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HomeMy WebLinkAboutCC - May 21, 20191685 CROSSTOWN BOULEVARD N.W. • ANDOVER, MINNESOTA 55304 • (763) 755-5100 FAX (763) 755-8923 • WWW.ANDOVERMN.GOV Regular City Council Meeting —Tuesday, May 21, 2019 Call to Order — 7:00 p.m. Pledge of Allegiance Resident Forum Agenda Approval 1. Approval of Minutes (5/7/19 Regular; 5/7/19 Closed) Consent Items 2. Approve Payment of Claims — Finance 3. Award Bid/18-39/Lift Station #10 Improvements —Engineering 4. Approve Refuse/Recycler Hauler Licenses —Administration 5. Accept QCD Drainage and Utility Easement — Planning 6. Approve City Hall Skylights Replacement — Finance 7. Approve First Amendment to Sublease Agreement/YMCA —Administration 8. Approve Lease Agreement/Anoka Hennepin School District/2019 Andover Family Fun Fest - Finance Discussion Items 9. Anoka County Sheriff's Office Monthly Report — Sheriff 10. Presentation of 2018 Audit —Administration 11. Consider Rezoning Ordinance — 1049 Andover Blvd NW — Mark Smith —planning 12. Consider Rezoning Ordinance — 14328 & 14329 Butternut St NW — Jan Thomas —planning 13. Consider Preliminary Plat — Shadowbrook North — Jan Thomas - planning Staff Items 14. Administrator's Report —Administration Mayor/Council Input Closed Session — Union Negotiations Update Adjournment 1685 CROSSTOWN BOULEVARD N.W. • ANDOVER, MINNESOTA 55304 • (763) 755-5100 FAX (763) 755-8923 . WWW.ANDOVERMN.GOV TO: Mayor and City Council CC: Jim Dickinson, City Administrat/ FROM: Michelle Hartner, Deputy City Clerk SUBJECT: Approval of Minutes DATE: May 21, 2019 INTRODUCTION The following minutes were provided by TimeSaver, reviewed by Administration and submitted for City Council approval: May 7, 2019 Regular May 7, 2019 Closed DISCUSSION The minutes are attached for your review. ACTION REQUIRED The City Council is requested to approve the above minutes. �Respectfully submitted, Michelle Harmer Deputy City Clerk Attach: Minutes 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 REGULAR ANDOVER CITY COUNCIL MEETING —MAY 7, 2019 MINUTES The Regular Bi -Monthly Meeting of the Andover City Council was called to order by Mayor Julie Trude, May 7, 2019, 7:00 p.m., at the Andover City Hall, 1685 Crosstown Boulevard NW, Andover, Minnesota. Councilmembers present: Councilmember absent: Also present: Mike Knight, Sheri Bukkila, Valerie Holthus and Jamie Barthel None City Administrator, Jim Dickinson Community Development Director, Joe Janish Director of Public Works/City Engineer, David Berkowitz Recreational Facilities Manager, Erick Sutherland City Attorney, Scott Baumgartner Others PLEDGE OFALLEGLANCE RESIDENT FORUM' No one wished to address the Council Firrejav7ILZ77M]IVA Mayor Trude noted the supplemental information received: Item # l Ob Approve appointment of Fire Technician Item #11 -'Additional communications received on the Community Center Expansion Project Motion by Holthus, Seconded by Barthel, to approve the Agenda as amended above. Motion carried unanimously. APPROVAL OF MINUTES April 16, 2019, Regular Meeting: Correct as written. Motion by Holthus, Seconded by Knight, to approve the April 16, 2019 Regular meeting minutes as presented. Motion carried unanimously. Regular Andover City Council Meeting Minutes —May 7, 2019 Page 2 April 30, 2019, Special Meeting: Correct as written. April 30, 2019, Board of Review Meeting: Correct as written. April 30, 2019, Workshop Meeting: Correct as written. Motion by Barthel, Seconded by Knight, to approve the April 30, 2019 Special meeting minutes, the April 30, 2019 Board of Review meeting minutes and the April 30, 2019 Workshop meeting minutes as presented. Motion carried unanimously. CONSENT ITEMS 10 11 Item 2 12 Item 3 13 14 Item 4 15 16 Item 5 17 18 19 Item 6 20 Item 7 21 22 23 24 25 26 27 28 Item 8 Item 9 Approve Payment of Claims Award City Contract for Emerald Ash Borer (EAB) Injections/18-25/EAB Management Program Order Improvement/Order Plans & Specs/18-33, Kelsey Round Lake Park Trail Expansion & 18-34, Andover Station North Trail Connection (See Resolution R038-19) Adopt Resolution Setting Annual Income Level for Senior Citizen and Disabled Individuals for Deferral of Assessments & Reduced Sanitary Sewer Rates (See Resolution R039-19) Accept Resignation/Retirement of Barbara Wells — Administrative Assistant Approve Temporary Intoxicating Liquor License/Andover Lions/Fun Fest Approve Application for Exempt Permit Approve Purchase/Stump Grinder Item 10 Approve City Code Amendment/Title 3-5 (Ordinance 492) Item l Ob Approve Appointment of Fire Technician Motion by Knight, Seconded by Bukkila, approval of the Consent Agenda as read. Motion carried unanimously. 29 PUBLIC HEARING —PROPOSED PROPERTY TAXABATEMENTS FOR A COMMUNITY 30 CENTER EXPANSION PROJECT/CONSIDER APPROVAL OF RESOLUTION 31 APPROVING PROPERTY TAXABATEMENTS 32 33 City Administrator Dickinson explained a presentation will be made and then the City Council is 34 asked to hold a public hearing and consider approval of a resolution approving the use of tax 35 abatements in connection with the financing of the Community Center Expansion Project. He 36 explained staff and Ehlers & Associates are of the opinion the City should consider the abatement 37 of property taxes levied by the City on benefited properties within close proximity of the 38 Community Center. Mr. Dickinson stated the public hearing was noticed, identifying properties 39 within the proposed abatement area. He displayed a map depicting the abatement area and 40 explained that based on how the City's tax base is set up, the City taxes collected within the 41 identified area will pay for the Community Center expansion project. It was noted that any parcel 42 in a TIF District will be exempt from the tax abatement. 43 44 Mr. Dickinson stated the cost of the abatement is estimated not to exceed $18,200,000. This was Regular Andover City Council Meeting Minutes —May 7, 2019 Page 3 an estimate that will be reevaluated based on the actual bids received and it will be adjusted accordingly. The Council will need to determine that the benefits to the City of the abatement to be at least equal to or exceed the cost to the City. Also the Council will need to find that granting the abatement is in the public interest because it will provide or help acquire or construct public facilities and will help provide access to services for residents of the political subdivision and, as mentioned, properties included are not located in a TIF District. 8 Mr. Dickinson referenced the Minnesota Statutes 469.1812 - 469.1815 relating to tax abatement 9 and explained it uses property tax revenue from a geographic area to fund abatement eligible uses 10 such as a recreational facility. Tax abatement does not require consent from the abatement owners, 11 nor does it change their tax impact relative to other property taxpayers. Tax abatement is simply 12 a designation of taxes for an eligible purpose and is not an exemption from paying taxes. 13 14 Mr. Dickinson stated the abatement cannot exceed 10% of the City's net tax capacity or $200,000, 15 whichever is greater. He stated based on the City's 2018 net tax capacity, it could abate 16 approximately $3.1 million. Mr. Dickinson estimated the City will not use abatement financing 17 again for the next 15 years or when the original community center debt is paid. 18 19 Mr. Dickinson provided an overview of the project's components, noting the areas for parking, 20 points of access, entry, meeting room space on the first floor, sports complex (ice, turf, other 21 related activities), ice system, storage, change of the existing ice sheet (which will not be financed 22 by tax abatement), expansion of one court, crash space, teen usage, and dedicated senior activity 23 space. Mr. Dickinson displayed a floor plan and described the first and second floor uses. The 24 second floor will have dry floor training area, walking track, and smaller -sized meeting rooms. 25 26 Mr. Dickinson reviewed the project budget estimate of $17,849,782 and milestone schedule as 27 detailed in a previous meeting packet. If bids are favorable, the Council will consider the award 28 of the project on June 4, 2019 and if approved, construction could start in July 2019. 29 30 Mr. Dickinson repeated the main finding required of the Council that the project is in the public 31 interest, the benefits to the City are equal to or exceed the cost to the City, and it provides a public 32 facility for use by the public. 33 34 Todd Hagen, Ehlers & Associates, stated Mr. Dickinson did a good job of talking about the project 35 because there are a number of local sports facilities, other organizations, the public, and YMCA 36 who also use this facility. He stated on June 4`h, they will preplan the bond issue based on the bids 37 received. Mr. Hagen explained rates have been fairly low so generally speaking, there is a flight 38 to quality, which means people start to buy bonds and that results in lower bond prices and interest 39 rates to the issuer. He stated they looked at various financing options, and this type of financing 40 is not new to Andover as it was used in 2012 to refinance the 2006 and 2007 lease revenue bonds, 41 which saved over $4 million. 42 43 Mr. Hagen stated the City recently financed $10 million for the Public Works project and a rating 44 report was conducted. Standard & Poors, at that time, gave Andover a bond rating of AA+, which Regular Andover City Council Meeting Minutes —May 7, 2019 Page 4 is due to the City's strong economy, strong management, budgetary performance, and strong reserves. As a result, many will compete for these bonds and a lot of interest will be created. Mr. Hagen explained the City's market value grew by 6.6% and its net tax capacity has grown by 28.7% from 2014 to 2018. As the City's market value grows, taxes will follow suit the other way. He noted the City's debt is very low at this point so Standard & Poors was told the City may issue $18 million for this project and Standard & Poors indicated that additional debt would not change the City's AA+ rating. Mr. Hagen commented on the City's debt service ratio as compared to other governmental agencies, noting it is at 11.9% and the new debt will not increase it too much. 10 Mr. Hagen commented on the healthy number of building permits the City issues each year, which 11 increases the City's market value. He noted if bonds need to be issued, it is a good market to 12 consider today. 13 14 Mayor Trude reviewed the process that will be followed during the public hearing, noting those 15 interested in speaking have written down their name and address. If more residents are interested 16 in speaking, they can add their name. Mayor Trude asked those speaking to limit their comments 17 to three minutes so all can be heard. 18 19 Motion by Bukkila, Seconded by Barthel, to open the public hearing at 7:27 p.m. Motion carried 20 unanimously. 21 22 Jan Rachel, 1320 137`° Lane NW, 30 -year resident, stated she is a pickleball advocate and supports 23 the addition of pickleball courts as they have outgrown the current facility. She explained they 24 want to be more active and social and pickleball is a growing sport. The pickleball program will 25 bring 300 people into Andover for a tournament this coming weekend, which will bring in business 26 for the City. She volunteers to teach pickleball and all are then welcome to play on the courts, 27 which has a charge. Last year it raised about $40,000. Ms. Rachel stated they can currently only 28 accommodate 36 so they have to modify the sport by shortening the game to let everyone play. 29 She stated this sport brings in people from all over, they pay to play pickleball, and then they stop 30 at local businesses, which brings in revenue to the community. Ms. Rachel stated there is a lot of 31 interest and that's because they offer pickleball skills and drills. She noted they also need outdoor 32 courts but there are none in Andover, so those players go Coon Rapids and Anoka. Ms. Rachel 33 stated as residents age, more move to pickleball so the demand is there. 34 35 Wayne Vistad, 3046 169h Lane NW, stated he was in real estate for 31 years and saw the extreme 36 of a downfall and a rapid increase. He noted currently, only 50% of the population can own a 37 home but that will top out and then go down. Mr. Vistad asked with this project, how much are 38 the Andover taxpayers going to pay because their taxes in the last three years have increased 30- 39 35%. 40 41 Brenda Clausen, 941 140`h Lane NW, asked about the cost per household over the life of the bonds. 42 She stated she has heard $3,000 to $3,500, which is upsetting to her. She asked why she wasn't 43 told sooner before this became a `done deal.' Ms. Clausen asked who on the Council voted for 44 this project. Regular Andover City Council Meeting Minutes —May 7, 2019 Page 5 Mayor Trude and City Attorney Baumgartner described the public hearing process for the public to make comment and indicated it is more efficient for questions raised to be answered by staff after the public hearing is closed. Cindy Ingelin, 961 1401h Lane NW, 11 -year resident, stated she was happy to hear of the City's good financial situation. She stated the people she knows feel this big of a project should have gone to a vote even if it didn't have to. That is what people are concerned about and feel there should have been more notification and information provided. 10 Don Legge, 14417 Vintage Street NW, 40 -year resident, stated this should have been brought up 11 to the people for a decision. He stated there are no figures on the break even or how much the 12 arena will be rented out. He believed the people need to know those figures before the Council 13 should vote approval or disapproval. Mr. Legge stated his situation is the approval on this project 14 is his vote against them in the next election. 15 16 Jolene Alger Hansen, 13676 Marigold Street, stated she called Mayor Trude after the Fox 9 report 17 and the Mayor said she did not know why Ms. Alger Hansen was upset because the Mayor pays 18 more taxes than Ms. Alger Hansen does. Ms. Alger Hanson stated when she asked if that was 19 because the Mayor made more money than her, the Mayor told her no, that her husband is disabled. 20 Ms. Alger Hansen stated when she asked if the Mayor was suggesting that her house was bigger 21 than hers, the Mayor said she knew where Ms. Alger Hansen lived and where she herself lived. 22 23 Mayor Trude explained this meeting is not a personal attack opportunity and asked Ms. Alger 24 Hansen to change her comments and address the topic under consideration, the public abatement 25 bond or the Community Center. 26 27 Ms. Alger Hansen stated she will speak to the 17% increase in her property tax including the 28 taxation of the hockey rink, which she did not expect when she purchased her house three years 29 ago. She doesn't know why the 28% increase in the City's tax evaluation does not result in her 30 taxes going down. Ms. Alger Hansen stated the Mayor may have more discretionary income than 31 she does but a 17% increase is too much to expect of her. As to the public interest, Ms. Alger 32 Hansen asked what this project does for her or any who are not part of the Andover school district, 33 which is a measurable group. She stated they have to pay Andover taxes but do not receive the 34 benefits and a 17% tax increase in four years is simply too much. 35 36 RECESS & RECONVENE 37 38 Mayor Trude indicated Ms. Alger Hansen's comments continue to be a personal attack and called 39 a recess at 7:48 p.m. The meeting was reconvened at 7:53 p.m. 40 41 Kevin Harding, 1493 154th Avenue NW, stated $10 million for the Public Works facility is a need 42 but $18 million for a glorified hockey arena is not. He stated he sent questions to the 43 Councilmembers and only Mayor Trude and Councilmember Bukkila replied. He stated the 44 Mayor made a case and when asked why it didn't go to a vote, the Mayor explained the financing 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 Regular Andover City Council Meeting Minutes —May 7, 2019 Page 6 used did not need a resident vote because it was not an education bond. Mr. Harding stated he felt it should be voted on by the people because he does not know if the hockey arena and pickleball courts are needed. He believed the Council was skipping the voter's rights on $18 million (without cost overruns), plus there will be upkeep and the user fees will not cover the cost to run this, much less build it and eventually they will have to pay to tear it down Mr. Harding asked the Council how many think they will be here after the next election. He stated this is a luxury item and the people should vote on it since it is taxpayer's money and coming from resident's pockets, and then some. He believed it will be a cost on Andover's residents for 20 years, noting the constituents put the Council in office. Merlyn Prochniak, 2941 141St Avenue NW, listed the basic infrastructure of the City and stated other items are not necessary or crucial needs but desired wants. His concern is with streets that need to be repaired and replaced. He complimented the Street Department for trying to keep up, as they do a good job. Mr. Prochniak stated out of the 140 miles he traveled, 100 miles have to be fixed and he does not know when or how it will happen or if it will be done right. He noted a temporary patch is only temporary and he thinks it is a safety concern when the streets are this bad in some spots. Mr. Prochniak stated the City needs to fix the streets and that should be a priority before anything else happening. Mr. Prochniak thought a few on the Council had a different priority and no matter how it is addressed, it will raise taxes. He suggested the people be asked whether they want their streets fixed or the new Community Center. Ben Riechers, 15844 Martin Street NW, stated this should have been a referendum, noting there is a lot of tension in Andover because people didn't get a chance to vote. He pointed out that even little kids are in the middle of a grown-up fight since it wasn't voted on. Mr. Riechers stated no matter how this goes, go home and hug your family and remember what is important. He believed without the accountability of a referendum, it gives unlimited delegation to the Council for unlimited debt that the lenders will lend. He referenced the League of Minnesota Cities handbook on financing and lending and commented on the City's bonds issue debt that is backed by the full faith and credit of the City's taxpayers. He asked why we are not having a referendum as this is the largest capital expenditure project in the history of Andover, not counting the Public Works facility. He stated you would think they would apply the Statutes specifically created for capital improvement spending and use capital improvement bonds. But instead, the Council is using a general obligation abatement bonds, which also applies the full faith and credit of the residents. Mr. Riechers noted capital improvement bonds require the improvement to be in the Capital Improvement Plan (CIP) and allows citizens to petition for a referendum. However, tax abatement bonds do not have any of those protections. Larry Schalo, 4208 16151 Lane NW, stated he attended three other meetings and Councilmembers Knight, Holthus, Barthel, and Mayor Trude voted for this and Councilmember Bukkila did not. He stated he found out the Community Center loses $200,000 a year and the taxpayers pay for it. Also not addressed, are the taxes against our businesses, $10,000 to $15,000 per property which we all pay for every time we buy something from the business. Mr. Schalo thought a small part of the community would use the ice rink, which has not been brought up. He stated resident's property taxes will weigh heavily on him and the rest of us but no one realizes that businesses can't Regular Andover City Council Meeting Minutes —May 7, 2019 Page 7 1 absorb a tax increase. Instead, the community absorbs it in the cost of their purchase from the 2 business. Mr. Schalo stated that puts stress on everybody. He asked the Council to consider the 3 expenditures and stress it places, from children to elderly. 4 5 Susan Wood, 2301 139th Avenue NW, stated she made phone calls and was disappointed when 6 Mayor Trude and Councilmember Knight didn't return her call, but the others did. She asked how 7 the Council can make a decision on this amount of money without a referendum on this issue. She 8 asked if there is a contract with the State for the Council to take that power away from the people 9 to make that decision. Ms. Wood stated she has lived here for 43 years and seen a lot of change. 10 She stated the people are the government and the Council is to represent them. Financially, she 11 asked how the income is coming in and the amount being brought in by the YMCA and ice arena. 12 She noted the Boston Tea Party was taxation without representation and to her, this falls into the 13 same category. Ms. Wood asked if they are being represented and if the original YMCA is paid 14 off and if not, for how long. 15 16 Mary VanderLaan, 2120 154th Lane NW, stated she is saddened by the lack of civility and what is 17 happening here. She stated she was the first woman who held office in Andover when it became 18 incorporated and was on the first Planning and Zoning Commission when similar things were 19 considered. She mentioned the types of issues they had considered and asked all to stick to facts 20 and be decent to our people as they are decent to you. Ms. VanderLaan stated she is again serving 21 on the Planning and Zoning Commission. She explained the City Council has the right to vote on 22 a project without the residents voting, mentioning it was the same thing with sanitary sewer and 23 road projects. She stated the Council was elected and if people don't like them, they can decide 24 to not vote for them in the next election. She asked all to be decent about it. Ms. VanderLaan 25 stated with her experience on the City Council and Planning and Zoning Commission and running 26 a business in Anoka, she is asking residents to think about the need to be forward thinking, 27 progressive, and improve the Community Center so Andover has a market share. She noted if it 28 is not improved, Andover will not have the market share. She believed it was a safe investment 29 because the assets will maintain the debt nicely. She stated the taxes will go up but in the long run, 30 it will be contributing to the City that has an estimated increase of 7,900 people in the next 20 31 years. Ms. VanderLaan stated the Council is qualified to make this decision. 32 33 Bob Lex, 15741 Xenia Street NW, 15 -year resident, stated this is the first Council meeting he has 34 attended and asked if this project is already a done deal. He stated even today, $18 million is a lot 35 of money. He likes Andover because it is not Coon Rapids, where he also owns a house and taxes 36 go up and up there too. He stated Andover has done a good job of holding down taxes. But he 37 does not think government should be in business and he views the ice arena as a business. Mr. 38 Lex stated he has worked for regional government and seen too much waste, fraud, and abuse, and 39 citizens should be able to trust their elected leaders. He stated his friend is a project manager, does 40 a good job, and says if it were a not for profit organization, they prove it every day. Mr. Lex 41 believed it was a travesty to consider this project. He would like the City to shelve it, though that 42 may not be possible, but the City should cut its losses and walk away from the table. 43 44 Sheila Dewitt, 2603 166`h Avenue NW, suggested the City is having an identity crisis in building Regular Andover City Council Meeting Minutes —May 7, 2019 Page 8 1 the new Community Center. She noted a Council Member had referred to Andover in comparison 2 to Blaine and Maple Grove that have multiple ice rinks and community centers and they can afford 3 it so we should as well. Ms. Dewitt stated it was decided by Andover 12 years ago to stay a small 4 town and started a program to purchase land and acreage to prevent Andover from huge expansion 5 and development. The City wanted to protect its small-town atmosphere. Now 12 years later, the 6 City has the land, new ideas, but not enough citizens or revenue. She noted that Andover has half 7 the population of Blaine and Maple Grove so it also has less revenue, business, industrial, retail, 8 and restaurants so there is no comparison to those towns. Ms. Dewitt stated Andover is a small 9 town with more churches than restaurants with a drive-thru window and an equal number of fitness 10 centers as gas stations. She believed needing to build to attract people to Andover is as ridiculous 11 as comparing Andover to Blaine and Maple Grove. Ms. Dewitt suggested instead to offer more 12 programs and opportunities instead of building what we already have. She stated the appeal is 13 more schools and a small-town feel. Ms. Dewitt recalled when Coon Rapids lost the ability to 14 have an indoor mall, which was devastating and those businesses moved to Maple Grove where 15 the money was. Coon Rapids got Costco instead and now Maple Grove has the retail development. 16 She suggested the City offer something to kids who do not play team sports, like a place to use 4- 17 wheelers or go horseback riding. She stated she wants to go horseback riding or 4 -wheeling and 18 not play pickleball. Ms. Dewitt suggested selling the land we have and offer more affordable 19 housing, more businesses. She stated if you want a big city, plan for it, and if you want a large 20 Community Center, save for it. Ms. Dewitt asked what is your view for Andover's identity, to be 21 a big city or stay a small town. 22 23 Frank Kellogg, 15120 Zilla Street NW, 24 -year resident, stated he is involved in the community 24 and lived in Andover when there were junk yards and not good infrastructure. He applauded the 25 past and present Councils for improving the City. Mr. Kellogg stated the WDE landfill will now 26 be cleaned, which has been a blight. He stated he respects others' opinions and asked others to 27 respect his opinion. He commented on the impact of his 58 -year-old sister's recent death and 28 stated we can be compassionate in what we believe while still respecting our neighbors. Mr. 29 Kellogg stated he chairs the Community Center Advisory Commission and worked to get the high 30 school here, grow schools, and evolve the Community Center. He noted the City had spent $18.98 31 million to build the Community Center, it did not go to a referendum, and the vote was 510 by the 32 Council. He stated his belief that the vast majority of residents consider the Community Center to 33 be a phenomenal asset with services and value associated with property value increases. Mr. 34 Kellogg noted the Community Center generates $900,000 in revenue on an annual basis to pay for 35 costs associated with that infrastructure. He explained they wanted to be prudent in what they 36 proposed 13-15 years ago and had looked at Sunshine Park that served 900 kids, noting the 37 associated costs equated to $5,000 per individual. Then they came to the Council and asked for 38 $5,000 to build a rink and that evolved. Mr. Kellogg stated this reminds him of 14-15 years ago 39 when there were 100 people at the meeting and they didn't disagree with the decision going 40 forward. 41 42 Angie Sedesky, 1162 157`h Lane NW, noted the public was asked to talk to the Council, not lecture 43 the crowd. She stated people have said the Council was elected to represent us and asked how 44 many who ran for office said they wanted to expand the Community Center and increase taxes. Regular Andover City Council Meeting Minutes —May 7, 2019 Page 9 1 She noted Councilmember Barthel had said he wanted to bring the cost down but he still voted for 2 it and did not respond to her Facebook question. Ms. Sedesky stated when she asked the Mayor, 3 she was blocked from her Facebook page. She stated people should be asked if they are expected 4 to pay and she will remember it in the next election. 6 Scott Roth, 648 142 d Avenue NW, 15 -year resident, stated he moved to Andover because they 7 like a small town feel even though there were not a lot of businesses and they liked the low property 8 taxes. He stated he does not know whether the expansion is needed but as a person in this industry, 9 an industry he has known for 30 years, when these projects start it will cost more than you think it 10 will cost, the revenue will be less than expected, and the property taxes will continue to go up, for 11 sure. Mr. Roth stated he has learned that from exhaustive industry studies. He stated home values 12 were as expensive in 2005 when he purchased his home and his home lost $120,000 in 2008. Mr. 13 Roth noted payments will have to be made on the debt even if the housing market goes down again. 14 He stated his house has never been worth more than it is now but that's not a limitless thing. He 15 stated streets, more streetlights, pothole repair, those should be the main purpose before having a 16 new building. Mr. Roth believed the property taxes would be eaten up by the Community Center 17 expansion and the main function of government is to assure roads and lights, noting the $18 million 18 could go for infrastructure. He stated he has seen nice facilities but the road is a disaster to get to 19 it and asked if the City's money is going to subsidize the facility instead of maintaining roads. 20 21 Nancy Hill, 3595 144`h Avenue NW, resident since 1994, stated she has attended several meetings. 22 She stated her area got some of the new streets that were paid for. She referenced the newsletter 23 article about the construction of the original Community Center and asked if there is a bond for 24 the City Services building and how many bonds will the City have that the taxpayers are paying 25 for. 26 27 Jean Carlstrom, 14941 Butternut Street NW, stated in her personal opinion it is criminal and 28 irresponsible to raid resident's pocketbooks without a referendum. She stated the City should save 29 before it pays. She pointed out that with a referendum, more residents would have been on board 30 if the majority support the project. She disagreed with the need for more streetlights in her 31 neighborhood because she wants to see the stars. Ms. Carlstrom stated she understands pickleball 32 is popular but if bringing in $40,000 a year it would take 450 years to pay $18 million. 33 34 Blair Bucciconi, 849 140`h Lane NW, stated frankly, he does not think this is a forum for laughter. 35 He described his son's and daughter's involvement in sports, and stated the football coach is here 36 tonight but afraid to talk because of the mentality of the audience tonight. He stated universally, 37 when people from Andover heard he was coming here tonight, it was an `eye roller' as he was here 38 two elections ago asking the Council to do this. Mr. Bucciconi stated he had left a high school 39 playoff soccer game early to come to the meeting, taking his then 6 -year-old daughter from 40 watching girls she idolizes playing a section tournament game because the meeting was that 41 important to him. He stated the people from whom he purchased his house, nearly four years ago, 42 got the benefit of a Community Center and their house increased in value because of it. He stated 43 he and his friends want the expansion, voted in the last election, and have been paying attention 44 for the last three years. He listed the activities he uses the Community Center for and stated he Regular Andover City Council Meeting Minutes —May 7, 2019 Page 10 1 does not use the YMCA but knows plenty of folks who do and some don't have a lot of money 2 and get a reduced rate at the YMCA. Mr. Bucciconi stated progress is hard and noted a lot of the 3 audience look like their kids are grown. He asked for the same benefit for his kids and stated 4 people move to Andover because of the schools, not for the small-town feel, noting that south of 5 Constance is not small town. Mr. Bucciconi stated it scares him to think that people can shoot a 6 shotgun shell near his house. He again noted that progress is hard and it costs money. Mr. 7 Bucciconi thanked the Council for their positive vote in favor as it is a wise investment in the 8 youth of the community because it keeps them busy and out of trouble. 10 Motion by Holthus, Seconded by Knight, to close the public hearing at 8:39 p.m. Motion carried 11 unanimously. 12 13 Mr. Dickinson answered questions raised during the public hearing. He presented a chart that was 14 in the last newsletter identifying the potential annual operating cost based on $17.650 million 15 construction proceeds. He noted the Hockey Association is providing funding if the project moves 16 forward so that amount will be reduced to $17.6 million, which will provide for the sports complex, 17 multipurpose rooms, fieldhouse, and site work. He explained the operational numbers include the 18 net cost of staffing, utilities, maintenance, and senior and teen programing. The teen programing 19 of $50,000 would be funded through the levy and approximately $30,000 associated with the 20 senior programing would be levy funded and the services provided through a partnership with the 21 YMCA. Mr. Dickinson stated their projections are on the conservative side. 22 23 Mr. Dickinson stated on the home value increases questions homes in the $200,000 to $350,000 24 range is where the most volatility is in market value, he agreed it can depend on the school district 25 boundary you are in. 26 27 Mr. Dickinson stated they are not predicting user fees will pay 100% of the operational costs of 28 the facility and the Council discussed the amount of subsidy early on. With the original facility, a 29 business plan was created as well as the Community Center Advisory Commissionto strive to seek 30 revenues to cover the operations of the facility. It was not identified to pay for the debt of the 31 facility through those revenues. He stated in 2004, they were targeting $60 on a $200,000 home. 32 33 Mr. Dickinson stated the 30 -year bond issued in 2004, will expire in 2031. The debt on the facility 34 was refinanced in 2006, 2007 and 2012. Between those re -financings, about $5 million in long - 35 term debt service costs were saved and the YMCA will receive some of that. He explained that 36 abatement bonds were done in 2012 and that is where the big savings were realized because it 37 reduced the payments by three years. Mr. Dickinson stated the YMCA lease is $635,000 a year 38 plus $50,000 to $80,000 for common costs. Any excess goes to pay down debt, which will be paid 39 in 2031 but additional payments from the YMCA will be received during the additional three years 40 when the City is not paying debt. 41 42 Mr. Dickinson stated Andover's slogan is Welcome Home and he read Andover's vision statement. 43 He described the number of bonds the City currently has, noting the City has also issued some 44 capital equipment notes for large equipment pieces. Regular Andover City Council Meeting Minutes —May 7, 2019 Page 11 1 Mr. Dickinson explained if all individual property values drop the same amount and the City's 2 levy is the same, the tax rate increases and the same amount of money is collected. He stated the 3 values help to alleviate the burden and there are opportunities when debt comes off to lower 4 property taxes. Mr. Dickinson explained all property tax valuations are different, so he speaks in 5 averages. The average market value will increase by 9%, but some will be more, some will be 6 less, and some may have lost value. Mr. Dickinson stated total taxes will likely increase if this 7 project moves forward unless other revenue sources are found. He stated meeting the top priorities 8 is what the Council identifies for capital and basic services, and he is challenged to deliver that 9 and present a budget in September. Mr. Dickinson stated for next year, there will be an increase 10 in total market value. 11 12 Mr. Dickinson stated a question was asked about the authority the City has to issue debt. He noted 13 he had identified the State Statute that grants that authority in his earlier presentation. The City 14 will also seek a bond counsel opinion. Mr. Dickinson reviewed some municipalities that have 15 used this type of bond to finance facilities. 16 17 Mr. Hagen explained that unlike school districts, cities have certain means to issue bonds without 18 a referendum. He described funding options and stated most projects (water, sewer, equipment, 19 streets with special assessments) are at the discretion of the Council in being stewards of the City. 20 He reviewed the types of buildings that can be constructed within those parameters and confirmed 21 the City works with legal counsel for review of the bond terms, noting Ehlers has regulatory 22 authority to represent the City and has many municipal clients. 23 24 Mayor Trude stated Ehlers & Associates has worked with a lot of growing cities that are carrying 25 debt on their city hall, fire stations, and streets. Mr. Hagen agreed and stated Andover is relatively 26 low on the debt scale when compared to other cities, which affects the bond rating. He stated as 27 part of the planning process, he knows there is a large document the finance department has with 28 the Capital Improvement Plan (CIP) that the Council works on from March through November. 29 The CIP is one of the most important planning tools of the City and includes projects for streets, 30 the fire department, public works, and the community center. He stated Andover is on the top of 31 the curve with planning and also looks at cash reserves that can be used without hurting the rating. 32 Mr. Hagen agreed that Andover does not bond for everything and looks at issuing bonds for large 33 projects. He noted with bonding, residents enjoy and pay for the improvements while living here 34 and then if they sell, the new buyer pays for and enjoys the improvement. Mr. Hagen explained it 35 is a balancing act with the payment matching the benefit. He stated 30 years ago, it was a different 36 story but now planning is an important tool as well as matching the payment with the benefit 37 whether a fire station or faciality like this. 38 39 Mayor Trude asked whether Andover is pulling money away from roads to consider this project. 40 Mr. Dickinson stated the City increases funding for roads and public safety and continually 41 monitors the contract with the Sheriffs Department to make sure it is keeping pace. He stated 42 there are a lot of projects that can be done (trails, streets, other buildings, equipment) but the City 43 has worked through the CIP, plans the next five years, and finances for the next five years. He 44 stated the City has increased dollars towards streets but you need to strike a balance and that is the Regular Andover City Council Meeting Minutes —May 7, 2019 Page 12 Council's challenge with the CIP and budget process, which is started early to assure adequate time for consideration. Director of Public Works/City Engineer Berkowitz stated the five-year CIP identifies streets in the worse shape, which is determined through yearly evaluations. Through that process, the City assesses 25% of the roadway project cost back to benefiting properties. The City also does sealcoat and crackseal for ongoing maintenance and spends 30-40 hours a week on pothole patching. Mr. Berkowitz stated staff continues to look for more funding as it is an important part of the City's infrastructure. 10 11 Mayor Trude stated she wanted to assure residents that the Council continues to look at every 12 aspect of the community and there are many children in Andover. She recapped that tonight there 13 were 20 speakers with the majority, 16, speaking against and many applauding. Mayor Trude 14 noted that some audience members left the meeting tonight because they felt threatened and not 15 welcomed to offer their opinion. The City also accepted 28 letters into the public record with 25 16 in support and 3 opposed. 17 18 In response to whether this project is a `done deal,' Mr. Dickinson stated he had shown the project 19 schedule earlier. Tonight, the Council will consider approving a resolution to use property 20 abatement taxes for a Community Center expansion project. That would provide the tool to finance 21 the project, if it is approved. The bids received on May 14" will be evaluated by staff to determine 22 if the bids fall within the budget. The bids will then be considered by the Council for award on 23 June 0. If the project is awarded, the Council will consider a request to authorize the sale of 24 bonds, if that is the tool approved tonight. 25 26 At the request of Councilmember Knight, Mr. Dickinson again stated the definition of tax 27 abatement based on Minnesota Statutes 469.1812 — 469.1815. 28 29 Motion by Knight, Seconded by Holthus, to approve Resolution No. R040-19 approving property 30 tax abatements. 31 32 Councilmember Bukkila stated yes, the Council can legally use tax abatement bonds but she does 33 not agree with its use. On the project, she noted she has been against the method the Council has 34 used to go through the process and the lack of communication with the public from the beginning 35 (June 2018). Councilmember Bukkila stated she has an issue with the City obtaining input from 36 the users and stakeholders of the Community Center, asking what they use, how they use it, and 37 how do you operate within the facility. The users and stakeholders were also asked if the City did 38 an expansion, what they would like to see. Councilmember Bukkila stated the `Christmas list' 39 began and that, to her, is what occurred. Everything possible was listed and nothing was subtracted 40 with the exception of meeting room size and/or location. She stated the project was expanded 41 beyond what she thought was possible. Councilmember Bukkila stated she supported meeting 42 rooms and to meet the needs of teens and others who are not involved with athletic activities. To 43 do that, the cost was in the neighborhood of $2-3 million or $20 for $250,000 house. She thought 44 that was an acceptable and wanted the amenity in the community. Regular Andover City Council Meeting Minutes —May 7, 2019 Page 13 1 Councilmember Bukkila explained when the project expanded to include the rink and concrete 2 floor with turnover to turf, then it looked competitive with private businesses and there are already 3 a couple of these businesses in Andover. Then a walking track and dry floor activities were added. 4 Councilmember Bukkila stated the project grew beyond what she was comfortable with. 5 6 Councilmember Bukkila stated she had asked when the public input would start and especially 7 those from the non -athletic community. She was told there were no accurate numbers to tell the 8 public and it was an estimate at $18.9 million, but it would have at least opened the discussion. 9 She felt the Council could have done more on the front end to communicate what was being 10 discussed. Councilmember Bukkila stated she and former Councilmember Goodrich favored a 11 referendum but there were not three on the Council that supported a referendum so that did not 12 happen. She stated last fall, residents started to attend and get informed and then spoke with each 13 other so the information spread. Councilmember Bukkila noted Citywide events were not held 14 until December and by then, the vote had already been taken. She felt it was disingenuous to hold 15 a public hearing after the vote was taken. Councilmember Bukkila stated she will vote no on this 16 vote tonight and thanked everyone for coming out tonight. 17 18 Councilmember Barthel stated he will vote for it but wanted to make some comments. He 19 apologized to the resident for not reaching out to her on Facebook, noting he had replied to many 20 others. He also apologized to the resident who did not receive an e-mail from him, noting he had 21 replied to many emails and also sat down for coffee with many residents. 22 23 Councilmember Barthel stated he would support having more industrial sites, but there is not an 24 interstate or major highway in Andover so industrial users are not interested. Councilmember 25 Barthel stated he came to the Council in January and when he ran, said he supported the 26 Community Center expansion and did not support a referendum. He wanted the price to come 27 down by using some of the fund balance but then someone pointed out that residents had paid for 28 the fund balance so why would the City use it to pay for a future building. He stated in Andover 29 there are 27 baseball fields, 21 soccer fields, and the City spends $1.3 million on those facilities 30 that bring in no revenue as there is no charge for those fields. Councilmember Barthel noted people 31 say the Community Center helps few people but recently, the Council agreed to improve a road 32 that serves few people and they will only pay 25% of the cost for it. He stated the City will pay 33 for it even if it benefits six people and asked whether the City should plow a road that benefits one. 34 Councilmember Barthel explained rarely what the City does affects everyone and more often, it 35 helps a few. He asked how this is any different. Councilmember Barthel stated he had joked with 36 a resident about putting in a toll road, but that will not happen. He believes the Community Center 37 expansion benefits the community and for the gentleman who asks if it is a done deal, the bids 38 have not come in yet. Councilmember Barthel stated when he ran for election, he said forefront 39 that he agreed with the Community Center expansion and at this time, he will support it. He stated 40 if he doesn't get reelected again, that's fine, but he believes this project is the best for the Andover 41 community. 42 43 Councilmember Knight stated the City's population is aged 6 to 60 and creates real demands from 44 the lower age end to the seniors at the other end. He stated a lot of seniors have talked to him Regular Andover City Council Meeting Minutes —May 7, 2019 Page 14 1 about what they need and want because there are a lot of seniors in Andover and it is more than 2 pickleball. He noted Maple Grove has places for seniors to do computer work and many other 3 things and since Andover's population is very broad, the City is looking at services and needs for 4 a larger age spectrum than other cities. 5 6 Mayor Trude stated this has been a topic since 2015 and she has spoken on it at many meetings. 7 She stated the Community Center Advisory Commission, a citizen appointed group, has provided 8 a recommendation and she supports their recommendation. 9 10 Councilmember Barthel stated he knows some people will not believe him, but this has been a 11 hard decision for everyone on the Council, whether for or against. He stated he has never lost 12 sleep except over this decision, on whether it is right or not right. So, he wanted the audience to 13 know this decision is not taken lightly, at all. 14 15 Mayor Trude stated there are many who provided input who are not in attendance and 100 kids 16 are at the hockey arena tonight with parents and fans, others are at baseball and soccer fields, and 17 others are at concerts. That is who is moving into Andover, families with a lot of children, and 18 they want 4- and 5 -bedroom homes. 19 20 Motion carried 4-1 (Bukkila). 21 22 RECESS & RECONVENE 23 24 Mayor Trude recessed the meeting at 9:24 p.m. The meeting was reconvened at 9:30 p.m. 25 Councilmember Bukkila was not present. 26 27 CONSIDER CONDITIONAL USE PERMIT — HOME OCCUPATION: SAPPHIRE 28 MASSAGE — I4405 OSA GE STREET NW — SARA JOHNSON 29 30 Mayor Trude asked if any neighborhood concerns have been brought forward since the Planning 31 and Zoning Commission meeting. Community Development Director Janish explained that since 32 the public hearing, there was a resident request for a sign indicating that there is a cul-de-sac ahead. 33 The Public Works Department has indicated such a request does not meet the City's past practice 34 or sign policy. Mayor Trude suggested discussion of a "No Through Street" sign can continue 35 outside of this consideration. 36 37 The Council dispensed with presentation of the full staff report as it was included in the meeting 38 packet and the Planning and Zoning Commission had recommended approval. 39 40 Motion by Holthus, Seconded by Knight, to approve Resolution No. R041-19 approving a 41 Conditional Use Permit for on-site in-home therapeutic massage services on property located at 42 14405 Osage Street NW. Motion carried 4-0 (Bukkila absent). 43 Regular Andover City Council Meeting Minutes —May 7, 2019 Page 15 1 CONSIDER APPROVAL OF MASSAGE ESTABLISHMENT LICENSE 2 3 The Council dispensed with presentation of the full staff report as it was included in the meeting 4 packet. Motion by Knight, Seconded by Holthus, to approve the Massage Establishment License for Sara Johnson, 14405 Osage Street NW, for the period of May 8 through December 31, 2019. Motion carried 4-0 (Bukkila absent). 10 CONSIDER VARIANCE REQUEST — SIDE YARD SETBACK — 2384151sT AVENUE NW — 11 KEVINKOSCHAK 12 13 Community Development Director Janish stated the property owners/applicants are requesting a 14 variance for their property at 2384 151St Avenue NW to provide an addition above the existing 15 garage that is located six feet from the property line. Mr. Janish stated the Planning and Zoning 16 Commission held a public hearing and no comments were received. 17 18 Motion by Holthus, Seconded by Barthel, to approve Resolution No. R042-19 approving a 19 Variance for Property at 2384 151" Avenue NW. Motion carried 4-0 (Bukkila absent). 20 21 Mayor Trude commented on the need to review the City's Code to address this issue and asked 22 staff to schedule it for Workshop discussion. 23 24 CONSIDER INTERIM USE PERMIT— LAND RECLAMATION— NE CORNER OF 25 PRAIRIE ROAD/146TH LANE NW, PIN 25-32-24-21-0004 MARK AND MIKE SMITH 26 27 It was noted that Mark and Mike Smith are seeking an Interim User Permit (IUP) to store/grade 28 up to 60,000 square yards of soil. The soil is excess dirt from the Catchers Creek East development 29 and will be used for future grading of the lots in this property. 30 31 Community Development Director Janish stated the recommendation is for a five-year duration 32 and a resident comment was received that they did not want to see additional traffic. He noted the 33 Planning and Zoning Commission recommended, on a 7-0 vote, approval of the IUP request for a 34 five-year timeframe to allow up to 60,000 yards of material to be moved and spread to the area as 35 shown and subject to conditions as outlined in the draft resolution. 36 37 Councilmember Barthel asked how long the dirt will be on the site. Mr. Janish referenced the staff 38 report that included the schedule, noting the dirt will be spread. Councilmember Barthel wanted 39 to assure there would not be a large dirt stockpile blowing dirt into the neighborhood. Mr. Janish 40 described the fill locations. Mr. Berkowitz stated staff continually monitors how dust is controlled. 41 42 Councilmember Bukkila returned to the Council dais at 9:38 p.m. 43 44 Motion by Barthel, Seconded by Knight, to approve Resolution No. R043-19 granting an Interim Regular Andover City Council Meeting Minutes — May 7, 2019 Page 16 Use Permit for land reclamation for the property at the NE corner of Prairie Road/146`h Lane 2 NW. Motion carried unanimously. 4 CONSIDER PRELIMINARY PLAT — CATCHER'S VARJANCE REQUEST — 1049 5 ANDOVER BOULEVARD NW—MARK SMITH 6 7 Community Development Director Janish stated the City Council is asked to review the Catcher's 8 Creek Preliminary Plat West, which is within the Municipal Urban Service Area (MUSA), consists 9 of nine urban lots located at 1049 Andover Boulevard NW, and the Preliminary Plat conforms to 10 the R-4 Single -Family Urban requirements. 11 12 Mr. Janish stated since this was presented, an agreement was reached that the applicant provide 13 for a right turn lane and then the County will allow for a future right-in/right-out. The County will 14 note it in their records for the future. Mr. Janish described points of access and stated this property 15 is in the MUSA with a gross density of 1.87 homes per acre, meeting the City's gross density 16 requirements. The Park and Recreation Commission recommend cash in lieu of land. 17 18 Mr. Janish stated the Planning and Zoning Commission held a public hearing on April 9, 2019. 19 During the public hearing, one property owner spoke regarding assurances that the development 20 layout will not affect future development to the north. He reviewed items discussed by the 21 Planning and Zoning Commission and recommendation for approval on a 7-0 vote with the 22 addition of a condition requiring the rezoning of the property prior to approval of the final plat. 23 24 Mr. Berkowitz stated the County wanted to make sure all understood they may limit it to a right - 25 in/right-out in the future so there will need to be other points of access out of the development. 26 27 Mayor Trude asked if there is some concern with the neighboring property owner that needs to be 28 addressed. 29 30 Mark Smith, 2120 Otter Lake Drive, Lino Lakes, applicant, stated he spoke with the neighbors a 31 year ago to find out if there was interest and he did not hear anything from them. Mr. Smith stated 32 he presented a concept plan that was supported, went through three reviews, and spent $50,000 on 33 the plans so he wants to move forward with the project as presented. He stated dirt is coming to 34 this site. Mr. Smith explained there has now been a call from the family asking to do something 35 different so he met with them but he does not see any advantage to change his plan at this point. 36 37 Mayor Trude stated she appreciates that explanation and that Mr. Smith had met with the Holasek 38 family. She noted the Holasek family is in attendance and had spoken before the Planning and 39 Zoning Commission. 40 41 Councilmember Holthus stated she would like to see a sign or plaque placed where the old General 42 Store used to sit to indicate the historical birthplace of Andover. 43 44 Mayor Trude offered an opportunity for Mr. Krekelberg to speak on behalf of the Holasek family, Regular Andover City Council Meeting Minutes — May 7, 2019 Page 17 1 noting though that this plan has already been through the process. 2 3 Joe Krekelberg, 6282 West Shadow Lake Drive, Lino Lakes, one of the members of the Holasek 4 family who own land to the north and west of the subject property, stated at the Planning and 5 Zoning Commission meeting he had raised two concerns but he is not his father-in-law Winslow 6 and doesn't know much about this process. He explained the family's concern relates to sewer 7 ability across the road and if it would serve the rest of the property. He noted Darren Lazan is a 8 family friend and done extended business with his family so Mr. Lazan is working with them and 9 met with staff to understand the issues. Mr. Krekelberg stated the family has assurances that the 10 sewer capacity has been preserved. The other concern is whether this is the right layout for the 11 rest of the property. He was referred to the ghost plat, which he reviewed with Mr. Lazan, who 12 pointed out that given where the road comes to their property, it will necessitate a cul-de-sac. Mr. 13 Krekelberg stated he thinks the City does not like cul-de-sacs because they are not easy to plow, 14 and the family does not like cul-de-sacs because of the expense and cutting up of the lots. He 15 compared the nine lots Mr. Smith is developing with the eight acres to the east and suggested one 16 could say there is preferential treatment related to maximum lot yield on his property. 17 18 Mayor Trude explained the first application gets to layout the street and then the next one has to 19 connect. She noted Mr. Smith is ready to go and has followed the process and while Mr. 20 Krekelberg's comments were made at the Planning and Zoning Commission meeting, the 21 Commission still recommended approval. Mayor Trude thanked the Council for allowing Mr. 22 Krekelberg an opportunity to make comment as the City respects the Holasek family. 23 24 Mr. Janish confirmed that is how Andover has developed, both past and present, with the first 25 project laying out the roads and the City assuring an opportunity to connect for the next property 26 to be developed. 27 28 Mr. Smith stated the ghost plat showed an outlot and asked if it was removed. Mr. Berkowitz 29 explained the outlot was needed for the drainage and utility easement within Lot 6. 30 31 Motion by Holthus, Seconded by Barthel, to approve Resolution No. R044-19 approving the 32 Preliminary Plat of "Catcher's Creek West." Motion carried unanimously. 33 34 SCHEDULE MA Y EDA MEETING 35 36 Motion by Bukkila, Seconded by Barthel, to schedule an EDA Meeting on May 21, 2019, at 6:00 37 p.m. Motion carried unanimously. 38 39 SCHEDULE MAY WORKSHOP MEETING 40 41 Motion by Holthus, Seconded by Knight, to schedule a Workshop Meeting on May 28, 2019, at 42 6:00 p.m. Motion carried unanimously. 43 Regular Andover City Council Meeting Minutes —May 7, 2019 Page 18 1 ADMINISTRATOR'S REPORT 2 3 City Staff updated the Council on the administration and city department activities, legislative 4 updates, updates on development/CIP projects, and meeting reminders/community events. 5 6 (Staff Activities) Mr. Dickinson noted the WDE public information meeting is tomorrow night in 7 the Council Chambers, from 6:30 p.m. to 8:30 p.m. The MPCA, Anoka County Health 8 Department, Minnesota State Health Department, City staff, and the contractor will be in 9 attendance. 10 11 Mr. Dickinson stated there will be a QCTV budget meeting tomorrow. He has conducted an audit 12 exit for the City's audit and the 2018 financial statements will be presented at the next Council 13 meeting. Mr. Dickinson stated staff has been working on the Community Center lease with the 14 YMCA. The YMCA is contemplating an expansion and will hold a board meeting next week. 15 Mr. Dickinson announced the North Metro Mayors meeting on May 15, 2019 and indicated all are 16 welcome to attend. He noted the City has issued new building permits in the mid-40s. 17 18 (Retirement of Barb Wells) Mr. Berkowitz recognized Barb Wells who is retiring after more than 19 22 years of service. He noted Ms. Wells started working for Andover about six months after he 20 was hired. She started as the receptionist and transitioned to Public Works. Mr. Berkowitz 21 described her years of service and stated she greatly helped him when he transitioned from City 22 Engineer to Public Works Director/City Engineer. He wished Ms. Wells well in her retirement 23 and stated she will be missed. Mayor Trude agreed, noting Ms. Wells also worked on the 24 Community Center Home Show. 25 26 (Clocktower Commons) Mr. Janish reported that the Clocktower Commons parking lot is being 27 expanded. 28 29 MAYORICOUNCIL INPUT 30 31 (Purple Park Community Build) Mayor Trude announced the need for volunteers for the Purple 32 Park community build on May 18, 2019. 33 34 (Recognitions) Mayor Trude announced that resident Briana Clifton was awarded the Comcast 35 Leaders of Tomorrow scholarship. She also announced that the Andover High School is ranked 36 as a top high school and its choir was voted as best Minnesota choir. 37 38 (Garage Sales) Councilmember Bukkila noted there are many garage sales coming up this 39 weekend. 40 41 (Legacy Academy Groundbreaking) Councilmember Holthus reported on the Legacy Academy 42 groundbreaking that she attended to represent the Council. Mayor Trude thanked Councilmember 43 Holthus for attending, noting Andover is growing with young families. 44 Regular Andover City Council Meeting Minutes —May 7, 2019 Page 19 1 ADJOURNMENT 2 3 Motion by Bukkila, Seconded by Barthel, to adjourn. Motion carried unanimously. The meeting 4 adjourned at 10:02 p.m. 5 6 CALL TO ORDER 7 8 Motion by Holthus, Seconded by Barthel, to reopen the meeting. Motion carried unanimously. 9 10 RECESS & RECONVENE 11 12 Mayor Trude recessed the regular City Council meeting at 10:02 p.m. to a Closed Session of the 13 City Council to discuss Public Works Negotiations. 14 15 The City Council reconvened at 10:18 p.m. 16 17 ADJOURNMENT 18 19 Motion by Councilmember Barthel, Seconded by Councilmember Bukkila, to adjourn. Motion 20 carried unanimously. The meeting adjourned at 10:18 p.m. 21 22 Respectfully submitted, 23 24 Carla Wirth, Recording Secretary 25 26 REGULAR ANDOVER CITY COUNCIL MEETING MINUTES — MAY 7, 2019 TABLE OF CONTENTS PLEDGEOF ALLEGIANCE......................................................................................................... 1 RESIDENTFORUM...................................................................................................................... 1 AGENDAAPPROVAL.................................................................................................................. 1 APPROVALOF MINUTES........................................................................................................... 1 CONSENTITEMS......................................................................................................................... 2 Item 2 Approve Payment of Claims............................................................................................ 2 Item 3 Award City Contract for Emerald Ash Borer (EAB) Injections/18-25/EAB Management Program......................................................................:::.................................................. 2 Item 4 Order Improvement/Order Plans & Specs/18-33, Kelsey Round Lake Park Trail Expansion & 18-34, Andover Station North Trail Connection (R038-19) ...................... 2 Item 5 Adopt Resolution Setting Annual Income Level for Senior Citizen and Disabled Individuals for Deferral of Assessments & Reduced Sanitary Sewer Rates (R039-19) .. 2 Item 6 Accept Resignation/Retirement of Barbara Wells — Administrative Assistant ................ 2 Item 7 Approve Temporary Intoxicating Liquor License/Andover Lions/Fun Fest ................... 2 Item 8 Approve Application for Exempt Permit.................::::......................::::.......................... 2 Item 9 Approve Purchase/Stump Grinder.................................................................................. 2 Item 10 Approve City Code Amendment/Tide 3-5 (Ord. 492) ..................................................... 2 Item l Ob Approve Appointment of Fire Technician..............::....................................................... 2 PUBLIC HEARING — PROPOSED PROPERTY TAX ABATEMENTS FOR A COMMUNITY CENTER EXPANSION' PROJECT/CONSIDER APPROVAL OF RESOLUTION APPROVING PROPERTY TAX ABATEMENTS (R040-19) ............................................... 2 CONSIDER CONDITIONAL USE PERMIT HOME OCCUPATION: SAPPHIRE MASSAGE —14405 OSAGE STREET NW =SARA JOHNSON(R041-19)........................ 14 CONSIDER APPROVAL OF MASSAGE ESTABLISHMENT LICENSE ............................... 15 CONSIDER VARIANCE REQUEST -SIDE YARD SETBACK — 2384 151sT AVENUE NW — KEVIN KOSCHAK (R042-19). ..................................................................................... 15 CONSIDER INTERIM USE PERMIT — LAND RECLAMATION — NE CORNER OF PRAIRIE ROAD/146TH LANE NW, PIN 25-32-24-21-0004 MARK AND MIKE SMITH (R043-19) . ......... .................................................................................................... 15 CONSIDER PRELIMINARY PLAT — CATCHER'S CREEK WEST —1049 ANDOVER BOULEVARD NW —MARK SMITH(R044-19)................................................................... 16 SCHEDULEMAY EDA MEETING........................................................................................... 17 SCHEDULE MAY WORKSHOP MEETING............................................................................. 17 ADMINISTRATOR'S REPORT.................................................................................................. 18 (Staff Activities)........................................................................................................................ 18 (Retirement of Barb Wells)....................................................................................................... 18 (Clocktower Commons)............................................................................................................ 18 MAYOR/COUNCIL INPUT........................................................................................................ 18 (Purple Park Community Build)............................................................................................... 18 (Recognitions)........................................................................................................................... 18 (Garage Sales)........................................................................................................................... 18 (Legacy Academy Groundbreaking)......................................................................................... 18 ADJOURNMENT......................................................................................................................... 19 Regular Andover City Council Meeting Minutes —May 7, 2019 Page 21 RECESS & RECONVENE........................................................................................................... 19 ADJOURNMENT......................................................................................................................... 19 1685 CROSSTOWN BOULEVARD N.W. • ANDOVER, MINNESOTA 55304 • (763) 755-5100 FAX (763) 755-8923 • WWW.ANDOVERMN.GOV TO: Mayor and Councilmembers CC: Jim Dickinson, City Administrator FROM: Lee Brezinka, Finance Manager SUBJECT: Payment of Claims DATE: May 21, 2019 INTRODUCTION Attached are disbursement edit lists for claims related to the on going business of the City of Andover. DISCUSSION Claims totaling $193,714.82 on disbursement edit lists #1—#3 from 05/03/19 to 05/16/19 have been issued and released. Claims totaling $1,145,274.15 on disbursement edit list #4 dated 05/21/19 will be issued and released upon approval. BUDGET IMPACT The edit lists consist of routine payments with expenses being charged to various department budgets and projects. ACTION REQUESTED The Andover City Council is requested to approve total claims in the amount of $1,338,988.97. Please note that Council Meeting minutes will be used as documented approval. Respectfully submitted, Lee Brezinka Attachments: Check Proof Lists Accounts Payable Computer Check Proof List by Vendor User: BrendaF Printed: 05/03/2019 - 9:18AM Batch: 00403.05.2019 Invoice No Description l� Amount Payment Date Acct Number Vendor: InvCloud InvoiceCloud Check Sequence: 2 Misc. Supplies Check Sequence: 1 1405-2019_4 04/19 IC Payment Transaction Fee 277.00 05/03/2019 5100-48100-63010 1405-2019_4 04/19 IC Payment Transaction Fee 216.00 05/03/2019 5200-48200-63010 1405-2019_4 04/19 IC Payment Transaction Fee 50.00 05/03/2019 5300-48300-63010 1405-2019_4 04/19 IC Payment Transaction Fee 21.75 05/03/2019 0101-43600-63010 Check Total: 564.75 Vendor: WellsFar Wells Fargo Bank Check Sequence: 2 Misc. Supplies 437.41 05/03/2019 010142200-61020 Misc. Supplies 330.34 05/03/2019 0101-42200-61005 Misc. Supplies 134.98 05/03/2019 010142200-61015 Misc. Supplies 450.00 05/03/2019 010145000-61130 Active9ll 1,047.49 05/03/2019 0101-42200-63010 Hotel for Conference 296.11 05/03/2019 010142200-61310 DPS Firefighters Licenses 1,000.00 05/03/2019 0101-42200-61320 Heavy Duty Garbage Bags 209.90 05/03/2019 0101-45000-61025 Subscription 35.00 05/03/2019 010143200-61325 Pop 21.40 05/03/2019 7100-00000-24208 Misc. Supplies 89.02 05/03/2019 0101-41420-61005 Council Meeting 73.79 05/03/2019 010141100-61310 HRCertification 150.00 05/03/2019 0101-41230-61320 CPR Certification 412.00 05/03/2019 010141230-63005 Postage 57.04 05/03/2019 510048100-61405 Registration for Conference 325.00 05/03/2019 0101-42300-61315 Airfare for Conference 473.30 05/03/2019 2130-44300-61410 Misc. Supplies 641.24 05/03/2019 2130-44400-61020 National Registry EMT 105.00 05/032019 0101-42200-61320 Hotel for Conference 490.03 05/032019 0101-42200-61310 Misc. Supplies 857.11 05/03/2019 010145000-61020 Day Q Capital & Finance Mtg W/Ehlers 61.65 05/032019 010141200-61310 Parts for Units #11-582, #452 & #558 951.24 05/03/2019 610048800-61115 DOT Stickers 24.50 05/032019 610048800-61020 Reference ACH Enabled: False ACH Enabled: False AP -Computer Check Proof List by Vendor (05/03/2019 - 9:18 AM) Page 1 Invoice No Description Amount Payment Date Acct Number Reference First Aid Kit 27.83 05/03/2019 6200-48900-61020 Safety Works Boots 188.00 05/03/2019 5100-48100-61005 Deposit for New Vehicle in Bldg Dept 500.00 05/03/2019 4180-49300-65400 Refund from MN Chapter -239.18 05/03/2019 0101-42200-61310 DPS Firefighters Licenses 1,365,00 05/03/2019 0101-42200-61320 Check Total: 10,515.20 Total for Check Run: 11,079.95 Total of Number of Checks: Y AP -Computer Check Proof List by Vendor (05/03/2019 - 9:18 AM) Page 2 Accounts Payable Computer Check Proof List by VendorAN&VgR User: AHeppell Printed: 05/09/2019 - 11:04AM Batch: 00409.05.2019 Invoice No Description Amount Payment Date Acct Number Reference Vendor: AbleHose Able Hose And Rubber Check Sequence: I ACH Enabled: False 213706-001 07-191 hose/clamps 113.66 05/09/2019 6100-48800-61115 Check Total: 113.66 Vendor: AceSolid Ace Solid Waste, Inc. Check Sequence: 2 ACH Enabled: False 4867908 05/19 Commercial Waste & Recycling 469.14 05/10/2019 2130-44000-62020 4867908 05/19 Commercial Waste & Recycling 469.14 05/10/2019 2130-44100-62020 4874282 05/19 Rental Property Garbage Service 267.61 05/10/2019 4520-49300-62020 Check Total: 1,205.89 Vendor: AdsBrds Ads on Boards Check Sequence: 3 ACH Enabled: False Hockey Board Cleaning & Seal 500.00 05/10/2019 2130-44300-63100 Check Total: 500.00 Vendor: AnkCo10 Anoka Co Highway Check Sequence: 4 ACH Enabled: False Fee Review . 19-02 review 150.00 05/09/2019 4140-49300-63010 Check Total: 150.00 Vendor: AnkCo02 Anoka Cc Property Tax Div Check Sequence: 5 ACH Enabled: False 23481491 & 2 19-02 Easement 33-32-24-34-0050 46.00 05/09/2019 4140-49300-63215 Check Total: 46.00 Vendor: BDTHIdin BDT Holdings, LLC Check Sequence: 6 ACH Enabled: False Escrow Refund Crack Seal / Seal Coat Refund 527.94 05/09/2019 2410-00000-24101 Escrow Refund Crack Seal / Seal Coat Refund 108.82 05/09/2019 2410-41600-63900 Check Total: 636.76 Vendor: BLHoldin BL Holdings LLC Check Sequence: 7 ACH Enabled: False AP -Computer Check Proof List by Vendor (05/09/2019 - 11:04 AM) - Page 1 Invoice No Description Amount Payment Date Acct Number Reference escrow refund Crack Seal/ Seal Coat Refund 408.35 05/09/2019 241041600-63900 5852601 escrow refund Crack Seal/ Seal Coat Refund 7,197.34 05/09/2019 2410-00000-24101 5864630 . 8000015174-8 Check Total 7,605.69 05/09/2019 0101-41970-62015 5883191 Vendor: BoyerTm Boyer Trucks 53.09 05/09/2019 Check Sequence: 8 ACH Enabled: False 856133X1 #577 -tube asy 75.71 05/09/2019 6100-48800-61115 5907226 8000015174-8 Check Total: 75.71 05/09/2019 5100-48100-62015 5927939 Vendor: BSNSport BSN Sports 50.13 05/09/2019 Check Sequence: 9 ACH Enabled: False 905037703 Bases for Ball Fields 6,525.15 05/10/2019 0101-45000-61105 5950580 8000015174-8 Check Total: 6,525.15 05/09/2019 5200-48200-62015 6122874 Vendor: CalATid CalAtlantic National Title Solutions, LLC 90.15 05/09/2019 Check Sequence: 10 ACH Enabled: False Eamest Escrow LS B3 Winslow Cove 5,000.00 05/09/2019 4170-49300-65100 7725077 8000015174-8 Check Total: 5,000.00 05/09/2019 0101-41950-62015 5825952 Vendor: Centerpt CenterPoint Energy Check Sequence: 11 ACH Enabled: False 8000015174-8 Fire Station 43 - 482.72 05/09/2019 0101-41920-62015 5852601 8000015174-8 Pumphouse#4 79.19 05/09/2019 5100-48100-62015 5864630 . 