 5,6% . For the most part, increases in expenses closely paralleled inflation and growth in the demand for services, -VIl- Management Discussion and Analysis - Continued April J 4, 2006 . Business~type activities. Business-type activities increased the City's net assets by $88,608 accounting for 8 percent of the total b1TOwth in the City~s net assets. Key elements of this increase are as follows: . . $1,400,000 $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 Expenses and Program Revenues - Bnsiness-t:ype Activities $- -- , --.II-I ------l ---~1 Water Recycling Surface Water Management Sewer l- Exp~~~-~--~lm~ramTevcnucs I Revenues by Source - Governmental Activities Charges for services 96,0% ) Investment earnings / 1,9% / / ( .'-~,-." Opcmting h:rrants and Capital grants and ~ contributions contnbutions 1.4% 0.7% -Vlll- Management Discussion and Analysis - Continued April 14,2006 . Financial Analysis of the Government's Funds As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with fmance-related legal requirements. Governmental funds. The focus of the City's governmental funds is to provide infonnation on near-term inflows, outflows and balances of spendable resources. Such information is useful in assessing the City's fmancing requirements. In particular, unreserved fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year. As ofthe end of the current fiscal year, the City's governmental funds reported combined ending fund balances of$9,153,443, a decrease of$1,989,439 in comparison with the prior yeaL Approximately 99 percent of this total amount $9,144,973 constitutes unreservedfund balance, which is available for spending at the City~s discretion. The remainder of fund balance is reserved to indicate that it is not available for new spending because it has already been committed to pay prepaid items and debt service in the amount of$8,470, The General fund is the chief operating fund of the City, At the end of the current year, tbe fund balance of the General fund was $1,266,743, As a measnre of the General fund's liquidity, it may be useful to compare both unreserved fund balance and total fund balance to total fund expenditures, Unreserved fund balance represents almost 40 percent of budgeted 2006 fund expenditures, while total fund balance represents 40 percent of that same amount. . The fund balance of the City's General fund decreased by $44,149 during the current fiscal year. The Debt Service fund has a total fund balance of$I,962, all of which is reserved for the payment of debt service, The net decrease in fund balance during the current year in the Debt Service fund was $2,371,827, The City issued refunding bonds in 2004, a portion of which was used to retire outstanding bonds in 2005, . Proprietary funds, The City's proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail. Unrestricted net assets of the enterprise funds at the end of the year amounted to $1,163,456, The total increase in net assets for tbe funds was $88,608, Other factors concerning the finances of this fund have already been addressed in the discussion of the City~s business-type activities. General Fund Budgetary Highlights The City's General fund budget was amended during the yeaL The budget called for spending down $241,452 of reserves, . -IX- Management Discussion and Analysis - Continued April 14,2006 . Capital Asset and Debt Administration Capital Assets. The City's investment in capital assets for its governmental and business type activities as of December 31,2005, amounts to $22,644,109 (net of accumulated depreciation), This investment in capital assets includes land, structures, improvements, machinery and equipmeut, park facilities, roads, highways and bridges, Major capital asset eveuts during the current fiscal year included the following: . Construction in process totaled approxilnately $2 million, Additional informatiou on the City's capital assets cau be found in Note 3C on pages 32 - 33 of this report, Land Construction work in process Buildings and structures Infrastructure and improvements Machinery and equipment Office furniture and equipment Vehicles $ Capital Assets Net of Depreciation Governmental Activities Business-type Activities Increase Increase 2005 2004 (Decrease:) 2005 2004 (Decrease) 2,435,238 $ 2,957,03t $ (52\,793) $ $ S 936,552 2,587,399 (1,650,847) 1,107,842 1,046,429 61,413 5,271 ,254 5,090,872 180,382 1,859 2,068 (209) 3,292,631 1,077,304 2,215,327 8,988,606 8,153,923 834,683 181,229 185,364 (4,135) ]87,593 217,332 (29,739) 4.383 5,156 (773) 151 (]5]) ]29,099 155,026 (25,927) 107,823 25,074 82,749 12,250,386 $ 12,058,152 $ 192,234 $ 10,393,723 S 9,444,977 $ 948,746 . Total $ Long-term debt. At the end of the current fiscal year, the City had total bonded debt outstanding of $2,395,000, all of which is lax increment revenue debt While all ofthe City's bonds have revenue streams, they are all backed by the full faith and credit of the City, Outstanding Debt Governmental Activities Business-type Activities 1ncrease Increase: 2005 2004 (Decrease) 2005 2004 (Decrease) Compensated absences $ 83,353 $ 93,157 S (9,804) $ 60,130 $ 52,812 S 7,318 Bonds Payable 2,395,000 4,940,000 (2,545,000) Total $ 2,478,353 $ 5,033,157 $ (2,554,804) $ 60,130 $ 52,812 S 7,318 During the prior fiscal year, the City refmanced some of its existing debt to take advantage of favorable interest rates. The City maintains a "AA" rating from Standard & Poor's and Fitch and a "Aa" rating from Moody's for general obligation debt The revenue bonds ofthe Water and Sewer Authority have been rated "A" by all three of these rating agencies, Additional informatiou on the City's long-term debt cau be fonnd in Note 3E on pages 35 of this report, . -x- Management Discussion and Analysis - Continued April 14, 2006 . Economic Factors and Next VeaT's Budgets and Rates . Property valuations within the City remain strong and growing, . Inflationary trends in the region compare favorably to national indices, All of these factors were considered in preparing the City's budget for the 2006 fiscal year, Water rates have remained unchanged for several years. After a rate increase in 2005, additional rate increases were approved for Water, Sewer and Smface Water. Requests for Information This financial report is designed to provide a general overview of the City's finances for all those with an interest in the City's finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Finance Director, City of Arden Hills, 1245 Highway 96 West, Arden Hills, Minnesota 55112. . . -XI- . DRAFT BASIC FINANCIAL STATEMENTS CITY OF ARDENHlLLS ARDEN HlLLS, MINNESOTA YEAR ENDED DECEMBER 31,2005 . . CITY OF ARDEN HILLS, MINNESOTA STATEMENT OF NET ASSETS DECEMBER 31 . ASSETS Cash and cash eqmvalents Receivables Accrued interest Delinquent taxes Accounts Special assessments Due from other governments Inventories Prepaid expense Unamortized bond discount Capital assets Land and construction in progress Depreciable assets (net of accumulated depreciation) TOTAL ASSETS . LIABILITIES Accounts payable Accmed salaries payable Due to other governments Accrued interest payable Unearned revenue Long-term liabilities Due \Vithin one year Compensated absences payable Bonds payable Due in more than one year Compensated absences payable Bonds payable TOTAL LIABILITIES NET ASSETS Invested in capital assets, net of related debt Unrestricted TOTAL NET ASSETS . The notes to the financial statements are an integral part oftbis statement --4- 37 520 38,754 40,956 882,282 400,309 6,508 25,949 3,371,790 8,878,596 23,671,545 390,667 15,234 908,036 31,292 46,402 62,515 190,000 20,838 2,205,000 3,869,984 9,881,335 9,920,226 $ 19,801,561 6023 350,417 104,634 12,418 1,107,842 9,285,881 12,208,237 354,605 8,317 228,006 45,097 15,033 651,058 10,393,723 1,163,456 $ 11,557,179 tal 11, 29,903 43,543 38,754 391,373 986,916 400,309 12,418 6,508 25,949 4,479,632 18,164,477 35,879,782 745,272 23,551 1,l36,042 31,292 46,402 107,612 190,000 35,871 2,205,000 4,521,042 20,275,058 11,083,682 $ 31,358,740 CITY OF ARDEN HILLS, MINNESOTA STATEMENT OF ACTIVITIES FOR TIrE YEAR ENDED D DI" ~an1:~e)'~'" . m '" ". g dpital , ~fI:~d .1 Gratts and FunctionsJPrograms Expense;$ Services Contributions Condibutions Governmental activities l I General government $ 978,463 $ 125,706 $ $ Public safety 1.153,493 339,305 Public works 536,829 803,339 Culture and recreation 668,885 146,118 65,649 Economic development 215,467 Miscellaneous 181,257 29,594 Interest ou long-term debt 87,080 Total governmental activities 3,821,474 640,723 65,649 803,339 Business-type activities Water 1,321,076 1,139,980 Sewer 1,113,189 1,017,970 37,700 Recycling 78,538 73,454 17,869 Surface water management 11 0,022 372,683 Total business-type activities 2,622,825 2,604,087 17,869 37,700 Total $ 6,444,299 $ 3,244,810 $ 83,518 $ 841,039. General revenues Taxes Property taxes) levied for general purposes Tax increments Franchise taxes Grants and contributions not restricted to specific programs Unrestricted investment earnings Gain on sale of capital assets Total general revenues and transfers Change in net assets Net assets, January 1 Prior period adjustment Net assets, December 31 . The notes to the fmancial statements are an integral part of this statement. -5- . Net (Expense) Revenue and D AFT Changes in Net Assets Governmental Business-type Activities Activities Tota] $ (852,757) $ $ (852,757) (814,188) (8]4,188) 266,510 266,5lO (457,118) (457,118) (215,467) (215,467) (151,663) (151,663) (87,080) (87,080) (2,311,763) (2,311,763) (181,096) (181,096) (57,519) (57,519) 12,785 12,785 262,661 262,661 36,831 36,831 . (2,311,763) 36,831 (2,274,932) . 2,303,598 2,303,598 449,274 449,274 63,428 63,428 33,300 33,300 265,029 51,777 316,806 274,508 274,508 3,389,137 51,777 3,440,914 1,077,374 88,608 1,165,982 17,822,409 11,468,571 29,290,980 901,778 901,778 $ 19,801,561 $ 11,557,179 $ 3],358,740 -6- . DRAFT FUND FINANCIAL STATEMENTS CITY OF ARDEN HILLS ARDEN HILLS, MINl\TESOT A YEAR ENDED DECEMBER 31, 2005 . . CITY OF ARDEN HILLS, MIl\'NESOTA BALANCE SHEET GOVERNMENT~ Ifl; I DECEMBER 31 2005 . DR lax o Q!l1JF lncfmellt !lifment B(IDds General Authority of h98A ASSETS Cash and cash equivalents $ 1,375,684 $ 420,470 $ 1,962 Receivables Interest 4,925 3,164 Delinquent taxes 37,]89 1,565 Accounts 20,603 Special assessments. Due from other governments 5],794 Advance to other funds Prepaid items 6,508 TOTAL ASSETS $ ] ,496,703 $ 425,199 $ 1,962 LIABILITIES AND FUND BALANCES LIABILITIES Accounts payable $ 135,192 $ 21,034 $ Due to other governments Accrued salaries payable 13,814 438 Deferred revenue 76,917 6]0 - TOTAL LIABILITIES 225,923 22,082 -- FUND BALANCES Reserved for Prepaid items 6,508 Debt service 1,962 Unreserved,. designated for Compensated absences 83,353 Working capital 1,180,919 Unreserved, undeslgnated reported in Special revenue funds 403,117 Capital project funds TOTAL FUND BALANCES 1,270,780 403,117 1,962 TOTAL LIABILITIES AND FUND BALANCES $ ],496,703 $ 425,199 $ ],962 The notes to the financial statements are an integral part of this statement. . -7- . Other DR FT Permanent Nonmajor Total Improvement Governmental Governmental Revolving Funds Funds $ 6,863,883 $ J ,326,882 $ 9,988,881 16,995 12,436 37,520 38,754 20,353 40,956 882,282 882,282 348,515 400,309 6,508 $ 8,11 J,675 $ 1,359,671 $ 11,395,210 $ 139,996 $ 94,445 $ 390,667 908,036 908,036 982 15,234 . 850,303 927,830 1,898,335 95,427 2,241,767 6,508 1,962 83,353 J.l80,919 6,213,340 742,874 521,370 1,145,991 6,734,710 6,213,340 1,264,244 9,153,443 $ 1,359,671 $ 11 ,395,210 $ 8,111,675 . -8- . . . CITY OF ARDEN HILLS, MINNESOTA RECONCILIA DON OF THE BALANCE SHEET TO THE STATEMENT 0 ,~~. GOVERNMENTAl F1JNDS DOCIDffiER"'D RAFT, 3,443 Total fund balances - governmental funds Amounts reported for governmental activities in the statement of net assets are different because: Capital assets used in governmental activities are not fInancial resources and therefore are not reported as assets in governmental funds. Cost of capital assets Less: accumulated depreciation 13,740,280 (1,489,894) Long-term liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported as liabilities in the funds. Long-term liabilities at year-end consist of: Compensated absences payable Bond principal payable Less bond discOlmt net of accumulated amortization (83,353) (2,395,000) 25,949 Delinquent property taxes receivable will be collected this year} but are not available soon enough to pay for the current period's expenditures, and therefore are deferred in the funds, 31,125 Delinquent special assessments receivable 'Will be collected this year, but are not available soon enough to pay for the current period's expenditlITes~ and therefore are deferred in the funds. 850,303 Governmental funds do not report a liability for accrued interest until due and payable (31,292) Total net assets - governmental activities $ 19,801,561 The Dotes to the fmancial statements are an integral part of this statement. -9- STATEMENT OF REVENUES, EXPENDITURES Al'I'D STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND J<A-l...A.I>Jr"~ GOVERNMENTA FUNDS FOR THE YEAR ENDED D General REVENUES Taxes Licenses and permits Intergovernmental Charges for services Fines and forfeitures Special assessments Interest on investments Miscellaneous $ 2,344,878 325,1 09 80,746 157,694 45,993 9,109 99,387 3,062,916 TOTAL REVENUES EXPEN'DITURES Current General government Public safety Public works Culture and recreation Economic development Miscellaneous Capital outlay General government Public safety Public works Culture and recreation Debt service Principal Interest and other 861,906 1,137,742 494,668 551,720 42,744 40,455 1,534 2,692 1,939 TOTAL EXPENDITURES 3,135,400 EXCESS (DEFICLENCY) OF REVENUES OVER (UNDER) EXPENDITURES (72,484) OTHER FINANCING SOURCES (USES) Sale of capital assets Transfers in Payment on refunded bonds Transfers out 28,335 TOTAL OTHER FINANCING SOURCES (USES) 28,335 NET CHANGE IN FUND BALANCES (44,149) FUND BALANCES (DEF1CITS), JAl'-HJARY I 1,3] 4,929 FUND BALANCES, DECEMBER 31 $ 1,270,780 The notes to the financial statements are an integral part of this statement. -10- AETful. Development .. .Etnds Authori n od998A . $ 449,274 $ ]68 13,313 462,755 114,902 -. 175,000 113,203 114,902 288,203 347,853 (288,203) 796,300 286,376 (2,370,000) (286,376) 509,924 (2,083,624) (2,371,827) 857,777 (454,660) 2,373.789 $ 403,117 $ 1,962. . . Permanent Improvement Revolving Other Nonmajor Governmental Funds Total Governmental Funds $ 759 $ 63,428 $ 2,858,339 325,]09 80,914 157,694 45,993 397,980 265,029 199,630 4,330,688 397,980 155,281 87,326 100,243 554,020 250,997 861,906 1,137,742 494,668 44,184 595,904 . 157,646 ]81,641 18],641 15,702 1,062 57,2]9 12,005 13,539 874,906 19,018 896,616 59,404 61,343 175,000 113,203 890,608 317,314 4,746,427 (336,588) (66,317) (415,739) 796,300 1,751,368 18,890 2,084,969 (2,370,000) (1,798,593) (2,084,969) 1,751,368 (1,779,703) (1,573,700) 1,4]4,780 (1,846,020) (1,989,439) 4,798,560 3,110,264 11,142,882 . $ 6,213,340 $ 1,264,244 $ 9,153,443 -11- DRAFT . CITY OF ARDEN HILLS, MINNESOTA RECONCILIA nON OF THE STATEMENT OF REVENUES, EXPE1>-lJ)ITIJRES A1>-lJ) CHANGES IN FUND BALANCES TO GOVERNMENT FOR THE YEAR ENDED DE IDS Total net change in fund balances - governmental funds "DRAFT, 9,439) Amounts reported for governmental activities in the statement of activities are different because: Capital outlays are reported in governmental funds as expenditures. However, in the statement of activities, the cost of those assets is allocated over the estimated usefulljves as depreciation expense. Capital outlay Depreciation expense 1,079,410 (365,384) Governmental funds report a gain (loss) on sale of capital assets to the extent of cash exchanged, whereas the the disposition of the assets book value is included in the total gain (loss) in the the statement of activities. (521,792) . The issuance of bonds provides current financial resources to governmental funds, while the repayment of the principal oflong-tenn debt consumes the current financial resources of governmental funds. Neither transaction has any effect on net assets. Also, governmental funds report the effect of issuance costs, premiums discounts, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. The amounts below are the effect of these differences in the treatment oflong-term debt and related items. Amortization of bond discount Principal repayments (2,883) 2,545,000 Interest on long-term debt in the statement of activities differs from the amount reported in the governmental funds because interest is recognized as an expenditure in the funds when it is due, and thus requires the use of current financial resources. In the statement of activities, however interest expense is recognized as the interest accrues, regardless of when it is due. 29,006 Certain revenues are recognized as soon as it is earned. Under the modified accrual basis of accounting certain revenues cannot be recognized until they are available to liquidate liabilities of the current period. Special assessments Property taxes 335,691 (42,039) Some expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds. Compensated absences 9,804 Change in net assets - governmental activities $ 1,077,374 . The notes to the financial statements are an integral part of this statement. -12- CITY OF ARDEN HilLS, MINNESOTA COMBINING STA1EMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BAL BUDGET AND A;AL GENERAL AND ECONOMIC DEVELOP NT AUTHORITY FUNDS . FOR 1BE YEAR ENDED DEfT)' dFT B~geted Amounts Varialee with . Final Budget - A.ctITal rolitive Original Final Amounts (Negative) REVENUES Taxes $ 2,370,270 $ 2,370,270 $ 2,344,878 $ (25,392) Licenses and permits 483,910 483,910 325,109 (158,801) Intergovernmental 70,879 70,879 80,746 9,867 Charges for services 153,715 153,715 157,694 3,979 Fines and forfeitures 31,000 31,000 45,993 14,993 Interest on investments 8,000 8,000 9,109 1,109 Miscellaneous 83,156 83,156 99,387 16,231 TOTAL REVEN1JES 3,200,930 3,200,930 3,062,916 (138,014) EXPENDITURES Current General government 890,301 922,459 861,906 60,553 Public safety 1,158,989 1,158,989 1,137,742 21,247 Public works 448,331 457,625 494,668 (37,043) Culture and recreation 407,506 607,506 551,720 55,786 Economic development 47,725 47,725 42,744 4,981 . Capital outlay 109,558 109,558 46,620 62,938 TOTAL EXPENDlTIJRES 3,062,410 3,303,862 3,135,400 168.462 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITlJRES 138,520 (102,932) (72,484) 30,448 01BER FINANCING SOURCES (USES) Sale of capital assets Transfers in 39,000 39,000 28,335 (10,665) Transfers out (177,520) (177 ,520) 177,520 TOTAL 01BER FINANCING SOURCES (USES) (138,520) (138,520) 28,335 166,855 NET CHANGE IN FUND BALANCES (24] ,452) (44,149) 197,303 FUND BALANCES (DEFICITS), JANUARY 1 1,314,929 1,314,929 ],314,929 FUND BALANCES (DEFICITS), DECEMBER 31 $ 1,314,929 $ 1,073,477 $ 1,270,780 $ 197,303 . The notes to the financial statements are an integral part of this statement. -13- . On ginal Economic Development Authority Fund Variance with Final Budget - Positive (Negative) Budgeted Amounts Actual Amounts Final $ 447,850 $ 449,274 1,424 $ $ 447,850 168 168 4,295 13,313 9,018 4.295 452,145 452,145 10,610 462,755 . 80,146 80,146 114,902 (34,756) 80,146 80,146 114,902 (34,756) 371,999 371,999 347,853 (24,146) 796,300 796,300 (286,376) (286,376) (286,376) (286,376) (286,376) 509,924 796,300 85,623 85,623 857,777 772,154 (454,660) (454,660) (454,660) $ (369,037) $ (369,037) $ 403,117 $ 772,154 . -14- D AFT ASSETS CURRENT ASSETS Casb and casb equivalents (deficits) Receivables Interest Accounts Special assessments Inventory Prepaid items CITY OF ARDEN HILLS, MINNESOTA STATEMENTS OF NET ASSETS PROPRIETARY FllND~ DECEMBER31'2005t=~viti~Ent~~ 1'it:~A~se~ 2005 1_ 2~f", _29l!S' ..it I $ 988,758 $ 1,104,910 $ 422,764 $ I I 21)04 I 620,489 . 4,]86 4,258 140,995 113,477 14,066 12,438 12,418 11,606 7]5 1,160,423 1,247,404 429 165,151 14,066 3,522 119,587 ]2,438 715 TOTAL CURRENT ASSETS 602,410 756,751 NONCURRENT ASSETS Capital assets Buildings 2,220 2,220 1,950 1,950 Macbinery and equipment 368,452 323,032 655,874 610,453 Construction in progress 269,048 178,724 326,072 195,657 Infrastructure 6,717,36] 6,512,929 5,426,393 5,229,]84 Less accumulated depreciation (2,038,951) (],880,442) (2,669,026) (2,545,801) TOTAL NONCURRENT ASSETS 5,318,130 5,136,463 3,741,263 3,491,443 . TOTAL ASSETS 6,478,553 6,383,867 4,343,673 4,248,194 LIABILITIES CURRENT LIABILITIES Accounts payable 170,391 18,947 ] 56,773 ]7,997 Due to other governments 228,006 139,870 Accrued salaries payable 3,347 3,496 3,561 4,275 Current portion of compensated absences payable 17,363 14,374 19,548 17,335 TOTAL CURRENT LIABILITIES 419,107 176,687 179,882 39,607 NONCURRENT LIABILlTIES Compensated absences payable 5,788 4,791 6,516 5,779 TOTAL LIABILlTIES 424,895 181,478 186,398 45,386 NET ASSETS Invested in capital assets 5,318,130 5,136,463 3,741,263 3,491,443 Umestricted 735,528 1,065,926 416,012 711,365 TOTAL NET ASSETS $ 6,053,658 $ 6,202,389 $ 4.157,275 $ 4,202,808 . Tbe notes to the financial statements are an integral part of this statement. -15- . Recycling 2005 2004 Business-type Activities - Enterprise u~........ A. "'Ilr:"f T Surface Water Management I II 8' ~tals/" ~ c 2005 2004 I J!lLJiDQ.$;L ~1: 'i?lW4lil ' $ 37,008 $ 23,854 $ (107,508) $ 139,911 $ 1,341,022 $ 1,889,164 141 1,267 631 6,023 8,411 44,271 23,291 350,417 256,355 76,502 76,965 104,634 101,841 12,418 11,606 1,430 113,651 100,819 (61,970) 163,833 1,814,514 2,268,807 4,170 4,170 50,820 50,820 1,075,146 984,305 512,722 672,048 1,107,842 1,046,429 829,576 148,442 12,973,330 11,890,555 (58,788) (54,239) (4,766,765) (4,480,482) . 1,334,330 817,071 10,393,723 9,444,977 113,651 100,819 1,272,360 980,904 12,208,237 1l,713,784 5,727 5,530 21,714 660 354,605 43,134 228,006 139,870 83 144 1,326 1,482 8,317 9,397 28] 568 7,905 7,332 45,097 39,609 6,091 6,242 30,945 9,474 636,025 232,010 94 189 2,635 2,444 15,033 13,203 6,185 6,431 33,580 11,918 651,058 245,213 1,334,330 817,071 10,393,723 9,444,977 107,466 94,388 (95,550) 151,915 1,]63,456 2,023,594 $ 107,466 $ 94,388 $ 1,238,780 $ 968,986 $ 11,557,179 $ 11 ,468,571 . -16- CITY OF ARDEN HILLS, MINNESOTA STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS PROPRIETARY JVNDS FOR TI-ffi YEARS ENDED DECEMBER 31, 2005 AND 2004 . I Qs- tiV\fit En se t:I" I liW at~ I"""1A II 1 Se& I 200~ -- "'21l1l4-- -- too, --:$04 $ 1,131~ m ])&,'/"l~29,277 49 1,775 420 630 3,375 40,950 105,300 1,139,980 1,000,507 1,055,670 935,207 227,969 213,395 262,037 252,204 30,716 30,512 41,869 17,417 86,065 59,176 33,118 29,673 27,333 16,995 27,333 16,995 21,297 17,917 21,736 17,917 12,524 11,275 23,667 24,645 24,252 22,900 10,779 1I,882 732,411 663,269 569.425 582,027 158,509 165,669 123,225 128,308 1,321,076 1,201,108 1,113,189 1,081,068 . (18],096) (200,601) (57,519) (145,861) OPERATING REVENUES Charges for services. Permit fees Miscellaneous TOTAL OPERA TLNG REVENUES OPERATING EXPENSES Personal services Supplies and maintenance Other services and charges Rent Insurance Utilities Purchased services Purchased water Recycling charges Sewer charges Depreciation TOTAL OPERATING EXPENSES OPERATING INCOME (LOSS) NONOPERATJ}.JG REVE1'-PJES County recycling grant Interest on investments Capital contributions CHANGE IN NET ASSETS 32,365 26,861 11,986 15,275 32,365 42,136 11,986 (148,731) (158,465) (45,533) 6,202,389 6,360,854 4,202,808 TOTAL NONOPERATING REVENlJES ?\TET ASSETS, JANUARY] PRlOR PERlOD ADmSTMENT NET ASSETS, DECEMBER 31 $ 6,053,658 $ 6,202,389 $ 4,157,275 The notes to the financials statements are an integral part of this statement. -17- 25,136 7,520 32,656 (113,205) 4,262,554 53,459 $ 4,202,808 . . -18- Receipts from tenants and users Payments to suppliers Payments to employees CITY OF ARDEN HILLS, MINNESOTA STATEMENTS OF CASH FLOWS PROPRIETARY FUNDS FOR TIlE YEARS ENDED DECE1E=:=::ti4 _ En~ J!'llW"l I . l',Yate. ~ _rA.. LA' Sew . I $ 1~~t3:! ': ~;9~1;;:78 ~ i::,m (695,""",,) :g,j.z,--9M~ (~ (.l79,561) (224,132) (214,397) (259,801) (254,233) . CASH FLOWS FROM OPERATING ACTIVITIES NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES 191,587 (16,179) 160,241 (96,017) CASH FLOWS FROM NONCAPlTAL Al'<'D RELATED FlNANCING ACTIVITIES Grants received CASH FLOWS FROM CAPITAL AND RELATED FlNANClNG ACTIVITIES Acquisition of capital assets CASH AND CASH EQUIVALENTS, JAJ>mARY 1 (340,176) (478,161) (373,045) (267,264) 32,437 29,272 15,079 25,638 (116,152) (465,068) (197,725) (337,643) 1,104,910 1,569,978 620,489 958,132 . $ 988,758 $ I,l 04,91 0 $ 422,764 $ 620,489 CASH FLOWS FROM lNVESTING ACTIVITIES Interest on investments NET lNCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUlV ALENTS, DECEMBER 31 . The notes to the financial statements are an integral part of this statement. -19- . e Activities - Enterprise Funds - 'on~ Surface Water Management ~I!I .1Ii.. 2005 2004 !lj2o,iW II' ~- $ 351,703 $ 189,971 $ 2,544,932 (159,4]0) (]O,799) ,~} (87,293) (85,674) (580,206) Business-t) Recycling 2005 2004 $ 2,195,797 ;!