8000015174-8 Sunshine Park 114.90 05/09/2019 0101-41970-62015 5883191 8000015174-8 Well#1 53.09 05/09/2019 5100-48100-62015 5893307 8000015174-8 Pumphouse#6 49.51 05/09/2019 510048100-62015 5907226 8000015174-8 Pumphouse#7 63.44 05/09/2019 5100-48100-62015 5927939 8000015174-8 Well 43 50.13 05/09/2019 510048100-62015 5945463 8000015174-8 City Hall/Senior Center 453.06 05/09/2019 0101-41910-62015 5950580 8000015174-8 Lift Station #4 16.20 05/09/2019 5200-48200-62015 6122874 8000015174-8 ASN Ballfields 90.15 05/09/2019 0101-41980-62015 7575198 8000015174-8 Lift Station #1 16.20 05/09/2019 5200-48200-62015 7725077 8000015174-8 Equipment Building 109.18 05/09/2019 0101-41950-62015 5825952 8000015174-8 Water Treatment Plant 1,722.93 05/09/2019 510048100-62015 5840270 8000015174-8 Prairie Knoll Park 38.62 05/09/2019 010141990-62015 5840341 8000015174-8 Fire Station#1 354.13 05/09/2019 0101-41920-62015 5841153 8000015174-8 Fire Station #2 252.48 05/09/2019 0101-41920-62015 5841451 8000015174-8 Warming House 21.04 05/09/2019 0101-45000-62015 8743371 8000015174-8 2543 Bunker Lk Blvd (4-plex) 142.30 05/09/2019 4520-49300-62015 10809697 8000015174-8 2557 Bunker Lk Blvd (4-plex) 108.50 05/09/2019 4520-49300-62015 10809498 8000015174-8 2526 138th Ave MAIN (4-plex) 9.50 05/09/2019 4520-49300-62015 6401449842 8000015174-8 2526 138th Ave #1 (4-plex) 44.53 05/09/2019 4520-49300-62015 6401449872 8000015174-8 2526138th Ave #2 (4-plex) 9.50 05/09/2019 4520-49300-62015 6401449873 8000015174-8 2526 138th Ave #3 (4-plex) 11.97 05/09/2019 4520-49300-62015 6401449875 AP -Computer Check Proof List by Vendor (05/09/2019 - 11:04 An Page 2 Invoice No Description Amount Payment Date Acct Number Reference 8000015174-8 2526138th Ave #4 (4-plex) 46.39 05/09/2019 4520-49300-62015 6401449879 8000015174-8 15211 Nightingale StNW 39.17 05/09/2019 0101-41930-62015 6401841192 AP -Computer Check Proof List by Veador (05/09/2019 - 11:04 AM) Page 3 Check Total: 4,378.83 Vendor: CentWood Central Wood Products Check Sequence: 12 ACH Enabled: False 403211 mulch- Coco brown 1,287.50 05/09/2019 0101-45000-61130 Check Total: 1,287.50 Vendor: CintasGK Cintas Corp - Cintas Loc 416K Check Sequence: 13 ACH Enabled: False 4021304939 mats 85.16 05/09/2019 0101-41930-62200 4021304979 mats 41.39 05/09/2019 0101-41910-62200 4021305137 Uniform Cleaning - 32.55 05/09/2019 0101-43300-61020 4021305137 Uniform Cleaning 65.05 05/09/2019 520OA8200-61020 4021305137 Uniform Cleaning 32.50 05/09/2019 6100-48800-61020 4021305137 Uniform Cleaning 227.75 05/09/2019 0101-43100-61020 4021305137 Uniform Cleaning 32.55 05/09/2019 5100-48100-61020 4021305137 Uniform Cleaning 97.60 05/09/2019 0101-45000-61020 Check Total: 614.55 Vendor: CityAndo City of Andover Check Sequence: 14 ACH Enabled: False 2526 138th Ave - Storm 12.65 05/10/2019 4520-49300-62025 217568 Public Works - Storm Water 386.65 05/10/2019 0101-41930-62025 204320 2nd Parcel PW - Storm Water 296.43 05/10/2019 0101-4193062025 204320 1st Parcel PW -Storm Water 368.70 05/10/2019 0101-41930-62025 204320 Sunshine Park - Storm Water 10.83 05/10/2019 0101-45000-62025 204322 City Hall/Sr Ctr - Storm Water 294.59 05/10/2019 0101-41910-62025 204323 Strip Along Hanson Blvd 49.71 05/10/2019 2130-44000-62025 204323 CH Park Lights - Storm Water 10.83 05/10/2019 0101-45000-62025 204323 Pumphouse#4 10.83 05/10/2019 5100-48100-62025 204323 Pumphouse #6 - Storm Water 10.83 05/10/2019 5100-48100-62025 204324 Pumpbouse #7 - Storm Water 10.83 05/10/2019 5100-48100-62025 204325 Hidden Creek N - Storm Water 10.83 05/10/2019 0101-45000-62025 204326 Shadowbrook E PK- Storm Water 10.83 05/10/2019 0101145000-62025 204327 Water Treatment Plant - Storm 103.11 05/10/2019 5100-48100-62025 204328 Fire Station #3 - Storm Water 10.83 05/10/2019 0101-41920-62025 204329 Community Center - Storm Water 492.98 05/10/2019 2130-44000-62025 204330 Country Oaks Pk - Storm Water 10.83 05/10/2019 0101-45000-62025 204332 Hickory Meadows Pk - Storm Wat 10.83 05/10/2019 0101-45000-62025 204348 Fire Station #1 -Storm Water 10.83 05/10/2019 010141192062025 204349 Crooked Lake Boat Landing 10.83 05/10/2019 0101-45000-62025 212987 AP -Computer Check Proof List by Veador (05/09/2019 - 11:04 AM) Page 3 Invoice No Description Amount Payment Date Acct Number Reference Eveland Fields - Stone Water 10.83 05/10/2019 0101-45000-62025 212988 Fox Meadow Park - Stone Water 10.83 05/10/2019 010145000-62025 212989 Hawkridge Park - Storm Water 10.83 05/10/2019 0101-45000-62025 212990 Hidden Creek E Pk - Storm Wat 10.83 05/10/2019 0101-45000-62025 212991 Hills Of Bunker Lk W Park 10.83 05/10/2019 0101-45000-62025 212992 Northwoods East Park - Storm .10.83 05/10/2019 0101-45000-62025 212993 Northwoods West Park - Storm 10.83 05/10/2019 0101-45000-62025 212994 Oak Bluff Park - Storm Water 10.83 05/10/2019 0101-45000-62025 212995 Pine Hills Park - Stone Water 10.83 05/10/2019 0101-45000-62025 212996 Pleasant Oaks Park - Storm Wat 10.83 05/10/2019 0101-45000-62025 212997 Prairie Knoll Park - Storm 10.83. 05/10/2019 0101-4500062025 212998 Water Tower #1 - Stoma Water 10.83 05/10/2019 5100-48100-62025 212999 Pumphouse #8 - Storm Water 10.83 05/10/2019 5100-48100-62025 213000 Red Oaks W Pk - Storm Water 10.83 05/10/2019 0101-45000-62025 213001 Terrace Park - Storm Water 10.83 05/10/2019 0101-45000-62025 213002 Timber Trails Park - Storm Wat 10.83 05/10/2019 0101-45000-62025 213003 Wild Iris Park - Storm Water 10.83 05/10/2019 0101-45000-62025 213004 Pumphouse #1 - Storm Water 10.83 05/10/2019 5100-48100-62025 213005 Pumphouse #2 - Storm Water 10.83 05/10/2019 5100-48100-62025 213006 Pumphouse #3 - Storm Water 10.83 05/10/2019 510048100-62025 213007 Pumphouse #5 - Storm Water 10.83 05/10/2019 5100-48100-62025 213008 Laagseth park -Storni Water 10.83 05/10/2019 0101-45000-62025 213009 Chesterton Commons Park 10.83 05/10/2019 0101-45000-62025 213012 Nordeens Park -Storm Water 10.83 05/10/2019 0101-45000-62025 213013 Creekview Crossing Park 10.83 05/10/2019 0101-45000-62025 213014 Kelsey Round Lk Park 10.83 05/10/2019 0101-45000-62025 213015 Snomman Park - Storm Water 10.83 05/10/2019 0101-45000-62025 213016 Fire Station#2 10.83 05/10/2019 0101-41920-62025 213076 Shady Knoll Park - Storm Water 10.83 05/10/2019 0101-45000-62025 213078 Oak Bluff Park 17.41 05/10/2019 0101-45000-62010 212995 Rose Park - Irrigation 17.41 05/10/2019 010145000-62010 214132 Public Works 1,222.82 05/10/2019 010141930-62010 204320 1929 Crosstown Blvd 10.83 05/10/2019 0101-41930-62025 204321 Sunshine Park 239.74 05/10/2019 0101-41970-62010 204322 City Hall/Senior Center 634.72 05/10/2019 0101-41910-62010 204323 Pumphouse #6 17.41 05/10/2019 510048100-62010 204324 Pumphouse #7 18.69 05/10/2019 510048100-62010 204325 Hidden Creek North Park 17.50 05/10/2019 0101-45000-62010 204326 Shadowbrook East Park 17.50 05/10/2019 0101-45000-62010 204327 Water Treatment Plant 1,766.89 05/10/2019 5100-48100-62010 204328 Fire Station #3 263.14 05/10/2019 0101-41920-62010 204329 Community Center 3,660.20 05/10/2019 2130-44000-62010 204330 Community Center 11320 05/10/2019 2130-44100-62010 204330 AP -Computer Check Proof List by Vendor (05/09/2019 - 11:04 AM) Page 4 Invoice No Description Amount Payment Date Acct Number Reference County Oaks Park 17.50 05/10/2019 010145000-62010 204332 Jay St Sprinkler House 17.50 05/10/2019 2110-00000-11310 204333 ASN Ballfields 170.37 05/10/2019 0101-45000-62010 204334 ASN Sprinkler House 17.50 05/10/2019 0101-45000-62010 204335 Community Garden Plots 17.50 05/10/2019 4180-49300-62010 204339 Woodland Estates Park 17.50 05/10/2019 0101-45000-62010 204340 Terrace Park - Irrigation 17.41 05/10/2019 0101-45000-62010 213002 Hickory Meadow Park 17.50 05/10/2019 0101-45000-62010 204348 Fire Station #1 129.14 05/10/2019 010141920-62010 204349 2600138th Ave NW 14.55 05/10/2019 4501-49300-62010 204350 Pumphouse#3 17.41 05/10/2019 5100-48100-62010 213007 Slyzuk Property 10.83 05/10/2019 0101-41930-62025 214226 Wild Iris Park 17.41 05/10/2019 0101-45000-62010 213004 2542 13th Ave- Sewer 244.60 05/10/2019 4520-49300-62010 218035 2542138th Ave - Storm Water 12.17 05/10/2019 4520-49300-62025 218035 Thorson Property 10.83 05/10/2019 0101-41930-62025 218109 2543 Bunker Lk Blvd - Sewer 244.60 05/10/2019 4520-49300-62010 217539 2543 Bunker Lk Blvd - Storm 11.69 05/10/2019 4520-49300-62025 217539 2557 Bunker Lk Blvd - Sewer 244.60 05/10/2019 4520-49300-62010 217540 2557 Bunker Lk Blvd - Storm 11.69 05/10/2019 4520-49300-62025 217540 2526 138th Ave- Sewer 244.60 05/10/2019 4520-49300-62010 217568 Check Total: Vendor: CollinsS Steve Collins ACC3v3 3 v 3 Ma May 19 100.00 840.00 Check Total: - 840.00 Check Sequence; 15 05/09/2019 0101-41970-63105 Check Sequence: 16 05/10/2019 0101-45000-62020 Check Sequence: 17 05/09/2019 2130-44300-63005 Vendor: Comcast5 Comcast Check Total: 11,973.21 Vendor: CitwdPlu Citywide Plumbing, LLC 94.98 Sunshine Park Sunshine Park faucet install 344.00 94.98 05/10/2019 Check Total: 344.00 Vendor: ClassCon Classic Construction 0101-41920-62030 21999 Fire Station#3 Dumping Fee for Blocks 100.00 Check Total: Vendor: CollinsS Steve Collins ACC3v3 3 v 3 Ma May 19 100.00 840.00 Check Total: - 840.00 Check Sequence; 15 05/09/2019 0101-41970-63105 Check Sequence: 16 05/10/2019 0101-45000-62020 Check Sequence: 17 05/09/2019 2130-44300-63005 Vendor: Comcast5 Comcast Check Sequence: 18 8772107890001086 Public Works - Internet 94.98 05/10/2019 0101-41930-62030 8772107890001086 City Hall - Internet 94.98 05/10/2019 0101-41910-62030 8772107890001086 Fire Station#2 41.90 05/10/2019 0101-41920-62030 8772107890001086 Fire Station#3 66.85 05/10/2019 0101-41920-62030 ACH Enabled: False ACH Enabled: False ACH Enabled: False ACH Enabled: False AP -Computer Check Proof List by Vendor (05/09/2019 - 11:04 Alvl) Page 5 Invoice No Description 8772107890001086 Public Works 8772107890001086 Public Works 8772107890001086 Water Treatment Plant 8772107890001086 Community Center 8772107890001086 Sunshine Park 8772107890001086 City Hall 8772107890001086 Fire Station #1 8772107890001086 Andover Station N Ballfields Amount Payment Date Acct Number 23.35 Check Total: Vendor: CoonRapi City of Coon Rapids 12567 CR water 12567 CR 1st Qtr Sewer -2019 114.75 Check Total: Vendor: CoumSSv Country Side Services of MN, Inc 1-102246-01 19-08 floor liners 05/10/2019 Check Total: Vendor: Dalco Dalco 3443207 Cleaning supplies - Sunshine/ASN 3445847 Surface Cleaner & Toilet Tissue 05/10/2019 Check Total: Vendor: DelmOil Dean Oil Company 61633 433 gl unleaded 61634 1289 gl diesel 05/10/2019 Check Total: Vendor: DemarsJu Justin Demers LTS ITS Mar -May 19 Check Total: Vendor: DeptLabo Department of Labor & Industry APRIL0030042019 April 2019 Surcharge Report APRIL0030042019 April 2019 Surcharge Report Check Total: Amount Payment Date Acct Number 23.35 05/10/2019 0101-41930-62030 93.40 05/10/2019 5100-48100-62030 114.75 05/10/2019 5100-48100-62030 215.28 05/10/2019 2130-44000-62030 41.90 05/10/2019 0101-41970-62030 221.59 05/10/2019 0101-41910-62030 43.59 05/10/2019 0101-41920-62030 41.90 05/10/2019 0101-41980-62030 1,094.47 84.00 7,933.18 8,017.18 109.99 109.99 756.71 210.16 966.87 1,093.33 3,538.31 4,631.64 100.50 100.50 4,099.59 -81.99 4,017.60 Check Sequence: 19 05/09/2019 5100-48100-55110 05/09/2019 5200-48200-55210 Check Sequence: 20 05/09/2019 4180-49300-65400 Check Sequence: 21 05/09/2019 0101-45000-61025 05/10/2019 2130-44000-61020 Check Sequence: 22 05/09/2019 6100-48800-61045 05/09/2019 6100-48800-61050 Check Sequence: 23 05/09/2019 2130-44300-63005 Check Sequence: 24 05/10/2019 0101-00000-23201 05/10/2019 0101-42300-54325 Reference ACH Enabled: False ACH Enabled: False ACH Enabled: False ACH Enabled: False ACE Enabled: False ACH Enabled: False AP -Computer Check Proof List by Vendor (05/09/2019 - 11:04 AM) Page 6 Invoice No Description Amount Payment Date Acct Number Reference Vendor: ECM ECM Publishers, Inc. Check Sequence: 25 ACH Enabled: False 692023 17-26 bids 945.00 05/09/2019 4180-49300-63025 692024 18-39 bids 742.50 05/09/2019 4120-49300-63025 692025 Rezoning & prelim Plat Shadowbrook 56.25 05/09/2019 010141500-63025 692026 Rezoning Catchers Creek West 56.25 05/09/2019 0101-41500-63025 Check Total: 1,800.00 Vendor: EganSery Egan Service Check Sequence: 26 ACH Enabled: False JC10189633 04/19 Andover/Crosstown RR Maint 765.75 05/10/2019 0101-43400-62300 Check Total: 765.75 Vendor: ElecSyst Electric Systems of Anoka, Inc Check Sequence: 27 ACH Enabled: False 7243 Repair Siren #8 304.64 05/10/2019 0101-42400-63010 7243-2 Repair Siren #8 425.00 05/10/2019 0101-42400-63010 Check Total: 729.64 Vendor: EmerAppa Emergency Apparatus Maint Check Sequence: 28 ACE Enabled: False 105766 #4886 gauge 207.07 05/09/2019 6100-48800-61115 Check Total: 207.07 Vendor: EnvEquip Environmental Equipment Check Sequence: 29 ACH Enabled: False 15163 171 / stock - switch gutter broom 110.42 05/09/2019 6100-48800-61115 Check Total 110.42 Vendor: ESSBmS ESS Brothers & Sons, Inc. Check Sequence: 30 ACH Enabled: False ZZ1851 EBS super glue 422.40 05/09/2019 5200-48200-61140 Check Total: 422.40 Vendor: FishConn Connie Fish Check Sequence: 31 ACH Enabled: False Replace Mail Box 61.05 05/10/2019 0101-43200-61105 Check Total: 61.05 Vendor: ForceAm Force America Distributing LLC Check Sequence: 32 ACH Enabled: False IN001-1337464 978 - armrestjoystick dual axis 907.71 05/09/2019 6100-48800-61115 ' Check Total: 907.71 Vendor: Frattalo Fmttallone's Hardware Ste Check Sequence: 33 ACE Enabled: False AP -Computer Check Proof List by Vendor (05/09/2019 - 11:04 AM) Page 7 Invoice No Description Amount Payment Date Acct Number Reference 35142 Painters Tool 12.28 05/10/2019 5100-48100-61205 35150 Snap Bolt 11.16 05/10/2019 0101-45000-61020 35151 Key Kwikset 7.77 05/10/2019 010145000-61020 35156 Pipe PVC for Unit #07-191 13.99 05/10/2019 6100-48800-61115 35215 Handle 9.49 05/10/2019 0101-42200-61005 35266 Valve Boiler for Unit #16-347 10.98 05/10/2019 6100-48800-61115 35324 Misc. Supplies 16.58 05/10/2019 0101-42200-61005 35357 Grass Seed& Turf Build Quick Fix 58.95 05/10/2019 4140-49300-61005 Check Total: 141.20 Vendor: Gonyeallo Gonyea Homes, Inc. Check Sequence: 34 ACH Enabled: False escrow refund Crack Seal / Seal Coat refund 575.54 05/09/2019 2410-41600-63900 escrow refund Crack Seal / Seal Coat refund 4,908.00 05/09/2019 2410-00000-24101 Check Total: 5,483.54 Vendor: GopherSt Gopher State One -Call Inc Check Sequence: 35 ACH Enabled: False 9040176 April 2019 locates 343.58 05/09/2019 5100-48100-63040 9040176 April 2019 locates 343.57 05/09/2019 5200-48200-63040 Check Total: 687.15 Vendor: GovDeals GovDeals, Inc Check Sequence: 36 ACH Enabled: False 4508-042019 2006 F250 sale 340.05 05/09/2019 5100-48100-58155 Check Total: 340.05 Vendor: HeertSoa Heart & Soul, LLC Check Sequence: 37 ACH Enabled: False 8486 Annual Administrative Fee 2019 25.00 05/10/2019 0101-41230-61320 Check Total: . 25.00 Vendor: HydraPlu Hydraulics Plus & Consulting Check Sequence: 38 ACH Enabled: False 11511 11-582 motor labor 174.00 05/09/2019 6100-48800-63135 Check Total: 174.00 Vendor: IagerRan Ingersoll Rand Company Check Sequence: 39 ACH Enabled: False 30751298 Labor for Repairs 2,019.88 05/10/2019 5100-48100-63100 Check Total: 2,019.88 Vendor: ImtrRes Instrumental Research, Inc Check Sequence: 40 ACH Enabled: False 1738 April 2019 Total Coliform Testing 190.00 05/10/2019 510048100-63005 AP -Computer Check Proof List by Vendor (05/09/2019 - 11:04 AM) Page 8 Invoice No Description - Amount Payment Date Acct Number Reference 190.00 101. 214.00 214.00 537.50 12.84 550.34 2,428.34 29,127.60 31,555.94 338.92 643.75 982.67 1,000.00 1,000.00 427.50 427.50 Check Sequence: 41 05/10/2019 0101-41970-61120 Check Sequence: 42 05/09/2019 2130-44300-63005 Check Sequence: 43 05/09/2019 2130-44300-63005 05/09/2019 2130-44300-61020 Check Sequence: 44 05/10/2019 2130-44300-61020 Check Sequence: 45 05/09/2019 2410-41600-63900 05/09/2019 2410-00000-24101 Check Sequence: 46 05/09/2019 610048800-61115 05/09/2019 6100-48800-63135 Check Sequence: 47 05/10/2019 6200-48900-62105 Check Sequence: 48 05/09/2019 0101-45000-62020 ACH Enabled: False ACH Enabled: False ACE Enabled: False ACH Enabled: False ACH Enabled: False ACH Enabled: False ACH Enabled: False ACH Enabled: False AP -Computer Check Proof List by Vendor (05/09/2019 - 11:04 AM) Page 9 Check Total: Vendor: InterBat Interstate All Battery Center 1901202004851 Batteries Check Total: Vendor: JurgenLu Lucas Jorgensen LTS LTS Mar -May 19 Check Total: Vendor: KalmesAs Ashley Kalmes LTS LTS Mar -May 19 training food training food Check Total: Vendor: Kriss Kriss Premium Products Inc 161391 CWT -350 Biocide Check Total: Vendor: LandTid Land Title, Inc. escrow refund Crack Seal / Seal Coat Refund escrow refund Crack Seal / Seal Coat Refund Check Total: Vendor: LanoEqui Lane Equipment, Inc. 02-664220 #70 -BPA Wheel sen 02-664220 - #70 -labor Check Total: Vendor: LMNCIT League of Minnesota Cities 14108 Deductible for J. Wallace Check Total: Vendor: LepageSo Lepage & Sons 0071043 04/17/19 30 yd dumpster Check Total: 190.00 101. 214.00 214.00 537.50 12.84 550.34 2,428.34 29,127.60 31,555.94 338.92 643.75 982.67 1,000.00 1,000.00 427.50 427.50 Check Sequence: 41 05/10/2019 0101-41970-61120 Check Sequence: 42 05/09/2019 2130-44300-63005 Check Sequence: 43 05/09/2019 2130-44300-63005 05/09/2019 2130-44300-61020 Check Sequence: 44 05/10/2019 2130-44300-61020 Check Sequence: 45 05/09/2019 2410-41600-63900 05/09/2019 2410-00000-24101 Check Sequence: 46 05/09/2019 610048800-61115 05/09/2019 6100-48800-63135 Check Sequence: 47 05/10/2019 6200-48900-62105 Check Sequence: 48 05/09/2019 0101-45000-62020 ACH Enabled: False ACH Enabled: False ACE Enabled: False ACH Enabled: False ACH Enabled: False ACH Enabled: False ACH Enabled: False ACH Enabled: False AP -Computer Check Proof List by Vendor (05/09/2019 - 11:04 AM) Page 9 Invoice No Description Amount Payment Date Acct Number Reference Vendor: LisyKayi Kaylin Lisy Check Sequence: 49 ACH Enabled: False LTS LTS Mar -May 19 247.50 05/09/2019 2130-44300-63005 Check Total: 247.50 Vendor: LubrTech Lube -Tech Check Sequence: 50 ACH Enabled: False 1369230 diesel additive 279.38 05/09/2019 6100-48800-61050 Check Total: 279.38 Vendor: MacQueen MacQueen Equipment Inc. Check Sequence: 51 ACH Enabled: False W04348 17-99 display 179.23 05/09/2019, 6100-48800-61115 W04348 17-99 display 497.50 05/09/2019 6100-48800-63135 Check Total: 676.73 Vendor: MattsoSa Samantha Mattson Check Sequence: 52 ACH Enabled: False LTS LTS Mar -May 19 209.50 05/09/2019 2130-44300-63005 Check Total: 209.50 Vendor: Menerds Menards Check Sequence: 53 ACH Enabled: False 215 split rail fence repair 70.53 05/09/2019 0101-45000-61105 338 cable look/ drain valves 47.02 05/09/2019 0101-45000-61020 96413 Paint & Supplies 72.84 05/10/2019 0101-45000-61020 99132 Misc. Supplies 15.76 05/10/2019 0101-45000-61020 99853 Misc. Supplies 1.75 05/10/2019 0101-41920-61120 99903 number combo cable lock 7.47 05/09/2019 010145000-61020 99905 cable look 27.57 05/09/2019 0101-45000-61020 ' Check Total: 242.94 Vendor: MNEquipu Minnesota Equipment Check Sequence: 54 ACH Enabled: False P88052 rope / starter ro 23.40 05/09/2019 6100-48800-61020 P88052 air filter / 16' chain 57.19 05/09/2019 6100-48800-61115 Check Total: 80.59 Vendor: MTIDist MTI Distributing Inc Check Sequence: 55 ACH Enabled: False 1209711-00 585 -blade service pack 259.67 05/09/2019 6100-48800-61115 1209711-01 11-583/16-580 = blade kit 496.56 05/09/2019 6100-48800-61115 Check Total: 756.23 Vendor: MCFOA Municipal Clerk &.Finance Officers Association Check Sequence: 56 ACH Enabled: False AP -Computer Check Proof List by Vendor (05/09/2019 - 11:04 AM) Page 10 Invoice No Description Amount Payment Date Acct Number Reference Membership fees Membership fees - M.Hartner 45.00 05/09/2019 0101-41300-61320 AP -Computer Check Proof List by Vendor (05/09/2019 - 11:04 AM) Page 11 Check Total: 45.00 Vendor: NelsonJa Jamie Nelson Check Sequence: 57 ACH Enabled: False ACC 3 v 3 ACC 3 v 3 Mar -May 19 225.00 05/09/2019 2130-44300-63005 Check Total: 225.00 Vendor: NoStTowi North Star Towing, Inc. Check Sequence: 58 ACH Enabled: False 66283 #169 towing 150.00 05/09/2019 6100-48800-63135 Check Total: 150.00 Vendor: OReiAuto O'Reilly Auto Parts Check Sequence: 59 ACH Enabled: False 3253-402693 #4821 - sealed beam 6.59 05/09/2019 6100-48800-61115 3253403559 oil filter 29.62 05/09/2019 6100-48800-61115 3253-403852 fuel filter 19.68 05/09/2019 6100148800-61115 3253-403970 18-172 cabin filter 13.28 05/09/2019 6100-48800-61115 3253-404012 oil filter 52.50 05/09/2019 6100-48800-61115 3253-404037 #577 Shock/gas-magnum 220.76 05/09/2019 6100-48800-61115 3253404054 motor solenoid 21.96 05/09/2019 6100-48800-61115 3253-404995 #577- ujoint and strap kit 30.56 05/09/2019 6100-48800-61115 3253-405305 Shop Tool - Disconnect 11.99 05/09/2019 6100-48800-61205 Check Total: 406.94 Vendor: OsterAbb Abbie Oster Check Sequence: 60 ACH Enabled: False LTS LTS Mar -May 19 132.75 05/09/2019 2130-44300-63005 Check Total: 132.75 Vendor: PartiBou Parties That Bounce, LLC Check Sequence: 61 ACH Enabled: False 521 Jan - May 2019 Castle & Slide Rental 405.00 05/10/2019 213044400-63005 Check Total: 405.00 Vendor: PietschR Rachel Pietsch Check Sequence: 62 ACH Enabled: False LTS LTS Apr -May 19 71.00 05/09/2019 2130-44300-63005 Check Total: 71.00 Vendor: Plunkett Phu kett's Pest Control, Inc. Check Sequence: 63 ACH Enabled: False 6253942 Pest Control 72.52 05/10/2019 2130144000-63010 6256142 Pest Control 156.00 05/10/2019 0101-41920-63010 AP -Computer Check Proof List by Vendor (05/09/2019 - 11:04 AM) Page 11 Invoice No Description Amount Payment Date Acct Number Reference 6258954 Pest Control 123.73 05/10/2019 0101-41980-63010 6258955 Pest Control 123.73 05/10/2019 0101-41970-63010 Check Total: 475.98 Vendor: PowLift Power Lift, Inc. Check Sequence: 64 ACE Enabled: False 142837 Power Lift 172.50 05/10/2019 2130-44400-61120 142837 Power Litt - 172.50 05/10/2019 2130-44300-61120 Check Total: 345.00 Vendor: PowSysSe Power Systems Services, Inc. Check Sequence: 65 ACE Enabled: False 00101518 Labor for Generator 1,821.00 05/10/2019 2130-44000-63105 Check Total: 1,821.00 Vendor: PralutsD Danielle Pralutsky Check Sequence: 66 ACH Enabled: False LTS ITS Mar -May 19 302.75 05/09/2019 2130-44300-63005 Check Total: 302.75 Vendor: PrintEut Printing Enterprises, Inc Check Sequence: 67 ACH Enabled: False 62691 May/June 2019 Andover Newsletter 1,580.00 05/10/2019 0101-41210-63030 Check Total: 1,580.00 Vendor: RaabollB Brendon Raabolle Check Sequence: 68 ACH Enabled: False LTS LTS Mar -May 19 165.00 05/09/2019 2130-44300-63005 Check Total: 165.00 Vendor: RussellN Nate Russell Check Sequence: 69 ACH Enabled: False LTS LTS Mar -May 19 209.00 05/09/2019 2130144300-63005 Check Total: 209.00 Vendor: SioValEn Sioux Valley Environmental Inc Check Sequence: 70 ACH Enabled: False 10558 Svenfloc 1,890.00 05/10/2019 5100-48100-61040 Check Total: 1,890.00 Vendor: SlteOnel, SiteOne Landscape Supply Check Sequence: 71 ACH Enabled: False 90547382-001 24v backpack sprayer 189.62 05/09/2019 0101-45000-61205 90547464-001 Liquid Herbicide 487.92 05/10/2019 0101-45000-61130 AP -Computer Check Proof List by Vendor (05/09/2019 - 11:04 AM) Page 12 Invoice No Description Amount Payment Date Acct Number Reference Check Total: 677.54 Vendor: SLSERC Sl-Serco Check Sequence: 72 ACH Enabled: False 11076568C April 19 meter reads 8,182.40 05/09/2019 5100-48100-63010 Check Total: 8,182.40 Vendor: SmithMar Mark Smith Check Sequence: 73 ACH Enabled: False escrow refund Crack Seal / Seal Coat Refund 3,253.25 05/09/2019 2410-00000-24101 escrow refund - Crack Seal / Seal Coat Refund 178.75 05/09/2019 2410-41600-63900 Check Total: 3,432.00 Vendor: SmithBr Smith Brothers Decorating Check Sequence: 74 ACE Enabled: False 25771 gray paint 192.96 05/09/2019 5100-48100-61120 Check Total: 192.96 Vendor: SWDevelo SW Development, LLC Check Sequence: 75 ACH Enabled: False escrow refund Crack Seal / Seal Coat Refund 19,741.00 05/092019 2410-00000-24101 escrow refund Crack Seal/ Seal Coat Refund 1,796.05 05/09/2019 2410-41600-63900 Check Total: 21,537.05 Vendor: THConstr TH Construction of Anoka, Inc. - Check Sequence: 76 ACH Enabled: False escrow refund Crack Seal / Seal Coat Refund 501.97 05/09/2019 2410-41600-63900 escrow refund Crack Seal / Seal Coat Refund 5,639.39 05/092019 2410-00000-24101 Check Total: 6,141.36 Vendor: Timesave Timesaver Check Sequence: 77 ACH Enabled: False M24670 Park & Recreation Meeting 145.00 05/10/2019 0101-45000-63005 M24670 Planning & Zoning Meeting 145.00 05/10/2019 0101-41500-63005 M24670 City Council Meeting . 287.88 05/10/2019 0101-41100-63005 " Check Total: 577.88 Vendor: Turnefry Tyra Tumer Check Sequence: 78 ACH Enabled: False ACC 3 v 3 ACC 3 v 3 Ma May 19 150.00 05/09/2019 2130-44300-63005 Check Total: 150.00 Vendor: Vanlwaa Van Iwaarden Associates Check Sequence: 79 ACH Enabled: False Actuarial Services 1,680.00 05/10/2019 0101-41400-63005 AP -Computer Check Proof List by Vendor (05/09/2019 - 11:04 AM) - Page 13 Invoice No Description Amount Payment Date Acct Number Reference Actuarial Services 210.00 05/10/2019 5100-48100-63005 Actuarial Services 210.00 05/10/2019 5200-48200-63005 Check Total: 2,100.00 Vendor: WPWDevb W.P.W. Development Inc. Check Sequence: 80 ACH Enabled: False escrow refund Crack Seal / Seal Coat Refund 485.84 05/09/2019 2410-41600-63900 escrow refund Crack Seal / Seal Coat Refund 8,060.66 05/09/2019 2410-00000-24101 Check Total: - 8,546.50 Vendor. WHSecuri WH Security Check Sequence: 81 ACH Enabled: False 150-1681-3487 Security Service @ Sunshine Park 32.95 05/10/2019 0101-41970-63010 150-1682-7288 Security Service @ Andover Station No. 42.95 05/10/2019 0101-41980-63010 150-1693-9665 Security Service @Fire Station#1 67.90 05/10/2019 0101-41920-63010 Check Total: 143.80 Vendor: WiucekRa Rachel Wincek Check Sequence: 82 ACH Enabled: False LTS LTS 05/04/19 30.75 05/09/2019 2130-44300-63005 Check Total: 30.75 Total for Check Run: 171,769.87 Total of Number of Checks: 82 ' AP -Computer Check Proof List by Vendor (05/09/2019 - 11:04 Al) Page 14 Accounts Payable Computer Check Proof List by Vendor User: BrendaF Printed: 05/16/2019 - 3:45PM Batch: 00413.05.2019 Invoice No Description Vendor: KinectEG Kinect Energy Group 293224/58528621 Community Center 293224/59505743 Public Works Check Total: Vendor: SmiMarkR Mark R. Smith Hickory Meadows 2nd Addition Hickory Meadows 2nd Addition Check Total: Total for Check Run: Total of Number of Checks: Amount Payment Date Acct Number Check Sequence: 1 6,524.60 05/16/2019 2130-44000-62015 908.40 05/16/2019 0101-41930-62015 7,433.00 Check Sequence: 2 178.75 05/16/2019 2410-41600-63900 3.253.25 05/16/2019 2410-00000-24101 10,865.00 2 9 CITY Ut+ k-ND(?VER� Reference . ACH Enabled: False ACH Enabled: False AP -Computer Check Proof List by Vendor (05/16/2019 - 3:45 PM) Page 1 Accounts Payable Computer Check Proof List by Vendor User: BmndaF Printed: 05/17/2019 - 10:17AM Batch: 00421.05.2019 Invoice No Description Vendor: AnkCOOI Anoka Co Treasurer S190501A 2019 2nd Qtr Law Enforcement Contract 26,189.69 Check Total: Vendor: DesEarth Designing Earth Contracting Payment #1 Vet Mem Const-Nightgl to Tower Check Total: Vendor: Hawkinsl Hawkins& Baumgartner, P.A. April 2019 April 2019 Legal Services Check Sequence: 3 Check Total: Vendor: KcuchUnd Keuchle Underground, Inc. Payment #1 2019 Street Reconstruction Check Total: Vendor: McICounW Metro Council Wastewater 0001096008 June 2019 Sewer Services Check Total: Vendor: MetCounE Metropolitan Council Environmental Services April 2019 April 2019 Sac Report April 2019 April 2019 Sac Report 4140-49300-63010 Check Total: Vendor: OertelAr Oertel Architects 17 PW Veh Maint/Cold Storage/Site Wk AxY Oil lovna Amount Payment Date Acct Number Reference Check Sequence: 1 ACH Enabled: False 795,902.50 05/21/2019 0101-42100-63010 795,902.50 AP -Computer Check Proof List by Vendor (05/17/2019 - 10:17 AM) Page 1 Check Sequence:2 ACH Enabled: False 26,189.69 05/21/2019 4140-49300-63010 26,189.69 Check Sequence: 3 ACH Enabled: False 15,983.53 05/21/2019 0101-41240-63015 15,983.53 Check Sequence: 4 ACH Enabled: False 108,519.83 05/21/2019 4140-49300-63010 108,519.83 Check Sequence: 5 ACH Enabled: False 99,936.42 05/21/2019 5200-48200-63230 99,936.42 Check Sequence: 6 ACH Enabled: False -695.80 05/21/2019 0101-41400-58100 69,580.00 05/21/2019 0101-00000-23201 68,884.20 Check Sequence: 7 ACH Enabled: False 11,856.98 05/21/2019 4303-49300-63005 AP -Computer Check Proof List by Vendor (05/17/2019 - 10:17 AM) Page 1 Invoice No Description Amount Payment Date Acct Number Reference Check Total: Vendor: YMCAAnc YMCA of Greater Twin Cities - Andover 2018-2019 Andover YMCA Youth Ctr 09/18 - 03/19 Check Total: Total for Check Run: Total of Number of Checks: 11,856.98 Check Sequence: 8 18,001.00 05/21/2019 2320-41400-63005 18,001.00 1,145,274.15 8 ACH Enabled: False AP -Computer Check Proof List by Vendor (05/17/2019 - 10:17 AM) Page 2 1685 CROSSTOWN BOULEVARD N.W. • ANDOVER, MINNESOTA 55304 • (763) 755-5100 FAX (763) 755-8923 . WWW.AN DOVE RMN.GOV TO: Mayor and Council Members (._ CC: Jim Dickinson, City Administrat FROM: David Berkowitz, Director of Publi W rks/City Engineer SUBJECT: Award Bid/18-39/Lift Station #10 Improvements - Engineering DATE: May 21, 2019 INTRODUCTION The City Council is requested to accept bids and award the bid for Project 18-39, Lift Station #10 Improvements. DISCUSSION A sanitary sewer by-pass lift station (Yellow Pine Lift Station #10) has been identified in the City's Capital Improvement Plan for construction in 2019 due to continued residential development. The by- pass is needed to alleviate sewer pipe capacity issues within the Bluebird Trunk line. The by-pass will divert sanitary sewer flow from the development area northeast of Hanson Boulevard and Crosstown Boulevard to the Pinewood Trunk line which has excess capacity. The need for this improvement has also been identified in the City's Sanitary Sewer study. The three lowest bids received are as follows: Contractor Bid Amount Minger Construction Co, Inc. $760,929.58 Pember Companies, Inc. $769,678.55 Meyer Contracting, Inc. $825,350.47 Engineer's Estimate $720,000.00 BUDGETIMPACT The project will be funded by the City's Sanitary Sewer Trunk Fund. The 2019-2023 CIP has an estimated project cost of $700,000. With bids received the estimated total project cost will be approximately $890,000 which includes consultant design, consultant inspection and all other indirect costs. Although the bid exceeds the Engineer's Estimate, staff is recommending awarding the project as it is not likely the cost will be lower if rebid and it is important to construct the lift station bypass to provide sanitary sewer capacity for development. ACTION REQUIRED The City Council is requested to approve the resolution accepting bids and awarding the contract to Minger Construction Company_ in the amount of $ 760,929.58 for Project 18-39, Lift Station #10 Improvements. Respectfully submitted, David D. Berkowitz, P.E. Attachments: Resolution, Location Map, Bid Tabulation Summary CITY OF ANDOVER COUNTY OF ANOKA STATE OF MINNESOTA RES. NO. MOTION by Council member to adopt the following: A RESOLUTION ACCEPTING BIDS AND AWARDING CONTRACT FOR THE IMPROVEMENT OF PROJECT NO. 18-39 LIFT STATION #10 IMPROVEMENTS WHEREAS, pursuant to advertisement for bids as set out in Council Resolution No. 033-19 dated April 16. 2019, bids were received, opened and tabulated according to law with results of the three lowest bidders as follows: Contractor Bid Amount Minger Construction Co, Inc. $760,929.58 Pember Companies, Inc. $769,678.55 Meyer Contracting, Inc. $825,350.47 Engineer's Estimate $720,000.00 NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Andover to hereby accept the bids as shown to Minger Construction Company. Inc. as being the apparent low bidder. BE IT FURTHER RESOLVED TO HEREBY direct the Mayor and City Clerk to enter into a contract with Minger Construction Company Inc in the amount of $760,929.58 for construction of the improvements; and direct the City Clerk to return to all bidders the deposits made with their bids, except that the deposit of the successful bidder and the next two lowest bidders shall be retained until the contract has been executed and bond requirements met. MOTION seconded by Council member and adopted by the City Council at a regular meeting this 21St day of May , 2019, with Council members of the resolution, and Council members against, whereupon said resolution was declared passed. CITY OF ANDOVER ATTEST: Julie Trude - Mayor Michelle Hartner — Deputy City Clerk voting in favor voting a BID TABULATION Lift Station #10 Improvements Andover, MN BMI Project No. R12.117486 Bids Taken: Wednesday, May 15, 2019 Addendum No. 1: 5/6/2019 2:00 P.M. No. 2 5/9/2019 H9ANDWi12117486\6_PLANS-SPEMB_BID TABULATIONU 17486 BID TAB.DOCX BIDDERS AMOUNT BID 1 Minger Construction Co., Inc. $760,929.58 2 Pember Companies, Inc. $769,678.55 3 Meyer Contracting, Inc. $825,350.47 4 GM Contracting, Inc. $838,702.62 5 PCiRoads, LLC $916,504.95 6 7 8 9 10 11 12 13 14 15 16 17 18 H9ANDWi12117486\6_PLANS-SPEMB_BID TABULATIONU 17486 BID TAB.DOCX ABSTRACT OF BIDS LIFT STATION NO 10 IMPROVEMENTS CITY OF ANDOVER, MINNESOTA BMI PROJECT NO. R16.117486 ITEM MWOOT APPROX. DATE: 5/15/2019 2 3 4 s Engineers Estimate I MINGER CONSTRUCTION PEM13ER COMPANIES I MEYER CONTRACTING GM CONTRACTING PCiROADS LLC 1 2021.501 MOBILIZATION 1 LS $40,000.00 $40,000.00 $35,000.00 $35,000.00 $50,000.00 $50,000.00 $40,442.17 $40,442.17 $78,000.00 $78,000.00 $35,000.00 2 2104.502 REMOVE CURB & GUTTER 39 LF $10.00 $390.00 $6.75 $263.25 $8.00 $312.00 $8.10 $315.90 $5.00 $195.00 $40.00 3 2104.503 REMOVE PIPE SEWERS (STORM) 60 LF $10.00 $600.00 $8.00 $480.00 $20.00 $1,200.00 $18.00 $1,080.00 $6.50 $390.00 $95.00 4 2104.503 REMOVE CONCRETE PAVEMENT 107 SF $10.00 $1,070.00 $2.25 $240.75 $1.75 $187.25 $1.60 $171.20 $2.00 $214.00 $14.00 5 2104.503 REMOVE BITUMINOUS PAVEMENT 359 BY $10.00 $3,590.00 $5.00 $1,795.00 $6.65 $2,387.35 $4.00 $1,436.00 $7.00 $2,513.00 $17.00 6 2104.503 SAWING BITUMINOUS PAVEMENT (FULL DEPTH) 145 LF $4.00 $580.00 $2.50 $362.50 $4.00 $580.00 $5.80 $841.00 $2.26 $327.70 $10.00 7 2104.602 SALVAGE & REINSTALL SIGN 2 EA $150.00 $300.00 $150.00 $300.00 $170.00 $340.00 $150.00 $300.00 $300.00 $600.00 $307.00 8 2105.507 COMMON EXCAVATION (EV) (P) 120 CY $15.00 $1,800.00 $65.00 $7,800.00 $65.00 $7,800.00 $69.50 $8,340.00 $18.00 $2,160.00 $122.00 9 2105.601 DEWATERING 1 LS $5,000.00 $5,000.00 $75,000.00 $75,000.00 $20,000.00 $20,000.00 $23,583.00 $23,583.00 $0.01 $0.01 $26,000.00 10 2231.604 BITUMINOUS PATCH SPECIAL 1 (STREET) 102 BY $50.00 $5,100.00 $95.85 $9,776.70 $86.15 $8,787.30 $79.75 $8,134.50 $57.84 $5,899.68 $60.00 11 2231.604 BITUMINOUS PATCH SPECIAL 2(TRAIL) 257 SY $30.00 $7,710.00 $52.80 $13,569.60 $44.50 $11,436.50 $41.50 $10,665.50 $46.69 $11,999.33 $54.00 12 2301.504 CONCRETE PAVEMENT 12" 240 SF $40.00 $9,600.00 $44.20 $10,608.00 $14.25 $3,420.00 $24.25 $5,820.00 $23.00 $5,520.00 $25.00 13 2301.504 CONCRETE PAVEMENT 8" 904 SF $20.00 $18,080.00 $15.85 $14,328.40 $10.60 $9,582.40 $18.00 $16,272.00 $14.00 $12,656.00 $20.00 14 2401.601 EXCAVATION SUPPORT AND PROTECTION 1 ITS $10,000.00 $10,000.00 $25,000.00 $25,000.00 $5,000.00 $5,000.00 $45,773.00 $45,773.00 $2,500.00 $2,500.00 $60,000.00 15 2501.502 12" RC PIPE APRON (SALVAGED) 2 EA $1,000.00 $2,000.00 $600.00 $1,200.00 $645.00 $1,290.00 $1,078.00 $2,156.00 $821.00 $1,642.00 $770.00 16 2503.503 12" RC PIPE SEWER DES 3006 CL V 90 LF $75.00 $6,750.00 $52.00 $4,680.00 $64.00 $5,760.00 $66.25 $5,962.50 $53.00 $4,770.00 $164.00 17 2503.601 PUMPING (SANITARY BYPASS) 1 ITS $5,000.00 $5,000.00 $3,700.00 $3,700.00 $20,000.00 $20,000.00 $19,290.00 $19,290.00 $25,000.00 $25,000.00 $50,000.00 18 2503.602 CONSTRUCT BULKHEAD 1 EA $150.00 $150.00 $50.00 $50.00 $150.00 $150.00 $527.50 $527.50 $609.08 $609.08 $3,500.00 19 2503.602 12" PIPE ELBOW (PVC) 1 EA $150.00 $150.00 $350.00 $350.00 $2,150.00 $2,150.00 $1,548.00 $1,548.00 $566.13 $566.13 $500.00 20 2503.602 ADJUST SANITARY INSIDE DROP 1 LS $1,000.00 $1,000.00 $1,500.00 $1,500.00 $815.00 $815.00 $1,836.00 $1,836.00 $1,560.00 $1,560.00 $3,000.00 21 2503.602 CONNECT TO EXISTING SANITARY SEWER PIPE 1 EA $1,000.00 $1,000.00 $2,000.00 $2,000.00 $1,300.00 $1,300.00 $1,888.00 $1,888.00 $5,320.00 $5,320.00 $3,000.00 22 2503.602 CONNECT TO EXISTING SANITARY SEWER MANHOLE (CORE & BOOT) 1 EA $3,000.00 $3,000.00 $4,500.00 $4,500.00 $2,000.00 $2,000.00 $2,391.00 $2,391.00 54,963.00 $4,963.00 $5,000.00 23 2503.602 DUPLEX LIFT STATION 1 LS $240,000.00 $240,000.00 $262,000.00 $262,000.00 $275,555.00 $275,555.00 $284,019.00 $284,019.00 $283,000.00 $283,000.00 $307,000.00 24 2503.603 10" ID FORCEMAIN (DIRECTIONALLY DRILLED) (HDPE OR PVC) 3132 LF $90.00 $281,880.00 $70.00 $219,240.00 $82.00 $256,824.00 $77.50 $242,730.00 $95.00 $297,540.00 $80.00 25 2503.603 12" PVC SANITARY SEWER, SDR 35 12 LF $80.00 $960.00 $60.00 $720.00 $138.00 $1,656.00 $104.50 $1,254.00 $84.20 $1,010.40 $130.00 26 2504.602 CONNECT TO EXISTING WATERMAIN (WET TAP) 1 EA $6,500.00 $6,500.00 $6,500.00 $6,500.00 $4,000.00 $4,000.00 $6,447.00 $6,447.00 $4,388.20 $4,388.20 $12,000.00 27 2504.602 HYDRANT 1 EA $4,500.00 $4,500.00 $5,500.00 $5,500.00 $5,100.00 $5,100.00 $6,918.00 $6,918.00 $5,414.64 $5,414.64 $2,300.00 28 ITEM NOT USED 29 2504.603 6" WATERMAIN, DUCTILE IRON CL 52 12 LF $65.00 $780.00 $150.00 $1,800.00 $71.00 $852.00 $114.00 $1,368.00 $66.05 $792.60 $130.00 30 ITEM NOT USED 31 2506.502 ADJUST FRAME &RING CASTING 3 EA $350.00 $1,050.00 $750.00 $2,250.00 $700.00 $2,100.00 $525.00 $1,575.00 $416.72 $1,250.16 $511.00 32 2506.516 CASTING ASSEMBLY i EA $1,200.00 $1,200.00 $900.00 $900.00 $650.00 $650.00 $724.50 $724.50 $810.06 $810.06 $1,000.00 33 2506.603 CONSTRUCT SANITARY SEWER MANHOLE(TYPE 301) 10 LF $275.00 $2,750.00 $375.00 $3,750.00 $505.00 $5,050.00 $821.50 $8,215.00 $677.30 $6,773.00 $1,200.00 34 2521.518 6" CONCRETE WALK 107 SF $15.00 $1,605.00 $41.45 $4,435.15 $8.90 $952.30 $19.25 $2,059.75 $35.00 $3,745.00 $30.00 35 2531.503 B612 CURB & GUTTER 39 LF $30.00 $1,170.00 $100.20 $3,907.80 $32.00 $1,248.00 $55.00 $2,145.00 $68.00 $2,652.00 $85.00 36 2531.618 TRUNCATED DOMES 20 SF $50.00 $1,000.00 $61.55 $1,231.00 $60.00 $1,200.00 $50.00 $1,000.00 $55.00 $1,100.00 $85.00 37 2540.602 BOLLARD 7 EA $350.00 $2,450.00 $889.34 $6,225.38 $615.00 $4,305.00 $627.00 $4,389.00 $375.00 $2,625.00 $200.00 38 2557.602 CHAIN LINK GATE (6' VINYL COATED) 20 LF $500.00 $10,000.00 $225.00 $4,500.00 $200.00 $4,000.00 $187.50 $3,750.00 $187.50 $3,750.00 $190.00 39 2557.603 CHAIN LINK FENCE (6' VINYL COATED) 76 LF $50.00 $3,600.00 $60.00 $4,560.00 $55.20 $4,195.20 $52.00 $3,952.00 $52.00 $3,952.00 $52.00 40 2563.601 TRAFFIC CONTROL 1 LS $12,000.00 $12,000.00 $10,000.00 $10,000.00 $30,000.00 $30,000.00 $39,541.15 $39,541.15 $37,500.00 $37,500.00 $5,500.00 41 2573.502 STORM DRAIN INLET PROTECTION 3 EA $150.00 $450.00 $175.00 $525.00 $115.00 $345.00 $125.00 $375.00 $110.00 $330.00 $400.00 42 2573.503 SILT FENCE, TYPE PA 250 LF $2.50 $625.00 $2.00 $500.00 $2.10 $525.00 $1.80 $450.00 $2.00 $500.00 $2.41 43 2573.533 SEDIMENT CONTROL LOG, TYPE WOOD CHIP 50 LF $5.00 $250.00 $3.95 $197.50 $3.70 $185.00 $3.50 $175.00 $3.50 $175.00 $4.22 44 2573.535 STABILIZED CONSTRUCTION EXIT 1 EA $750.00 $750.00 $750.00 $750.00 $600.00 $600.00 $500.00 $500.00 $1,849.23 $1,849.23 $3,000.00 45 2574.507 TOPSOIL BORROW (LV) 160 CY $26.00 $4,160.00 $10.00 $1,600.00 $65.00 $10,400.00 $55.00 $8,800.00 $32.00 $5,120.00 $40.00 46 2574.508 FERTILIZER. TYPE 1 95 LB $50.00 $4,750.00 $1.15 $109.25 $1.05 $99.75 $1.00 $95.00 $1.00 $95.00 $1.21 47 2575.504 EROSION CONTROL BLANKET, CATEGORY 3N 1440 BY $2.75 $3,960.00 $3.00 $4,320.00 $1.70 $2,448.00 $2.60 $3,744.00 $1.60 $2,304.00 $2.00 48 2575.505 SEEDING 0.3 ACRE $3,000.00 $900.00 $655.00 $196.50 $800.00 $240.00 $500.00 $150.00 $750.00 $225.00 $905.00 49 2575.508 SEED MIXTURE, TYPE 25-151 80 LB $50.00 $4,000.00 $3.30 $264.00 $3.30 $264.00 $3.00 $240.00 $3.13 $250.40 $4.00 50 2575.604 GRASS PAVER 30 BY $100.00 $3,000.00 $64.30 $1,929.00 $63.35 $1,900.50 $50.00 $1,500.00 $125.00 $3,750.00 $250.00 51 2582.518 CROSSWALKPAINT 72 SF $10.00 $720.00 $7.15 $514.80 $6.75 $486.00 $6.40 $460.80 $5.50 $396.00 $51.00 TOTAL: $718,080.00 $760,929.58 $769,878.55 $825.350.47 $838,702.62 $916,504.95 Y 0m F O `♦ E 1685 CROSSTOWN BOULEVARD N.W. • ANDOVER, MINNESOTA 55304 • (763) 755-5100 FAX (763) 755-8923 • WWW.ANDOVERMN.GOV TO: Mayor and City Council CC: Jim Dickinson, City Admini FROM: Michelle Harmer, Deputy City Clerk SUBJECT: Approve Refuse/Recycler Hauler Licenses DATE: May 21, 2019 INTRODUCTION Refuse/recycle hauler licenses expire on May 31, 2019. DISCUSSION The following licensed haulers in the City have applied for renewal of their licenses. Ace Solid Waste (all trucks have passed inspection) Aspen Waste Systems Inc. Lepage & Sons Loe's Oil Company Randy's Sanitation Inc. (all trucks have passed inspection) Republic Services (all trucks have passed inspection) Walters Recycling & Refuse Waste Management ACTION REQUIRED The City Council is requested to approve residential and commercial licenses for the haulers listed above, contingent upon payment of appropriate fees and their trucks passing inspections performed by our mechanics. The license period will be from June 1, 2019 through May 31, 2020. (Reespectfully submitted, 1) . Michelle Harmer Deputy City Clerk Attach: License Applications 1685 CROSSTOWN BOULEVARD N.W. • ANDOVER, MINNESOTA 55304 • (763) 755-5100 FAX (763) 755-8923 • WWW.ANDOVERMN.GOV 1. Business 2. Address of LICENSE APPLICATION REFUSE/RECYCLE HAULERS City State Business Phone Number �J�✓�d 141 -mail Address 4. Owner of Name (Please print) Phone Number v Street 14ref City State Zip 64) 5s3�j 5. Attach a description of each piece of equipment proposed to be used in the collection operation. 6. Attach a schedule of services to be made to the customer including, but not limited to, proposed days of collection in different areas of the city. Attach a schedule of varying rates based on the volume of weight of the refuse collected indicating the charge for each size container or other schedule of charges. 8. Provide a certificate of public liability insurance in the amount of at least $100,000 for injuries, including accidental death, to any one person and in an amount not less than $300,000 for each accident; and for loss or damage to property in the amount of $50,000. 9. Check all types of materials you collect and indicate where they are taken for disposal/processing or recycling: Name & Location Garbage Tires Used Oil Appliances ea 10. 11 Name & Location of Disposal/Processing/Recycling Corrugated'�- Edible Food Waste Scrap Metal Yard Waste! Demolition/Construction Debris Paper/Paper Products Plastics Newspaper i Ashes Tree Debris X Office Paper Glass Other - specify License(s) Requested: Residential ($150) Number of trucks proposed to be licensed per truck) %7 Commercial ($150) Applicant acknowledges receipt of a copy of City Code Title 4, Chapter 2 and agrees to compl at all times with the provisions of said ordinance. k^., S b, - Date LI Fees: Residential License $150.00 License/Receipt # C! -Q D 19 - OU P,-.q,()i o0 Commercial License $150.00 Insurance Expiration Date:�— Per Truck Fee* $25.00 * $50.00 re -inspection fee per truck if 1st inspection fails. Action: Approved Denied Date *S 1685 CROSSTOWN BOULEVARD N.W. • ANDOVER, MINNESOTA 55304 • (763) 755-5100 FAX (763) 755-8923 . WWW.ANDOVERMN.GOV Business 2. Address 3. 4. 5. 6. LICENSE APPLICATION REFUSE/RECYCLE HAULERS Street State Business Phone Number\1�CA-mail Address Owner of the gollection service: Name (Please orint) .y. Phone Number Zip t (-\ _ _ . . 1 - _ _d Street Address Ci ` State Zip - ' Attach a description of each piece of equipment proposed to be used in the collection operation. Attach a schedule of services to be made to the customer including, but not limited to, proposed days of collection in different areas of the city. 7. Attach a schedule of varying rates based on the volume of weight of the refuse collected indicating the charge for each size container or other schedule of charges. 8. Provide a certificate of public liability insurance in the amount of at least $100,000 for injuries, including accidental death, to any one person and in an amount not less than $300,000 for each accident; and for loss or damage to property in the amount of $50,000. 9. Check all types of materials you collect and indicate where they are taken for disposal/processing or recycling: Name \&' yL_ocattio\n of Disposal/Processing/Recycling Garbage<� - `C � \A Tires \�% Used Oil Appliances \�� Name & Location of Disposal/Processing/Recycling (� Corrugated ��� \ y V����Q��` �( 1\ Edible Food Waste U�\Asz-�, Scrap Metal k�� WkA Yard Waste ft�L 31, Demolition/Construction Debris%%����_�VQ��� 1` '..- '.. Prod&V fj Plastics Newspaper\-A%M�- %� Ashest Tree Debris wk —�&-OfficePaper "k Glass Other - specify 10. License(s) Requested: Residential ($150) Commercial ($150) 11. Number of trucks proposed to be licensed ($25 per truck) Applicant acknowledges receipt of a copy of City Code Title 4, Chapter 2 and agrees to comply at at al� t the provisions of said ordinance. Signature Date Fees: Residential License $150.00 License/Receipt Commercial License $150.00 Insurance Expiration Date: 03,19 Per Truck Fee* Action: Approved $25.00 * $50.00 re -inspection fee per truck if 1St inspection fails. Denied Date 1685 CROSSTOWN BOULEVARD N.W. • ANDOVER, MINNESOTA 55304 • (763) 755-5100 FAX (763) 755-8923 • WWW.ANDOVERMN.GOV LICENSE APPLICATION REFUSE/RECYCLE HAULERS Business 2. Address of Business: K Business Phone Number ��—liX� E-mail Address 4. Owner of the collection service: A 1 - - — Name (Please print; Phone Number Y• { 1 Street Address City State ip 5. Attach a description of each piece of equipment proposed to be used in the collection operation. 6. Attach a schedule of services to be made to the customer including, but not limited to, proposed days of collection in different areas of the city. 7. Attach a schedule of varying rates based on the volume of weight of the refuse collected indicating the charge for each size container or other schedule of charges. 8. Provide a certificate of public liability insurance in the amount of at least $100,000 for injuries, including accidental death, to any one person and in an amount not less than $300,000 for each accident; and for loss or damage to property in the amount of $50,000. 9. Check all types of materials you collect and indicate where they are taken for disposal/processing or recycling: Name & Location of Disposal/Processing/Recycling Garbage Tires Used Oil Appliances Name & Location of Disposal/Processing/Recycling Corrugated Edible Food Waste Scrap Metal Yard Waste Demolition/Construction Debris Paper/Paper Products Plastics Newspaper Ashes Tree Debris Office Paper Glass Other - specify 10. License(s) Requested: V Residential ($150) Commercial ($150) 11. Number of trucks proposed to be licensed per truck) Applicant acknowledges receipt of a copy of City Code Title 4, Chapter 2 and agrees to comply at es with provisions of said ordinance. C� �-(L t Sgnature Date Fees: Residential License $150.00 License/Receipt# K cRb101-6Dal6 Commercial License $150.00 Insurance Expiration Date: Per Truck Fee* $25.00 * $50.00 re -inspection fee per truck if 1st inspection fails. Action: Approved Denied Date 1685 CROSSTOWN BOULEVARD N.W. • ANDOVER, MINNESOTA 55304 • (763) 755-5100 FAX (763) 755-8923 • WWW.ANDOVERMN.GOV 1. Business Name 2. Address LICENSE APPLICATION REFUSE/RECYCLE HAULERS 1:;t e_1 Street city state up 6 7 3. Business Phone Number 5_%5.2 9 E-mail Address 4. Owner of the collection service: < s Name (Please print) Phone Number n Street Address City State zip 5. Attach a description of each piece of equipment proposed to be used in the collection operation. 6. Attach a schedule of services to be made to the customer including, but not limited to, proposed days of collection in different areas of the city. 7. Attach a schedule of varying rates based on the volume of weight of the refuse collected indicating the charge for each size container or other schedule of charges. Provide a certificate of public liability insurance in the amount of at least $100,000 for injuries, including accidental death, to any one person and in an amount not less than $300,000 for each accident; and for loss or damage to property in the amount of $50,000. 9. Check all types of materials you collect and indicate where they are taken for disposal/processing or recycling: Name & Location of Disposal/Processing/Recycling Garbage Tires e / Used Oil J,Ct � �=� G kbef, Appliances Name &c Location of Disposal/Processing/Recycling Corrugated Edible Food Waste Scrap Metal Yard Waste Demolition/Construction Debris Paper/Paper Products Plastics Newspaper Ashes Tree Debris Office Paper Glass y , �" Other - specify [Lbw � i I,k i �'/ � / 10. License(s) Requested: Residential ($150) Commercial ($150) 11. Number of trucks proposed to be licensed '152 ($25 per truck) Applicant acknowl ges receipt of a copy of City Code Title 4, Chapter 2 and agrees to y at all time ith the provisions of said ordinance. %A ,4 teri Sign tore Date Fees: Residential License $150.00 License/Receipt# Commercial License $150.00 Insurance Expiration Date: 9-10-19 Per Truck Fee* 25.00 * $50.00 re -inspection fee per truck if 1" inspection fails. Action: Approved Denied Date Y O%F OVE. 1685 CROSSTOWN BOULEVARD N.W. • ANDOVER, MINNESOTA 55304 . (763) 755-5100 FAX (763) 755-8923 • WWW.ANDOVERMN.GOV Q K? LICENSE APPLICATION REFUSE/RECYCLE HAULERS Business Phone Numbe4 E-mail Address _ 4. Owner of the collection service: Name (Plea6e print - Phone Number Street Address -iTy State Zip 5. Attach a description of each piece of equipment proposed to be used in the collection operation. 6. ✓ Attach a schedule of services to be made to the customer including, but not limited to, proposed days of collection in different areas of the city. 7. ✓ Attach a schedule of varying rates based on the volume of weight of the refuse collected indicating the charge for each size container or other schedule of charges. 8. ✓ Provide a certificate of public liability insurance in the amount of at least $100,000 for injuries, including accidental death, to any one person and in an amount not less than $300,000 for each accident; and for loss or damage to / property in the amount of $50,000. 9. ;/ Check all types of materials you collect and indicate where they are taken for disposal/processing or recycling: Name & Location of Disposal/Processing/Recycling P" Garbage Tires Used Oil Appliances Name & Location of Disposal/Processing/Recycling Corrugated '/0 iii ;/♦ Edible Food Waste Yard Waste Paper/Paper Productsi ✓ Plastics Ashes Tree Debris ✓ Office +/ Glass i/ Other 10. License(s) Requested: Residential ($150)_ Commercial ($150) 11. Number of trucks proposed to be licensed /© ($25 per truck) Applicant acknowledges receipt of a copy of City Code Title 4, Chapter 2 and agrees to comply at all times with the provisions of said ordinance. Fees: Residential License $150.00 License/Receipt # C-- a b 1 q- 00,D i'a j2-aok 9_ ooa 13 Commercial License $150.00 Insurance Expiration Date: 16 — I — 19 Per Truck Fee* $25.00 * $50.00 re -inspection fee per truck if 1st inspection fails. Approved Denied Date I 1685 CROSSTOWN BOULEVARD N.W. • ANDOVER, MINNESOTA 55304 • (763) 755-5100 FAX (763) 755-8923 • WWW.ANDOVERMN.GOV LICENSE APPLICATION REFUSE/RECYCLE HAULERS Business Name f�:r*r1Ri r$T1 State Zip 3. Business Phone Number' u3 ` 7e� aU 4 E-mail Address i 4. Owner of the collection service: Name (Please print) Phone Number Street Address City State Zip 5. Attach a description of each piece of equipment proposed to be used in the collection operation. 6. Attach a schedule of services to be made to the customer including, but not limited to, proposed days of collection in different areas of the city. Attach a schedule of varying rates based on the volume of weight of the refuse collected indicating the charge for each size container or other schedule of charges. 8. Provide a certificate of public liability insurance in the amount of at least $100,000 for injuries, including accidental death, to any one person and in an amount not less than $300,000 for each accident; and for loss or damage to property in the amount of $50,000. Check all types of materials you collect and indicate where they are taken for disposal/processing or recycling: Name & Location of Disposal/Processing/Recycling Garbage i%Iyr, 1Cfp_ e:r a0+1 Xl 3foun Yl K Tires Used Oil i Appliances Name & Location of Disposal/Processing/Recycling Corrugated 9M=1DIK Edible Food Waste Scrap Metal -k—Yard WasteSZEC(��m- Demolition/ConstructionDeb`riis i Paper/Paper Products (V /l le', \( lom` M I nom Its Plastics Newspaper Ashes Tree Debris Office Paperminm W l� Glass Other - specify 10. License(s) Requested: Residential ('$1150) -A—Commercial ($150) 11. Number of trucks proposed to be licensed ($25 per truck) Applicant acknowledges receipt of a copy of City Code Title 4, Chapter 2 and agrees to comply at all times with the provisions of said ordinance. �v 1c signature Date icense Fees: Residential License Caul -i Commercial License $150.00 Insurance Expiration Date: _ Per Truck Fee* Action: Approved $25.00 * $50.00 re -inspection fee per truck if 15t inspection fails. Denied Date ND. 1685 CROSSTOWN BOULEVARD N.W. • ANDOVER, MINNESOTA 55304 • (763) 755-5100 FAX (763) 755-8923 • WWW.ANDOVERMN.GOV LICENSE APPLICATION REFUSE/RECYCLE HAULERS 2. Address of Street v City state Zip 3. Business Phone Number b5.1h'E-mail Address 4. Owpp,r_nf flip, rnllartinn oo,•..;..e• •• v ••wv vw Name leaseprint) Phone Number .t Street ddress V City State Zip 5. Attach a description of each piece of equipment proposed to be used in the collection operation. 6. Attach a schedule of services to be made to the customer including, but not limited to, proposed days of collection in different areas of the city. 7. Attach a schedule of varying rates based on the volume of weight of the refuse collected indicating the charge for each size container or other schedule of charges. 8. Provide a certificate of public liability insurance in the amount of at least $100,000 for injuries, including accidental death, to any one person and in an amount not less than $300,000 for each accident; and for loss or damage to property in the amount of $50,000. 9. Check all types of materials you collect and indicate where they are taken for disposal/processing or recycling: Name &Location of DisposaUPro%c�essing/Recycling Garbage k u,S ky 4nu Y,2�U.ifi F Tires Used Oil ✓ Appliances Name & Location of Disposal/Processing/Recycling Corrugated Edible Food Waste Scrap Metal Yard Waste bt �C.���Lowo1 �Demolition/ConstructionDebrislipua((�ylU�•�I Paper/Paper Products I Plastics Newspaper Ashes Tree Debris Office Paper Glass Other - specify 10. License(s) Requested: X Residential ($150) X Commercial ($150) 11. Number of trucks proposed to be licensed (' per truck) Applicant acknowledges receipt of a copy of City Code Title 4, Chapter 2 and agrees to comply at all times with the provisions of said ordinance. � 4 114L 731q —% Signature V J D to " Fees: Residential License $150.00 License/Receipt # C a 09 Commercial License $150.00 Insurance Expiration Date: Per Truck Fee* $25.00 * $50.00 re -inspection fee per truck if 1St inspection fails. Action: Approved Denied Date 1685 CROSSTOWN BOULEVARD N.W.. ANDOVER, MINNESOTA 55304 • (763) 755-5100 FAX (763) 755-8923 • WWW.ANDOVERMN.GOV LICENSE APPLICATION REFUSE/RECYCLE HAULERS Business Name 2. Address of Business: wow-,; )unlos Si- nc- (Uiri,me, 1N1 n 5,5gq SVeet City State zip Business Phone Number 1 -JZ96- 1104 E-mail Address 4. Owner of the collection service: Name (Please print) 5. Attach a description of each piece of equipment proposed to be used in the collection operation. 6. Attach a schedule of services to be made to the customer including, but not limited to, proposed days of collection in different areas of the city. 7. Attach a schedule of varying rates based on the volume of weight of the refuse collected indicating the charge for each size container or other schedule of charges. 8. Provide a certificate of public liability insurance in the amount of at least $100,000 for injuries, including accidental death, to any one person and in an amount not less than $300,000 for each accident; and for loss or damage to property in the amount of $50,000. 9. Check all types of materials you collect and indicate where they are taken for disposal/processing or recycling: Name & Location of Disposal/Processing/Recycling Garbage u l2 i V tV.� l i t � �� IC V P_ r� c 3� M g7ke 6yavR'f5 1014o33- get kvzV\ 0Au.7le it�vz Tires Lwatalil _X_ Appliances �A)M - ("l Chow- I5 16(Q � - PGf"n"' &�- h Mq7� �1rau L Name & Location of Disposal/Processing/Recycling Corrugated ja)iy1 Iu :n Ctl,es 11r121' t?Oc S".C(AtAMNI S+ftV 1MVIS Edible Food Waste Scrap Metal u)M wey) Gh;es 11\%'F 1$00 9y-cc.AL,," 9f Y1C- YWp)s Yard Waste 5YZ U30 i Aow 0e I14 P �C Demolition/Construction Debris l a pI o 6�yyk -fc, - 10033 191- V) i1n04* G`V` X Paper/Paper Products (A) M Ai Q5 PAV F i Rhe I�iyaariW ay %k hl 9�h l5 X Plastics i�, Newspaper Ashes Tree Debris '5'(-13 1030 Ma)(n 1rn ke Nlply Office Paper W M :j-,jjo(� }jQS IM Q r- 1960 gwad wnJ S-�- nE )n*If, Glass Other specify 10. License(s) Requested: _3 _Residential ($150) Commercial ($150) 11. Number of trucks proposed to be licensed ($25 per truck) Applicant acknowledges receipt of a copy of City Code Title 4, Chapter 2 and agrees to comply at 1 s with the provisions of said ordinance. Signature Date Fees: Residential License $150.00 License/Receipt # R.�bt`I- aoaa.� Commercial License $150.00 Insurance Expiration Date:Q Per Track Fee* Action: Approved $25.00 * $50.00 re -inspection fee per truck if 1" inspection fails. Denied Date 1685 CROSSTOWN BOULEVARD N.W. • ANDOVER, MINNESOTA 55304 • (763) 755-5100 FAX (763) 755-8923 • WWW.ANDOVERMN.GOV TO: Mayor and Councilmembers CC: Jim Dickinson, City Ad Joe Janish, Community FROM: Stephanie L. Hanson, City Planner SUBJECT: Accept QCD Drainage and Utility Easement - Planning DATE: May 21, 2019 0 As part of the Catcher's Creek East development project, City utilities will be extended from the south, through the property owned by Ms. Jan Thomas. Ms. Thomas is granting the City of Andover a Drainage and Utility Easement so City utilities can be extended to serve the Catcher's Creek East residential development and the future residential development known as Shadowbrook North. If the easement is not dedicated, Catcher's Creek East will not be able to move forward until the final plat for Shadowbrook North is approved and recorded with Anoka County. Although Shadowbrook North is in the preliminary platting process, the property owner may not file the final plat until 2020. The Quit Claim Deed has been reviewed and approved by the City Attorney. It is attached for your review. ACTION REQUIRED The City Council is requested to accept the easement and approve the attached Quit Claim Deed, pending any changes by the City Attorney. Attachments Location Map Quit Claim Deed — Drainage and Utility Easement g ospe,gtfullnbitte'l, StepTiani6 L. Hanson u City Planner Cc: Jan Thomas, 14329 Butternut St NW, Andover, MN 55330 JA I I A. / " A N A M I „ A R A A N Date Created: May 08, 2019 Disclaimer. The provider makes no representation or warranties with respect to the reuse of this data. LOCATION MRP W LU 0 g U Cl (Top 3 inches reserved for recording data) TRUSTEE'S DEED by Individual Trustee eCRV number. Minnesota Uniform Conveyancing BIS Form 10.4.1 (2C DEED TAX DUE: $ DATE: (monthrdayyyear) FOR VALUABLE CONSIDERATION, Janet R. Thomas (insertname ofeach Trustee) as Trustee of the Janet R. Thomas Revocable Trust Agreement effective January 27, 2010 (insert name ofTruso ("Grantor"), hereby conveys and quitclaims to City of Andover (insert name of each Grantee) ('Grantee"), as (Check only one box) 0 tenants in common, (Ifmorafhan one Grantee is named above and either no box is checked or both boxes are checked, ❑ jointtenants, this conveyance is made to the named Grantees as tenants in common.) real property in Anoka County, Minnesota, legally described as follows: See Attached Exhibit "A" Check here if all or part of the described real property is Registered (Torrens) ❑ together with all hereditaments and appurtenances belonging thereto. 2of2 Check applicable box.- 0 ox:❑ The Seller certifies that the Seller does not know of any wells on the described real property. ❑ A well disclosure certificate accompanies this document or has been electronically filed. (If electronically filed insert WDC number:_ ) ❑ 1 am familiar with the property described in this instrument and I certify that the status and number of wells on the described real property have not changed since the last previously filed well disclosure certificate. Minnesota Uniform Conveyancing Blanks Form 10.4,1 Grantor (slgnafweorrrusfee)Janet R. Thomas, Trustee (819naf im of Pastes) State of Minnesota, County of This instrument was,acknowledged before me on by Janet R. Thomas (montMday/year) (insertname d each Tmstee) as Trustee of the Janet R. Thomas Revocable Trust Aoreement effective January 27 2010 (Inert name ofTmsf) (Stamp) (sfirnatwe ofnotadal ofioaq Title (and Rank): My commission expires: (monWday/year) THIS INSTRUMENT WAS DRAFTED BY: TAX STATEMENTS FOR THE REAL PROPERTY DESCRIBED IN THIS rimed name arra address) INSTRUMENT SHOULD BE SENT TO: (Insert legal name andreadenh'alorfwsimss address dGrantee) Registered Abstracters, Inc. City of Andover 2115 North Third Avenue Anoka, MN 55303 EXHIBIT "A" A 40.00 foot wide Drainage and utility easement lying over, under and across that part of Lot 8, Auditor's Subdivision No. 141, lying South of the North 673.01 feet thereof, and that part of Lot 6, Said Auditor's Subdivision No. 141, EXCEPT the North 160.00 feet thereof, all lying North of the plat of SHADOWBROOK FIFTH ADDITION, Anoka County, Minnesota, said easement has a centerline described as follows: Commencing at the Southeast corner of said North 673.01 feet of Lot 8, Auditor's Subdivision No. 141; thence North 89 degrees 23 minutes 21 seconds West, assumed bearing, along the South line of said North 673.01 feet of Lot 8, a distance of 162.76 feet to the point of beginning of said centerline to be described; thence South 01 degrees 57 minutes 16 seconds West, 308.01 feet; thence South 81 degrees 39 minutes 04 seconds West, 238.19 feet; thence South 17 degrees 25 minutes 55 seconds East, 227.24 feet to the Northerly line of said SHADOWBROOK FIFTH ADDITION and said centerline there terminating. Sidelines of said 40.00 foot easement are to be prolonged or shortened to terminate at said South line of the North 673.01 feet of Lot 8, and at said Northerly line of SHADOWBROOK FIFTH ADDITION N Drainage and Utility Easement Description Sketch -North line of Lot 6, AUDITOR'S SUBDIVISION NO. 141 S..th line of the � � r IL J r I n e North 673.01 fact of Lot B, SUDDYIS ONITNO.5141 Southeast comcr of N69'23'21"W -the North 673.01 feat 16276 - of Lot & AUDIVRd'S SUBDIVISION NO. 141 EXCEPTION i � I21 I - 1 i 1 I _ Il o IN r�_1I I y 1 f -I V J � ' 1 2020 I o g 36� T 0 61'390` L ` J ' x ISI � tNyy� t- F� 1 I1 °�I—SHrf ADOMROM V J / FIFTH ADDITION VA n n IA/ n !l li r- I r I �] n U v vv C: r\l t - v v I\ I i I !'1 A n n I r I n nl /'1 U U I I I V lv DRA/NAl.K' ANO N77U7Y FA.S9&WT OFSiG)WP770N- A 40.00 /oat wide ....marl Hing over, under, and ..1083 that part of Lot S. AUDITOR'S SUBDMSION NO. 141, lying South of the North 673.01 feet thereof, and that part of Lot 6, sold AUDITOR'S SUBDIVISION NO. 141, EXCEPT the North 160.00 feet thereof, all Iying North of fine plot of SHADOWBROOK FIFTH ADOMON, Anoka County. Minnesota, Paid ...smart has a oantedine deevibed .s follows: Commencing at the Southeast comer of said North 673.01 fact of Lot & AUDITOR'S SUBDIMSION NO. 141; thence North 89 degrees U minutes 21 seconds West, assumed bearing, .long the South line of said North 673.01 feel of Lot S, o distance of 162.76 feet to the point of beginning of said cant.rtm, to be desarlbed; thence South 01 degree 57 minutes 16 seconds West. 308.01 feet; thence South 81 degrees 39 minutes 04 :.acrd. West, 238.19 feel; thence South 17 degrees 2 minutes 55 seconds East, 227.24 feet to Ne northerly line of sold SHADOMR00K PM ADOMON and said ...Wine there tem rooting. Sidelines of said 40.00 foot easement are to be prolonged or eh.rt.ned to terminate at said South line of the North 673.01 feat of Lot 8, and at sold northerly line of SHADOnROOK FIFTH AUDITON. Sold easement contain. 330,939 sq. ft, McCain ENNRON90Pheaant.INEER..•SURV[YINa 3Su Pheasant Ridge D. NE, Suite Ln.,Blalnq NN 6X49 Phone: JC3<89->900 Fax: 763-989-7969 �4773zdu desc sketch WN, Easement and Uf9lly Easement aArva nd GRAPHIC SCALE OVE 1685 CROSSTOWN BOULEVARD N.W. • ANDOVER, MINNESOTA 55304 • (763) 755-5100 FAX (763) 755-8923 • WWW.CI.AN DOVER. MN. US TO: CC: FROM: SUBJECT: DATE: Mayor and Councilmembers Jim Dickinson, City Lee Brezinka, Finance Manager Replace City Hall Skylights May 21, 2019 INTRODUCTION The skylights at city hall are failing and are in need of replacement. (Fbo) DISCUSSION The Kalwall skylights have been inspected by SpecPro, Inc., an environmental and facilities service firm, and the skylights need to be replaced. Damage is apparent by the crescent shaped fractures left on the exterior face sheets of the panels and star shaped fractures that are on the inside of the exterior face sheet. Through weather exposure and freeze thaw cycles, the fractures will continue to expand, emit odors and eventually cause the panels to completely fail. Below are the two quotes received from W.L Hall Co. with two different types of materials: Laminated glass skylights $40,844 Acrylic skylights with OSHA safety screens $15,567 The glass skylight option requires the roof curbs to be modified and re -flashed bringing the slope up to code for proper drainage and warranty stipulations; but will perform better from a U -value perspective and may last longer. However, both provide vision and are viable options depending on the available funds. Staff is recommending the acrylic skylights and would anticipate a full evaluation on the future replacements being matched with roof repairs or replacements. BUDGETIMPACT This project will be funded by the Building Capital Projects Fund. ACTION REQUESTED The Andover City Council is requested to award the quote to W.L.Hall Co. and approve using the acrylic skylights. Respectfully submitted, Lee Brezinka 1685 CROSSTOWN BOULEVARD N.W. • ANDOVER, MINNESOTA 55304 . (763) 755-5100 FAX (763) 755-8923 • WWW.ANDOVERMN.GOV TO: Mayor and Council Members FROM: Jim Dickinson, City Administrator SUBJECT: Approve First Amendment to Sublease Agreement with YMCA DATE: May 21, 2019 G) The City Council is requested to approve the attached First Amendment to Sublease Agreement with the YMCA of Metropolitan Minneapolis. DISCUSSION The YMCA is moving forward with an Andover YMCA expansion and updating project; they are currently finalizing their scope and cost with the architect and construction manager. With that movement, City Administration and the YMCA have been reviewing the current sublease agreement and have been discussing the needed current amendments and future amendments necessary for the YMCA to move forward with finalizing their construction plans and financing/fundraising. The primary focus of this First Amendment to Sublease Agreement addresses the following items -Refinancing and Capital Campaign Shortfall impact -City fee ownership of the facility -Insurance requirement updates Council should note that all other terms and conditions of the Original Sublease shall remain in full force and effect. A future second amendment or an amended and restated sublease agreement will be completed once the YMCA has finalized their scope and cost with the architect and construction manager. The YMCA has completed their committee approvals authorizing an Andover YMCA project. Refinancing History The original Andover YMCA Community Center construction project was facilitated by the issuance of 30 -year 2004 Economic Development Authority of the City of Andover $19,580,000 Public Facility Lease Revenue Bonds. Those bonds were used as the basis to determine the YMCA's base annual rent to the City of Andover in the original Sublease Agreement (attached). The original 2004 Economic Development Authority of the City of Andover $19,580,000 Public Facility Lease Revenue Bonds were first refinanced in late 2006 and early 2007 through the issuance of 2006 Economic Development Authority of the City of Andover $10,000,000 Public Facility Lease Revenue Bonds and 2007 Economic Development Authority of the City of Andover $6,865,000 Public Facility Lease Revenue Bonds, those bonds matched the payment schedule of the original 2004 issuance, but with lower payments due to the reduced interest rates. That refinancing yielded $1,273,142.93 in long term debt service costs. In 2012 the City again pursued an advanced refinancing, through the issuance of 20 -year 2012 City of Andover $17,315,000 General Obligation Abatement Bonds. With the favorable new interest rate from the use of abatement bonds, the City was able to reduce the annual debt service payment and reduce the term from the original bonds by 3 years (from final payment in 2034 to final payoff in 2031). That refinancing yielded $4,013,528.60 in long term debt service costs and eliminated the lease arrangements between the City of Andover and the Andover EDA (Lease and Prime Lease), that was completed February 2014. Through the refinancing a total of $5,286,671.53 in long term debt service costs were achieved and in the spirit of the partnership principles and for the City to timely complete the new bond sales the YMCA consented to the necessary processes to be conducted by the City with the understanding the YMCA would receive benefit from the savings to help offset their portion of the Capital Campaign Shortfall as outlined in the sublease agreement. The YMCA shortfall portion, based on the original sublease, is to be added as base rent payments at the completion of the initial base rent payments which are complete in 2034. The benefit from the refinancing would be capped at their portion of the Capital Campaign Shortfall which is $1,302,698. Ownership/Leases History: In May of 2004, the City of Andover and YMCA of Metropolitan Minneapolis (YMCA), entered into a Sublease Agreement and under the terms the YMCA subleased certain "Land" and "Improvements" referred to in the sublease as the "Premises" from the City of Andover for purposes of operating a "YMCA" aquatic and fitness center and offering related programming. At the time of execution of the Original Sublease, the City of Andover had leased the "Land" portion of the Premises to the Economic Development Authority of the City of Andover (the "BDA") under the terms of a "Ground Lease" and the EDA had committed to constructing certain "Improvements," thereon, a portion of which are included in the Premises. The City subsequently leased back the Improvements from the EDA under the terms of a "Prime Lease". Subsequent to the date of the Original Sublease, the City of Andover purchased the EDA's fee interest in the Improvements, resulting in the City of Andover owning fee title to both the Land and the Improvements. Insurance Requirement Updates: Updating is being done to recognize that City of Andover insurance policies shall be with the League of Minnesota Cities Insurance Trust or, at the discretion of the City, another insurance company or companies with general policy holders' rating of not less than "A -VIII" as rated in the most current available Best's Key Rating Guide and which are qualified to do business in the State of Minnesota. ubmitted, -First Amendment to Sublease Agreement -Sublease Agreement FIRST AMENDMENT TO SUBLEASE AGREEMENT This First Amendment to Sublease Agreement (the "First Amendment") is made and deemed effective as of the day of , 2019, the date of the signatures of the parties notwithstanding, by and between the City of Andover, a municipal corporation under the laws of Minnesota ("Landlord"), whose address is 1685 Crosstown Boulevard NW, Andover, MN 55304, and The YMCA of the Greater Twin Cities, a Minnesota nonprofit corporation and successor in interest to The Young Men's Christian Association of Metropolitan Minneapolis, a Minnesota corporation ('Tenant") whose address is 30 South Ninth Street, Minneapolis, MN 55402. WITNESSETH: WHEREAS, the Landlord and The Young Men's Christian Association of Metropolitan Minneapolis, a Minnesota corporation and Tenant's predecessor in interest, entered into a Sublease Agreement dated May 1, 2004 (`Original Sublease," and, as amended by this First Amendment, the "Lease") under the terms of which the Tenant subleased certain "Land" and "Improvements" referred to therein as the "Premises" from the Landlord for purposes of operating a "YMCA" aquatic and fitness center and offering related programming; and WHEREAS, at the time of execution of the Original Sublease, the Landlord had leased the "Land" portion of the Premises to the Economic Development Authority of the City of Andover (the "EDA") under the terms of a "Ground Lease" and the EDA had committed to constructing certain "Improvements," thereon, a portion of which are included in the Premises. The City subsequently leased back the Improvements from the EDA under the terms of a "Prime Lease"; and WHEREAS, subsequent to the date of the Original Sublease, the Landlord purchased the FDA's fee interest in the Improvements, resulting in the Landlord owning fee title to both the Land and the Improvements; and WHEREAS, the Original Sublease contemplates that the Tenant may be required to pay a portion of the "Capital Contribution Shortfall" as defined in the Original Sublease, to Landlord upon Tenant's extension of the "Sublease Term"; and WHEREAS, the Landlord and Tenant desire to amend the Original Sublease to reflect the current fee ownership of the Premises by the Landlord, to reflect that the termination of the Tenant's obligations to pay a portion of the Capital Contribution Shortfall, and to make certain other amendments to the Original Sublease all as provided herein; and WHEREAS, the parties wish to amend certain provisions of the Original Sublease as hereinafter set forth. NOW, THEREFORE, in consideration of the premises and the mutual obligations of the parties hereto, the Original Sublease between the parties shall be amended as follows: 1. The above Recitals are incorporated herein by reference 2. Capitalized terms not defined herein shall have the meanings assigned to such terms in the Original Sublease. 3. Landlord acknowledges that it holds a valid, enforceable fee simple interest in the Premises. As a result, Recital B on Page 1 of the Original Sublease is no longer applicable and therefore deleted from the Sublease. In addition, all references in the Original Sublease to the Landlord's leasehold interest in the Premises or portions thereof shall be amended to reference, from and after the date of this First Amendment, the Landlord's fee simple interest in the Premises. 4. Section 3.1(b) of the Original Sublease shall be amended to read as follows (b) Tenant shall have the right, by notice to Landlord given not less than eighteen (18) months prior to the end of the Sublease Term (whether the original term or the term as extended pursuant to this Section 3. 1), to extend the Sublease Term for up to six (6) extension terms of ten (10) years each, and a final extension term of nine (9) years, provided that Tenant shall not then be in default under this Sublease. If Tenant fails timely to exercise the option to extend the Sublease Term for any such renewal term, all rights of Tenant to extend the Sublease Term shall expire. If Tenant timely exercises any such extension option, the Expiration Date shall be extended to a date ten (10) years later than the then -existing Expiration Date, and all of the terms and conditions of this Sublease shall apply throughout the renewal term except as otherwise expressly agreed in writing by Landlord and Tenant. Landlord has attributed a $1,302,698 Capital Contribution Shortfall to the Tenant. Landlord and Tenant agree that such Capital Contribution Shortfall shall be waived by the Landlord and Tenant shall have no further obligation to pay any portion of the Capital Campaign Shortfall. 6. Section 4.1 (a) of the Original Sublease shall be amended to read as follows: (a) Payment. Tenant shall pay to Landlord, without notice or demand and without any offset or deduction, except as otherwise provided herein, as fixed annual base rent, the amounts calculated below ("Base Rent"), which Base Rent shall be paid thirty (30) days prior to the first debt service payment due on the Bonds and thirty (30) days prior to each subsequent debt service payment due on the Bonds, commencing with the Rent Commencement Date as set forth Section 1.1(f) of this Sublease. Base Rent shall be considered delinquent if not so paid. Notwithstanding the foregoing, the first $1,568,450.00 of Base Rent payable by Tenant pursuant to this Sublease shall be paid or credited to Tenant from Tenant's Proportionate Share of capital contributions for the Project actually collected. 7. Section 4.1(c) of the Original Sublease shall be amended to read as follows: (c) Capital Contribution Shortfall. Landlord and Tenant jointly participated in a campaign to raise capital for the Project, with the goal of raising a total of $3,500,000.00 with the goal of raising $3,250,000.00 after expenses of the capital campaign. A Capital Contribution Shortfall shall exist to the extent that the total amount of capital contributions raised for the Project, in cash or binding pledges received by Landlord or Tenant on or before December 1, 2005, minus capital campaign expenses, is less than $3,250,000.00. The actual amount of the Capital Contribution Shortfall shall be determined when all pledges of contributions to the Project received by Landlord or Tenant on or before December 1, 2005 have been paid or determined by Landlord in its reasonable discretion to be uncollectable and all capital campaign expenses have been determined. Landlord has attributed a $1,302,698 Capital Contribution Shortfall to the Tenant. Landlord and Tenant agree that such Capital Contribution Shortfall shall be waived by the Landlord and Tenant shall have no further obligation to pay any portion of the Capital Campaign Shortfall. Landlord acknowledges and agrees that Tenant solicits contributions on a regular, continuous basis for its ongoing operations, in addition to soliciting capital contributions for specific projects. Tenant shall not be precluded from continuing to solicit charitable contributions to Tenant in its normal course of operation, regardless of the status of any Capital Contribution Shortfall as provided herein. 8. Section 4.2(b)(iii) of the Original Sublease shall be amended to read as follows: (iii) On or before September 1, 2005 and on or before December 1 of each subsequent calendar year during the Sublease Term, Landlord shall submit to Tenant a reasonably detailed statement indicating Landlord's monthly and annual estimates of Tenant's Proportionate Share of Common Area Costs. Tenant shall pay to Landlord on the first (I ") day of each month after receipt of such statement (until receipt of a succeeding statement) Tenant's Proportionate Share of the estimated monthly Common Area Costs. Landlord reserves the right, but not the obligation, to revise Landlord's estimate of the amount of Tenant's Proportionate Share of Common Area Costs; provided, however, that (i) Landlord may not make more than one (1) such revision in any calendar year and (ii) Tenant shall commence to pay such revised amounts within thirty (30) days after Tenant's receipt of written notice thereof from Landlord. Within ninety (90) days following the end of each calendar year, Landlord shall furnish Tenant with a statement, certified as true and correct by an officer of Landlord, showing the total Common Area Costs for the calendar year just expired, the amount of Tenant's Proportionate Share of such Common Area Costs and payments 3 made by Tenant during such calendar year for estimated Common Area Costs under this Sublease. Landlord's statement shall include supporting documentation for Common Area Costs and payments made by Tenant during such calendar year under this Sublease. If Tenant's Proportionate Share of Common Area Costs for such calendar year shall exceed Tenant's payments as shown on such statement, then Tenant shall, within thirty (30) days after receipt of such statement, pay the difference to Landlord. If the statement indicates an overpayment by Tenant, then Tenant shall be entitled to either (i) receive a refund of such overpayment from Landlord within thirty (30) days after Tenant's receipt of such statement or, in the event Landlord fails to make such refund, (ii) credit such excess against payments next becoming due under this Sublease or any other payment obligation under this Sublease. 9. Section 13.1 of the Original Sublease shall be amended to read as follows: Landlord's Insurance. Landlord will carry and maintain general liability and property insurance as set forth herein. Landlord agrees to carry during the Sublease Term commercial general liability insurance ("Landlord's Liability Insurance") with a combined single limit of not less than ONE MILLION DOLLARS ($1,000,000) per occurrence, insuring against any and all liability of Landlord with respect to the ownership, operation and/or use of the Project. Landlord also agrees to carry during the Sublease Term insurance covering the building of which the Premises are a part for the full replacement value thereof (exclusive of the cost of excavation, foundations and footings) as may be determined from time to time during the Sublease Term, providing protection against any peril generally included in the classification "all risk," covering fire and extended coverage, vandalism and malicious mischief, sprinkler leakage and all other perils of direct physical loss or damage, insuring the improvements and betterments located in the Project, including the Premises and all appurtenances thereto (but excluding Tenant's personal property, trade fixtures and equipment) ("Landlord's Property Insurance"). Landlord shall also obtain and maintain rental interruption insurance (herein "Rental Interruption Insurance") covering a period not to exceed one (1) year. Said insurance policies shall be with the League of Minnesota Cities Insurance Trust or, at the discretion of the Landlord, another insurance company or companies with general policy holders' rating of not less than "A -VIII" as rated in the most current available Best's Key Rating Guide and which are qualified to do business in the State of Minnesota. Landlord's Liability Insurance and Landlord's Property Insurance shall collectively be deemed "Landlord's Insurance Policies." Landlord shall, upon request, furnish to Tenant from time to time a certificate of Landlord's Insurance Policies. 10. All other terms and conditions of the Original Sublease shall remain in full force and effect. M In witness whereof, the parties have executed this First Amendment as of the day and year first written above. LANDLORD: City of Andover M Julie Trude, Mayor Date: a, Michelle Hartner, City Clerk Date: 17223847v1 TENANT: The YMCA of the Greater Twin Cities Anita Lancello Bydlon Its: Chief Real Estate Development Officer Date: SUBLEASE AGREEMENT THIS SUBLEASE AGREEMENT (this "Sublease") is made as of the 1st day of May, 2004, by and between the City of Andover, Minnesota, a Minnesota municipal corporation ("Landlord"), and The Young Men's Christian Association of Metropolitan Minneapolis, a Minnesota corporation ("Tenant"), and is based on the following facts: A. Landlord owns real property (the "Land") situated in Anoka County, Minnesota, legally described on the attached Exhibit "A-1," located to the north of Landlord's existing city ball, and that Landlord is contributing or dedicating to a community center project (the "Project"), which Project shall include a field house, an aquatic center/water park, a fitness center, an ice arena, other space suitable for operation of a suburban branch of Tenant, and all infrastructure necessary to support such facilities. B. Landlord and the Economic Development Authority of the City of Andover, Minnesota, a public body corporate and politic (the "Authority"), have entered into a Ground Lease of even date herewith (the "Ground Lease"), pursuant to which the Authority has the right to possess the Land during the term, including any and all extension terms, of the Ground Lease. a Lease Agreement of even date herewith (the "Prime Lease') E. Landlord and Tenant wish to set forth in writing the terms of their agreement relating to the foregoing. NOW, THEREFORE, for and in consideration of the rents reserved hereunder and the terms and conditions hereof, Landlord hereby subrents, subdemises and subleases the Premises to Tenant, and Tenant hereby takes and subleases the Premises from Landlord, for the term of this Sublease and upon the following terms and conditions: BASIC SUBLEASE PROVISIONS AND ENUMERATION OF EXHIBITS. 1.1 Basic Sublease Provisions, 663330/10 (a) Landlord: City of Andover Address of Andover City Hall Landlord: 1685 Crosstown Boulevard NW Andover, MN 55304 (b) Tenant: The Young Men's Christian Association of Metropolitan Minneapolis Address of 30 South Ninth Street Tenant: Minneapolis, MN 55402 (c) Premises: 55,187 square feet of floor space in the Project, as depicted on the attached Exhibit "A-2." (d) Sublease Term: Thirty (30) years from the Rent Commencement Date, subject to extension as provided in Section 3.1(b) below. (e) Sublease Commencement Date: The date of mutual execution of this Sublease by Landlord and Tenant. (f) Rent Commencement Date: Thirty (30) days prior to the due date of the first debt service payment due on the $19,580,000 Economic Development Authority of the City of Andover, Minnesota Public Facility Lease Revenue Bonds, Series 2004 (City of Andover Community Center) (the "Bonds"), subject, however, to Tenant's right to terminate this Sublease pursuant to Section 3.3(a) below. (g) Expiration Date: Thirtieth (30'h) anniversary of the Rent Commencement Date, subject to extension as provided in Section 3.1(b) below. (h) Additional Rent: See Section 4.2 below. (i) Permitted Uses: Programs and services offered by Tenant in furtherance of its mission, including without limitation programs and services using the aquatic center and the fitness center to be included in the Project. 663330/10 2 2. 663330/10 L2 Significance of Basic Sublease Provisions. Each reference in this Sublease to any of the Basic Sublease Provisions contained in Section 1.1 shall be deemed and construed to incorporate all the terms provided under each such Basic Sublease Provision, provided that the Basic Sublease Provisions shall be controlled by the specific terms and provisions of this Sublease relating to the subject matter of those Basic Sublease Provisions. 1.3 Definitions. (a) Common Area. See definition under Section 2.3(a). (b) Community Center. The improvements as described in the attached Exhibit "B'.' to be located upon the Land. (c) Landlord's Proportionate Share. Fifty-two and twenty-seven hundredths percent (52.27%). (d) Tenant's Proportionate Share. Forty-seven and seventy-three hundredths percent (47.73%). 1.4 Enumeration of Exhibits. The exhibits enumerated in this Section 1.4 and attached to this Sublease are incorporated herein by reference and are to be construed as a part of this Sublease, Each party agrees to perform any obligations on its part stated in any and all such exhibits. Exhibit A-1 Legal Description of the Land; Exhibit A-2 Site Plan; Exhibit B Plans and Specification for the Project; Exhibit C'` Description of Landlord's Work, Exhibit D ` Form of Confirmation of Turnover and Punch List. _ PREMISES, COMMUNITY CENTER., COMMON AREA, AND PARKING. 2.1 Premises. Landlord hereby subleases, subrents and subdemises to Tenant, and Tenant hereby accepts fiom Landlord, throughout the Sublease Term and subject to and with the benefit of the terms and provisions of this Sublease, the Premises as described in Section 1.1(c) above and depicted as cross -hatched on the Site Plan attached hereto as Exhibit A-2. In addition to Tenant's exclusive right to possession of the Premises throughout the Sublease Term, Tenant and Tenant's agents, employees, officers, directors, contractors, members and program participants shall have the right to use the Common Area, in common with Landlord and its agents, employees, officers, contractors, guests and invitees, throughout the Sublease Term. 2.2 Community Center. (a) Depiction. The Community Center and Premises are depicted in the Site Plan attached hereto as Exhibit A-2. Tenant shall have only such rights in and to the Community Center as are specifically set forth herein. (b) Representations. It is specifically understood and agreed that the depiction of the Community Center on Exhibit A-2 is subject to change and that Landlord reserves the right from time to time, with the prior written consent of Tenant, to change the size, layout and dimensions of the Community Center and any part thereof, and to locate, relocate, alter and/or modify the number and location of the buildings, building dimensions, number of floors in any of the buildings, parking areas, and the Common Area located from time to time in or on the Community Center or any part thereof; provided, however, that notwithstanding the foregoing, in no event shall Landlord be permitted to relocate Tenant, to make alterations or improvements to the Premises, or to alter the Common Area in a manner that adversely affects the usefulness to Tenant of the Premises and the Common Area. Landlord shall not, without Tenant's express written approval, change the amount or location of access to the Premises, the visibility of the Premises, or reduce or restrict the parking available to the Premises. Landlord shall make no changes to the Community Center that would adversely affect the character of the Community Center, including, but not limited to, reducing the Community Center's primary recreational purposes. 2.3 Common Area. (a) "Common Area" means all areas within the exterior boundaries of the Land which are now or hereafter made available for the general, non-exclusive use, convenience and benefit of Tenant, including but not limited to parking areas, driveways, exterior lighting, sidewalks,,landscaped and planted areas, washrooms, lounges, shelters and other facilities designed for non-exclusive use. The Common Area is depicted on the Site Plan attached hereto as Exhibit A-2. (b) Tenant's Rights. Tenant and its agents, employees, officers, directors, contractors, members and program participants are, except as otherwise specifically provided for in this Sublease, authorized, empowered, and privileged to use the Common Area, in common with Landlord, throughout the term of this Sublease, Landlord and Tenant shall jointly establish a reasonable schedule and rules and regulations regarding the use of the Common Area, including without limitation rules for scheduling the frequency and use by Tenant and Landlord of those portions of the Common Area as are not suitable for simultaneous use by both Tenant and Landlord. 3. TERM; LANDLORD'S WORK. 3.1 Sublease Term. 663330/10 4 i 663330/10 3.2 (a) Sublease Commencement Date; Rent Commencement Date. This Sublease shall be for the term set forth Section 1.1(d) above (the "Sublease Term"), which shall commence on the Rent Commencement Date specified in Section 1.1(f) above, and shall terminate at midnight of the expiration date as set forth in Section 1.1(g) above (hereinafter referred to as the "Expiration Date"), subject to extension as provided below. (b) Options to Extend. Tenant shall have the right, by notice to Landlord given not less than eighteen (18) months prior to the end of the Sublease Term (whether the original term or the term as extended pursuant to this Section 3.1), to extend the Sublease Term for up to six (6) extension terms of ten (10) years each, and a final extension term of nine (9) years, provided that Tenant shall not then be in default under this Sublease. If Tenant fails timely to exercise the option to extend the Sublease Tenn for any such renewal term, all rights of Tenant to extend the Sublease Term shall expire. If Tenant timely exercises any such extension option, the Expiration Date shall be extended to a date ten (10) years later than the then -existing Expiration Date, and all of the terms and conditions of this Sublease shall apply throughout the renewal term except as otherwise expressly agreed in writing by Landlord and Tenant, and except that no Base Rent shall be payable during any extension term unless there; is a "Capital Contribution Shortfall;" in which event Tenant's, share of the Capital but Tenant does Share. of the CapitalContribution=Shortfall shall be due and payable in full from Tenant :to -Landlord on the last day of the Sublease Term. 's Work attached hereto and made`apart hereof as Exhibit C. 33 Delivery of Premises. (a) Delivery Date by -Landlord. Landlord hereby covenants -;and agrees, to cause the construction of Landlord's Work to be undertaken promptly and performed and=completed=diligently and continuously, and -to cause the Premises and surrounding' area to be delivered to Tenant according to the terms and conditions of Exhibit C by August 1, 2005 C'Delivery' Date")., In the,event Landlord fails to deliver the Premises to Tenartby the'` Delivery' Date, Tenant's obligation to pay, Base Rent and:Additional Rent shall be extended beyond the Rent Commencement Date 'set forth'in Sectionhl(f) one dayfor-each day of delay. Inthe <eventLandlord fails to deliver the'Premises to Tenant by December 1, 2005, Tenant may elect either to terminate this Sublease or'confinue to accrue the one (I)%tone (1) extension of the Rent Commencement Date as set forth. (b) '''Acceptance of the Premises. Upon delivery of the Premises to Tenant, unless the Premises are rejected by Tenant as provided in Section 3.3(c) below, Tenant shall acknowledge to Landlord in writing within thirty (30) days after delivery of possession of the Premises in the form attached hereto as Exhibit D ("Confirmation of Turnover and Punch List"), that Tenant has inspected the Premises and accepts them in their then existing condition, or else, within said thirty (30) day period, Tenant shall notify Landlord in writing of any deficiencies then apparent ("Punch List"); provided, however, that a failure by Tenant to provide the above written notices to Landlord within said thirty (30) day period shall be deemed acceptance of the Premises in its then existing condition, Landlord shall promptly commence and diligently prosecute until completed the items set forth in the Punch List. Landlord's obligation and/or liability to Tenant for deficiencies shall be limited to the correction of the noted deficiencies set forth on the Punch List, which correction shall be made to the extent required for compliance with Landlord's Work as set forth in Exhibit C. Tenant shall be deemed to have accepted the Premises upon Landlord's delivery of possession, subject to subsequent completion by Landlord of any Punch List deficiencies, unless the failure to complete the items set forth on the Punch List materially interferes with Tenant's preparation of the Premises for Tenant's use or materially affects Tenant's ability to operate in the Premises, in which case acceptance shall be upon completion of the Punch List work which caused such interference. Notwithstanding the above, this paragraph shall in no way limit Landlord's liability for hazardous substance, structural, seismic or latent defects that affect Landlord's repair and/or maintenance agreements under this Sublease. Nothing in this Sublease shall be construed to impair Tenant's rights under any and all warranties made or provided by manufacturers, suppliers, installers or other individuals or entities performing labor or supplying materials in connection with Landlord's Work, and Landlord shall assign to Tenant all such warranties applicable to the Premises on the Delivery Date, (c) - Rejection of Premises. If, at the time of delivery of the Premises to Tenant, Landlord has failed to complete any of Landlord's Work necessary for Tenant's commencement and/or uninterrupted operations within the Premises ("Necessary Work"), Tenant may reject Landlord's delivery of the Premises. Such Necessary Work shall include, but shall not be limited to, installation and connection of all utilities, including electrical power, with installation of panels, completion of exterior walls, storefront and glazing, roof top heating, ventilating and air conditioning ("HVAC") units, slab, a watertight structure, paved parking area, sidewalks, permanent paved access to public roads, and any other item the absence of which would prevent Tenant from commencing and/or continuing, uninterrupted, Tenant's operations within the Premises. If Tenant rejects the Premises, Landlord shall promptly complete the Necessary Work and shall deliver the Premises to Tenant with Landlord's Work complete as set forth in Exhibit C. If the Necessary Work is not completed by December 1, 2005, Tenant may elect 663330/10 6 either to terminate this Sublease or to delay the Rent Commencement Date until all Necessary Work has been completed. 3.4 Landlord's Title, Landlord represents and warrants that: upon commencement of the Sublease Tenn, Landlord will have a valid, enforceable leasehold interest in the Land and the Improvements, and fall right and authority to make and execute this Sublease; the Land now constitutes one or more entire parcels of real estate for purposes of real estate taxation and conveyancing; and that the Premises are now and will be, upon commencement of the Sublease Tenn, free and clear of all liens, restrictions, leases, encumbrances, easements and reservations other than any such matters as have been approved in writing by Tenant, and free from any and all laws, ordinances, governmental rules, regulations, title restrictions, zoning, or other matters (whether recorded or unrecorded), which may materially adversely restrict or prevent Tenant's operation of a YMCA facility in the Premises as described in Section 1,1(i) above. 4. RENT, 4,1 Bm6Rent. (a) Payment. Tenant shall pay to Landlord, without notice or demand and without any offset or deduction, except as otherwise provided herein, as fixed annual base rent, the amounts calculated below ("Base Rent"), which Base Rent E. shall be paid thirty (30) days prior to the first debt service payment due on the Bonds and thirty (30) days prior to each subsequent debt service payment due on the Bonds, commencing with the Rent Commencement Date as set forth Section 1.1(f) of this Sublease. Base Rent shall be considered delinquent if not so paid, Notwithstanding the foregoing, the first $1,568,450.00 of Base Rent payable by Tenant pursuant to this Sublease shall be paid or credited to Tenant: first from Tenant's Proportionate Share of capital contributions for the Project actually collected; and next, if a Capital Contribution Shortfall exists, from Tenant's Proportionate Share of the Capital Contribution Shortfall, which Landlord shall credit to Tenant and Tenant shall repay to Landlord pursuant to Section 4,1(c) below, (b) Base Rent Calculation, The Base Rent payable by Tenant to Landlord shall be determined following the sale by the Authority of the Bonds. The total amount of the Bonds to be sold, which shall serve as a basis for Tenant's Base Rent, shall not exceed Nineteen Million Five Hundred Eighty Thousand and N0/100 Dollars ($19,580,000.00). The amount and due date of each installment of Base Rent shall be as set forth on Schedule 4,1 attached to this Sublease promptly after the amount of the Bonds to be sold has been finally determined. The installments of Base Rent set forth on Schedule 4.1 during calendar years 2005 through 2008 are calculated as Tenant's Proportionate Share of interest only on the Bonds. Base Rent during any calendar year shall not exceed $635,000,00. 663330/10 (c) "Capital Contribution Shortfall. Landlord and Tenant have jointly participated in a campaign to raise capital for the Project, with the goal of raising a total of $3,500,000.00 with the goal of raising $3,250,000.00 after expenses of the capital campaign. A Capital Contribution Shortfall shall exist to the extent that the total amount of capital contributions raised for the Project, in cash or binding pledges received by Landlord or Tenant on or before December 1, 2005, minus capital campaign expenses, is less than $3,250,000.00. The actual amount of the Capital Contribution Shortfall shall be determined when all pledges of contributions to the Project received by Landlord or Tenant on or before December 1, 2005 have been paid or determined by Landlord in its reasonable discretion to be uncollectable and all capital campaign expenses have been determined. If a Capital Contribution Shortfall exists, Tenant shall pay Tenant's Proportionate Share of the actual amount of the Capital Contribution Shortfall, without interest: on the last day of the Sublease Term if Tenant does not timely exercise its first option to extend the Sublease Term; or, if Tenant timely exercises its fust option to extend the Sublease Term, Tenant's Proportionate Share shall be payable during the first extension term, on the dates and in the amounts that Base Rent was payable during the preceding calendar year, until Tenant's Proportionate Share of the Capital Contribution Shortfall has been paid in full. Landlord acknowledges and agrees that Tenant solicits contributions on a regular, continuous basis for its ongoing operations, in addition to soliciting capital contributions for specific projects. Tenant shall not be precluded from continuing to solicit charitable contributions to Tenant in its normal course of operation, regardless whether a Capital Contribution Shortfall exists. 4.2 Additional Rent. The term "Additional Rent" shall be deemed to be: Tenant's Proportionate Share, as described in Section 1.3(d) above, of the Common Area Costs; the costs of Landlord's insurance policies as set forth in b and c below, one hundred percent (100%) of Real Estate Taxes, if any, that are levied on the Premises; and, if applicable, Tenant's Proportionate Share of Annual Replacement Reserve as described in Section 6.2 below. (a) Taxes (If Applicable by State Law). (i) In addition to the Base Rent provided in Section 4.1 above and commencing with the Rent Commencement Date set forth in Section 1.1(f) above, Tenant shall reimburse Landlord for one hundred percent (100%) of all Real Estate Taxes that may be levied on the Premises. (ii) The term "Real Estate Taxes" shall include all real estate taxes, if any, that are levied upon or assessed against the Premises individually or as part of the Project, and the reasonable costs of professional consultants and/or counsel to analyze tax bills and prosecute any protests, refunds, and appeals for the period covered during the Sublease Term; provided 663330/10 however, Tenant shall receive a refund in reduction of the Real Estate Taxes if Landlord is successful in such protest or appeal. (iii) Landlord shall provide to Tenant a copy of the tax bill for the Real Estate Taxes for which Landlord is billing Tenant with evidence of payment by Landlord. Evidence of payment shall be a copy of Landlord's canceled check or a copy of the receipt for payment. (b) Common Area Costs. (i) As used in this Sublease, the term "Common Area Costs" means costs reasonably incurred for the operation, maintenance, and repair of the Common Area and supervision thereof. Common Area Costs shall include, but not be limited to: repairing the parking area (but not repaving or putting a new coat thereupon); restriping and repainting the parking areas; cleaning, sweeping, and other janitorial services; sanitation; snow and ice removal; security system; maintenance of refuse receptacles; maintaining and replanting existing landscaping (including pruning and trimming to preserve the existing view corridor); maintaining directional signs and other markers; upkeep of lighting and other utilities; utility charges for electricity, sewer and water, natural gas, telephone, television and other utilities; the Real Estate Taxes attributable to the Common Area to the extent not recovered pursuant to Section 4.2(a) above; the costs of insurance provided by Landlord including, but not limited to, comprehensive general liability insurance and all risk casualty insurance (collectively "Insurance Premiums"); and a management fee, for operation, maintenance, repair and supervision of the Common Area, which shall not exceed four and one-half percent (4.5%) of all Common Area Costs exclusive of Real Estate Taxes, Insurance Premiums and costs of utilities for the Common Area. In no event shall the term "Common Area Costs" include any Capital Expenditures (as hereinafter defined), costs of electricity for other tenants or occupants in the Community Center, costs recoverable by Landlord pursuant to its insurance policies, costs of deductibles paid by Landlord for insurance policies, costs resulting from defects in design, construction, or workmanship of Landlord's Work and the materials used in same, costs due to Landlord's default under the Prime Lease or this Sublease, and/or costs due to the negligence or willful misconduct of Landlord, its employees, agents, contractors, and assigns. "Capital Expenditures" means those expenditures which, in accordance with generally accepted accounting principles, must be capitalized and are not fully chargeable to current expenses in the year the expenditure is incurred. Landlord agrees to use reasonable diligence to avoid unreasonable Common Area Costs and, upon written request by Tenant, to solicit competitive bids for work which will result in Common Area Costs. 663330/10 (ii) Commencing upon the Rent Commencement Date, Tenant shall pay to Landlord, upon demand but not more than once a month, Tenant's proportionate share of the Common Area Costs based upon Landlord's reasonable good faith estimates, subject to readjustments as hereinafter provided. (iii) On or before September 1, 2005 and on or before September 1 of each subsequent calendar year during the Sublease Term, Landlord shall submit to Tenant a reasonably detailed statement indicating Landlord's monthly and annual estimates of Tenant's Proportionate Share of Common Area Costs. Tenant shall pay to Landlord on the first (1') day of each month after receipt of such statement (until receipt of a succeeding statement) Tenant's Proportionate Share of the estimated monthly Common Area Costs. Landlord reserves the right, but not the obligation, to revise Landlord's estimate of the amount of Tenant's Proportionate Share of Common Area Costs; provided, however, that (i) Landlord may not make more than one (1) such revision in any calendar year and (ii) Tenant shall commence to pay such revised amounts within thirty (30) days after Tenant's receipt of written notice thereof from Landlord. Within ninety (90) days following the end of each calendar year, Landlord shall famish Tenant with a statement, certified as true and correct by an officer of Landlord, showing the total Common Area Costs for the calendar year just expired, the amount of Tenant's Proportionate Share of such Common Area Costs and payments made by Tenant during such calendar year for estimated Common Area Costs under this Sublease. Landlord's statement shall include supporting documentation for Common Area Costs and payments made by Tenant during such calendar year under this Sublease. If Tenant's Proportionate Share of Common Area Costs for such calendar year shall exceed Tenant's payments as shown on such statement, then Tenant shall, within thirty (30) days after receipt of such statement, pay the difference to Landlord. If the statement indicates an overpayment by Tenant, then Tenant shall be entitled to either (i) receive a refund of such overpayment from Landlord within thirty (30) days after Tenant's receipt of such statement or, in the event Landlord fails to make such refund, (ii) credit such excess against payments next becoming due under this Sublease or any other payment obligation under this Sublease. (c) Insurance. Commencing upon the Rent Commencement Date, Tenant shall reimburse Landlord for Tenant's Proportionate Share of the cost of Insurance Premiums. (d) Costs. All applicable covenants and agreements to be performed by Tenant under any of the terms of this Sublease shall be performed by Tenant at Tenant's sole cost and expense and without any abatement of rent, unless otherwise specifically provided for in this Sublease. If Tenant 663330/10 10 shall fail to pay any sum of money owed to any party other than Landlord, for which it is liable hereunder, or if Tenant shall fail to perform any other act on its part to be performed hereunder, and such failure shall continue for thirty (30) days after written notice thereof by Landlord, Landlord may, without waiving such default or any other right or remedy, but shall not be obligated to, make any such payment or perform any such other act to be made or performed by. Tenant. All sums so paid by Landlord and all reasonably necessary incidental costs, together with interest thereon at eight percent (8%) per annum from the date of expenditure by Landlord, shall be payable to Landlord as Additional Rent within ten (10) days after written demand; provided, however, that Tenant shall have the right to contest any amount owing to a third party so long as Tenant has adequately protected Landlord against loss, damage, or liens as may be reasonably determined by Landlord. (e) Audit. Tenant shall have the right to audit, inspect and copy the books and records of Landlord with respect to any Common Area Costs upon ten 0 0) days' advance written notice from Tenant to Landlord. Landlord shall cooperate with Tenant in providing to Tenant reasonable access to Landlord's books and records during normal business hours for this purpose. If the results of the audit show an overcharge to Tenant of more than five percent (5%) of the actual amount owed by Tenant, then Landlord shall pay the reasonable costs of such audit. If the audit indicates an overpayment by Tenant, then Tenant shall be entitled to either (i) receive a refund from Landlord within thirty (30) days after Landlord's receipt of a copy of the report of such audit or, in the event Landlord fails to make such refund, (ii) credit such excess against payments next becoming due under this Sublease or any other payment obligations under this Sublease. 5. USE. 5.1 Permitted Uses. Tenant may use the Premises for the purposes set forth in Section 1.1(i) above. 5.2 Uses Prohibited. Tenant shall not do, or permit to be done, anything in or about the Premises, nor bring or keep anything therein, which will in any way unreasonably increase the existing rate of, or otherwise affect any fire or other insurance policy upon the Project or the Premises, or cause a cancellation of any insurance policy covering the Premises or any part thereof or any of its contents. Tenant shall not do anything which may unreasonably obstruct or interfere with the rights of other tenants, owners, or occupants of the Project (and Tenant shall take all reasonable action to prevent odors, emissions, fumes, liquids, other substances or excessive noise from escaping or extending beyond the Premises), not shall Tenant use or allow the Premises to be used for any 663330/10 11 unlawful purpose. Tenant shall refrain from using or permitting the use of the Premises or any portion thereof as living quarters, sleeping quarters, or lodging. 5.3 Abandonment. Tenant shall not vacate or abandon the Premises or cease to operate its facility in the Premises at any time during the Sublease Term without Landlord's written consent, 5.4 Compliance with Laws. (a) Tenant's Compliance. Tenant shall, at its sole cost and expense, promptly comply with all federal, state, county or municipal laws, ordinances, rules, regulations, directives, orders, and/or requirements (collectively "Governmental Regulations") now in force or which may hereafter be in force with respect to the Premises due specifically to Tenant's use and occupancy of the Premises and Tenant's operations conducted thereon. The final, non -appealable judgment of any court of competent jurisdiction or the admission by Tenant in any action against Tenant, whether Landlord be a party thereto or not, that Tenant has violated any law, statue, ordinance, or governmental rule, regulation, order, directive or requirement, shall be conclusive of that fact as between Landlord and Tenant. (b) Landlord's Compliance. Landlord shall, at its sole cost and expense, promptly comply with all Governmental Regulations concerning all structural changes and/or additions that may be required for such compliance, including, but not limited to, compliance due to the general retail nature of the Premises and Common Area, unless such changes are made necessary by Tenant's unique use of the Premises. Landlord shall be responsible for any improvements or modifications necessary in the Common Area in order for the Common Area to comply with all Governmental Regulations. 5.5 Tax Exemption. Tenant is an organization described in Section 501(c)(3) of the Internal Revenue Code (the "Code"), exempt from the payment of federal income taxes under Section 501(a) of the Code, and no revenues derived from its use of any portion of the Project does or shall constitute "unrelated business income" within the meaning of Section 513(a) of the Code. Tenant agrees that, through the Sublease Term, it will maintain its existence (i) as a not-for-profit corporation under the laws of Minnesota and (ii) as an organization described in Section 501(c)(3) of the Code, Tenant covenants that it shall make no use of the Project, including but not limited to entering into any agreement for the management of its use of the Project or any other similar agreement, the effect of which would cause the Bonds not to 663330/10 12 C constitute "qualified 501(c)(3) bonds," within the meaning of Section 145 and related sections of the Code, and any service contract to be entered into with respect to the Project (unless entered into with another organization described in Section 501(c)(3) of the Code) shall constitute a "qualified management agreement" within the meaning of all pertinent provisions of law, including all relevant provisions of the Code and regulations, rulings and revenue procedures thereunder, including Revenue Procedure 97-13. Tenant covenants that it shall make no use of the Project, or any portion thereof, as a skybox or other private luxury box, a facility primarily used for gambling, or a store the principal business of which is the sale of alcoholic beverages for consumption off premises, Tenant represents that is has no present intention to sublease, assign or otherwise dispose of its interest in the Project, but Tenant may, with the consent of Landlord (which consent Landlord agrees not unreasonably to withhold or delay) sublease or assign all or any part of its interest in the Project to a governmental unit or an organization described in Section 501(c)(3) of the Code, or enter into an agreement for the management or use of the Project, so long as (i) no such sublease or assignment shall be inconsistent with the provisions of this Sublease and (ii) the excludability of interest on the Bonds from gross income for federal income tax purposes shall not be jeopardized thereby. 6. MAINTENANCE OF PREMISES. 6.1 Maintenance and Repair. (a) Maintenance and Repair by Tenant. Tenant shall at all times throughout the Sublease Term, at its sole cost and expense, keep the interior of the Premises, including the interior walls and nonstructural portions of the Premises, as well as exterior doors and entrances, all windows, floor coverings, sills, door closures, moldings, trim of all doors and windows partitions, door surfaces, fixtures and equipment (including lighting) in good order, condition, and repair. Without limiting the generality thereof, Tenant shall keep the glass of all windows, doors, and showcases within the Premises clean and presentable; immediately replace all broken glass within the Premises; at reasonable intervals paint or refinish. the interior of the Premises; keep all plumbing within the Premises (including pipes, drains, toilets, basins and water heaters) reasonably clean and in a good state of repair, and keep all utilities, including circuit breakers, HVAC systems, panel boxes and Tenant's meters, within the Premises in a good state of repair. (b) Failure to Maintain by Tenant. If Tenant fails to keep and preserve the Premises as set forth in Section 6.1(a) above and such failure continues after Landlord has given Tenant notice of such failure (pursuant to Section 14.1(d)), Landlord may, at its option, put or cause the same to be put in the condition and 663330/10 13 state of repair agreed upon, and in such case, upon receipt of written statements and copies of invoices from Landlord's contractor(s) and/or vendor(s), Tenant shall promptly pay the entire cost thereof as Additional Rent. Landlord shall have the right, without liability, to enter the Premises for the purpose of making such repairs upon the failure of Tenant to do so. (c) Maintenance and Repair by Landlord. Landlord covenants and agrees, at its expense throughout the Sublease Term and without reimbursement or contribution by Tenant except as provided in Section 6.2 below, to keep and maintain in good condition and repair, and to replace, as and when necessary, the following portions of the Project: foundations; exterior surfaces and paint; plumbing system to the point of distribution within the Premises; electrical systems to the point of distribution within the Premises; utility lines and connections to the point of distribution within the Premises; sprinkler mains, if any; all structural systems, including without limitation the roof, roof membrane and roof covering (and including all interior ceilings and any inventory and other personal property if damaged by leakage); load bearing walls; floors; slabs and masonry walls. (d) Failure to Maintain by Landlord. If Landlord fails to keep and preserve the Project as set forth in Section 6,1(c) above, and such failure continues for thirty (30) days (five (5) days in the case of failure to maintain, repair or replace the roof) after Tenant has given to Landlord notice of such failure, provided that, if such failure results in an emergency, no prior notice is required, Tenant may, at its option, put or cause the same to be put in the condition and state of repair agreed upon, and in such case, Landlord shall reimburse Tenant the amounts incurred by Tenant in performing such repairs within thirty (30) days after delivering to Landlord written statements and copies of invoices from Tenant's contractor(s) and/or vendor(s). In the event Landlord shall fail to so reimburse Tenant, Tenant may credit the amounts due Tenant from Landlord against any payment next becoming due under this Sublease or any other payment obligations under this Sublease. Further, in the event any repair or construction by Landlord, whether under this provision or otherwise, results in all or part of the Premises being unavailable for Tenant's use or if Tenant's operations otherwise are adversely affected thereby, Tenant's Base Rent, Additional Rent and other charges shall be abated in the same proportion that the Premises are unavailable or Tenant's operations are affected adversely until such time as Tenant is able to reopen such portions of the Premises for its operations or Landlord completes its repairs or construction. 6.2 Replacement Reserve, Commencing at such time as Landlord and Tenant shall mutually agree but in no event (unless otherwise agreed by Tenant) prior to January 1, 2008 and in no event (unless otherwise agreed by Landlord) later than January 1, 2010, and continuing throughout the remainder of the Sublease Term, Tenant shall pay to Landlord, annually on or before March 31 of each calendar year during the Sublease 663330/10 14 f Term, Tenant's Proportionate Share of the "Annual Replacement Reserve." The "Annual Replacement Reserve" is the amount reasonably required to be paid by Landlord and Tenant during any calendar year during the Sublease Term to cause to be accumulated sufficient funds to pay, when needed, Capital Expenditures relating to the following components of the Project; building foundations; exterior building surfaces; roof, roof membrane and roof covering; load bearing wails; other structural building components and systems; plumbing, heating, air conditioning, ventilating and electrical systems serving the Common Area or the Project as a whole and not merely either the Premises or Landlord's portions of the Project; and parking areas, landscaped areas and all driveways and walkways on the Land which have not been dedicated for public use pursuant to any plat or other instrument of dedication. Landlord, by notice to Tenant given on or before September 1 of any year prior to the year in which Tenant's Proportionate Share of Annual Replacement Reserve is to be paid by Tenant pursuant to this Section 6.2, shall propose the amount of and the Capital Expenditures proposed to be paid from the Annual Replacement Reserve for the ensuing five (5) years, specifying the components and method of calculation thereof. If Tenant disagrees with the same, the parties shall resolve the dispute in accordance with Article 15 below. Landlord and Tenant shall collaborate in reviewing annually whether the amount of the Annual Replacement Reserve should be adjusted. All amounts paid by Tenant to Landlord pursuant to this Section 6,2 shall be deposited by Landlord in a segregated, interest-earning account in a depository institution the accounts in which are federally insured. The Annual Replacement Reserve shall not include any amounts relating to systems or components of the Project which are unique and proprietary to a portion or portions of the Project that either are entirely within the Premises (for which Tenant shall be solely responsible), or entirely outside of both the Premises and the Common Area (for which Landlord shall be solely responsible). MAINTENANCE OF COMMON AREAS, 7.1 Maintenance and Repair by Landlord., Landlord covenants and agrees that it shall maintain, or cause to be maintained, the Common Areas in an acceptable manner. All Common Area Costs (as defined in Section 4.2(b)) shall be based upon competitive charges for similar services and/or materials that are available in the general geographical area of the Project. 7.2 Failure to Maintain by Landlord. If Landlord fails to keep and preserve the Common Areas as set forth in Section 7.1 above and such failure continues for thirty (30) days after Tenant has given to Landlord notice of such failure except that no such notice shall be required in the event of an emergency, Tenant may, at its option, put or cause the same to be put in the condition and state of repair agreed upon, and in such case, Landlord shall reimburse Tenant the amounts incurred by Tenant in performing such repairs within thirty (30) days after delivery to Landlord of written statements and copies of invoices from Tenant's contractor(s) and/or vendor(s). In the event Landlord shall fail to so reimburse Tenant, Tenant may credit the amounts due Tenant by Landlord against any payment next becoming due under this Sublease or any other payment obligations under this Sublease. 663330/10 15 8. UTILITIES AND SERVICES, 8.1 Tenant's Obligation. Tenant shall pay before delinquency, at its sole cost and expense, all charges for water, gas, heat, electricity, power, telephone service, trash removal and sewer service charges attributable to the Premises, and all other services or utilities used.in, upon or about the Premises by Tenant or any of its subtenants, licensees, or concessionaires from the Delivery Date and throughout the Sublease Term. The trash enclosure/dumpster serving the Premises shall be in the location set forth on Exhibit A-3 and per the specifications of Exhibit B. 8.2 Landlord's Obligations. (a) Landlord shall cause the necessary meters, mains, conduits and other facilities to be provided and be of adequate capacity for Tenant's use to make water, sewer, gas, telephone and electricity available to the Premises and other occupied space in the Project and to make available to Tenant water, sewer, gas, telephone and electrical services prior to the Delivery Date, at Landlord's expense. (b) Landlord shall supply water and sewer services to Tenant at the Premises. Tenant shall reimburse Landlord Tenant's share based on Tenant's actual consumption of such services monthly. Landlord shall install an individual meter, and Tenant will be billed on the basis of the water and sewer actually used by Tenant, at rates applicable to Landlord's other water and sewer service customers. 8.3 Interruptions. Landlord shall not be liable to Tenant in damages or otherwise if the utilities or services are interrupted or terminated because of necessary repairs, installations, improvements or any cause beyond Landlord's reasonable control, nor shall any such interruption or termination relieve Tenant from the performance of any of its obligations hereunder, except that if Tenant is unable to operate within all or any portion of the Premises, there shall be an abatement of all Base Rent and Additional Rent hereunder during such time period. If the utilities or services are interrupted or terminated and not restored within thirty (30) days, Tenant may elect to terminate this Sublease by providing Landlord with written notice, and this Sublease shall terminate as of the date of such notice. ALTERATIONS. 9.1 Alterations by Tenant. Except for any nonstructural interior alteration which costs FIFTY THOUSAND DOLLARS ($50,000) or less, Tenant shall not make any alterations, additions or improvements in or to the Premises, including but not limited to penetration of the roof, without the prior written consent of Landlord, which consent shall not be unreasonably withheld or delayed. Any such alterations, additions or improvements consented to by Landlord, including roof penetration, shall be made at Tenant's sole cost 663330/10 16 ( and expense. Tenant shall: provide its own trash container or containers for construction debris; promptly remove all construction and related debris from the Common Area; immediately following completion of construction, return the Common Area to the condition it was in immediately prior to construction; and repair and restore any portion of the Common Area harmed as a result of the construction activities to the condition they were in immediately prior to construction, Tenant shall secure any and all governmental permits, approvals or authorizations required in connection with any such work and shall defend, indemnify and hold Landlord harmless from and against any and all liability, costs, damages (including any damage to the Premises, Common Area or any other part of the Project), expenses (including reasonable attorneys' fees), and any and all liens resulting therefrom. Subject to Section 16.1, on the last day of the Sublease Term all alterations, additions and improvements (and expressly including all light fixtures and floor coverings), except trade fixtures, appliances and equipment which does not become a part of the Premises, shall immediately become the property of Landlord. Landlord's review and/or approval of any request for alterations, additions or improvements in or to the Premises, and/or the plans or specifications with respect thereto, shall create no responsibility or liability on the part of Landlord, nor shall such review or approval evidence or constitute a representation or warranty by Landlord with respect to the action or undertaking approved or the completeness, accuracy, design sufficiency or compliance of such plans or specifications with laws, ordinances, rules and/or regulations of any governmental agency or authority. Landlord understands, acknowledges and agrees that Tenant may elect to expand the Premises by building above and/or south of the original - Premises, and Landlord agrees that it will not withhold or delay its consent to such improvements solely on the basis that Tenant is building improvements above and/or south of the original Premises. 10. LIENS AND ENCUMBRANCES. 10.1 Liens. Tenant shall keep the Premises and the Project free from any liens arising out of any work performed, materials furnished or obligations incurred by Tenant. Tenant retains the right to contest any lien or encumbrance upon the Premises provided that Tenant complies with all statutory obligations required to contest such lien. Landlord shall also keep the Premises and the Project free from any liens arising out of any work performed, materials furnished or obligations incurred by Landlord. 10.2 Encumbrances. Tenant shall not, without the prior written consent of Landlord (which Landlord agrees not unreasonably to withhold or delay) cause or suffer to be placed, filed or recorded against the title to the Premises or the Project, or any part thereof, any mortgage, deed of trust, security agreement, financing statement or other encumbrance except for a Memorandum of this Sublease, 10.3 Prime Lease, Landlord covenants and agrees that, throughout the Sublease Term, provided Tenant is not in default under this Sublease, Landlord promptly will pay and perform all of Landlord's obligations under the Prime Lease and, unless Landlord causes the Prime Lease to terminate as a result of a "Non -appropriation" (as defined in the Prime 663330/10 17 Lease), will extend the term of the Prime Lease in order that Tenant shall have the benefit of any and all extensions of the Sublease Term for which Tenant is eligible and shall exercise the option to purchase the Project pursuant to the terms of the Prime Lease in a timely manner. Landlord further agrees that, if Landlord fails timely to pay or perform any such obligation under the Prime Lease, Tenant may, but shall not be obligated to, pay or perform the same and all amounts so expended by Tenant and any and all other costs incurred by Tenant as a result of such failure by Landlord shall be due and payable immediately upon demand by Tenant to Landlord, together with interest thereon at the rate applicable to delinquent amounts owing from Tenant, and if Landlord fails timely to reimburse such amounts, Tenant may apply one hundred twenty-five percent (1251/0) of the same against amounts next becoming due or then owing from Tenant to Landlord pursuant to this Sublease. In the event of a "Non -appropriation" (as defined in the Prime Lease): any Base Rent and Additional Rent becoming due during any calendar year affected by the Non -appropriation shall be payable only as provided in the Subordination, Non -Disturbance and Attornment Agreement of even date herewith by and among the Authority, Landlord and Tenant, and any Additional Rent received by Landlord during any calendar year prior to the first year affected by the Non -appropriation promptly shall be refunded by Landlord to Tenant to the extent that Landlord has not applied the same to pay the Real Estate Taxes, Common Area Costs, Insurance Premiums or Capital Expenditures for which such Additional Rent was collected. 11. ASSIGNMENT AND SUBLETTING. 11.1 Landlord's Consent Required. Tenant may assign, transfer, mortgage, pledge, hypothecate or encumber this Sublease or any interest therein, and/or sublet the whole or any part of the Premises (collectively, an "Assignment"), only in accordance with Section 5.5 above and only with the prior written consent of Landlord, which consent Landlord shall not unreasonably withhold or delay. In the event Landlord does not consent to an Assignment by Tenant, Landlord shall provide Tenant with a reasonably detailed written explanation as to the reasons for withholding such consent. Landlord's consent to such Assignment shall not, unless otherwise so specified, serve to release Tenant of all further liability under this Sublease. 12. INDEMNIFICATION. 12.1 Indemnification. Subject to the provision of Section 13.3 below, Tenant will save and hold Landlord and Landlord's officers, directors and/or partners harmless from and against any and all losses, damages, liabilities and expenses (including reasonable attorneys' fees) resulting from, claimed by or against or incurred by Landlord, arising from any injury to any person, or loss of or damage to any property, caused by or resulting from any negligent or willful act or omission by Tenant or any officer, agent, contractor or employee of Tenant in or about the Premises. Subject to the provisions of Section 13.3 below, Landlord shall defend, indemnify and hold Tenant and Tenant's officers, directors and/or partners harmless from and against any and all losses, damages, liabilities and expenses (including reasonable attorneys' fees) resulting from, claimed by or against or 663330/10 18 incurred by Tenant, arising from any injury to any person, or loss of or damage to any property, caused by or resulting from any negligent or willful act or omission of Landlord or any officer, agent, contractor or employee of Landlord in or about the Premises or the Project. 12.2 Concurrent Negligence. Notwithstanding the provisions of Section 12.1 above, in the event of the concurrent negligence or intentional misconduct of Tenant, its agents, employees, sublessees or contractors on the one hand and that of Landlord, its partners, directors, officers, agents, employees or contractors on the other hand, which concurrent negligence or intentional misconduct results in injury or damage to persons or property and relates to the construction, alteration, repair, addition to, subtraction from, improvement to or maintenance of the Premises, the Common Areas or the Project, a party's (the "Indemnifying Party") obligation to indemnify the other as set forth in this Article 12 shall be limited to the extent of the Indemnifying Party's negligence and/or intentional misconduct, and that of its agents, employees, sublessees or contractors, including the Indemnifying Party's proportionate share of reasonable costs, attorneys' fees and expenses incurred in connection with any claim, action or proceeding brought with respect to such injury or damage. 12.3 Survival. The obligations of Tenant and Landlord under this Article 12 arising by reason of any occurrence taking place during the Sublease Term shall survive the expiration or earlier termination of the Sublease Term. 13. INSURANCE, 13.1 Landlord's Insurance. Landlord will carry and maintain general liability and property insurance as set forth herein. Landlord agrees to carry during the Sublease Term commercial general liability insurance ("Landlord's Liability Insurance") with a combined single limit of not less than ONE MILLION DOLLARS ($1,000,000) per occurrence, insuring against any and all liability of Landlord with respect to the ownership, operation and/or use of the Project. Landlord also agrees to carry during the Sublease Term insurance covering the building of which the Premises are a part for the fall replacement value thereof (exclusive of the cost of excavation, foundations and footings) as may be determined from time to time during the Sublease Term, providing protection against any peril generally included in the classification "all risk," covering fire and extended coverage, vandalism and malicious mischief, sprinkler leakage and all other perils of direct physical loss or damage, insuring the improvements and betterments located in the Project, including the Premises and all appurtenances thereto (but excluding Tenant's personal property, trade fixtures and equipment) ("Landlord's Property Insurance"). Landlord shall also obtain and maintain rental interruption insurance (herein "Rental Interruption Insurance") covering a period not to exceed one (1) year. Said insurance policies shall be with an insurance company or companies with general policy holders' rating of not less than "A -VIII" as rated in the most current available Best's Key Rating Guide and which are qualified to do business in the State of Minnesota. Landlord's Liability Insurance and Landlord's Property Insurance shall 663330/10 19 collectively be deemed "Landlord's Insurance Policies." Landlord shall, upon request, furnish to Tenant from time to time a certificate of Landlord's Insurance Policies. 13.2 Tenant's Insurance, Tenant shall, during the entire Sublease Term, keep in full force and effect a policy or policies of commercial general liability insurance and property damage insurance with respect to the Premises and Tenant's operations and those of any sublessee of Tenant in the Premises, in which the combined single limit of liability shall be not less than ONE MILLION DOLLARS ($1,000,000). Said policy shall name Landlord and Landlord's lender as additional insureds and contain a clause that the insurer may not cancel or change the insurance coverage limits without first giving Landlord thirty (30) days' prior written notice, except cancellation for nonpayment of premium, in which case only ten (10) days' prior written notice shall be required. Said insurance policy shall be with an insurance company or companies with general policy holders' rating of not less than "A -VAI" as rated in the most current available Best's Key Rating Guide and which are qualified to do business in the State of Minnesota 133 Waiver of Subrogation. Landlord and Tenant hereby mutually release each other from liability and waive all right of recovery against each other for any loss in or about the Premises, or the Project, as the case may be, from perils insured against under their respective fire or liability insurance contracts, including any all risk endorsements thereof, whether due to negligence or any other cause. Either Landlord or Tenant shall, at the request of the other party, execute and deliver to such requesting party a waiver of claims and waiver of subrogation in the form and content reasonably required by the requesting party's insurance carrier. To the extent Landlord or Tenant fails to maintain the insurance required under the terms of this Sublease, such failure shall be a defense to any claim asserted by Landlord or Tenant against the other by reason of any loss sustained by the claiming party, due to circumstances that would have been covered had such required insurance been maintained, 13.4 Certificate of Insurance. A certificate issued by the insurance carrier for each policy of insurance required to be maintained by either Landlord or Tenant under the provisions of this Sublease shall be delivered to the other party upon or before the delivery of the Premises to Tenant for any purpose, and thereafter annually, upon renewal at either party's request. Each of said certificates of insurance and each such policy of insurance required to be maintained by either party hereunder shall expressly evidence insurance coverage as required by this Sublease. Any insurance required by this Sublease may be provided as part of Tenant's blanket insurance policy. Tenant may self -insure all plate glass on the Premises. In the event insurance carried by Landlord covers the Premises and other property and duplicates insurance already carried by Tenant, or a particular tenant's use increases the premiums to be paid by Landlord, Landlord shall reduce the total premiums by such an additional amount prior to allocating Tenant's Proportionate Share of such premiums. 14. DEFAULT BY TENANT. 663330/10 20 14.1 Events of Default. The following events shall be deemed events of default by Tenant under this Sublease if not cured within the applicable period specified in Section 14.2: (a) Part or all of the Base Rent hereby required is not paid within 10 days of when due, or (b) Tenant becomes insolvent or commits an act of bankruptcy or becomes bankrupt or takes the benefit of any statute that may be in force for bankrupt or insolvent debtors or becomes involved in voluntary or involuntary winding up proceedings or if a receiver shall be appointed for the business, property, affairs or revenues of Tenant, or (c) Tenant moves or commences, attempts or threatens to move its goods, chattels and equipment out of the Premises or ceases to conduct its operations from the Premises, or (d) Tenant fails to observe, perform and keep each and every of the covenants, agreements, provisions, stipulations and conditions herein contained to be observed, performed and kept by Tenant (other than payment of Rent). 14.2 Period of Cure. Any shorter period for cure provided by law notwithstanding, and in lieu thereof, Tenant may cure any default under Section 14.1(c) at any time within five (5) days after written notice of default is received by Tenant from Landlord; and Tenant may cure any default under Section 14.1(d) above, within thirty (30) days after written notice of default is received by Tenant from Landlord, provided that if such non - monetary default is curable but is of such a nature that the cure cannot be completed within thirty (30) days, Tenant shall be allowed to cure the default if Tenant promptly commences the cure upon receipt of the notice and diligently prosecutes the same to completion as promptly as reasonably possible thereafter. In the event of any involuntary proceeding referred to in Section 14.1(b), the commencement of such involuntary proceeding shall not be an event of default unless such proceeding is not dismissed or otherwise discharged within sixty (60) days after the commencement thereof. 14.3 Landlord's Notice of Default. Landlord's notice of default may be accomplished by, and shall not be in addition to, any notice otherwise required by law. 14.4 Remedies Upon Default. Upon the occurrence of any event of default by Tenant, Landlord shall have, in addition to any other remedies available to Landlord under this Sublease or at law or in equity, the option to pursue any one or more of the following remedies (each and all of which shall be cumulative and non-exclusive) without any notice or demand whatsoever: (a) Terminate this Sublease, in which event Tenant shall immediately surrender the Premises to Landlord, and if Tenant fails to do so, Landlord may, 663330/10 21 without prejudice to any other remedy which it may have for possession or arrearages in rent, and as allowable by law, enter upon and take possession of the Premises and expel or remove Tenant and any other person who may be occupying the Premises or any part thereof. Tenant hereby waives any rights it may have to make any claim or assess any damages against Landlord for such entry and/or expulsion and Landlord may recover from Tenant the following: (i) Any unpaid Rent which has been earned at the time of such termination; plus (ii) The amount of any unpaid Rent which would have been earned after termination until the time of award; plus (iii) The amount of any unpaid Rent for the balance of the Sublease Term after the time of award; plus (iv) Any other amount necessary to compensate Landlord for all the detriment proximately caused by Tenant's failure to perform its obligations under this Sublease or which in the ordinary course of things would be likely to result therefrom, specifically including but not limited to brokerage commissions, advertising expenses and legal fees incurred, expenses of remodeling the Premises or any portion thereof for a new tenant, whether for the same or a different use, and any special concessions made to obtain a new tenant; and (v) At Landlord's election, such other amounts in addition to or in lieu of the foregoing as may be permitted from time to time by applicable law. (b) The term "Rent" as used.in this Section 14.4 shall be deemed to be and to mean all sums of every nature required to be paid by Tenant pursuant to the terms of this Sublease, whether to Landlord or to others. (c) If Landlord does not elect to terminate this Sublease on account of any default by Tenant, Landlord may, from time to time, without terminating this Sublease, enforce all of its rights and remedies under this Sublease, including the right to recover all Rent as it becomes due. 15. DISPUTE RESOLUTION. Landlord and Tenant shall in good faith attempt to settle any dispute arising under this Sublease. In the event that Landlord and Tenant cannot resolve a dispute, the matter shall be submitted to a Dispute Resolution Committee (hereinafter "DRC") under the terms of this Article 15. The purpose of the DRC shall be to resolve any dispute arising under the terms of this Sublease, unless specifically excepted elsewhere, as expeditiously as 663330/10 22 possible so as not to impair duties, benefits and obligations arising from the terms of this Sublease. The DRC shall consist of three members. Landlord and Tenant shall each appoint one member. These two members, after consultation with the party who appointed them, shall together select the third member. Members shall be appointed each year and in the event any one member resigns or is otherwise unavailable, the party or the members who appointed such member shall appoint a replacement member. Either party may, by written notice to the other and to the DRC, submit a dispute to the DRC. The DRC shall convene within five business days of notice, or as soon as possible. All proceedings before the DRC shall be informal. Each party will select a person or persons to present its case to the DRC. Established legal procedure and evidentiary rules may be used as a guide in conducting the proceeding, but formal rules of evidence shall not apply to the proceeding. The proceeding shall not be open to ,the public. Landlord and Tenant shall have the right of discovery regarding any matter, not privileged by law, which is relevant to a dispute referred to the DRC. The methods of discovery shall include all recognized methods of discovery for civil court actions. Disagreements between Landlord and Tenant regarding the nature or extent of discovery shall be submitted to the DRC pursuant to this Article. The DRC shall determine the extent to which the parties shall proceed with carrying out the provisions of this Sublease during the pendency of the dispute resolution. The DRC shall render a decision upon conclusion of the proceeding as expeditiously as possible, The decision shall be in writing. The DRC shall provide reasons for the decision in writing. In its decision, the DRC shall decide the extent to which each of the parties shall bear the reasonable cost of resolving the dispute. The decision shall be final and binding upon the parties if, in the opinion of the DRC, the total monetary impact of the decision upon either party does not exceed $25,000. In the event the DRC decides that the total monetary impact of its decision upon any party equals or exceeds that amount, the DRC's decision may be appealed by either party to the District Court of Anoka County or Federal District Court of the State of Minnesota per applicable law. In the event the DRC is unable to reach a resolution of a dispute within sixty days of submittal, either party may commence legal action in State or Federal District Court in Minnesota and the authority of the DRC to render a decision shall terminate. 16. DAMAGE BY FIRE OR OTHER CASUALTY 16.1, Limited Damage to Premises. If all or part of the Premises are rendered untenantable by damage from fire or other casualty which, in the reasonable opinion of an architect selected by Landlord and approved by Tenant, can be substantially repaired i 663330/10 23 under applicable laws and governmental regulations within 120 days from the date of such casualty (employing normal construction methods without overtime or other premium), Landlord shall forthwith at its own expense repair such damage, including damage to equipment, furniture, trade fixtures and other chattels owned by Landlord, but excluding damage to improvements, furniture, chattels or trade fixtures owned by Tenant, which shall be repaired forthwith by Tenant at its own expense. 16.2. Major Damage to Premises. If all or part of the Premises are rendered untenantable by damage from fire or other casualty which, in the reasonable opinion of an architect acceptable to Landlord and Tenant, cannot be substantially repaired under applicable laws and governmental regulations within 120 days from the date of such casualty (employing normal construction methods without overtime or other premium), then either Landlord or Tenant may elect to terminate this Sublease as of the date of such casualty by written notice delivered to the other not more than ten (10) days after receipt of such architect's opinion, failing which Landlord shall forthwith at its own expense repair such damage other than damage to improvements, furniture, chattels or trade fixtures, which shall be repaired forthwith by Tenant at its own expense. 16.3. Abatement, If Landlord is required to repair damage to all or part of the Premises under Section 16.1 or 16.2, Base Rent and Additional Rent payable by Tenant under this Sublease shall be proportionately reduced, to the extent that the Premises are thereby rendered untenantable, from the date of such casualty until five (5) days after completion by Landlord of the repairs to the Premises (or the part thereof rendered untenantable) or until Tenant again uses the Premises (or the part thereof rendered untenantable) in its business, whichever first occurs. 16.4. Major Damage to Improvements. If all or a substantial part (whether or not including the Premises) of the Improvements is rendered untenantable by damage from fire or other casualty to such a material extent that in the reasonable opinion of Landlord the Improvements must be totally or partially demolished, whether or not to be reconstructed in whole or in part, Landlord may elect to terminate this Sublease as of the date of such casualty (or on the date of notice if the Premises are unaffected by such casualty) by written notice delivered to Tenant not more than sixty (60) days after the date of such casualty. 16.5. Limitation on Landlord's Liability. Except as specifically provided in this Article 16, there shall be no reduction of Base Rent or Additional Rent, and Landlord shall have no liability to Tenant by reason of any injury to or interference with Tenant's operations or property arising from fire or other casualty, howsoever caused, or from the making of any repairs resulting therefrom in or to any portion of the Improvements or the Premises. Notwithstanding anything contained herein, neither Base Rent nor Additional Rent payable by Tenant hereunder shall be abated if the damage is caused by any negligence of Tenant, its agents, servants or employees. 