-;<i , (563,130) $ 73,917 $ (69,804) (8,980) 56,870 (64,320) (8,826) (4,867) 93,498 451,961 (34,974) (16,276) 105,000 17,869 18,489 ]7,869 18,489 (358,916) (295,655) (1,072,137) (1,041,080) 152 97 6,497 7,726 54,165 62,733 13,154 2,310 (247,4]9) (194,43 ]) (548,142) (994,832) . 23,854 2],544 139,911 334,342 1,889,164 2,883,996 $ 37,008 $ 23,854 $ (107,508) $ 139,911 $ 1,341,022 $ 1,889,164 . -20- T CITY OF ARDEN HILLS, MINNESOTA STATEMENTS OF CASH FLO PROPRIETARY iNDS FOR THE YEARS ENDED DECEMBER 3 I, 2005 AND 2004 . I nnti,"AEn~or I lW at#J 11"6. ~i\!i' Se~ I 200$ 2004 - --f005 2{l04 RECONCILIATION OF OPERATING ~ I INCOME (LOSS) TO NET CASH PROVIDED (USED) BY OPERATING ACTJVITIES Operating income (loss) $ (18 I ,096) $ (200,60 I) $ (57,519) $ (145,861) Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Depreciation and amortization 158,509 165,669 123,225 l28,308 (Increase) decrease in assets: Receivables Accounts (27,518) 14,619 (45,564) 6,517 Special assessments (1,628) (3,947) (1,628) (3,947) Inventory (812) (2,920) Prepaid jtems 715 (634) 715 (634) Increase (decrease) in liabilities: Accounts payable 151,444 17,669 138,776 (78,371) Due to other governments 88,136 (5,032) Accrued salaries payable (149) (3,203) (714) (4,284) Compensated absences 3,986 2,201 2,950 2,255 NET CASH PROVIDED (USED) (96,017) . BY OPERATING ACTIVITIES $ 191,587 $ (16,179) $ 160,241 $ NONCASH CAPITAL AND RELATED FINANCING ACTIVITIES Capital assets contributed from other funds $ $ J5,275 $ $ 7,520 Capital assets purchased on account $ 22,060 $ $ 10,415 $ .Prior period adjusnnent $ $ $ $ (53,459) Dispositions of capital assets $ $ 2,771 $ $ 2,779 . The notes to the financial statements are an integral part of this statement. -21- . 2005 Business-type Activities - Enterprise Funds - ~onn D A . ~ IT Surface Water Management ~ N ~$! ~,~. · 2004 2005 2004 "'""'"'2005 - -~OO4....... .. Recycling $ (5,084) $ (5,269) $ 262,661 $ 93,831 $ 18,962 $ (257,900) 4,549 2,023 286,283 296,000 (20,980) (1,375) (94,062) 19,761 463 (16,622) (2,793) (24,516) (812) (2,920) 1,430 (1,268) 197 5,530 (141,838) 107 148,579 (55,065) 88.136 (5,032) (61) (140) (156) (1,871) (1,080) (9,498) (382) 225 764 783 7,318 5,464 . $ (4,867) $ (16,276) S 105,000 $ 93,498 $ 451,961 $ (34,974) $ $ $ $ 7,967 $ $ 30,762 $ $ $ 162,892 $ $ 195,367 $ s $ $ $ 346,078 $ $ 292,619 $ $ $ $ $ s 5,550 . -22- CITY OF ARDEN HILLS, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31 Note I: :":::~"~:'::;""CANTACCOUNTING "ouer R A V T The CIty of Arden Hills, Mmnesota (the CIty), operates 4d otiai~J~overnment a .defmed in the State of Minnesota statutes, Under this plan, the g:t:::.nt of the City is directed by a Council cO'1'osed of an elected Mayor and four elected Counell members_ Th ).."p.:Y-P.r<-!~~"'~~-hvp,.,:mthArity~nA....riPtp.;r;rnlnes all matters of policy, The Council appoints persounel responsible for the proper administration of all affairs relating to the City, The City has considered all potential units for which it is fmancially accountable, and other organizations for which the nature and signilicance 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 !inancial accountability, These criteria include appointing a voting majority of an organization's governing body, and (I) the ability of the primary government to impose its will on that organization or (2) the potential for the organization to provide specific benefits to, or impose specific fInancial burdens on the primary governn1cnt. . Blended component units, although legally separate entities, are, in substance, part of the City's operations and so data from these units are combined with data of the City, The blended component unit bas a December 31 year end, The City bas the following component unit. Blended Component Unit 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 Council, The EDA activities are blended and reported in a separate special revenue fund. Separate fmancial statements are not issued for this component unit. . B. Government-wide and Fund Financial Statements The government-wide financial statements (i.e., the statement of net assets and the statement of changes in net assets) report infonnation on all of the nonfiduciary activities of the City :md its component unit. For the most part, the effect of interfimd activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. Likemse, the primary government is reported separately from certain legally separate component units for whicb the City is fmancially accountable, The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. Separate financial statements are provided for governmental funds and proprietary funds. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. . -23- . Note 1: . . CITY OF ARDEN HILLS, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31 2005 SUMMARY OF SIGNIFICANT ACCOUNTING POLIC S - CONTINUED c. M~=,_' '"'0' B,.;o"' 'tt.O"", m' -"",-, ft' F I The government-WIde fmanclaJ statements are reported ul 0 rc easureme ""-us d the accrual basis of accounting, as are the proprietary fund t:d=~~ fmanciaJ statements, Revenues lre recorded when earned and expenses are recorded when a. ill. __". .ed.~rp.o-51r-dJess"ofjhF Jimim:r "of.r..e1lted cash flov.rs. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible vritbin the elUTent period or soon enough thereafter to pay liabilities of the current period. For this purpose, the City considers revenues to be available if they are collected within 60 days of the end of the cmrent fiscal period, Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However) debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. Property taxes, franchise taxes, licenses and interest associated 'With the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Only the portion of special assessments receivable due 'Within the current fiscal period is considered to be susceptible to accrual as revenue of the current period. All other revenue items are considered to be measurable and available only when cash is received by the City. Revenue resulting from exchange transactions, in which each party gives and receives essentially equal value, is recorded on the accrual basis when the exchange takes place. On a modified accrual basis, revenue is recorded in the year in which the resources are measurable and become available. Non-exchange transactions, in which the City receives value without directly giving equal value in return, include property taxes, grants, entitlement and donations. On an accrual basis, revenue from property taxes is recognized in the year for which the tax 1S levied. Revenue from grants, entitlements and donations is recognized in the year in wIllch all eligibility requirements have been satisfied, Eligibility requirements include timing requirements, wIllch specify the year when the resources are required to be used or the year when use is first permitted, matching requirements, in which the City must provide local resources to be used for a specified purpose, and expenditure requirements, in which the resources are provided to the City on a reimbursement basis. On a modified accrual basis, revenue from non-exchange transactions must also be available before it can be recognized. 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 in the fund financial statements. The preparation offmancial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures, Accordingly, actual results could differ from those estimates, -24- CITY OF ARDEN IDLLS, MINNESOTA NOTES TO mE FINANCW. STATEMENTS DECEMBER 31 2005 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED The City reports the following major governmental fundsl n. . The Generalfund 15 the Clty's pnmary operatmg f$d, . 0 except those required to be accounted for in anothe~ fund, FI,' ",,,,I"I'eSmITce <"!he . The Economic Development Authority fund aCcollllts for revenue sources that are legally restricted to expendimres for specified pUlposes (uot including major capital projects). The Tax Increment Bonds of 1998Afund accounts for the accumulation ofresoUTces and payment of general obligation bond principal and interest from governmental reSOUTces and special assessment bond principal and interest from special assessment levies when the City is obligated in some manner for the payment. The Permanent Improvement Revolvingfund accounts for the acquisition affIxed assets or construction for tbis major capital project not being fmanced by proprietary funds, The City reports the following major proprietary funds: The Water fund accounts for costs associated v..rith the City's water system and insure that user charges are sufficient to pay for those costs. The Sewer fund accounts for the costs associated with the City's sewer system and insure that user charges are sufficient to pay for those costs. The Recyclingfund accounts for costs associated with the City's recycling operations and insure that us.er charges are sufficient to pay for those costs. . The Surface Water ManagementfUnd accounts for costs associated "With the City's storm water system and insure that user charges are sufficient to pay for those costs. Private-sector standards of accounting and financial reporting issued prior to December 1, 1989, generally are followed in both the gove=ent,wide and proprietary fund fmaneia! statements to the extent that those standards do not conflict with or contradict guidance ofGASB, Governments also have the option of following subsequent private-sector guidance for their business-type activities and enterprise funds, subject to this same limitation. The City has elected not to follow subsequent private-sector guidance, As a general rule the effect ofinterfund activity has been eliminated from government-wide fmancial statements, Exceptions to this general rule are payments-ill-lieu of taxes and other .charges between the City's water and sewer function and various otber functions of the City, Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. Amounts reported as program revenues include 1) charges to customers or applicants for goods, services, or privileges provided, 2) operating grants and contribution, and 3) capital grants and contributions, including special assessments. Internally dedicated resources are reported as general revenues rather than as program revenues. Like"Wise, general revenues include all taxes. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations, The principal operating revenues of the City's enterprise funds are charges to customers for sales and services. The City also recognizes as operating revenue the portion of tap fees intended to recover the cost of connecting new customers to the system All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. . When both restricted and umestricted resources are available for use, it is the City's policy to use restricted resources fIrst, then unrestricted resources as they are needed. -25- . Note t: CITY OF ARDEN HILLS, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31 SUMt'\1ARY OF SIGNlFlCANT ACCOUNTING POLICIES - CONTINUED DRAFT D. Assets, Liabilities and Net Assets or Equity Deposits and Investments ~1t.;;: ~nr1 <:nn - The City's cash and cash equivalents are considered to b icJlsh..o with original maturities of three months or less from the date of acquisition. .estments 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. The City may also invest idle funds as authorized by Minnesota statutes, as follows: 1. 2. 3. 4. 5. . 6. 7. Direct ohligations or obligations guaranteed by the United States or its agencies. Shares of investment companies registered under the Federal Investment Company Act of 1940 and whose only investments are in securities in (a) above. General obligations of the State of Minnesota or any of its municipalities. Banker's acceptances of Unites States banks eligible for purchase by the Federa] Reserve System. Commercial paper issued by United States banks corporations or their Canadian subsidiaries, of highest quality, and maturing in 270 days or less. Repurchase or reverse repurchase agreements Mtb banks that are members of the Federal Reserve System with capitalization exceeding $10,000,000, a primary reporting dealer in U.S. government securities to the Federal Reserve Bank of New York, or certain Minnesota securities broker-dealers. Guaranteed investment contracts (GIe's) issued or guaranteed by United States commercial banks or domestic branches offoreign banks or United States insurance companies if similar debt obligations of the issuer or the collateral pledged by the issuer is in the top tw"o rating categories, or in the top three rating categories for long-term GTe's issued by Minnesota banks. Investments for the City are reported at fair value. The Minnesota Municipal Money Market fund operates in accordance with appropriate State of Minnesota (the State) laws and regulations. The reported value of the pool is the same as the fair value of the pool shares. Financial statements of the Minnesota Municipal Money Market fund can be obtained by contacting Voyageur Asset Management at 1 00 South Fifth Street Suite 2300, Minneapolis, MN 55402-]240. Property Taxes The Council aunuaUy adopts a tax levy and certifies it to the County in December for collection 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 Treasurer 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, are partially reduced by a market value credit aid. The credit is paid to the City by the State in lieu of taxes levied against the homestead property. The State remits this credit in TIVO equal instalhnents in October and December each year. . Delinquent taxes receivable include the past six yearsl uncollected taxes. Delinquent taxes have been offset by a deferred revenue liability for delinquent taxes not received 'Within 60 days after year end in the fund financial statements. -26- CITY OF ARDEN HILLS, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31,2005 Note 1: SUMMARY OF SIGNIF1CANT ACCOUNTING POLICIES - CONTINVED . . Accounts Receivable . . I D . .Ec ..I, . Accounts receIvable mclude amounts billed for servIces PIovtded'lleD . Bn "UtilIty . ns~ fund receivables are also included for services provided in 2005. The City annually certifi. . Ie. s delinquent. water an&. sewer accounts to the County for collection in the following yeJ~vT~f.orl?.-Jh~T..P.....h~~~,.J;lQ.::llJOWaD{,1'"...fnT....Aou!tful accounts established. Special Assessments Special assessments represent the financing for public improvements paid for by benefiting property owners. These assessments aTe recorded as receivables upon certification to the County. Special assessments are recognized as revenue when they are annually certified to the County or received in cash or within 60 days after year end. All governmental special assessments receivable are offset by a deferred revenue liability in the fund fmancial statements. Interfund Receivables and Payables Activity between funds that are representative oflending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either "due to/from other funds" (i.e., the current portion ofinterfund loans) or "advances to/from other funds" (i.e., the non-current portion of interfund loans). All other outstanding balances between funds are reported as "due to/from other funds." Any residual balances outstanding betv;reen the governmental activities and business-type activities are reported in the government-wide fmancial statements as "internal balances.'~ Advances betvveen funds, as reported in the fund fInancial statements, are offset by a fund balance reserve account in applicable governmental funds to indicate that they are not available for appropriation and are not expendable . available [mancial resources. Inventories and Prepaid Items All inventories are stated at the lower of cost or market on the first-in, first-out (FIFO) method. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements. Capital Assets Capital assets, which include property, plant equipment and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items) are, reported in the applicable governmental or business-type activities columns in the governrnent- wide fmancial statements. Capital assets are defmed by the City as assets with an initial, individual cost of more than $5,000 (amount not rounded) and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. In the case of initial capitalization of general infrastructure assets (i.e., those reported by governmental activities) the City chose to include items dating back to June 30, 1980. The City was able to estimate the historical cost for the initial reporting of these assets through backtracking (i.e., estimating the current replacement cost of the infrastructure to be capitalized and using an appropriate price-level index to deflate the cost to the acquisition year or estimated acquisition year). As the Ciry constructs or acqnires capital assets each period, including infrastructure assets, they are capitalized and reported at historical cost. The reported value excludes normal maintenance and repairs which are essentially amount') spent in relation to capital assets that do not increase the capacity or efficiency of the item or extend its useful life beyond the original estimate. In the case of donations the City values these . capital assets at the estimated fair value of the item at the date of its donation. -27- .NoteI: . . CITY OF ARDEN HILLS, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31 SUMMARY OF SIGl\'1FICANT ACCOUNTING POLICIES - CONTINUED Interest incurred during the construction phase of capital tsB' e*s:Ft~ capltahzed value of the assets constructed.. -, .I. . of the Property, plant and equipment are depreciated using the lives: . ght-line method over the following estimated eful Assets Useful Lives in Years Buildings and improvements Infrastructure and improvements Machinery and eqnipment Office furniture and equipment Vehicles 7 -40 15 - 50 5 -15 5 - 10 7 -20 Compensated Absences It is the City's policy to pennit employees to accunmlate earned but illlused vacation and sick pay benefits. Employees 'With at least ten years of service arc entitled to receive one-third of their unused sick leave up to a maximum of 800 hours upon termination in addition to any unused vacation and compensatory time. All vacation pay is accrued when incurred in the government-v..ride and proprietary flllancial statements. A liability for these amounts is reported in governmental funds only if they have matured, for example~ as a result of employee resignations and retirements. Long-term Obligations In the government-wide financial statements, and proprietary fund types in the fund fmancial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business- type activities, or proprietary fund type statement of net assets. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the straight line method. Bond issuance costs are reported as deferred charges and amortized over the term of the related debt. In the fund fmancial statements, governmental fund types recognized bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other fmancing uses. Issuance costs, whether or not withheld from the actual debt proceeds received) are reported as debt service expendinrres. Net Assets In the government-Viride fmancial statements, net assets represent the difference between assets and liabilities. Net assets are displayed in three components: a. Invested in capital assets, net of related debt - Consists of capital assets, net of accumulated depreciation reduced by any outstanding debt attributable to acquire capital assets. b. Restricted net assets - Consist of net assets restricted when there are limitations imposed on their use through external restrictions imposed by creditors, grantors, laws or regulations of other governments. c. Unrestricted net assets - All other net assets that do not meet the defInition of "restricted" or "invested in capital assets, net of related debt". -28- CITY OF ARDEN HILLS, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 3 I Note 1: 'UM::::gGNMCMCC AGroUNTINGroUTn-CONTffln :'E. T In the fund fmancra] statements, governmental funds repdrt rvanoA-~ fil omLt"If not available for appropriation or are legally restricted by ou!ide parties for use for a specific purpose. Desi~tions of fund balance represent tentative management plans that abbj~~,. i . Comparative DatalReclassifications Comparative total data for the prior year have been presented only for the individual enterprise funds in the fund financial statements in order to provide an understanding of the changes in the financial position and operations of these funds. Also, certain amounts presented in the prior year have been reclassified in order to be consistent with the current year's presentation. Note 2: STEWARDSIDP, COMPLIANCE AND ACCOUNTABILITY A. Budgetary Informatioo 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 annual 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 15ili, the proposed budget is presented to the Council for review. The Council 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 December 31, 2005, expenditures exceeded appropriations in the Economic Development Authority fund (the legal level of budgetary control) by $34,576. These overexpenditures were funded by greater than anticipated revenues and other financing sources. Note 3: DETAILED NOTES ON ALL HiNDS A. Deposits and Investments Custodial credit risk for deposits and investments is the risk that in the event of a bank failure, the City's deposits and investments may not be returned or the City \ViII not be able to recover collateral securities in the possession of an outside party. The Minnesota Municipal Money Market Fund (the 4M Fund) is a customized cash management and investment prograro for Minnesota public funds. Sponsored and governed by the League of Minnesota Cities since 1987, the 4M Fund is a unique investment alternative designed to address the daily and long term investment needs of Minnesota cities and other municipal entities. Allowable under Minnesota statutes, the 4M Fund is comprised of top quality, rated investments. . -29- CITY OF ARDEN HILLS, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 3] . Note 3: DETAILED NOTES ON ALL FUl\'DS Cash balances of the City's funds are combined (pooled) dilllves' au~orized by Minnesota statu:es. Each fund's portion ojihis"4'lo~l; 1,r as cash and cash eqUJvalents. . For purposes of IdennfYij1g llie s 0 categorized as follows: xtA. 1...,ailRmvestments is ~edt4t e :.lti~l s tements e /p;b1~~ the ~ces e Deposits In accordance with Minnesota statutes and as authorized by the Council, the City maintains deposits at those depository banks, all of which are members of the Federal Reserve System. Minnesota statutes require that all City deposits be protected by insurance, surety bond or collateral; The market value of collateral pledged must equal 110 percent of the 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 government obligations. Minnesota statutes require that secnrities pledged as collateral be held in safekeeping by the City or in a fInancial institution other than that furnishing the collateral; At year end, the City has deposits with a bank and a book value of$3,291,7]3. Of the bank balance, $2,243,000 was covered by federal depository insurance. The remaining balance of$I,048,713 was covered by collateral held by the City's agent in the City's name. Investments . Investments are carried at fair value. Investment and dividend income are recognized as revenue when earned. Types of Investments Credit Qualiryl Ratiogs (1) Segmented Time Distribution (2) Fair Value and Carrying Amount Nonpooled investments Government Securities N1A N/A 1 to 3 years more than 3 years $ 807,345 2,656,410 Total Government Securities 3,463,755 Treasury strips NIA more than 3 years 724,879 Total nonpooled investments 4,188,634 Pooled investments Minnesota Municipal Monet Market Fund P-l less than 6 months 3,251,4] 4 Broker money market N/A less than 6 months 597,742 3,849,]56 $ 8,037,790 Total pooled investments Total investments . 