17. SURRENDER OF PREMISES. 663330/10 24 19. 17.1 Surrender of Possession. On the last day of the Sublease Term, or on the sooner termination thereof; Tenant shall peaceably surrender the Premises in good condition and repair, ordinary wear, tear and casualty excepted, consistent with Tenant's duty to make repairs as herein provided; Tenant shall, at its sole cost and expense, remove all merchandise, trade fixtures and equipment from the Premises, and all property not removed shall be deemed abandoned, all modifications, improvements, alterations, additions and fixtures, other than Tenant's trade fixtures and equipment, which have been made or installed by either Landlord or Tenant upon the Premises shall remain the property of Landlord and shall be surrendered with the Premises as part thereof; and Tenant shall promptly surrender all keys to the Premises to Landlord at the place then fixed for the payment of Rent and shall inform Landlord of combinations to any vaults, locks, and safes left on the Premises, 17.2 Holding Over, In the event Tenant remains in possession of the Premises after expiration of the Sublease Term, and without the execution of a new or amended lease or sublease, Tenant shall be deemed to be occupying the Premises as a tenant from month- to-month subject to all the provisions, conditions and obligations of this Sublease insofar as the same can be applicable to a month-to-month tenancy, except that Base Rent shall be escalated to one hundred twenty-five percent (125%) of the Base Rent payable by Tenant immediately prior to the expiration of the Sublease Term. RULES AND REGULATIONS. 18.1 Common Area. Landlord and Tenant may from time to time adopt reasonable and nondiscriminatory rules and regulations governing the Common Area. Any and all rules and regulations shall be consistent with the terms of this Sublease, and the terms of this Sublease will control unless otherwise agreed to in a writing signed by Landlord and Tenant. QUIET ENJOYMENT. 19.1 Landlord's Covenant. Tenant, upon fully complying with and promptly performing all of the terms, covenants and conditions of this Sublease on its part to be performed, and upon the prompt and timely payment of all sums due hereunder, shall have and quietly enjoy the Premises and enjoy all rights herein granted without interference throughout the Sublease Term. AUTHORITY OF PARTIES. 20.1 Corporate Authority. Each individual executing this Sublease on behalf of a corporation represents and warrants that he/she is duly authorized to execute and deliver this Sublease on behalf of said corporation in accordance with a duly adopted resolution of the board of directors of said corporation: authorizing and consenting to this Sublease; authorizing the specific officers signing this Sublease to execute, acknowledge and 663330/10 25 deliver the same without the consent of any other officer or officers; resolving that such action and execution is in accordance with the bylaws of said corporation; and resolving that this Sublease is binding upon said corporation in accordance with its terms. 21. SIGNS. 21.1 General. Except for Tenant's signage originally constructed by Landlord as part of Landlord's Work, Tenant shall not place or suffer to be placed on the exterior walls or the roof of the Project any sign, awning, canopy, marquee, advertising matter, decoration, letter or other thing of any kind without Landlord's prior consent, which shall not be unreasonably withheld or delayed. 22. CONCESSION AND VENDING SALES. 22.1 General, Landlord or its assigns shall have the right to operate the concession area shown on Exhibit A-2 attached hereto. All costs for construction and equipment for said concession area shall be included in the plans and specifications attached hereto as Exhibit B. 22.2 Operation of Concession Area. Landlord agrees that it will use its best efforts to operate the concession area in a manner using best business practices. Landlord and Tenant agree that all net profits or losses from the concession area operations shall be divided according to Tenant's and Landlord's Proportionate Shares as described in Section 1.3. Landlord and Tenant shall conduct a review, after the first two years of operation, of the concession area and its profit and loss experience, in order to refine marketing strategy, pursue operating efficiency and optimize revenue generation by meeting customer expectations and minimizing food service delivery costs. 22.3 Revenues and Expenses. Landlord shall at the end of each calendar month submit to Tenant a reasonably detailed statement indicating the concession area's monthly revenues and expenses and Tenant's Proportionate Share of said profits or losses. Tenant shall pay to Landlord within thirty (30) days after receipt of such statement Tenant's Proportionate Share of any losses: Landlord shall pay to Tenant at the time of providing the monthly statement, Tenant's Proportionate Share of any profits. 22.4 Audit. Tenant shall have the right to audit the books and records of the concession area in the same manner as provided for Common Area Costs herein. 22.5 Vending Machine Sales. Landlord and Tenant understand, acknowledge and agree that the presence of vending machines at the Project may diminish revenues from the concession area. Accordingly, Landlord and Tenant agree that: (a) they shall share, in the same manner as revenues and expenses of the concession area are shared, all revenue and expenses of vending machines in the Common Area, and jointly shall agree from time to time on the number and location of, identity of vendors for and products offered from all vending machines in the Common Area; (b) no vending machine for food 663330/10 26 or beverage items shall be located in any part of the Project, and no sale of food or beverages, other than from the concession area and the Common Area, shall be permitted in or on the Project, without the mutual agreement of both Landlord and Tenant as to the number and location of, identity of vendors for and products offered from such vending machines; and (c) the revenues and expenses of vending machines permitted in the Project which are not located in the Common Area shall be and remain the property of Tenant (if such machines are located in the Premises) or Landlord (if such machines are located neither in the Premises nor in the Common Area). 23. HAZARDOUS SUBSTANCES. 23.1 Presence and Use of Hazardous Substances. Neither Tenant nor Tenant's agents or contractors shall keep on or around the Premises, the Common Areas or the Project for use, handling, transport, disposal, treatment, generation, storage or sale, any of the following (collectively, "Hazardous Substances"): hazardous materials, hazardous substances, toxic wastes, toxic substances, pollutants, petroleum products, underground tanks, oils, pollution, asbestos, PCB's, hazardous materials or contaminants, as those terms are commonly used or are defined by federal, state and/or local law or regulation related to protection of health or the environment, including, but not limited to, the Resource Conservation and Recovery Act (RCRA), (42 U.S.C. §6901, et. seq.); the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), (42 U.S.C. §9601, et, seq.); the Toxic Substances Control Act, (15 U.S.C. §2601, et. seq.); the Clean Water Act, (33 U.S.C. §1251, et. seq.); and/or by any rules and regulations promulgated thereunder; and/or is subject to regulation by any federal, state or local law, regulation, statute, ordinance or management plan, Notwithstanding the foregoing, Landlord understands, acknowledges and agrees that Tenant, in the course of its normal operations, uses certain Hazardous Substances and that Tenant shall be entitled to use such Hazardous Substances in the Premises throughout the Sublease Term provided such use is in accordance with all applicable laws, rules and regulations relating to the storage, use and disposal of Hazardous Substances. Tenant, promptly upon request by Landlord, shall notify Landlord in writing of the name and quantity of Hazardous Substances being used and/or stored in the Premises by Tenant. 23.2 Clean -Up Costs, Default, and Indemnification. (a) Tenant shall be liable to Landlord for any and all clean-up costs and any and all other charges, fees or penalties (civil and criminal) imposed by any governmental authority with respect to Tenant's use, transportation, generation, storage and/or sale of Hazardous Substances in or about the Premises, the Common Area or the Project. (b) Tenant shall defend, indemnify and hold Landlord harmless from and against any and all costs, fees, penalties and charges assessed against, incurred by or imposed upon Landlord (as well as Landlord's reasonable attorneys' and 663330/10 27 consultants' fees and costs) as a result of Tenant's use, transportation, generation, storage and/or sale of Hazardous Substances. (c) Upon Tenant's default under this Article 23, in addition to the rights and remedies set forth elsewhere in this Sublease, Landlord shall be entitled to the following rights and remedies: (i) At Landlord's option, to terminate this Sublease immediately; and (ii) To recover any and all damages associated with the default, including, but not limited to, clean-up costs and charges, civil and criminal penalties and fees, loss of business and sales by Landlord and all damages and claims asserted by third parties, and Landlord's reasonable attorneys' and consultants' fees and costs. 23.3 Survival. The provisions of this Article 23 shall survive the expiration or earlier termination of this Sublease. 24. ADDITIONAL PROVISIONS. 24.1 Successors or Assigns. All terms, conditions, covenants and agreements of this Sublease shall extend to and be binding upon Landlord, Tenant, and their respective heirs, administrators, executors, successors, subtenants, sublessees, concessionaires, assigns and marital communities, if any, and upon any person or person coming into ownership or possession of any interest in the Premises, by operation of law or otherwise. 24.2 Partial Invalidity. If any term, covenant, or condition of this Sublease or the application thereof to any person or circumstance is, to any extent, invalid or unenforceable, the remainder of this Sublease, or the application of such term, covenant, or condition to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby and each term, covenant, and condition of this Sublease shall be valid and be enforceable to the fullest extent permitted by law. 24.3 Recording. Tenant may record a Memorandum of this Sublease. Tenant will pay all recording fees, costs, taxes and other expenses for the recording. Landlord shall execute such Memorandum of Sublease within ten (10) days after written request by Tenant. 24.4 Notices, Any notice required in accordance with any of the provisions herein, or desired to be given hereunder, if to Landlord shall be delivered personally, or by express courier, or if mailed, then mailed by certified mail, return receipt requested, and addressed to the address of Landlord as set forth in Section 1.1(a), or at such other place as Landlord may in writing from time to time direct to Tenant; and if to Tenant shall be delivered personally, or by express courier, or if mailed, then mailed by certified mail, return receipt requested, and addressed to Tenant as set forth in Section 1.1(b) or at such 663330/10 28 other place as Tenant may in writing from time to time direct to Landlord. Notices shall be deemed given when delivered, if delivered personally or by express courier, and upon receipt or rejection if sent by the United States mail as set forth above. All notices shall be in writing. 24,5 Waiver. The waiver by Landlord or Tenant of any term, covenant or condition herein contained shall not be deemed to be a waiver of such term, covenant or condition or any subsequent breach of the same or any other term, covenant or condition herein contained. The subsequent acceptance of Base Rent, Additional Rent or any other sum hereunder by Landlord shall not be deemed to be a waiver of any preceding default by Tenant of any term, covenant or condition of this Sublease, other than the failure by Tenant to pay the particular sum so accepted, regardless of Landlord's knowledge of such preceding default at the time of the acceptance of such sum. 24.6 Marginal Headings. The marginal headings and titles to the articles, sections and subsections of this Sublease are not a part of this Sublease and shall have no effect upon the construction or interpretation of any part hereof, 24.7 Time. Time is of the essence in regard to this Sublease and each and all of its provisions in which performance is a factor. 24.8 Late Charges. Tenant hereby acknowledges that late payment by Tenant to Landlord of Base Rent or other sums due hereunder will cause Landlord to incur costs not contemplated by this Sublease, the exact amount of which will be extremely difficult to ascertain. Such costs include, but are not limited to, processing and accounting charges and late charges which may be imposed upon Landlord by the terms of any mortgage covering the Premises or the Project. Accordingly, if any installment of Base Rent, Additional Rent or any other costs due from Tenant shall not be received by Landlord or Landlord's designee on or before ten (10) days after the date such sum is due as set forth in Article 4 above, then Tenant shall pay to Landlord a late charge equal to five percent (5%) of the amount past due, but in no event more than the legal maximum on such past due amount. Any such late charges shall be billed by Landlord to Tenant on the next installment of Base Rent due ander this Sublease, Acceptance of such late charges by Landlord shall in no event constitute a waiver of Tenant's default with respect to such overdue amount, nor prevent Landlord from exercising any of the other rights and remedies granted hereunder, Any such late charge not billed to Tenant within ninety (90) days of any late payment shall be deemed waived by Landlord. - 24.9 Choice of Law. This Sublease shall be governed by the laws of the State of Minnesota, 24.10 Legal Expenses. If either party is required to bring or maintain any action (including assertion of any counterclaim, cross-claim or claim in a proceeding in bankruptcy, receivership or any other proceeding instituted by a party hereto or by others), or otherwise refers this Sublease to an attorney for the enforcement of any of the 663330/10 29 covenants, terms or conditions of this Sublease, the prevailing party in such action shall, in addition to all other payments required herein, receive from the other all the costs incurred by the prevailing party at and in preparation for arbitration, trial, appeal, review and proceedings in bankruptcy court, including but not limited to matters unique to bankruptcy, including, but not limited to reasonable attorneys' fees. 24.11 , Tenant and Tenant's Employee Parking. Tenant and Tenant's agents and employees shall park in those areas within the Project as are reasonably designated by Landlord or Landlord's agents. 24.12 Force Majeure. In the event Landlord or Tenant is prevented, delayed or stopped from performing any act, undertaking or obligation under this Sublease by reason of an "event of force majeure," including excessive adverse weather, strikes, lockouts, labor disputes, failure of power, acts of public enemies of this state or the United States of America, riots, insurrection, war, civil commotion, inability to obtain labor or materials, and/or any other cause (except financial) beyond the reasonable control of the party whose performance is so prevented, delayed or stopped, then the time for that party's performance shall be extended one (1) day for each day's prevention, delay or stoppage by reason of such event of force majeure. 24.13 Prior Agreements, THIS SUBLEASE CONTAINS THE ENTIRE AGREEMENT OF THE PARTIES HERETO AND ANY AND ALL ORAL AND WRITTEN AGREEMENTS, UNDERSTANDINGS, REPRESENTATIONS, WARRANTIES, PROMISES AND STATEMENTS OF THE PARTIES HERETO AND THEIR RESPECTIVE OFFICERS, DIRECTORS, PARTNERS, AGENTS AND BROKERS WITH RESPECT TO THE SUBJECT MATTER OF THIS SUBLEASE, AND ANY MATTER COVERED OR MENTIONED IN THIS SUBLEASE, SHALL BE MERGED IN THIS SUBLEASE AND NO SUCH PRIOR ORAL OR WRITTEN AGREEMENT, UNDERSTANDING, REPRESENTATION, WARRANTY, PROMISE OR STATEMENT SHALL BE EFFECTIVE OR BINDING FOR ANY REASON OR PURPOSE UNLESS SPECIFICALLY SET FORTH IN THIS SUBLEASE. NO PROVISION OF THIS SUBLEASE MAY BE AMENDED OR ADDED TO EXCEPT BY AN AGREEMENT IN WRITING SIGNED BY THE PARTIES HERETO OR THEIR RESPECTIVE SUCCESSORS IN INTEREST. THIS SUBLEASE SHALL NOT BE EFFECTIVE OR BINDING ON ANY PARTY UNTIL FULLY EXECUTED BY BOTH PARTIES HERETO. 24.14 Acceptance. The submission of this Sublease to Tenant does not constitute an offer to lease. This Sublease shall become effective only upon the execution and delivery thereof by both Landlord and Tenant. 24.15 Consent, Except where otherwise expressly provided for in this Sublease, any consent or approval required under this Sublease may not be unreasonably withheld or delayed. 663330/10 30 24.16 Cooperation. Throughout the Sublease Term, Tenant plans to offer from the Premises programs and services including, but not limited to aquatic programming (including without limitation swimming lessons and safety certifications), child care programs for Tenant's members and other participants in Tenant's programs, fitness center training, strength training, yoga, and aerobic exercise programs. Landlord shall not provide programs or services to residents of the City of Andover, Minnesota ("Residents") which compete with the core programs and services provided by Tenant from the Premises so long as Tenant is meeting the demand and needs of Residents for such programs and services. Landlord and Tenant agree, throughout the Sublease Term, to work cooperatively to satisfy the recreational and fitness programming needs of Residents without adversely affecting the demand' far Tenant's programs and services offered from the Premises. Landlord agrees that it will provide to Tenant the opportunity to expand the size or scope of Tenant's programs and/or services to meet the needs of Residents, but if Tenant does not satisfy such needs of Residents within a reasonable period of time, Landlord reserves the right to satisfy such needs itself, to the extent that Landlord deems it appropriate and in the best interests of Residents for Landlord to do so. 24.17 Residents Benefits. Unless and until otherwise agreed by Landlord, Tenant shall provide to Residents the benefits relating to the Premises described in this Section, through the thirtieth (30"') anniversary of the Rent Commencement Date. Tenant shall be entitled to require proof of residence in the City of Andover to determine entitlement to these Resident benefits. The benefits provided to Residents during that period shall be: (a) a one-time waiver of up to $79.00 of Tenant's joiner's fee (which currently is $79.00); (b) periodic (8-12 times per year, once during a calendar month) family events for Residents, scheduled by Tenant and for only a nominal usage fee; and (c) four (4) guest passes per Resident household per year. IN WITNESS WHEREOF, the parties hereto have executed this instrument as of the date and year set forth below. _N1I0 • CITY OF ANDOVER, MINNESOTA Its: . -Mayor BY; Its: City Cleric—Treaaurer 663330/10 31 TENANT THE YOUNG MEN'S CHRISTIAN ASSOCIATION OF METROPOLITAN MINNEAPOLIS i b; L� a i/ LEGAL DESCRIPTION OF THE LAND That part of the Northeast Quarter of the Southeast Quarter, Section 22, Township 32, Range 24, Anoka County, Minnesota, described as follows: Commencing at a point on the east line of said Northeast Quarter of the Southeast Quarter, distant 935.81 feet northerly of the southeast corner thereof, for the purposes of this description, said east line is assumed to bear North 0 degrees 42 minutes 30 seconds West; thence on a bearing of West a distance of 125.01 feet to the west right-of-way line of County Road No. 78 and to the point of beginning of the property being described; thence North 0 degrees 42 minutes 30 seconds West, along said west right-of-way line a distance of 41.34 feet; thence on a bearing of West a distance of 889.24 feet; thence South 0 degrees 21 minutes 31 seconds East a distance of 41.34 feet; thence on a bearing of East a distance of 29.86 feet; thence on a bearing of South a distance of 503.00 feet; thence on a bearing of West a distance of 17.47 feet; thence South 20 degrees 49 minutes 09 seconds East a distance of 55.74 feet; thence on a bearing of East a distance of 206.56 feet; thence easterly a distance of 109.76 feet along a tangential curve concave to the south, having a radius of 581.33 feet and a central angle of 10 degrees 49 minutes 06 seconds; thence easterly a distance of 95.26 feet along a reverse curve concave to the north having a radius of 168.67 feet and a central angle of 32 degrees 21 minutes 29 seconds; thence easterly a distance of 105.76 feet along a reverse curve concave to the south, having a radius of 281.33 feet and a central angle of 21 degrees 32 minutes 23 seconds; thence on a bearing of East, tangent to said curve, a distance of 145.11.feet, thence on a bearing of South a distance of 20.00 feet, thence on a bearing of East a distance of 117.34 feet; thence on a bearing of North a distance of 557.00 feet to the intersection with a line drawn on a bearing of West from the point of beginning; thence on a bearing of East a distance of 82.29 feet to the point of beginning, TOGETHER WITH a perpetual, non-exclusive easement for surface Water drainage purposes over and across the following -described seven (7) parcels of land, and a perpetual, non-exclusive easement for ponding purposes over Parcels 1, 2, 3, 4 and 5 described below, all being part of the Northeast Quarter of the Southeast Quarter of Section 22, Township 32, Range 24, Anoka County, Minnesota: Parcel 1: Commencing at a point on the east line of said Northeast Quarter of the Southeast Quarter, distant 935.81 feet northerly of the southeast comer thereof, for the purposes of this description, said east line is assumed to bear North 0 degrees 42 minutes 30 seconds West; thence on a bearing of West a distance of 125.01 feet to the west right-of-way line of County Road No. 78; thence North 0 degrees 42 minutes 30 seconds West, along said west right-of-way line a distance of 41.34 feet; thence on a bearing of West a distance of 340.00 feet to the point of beginning of the.parcel being described; thence continue on a 663330/IO 32 bearing of West a distance of 317.57 feet; thence North 00 degrees 51 minutes 45 seconds West a distance of 70.74 feet; thence South 78 degrees 22 minutes 03 seconds East a distance of 136,34 feet; thence North 82 degrees 13 minutes 25 seconds East a distance of 176,03 feet; thence South 09 degrees 03 minutes 16 seconds East a distance of 67.91 feet to the point of beginning. Parcel 2: Commencing at a point on the east line of said Northeast Quarter of the Southeast Quarter, distant 935.81 feet northerly of the southeast corner thereof; thence on a bearing of West a distance of 125.01 feet to the west right-of-way line of County Road No. 78; thence North 0 degrees 42 minutes 30 seconds West, along said west right-of-way line a distance of 41.34 feet; thence on a bearing of West a distance of 687.16 feet to the point of beginning of the parcel being described; thence continue on a bearing of West a distance of 202.08 feet; thence North 41 degrees 03 minutes 37 seconds East, a distance of 85.54 feet; thence North 87 degrees 34 minutes 51 seconds East a distance of 131.23 feet; thence South 11 degrees 54 minutes 40 seconds East, a distance of 71.58 feet to the point of beginning. Parcel 2A: A strip of land 20.00 feet in width, the center line of which is a line drawn from a point ' on the west line of the above described Parcel 1, distant 32.81 feet north of the southwest corner thereof, to a point on the east line of the above described Parcel 2, distant 32.33 feet northerly of the southeast comer thereof. The side lines of said strip of land shall be lengthened or shortened to terminate on the west line of said Parcel 1 and on the east line of said Parcel 2, Parcel 3: Commencing at a point on the east line of said Northeast Quarter of the Southeast Quarter, distant 935.81 feet northerly of the southeast corner thereof, thence on a bearing of West a distance of 125.01 feet to the west right-of-way line of County Road No. 78; thence North 0 degrees 42 minutes 30 seconds West, along said west right-of-way line a distance of 41.34 feet; thence on a bearing of West a distance of 889.24 feet, thence South 0 degrees 21 minutes 31 seconds East a distance of 41.34 feet; thence on a bearing of East a distance of 29.86 feet; thence on a bearing of South a distance of 503.00 feet; thence on a bearing of West a distance of 17.47 feet; thence South 20 degrees 49 minutes 09 seconds East a distance of 55.74 feet; thence on a bearing of East a distance of 206.56 feet; thence easterly a distance of 20,81 feet along a tangential curve concave to the south, having a radius of 581,33 feet and a central angle of 2 degrees 03 minutes 04 seconds to the point of beginning of the parcel being described; thence continue easterly a distance of 88.95 feet along said 581.33 foot radius curve, having a central angle of 8 degrees 46 minutes 02 seconds; thence easterly a distance of 95.26 feet along a reverse curve 663330/10 33 concave to the north, having a radius of 168.67 feet and a central angle of 32 degrees 21 minutes 29 seconds; thence easterly a distance of 56.72 feet along a reverse curve concave to the south, having a radius of 281.33 feet and a central angle of 11 degrees 33 minutes 08 seconds; thence South 56 degrees 09 minutes 04 seconds West, not tangent to said curve, a distance of 106.50 feet; thence South 12 degrees 39 minutes 33 seconds West a distance of 39.15 feet; thence South 78 degrees 51 minutes 48 seconds West a distance of 69,65 feet; thence South 2 degrees 46 minutes 04 seconds West a distance of 65.88 feet; thence South 89 degrees 02 minutes 54 seconds West a distance of 89.71 feet, thence North 12 degrees 42 minutes 35 seconds East a distance of 67.84 feet; thence North 4 degrees 02 minutes 39 seconds East a distance of 98.13 feet to the point of beginning. Parcel 3A: Commencing at a point on the east line of said Northeast Quarter of the Southeast Quarter, distant 935.81 feet northerly of the southeast corner thereof, thence on a bearing of West a distance of 125.01 feet to the west right-of-way line of County Road No. 78; thence North 0 degrees 42 minutes 30 seconds West, along said west right-of-way line a distance of 41.34 feet; thence on a bearing of West a distance of 889.24 feet; thence South 0 degrees 21 minutes 31 seconds East a distance of 41.34 feet; thence on a bearing of East a distance of 29.86 feet; thence on a bearing of South a distance of 503.00 feet; thence on a bearing of West a distance of 17.47 feet; thence South 20 degrees 49 minutes 09 seconds East a distance of 55.74 feet; thence on a bearing of East a distance of 206.56 feet, thence easterly a distance of 109,76 feet along a tangential curve concave to the south, having a radius of 581.33 feet and a central angle of 10 degrees 49 minutes 06 seconds; thence easterly a distance of 95.26 feet along a reverse curve concave to the north, having a radius of 168.67 feet and a central angle of 32 degrees 21 minutes 29 seconds; thence easterly a distance of 69.98 feet along a reverse curve concave to the south, having a radius of 281,33 feet and a central angle of 14 degrees 15 minutes 09 seconds to the point of beginning of the parcel being described; thence continue easterly a distance of 35.78 feet along said 281.33 foot radius curve, having a central angle of 7 degrees 17 minutes 14 seconds; thence on a bearing of East, tangent to said curve, a distance of 145.11 feet, thence on a bearing of South, a distance of 16,28 feet; thence North 85 degrees 34 minutes 11 seconds West a distance of 181.34 feet to the point of beginning. Parcel 4: Commencing at a point on the east line of said Northeast Quarter of the Southeast Quarter, distant 935.81 feet northerly of the southeast corner thereof, thence on a bearing of West a distance of 207.30 feet; thence on a bearing of South a distance of 557.00 feet to the point of beginning of the parcel being described; thence on a bearing of West a distance of 73.37 feet; thence South 7 degrees 32 minutes 48 seconds West a distance of 176.86 feet; thence South 00 degrees 52 minutes 41 seconds East a distance of 90.99 feet; thence South 88 degrees 57 minutes 56 seconds East a distance of 154.46 feet; thence 663330/10 34 North 00 degrees 39 minutes 27 seconds West a distance of 269.12 feet to the intersection with a line drawn on a bearing of East from the point of beginning; thence on a bearing of West a distance of 56.15 feet to the point of beginning. Parcel 5: Commencing at a point on the east line of said Northeast Quarter of the Southeast Quarter, distant 935.81 feet northerly of the southeast corner thereof; thence on a bearing of West a distance of 143.23 feet to the point of beginning of the parcel being described; thence continue on a bearing of West a distance of 64,07 feet; thence on a bearing of South a distance of 557.00 feet; thence on a bearing of East a distance of 64.07 feet; thence on a bearing of North a distance of 557.00 feet to the point of beginning. 663330/10 35 SfTC P)AllI� ANDOVER /YMCA COMMUNITY CENTER �. i PLANS AND SPECIFICATIONS FOR THE COMMUNITY CENTER All drawings, plans, specifications, manuals and other papers included in: (a) Bid Package #1 for the Project, prepared by Rozeboom Miller Architects, Inc. ("RMA"), as amended by Addendum #1, dated January 19, 2004 (7 pages), and Addendum #2, dated January 21, 2004 (1 page); (b) Bid Package #2 for the Project, prepared by RMA, as amended by Addendum #1, dated February 27, 2004 (3 pages), and Addendum 42, dated March 3, 2004 (3 pages); (c) Bid Package #3 for the Project, prepared by RMA, as amended by Addendum #1, dated May 5, 2004 (3 pages); and (d) Bid Package #4 for the Project, prepared by RIM Construction, as amended by Addendum #1, dated May 5, 2004 (3 pages), prepared by RMA; as any of the same hereafter may be amended or supplemented by mutual agreement of Landlord and Tenant. 663330/]0 37 EXHIBIT C DESCRIPTION OF LANDLORD'S WORK Landlord shall be obligated to construct everything as shown in the Plans and Specifications attached in Exhibit B hereto finished and ready for occupancy by Tenant. Tenant shall be responsible for providing all personal property on the Premises in such a manner and quantity as to allow the operation of a YMCA facility within the Premises. 663330/10 38 663330/10 EXHIBIT D FORM OF CONFIRMATION OF TURNOVER AND PUNCH LIST (To be agreed to hereafter by Landlord and Tenant) 39 SCT' "� E 4.1 BASEREN. AYNMNTS (1) The wmmtmnings aPDliW,v1 babazN w arcual mmwgs (2) ]Lis pvymms is essL flow�dvovsb Ciry allovled Pah DWiwtim Fuadx 'If(kPiml Con baem SLm[fa0 eis¢ov dva dssa Ciry wifl PW'd<is Pv�d9a af[Le Bax lim<mdfbc CiHu'8l be rcmbv<acd cN¢vs [Lc dmeiLa<Cvpitvl tiovsbccomcaw0able or a[Ommd ofNc Sublme<TamiPSubleax Tamie no[a[<adN, oc oa<mvixcdusivg fort camsw <FSublease Tam. flee 8ecdan 4.1(4.1(ce)) Maaa1 Ysymcv< Gross YMCw Capiml Aad'1C'ry - Ne<YMCw YMCA Dam Psiaeiml iasc<e< Totvl 263 ]ISR (1) ]SaseRm< wmval Yrar Covmibutioa• Coavibuuoa 8vs<Rm< 13aseRm< Ymr SA2000 110,496.16 110,496.16 (3976.41) 106319.75 306519.75 2004 - (106,519,75) (2) - - 2004 11]2005 233,991.88 233,991.88 (8,474.86) 225517.02 (225,517.02) - - 8/12005 233,991.88 233,991.88 (8,474.86] 225,517.02 451,034.04 2005 (275,517.02) - _ - 2005 2112006 233,991.88 233,991.88 (8,474.86) 225517.02 (225517.02) - - MM06 233,991.88 233,991.88 (8,474.86) 225517.02 45I,034.04 2006 (225517.02) _ _ 2006 21112007 233,991.88 ]33,991.88 (8,474.86) 225517.02 (225,517.02) 8/12007 293,991.88 233,991.88 (8,474.86) 225317.02 451,034.04 2007 (225,517,02) - _ _ 2001 2112008 233,991.88 233991.88 (8,474.56) 225517.02 (215,347.88) - 10,169.14 8/12008 233,991.58 233991.88 ($474.86) 225517.02 453,034.04 2008 - 225,517.02 235,686 2008 2/12009 190,000.00 233991.88 423991.88 (8,474.86) 415537.02 - 415317.02 SN (W 230,761.88 230,761.88 (8.474.86) 222,28].02 637,804.04 2009 (2,804.04) 219,48298 635,000 2009 2112010 200,000.00 230,761.88 430,763.88 (8,474.86) 421}87.02 - 422,287.2 8/72010 221.063.88 227.061.88 (8.474.56) 218557.02 660,8]4.04 2010 (5.874.04) 212,71298 635,000 2010 81120t1 205,000.00 227,061.58 432,061.88 (8,474.86) 423387.02 423,587.02 &/12011 222961.68 272961.88 (8,474.86) 214.45/.2 638,074.04 2011 (3,074.oa) 211,41298 63$,400 2011 2/72012 215,000.00 222,961.88 437,961.88 (8,47486) 429,48].02 429,487.02 8/12012 218,446.88 218,446.88 (8.474.86) 209,972.02 639,4$9.04 2012 (4.459.04) 20$512.98 635,000 2012 2/12013 220,000.00 218.46.88 438,446.85 (8,474.86) 429,972.02 - 4299]2.02 8/12013 213.663.88 213,661.88 (8.474.86) 205.187.02 63$,159.04 2013 (159.04) 205,021.98 635,000 2013 2/72014 230,000.0➢ 213,661.86 443,661.88 (8,474.86) 435,187.2 - 435.18].02 8/120I4 20&48588 20$486.88 (8,474,86) 200,01202 635,199.04 2014 (199.04) 199,812.98 635.000 2014 2.2015 245-M0.00 208.486,86 453,486.88 (8.474.86) 445,01202 4 5,0 202 8/12015 202361.88 202}61.88 (8,474.86) 193.882.42 638.899.06 2015 (3,899.04) 389987.98 635,000 2015 2/12016 255,000.00 457}61.88 (6,474.86) 448,882.02 _ 8!12016 10.gm.88 195986.85 195,986.88 (6,474.86) 187512.02 636,399.06 2036 (1}99.04) 136JI7p2 186.11298 635,000 2016 2/12017 265,040.00 195966.86 460986.88 (8,47496) 452312.0'7 - 45231202 8/12017 189,361.88 189,361.88 (8,474.86) 180,887.02 633,399.44 2017 - 180.88].02 633}99 2037 8112018 280,000.00 189,361.88 469,361.86 (8,474.86) 460,887.02 - 160,887.02 8/12018 182,361.88 182,361.99 (8,474.66) 173,88].02 634,774.06 2018 - 173,887.02 636,774 2018 232019 293000.40 182}61.88 477}61.88 (8.474.86) 468,887.42 468,887.02 &]/2019 174986.S8 174956.88 (8,474.86) 16651202 635,399.04 2019 (399.06) 166,11298 635,000 2019 212020 310.000.00 164986.88 484986.18 (8.474.86) 47633202 476,312.02 8/12020 167,043.13 162,043.13 (8,474.86) 159.56927 645,080.29 2020 (8019) 155,48].98 635,000 2020 1132021 325,000.00 166,043.13 ,063.13 (8,474 .86) 483,5,1 6817 _ 568 453.2] 8/12021 158,715.00 158 358,715.00 (8,474.86) 350,240.14 633.806.61 2021 - 150240.14 633,808 2022 1112022 340,004.00 158,715.00 496,715.00 (8,474.86) 490,240.14 - 490140.14 8/32022 150.00250 150,00250 (8.474.86) 141,521.64 633,701.]6 2022 - 301,527.66&1 631.768 2022 7/12023 360.000.00 150,00230 510,00250 (8,474.86) 501522.64 - 501327.66 8/12013 140,77630 140,777.50 (8,474.86) 332]0264 633,83028 20]3 - 132,30266 633,830 2023 VI�M4 380,000.00 140.]7)30 520,776.50 (8.474.86) 51230266 - 512}02.64 8/12026 slln 131.040.00 131,040.D0 (8,474.86) 122,565.14 634,36278 2024 - 117565.14 634,868 2024 1112025 395,000.00 133,060.00 526.040.00 (8,474.86) 517565.14 - 536.565.14 8/120]5 120.770.00 120,7 .00 (8,474.86) 11229 5.14 629,660.28 2025 - 112295.14 629,860 2025 2 420,000.00 120,770.00 $40,77700.00 (8,474.86) 532,295.14 - 532195.14 8/12026 Mud 109,850.00 149,850.00 (6,474.86) 101}75.14 633,660.26 2026 - 101}75.14 633,670 2026 2/12027 444,000.00 ]09,850.00 549,850.00 (9,474.86) 541,375.14 - 541}75.14 6)12022 98,410.00 98,410.00 (8,474.86) 89935.14 63131026 2027 - 89,935.34 631}30 2026 213/2028 665,000.00 98.410.00 $63,430.00 (8.47496) 554.935.14 - 554.935.14 8/12028 86}20.00 86}20.00 (8,474,86) 62,815.14 632,780.28 2028 - 71,845.14 632780 2028 2/12429 485,000.00 86,320.00 571,720.00 (8.474.56) 562845.34 _ 562.845.10 6/12029 ]3,710.00 73,610.00 (8.474.80 628,08028 2029 - 65,235.14 626,080 2029 510,000.00 63,210. 00 583,710.00 (8,47496) 5)65,235.14 5.235.24 - 573135.11 S/IM30 8/12030 60,450.00 60,450.00 (6,474.86) 53965.34 627110.78 2030 - $1975.14 62611➢ 2030 2112031 540,000.00 60,450.00 600,450.00 (8,47496) 591,915.14 - 591975.14 8/12431 46,410.00 66,410.00 (8,474.86) 36935.14 629,9IQ28 2031 - 32,935.34 629910 2031 1132032 565.000.00 46.10.00 611,410.00 (8,474.86) 602935.14 - 602935.14 8/12032 31.720.00 31,720.00 (8.474.86) 23145.19 626,180.28 2032 - 13145.34 626,180 2032 2/32033 595,000.00 33,220.00 626120.00 (8.47486) 618145.14 - 618145.14 8/12033 16.130.00 16,250.00 (8,47496) 7,765.14 626,02018 2033 - 6,765.14 626,020 2033 1112034 6]5,000.00 16,250,00 641150.00 (353,68268] 287,567.32 28'!567.32 2034 - 286,567,32 287567 2034 9.355,000.00 9,5321..70 18,887110.60 (84910097) 18.038,039.73 18,038.039.73 (3568,450.0) (128,866.40) 16,344,713,33 (1) The wmmtmnings aPDliW,v1 babazN w arcual mmwgs (2) ]Lis pvymms is essL flow�dvovsb Ciry allovled Pah DWiwtim Fuadx 'If(kPiml Con baem SLm[fa0 eis¢ov dva dssa Ciry wifl PW'd<is Pv�d9a af[Le Bax lim<mdfbc CiHu'8l be rcmbv<acd cN¢vs [Lc dmeiLa<Cvpitvl tiovsbccomcaw0able or a[Ommd ofNc Sublme<TamiPSubleax Tamie no[a[<adN, oc oa<mvixcdusivg fort camsw <FSublease Tam. flee 8ecdan 4.1(4.1(ce)) 1685 CROSSTOWN BOULEVARD N.W. • ANDOVER, MINNESOTA 55304 • (763) 755-5100 FAX (763) 755-8923 • WWW.CI.ANDOVER.MN.US TO: CC: FROM: SUBJECT: DATE Mayor and Councilmembers Jim Dickinson, City Lee Brezinka, Finance Manager Approve Lease Agreement with the Andover Family Fun Fest May 21, 2019 Mo School District / 2019 To accommodate the activities of the 2019 Andover Family Fun Fest, space is needed on the Andover Elementary School and Andover High School grounds. DISCUSSION The attached is the lease agreement with the Anoka -Hennepin School District and is identical to the agreement used for the 2018 Andover Family Fun Fest with the exception to the date changes. BUDGETIMPACT None. ACTION REQUIRED The Andover City Council is requested to approve the attached lease agreement. Respectfully submitted, Lee Brezinka Attachments: - Lease Agreement AGREEMENT THIS AGREEMENT, made this 4th day of June, 2019, by and between Anoka - Hennepin Independent School District No. 11 ("District") and the City of Andover ("City") - District hereby demises and leases the premises in City, and City hereby leases and accepts the premises from District to have and to hold during the term, subject to the terms and conditions of this Agreement. "Premises" is hereby defined as the grounds, but not the building, of Andover Elementary School located at 14950 Hanson Blvd. NW, Andover, MN 55304 and the parking lot at Andover High School located at 2115 Andover Blvd. NW, Andover, MN 55304. City has inspected the Premises and accepts the same in "As Is" condition. The Premises shall be used and occupied only for the purposes of activities sponsored by City at the City of Andover Family Fun Fest, July 12'" and 13", 2019. It is understood and agreed that City shall have the use of the Premises from July 91" through July 16'", 2019 for "set-up" and "take-down" purposes. The use of the Premises shall be rent free. City agrees to reimburse District for any direct costs that District may incur by reason of City's use of said Premises. During the term, the City shall maintain at its own expense liability insurance, with District named as an additional insured, against claims for death, personal injury, and property damage in an amount of $1,500,000 each occurrence. Said policy shall also insure any property damage to the school building located on the premises caused by the City or its contractors. Policies for the aforesaid insurance shall be in a form with an insurer acceptable to District and shall waive any rights of subrogation against District. City shall, prior to July 9", 2019, deliver to District copies or other evidence of such insurance satisfactory to District that all premiums thereon have been paid and the policies are in full force and effect. It is agreed that no alcoholic beverage shall be served on the Premises. General (a) A representative of District will meet with City and provide site and irrigation plans to help identify acres of use, layout of walks and traffic patterns with intentions to minimize potential damage to the site. (b) Prior to the dates of the Fun Fest set up, District will adjust irrigation schedules and amounts of water to prepare the turf. (c) District will locate and mark all irrigation heads and valve boxes a week prior to set up. (d) City will install protective covers over all irrigation heads within the use area the morning of set up and clearly identify all valve boxes. (e) District will turn off all irrigation to the areas used for Fun Fest during the duration of set up through the completion of clean up and take down. (f) City will, by noon, Tuesday, July 161, clean up and remove all debris, litter and trash from District property that was produced as a result of Fun Fest as well as the removal of all temporary fencing, protective covers over irrigation heads and anything else used during Fun Fest. (g) City will remove and replace soils in areas of petroleum or other contamination that cause damage considered extensive or permanent. (h) Not knowing what weather conditions will occur during Fun Fest and/or the amount of wear damage and compaction from foot and vehicular traffic, City will provide various cultural activities such as aeration, rolling and/or slit seeding as needed to aid in the restoration of the turf. City and District representatives will assess specific restoration needs, timing, materials and procedures the week of July 22nd. (i) Repairs needed to the irrigation system as a result of Fun Fest will be the responsibility and at the expense of City. (j) Any damage or destruction to plant materials, structures and/or other site amenities will be repaired or replaced by City. IN WITNESS WHEREOF, the parties have executed this Agreement the day and year above first written. ANOKA-HENNEPIN INDEPENDENT CITY OF ANDOVER SCHOOL DISTRICT NO. 11 By \ ), - &L--- By Its C'UEi., (XFii£n Its By By Its Its 1685 CROSSTOWN BOULEVARD N.W. • ANDOVER, MINNESOTA 55304 FAX (763) 755-8923 • WWW.ANDOVERMN.GOV TO: CC: FROM: SUBJECT: DATE: Mayor and Councilmembers Jim Dickinson, City Commander Paul Lenzmeier - Anoka Countv Sheriff's Office Anoka County Sheriffs Office Monthly Report - Sheriff May 21, 2019 755-5100 U INTRODUCTION Commander Paul Lenzmeier from the Anoka County Sheriff's Office will be present to provide the Council and the citizens of Andover with an update on law enforcement activities within the City. DISCUSSION To be verbally presented. ACTION REQUIRED For Council information. Respectfully submitted, Commander Paul Lenzmeier Anoka County Sheriff's Office PATROL DIVISION CITY OF ANDOVER - APRIL 2019 OFFENSE JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC 2019 2018 Call for Service 1,320 1,212 1,206 1,233 0 4,971 4,573 Burglaries 2 0 1 1 4 8 Thefts 26 33 26 31 116 91 Crim Sex Conduct 1 0 0 0 1 4 Assault 1 0 5 1 1 0 6 12 Drugs** 16 11 8 3 38 32 -Citations 3 6 1 1 11 16 -Arrests 11 5 4 2 22 12 Dam to Property 8 4 4 4 20 18 Harass Comm 4 0 1 1 6 4 Felony Arrests 9 3 1 4 3 19 30 Gross Misd Arrests 3 3 2 0 8 12 Misd Arrests 26 36 22 16 100 81 DUI Arrests 4 8 3 1 16 21 Domestic Arrests 7 10 6 0 23 14 Warrant Arrests 7 1 3 1 10 7 1 1 1 27 145 Traffic Arrests 1 142 115 1 111 87 455 1 614 DUI Offenses: Day of Week: Sunday Monday Tuesday Wednesday Thursday Friday Saturday Time: 01:20 Patrol Division Monthly Report Page 13 City of Andover Calls for Service 6000 ----- 4,971 4573 5000 4000 3000 2000 1,233 1000 0 Current Last YTD YTD Month Month 2019 2018 Patrol Division Monthly Report Page 13 PATROL DIVISION CITY OF ANDOVER CSO'S ACTIVITY -APRIL 2019 OFFENSE JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Ylu 2019 2018 Call for Service 71 84 119 133 250 407 351 Accident Assist 8 7 10 10 150 133 100 50 35 35 Vehicle Lock Out 7 14 19 13 Current Last YTD YTD Month Month 2019 2018 53 54 Extra Patrol* 192 126 153 359 830 975 House Check 0 0 0 0 1 1 1 1 0 0 Business Check 0 0 0 0 0 0 Animal Complaints 9 2 26 38 75 85 Traffic Assist 5 15 15 15 50 39 Aids: Agency 56 56 56 40 208 1 213 Aids: Public 36 1 32 30 49 147 104 Paper Service 0 0 0 0 0 0 32 16 4 12 Inspections 0 0 0 0 Ordinance Viol 1 12 it 8 * Increase of Extra Patrol during the summer months are due to seasonal patrolling of Andover City Parks. Patrol Division Monthly Report Page 13 City of Andover - CSO's 450 407 400 351 350 300 250 200 150 133 100 50 0 Current Last YTD YTD Month Month 2019 2018 Patrol Division Monthly Report Page 13 Significant Events Drug Arrest C I T Y O F DOVER f Significant Events Month of April, 2019 Submitted by Commander Paul Lenzmeier On April 5"' near the 14500 block of Jonquil Street a deputy stopped a vehicle for a traffic violation. The vehicle had left a known residence where previous narcotic activity had been observed. During the course of the traffic stop, a search was completed of the driver and methamphetamine was found. DWI -3,d Degree -ONLY I this month. On April 6"' at 0120 hours, deputies were dispatched to Mcdonald's on Round Lake Blvd by an employee who reported an intoxicated driver in the drive-thru. The vehicle left the drive-thru and deputies stopped the vehicle as it entered the roadway. The driver showed signs of impairment and was arrested for DWI. The driver tested .16. Drug Arrest/Recovered Stolen On April 11`h at 1608 hours, a deputy ran a license plate and it came back as a stolen vehicle from Andover. A traffic stop was made on the vehicle near Round Lake and 157 Ave. The driver was arrested for possession of a stolen vehicle. During the search a small amount of methamphetamine was located. Training Update In April, deputies, sergeants and patrol command staff attended training at Camp Ripley. In two days, all licensed staff met licensing objectives and participated in a many different scenarios. At the end of April, all licensed staff participated in the annual spring firearms training which is a 3 -hour training for handgun, rifle, shotgun and less lethal weapons. Traffic Enforcement Traffic Stops Written Warnings Citations DWI's 263 99 87 1 Arrest Activity Felony Gross Misdemeanor Misdemeanor 3 0 16. Calls for Service Priority Report Unknown Highest Emergency Urgent Priority Report Non -Priority Phone Call Lowest Total 59 13 92 46 121 72 529 247 54 1233 Example of Priorities above: Unknown: No Information Highest: Medical Difficulty Breathing or not breathing. Emergency: Medicals or Medical alarms, Personal Injury Accidents, Suicides, Domestic Assault Urgent: 911 hang ups, Fires, Medical Psych Holds, Thefts, Priority: Welfare checks, Trespassing, Suspicious Activity, Slumper, Runaway, Fires. Report: Reporting only Non -Priority: Animal calls, Civil calls, Debris, Disorderly, Verbal domestic, dumping. Phone Calls: Phone call reports. Lowest Priority: Extra Patrol Information, Follow-up Calls Community Connections ➢ Staff from the Sheriff's Office attended the annual Mayor's Prayer Breakfast. ➢ Hosted a Bike Helmet Clinic and sold 276 Helmets ➢ Opened registration for Night to Unite, Kids safety Series, Home Alone and the CAST fishing event. ➢ Checked 8 car seats for Andover residents. •1 VVE^ / J 1685 CROSSTOWN BOULEVARD N.W. • ANDOVER, MINNESOTA 55304 • (763) 755-5100 FAX (763) 755-8923 • WWW.ANDOVERMN.GOV TO: Mayor and Councilmembers CC: Jim Dickinson, City Administrat FROM: Lee Brezinka, Finance Manager SUBJECT: 2018 Audit Presentation — Redpath and Company, Ltd. DATE: May 21, 2019 INTRODUCTION Peggy Moeller, CPA, an Audit Partner with the City's auditing firm, Redpath and Company, Ltd., will be providing a presentation to the City Council related to the City of Andover Comprehensive Annual Financial Report (CAFR) as of December 31, 2018 and the corresponding Management Report. A December 31, 2018 CAFR, the corresponding Management Report, report on internal controls, independent auditor's report, report on legal compliance and a communication with those charged with governance will be handed out prior to the meeting and will be the basis of Ms. Moeller's presentation. DISCUSSION The City is required to have an independent audit conducted annually. The 2018 Audit was conducted throughout the months of January, February, March and April. The Finance Staff was very involved in the audit process and enjoyed our excellent working relationship with Redpath and Company, Ltd. Ms. Moeller's presentation will touch on the highlights of the City's finances and provide suggestions for improvement on reporting and internal controls. Of significant importance to the Council is that the City received an "unqualified opinion". BUDGETIMPACT No budget impact; the presentation, financial report, corresponding management report, report on internal controls, independent auditor's report, report on legal compliance and a communication with those charged with governance are provided as informational. ACTION REQUESTED The Andover City Council is requested to make a motion to receive the presentation from Redpath and Company, Ltd. and the City of Andover CAFR as of December 31, 2018, the corresponding Management Report, report on internal controls, independent auditor's report, report on legal compliance and a communication with those charged with governance. Respectfully submitted, (/'� Lee Brezinke r= ANOLCOMPANY INDEPENDENT AUDITOR'S REPORT To the Honorable Mayor and Members of the City Council City of Andover, Minnesota Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City of Andover, Minnesota, as of and for the year ended December 31, 2018, and the related notes to the financial statements, which collectively comprise the City of Andover, Minnesota's basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. 55 E 5th Street Suite 1400, St. Paul, MN, 55101 651.426.7000 www.redpathcpas.com We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City of Andover, Minnesota, as of December 31, 2018, and the respective changes in financial position, and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Report on Summarized Comparative Information We have previously audited the City of Andover, Minnesota's 2017 financial statements, and we expressed an unmodified audit opinion on the respective financial statements of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information in our report dated April 25, 2018. In our opinion, the summarized comparative information presented herein as of and for the year ended December 31, 2017 is consistent, in all material respects, with the audited financial statements from which it has been derived. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis, the budgetary comparison information, and the schedules of OPEB and pension information, as listed in the table of contents, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of Andover, Minnesota's basic financial statements. The introductory section, combining and individual fund financial statements and schedules, other information section and statistical section, are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual fund financial statements and schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual fund financial statements and schedules are fairly stated in all material respects in relation to the basic financial statements as a whole. The introductory, other information and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated May 2, 2019, on our consideration of the City of Andover, Minnesota's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City of Andover, Minnesota's internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City of Andover, Minnesota's internal control over financial reporting and compliance. REDPATH AND COMPANY, LTD. St. Paul, Minnesota May 2, 2019 I _ AND !. COMPANY INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GO VERNMENT A UDITING STANDARDS To the Honorable Mayor and Members of the City Council and Management City of Andover, Minnesota We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business -type activities, each major fund and the aggregate remaining fund information of the City of Andover, Minnesota, as of and for the year ended December 31, 2018, and the related notes to the financial statements, which collectively comprise the City of Andover, Minnesota's basic financial statements, and have issued our report thereon dated May 2, 2019. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the City of Andover, Minnesota's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City of Andover, Minnesota's internal control. Accordingly, we do not express an opinion on the effectiveness of the City of Andover, Minnesota's internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. 55 E 5th Street Suite 1400, St. Paul, MN, 55101 651.426.7000 www.redpathcpas.com City of Andover, Minnesota Report on Internal Control over Financial Reporting and on Compliance and Other Matters Page 2 Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Compliance and Other Matters As part of obtaining reasonable assurance about whether the City of Andover, Minnesota's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. REDPATH AND COMPANY, LTD. St. Paul, Minnesota May 2, 2019 55 E 511 Street Suite 1400, St. Paul, MN, 55101 651.426.7000 www.redpathopas.com I , A N D P C O M P A NY MINNESOTA LEGAL COMPLIANCE REPORT To the Honorable Mayor and Members of the City Council City of Andover, Minnesota We have audited, in accordance with auditing standards generally accepted in the United States of America, and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States the financial statements of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City of Andover, Minnesota, as of and for the year ended December 31, 2018, and the related notes to the financial statements, which collectively comprise the City of Andover, Minnesota's basic financial statements, and have issued our report thereon dated May 2, 2019. The Minnesota Legal Compliance Audit Guide for Cities, promulgated by the State Auditor pursuant to Minn. Stat. § 6.65, contains seven categories of compliance to be tested: contracting and bidding, deposits and investments, conflicts of interest, public indebtedness, claims and disbursements, miscellaneous provisions, and tax increment financing. Our audit considered all of the listed categories. In connection with our audit, nothing came to our attention that caused us to believe that the City of Andover, Minnesota failed to comply with the provisions of the Minnesota Legal Compliance Audit Guide for Cities, except as described as item 2018-001. However, our audit was not directed primarily toward obtaining knowledge of such noncompliance. Accordingly, had we performed additional procedures, other matters may have come to our attention regarding the City of Andover, Minnesota's noncompliance with the above referenced provisions. The purpose of this report is solely to describe the scope of our testing of compliance and the results of that testing, and not to provide an opinion on compliance. Accordingly, this communication is not suitable for any other purpose. REDPATH AND COMPANY, LTD. St. Paul, Minnesota May 2, 2019 55 E 5t1 Street Suite 1400, St. Paul, MN, 55101 651.426.7000 www.redpathcpas.com Report on Compliance with Minnesota Legal Compliance Guide for Local Governments Page 2 2018-001 Deficiencies in Collateral for Deposits Criteria: Minnesota Statute I I 8 provides certain specific collateral requirements for deposits, including a requirement that collateral be provided in an amount equal to or greater than 110% of uninsured deposits at a financial institution. Condition: At December 31, 2018, the City held deposits in the amount of $1,654,087 at a local bank. $250,000 of these deposits are insured by the FDIC. Collateral required on the uninsured deposits was $1,544,496 ($1,404,087 x 110%), however, collateral provided was $1,367,896. Cause: Unknown. Effect: Custodial credit risk is the risk that in the event of a bank failure, the City's deposits may not be returned to it. Insufficient collateral increases this risk. Recommendation: We recommend the City verify sufficient collateral is maintained by all banks in order to comply with Minnesota Statute 118A.03 and reduce its custodial credit risk. Management Response: Currently there is a one -day lag on collateral and since there was a larger than anticipated deposit transferred into the account on 12/31/18 from our utility billing provider, there wasn't sufficient collateral by the end of the day. The City currently calls for same-day collateral on the tax settlements but will now include the larger utility billing deposits as part of that process. CITY OF ANDOVER, MINNESOTA AUDIT MANAGEMENT LETTER December 31, 2018 - This page intentionally left blank - Table of Contents Table of Contents ReportSummary ................................................................................... 2 Certificate of Achievement.................................................................... 3 Government -Wide Financial Statements ............................................... 4 GeneralFund........................................................................................ 10 Debt Service Funds............................................................................... 17 Accounting Standards Requiring Implementation in 2019 and 2020..... 20 K, R=CJ :),A4- ag 7' 11 ANO [7ac To the Honorable Mayor and Members of the City Council City of Andover, Minnesota We have completed the 2018 audit of the City of Andover, Minnesota and have issued our report thereon. Our Independent Auditor's Report is included in the City's Comprehensive Annual Financial Report. This Audit Management Letter provides a summary of audit results. Thank you for the opportunity to serve the City. We are available to discuss this report with you at your convenience. REDPATH AND COMPANY, LTD. St. Paul, Minnesota May 2, 2019 55 E 5" Street Suite 1400, St. Paul, MN, 55101 651.426.7000 www.redpathcpas.com Report Summary Report Summary Several reports are issued in conjunction with the audit. A summary is as follows: REQUIRED REPORTS Comprehensive Annual Financial • Financial statements • Unmodified ("clean") Report (CAFR) • Footnotes opinion on the Financial • Supplemental information Statements Report on Internal Control Over Results of testing • No compliance findings Financial Reporting and on • Internal controls over • No internal control Compliance and Other Matters financial reporting findings • Compliance with laws, regulations, contracts and rants State Legal Compliance Report • Results of testing certain • One compliance finding provisions of Minnesota Statutes Communication with Those • Required Communications Charged with Governance DISCRETIONARY REPORTS Audit Management Letter Intended to be a working tool for City Council Audit Management Letter Certificate of Achievement Certificate of Achievement for Excellence in Financial Reporting The "Certificate of Achievement for Excellence in Financial Reporting" is an award program offered by the Government Finance Officers Association of the United States and Canada (GFOA). The City of Andover, Minnesota submitted their Comprehensive Annual Financial Report (CAFR) to the GFOA and received the award for 2002 through 2017. The City of Andover is one of 122 Minnesota entities receiving the award for 2017. We commend the City on this achievement. The City is submitting the 2018 CAFR to the Certificate Program. Audit Management Letter Government -Wide Financial Statements GOVERNMENT -WIDE FINANCIAL STATEMENTS The government -wide financial statements of the City of Andover, Minnesota are presented in Statements 1 and 2 of the 2018 Comprehensive Annual Financial Report. The following comments relate to the Statement of Net Position (Statement 1) and the Statement of Activities (Statement 2). Cash and Investments Cash and investment balances of Minnesota cities are commonly restricted by statutory requirements and long range financial planning objectives. The following schedule presents cash and investment balances by fund type: Cash and Investment Balances $41,724,381 $53,460,504 $11,736,123 The increase in cash and investments in the Capital Project Funds is primarily due to the unspent bond proceeds associated with the $10,000,000 G.O. Capital Improvement bonds of 2018A. December 31, Increase Fund Type 2017 2018 (Decrease) General $7,642,118 $7,965,109 $322,991 Special Revenue 853,681 969,981 116,300 Debt Service 943,862 1,032,604 88,742 Capital Projects 24,308,033 33,841,867 9,533,834 Enterprise 6,988,595 8,644,996 1,656,401 Internal Service 988,092 1,005,947 17,855 $41,724,381 $53,460,504 $11,736,123 The increase in cash and investments in the Capital Project Funds is primarily due to the unspent bond proceeds associated with the $10,000,000 G.O. Capital Improvement bonds of 2018A. Government -Wide Financial Statements Governmental accounting standards require the reporting of investments at fair value (i.e., market value). Therefore, investment income consists of interest, dividends and the change in market value of investments. Reporting investments at fair value results in greater "swings" in investment earnings because of market changes. Investment income of the City for 2017 and 2018 was as follows: 2017 2018 Interest and dividends $583,718 $665,860 Market value change (144,332) 11,910 Total $439,386 $677,770 Government -Wide Financial Statements Property Taxes Receivable A schedule of property tax activity for the past three years is as follows: 2016 2017 2018 Delinquent taxes -January 1 $189,335 $150,287 $101,544 Current levy 11,593,925 11,938,555 12,416,357 Total collectible 11,783,260 12,088,842 12,517,901 Collections Less adjustment to County Delinquent taxes - December 31 Total collections as a percent of current levy 11,792,601 11,910,746 12,388,337 159,628 (76,552) (38,611) $150,287 $101,544 $90,953 101.71% 99.77% 99.77% As presented above, the City is experiencing a consistently solid collection rate for property taxes. In addition to the $90,953 of delinquent taxes above, the City has $2,032 in delinquent tax increments receivable. See later discussion of tax increments (page 7). The Minnesota Property Tax System is complex with the number of different classes of property defined in State Statutes. However, the formulas are based on a simple equation, which is as follows: Market Value x Class Rate = Tax Capacity Market value is the starting point in the property tax equation and in theory is consistently applied to all properties. Class rate is the mechanism used to allocate property taxes on a basis other than market value. Audit Management Letter Government -Wide Financial Statements Tax Increments A schedule of tax increment revenues by district is as follows: Delinquent 2018 Collection Balance TIF District Fund TIF District Current Delinquent 12/31/18 1-2 4501 TIF Refunding Bonds of 2003B and 2004B $ - $ - $2,032 1-5 4515 Tax Increment Projects 70,032 - - 1-6 4516 Tax Increment Projects 16,761 - $86,793 $ $2,032 TIF District 1-5, Fund 4515, is a pass-through, pay-as-you-go district. The City has 2 active tax increment districts. District 1-2 is not an active district but it does have a delinquent receivable balance at year end. Reporting requirements implemented by the Office of the State Auditor (OSA) require reporting of tax increment activity by district. it Management Government -Wide Financial Statements Bonded Debt The City has the following bond issues outstanding at December 31, 2018 and 2017: G.O. Revenue Bonds G.O. Tax Abatement Bonds G.O. Certificates of Indebtedness G.O. Capital Improvement Bonds G.O. Referendum Bonds Total bonds payable December 31, 2017 2018 $4,460,000 $3,775,000 14,140,000 13,270,000 1,330,000 939,000 - 10,000,000 810,000 655,000 $20,740,000 $28,639,000 GASB Statement No. 68 — Pensions GASB Statement No. 68 required the City to record a liability for its proportionate share of the net pension liability (NPL) and related deferred outflows and inflows of resources for defined benefit pension plans (PERA) in 2015. These amounts are reported on the Government -Wide Statement of Net Position (Statement 1) and the Proprietary Funds Statement of Net Position (Statement 6). It should be noted that the City's contribution requirements to pension plans have not changed as a result of this standard. Pension Liability During 2018, the City's share of PERA's NPL decreased from $4,170,090 to 3,541,030. During 2018, the City paid its required contribution to the Plan. The required contribution is a percentage of eligible wages. Audit Management Letter Government -Wide Financial Statements GASB Statement No. 75 — OPEB GASB Statement No. 75 was implemented by the City in 2018 and required the City to record its total Other Post Employment Benefits other than Pensions (OPEB) liability. Prior to 2018, OPEB was measured using the guidance of GASB Statement No. 45 which required the City to record the net OPEB obligation. The net OPEB obligation at December 31, 2017 was $261,651 as recorded under GASB 45. The total OPEB liability at December 31, 2017 as measured under GASB 75 was $263,926. Net position was not restated as a result of the change in accounting principles because its effects on the financial statements were not material. Audit Management GENERAL FUND General Fund The General Fund of the City is maintained to account for the current operating and capital outlay expenditures common to all cities. These basic services include (but are not limited to) public safety, public works, parks and recreation and general government. A history of major revenue sources is as follows: 2009 2010 2011 2012 2013 2014 2015 2016 2017 State Aids Amount $454,546 428,572 439,187 451,993 514,261 509,298 555,765 569,413 568,805 Percent 5% 5% 5% 5% 5% 5% 5% 5% 5% ProDerty Taxes Amount Percent $6,588,601 78% 7,191,602 78% 7,115,936 77% 7,340,532 75% 7,376,284 74% 7,476,294 75% 7,634,714 77% 8,217,768 76% 8,332,634 76% 8,634,130 77% All Other Revenue Amount Percent $1,451,722 17% 1,538,442 17% 1,738,962 18% 1,967,950 20% 2,074,994 21% 1,940,786 20% 1,768,358 18% 2,054,456 19% 1,934,477 19% 2,058,511 18% Total Revenue Amount Percent $8,494,869 100% 9,158,616 100% 9,294,085 100% 9,760,475 100% 9,965,539 100% 9,926,378 100% 9,958,837 100% 10,841,637 100% 10,835,916 100% 11,273,406 100% General Fund A graph of the 2018 and 2017 revenue is as follows: Detail of the 2018 revenue is presented in Statements 4 and 10 of the Comprehensive Annual Financial Report. Audit Management Letter General Fund A graph of 2018 and 2017 current expenditures is as follows: Detail of the 2018 expenditures is presented in Statements 4 and 10 of the Comprehensive Annual Financial Report. $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 11 $ - General avernment public safety Public works Parks and recreation Recycling Unallocated ■ 2018 $2,748,464 $4,956,350 $1,671,735 $1,158,535 $199,182 $11,940 ■ 2017 2,642,222 4,778,336 1,470,723 1,152,988 169,956 14,875 Detail of the 2018 expenditures is presented in Statements 4 and 10 of the Comprehensive Annual Financial Report. Detail of the 2018 expenditures is presented in Statements 4 and 10 of the Comprehensive Annual Financial Report. Audit Management General Fund The fund balance of the General Fund increased by $346,720 in 2018 as follows: Expenditures: 2018 Current: Over General government Final 2,748,464 (Under) Public safety Budget Actual Budget Revenues: 1,739,967 1,671,735 (68,232) General property taxes $8,721,256 $8,634,130 ($87,126) Licenses and permits 377,900 562,525 184,625 Intergovernmental 788,274 829,861 41,587 Charges for services 746,700 888,947 142,247 Fines 90,250 73,719 (16,531) Investment income 75,000 107,561 32,561 Miscellaneous 129,300 176,663 47,363 Total revenues 10,928,680 11,273,406 344,726 Expenditures: Current: General government 3,011,379 2,748,464 (262,915) Public safety 5,000,056 4,956,350 (43,706) Public works 1,739,967 1,671,735 (68,232) Parks and recreation 1,192,969 1,158,535 (34,434) Recycling 157,216 199,182 41,966 Unallocated 70,428 11,940 (58,488) Capital outlay 130,000 129,038 (962) Total expenditures 11,302,015 10,875,244 (426,771) Revenues over (under) expenditures (373,335) 398,162 771,497 Other financing sources (uses): Transfers in 178,558 178,558 Transfers out (230,000) (230,000) - Net change in fund balance ($424,777) $346,720 $771,497 Audit Management Letter General Fund The City's December 31, 2018 General Fund fund balance totaled $8,136,336. The City's General Fund balance, compared to annual expenditures, has been as follows for the past ten years: Geneml Fund Belenm 511,000M 210,50%m - S1400%m - V,SO1 " W,ODRM U,%C om $8,000,= General Fund The fund balance at December 31, 2018 is reported as follows. General Fund Fund Balance Classifications Classification Amount Nonspendable: Inventory $112,971 Unassigned* 8,023,365 Total fund balance $8,136,336 *See minimum fund balance policy discussion on page 16. GASB No. 54 requires the reporting of fund balance based on the constraint imposed on the use of the resources. The fund balance classifications are as follows: Nonspendable - consists of amounts that are not in spendable form, such as prepaid items. Restricted - consists of amounts related to externally imposed constraints established by creditors, grantors or contributors; or constraints imposed by state statutory provisions. Committed - consists of internally imposed constraints. These constraints are established by Resolution of the City Council. Assigned - consists of internally imposed constraints. These constraints reflect the specific purpose for which it is the City's intended use. These constraints are established by the City Council and/or management. Pursuant to City Council Resolution, the City's Administrator and Finance Director are authorized to establish assignments of fund balance. Unassigned - is the residual classification for the general fund and also reflects negative residual amounts in other funds. General Fund Minimum Unassigned Fund Balance As previously noted, approximately 82% of the General Fund's revenue sources are from property taxes and state aids. These revenue sources are generally not received until the second half of the fiscal year. As a result, the City is required to have sufficient reserves at the beginning of the year to fund operations of the first six months of the year. The City's fund balance policy states that the City will maintain a minimum fund balance equal to approximately six months of the subsequent year's operations for cash flow and 1-3% of budgeted expenditures for contingencies. For the City, the minimum unassigned fund balance is computed as follows: 2019 General Fund budgeted expenditures $11,695,493 Cashflow (fifty percent of total) 5,847,747 Contingencies (three percent of total) 350,865 Minimum General Fund unassigned balance $6,198,612 General Fund unassigned fund balance at December 31, 2018 $8,023,365 In addition to the reserves for cash flow and contingencies included in the City's minimum fund balance policy, the City has informally allocated fund balance for the following purposes: Snow emergency $90,000 Public safety 90,000 Facility management 90,000 Information technology 90,000 Economic development 300,000 Fiscal disparities fluctutation 300,000 Total $960,000 General Fund A summary of the purposes of General Fund unassigned balances is as follows: DEBT SERVICE FUNDS The combining financial statements for the nonmajor Debt Service Funds are presented in Statements 20 and 21 of the 2018 Comprehensive Annual Financial Report. Debt Service Funds are a type of governmental fund to account for the accumulation of resources for the payment of interest and principal on debt (other than Enterprise Fund debt). Current governmental reporting standards do not provide for the matching of long-term debt with its related financing sources. Although this information can be found in the City's Comprehensive Annual Financial Report, it is located in several separate sections of the Comprehensive Annual Financial Report. The following schedule extracts information from these sections of the Comprehensive Annual Financial Report to provide an overview analysis of long-term debt and its related funding. Audit Management Letter Debt Service Fund The reader is cautioned that 1) future interest revenue from assessments and investments, and 2) future interest expense on bonded debt, is not included in the following schedule. December 31, 2018 Scheduled Final Fund Fund Unavailable Outstanding Property Maturity Description Balance Revenues Total Debt Taxes Date Certificates of Indebtedness: G.O. Equipment Certificate of 2014A G.O. Equipment Certificate of 2016A Total certificates of indebtedness Capital Improvement Bonds 2018A G.O. Capital Improvement Plan Bonds Abatement Bonds: 2012C G.O. Abatement Bonds Open Space Referendum Bonds 2010A Totals -All Debt Service Funds $352,239 $2,452 $354,691 $545,000 157,830 1,192 159,022 394,000 510,069 3,644 513,713 939,000 10,000,000 277,698 8,082 285,780 13,270,000 257,572 1,412 258,984 655,000 $1,045,339 $13,138 $1,058,477 $24,864,000 $294,525 02/01/20 286,210 02/01/21 16,042,868 02/01/44 15,112,233 02/01/31 552,266 02/01/22 The City analyzes its debt position annually as part of the budget and CIP process and the City's fiscal agent prepares a quarterly review and a refunding/call review with each new issuance. We recommend the City continue to annually review debt service requirements and long-term funding for the above bond issues. Audit Management Letter Debt Service Fund The following decision chart prompts questions to further evaluate a fund's financial position: Condition A Fund balance plus deferred revenue meets or exceeds bonds payable. Cautions 1. Is the City experiencing favorable collection rates for special assess- ments? 2. Are anticipated investment interest rates earned on prepayments ade- quate to replace assessment interest? 3. Is the timing of receipts sufficient to meet bonded debt payments as they become due? 4. Are significant portions of assess- ments not scheduled for collection (green acres, tax forfeit, etc.)? 5. Is arbitrage or negative arbitrage an issue? The debt service fund is clearly adequately coded. Plan for eventu use of surplus. Condition B Fund balance plus deferred revenue is less than bonds payable. Questions 1. Are sufficient future assets scheduled (such as property taxe to meet bonded debt payments? 2. Are cash assets sufficient to generate investment earnings? 3. Are transfers or other funding sources available? 4. Are there future assets to pledge such as assessments, MSA allot- ments, etc.9 he debt service fund is clearly not adequately funded. Plan for altern- ative funding (taxes, transfers, other sources). outcomes are too diverse. Prepare projections to analyze possible scenarios and options. Conclusion 1 Conclusion 2 Conclusion 3 Audit Management Accounting Standards Standards Governmental Accounting Standards Board (GASB) statements that are required to be implemented in future years that may affect the City are as follows: City Implementation GASB Statements Required By Statement No. 83 Certain Asset Retirement Obligations Statement No. 84 Fiduciary Activities Statement No. 87 Leases 2019 2019 2020 Statement No. 88 Certain Disclosures Related to Debt, including Direct 2019 Borrowings and Direct Placements Statement No. 89 Accounting for Interest Cost Incurred before the End of a 2020 Construction Period Statement No. 90 Majority Equity Interests. 2019 F' I A N D 1!I C O M P A N V COMMUNICATION WITH THOSE CHARGED WITH GOVERNANCE To the Honorable Mayor and Members of the City Council City of Andover, Minnesota We have audited the financial statements of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City of Andover, Minnesota (the City) for the year ended December 31, 2018. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards and Government Auditing Standards, as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our letter to you dated November 16, 2018. Professional standards also require that we communicate to you the following information related to our audit. Significant Audit Matters Qualitative Aspects of Accounting Practices Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the City are described in Note 1 to the financial statements. As described in Note 10 to the financial statements, the City implemented GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions for the year ended December 31, 2018. The effect of implementing this new standard was not material to the financial statements. We noted no transactions entered into by the City during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period. Accounting estimates are an integral part of the financial statements prepared by management and are based on management's knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates affecting the City's financial statements were management's estimate of the value of land held for resale, the net pension liability, pension related deferred outflows and inflows of resources and pension expense. Management's estimate of the value of land held for resale is based on estimated recoverable costs. Management's estimates relating to the net pension liability, pension related deferred outflows and inflows of resources and pension expense are based on actuarial studies. We evaluated the key factors and assumptions used to develop the estimates for the value of land held for resale and the estimates for net pension liability, pension related deferred outflows and inflows of resources, and pension expense in determining that they are reasonable in relation to the financial statements taken as a whole. 55 E 51 Street Suite 1400, St. Paul, MN, 55101 651.426.7000 www.redpathcpas.com City of Andover, Minnesota Communication with Those Charged with Governance Page 2 Certain financial statement disclosures are particularly sensitive because of their significance to financial statement users. Determining sensitivity is subjective, however, we believe the disclosure most likely to be considered sensitive is Note 8 — Defined Benefit Pension Plans - Statewide. The financial statement disclosures are neutral, consistent, and clear. Difficulties Encountered in Performing the Audit We encountered no significant difficulties in dealing with management in performing and completing our audit. Corrected and Uncorrected Misstatements Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are clearly trivial, and communicate them to the appropriate level of management. There were no uncorrected misstatements that have an effect on our opinion on the financial statements. There were no corrected misstatements identified during the audit. Disagreements with Management For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction that could be significant to the financial statements or the auditor's report. We are pleased to report that no such disagreements arose during the course of our audit. Management Representations We have requested certain representations from management that are included in the management representation letter dated May 2, 2019. Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a "second opinion" on certain situations. If a consultation involves application of an accounting principle to the City's financial statements or a determination of the type of auditor's opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants. Other Audit Findings or Issues We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the City's auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. City of Andover, Minnesota Communication with Those Charged with Governance Page 3 Other Matters We applied certain limited procedures to the management discussion and analysis, budgetary comparison information, Schedule of Changes in the total OPEB liability and related ratios, the pension information and the Notes to Required Supplementary Information, which are required supplementary information (RSI) that supplements the basic financial statements. Our procedures consisted of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We did not audit the RSI and do not express an opinion or provide any assurance on the RSI. We were engaged to report on the combining and individual nonmajor fund financial statements and schedules which accompany the financial statements but are not RSI. With respect to this supplementary information, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America, the method of preparing it has not changed from the prior period, and the information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves. We were not engaged to report on the introductory, other information and statistical sections, which accompany the financial statements but are not RSI. Such information has not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on it. Restriction of Use This information is intended solely for the information and use of the City Council and management of the City of Andover, Minnesota and is not intended to be, and should not be, used by anyone other than these specified parties. v i4ag as,d REDPATH AND COMPANY, LTD. St. Paul, Minnesota May 2, 2019 qkC I T Y 0 F NDOVE COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2018 1 MINNESOTA - This page intentionally left blank - NN "Irl 11161TJDI&R�w 1685 CROSSTOWN BOULEVARD N.W.. ANDOVER, MINNESOTA 55304 • (763) 755-5100 FAX (763) 755-8923 • WWW.ANDOVERMN.GOV Comprehensive Annual Financial Report of the City of Andover, Minnesota For the Year Ended December 31, 2018 Prepared By: Finance Department City of Andover CITY OF ANDOVER, MINNESOTA TABLE OF CONTENTS I. INTRODUCTORY SECTION Letter of Transmittal Organization Organizational Chart Certificate of Achievement II. FINANCIAL SECTION Independent Auditor's Report Management's Discussion and Analysis Basic Financial Statements: Government -Wide Financial Statements: Statement of Net Position Statement of Activities Fund Financial Statements: Balance Sheet - Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities Statement of Net Position - Proprietary Funds Statement of Revenues, Expenses and Changes in Net Position - Proprietary Funds Statement of Cash Flows - Proprietary Funds Statement of Net Position - Fiduciary Funds Notes to Financial Statements Required Supplementary Information: Page Reference N. 2 10 11 12 14 17 Statement 1 29 Statement 2 30 Statement 3 32 Statement 4 34 Statement 5 37 Statement 6 38 Statement 7 40 Statement 8 42 Statement 9 44 45 Budgetary Comparison Schedule - General Fund Statement 10 80 Schedule of Changes in the Total OPEB Liability and Related Ratios Statement 11 82 Schedule of Proportionate Share of Net Pension Liability - General Employees Retirement Fund Statement 12 83 Schedule of Pension Contributions - General Employees Retirement Fund Statement 13 84 Schedule of Proportionate Share of Net Pension Liability - Public Employees Police and Fire Fund Statement 14 85 Schedule of Pension Contributions - Public Employees Police and Fire Fund Statement 15 86 Notes to Required Supplementary Information Budgets 87 Modified Approach for City Streets and Trails Infrastructure Capital Assets 87 OPEB Information 88 Pension Information 88 CITY OF ANDOVER, MINNESOTA TABLE OF CONTENTS Page Reference No. Combining and Individual Fund Statements and Schedules: Nonmajor Governmental Funds: Combining Balance Sheet - Nonmajor Governmental Funds Statement 16 93 Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Governmental Funds Statement 17 94 Nonmajor Special Revenue Funds: Subcombining Balance Sheet - Nonmajor Special Revenue Funds Statement 18 96 Subcombining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Special Revenue Funds Statement 19 98 Nonmajor Debt Service Funds: Subcombining Balance Sheet - Nonmajor Debt Service Funds Statement 20 102 Subcombining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Debt Service Funds Statement 21 104 Nonmajor Capital Projects Funds: Subcombining Balance Sheet - Nonmajor Capital Project Funds Statement 22 108 Subcombining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Capital Project Funds Statement 23 110 Special Revenue Funds: Table 1 128 Schedules of Revenues, Expenditures and Changes in Table 2 130 Fund Balances - Budget and Actual: Table 3 134 EDA General Statement 24 112 Community Center Statement 25 113 Drainage and Mapping Statement 26 114 LRRWMO Statement 27 115 Forestry Statement 28 116 Right -of -Way Management(Utility Statement 29 117 Charitable Gambling Statement 30 118 Construction Seal Coating Statement 31 119 Internal Service Funds: Combining Statement of Net Position - Internal Service Funds Statement 32 121 Combining Statement of Revenues, Expenses and Changes in Net Position - Internal Service Funds Statement 33 122 Combining Statement of Cash Flows - Internal Service Funds Statement 34 123 Agency Funds: Combining Statement of Net Position - Fiduciary Funds Statement 35 125 Combining Statement of Changes in Assets and Liabilities - Fiduciary Funds Statement 36 126 III. STATISTICAL SECTION Net Position by Component - Last Ten Fiscal Years Table 1 128 Changes in Net Position - Last Ten Fiscal Years Table 2 130 Fund Balances - Governmental Funds - Last Ten Fiscal Years Table 3 134 Changes in Fund Balances - Governmental Funds - Last Ten Fiscal Years Table 4 136 Assessed and Estimated Actual Value of Taxable Property - Last Ten Fiscal Years Table 5 138 CITY OF ANDOVER, MINNESOTA TABLE OF CONTENTS IV. OTHER INFORMATION Combined Schedule of Indebtedness Exhibit 1 Page Schedule of Tax Capacity Rates and Levies Reference No. Property Tax Rates - Per $1,000 of Assessed Tax Capacity Value - Direct and Overlapping Exhibit 3 163 Governments - Last Ten Fiscal Yews Table 6 139 Property Tax Levies and Collections - Last Ten Fiscal Years Table 7 140 Principal Taxpayers - Current Year and Nine Years Ago Table 8 141 Estimated Market Values and New Construction - Last Ten Fiscal Years Table 9 142 Special Assessment Levies and Collections - Last Ten Fiscal Years Table 10 143 Ratio of Net Bonded Debt to Assessed Value and Net Bonded Debt Per Capita - Last Ten Fiscal Years Table 11 144 Computation of Direct and Overlapping Debt Table 12 145 Computation of Legal Debt Margin - Last Ten Fiscal Years Table 13 146 Pledged -Revenue Coverage - Last Ten Fiscal Years Table 14 149 Outstanding Debt by Type - Last Ten Fiscal Years Table 15 150 Demographic and Economic Statitistics - Last Ten Yews Table 16 152 Principal Employers - Current Year and Nine Years Ago Table 17 153 Full Time Equivalent Employees - City Government Employees by Function/Program - Last Ten Fiscal Years Table 18 155 Operating Indicators by Function/Program - Last Ten Years Table 19 156 Capital Asset Statistics by Function/Program - Last Ten Years Table 20 158 IV. OTHER INFORMATION Combined Schedule of Indebtedness Exhibit 1 160 Schedule of Tax Capacity Rates and Levies Exhibit 2 162 Schedule of Deferred Tax Levies - General Obligation Bonds Exhibit 3 163 Schedule of Fund Transfers Exhibit 4 164 1685 CROSSTOWN BOULEVARD N.W. • ANDOVER, MINNESOTA 55304 . (763) 755-5100 FAX (763) 755-8923 • WWW.ANDOVERMN.GOV May 21, 2019 To the Honorable Mayor and City Council City of Andover 1685 Crosstown Blvd. NW Andover, Minnesota 55304 Dear Honorable Mayor and Council Members: The Comprehensive Annual Financial Report is submitted in conformance with all applicable governing laws and regulations. The following has set the standards forth: *Andover City Policy and Code *The State Auditor, State of Minnesota *Government Finance Officers Association *Governmental Accounting Standards Board RESPONSIBILITY. Responsibility for both the accuracy of the presented data and the completeness of the financial statements including all disclosures rests with the City. We believe the data, as presented, is accurate in all material aspects. This report has been presented in a manner designed to fairly set forth the financial position and results of operations as measured by the financial activity of its various funds. FINANCIAL STATEMENT FORMAT. This Comprehensive Annual Financial Report is presented in three main sections: I. Introductory II. Financial III. Statistical The Introduction includes a list of the City's principal officials as of December 31, 2018, the table of contents, the public officials, organizational chart, and this Letter of Transmittal. The Financial Section includes: (1) independent auditors report; (2) management's discussion and analysis; (3) government wide and fund financial statements; (4) notes to the financial statements; (5) required supplementary information; (6) the combining statements, individual fund statements; and, (7) the supplemental information. The Statistical Section includes tables and reports of various economic, social, financial and fiscal data designed to reflect trends and ratios. Generally Accepted Accounting Principles (GAAP) requires that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management's Discussion and Analysis (MD&A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The City of Andover's MD&A can be found immediately following the report of the independent auditors. REPORTING ENTITY. All City funds, departments, commissions, and other organizations for which the City of Andover is financially accountable are presented within the Comprehensive Annual Financial Report. The Andover Firefighters' Relief Association does not meet the established criteria for inclusion in the reporting entity, and accordingly is excluded from this report. GENERAL INFORMATION. The city we know today as Andover was first organized in 1857 under the name "Round Lake Township." However, in 1860 the time was changed to "Grow Township" in honor of Senator Galusha A. Grow of Pennsylvania. Senator Grow spoke at a political campaign in Anoka that year, and the town time was changed to reflect Senator Grow because of his strong advocacy of the Union cause. At that time, the population was 330 and included the geographical area we know today as Ham Lake. In fact, the area of Ham Lake was considered a part of Grow Township until 1871. In 1972, the Grow Township Board of Supervisors recognized that the town was growing at a very rapid rate. They felt a village form of government would provide better services to the community. Board supervisors then voted in favor of proceeding with the incorporation process. The board voted to submit a new name for the village. "Andover Village" was chosen because the name Andover had historical interest. The historical interest, we believe, came from the Andover train station. To the Honorable Mayor and City Council City of Andover, Minnesota You may have heard the popular "train myth" about how Andover received its name. The myth states that a train tipped over in a swamp, and an eyewitness, relaying the incident, said it "went over and over," thereby naming the city "Andover." However, research reveals that the name Andover first appeared in an article dated March 14, 1899 in the Anoka County Union Newspaper - before train tracks were ever built in the city. The article stated that the Eastern Minnesota line of the Great Northern Railway was in the process of constructing railroad tracks from the Coon Creek Cut-off to the North. The railway announced that new railroad stations with mathematical precision were to be located five miles apart from each other. The new stations (from Coon Creek to the North, along the new railroad line) were to be named Andover, Cedar, Bethel, Isanti, Cambridge, Stanchfield, Braham, Grasston, Cornell, and Brook Park. On July 4, 1899, the first train passed through the Andover station. Where the railway came up with the time Andover still remains unknown. Andover Village was established in 1972 and then became the City of Andover, a city of the fourth class, in 1974. Today the City of Andover's population exceeds 20,000, classifying it as a second class city. The City of Andover as it exists today consists of 23,040 acres. Andover has a population estimated at 32,000. A growing suburb of the northern metropolitan area, the City of Andover is approximately sixteen miles from Minneapolis. SERVICES PROVIDED. The City of Andover provides various services to the residents in the community. The current services are: General Government: Mayor and City council Financial administration Information systems Newsletter Elections Facility management City clerk Assessing Engineering Administration Legal Risk management Human resources Planning and zoning Public Safety: Police Protective inspection Animal control Fire protection Civil defense Public Works: Streets and highways Street signs Traffic signals Snow and ice removal Central equipment maintenance Water maintenance Street lighting Sanitation: Storm sewers Sanitary sewer maintenance Parks and Recreation Recycling GOVERNMENT STRUCTURE. Andover is a statutory city with the City Council appointing a City Administrator. The City Administrator has operating responsibilities for all City functions. A list of public officials and organizational chart can be found on page 10 and 11 respectively. ECONOMIC CONDITION AND OUTLOOK Moderate population growth is expected to continue in 2019 and 2020, with an estimated population of 32,800 by 2019. The rate of residential growth as compared to the growth in the 1990's and 2000's has significantly declined as the availability of residentially zoned property decreased. The City has experienced a significant amount of commercial growth from 2000 through current 2018. Continual commercial growth is anticipated over the next couple years, beyond that growth will slow as the amount of undeveloped commercially zoned property also declines. The City's General Fund has two major categories of revenue, which accounted for 85% of the total in 2018. They are general property taxes at 77% and charges for services at 8%. In prior years, intergovernmental revenue was the second largest category of revenue for the General Fund. Intergovernmental revenue includes state aids, such as local government aid (LGA), market value homestead credit (MVHC), highway maintenance aid, fire relief aid and police aid; and county grants, such as recycling and community development. To the Honorable Mayor and City Council City of Andover, Minnesota During the past several years, the State of Minnesota has made numerous changes to laws pertaining to the distribution of LGA, Homestead and Agricultural Credit Aid (HACA) and MVHC resulting in significant reductions in intergovernmental revenue. The City has been able to make up this loss in aid through operational efficiencies and an increased tax levy, the most substantial increase in the local tax rate took place in 2002. The tax laws that resulted in the 2002 change also greatly reduced school district property tax levies, resulting in no net tax increase for most residential property owners. Sweeping changes approved in 2003 resulted in the loss of approximately $590,000 in aid to Andover, that loss in aid was originally intended to be for two years (2003 & 2004) but that loss was extended to include years 2005 and 2006. The state allowed cities the ability to levy up to 60% of the lost 2003 aid in 2004. Again, in 2008 through 2012, the State of Minnesota significantly reduced MVHC to help deal with the state budget deficit. In 2013, the State eliminated MVHC and instituted the new market value exclusion program. In 2014, LGA was reinstated for the City in the amount of $74,655. Due to the unpredictability of the State, those funds were used to help offset the growing needs of the Road and Bridge Capital Projects Fund for street improvements/replacements. The City is not intending to rely on this funding for general operational needs. In 2015, LGA was eliminated again for the City. In 2016, the City received $2,706 in LGA. In 2017 and 2018, it was eliminated again for the City. For 1998 through 2000, cities with populations over 2,500 were under levy limit restrictions imposed by the State. Levy limits severely curb the ability of cities to generate additional tax revenue needed to respond to an increasing demand for services. For 1999 and 2000, the levy limit formula was modified to allow for increases based on commercial and industrial growth. This was a favorable change for Andover, as the City experienced a surge in commercial growth during that period. Levy limits were lifted for 2001 but were reinstated for 2002 - 2004. The 2004 levy limits were so severe that the State did not allow cities the ability to capture residential and commercial market value growth. Levy limits were lifted from 2005 to 2008, but reinstated for 2009 and are still in place in some form yet today. The City's General Fund receives a substantial amount of revenue from licenses and permits. The past ten years are shown below Revenues Change 2009 $ 291,903 n/a 2010 329,901 $ 37,998 2011 387,206 57,305 2012 449,826 62,620 2013 536,706 86,880 2014 364,430 (172,276) 2015 452,422 87,992 2016 625,907 173,485 2017 546,378 (79,529) 2018 562,525 16,147 Revenue from residential building continued to modestly increase from 2010 to 2013, but it is unlikely that those revenues will reach the levels of the early 2000's as a reduced number of new residential lots are being added to the overall lot inventory. The decrease in 2009 is due to the continued downturn in the economy, especially the construction industry. From 2010 to 2013, the home building market showed signs of improvement and some commercial activity taking place accounted for the increase in permit revenue. In 2014, there was a decrease in both residential and commercial activity. There was a slight increase in construction activity in 2015. In 2016, there was an increase in both residential and commercial construction. In 2017, there was a decrease in single-family building permits issued going from 111 permits in 2016 to 94 in 2017. The decline in single-family building permits continued in 2018 to a total of 60, but commercial permit valuations exceeded 2017 by over $10,000,000 thus the increase in 2018. The City's General Fund also receives a considerable amount of revenue from charges for services. The past ten years are shown below: To the Honorable Mayor and City Council City of Andover, Minnesota Revenues Change 2009 $ 701,289 n/a 2010 755,184 $ 53,895 2011 866,584 111,400 2012 973,605 107,021 2013 1,122,461 148,856 2014 998,510 (123,951) 2015 804,228 (194,282) 2016 912,219 107,991 2017 843,023 (69,196) 2018 888,947 45,924 The City analyzes user fees every year as part of the budget process and makes adjustments where appropriate. The decrease in 2009 was expected due to the struggling economy. From 2010 to 2013, the home building market showed signs of improvement and some commercial activity taking place accounted for the increase in plan review revenue. In 2014, the decrease in both residential and commercial activity resulted in a decrease as compared to 2013. A reduction in the scope of roadway projects accounted for a large part of the reduction in 2015 for engineering fees charged as compared to 2014. The increase in 2016 pertains to plan check fees associated with the increase in construction activity and engineering fees charged to roadway projects. The slight decline in 2017 relates to the decrease in housing permits issued as compared to 2016. The increase in 2018 pertains to plan check fees associated with the commercial construction activity taking place. In 2018, the City issued 60 new single-family building permits with a total valuation of $19,703,856 compared to 94 new single- family building permits with a total valuation of $27,847,716 the prior year. The past ten years are shown below: Residential Development New residential development included approval of 49 urban lots within the Shaw's Glen 2nd Addition, Winslow Cove and White Pine Wilderness 411 developments. Also 24 rural lots were approved in a development known as the Preserve at Petersen Farms. The City currently has a supply of 196 urban lots and 32 rural lots (which includes the lots above). Commercial Industrial Development New institutional/commercial/industrial construction did occur in 2018. Growing Generations constructed a new 10,450 square foot day-care facility at 15216 Bluebird Street NW. Fitaholic Fitness opened a facility within a new multipurpose building that is 11,941 square feet at 1714 Banker Lake Boulevard NW. Muddy Paws acquired a vacant building at 3121 161'" Avenue NW and repurposed the 5,640 square foot building into a pet daycare. Other businesses that came to Andover and did extensive tenant finishes or remodels in existing multi -tenant buildings include: Realty One Group, State Farm Insurance Group, FedEx, Dominos Pizza, Derringer Pinewski LLC, Andover Karate, Milk Moms, Jon Smith Subs, City Chiropractic and O'Reilly Auto Parts. Andover High School is to receive close to $30 million in additions totaling 67,000 square feet, and other improvements to another 5,700 square feet of space in the school. Phase 1 additions and remodeling started in 2018. Priority among the projects is an addition to the building to create safe and secure leaming environments through the removal of 12 portable classrooms. The school was originally designed for 1,400 students, but today 1,700 students attend the school. The projects will bring the school's capacity to 2,000 students. There will also be an expansion of the school's security control space, classroom expansion, group learning space, staff planning areas, additional student lockers; expansion of administrative and guidance areas to support the expanded capacity; and an auditorium expansion to increase seating and better serve the increased student capacity and community. In addition, there will be an expansion of the school's cafeteria to accommodate the expanded capacity; an expansion of Andover's New Residential New Commercial / Industrial Permits Valuation Permits Valuation 2009 47 $ 9,246,347 13 $ 767,430 2010 71 14,700,800 11 1,247,106 2011 58 11,803,000 24 11,461,453 2012 81 15,243,007 25 5,042,964 2013 98 20,351,892 15 9,249,466 2014 52 13,926,901 14 4,285,281 2015 74 19,631,775 16 2,513,609 2016 111 28,893,036 7 14,009,200 2017 94 27,847,716 - - 2018 60 19,703,856 2 2,860,000 Residential Development New residential development included approval of 49 urban lots within the Shaw's Glen 2nd Addition, Winslow Cove and White Pine Wilderness 411 developments. Also 24 rural lots were approved in a development known as the Preserve at Petersen Farms. The City currently has a supply of 196 urban lots and 32 rural lots (which includes the lots above). Commercial Industrial Development New institutional/commercial/industrial construction did occur in 2018. Growing Generations constructed a new 10,450 square foot day-care facility at 15216 Bluebird Street NW. Fitaholic Fitness opened a facility within a new multipurpose building that is 11,941 square feet at 1714 Banker Lake Boulevard NW. Muddy Paws acquired a vacant building at 3121 161'" Avenue NW and repurposed the 5,640 square foot building into a pet daycare. Other businesses that came to Andover and did extensive tenant finishes or remodels in existing multi -tenant buildings include: Realty One Group, State Farm Insurance Group, FedEx, Dominos Pizza, Derringer Pinewski LLC, Andover Karate, Milk Moms, Jon Smith Subs, City Chiropractic and O'Reilly Auto Parts. Andover High School is to receive close to $30 million in additions totaling 67,000 square feet, and other improvements to another 5,700 square feet of space in the school. Phase 1 additions and remodeling started in 2018. Priority among the projects is an addition to the building to create safe and secure leaming environments through the removal of 12 portable classrooms. The school was originally designed for 1,400 students, but today 1,700 students attend the school. The projects will bring the school's capacity to 2,000 students. There will also be an expansion of the school's security control space, classroom expansion, group learning space, staff planning areas, additional student lockers; expansion of administrative and guidance areas to support the expanded capacity; and an auditorium expansion to increase seating and better serve the increased student capacity and community. In addition, there will be an expansion of the school's cafeteria to accommodate the expanded capacity; an expansion of Andover's To the Honorable Mayor and City Council City of Andover, Minnesota strength/fitness space to provide all students and school/community programs with opportunities before and after school; an additional gymnasium attached to existing gym space to accommodate the expanded capacity and address storage deficiencies. The Anoka County Parks Department is constructing two new outdoor gathering spaces at the Bunker Hills Activities Center. The first area will remove the current ramps on the south side of the building and replace it with a 120 person capacity deck. This will provide additional space for meetings, family gatherings, weddings, and other events. The second area converts the existing greenhouse into an exterior patio area accessible from the inside as well as the outside. Construction on the deck and patio started in 2018 and will be complete in the spring of 2019. The City of Andover's largest employers are government entities. The Anoka -Hennepin School District has a significant presence in the community and Anoka County's Parks and Highway Departments and Sheriffs Office headquarters are located in Andover. The City of Andover is best classified as a bedroom community, since a majority of the residents commute outside of Andover for employment opportunities. The City does anticipate with the completion of development of the Andover Station Commercial Park that additional employment opportunities will be provided to residents in the new future. Major employers in Andover are as follows: Anoka -Hennepin ISD No I1 Wal-Mart Fairview - Andover Clinic Anoka County Sheriffs Office Kottkes' Bus Service, Inc. Target GAF Materials Corp Anoka County Highway Department Bunker Hills Regional Park/Activity Center YMCA MAJOR INITIATIVES FOR THE YEAR. The City has many accomplishments to report for 2018. The following list is a summary of some of the major initiatives completed throughout the year. 1) Ongoing implementation of a single-family rental housing license program to provide property owners/landlords with educational materials and checklists on how to inspect and maintain the exterior of the property, a list of potential ordinance violations that may occur with a rental property, and an exterior inspection of the building and grounds with city staff. This program was authorized by the Andover City Council in 2009 and is reviewed annually, there were close to 260 single family rental licenses issued throughout the City in 2018. 2) In 2018, the City again saw new residential development which included approval of 49 urban lots within the Shaw's Glen 2nd Addition, Winslow Cove and White Pine Wilderness 4'h developments. Also 24 rural lots were approved in a development known as the Preserve at Petersen Farms. The City currently has a supply of 196 urban lots and 32 rural lots (which includes the lots above). 3) In 2018, the City issued 60 new single-family building permits with a total valuation of $19,703,857 compared to 94 new single-family building permits with a total valuation of $27,847,716 for the preceding year. 4) In 2018, the City saw commercial construction throughout the community. Growing Generations constructed a new 10,450 square foot day-care facility, Fitaholic Fitness opened a facility within a new multipurpose building that is 11,941 square feet, Muddy Paws acquired a vacant building at 3121 161" Avenue NW and repurposed the 5,640 square foot building into a pet daycare. Many other businesses also came to Andover and did extensive tenant finishes or remodels in existing multi -tenant buildings. 5) In 2017 and 2018, the City of Andover, in cooperation with the Anoka County Highway Department, worked through the planning of the Hanson Boulevard expansion and reconstruction. Right of Way clearing and utility work has taken M. Number of Type of Business / Product Employees Elementary and secondary education 928 Retail 335 Healthcare 300 County government and services 250 Bus transportation 225 Retail 150 Roofing materials -manufacturing 150 County government and services 105 County government and services 100 Youth organization - fitness center 100 FOR THE YEAR. The City has many accomplishments to report for 2018. The following list is a summary of some of the major initiatives completed throughout the year. 1) Ongoing implementation of a single-family rental housing license program to provide property owners/landlords with educational materials and checklists on how to inspect and maintain the exterior of the property, a list of potential ordinance violations that may occur with a rental property, and an exterior inspection of the building and grounds with city staff. This program was authorized by the Andover City Council in 2009 and is reviewed annually, there were close to 260 single family rental licenses issued throughout the City in 2018. 2) In 2018, the City again saw new residential development which included approval of 49 urban lots within the Shaw's Glen 2nd Addition, Winslow Cove and White Pine Wilderness 4'h developments. Also 24 rural lots were approved in a development known as the Preserve at Petersen Farms. The City currently has a supply of 196 urban lots and 32 rural lots (which includes the lots above). 3) In 2018, the City issued 60 new single-family building permits with a total valuation of $19,703,857 compared to 94 new single-family building permits with a total valuation of $27,847,716 for the preceding year. 4) In 2018, the City saw commercial construction throughout the community. Growing Generations constructed a new 10,450 square foot day-care facility, Fitaholic Fitness opened a facility within a new multipurpose building that is 11,941 square feet, Muddy Paws acquired a vacant building at 3121 161" Avenue NW and repurposed the 5,640 square foot building into a pet daycare. Many other businesses also came to Andover and did extensive tenant finishes or remodels in existing multi -tenant buildings. 5) In 2017 and 2018, the City of Andover, in cooperation with the Anoka County Highway Department, worked through the planning of the Hanson Boulevard expansion and reconstruction. Right of Way clearing and utility work has taken M. To the Honorable Mayor and City Council City of Andover, Minnesota place in 2018 with full construction to start in 2019, completion is anticipated 2020. This project will be financed primarily by a federal grant. Trails and intersection improvements will also be constructed as part of the project. 6) Andover High School will receive close to $30 million in additions totaling 67,000 square feet, and other improvements adding another 5,700 square feet of space in the school. Phase 1 of the additions and remodeling started in 2018. Priority among the projects is an addition to the building and the removal of 12 portable classrooms. The school was originally designed for 1,400 students, but today 1,700 students attend the school. The projects will bring the school's capacity to 2,000 students. 7) In 2018, working with the Anoka County Parks Department, two new outdoor gathering spaces at the Bunker Hills Activities Center started construction. The fust area will remove the current ramps on the south side of the building and replace it with a 120 person capacity deck. This will provide additional space for meetings, family gatherings, weddings, and other events. The second area converts the existing greenhouse into an exterior patio area accessible from the inside as well as the outside. The project will be complete in the spring of 2019. 8) The City of Andover EDA went through the public hearing process in 2011 to modify the City Development Plan to create redevelopment areas of the community and to facilitate the opportunity to acquire dilapidated and substandard multi -family homes within specified target areas. The EDA was successful in acquiring one 4-plex property in November of 2011 to start the redevelopment process with hopes of continuing to add to the critical land mass necessary to start marketing for a redevelopment project. In late 2017 the EDA was successful in acquiring three more 4-plex properties and one additional 4-plex in 2018. It is anticipated that the EDA will continue to acquire two 4- plexes a year for the next few years. 9) In 2016, City Staff started work with the State of Minnesota Board of Soil and Water Resources on a wetland restoration of the old Woodland Creek Golf Course parcel. The City acquired the old 74 acre golf course in late 2013, subsequently a 6 acre parcel was sold to a developer and a 6 unit subdivision called Shadow Ponds was the outcome. The remaining acreage is being restored to a wetland with passive nature trails. Construction bids were received in late 2016 with the first phase of construction completed the summer and fall of 2017. Other restoration elements including the addition of a boardwalk continued through 2018. It is anticipated the restoration project's nature trails will be open to the public in the summer of 2019. 10) The City completed the master planning concept layout of the City Campus site in 2016 to prepare for the facility needs for the ultimate build out of the City. The master planning concept layout provides for the Public Works, Public Safety, General Government and Recreational long term needs of the community. In 2017, the City hired two architectural firs to start the design for a Public Works Maintenance Facility, cold storage building and to explore a potential expansion of the Andover YMCA/Community Center. Both projects completed design in 2018. The Public Works component was out for bid in late 2018 and is anticipating a bid award in early 2019. The Community Center Expansion design has continued throughout 2018 and is anticipated to go out for bid in early 2019. 11) Andover residents continue to have one of the highest recycling rates per person for all recyclable materials in Anoka County. In 2014, the City added a new Recycling Center to expand the current recycling opportunities for Andover residents. In 2018, the City hosted monthly recycling events (on weekends), generally with a specific focus, such as paper shredding and appliance or electronics collection. 12) A strategic planning session was held with the City Council, a final Council Community Vision and Organization Goals and Values document was approved at the July 7, 2015 City Council meeting. Direction provided in that document is being integrated into various department work plans and budgets. The 2019 Budget does provide for a new strategic planning process in early 2019. 13) The City's Comprehensive Annual Financial Report (CAFR) for the year ended December 31, 2017 was awarded the Government Finance Officers Association's "Excellence in Financial Reporting Award." The City completes this document internally and recognized significant cost savings in the form of reduced financial consulting fees. This is the sixteenth consecutive year receiving the award and it is anticipated that the City's CAFR for the year ended December 31, 2018 will also achieve this award. 14) For the seventeenth year in a row, the City of Andover was awarded the Government Finance Officers Association Distinguished Budget Presentation Award for the City's 2018 Annual Budget. This award recognizes excellence in the preparation of the City's budget document as a policy document, an operations guide, as a financial plan and as a communications device. 15) The City continues to make significant progress on the process of digitally imaging documents retained, this includes standard and legal documents and large construction plan documents. The imaging project has helped the City reduce To the Honorable Mayor and City Council City of Andover, Minnesota staffing through data storage retrieval efficiencies, eliminated the need for office expansion and has expedited City research projects. 16) The City continues to utilize updates to our financial management software to improve reporting and operating efficiencies. These updates continue to yield reduced personnel costs and more timely reports. In 2018, the City saw increased growth in the number of online and counter credit card payments for various City permits and services. Approximately 40% of the Building Department's permits were done online. FOR THE FUTURE. The City continues to focus on quality of life improvements throughout the City. These efforts cover a broad array of areas including: protecting and improving the environment, revitalization of parks and public areas, expanding recreational opportunities, providing cost-effective city services, increased communication between city representatives and the public and added commerciaUretail opportunities. The City utilizes many avenues to reach its residents, whether through community access television, electronic reader boards, the City newsletter, Facebook, Twitter or the City's webpage (www.andovermn.gov). It is important to the City that our residents are informed and have the ability to participate in the activities of their City. The City did conduct a community survey in 2006, with the help of a polling firm, to secure opinions and suggestions from the public. The City initiated and completed a community survey in early 2014, the City received very high marks. RELEVANT FINANCIAL POLICIES The City has a policy regarding General Fund reserve balances. The City plans for an unassigned fund balance in the General Fund equivalent to 6 -months of the current year's budgeted expenditures to provide working capital between semi-annual property tax settlements. Since the property tax settlements are received by the City in July and December, the City needs sufficient cash reserves to avoid short-term borrowing to finance operations. The City also classifies fund balances for prepaid items, inventories and other legal obligations. The City may also classify a portion of fund balance for special purposes. The primary goal of the City's investment policy is to ensure the safety of the principal invested. Cash temporarily idle during the year is invested in certificates of deposit, commercial paper, and obligations of the U.S. Treasury and government agencies. Cash balances from all City funds are pooled into an investment fund and investment income is distributed on a pro -rata basis at the end of each quarter. Extended maturities are utilized to take advantage of higher yields but staggered in a way to meet projected liquidity needs. Capital financing for major improvements is provided through improvement bonds, general obligation bonds, tax increment bonds, or revenue bonds. Depending on the project, special assessments may be levied upon properties to share in the cost of the improvement project. The special assessments are collected over a period of time and are used to help satisfy the improvement bond debt or reimburse the fund used to finance the project. The City Council has also adopted financial management policies in order to allow for the planning of adequate funding of services desired by the public, to manage City finances wisely, and to carefully account for public funds. These policies are reviewed each year when the annual budget is adopted. The financial management policies included: operating budget policies; revenue policies; accounting, auditing and financial reporting policies; investment policies; debt policies; capital improvement policies; and risk management policies. The City Council has adopted a comprehensive set of internal control procedures. The City's accounting system was developed and is continually evaluated to assure the adequacy of internal accounting controls. Internal accounting controls are designed to provide reasonable but not absolute assurance in the areas of: safeguarding assets against loss from unauthorized use or disposition, reliability of financial records, and convenience of access for preparing financial statements and maintaining accountability for assets. The concept of reasonable assurance adopted by the City Council recognizes that the evaluation of cost and benefits requires estimates and judgments by management, and the cost of a control should not exceed the benefits likely to be derived. All internal controls are evaluated against the above criteria. It is our belief that the City's internal accounting controls adequately safeguard the City's assets and also provide reasonable assurance of properly recording financial transactions. OTHER INFORMATION AWARDS. The Government Finance Officers Association (GFOA) of the United States and Canada presented a Distinguished Budget Presentation Award to the City of Andover for its annual budget for the fiscal year beginning January 1, 2018. This is the seventeenth year in a row the City of Andover has received this award. In order to receive this award, a governmental unit must publish a budget document that meets program criteria as a policy document, as an operations guide, as a financial plan and as a communications device. This award is valid for a period of one year only. We believe that the annual budget for the fiscal year To the Honorable Mayor and City Council City of Andover, Minnesota beginning January 1, 2019 continues to conform to the program requirements and have submitted it to the GFOA to determine its eligibility for another award. The GFOA also presented the Certificate of Achievement for Excellence in Financial Reporting Award to the City of Andover for its 2017 Comprehensive Annual Financial Report. This is the sixteenth time the City of Andover has received this award. In order to receive this award, a government unit must publish an easily readable and efficiently organized comprehensive annual financial report whose contents conform to program standards. Such reports must satisfy both generally accepted accounting principles and applicable legal requirements. This award is valid for a period of one year only. We believe this report for 2018 continues to conform to the Certificate of Achievement Program requirements and have submitted it to the GFOA to determine its eligibility for another award. INDEPENDENT AUDIT. State statutes require an annual audit by independent certified public accountants. Redpath and Company, Ltd. was engaged by the City to render an opinion on the City's financial statements. The auditor's report on the basic financial statements and combining and individual fund statements and schedules is included in the financial section of this report. ACKNOWLEDGMENTS. The preparation of this report could not have been accomplished without the efficient services and dedication of the Finance Department staff and the consultation of the City's auditing firm. Staff members: Lee Brezinka, Melissa Knutson and Brenda Fildes have my sincere appreciation for their contribution to the preparation of this report. I also want to express our appreciation to the Mayor and members of the City Council for their interest and support in planning and conducting the financial operations of the City in a fiscally responsible manner. Respectfully submitted, James Dickinson City Administrator CITY OF ANDOVER, MINNESOTA ORGANIZATION December 31, 2018 Office Mayor Council Member Council Member Council Member Council Member City Administrator / City Clerk Community Development Director Director of Public Works / City Engineer Finance Manager Building Official Fire Chief Attorney Fiscal Consultants Name Term Julie Trude January 1, 2019 Sheri Bukkila January 5, 2021 Jim Goodrich January 1, 2019 Valerie Holthus January 1, 2019 Michael Knight January 5, 2021 James Dickinson Appointed Joe Janish Appointed David Berkowitz Appointed Lee Brezinka Appointed Fred Patch Appointed Jerry Streich Appointed Hawkins & Baumgartner, P.A. Appointed Ehlers & Associates, Inc. Appointed 10 CITY OF ANDOVER Organizational Chart 11 City Cannel City Attorney City .4dminlsmta Advisory Boards ff=- Buildinglaspectiom e Fire Protectica Planning PublicWolf¢ Adminisoatim Civillkfensevancial Fire Protection planning Strcets/Fbghways �k5p; 'utisVatim Services Human Reromces Protectivessessing Removal Newslenu Drainage& FaciGtia Sturm Sewer Mapping Management Economic Lower Rum River Unallocated Street lighting Development Watershed Mgmt Authority Organintion Community Forany Capital Equipment Signage Center Reserve Eltttion Tmil& Debt Sertice Frmds TMfic Siennit Tranponatian Animal Control Contraction Unfnmcd Projtta Parks&Recreatiar Seal Coating information WaterTmm; Tax lnuemrnt Recycling Styskrrs Projects City Cled Stomr Sewer euildng Furl Water Sewer Truro: permanent Sewer Improvement Revolving Road&Bridge G.O. Capita Central Equipment Notes Park Daenitim Risk Projects Management 11 Ek Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting Presented to City of Andover Minnesota For its Comprehensive Annual Financial Report for the Fiscal Year Ended December 31, 2017 Executive Director/CEO 12 II. FINANCIAL SECTION 13 i A N O 6 C O M PAN Y INDEPENDENT AUDITOR'S REPORT To the Honorable Mayor and Members of the City Council City of Andover, Minnesota Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City of Andover, Minnesota, as of and for the year ended December 31, 2018, and the related notes to the financial statements, which collectively comprise the City of Andover, Minnesota's basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. 55 E 5th Street Suite 1400, St. Paul, MN, 55101 651.426.7000 www.redpathcpas.com 14 We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City of Andover, Minnesota, as of December 31, 2018, and the respective changes in financial position, and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Report on Summarized Comparative Information We have previously audited the City of Andover, Minnesota's 2017 financial statements, and we expressed an unmodified audit opinion on the respective financial statements of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information in our report dated April 25, 2018. In our opinion, the summarized comparative information presented herein as of and for the year ended December 31, 2017 is consistent, in all material respects, with the audited financial statements from which it has been derived. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis, the budgetary comparison information, and the schedules of OPEB and pension information, as listed in the table of contents, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. 15 Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of Andover, Minnesota's basic financial statements. The introductory section, combining and individual fund financial statements and schedules, other information section and statistical section, are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual fund financial statements and schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual fund financial statements and schedules are fairly stated in all material respects in relation to the basic financial statements as a whole. The introductory, other information and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated May 2, 2019, on our consideration of the City of Andover, Minnesota's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City of Andover, Minnesota's internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City of Andover, Minnesota's internal control over financial reporting and compliance. u z'a` Oust REDPATH AND COMPANY, LTD. St. Paul, Minnesota May 2, 2019 III CITY OF ANDOVER, MINNESOTA MANAGEMENT'S DISCUSSION AND ANALYSIS December 31. 2018 As management of the City of Andover, we offer readers of the City's financial statements this narrative overview and analysis of the financial activities of the City for the fiscal year ended December 31, 2018. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal, which can be found on pages 2 through 9 of this report. Financial Hi2hli2hts The assets of the City exceeded its liabilities at the close of the most recent fiscal year by $183,872,437 (net position). Of this amount, $38,144,984 (unrestricted net position) may be used to meet the government's ongoing obligations to citizens and creditors in accordance with the City's fund designations and fiscal policies. The City's total net position increased by $4,038,736 from current year activity, primarily due to the budget savings and an increase in commercial/residential construction fees. As of the close of the current fiscal year, the City's governmental funds reported combined ending fund balances of $44,143,951 The City's total long-term liabilities increased by $7,129,040 during the current fiscal year, primarily due to the issuance of general obligation bonds for the construction of a new vehicle maintenance facility with a wwhbay and a cold storage building in 2018. Beginning Special Debt Capital Balance General Revenue Service Projects Totals Nonspendable $ 112,971 $ 2,386 $ - $ - $ 115,357 Restricted - 74,244 1,045,339 13,106,256 14,225,839 Committed - 518,617 - - 518,617 Assigned - 394,107 - 20,932,929 21,327,036 Unassigned 8,023,365 (562,429) - (66,263) 7,957,102 10,427,645 $ 8,136,336 $ 989,354 $ 1,045,339 $ 33,972,922 $ 44,143,951 The City's total long-term liabilities increased by $7,129,040 during the current fiscal year, primarily due to the issuance of general obligation bonds for the construction of a new vehicle maintenance facility with a wwhbay and a cold storage building in 2018. Overview of the Financial Statements The discussion and analysis are intended to serve as an introduction to the City's basic financial statements. The City's basic financial statements comprise three components: 1) government -wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. 17 Beginning Ending Balance Additions Reductions Balance Governmental activities: Bonds payable $ 16,280,000 $10,000,000 $ (1,416,000) $ 24,864,000 Other post employment benefits 230,253 26,193 (5,000) 251,446 Promissory note payable 196,717 - (196,717) - Compensated absences 664,210 401,452 (373,283) 692,379 Net pension liability 3,698,358 - (562,429) 3,135,929 Total governmental activities 21,069,538 10,427,645 (2,553,429) 28,943,754 Business -type activities: Bonds payable 4,527,690 - (698,316) 3,829,374 Other post employment benefits 31,398 10,348 (813) 40,933 Compensated absences 188,691 95,491 (85,255) 198,927 Net pension liability 471,732 (66,631) 405,101 Total business -Type activities 5,219,511 105,839 (851,015) 4,474,335 Total City long-term liabilities $ 26,289,049 $10,533,484 _LL,404,4441 $ 33,418,089 Overview of the Financial Statements The discussion and analysis are intended to serve as an introduction to the City's basic financial statements. The City's basic financial statements comprise three components: 1) government -wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. 17 CITY OF ANDOVER, MINNESOTA MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2018 Government -wide financial statements. The government -wide financial statements are designed to provide readers with a broad overview of the City's finances, in a manner similar to a private -sector business. The statement of net position presents information on all of the City's assets and liabilities, with the difference between the two reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. The statement of activities presents information showing how the City's net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g. uncollected taxes and earned but unused vacation leave). Both of the government -wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business -type activities). The governmental activities of the City include general government, public safety, public works, sanitation, parks and recreation, recycling and economic development. The business -type activities of the City include water, sewer and storm sewer. The government -wide financial statements can be found on pages 29 through 31 of this report. Fund financial statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance -related legal requirements. All of the funds of the City can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the govenunent-wide financial statements. However, unlike the government -wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near-term financial requirements. Because the focus of governmental funds is narrower than that of the government -wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government -wide financial statement. By doing so, readers may better understand the long-term impact of the City's near-term financial decisions. Both the governmental fund balance sheet and governmental fund statement of revenues, expenditures and change in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The City maintains six individual major 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 following major funds: General Fund and the following capital projects funds (CPF): Water Trunk, Sewer Trunk, Road and Bridge, 2018A G.O. Capital Improvement Plan Bonds, Tax Increment Projects and Permanent Improvement Revolving. Data from the other governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these non -major governmental funds is provided in the form of combining statements elsewhere in this report. The City adopts an annual appropriated budget for its general and special revenue funds. A budgetary comparison statement has been provided for those funds to demonstrate compliance with this budget. The basic governmental fund financial statements can be found on pages 32 through 37 of this report. Proprietary funds. When the City charges customers for the services it provided — whether to. outside customers or to other departments of the City — these services are generally reported in proprietary funds. Proprietary funds are reported in the same way that all activities are reported in the statement of net position and the statement of revenues, expenses and changes in net position. The enterprise funds are the same as the business -type activities reported in the government -wide statements but provide more detail and additional information, such as cash flows, for proprietary funds. The City uses enterprise funds to account for its water, sanitary sewer and storm sewer operations. Internal service funds are used to report activities that provide supplies and services for the City's other departments, such as the equipment maintenance and insurance funds. The internal service funds we reported with governmental activities in the government -wide financial statements. The basic proprietary fund financial statements can be found on pages 38 through 43 of this report. 18 CITY OF ANDOVER, MINNESOTA MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2018 Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of parties outside the City. Fiduciary funds are not reflected in the goverument-wide financial statements because the resources of those funds are not available to support the City's own program. The accounting used for fiduciary funds is much like that used for proprietary funds. The basic fiduciary fund financial statement can be found on page 44 of this report. Notes to the financial statements. The notes provide additional information that is essential to a full understanding of the data provided in the government—wide and fund financial statements. The notes to the financial statements can be found on pages 45 through 78 of this report. Other information. The combining statements referred to earlier in connection with non -major governmental funds is presented immediately following the required supplementary information on budgetary comparisons, the modified approach for streets and trails infrastructure and pension information. Combining and individual fund statements and schedules can be found on pages 92 through 126 of this report. Government -wide Financial Analysis As noted earlier, net position may serve over time as a useful indicator of a government's financial position. In the case of the City, assets exceeded liabilities by $183,872,437 at the close of the most recent fiscal year. The largest portion of the City's net position ($140,646,223 or 77 percent) reflects its investment in capital assets (e.g. land, buildings, machinery, and equipment) less any related debt used to acquire those assets that is still outstanding. It does not include any refunding debt that has not met the refunding date of the original issue. The City uses these capital assets to provide services to citizens; consequently, these assets we 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. CITY OF ANDOVER'S NET POSITION A portion of the City's net position represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net position ($38,144,984) may be used to meet the City's ongoing obligations to citizens and creditors. At the end of the current fiscal year, the City is able to report positive balances in all three categories of net position, both for the City as a whole, as well as for its separate governmental and business -type activities. 19 Governmental Activities Business -Type Activities Totals 2017 2018 2017 2018 2017 2018 Current and other assets $ 38,325,140 $ 48,786,279 $ 9,086,720 $ 10,527,200 $ 47,411,860 $ 59,313,479 Capital assets 118,079,364 118,615,236 41,702,507 40,898,073 159,781,871 159,513,309 Total assets 156,404,504 167,401,515 50,789,227 51,425,273 207,193,731 218,826,788 Deferred outflows of resources 1,406,741 949,991 116,915 72,215 1,523,656 1,022,206 Long-term liabilities outstanding 21,069,538 28,943,754 5,219,511 4,474,335 26,289,049 33,418,089 Other liabilities 1,223,300 1,084,990 (29,364) 21,846 1,193,936 1,106,836 Total liabilities 22,292,838 30,028,744 5,190,147 4,496,181 27,482,985 34,524,925 Deferred inflows of resources 1,306,465 1,344,705 94,236 106,927 1,400,701 1,451,632 Net position: Net investment in capital assets 101,602,647 103,577,524 37,174,817 37,068,699 138,777,464 140,646,223 Restricted 4,935,375 5,081,230 - - 4,935,375 5,081,230 Unrestricted 27,673,920 28,319,303 8,446,942 9,825,681 36,120,862 38,144,984 Total net position $ 134,211,942 $ 136,978,057 $ 45,621,759 $ 46,894,380 $ 179,833,701 $ 183,872,437 A portion of the City's net position represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net position ($38,144,984) may be used to meet the City's ongoing obligations to citizens and creditors. At the end of the current fiscal year, the City is able to report positive balances in all three categories of net position, both for the City as a whole, as well as for its separate governmental and business -type activities. 19 CITY OF ANDOVER, MINNESOTA MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2018 Government -wide Activities 2,937,380 3,209,512 - -. 2,937,380 3,209,512 Governmental activities increased the City's net position by $2,766,115 and business -type activities increased net position by $1,272,621. Key elements of the activities are as follows: 5,263,071 Public works 5,428,350 4,257,014 - City of Andover's Changes in Net Position 5,428,350 4,257,014 Parks and recreation 3,385,001 3,321,793 - Governmental Activities Business -Type Activities Total 169,100 206,335 2017 2018 2017 2018 2017 2018 Revenues: - - 1,098,300 249,669 Interest on long-term debt 403,200 Program revenues: - - 403,200 377,314 Water - Charges for services $ 3,910,559 $ 3,342,141 $ 5,517,290 $ 5,924,798 $ 9,427,849 $ 9,266,939 Operating grants 2,190,453 2,175,331 2,190,453 2,175,331 Storm sewer and contributions 1,186,721 1,407,217 - - 1,186,721 1,407,217 Capital grants 5,138,909 5,096,160 23,728,170 21,980,868 and contributions 3,414,161 1,608,129 481,343 504,267 3,895,504 2,112,396 General revenues: 2,279,017 2,588,194 958,380 1,450,542 3,237,397 4,038,736 Property taxes 11,874,354 12,423,060 - - 11,874,354 12,423,060 Tax increment 74,771 82,874 - - 74,771 82,874 Grants and contributions 131,412,150 134,211,942 45,184,154 45,621,759 176,596,304 179,833,701 not restricted to Net position -ending $ 134,211,942 $ 136,978,057 $ 45,621,759 $ 46,894,380 specific programs 13,638 12,917 - - 13,638 12,917 Unrestricted investments earnings 373,585 560,133 65,801 117,637 439,386 677,770 Gain on sale of capital assets 20,489 36,431 32,855 53,344 36,431 Total revenues 20,868,278 19,472,902 6,097,289 6,546,702 26,965,567 26,019,604 Expenses: General government 2,937,380 3,209,512 - -. 2,937,380 3,209,512 Public safety 5,167,930 5,263,071 - - 5,167,930 5,263,071 Public works 5,428,350 4,257,014 - - 5,428,350 4,257,014 Parks and recreation 3,385,001 3,321,793 - - 3,385,001 3,321,793 Recycling 169,100 206,335 - - 169,100 206,335 Economic development 1,098,300 249,669 - - 1,098,300 249,669 Interest on long-term debt 403,200 377,314 - - 403,200 377,314 Water - - 2,263,748 2,306,013 2,263,748 2,306,013 Sewer - - 2,190,453 2,175,331 2,190,453 2,175,331 Storm sewer 684,708 614,816 684,708 614,816 Total expenses 18,589,261 16,884,708 5,138,909 5,096,160 23,728,170 21,980,868 Increase (decrease) in net position before transfers 2,279,017 2,588,194 958,380 1,450,542 3,237,397 4,038,736 Transfers 520,775 177,921 (520,775) (177,921) - Change in net position 2,799,792 2,766,115 437,605 1,272,621 3,237,397 4,038,736 Net position - beginning 131,412,150 134,211,942 45,184,154 45,621,759 176,596,304 179,833,701 Net position -ending $ 134,211,942 $ 136,978,057 $ 45,621,759 $ 46,894,380 $ 179,833,701 $ 183,872,437 R7 CITY OF ANDOVER, MINNESOTA MANAGEMENT'S DISCUSSION AND ANALYSIS December 31. 2018 Business -Type Activities Following are graphs showing the business -type activities revenue and expense comparisons: Business -Type Activities - Revenues Capital grants and contributions 7.70% Unrestricted investments earnings 1.80% Charges for services 90.50% Business -Type Activities - Expenses Storm sewer 12.06° Water 45.25% Sewer 42.69% 'Y] CITY OF ANDOVER, MINNESOTA MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2018 Governmental Activities Following are specific graphs that provide comparisons of the governmental activities revenues and expenses: Governmental Activities - Revenues Unrestricted Grants and investments earnings Charges for services contributions not 17,2% restricted to specific Tax increment programs 0.4% 0.1% Parks and recreation Gain on sale of capital 19.7% assets 0.1% Capital grants and contributions Public works 8.3% Property taxes 63.7% Operating grants and contributions 7.2% Governmental Activities - Expenses Interest on long -teen debt Economic 22% General government development 19.0% Parks and recreation 19.7% Recycling 1.2% Public safety 31.2% Public works 25.2% 21 CITY OF ANDOVER, MINNESOTA MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2018 Financial Analysis of the Government's Funds Governmental Funds. The focus of the City's governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City's financing requirements. In particular, unrestricted fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year. At the end of the current fiscal year, the City's governmental funds reported combined ending fund balances of $44,143,951. Approximately 18.0 percent of this total amount ($7,957,102) constitutes unassigned fund balance. The remainder of the fund balance ($36,186,8490) is not available fornew spending because it is either 1) nonspendable ($115,357), 2) restricted ($14,225,839), 3) committed ($518,617) or 4) assigned ($21,327,036). Maier Funds The general fund increased by $346,720 in 2018, which was a $771,497 change from the final budget. The final budget showed a decrease in fund balance of $424,777. The change in fund balance is due to various departments under -spending and revenues exceeding budgets related to residential and commercial construction activity and a one-time transfer out of $230,000. The water and sewer trunk capital projects funds fluctuate based on development activity and whether there is any cost sharing for pipe over - sizing, extra depth, etc. The addition of the following developments has increase connection fees and special assessments: Catchers Creek 2"d Addition, Country Oaks North 311 addtion, Catcher's Creek 2nd Addition, Winslow Cove and White Pine Wilderness 4d' Addition. The sewer trunk fund continues to receive funds from the sewer enterprise fund to be set aside for future infrastructure replacements ($400,000). The road and bridge capital projects fund increased by $73,856 primarily due to the increased collection of special assessments in 2018. The 2018A G.O. capital improvement plan bonds capital projects fund increased due to the sale of bonds in late December with construction planned in the spring of 2019. The tax increment capital projects fund decreased by $256,451 primarily due to the purchase of a 4-plex rental property. The permanent improvement revolving capital projects fund increased by $78,800 due to the collection of assessments, both through a tax forfeit land sale and the normal collection process. Nonmaior Funds The eda general special revenue fund decreased $47,329 due to the tax increment administration fee revenue diminishing. The community center special revenue fund increased $145,016 due to departments under -spending and revenues exceeding the budget. The 2012C G.O. abatement bonds debt service fund increased by $53,061 due to revenues and transfers in exceeding debt service payments. The building capital projects fund decreased by $175,987 primarily due to the final promissory note payment made in 2018. The capital equipment reserve capital projects fund decreased by $300,451 primarily due to the city campus expansion plan. Proprietary funds. The City's proprietary funds provide the same type of information found in the govermnent-wide financial statements, but in more detail. The unrestricted net position in the respective proprietary funds are enterprise funds of $9,679,253 (water $5,015,416, sewer $4,034,016 and storm sewer $629,821) and internal service funds of $1,106,415. The enterprise funds had a net increase in net position from current year activity of $1,276,182 (water $1,177,078, sewer ($111,018) and storm sewer $210,122). Internal service funds had a net increase in net position of $24,510. 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, 2018, amounts to $159,513,309 (net of accumulated depreciation). This investment in capital assets includes land, buildings, infrastructure, machinery and equipment. The City has elected to use the modified approach as defined in GASB Statement No. 34 for infrastructure reporting for its Pavement Management Program, which includes streets and trails. Under GASB Statement No. 34, eligible infrastructure capital assets are not required to be depreciated under the following requirements: 23 CITY OF ANDOVER, MINNESOTA MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2018 1) The City manages the eligible infrastructure capital assets using an asset management system with characteristics of (a) an up-to-date inventory; (b) perform condition assessments and summarize the results using a measurement scale; and (c) estimate annual amount to maintain and preserve at the established condition assessment level. 2) The City documents that the eligible infrastructure capital assets are being preserved approximately at or above the established and disclosed condition assessment level. Prior to 2013, the continuous scale was from 0 to 100 where 0 is assigned to the least acceptable physical condition and 100 is assigned to a new street or trail. Starting in 2013, the continuous scale was from 0 to 10, where 0 is assigned to the least acceptable physical condition and 10 is assigned the physical characteristics of a new street or trail. The City's policy is to achieve an average rating of good which is 6 — 6.9 (56 — 70 old scale) for all streets and trails. In the fall of 2017, the City conducted a physical condition assessment of the streets and trails constructed since 1974. This assessment will be completed every three years. As of December 31, 2018, the City's street and trail system was rated at an Overall Condition Index (OCI) of 6.4. The City's streets and trails are constantly deteriorating resulting from the following factors: (1) traffic using the system; (2) the sun's ultra- violet rays drying out and breaking down the top layer of pavement; (3) utility company/private development trenching operations; (4) water damage from natural precipitation; and (5) frost heave. The City is continuously taking actions to prolong the life of the system through short- term maintenance activities such as pothole patching, crack sealing, seal coating and overlaying. The City expended $2,274,146 on street and trail maintenance for the year ending December 31, 2018. These expenditures delayed deterioration and the overall condition of the system remains at an appropriate OCI level through these maintenance expenditures. The City has estimated that the amount of annual expenditures required to maintain the City's street and trail system at the average OCI rating of good is approximately $1,150,000. 