1. 2. N/A Ratiogs are provided by Moody's where applicable to indicate associated credit risk. Interest rate risk is disclosed using the segmented time distribntion method. Indicated not applicable or available. -30- CITY OF ARDEN HILLS, MINNESOTA NOTES TO THE FINA.c'\lCIAL STATEMENTS DECEMBER 31 2005 Carrying amount of deposits Investtnents Cash on hand th~R*FT:: 8, . Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED A reconciliation of cash and cash equivalents as shovro 0 1,713 7,790 400 Total cash and cash equivalents $ 11,329,903 B. Intergovernmental Receivables/Deferred Revenue A sununary of all intergovernmental receivables as ofDccember 31, 2005 is as follows: Fund Local State Total General Permanent Improvement Revolving $ 51,794 $ $ 51,794 348,515 348,515 Total $ 51.794 $ 348,515 $ 400.309 Governmental funds report deferred revenue in connection v,rith receivables for revenues that are not considered to be available to liquidate liabilities of the current period. Governmental funds also defer revenue recognition in connection with resources that have been received, but not yet earned. At the end of the current fiscal year, the various components of deferred revenue and unearned revenue reported in the governmental funds were as follows: Fund Uuavai1able Unearned . General Delinqnent taxes $ 30,515 $ Licenses and permits 46,402 Economic Development Authority Delinquent taxes 610 Permanent Improvement Revolving Special assessments 850,303 Total $ 881.428 $ 46,402 . -31- CITY OF ARDEN HILLS, MINNtSOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31 ~^M . Note 3: DETAILED NOTES ON ALL FUNDS - CONTThlJED JlRAFT c. Capital Assets Capital asset actJ.vity for the CIty for the year ended Dece Beginning g Balance Increases Decreases Balance Governmental activities Capital assets not being depreciated Land $ 2,957,03 1 $ $ (521,793) $ 2,435,238 Construction in progress 2,587,399 1,052,253 (2,703,100) 936,552 Total capital assets not being depreciated 5,544,430 1,052,253 (3,224,893) 3,371,790 Capital assets, being depreciated Buildings and structures 5,817,331 361,371 6,178,702 Infrastrucrure and improvement" 1,278,006 2,341,729 3,619,735 Machinery and equipment 284,734 27,158 311,892 Office furniture and equipment 7,734 7,734 VehicJes 250,427 250,427 . Total capital assets being depreciated 7,638,232 2,730,258 10,368,490 Less accumulated depreciation for Buildings and structures (726,459) ( 180,989) (907,448) Infrastructure and improvements (200,702) (126,402) (327,104) Machinery and equipment (99,370) (31,293) (130,663) Office furniture and equipment (2,578) (773) (3,351) VehicJes (95,401) (25,927) (121,328) Total accumulated depreciation (1,124,510) (365,384) ( 1,489,894) Total capital assets being depreciatecL net 6,513,722 2,364,874 8,878,596 Governmental activities capital assets, net $ 12.058,152 $ 3,417,127 $ (3.224,893) $ 12,250,386 . -32- CITY OF ARDEN HILLS, MINl\TESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31 Q Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED Business-type activities Capital assets not being depreciated Construction in progress Capital assets being depreciated Buildings and structures Infrastructure and improvements Machinery and equipment Office funniture and equipment Vehicles Total capital assets being depreciated Less accumulated depreciation for Buildings and structures Infrastructure and improvements Machinery and equipment Office funniture and equipment V chicles Total accumulated depreciation Total capital asse!.s being depreciated, net Business-type activities capital assets, net Beginning Balance $ 1,046,429 4,170 11,890,555 869,221 11,975 103,109 12,879,030 (2,102) (3,736,632) (651,889) (11,824) (78,035) (4,480,482) 8,398,548 $ 9,444.977 ~ t1eF 11~b:e -~ -J '44':1~~-.-~""'\'t\1g~~,~$"""'9, ()7,842 . Us 4,170 1,082,775 12,973,330 869,221 11,975 90,841 193,950 1,173,616 14,052,646 (209) (2,311) (248,092) (3,984,724) (29,739) (681,628) (151) (11,975) (8,092) (86,127) . (286,283) (4,766,765) 887,333 9,285,881 Depreciation expense was charged to functions/programs of the City as follows: $ 2,031,521 $ (1,082,775) $ 10,393,723 Governmental activities General government Public safety Public works Culture and recreation Economic development $ 89,691 2,948 149,150 65,423 58,172 $ 365,384 Total depreciation expense - governmental activities Business-type activities Water Sewer Surface water management $ 158,509 123,225 4,549 286,283 . Total depreciation expense - business-type activities $ -33- CITY OF ARDEN HILLS, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31 . Note 3: DETAILED NOTES ON ALL FUNDS - CONTI1'nJED Construction Conunitments pD I ETn_ I As of December 31,2005, the City has signed contracts summarizes those commitment....,: Project Spent to date Remaining Commitment 2005 PMP project (Red Fox/Grey Fox) $ 1,553,565 $ 30,790 D. Interfund Receivables, Payables and Transfers The Economic Development Authority fund had a loan from the Permanent Improvement Revolving fund which was paid off in 2005. Interfund transfers Transfer in Tax Increment Permanent Nonmajor General Bonds Improvement governmental Fund Fund of1998A Revolving Funds Total Transfer out Economic Development . Authority $ $ 286,376 $ $ $ 286,376 Nonmajor governmental 28,335 1,751,368 18,890 1,798,593 Total $ 28,335 $ 286,376 $ 1,751,368 $ 18.890 $ 2,084.969 Transfers were made for the follov.mg purposes: . The Economic Development Authority fund transferred $286376 to the Tax Increment Bonds of 1998A fund for its share of debt expenditures. . The Community Service fund transferred $28,335 to the General fund to cover culture and recreation expenditures. . The Community Service fund transferred $18,890 to the Public Safety Capital Equipment fund for future public safety capital expenditure. . The Non-assessable Road Improvements fund transferred $1,582,151 to close the fund into the Permanent Improvement Revolving fund. . The Capital Equipment fund transferred $152,385 to close the fund into the Pennanent Improvement Revolving fund. . The Municipal Land and Buildings flUld transferred $16,832 to close the fund into the Permanent Improvement Revolving fund. . -34- CITY OF ARDEN HILLS, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31 Note 3: DET All..ED NOTES ON ALL FUNDS - CONTINUED E. Long-term Debt . . . .D~'.. ... R A VT General Obhgatwn Bonds. The CIty Issues general obli!j'n onUs tll1'toVlad)fl, :cqU1'Sltmn ani:! construction of major capital facilities. General obligation bonds have been issued for governmental activities. I .. . I General Obligation Tax Increment Bonds . The following bonds were issned to refund genera] obligation tax increment bonds, which were initially issued for redevelopment projects. The additional tax increments resulting from increased tax capaciry of the redeveloped properties will be used to retire related debt. Authorized Interest Issue Maturity Balance at Description and Issued Rate Date Date Year End G.O. Tax Increment Refunding Bonds, Series 2004A $ 2,395,000 3.0 - 3.5 % 11/04/04 02/01/15 $ 2,395.000 Annual requirement to maturity for long-term liabilities is as follows: Year Ending December 31, Governmental Activities G.O. Tax Increment Bonds Principal Interest Total Total $ 190,000 215,000 220,000 225,000 235,000 1,310,000 $ 2.395.000 $ 72,250 $ 262,250 . 66,175 281,175 59,650 279,650 52,975 277,975 46,075 281,075 112,417 1,422,417 409.542 $ 2.804.542 2006 2007 2008 2009 2010 2011 - 2015 $ Changes in Long-tenn Liabilities Long-term liability activity for the year ended December 31,2005 was as follows: Beginning Ending Due Within Balance Additions Reductions Balance One Year $ 4,940,000 $ $ (2,545,000) $ 2,395,000 $ 190,000 93,157 60,064 (69.868) 83,353 62,515 $ 5,033.157 $ 60.064 $ (2.614.868) $ 2,478.353 $ 252.515 Governmental activities G. O. tax increment bonds Compensated absences payable Total governmental activities Business-type activities Compensated absences payable $ 52.812 $ 46.927 $ (39.609) $ 60.130 $ 45.09. -35- CITY OF ARDEN HILLS, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31 . Note 3: Authorizing law Type of district lra~ 'f= Increment Increment District No.2 District No.3 M.S. 469 M.S. 469 Redevelopment Housing 1989 1993 25 years 15 years $ 25,135 $ 1,758 461,116 48,599 $ 435,981 $ 46,841 $ 3,100,000 $ 705,000 $ 2.395,000 $ Year established Duration of district Tax capacity Original Current Captured - retained Total General Obligation Tax Increment Bonds and Notes issued Amounts redeemed Outstanding at December 3 l, 2005 . Note 4: DEFINED BENEFIT PENSION PLAN - 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 of Minnesota (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 membcrs are not. All new 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 defmed retirement benefit$ are based on a memberls highest average salary fOT any five successive yeaTS of allowable service) age, and years of credit at termination of service. . 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 1) or a level accrual formula (Method 2). Under Method 1, the annuity accrual rate for a Basic Plan member is 2.2 percent ofaverage salary for each of the frrst 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 fITS! 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 members for each year of service. For all PERF members whose annuity is calculated using Method 1, a full annuity is available when age pIns years of service equal 90. A reduced retirement annuiry is also available to eligible members seeking early retirement. -36- Note 4: CITY OF ARDEN HILLS, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DFcrMD8U'F' DETINED"''''''' ''''''DNPLAN-SCATEWIDE- .ONTINUED ... _ ] Th",=.""w,_"~."..,""",,._~~1f~~ - , armuity that ceases upon death of the retiree--no survivor . is, a ,:.1' . here "f,f~1S94.'Vlnous '. es oijoint and survivor armuity options available which will be payr over jOin#!t. . ein15ers may also leave theiJi contributions in the fund upon tennination of public servte, in order to qualify for a deferred armuity at retijement age. Refunds of contrIbutIOns are available at any tune tcrmemt>o>> who-\eave"ptlbl~~jjef<>re'rmrrement benefits begin. . The benefit provisions stated in the previous paragraphs of this section are current provisions and apply to active plan participants. Vested, tenninated employees, who are entitled to benefits bnt 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 fmancial statements and required supplementary information for PERF and PEPFF. That report may be obtained on the web at rnnpera.org, by writing to PERA, 60 Empire Drive #200, St. Paul, Minnesota, 55103-2088 or by calling (651) 296-7460 or 1-800-652-9026. B. Funding Policy Minnesota statutes, chapter 353 sets the rates for employer and employee contributions. These statutes are established aud 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. I 0 percent, respectively, of their annual covered salary. PEPFF members were required to contribute 6.20 percent of their annual covered salary. The Ciry is reqnired to contribute the following percentages of annual covered payroll: 11.78 percent for Basic Plan PERF members, 5.53 percent for Coordinated Plan PERF members, and 9.30 percent for PEPFF members. The City's contributions to the PERF for the years ending December 31, 2005, 2004 and 2003 were $61,615, $61,421, and $57,633, respectively. The City's . contributions were equal to the contractually required contributions for each year as set by Minnesota statute. Note 5: OTHER INFORMATION 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 insurance through participation in the League of Minnesota Cities Insurance Trust (LMCIT) which is a risk sbaring pool with approxinaately 800 other governmental units. The City pays au annual premium to LMCIT for its workers compensation and property and casualty insurance. The LMCIT is self sustainirg through member premiums aud 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 esrimated. Liabilities, if any, include an amount for claims that have been incurred but not reported (IBN'RS). The City's management is not aware of any incurred but not reported claims. B. Legal Debt Margin The City's statutory debt limit is computed as two percent of the taxahle market value of property within the City. Long-term debt issued and fInanced partially or entirely by special assessments or the net revenues of enterprise fund operations is excluded from the debt limit computation. There is no outstanding debt at year end that is applied against the statutory debt limit . -37- CITY OF ARDEN HILLS, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31 . Note 5: OTHER INFORJ\L'\.TION - CONTINUED Ice Arena Financing D.....~ .<~ AFT C. Commitments The City, along with three other cities and Ramsey Coun~teredoinm",=greemenp..Januarycly"199~ e Minnesota Amateur Sports Commission to provide fmancing of a four sheet ice arena. Tbe 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. The City's 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 commitment in 2005. D. Lake Johanna Volunteer Fire Department~ Inc. The City receives fIre protection under a contract with the Lake Johanna Volunteer Fire Department, Inc. The contract calls for annual payments and expires December 31, 2008 and allows renewal for m'o additional five-year periods. The contract cost will be based on the budget submitted by the fIre department and approved by the City. Capital costs are billed separately in addition to the contract rate. The amount expended under the contract was $230,936 in 2005. E. Employee Theft . During 2005, the City pressed charges against Sandra Berres, Senior Accounting Clerk, for misappropriation of assets. This employee was terminated in August 2005. In March 2006, the cbarged individual plead guilty to five counts of theft by swindle in the amount of nearly $225,000. The theft had taken place over five years. The City expects to receive from insurance the entire amount less their deductible in 2006. Note 6: PRIOR PERIOD ADJUSTMENT A prior period adjustment was made to the beginning equity balances as folIov....s: Fund Fund Balance January 1,2005 as Previously Reported Prior Period Adjustment! Restatement Fund Balance January 1,2005 as Restated Governmental activities $ 17.822.409 $ 901,778 $ 18,724.187 The City reviewed the cost reported on a parcel of land and detennined it was not accurate. . -38- . DRAFT COMBINING AND INDIVIDUAL FUND fiNANCUL STATEMENTS AND SCHEDULES CITY OF ARDEN HILLS ARDEN HILLS, MINNESOTA YEAR ENDED DECE.MBER 31,2005 . . CITY OF ARDEN HILLS, MINNESOTA NONMAJOR GOVERN~NTAL FUNl)S COMBINING BAL 200~T . . J DECEMBER 31 . DD AIf~ ftal 1~ amtli . Norjor ". ~-t'i .' vemmentaI Funds Funds F~~ ASSETS Cash and casb equivalents $ 786,170 $ 540,712 $ 1,326,882 Receivables Interest 3,396 9,040 12,436 Accounts 20,353 20,353 TOTAL ASSETS $ 809,919 $ 549,752 $ 1,359,671 LIABILITIES AND FUND BALANCES LIABILITIES Accounts payable $ 66,063 $ 28,382 $ 94,445 Accrued salaries payable 982 982 TOTAL LIABILITIES 67,045 28,382 95,427 FUNl) BALANCES Unreserved Undesignated 742,874 521,370 1,264,244 TOTAL LIABILITIES AND FUND BALANCES $ 809,919 $ 549,752 $ 1,359,671 . . -39- CITY OF ARDEN HILLS, MIN1\1ESOT A NONMAJOR GOVERNMENTAL FUNDS COMBINING STATEMENT OF REVE~~J;Nj:)TXI-lRR.~ FOR T~~:SE~~d:ALANn. ~:R... . . A.. '... lr'i.. . T' . . . . iJ ' 1ftal Sp -.. .., aLl Nomnajor Revenue Projects Govelnmental I _ _ ~o=f~.1.~0.s=..~.. .__~,:l'nds . REVEl\'UES Taxes Interest on investments Miscellaneous $ 63,428 23,869 100,243 TOTAL REVENUES 187,540 EXPENlJITURES Current Culture and recreation Miscellaneous Capital outlay General government Public safety Public works Culture and recreation 44,184 181,641 59,404 . TOTAL EXPENDITURES 285,229 EXCESS (DEFICIENCY) OF REVENUES OVER (U1\TDER) EXPENDITURES (97,689) OTHER FINANCING SOURCES (USES) Transfers in Transfers out (47,225) TOTAL OTHER FINANCING SOURCES (USES) (47,225) NET CHA-NGE IN FUND BALANCES (144,914) FUND BALANCES, JANUlI.RY 1 887,788 FUND BALANCES, DECEMBER 31 $ 742,874 . -40- $ 63,457 63,457 1,062 12,005 19,018 32,085 31,372 18,890 (1,751,368) (1,732,478) (1,701,106) 2,222,476 $ 521,370 $ 63,428 87,326 100,243 250,997 44,184 ]81,641 1,062 12,005 ]9,018 59,404 317,314 (66,317) 18,890 (1,798,593) (1,779,703) (1,846,020) 3,110,264 $ 1,264,244 CITY OF ARDEN HILLS, MINNESOTA NONMAJOR SPECIAL REVENUE FUNDS COMBINING BALANCE SHEET DECEMBER 31 2005 . ASSETS Cash and cash equivalents Receivables Interest 204 744 1,183 Accounts 3,818 16,535 TOTAL ASSETS $ 4,022 $ 187,882 $ 298,220 LIABILITIES AND FUND BALANCES LIABILITIES Accounts payable $ $ $ 973 Accrued salaries payable 336 TOTAL LIABILITIES 1,309 FUND BALANCES Unreserved Undesignated 4,022 187,882 296,911 TOTAL LIABILITIES AND FUND BALA,"lCES $ 4,022 $ 187,882 $ 298,220 . . -41- . DR FT Risk TCAAP Management Total $ 48,091 $ 270,439 $ 786,170 188 1,077 3,396 20,353 $ 48,279 $ 271,516 $ 809,919 . . $ 39,292 646 39,938 8,341 $ 48,279 $ 25,798 $ 66,063 982 25,798 67,045 245,718 742,874 $ 271,516 $ 809,919 -42- AFTab.TV . REVENUES Franchise taxes 3,428 Interest on investments 468 5,650 7,602 Miscellaneous Park dedication fees 5,000 Other 65,649 TOTAL REVENUES 66,117 10,650 71,030 EXPENDITURES Current Culture and recreation 464 43,720 Miscellaneous Capital outlay Culture and recreation 53,352 6,052 TOTAL EXPENDITlJRES 53,816 49,772 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 66,117 (43,166) 21,258 . OTHER FINANCING USES Transfers out (47,225) NET CHANGE IN FUND BALANCES J8,892 (43,166) 21,258 FUND BALANCES (DEFICITS), JANUARY 1 (14,870) 231,048 275,653 FUND BALANCES, DECEMBER 31 $ 4,022 $ 187,882 $ 296,911 . -43- . Risk TCAAP Management Total $ $ $ 63,428 2,437 7,712 23,869 5,000 29,594 95,243 2,437 37,306 187,540 . -44- D AFT ASSETS Cash and cash equivalents (deficits) Interest receivable TOTAL ASSETS LIABILITIES AND FUND BALANCES LIABILITIES Accounts payable FUND BALANCES Umeserved Undesignated TOTAL LIABILITIES Ai"D FUND BALANCES CITY OF ARDEN HILLS, MINNESOTA NONMAJOR CAPITAL PROJECTS FUNDS COMBINING BALAN DECEMBER 31, 005 -45- ANOD.. T' e~~1rI . .ll-oa-" . Calf"l Improvements Equip!llent Buildings $ 17,049 135 $ 17,184 $ 17,184 $ 17,184 $ (6,276) $ 6,276 $ $ $ (591) 591 $ $ $ . . . . . Public D Safety Capital Equipment Total $ 530,530 $ 540,7J2 2,038 9,040 $ 532,568 $ 549,752 . . $ 1l,198 $ 28,382 52],370 521,370 $ 532,568 $ 549,752 -46- CITY OF ARDEN HILLS, MINNESOTA . NOJ:\1MAJOR CAPITAL PROJECTS FUNDS COMBINING SCHEDULE OF REVE ITURES CHANGES IN FUND ALANCES COR TIm YEAR CNDeD DE DRkY T . Land and Road cayitaI Buildings . rovements E uipment REVENUES Interest on investments $ 949 $ 44,104 $ 4,179 EXPENDITURES Capital outlay General government 1,062 Public safety Public works J9,018 TOTAL EXPENDITURES 1,062 19,018 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (113) 25,086 4,179 OTHER FINANCING SOURCES (USES) Transfers in Transfers out (16,832) (1,582,151) (152,385) TOTAL OTHER FINANCING . SOURCES (USES) (16,832) (1,582,151) (152,385) NET CHANGE IN FUND BALANCES (16,945) (1,557,065) (148,206) FUND BALA.'lCES, JANUARY 1 16,945 1,557,065 148,206 FUND BALANCES, DECEMBER 31 $ $ $ . -47- . Public Safety Capital Equipment Total $ 14,225 $ 63,457 1,062 12,005 12,005 19,018 12,005 32,085 2,220 31,372 18,890 18,890 (1,751,368) . 18,890 (1,732,478) 21,110 (1,701,106) 500,260 2,222,476 $ 521,370 $ 521,370 . -48- DRAFT CITY OF ARDEN HILLS, MINNESOTA GENERAL FUND SCHEDULE OF REVENUES, E CHANGES IN FUND BALANCES- UDGET AND ACTUAL . FOR THE YEAR ENDED DE EMBER 31,2005 (With comparative actual amounts for the rarl:Je 31)\ FT %()04 Budgeted Amountsl "'"V"anance with Final Budget - J-\l.[i:i'al ~'o ual Original Final Amounts (Negative) Amounts REVENUES General property taxes $ 2,370,270 $ 2,370,270 $ 2,344,878 $ (25,392) $ 2,244,078 Li censes and permits Business 53,555 53,555 49,490 (4,065) 54,543 Nonbusiness 430,355 430,355 275,619 (154,736) 456,420 Total 483,910 483,910 325,109 (158,801) 510,963 Intergovernmental revenue State Street aid 65,700 65,700 69,668 3,968 66,218 Property tax credits 5,899 5,899 6,234 Other 5,179 5,179 5,179 5,179 Total 70,879 70,879 80,746 9,867 77,631 Charges for services . General government 60,450 60,450 66,304 5,854 56,063 Public safety 6,635 6,635 2,003 (4,632) 5,914 Culture and recreation 86,630 86,630 89,387 2,757 82,892 Total 153,715 153,715 157,694 3,979 144,869 Fines and forfeitures 31,000 31,000 45,993 14,993 43,055 Jntcrest on investments 8,000 8,000 9,109 1,109 23,376 Miscellaneous State building code surcharges 12,000 ]2,000 9,144 (2,856) 14,085 City building code surcharges 990 990 901 (89) 1,025 Refunds and reimbursements 15,500 15,500 34,136 18,636 47,088 Sale of assets 540 540 860 Building Tent 54,666 54,666 54,666 33,990 Total 83,156 83,156 99,387 16,231 97,048 TOTAL REVENUES 3,200,930 3,200,930 3,062,916 (138,014) 3,141,020 . -49- . CITY OF ARDEN HILLS, MINNESOTA GENERAL FUND SCHEDULE OF REVENUES, FY-,,""'TTITI>lO."-A"lD I . CHANGES IN FUND BALANCES - BUDGlIT AND ACTUAL - CONTINUED >OR urn TIA' ~ffi 01'""& n "'" (With comparative actual amounts for the eari:JR3 f\ ~., ~004 Budgeted Amountsl Variance vrith final Budget - 051 ve ctual Original Final Amounts (Negative) Amounts EXPENDITURES Current ex.penditures General government Mayor and Council Personal servlces $ 17,655 $ 17,655 $ 17,655 $ $ 17,682 Supplies 3,200 3,200 1,087 2,113 2,271 Other services and charges 46,549 46,549 28,791 17,758 85,593 Total 67,404 67,404 47,533 19,871 105,546 Elections and voter registration Personal services 158 (158) Supplies 943 Other services and charges 800 800 823 (23) 13,289 Total 800 800 981 (18]) 14,232 . Administration Personal services 276,186 276,186 220, 117 56,069 253,808 Supplies 13,500 13,500 19,797 (6,297) 12,331 Other services and charges 132,687 134,845 156,177 (21,332) 93,193 Total 422,373 424,53 ] 396,091 28,440 359,332 Legal Other sef\l;ces and charges 64,000 64,000 69,784 (5,784) 48,802 Planning and zoning Personal services 68,024 88,024 83,620 4,404 69,467 Supplies 2,300 2,300 1,118 1,182 1,000 Other services and charges 7,400 17,400 7,12] 10,279 6,900 Total 77,724 107,724 91,859 15,865 77 ,367 Building Personal services 27 ,340 27,340 29,829 (2,489) 30,885 Supplies 5,738 5,738 6,008 (270) 4,303 Other services and changes 224,922 224,922 219,821 5,101 183,513 Total 258,000 258,000 255,658 2,342 218,701 Total general government 890,301 922,459 861,906 60,553 823,980 . -50- CITY OF ARDEN HILLS, MINNESOTA . GENERAL FUND SCHEDULE OF REVENUES, E ND AND CHANGES IN FUND BALANCES - BUDG; AND ACTUAL - CONTINUED FOR TIJ.E YEAR ENDED D EMBER 31, 2005 . (Willi comparative actual arnounts for llie rl:JT(31J\: 11 'T ~004 --- I I Tanance Wllli Budgeted Amounts. Final Budget - , ..-..'ctum lOsmVE ~ctual Original Final Amounts (Negative) Amounts EXPENDITURES-CONTINUED Current expenditures - Continued Public safety Police and animal control Other services and charges $ 718,225 $ 718,225 $ 718,252 $ (27) $ 705,357 Fire protection Other services and charges 230,936 230,936 230,936 219,736 Protective inspection Personal services 169,733 169,733 156,995 12,738 147,739 Supplies 850 850 262 588 385 Other services and charges 39,245 39,245 31,297 7,948 57,702 Total 209,828 209,828 188,554 21,274 205,826 Total public safety 1,158,989 1,158,989 1,137,742 21,247 1,130,919 Public works . Streets Personal services 140,852 140,852 148,098 (7,246) 134,540 Supplies 54,764 54,764 63,843 (9,079) 38,564 Other services and charges 252,715 262,009 282,727 (20,718) 213,323 Total public works 448,331 457,625 494,668 (37,043) 386,427 Culture and recreation Park maintenance Personal services 276,649 276,649 280,075 (3,426) 270,908 Supplies 49,358 49,358 54,436 (5,078) 56,661 Other services and charges 81,499 281,499 217,209 64,290 46,904 Total culture and recreation 407,506 607,506 551,720 55,786 374,473 Economic development Other services and charges 47,725 47,725 42,744 4,981 42,207 Total CUTTent expenditures 2,952,852 3,194,304 3,088,780 105,524 2,758,006 . -51- . CITY OF ARDEN HILLS, MINNESOTA GENERAL FUND SCHEDULE OF REVENUES, E . CHANGES IN FUND BALANCES - BUDGlil AND ACTUAL - CONTINUED . FOR THE YEAR ENDED D1fElvIBER 31 2005 (WIth comparal1ve actual amounts for the rl:JR3 f\ F ~04 Budgeted Amountsl Variance with Final Budget - c a OS11ve ctual Original Final Amounts (Negative) Amounts EXPENDITURES - CONTINUED Capital outlay General government $ J 03,958 $ J 03,958 $ 40,455 $ 63,503 $ 4,360 Public safety 3,500 3,500 1,534 1,966 20,633 Public works 350 350 2,692 (2,342) 1,163 Culture and recreation 1,750 1,750 1,939 (189) 37,078 Total capita] outlay 109,558 109,558 46,620 62,938 63,234 TOTAL EXPENDITURES 3,062,410 3,303,862 3,135,400 168,462 2,821,240 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 138,520 (102,932) (72,484) 30,448 319,780 OTHER FINANCING SOURCES (USES) Transfers in 39,000 39,000 28,335 (10,665) 42,000 . Transfers out (177,520) (177,520) 177,520 (161,690) TOTAL OTHER FINANCING SOURCES (USES) (138,520) (138,520) 28,335 166,855 (119,690) NET CHANGE IN FUND BALANCES (241,452) (44,149) 197,303 200,090 FUND BALANCES, JANUARY 1 1,314,929 1,314,929 1,314,929 1,114,839 FUND BALANCES, DECEMBER 31 $ 1,314,929 $ 1,073,477 $ 1,270,780 $ ]97,303 $ 1,314,929 . -52- CITY OF ARDEN HILLS, MINNESOTA' SUMMARY FINANCIAL REPORT REVENUES AND EXJ>ENDlTURES FQR-G=.R · r ",PI''' ATIDN~ GOVERNMENTAJlFUNDS I YEARSENDEDDECEMBER IDOMA_ F. T'"f~ · ~~ ,.Jil. ~9iease 2005 2004 (De....ease) REVENUES Taxes Special assessments Licenses and pennits Intergovernmental Charges for services Fines and forfeitures Investment earnings Miscellaneous $ 2,858,339 397,980 325,109 80,914 157,694 45,993 265,029 199,630 TOTAL REVENUES Per Capita $ 4,330,688 450.18 EXJ>ENDITURES Current General government Public safety Public works Culture and recreation Economic development Miscellaneous Capital outlay General government Public safety Public works Culture and recreation Debt service Principal Interest and other charges $ 861,906 1,137,742 494,668 595,904 157,646 181,641 57,219 13,539 896,616 61,343 175,000 113 ,203 TOTAL EXPENDITURES Per Capita $ 4,746,427 493.39 Total Long-term Indebtedness Per Capita $ 2,395,000 248.96 General Fund Balance - December 31 Per Capita $ 1,270,780 132.10 $ 2,898,769 510,963 77 ,826 144,869 43,055 235,803 283,525 316,132 $ 4510,942 468.91 $ 823,980 1,130,919 386,427 428,135 152,165 269,111 13,349 36,105 2,011,680 411,633 170,000 141,582 $ 5,975,086 621.11 $ 4,940,000 513.51 $ 1,314,929 136.69 (1.39) % (22.11) 317.74 (44.15) 266.26 (80.50) (6.52) (36.85) (4.00) % (3.99) 4.60 % 0.60 28.01 39.19 3.60 . (32.50) 100.00 (62.50) (55.43) (85.10) 2.94 (20.04) (20.56) % (20.56) (51.52) % (51.52) (3.36) % (3.36) The purpose of this report is to provide a suromary of financial infonnation concerning the City of Arden Hills to interested citizens. The complete financial statements may be examined at City Hall, 1245 Hwy 96 W. Questions about this report should be directed to Murtuza Siddiqui at (651) 634-5132, -53- . . . . TAX CAPACITY Real estate Personal property TOTAL CITY OF ARDEN HILLS, MINrffiSOTA TAX CAPACITY, TAX LEVIES AND TAX CAPACITY RATES (Shown by year of tax ~~ DR FISCAL DISPARITY ADmSTMENT Contribution Distribution ADmSTED TOTAL TAX CAPACITY TAX LEVIES General fund TAX CAPACITY RATES General fund .54. 2QP~. Iii" 2,9&P. 8, ) 1 ~742 __104 :J91,825 [52,972 44,797 (2,135,554) (2,180,577) 787,475 772,095 $ 11,799,874 $ 10,436,315 $ 2,353,044 $ 2,243,081 19.941% 21.493% . . DRAFT OTHER REPORTS CITY OF ARDEN HILLS ARDEN HILLS, MINNESOTA YEAR ENDED DECEMBER 31, 2005 . . .. DRAFT . Grandview Square 5201 Eden Avenue Suite 370 Edina, MN 55436 I I REPORT ON MINNESOTA LEGAL COMPLIANCE Honorable Mayor and Council City of Arden Hills, Minnesota We have audited the fmancial statements of the governmental activities) the business-type activities, each major fund" and the aggregate remaining fund information of the City of Arden Hills, Minnesota (the City) as of and for the year ended December 31, 2005, which collectively comprise the City's basic fInancial statements and have issued our report thereon dated April 14, 2006. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the provisions of the Minnesota Legal Compliance Audit Guide!or Local Government, promulgated by the Minnesota Office of the State Auditor pursuant to Minnesota statute 6.65. Accordingly, the audit included such tests of the accounting records and such . other auditing procedures as we considered necessary in the circumstances. The Minnesota Legal Compliance Audit Guidefor Local Government covers six main categories of compliance to be tested: contracting and bidding, deposits and investments, conflicts of interest, public indebtedness, claims and disbursements and miscellaneous provisions. Our study included all of the listed categories. The results of our tests indicate that for the items tested, the City complied with the material terms and conditions of applicable legal provisions, except as described in the schedule of [mdings and questioned costs on the following page. This report is intended solely for the information and use of the Council, management, others within the City and the Minnesota Office of the State Auditor, and is not intended to be and should not be used by anyone other than these specified parties. April 14, 2006 Minneapolis, Minnesota ABDO, E1CK & MEYERS, LLP Certified Public Accountants . -55- 952.835.9090 . Fax 952.835.326] ,",,'WW.aemcpAs.com " " DRAFT - - Grandview Square 5201 Eden Avenue Suite 370 Edina, MN 55436 REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS Honorable Mayor and Council City of Arden Hills, Minnesota We havc audited the fmaucial statements of the major funds and remaining fund information of the City of Arden Hills, Minnesota (the City), as of and for the year ended December 31,2005 which collectively comprise the City's basic fmancial statements and have issued our report thereon dated April 14) 2006. We conducted our audit in accordance with auditing standards generally accepted in the United States of America . In planning and performing our audit, we considered the City's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide an opinion on the internal control over fmancial reporting. However, we noted certain matters involving the internal control over fInancial reporting and its operation that we consider to be reportable conditions, reported as fmding 2005-1 in the Schedulc of Findings. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control over fmancial reporting that, in our judgment, could adversely affect the City's ability to record, process, sunnnarize and report fInancial data consistent 'With the assertions of management in the fmancial statements. A material weakness is a 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 misstatements in amounts that would be material in relation to the [mandaI statements being audited may occur and not be detected ",;thin a timely period by employees in the normal course of performing their assigned fimctions. Our consideration of the internal control over fInancial reporting would not necessarily disclose an matters in the intemaJ control that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, We believe the reportable condition described above is not a material weakness. This report is intended solely for the information and use of the Council, management, others within the City and the Minnesota Office of the State Auditor and is not intended to be and should not be nsed by anyone other than these specified parties. April 14, 2006 Minneapolis, Minnesota ABDO, EICK & MEYERS, LLP Certified Public Accountants . -56- 952.8.35.9090 . Fax 952.835.326] vr'w'w.aemcpas.com .' . Findigg . . 2005-1 2005-2 CITY OF ARDEN HILLS, MINNESOTA SCHEDULE OF FINDINGS DECEMBER 31 2 0 Description Segregation of Duties D. DA EI Our study and evaluation disclosed that because of me .~. s~'l. ffi iSfu , e Ci . . hnnted segregation of duties for a portion of2005. Good infernal control contemplates an adequate segregatiT of duties so that no one individual handles a transactiorln-.fim.;jn{':eptioIl:t6~1ecio~ith,4h~T()Sp.j"'nHhn of a former City employee for misappropriation of assets and reorganization of job responsibilities, we believe that this issue has been remedied as of year end. Management Response Management recognizes the importance of this fInding and has taken steps to alleviate this deficiency in internal control. As of the year ended December 31, 2005, controls are maintained to ensure that the City has proper segregation of duties_ Declaration for Payment Minnesota statute 471.38 requires that each declaration for payment be signed to the effect that such account, claim, or demand is just and correct and that no part of it has been paid. The statute is satisfied if on the back of City checks is a declaration as defined in Minnesota statute 471.391 reading "I declare under the penalties of law that this account, claim or demand is jnst and correct and that no part of it has been paid." The City did not have the required statement on the back of their check in 2005. Management Response Management understands the fmding and has since taken steps to correct the noncompliance. -57- . . . ~ ~HILLS MEMORANDUM DATE: May 10, 2006 AGENDA ITEM: 2.A2 TO: Honorable Mayor and City Council FROM: Murtuza Siddiqui, ChicfFinancial Officer/Treasurer .....\.1 SUBJECT: Restructuring Account Codes BACKGROUND: The City of Arden Hill's financial system has currently been in place for over a decade. The current system consists of five major fund categories and multiple departments within these funds. Within each department there are categories and within each of these categories are numerous object codes, amounting to approximately 250 object codes. A majority ofthese object codes were created for specific purposes, for example, to track the expenses of a particular vendor or expense item. As a result, hundreds of object codes were created because each objcct code was very specific to a particular expense. DISCUSSION: The existing number of object codes was created to track and report particular expenses. However, there are other possible ways to track thesc items without creating an object code whenever needed. The City's financial system allows for tracking by a specific vendor or by object code. Another way to track the expenses of a particular item would be to look up the original invoice. In addition to downsizing the number of object codes, staff is proposing to add major expense categories within each department (Exhibit A). The proposal is have ten major expense categories, as compared to the existing five categories (two out of five are not used very frequently). Creating additional categories will allow for tracking and reporting to be easier. For example, reporting can be done at a category level, making it easier to analyze at a glance. Currently, it is difficult to analyze reports for tracking and reporting purposes due to the number of object codes. Analyzing large amounts of object codes at any particular time makes it difficult to spot irregularities in a certain object code. Particularly with what has occurred, having account codes for every expense item makes it very difficult to detect fraud, as expenses can be coded to numerous object codes, thus making it difficult to identify irregularities with ease, particularly Memo Restructuring Account Codes 2 when a comparison is done for budget versus expense. Thc proposed structure would have about 85 object codes as compared to 250 object codes as they exist today. If implemented, the restructuring of the account codes would take affect during the 2007 budgeting process. Exhibit B shows the entire proposed object code structure along with the existing structure. Also included is an example of the Administration Department budget that compares the existing object code structure with the proposed new structure (Exhibits C & D). SUMMARY: In order to improve reporting and tracking, it is suggested that a number of these object codes be eliminated. These object codes had very specific purposes when they were originally created, but with the restructuring ofthese object codes those specific purposes can still be met. The suggestion is to restructure the current financial system with far less object codes and additional categories. The City will be able to analyze and report expenses with greater ease as a result of this restructuring. RECOMMENDED ACTION: Staff recommends the City Council approve the restructuring of the current financial system. As part of this restructuring, the Council also authorizes staff to combine any balances with their respective object codes. . . . . .f:o.f:o.f:oJ;;,.J;;,.J;;,.J;;,.J;;,.J:>, .v.f:o.f:o........10101'01'01'0 'v'" 0 0 0 .l;>.1'01'01'0'" "oJ (Jl.... W W 0 "'-J.f:o UJ CJ1 OOC'JWOOOOO 5: AlS:S::(f)(f):l:ClJOJUJ iii'~ !:!!,~.re 3 f!!,~~g tOi;a~O~~_a.,,-'O Qiilooo-f::CIJ~~ :::T __I)JOIllIllO!!:. ~ <~5'~roF5g. 3: ~=;lO m:::::!' AlQ.[l) [l) a g. .g *' g s: Vi ~' ~ ~ "6' 3" ~, 3: ~ ~ x'!! ~ -5' a ~ iii' . 1ti iF ....J;;,.J;;,.J;;,.J;;,. J:>,J:>,..,...,.,j::,. lOt,..lWNO g:€~g~ ttt; 00>0> mm," 0"'0 ..,.+>.,/:>0.';:" WWVlW ~~v;8 000CJ1 ;;il?~~~~g!~4';;5'~ ~ (ii~~ ~lO ()f:l.g ~3'Q. , f/l Co (D _' "S (D lO I\) o' ~~~ E'5:~~.~~(D o:J 3 >< ~g,~,g.3 (ijpo>~a2- 3 :J;;::l;;::l ,,\ g-... r- -.. a. co.. ""..., () -. 3 m("Q :J (D 'i1 s: f/l =r ~ o-:::::! 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Ii' 8 o '" () 8. ro <f> 2' ;:: o <il <f> . 3 5' m m .0 ~ ()m o 3 ~'2. iI 0 ,';1; ~ . . c c,~ c . .m .g ::!~ ~ :a .. . p c- o '" .!1. ~ " ~ o 2, ~ .- 0 ~ h '" 0 5' a ~ ~ ~.~ , ~ rn- '" '" o. . <5 < 0' _. a g o ~ ,~ ;0 o . ~ " Proposed At:Couflt Code Structure . Old AccounUNew Account Numbers .-.:-E-o-1-Pe:r~5el'Vjces:.: OJd_AcC:b~hH~. OId-:Ac:C:O:unlNa:m-e-. -New:ACtoOnt:# . t\k!W:AcC:oul1t:r-tarhe-. ::::::: :~Eis:~~iP:~I~Fi~.E.ic:a_~~I~s::.. 41010 Regular Office Salaries 41010 Regular Salaries 41020 Overtime Salaries 41020 Overtime Salaries 41030 Part Time Salaries 41040 Temporal)' Employees 41040 Temporary Employees 41040 Temporary Employees 41045 Temporary Employees 41040 Temporary Employees 41060 Council Salaries 41010 Regular Salaries 41110 Unused Vacatlon/SicK Pay 41110 Unused PTO 41120 Car Allowance 41120 Car Allowance 41130 Employer Savings Match 41130 Employer Savings Match 41210 PERA Employer Expense 41210 PERA Employer Expense 41220 FICA Expense 41220 FICA Expense 41300 Insurance Expeflse 41300 Insurance Expense 41310 Ufe fnsurance 41310 life Insurance/STD/l TD 41410 Paid Unemployment Benefits 41410 Paid Unemployment Benefits 41510 Workers' Comp Ins Premiums 41510 WorKers' Comp Ins Premiums 42111 Uniform Expense 42111 Uniform Expense 41024 PTO Pay 41026 Holiday Pay 41022 Compo Pay ??? Flex Pay S~~"SU"""............ Old-A"@()untpt-. ...Old-:Acc_o:u:nt-Na:~:. -N~v(AC<:Qlil)t:lt: : .:F%w:ACCQLjrIl:N<lftiil-. .::::: :D~~:~~I~I~~~J:E.x:a~PI~?: 42010 Office Supplies/Accessories 42010 Supplies/Accessories 42020 CopierlPaperExpense 42010 Supplies/Accessories 42030 Printed Forms 42030 Printed Forms 42040 Envelopes & Letterhead 42010 Supplles/Accessories 42170 Arts & Crafts Supplies 42170 Misc. Program Supplies/Fees 42171 Adult Sports Equipment 42172 Athletic Sports Supplies 42172 Youlh Sports Equipment 42172 Athletic Sports Supplies 42175 Penny Carnival Materials 42170 Misc. Program Supplies/Fees 42173 Summer Playground Trips 42170 Misc. Program Supplies/Fees 42174 MiscFamilySpecial Events 42170 Misc Program Supplies/Fees 43084 After School Programs 42170 Misc. Program Supplies/Fees 43086 Special Events Program 42170 Misc. Program Supplies/Fees 43088 fSD 621 B!dg Coordinator 42170 Misc. Program SupplieslFees 42110 Cleaning Supplies 42010 Supplies/Accessories ??? Subscriplions 43240 Misc.lOtherSupplies : -: -: - :c:_1 O'c:omrnuol~ali~n OrdAccount:# : -: -:. :O_i4 .A_c_C.O_lllli Na.iT.le:: :"Nayi-~6l!iJt#::. .-. -.- .Ne~.Accoui1t.N:airie. : -Oei;ciiption_i;lE:~~~~!~~::: 43210 Telephone 43210 Telephone/Cell Phone Charges 43215 Cell Phone Charges 43210 Telephone/Cell Phone Charges 43220 Postage General 43220 Postage 43222 Postage Utilities 43220 Postage 43224 Postage Newsfetler 43220 Postage 43510 Legal NoticePublishiny 43510 Legal Notice/Advertising 43550 Newsletter Printing 43550 N~sletlerPublishing/Printing 43552 Newsletter Writing/Editing 43550 Newsletler Publishing/Printing 43410 Advertising-Employment 43510 Legal Notice/Advertising 43240 Delivery Service 43240 Misc.lOther Delivery service .E15;Ernployee O~lopirierit Old-A"c~ount'# -:.OI:d:A~untName- .N~:A:c.c.o~Jlt# .:: :::::: ::~:N:~~!5~!-iri~:tiIar11e-. Desci:iptiori~riri1pleS:::. - 44330 Dues/Licenses/Subscriptions 44330 Dues/Licenses 44370 Training/Subsislence 44370 Training/Subsistence 44375 Planning Commision Training 44375 Public OfficIal Training 43240 Misc.lOther -:: E20: _Contrachi~al:~~N!ces.. Old:A-ccoLirit:#-: :.:. :_:(}ldAti?u.ri_t ~a.m:~:. :r;.rfjw'A~i?it~~#:: .... ... -:~v..i)~ccouni'Name. Des_c_r.ipti_oi1_s/EX.<liTip.l~s.:: . 43010 Prof Svcs-Auditing Fees 43010 Professional Services 43020 Prof Svcs-Archilect Fees 43010 Professional Services 43030 Prof Svcs-Engineering Fees 43010 ProfeSSional Services 43031 TCAAP"Civil Engineer-URS 43010 Professional Services 43035 Rebillable Engineering fees 43010 Professional Services 43040 Prof Svcs-Legal Fees 43010 Professional Services 43042 Rebillable Legal Fees 43010 ProfeSSional Services 43045 Prof Svcs-Legal Prosecution 43010 ProfessIonal Services 43047 TCAAP Legal-Larkin Hoffman 43010 Professional Services 43049 TCAAP Legal 43010 Professional Services 43050 Fiscal Consu!1an1 Fees 43010 Professional Services 43051 TeAAP Finance Consultanl-Ehlers 43010 Professional Services 43060 Clerical Svcs Fees 43010 Professional Services 43070 Prof Svcs-Managemen! Fees 43010 Professional Services 43080 Prof Svcs-Instructor Fees 43010 Professional Services 43090 Appl Software Support Fees 43090 Appl Software Support Fees 43091 PC Network Supprnl Fees 43091 PC Network Support Fees 43110 Recording Secretary Fees 43010 Professional Services 43120 Planning Consultant Fees 43010 Professional Services 43122 TCAAP P!anning-DSU 43010 Professional Services . . Exhibil B Proposed Account Code Structure 43130 Ramsey County Sheriff Contract 43010 Professional Services 43140 Fire Protection Contract 43010 Professional Services 45801 Outside Engineering 43010 ProfessionalSerllices 45804 Legal & Fjscal Costs 43010 ProfessionalServjces 43059 Developer TIF Payments 43059 Delleloper TIF Payments 43102 Electrical Inspections 43102 Electrical Inspections 44050 Tree Remollal-Public Prop 44050 Treef\Neea Services 44055 Tree Removal-Private Prop 44050 Tree-!\Need Services 44058 Weed Remollal 44050 Tree!\Need Services 43075 FSAAdmln. Fees 44090 Admin, Fees EAP, FSA Fees 43076 EAP Admin. Fees 44090 Admin. Fees EAP. FSA Fees 43240 MiscJQther : : E~~;rv\ai:nleiiiU'KEifMaI:er'j.a!~: : ~ldACC6Lirit#. Ord:Ac.tcC>UJi{Nam:e:. New- Ae:c:oi.frd '# . NeW-AccolJntNalrte . .:::::: P~s..c~~p.ti.~n.~~~fl!f:il::' 42150 ShopMaterials-O&M 42150 Shop Malerials 42151 Shop Materials-Parks 42150 Shop Materials 42210 Equip. Maint. Materials 42270 Main!. Materials 42230 Bldg & Ground Maintenance- 42230 Bldg.lGroundMainte-nance 42240 Sand. Salt, Roadmix 42240 Sand, Sale Roadmix 42250 Landscaping Material 42270 Main!. Materials 42260 Sign Repair Materials 42270 Main!. Materials 42270 Utility Maint Materials 42270 Mainl.Materials 42400 Small Tools & Minor Equipment 42400 Small Tools/Equipment 42401 Safety Equipment 42400 Small Tools/Equipment 44015 Maint_ Of Bldg. & Grounds 42230 Bldg.lGround Main1enance 44032 Mise Streel Maint. Projects 44036 Main!. Of Utilities 44036 Maint OfUlililies 44036 Main!. Of Utilities 44037 Maint of Street Lights 44036 Maint Of Utilities 44038 Maint of Storm Sewers 44036 Maint Of Utilities 44040 Main!. Of Vehicles & Equip 44040 Main!. Of Vehicles & Equip 44150 Equipment Rental 44150 Rentals 44033 Pvmt Management Seal Coaling 44033 Seal Coaling 44034 Pvmt Management Alloc. Costs 44033 Seal Coaling 44045 Main!. Of Office Equipment 44040 Maint. Of Vehicles & Equip. 43240 Misc.lOther . E30;9'the:r:~lirvi~e: :&:~~a~Q~s ~ld:AC~6Lirit# :Old: A(;.(:oOIl( Nattle: New. At::epunl, # .t{eW,A:Ccouilt.Natriei . ~e5ef'ipt~otl~mpl~s.:.. 43065 Election Judge Payments 43065 Election Judge Payments 43150 Animal Ord. Enforcement 43150 Animal Oro. Enforcement 43310 Mileage Reimbursement 43310 Mileage Reimbursement 43610 General Liability Insurance 43610 Proper1y& Liability Insurance 43615 Excess liability Insurance 43610 Proper1y& liability Insurance 43620 Open Meeling liability Insurance 43610 Property & Liability Insurance 43650 Surety Bond 43610 f'roperty & liability Insurance 43860 MWCC-Current Year 43860 Wastewater Charges 43865 SAC Charges 43865 SAC Charges 43060 Bldg. Code Surcharges 43060 Bldg_ Code Surcharges 44380 Bank Service Charges 44090 Admin. Fees Banking, TIF Fees 44055 County TIF Admin, Fees 44090 Admin. Fees Banking, TIFFees 44200 Depreciation 44200 Depreciation 44340 Awards & Indemnities-Property 44340 Awards & Indemnities 44345 Awards & Indemnities-Auto 44340 Awards & Indemnities 44390 Sales Tax 44390 Sales Tax 44900 Misc. Community Projects 44900 Misc. Community Projects 43240 Misc./Other :r;~:utllllt~s:::. :QldAccQunt: #: O.'d: ~(;.:<:~n( Nam:e:. NeW ACllP)Jnt # :::-NewAJ;j:;9!Jtlt.f\I:amE! . . .:~~$:C!j.p.t~oo~mples:. 42120 Molar Fuei-Gas 42120 Motor Fuel 42121 Motor Fuel-Diesel 42120 Motor Fuel 43800 City Hall Water/Sewer Utilities N1A Eliminated 43810 Electric Utility 43810 Electricity/Gas 43812 Electricity-Semaphores 43810 Electricity/Gas 43813 Electricity-Street Lighting 43810 Electricity/Gas 43814 Electricity-Civil Defense 43810 Electricity/Gas 43815 Electricity-lift S1ations 43810 Electricity/Gas 43825 MN DH Water Testing Fees 43825 Water Testing/Gopher Fees 43630 Natural Gas Expense 43810 Electricity/Gas 43840 Res Recycling Costs 43840 Res. Recycling Costs 43845 Residential Cleanup Costs 44010 SanitationlWaste Removal 43850 Gopher Stale Fees 43825 Water Testing/Gopher Fees 44010 Cleaning & Waste Removal 44010 SanitationNVaste Remollal 44180 Sanitation/Facility Rental 44010 SanitationNVas1e Removal 43820 WaterPurchases-Roseville 43820 Water Purchases 43240 Misc.lOther Exhibit B . . . Proposed Account Code Structure . :-E5-5~:Ca~t~.Q~tlay': OltJA.cj:;olJht.# .QI<J A~:,?:oull1: ~~'.I1.e-.' Nf!v(A<:coOr)(~:',._. . 'New:A((Ql.lrtt:Name::' . ':::J;l~!,,?~iJ:(tl~!l~J~~:a~l>leS;' 45140 Streets & Sidewalks 45200 Building & Structures 45200 Building & Structures 45200 Building & Structures 45400 Other Equipment 45400 Equipment Playground 45500 Heavy Machinery & Aulo 45500 Heavy Machine!)! & AUlo 45600 Furniture & Fixtures 45700 Office Equip..& Furnishings 45700 OffieeEquip..& Furnishings 45700 Office Equip, & Furnishings 45720 Offiee Equip.-Capilal lease 45700 Office Equip. & Furnishings 45800 ConstruclionContract 45800 Construction Contract 45805 OlherProject Costs 45805 Other Project Costs Park. Improvements 45807 Alice Pvmt Mgml to Genl Fund NfA Eliminated 45808 Alice Pvmt Mgmt to SWM Fund NfA Eliminated 45809 Alloe Pvmt Mgmt to Water Fund NfA Eliminated 45810 Alloc Pvmt Mgmt to Sewer Fund NfA Eliminated 45900 Trees & landscaping 45900 Trees & landscaping 45903 Playground Equipment 45400 Equipment Playground 45907 Misc Park Improvements 45805 Other ProjectCosls Park Improvements 46010 Debt Principal 46010 Debt Principal 46110 Inlereston Bonds 46110 Interest on Bonds 46120 Inlerfundloan Inlerest 46120 InterfundLoanlnterest 43240 Misc.lOther -.-~6(r-Oll:er-atlllp-Tr:..afl:>f,,!rs. :Old:A"c:COU"!tll ... o.klA(::c:OJ-J:nlNa:rr'I~', -Nt!W:M:C?IlIl(fI:::' 'NeW:A(~Q~r1t:Noq.mj!: : -:::: D~s:c~tPlh:in:s/-E_X"~Il]~~ . 