24 Maintenance Actual OCI Year Estimate Expenditures Rating 2009 $1,150,000 $ 1,666,216 81 2010 1,150,000 1,457,082 83 2011 1,150,000 1,770,980 83 2012 1,150,000 3,894,784 83 2013 1,150,000 2,471,123 6.9 2014 1,150,000 2,029,026 6.7 2015 1,150,000 1,114,900 6.7 2016 1,150,000 1,585,756 6.3 2017 1,150,000 3,548,327 6.4 2018 1,150,000 2,274,146 6.4 24 CITY OF ANDOVER, MINNESOTA MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2018 Primary Government Additional information on the City's capital assets can be found in Note 5 Long-term debt. At the end of the current fiscal yew, the City had total long-term debt outstanding of $29,584,680, an increase of $7,727,372 from 2017. General obligation abatement bonds ($13,270,000) were used to refund the 2006 and 2007 EDA lease revenue refunding bonds. General obligation revenue bonds ($3,775,000) were used for an addition to the water treatment plant and the refunding of portions of the water treatment plant bonds. Certificates of indebtedness ($939,000) financed capital equipment purchases. Capital improvement bonds ($10,000,000) were used to construct a new vehicle maintenance facility with a washbay and a cold storage building. Referendum bonds ($655,000) were used to finance land acquisitions for the preservation of open space. Additional long-term debt in the amount of $891,306 is for compensated absences. 25 Beginning Ending Balance Additions Deletions Balance Governmental activities: Land and improvements $ 10,800,015 $ 289,990 $ - $ 11,090,005 Streets and trails 85,084,915 638,895 - 85,723,810 Construction in progress 31,566 866,358 - 897,924 Buildings and improvements 27,485,144 93,463 (25,919) 27,552,688 Furniture and equipment 881,656 41,218 (15,187) 907,687 Machinery and equipment 8,909,915 291,437 (254,808) 8,946,544 Other park improvements 8,093,741 79,489 (53,437) 8,119,793 Total capital assets 141,286,952 2,300,850 (349,351) 143,238,451 Less accumulated depreciation for: Buildings and improvements 12,551,625 921,703 (25,919) 13,447,409 Furniture and equipment 539,973 66,261 (15,187) 591,047 Machinery and equipment 6,166,407 401,320 (222,268) 6,345,459 Other park improvements 3,949,583 343,154 (53,437) 4,239,300 Total accumulated depreciation 23,207,588 1,732,438 (316,811) 24,623,215 Governmental activities capital assets - net 118,079,364 568,412 (32,540) 118,615,236 Business -type activities: Land and improvements 730,243 - - 730,243 Buildings and improvements 15,877,590 - - 15,877,590 Furniture and equipment 52,110 - (10,000) 42,110 Machinery and equipment 1,281,384 278,554 (122,145) 1,437,793 Collection and distribution 57,750,743 639,892 - 58,390,635 Total capital assets being depreciated 75,692,070 918,446 (132,145) 76,478,371 Less accumulated depreciation for: Buildings and improvements 9,415,613 489,751 - 9,905,364 Furniture and equipment 51,177 934 (10,000) 42,111 Machinery and equipment 931,980 62,990 (122,145) 872,825 Collection and distribution 23,590,793 1,168,905 - 24,759,698 Total accumulated depreciation 33,989,563 1,722,580 (132,145) 35,579,998 Business -type activities capital assets - net 41,702,507 (804,134) - 40,898,373 Total capital assets - net $ 159,781,871 $ (235,722) $ (32,540) $ 159,513,609 Additional information on the City's capital assets can be found in Note 5 Long-term debt. At the end of the current fiscal yew, the City had total long-term debt outstanding of $29,584,680, an increase of $7,727,372 from 2017. General obligation abatement bonds ($13,270,000) were used to refund the 2006 and 2007 EDA lease revenue refunding bonds. General obligation revenue bonds ($3,775,000) were used for an addition to the water treatment plant and the refunding of portions of the water treatment plant bonds. Certificates of indebtedness ($939,000) financed capital equipment purchases. Capital improvement bonds ($10,000,000) were used to construct a new vehicle maintenance facility with a washbay and a cold storage building. Referendum bonds ($655,000) were used to finance land acquisitions for the preservation of open space. Additional long-term debt in the amount of $891,306 is for compensated absences. 25 CITY OF ANDOVER, MINNESOTA MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2018 City of Andover's Outstanding Debt Bonds payable: Abatement bonds G.O. revenue bonds Certificates of indebtedness Capital improvement bonds Referendum bonds Total bonds payable Issuance premiums Compensated absences Total Governmental Business -Type Activities Activities Total $ 13,270,000 $ - $ 13,270,000 - 3,775,000 3,775,000 939,000 - 939,000 10,000,000 - 10,000,000 655,000 - 655,000 24,864,000 3,775,000 28,639,000 54,374 54,374 692,379 198,927 891,306 $ 25,556,379 $ 4,028,301 $ 29,584,680 The City maintains an AA+ rating with a stable outlook from Standard and Poor's. State statutes limit the amount of general obligation debt a Minnesota city may issue to 3% of total Estimated Taxable Market Value. The current debt limitation for the City is $88,782,344. Only $23,831,396 of the City's outstanding debt is counted within the statutory limitation. Additional information on the City's long-term debt can be found in Notes 6 and 7. Requests for information. This financial report is designed to provide a general overview of the City of Andover's finances for all those with an interest in the government's finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the City of Andover, Attn: Finance Manager, 1685 Crosstown Boulevard NW, Andover, Minnesota 55304 or by calling 763-755-5100. FrP CITY OF ANDOVER MINNESOTA STATEMENT OF NET POSITION Statement 1 December 31, 2018 With Comparative Totals For December 31, 2017 Primary Government Government Business -Type Totals Activities Activities 2018 2017 Assets: Cash and investments S 44,815,508 $ 8,644,996 $ 53,460,504 $ 41,724,381 Cash and investments with escrow agent 176,788 - 176,788 176,462 Accrued interest 180,553 40,853 221,406 190,066 Due from other governmental units 329,212 32,320 361,532 88,818 Accounts receivable - net 211,554 1,517,081 1,728,635 2,008,104 Property taxes receivable: Unremitted 85,807 - 85,807 37,312 Delinquent 92,985 - 92,985 107,496 Special assessments receivable: Unremitted 3,078 3,793 6,871 3,744 Delinquent 20,508 263,020 283,528 272,101 Deferred 1,817,349 2,142 1,819,491 2,022,800 Inventories - at cost 227,937 22,995 250,932 255,576 Land held for resale 825,000 - 825,000 525,000 Capital assets - net: Nondepreciable 97,711,739 730,243 98,441,982 96,646,739 Depreciable 20,903,497 40,167,830 61,071,327 63,135,132 Total assets 167,401,515 51,425,273 218,826,788 207,193,731 Deferred outflows of resources: Related to other post employment benefits 10,552 1,759 12,311 - Related to pensions 939,439 70,456 1,009,895 1,523,656 Total deferred outflows of resources 949,991 72,215 1,022,206 1,523,656 Liabilities: Interfind payable 146,428 (146,428) - - Accounts payable 230,809 45,897 276,706 279,900 Contracts payable 117,200 38,159 155,359 280,006 Deposits payable 78,851 2,234 81,085 105,956 Due to other governmental units 48,182 28,464 76,646 54,419 Salaries payable 121,566 18,289 139,855 117,210 Unearned revenue 183,463 - 183,463 148,409 Accrued interest payable 158,491 35,231 193,722 208,036 Other post employment benefits: Due in more than one year 251,446 40,933 292,379 261,651 Compensated absences: Due within one year 103,857 29,839 133,696 127,935 Due in more than one yen 588,522 169,088 757,610 724,966 Promissory note payable: Due within one year - - - 196,717 Bonds/notes payable (net of unamortized premiums): Due within one year 1,444,000 705,000 2,149,000 2,101,000 Due in more than one year 23,420,000 3,124,374 26,544,374 18,706,690 Net pension liability: Due in more than one year 3,135,929 405,101 3,541,030 4,170,090 Total liabilities 30,028,744 4,496,181 34,524,925 27,482,985 Deferred inflows of resources: Related to pensions 1,344,705 106,927 1,451,632 1,400,701 Net position: Net investment in capital assets 103,577,524 37,068,699 140,646,223 138,777,464 Restricted for: Debt service 899,986 - 899,986 800,214 Tax increment purposes 4,107,000 - 4,107,000 4,067,371 Public services 74,244 - 74,244 67,790 Unrestricted 28,319,303 9,825,681 38,144,984 36,120,862 Total net position $ 136,978,057 5 46,894,380 $ 183,872,437 $ 179,833,701 The accompanying notes are an integral part of these financial statements. 29 CITY OF ANDOVER, MINNESOTA STATEMENT OF ACTIVITIES For The Year Ended December 31, 2018 With Comparative Actual Amounts For The Year Ended December 31, 2017 The accompanying notes are an integral part of these financial statements. Program Revenues Charges Operating Capital For Grants and Grants and Expenses Services Contributions Contributions Functions/Proerams Primary government: Government activities: General government $ 3,209,512 $ 647,452 $ 104,195 $ - Public safety 5,263,071 721,078 431,568 - Public works 4,257,014 331,620 749,688 1,507,310 Parks and recreation 3,321,793 1,504,647 - 100,819 Recycling 206,335 49,453 121,766 - Economic development 249,669 87,891 - - Interest on long-term debt 377,314 - - - Total government activities 16,884,708 3,342,141 1,407,217 1,608,129 Business -type activities: Water 2,306,013 3,061,920 - 215,375 Sewer 2,175,331 2,325,456 - 170,681 Storm sewer 614,816 537,422 118,211 Total business -type activities 5,096,160 5,924,798 - 504,267 Total primary government $ 21,980,868 $ 9,266,939 $ 1,407,217 $ 2,112,396 The accompanying notes are an integral part of these financial statements. Statement 2 Net (Expense) Revenue and Chanties in Net Position Activities Activities — $ (2,457,865) $ - $ (2,457,865) $ (1,947,057) (4,110,425) - (4,110,425) (4,062,606) (1,668,396) - (1,668,396) (1,205,179) (1,716,327) - (1,716,327) (1,822,141) (35,116) - (35,116) (631) (161,778) - (161,778) (637,006) (377,314) (377,314) (403,200) (10,527,221) (10,527,221) (10,077,820) 31 - 971,282 971,282 _ 659,044 - 320,806 320,806 255,617 40,817 40,817 (54,937) 1,332,905 1,332,905 859,724 (10,527,221) 1,332,905 (9,194,316) (9,218,096) General revenues: General property taxes 12,423,060 - 12,423,060 11,874,354 Tax increment collections 82,874 - 82,874 74,771 Grants and contributions not restricted to specific programs 12,917 - 12,917 13,638 Unrestricted investment earnings 560,133 117,637 677,770 439,386 Gain on sale of capital assets 36,431 - 36,431 53,344 Transfers 177,921 (177,921) - Total general revenues, gain on sale of capital assets and transfers 13,293,336 (60,284) 13,233,052 12,455,493 Change in net position 2,766,115 1,272,621 4,038,736 3,237,397 Net position - beginning 134,211,942 45,621,759 179,833,701 176,596,304 Net position - ending $ 136,978,057 $ 46,894,380 _LI83,872,437 $ 179,833,701 31 CITY OF ANDOVER, MIRVNESOTA BALANCESHEET GOVERNMENTAL FUNDS December 31, 2018 With Comparative Totals For December 31, 2017 Property taxes receivable: 2018A Unremitted 55,111 - - 7,473 G.O. Capital Delinquent 62,066 - - Road & Improvement Special assessments receivable: Water Trunk Sewer Trunk Bridge Plan Bonds Unremitted General CPF CPF CPF CPF Assets: 14,290 - - 6,218 - Cash and investments $ 7,965,109 $ 3,652,672 $ 7,336,761 $ 6,459,043 $ 9,832,848 Cash and investments with escrow agent - - - - - Accrued interest 36,426 19,855 40,095 32,610 - Due from other governmental units 60,532 - - 268,680 - Accountsreceivable - net 91,379 - - - - Interfandreceivable 70,000 - - - - Property taxes receivable: Unremitted 55,111 - - 7,473 - Delinquent 62,066 - - 9,116 - Special assessments receivable: Unremitted 510 - - 2,568 - Delinquent 14,290 - - 6,218 - Deferred - 478,019 132,452 968,187 - Inventories - at cost 112,971 - - - - Land held for resale Total assets $ 8,468,394 $ 4,150,546 $ 7,509,308 $ 7,753,895 $ 9,832,848 Liabilities, Deferred Inflows of Resources, and Fund Balances Liabilities: Interfund payable $ - S - $ - $ - $ - Accounts payable 73,006 - 10,619 61,543 6,560 Contracts payable 24,465 - - 92,735 - Deposits payable 22,005 5,741 5,741 1,139 - Due to other governmental units 32,139 - - 11,381 - Salaries payable 104,087 - - - Unearned revenue Total liabilities 255,702 5,741 16,360 166,798 6,560 Deferred inflows of resources: Unavailable revenues 76,356 478,019 132,452 983,521 - Fund balances (deficit): Nonspendable 112,971 - - - - Restricted - - - - 9,826,288 Committed - - - - - Assigned - 3,666,786 7,360,496 6,603,576 - Unassigned 8,023,365 - - Total fund balances 8,136 336 3,666,786 7,360,496 6,603 576 9,826,288 Total liabilities, deferred inflows of resources, and fund balances (deficit) $ 8,468,394 $ 4,150,546 $ 7,509,308 $ 7 753 895 $ 9,832,848 Fund balance reported above Amounts reported for governmental activities in the statement of net position are different because: Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds. Deferred outflows of resources - related other post employment benefits and pensions me not current financial resources and, therefore, are not reported in the funds. Other long-term assets are not available to pay for current -period expenditures and, therefore, are reported as unavailable revenue in the funds. Internal service funds are used by management to charge the cost of equipment maintenance and insurance to individual funds. The assets and liabilities are included in the governmental activities statement of net position along with a deduction of net revenue attributable to business -Type activities. Long-term liabilities, including bonds payable, other post employment benefits and net pension liability, are not due and payable in the current period and, therefore, are not reported in the funds. Deferred inflows of resources - pension related are associated with long-term liabilities that are not due and payable in the current period and, therefore, are not reported in the funds. Net position of governmental activities The accompanying notes are an integral part of these financial statements. 32 Statement 3 Tax Permanent Increment Improvement Other Intm Totals Projects Revolving Governmental Activity Governmental Funds CPF CPF Funds Eliminations 2018 2017 $ 3,269,305 $ 997,248 $ 4,296,575 $ - 5 43,809,561 $ 33,747,694 - - 176,788 - 176,788 176,462 18,577 5,467 21,957 - 174,987 155,011 - - - - 329,212 71,965 2,410 - 112,113 - 205,902 237,432 - - - (70,000) - - 8,380 - 14,843 - 85,807 37,312 2,032 - 19,771 - 92,985 107,496 - - - - 3,078 387 - - - 20,508 21,159 - 238,691 - - 1,817,349 2,020,283 - - 2,386 - 115,357 119,294 825,000 825,000 525,000 $ 4,125,704 $ 1,241,406 $ 4,644,433$ (70,000) $ 47,656,534 $ 37,219,495 $ - $ - $ 70,000 $ (70,000) $ - $ - 8,733 - 53,066 - 213,527 245,960 - - - - 117,200 257,267 9,142 - 35,083 - 78,851 103,722 829 - 3,833 - 48,182 29,466 - - 11,431 - 115,518 98,015 183,463 183,463 148,409 18,704 356,876 (70,000) 756,741 882,839 827,032 238,691 19,771 2,755,842 2,673,938 - - 2,386 - 115,357 119,294 3,279,968 - 1,119,583 - 14,225,839 4,550,557 - - 518,617 - 518,617 530,505 - 1,002,715 2,693,463 - 21,327,036 20,855,184 (66,263) 7,957,102 7,607,178 3,279,968 1,002,715 4,267,786 44,143,951 33,662,718 $ 4,125,704 $ I,241,406 $ 4 644 433 $(70,000) $ 47,656,534 $ 37,219,495 $ 44,143,951 $ 33,662,718 118,615,236 118,079,364 949,991 1,406,741 2,755,842 2,673,938 959,987 931,916 (29,102,245) (21,236,270) (1,344,705) (1,306,465) $ 136978057 $ 134,211,942 33 CITY OF ANDOVER, MINNESOTA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE GOVERNMENTALFUNDS For The Year Ended December 31, 2018 With Comparative Actual Amounts For The Year Ended December 31, 2017 The accompanying notes are an integral part of these financial statements. 34 2018A G.O. Capital Road & Improvement Water Tmnk Sewer Trunk Bridge Plan Bonds General CPF CPF CPF CPF Revenues: General property taxes $ 8,634,130 $ - $ - $ 1,267,234 $ - Tax increment collections - - - - - Licenses and permits 562,525 - - - - Intergovernmental 829,861 - - 809,106 - Special assessments - 166,435 74,233 284,954 - Charges for services 888,947 - - - - Fines 73,719 - - - - Investment income 107,561 62,664 127,533 107,684 3,096 Miscellaneous: Park dedication fees - - - - - Connection charges - 341,371 103,618 - - Rent - - - - Other 176,663 12,273 Total revenues 11,273,406 570,470 305,384 2,481,251 3,096 Expenditures: Current: General government 2,748,464 - - - - Public safety 4,956,350 - - - - Public works 1,671,735 16,865 75,593 2,269,830 202,575 Parks and recreation 1,158,535 - - - - Recycling 199,182 - - - - Economic development - - - - - Unallocated 11,940 - - - - Capital outlay: General government - - - - - Public safety - - - - - Public works - 137,201 137,200 142,865 196,927 Parks and recreation 129,038 - - - - Debt service: Principal retirement - - - - - Interest - - - - - Paying agent fees - - - - - Professional services - - - - - Construction/acquisition costs - 135,625 28,774 - - Total expenditures 10,875,244 289,691 241,567 2,412,695 399,502 Revenues over (under) expenditures 398,162 280,779 63,817 68,556 (396,406) Other financing sources (uses): Transfers in 178,558 - 400,000 5,300 - Transfers out (230,000) (114,850) - - (31,566) Bonds issued - - - - 10,000,000 Bond premium - - - - 254,260 Proceeds from sale of capital assets - - - - - Total other financing sources (uses) (51,442) (114,850) 400,000 5,300 10,222,694 Net increase (decrease) in fund balance 346,720 165,929 463,817 73,856 9,826,288 Fund balance -January 1 7,789,616 3,500,857 6,896,679 6,529,720 - Fund balance- December 31 $ 8,136,336 $ 3,666,786 $ 7,360,496 $ 6,603,576 $ 9,826,288 The accompanying notes are an integral part of these financial statements. 34 Statement 4 Tax Permanent Increment Improvement Other Intra Totals Projects Revolving Governmental Activity Governmental Funds CPF CPF Funds Eliminations 2018 2017 $ - $ 33,295 $ 2,498,992 $ - $ 12,433,651 $ 11,923,097 86,794 - - - 86,794 82,448 - - - - 562,525 546,378 - - 2,839 - 1,641,806 3,150,578 - 28,849 - - 554,471 832,528 - - 767,307 - 1,656,254 1,574,242 - - - - 73,719 75,287 56,166 16,656 62,312 - 543,672 362,974 - - 75,798 - 75,798 95,198 - - - - 444,989 412,691 - - 637,150 - 637,150 641,691 80,711 286,620 (30,600) 525,667 428,186 223,671 78,800 4,331 018 (30,600) 19 236,496 20,125,298 - - 367,492 - 3,115,956 2,754,189 - - - - 4,956,350 4,822,435 - - 62,247 - 4,298,845 5,208,862 - - 1,055,880 - 2,214,415 2,253,370 - - - - 199,182 169,956 480,122 - 58,833 - 538,955 1,087,586 - - - - 11,940 14,875 - - - - - 148,459 - - 126,053 - 126,053 114,081 - - 643,308 - 1,257,501 722,621 - - 589,438 - 718,476 499,261 - - 1,612,717 - 1,612,717 1,996,719 - - 385,555 - 385,555 418,419 - - 3,095 - 3,095 875 - - - - - 2,220 164,399 52,527 480,122 4,904,618 19,603,439 20,266,455 (256,451) 78,800 (573,600) (30,600) (366,943) (141,157) - - 596,137 (536,266) 643,729 627,530 - - (305,300) 566,866 (114,850) (54,228) - - - - 10,000,000 - - - - - 254,260 - 65,037 65,037 20,489 355,874 30,600 10,848,176 593,791 (256,451) 78,800 (217,726) - 10,481,233 452,634 3,536,419 923,915 4,485,512 33,662,718 33,210,084 $ 3,279,968 $ 1,002,715 $ 4,267,786 $ $ 44,143,951 $ 33,662,718 35 - This page intentionally left blank - 36 CITY OF ANDOVER, MINNESOTA RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES For The Year Ended December 31, 2018 With Comparative Actual Amounts For The Year Ended December 31, 2017 Statement 5 2018 2017 Amounts reported for governmental activities in the statement of activities (page 30) are different because: Net changes in fund balances - total governmental funds (page 35) $ 10,481,233 $ 452,634 Govemmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlays exceeded depreciation in the current period. 533,991 (167,011) The net effect of various miscellaneous transactions involving capital assets is to increase (decrease) net position (i.e., sales, trade-ins, and donations). 341,768 285,628 Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds. 81,904 417,830 The issuance of long-term debt (e.g., bonds, leases) provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net position. This amount is the net effect of these differences in the treatment of long-term debt and related items. (8,387,283) 1,996,719 Vested post employment benefits are reported in the governmental funds when amounts are paid. The statement of activities reports the benefits earned during the years. This amount (10,641) (2,018) is the net effect of employee benefits earned and paid during the year. Transfer out of governmental capital assets contributed to Enterprise Funds. (339,887) (52,527) Some expenses reported in the statement of activities do not require use of current financial resources and, therefore, are not reported as expenditures in governmental funds. (19,928) (22,146) Governmental funds report pension contributions for defined benefit plans as expenditures, however, pension expense is reported in the Statement of Activities. This is the amount by which pension expense differs from pension contributions: Pension contributions $ 333,948 Pension expense (277,061) 56,887 (215,288) Internal service funds are used by management to charge the cost of equipment maintenance and insurance to individual funds. This amount is the portion of net revenue attributable to governmental activities. 28,071 105,971 Change in net position of governmental activities (page 31) $ 2,766,115 $ 2,799 792 The accompanying notes are an integral part of these financial statements. 37 CITY OF ANDOVER, MINNESOTA STATEMENT OF NET POSITION PROPRIETARY FUNDS December 31, 2018 With Comparative Totals For December 31, 2017 Net position: Net investment in capital assets 15,431,188 14,347,437 7,290,074 Unrestricted 5,015,416 4,034 016 629,821 Total net position S 20,446,604 $ 18,381,453 $ 7,919,895 Net position reported above Amounts reported for business -type activities in the statement of net position are different because: Internal service funds are used by management to charge the cost of equipment maintenance and insurance to individual funds. This amount is the portion of net revenue attributable to business -type activities. Net position of business -type activities The accompanying notes are an integral part of these financial statements. ;R] Water Sewer Storm Sewer Assets: Current assets: Cash and cash equivalents S 4,760,337 $ 3,415,388 $ 469,271 Accrued interest 21,982 16,628 2,243 Due from other governmental units 920 31,400 - Accounts receivable -net 619,462 720,332 177,287 Special assessments receivable: Uuremitted 1,670 1,802 321 Delinquent 113,746 119,165 30,109 Deferred - - 2,142 Inventories - at cost 22,995 Total current assets 5,541 112 4,304,715 681,373 Noncurrent assets: Capital assets: Land 730,243 - - Buildings and structures 15,877,590 - - Machinery and equipment 283,475 643,257 552,871 Distribution and collection system 20,015,913 26,378,926 11,995,796 Total capital assets 36,907,221 27,022,183 12,548,667 Less: Allowance for depreciation (17,646,659) (12,674,746) (5,258,593) Total noncurrent assets 19,260,562 14,347,437 7,290,074 Total assets 24,801,674 18,652,152 7,971,447 Deferred outflows of resources: Related to other post employment benefits 1,005 754 - Related topensions 43,214 27,242 Total deferred outflows of resources 44,219 27,996 Liabilities: CWrenl liabilities: Accounts payable 39,311 6,182 404 Contracts payable 21,757 6,821 9,581 Deposits payable 2,234 - - Interest payable 35,231 - - Due to other governmental units 20,551 7,913 - Salaries payable 8,592 6,616 3,081 Bonds payable- due within one year 705,000 - - Compensated absences payable - due within one year 15,720 8,346 5,773 Total current liabilities 848,396 35,878 18,839 Noncurrent liabilities: Other post employment benefits- due in more than one year 23,390 17,543 - Bonds payable - due in more than one year 3,124,374 - - Compensated absences payable - due in more than one year 89,080 47,295 32,713 Net pension liability - due in more than one year 248,466 156,635 - Total noncurrent liabilities 3,485,310 221,473 32,713 Total liabilities 4,333,706 257,351 51,552 Deferred inflows of resources: Related to pensions 65,583 41,344 Net position: Net investment in capital assets 15,431,188 14,347,437 7,290,074 Unrestricted 5,015,416 4,034 016 629,821 Total net position S 20,446,604 $ 18,381,453 $ 7,919,895 Net position reported above Amounts reported for business -type activities in the statement of net position are different because: Internal service funds are used by management to charge the cost of equipment maintenance and insurance to individual funds. This amount is the portion of net revenue attributable to business -type activities. Net position of business -type activities The accompanying notes are an integral part of these financial statements. ;R] Statement 6 Totals Govemmeutal Activities - Totals Intemal Service Funds 2018 2017 2018 2017 $ 8,644,996 $ 6,988,595 $ 1,005,947 S 988,092 40,853 30,162 5,566 4,893 32,320 16,853 - - 1,517,081 1,770,672 5,652 - 3,793 3,357 - - 263,020 250,942 - - 2,142 2,517 - - 22,995 23,622 112,580 112,660 10,527,200 9,086,720 1,129,745 1,105,645 730,243 730,243 - - 15,877,590 15,877,590 - - 1,479,603 1,333,494 - - 58,390,635 57,750,743 76,478,071 75,692,070 - - (35,579,998) (33,989,563) 40,898,073 41,702,507 51,425 273 50,789,227 1,129,745 1,105,645 1,759 - - - 70,456 116,915 72,215 116,915 45,897 15,438 17,282 18,502 38,159 22,739 - - 2,234 2,234 - - 35,231 41,304 - - 28,464 24,594 - 359 18,289 14,316 6,048 4,879 705,000 685,000 - - 29,839 28,304 - 903,113 833,929 23,330 23,740 40,933 31,398 - - 3,124,374 3,842,690 - - 169,088 160,387 - - 405,101 471,732 3,739,496 4,506,207 4,642,609 5,340,136 23,330 23,740 106,927 94,236 37,068,699 37,174,817 - - 9,679,253 8,296,953 1,106,415 1,081,905 $ 46,747,952 $ 45,471,770 $ 1,106,415 $ 1,081,905 $ 46,747,952 $ 45,471,770 146,428 149,989 $ 46,894,380 $ 45,621,759 39 CITY OF ANDOVER, MINNESOTA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION PROPRIETARY FUNDS For The Year Ended December 31, 2018 With Comparative Actual Amounts For The Year Ended December 31, 2017 Net changes in net position reported above Amounts reported for business -Type activities in the statement of activities me different because: Internal service funds are used by management to charge the cost of equipment maintenance and insurance to individual funds. This amount is the portion of net revenue attributable to business -type activities. Change in net position of business -type activities The accompanying notes are an intregral part of these financial statements. 40 Water Sewer Storm Sewer Operating revenues: User charges $ 2,987,671 $ 2,325,420 $ 537,072 Meters 14,412 - - Penalties 39 36 5 Other 59,798 345 Total operating revenues 3,061,920 2,325,456 537,422 Operating expenses: Personal services 483,704 340,736 233,837 Supplies 210,044 18,044 21,609 Other service charges 663,800 161,361 95,651 Disposal charges - 1,099,379 - Depreciation 892,585 566,260 263,735 Total operating expenses 2,250,133 2,185,780 614,832 Operating income (loss) 811,787 139,676 (77,410) Nonoperating revenues (expenses): Investment income 62,595 48,637 6,405 Gain on sale of capital assets - - - Interest expense (72,454) - - Total nonoperating revenues (expenses) (9,859) 48,637 6,405 Income (loss) before contributions and transfers 801,928 188,313 (71,005) Capital contributions 351,000 170,681 322,473 Transfers: Transfers in 114,850 - - Transfers out (90,700) (470,012) (41,346) Total transfers 24,150 (470,012) (41,346) Change in net position 1,177,078 (111,018) 210,122 Net position - January 1 19,269,526 18,492,471 7,709,773 Net position -December 31 $ 20,446,604 $ 18,381,453 $ 7,919,895 Net changes in net position reported above Amounts reported for business -Type activities in the statement of activities me different because: Internal service funds are used by management to charge the cost of equipment maintenance and insurance to individual funds. This amount is the portion of net revenue attributable to business -type activities. Change in net position of business -type activities The accompanying notes are an intregral part of these financial statements. 40 Statement 7 Totals Intra Governmental Activities - Activity Totals Internal Service Funds Eliminations 2018 2017 2018 2017 $ - $ 5,850,163 $ 5,433,027 $ 1,167,698 $ 1,155,907 14,412 23,005 - - 80 - - - 60,143 61,258 21,523 26,074 5,924,798 5,517,290 1,189,221 1,181,981 - 1,058,277 1,058,226 460,131 446,274 - 249,697 245,479 347,824 289,765 (30,600) 890,212 878,148 362,146 331,546 - 1,099,379 1,166,322 - - 1,722,580 1,709,643 (30,600) 5,020,145 5,057,818 1,170,101 1,067,585 30,600 904,653 459,472 19,120 114,396 - 117,637 65,801 16,461 10,611 - - 32,855 - - (72,454) (100,127) 45,183 (1,471) 16,461 10,611 30,600 949,836 458,001 35,581 125,007 844,154 533,870 - 114,850 54,228 - - (30,600) (632,658) (627,530) (11,071) (30,600) (517,808) (573,302) (11,071) - 1,276,182 418,569 24,510 125,007 45,471,770 45,053,201 1,081,905 956,898 $ $ 46,747,952 $ 45,471,770 $ 1,106,415 $ 1,081,905 $ 1,276,182 $ 418,569 (3,561) 19,036 - $ 1,272,621 $ 437,605 41 CITY OF ANDOVER, MINNESOTA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS For The Year Ended December 31, 2018 With Comparative Actual Amounts For The Year Ended December 31, 2017 Cash flows from operating activities: Receipts from customers and users Payment to suppliers Payment to employees Net cash flows from operating activities Cash flows from noncapital financing activities: Transfers in Transfers out Net cash flows from noncapital financing activities Cash flows from capital and related financing activities: Acquisition of capital assets Interest paid on debt Payment of bonds Proceeds from the sale of capital assets Net cash flows from capital and related financing activities Cash flows from investing activities: Investment income Net increase in cash and cash equivalents Cash and cash equivalents - January 1 Cash and cash equivalents - December 31 Reconciliation of operating income to net cash provided (used) by operating activities: Operating income (loss) Adjustments to reconcile operating income (loss) to net cash flows from operating activities: Depreciation Changes in assets, deferred outflows of resources, liabilities and deferred inflows of resources: Decrease (increase) in due from other governmental units Decrease (increase) in accounts receivable Decrease (increase) in special assessments Decrease (increase) in inventory Decrease (increase)in deferred outflows of resources Increase (decrease) in accounts payable Increase (decrease) in contracts payable Increase (decrease) in due to other governmental units Increase (decrease)in salaries payable Increase (decrease) in other post employment benefits Increase (decrease) in compensated absences Increase (decrease)in net pension liability Increase (decrease) in deferred inflows of resources Total adjustments Net cash provided (wed) by operating activities Noncash investing, capital and financing activities: Assets contributed to the Enterprise Funds The accompanying notes are an integral part of these financial statements. Water Sewer Storm Sewer $ 3,167,024 $ 2,437,302 $ 546,457 (830,244) (1,272,939) (116,329) (480,749) (335,110) (227,914) 1,856,031 829,253 202,214 114,850 - - (90,700) (470,012) (41,346) 24,150 (470,012) (41,346) (54,264) (9,864) (9,864) (78,527) - - (698,316) - - (831,107) (9,864) (9,864) 55,852 45,583 5,511 1,104,926 394,960 156,515 3,655,411 3,020428 312,756 $ 4,760,337 $ 3,415,388 $ 469,271 $ 811,787 $ 139,676 $ (77,410) 892,585 566,260 263,735 95 (15,562) - 109,282 132,367 11,942 (4,273) (4,959) (2,907) 627 27,491 17,209 - 24,787 5,284 388 14,481 396 543 3,705 165 - 1,540 2,266 167 7,691 1,844 - (683) 5,163 5,756 (40,868) (25,763) - 7,784 4,907 1,044,244 689,577 279,624 $ 1,856,031 $ 829,253 $ 202,214 $ 351,000 $ 170,681 $322,473 42 Statement 8 $ 874,053 $ 428,872 $ 19,120 $ 114,396 1,722,580 1,709,643 (15,467) (9,970) Totals - 253,591 Governmental Activities - Tomis Intemal Service Fwtds 2018 2017 2018 2017 627 3,991 80 (1,062) $ 6,150,783 $ 5,176,662 $ 1,183,569 $ 1,181,981 (2,219,512) (2,304,246) (711,469) (631,718) (1,043,773) (1,010,225) (458,962) (446,083) 2,887,498 1,862,191 13,138 104,180 3,973 788 1,169 191 114,850 54,228 - - (602,058) (596,930) (11,071) - (487,208) (542,702) (11,071) - 12,691 15,714 (73,992) (241,465) - - (78,527) (151,087) - - (698,316) (4,583,316) - - $ 844,154 32,855 $ $ (850,835) (4,943,013) 106,946 62,196 15,788 9,465 1,656,401 (3,561,328) 17,855 113,645 6,988,595 10,549,923 988,092 874,447 $ 8,644,996 $ 6,988,595 $ 1,005,947 $ 988,092 $ 874,053 $ 428,872 $ 19,120 $ 114,396 1,722,580 1,709,643 (15,467) (9,970) - - 253,591 (328,019) (5,652) - (12,139) (2,639) - - 627 3,991 80 (1,062) 44,700 131,006 - - 30,459 (12,616) (1,220) (2,466) 15,420 9,562 - - 3,870 15,366 (359) (6,879) 3,973 788 1,169 191 9,535 3,189 - - 10,236 21,511 - - (66,631) (124,207) - - 12,691 15,714 2,013,445 1,433,319 (5,982) (10,216) $ 2,887,498 $ 1,862,191 $ 13,138 $ 104,180 $ 844,154 $ 533,870 $ $ 43 CITY OF ANDOVER, MINNESOTA STATEMENT OF NET POSITION FIDUCIARY FUNDS December 31, 2018 With Comparative Totals For December 31, 2017 Assets: Cash and investments Liabilities: Accounts payable Deposits payable Total liabilities Statement 9 2018 2017 $ 181,354 $ 285,706 1,149 2,234 180,205 283,472 $ 181,354 $ 285,706 The accompanying notes are an integral part of these financial statements. 44 CITY OF ANDOVER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2018 Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The City of Andover was incorporated in 1974 and operates under the State of Minnesota Statutory Plan A form of government. The governing body consists of a five -member City council elected by voters of the City. The financial statements of the City have been prepared in conformity with generally accepted accounting principles as applied to governmental units by the Governmental Accounting Standards Board (GASB). The following is a summary of the significant accounting policies. A. FINANCIAL REPORTING ENTITY As required by generally accepted accounting principles, the financial statements of the reporting entity include those of the City (the primary government) and its component units. The component units discussed below are included in the City's reporting entity because of the significance of their operational or financial relationships with the City. COMPONENT UNITS In conformity with generally accepted accounting principles, the financial statements of the component units have been included in the financial reporting entity as blended component units. The Andover Economic Development Authority (EDA) is an entity legally separate from the City. However, for financial reporting purposes, the EDA is reported as if it were part of the City's operations because the members of the City Council serve as EDA Board Members and its purpose is to promote development within the City. The activity of the EDA is reported in the EDA General Special Revenue Fund. Separate financial statements are not prepared for the EDA. B. GOVERNMENT -WIDE AND FUND FINANCIAL STATEMENTS The government -wide financial statements (i.e, the statement of net position and the statement of activities) report information on all of the nonfiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business -type activities, which rely to a significant extent on fees and charges for support. The statement of activities demonstrates the degree to which the direct expenses of a given function or business -type activity are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or business -type activity. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or business -type activity and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or business -type activity. Taxes and other items not included among program revenues are reported instead as general revenues. Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter we excluded from the government -wide financial statements. Major individual governmental funds and major individual enterprise funds me reported as separate columns in the fund financial statements. C. MEASUREMENT FOCUS, BASIS OF ACCOUNTING, AND FINANCIAL STATEMENT PRESENTATION The government -wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the Proprietary Fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they we levied. Grants and similar items me recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. The City's only fiduciary funds are agency funds. Agency funds are custodial in nature (assets equal liabilities) and do not involve measurement of results of operations. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the City considers all revenues, except reimbursement grants, to be available if they are collected within 60 days of the end of the current fiscal period. Reimbursement grants are considered available if they we collected within one year of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual 45 CITY OF ANDOVER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2018 accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. Property taxes, special assessments, intergovernmental revenues, charges for services and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Only the portion of special assessments receivable due within the current fiscal period is considered to be susceptible to accrual as revenue of the current period. All other revenue items are considered to be measurable and available only when cash is received by the City. The City reports the following major governmental funds: The General Fund is the City's primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. The Water Trunk Capital Projects Fund (CPF) is used to account for water access fees and trunk improvements as part of development. It is also used to reserve monies that will be needed for capital infrastructure replacements in the future. The Sewer Trunk CPF is used to account for sewer access fees and sanitary sewer improvements. The Road and Bridge CPF accounts for all road projects and the pavement management program, which includes annual seal coating, crack sealing and overlays for roads. The 2018A General Obligation (G. 0.) Capital Improvement Plan Bonds CPF accounts for the construction of a new vehicle maintenance facility with a wash bay and a cold storage building. The Tax Increment Projects CPF is used to account for activities in TIF districts 1-2, 1-5, 1-6 and all TIF land sales and expenditures to reach the goals of the TIF district plans. The Permanent Improvement Revolving CPF serves as a long-term funding source for large capital improvement expenditures. The City reports the following major proprietary funds: The Water Fund accounts for the water service charges, which are used to finance the water system operating expenses. The Sewer Fund accounts for the sewer service charges, which we used to finance the sanitary sewer system operating expenses. The Storm Sewer Fund accounts for the storm sewer utility charges, which are used to finance the storm sewer operating expenses. Additionally, the City reports the following fund types: Internal Service Funds (ISF) are used to provide equipment maintenance and insurance to other departments of the City on a cost reimbursement basis. The Agency Funds are used to account for assets held by the City in a trustee capacity or as an agent for individuals, private organizations, and/or other governmental units. It is used to account for the collection and distribution of funds relating to development activities and retiree insurance premiums. As a general role the effect of interfund activity has been eliminated from the government -wide financial statements. Exceptions to this general rule are transactions that would be treated as revenues, expenditures or expenses if they involved external organizations, such as buying goods and services or payments in lieu of taxes, are similarly treated when they involve other funds of the City. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. Amounts reported as program revenues include 1) charges to customers or applicants for goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes. S7 CITY OF ANDOVER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2018 Proprietary funds distinguish operating revenues and expenses from nonaperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the water and sewer enterprise funds are charges to customers for sales and services. Operating expenses for enterprise funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. When both restricted and unrestricted resources are available for an allowable use, it is the City's policy to use restricted resources first, and then unrestricted resources as they are needed. D. BUDGETS Budgets are legally adopted on a basis consistent with generally accepted accounting principles. Annual appropriated budgets we legally adopted for the General and Special Revenue Funds. Budgeted expenditure appropriations lapse at year-end. Encumbrance accounting, under which purchase orders, contracts, and other commitments for the expenditure of monies are recorded in order to reserve that portion of the appropriation, is not employed by the City because it is at present not considered necessary to assure effective budgetary control or to facilitate effective cash management. E. LEGAL COMPLIANCE - BUDGETS The City follows these procedures in establishing the budgetary data reflected in the financial statements: 1. The City Administrator submits to the City Council a proposed operating budget for the fiscal year commencing the following January 1. The budget includes proposed expenditures and the means of financing them. 2. Public hearings are conducted to obtain taxpayer comments. 3. The budget is legally enacted through City Council action. 4. Expenditures may legally exceed budgeted appropriations at the fund level through City Council action. Also, the City Council may authorize transfers of budgeted amounts between departments within any fund. 5. Formal budgetary integration is employed as a management control device during the year for the General Fund and Special Revenue Funds. Budgetary control for Capital Projects Funds is accomplished through the use of project controls. 6. The legal level of budgetary control is at the department level for the General Fund and at the fund level for the Special Revenue Funds. Also inherent in this controlling function is the management philosophy that the existence of a particular item or appropriation in the approved budget does not automatically mean that it will be spent. The budget process has flexibility in that, where need has been properly demonstrated, an adjustment can be made within the department budget by the City Administrator or between departments by the City Council. 7. The City Council made supplemental budget appropriations throughout the year. Individual amendments were not material in relation to the original appropriations which were adjusted. The following is a listing of Special Revenue Funds whose expenditures exceed budget appropriations: Final Over Budget Actual Budget Special Revenue Funds: Charitable Gambling $ 26,300 $ 68,142 $ 41,842 The expenditures over budget were funded by greater than anticipated revenues and/or available fund balance. 47 CITY OF ANDOVER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2018 F. CASH AND INVESTMENTS Cash balances from all funds are combined and invested to the extent available in authorized investments. Earnings from such investments are allocated to the individual funds on the basis of applicable cash balance participation of each fund. The City provides temporary advances to funds that have insufficient cash balances by means of an advance from another fund shown as interfund receivables in the advancing fund, and an interfund payable in the fund with the deficit, until adequate resources are received. These interfund balances are eliminated on the government -wide financial statements. Investments are stated at fair value, except for investments in external investment pools that meet GASB 79 requirements, are stated at amortized cost. Short-term investments, such as commercial paper and banker's acceptances, are reported at amortized cost. For purposes of the Statement of Cash Flows of Proprietary Fund Types, cash equivalents are defined as short-term, highly liquid investments that are both: a. readily convertible to known amounts of cash, or b. so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. The City's policy considers cash equivalents to be those that meet the above criteria and have original maturities of three months or less. G. RECEIVABLES AND PAYABLES During the course of operations, numerous transactions occur between individual funds for goods provided or services rendered. Short-term interfand loans are classified as "interfund receivables/payables." All short-term interfund receivables and payables at December 31, 2018 are planned to be eliminated in 2019. Long-term interfund loans are classified as "interfund loan receivable/payable." Any residual balances outstanding between the governmental activities and business -type activities are reported in the government -wide financial statements as "internal balances." Interfund loan receivables, 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 we not expendable, available financial resources. Property taxes and special assessments receivable have been reported net of estimated uncollectible accounts. (See Note 1 H and I). Because utility bills are considered liens on property, no estimated uncollectible amounts are established. Uncollectible amounts are not material for other receivables and have not been reported. H. PROPERTY TAX REVENUE RECOGNITION The City levies its property tax for the subsequent year during the month of December and it is certified to Anoka County. December 30th is the last day the City can certify a tax levy to the County Auditor for collection the following year. Such taxes become a lien on the following January 1. Anoka County is the collecting agency for the levy and remits the collections to the City three times a year. Taxes not collected as of December 31 each year are shown as delinquent taxes receivable. The County Auditor prepares the tax list for all taxable property in the City, applying the applicable tax rate to the tax capacity of individual properties, to arrive at the actual tax for each property. The County Auditor also collects all special assessments, except for certain prepayments paid directly to the City. The County Auditor submits a list of taxes to be collected on each parcel of property to the County Treasurer in January of each year. The County Treasurer collects all taxes and is required to mail copies of all personal property tax statements by April 15, and copies of all real estate tax statements by April 15, of each year. Property owners me required to pay one-half of their real estate taxes due by May 15 and the balance by October 15. If taxes due May 15 me not paid on time, a penalty of 3% is assessed on homesteaded property and 7% on non -homesteaded property. An additional 1% penalty is added each month the taxes remain unpaid, until October 15. If the taxes due May 15 me not paid by October 15, a 2% penalty per month is added to homesteaded property and 4% per month to non -homesteaded property until January 1. If the taxes are not paid by January 1, further penalties are added. Penalties and interest apply to both taxes and special assessments. There are some exceptions to the above penalties, but they are not material. 48 CITY OF ANDOVER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2018 Within 30 days after the tax settlement date, the County Treasurer is required to pay 70% of the estimated collections of taxes and special assessments to the City Treasurer. The County Treasurer must pay the balance to the City Treasurer within 60 days after settlement, provided that after 45 days interest accrues at the rate of 8% per annum. GOVERNMENT -WIDE FINANCIAL STATEMENTS The City recognizes property tax revenue in the period for which the taxes were levied. Uncollectible property taxes are not material and have not been reported. GOVERNMENTAL FUND FINANCIAL STATEMENTS The City recognizes property tax revenue when it becomes both measurable and available to finance expenditures of the current period. In practice, current and delinquent taxes and State credits received by the City in July, December and January are recognized as revenue for the current year. Taxes collected by the County by December 31 (remitted to the City the following January) and taxes and credits not received at the year-end we classified as delinquent and due from County taxes receivable. The portion of delinquent taxes not collected by the City in January is fully offset by deferred inflow of resources because they are not available to finance current expenditures. I. SPECIAL ASSESSMENT REVENUE RECOGNITION Special assessments are levied against benefited properties for the cost or a portion of the cost of special assessment improvement projects in accordance with State Statutes. These assessments are collectible by the City over a term of years usually consistent with the term of the related bond issue. Collection of annual installments (including interest) is handled by the County Auditor in the same manner as property taxes. Property owners are allowed to (and often do) prepay future installments without interest or prepayment penalties. Once a special assessment roll is adopted, the amount attributed to each parcel is a lien upon that property until full payment is made or the amount is determined to be excessive by the City Council or court action. If special assessments are allowed to go delinquent, the property is subject to tax forfeit sale. Proceeds of sales from tax forfeit properties are allocated firstto the County's costs of administering all tax forfeit properties. Pursuant to State Statutes, a property shall be subject to a tax forfeit sale after three years unless it is homesteaded, agricultural or seasonal recreational land in which event the property is subject to such sale after five years. GOVERNMENT -WIDE FINANCIAL STATEMENTS The City recognizes special assessment revenue in the period that the assessment roll was adopted by the City Council Uncollectible special assessments are not material and have not been reported. GOVERNMENTAL FUND FINANCIAL STATEMENTS The City recognizes revenue from special assessments when it becomes measurable and available to finance expenditures of the current fiscal period. In practice, current and delinquent special assessments received by the City are recognized as revenue for the current year. Special assessments that are collected by the County by December 31 (remitted to the City the following January) are also recognized as revenue for the current year. All remaining delinquent, deferred and special deferred assessments receivable in governmental funding are completely offset by deferred inflow of resources. J. INVENTORIES Inventories of the Governmental Funds and the Proprietary Funds are stated at cost, which approximates market, using the first - in, fust -out (FIFO) method. Inventories of Governmental Funds are recorded as expenditures when consumed rather than when purchased. K. PREPAID ITEMS Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government -wide and fund financial statements. Prepaid items are reported using the consumption method and recorded as expenditures/expenses at the time of consumption. 49 CITY OF ANDOVER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2018 L. LAND HELD FOR RESALE Land held for resale represents various property purchases made by the City with the intent to sell in order to increase tax base or attract new business. These assets are stated at the lower of cost or net realizable value. M. CAPITAL ASSETS Capital assets, which include property, plant, equipment and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items) and intangible assets such as easements and computer software, are reported in the applicable governmental or business - type activities columns in the government -wide financial statements. Capital assets are defined by the City as assets with an initial, individual cost of more than $5,000 (except for easements which is $10,000) 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 acquisition value at the date of donation. The City has chosen the modified approach for reporting street and trail system capital assets. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business -type activities is included as part of the capitalized value of the assets constructed. For the year ended December 31, 2018, no interest was capitalized in connection with construction in progress. The City implemented GASB Statement No. 51. Accounting and Financial Reporting for Intangible Assets effective January 1, 2010 which required the City to capitalize and amortize intangible assets. Intangible assets include easements and computer software. Pursuant to GASB Statement 51, in the case of initial capitalization of intangible assets, the City chose to capitalize intangible assets retroactively to 1980, except for permanent easements and internally generated software. The City has already accounted for computer software at historical cost and therefore retroactive reporting was not necessary. The City does not have any temporary easements to record that meet the threshold of $10,000. Property, plant and equipment of the primary government, as well as the component units, are depreciated/amortized using the straight line method over the following estimated useful lives: Assets Life Buildings and improvements 10 - 30 yews Furniture and equipment (including software) 5 - 10 years Machinery and equipment 5 - 10 years Other park improvements 10 - 30 years Storm sewer 50 years Distribution and collection systems 50 years Temporary easements 5 - 15 years The City elected to use the modified approach as defined by GASB Statement No. 34 for infrastructure reporting of its streets and trails. The City conducted a physical assessment in the fall of 2017 of the condition of the streets and trails constructed since 1974. This condition assessment will be performed every 3 years. Each segment of City owned street or trail was assigned a physical condition based on potential defects. An Overall Condition Index (OCI) was assigned to each segment. The index is expressed in a continuous scale from 0 to 10, where 0 is assigned to the least acceptable physical condition and 10 is assigned to those segments that have the characteristic of a new street or trail. The following conditions were defined: Range Description 8-10 Excellent 7-7.9 Very good 6-6.9 Good 4-5.9 Fair 2-3.9 Poor 1 - 1.9 Very poor 0-.9 Substandard CITY OF ANDOVER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2018 The City's policy relative to maintaining the street and trail assets is to achieve an average rating of "Good" for all segments. This acceptable rating allows minor cracking and patching of the pavement along with minor roughness that could be noticeable to the users of the system. N. COMPENSATED ABSENCES City employees earn vacation and sick pay accruing each payroll period. Unused vacation can be accrued by the employees up to a maximum of 200 hours (240 hours if on the annual leave plan) as of the anniversary date of the individual's employment with the City, unless a specific authorization is granted to an employee. All vacation pay is accrued when incurred in the government -wide and proprietary fund financial 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. Employees can also accrue an unlimited amount of unused sick leave. Employees with two or more years of service are entitled to receive severance pay equal to a percentage of unused sick pay ranging from 20-50 percent based on years of service, up to a maximum of 400 hours. The liability for severance pay is accounted for the same as accrued vacation pay. O. LONG-TERM OBLIGATIONS In the government -wide financial statements and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business -type activities, or proprietary fund type statement of net position. Bond premiums and discounts are amortized over the life of the related debt. In the fund financial statements, governmental fund types recognize bond premiums and discounts during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. P. FUND BALANCE CLASSIFICATIONS In the fund financial statements, governmental funds report fund balance in classifications that disclose constraints for which amounts in those funds can be spent. These classifications are as follows: Nonspendable — consists of amounts that are not in spendable form, such as prepaid items. Restricted— consists of amounts related to externally imposed constraints established by creditors, grantors or contributors; or constraints imposed by state statutory provisions. Committed—consists of internally imposed constraints. These constraints are established by Resolution of the City Council. Assigned— consists of internally imposed constraints. These constraints reflect the specific purpose for which it is the City's intended use. These constraints are established by the City Council and/or management. Pursuant to City Council Resolution, the City's Administrator and Finance Director are authorized to establish assignments of fund balance. Unassigned — is the residual classification for the general fund and also reflects negative residual amounts in other funds. When both restricted and unrestricted resources are available for use, it is the City's policy to first use restricted resources, and then use unrestricted resources as they am needed. When unrestricted resources are available for use, it is the City's policy to use resources in the following order: 1) committed, 2) assigned, and 3) unassigned. Q. INTERFUND TRANSACTIONS Interfund services provided and used are accounted for as revenues, expenditures or expenses. Transactions that constitute reimbursements to a fund for expenditures/expenses initially made from it that are properly applicable to another fund, are recorded as expenditures/expenses in the reimbursing fund and as reductions of expenditures/expenses in the fund that is reimbursed. Interfund loans are reported as an interfund loan receivable or payable which offsets the movement of cash between funds. All other interfand transactions are reported as transfers. 51 CITY OF ANDOVER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2018 R. USE OF ESTIMATES The preparation of financial statements in accordance with generally accepted accounting principles (GAAP) requires management to make estimates that affect amounts reported in the financial statements during the reporting period. Actual results could differ from such estimates. S. RECLASSIFICATIONS Certain amounts presented in prior year data have been reclassified in order to be consistent with the current year's presentation. T. COMPARATIVE TOTALS The basic financial statements and combining and individual fund financial statements and schedules include certain prior -year summarized comparative information in total but not at the level of detail required for a presentation in conformity with generally accepted accounting principles. Accordingly, such information should be read in conjunction with the government's financial statements for the year ended December 31, 2017, from which the summarized information was derived. U. DEFERRED OUTFLOWSANFLOWS OF RESOURCES In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred out7ows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The government has two items that qualify for reporting in the category. It is other post employment benefits and the pension related deferred outflows of resources reported in the goverrinent-wide Statement of Net Position and the proprietary funds Statement of Net Position. In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows ofresources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The government has pension related deferred inflows of resources reported in the government -wide Statement of Net Position and the proprietary funds Statement of Net Position. The government also has a type of item, which arises only under a modified accrual basis of accounting, that qualifies for reporting in this category. Accordingly, the item, unavailable revenue, is reported only in the governmental funds balance sheet. The governmental funds report unavailable revenues from the following sources: property taxes, special assessments, certified bills, due from other governmental units, and loans receivable. V. DEFINED BENEFIT PENSION PLANS - STATEWIDE Pensions. For purposes of measuring the net pension liability, deferred outflows/inflows of resources, and pension expense, information about the fiduciary net position of the Public Employees Retirement Association (PERA) and additions to/deductions from PERA's fiduciary net position have been determined on the same basis as they are reported by PERA except that PERA's fiscal year end is June 30. For this purpose, plan contributions are recognized as of employer payroll paid dates and benefit payments and refunds are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. W. RECONCILIATION OF GOVERNMENT -WIDE AND FUND FINANCIAL STATEMENTS 1. EXPLANATION OF CERTAIN DIFFERENCES BETWEEN THE GOVERNMENTAL FUND BALANCE SHEET AND THE GOVERNMENT -WIDE STATEMENT OF NET POSITION The governmental fund balance sheet includes a reconciliation between fund balance — total governmental funds and net position — governmental activities as reported in the govemment-wide statement of net position. One element of that reconciliation explains that "long-term liabilities, including bonds payable, other post employment benefits and net pension liability, we not due and payable in the current period and therefore are not reported in the funds." The details of this ($29,102,245) difference are as follows: WA CITY OF ANDOVER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2018 Bonds payable $ (24,864,000) Accrued interest payable (158,491) Other post employment benefits (251,446) Compensated absences (692,379) Net pension liability (3,135,929) Net adjustment to reduce fund balance - total governmental funds to arrive at net position - governmental activities $ (29,102,245) Another element of that reconciliation states that "internal service funds are used by management to charge the cost of equipment maintenance and insurance to individual funds. The assets and liabilities are included in the governmental activities statement of net position along with a deduction of net revenue attributable to business -type activities." The details of this $959,987 difference are as follows: Internal Service Funds net position $ 1,106,415 Net revenue attributable to business -type activities (146,428) Net adjustment to increase fund balance - total governmental funds to arrive at net position - governmental activities $ 959,987 2. EXPLANATION OF CERTAIN DIFFERENCES BETWEEN THE GOVERNMENTAL FUND STATEMENT OF REVENUES, EXPENDITURES. AND CHANGES IN FUND BALANCES AND THE GOVERNMENT -WIDE STATEMENT OF ACTIVITIES The governmental fund statement of revenues, expenditures, and changes in fund balances includes a reconciliation between net changes in fund balances — total governmental funds and changes in net position ofgovernmental activities as reported in the government -wide statement of activities. One element of that reconciliation explains that "Governmental Funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense." The details of this $533,991 difference are as follows: Capital outlay $ 2,102,030 Construction/acquisition costs 164,399 Depreciation expense (1,732,438) Net adjustment to increase net changes in fund balances - total governmental funds to arrive at changes in net position of governmental activities $ 533,991 Another element of that reconciliation states that "The net effect of various miscellaneous transactions involving capital assets (i.e., sales, trade-ins, and donations) is to increase (decrease) net position." The details of this $341,768 difference are as follows: In the statement of activities, only the gain on the sale of capital assets is reported. However, in the governmental funds, the proceeds from the sale increase financial resources. Thus, the change in net position differs from the change in fund balance by the cost of the capital assets sold. $ (32,540) Donations of capital assets increase net position in the statement of activities, but do not appear in the governmental funds because they are not financial resources. 374,308 Net adjustment to decrease net changes in fund balances - total governmental funds to arrive at changes in net position of governmental activities. $ 341,768 Another element of that reconciliation states "Revenues in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds." The details of this $81,904 difference are as follows: 53 CITY OF ANDOVER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2018 Unavailable revenue - general property taxes: At December 31, 2017 $ (101,544) At December 31, 2018 90,953 Unavailable revenue - tax increment taxes: At December 31, 2017 (5,952) At December 31. 2018 2,032 Unavailable revenue - special assessments At December 31, 2017 (2,041,442) At December 31, 2018 1,837,857 Unavailable revenue - land held for resale: 391,000 At December 31, 2017 (525,000) At December 31, 2018 825,000 Net adjustments to decrease net changes in fund balances - total governmental $ (8,387,283) funds to arrive at changes in net position of governmental activities $ 81,904 Another element of that reconciliation states "the issuance of long-term debt (e.g., bonds, leases) provides current financial resources to govemmental funds, while the repayment of the long-term debt consumes the current financial resources of governmental funds." Neither transaction, however, has any effect on net position. The details of this ($8,387,283) difference are as follows: Debt issued or incurred Issuance of capital improvement plan bonds $ (10,000,000) Principal repayments Abatement bonds 870,000 Referendum bonds 155,000 Certificates of indebtedness 391,000 Promissory note payable 196,717 Net adjustment to increase net changes in fund balances - total governmental funds to arrive at changes in net position of governmental activities $ (8,387,283) Another element of that reconciliation states that "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." The details of this ($19,928) difference are as follows: Compensated absences $ (28,169) Accrued interest 8,241 Net adjustment to decrease net changes in fund balances - total governmental funds to arrive at changes in net position of governmental activities $ (19,928) Another element of that reconciliation states that "internal service funds are used by management to charge the cost of equipment maintenance and insurance to individual funds. This amount is the portion of net revenue attributable to governmental activities." The details of this $28,071 difference are as follows: Internal Service Funds change in net position Net revenue attributable to business -type activities Net adjustment to increase fund balance - total governmental funds to arrive at net position - governmental activities 54 $ 24,510 3,561 $ 28,071 CITY OF ANDOVER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2018 Note 2 DEPOSITS AND INVESTMENTS DEPOSITS In accordance with Minnesota Statutes, the City maintains deposits at those depository banks authorized by the City Council, all of which are members of the Federal Reserve System. Minnesota Statutes require that all City deposits be protected by insurance, surety bond, or collateral. The market value of collateral pledged must equal 110% of the deposits not covered by insurance or bonds. Minnesota Statutes require that securities pledged as collateral be held in safekeeping by the City Clerk/Treasurer or in a financial institution other than that famishing the collateral. Authorized collateral includes the following: a) United States government treasury bills, treasury notes, treasury bonds; b) Issues of United States government agencies and instrumentalities as quoted by a recognized industry quotation service available to the government entity; c) General obligation securities of any state or local government with taxing powers which is rated "A" or better by a national bond rating service, or revenue obligation securities of any state or local government with taxing powers which is rated "AA" or better by a national bond rating service; d) Unrated general obligation securities of a local government with taxing powers may be pledged as collateral against funds deposited by that same local government entity; e) Irrevocable standby letters of credit issued by Federal Home Loan Banks to a municipality accompanied by written evidence that the bank's public debt is rated "AA" or better by Moody's Investors Service, Inc. or Standard & Poor's Corporation; and f) Time deposits that are fully insured by the Federal Deposits Insurance Corporation. Custodial Credit Risk — Deposits: Custodial credit risk is the risk that in the event of a bank failure, the City's deposits may not be returned to it. State statutes require that insurance, surety bonds or collateral protect all City deposits. The market value of collateral pledged must equal 110% of deposits not covered by insurance or bonds. As of December 31, 2018, $176,600 of the bank balance of the City's deposits was not covered by federal depository insurance or covered by perfected collateral pledged and held in the City's name. The City has no additional deposit policies addressing custodial credit risk. INVESTMENTS Minnesota Statutes authorize the City to invest in the following: a) Direct obligations or obligations guaranteed by the United States or its agencies, its instrumentalities or organizations created by an act of congress, excluding mortgage-backed securities defined as high risk. b) Shares of investment companies registered under the Federal Investment Company Act of 1940 and whose only investments are in securities described in (a) above, general obligation tax-exempt securities, or repurchase or reverse repurchase agreements. c) Obligations of the State of Minnesota or any of its municipalities as follows: 1) any security which is a general obligation of any state or local government with taxing powers which is rated "A" or better by a national bond rating service; 2) any security which is a revenue obligation of any state or local government with taxing powers which is rated "AA" or better by a national bond rating service; and 3) a general obligation of the Minnesota housing fmance agency which is a moral obligation of the State of Minnesota and is rated "A" or better by a national bond rating agency. d) Bankers acceptance of United States banks eligible for purchase by the Federal Reserve System. e) Commercial paper issued by United States corporations or their Canadian subsidiaries, of the highest quality, and maturing in 270 days or less. 55 CITY OF ANDOVER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2018 I) Repurchase or reverse repurchase agreements with 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; certain Minnesota securities broker-dealers; or, a bank qualified as a depositor. g) General obligation temporary bonds of the same governmental entity issued under section 429.091, subdivision 7; 469.178, subdivision 5; or 475.61, subdivision 6. As of December 31, 2018, the City had the following investments and maturities: The following is a reconciliation of the City's total cash and investment balances at December 31, 2018: Government -wide statement of net position: Cash and investments $ 53,460,504 Cash and investments with escrow agent 176,788 Fiduciary funds statement of net position 181,354 Total $ 53,818,646 The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. The hierarchy has three levels. Level 1 investments are valued using inputs that are based on quoted prices in active markets for identical assets. Level 2 investments are valued using inputs that are based on quoted prices for similar assets or inputs that are observable, either directly or indirectly. Level 3 investments are valued using inputs that are unobservable. The City has the following recurring fair value measurements as of December 31, 2018: 56 Investment Maturities (in Yews) Credit Fair Less Than More Than Investment Type Rating Value 1 1 - 5 6-10 10 Money market funds N/A $ 3,504,282 $ 3,504,282 $ - $ - $ - Minnesota Municipal Money Market Fund (4M) N/A 11,083,126 11,083,126 - - - Certificates of deposit N/A 13,133,580 8,729,967 4,403,613 - - Local/Stategovernments A/A1/A2 546,452 184,155 262,152 100,145 - AAl/AA2/AA3 6,532,833 1,615,320 3,571,709 1,244,487 101,317 AAA 5,256,432 888,407 3,589,493 778,532 - U.S. agencies AAA 11,982,876 5,520,070 6,307,414 155,392 U.S. agencies N/A 99,795 99,795 - - Total investments 52,139,376 $31,625,122$18,134,381 $ 2,278,556 $ 101,317 Deposits 1,679,270 Total cash and investments $53,818,646 The following is a reconciliation of the City's total cash and investment balances at December 31, 2018: Government -wide statement of net position: Cash and investments $ 53,460,504 Cash and investments with escrow agent 176,788 Fiduciary funds statement of net position 181,354 Total $ 53,818,646 The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. The hierarchy has three levels. Level 1 investments are valued using inputs that are based on quoted prices in active markets for identical assets. Level 2 investments are valued using inputs that are based on quoted prices for similar assets or inputs that are observable, either directly or indirectly. Level 3 investments are valued using inputs that are unobservable. The City has the following recurring fair value measurements as of December 31, 2018: 56 CITY OF ANDOVER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2018 Investment Investments at fair value: Federal Home Loan Bank Federal Farm Credit Bank Federal Home Loan Mortgage Corporation Federal National Mortgage Association Financing Corp oration Resolution Funding Corporation Municipal Bonds Brokered Certificates of Deposit Total investments at fair value Investments not categorized: External investment pool: 4M Wells Fargo Bank Money Market Total investments not categorized Total 11,083,126 3,504,282 14,587,408 $ 52,139,376 The 4M Fund is an external investment pool investment which is regulated by Minnesota Statutes and the Board of Directors of the League of Minnesota Cities. It is an unrated pool and the fair value of the position in the pool is the same as the value of pool shares. The pool is managed to maintain a portfolio weighted average maturity of no greater than 60 days and seeks to maintain a constant net asset value (NAV) per share of $1. The pool measures their investments in accordance with Government Accounting Standards Board Statement No. 79, at amortized cost. The 4M Plus Fund requires funds to be deposited for a minimum of 14 calendar days. Withdrawals prior to the 14 -day restriction period are subject to a penalty equal to 7 days interest on the amount withdrawn. Custodial Credit Risk - Investments — For investments in securities, custodial credit risk is the risk that in the event of a failure of the counterparty, the City will not be able to recover the value of its investment securities that are in the possession of an outside party. As of December 31, 2018, $250,000 of the City's $52,139,376 investments was uninsured and unregistered, with securities held in the City's time. Interest Rate Risk - The City has a formal investment policy that states the City will minimize the risk that the market value of securities in the portfolio will fall due to the changes in general interest rates, by: 1) Structuring the investment portfolio so that securities mature to meet cash requirements for ongoing operations, thereby avoiding the need to sell securities on the open market prior to maturity. 