47200 Transfer to Genl Fund(101) 47200 Transfer to Genl Fund(101) 47212 Transfer Out to Prog Fund(226) 47212 Transfer Out to Prog Fund(226) 47213 OperTransferto Recreation 47213 OperTransferlo Recrcalion 47240 OperTrdnsferto Bldg Fund(40B) NfA Eliminated 47242 Oper Transfer to Cap Equip(411) 47242 Oper Transfer 10 Cap Equip(411) 47243 Oper Transfer to Pub Safety(412) 47243 Oper Transfer to Pub Safety(412) 47260 Oper Transfer to PIR(501) 47260 Oper Transfer to PIR(501) 47285 Transfer 10 GO Bonds 199(\(325) 47285 Transfer 10 GO Bonds 1998(325) . . Exhibit B City of Arden Hills Adopted 2006 Budget . Administration EXPENDITURES PERSONAL SERVICE 41010 Regular Office Salaries 180,144 197,346 210,243 221,023 41020 Overtime Salaries 98 149 200 41120 Car Allowance 1,288 1.800 1,800 1,800 41130 Employer Savings Match 1,984 2,528 2,511 2,281 41210 Pera EmployerE:xpense 7,890 9,972 11,637 13,261 41220 .Fica Expense 14,407 14,901 16,291 16,907 41300 Insurance Expense 15,523 16,209 21,909 24,568 41310 l.life Insurance 1,299 1,397 1,680 1,680 41410 Paid Unemplo:yment Benefits 15,888 41510 Workers' Comp Ins Premiums 9,162 9,506 9,915 11,000 Total Personal Service $247,683 $253,808 $276,186 $292,520 SUPPLIES 42010 Office Supplies/Accessories 6,450 5,950 7,500 10,000 42020 CopierlPaper Expense 1,956 1.560 2,000 2,200 42030 Printed Forms 330 1,407 1,500 1,500 . 42040 Envelopes & Letterhead 2,212 3,414 2,500 2,500 Other Total Supplies $10,948 $12,331 $13,500 $16,200 OTHER SERVICES & CHARGES 43010 Prof Sves-Auditing Fees 5,736 7,272 9,335 8,500 43050 Fiscal Consultant "Fees 10.000 43060 Clerical Sves }'ees 1,361 3,286 43075 ProfSves-FSA Admin Fees 1,465 2,820 1.600 2,000 43076 EAP Admin Fee 1,500 1,500 1,500 1,500 43090 Appl Software Support Fees 2,004 4,542 7,165 5,000 43091 PC Network Support Fees 6,867 7,724 12.000 8,000 43210 Telephone 1,000 43215 Cell Phone Charges 1,490 805 1,300 43220 Postage General 7,570 13,956 8,000 12,000 43240 Delivery Service 169 27 300 200 43310 Mileage Reimbursement 1,434 533 1,000 800 434]0 Advertising- Employment 993 2,500 2,500 . Exhibit C City of Arden Hiils Adopted 2006 Budget 43610 Gencral Liability Insurance 14,865 15,690 16,500 20,000 . 43615 Excess Liability Insurance 2,239 2,099 2,200 2,500 43650 Surety Bond 150 127 200 200 44045 Maintenance of Office Equip. 373 1.194 1,995 4,380 44090 Other Services 412 795 500 800 44150 Equipment Rental 13,191 15,662 6,500 44330 Ducs/Su bscription slLicenses 8,673 5,588 3.000 5,600 44370 Training & Subsistence 3,287 7,080 7,000 7,000 44380 Bank Services Charges 25 500 12,250 12,000 44900 Misc Communi!)' Projects 40,000 40,000 Other Total Other Scrvices & Charges $72,811 $93,193 $134,845 $142,980 CAPITAL OUTLA Y 45400 Other Equipment 7,000 45700 Office Equip & Furnishings 9.563 2,708 91,358 1,500 Other Total Capital Outlay $9,563 $2,708 $91,358 $8,500 Grand Total- Expenditures $341,005 $362,040 $515,889 $460,200 . . Exhibit C Proposed Account Code Structure . Administration EXPENDTTURES PERSONNEL SERVICES 41010 Regular Salaries/Council 180,144 197,346 210,243 221,023 41020 Overtime Salaries 98 149 200 41022 Compo Pay 41024 PTO Pay 41026 Holiday Pay 41040 Temporary Employees 41110 Unused PTO 41120 Car Allowance 1,288 1,800 1,800 1,800 41130 Employer Savings Match 1,984 2,528 2,511 2,281 41210 Pera Employer Expense 7,890 9,972 11,637 13,261 41220 Fica Expense 14,407 14,901 16,291 16,907 41300 Insurance Expense 15,523 16,209 21,909 24,568 41310 Ufe Insurance/STDILTD 1,299 1,397 1,680 1,680 41410 Paid Unemployment Benefits 15,888 . 41510 Workers' Comp Ins Premiums 9,162 9,506 9,915 11,000 42111 Uniform Expense ?'?,! Flex Pay Total Personal Service $247,683 $253,808 $276,186 $292,520 SUPPLIES 42010 Office Supplies/Accessories 10,618 10.924 12,000 14,700 42030 Printed Forms 330 1,407 1,500 1,500 ??? Subscriptions 43240 Other Total Supplies $10,948 $12,331 $13,500 $16,200 CONTRACTURAL SERVICES 43010 Professional Services 7,097 10,558 9.335 18,500 44090 Admin. Fees 3,377 5,115 3,600 16,300 43090 Appl Software Support Fees 2,004 4,542 7,165 5,000 43091 PC Network Support Fees 6,867 7,724 12,000 8,000 43240 Mise./Other Contractural Services . Total Contraetural Services 19,345 27,939 32,100 47,800 Exhibit D Proposed Account Code Structure COMMUNICATION . 43210 Telephone/Cell Phone Charges 1,490 1,805 1,300 43220 Postage 7,570 13,956 8,000 12,000 43240 Misc.lOther Communication 169 27 300 200 43510 Legal Notice/Advertising 993 2,500 2,500 Total Communication $9,229 $16,781 $12,100 $14,700 EMPLOYEE DEVELOPMENT 44330 Dues/Licenses 8,673 5,588 3,000 5,600 44370 Training/Subsistence 3,287 7,080 7,000 7,000 43240 Misc.lOthcr Employee Development Total Employee Development $11,960 $12,668 $10,000 $12,600 MAINTENANCEIMA TERIALS 44040 Maint. Of Vehicles /Equip. 373 1,194 1,995 4,380 44150 Rentals 13,191 15,662 6.500 43240 Misc.!Other Maint.IMaterials Total Maintenance/Materials $13,564 $16,856 $8,495 $4,380 OTHER SERVICE & CHARGES . 43310 Mileage Reimbursement 1,434 533 1,000 800 44900 Misc. Community Projects 40,000 40,000 43610 Property & Liability Insurance 17,254 17,916 18,900 22,700 43240 Misc.lOther Charges Total Other Service & Charges $18,688 $18,449 $59,900 $63,500 CAPITAL OUTLAY 45400 Equipment 7,000 45700 Office Equip & Furnishings 9,563 2,708 91,358 1,500 43240 Misc.lOther Capital Outlay Total Capital Outlay $9,563 $2,708 $91,358 $8,500 Grand Total- Expenditures $340,980 $361,540 $503,639 $460,200 . Exhibit D , . . . ~ ~ EN HILLS MEMORANDUM DATE: Agenda Item 2 B May 11, 2006 TO: Mayor and Council Michelle Wolfe, City Administrator Karen Barton, Community Development Director ~ FROM: SUBJECT: Code Enforcement Discussion BACKGROUND Currently, our code enforcement program is complaint driven, with somewhat of a limited ability to cnforce issues. The primary complaints staff responds to are related to cars and recreational vehicles, outdoor storage/refuse containers, accumulation of junk and debris, weeds and tall grass, snow removal, and barking dogs. The typical process involves recelVlng a complaint, investigating the complaint, writing compliance orders if appropriate, and continuing follow-up until the issue is resolved. This process can take anywhere from two weeks to several months. DISCUSSION There are a number of ways in which a code enforcement program can be operated. One is the way we currently operate, which is on a complaint basis. This type of program provides response to complaints generated by citizens, neighborSj'-or others. It is reactive in nature, which may seem to allow for unequal treatment. However, it does allow us to address resident concerns and provide for resolution, and can be handled with a limited staff. Another means by which a code enforcement program can be operated is proactive in nature. This typically involves a full-time dedicated code enforcement officer to proactively seek out nuisance situations and codc violations within the city. This type of a program is much more , Code Enforcement Memo to Council May 11,2006 Page 2 . staff intensive and often times mects with resistance from rcsidents as being too "Big Brother". But does allow for a more comprehensive program. Information regarding Roseville's program is attached for your reference as an example (Attachment 2B-I) A third option is a hybrid of the proactive and reactive forms of code enforcement. This type of program allows for pcriodic "sweeps" of different areas, while continuing a reactive complaint- based program for the rest of the city. An example of this type of a program can be found in Shoreview's SHINE program (information attached 2B-2). This type of program would also involve more staff time and can be met with resistance from residents who feel that they are being "targeted". Fnrther Considerations One problem with our current program is the time it takes to achieve compliance. Therc are a number of ways in which this can be improved, several of which can be readily implemented. Others, such as developing a more effective means to handle non-compliance are more involved (i.e., issuance of fines, instituting a housing court, etc.). Also, currently the city utilizes section 600 of the City Code, as well as portions of several other . sections.' This section is limited in scope and doesn't allow for a number of housing-related maintenance issues to be addressed. If the city desires to move to a proactive or a hybrid program, it is recommended that we adopt a housing maintenance or property maintenance code, such as the International Property Maintenance Code, for a more comprehensive enforcement program. Attached is a copy of Shoreview's property maintenance code for your reference as an example, also (attachment 2B-3). Additionally, moving to a proactive or hybrid program would require hiring additional staff to ensure effective enforcement. \\Metro-inet.us\ardenhills\PJanning\Community DevcJopment\Coullcil Agenda Itcllls\Code Enforcement Memo to CounciI5-ll-06.doc . . Attachment 2B-l City of Roseville Neighborhood Enhancement Effort . . . Ciry of ~~ Minnesota 2005 NEIGHBORHOOD ENHANCEMENT EFFORT JANUARY 2005 1. GOAL To help maintain property values and enhance the livability of Roseville neighborhoods by improving the appearance of both residential and commercial properties which have fallen below minimum (city code) standards, furthermore, to accomplish this by emphasizing education, flexibility and assisting residents over traditional code enforcement methods. . 2. BENEFITS Some Roseville neighborhoods and commercial areas are struggling with scattered, individual properties that are visual eyesores which negatively impact the quality of life and property values in an entire neighborhood or area. By utilizing a combination of education, program assistance and zoningf city code enforcement, the Community Development Department anticipates the following benefits will be attained: . Entire neighborhoods or areas can be visually enhanced. · Surrounding owners are encouraged to maintain their properties as well. . Property values are maintained and the livability of neighborhoods is enhanced. · Instilling confidence that public nuisance violations will not be allowed to continue encourages reinvestment in both neighborhoods and commercial areas. 3. OBJECTIVES To reach the stated goal by performing the following: · Educate citizens of common city codeflanduse nuisance violations in an effort to gain voluntary compliance. Also, to inform citizens of the direct and indirect benefits of compliance and enforcement efforts (to both bolster compliance and to instill confidence in neighborhood stability). . Inform citizens of assistance programs offered by the city and county. · Assist residents accomplish compliance by offering information on reasonable and affordable options available. . · Respond to citizen concerns and complaints regarding nuisance code violations and/or land use issues. . Pro actively enforce city nuisance code and land use provisions when violations are observed from the public right-of-way. · Explore options for improving voluntary compliance and enforcement efforts through research and observing other successful municipal efforts. . 4. METHODS · Educate and inform citizens of common violations and identify benefits of voluntary compliance and enforcement efforts. o Informational segments in the Roseville Wrap. o Informational segments in the Roseville Business Link. o Informational segments on the cable network (CT15). o Periodic mailings to business properties. o lnformational segments in local newspapers. o When mailing notices of violations to residents or businesses, include information (handout) identifying the benefit compliance will bring to the neighborhood. . Inform citizens of assistance available through: o Housing Resource Center. o Dispute Resolution Center. o County assistance programs. . Inform citizens and business owners of options in gaining compliance. o i.e. inform of how and where to dispose of storage, appliances, etc. . Respond to citizen concerns and complaints. o Document all calls in computer complaint system. o Inspect all received complaint within 3 days. o Respond to complainant (if requested) with outcome. · Pro actively enforce city nuisance and landuse provisions. o Initiate enforcement action when zoning ordinance and/ or nuisance violations are observed from the public right-of- way (in both residential and commercial areas). o Priority issues will include the following: Outside storage of junk, debris, unusable equipment and materials. Outside storage of vehicles. . Inoperable/junk. . Unlicensed. . Stored on grass. . . . Commercial vehicles and equipment on residential property. Trailers. . Stored in front yards. . Commercial trailers in residential districts. Grass over 8" tall. Unmaintained building exteriors. . Commercial enterprises. . Apartment buildings. . Single family homes. . Explore options for improving voluntary compliance and enforcement efforts. o Research other municipal education efforts that have been successfully implemented. o Visit other local landuse enforcement departments to learn successful techniques. . 5. ENFORCEMENT PROCEDURES Signs (proactively enforced) · Document banner signs observed and send form letter to the offending business. If compliance not obtained, proceed to $50 administrative ticket and then to court citation (through council action). . Sign maintenance. o Pursue signs in disrepair. Typical enforcement procedures for most violation types · Any staff who observes or receives notice of a violation records the violation for follow-up by the land use inspector. . Code enforcement officer inspects site within 3 days. o Wear identification tag on jacket. o Always knock on door first and inform resident of reason for visit. o Do not look in windows or go into fenced yards. o If violation observed, photograph. o Discuss issues with resident (if available) and leave business card. · Landuse inspector will utilize time, not dedicated to citizen complaints or scheduled inspections, driving residential and commercial areas to document violations visible from the street. · Inspection results will be documented on a violation form and a picture taken of any observed violation. · The Inspector will record the violation in the computer, mail the violation notice to the property (if inspector wasn't able to . discuss in person) and file the form copy and picture. A re- inspection will be scheduled (typically for two weeks out -14 days are given to correct a violation). . A re-inspection occurs. If the violation is not corrected (approximately 50% are corrected by this time) the file is closed. If the violation is not corrected, another inspection is conducted and picture taken. A second notice is sent warning of a possible fine (administrative ticket) or further legal action. A re- inspection is typically scheduled for two weeks out (14 days are typically given to correct the violation). . A re-inspection occurs. If the violation is corrected (approximately 85% are corrected by this time) the file is closed. If the violation is not corrected the Codes Coordinator will then initiate contact to attempt a resolution. · If the violation continues a decision must be made as to what action would be appropriate. If it is determined that an administrative ticket will be effective and likely resolve the issue, one is issued. If it is determined by staff (Community Development Director, City Attorney and Codes Coordinator) that an administrative ticket would not be effective or would not resolve the issue (or, if an administrative ticket has been issued but has not resulted in compliance) a recommendation is proposed to City Council that a Ramsey County Court Citation be issued and the case referred to the Citv Attornev. Abatement ~ 0 by City Council action is also an option at this time which City staff considers. · Note: cases are rarely this simple and straightforward; however, this outlines the basic procedure/method. · The Department has been placing more emphasis on personal contact with residents and less emphasis on letters (particularly the initial contact). While more time intensive, Staff can better explain the violation, the reasoning behind it and gain voluntary compliance. Also, staff has been emphasizing flexibility in time frames for correcting violations. . With a sampling of files, mail a thank you card and a customer service card (asking for comments on services provided and suggested improvements). . . 6. ADDITIONAL OUTCOMES ANTICIPATED · As public awareness grows regarding violations that can negatively impact the livability and property values of neighborhoods, residents will be less inclined to maintain these conditions in rear yard areas (not visible from the public right- of-way). The result will be further enhancement of the livability . . of Roseville neighborhoods, the maintenance of its property values, and, instilling confidence in the long term viability of the community. . 7. EXCERPTS FROM 'PROPERTY VALUE CHANGE ANALYSIS IN THE MCKINLEY NEIGHBORHOOD' (Oliver Byrum, 1992) · There are three considerations which are cited as most important by a potentia] buyer looking for a house. One of these is the overall appearance of the neighborhood... · The importance of neighborhood livability cannot be overstated...of the various aspects of livability, studies show that the three most important are safety and security, neighborhood appearance, and quality of public schools. · There are a number of factors which contribute to the genera] appearance of the neighborhood. These include the condition of the houses, the condition of the streets and sidewalks, and the cleanliness of the neighborhood. · The appearance of the houses which make up a neighborhood is one of the most crucial aspects of neighborhood appearance. Deteriorating housing is evidence of a deteriorating neighborhood. · If potential homebuyers perceive the livability of a particular neighborhood to be deteriorating they are less likely to choose to buy a home there. As more people choose not to buy property and live in a particular area, property values drop. · If expectations and standards are lowered the neighborhood will often live up to these lower expectations. 8. CONCLUSION . A long term city-wide neighborhood enhancement effort aimed at maintaining the livability of neighborhoods is necessary to any city's long-term stability. As Roseville's housing stock ages, consideration should be given to identifying other successful community efforts and implementing those deemed beneficial to Roseville. . . Attachment 2B-2 City of Shoreview SHINE Program . . . , ...~ ~,- ~ is e oE~'~ o a..s:: 'C. 0 ..... ,..... 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"CJ .~ 0 .... 0 1\1 '<t .s::. :.e 0 ... c: 0 0 N ..0 a. .s::. ::l '" 01 c: u.. CV 1\1 Z CV U c v E t ro CL v o - ~ c t ID 0 EZ~ f5a:i~ $: W ~ LD .~ ~ en z a:; 0 _~ 2 o ,z.. 0 :i 55 ~ .~ ,~ -E>> o EOI!' >. 0 0 _~OWL OO-<t(./) ~ ~ c E ~ v 'S; ro '" " ;:gwL ,. ~ .~ o'<t~ ~g~ ~'<t ~ "' - <.0"- .. -"'" G)~(?j C:.. .CI o x ro ci:~~ . . Attachment 2B-3 City of Shoreview Property Maintenance Code . . City of Shoreview Municipal Code Chapter 200. Development Regulations . 211 Property Maintenance 211.010 Parkin!! and Stora!!e of Vehicles and Eouipment (A) Parking or Storage of Commercial Usage Vehicles, Inoperable Vehicles, Unlicensed Vehicles and Vehicle Parts. (I) Commercial usage vehicles, inoperable vehicles, unlicensed vehicles or any part or eqnipment appurtenant to any vehicle shall not be: (a) Parked or stored outdoors on lots in residential districts except for the following: (i) One commercial usage vehicle of over 3/4 ton carrying capacity or 9,000 pounds gross vehicle weight, but not in excess of one ton carrying capacity or 12,000 pounds gross vehicle weight, may be stored outside. (ii) No more than one commercial usage vehicle of any size bearing exterior evidence of cOll1mercial advertising, identification or equipment may be stored outside. . (b) Parked or stored on lots in non-residential districts for more than 48 continuous hours, (B) Parking or Storage of Recreation Vehicles, Boats, A TV's, Snowmobiles, etc. (I) Recreational vehiclcs, boats, ATV's, snowmobiles, special purpose trailers or other vehicles designed or used for off-road purposes may be parked or stored in a garage or lawfully erected building, or may be parked or stored outdoors as follows: (a) No more than two such vehicles, not more than one of which is a recreational vehicle, shall be parked or stored outdoors on each lot. For the purposes hereof, a vehicle on a trailer shall be considered one vehicle. (b) Any sneh vehicle parked or stored outdoors shall be owned or leased by the occupant of the premises where parked or stored. (c) Any such vehicle shall not be parked or stored within five feet of a side yard lot line, or within ten feet of a rear yard property line. Vehicles may be parked within the required front setback provided vehicles are parked on an approved asphalt, concrete or similar approved hard surface and shall not be within five feet of the front yard property line. . Section 211. Property Maintenance 211-1 City of Shoreview Municipal Code Chapter 200. Development Regulations (C) Other Vehicles. Passenger automobiles and all other vehicles not rcgulated by Section 21 I.OIO(A) and 21 I.OIO(B) may be parked or stored in a garage or lawfully erccted building, or may be parked or stored outdoors as follows: . Rev. Date 4/18/05 Ord. #774 (I) Lots in Residential Districts. On an asphalt, concrete or similar approved hard surface but not within five feet of a side or front propcrty line. No more than four vehicles or one per licensed driver residing on the premises, whichcver is more may be parked or stored outside. Rev. Date 4/18/05 Ord. #774 (2) Lots in Non-Residential Districts. On a parking area that is asphalt, concrete or similar approved hard surface but not for periods exceeding 48 hours. Provided, however, vehicles may be stored for periods exceeding 48 hours in Districts allowing for the sale of new or used automobiles or boats on property approved by the City for use as an open sales lot. 211.020 Refuse (A) Definition. Refuse shall be all solid waste products which are composed wholly or partly of such materials including but not limited to garbage, sweepings, cleanings, trash, rubbish, litter, industrial solid wastes or domestic solid wastes including organic wastes or residues of animals, meat, fruit. vegetables, grains or fish; animal excreta or carcasses of animals; rubbish including wood, leaves, vegetation, trce trimmings, dead trees and shrubs, branches, sawdust, shavings, grass, paper products, straw, rags, clothing, and all other combustibles; waste matter composed of soil, clay, sand, earth, gravel, fill, stones, bricks, plaster, glass, glassware, crockery, ashes, cinders, shells, metal and other non-combustibles; waste debris resulting from the construction, demolition, repair or alteration of structures or buildings; accumulated waste materials composed of cans, containers, tires, junk, vehicle parts or other substances which may become a nuisance. Other waste materials which could be considered a nuisance or hazard to the public health, safety or welfare shall be disposed of within a reasonable period of time by arranging collection by a licensed collector. . (B) Every person shall arrangc for the collection and disposal of all accumulations of refuse on his premises by a collector of refuse, licensed by the City, at least once a week. (C) All refuse shall be properly contained in a closed container sufficiently designed for the storage of all refusc accumulating on the premises between collections. Said containers shall be stored within a fully enclosed building or in an area designed for such purpose and properly screened from adjoining properties and the public right-of-way. 211.030 Gradinl! and Drainal!e . Section 211. Property Maintenance 211-2 City of Shoreview Municipal Code Chapter 200. Development Regulations . (A) All premises shall be graded and maintained so as to prevent the accumulation of stagnant water, except in natural occurring ponding areas on said premises. (B) Grading shall not be altered, and gutters and downspouts shall not be installed as to direct additional surface and storm water onto adjoining properties. (C) Discharging any sump pump water, swimming pool water, or water which has been used in a manufacturing process or mechanical process so as to flow upon or ovcr streets, sidewalks, or other public property or private property except that owned by the person discharging the water. (D) Vegetation shall be restored by sodding or sceding disturbed areas upon completion of grading or any yard maintenance resulting in the removal of vegetation. 211.040 Outside Storal!e. All materials and equipment shall be stored as provided in this Code except for the following: (A) Laundry drying equipment, recreational equipment and patio furniture may be stored outside. . (B) l'irewood may be stored outside provided it is stored in a rear or side yard and it is set back a minimum of five feet from the property line. Storage of firewood in the front yard may be permitted for loading and unloading and shall not exceed five days. Pirewood shall be stacked in a neat, orderly, safe manner and in a manner to prevent the harboring of rodents. The maximum height allowed is six feet. The maximum amount of firewood stored on properties less than two acres shall be two cords. One cord four feet in height by eight feet in width (4' x 8'). 211.050 Glare. In all districts, no light or combination of lights which cast light upon a public street shall exceed I foot candle meter reading as measured trom the centerline of the street nor shall any light or combination of lights cast light upon residentially zoned property exceeding 0.4 foot candle meter reading as measured at the receiving residential lot line. 211.060 General Property Maintenance. (A) In all districts, structures, buildings, fences and landscaping shall be maintained so as to prevent unsightliness, health hazards, or unsafe conditions. (B) In all districts, grass clippings, weed clippings, and leaves shall be disposed of in a reasonable time by composting in a proper manner, hauling to a regulated composting site, or by bagging or otherwise properly containing such material . Section 211. Property Maintenance 211-3 City of Shoreview Municipai Code Chapter 200. Development Regulations until waste pick up. Composting areas shall be located in a rear yard, at least ten feet from any property line, at least thirty feet from any adjoining residence and designed so that seepage from the compost will not run off into public or private streets, storm sewers, drainage ditches, water retention basins, streams or lakes. No person shall rake or deposit grass clippings, weeds, noxious weeds, leaves, chemicals, sand or other refuse on or into a public or private street, storm sewer, drainage ditch, water retention basin, stream or lakc. . (C) All exterior property areas shall be kept free from species of weeds or plant growth which are noxious and a detriment to public health. Grass plots and lawn areas shall not exceed nine inches in growth height. Weeds on vacant platted residential properties shall not exceed eighteen inches in growth height. (D) Property owners shall provide snow-free and ice-free access to all dwelling units. Storage of snow shall be maintained on the property and cannot be placed on any public street, alley, sidewalk, bike path, trailway, or adjoining private property or boulevard. 211.070 HousiDl! Code (A) Purpose. The purpose of the Housing Code is to establish a minimum level of maintenance standards for all housing in the City. The general objectives shall include the following: . (1) To protect the character and stability of residential properties within the City. (2) To correct and prevent housing conditions that adversely affect or are likely to adversely affect the life, safety, gcneral welfare and health, including the physical, mental and social well-being of persons occupying dwellings within the City. (3) To provide minimum standards necessary to the health and safety of occupants of the buildings. (4) To provide minimum standards for the maintenance of existing residential buildings, and to thus prevent deterioration and blight. (B) Applicabilitv and Scope. This Housing Code shall apply to exterior and interior area of all housing properties in the City. The construction, repair, alteration and maintenance of residential property shall comply with the provisions of this Code and other applicable sections of the Shoreview Municipal Code including the Building Code and the Development Ordinance. . Section 211. Property Maintenance 211-4 City of Shoreview Municipal Code Chapter 200. Development Regulations . (C) Exterior of DweJJing Units. AJJ exterior of structures in the City shaJJ comply with the following requirements. (1) Foundations. waJJs and roofs. Every foundation, exterior wall, roof and all other exterior surfaces shall be maintained in a workmanlike statc of maintenance and repair: (a) The foundation elements shall adequately support the building at all points. (b) Every exterior wall shall be tree of holes, breaks, loose or rotting boards or timbers, falling or loose stucco or brick, substantial amounts of peeling paint and any conditions which might admit moisture to thc interior portions of the walls or to the interior spaces of the dwelling. (e) Roofs shall be tight and have no defects which admit water. Roof drainage shall be adequate to prevent water from causing dampness in the walls. Roof materials shall be matching. (2) Stairs. porches, decks and railings. . (a) Every outside stair, porch, deck, railings and appurtenance attached thereto shall be maintained as to be safe in use and capable of supporting a load as determined in the Building Code and shall be kept in sound condition and good repair. (b) Every night of stairs which is more than four (4) risers high shall have hand rails which are to be so located as determined by the Building Code; and every porch and deck which is more than eighteen (] 8) inches above grade shall be capable of restraining a horizontal pressure, as determined by the provisions of the Building Code. (c) AJJ stairs, porches, decks, railings and appurtenance attached thereto shall be free of holes, breaks, loose or rotting boards or timbers, falling or loose stucco or brick, substantial amount of peeling paint and any conditions which might admit moisture to the interior portions of any structure and free of conditions that show lack of maintenance. (3) Windows. doors and hatcbwavs. Evcry window, exterior door and hatchway shall be substantially tight and shall bc kept in sound condition and repair. (a) Every window shall be fully supplied with window panes which are without open cracks or holes. . Section 211. Property Maintenance 211.5 City of Shoreview Municipal Code Chapter 200. Development Regulations (b) Every window sash shall be in good condition and fit reasonably tight within its frame. Windows designed to be opened and closed shall be capable of bcing held in a open or closed position by window hardware. . (c) Every exterior door, door hinges or door latch shall be in good condition. (d) Every cxterior door, when closed, shall fit reasonably well within its tramc. ( c) Every window, door and frame shall be maintained in relation to the adjacent wall constructions, as to exclude rain, and substantially to exclude wind from entering the dwelling. (f) Every hatchway shall be so maintained as to prevent the entrance of rodents, rain and surface drainage water into the dwelling. (g) Every door available as an exit in a dwelling shall be capable of being easily opened from the inside. (D) Interior Areas of Dwelling Units. The interior of all dwelling units in the City shall comply with the following standards: (1) Interior walls, floors, ceiling and woodwork. All interior walls, floors, ceilings and associated woodwork or trim must be maintained in a sound condition and in workmanlike repair. . (2) Plumbing svstems. All plumbing systems shall be maintained in good working order, and must be kept free trom obstructions, leaks and defects. (3) Connected to water and sewer svstem. Every kitchen sink, lavatory basin, bathtub, or shower and water closet required under the provisions of this division shall be properly connected to either a publie water and sewer system or to an approved private watcr and sewer system and shall be supplied with hot and cold running water. (4) Heating facilities. Every dwelling and multiple dwelling shall have heating facilities and the owner of said heating facilities shall be required to see that said heating facilities are safety maintained and in good working condition, and that said facilities be capable of safely and adequatcly heating all habitable rooms, bathrooms and toilet rooms located thercin. The heating facilities shall be capable of maintaining a minimum room temperature of seventy (70) dcgrees Fahrenheit (twenty- one (21) degrccs Celsius) at three (3) feet above the floor in all habitable rooms including bathrooms and under all weathcr conditions. . Section 2t t. Property Maintenance 211-6 City of Shoreview Municipal Code Chapter 200. Development Regulations . (5) Electrical service, outlets. and fixtures. All residential structures and dwelling units shall be supplied with electrical service that is adequate to safel y meet the electrical needs of the structure and dwelling units in accordance with the provisions of the Building Code. Every electrical outlet and fixture shall be maintained and connected to thc source of electrical power in accordance with the provisions of the Building Code. (6) Light and ventilation. No person shall occupy as owner-occupant or let to another for occupancy any dwelling unit, for the purpose of living, sleeping, cooking, and eating therein which does not comply with thc provisions of the Building Code for light and ventilation. (7) Fire safety. No person shall occupy as owner-occupant or shall let to another for occupancy any dwelling unit which does not comply with the applicable provisions of the Uniform Fire Code and all accepted standards for safety from fire. (8) Cleanliness. The interior of every dwelling shall be maintained in clean and sanitary condition, free of accumulations of garbage and refuse. Every dwelling shall be maintained free from infcstation of noxious insects, rodents and other pests. . (E) Enforcement Officer. It shall be the duty of the City Manager and his anthorized representatives to cnforce the provisions of this code. (F) Inspections. The Enforcement Officcr shall be authorized to make or causc to be made inspections to determine the condition of dwellings and premises in the City under this code in order to safeguard thc health, safety and welfare of the public. The Enforcement Officer, or his designated representatives, shall be authorized to enter any dwelling or premises at any reasonablc time for the purpose of performing his duties under this code. If the owner, operator or pcrson in possession of the dwelling shall refuse to consent to the inspection and there is probable causc to believe that a violation exists within the particular structure, a search warrant may be obtained. (G)Acccss by owner or operator. Every occupant of a dwelling shall give the owner or operator thereof, or his agent or employee, access to any part of such dwelling unit, rooming unit or its premises, at reasonable times, for the purposc of affecting inspection and maintenance, making such repairs, or making such alterations as arc ncccssary to comply with the provisions of this code. (H) Compliancc orders. . Section 211. Property Maintenance 211-7 City of Shoreview Municipal Code Chapter 200. Development Regulations (1) Whenever the Enforcement Officer determines that any dwelling, dwelling unit or rooming unit in the City under this code, or the premises surrounding any of these, fails to meet the provisions of this code, he may issue a compliance order setting forth the violations of the code and ordering the owner, occupant, operator or agent to correct such violations. This compliance ordcr shall: . (a) Be in writing. (b) Describc the location and nature of the violations of this code. (c) Establish a timc for the correction of such violation. (d) Be served upon the owner, his agent or the occupant, as the case may require. Such notice shall be deemed to be properly served upon such owner, agent or upon any such occupant, if a copy thercof is: (i) Served upon him personally, or (ii) Sent by registered or certified mail to his last known addrcss or (iii)Upon failurc to effect notice through (i) or (ii) above, as set out in this section, posted at a conspicuous place in or about the dwelling which is affected by the notice. . (2) Any property owner who fails to satisfy the conditions of the Housing Code and Compliance Order shall bc guilty of a misdemeanor. . Section 211. Property Maintenance 211-8 . . . ~ ~~HILLS MEMORANDUM DATE: AGENDA ITEM: 2.C May 10, 2006 TO: Honorable Mayor and City Council FROM: Murtuza Siddiqui, ChiefFinancial Officer/Treasurer '''>S SUBJECT: 2006 - 20 I 0 Draft ClP (Fiscal Impact on Working Capital- Fund Balance) BACKGROUND: The engineering staff has drafted a proposed 2006 - 2010 CIP for City of Arden Hills. Attached is a spreadsheet that summarizes the projects, including the estimated cost and its impact on the City's Working Capital (fund balance). DISCUSSION: The attached spreadsheet is organized in a manner so it demonstrate how each CIP item will be funded. In addition, it also demonstrates the impact each CIP item has on the Working Capital (fund balance), by fiscal year. The State -Aid funds are applied either towards street construction or towards storm water (storm sewer). When funds are received from the state, they are deposited either under the stonn water fund or the general capital fund, depending upon the project. During 2005, one of the eligible projects for the state-aid was Red Fox-Grey Fox. Originally, the state-aid portion was estimated to be $175,000, but due to excess drainage costs, the revised number for draw down is $225,000. The spreadsheet reflects this adjustment. The adjustment is accounted for under both the state-aid fund as well as the storm water fund. It should be noted that any variances in constructions costs or in operating revenues and expenditures, from the projections, will have a direct impact on the Working Capital. Under each of the Utility Funds, an estimated contribution amount is listed. This estimated amount is derived from taking the difference between the operating revenues and operating expenditures. If the City desires to maintain a higher Working Capital balance in these funds, the City would have to consider a number of options. Option 1 is to defer projects into the future years or delete projects or purchases, allowing the funds to build a healthier fund balance. Option 2 is to consider re-evaluating the utility rates. Option 3 is to consider bond issuance. Memo Draft ClP 2 It should be kept in mind that Working Capital balance under the General Capital Fund is the uncommitted reserve for the City. Any future major capital outlays, other than Public Safety, are to be financed from this fund. The question is does the City desires to commit all of its reserves to CIP? Or does it want to set aside funds for other items? In the future, staff will be working with the Council to develop a fund balance policy. Not many cities have an official policy, but it would be prudent for us to have one in place. RECOMMENDED ACTION: Presented for discussion purposes and to demonstrate the impact ofCIP on the Working Capital - fund balance. . . . . .... ... .. "' c .; o .,. ~ o o N >- "' .. " " ::> ., "' .. ~g .n ~~ Oz ",0 a." .,~ ..... z w " w > o "' 0. " ~ ;0 n: .. " ., .... =' I Z W " '" .. . N gg ~b ~g '~~ g~ w... -",,,,,,, ClOg :~ ~ ~ ~ ~ iii" ~ .i:~ ~ 5 ...~ <> ""' ~ I,() ""'. . "' . ,ei" " "'* o ~~~ ~~ S ",.I'M ... ~ :i E 0"" ~g!:' .5 ~-<: ~ o 0 , u ... M "" f:;.(1 . o ... Ii ~m o . N ~-g ~ ~~ ,.: if ~ w ... W 0 ~ :;g 0 3~ ;! ~ ~,r ~ o .... o U o " . ~ , ~' o o N o o '5. '0 o ~ - o . ~ . u o . .. 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' ii' oJ, ~Li [~t g~ ~ ii~ 0- &~~ ~~~ ~~a 3:;]5, ':: ~ 3_~ i?,!;S'1l ~~:~ .,- => 0 5~;-g ; ~ ~.~ I, {i~~ :: ii'[~ ~ ..!!!~ !.g '00 - c: '" oj ~ Q.~~~ ~ 8- E ;; ~-'" . c: ~ j ~~~~~g $! ~~';,-~;'~ - ~ 'Ri'e- "'"; Ii. 0IC."Z.~1- '[ ~5~~~E '" ~~.~~~;::.' ~ I=!!! ",.!!O '" .2 o~o.""1; = g.=:!!o .g:-5 ~ 0,,0... 0.. ~ ~H ~ ~ ~.;; !~~~~:g~~ ~ ~q: g-~~:l-c- 1?~';'~~~S~ ~a.~Z~1u~ @.!;~g::;E,~~ ~~~g~;~~ ImHH -:il@~~';!'U~<;: *-g~ ~ ~ t ~'E !i.iiiiI! ~~E;~~~~ ~~ ;~~ ~~:~ 1?,g'~~:;;J Z ~~~~~~g&i n: ",-i;l::: ~ E~ 'l; *2:~~:;;~~g "= 5" ~ 'I' c: o. ~ ':; 0 <;] 2i ~Z:!l sg!!.:'Jll.8:;;:; g:;~~]~=~ u..OE "''''... 0:: a. -i~5~-~ ~g~ 3~i!:~~;1::~ ~ E :t1~Uj:! ~ 11 g~~E~~~% (!l.:lEW:J:5=:O: g " i ! i ~ o ~ ~ " < o o o "--:N";";";";"':,,; * Z . . . ~ ~ EN HILLS MEMORANDUM DATE: May 11,2006 AGENDA ITEM 2.C TO: Mayor and City Council 1 ill, / Kristinc Giga, Civil Enginccr !.f7!:..r FROM: SUBJECT: CIP Discussion BACKGROUND Over the past several months, staff has provided Council with an overview ofthe CIP. Staff has continued to work on the various aspects of the CIP and is sharing the next pieces ofinf(JTIl1ation. GoodPointe Technology has computed and provided the City with several pavement management budget scenarios. The following information is attached for your review: . Executive summary of GoodPointe repOlt . Figures fi-om GoodPointe report DISCUSSION Street Maintenance Practices and Procedures The f(lllowing are brief descriptions of various types of street maintenance procedures. 5eal Coat A seal coal is one of many types of surface treatments used in street maintenance. A seal coat is an application of asphalt emulsion followed immediately with an aggregate cover. Seal coats can waterproof the surface, provide low-severity crack scaling, and restore surface friction_ Seal coating can be performed at any timc in the life of a pavement and lasts an average of three to six years. The primary purpose of seal coating a street is to protect the strcet trom deterioration caused by sun and water. A seal coat provides a waterproof membrane that kecps the pavement from \1\1 etm-incl.lJs'<lrdenhills',PR&P\V. Engineering'2006'Work Sessions'.j- I 5-06 CIP-GolldpolnlC'.doc 2006 PMP Update 5/11/2006 Page 2 . becoming brittle and cracking, and also helps keep the water from seeping through the pavement and causing problems to the base material. Mill and Overlav There arc several maintenance practices that involve milling. An edge mill typically consists of grinding the old bituminous surface along the outer 8 fect of the street. This helps establish a uniform cross-section, especially in instances where the crown in the strect is relatively flat. A full width mill, or rcsurfacing, is necessary when the upper surface layer of a pavement has deteriorated considerably. Significant surfaec pavcmcnt distresses and more extensive "thermal" cracking need to be removed and/or repaired with a full width and uniform depth milling process. Both edge mills and full-width mills are typically 1.5 to 2 inches thick, but can vary on a project by project basis. Milling creates an even surfacc to ensure a unifann overall thickncss to thc ncw overlay. An asphalt overlay of 1.5 to 2 inches over the entire pavement width farms a smooth crown, rcnews the street surface, rcstores structural capacity and proper drainage, and extends the life cyele of the original pavement. A[ull depth mill can be used on a street that has already been rcconstructed with a good base . section, but the pavement has deteriorated to a point where seal coating or a standard mill and overlay is not effective. A pavement section with significant cracking will end up rcfleeting through the new pavement. The full depth of the pavement is ground up and removed. This process may also involve some suhgrade soil COlTeetions and some removal of aggregate base, if it has been contaminated or is sub-standard. The street is paved with the same thickness of new asphalt. Pavement can also be reclaimed, where approximately 8 to 10 inches of the existing asphalt and base are ground up in place. This forms a ncw more stable base without adding new material. The road is then paved with new asphalt. This is only recommended where there is no curb and gutter on the road, since the existing materials stay in plaee and a higher road elevation is created once the new pavement thickness is added. Reconstruction When a street is fully reconstructed, the existing asphalt and base are completely removed and replaced. Reconstruction may also involve sub grade soil corrections. For streets that do not meet current design standards for width, curb and gutter, and drainage, an upgrade may also be incorporated. . . . . 2006 PMP Update 5/11/2006 Page 3 GoodPointe Analvsis GoodPointe Technology utilized the current pavement condition index (PCI) information as well our historical data of street improvement projects to perform pavement management analysis of the street system in Arden Hills. The budget analysis is based on current construction costs and factors in an inllation rate of3%. Engineering costs, 20% of the estimated construction cost, have been incorporated into the unit costs. It should be noted, however, that the analysis is only an estimate, and docs not include any utility (watermain, sanitary sewer or stom1 sewer) construction costs, easement acquisition costs, or trail/sidewalk construction costs. Also not includcd are additional costs that may be incurred lor retaining walls, cxecssive driveway replacement, right-of-way reestablishment or other costs for areas that may have extreme situations such as signilicant grade changes. The reason for this is that these costs vary from project to project and there is no reliable way to estimate them. The maintenance strategy used by GoodPointe lor this analysis is based on categorizing the PCI ratings into adequate (86-100), marginal (31-85), and poor (0-30). Streets that are adequate receive seal coats, marginal streets receive a mill and overlay, and poor streets are reconstructed. The type of mill and overlay used in the analysis is a 2" mill over the entire pavement section. Streets that have PCI values bordering two categories would be individually evaluated to ensure that the most cost-effective maintenance will occur for the condition of the street. A city street map has been included in this report with the existing PCI ratings color coded to the above mentioned categories. Staff asked GoodPointe to evaluate the following four budget scenarios: Scenario 1 is budget driven, designed to project the average pavement condition if$1 million is spent each year on street improvements for the next 20 years. The existing 5-year CIP has been incorporated into the first five years of this model. Over the 20 year period, the average PCI would increase from 64 to 77. Scenario 2 is designed based on the current average PCl (64) and project the level offunding needed to maintain this over the next 20 years. In a budget model that is driven by a benchmark PCI, predetermined projects cannot be cntcred. The strccts arc selected by the program for maintenance on a needs basis. The results of this scenario indicatc that approximately $14.5 million will need to be budgeted for pavement management over the next 20 years. Scenario 3 is based on the dcsirc to increase the average PCI to 75 and determine the level of funding needed to achieve this over the next 20 years. A PCI value of 75 is an average benchmark among sevcral other cities in the metro area. Again, this model does not allow [(IT predetermined projects, and the program has selected streets on a needs basis. The results of this scenario indicate that approximately $16 million will need to be budgeted for pavement management over the nexl 20 years. 