2) Investing operating funds primarily in shorter -term securities, money market mutual funds or similar investment pools. Credit Risk - The City has a formal investment policy that states the City will minimize the credit risk, the risk of loss due to the failure of the security issuer or backer, by: I) Limiting investments to the safest types of securities. 2) Pre -qualifying the financial institutions, broker/dealers, intermediaries and advisers with which the City will do business. A list will be maintained of financial institutions authorized to provide investment services. In addition, a list also will be maintained of approved security broker/dealers selected by creditworthiness. These may include "primary" dealers or regional dealers that qualify under Securities and Exchange Commission (SEC) Rule 150-1. All financial institutions and broker/dealers who desire to become qualified for investment transactions must supply: audited financial statements, proof of National Association of Securities Dealers (NASD) certification, proof of state registration, completed broker/dealer questionnaire, and certification of having read and understood and agreeing to comply with the City's investment policy. 57 Fair Value M easurement Using 12/31/2018 Level Level Level $ 2,971,989 $ - $ 2,971,989 $ - 3,623,436 - 3,623,436 - 3,895,590 - 3,895,590 - 1,295,999 - 1,295,999 - 99,795 - 99,795 - 195,862 - 195,862 - 12,335,717 - 12,335,717 - 13,133,580 13,133,580 37,551,968 $ $37,551,968 $ 11,083,126 3,504,282 14,587,408 $ 52,139,376 The 4M Fund is an external investment pool investment which is regulated by Minnesota Statutes and the Board of Directors of the League of Minnesota Cities. It is an unrated pool and the fair value of the position in the pool is the same as the value of pool shares. The pool is managed to maintain a portfolio weighted average maturity of no greater than 60 days and seeks to maintain a constant net asset value (NAV) per share of $1. The pool measures their investments in accordance with Government Accounting Standards Board Statement No. 79, at amortized cost. The 4M Plus Fund requires funds to be deposited for a minimum of 14 calendar days. Withdrawals prior to the 14 -day restriction period are subject to a penalty equal to 7 days interest on the amount withdrawn. Custodial Credit Risk - Investments — For investments in securities, custodial credit risk is the risk that in the event of a failure of the counterparty, the City will not be able to recover the value of its investment securities that are in the possession of an outside party. As of December 31, 2018, $250,000 of the City's $52,139,376 investments was uninsured and unregistered, with securities held in the City's time. Interest Rate Risk - The City has a formal investment policy that states the City will minimize the risk that the market value of securities in the portfolio will fall due to the changes in general interest rates, by: 1) Structuring the investment portfolio so that securities mature to meet cash requirements for ongoing operations, thereby avoiding the need to sell securities on the open market prior to maturity. 2) Investing operating funds primarily in shorter -term securities, money market mutual funds or similar investment pools. Credit Risk - The City has a formal investment policy that states the City will minimize the credit risk, the risk of loss due to the failure of the security issuer or backer, by: I) Limiting investments to the safest types of securities. 2) Pre -qualifying the financial institutions, broker/dealers, intermediaries and advisers with which the City will do business. A list will be maintained of financial institutions authorized to provide investment services. In addition, a list also will be maintained of approved security broker/dealers selected by creditworthiness. These may include "primary" dealers or regional dealers that qualify under Securities and Exchange Commission (SEC) Rule 150-1. All financial institutions and broker/dealers who desire to become qualified for investment transactions must supply: audited financial statements, proof of National Association of Securities Dealers (NASD) certification, proof of state registration, completed broker/dealer questionnaire, and certification of having read and understood and agreeing to comply with the City's investment policy. 57 CITY OF ANDOVER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2018 An annual review of the financial condition and registration of qualified financial institutions and broker/dealers will be conducted by the City Administrator. Concentration of Credit Risk - More than 23% of the City's investments are in various holdings with U.S. agencies; Federal Home Loan Bank (5.7%), Federal Farm Credit Bank (7.0%), Federal National Mortgage Association (2.50/6), Federal Home Loan Mortgage Corporation (7.5%) and U.S. Treasury (0.6%). The City's policy on concentration of investments is as follows: 1) Diversification - The investments shall be diversified by: a) investments to avoid over concentration in securities from a specific issuer or business sector (excluding U.S. Treasury securities), b) limiting investment in securities that have higher credit risks, c) investing in securities with varying maturities, and d) continuously investing a portion of the portfolio in readily available funds such as local government investment pools (LGIPs), money market funds or overnight repurchase agreements to ensure that appropriate liquidity is maintained in order to meet ongoing obligations. 2) Maximum Maturities - To the extent possible, the City shall attempt to match its investments with anticipated cash flow requirements. Unless matched to a specific cash flow, the City will not directly invest in securities maturing, or having average lifes, of more than five (5) years from the date of purchase or in accordance with state and local statutes and ordinances. Reserve funds and other funds with longer-term investment horizons may be invested in securities exceeding five (5) years if the maturity of such investments are made to coincide as nearly as practicable with the expected use of funds. The intent to invest in securities with longer maturities shall be disclosed in writing to the legislative body. Because of inherent difficulties in accurately forecasting cash flow requirements, a portion of the portfolio should be continuously invested in readily available funds such as local government investment pools, money market funds, or overnight repurchase agreements to ensure that appropriate liquidity is maintained to meet ongoing obligations. Note RECEIVABLES Significant receivables balances not expected to be collected within one year of December 31, 2018 are as follows: Major Funds: General Fund Water Trunk CPF Sewer Trunk CPF Road and Bridge CPF Tax Increment Projects CPF Permanent Improvement Revolving CPF Nonmajor Funds Total Note 4 UNAVAILABLE REVENUES Delinquent Delinquent Special Property Tax Assessment Taxes Increment Receivable Total 19,240 $ - $ 14,290 $ 33,530 - - 422,087 422,087 - - 108,392 108,392 2,826 - 806,293 809,119 - 691 - 691 - 236,700 236,700 6,128 6,128 $ 28,194 $ 691 $ 1,587,762 $ 1,616,647 Governmental funds report deferred inflows of resources in connection with receivables for revenues that are not considered to be available to liquidate liabilities of the current period. At the end of the current fiscal year, the various components of unavailable revenue reported in the governmental funds were as follows: 68 CITY OF ANDOVER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2018 Major Funds: General Fund Water Trunk CPF Sewer Trunk CPF Road and Bridge CPF Tax Increment Projects CPF Permanent Improvement Revolving CPF Nonmajor Funds Total Note 5 CAPITAL ASSETS Property Tax Special Land Held Taxes Increment Assessments for Resale Total $ 62,066 $ - $ 14,290 $ - $ 76,356 - - 478,019 - 478,019 - - 132,452 - 132,452 9,116 - 974,405 - 983,521 - 2,032 - 825,000 827,032 - 238,691 - 238,691 19,771 - - - 19,771 $ 90,953 $ 2,032 $ 1,837,857 $ 825,000 $ 2,755,842 In accordance with GASB Statement No. 34, the City has reported all capital assets including infrastructure in the government -wide statement of net position. The City elected to use the modified approach as defined by GASB Statement No. 34 for infrastructure reporting for its streets and trails. As a result, no accumulated depreciation or depreciation expense has been recorded for this system. A more detailed discussion of the modified approach is presented in the Required Supplementary Information section of this report. All other capital assets including other infrastructure systems were reported using the basic approach whereby accumulated depreciation and depreciation expense have been recorded. Capital asset activity for the year ended December 31, 2018 was as follows: Primary Government Governmental activities: Capital assets not being depreciated: Land and improvements Streets and trails Construction in progress Total capital assets not being depreciated Capital assets being depreciated Beginning Balance Additions Ending Deletions Balance $ 10,800,015 $ 289,990 $ - $ 11,090,005 85,084,915 638,895 - 85,723,810 31,566 866,358 897,924 95,916,496 1,795,243 97,711,739 Buildings and improvements 27,485,144 93,463 (25,919) 27,552,688 Furniture and equipment (including software) 881,656 41,218 (15,187) 907,687 Machinery and equipment 8,909,915 291,437 (254,808) 8,946,544 Other park improvements 8,093,741 79,489 (53,437) 8,119,793 Total capital assets being depreciated Less accumulated depreciation for: Buildings and improvements Furniture and equipment Machinery and equipment Other park improvements Total accumulated depreciation Total capital assets being depreciated - net 45,370,456 505,607 (349,351) 45,526,712 12,551,625 921,703 539,973 66,261 6,166,407 401,320 3,949,583 343,154 (25,919) 13,447,409 (15,187) 591,047 (222,268) 6,345,459 (53,437) 4,239,300 23,207,588 1,732,438 (316,811) 24,623,215 22,162,868 (1,226,831) (32,540) 20,903,497 Governmental activities capital assets - net $ 118,079,364 $ 568,412 $ (32,540) _Ll 18,615,236 59 CITY OF ANDOVER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2018 Business -type activities: General government $ 82,588 Public safety Capital assets not being depreciated: Public works 217,023 Parks and recreation 1,109,761 Land and improvements $ 730,243 $ - $ - $ 730,243 Capital assets being depreciated: Business -type activities: Water $ 892,585 Buildings and improvements 15,877,590 - - 15,877,590 Furniture and equipment (including software) 52,110 - (10,000) 42,110 Machinery and equipment 1,281,384. 278,554 (122,145) 1,437,793 Collection and distribution 57,750,743 639,892 - 58,390,635 Total capital assets being depreciated 74,961,827 918,446 (132,145) 75,748,128 Less accumulated depreciation for: Buildings and improvements 9,415,613 489,751 - 9,905,364 Furniture and equipment 51,177 934 (10,000) 42,111 Machinery and equipment 931,980 62,990 (122,145) 872,825 Collection and distribution 23,590,793 1,168,905 - 24,759,698 Total accumulated depreciation 33,989,563 1,722,580 (132,145) 35,579,998 Total capital assets being depreciated - net 40,972,264 (804,134) - 40,168,130 Business -type activities capital assets - net $ 41,702,507 $ (804,134) $ $ 40,898,373 Depreciation/amortization expense was charged to functions/programs of the primary government as follows: Governmental activities: General government $ 82,588 Public safety 305,490 Public works 217,023 Parks and recreation 1,109,761 Recycling 6,862 Economic development 10,714 Total depreciation/amortization expense - governmental activities $ 1,732,438 Business -type activities: Water $ 892,585 Sewer 566,260 Storm sewer 263,735 Total depreciation/amortization expense - business -type activities $ 1,722,580 At December 31, 2018, the City had the following construction project contracts in progress: Contract Remaining Project# Project Amount Commitment 17-26 Community Center Expansion $ 1,021,696 $ 567,897 17-27 Public Works - VM/Cold Storage/Site Work 386,185 193,425 $ 1,407,881 $ 761,322 we CITY OF ANDOVER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2018 Note 6 LONG-TERM DEBT The City issues general obligation bonds, equipment certificates and promissory notes to provide funds for the acquisition and construction of major capital facilities. The reporting entity's long-term debt is segregated between the amounts to be repaid from governmental activities and amounts to be repaid from business -type activities. GOVERNMENTAL ACTIVITIES: Abatement Bonds: 2012C G.O. Abatement Bonds Certificates of Indebtedness: 2014A G.O. Equipment Certificates 2016A G.O. Equipment Certificates Total certificates of indebtedness Issue Maturity Date Date 12/27/2012 2/1/2031 Interest Original Payable Rate Issue 12/31/18 1.00-3.00% $ 17,315,000 $ 13,270,000 5/29/2014 2/1/2020 1.50-2.00% 1,555,000 545,000 2/19/2016 2/1/2021 1.90% 520,000 394,000 2,075,000 939,000 Capital Improvement Bonds: 2018A G.O. Capital Improvement Plan Bonds 12/27/2018 Referendum Bonds: 2010A G.O. Open Space Referendum Bonds 2/18/2010 Total- bonded indebtedness Compensated absences payable Total governmental activities indebtedness BUSINESS -TYPE ACTIVITIES: General Obligation Revenue Bonds: 2009A G.O. Water Revenue Bonds 3/26/2009 2016B G.O. Water Revenue Refunding Bonds 12/7/2016 Total general obligation revenue bonds 2/1/2044 3.00-5.00% 10,000,000 10,000,000 2/1/2022 2.00-3.12% 1,660,000 655,000 31,050,000 24,864,000 692,379 31,050,000 25,556,379 2/1/2024 2.00-4.25% 1,025,000 465,000 2/1/2023 2.00% 3,925,000 3,310,000 4,950,000 3,775,000 Issuance premiums - 54,374 Compensated absences payable - 198,927 Total business -type activities indebtedness 4,950,000 4,028,301 Total City indebtedness $ 36,000,000 $ 29,584,680 For the governmental activities, compensated absences are generally liquidated by the General and Special Revenue Funds Annual debt service requirements to maturity for general obligation bonds are as follows: 61 CITY OF ANDOVER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2018 It is not practical to determine the specific year for payment of long-term accrued compensated absences 9E Abatement Bonds Certificates of Indebtedness Capital Improvement Bonds Principal Interest Principal Interest Principal Interest 2019 $ 885,000 $ 323,931 $ 399,000 $ 14,460 $ - $ 212,963 2020 910,000 305,981 406,000 6,541 85,000 356,131 2021 925,000 287,631 134,000 1,273 125,000 350,881 2022 945,000 268,931 - - 130,000 344,506 2023 960,000 249,281 - - 290,000 334,006 2024-2028 5,160,000 881,028 - - 1,670,000 1,437,481 2029-2033 3,485,000 159,075 - - 2,010,000 1,105,981 2034-2038 - - - - 2,330,000 773,938 2039-2043 - - - - 2,750,000 352,359 2044 - 610,000 10,675 Total $ 13,270,000 $ 2,475,858 $ 939,000 $ 22,274 $ 10,000,000 $ 5,278,921 Governmental Activities Business -Type Activities Referendum Bonds G.O. Revenue Bonds Principal Interest Principal Interest 2019 $ 160,000 $ 17,508 $ 705,000 $ 76,980 2020 160,000 12,828 725,000 61,499 2021 165,000 7,870 735,000 45,492 2022 170,000 2,656 755,000 29,042 2023 - - 770,000 12,153 2024-2027 85,000 1,806 $ 655,000 $ 40,862 $ 3,775,000 $ 226,972 It is not practical to determine the specific year for payment of long-term accrued compensated absences 9E CITY OF ANDOVER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2018 CHANGE IN LONG-TERM LIABILITIES Long-term liability activity for the yew ended December 31, 2018, was as follows: Beginning Ending Due Within Balance Additions Reductions Balance One Year Governmental activities: Bonds payable: Abatement bonds $ 14,140,000 $ - $ (870,000) $ 13,270,000 $ 885,000 Certificates of indebtedness 1,330,000 - (391,000) 939,000 399,000 Capital improvement bonds - 10,000,000 - 10,000,000 - Referendum bonds 810,000 - (155,000) 655,000 160,000 Total bonds payable 16,280,000 10,000,000 (1,416,000) 24,864,000 1,444,000 Promissory note payable 196,717 - (196,717) - - Compensated absences 664,210 401,452 (373,283) 692,379 103,857 Total governmental activities long-term liabilities $17,140,927 $10,401,452 _L_L,986,0001 $25,556,379 $ 1,547,857 Business -type activities: Bonds payable: G.O. revenue bonds $ 4,460,000 $ - $ (685,000) $ 3,775,000 $ 705,000 Issuance premiums 67,690 - (13,316) 54,374 - Compensated absences 188,691 95,491 (85,255) 198,927 29,839 Total business -type activities long-term liabilities $ 4,716,381 $ 95,491 $ (783,571) $ 4,028,301 $ 734,839 For the governmental activities, bonds and the promissory note payable can be summarized in the following categories: The abatement bonds were used to purchase the 132,000 square foot building from the EDA. The bonds are general obligations of the City for which it pledges its full faith, credit and taxing powers to the payment of principal and interest on the bonds. The certificates of indebtedness are used to finance the purchase of capital equipment. The certificates are general obligations of the City for which it pledges its full faith, credit and taxing powers to the payment of principal and interest on the certificates. The capital improvement bonds are used to finance the construction of the public works maintenance facility with a wash bay and a cold storage building. The bonds are general obligations of the City for which it pledges its full faith, credit and taxing powers to the payment of principal and interest on the bonds. The referendum bonds were used to finance various land acquisitions for open space preservation within the City. The bonds are general obligations of the City for which it pledges its full faith, credit and taxing powers to the payment of principal and interest on the certificates. The promissory note payable was used to finance the purchase of 13 acres adjacent to the city hall campus for future expansion. The note is payable from monies set aside in the Building Capital Projects Fund. For the governmental activities, compensated absences are generally liquidated through the General Fund. For the business -type activities, the G. 0. revenue bonds were used to finance the construction of a water treatment plant. The bonds are payable from net revenues of the water system and are general obligations of the City for which its full faith, credit and taxing powers are pledged. 63 CITY OF ANDOVER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2018 2012C G.O. Abatement Bonds. The City has pledged future lease revenue, operating revenues (net of operating expenses) and, if necessary, a debt service tax levy to repay the $17,315,000 bonds issued in December 2012. Proceeds from this bond refunded the 2004 EDA Public Facility Lease Revenue Bonds. Lease revenues were projected to produce 100% of the debt service requirements over the life of the bonds. Total principal and interest remaining on the bonds is $15,745,858, payable through February 2031. For the current year, principal and interest paid and total property tax revenues were $1,211,481 and $970,085, respectively. 2014A G.O. Equipment Certificates. The City has pledged future property tax revenue to repay the $1,555,000 bonds issued in May 2014. Proceeds from the bonds were used to finance the purchase of capital equipment. Property taxes were projected to produce 100% of the debt service requirements over the life of the bonds. Total principal and interest remaining on the bonds is $555,950, payable through February 2020. For the current year, principal and interest paid and total property tax revenues were $278,550 and $294,347, respectively. 2016A G.O. Equipment Certificates. The City has pledged future property tax revenue to repay the $520,000 bonds issued in February 2016. Proceeds from the bonds were used to finance the purchase of capital equipment. Property taxes were projected to produce 100% of the debt service requirements over the life of the bonds. Total principal and interest remaining on the bonds is $405,324, payable through February 2021. For the current year, principal and interest paid and total property tax revenues were $134,683 and $143,020, respectively. 2018A G.O. Capital Improvement Plan Bonds. The City has pledged future property tax revenue to repay the $10,000,000 bonds issued in December 2018. Proceeds from the bonds were used to finance the construction of a public works maintenance facility with a wash bay and a cold storage building. Property taxes were projected to produce 100% of the debt service requirements over the life of the bonds. Total principal and interest remaining on the bonds is $15,278,921, payable through February 2044. 2010A G.O. Open Space Referendum Bonds. The City has pledged future property tax revenue to repay the $1,660,000 bonds issued in February 2010. Proceeds from the bonds were used to finance various land acquisitions for open space preservation within the City. Property taxes were projected to produce 100% of the debt service requirements over the life of the bonds. Total principal and interest remaining on the bonds is $695,862, payable through February 2022. For the current year, principal and interest paid and total property tax revenues were $176,841 and $188,916 respectively. 2009A G.O. Water Revenue Bonds. The City has pledged future water customer revenues, net of operating expenses, to repay the $1,025,000 bonds issued in March 2009. Proceeds of the bonds provided financing for the addition to the water treatment plant. The bonds are payable from water customer net revenues and are payable through 2024. The total principal and interest remaining on the bonds is $523,772. The principal and interest paid for the current year and total customer net revenues were $89,492 and $1,728,522, respectively. 2016B G.O. Water Revenue Refunding Bonds. The City has pledged future water customer revenues, net of operating expenses, to repay the $3,925,000 bonds issued in December 2016. Proceeds of the bonds refunded the Series 2007B Bonds. The bonds are payable from water customer net revenues and are payable through 2023. The total principal and interest remaining on the bonds is $3,478,200. The principal and interest paid for the current year and total customer net revenues were $687,350 and $1,728,522, respectively. CURRENT REFUNDING On December 7, 2016, the City issued $3,925,000 in Water Revenue Refunding Bonds, Series 2016B with an average interest rate of 2.00% to advance refund $3,935,000 of outstanding 2007B Series Bonds with an average interest rate of 4.12%. The net proceeds of $3,938,608 were used to purchase U.S. Government Securities. Those securities were deposited in an irrevocable trust with an escrow agent to provide for the called principal on the refunded bonds on February 1, 2017. The City refunded a portion of the 2007B G.O. Water Revenue Refunding Bonds to reduce its total debt service payments over the last six years of the bond by $309,113 and to obtain an economic gain (difference between the present value of the debt service payments on the old and new debt) of $294,725. Note 7 LEGAL DEBT MARGIN The City is subject to a statutory limitation by the State of Minnesota for bonded indebtedness payable principally from property taxes. The City's legal debt margin for 2018 and 2017 is computed as follows: 64 CITY OF ANDOVER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2018 December 31, 2018 2017 Estimated taxable market value $ 2,959,411,470 Debt limit (3% of market value) 88,782,344 Amount of debt applicable to debt limit Total bonded debt $ 28,639,000 Less: Nonapplicable debt G.O. water revenue bonds (3,775,000) Less: Cash and investments in related debt service funds (1,032,604) Total debt applicable to debt limit 23,831,396 Legal debt margin $ 64,950,948 Note 8 DEFINED BENEFIT PENSION PLANS - STATEWIDE A. PLAN DESCRIPTION $ 2,633,480,159 79,004,405 $ 20,740,000 (4,460,000) (943,862) 15,336,138 $ 63,668,267 The City participates in the following cost-sharing multiple -employer defined benefit pension plans administered by the Public Employees Retirement Association of Minnesota (PERA). PERA's defined benefit pension plans are established and administered in accordance with Minnesota Statutes, Chapters 353 and 356. PERA's defined benefit pension plans are tax qualified plans under Section 401 (a) of the Internal Revenue Code. 1. General Employees Retirement Plan (General Employees Plan; accounted for in the General Employees Fund) All full-time (with exception of employees covered by the Public Employees Police and Fire Plan) and certain part-time employees of the City are covered by the General Employees Plan. General Employees Plan members belong to the Coordinated Plan. Coordinated Plan members are covered by Social Security. 2. Public Employees Police and Fire Plan (Police and Fire Plan; accounted for in the Police and Fire Fund) The Police and Fire Plan, originally established for police officers and firefighters not covered by a local relief association, now covers all police officers and firefighters hired since 1980. Effective July 1, 1999, the Police and Fire Plan also covers police officers and firefighters belonging to a local relief association that elected to merge with and transfer assets and administration to PERA. B. BENEFITS PROVIDED PERA provides retirement, disability, and death benefits. Benefit provisions are established by state statute and can only be modified by the state legislature. Vested, terminated employees who we entitled to benefits, but are not receiving them yet, are bound by the provisions in effect at the time they last terminated their public service. 1. General Employees Plan Benefits General Employees Plan benefits are based on a member's highest average salary for any five successive years of allowable service, age, and years of credit at termination of service. Two methods are used to compute benefits for PERA's Coordinated Plan members. Members hired prior to July 1, 1989, receive the higher of Method 1 or Method 2 formulas. Only Method 2 is used for members hired after June 30, 1989. Under Method 1, the accrual rate for Coordinated Plan members is 1.2% for each of the first ten years of service and 1.7% for each additional year. The rates are 2.2% and 2.7%, respectively, for Basic members. Under Method 2, the accrual rate for Coordinated members is 1.7% for all years of service, and 2.7% for Basic members. The accrual rates for former MERF members is 2.0% for each of the first 10 years of service and 2.5% for each additional year. For members hired prior to July 1, 1989, a full annuity is available when age plus yews of service equal 90 65 CITY OF ANDOVER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2018 C. and normal retirement age is 65. For members hired on or after July 1, 1989, normal retirement age is the age for unreduced Social Security benefits capped at 66. Beginning January 1, 2019, benefit recipients will receive a future annual increase equal to 50 percent of the Social Security Cost of Living Adjustment, not less than 1.0 percent and not more than 1.5 percent. For retirements on or after January 1, 2024, the first benefit increase is delayed until the retiree reaches Normal Retirement Age (not applicable to Rule of 90 retirees, disability recipients, or survivors). A benefit recipient who has been receiving a benefit for at least 12 full months as of June 30 will receive a full increase. Members receiving benefits for at least one month. but less than 12 full months as of June 30 will receive a pro rata increase. 2. Police and Fire Benefits Benefits for Police and Fire members first hired after June 30, 2010 but before July 1, 2014, vest on a prorated basis from 50 percent after five years up to 100 percent after ten years of credited service. Benefits for Police and Fire members first hired after June 30, 2014 vest on a prorated basis from 50% after ten years up to 100% after twenty years of credited service. The annuity accrual rate is 3 percent of average salary for each year of service. For Police and Fire members who were fust hired prior to July 1, 1989 a full annuity is available when age plus years of service equal at least 90. Beginning in 2019, COLA will be fixed at 1 percent. Under funding measurements from 2017, the 2.5 percent COLA trigger was never expected to occur and was subsequently removed from law. Post retirement increases are given each year except for annuitants who have been receiving a benefit for only 31 to 41 months. These annuitants will receive a prorated amount of the increase on a sliding scale. Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions. Contribution rates can only be modified by the state legislature. I. General Employees Fund Contributions Coordinated Plan members were required to contribute 6.50 percent of their annual covered salary in fiscal year 2018; the City was required to contribute 7.5 percent for Coordinated Plan members. The City's contributions to the General Employees Fund for the year ended December 31, 2018 were $301,507. The City's contributions were equal to the required contributions as set by state statute. 2. Police and Fire Fund Contributions Legislation increased both employee and employer contribution rates in the Police and Fire Plan. Employee rates increased from 10.80 percent of pay to 11.30 percent and employer rates increase from 16.20 percent to 16.95 percent on January 1, 2019. On January 1, 2020 employee rates increase to 11.80 percent and employer rates increase to 17.70 percent. The City's contributions to the Police and Fire Fund for the year ended December 31, 2018 were $46,365. The City's contributions were equal to the required contributions as set by state statute. D. PENSION COSTS 1. General Employees Fund Pension Costs At December 31, 2018 the City reported a liability of $3,256,435 for its proportionate share of the General Employees Fund's net pension liability. The City's net pension liability reflected a reduction due to the State of Minnesota's contribution of $16 million to the fund in 2018. The State of Minnesota is considered a non -employer contributing entity and the state's contribution meets the definition of a special funding situation. The State of Minnesota's proportionate share of the net pension liability associated with the City totaled $106,772. The net pension liability was measured as of June 30, 2018 and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The City's proportion of the net pension liability was based on the City's contributions received by PERA during the measurement period for employer payroll paid dates from July 1, 2017 through June 30, 2018 relative to the total employer contributions received from all of PERA's participating employers. At June 30, 2018 the City's proportion was 0.0587 percent which was a decrease of 0.0007 percent from its proportion measured as of June 30, 2017. m CITY OF ANDOVER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2018 Post-retirement benefit increases were changed from 1.0% per year with a provision to increase to 2.5% upon attainment of a 90% funding ratio to 50% of the Social Security Cost of Living Adjustment, not less than 1.0% and not more than 1.5%, beginning January 1, 2019. For the year ended December 31, 2018 the City recognized pension expense of $241,363 for its proportionate share of the General Employees Plan's pension expense. In addition, the City recognized an additional $24,899 of pension expense (and grant revenue) for its proportionate share of the State of Minnesota's contribution of $16 million to the General Employees Fund. At December 31, 2018, the City reported its proportionate share of the General Employees Plan's deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Total $ 566,367 $ 859,547 $148,645 reported as deferred outflows of resources related to pensions resulting from City contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31, 2019. Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows: Pension Year Ended Expense December 31. Amount 2019 Deferred Deferred (179,475) Outflows Inflows 2022 of Resources of Resources Differences between expected and actual economic experience $ 86,193 $ 94,412 Changes in actuarial assumptions 309,217 365,895 Differences between projected and actual investment earnings - 334,823 Changes in proportion 22,312 64,417 Contributions paid to PERA subsequent to the measurement date 148,645 - Total $ 566,367 $ 859,547 $148,645 reported as deferred outflows of resources related to pensions resulting from City contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31, 2019. Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows: Pension Year Ended Expense December 31. Amount 2019 $ 83,668 2020 (179,475) 2021 (278,052) 2022 (67,966) Thereafter - 2. Police and Fire Fund Pension Costs At December 31, 2018 the City reported a liability of $284,595 for its proportionate share of the Police and Fire Fund's net pension liability. The net pension liability was measured as of June 30, 2018 and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The City's proportion of the net pension liability was based on the City's contributions received by PERA during the measurement period for employer payroll paid dates from July 1, 2017 through June 30, 2018 relative to the total employer contributions received from all of PERA's participating employers. At June 30, 2018 the City's proportion was 0.0267% which was a decrease of 0.0013% from its proportion measured as of June 30, 2017. The City also recognized $2,403 for the year ended December 31, 2018 as revenue and an offsetting reduction of new pension liability for its proportionate share of the State of Minnesota's on -behalf contributions to the Police and Fire Fund. Legislation passed in 2013 required the State of Minnesota to begin contributing $9 million to the Police and Fire Fund each year, starting in fiscal year 2014. Beginning in January 1, 2019, COLA will be fixed at 1 percent. Under funding measurements from 2017, the 2.5 percent COLA trigger was never expected to occur and was subsequently removed from law. For the yew ended December 31, 2018 the City recognized pension expense of $44,544 for its proportionate share of the Police and Fire Plan's pension expense. 67 CITY OF ANDOVER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2018 At December 31, 2018, the City reported its proportionate share of the Police and Fires Plan's deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Differences between expected and actual economic experience Changes in actuarial assumptions Differences between projected and actual investment earnings Changes in proportion Contributions paid to PERA subsequent to the measurement date Total Deferred Deferred Outflows Inflows of Resources of Resources $ 11,472 $ 68,567 349,515 418,960 - 61,261 59,020 43,297 23,521 (8,880) $ 443,528 $ 592,085 $23,521 reported as deferred outflows of resources related to pensions resulting from City contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31, 2019. Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows: E. ACTUARIAL ASSUMPTIONS The total pension liability in the June 30, 2018 actuarial valuation was determined using the following actuarial assumptions: General Employees Plan Police and Fire Plan Inflation 2.5% per year 2.5% per year Salary Growth 3.25% after 26 years of service 3.25% after 25 years of service Investment Rate of Return 7.50% 7.50% Total pension liability for each of the defined benefit cost-sharing plans was determined by an actuarial valuation as of June 30, 2018, using the entry age normal actuarial cost method. Inflation is assumed to be 2.50 percent for the General Employees and Police and Fire Plans. Salary growth assumptions in the General Employees Plan decrease in annual increments from 11.25 percent after one year of service, to 3.25 percent after 26 years of service. In the Police and Fire Plan, salary growth assumptions decrease from 12.25 percent after one year of service to 3.25 percent after 25 years of service. Mortality rates for all plans are based on RP -2014 mortality tables. The tables are adjusted slightly to fit PERA's experience. Actuarial assumptions for the General Employees Plan are reviewed every four to six yews. The most recent six-year study for the General Employees Plan was completed in 2015. The most recent four-year experience study for the Police and Fire Plan was completed in 2016. The following changes in actuarial assumptions occurred in 2018: General Employees Fund The mortality projection scale was changed from MP -2015 to MP -2017. 68 Pension Year Ended Expense December 31, Amount 2019 $ (668) 2020 (13,235) 2021 (32,383) 2022 (116,912) 2023 (8,880) Thereafter - E. ACTUARIAL ASSUMPTIONS The total pension liability in the June 30, 2018 actuarial valuation was determined using the following actuarial assumptions: General Employees Plan Police and Fire Plan Inflation 2.5% per year 2.5% per year Salary Growth 3.25% after 26 years of service 3.25% after 25 years of service Investment Rate of Return 7.50% 7.50% Total pension liability for each of the defined benefit cost-sharing plans was determined by an actuarial valuation as of June 30, 2018, using the entry age normal actuarial cost method. Inflation is assumed to be 2.50 percent for the General Employees and Police and Fire Plans. Salary growth assumptions in the General Employees Plan decrease in annual increments from 11.25 percent after one year of service, to 3.25 percent after 26 years of service. In the Police and Fire Plan, salary growth assumptions decrease from 12.25 percent after one year of service to 3.25 percent after 25 years of service. Mortality rates for all plans are based on RP -2014 mortality tables. The tables are adjusted slightly to fit PERA's experience. Actuarial assumptions for the General Employees Plan are reviewed every four to six yews. The most recent six-year study for the General Employees Plan was completed in 2015. The most recent four-year experience study for the Police and Fire Plan was completed in 2016. The following changes in actuarial assumptions occurred in 2018: General Employees Fund The mortality projection scale was changed from MP -2015 to MP -2017. 68 CITY OF ANDOVER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2018 • The assumed benefit increase was changed from 1.00 percent per year through 2044 and 2.50 percent thereafter to 1.25 percent per year. Police and Fire Fund • The mortality projection scale was changed from MP -2016 to MP -2017. The State Board of Investment, which manages the investments of PERA, prepares an analysis of the reasonableness on a regular basis of the long-term expected rate of return using a building-block method in which best -estimate ranges of expected future rates of return are developed for each major asset class. These ranges are combined to produce an expected long-term rate of return by weighting the expected future rates of return by the target asset allocation percentages. The target allocation and best estimates of geometric real rates of return for each major asset class are summarized in the following table: F. DISCOUNT RATE The discount rate used to measure the total pension liability in 2018 was 7.50%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members and employers will be made at rates set in Minnesota Statutes. Based on these assumptions, the fiduciary net position of the General Employees Fund and Police and Fire Fund were projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. G. PENSION LIABILITY SENSITIVITY The following presents the City's proportionate share of the net pension liability for all plans it participates in, calculated using the discount rate disclosed in the preceding paragraph, as well as what the City's proportionate share of the net pension liability would be if it were calculated using a discount rate I percentage point lower or 1 percentage point higher than the current discount rate: Target Long -Term Expected Asset Class Allocation Real Rate of Return Discount Rate Discount Rate Domestic Stocks 36% 5.10% International Stocks 17% 5.30% Bonds (Fixed Income) 20% 0.75% Alternative Assets (Private M arkets) 25% 5.90% Cash 2% 0.00% Total 100% 610,188 F. DISCOUNT RATE The discount rate used to measure the total pension liability in 2018 was 7.50%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members and employers will be made at rates set in Minnesota Statutes. Based on these assumptions, the fiduciary net position of the General Employees Fund and Police and Fire Fund were projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. G. PENSION LIABILITY SENSITIVITY The following presents the City's proportionate share of the net pension liability for all plans it participates in, calculated using the discount rate disclosed in the preceding paragraph, as well as what the City's proportionate share of the net pension liability would be if it were calculated using a discount rate I percentage point lower or 1 percentage point higher than the current discount rate: H. PENSION PLAN FIDUCIARY NET POSITION Detailed information about each pension plan's fiduciary net position is available in a separately -issued PERA financial report that includes financial statements and required supplementary information. That report may be obtained on the Internet at www.mnpera.org. [:F1 1% Decrease in 1% Increase in Discount Rate Discount Rate Discount Rate (6.5%) (7.5%) (8.5%) City's proportionate share of the General Employees Fund net pension liability $ 5,292,124 $ 3,256,435 $ 1,576,032 City's proportionate share of the Police and Fire Fund net pension liability 610,188 284,595 15,342 H. PENSION PLAN FIDUCIARY NET POSITION Detailed information about each pension plan's fiduciary net position is available in a separately -issued PERA financial report that includes financial statements and required supplementary information. That report may be obtained on the Internet at www.mnpera.org. [:F1 CITY OF ANDOVER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2018 I. PENSION EXPENSE Pension expense recognized by the City for the fiscal year ended December 31, 2018 is as follows: General Employ ces Fund $ 266,262 Police and Fire Fund 44,544 Total $ 310,806 For the governmental activities, pension liabilities are generally liquidated by the General and Special Revenue Funds. Note 9. DEFINED CONTRIBUTION LUMP SUM SERVICE PENSION PLAN — VOLUNTEER FIREFIGHTERS RELIEF ASSOCIATION PLAN DESCRIPTION Members of the City's volunteer fire department are members of the Andover Firefighters' Relief Association. The Association is the administrator of a single -employer defined contribution plan available to firefighters that was established October 9, 1979 and operates under the provisions of Minnesota Statutes Section 424A. It is governed by a board of six members elected by the members of the Association for three-year terms. The City's Mayor, Finance Manager and Fire Chief we ex -officio members of the Board of Trustees. The Association provides retirement benefits as well as disability benefits to members, and benefits to survivors upon death of eligible members. I. Twenty -Year Service Pension — In order to be entitled to a pension benefit, a firefighter must have completed a minimum of five years of service with the Department and five years membership in the Association and attain the age of 50 years. The firefighter will then be 40% vested. This percentage increases 4% per year until the twentieth year when 100% vesting will occur. Because this is a defined contribution plan, the amount of the retirement benefit is not predetermined, but rather is based on the individual member's allocable portion of contributions made during the participation period. 2. Deferred Pension— If the retired or terminated member has not attained age 50 and is otherwise eligible for the pension benefit, the balance of the member's account will be credited with earned interest at the rate permitted by Minnesota Statutes Section 424.A02, Subd.7. 3. Disability Benefit —Ifamember of the Association becomes totally and permanently disabled due to injury, disability, sickness or dismemberment as a result of performance of duty, a disability payment will be made after one hundred days of disability. 4. Death Benefit—In the event of death of an active member or deferred pensioner, the member's individual account balance will be paid to the surviving spouse, surviving children or the estate of the member after approval by the Board. The Association issues a publicly available financial report that includes financial statements and required supplementary information. That report may be obtained by writing to Andover Firefighters' Relief Association, 13875 Crosstown Boulevard NW, Andover, Minnesota 55304. FUNDING POLICY The State of Minnesota contributes amortization aid, or two percent fire aid, in accordance with state statute requirements. Plan members are not required to contribute to the plan. The state legislature may amend contribution requirements of the City and State. The City is allowed to make voluntary contributions of other public funds pursuant to Minnesota Statutes Chapter 69. The City receives the State aid contribution and is required by state statutes to pass this through as payment to the Association. This transaction is recorded as revenue and expenditure in the City's financial statements. Contributions for the last three years are as follows: 70 CITY OF ANDOVER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2018 Year Ending City State Total 12/31/2016 $ 55,000 $ 167,844 S 222,844 12/31/2017 55,000 167,893 222,893 12/31/2018 55,000 176,391 231,391 Note 10 OTHER POST EMPLOYMENT BENEFITS (OPEB) In 2018, the City implemented the requirement of anew accounting pronouncement, GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other than Pensions. Net pension has not been restated as a result of the change in accounting principle because its effects on the financial statements were not material. A. PLAN DESCRIPTION In addition to providing the pension benefits described in Note 8, the City provides post employment health care benefits (as defined in paragraph B) for retired employees through a single employer defined benefit plan. The term plan refers to the City's requirement by State Statute to provide retirees with access to health insurance. The OPEB plan is administered by the City. The authority to provide these benefits is established in Minnesota Statutes Sections 471.61 Solid. 2a, and 299A.465. The benefits, benefit levels, employee contributions and employer contributions are governed by the City and can be amended by the City through its personnel manual and collective bargaining agreements with employee groups. The Plan is not accounted for as a trust fund, as an irrevocable trust has not been established to account for the plan. The Plan does not issue a separate report. B. BENEFITS PROVIDED Retirees The City is required by State Statute to allow retirees to continue participation in the City's group health insurance plan if the individual terminates service with the City through service retirement or disability retirement. Employees who satisfy the rule of 90 or attain age 55 and have completed 10 years of service at termination can immediately commence medical benefits. Retirees may obtain dependent coverage while the participating retiree is under age 65. Covered spouses may continue coverage after the retiree's death. The surviving spouse of an active employee may continue coverage in the group health insurance plan after the employee's death. All health cue coverage is provided through the City's group health insurance plan. The retiree is required to pay 100% of their premium cost for the City -sponsored group health insurance plan. The premium is a blended rate determined by the entire active and retiree population. Since the projected claims costs for retirees exceed the blended premium paid by retirees, the retirees are receiving an implicit rate subsidy (benefit). The coverage levels are the same as those afforded to active employees. Upon a retiree reaching age 65 years of age, Medicare becomes the primary insurer and the City's plan becomes secondary. C. PARTICIPANTS As of the actuarial valuation dated January 2018, participants consisted of Retirees and beneficiaries currently purchasing health insurance through the City 2 Active employees 55 Total 57 Participating employers I 71 CITY OF ANDOVER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2018 D. TOTAL OPEB LIABILITY AND CHANGES IN TOTAL OPEB LIABILITY The City's total OPEB liability of $292,379 was measured as of December 31, 2017, and was determined by an actuarial valuation using the alternative measurement method as of December 31, 2016. Changes in the total OPEB liability during 2018 were: Balance -beginning of year $ 261,651 Changes for the year: Service Cost - 14,090 Interest 10,482 Changes of benefit terms - Differences between expected and actual experience - Changes in assumptions 11,969 Benefit payments (5,813) Net Changes 30,728 Balance - end of y ear $ 292,379 For governmental activities, OPEB liabilities we generally liquidated by the General and Special Revenue Funds. E. ACTUAL ASSUMPTIONS AND OTHER INPUTS The total OPEB liability in the January 1, 2018 actuarial valuation was determined using the following actuarial assumptions and other inputs, applied to all periods included in the measurement, unless otherwise specified: Inflation 2.75% Salary increases 3.50% Discount rate 3.31% Investment rate of return 3.31% Healthcare cost trend rates Actual premium increase rates for FY2018 and 6.90% for FY2019, gradually decreasing over several decades to an ultimate rate of 4.40% in FY2075 and later years. Retirees' share of benefit -related costs 100% Since the plan is funded on a pay-as-you-go basis, both the discount rate and the investment rate of return was based an index rate for 20 -year tax-exempt municipal bonds (Fidelity 20 -Year Municipal G.O. AA Index). Mortality rates were based on the RP -2014 mortality tables with projected mortality improvements based on scale MP -2016, and other adjustments. Based on past experience of the plan, 75% of future retirees are assumed to continue medical coverage until age 65. 50% of police/fire employees are assumed to retire at age 55, the balance at 65. 50% of other City employees are assumed to retire at age 62, the balance at age 65. F. SENSITIVITY OF THE TOTAL OPEB LIABILITY TO CHANGES IN THE DISCOUNT RATE The following presents the total OPEB liability of the City, as well as what the City's total OPEB liability would be if it were calculated using a discount rate that is 1% lower (2.31%) or 1 % higher (4.31%) than the current rate: Total OPER liability 1% Decrease in Discount Rate (2.31%) 312,467 Discount Rate (3.31%) $ 292,379 72 1% Increase in Discount Rate (4.31%) 273,248 CITY OF ANDOVER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2018 G. SENSITIVITY OF THE TOTAL OPEB LIABILITY TO CHANGES IN THE HEALTHCARE COST TREND RATES The following presents the total OPEB liability of the City, as well as what the City's total OPEB liability would be if it were calculated using healthcare cost trend rates that are 1 % lower or 1% higher than the current rate: 1% Decrease in 1% Increase in Healthcare Cost Healthcare Cost Healthcare Cost Trend Rate Trend Rate Trend Rate Total OPEB liability $ 262,626 $ 292,379 S 327,163 H. OPEB EXPENSE AND DEFERRED OUTFLOWS AND INFLOWS OF RESOURCES RELATED TO OPEB For the year ended December 31, 2018, the City recognized $18,417 of OPEB expense. At December 31, 2018, the City reported deferred outflows and inflows of resources related to OPEB from the following sources: Deferred Outflows Deferred Inflows of Resources of Resources Contributions between measurement date and reporting date $ 12,311 $ - $12,311 reported as deferred outflows of resources related to OPEB resulting from City contributions subsequent to the measurement date will be recognized as a reduction of the OPEB liability in the year ended December 31, 2019. Note 11 INTERFUND RECEIVABLES/PAYABLES. LOANS AND TRANSFERS Individual fund interfund receivable and payable balances at December 31, 2018 are as follows: Fund Receivable Payable Governmental Funds: Major Funds: General Fund Nonmajor Governmental Funds Total governmental funds $ 70,000 $ - 70,000 $ 70,000 $ 70,000 Interfund receivables and payables are representative of lending/borrowing arrangements to cover deficit cash balances at the end of the fiscal year. The City made the following interfond transfers during the year: 73 CITY OF ANDOVER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2018 Transfer In Transfer Out Amount Purpose General Fund Water Fund $ 90,700 Admin allocation General Fund Sewer Fund 70,012 Admin allocation General Fund Storm Sewer Fund 17,846 Admin allocation Sewer Trunk CPF Sewer Fund 400,000 Replacement reserve Road & Bridge CPF Nonmajor Fund 5,300 Roadway degredation Water Fund Water Trunk Fund CPF 114,850 Debt service allocation 2018A G.O. CIP Bonds Nonmajor Fund 31,566 Reimburse PY expenditures Nonmajor Fund General Fund 230,000 Trail funding Nonmajor Fund Storm Sewer Fund 23,500 City Campus Expansion Plan Nonmajor Fund Nonmajor Fund 11,071 Equipment purchase Nonmajor Fund Nonmajor Fund 300,000 Debt service allocation $ 1,294,845 Additionally, computer service fees paid by the Water, Sewer and Storm Sewer Enterprise Funds to the General Fund have been reclassified as transfers on the Government -Wide Statement of Activities as follows: Transfer In Transfer Out Governmental Activities $ 30,600 $ - Business -Type Activities - 30,600 Total $ 30,600 $ 30,600 Note 12 TAX INCREMENT DISTRICTS The City is the administering authority for the following tax increment finance districts: Name of District: Type of District: Authorizing Law: Established: Duration of District: Original net tax capacity: Current net tax cap acity: Tax Increment Financing District 1-5 Redevelopment M.S. Section 469 2012 Through 2039 $ 6,139 82,321 Captured net tax capacity - retained by the City $ 76,182 2 . Name of District: Type of District: Authorizing Law: Established: Duration of District: Original net tax capacity: Current net tax cap acity: Tax Increment Financing District 1-6 Redevelopment M.S. Section 469 2014 Through 2024 $ 21,998 63,500 Captured net tax capacity - retained by the City $ 41,502 74 CITY OF ANDOVER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2018 Note 13 DEFICIT FUND BALANCES The City has deficit fund balances at December 31, 2018 as follows: Fund Amount Nonmajor Capital Projects Funds: Storm Sewer Project $ 66,263 Note 14 CONTINGENCIES A. RISK MANAGEMENT The City is exposed to various risks of loss related to torts, theft of, damage to and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The City participates in the League of Minnesota Cities Insurance Trust (LMCIT), a public entity risk pool for its general property and casualty, workers' compensation, and other miscellaneous insurance coverages. Workers compensation coverage is provided through a pooled self-insurance program through the LMCIT. The City pays an annual premium to LMCIT. The City is subject to supplemental assessments if deemed necessary by the LMCIT. The LMCIT reinsures through Workers Compensation Reinsurance Association (WCRA) as required by law. The City also has a $2,500 deductible per occurrence to further decrease the cost of coverage. Final premiums are determined after an audit of payroll subsequent to the close of the agreement year and are subject to revisions in rates, payrolls and experience modification. The amount of premium adjustment, if any, is considered immaterial and not recorded until received or paid. Property, casualty, and automobile insurance coverage are provided through a pooled self-insurance program through the LMCIT. The City pays an annual premium to the LMCIT. The LMCIT reinsures through commercial companies for claims in excess of various amounts. The City retains risk for the deductible portions. These deductibles are considered immaterial to the financial statements. The City continues to carry commercial insurance for all other risks of loss, including employee health and disability insurance. There were no significant reductions in insurance from the previous year or settlements in excess of insurance coverage for any of the past three fiscal years. B. LITIGATION The City is not aware of any existing or pending lawsuits, claims or other actions in which the City is a defendant. C. FEDERAL AND STATE FUNDS The City receives financial assistance from federal and state governmental agencies in the form of grants. The disbursement of funds received under these programs generally requires compliance with the terms and conditions specified in the grant agreements and are subject to audit by the grantor agencies. Any disallowed claims resulting from such audits could become a liability of the applicable fund. However, in the opinion of management, any such disallowed claims will not have a material effect on any of the financial statements of the individual fund types included herein or on the overall financial position of the City at December 31, 2018. D. TAX INCREMENT DISTRICTS The City's tax increment districts are subject to review by the State of Minnesota Office of the State Auditor (OSA). Any disallowed claims or misuse of tax increments could become a liability of the applicable fund. Management has indicated that they are not aware of any instances of noncompliance that would have a material effect on the financial statements. 75 CITY OF ANDOVER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2018 E. TAX ABATEMENTS - PAY-AS-YOU-GO TAX INCREMENT The City provides tax abatements pursuant to Minnesota Statutes 469.174 to 469.1794 (Tax Increment Financing) through a pay- as-you-go note program. Tax increment financing (TIF) can be used to encourage private development, redevelopment, renovation and renewal, growth in low -to -moderate -income housing, and economic development within the City. TIF captures the increase in tax capacity and property taxes from development or redevelopment to provide funding for the related project. The City has one tax increment pay-as-you-go agreement. The agreement is not a general obligation of the City and is payable solely from available tax increment. Accordingly, this agreement is not reflected in the financial statements of the City. Details of the pay-as-you-go are as follows: TIF District #1-5, Arbor Oaks Project: Issued in 2012 in the principal sum of $540,000 with an interest rate of 5.00% per annum. Principal and interest shall be paid on August 1, 2014 and each February and August thereafter to and including February 1, 2029. Payments are payable solely from available tax increment derived from the developed/redeveloped property and paid to the City. The pay-as-you- go note provides for payment to the developer equal to 90% of all tax increment received in the prior six months. The payment reimburses the developer for street, utilities, right-of-way, land acquisition, and other public improvements. Principal and interest payments will be completed February 1, 2029. The City shall have no obligation to pay any unpaid balance of principal or accrued interest that may remain after the final payment on February 1, 2029. The current year abatement (TIF note payments) amounted to $63,029. At December 31, 2018, the principal amount outstanding on the note was $404,129. Note 15 DEFERRED AD VALOREM TAX LEVIES -BONDED DEBT General Obligation bond issues sold by the City are financed by ad valorem tax levies and special assessment bond issues sold by the City we partially financed by ad valorem tax levies in addition to special assessments levied against the benefiting properties. When a bond issue to be financed partially or completely by ad valorem tax levies is sold, specific annual amounts of such tax levies are stated in the bond resolution and the County Auditor is notified and instructed to levy these taxes over the appropriate years. The future tax levies are subject to cancellation when and if the City has provided alternative sources of financing. The City Council is required to levy any additional taxes found necessary for full payment of principal and interest. These future scheduled tax levies are not shown as assets in the accompanying financial statements at December 31, 2018. Future scheduled tax levies for all bonds outstanding at December 31, 2018 totaled $32,288,102. Note 16 FUND BALANCE A. CLASSIFICATIONS At December 31, 2018, a summary of the governmental fund balance classifications are as follows: 76 CITY OF ANDOVER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2018 Nonspendable: Inventory Resedcted for: Debt service Capital improvemmm Tax incmment Publ c um. Total restricted Commined to: Economic development cm/s mapping rystem Su na water management Public not dtwa management Seal coating new developments $ 112,971 $ $ E $ $ $ S 2,386 S 115,357 9,826,288 3,279,968 9,826,288 3,279,968 1,045,339 1,045,339 9,826,288 - 3,279,968 74,244 74,244 1,119,583 14,225,839 - - - - - - - 247,431 247,431 2018A GO. 158,562 - - - - - - - 44,311 44,311 - - - - - 58,522 58,522 Capital Tax Pennant 244,859 water Srnv Road& Improvement Increment Improvement OOter Tmnk Tr Bridge Plan Bonds Projects Revolving Gov nmeatal General CPF CFF CPF CPF CPF CPF Funds Tote) $ 112,971 $ $ E $ $ $ S 2,386 S 115,357 9,826,288 3,279,968 9,826,288 3,279,968 1,045,339 1,045,339 9,826,288 - 3,279,968 74,244 74,244 1,119,583 14,225,839 - - - - - - - 247,431 247,431 - - - - - - - 158,562 158,562 - - - - - - - 44,311 44,311 - - - - - 58,522 58,522 9,791 9,791 Total committed - Assigned to: Watm rystem Sanitary sewerrys[em Strutrehabilitafion Development pmposa Commanity center Forst resource programs Public services Park improvements Fuilitia mmagemmt Pe .d. trails Capital improvements Total assigned 3,666,786 - - - 7,360,496 - - 6,603,576 3,666,786 7,360,496 6,603,576 518,617 518,617 3,666,786 7,360,496 6.603.576 - 1,002,715 - 1,002,715 - - 383,159 383,159 - - 5,132 5,132 - - 5,816 5,816 - - 158,707 158,707 - - 244,859 244,859 - - 509,126 509,126 - - 1.386.664 1.386.664 1,002715 2,693,463 21,327,036 Unaaigned 8,023,365 (66,263) 7,957,102 Total S 8,136,336 $ 3,666,786 S 7,360,496 $ 6,603,576 $ 9,826.288 53,279,968 $1,002,715 $ 4,267,786 S 44,143,951 B. MINIMUM UNASSIGNED FUND BALANCE POLICY The City Council has formally adopted a policy regarding the minimum unassigned fund balance for the General Fund. The most significant revenue source of the General Fund is property taxes. This revenue source is received in two installments during the year — July and December. As such, it is the City's goal to begin each fiscal year with sufficient working capital to fund operations between each semi-annual receipt of property taxes. The policy established a year-end targeted unassigned fund balance amount for cash-flow timing needs in the range of 51-53% of the subsequent year's budgeted expenditures. At December 31, 2018, the unassigned fund balance of the General Fund targeted for cash-flow needs was 68% of the subsequent year's budgeted expenditures. Note 17 CONDUIT DEBT OBLIGATION Conduit debt obligations are certain limited -obligation revenue bonds or similar debt instruments issued for the express purpose of providing capital financing for a specific third party. The City has issued various revenue bonds to provide funding to private -sector entities for projects deemed to be in the public interest. Although these bonds bear the time of the City, the City has no obligation for such debt beyond the resources provided by related leases or loans. Accordingly, the bonds are not reported as liabilities in the financial statements of the City. As of December 31, 2018, the following revenue bonds were outstanding: 77 CITY OF ANDOVER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2018 Date of Original Expiration Outstanding Project Issue Issue Retired 12/31/2018 Presbyterian Homes of Andover, Inc. 11/1/2003 $13,145,000 $ (4,309,606) $ 8,835,394 Note 18 OPERATING LEASES The City received revenue from agreements for the lease of space for antennas placed on the water tower and an emergency siren pole. The City also has leases with the Greater Minneapolis YMCA, Subway Real Estate, LLC for building space at the Andover YMCA Community Center and various tenants in three residential 4-plexes. Terms of each lease are as follows: Location Lessee City Hall water tower City Hall water tower City Hall water tower Emergency Siren Pole Andover YMCA Comm Ctr Rose Park water tower Rose Park water tower Andover YMCA Comm Ctr 10 Rental Housing Units Sprint Nextel T -Mobile USA, Inc Verizon T -Mobile USA, Inc Greater Minneapolis YMCA Sprint Nextel Verizon Subway Real Estate, LLC Various Tenants 2018 Lease Annual Lease Expiration Renewal Amount Adjustment Factor Date Options i 30,000 3% annually 12/31/2022 3 - 5 year terms 25,956 3% annually 12/31/2026 3 - 5 year terms 28,019 3% annually 5/31/2024 3 - 5 year terms 12,000 $1,000 annual increase 9/22/2023 1 - 5 year terms 634,774 None 8/1/2035 N/A 17,926 3%annually 7/31/2020 4-5 year terms 24,016 3% annually 5/31/2024 3 - 5 year terms 16,028 None 10/2/2021 N/A 78,871 None Monthly N/A Future minimum lease payments are unavailable at this time due to changing variables: CPI and the completion of the capital campaign for the community center. Note 19 RECENTLY ISSUED ACCOUNTING STANDARDS The Governmental Accounting Standards Boards (GASB) recently approved the following statements which were not implemented for these financial statements: Statement No. 83 Certain Asset Retirement Obligations. The provisions of this Statement we effective for reporting periods beginning after June 15, 2018. Statement No. 84 Fiduciary Activities. The provisions of this Statement are effective for reporting periods beginning after December 15, 2018. Statement No. 87 Leases. The provisions of this Statement are effective for reporting periods beginning after December 15, 2019. Statement No. 88 Certain Disclosures Related to Debt, including Direct Borrowings and Direct Placements. The provisions of this Statement are effective for reporting periods beginning after June 15, 2018. Statement No. 89 Accounting for Interest Cost Incurred before the End of a Construction Periods. The provisions of this Statement are effective for reporting periods beginning after December 15, 2019. Statement No. 90 Majority Equity Interests. The provisions of this Statement are effective for reporting periods beginning after December 15, 2018. The effect these standards may have on future financial statements is not determinable at this time, but it is expected that Statement No. 87 may have a material impact. 78 REQUIRED SUPPLEMENTARY INFORMATION 79 CITY OF ANDOVER, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION Statement 10 BUDGETARY COMPARISON SCHEDULE - GENERAL FUND For The Year Ended December 31, 2018 With Comparative Actual Amounts For The Year Ended December 31, 2017 Variance with Final Budget - Budgeted Amounts 2018 Positive 2017 Original Final Actual (Negative) Actual Revenues: General property taxes $ 8,721,256 $ 8,721,256 $ 8,634,130 $ (87,126) $ 8,332,634 Licenses and permits 377,900 377,900 562,525 184,625 546,378 Intergovernmental 766,274 788,274 829,861 41,587 793,931 Charges for services 746,700 746,700 888,947 142,247 843,023 Fines 90,250 90,250 73,719 (16,531) 75,287 Investment income 75,000 75,000 107,561 32,561 64,751 Miscellaneous 129,300 129,300 176,663 47,363 179,912 Total revenues 10,906,680 10,928,680 11,273,406 344,726 10,835,916 Expenditures: Current General government: Mayor and City council 91,298 91,298 87,813 3,485 84,136 Administration 203,833 209,533 198,945 10,588 187,514 Newsletter 26,000 26,000 17,770 8,230 25,287 Human resources 28,431 28,431 13,666 14,765 15,520 Legal 191,360 191,360 188,031 3,329 188,644 City clerk 155,608 155,608 149,770 5,838 147,450 Elections 59,781 59,781 50,629 9,152 17,852 Financial administration 278,660 278,660 272,851 5,809 258,883 Assessing 154,000 154,000 149,040 4,960 147,914 Information systems 180,597 180,597 171,637 8,960 149,513 Planning and zoning 438,827 438,827 422,984 15,843 398,780 Engineering 553,765 553,765 527,688 26,077 511,183 Facility management 648,519 643,519 497,640 145,879 509,546 Total general government 3,010,679 3,011,379 2,748,464 262,915 2,642,222 Public safety: Police 3,053,526 3,053,526 3,053,526 - 2,962,551 Fire protection 1,423,914 1,445,914 1,445,167 747 1,353,209 Protective inspection 462,164 462,164 436,789 25,375 443,712 Civil defense 32,502 32,502 18,060 14,442 16,320 Animal control 5,950 5,950 2,808 3,142 2,544 Total public safety 4,978,056 5,000,056 4,956,350 43,706 4,778,336 Public works: Streets and highways 659,943 659,943 656,194 3,749 597,964 Snow and ice removal 562,706 562,706 599,028 (36,322) 449,881 Street signs 219,418 219,418 206,890 12,528 214,540 Traffic signals 37,000 37,000 33,857 3,143 36,152 Street lighting 260,900 260,900 175,766 85,134 172,186 Total public works $ 1,739,967 $ 1,739,967 $ 1,671,735 $ 68,232 $ 1,470,723 (Continued) 80 CITY OF ANDOVER, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION BUDGETARY COMPARISON SCHEDULE - GENERAL FUND For The Year Ended December 31, 2018 With Comparative Actual Amounts For The Year Ended December 31, 2017 Statement 10 (Continued) Capital outlay Parks and recreation 100,000 130,000 129,038 Variance with 60,875 Total expenditures 11,265,315 11,302,015 10,875,244 Final Budget - 10,289,975 Revenues over (under) expenditures Budgeted Amounts 2018 Positive 2017 Other financing sources (uses): Original Final Actual (Negative) Actual Expenditures: 178,558 178,558 178,558 - 196,930 Current: (continued) (230,000) (230,000) (750,000) Parks and recreation $ 1,208,969 $ 1,192,969 $ 1,158,535 $ 34,434 $ 1,152,988 Recycling 157,216 157,216 199,182 (41,966) 169,956 Unallocated 70,428 70,428 11,940 58,488 14,875 Total current 11,165,315 11,172,015 10,746,206 425,809 10,229,100 Capital outlay Parks and recreation 100,000 130,000 129,038 962 60,875 Total expenditures 11,265,315 11,302,015 10,875,244 426,771 10,289,975 Revenues over (under) expenditures (358,635) (373,335) 398,162 771,497 545,941 Other financing sources (uses): Transfers in 178,558 178,558 178,558 - 196,930 Transfers out (230,000) (230,000) (750,000) Total other financing sources (uses) 178,558 (51,442) (51,442) (553,070) Net increase (decrease) in fund balance $ (180,077) $ (424,777) 346,720 $ 771,497 (7,129) Fund balance - January 1 7,789,616 7,796,745 Fund balance - December 31 $ 8,136,336 $ 7,789,616 81 CITY OF ANDOVER, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CHANGES IN THE TOTAL OPEB LIABILITY AND RELATED RATIOS For The Year Ended December 31, 2018 Statement 11 2018 Total OPEB liability: Service cost $ 14,090 Interest 10,482 Changes of benefit terms - Differences between expected and actual experience - Changes in assumptions 11,969 Benefit payments (5,813) Net change in total OPEB liability 30,728 Total OPEB liability - beginning 261,651 Total OPEB liability - ending $ 292,379 Covered -employee payroll $ 4,469,146 Total OPEB liability as a percentage of covered -employee payroll 6.5% The schedule is provided prospectively beginning with the City's fiscal year ended December 31, 2018 and is intended to show a ten year trend. Additional years will be added as they become available. 82 CITY OF ANDOVER, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PROPORTIONATE SHARE OF NET PENSION LIABILITY* GENERAL EMPLOYEES RETIREMENT FUND For The Year Ended December 31, 2018 Statement 12 * The schedule is provided prospectively beginning with the City's fiscal year ended December 31, 2015 and is intended to show a ten year trend. Additional years will be reported as they become available 83 City's State's Proportionate Share City's Proportionate of the Net Pension Proportionate City's City's Share (Amount) Liability and the Share of the Proportionate Proportionate of the Nel State's Proportionate Net Pension Plan Fiduciary Share Share (Amount) Pension Share of the Net Liability as a Net Position as Measurement Fiscal Year (Percentage) of of the Net Liability Pension Liability Percentage of its a Percentage Date Ending the Net Pension Pension Associated with Associated with Covered Covered of the Total June 30 December3l Liability Liability(a) City(b) City (a+b) Payroll (c) Payroll(a+b/c) Pension Liability 2015 2015 0.0609% $ 3,156,154 $ - $ 3,156,154 $ 3,578,755 88.2% 781% 2016 2016 0.0590% 4,790,507 62,597 4,853,104 3,623,880 133.9% 68.9% 2017 2017 0.0594% 3,792,057 47,673 3,839,730 3,825,146 100.4% 75.9% 2018 2018 0.0587% 3,256,435 106,772 3,363,207 3,944,067 85.3% 79.5% * The schedule is provided prospectively beginning with the City's fiscal year ended December 31, 2015 and is intended to show a ten year trend. Additional years will be reported as they become available 83 CITY OF ANDOVER, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PENSION CONTRIBUTIONS* GENERAL EMPLOYEES RETIREMENT FUND For The Year Ended December 31, 2018 Statement 13 * The schedule is provided prospectively beginning with the City's fiscal year ended December 31, 2015 and is intended to show a ten year trend. Additional years will be reported as they become available. 