2006 PMP Update 5/11/2006 Page 4 . Scenario 4 shows the effect of the existing 5-year CIP on the average PCI values. The results of this scenario indicate that the average PCI values would be 65 after the five year period, an increase of one point from today's average PCI. While Ihis scenario is only a five year model, il could be expected that if this model were extended, results would bc similar to those described in Scenario 2. The graphs supplementing this report compare the average PCls and budgets for Scenarios I, 2 and 3 over the 20 year period. Staff Observations: . The results indicate that if the City were to select a management plan based on maintaining a benchmark PCI, the difference between maintaining the current PCI of 64 (Scenario 2) and increasing the PCI to 75 (Sccnario 3) is only $1.5 million over a 20 year period. . The results of Sccnario I and Scenario 3 are similar in that at the end of the 20 year period for a new average PCI (77 to 75, respectively). In Scenario 1, a consistcnt amount of money is spent each year (approximately $1 million). However, in Scenario 3, morc money would be spent up front, in the first six years, and then spending would level off at a lower annual amount. In Phase I (2006-20] I) average spending would be approximately $1.5 million, and Phase 2 (20]2-2025) would decrease and level off to just over $500,000 per year. . CONCLUSION The scenarios completed by Goodpointe show the relationship between average PCI and funding levels. Staff is requesting that the Council review the scenarios and discuss how to move forward with our pavement management program. Items to consider: . Does the Council want to proceed with the current program (Scenario 4) and level of funding? . Would the Council like to pursue one of the other scenarios (Scenario 1,2 or 3)? . W ou]d the Council like to evaluate other budget scenarios? Feedback received at the work session will be incorporated into our continuing evaluation and revisions to tlie5-Year ClP, and will be presented at a future work session. . . . . City of Arden Hills Budget Analysis Report May 04, 2006 Page 1 Executive Summary Studies conducted by a number of agencies indicate that as pavement conditions decrease, the cost for the appropriate method of repair can quadruple. A graph of a typical case taken from the American Public Works Association, The Hole Story, is shown in the following figure. '0 0 0 10 co ~ ~ -8 '0 0 0 co n 8 ~ 'm .. "- 0 -. 0 ;; 0 a. -c-2 0 0 a. ~ ~ 75% Time ~-_____________ Each $1.00 of ~ 40%" _I Renovation ----...... Quality (""i Cost Here lowest Annual \mp ......j I Will Cost $4.00 Resurfacing Cost I to $5.00 if I Delayed to I Here. , t I /' 40% i Quality ! Drop! Total Failure '------> / 12% Time J 4 8 12 16 Years (Time Varies lor Each Road Section) Figure 1 The City of Arden Hills contracted GoodPointe Technology to perform pavement management consultation services including: . pavement condition survey and data entry, . historical maintenance project data entry, . updating the pavement maintenance policies, . analyzing the pavement performance data, . updating/establishing the network level designations, . updating the ICON pavement management system to the current version, and . linking the GIS Centerline Map to the ICON System. GoodPointe Technology was also asked to perform a detailed, multi-year network level budget analysis on the City's pavement network using the existing CIP projects for the first five years. This report summarizes the work accomplished in this project and focuses on the budget analysis results for four budget analysis scenarios. The first scenario, Scenario 1, demonstrates the long-term effects of applying $1 Million dollars per year for 20 years on the pavement network. Scenario 2 shows the amount of funding needed to maintain the City's current average PCI of 64 over 20 years. Scenario 3 shows the amount of funding needed to increase the City's average PCI from a 64 to a 75 over 20 years. Scenario 4 shows just the affect of the CIP list for the first five years of the analysis. The centerline length (linear distance measured along the centerline) of the Arden Hills pavement network maintained in ICON contains 28.42 miles of asphalt- surlaced pavement. The City ICON system also contains 0.04 centerline miles of concrete roads for a grand total of 28.46 centerline miles of roadway. In the summer of 2005, each of the asphalt-surfaced street blocks within the City of Arden Hills jurisdiction was been visually inspected using the Paver-based Pavement Condition Index (PCI) methodology. This methodology is based on a numeric rating City of Arden Hills Budget Analysis Report May 04, 2006 Page 2 system ranging from 100 for a newly surfaced pavement to 0 for a failed pavement. Based on the latest available survey data collected for each section, the average PCI of the Arden Hills pavement network using the PCI resulting from the survey is 67.9. The average PCI can also be calculated by projecting the surveyed condition to today's estimated PCI using the decay curves in ICON. Using these curves, the "current average projected" PCI for the network is a 64. The results of Scenario 1 indicate that the current level of funding and funding allocation will result in a higher average PCI each year and will decrease the backlog. Over the twenty-year analysis period, the average PCI increases significantly, from 64 to 77. . The results of Scenario 2 indicate that a total of approximately $14.5 million will be required over the next twenty years to maintain the City's current average PCI of 64. Due to a significant amount of budget allocated in the first five years, the pavement can be maintained at a lower budget. The results of Scenario 3 indicate that a total of approximately $16 million will be required over the next twenty years to gradually increase the City's average PCI from a 64 to a 75. In comparison to Scenario 2, more budgets are spent in the first 10 years to increase the PCI to a 75. Then the pavement can be maintained at a 75 at a lower budget. The results of Scenario 4 indicate that the current CIP list will maintain an average condition of 65 over the next five years. It is important to note that these scenarios were generated at the network level and were based on pavement repair and rehabilitation costs that may require additional project-level costs such as curb and gutter replacement, water main replacement, and/or right-of-way restoration. Also included in the cost is a 20% increase for engineering fees. . . . . . City of Arden Hills Budget Analysis Report May 04, 2006 Page 3 Budget Analysis Develop a multi-year network level budget analysis The City has requested that GoodPointe Technology perform a number of budget scenario projections to obtain a general idea of how the City pavement network is changing with time, given the best available information from the street condition survey, Arden Hills pavement performance data, pavement maintenance, repair, and rehabilitation unit cost data and general budget provisions of the City. Process Summary With the ICON software, GoodPointe Technology used the pavement performance data to project the condition of the PCI into the future and to calculate the amount of deferred maintenance, repair, and rehabilitation work (backlog) present in the network in each year of the 30-year scenarios included in this report. From an engineering perspective, the correct application of future pavement projects depends on the sequence of historical projects that have already been applied. The budget module of the ICON program utilizes historical project-related data (seal coats, overlays, reconstruct information) to qualify or disqualify certain projects from being recommended in a given budget scenario run. For a particular alternative or strategy, the user specifies: 1) The condition index (CI) score range for which the strategy will be considered; 2) The maximum number of applications the strategy can be applied successively before a new strategy must be recommended; 3) The time interval (in years) between successive applications of the strategy; and, 4) The unit cost of the treatment and the category to which the strategy belongs. At the start of a budget scenario, ICON will look for the most recent historical condition surveyor project related information and will deteriorate the score from that historical date to the date of the analysis. ICON then filters through the historical project information to determine how many times each particular strategy has been applied successively and what the time interval has been since the last strategy. With this historical information in mind, ICON performs the life cycle cost analysis to determine the optimum way to spend your budget in the future given the practical constraints of how your strategies need to be programmed. A practical constraint associated with running budget analysis scenarios involves the amount of budget that is allocated to the different categories of pavement maintenance, repair, and rehabilitation (seal coat, overlays, reconstructs). Care must be taken not to allocate too much money to a given category (e.g. sealcoats), if it exceeds the realistic amount of seal coat projects that the City is able to contract and manage, for example. Development of Maintenance Strategies The optimal combination of maintenance methods is the one that provides maximum benefit for the least cost. The following figure illustrates an example of how the maintenance benefit can be derived. City of Arden Hills Budget Analysis Report May 04, 2006 Page 4 Pavement Management Pavement Benefit . 100 ---------~~"" PCI Af\er MlIintenace ~ 80 ~e_c~~::~_e_B_e:~r~~~~~~~___________ C ~ C ~~,. o ~ 60 c o U ---------------------------------------'~::- AIea ofM'iIin1an'iDce Beoe1l.t PCIbeforeM!lin1enllI1Ct '~_ . "E 40 __ _______,___, ___ ____ _ __ ____ ____ _________________>~_,~~~e!-~~~:-~:~~-~:~~~~~- (J) E (J) > <IS 0... " , 20 u,u,,"__uuum'm'mmmmu'muuu -----------'"'-------------- "'.- o o 5 10 15 20 25 Age Since Construction 30 35 - Figure 2 The shaded area is the benefit provided by the maintenance being done at some point in time. Factors that influence the benefit are: . . type of pavement (determines which decay curve to use); . age of pavement (affects the PCI increase); . type of maintenance proposed (affects the PCI increase); and . cost of the proposed maintenance (affects the cost/benefit ratio). In most cases, the maximum benefit or extension of pavement life may be provided by some combination of maintenance procedures as opposed to using one type of maintenance, since combining maintenance techniques often provides larger increases in the PCI. The benefit of performing each type of maintenance is then divided by the calculated cost to determine the cost/benefit ratio of each alternative. Note that there are limiting conditions that may prohibit a procedure from being selected such as lack of funding or minimal PCI increase for the selected maintenance procedure. Prioritized Work Plan Maintenance and repair work can be prioritized in a number of ways. Pavements in the worst condition can be fixed first. Pavements in the best condition can be fixed first. An optimal prioritization method distributes funding between the preventive maintenance of "good" to "excellent" pavements; the rehabilitation of "fair" to "poor" pavements; and, the reconstruction of "very poor" or "failed" pavements. Pavement sections within the Arden Hills pavement network were prioritized for maintenance and repair according to an optimal prioritization plan. . . . . City of Arden Hills Budget Analysis Report May 04, 2006 Page 5 The first step in defining a prioritized work plan for the City of Arden Hills is to define the local and global pavement maintenance activities and their related costs. Local pavement repairs are those repairs that are performed on a localized area of a given pavement section (e.g., patching, crack sealing, etc.). A global pavement maintenance activity is one that is performed on the entire surface of a given pavement section (e.g., reconstruction, seal coat, overlay, etc.). Once the local maintenance policy has been established, the PCI is recalculated based on these assumptions to determine the improvement in the PCI based on the maintenance. For example, a street with an original PCI of 68 may increase to a PCI of 80 when all rutting has been patched. Every pavement section was analyzed in this way in the first year of the budget analysis. The difference between the improved and original PCI is a measure of the effectiveness of that particular type of maintenance. The ICON program attempts to find the optimal combination for routine maintenance. This may include seal coating, patching or crack/joint sealing separately or in combination. A routine maintenance strategy, consisting of patching and crack sealing, is assigned to pavements with limited amounts of low-severity cracking. Routine maintenance on pavements that are still in very good condition will help preserve the integrity of the base and prolong the life of the pavement. Overlays are used to repair pavements where local repairs such as patching are not cost effective. These pavements are in "fair" to "poor" condition and may have low strength and/or other problems such as poor drainage. The global repair of reconstruction is recommended for pavements with extensive amounts of load-related distress. Global Maintenance Strategy The correct application of global (applied to the entire pavement section area) maintenance, repair and rehabilitation strategies is difficult to develop due to the number of variables that affect pavements. The optimum application of maintenance activities depends on the current surface condition and subgrade strength of the pavement as well as the pavement age, traffic loading and other factors. GoodPointe Technology and City staff discussed the development and application of maintenance strategies on a number of occasions to determine the analysis parameters used to derive the results of this report. Note: When a pavement section has a PCI that falls on an overlapping range between two or more global maintenance activities, an additional Life Cycle Cost (LCC) analysis is performed for each applicable strategy. The estimated amount of pavement life for each particular maintenance activity is determined and is divided by the cost to provide that life. The program then recommends maintenance activity with the highest LCC value for the given pavement section. City of Arden Hills Budget Analysis Report May 04, 2006 Page 6 Budget Needs and Scenarios The data collected from the PCI surveys was correlated to other City-supplied information such as pavement age, functional class, and historical budget expenditures to serve as the basis for multi-year budget projections. The following pages describe the general process that GoodPointe Technology followed to develop the budget needs and scenarios for the City of Arden Hills. . Introduction Once the pavement network has been defined and each section has been inspected, the condition of the overall network condition without maintenance or rehabilitation can be determined by projecting the PCI into the future. Pavement sections are selected for maintenance and rehabilitation during a multi-year analysis period if they meet the decision criteria established based on PCI, functional class and surface type. When they are identified for maintenance or rehabilitation, a network-level budget planning maintenance strategy for pavements of that condition is used to determine the funds needed for that section. Those funding needs are totaled for each year of the analysis period to determine budget needs. The first step is to identify the best maintenance strategy for each pavement surface type - pavement condition group and develop decision trees. This requires a long-term life cycle cost analysis of typical pavements from each group in different condition categories. The following three general maintenance categories have been correlated to the respective PCI ranges to provide a realistic maintenance and rehabilitation treatment assignment. Seal Coat At the high end of this range, pavements may have little or no distress. At the low end of this range pavements may require intensive local repairs and/or seal coats. A pavement in this category may be generally described as "good" to "excellent" with a PCI between 65 and 85. . Overlay Pavements have a significant level of distress that mayor may not be load-related. A pavement in this category may be generally described as "poor" to "fair" with a PCI between 25 and 65. Reconstruct Pavements have extensive amounts of distress. A pavement in this category may be generally described as "very poor" to "failed" with a PCI between 0 and 30. Pavement Management Decision Tree Each pavement section was analyzed according to its predefined global and local strategy and processed through the following pavement management decision tree. . . . . ICON Budget Plan Process Collect Information Dn Sections Selected for Analysis Budget Analysis Input Parameters Pavement Surface Type Clfrom latest Surveyor Latest Project: Analysis Period (years) Plan start Year Functional Class HistoriCal Global Strategies App~ed inflatiOn Rate (%) Annual8udget Allocation Quant~ies Sn (Calc:ukrted structural Number) if available Buclgel: Overflow Priorlies Predetermined Project Plan if available Try AU Possible and Applicablestralegies Based On Ufe Cycle Cost (leG) Add 10 Annual Ust of Recommended Projects Ccp(llgltlO:nDGoo:lI'OIII!Ttcl.Dtg'{COIpOr.IlIClj Decay Condition Index (el) to Ye6r of Budget Analysis Pbn Yes No y" For Eoc.h MaintenMce Cme!:1Jry, Sort Priority By 1) Condition Index (a) 2) Functional Class 3) structural Number (SrI) y, Add 10 Annual BacklolJ List No Figure 3 The program did not sort pavements on the basis of structural information (nondestructive deflection testing) in the budget analysis of this report, since this testing was not included in the scope of work for this project. Deferred Maintenance Backlog An important factor in evaluating budget scenarios is deferred maintenance. Deferred maintenance is work that could not be done in a given year of the analysis period due to lack of funding. It represents work that is delayed until additional funds can be found. The monetary result of deferred maintenance is maintenance backlog. In the budget analysis of this report, the maintenance backlog for a given year is defined as the cost for the City to repair all the pavements in that year. . As the average network PCI decreases, the cost to repair pavements rises. As the pavements approach the poor category, the cost of rehabilitation rises due to the large amount of individual distresses that require repair. The following figure illustrates the general relationship between the increasing cost of rehabilitation maintenance and decreasing pavement condition for Arden Hills pavements. It is based on our experience with urban pavements like those of the Arden Hills pavement network, but does not use actual Arden Hills pavement data. Typical City Streets Maintenance Cost and Condition vs. Age Pavement Condition Pavement Rehab cosl ($/sq. fl.) 100 $5 . 80 $4 60 $3 40 $2 20 $1 0 $- o 10 20 30 40 Age of Present Surface (years) Figure 4 As the pavements approach the poor category, the cost of rehabilitation rises sharply. If preventive maintenance is not emphasized now, the bulk of the pavement network will rapidly decline in condition. A considerable amount of heavy maintenance at a high unit cost will be needed later to regain the original current condition of the pavement network. The labor-intensive effort required for heavy spot repairs would most likely put a burden on City staff. The actual cost of the deferred backlog would rise, resulting in a decreasing annual average pavement condition. . . . . Deferred maintenance has a negative impact for two reasons. The first is that by deferring maintenance, Arden Hills is allowing streets to deteriorate down the pavement life cycle curve. This will increase the cost to fix streets in the future. Streets that once cost an average of $3 per square yard to fix will soon cost $32 per square yard or more to repair at teday's prices. The second reason is that as streets deteriorate, citizen complaints about the condition of the streets will increase and emergency (or necessary) repair costs will increase. Developing A Budget Strategy For Arden Hills The ICON pavement management program is designed to present strategies that will shift the focus of a network repair program from rehabilitation to preventive maintenance. This means moving the average network PCI higher into the upper end of the "very good" condition range. As mentioned earlier, today's estimated average PCI for the pavement network is 64, in the "fair" condition category. The logical questions are "If the average PCI is in the very good condition category, why does it cost so much to repair Arden Hills's pavements?", "Why bother improving them at all?", "How much would it cost to improve the streets to an accepted level of service?" These are questions that can be answered with the ICON Pavement Management Program. First of all, the PCI of a pavement has a lot to do with how much it costs to repair and maintain it. In the "excellent" condition category, it costs very little money to apply treatments such as crack and surface seals, which extend the life of a pavement. Treatments of this sort usually cost less than $0.11 per square foot. Pavements in the "good" to "fair" range show some form of distress or wear which require more than a life-extending treatment. By this point, a well-designed pavement will have served at least 75 percent of its life and the quality of the pavement has dropped by about 40 percent. The road surface may require a chip seal application or a thin overlay. These treatments range in cost from $0.11 to $0.33 per square foot. Pavements in the "very poor" to "failed" range of the pavement condition index. These pavements are near the end of their service life and usually exhibit major forms of distress such as potholes, extensive cracking, and others. At this stage, a roadway usually requires either a thick overlay or a reconstruction. The costs for these treatments range from $0.44 to $10 per square foot. One of the key elements of a pavement repair strategy is to slow down the deterioration of the pavements in the "very good" to "good" condition categories. This is particularly true for streets in the "good" range because they are at the point where pavement deterioration accelerates if the pavements are left untreated; whereas, the cost to repair pavements in the "fair" to "poor" range increases substantially if repair is delayed. Graphical Comparison Of Scenarios . Average PCI Scenario Comparison 100 .-- -~,._~------~ 90 80 70 - <3 - "- 60 .. '" 50 .. ~ ~ 40 30 20 10 0 "' <D .... a) '" 0 ~ N M " "' <D .... a) '" 0 ;; N M " "' '" 0 0 0 0 0 0 0 ~ 0 0 " ~ " " " N N N N N N co 0 0 0 0 0 0 0 0 0 0 0 0 0 N N N N N N N N N N N N N N N N N N N N N N Scenario Year I-Scenario 2 Avg Cl -Scenario 3 Avg Cl Scenario 1 Avg CI I Figure 13 Budget Scenario Comparison . $3,000.00 T~----~--_~~__~m_____~-------- l I , I .--! , $2.500.00 $2,000.00 ~ ~ $1,500.00 ;; '" -g $1,000.00 III $500.00 $- $(500.00) o o --------------- -N------ "' o -- --N--- , o L() 6 N N C'!) 00'" - --N----------------N--------------<'.I Scenario Year I-scenario 2 Budget ($K) -Scenario 3 Budget ($1<) Scenario 1 Budget ($K) I Figure 14 . . . . ~ ~HILLS MEMORANDUM DATE: May 10, 2006 Agenda Item 2.D TO: Mayor & City Council FROM: James Lehnhoff, City Planner & Websitc Coordinator SUBJECT: City Website Update Background The current City of Arden Hills web site was launched in January 2001. The website is the electronic face of the City and is a first step for many residents and businesses to find information about Arden Hills. Although the website has grown in the last five years; it has also become increasingly difficult to navigate, laborious to update, is not cohesive, and has an outdated appearance. Despite these deficiencies, the web site is becoming more important. The existing website was built using a computer program called Microsoft FrontPage. While this software is suitable for smaller websites, FrontPage is not designed to efficiently handle larger websites and is not an intuitive piece of software for many computer users. FrontPage has very limited tools to manage the organization and navigation of the website, and there are very few interactive functions that are common on modem websites. For example, such simple features as searching the City's website, a community calendar, having the ability to send anonymous comments to the City, and providing online forms are currently unavailable. Furthermore, except for providing a link to the webcasting, there is very little coordination between the cable television broadcasts, webcasts and the existing website. Discussion Due to the increasing importance of the City's web site, Staff has been researching options for updating the web site to make more information easier to find and to better coordinate the web site with the cable and web broadcasts. The two options presented in this memo are purchasing services from GovOffice, a website development company, or having City Staff update the website. GovOffice GovOffice is a website development service based in Saint Paul that provides services to more than nine hundred communities, counties, and government agencies in the United States. GovOffice provides the template, design, and overall structure of the website I while the City determines the organization ofthe website and inputs the information. All of the programming and technical services are provided by GovOffice. GovOffice provides a professional look and organization to the website at a fraction of the cost of a custom website design. . Although the website is based on a pre-made template, there is a considerable amount of customization possible. Compared to FrontPage, the updating process is relatively easy for most computer uses. With GovOfficc, City employees would not have to learn any specialized software or web programming language to update the website. Information can be uploaded to the website in preparation for a City meeting and be immediately available for download before public broadcasts. Services included with the GovOffice package includes the ability to set up electronic newsletters, community calendars, forms, links, video files, audio files, pictures, documents, post events that are automatically removed from the website once the event has passed, and the ability for residents to send anonymous concerns to the City. The website has built in search functions and the navigation system automatically updates itself as new webpages are added. The cost [or GovOffice is as follows: $1,050 One-time license and set up fee $75 One-time URL redirect fee $400 One-time custom graphic creation and installation (estimated, optional) $45 Monthly Service Package fee (which is paid $135 quarterly or $540 yearly) $2,065 Estimated cost for the first full year of web site service including one-time expenses $540 Yearly cost after the first year . The license and set up fee is used to reserve space on the GovOffice server for the City's website and for Staff training. With GovOffice, the City of Rose vi lie would no longer host the City's websile. The URL redirect fee is needed to redirect the current City website address (www.ci.arden-hills.mn.us) from the Roseville server to the GovOffice server. The custom graphic is the "banner" across the top of each of the webpage on the website. The custom graphic could contain the City's logo, pictures from the community, and/Or other symbols that represent Arden Hills. Although this is an optional upgrade, the Communications Committee strongly recommends that the City include a custom graphic on the website. The Communications Committee has recommended contacting Derrek Hames to see ifhe would be interested in designing a custom graphic. Mr. Hames is a . resident of Arden Hills, and he designed the current City logo. 2 . . . Since Staff would be responsible for inputting the data into the website, there would be a one-time cost of employee time to transfer the data from the current website to the new web site. Approximately 40 hours of staff time would be needed to input the data into the new wcbsite. Based on a rate of$27.00Ihour, the estimated cost ofStafftime would be approximately $1080. GovOffice has provided the City with a 30 day free trail to test Ihe features offered by GovOffice. A sample of the possible templates Arden Hills could use is in Attachment 2D-2. To visit the online version of the sample site, please go to http://tria150.govoffice2.com. Please note that this is nol a complete site and is only meant to sample the services offered by GovOffice. Onc of the most important aspects of Ihe GovOffice web service IS its consistency, reliability, and that it is a more efficient use of Staffs time in the short- and long-term. While the short-term cost savings of purchasing GovOffice may not be significant, the updated web site would be more functional and efficient for residents, visitors, and businesses. Additionally, since updating the website would be easier with GovOffice, the long-term cost of Staff time to maintain the basic functions on the existing website is likely more than $45 per month of Staff time-time that could othelWise be used on other projects. GovOffice is partnered with International City/County Managcmcnt Association (ICMA) and the League of Minnesota Cities. After visiting a number of websites hosted by GovOffice and speaking with a handful of their clients, Staff has only received positive comments fi'om GovOffice clients. Stafl Website Overhaul Budget It is possible for Staff to update and reorganize the existing website. Based on a preliminary estimate, it would require 80 to ]20 hours of Staff time to completely redesign and update the City's wcbsite. At a rate of $27.00/hour, the estimated cost of Staff time would be between $2,160 and $3,240 for this option. While this is an option, the website would still be proprietary and therefore difficult for most current and future StafTmembers (and future webmasters) to update. With this option, Staff would also recommend replacing Microsoft FrontPage with a different website editor. Although more research would need to be done to determine which software would best suit the City's needs, website software tends to be in upwards of $500. Since one of the primary goals of updating the website is to provide more information to residents that are watching City meetings on cable television and through webcasting, the Cable Fund is available to cover the cost of the website update. By providing City Council packets, Planning Commission packets, and other supplementary infonnation on the website, residents will be able to more closely follow City meetings from home. 3 Additionally, the updated website will make it easier for residents to send questions back to the City via the internet. The website would be the interactive companion to the cable . and web broadcast. Recommendation Staff met with the Communications Committee at the end of April to discuss the possibility of updating tbe City's website. The Communications Committee carne to a consensus and strongly recommends purchasing the GovOffice services. Staff also recommends moving forward with GovOffice to update the City's website to make it more functional and usable for residents, businesses, and visitors. Staff believes that GovOffice is the most cost effective and time saving method for upgrading the City's wcbpage. Most importantly, updating the website will supplement the cable and web broadcasting by making it easier for residents to access information about the City and provide more direct access to webcasting. Attachments 2D-l 2D-2 Other Cities with GovOffice hosted web sites Prototype Arden Hills web site front pagc . . 4 . Attachment 2D-l Sample GovOffice City Website . . . . . 2D-l: Other cities with GovOffice hosted websites: West St. Paul http://www.ci.west-saint-paul.mn.us/ North St. Paul htto://www.ci.north-saint-paul.mn.us/ Minnetonka htto://www.eminnetonka.com/ Maplewood htto://www.ci.maplewood.mn.us/ New Brighton htto://www.ci.new-briqhton.mn.us/ Lino Lakes htto://www.ci.lino-Iakes.mn.us/ Circle Pines http://www.ci.circle-pines.mn.us/ Little Canada http://www.ci.little-canada.mn.us/ Rosemount http://www.ci.rosemount.mn.us/ Lauderdale htto:l/www.ci.lauderdale.mn.us/ Stillwater http://www.ci.stillwater.mn.us/ Bedminster Township http://bedminster.us/ Carbondale, CO http://www.carbondaleqov.orq/ Ellisville, MO http://www.ellisville.mo.us/ Grand Rapids, MN htto:l/qrandraoids.qovoffice.com/ Old Orchard Beach, ME htto:l/oobmaine.com/ Riverside, IL htto://www.riverside.il.us/ Seabrook, TX htto://www.ci.seabrook.tx.us/ Stoughton, WI htto://www.cLstouqhton.wi.us/ GovOffice: http://www.l!ovoffice.com/ 5 . 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I Q) n :::::I 11)........; C Q) 61; .~ Q)..n ...~ c.n<l:: I1J (l " ~ a E '0 C '" ~" .0 --.s:::: Q) ID o-::Us ~u.t}~ IT) C .- 'if'i C III U :s 0 E ID oUEf; E~8'O o '" ~ ~~Jc (JlCLOQ) _~ ""O~>- E IJl C _ CL -~I.::: ~.Q E c" c.8-.C~ O.:l::: 01""0 :.;JJC ruu~"'D E ~-~ ?; o '6 U _~ ~ ~ C IJl >- C -- .- .0 0 .~ c ..... U Q.l ,g 0 Q.l ~iU1iJ-F; ....E.b~ is D'!{! .8 U 'C .~ ...- s-- E c I.::: cU'" 32 <( ~ - >-.....~CLQ) t; ~.tii_g'~ . ~ \Ii VI VI c 'i5 O! ~ 1; ..... " (J. .'g" O! I IE E 0 ~ 1:: 81 > oil '" .<: ~ c. u ;;; VI " ~ '" Q '" c i '0 '" 0 " > '" 'jj " ."!::: .~ . , C\ " In In ; <; . i ." :EO ~ .... :!) ~ ,~ ~ . Current Roadway Conditions ~ .-f,,~_HILLS I /"..J f . ~ 5 ~ o '" G' TEWAY CT -- I I '" '%I "" 'l'lq. i t -HOM CT N BlE RD L STO EAVE KATIE LN ',,~ KA.11Ed w ~ IT IT o z o W I ~ W ~ z w ~ ~ z ~ ~ w z w NURSER YHILL [fit ~ ARDEN VIEW DR " 0' ~ -.f>v ";>D(: A~ "'"V/3l: 1C7 NURSERY~ILL T o o o ~ AMBLE c' \""'1--- l..4:jVALl:Nr. INERD BR COLLEEN AVE ~ ~ INDIAN OAKS w :': m INDIAN 0 STRL w ~ ~ " OYAlLN " 0 z Fl RW U "'~ ~ (' ~ 'i> " o IT "l ~ I~ " z ~ <5 " w ~ ~ \/rvUSAVw ~ OAK AVE z w ~ w z ii "' CONNELLY AVE o z w o IT ~ <5 Condition Rating: ~.,""",. """~".',,..,o;c,""~, ',~'m<<,~u""CI(;S",M.'I""'1OOO) 'C""ofRo>.,.;:IoE"";,,,,;ooDo,,,,,,,,,,, f'o,r",".'~"'m""""r","~'"L""""tco""""m'p'oot,,1 c"J"r'""~I",E"""""nqD<,,,,,,,,",. ,""'Oc;..",c...n",D,,,",, "",,,m,MN /'.../ Not City Streets /'V Poor (0-30) /'.../ Marginal (31-65) /'V Adequate (66-100) ,.'v'"',''''' ;:.J;;; . o INYNCREST T FERNW OD8T ~o 'i'~ Ozk 00 "'" 01' RED FOX RD z ~ W ~ S z ~ o GREY FOX RO IT o w w <r ~ w Z ~ o c z ~ ~ '(,z. 'b TILLERlN ~ Z ......=fflf-A,RLT9N DR o o o INGERSON RD ONcrffi ~ IN 250 SOO 7501000 Feet -~~ ......,..""',"'.~.-,, -,,,,,,~,",,......,..,... . . . ~ ~HILLS MEMORANDUM DATE: WORK SESSION ITEM 2.E. May 10, 2006 TO: Mayor and City Council FROM: Michelle Wolfe, City Administrator SUBJECT: 2006 City-Staff Retreat: Follow-up Discussion and Reports Attached are a series of reports from retreat facilitator Karen Ray. There is a cover memorandum from her, introducing her reports. This is followed by a summary from the retreat sessions, held on March 10, II, and 15. The third item is a summary of the Council goals that were discussed at the March 15 session. Last is a proposed "Format for a Board Policy". Here are some additional suggestions that Ms. Ray forwarded to me: 1. Discuss the Council goals, and if comfortable, we can put this into the Council packet for the next meeting and approve it as part of the Consent Agenda. Take the section entitled "Tone of Debate" re-title it "Civil Discourse", and place a copy of it in every packet for every meeting. Staff is updating the 2004 Strategic Plan per the comments made by Council during the retreat. This document, along with the staff-generated goals for 2006, will be brought back to Council, and will ultimately serve as work plans for 2006 and into 2007. Ms. Ray forwarded the "Format for a Board Policy" as a result of discussion during the retreat sessions. This relates to discussion about the Council setting policies. Ms. Ray's suggestion was that we first develop a list of the policies that Council needs to develop or update, then start addressing these at future meetings, using a consistent format. Policy lays out vision, philosophy, and evaluation measures. She suggests that as Council fills out this form by discussing each item during a meeting, you will also be having a vision discussion, setting measurements, and end with solid policies to guide staff work. In terms of the Council goals, once they are adopted or approved by Council, then staff would keep the goals in front of Council and track what work is being done on each item. This would be done via the Administrator's Update and possibly also updates on the Consent Agenda. 2. 3. 4. 5. \\metro-inet\ardenhiJIs\Admin\City Administrator\Jvlemo\2006\5-8-06 Memo RE 2006 Retreat.doc . . . KAREN RA Y ASSOCIA TES Voice 612-377-2128 Fax 651-488-0590 e-mail karenrayvisi.com MEMO DA TE: 03-20-06 TO: City of Arden Hills City Council Members Michelle Wolfe, City Administrator FROM: Karen Ray RE: March 2006 Strategic Planning Retreat '111ank you for the opportunity to work with you and City staff during the Council retreat held March 10, II and 15,2006. It was an honor to help you think through plans and opportunities to uphold the City's vision. Attachcd please find a report on the results of this retreat. During our discussion we agreed to focus on goals for 2006-2007 for City staff to use to create thcir work plans. Michelle will be sharing those work plans with you. The Council itself has a list of goals to complete in the next 3 --4 years. I have made rccommendations to Michelle about how to keep these goals 'front and center' during your meetings. In addition, you agreed to take a more rigorous look at vision and philosophy than can be obtained in a few hours of retreat lime. The Council and Michelle will be scheduling a series of discussions to be held during Council meetings on the vision / measures of excellence for a variety of topics. I have made several recommendations to Michelle on how these discussions might work. Importantly, you took time during the retreat to set groundmles for discussion, and address issues about communication. You agreed to a modified format for the "Administrator's Update". You will limit your agenda for work sessions in order to avoid the perception of decisions as "done deals" and to maximize a work session's opportunity to ask hard questions and deliberate on complex issues. You will use a longer consent agenda, and bring more items to discussion and vote at the regular Council meetings. Michelle is preparing shorter packets for your meetings, including a brief list of upcoming agenda items. Finally, you have agreed on ways things get listed on the agenda. . If you have any questions about this report, please feel free to call. . . . . . 2006 City Council Retreat Fridav-Saturdav, March 10-11 - - Follow-up Wednesday, March 15 Complete agendas, notes and flip chart transcriptions are available upon requcst. The purpose of this rcport is to summarize important discussions, agreements and actious. "Rccommendatious" are actions Council believes will improve work. TIlE CITY COUNCIL'S LIST OF GOALS .FOR 2006-2009 This is an abbreviated list. Thcse items are not listed in order; priorities were not chosen. A full transcript of each Council member's list is in the Administrator's files. I. TCAAP 2. CLP Priorities 3. Road Changes - Benchmarks / description ofwhal Arden lIills wants 4. Strong Regional relationships with other cilies. 5. Park I trail vision and budget I action plan; response to committee's work Ii. Vision and/or Philosophy and/or Policy on: Strong neighborhoods Strong businesses Fiscal responsibility Police Fire Communications with residents 7. Committees / Commissions structure philosophy and role definition 8. Leadership / Building staff capacity / Retaining good statT 9. lnl[astructure revenue needs. (How are we going to pay for all this?) 10. Library II. Philosophy of Development and redevelopment: cost and investment vs. status quo. THE CITY STAFF GOALS AND WORK PLANS FOR 2006 (into 2007) City staff are using the revisions on thc 2004 Strategic Plan to establish a work plan. Michelle will bring thaI work plan to the Council for approval. TONE OF DEBA TF. I CIVIL DISCOURSE The Council adopted these ground rules for discussion during the facilitatcd rctreat, and then adopted these ground rules as the basis for "civil discourse" during all Council meetings, work sessions and discussions. o Respectful o Agree to disagree o No personal attacks o Discussion is focused on business - not personal - stick to topic o Showing emotions is okay, such as being passionate about a topic, but "put downs", extreme body language, and denigration is not allowed. o Don't put down other's votes. You may say "I'm surprised" or "I'm frustrated", but don't make negative comments after the vote is fInished. o Techniques for cooling down angry Council members include saying "When you're this angry J can't hear you" or asking for a recess. o During work sessions and meeting discussions it's impOltant to get a sense ofwhcre people are coming from. Try not to surprise others with your vote AND o It's okay to change your mind when the time to vote arrives_ But please be clear why. o No unilateral changes in decisions - act on decisions_ o The Mayor should recap meeting decisions at the end of the meeting, and Michelle can clarify what she heard o Stick to agenda o Nobody speaks for whole Council o Everybody can call an issue to the table, or can suggest it gel tabled. o No disrespectful body language o No cheap shots o No surprises o Everybody monitors the rules . RECOMMENDATION: Eliminate the "Council Report" section at thc end of Council meetings, and find another way to keep others informed. . RECOMMENDATION: Review and install parliamentary procedures for raising and tabling issues. RECOMMENDA TJON: Place a copy of these ground rules in every packet. RECOMMENDATION: Adopt a "Rules of Order" or similar document that describes how Council meetings are run. It could be part of new council training. BUILDING THE COUNCIL MEETING AGENDA and PACKETS Michelle will create more condense meeting packets, including a shorter list of upcoming Council agenda itcms. Michelle will prepare a more useful Conscnt agenda. Whenever possible, Council members are expected to let Michelle know on Monday if be/she is pulling an item from the Consent agcnda. A brief qucstion is allowable during the Conscnt agenda section of the meeting. The Mayor should make sure such a quick question does not become a drawn-out discussion. . . . . These changes to the Consent agenda are part of the general agreement that the Council needs to micromanage less. Michelle has enough experience now to accurately predict what can go on the Consent agenda. Wise use of a Consent agenda leaves more time on the regular agenda for discussion and decision making on more important topics. How items get placed on the City Council meeting agenda: As discussed at the April200G Work Session, Council has agreed to a general process for how items get placed on an agenda_ See attached summary document. REPORTS FROM STAFF TO COUNCIL MEMBERS An important aspect of using the Consent agenda and being careful not to do staffs jobs is what kind of information the Council is getting. Michelle is improving Council reports to adequately provide the infonnation they need to steward and monitor the City's resources, work and goal attainment. RECOMMENDA nON: Michelle provides to the Council a list ofthc reports she and her staff are improving. . . . ~ ~~J:-IILLS MEMORANDUM DATE: AGENDA ITEM: 2D Aptil 17, 2006 TO: Mayor and City Council FROM: Michelle Wolfe, City Administrator SUBJECT: City Protocol for Setting Meeting Agendas At thc March City Council retreat, there was discussion about how items get on meeting and work session agendas. Attached is the document I prepared for the retreat discussion. An outcome of the retreat was that we removed "Council Comments and Requests" from Council Meeting agendas. Another outcome was that we were going to develop a protocol for how items get on agendas. Some ideas were discussed at the retreat, but I don't believe we came to a full conclusion. In the draft reports I received from the facilitator, this is one area she left for me to fill in. I would recommend that the first four items from the attachment remain in place as methods for items to be placed on an agenda: o Part of an established process (for example planning cases, public improvement projects, claims/payroll). o Clear Council direction ( consensus) following discussion about an item during a work session or mceting. o Staff recommendations (for example polices, administrative actions, items requiring Council approval such as hiring/firing). o Request from outside organizations to appear before Council (examples here would include organizations we are a member of such as Visit Minneapolis North or Twin Cities North Chamber of Commerce), organizations we work with (such as Mounds View School District or Ramsey Center for the Arts), local community groups such as Boy/Girl Scouts, and elected officials (legislative delegation.) The last bullet that I listed was "Councilmember request"- I indicated that this was the area that was problematic for staff and where clarification was needed. I understood the consensus from the retreat was that items should not be placed on an agenda based on one individual request; rather, there should be consensus/agreement of the Council to do so. With the removal of "Council Comments and Requests" hom the agenda, I think some have struggled with how to get on item on to an agenda. Therefore, I suggest that we add an item to the Council Meeting agendas called "Council Requests" (see attached sample agenda.) When we Page 2 of2LJ get to this part of the agenda at a meeting, if a Council member has a request of some kind, they can raise if for consideration. Examples of requests could include: . o To place an item on an upcoming work session or regular meeting agenda o To request infOlmation or a report from staff on a certain topic o To request attcndance at a mecting or event (f()r example, "We need a Council member to represent the City at a meeting about XXXXX on (date/timc). Is anyone available.")) ln sum, therc would be five gcncral ways for items to be placed on an agenda: I. Part of an established process. 2. Council direction following the discussion of an item during a work session or mceting. 3. Staff recommendations. 4. Requests from outside organizations. 5. Mayor or Councilmember request (via "Council Requests" on the agenda.) . MW \\metro-met\ardenhillsIAdminlCity Administratorl!vfemo\2006\4-17-06Memo RE Setting Agendas.doc . . . . 2006 City Council Retreat Wednesday, March 15, 2006 During a retreat in March, 2006, the City Council set the following goals it wanted to achieve between 2006 - 2010. These are not listcd in ordcr; no priority was set Each goal needs to bc achievable. TCAAP Follow established work plans to make decisions in stages. Each dccision builds on the next CIP Priorities A budget is not a decision making tooL CIP items need to be decided on merit Road Benchmarks, especially 694/ I 0/96 issues including loss of access and grade separation. We need to be in a position to tell other government entities "This is what Arden lIills wants". Strong Regional relationships with other cities. Park / trail planning complete, including funding, and a response to the PTRC vision. Committees Structure Philosophy What committee has what role and what power? What is the Council's role vis-a- vis each committee or commission? Leadership Risk Management Creating leadership at the stafIlcvel StafTsalaries, benefits (as it relates to staffretention.) Infrastructure revenue nccds. (How are we going to pay for all this'!) Library prcscnce in Ardcn Hills is dcsirable Philosophy of Development and redevelopment: cost and invcstment vs. status quo. Vision and/or Philosophy and/or Policy on: Strong neighborhoods Strong businesscs Fiscal rcsponsibility Police Fire Communications with rcsidents Format for a Board Policy . ISSUE: GOALS: RESUL TS: POLICY: BENCHMARKS: Once the policies have been written in this format, a summary version may be published This would contain only the policies themselves. lIere is an example: . ISSUE: Retaining employees in a competitive markefplace. GOAI8: Valued statl are retained and compensated in a manner that best serves our agency, our clients and the staff person. RESUL TS: Senior staff and staff with unusual skill sets are eager to stay with our agency, and evidence motivation to perform well. POLICY: The Executive Director shall devise and use any array of perks, bonuses, and incentives to keep staff who are essenfial to program operation. The Executive Director shall not violate union rules and contracts, and shall not offer any cash retainer beyond 2% of that employee's base pay. BENCHMARKS: Turnover in program staff is reduced to 5% by January l, 2 .