84 Statutorily Contributions in Contribution Contributions as a Required Relation to the Deficiency Covered Percentage of Fiscal Year Contribution Statutorily Required (Excess) Payroll Covered Ending (a) Contribution (b) (a -b) (c) Payroll (b/c) December 31, 2015 $ 268,490 $ 268,490 $ - $ 3,579,867 7.5% December 31, 2016 283,158 283,158 - 3,775,440 7.5% December 31, 2017 284,139 284,139 - 3,788,520 7.5% December 31, 2018 301,507 301,507 - 4,020,093 7.5% * The schedule is provided prospectively beginning with the City's fiscal year ended December 31, 2015 and is intended to show a ten year trend. Additional years will be reported as they become available. 84 CITY OF ANDOVER, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PROPORTIONATE SHARE OF NET PENSION LIABILITY* PUBLIC EMPLOYEES POLICE AND FIRE FUND For The Year Ended December 31, 2018 Proportion (Percentage)of Measurement Fiscal Year the Net Pension Date Ending Liability June 30, 2015 December 31, 2015 0.0210% Proportionate Share June 30, 2016 December 31, 2016 0.0280% of the Net Pension June 30, 2017 December 31, 2017 0.0280% Liability as a June 30, 2018 December 31, 2018 0.0267% Percentage of its Proportionate Proportionate Share Share (Amount) of the Net Pension of the Net Liability as a Pension Covered Percentage of its Liability (a) Payroll (b) Covered Payroll (alb) $ 238,609 $ 194,274 122.8% 1,123,689 283,389 396.5% 378,033 287,895 131.3% 284,595 281,901 101.0% * The schedule is provided prospectively beginning with the City's fiscal year ended December 31, 2015 and is intended to show a ten year trend. Additional years will be reported as they become available. 85 Statement 14 Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 86.6% 63.9% 85.4% 88.8% CITY OF ANDOVER, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PENSION CONTRIBUTIONS* PUBLIC EMPLOYEES POLICE AND FIRE FUND For The Year Ended December 31, 2018 Statement 15 Statutorily Contributions in Contribution Contributions as a Required Relation to the Deficiency Covered Percentage of Fiscal Year Contribution Statutorily Required (Excess) Payroll Covered Ending (a) Contribution (b) (a -b) (c) Payroll (b/c) December 31, 2015 $ 38,121 $ 38,121 $ - $ 235,315 16.2% December 31, 2016 45,909 45,909 - 283,389 16.2% December 31, 2017 45,604 45,604 - 281,506 16.2% December 31, 2018 46,365 46,365 - 286,204 16.2% * The schedule is provided prospectively beginning with the City's fiscal year ended December 31, 2015 and is intended to show a ten year trend. Additional years will be reported as they become available. 86 CITY OF ANDOVER, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION NOTES TO REQUIRED SUPPLEMENTARY INFORMATION December 31, 2018 Note A BUDGETS The General Fund budget is legally adopted on a basis consistent with accounting principles generally accepted in the United States of America. The legal level of budgetary control is at the departmental level for the General Fund. The following is a listing of General Fund departments whose expenditures exceed budget appropriations. Final Over Budget Actual Budget General Fund: Current: Public Works: Snow and ice removal $ 562,706 $ 599,028 $ 36,322 Recycling 157,216 199,182 41,966 Note B MODIFIED APPROACH FOR CITY STREETS AND TRAILS INFRASTRUCTURE CAPITAL ASSETS In accordance with GASB Statement No. 34, the City is required to account for and report infrastructure capital assets. The City defines infrastructure as the basic physical assets including the street and trail system; water treatment and distribution system; wastewater collection system; park and recreation lands and improvement system; storm water conveyance system; and building combined with site amenities such as parking and landscape areas used by the City in the conduct of its business. Each major infrastructure can be divided into subsystems. For example, the street and trail system can be divided into pavement widths, curb type and sidewalk. City owned streets could further be classified as collector or local. Subsystem detail is not presented in these basic financial statements; however, the City maintains detailed information on these subsystems. The City has elected to use the modified approach as defined in GASB Statement No. 34 for infrastructure reporting for its Pavement Management Program. Under GASB Statement No. 34, eligible infrastructure capital assets are not required to be depreciated under the following requirements: 1) The City manages the eligible infrastructure capital assets using an asset management system with characteristics of (1) an up to - date inventory; (2) perform condition assessments and summarize the results using a measurement scale; and (3) estimate annual amount to maintain and preserve at the established condition assessment level. 2) The City documents that the eligible infrastructure capital assets are being preserved approximately at or above the established and disclosed condition assessment level. The City's policy relative to maintaining the street and trail assets is to achieve an average rating of "Good" for all segments. This acceptable rating allows minor cracking and patching of the pavement along with minor roughness that could be noticeable to the users of the system. In the fall of 2017, the City conducted a physical condition assessment of the streets and trails constructed since 1974. This assessment will be performed every three years. Each street and trail segment was assigned a physical condition based on potential defects. An Overall Condition Index (OCI) was assigned to each street and trail and expressed in a continuous scale. Prior to 2013, the continuous scale was from 0 to 100 where 0 is assigned to the least acceptable physical condition and 100 is assigned to a new street or trail. Starting in 2013, the continuous scale was from 0 to 10, where 0 is assigned to the least acceptable physical condition and 10 is assigned the physical characteristics of a new street or trail. The following conditions were defined: 87 Prior to 2013 Current Condition Rating Scale Rating Scale Excellent 86-100 8-10 Very Good 71-85 7-7.9 Good 56-70 6-6.9 Fair 41-55 4-5.9 Poor 26-40 2-3.9 Very Poor 11-25 1 - 1.9 Substandard 0-10 0-.9 87 CITY OF ANDOVER, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION NOTES TO REQUIRED SUPPLEMENTARY INFORMATION December 31. 2018 As of December 31, 2018, the City's street and trail system was rated at an OCI index of 6.4 on the average with detail condition as follows: % of Street Condition and Trails Excellent to Good 66.0% Fair 29.0% Poor to Substandard 5.0% The City's streets and trails are constantly deteriorating resulting from the following factors: (1) traffic using the system; (2) the sun's ultra- violet rays drying out and breaking down the top layer of pavement; (3) utility company/private development trenching operations; (4) water damage from natural precipitation; and (5) frost heave. The City is continuously taking actions to prolong the life of the system through short-term maintenance activities such as pothole patching, crack sealing, seal coating and overlaying. The City expended $2,274,146 on street and trail maintenance for the year ending December 31, 2018. These expenditures delayed deterioration; however, the overall condition of the system was not improved through these maintenance expenditures. The City has estimated that the amount of annual expenditures required to maintain the City's street and trail system at the average OCI rating of good is approximately $1,150,000. The City has an on-going street and trail rehabilitation program funded in the Capital Improvement Program that is intended to improve the condition rating of the City streets and trails. The rehabilitation program is formulated based on the deficiencies identified as a part of its Pavement Management Program. Note C OPEB INFORMATION No assets are accumulated in a trust that meets the criteria in paragraph 4 of GASB Statement No. 75 to pay related benefits. There are no factors that affect trends in the amounts reported, such as changes in benefit terms or assumptions. Note D PENSION INFORMATION PERA — General Employees Retirement Fund 2018 Changes in Actuarial Assumptions: • The mortality projection scale was changed from MP -2015 to MP -2017. • The assumed benefit increase was changed from 1.0 percent per year through 2044 and 2.5 percent per year thereafter to 1.25 percent per year. 2017 Changes in Actuarial Assumptions: • The Combined Service Annuity (CSA) loads were changed from 0.8 percent for active members and 60 percent for vested and non -vested members. The revised CSA loads are now 0.0 percent for active member liability, 15.0 percent for vested deferred member liability and 3.0 percent for non -vested deferred member liability. 88 Maintenance Actual OCI Year Estimate Expenditures Rating 2009 $1,150,000 $ 1,666,216 81 2010 1,150,000 1,457,082 83 2011 1,150,000 1,770,980 83 2012 1,150,000 3,894,784 83 2013 1,150,000 2,471,123 6.9 2014 1,150,000 2,029,026 6.7 2015 1,150,000 1,114,900 6.7 2016 1,150,000 1,585,756 6.3 2017 1,150,000 3,548,327 6.4 2018 1,150,000 2,274,146 6.4 The City has an on-going street and trail rehabilitation program funded in the Capital Improvement Program that is intended to improve the condition rating of the City streets and trails. The rehabilitation program is formulated based on the deficiencies identified as a part of its Pavement Management Program. Note C OPEB INFORMATION No assets are accumulated in a trust that meets the criteria in paragraph 4 of GASB Statement No. 75 to pay related benefits. There are no factors that affect trends in the amounts reported, such as changes in benefit terms or assumptions. Note D PENSION INFORMATION PERA — General Employees Retirement Fund 2018 Changes in Actuarial Assumptions: • The mortality projection scale was changed from MP -2015 to MP -2017. • The assumed benefit increase was changed from 1.0 percent per year through 2044 and 2.5 percent per year thereafter to 1.25 percent per year. 2017 Changes in Actuarial Assumptions: • The Combined Service Annuity (CSA) loads were changed from 0.8 percent for active members and 60 percent for vested and non -vested members. The revised CSA loads are now 0.0 percent for active member liability, 15.0 percent for vested deferred member liability and 3.0 percent for non -vested deferred member liability. 88 CITY OF ANDOVER, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION NOTES TO REQUIRED SUPPLEMENTARY INFORMATION December 31, 2018 • The assumed post-retirement benefit increase rate was changed from 1.0% per year for all years to 1.0% per year through 2044 and 2.5 percent per year thereafter. 2016 Changes in Actuarial Assumptions: • The assumed post-retirement benefit increase rate was changed from 1.0% per year through 2035 and 2.5% per year thereafter to 1.0% per year for all future years. • The assumed investment return was changed from 7.9% to 7.5%. The single discount rate was changed from 7.9% to 7.5%. • Other assumptions were changed pursuant to the experience study dated June 30, 2015. The assumed future salary increases, payroll growth, and inflation were decreased by 0.25% to 3.25% for payroll growth and 2.5% for inflation. PERA— Public Employees Police and Fire 2018 Changes in Actuarial Assumptions: • The mortality projection scale was changed from MP -2016 to MP -2017. 2017 Changes in Actuarial Assumptions: • The single discount rate was changed from 5.6 percent to 7.5 percent. • Assumed salary increases were changed as recommended in the June 30, 2016 experience study. The net effect is proposed rates that average 0.34 percent lower than the previous rates. • Assumed rates of retirement were changed, resulting in fewer retirements. • The Combined Service Annuity (CSA) load was 30 percent for vested and non -vested deferred members. The CSA has been changed to 33 percent for vested members and 2 percent for non -vested members. • The base mortality table for healthy annuitants was changed from the RP -2000 fully generational table to the RP -2014 fully generational table (with a base year of 2006), with male rates adjusted by a factor of 0.96. The mortality improvement scale was changed from Scale AA to Scale MP -2016. The base mortality table for disabled annuitants was changed from the RP - 2000 disabled mortality table to the mortality tables assumed for healthy retirees. • Assumed termination rates were decreased to 3.0 percent for the first three years of service. Rates beyond the select period of three years were adjusted, resulting in more expected terminations overall. • Assumed percentage of married female members was decreased from 65 percent to 60 percent. • Assumed age difference was changed from separate assumptions for male members (wives assumed to be three years younger) and female members (husbands assumed to be four years older) to the assumption that males are two years older than females. • The assumed percentage of female members electing Joint and Survivor annuities was increased. • The assumed post-retirement benefit increase rate was changed from 1.00 percent for all years to 1.00 percent per year through 2064 and 2.5 percent thereafter. 2016 Changes in Actuarial Assumptions: • The assumed post-retirement benefit increase rate was changed from 1.0% per year through 2037 and 2.5% per year thereafter to 1.0% per year for all future years. • The assumed investment return was changed from 7.9% to 7.5%. The single discount rate was changed from 7.9% to 5.6%. • The assumed future salary increases, payroll growth, and inflation were decreased by 0.25% to 3.25% for payroll growth and 2.5% for inflation. 89 This page intentionally left blank - 90 COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES 91 NONMAJOR GOVERNMENTAL FUNDS SPECIAL REVENUE FUNDS A Special Revenue Fund is used to account for the proceeds of specific revenue sources that are legally restricted to expenditures for specified purposes. Revenues for these funds can come from a variety of sources, such as taxes, fees, gifts and grants or contributions from other governmental entities. Expenditures from these funds are normally restricted by statute, local ordinance or grant agreements. The funds may be used for either operations or capital outlay as legal restrictions mandate. DEBT SERVICE FUNDS A Debt Service Fund accounts for the accumulation of resources for, and the payment of general long-term principal, interest and other related costs. CAPITAL PROJECTS FUNDS A Capital Projects Fund is used to account for acquisition or construction of major capital facilities financed mainly with governmental fund resources, general obligation debt, special assessments, special assessment debt, grants or other resources that are not part of Proprietary Funds or Trust Funds. 92 CITY OF ANDOVER, MINNESOTA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS December 31, 2018 With Comparative Totals For December 31, 2017 Statement 16 Total assets $ 1,267,298 $ 1,058,477 $ 2,318,658 $ 4,644,433 $ 5,071,324 Liabilities, Deferred Inflows of Resources and Fund Balances Liabilities: Interfand payable Accounts payable Contracts payable Deposits payable Due to other governmental units Salaries payable Unearned revenue Total liabilities Deferred inflows of resources: Unavailable revenues Fund balance (deficit): Nonspendable Restricted Committed Assigned Unassigned Total fund balance (deficit) Total liabilities, deferred inflows of resources, and fund balances (deficit) $ 70,000 $ 70,000 Totals 43,824 - Special Debt Capital Nonmajor Governmental Funds - Revenue Service Projects 2018 2017 Assets: 35,083 59,181 3,716 - 117 Cash and investments $ 969,981 $ 1,032,604 $ 2,293,990 $ 4,296,575 $ 4,704,647 Cash and investments with escrow agent 176,788 - - 176,788 176,462 Accrued interest 5,395 3,188 13,374 21,957 20,546 Accounts receivable - net 112,113 - - 112,113 137,414 Property taxes receivable: 19,771 22,749 Unremitted 208 9,547 5,088 14,843 7,465 Delinquent 427 13,138 6,206 19,771 22,749 Inventories - at cost 2,386 - - 2,386 2,041 Total assets $ 1,267,298 $ 1,058,477 $ 2,318,658 $ 4,644,433 $ 5,071,324 Liabilities, Deferred Inflows of Resources and Fund Balances Liabilities: Interfand payable Accounts payable Contracts payable Deposits payable Due to other governmental units Salaries payable Unearned revenue Total liabilities Deferred inflows of resources: Unavailable revenues Fund balance (deficit): Nonspendable Restricted Committed Assigned Unassigned Total fund balance (deficit) Total liabilities, deferred inflows of resources, and fund balances (deficit) 93 $ 70,000 $ 70,000 $ 70,000 43,824 - 9,242 53,066 139,819 - - - - 133,555 35,083 - - 35,083 59,181 3,716 - 117 3,833 3,010 11,431 - - 11,431 9,089 183,463 183,463 148,409 277,517 79,359 356,876 563,063 427 13,138 6,206 19,771 22,749 2,386 - - 2,386 2,041 74,244 1,045,339 - 1,119,583 1,014,138 518,617 - - 518,617 530,505 394,107 - 2,299,356 2,693,463 3,004,013 - (66,263) (66,263) (65,185) 989,354 1,045,339 2,233,093 4,267,786 4,485,512 $ 1,267,298 $ 1,058,477 $ 2,318,658 $ 4,644,433 $ 5,071,324 93 CITY OF ANDOVER, MINNESOTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND - 300,000 Statement 17 CHANGES IN FUND BALANCES 1,100,845 Transfers out (305,300) - - NONMAJOR GOVERNMENTAL FUNDS (355,845) Proceeds from sale of capital assets - - 65,037 For The Year Ended December 31, 2018 20,489 Total other financing sources (uses) (305,300) 300,000 361,174 With Comparative Totals For The Year Ended December 31, 2017 765,489 Net increase (decrease) in fund balance 145,123 94,291 (457,140) (217,726) (12,881) Totals 844,231 Special Debt Capital Nonmajor Governmental Funds Fund balance - December 31 Revenue Service Projects 2018 2017 Revenues: General property taxes $ 39,871 $ 1,596,368 $ 862,753 $ 2,498,992 $ 2,413,010 Intergovernmental - - 2,839 2,839 - Charges for services 767,307 - - 767,307 731,219 Investment income 18,169 2,573 41,570 62,312 38,184 Miscellaneous: Park dedication fees - - 75,798 75,798 95,198 Rent 637,150 - - 637,150 641,691 Other 222,241 64,379 286,620 267,696 Total revenues 1,684,738 1,598,941 1,047,339 4,331,018 4,186,998 Expenditures: Current: General government 68,142 - 299,350 367,492 111,967 Public safety - - - - 44,099 Public works 62,199 - 48 62,247 70,511 Parks and recreation 1,045,141 - 10,739 1,055,880 1,100,382 Economic development 58,833 - - 58,833 28,239 Capital outlay: General government - - - - 148,459 Public safety - - 126,053 126,053 114,081 Public works - - 643,308 643,308 491,011 Parks and recreation - - 589,438 589,438 438,386 Debt service: Principal retirement - 1,416,000 196,717 1,612,717 1,996,719 Interest - 385,555 - 385,555 418,419 Paying agent fees - 3,095 - 3,095 875 Professional service - - 2,220 _ Total expenditures 1,234,315 1,804,650 1,865,653 4,904,618 4,965,368 Revenues over (under) expenditures 450,423 (205,709) (818,314) (573,600) (778,370) Other fmancing sources (uses) Transfers in - 300,000 296,137 596,137 1,100,845 Transfers out (305,300) - - (305,300) (355,845) Proceeds from sale of capital assets - - 65,037 65,037 20,489 Total other financing sources (uses) (305,300) 300,000 361,174 355,874 765,489 Net increase (decrease) in fund balance 145,123 94,291 (457,140) (217,726) (12,881) Fund balance - January 1 844,231 951,048 2,690,233 4,485,512 4,498,393 Fund balance - December 31 $ 989,354$ 1,045,339 $ 2,233,093 $ 4,267,786 $ 4,485,512 NONMAJOR SPECIAL REVENUE FUNDS The City of Andover had the following Special Revenue Funds during the year EDA General - This fund was established to account for activities designed to promote quality economic development within the community. Community Center - This fund is used to account for the operations of the Andover YMCA/Community Center, particularly the ice arena, field house and concessions. The aquatic's portion of the Community Center is under the operations of the YMCA. Drainage and Mapping - This fund accounts for resources necessary to maintain existing maps and developing new maps and mapping systems for the City. LRRWMO - This fund is used to account for the City's involvement with the Lower Rum River Watershed Management Organization (LRRWMO). Forestry - This fund was established to account for the protection of forest resources and the development of control plans to ensure preservation or restoration of these resources. Right -of -Way Management/Utility - This fund is used to account for activity associated with the management of the public right-of-ways. Charitable Gambling -This fund accounts for the 10% of net profits received from gambling activities by local non- profit organizations. According to state statute, all expenditures from this fund must be for public services and police, fire and other emergency or public safety-related services, equipment, and training, excluding pension obligations. Construction Seal Coating - This fund accounts for the contributions associated with land development to be used for the respective developments first application of crack seal and seal coat. CITY OF ANDOVER, MINNESOTA SUBCOMBINING BALANCE SHEET NONMAJOR SPECIAL REVENUE FUNDS December 31, 2018 With Comparative Totals For December 31, 2017 Inventories - at cost 2,386 Drainage Total assets $ EDA Community and $ 44,936 Liabilities, Deferred Inflows of Resources and Fund Balances General Center Mapping LRRWMO Assets: Cash and investments $ 231,801 $ 201,107 $ 157,698 $ 44,301 Cash and investments with escrow agent - 176,788 - - Accrued interest 1,323 1,562 864 - Accounts receivable - net 15,437 96,228 - - Prop" taxes receivable: Unremitted - - - 208 Delinquent - - - 427 Inventories - at cost 2,386 Total assets $ 248,561 $ 478,071 $ 158,562 $ 44,936 Liabilities, Deferred Inflows of Resources and Fund Balances Liabilities: Accounts payable $ 980 $ 42,844 $ - $ - Deposits payable - 35,083 - - Due to other governmental units - 3,716 - - Salaries payable 150 10,883 - 198 Unearned revenue Total liabilities 1,130 92,526 - 198 Deferred inflows of resources: Unavailable revenues 427 Fund balance (deficit): Nonspendable - 2,386 - - Restricted - - - - Committed 247,431 - 158,562 44,311 Assigned - 383,159 - - Total fund balance (deficit) 247,431 385,545 158,562 44,311 Total liabilities, deferred inflows of resources, and fund balances (deficit) $ 248,561 $ 478,071 $ 158,562 $ 44,936 Statement 18 Right -of -Way Totals Management/ Charitable Construction Nonmajor Special Revenue Funds Forestry Utility Gambling Seal Coating 2018 2017 $ 5,132 $ 57,977 $ 79,685 $ 192,280 $ 969,981 $ 853,681 - - - 176,788 176,462 297 375 974 5,395 4,578 448 - - 112,113 137,414 208 171 427 517 2,386 2,041 $ 5,132 $ 58,722 $ 80,060 $ 193,254 $ 1,267,298 $ 1,174,864 $ - $ - $ 43,824 $ 110,427 - - - 35,083 59,181 - - - 3,716 3,010 200 - - 11,431 9,089 183,463 183,463 148,409 200 183,463 277,517 330,116 427 517 - - 2,386 2,041 - 74,244 - 74,244 63,090 - 58,522 - 9,791 518,617 530,505 5,132 5,816 394,107 248,595 5,132 58,522 80,060 9,791 989,354 844,231 $ 5,132 $ 58,722 $ 80,060 $ 193,254 $ 1,267,298 $ 1,174,864 97 CITY OF ANDOVER, MINNESOTA SUBCOMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR SPECIAL REVENUE FUNDS For The Year Ended December 31, 2018 With Comparative Totals For The Year Ended December 31, 2017 Drainage EDA Community and General Center Mapping LRRWMO Revenues General property taxes $ - $ - $ - $ 39,871 Charges for services 7,003 704,459 18,782 Investment income 4,324 5,780 2,642 - 427 Miscellaneous: Rent - 637,150 - - Other 177 142,768 Total revenues 11,504 1,490,157 21,424 40,298 Expenditures: Current: General government - - - - Public works - - 12,969 23,030 Parks and recreation - 1,045,141 - - Economic development 58,833 - - - Capital outlay: Parks and recreation - - Total expenditures 58,833 1,045,141 12,969 23,030 Revenues over (under) expenditures (47,329) 445,016 8,455 17,268 Other financing sources (uses): Transfers out - (300,000) - Net increase (decrease) in fund balance (47,329) 145,016 8,455 17,268 Fund balance (deficit) - January I 294,760 240,529 150,107 27,043 Fund balance (deficit) - December 31 $ 247,431 $ 385,545 $ 158,562 $ 44,311 92 Statement 19 Right -of -Way Totals Management/ Charitable Construction Nonmalor Special Revenue Funds Forestry Utility Gambling Seal Coating 2018 2017 M $ 39,871 $ 39,955 - 32,747 - 4,316 767,307 731,219 85 853 1,116 2,942 18,169 11,422 - - - - 637,150 641,691 79,296 222,241 199,823 85 33,600 80,412 7,258 1,684,738 1,624,110 - - 68,142 - 68,142 75,839 360 21,524 - 4,316 62,199 65,913 - - - - 1,045,141 1,033,974 - - - - 58,833 28,239 7,740 360 21,524 68,142 4,316 1,234,315 1,211,705 (275) 12,076 12,270 2,942 450,423 412,405 - (5,300) - - (305,300) (305,000) (275) 6,776 12,270 2,942 145,123 107,405 5,407 51,746 67,790 6,849 844,231 736,826 $ 5,132 $ 58,522 $ 80,060 $ 9,791 $ 989,354 $ 844,231 M This page intentionally left blank - iG➢l NONMAJOR DEBT SERVICE FUNDS The City's Debt Service Funds account for four types of bonded indebtedness: • Certificates of Indebtedness • Capital Improvement Bonds • Abatement Bonds • Referendum Bonds Certificates of Indebtedness - (G.O. Equipment Certificates - 2014A and 2016A) are repaid primarily from general property taxes. Abatement Bonds - (G.O. Abatement Bonds of 2012C) are repaid from annual lease payments from the YMCA, Community Center operations and general property tax. Referendum Bonds — (Open Space Referendum Bonds of 2010A) are used to finance the purchase of land to remain as open space. 101 CITY OF ANDOVER, MINNESOTA SUBCOMBINING BALANCE SHEET NONMAJOR DEBT SERVICE FUNDS December 31, 2018 With Comparative Totals For December 31, 2017 102 G.O. G.O. G.O. Open Space Equipment Equipment Abatement Referendum Certificate Certificate Bonds Bonds 2014A 2016A 2012C 2010A Assets: Cash and investments $ 349,036 $ 156,346 $ 271,927 $ 255,295 Accrued interest 1,452 633 - 1,103 Property taxes receivable: Uuremitted 1,751 851 5,771 1,174 Delinquent 2,452 1,192 8,082 1,412 Total assets $ 354,691 $ 159,022 $ 285,780 $ 258,984 Deferred Inflows of Resources and Fund Balances Deferred inflows of resources: Unavailable revenues $ 2,452 $ 1,192 $ 8,082 $ 1,412 Fund balance (deficit): Restricted 352,239 157,830 277,698 257,572 Total deferred inflows of resources, and and fund balances (deficit) $ 354,691 $ 159,022 $ 285,780 $ 258,984 102 Statement 20 Totals Nonmajor Debt Service Funds 2018 2017 $ 1,032,604 $ 943,862 3,188 2,291 9,547 4,895 13,138 15,898 _L 1,058,477 $ 966,946 13,138 $ 15,898 1,045,339 951,048 $ 1,058,477 $ 966,946 103 CITY OF ANDOVER, MINNESOTA SUBCOMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR DEBT SERVICE FUNDS For The Year Ended December 31, 2018 With Comparative Totals For The Year Ended December 31, 2017 Revenues: General property taxes Investment income Total revenues Expenditures: Debt service: Principal retirement Interest Paying agent fees Professional services Total expenditures Revenues over (under) expenditures Other financing sources (uses): Transfers in Transfers out Total other financing sources (uses) Net increase (decrease) in fund balance Fund balance - January 1 Fund balance - December 31 G.O. G.O. G.O. Open Space Equipment Equipment Abatement Referendum Certificate Certificate Bonds Bonds 2014A 2016A 20I2C 2010A $ 294,347 $ 143,020 $ 970,085 $ 188,916 3,088 1,290 (4,378) 2,573 297,435 144,310 965,707 191,489 265,000 126,000 870,000 155,000 13,550 8,683 341,481 21,841 740 - 1,165 1,190 279,290 134,683 1,212,646 178,031 18,145 9,627 (246,939) 13,458 300,000 300,000 18,145 9,627 53,061 13,458 334,094 148,203 224,637 244,114 $352,239 $ 157,830 $ 277,698 $ 257,572 114111 Statement 21 Totals Nonmajor Debt Service Funds 2018 2017 $ 1,596,368 $ 1,608,636 2,573 (2,716) 1,598,941 1,605,920 1,416,000 1,800,000 385,555 418,419 3,095 875 - 2,220 1,804,650 2,221,514 (205,709) (615,594) 300,000 300,000 (50,845) 300,000 249,155 94,291 (366,439) 951,048 1,317,487 $ 1,045,339 $ 951,048 105 -This page intentionally left blank - 106 NONMAJOR CAPITAL PROJECTS FUNDS The City of Andover had the following Capital Projects Funds during the year: Storm Sewer Project - This fund was established to account for storm sewer fees and improvements as part of development and ongoing maintenance. Park Dedication - This fund was established to account for contributions associated with land development to be used for constructing and upgrading the City's park system. Building Fund - This fund was established to account for miscellaneous building improvements for all facilities. Trail and Transportation -This fund is used to account for contributions associated with land development to be used for constructing and upgrading the City's trail system. Capital Equipment Reserve - This fund is used to account for the capital equipment/projects levy and the various capital expenditures it will be used for. 107 CITY OF ANDOVER, MINNESOTA SUBCOMBINING BALANCE SHEET NONMAJOR CAPITAL PROJECTS FUNDS December 31, 2018 With Comparative Totals For December 31, 2017 Storm Sewer Pak Building Trail & Project Dedication Fund Transportation Assets Cash and investments $ 3,737 $ 164,920 $ 242,647 $ 505,913 Accrued interest - 887 1,920 3,213 Property taxes receivable: Unremitted - 89 292 - Delinquent 108 356 Total assets $ 3,737 $ 166,004 $ 245,215 $ 509,126 Liabilities, Deferred Inflows of Resources and Fund Balances Liabilities: Interfund payable $ 70,000 $ - $ - $ - Accounts payable - 7,189 - - Contracts payable - - - - Due to other government units - - - - Total liabilities 70,000 7,189 Deferred inflows of resources: Unavailable revenues 108 356 Fund balance (deficit): Assigned - 158,707 244,859 509,126 Unassigned (66,263) - Total fund balance (deficit) (66,263) 158,707 244,859 509,126 Total liabilities, deferred inflows of resources, and fund balances (deficit) $ 3,737 $ 166,004 $ 245,215 $ 509,126 108 Statement 22 Capital Totals $ 70,000 Equipment Nonmajor Capital Projects Funds Reserve 2018 2017 $ 1,376,773 $ 2,293,990 $ 2,907,104 7,354 13,374 13,677 4,707 5,088 2,399 5,742 6,206 6,334 $ 1,394,576 $ 2,318,658 $ 2,929,514 $ - $ 70,000 $ 70,000 2,053 9,242 29,392 - - 133,555 117 117 2,170 79,359 232,947 5,742 6,206 6,334 1,386,664 2,299,356 2,755,418 (66,263) (65,185) 1,386,664 2,233,093 2,690,233 $ 1,394,576 $ 2,318,658 $ 2,929,514 109 CITY OF ANDOVER, MINNESOTA SUBCOMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR CAPITAL PROJECTS FUNDS For The Year Ended December 31, 2018 With Comparative Totals For The Year Ended December 31, 2017 Storm Sewer Park Building Trail & Project Dedication Fund Transportation Revenues: General property taxes $ - $ 15,061 $ 49,485 $ - Intergovernmental - - - Investment income (1,078) 2,797 6,149 9,302 Miscellaneous: Park dedication fees - 75,798 - - Other 12,385 23,477 Total revenues (1,078) 106,041 55,634 32,779 Expenditures: Current: General government Public safety Public works Parks and recreation Capital outlay: General government Public safety Public works Parks and recreation Debt service: Principal retirement Total expenditures Revenues over (under) expenditures Other financing sources (uses): Transfers in Proceeds from sale of capital assets Total other financing sources (uses) Net increase (decrease) in fund balance Fund balance (deficit) - January 1 Fund balance (deficit) - December 31 34,904 - 48 10,739 - 264,687 72,970 196,717 83,709 231,621 264,735 (1,078) 22,332 (175,987) (231,956) 230,000 230,000 (1,078) 22,332 (175,987) (1,956) (65,185) 136,375 420,846 511,082 $ (66,263) $ 158,707 $ 244,859 $ 509,126 110 Statement 23 Capital Totals 800,845 Equipment Nonmalor Capital Projects Funds Reserve 2018 2017 $ 798,207 $ 862,753 $ 764,419 2,839 2,839 - 24,400 41,570 29,478 - 75,798 95,198 28,517 64,379 67,873 853,963 1,047,339 956,968 264,446 299,350 36,128 - 44,099 48 4,598 - 10,739 66,408 - - 148,459 126,053 126,053 114,081 378,621 643,308 491,011 516,468 589,438 430,646 196,717 196,719 1,285,588 1,865,653 1,532,149 (431,625) (818,314) (575,181) 66,137 296,137 800,845 65,037 65,037 20,489 131,174 361,174 821,334 (300,451) (457,140) 246,153 1,687,115 2,690,233 2,444,080 $ 1,386,664 $ 2,233,093 $ 2,690,233 111 CITY OF ANDOVER, MINNESOTA SPECIAL REVENUE FUND - EDA GENERAL Statement 24 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL For The Year Ended December 31, 2018 With Comparative Actual Amounts For The Year Ended December 31, 2017 Variance with Final Budget - Budgeted Amounts 2018 Positive 2017 Original Final Actual (Negative) Actual Revenues: Charges for services $ 8,000 $ 8,000 $ 7,003 $ (997) $ 7,249 Investment income 3,000 3,000 4,324 1,324 3,383 Miscellaneous - 177 177 367 Total revenues 11,000 11,000 11,504 504 10,999 Expenditures: Current: Economic development 110,252 110,252 58,833 51,419 28,239 Net increase (decrease) in fund balance $ (99,252) _j___(99,252L (47,329) $ 51,923 (17,240) Fund balance (deficit) - January 1 294,760 312,000 Fund balance (deficit) - December 31 $ 247,431 $ 294,760 112 CITY OF ANDOVER, MINNESOTA SPECIAL REVENUE FUND - COMMUNITY CENTER Statement 25 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL For The Year Ended December 31, 2018 With Comparative Actual Amounts For The Year Ended December 31, 2017 Variance with Final Budget - Budgeted Amounts 2018 Positive 2017 Original Final Actual (Negative) Actual Revenues: Charges for services $ 647,900 S 647,900 $ 704,459 $ 56,559 $ 665,165 Investment income - - 5,780 5,780 2,779 Miscellaneous: Rent 638,000 638,000 637,150 (850) 641,691 Other 140,068 140,068 142,768 2,700 136,149 Total revenues 1,425,968 1,425,968 1,490,157 64,189 1,445,784 Expenditures: Current: Parks and recreation 1,071,509 1,071,509 1,045,141 26,368 1,033,974 Capital outlay: Parks and recreation 22,000 22,000 22,000 7,740 Total expenditures 1,093,509 1,093,509 1,045,141 48,368 1,041,714 Revenue over (under) expenditures 332,459 332,459 445,016 112,557 404,070 Other financing sources (uses) Transfers out (300,000) (300,000) (300,000) (300,000) Net increase (decrease) in fund balance $ 32,459 $ 32,459 145,016 $ 112,557 104,070 Fund balance (deficit) - January 1 240,529 136,459 Fund balance (deficit) - December 31 $ 385,545 $ 240,529 113 CITY OF ANDOVER, MINNESOTA SPECIAL REVENUE FUND - DRAINAGE AND MAPPING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL For The Year Ended December 31, 2018 With Comparative Actual Amounts For The Year Ended December 31, 2017 Revenues: Charges for services Investment income Total Revenues Expenditures: Current: Public works Net increase (decrease) in fund balance Fund balance (deficit) - January 1 Fund balance (deficit) - December 31 Statement 26 Variance with Final Budget - Budgeted Amounts 2018 Positive 2017 Original Final Actual (Negative) Actual $ 8,000 $ 8,000 $ 18,782 $ 10,782 $ 20,379 1,200 1,200 2,642 1,442 1,678 9,200 9,200 21,424 12,224 22,057 23,800 23,800 12,969 10,831 12,976 _L_L14,6001 $(14,600) 8,455 $ 23,055 9,081 114 150,107 $ 158,562 141,026 $ 150,107 CITY OF ANDOVER, MINNESOTA SPECIAL REVENUE FUND - LRRWMO SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL For The Year Ended December 31, 2018 With Comparative Actual Amounts For The Year Ended December 31, 2017 Revenues: General property taxes Investment income Total revenues Expenditures: Current: Public works Net increase (decrease) in fund balance Fund balance (deficit) - January 1 Fund balance (deficit) - December 31 Statement 27 115 27,043 $ 44,311 9,845 $ 27,043 Variance with Final Budget - Budgeted Amounts 2018 Positive 2017 Original Final Actual (Negative) Actual $ 40,000 S 40,000 $ 39,871 $ (129) $ 39,955 100 100 427 327 87 40,100 40,100 40,298 198 40,042 23,844 23,844 23,030 814 22,844 $ 16,256 $ 16,256 17,268 $ 1,012 17,198 115 27,043 $ 44,311 9,845 $ 27,043 CITY OF ANDOVER, MINNESOTA SPECIAL REVENUE FUND - FORESTRY Statement 28 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL For The Year Ended December 31, 2018 With Comparative Actual Amounts For The Year Ended December 31, 2017 Variance with Final Budget - Budgeted Amounts 2018 Positive 2017 Original Final Actual (Negative) Actual Revenues: Intergovernmental Investment income Miscellaneous Total revenues Expenditures: Current: Public works Net increase (decrease) in fund balance Fund balance (deficit) - January 1 Fund balance (deficit) - December 31 $ 12,500 $ 12,500 $ - $ (12,500) $ - 100 100 85 (15) 97 6,500 6,500 - (6,500) - 19,100 19,100 85 (19,015) 97 15,000 15,000 360 14,640 1,611 $ 4,100 $ 4,100 (275) $ (4,375) (1,514) 116 5,407 $ 5,132 6,921 $ 5,407 CITY OF ANDOVER, MINNESOTA SPECIAL REVENUE FUND - RIGHT-OF-WAY MANAGEMENT/UTILITY SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL For The Year Ended December 31, 2018 With Comparative Actual Amounts For The Year Ended December 31, 2017 Revenues: Charges for services Investment income Total revenues Expenditures: Current: Public works Revenue over (under) expenditures Other financing sources (uses): Transfers out Net increase (decrease) in fund balance Fund balance (deficit) - January I Fund balance (deficit) - December 31 Statement 29 (5,300) (5,300) (5,300) _L__18,7331 $ (8,733) 6,776 51,746 $ 58,522 117 (5,000) $ 15,509 5,649 46,097 $ 51,746 Variance with Final Budget - Budgeted Amounts 2018 Positive 2017 Original Final Actual (Negative) Actual $ 20,000 S 20,000 $ 32,747 $ 12,747 $ 31,253 500 500 853 353 706 20,500 20,500 33,600 13,100 31,959 23,933 23,933 21,524 2,409 21,310 (3,433) (3,433) 12,076 15,509 10,649 (5,300) (5,300) (5,300) _L__18,7331 $ (8,733) 6,776 51,746 $ 58,522 117 (5,000) $ 15,509 5,649 46,097 $ 51,746 CITY OF ANDOVER, MINNESOTA SPECIAL REVENUE FUND - CHARITABLE GAMBLING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL For The Year Ended December 31, 2018 With Comparative Actual Amounts For The Year Ended December 31, 2017 Revenues: Investment income Miscellaneous Total revenues Expenditures: Current: General government Net increase (decrease) in fund balance Fund balance (deficit) - January 1 Fund balance (deficit) - December 31 Statement 30 26,300 26,300 68,142 (41,842) 75,839 $ (10,900) $ (10,900) 12,270 $ 23,170 (11,740) 118 67,790 $ 80,060 79,530 $ 67,790 Variance with Final Budget - Budgeted Amounts 2018 Positive 2017 Original Final Actual (Negative) Actual $ 400 $ 400 $ 1,116 $ 716 $ 792 15,000 15,000 79,296 64,296 63,307 15,400 15,400 80,412 65,012 64,099 26,300 26,300 68,142 (41,842) 75,839 $ (10,900) $ (10,900) 12,270 $ 23,170 (11,740) 118 67,790 $ 80,060 79,530 $ 67,790 CITY OF ANDOVER, MINNESOTA SPECIAL REVENUE FUND - CONSTRUCTION SEAL COATING Statement 31 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL For The Year Ended December 31, 2018 With Comparative Actual Amounts For The Yew Ended December 31, 2017 Variance with Final Budget - Budgeted Amounts 2018 Positive 2017 Original Final Actual (Negative) Actual Revenues: Charges for services Investment income Total revenues Expenditures: Current: Public works Net increase (decrease) in fund balance Fund balance (deficit) - January I Fund balance (deficit) - December 31 $ 10,000 S 10,000 $ 4,316 $ (5,684) $ 7,173 750 750 2,942 2,192 1,900 10,750 10,750 7,258 (3,492) 9,073 10,000 10,000 4,316 5,684 7,172 $ 750 $ 750 2,942 $ 2,192 1,901 119 6,849 $ 9,791 4,948 $ 6,849 INTERNAL SERVICE FUNDS Internal Service Funds are used to account for the financing of goods or services provided by one department or agency to other departments or agencies of the government and to other government units, on a cost reimbursement basis. The City of Andover had the following Internal Service Funds during the year: Central Equipment Maintenance — This fund accounts for the maintenance of the equipment for the City. Risk Management — This fund accounts for the expenditures in payment of insurance deductibles, loss reduction, safety training and administrative expense. M11 CITY OF ANDOVER, MINNESOTA COMBINING STATEMENT OF NET POSITION Statement 32 INTERNAL SERVICE FUNDS December 31, 2018 With Comparative Totals for December 31, 2017 Central Equipment Risk Totals Maintenance Management 2018 2017 Assets: Current assets: Cash and cash equivalents $ 407,187 Accrued interest 2,507 Accounts receivable - Inventories - at cost 112,580 Total assets 522,274 Liabilities: Current liabilities: Accounts payable 10,910 Due to other governmental units - Salaries payable 5,734 Total liabilities 16,644 Net position: Unrestricted $ 505,630 121 $ 598,760 $ 1,005,947 $ 988,092 3,059 5,566 4,893 5,652 5,652 - 112,580 112,660 607,471 1,129,745 1,105,645 6,372 17,282 18,502 - - 359 314 6,048 4,879 6,686 23,330 23,740 $ 600,785 $ 1,106,415 $ 1,081,905 CITY OF ANDOVER, MINNESOTA COMBINING STATEMENT OF REVENUES, EXPENSES AND Statement 33 CHANGES IN NET POSITION INTERNAL SERVICE FUNDS For The Year Ended December 31, 2018 With Comparative Totals For The Year Ended December 31, 2017 - Central Equipment Risk Totals Maintenance Management 2018 2017 Operating revenues User charges $ 698,994 $ 468,704 $ 1,167,698 $ 1,155,907 Other 116 21,407 21,523 26,074 Total operating revenues 699,110 490,111 1,189,221 1,181,981 Operating expenses: Personal services 293,888 166,243 460,131 446,274 Supplies 324,786 23,038 347,824 289,765 Other service charges 117,973 244,173 362,146 331,546 Total operating expenses 736,647 433,454 1,170,101 1,067,585 Operating income (loss) (37,537) 56,657 19,120 114,396 Nonoperating revenues (expenses): Investment income 7,884 8,577 16,461 10,611 Transfers Transfers out (11,071) (11,071) Change in net position (40,724) 65,234 24,510 125,007 Net position - January 1 546,354 535,551 1,081,905 956,898 Net position - December 31 $ 505,630 $ 600,785 $1,106,415 $ 1,081,905 122 CITY OF ANDOVER, MINNESOTA COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS For The Year Ended December 31, 2018 With Comparative Totals For The Year Ended December 31, 2017 Cash flows from operating activities: Receipts from customers and users payment to suppliers payment to employees Net cash flows from operating activities Cash flows from noncapital financing activities: Transfers out Cash flows from investing activities: Investment income Net increase (decrease) in cash and cash equivalents Cash and cash equivalents - January I Cash and cash equivalents - December 31 Reconciliation of operating income to net cash provided (used) by operating activities: Operating income (loss) Adjustments to reconcile operating income (loss) to net cash flows from operating activities: Changes in assets and liabilities: Decrease (increase) in accounts receivable Decrease (increase) in inventory Increase (decrease) in accounts payable Increase (decrease) in due to other governmental units Increase (decrease) in salaries payable Total adjustments Net cash provided (used) by operating activities Central Equipment Maintenance S 699,110 (449,798) (292,780) (43,468) (11,071) 7,893 (46,646) 453,833 $ 407,187 Statement 34 Risk Totals Management 2018 2017 $ 484,459 $ 1,183,569 $ 1,181,981 (261,671) (711,469) (631,718) (166,182) (458,962) (446,083) 56,606 13,138 104,180 (11,071) 7,895 15,788 9,465 64,501 17,855 113,645 534,259 988,092 874,447 $ 598,760 $ 1,005,947 $ 988,092 $ (37,537) $ 56,657 $ 19,120 $ 114,396 - (5,652) (5,652) - 80 - 80 (1,062) (7,119) 5,899 (1,220) (2,466) - (359) (359) (6,879) 1,108 61 1,169 191 (5,931) (51) (5,982) (10,216) $ (43,468) $ 56,606 $ 13,138 $ 104,180 123 AGENCYFUNDS Agency Funds are used to account for assets held by the City in a trustee capacity or as an agent for individuals, private organizations and/or other governmental units. The City of Andover had the following Agency Funds during the year: General Escrow— This fund is used to account for distribution of funds for insurance premiums of retirees. General Agency — This fund is used to account for the collection and distribution of funds relating to building and land development activities. 124 CITY OF ANDOVER, MINNESOTA COMBINING STATEMENT OF NET POSITION FIDUCIARY FUNDS December 31, 2018 General Escrow Assets Cash and investments S 15,949 Liabilities: Accounts payable 55 Deposits payable 15,894 Total liabilities $ 15,949 125 General Agency $ 165,405 1,094 164,311 $ 165,405 Statement 35 Total $ 181,354 1,149 180,205 $ 181,354 CITY OF ANDOVER, MINNESOTA COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES FIDUCIARY FUNDS For The Year Ended December 31, 2018 General Escrow Fund Assets: Cash and investments Liabilities: Accounts payable Deposits payable Total liabilities General Agency Fund Assets: Cash and investments Liabilities: Accounts payable Deposits payable Total liabilities Total Fiduciary Funds Assets: Cash and investments Liabilities: Accounts payable Deposits payable Total liabilities Statement 36 Balance Balance January 1, December 3l, 2018 Additions Deletions 2018 $ 24,516 $ 47,597 $ (56,164) $ 15,949 56 27,896 (27,897) 55 24,460 19,701 (28,267) 15,894 $ 24,516 $ 47,597 $ (56,164) $ 15,949 $ 261,190 $ 659,764 $ (755,549) $ 165,405 2,178 307,350 (308,434) 1,094 259,012 352,414 (447,115) 164,311 $ 261,190 $ 659,764 $ (755,549) $ 165,405 $ 285,706 $ 707,361 $ (811,713) $ 181,354 2,234 335,246 (336,331) 1,149 283,472 372,115 (475,382) 180,205 $ 285,706 $ 707,361 $ (811,713) $ 181,354 126 III. STATISTICAL SECTION This part of the City of Andover's comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the City's overall financial health. Contents pace Financial Trends 128 These tables contain trend information to help the reader understand how the City's financial performance and well-being have changed over time. Revenue Capacity 138 These tables contain information to help the reader assess the City's most significant local revenue source, the property tax. Debt Capacity 144 These tables present information to help the reader assess the affordability of the City's current levels of outstanding debt and the City's ability to issue additional debt in the future. Demographic and Economic Information 152 These tables offer demographic and economic indicators to help the reader understand the environment within which the City of Andover's financial activities take place. Operating Information 155 These tables contain service and infrastructure data to help the reader understand how the information in the City's financial report relates to the services the City provides and the activities it performs. IP'il CITY OF ANDOVER, MINNESOTA NET POSITION BY COMPONENT Last Ten Fiscal Years (accrual basis of accounting) Governmental Activities Net investment in capital assets Restricted Unrestricted Total governmental activities net position Business -Type Activities Net investment in capital assets Unrestricted Total business -type activities net position Primary Government 2009 2010 2011 2012 $ 83,394,872 $ 87,206,607 $ 90,859,970 $ 89,592,661 8,252,691 6,364,714 3,107,253 4,461,020 19,442,008 21,071,212 23,353,009 25,589,728 111,089,571 114,642,533 117,320,232 119,643,409 36,939,962 36,140,050 4,875,384 4,912,822 41,815,346 41,052,872 36,031,319 34,922,691 5,100,628 5,784,313 41,131,947 40,707,004 Net investment in capital assets 120,334,834 123,346,657 126,891,289 124,515,352 Restricted 8,252,691 6,364,714 3,107,253 4,461,020 Unrestricted - 24,317,392 25,984,034 28,453,637 31,374,041 Total primary government net position $ 152,904,917 $ 155,695,405 $ 158,452,179 $ 160,350,413 GASB 68 was implemented in 2015. Net position was restated for 2014 to reflect the reporting of net pension liability and pension related deferred outflows and inflows of resources. Net position for years prior to 2014 were not restated. 128 Table 1 2013 2014 2015 2016 2017 2018 $ 93,393,474 $ 94,533,473 $ 95,998,027 $ 99,539,838 $ 101,602,647 $ 103,577,524 3,792,323 4,776,047 5,755,162 5,787,072 4,935,375 5,081,230 22,936,032 23,175,077 24,457,253 26,085,240 27,673,920 28,319,303 120,121,829 122,484,597 126,210,442 131,412,150 134,211,942 136,978,057 34,864,659 34,787,382 35,507,385 37,531,815 37,174,817 37,068,699 6,310,830 6,292,850 7,004,563 7,652,339 8,446,942 9,825,681 41,175,489 41,080,232 42,511,948 45,184,154 45,621,759 46,894,380 128,258,133 129,320, 855 131,505,412 137,071,653 138,777,464 140,646,223 3,792,323 4,776,047 5,755,162 5,787,072 4,935,375 5,081,230 29,246,862 29,467,927 31,461,816 33,737,579 36,120,862 38,144,984 $ 161,297,318 $ 163,564,829 $ 168,722,390 $ 176,596,304 $ 179,833,701 $ 183,872,437 129 CITY OF ANDOVER, MINNESOTA CHANGES IN NET POSITION Last Ten Fiscal Years (accrual basis of accounting) Business -type activities Water 2009 2010 2011 2012 Expenses 1,831,505 1,915,072 1,914,113 1,842,473 Governmental activities: 536,619 532,168 614,958 531,103 General government $ 2,413,916 $ 2,398,007 $ 2,406,750 $ 2,453,801 Public safety 4,237,401 4,157,050 4,214,316 4,325,531 Public works 3,776,367 3,445,403 4,029,164 5,623,942 Parks and recreation 2,880,595 3,447,730 2,945,742 3,102,534 Recycling 86,949 108,785 109,293 94,319 Economic development 481,632 654,961 777,298 1,396,466 Interest on long-term debt 2,146,960 1,936,731 1,796,782 2,497,344 Total governmental activities expenses 16,023,820 16,148,667 16,279,345 19,493,937 Business -type activities Water 2,594,713 2,585,469 2,655,926 2,782,948 Sewer 1,831,505 1,915,072 1,914,113 1,842,473 Storm sewer 536,619 532,168 614,958 531,103 Total business -type activities expenses 4,962,837 5,032,709 5,184,997 5,156,524 Total primary government expenses $ 20,986,657 $ 21,181,376 $ 21,464,342 $ 24,650,461 Program Revenues Governmental activities: Charges for services: General government $ 483,639 $ 454,419 $ 532,764 $ 690,875 Public safety 412,113 479,516 540,089 607,715 Public works 316,451 337,360 309,066 308,583 Parks and recreation 1,495,779 1,432,672 1,498,847 1,495,872 Recycling 29,479 40,504 48,339 39,530 Economic development 185,539 211,121 235,134 170,391 Operating grants and contributions 966,635 1,214,066 977,553 1,358,424 Capital grants and contributions 1,631,929 1,461,834 1,356,091 2,774,126 Total governmental activities program revenue 5,521,564 5,631,492 5,497,883 7,445,516 Business -type activities: Charges for services: Water 2,127,676 2,077,305 2,119,954 2,572,560 Sewer 1,967,997 1,964,117 1,990,218 2,063,177 Storm sewer 325,392 338,823 358,708 379,262 Operating grants and contributions - 9,380 - - Capital grants and contributions 793,589 - - - Total business -type activities program revenue 5,214,654 4,389,625 4,468,880 5,014,999 Total primary government program revenues 10,736,218 10,021,117 9,966,763 12,460,515 Net (Expense)/Revenue Governmental activities (10,502,256) (10,517,175) (10,781,462) (12,048,421) Business -type activities 251,817 (643,084) (716,117) (141,525) Total primary government net expense $ (10,250,439) $ (11,160,259) $ (11,497,579) _L(12,189,946) 130 Table 2 2013 2014 2015 2016 2017 2018 704,119 492,665 624,430 832,412 680,729 721,078 $ 3,061,867 $ 2,791,507 $ 2,823,408 $ 2,904,102 $ 2,937,380 $ 3,209,512 4,495,447 4,747,142 4,774,033 5,140,347 5,167,930 5,263,071 4,465,153 4,430,295 2,967,957 3,905,703 5,428,350 4,257,014 3,029,917 3,229,894 3,340,561 3,321,814 3,385,001 3,321,793 124,515 111,760 98,016 133,614 169,100 206,335 318,646 676,039 192,265 411,958 1,098,300 249,669 1,399,172 542,139 454,808 437,513 403,200 377,314 8,511,441 16,894,717 16,528,776 14,651,048 16,255,051 18,589,261 16,884,708 2,495,561 2,347,763 2,593,303 2,575,920 2,716,239 2,275,363 2,308,552 2,316,651 2,454,931 2,263,748 2,306,013 1,964,911 1,951,785 2,002,623 2,128,814 2,190,453 2,175,331 561,807 848,745 595,902 546,526 684,708 614,816 - - 4,802,081 5,109,082 4,915,176 5,130,271 5,138,909 5,096,160 $ 21,696,798 $ 21,637,858 $ 19,566,224 $ 21,385,322 $ 23,728,170 $ 21,980,868 $ 843,304 $ 801,458 $ 1,381,113 $ 2,124,665 $ 925,639 $ 647,452 704,119 492,665 624,430 832,412 680,729 721,078 321,114 318,018 298,143 661,788 334,273 331,620 1,463,579 1,545,794 1,514,900 1,521,585 1,465,562 1,504,647 42,544 41,440 32,976 42,768 43,062 49,453 239,570 96,772 50,628 174,754 461,294 87,891 1,119,778 946,540 965,986 992,194 1,186,721 1,407,217 1,425,815 4,677,704 863,155 2,703,429 3,414,161 1,608,129 6,159,823 8,920,391 5,731,331 9,053,595 8,511,441 6,357,487 2,495,561 2,347,763 2,593,303 2,575,920 2,716,239 3,061,920 2,065,467 2,117,624 2,129,201 2,144,794 2,301,077 2,325,456 399,417 421,056 444,335 464,928 499,974 537,422 - 9,506 - 2,681 - - - 990,412 1,524,088 2,670,641 481,343 504,267 4,960,445 5,886,361 6,690,927 7,858,964 5,998,633 6,429,065 11,120,268 14,806,752 12,422,258 16,912,559 14,510,074 12,786,552 (10,734,894) (7,608,385) (8,919,717) (7,201,456) (10,077,820) (10,527,221) 158,364 777,279 1,775,751 2,728,693 859,724 1,332,905 $ (10,576,530) $ (6,831,106) $ (7,143,966) $ (4,472,763) $ (9,194,316) (Continued) 131 CITY OF ANDOVER, MINNESOTA CHANGES IN NET POSITION Last Ten Fiscal Yews (accrual basis of accounting) General Revenues and Other Changes in Net Position Governmental activities: Taxes: General property taxes Tax increment collections Grants and contributions not restricted to specific programs Unrestricted investment earnings Gain on sale of capital assets Transfers Total governmental activities Business -type activities: Unrestricted investment earnings Gain on sale of capital assets Transfers Total business -type activities Total primary government 2009 2010 2011 2012 $ 10,175,519 $ 10,336,536 $ 10,292,674 $ 10,594,940 1,930,669 2,074,589 2,005,056 2,033,932 131,084 84,875 86,802 14,360 1,032,507 1,114,451 1,399,987 1,201,995 6,144 22,500 91,693 16,625 421,887 437,186 (417,051) 509,746 13,697,810 14,070,137 13,459,161 14,371,598 373,893 317,796 370,641 226,328 - - 7,500 - (421,887) (437,186) 417,051 (509,746) (47,994) (119,390) 795,192 (283,418) $ 13,649,816 $ 13,950,747 $ 14,254,353 $ 14,088,180 Change in Net Position Governmental activities $ 3,195,554 $ 3,552,962 $ 2,677,699 $ 2,323,177 Business -type activities 203,823 (762,474) 79,075 (424,943) Total primary government $ 3,399,377 $ 2,790,488 $ 2,756,774 $ 1,898,234 GASB 68 was implemented in 2015. Expenses for years prior to 2015 were not restated. 132 Table 2 (Continued) 2013 2014 2015 2016 2017 2018 $ 10,608,678 $ 10,863,912 $ 11,120,449 $ 11,770,304 $ 11,874,354 $ 12,423,060 320,822 353,773 210,625 69,772 74,771 82,874 12,511 87,179 15,327 16,260 13,638 12,917 571,307 747,621 348,885 399,021 373,585 560,133 23,650 228,639 548,950 20,360 20,489 36,431 (323,654) 606,793 401,326 127,447 520,775 177,921 11,213,314 12,887,917 12,645,562 12,403,164 12,877,612 13,293,336 (21,533) 115,425 57,291 68,768 65,801 117,637 8,000 - - 2,192 32,855 - 323,654 (606,793) (401,326) (127,447) (520,775) (177,921) 310,121 (491,368) (344,035) (56,487) (422,119) (60,284) $ 11,523,435 $ 12,396,549 $ 12,301,527 $ 12,346,677 $ 12,455,493 $ 13,233,052 $ 478,420 $ 5,279,532 $ 3,725,845 $ 5,201,708 $ 2,799,792 $ 2,766,115 468,485 285,911 1,431,716 2,672,206 437,605 1,272,621 $ 946,905 $ 5,565,443 $ 5,157,561 $ 7,873,914 $ 3,237,397 $ 4,038,736 133 CITY OF ANDOVER, MINNESOTA FUND BALANCES - GOVERNMENTAL FUNDS Last Ten Fiscal Years (modified accrual basis of accounting) 2009 2010 2011 2012 General Fund Reserved $ 207,515 $ 206,666 $ - $ - Unreserved 4,120,897 4,904,239 - - Nonspendable - - 222,641 160,177 Unassigned - - 5,665,496 6,227,664 Total general fund 4,328,412 5,110,905 5,888,137 6,387,841 All Other Governmental Funds Reserved 20,756,195 19,258,490 - - Unreserved reported in: Special revenue funds 1,233,202 1,135,919 - - Capitalprojectfunds 14,170,266 14,714,140 - - Nonspendable - - 16,074 1,471 Restricted - - 19,741,214 21,307,923 Committed - - 650,766 681,413 Assigned - - 14,451,306 16,420,228 Unassigned - - (517,251) (314,734) Total all other governmental funds 36,159,663 35,108,549 34,342,109 38,096,301 Total governmental funds $ 40,488,075 $ 40,219,454 $ 40,230,246 $ 44,484,142 In 2011, the City adopted the provisions of Governmental Accounting Standards Board Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions. 134 Table 3 2013 2014 2015 2016 2017 2018 $ $ $ $ $ $ 106,445 137,001 131,813 146,417 117,253 112,971 6,853,791 7,065,133 7,136,091 7,650,328 7,672,363 8,023,365 6,960,236 7,202,134 7,267,904 7,796,745 7,789,616 8,136,336 1,316 1,562 1,800 2,027 2,041 2,386 21,274,444 5,022,967 5,674,417 5,852,444 4,550,557 14,225,839 588,516 591,289 531,729 513,916 530,505 518,617 13,481,786 16,095,395 17,907,929 19,109,145 20,855,184 21,327,036 (276,829) (114,344) (63,357) (64,193) (65,185) (66,263) 35,069,233 21,596,869 24,052,518 25,413,339 25,873,102 36,007,615 $ 42,029,469 $ 28,799,003 $ 31,320,422 $ 33,210,084 $ 33,662,718 $ 44,143,951 135 CITY OF ANDOVER, MINNESOTA CHANGES IN FUND BALANCES- GOVERNMENTAL FUNDS Last Ten Fiscal Years (modified accrual basis of accounting) Debt service as a percentage of noncapital expenditures 32.92% 38.21% 31.26% 136 18.69% 2009 2010 2011 2012 Revenues General property taxes $ 10,168,143 $ 10,267,085 $ 10,279,967 $ 10,638,117 Tax increment collections 1,951,343 2,015,123 1,976,800 2,035,663 Licenses and permits 291,903 329,901 387,206 449,826 Intergovernmental 1,654,614 1,989,420 1,876,685 3,493,528 Special assessments 1,421,591 1,725,695 891,942 792,460 Charges for services 1,579,659 1,604,681 1,732,791 1,874,321 Fines 110,779 104,780 99,777 97,571 Investment income 1,029,683 1,107,335 1,386,698 1,191,438 Miscellaneous: Park dedication fees 41,216 32,649 51,706 47,700 . Connection charges 20,119 48,086 27,165 170,202 Rent 637,305 638,037 641,859 639,983 Other 381,548 396,186 332,992 645,897 Total revenues 19,287,903 20,258,978 19,685,588 22,076,706 Expenditures General government 2,242,662 2,255,793 2,298,571 2,280,373 Public safety 4,015,410 3,920,073 3,965,541 4,092,073 Public works 3,545,132 3,204,444 3,788,636 5,415,924 Parks and recreation 1,891,125 2,433,495 1,926,220 2,001,624 Recycling 85,527 109,034 109,911 94,328 Economic development 477,648 650,977 966,687 1,537,611 Unallocated 19,540 24,953 30,631 63,371 Capital outlay 1,519,944 1,324,881 985,399 723,017 Debt service: Principal retirement 3,865,000 5,779,000 4,100,000 1,842,000 Interest 2,178,233 2,030,267 1,855,538 1,768,748 Other 39,265 29,939 10,430 225,378 Construction/acquisition costs - 101,153 1,044,581 110,650 Total expenditures 19,879,486 21,864,009 21,082,145 20,155,097 Revenues over (under) expenditures (591,583) (1,605,031) (1,396,557) 1,921,609 Other Financing Sources (Uses) Transfers in - 587,530 627,530 627,530 627,530 Transfers out (165,643) (89,191) - (7,134) Bonds issued 385,000 1,660,000 265,000 585,000 Refunding bonds issued 955,000 1,480,000 - 18,885,000 Redemption of refunded bonds - (2,416,834) - (17,907,898) Bond premium 18,781 31,688 - 133,164 Proceeds from the sale of capital assets 12,264 43,217 514,819 16,625 Total other financing sources (uses) 1,792,932 1,336,410 1,407,349 2,332,287 Net increase (decrease) in fund balance $ 1,201,349 $ (268,621) $ 10,792 $ 4,253,896 Debt service as a percentage of noncapital expenditures 32.92% 38.21% 31.26% 136 18.69% Table 4 $ 10,682,975 $ 10,894,301 $ 11,148,149 $ 11,809,352 $ 11,923,097 $ 12,433,651 375,040 377,733 213,020 91,808 82,448 86,794 536,706 364,430 452,422 625,907 546,378 562,525 1,115,047 3,464,985 959,790 1,564,848 3,150,578 1,641,806 1,045,000 733,425 690,161 818,065 832,528 554,471 1,806,919 1,720,972 1,499,909 1,613,941 1,574,242 1,656,254 96,130 94,375 99,304 88,600 75,287 73,719 573,256 735,325 341,392 389,114 362,974 543,672 205,080 156,384 170,144 431,784 95,198 75,798 436,628 676,826 405,967 445,698 412,691 444,989 639,423 639,000 638,220 656,604 641,691 637,150 1,698,964 564,057 542,473 1,189,179 428,186 525,667 19,211,168 20,421,813 17,160,951 19,724,900 20,125,298 19,236,496 2,647,278 2,588,950 2,639,821 2,686,308 2,754,189 3,115,956 4,301,698 4,537,264 4,521,129 4,709,083 4,822,435 4,956,350 4,251,454 4,145,404 2,747,550 3,694,911 5,208,862 4,298,845 1,990,457 2,139,552 2,277,576 2,226,454 2,253,370 2,214,415 123,595 106,587 91,940 124,860 169,956 199,182 408,210 665,325 181,551 401,244 1,087,586 538,955 75,517 81,183 56,720 33,077 14,875 11,940 2,763,351 2,816,375 941,213 2,220,253 1,484,422 2,102,030 1,689,000 2,336,719 1,961,719 1,966,719 1,996,719 1,612,717 1,262,302 900,504 470,687 444,144 418,419 385,555 5,509 7,895 5,009 1,325 3,095 3,095 946,942 - 167,955 414,987 52,527 164,399 20,465,313 20,325,758 16,062,870 18,923,365 20,266,455 19,603,439 (1,254,145) 96,055 1,098,081 801,535 (141,157) (366,943) 627,530 627,530 627,530 627,530 627,530 643,729 (4,242) (20,737) (58,249) (85,096) (54,228) (114,850) - 1,555,000 - 520,000 - 10,000,000 (1,900,000) (16,455,000) - - - - - 44,278 - - - 254,260 76,184 922,408 854,057 25,693 20,489 65,037 (1,200,528) (13,326,521) 1,423,338 1,088,127 593,791 10,848,176 $ (2,454,673) $ (13,230,466) $ 2,521,419 $ 1,889,662 $ 452,634 $ 10,481,233 17.61% 18.49% 16.27% 14.80% 12.89% 11.53% 137 CITY OF ANDOVER, MINNESOTA ASSESSED AND ESTIMATED ACTUAL VALUE OF Last Ten Fiscal Years TAXABLE PROPERTY Table 5 Real Property Personal Property Total Total Net Tax Capacity Taxable Net Tax Taxable Net Tax Taxable Net Tax Direct as a Percentage Year Market Value Capacity Market Value Capacity Market Value Capacity Tax Rate of Market Value 2009 $ 2,961,410,400 $ 31,023,349 $ 21,185,200 $ 422,931 $ 2,982,595,600 $ 31,446,280 32.484% 1.05% 2010 2,685,802,600 28,233,178 24,712,000 493,441 2,710,514,600 28,726,619 36.814% 1.06% 2011 2,444,519,600 25,667,544 25,425,400 506,806 2,469,945,000 26,174,350 38.731% 1.06% 2012 2,176,836,156 22,945,277 25,299,200 504,304 2,202,135,356 23,449,581 42.539% 1.06% 2013 2,097,459,658 22,048,362 26,136,700 520,656 2,123,596,358 22,569,018 41.170% 1.06% 2014 2,045,873,681 21,462,221 25,938,600 516,101 2,071,812,281 21,978,322 43.657% 1.06% 2015 2,411,059,312 25,213,801 24,711,300 491,549 2,435,770,612 25,705,350 37.460% 1.06% 2016 2,513,051,767 26,316,855 26,635,100 530,418 2,539,686,867 26,847,273 38.667% 1.06% 2017 2,605,298,959 27,358,838 28,181,200 561,340 2,633,480,159 27,920,178 37.738% 1.06% 2018 3,085,827,000 30,682,357 30,348,500 604,686 3,116,175,500 31,287,043 34.952% 1.00% Source: Anoka County Property Tax Division 138 CITY OF ANDOVER, MINNESOTA PROPERTY TAX RATES - PER $1,000 OF ASSESSED TAX CAPACITY VALUE DIRECT AND OVERLAPPING GOVERNMENTS Last Ten Fiscal Years Table 6 Source: Anoka County Property Tax Division 139 Direct City General Debt Lower Taxes Oper Service Rum Overlapping Governments Payable Levy Levy Watershed Total School County Other Total Total 2010 30.507% 5.977% 0.330% 36.8140/. 20.236% 35.273% 3.436% 58.945% 95.759% 2011 31.914% 6.461% 0.356% 38.731% 24.023% 39.884% 4.872% 68.779% 107.510% 2012 35.138% 6.952% 0.449% 42.539% 21.447% 41.056% 3.626% 66.129% 108.668% 2013 33.676% 6.989% 0.449% 41.114% 26.751% 44.328% 3.912% 74.991% 116.105% 2014 35.486% 7.711% 0.460% 43.657% 28.265% 43.239% 4.354% 75.858% 119.515% 2015 30.441% 6.628% 0.391% 37.460% 22.482% 38.123% 4.104% 64.709% 102.169% 2016 31.898% 6.381% 0.388% 38.667% 20.885% 38.894% 4.949% 64.728% 103.395% 2017 33.128% 4.246% 0.364% 37.738% 18.590% 36.841% 3.952% 59.383% 97.121% 2018 30.607% 4.020% 0.325% 34.952% 18.392% 35.334% 3.906% 57.632% 92.584% 2019 29.830% 5.480% 0.311% 35.621% 16.330% 34.473% 3.478% 54.281% 89.902% Source: Anoka County Property Tax Division 139 CITY OF ANDOVER, MINNESOTA PROPERTY TAX LEVIES AND COLLECTIONS Last Ten Fiscal Years Table 7 Collected Within the Fiscal Year of Levy Total Market Value Collections In Total Collections to Date Tax Tax Homestead Total Percentage Subsequent Percentage Year Levy Levy Credit Collected of Levy Years Amount of Levy 2009 $ 10,593,520 $ 9,992,240 $ 54,629 * $ 10,046,869 94.84% $ 154,759 $ 10,201,628 96.30% 2010 10,856,299 10,125,752 3,905 * 10,129,657 93.31% 183,720 10,313,377 95.00% 2011 10,856,299 10,119,681 853 * 10,120,534 93.22% 144,009 10,264,543 94.55% 2012 10,631,299 10,460,838 2,354 10,463,192 98.42% 128,224 10,591,416 99.62% 2013 10,631,299 10,535,521 1,246 10,536,767 99.11% 103,053 10,639,819 100.08% 2014 10,843,925 10,776,635 - 10,776,635 99.38% 75,861 10,852,496 100.08% 2015 11,143,925 11,054,157 - 11,054,157 99.19% 55,017 11,109,173 99.69% 2016 11,593,925 11,525,770 3,461 11,529,231 99.44% 23,737 11,552,968 99.65% 2017 11,938,555 11,858,376 3,545 11,861,921 99.36% 29,967 11,891,888 99.61% 2018 12,416,357 12,342,648 2,824 12,345,471 99.43% Not Available * Included in the total tax levy is approximately $400,000 of market value homestead credit (MVHC) that the City will not be receiving. Due to State legislative actions to deal with the State budget deficit, the MVHC program was significantly reduced for the City. 140 CITY OF ANDOVER, MINNESOTA PRINCIPAL TAXPAYERS Table 8 Current Year and Nine Years Ago 2018 2009 Net Percentage of Net Percentage of Tax Total City Tax Total City Taxpayers Capacity Rank Tax Capacity Capacity Rank Tax Capacity Minnegasco, Inc. $ 285,866 1 0.91% $ 137,886 6 0.44% Connexus Energy 214,724 2 0.69% 226,488 l 0.73% Presbyterian Homes of Andover 205,841 3 0.66% 164,899 4 0.53% Wal-Mart 171,202 4 0.55% Great River Energy 162,940 6 0.52% 98,944 10 0.32% Andover Limited Partnership 162,540 7 0.52% 169,706 3 0.54% Target Corporation 161,250 5 0.52% 221,656 2 0.71% Andover Station 2016 LLC 119,060 8 0.38% DST Properties LLC 98,316 9 0.31% US Bank NA 85,128 10 0.27% 1 l6 LLC 141,966 5 0.46% Andover Station LLC 109,680 7 0.35% BDT Holdings LLC 109,416 8 0.35% Grey Oaks Inc. 100,798 9 0.32% Total $ 1,666,867 5.33% $ 1,481,439 4.75% Net Tax Capacity $ 31,287,043 $ 31,165,076 Source: Anoka County Property Tax Division 141 CITY OF ANDOVER, MINNESOTA ESTIMATED MARKET VALUES AND NEW CONSTRUCTION Last Ten Fiscal Years Table 9 Estimated Market Values New Construction Commercial / Commercial / Industrial Residential Year Industrial (1) Residential Total Permits Value Permits Value 2009 $ 248,129,500 $ 2,807,144,500 $ 3,055,274,000 11 $ 767,430 47 $ 9,246,347 2010 229,977,800 2,526,288,900 2,756,266,700 11 1,247,106 71 14,700,800 2011 199,728,200 2,305,897,900 2,505,626,100 24 11,461,453 58 11,803,000 2012 192,112,500 2,206,195,400 2,398,307,900 25 5,042,964 81 15,243,007 2013 174,971,400 2,141,898,900 2,316,870,300 15 9,249,466 98 20,351,892 2014 166,531,500 2,103,536,600 2,270,068,100 14 4,285,281 52 13,926,901 2015 173,717,700 2,435,950,500 2,609,668,200 16 2,513,609 74 19,631,775 2016 184,083,400 2,530,046,700 2,714,130,100 7 14,009,200 111 28,893,036 2017 196,837,900 2,610,055,500 2,806,893,400 - - 94 27,847,717 2018 207,569,200 2,908,606,300 3,116,175,500 2 2,860,000 60 19,703,857 Note: (1) Also includes agricultural, public utility, railroad operating property, and personal property. 142 CITY OF ANDOVER, MINNESOTA SPECIAL ASSESSMENT LEVIES AND COLLECTIONS Table 10 Last Ten Fiscal Years Note: (1) Only includes assessments certified to Anoka County. 143 Total Delinquent Collections Assessments Current Current Percent of Delinquent Total as a Percent of Outstanding as a Percent of Assessments Assessments Assessments Assessment Assessment Current Delinquent Current Year Due (1) Collected Collected Collections Collections Assessments Due Assessments Assessments Due 2009 $ 319,448 $ 332,739 104.16% $ 36,693 $ 369,432 115.65% $ 202,999 63.55% 2010 325,361 314,097 96.54% 61,247 375,344 115.36% 218,860 67.27% 2011 308,794 304,164 98.50% 5,112 309,276 100.16% 267,016 86.47% 2012 348,129 376,601 108.18% 25,087 401,688 115.38% 237,175 68.13% 2013 338,411 387,584 114.53% 168,941 556,525 164.45% 82,826 24.47% 2014 326,597 387,651 118.69% 3,788 391,439 119.85% 215,970 66.13% 2015 334,054 514,868 154.13% 4,003 518,871 155.33% 269,754 80.75% 2016 267,704 510,275 190.61% 2,153 512,429 191.42% 268,716 100.38% 2017 265,163 513,140 193.52% 212 513,352 193.60% 272,101 102.62% 2018 305,249 555,684 182.04% 412 556,096 182.18% 283,528 92.88% Note: (1) Only includes assessments certified to Anoka County. 143 CITY OF ANDOVER, MINNESOTA RATIO OF NET BONDED DEBT TO ASSESSED VALUE AND NET BONDED DEBT PER CAPITA Last Ten Fiscal Years Table 11 Notes: (1) Source: Metropolitan Council (2) Only includes debt supported by tax levy. 144 General Bonded Debt Outstanding (2) Gross Amount Net Percentage Net Bonded Fiscal Estimated Bonded Restricted For Bonded of Estimated Debt Year Population (1) Market Value Debt Debt Service Debt Market Value Per Capita 2009 31,298 $ 3,055,274,000 $ 39,690,000 $ (17,973,588) $ 21,716,412 0.71% $ 693.86 2010 30,598 2,756,266,700 40,026,000 (17,768,743) 22,257,257 0.81% 727.41 2011 30,847 2,505,626,100 39,096,000 (17,779,964) 21,316,036 0.85% 691.02 2012 31,125 2,398,307,900 40,444,000 (18,497,679) 21,946,321 0.92% 705.10 2013 31,392 2,316,870,300 37,460,000 (17,415,812) 20,044,188 0.87% 638.51 2014 31,574 2,270,068,100 21,035,000 (942,607) 20,092,393 0.89% 636.36 2015 31,704 2,611,399,200 19,330,000 (1,064,634) 18,265,366 0.70% 576.12 2016 32,335 2,714,130,100 18,080,000 (1,163,486) 16,916,514 0.62% 523.16 2017 32,470 2,806,893,400 16,280,000 (800,214) 15,479,786 0.55% 476.74 2018 32,620 3,116,175,500 24,864,000 (899,986) 23,964,014 0.77% 734.64 Notes: (1) Source: Metropolitan Council (2) Only includes debt supported by tax levy. 144 CITY OF ANDOVER, MINNESOTA COMPUTATION OF DIRECT AND OVERLAPPING DEBT December 31, 2018 Table 12 Notes: (l) Information obtained from Anoka County. (2) Overlapping governments are those that coincide with the geographical boundaries of the city. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of the City. This process recognizes that, when considering the City's ability to issue and repay long-term debt, the entire debt burden borne by the residents and businesses should be taken into account. However, this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt of each overlapping government. ECM Gross General Obligation Percentage Net Amount Bonded Debt Applicable Applicable Outstanding to City (2) to City Direct: City of Andover S 24,864,000 100.0000% S 24,864,000 Overlapping: Anoka County 82,535,000 (1) 9.4951% 7,836,781 ISD No. 1l Anoka -Hennepin 185,275,000 (1) 13.3380% 24,711,980 ISD No. 15 St. Francis 94,610,000 (1) 6.5039% 6,153,340 Metropolitan Council 185,340,000 (1) 0.8766% 1,624,690 Total overlapping debt 40,326,791 Total overlapping and direct debt S 65,190,791 Notes: (l) Information obtained from Anoka County. (2) Overlapping governments are those that coincide with the geographical boundaries of the city. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of the City. This process recognizes that, when considering the City's ability to issue and repay long-term debt, the entire debt burden borne by the residents and businesses should be taken into account. However, this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt of each overlapping government. ECM CITY OF ANDOVER, MINNESOTA COMPUTATION OF LEGAL DEBT MARGIN Last Ten Fiscal Years 146 2009 2010 2011 2012 Estimated Taxable Market Value $ 2,982,595,600 $ 2,710,514,800 $ 2,469,945,000 $ 2,202,135,356 Debt limitation: Debt limit percent 3% 3% 3% 3% Debt limit in dollars 89,477,868 81,315,444 74,098,350 66,064,061 Debt applicable to limit: Total bonded debt 65,175,000 59,671,000 55,361,000 49,144,000 Less: Nonapplicable debt G.O. water revenue bonds (15,330,000) (14,875,000) (14,400,000) (7,420,000) Special assessment bonds (2,450,000) (600,000) - - Tax increment bonds (2,515,000) (1,735,000) - - Permanent improvement revolving bonds (2,635,000) (1,480,000) (1,125,000) (760,000) State aid bonds (2,555,000) (955,000) (740,000) (520,000) Less: Cash and investments in related debt service funds (17,973,588) (17,768,743) (17,779,964) (18,497,679) Total debt applicable to limitation 21,716,412 22,257,257 21,316,036 21,946,321 Legal debt margin $ 67,761,456 $ 59,058,187 $ 52,782,314 $ 44,117,740 Total debt applicable to the limit as a percentage of debt limit 24.27% 27.37% 28.77% 33.22% 146 Table 13 2013 2014 2015 2016 2017 2018 D Z,IZS,J Yb,3J5 D L,U /1,7i1L,L7i1 D 2,4SJ,/1U,61L 3 L,JS Y,btfb,tf0/ a 2,633,4EU,13Y D 2,Y39,411,4/U 3% 3% 3% 3% 3% 3% 63,707,891 62,154,368 73,073,118 76,190,606 79,004,405 88,782,344 45,010,000 27,405,000 25,050,000 27,110,000 20,740,000 28,639,000 (6,875,000) (6,310,000) (5,720,000) (9,030,000) (4,460,000) (3,775,000) (385,000) - - - - - (290,000) (60,000) - - - - (17,415,812) (942,607) (1,191,519) (1,299,334) (943,862) (1,032,604) 20,044,188 20,092,393 18,138,481 16,780,666 15,336,138 23,831,396 $ 43,663,703 $ 42,061,975 $ 54,934,637 $ 59,409,940 $ 63,668,267 $ 64,950,948 31.46% 32.33% 24.82% 22.02% 19.41% 26.84% 147 This page intentionally left blank - 148 CITY OF ANDOVER, MINNESOTA PLEDGED -REVENUE COVERAGE Table 14 Last Ten Fiscal Years Water Revenue Bonds 2004 EDA Public Facility Lease Revenue Bond 01 & 2012 Abatement Bonds Community Water Enterprise Fund 0.63 2009 993,703 Fiscal Fiscal Operating Less: Operating Transfers Net Available Debt Service 0.39 Year Year Revenues Expenses (1) In (2) Revenue Principal Interest Coverage 2009 $ 2,127,676 $ 1,264,398 $ 165,643 $ 1,028,921 $ 375,000 $ 393,828 1.34 2010 2,077,305 1,249,420 89,191 917,076 455,000 384,713 1.09 2011 2,119,954 1,318,848 - 801,106 475,000 366,065 0.95 2012 2,572,560 1,592,417 7,134 987,277 490,000 214,933 1.40 2013 2,495,561 1,285,188 4,242 1,214,615 545,000 276,458 1.48 2014 2,347,763 1,320,552 20,737 1,047,948 565,000 254,715 1.28 2015 2,593,303 1,373,362 58,249 1,278,190 590,000 231,978 1.56 2016 2,575,920 1,535,224 85,096 1,125,792 615,000 208,122 1.37 2017 2,716,239 1,441,224 54,228 1,329,243 645,000 71,818 1.85 2018 3,061,920 1,448,248 114,850 1,728,522 685,000 85,770 2.24 2004 EDA Public Facility Lease Revenue Bond 01 & 2012 Abatement Bonds 2008 $ Community Center Special Revenue Fund Debt Service 0.63 2009 993,703 Fiscal Operating Less: Operating Net Available General Property Debt Service 110,822 0.39 Year Revenue Expenses Revenue Tax Revenue Principal Interest Coverage 2009 $ 1,422,614 $ 903,446 $ 519,168 $ 940,640 $ 390,000 $ 944,806 1.09 2010 1,351,069 882,364 468,705 885,349 405,000 930,684 1.01 2011 1,414,617 991,098 423,519 908,894 415,000 914,891 1.00 2012 1,430,874 1,011,186 419,688 1,091,430 435,000 897,456 1.13 2013 1,381,573 971,108 410,465 1,029,949 425,000 878,534 1.11 2014 1,462,169 1,058,467 403,702 924,057 790,000 820,054 0.82 2015 1,449,851 1,045,347 404,504 974,822 835,000 379,906 1.14 2016 1,428,771 1,048,452 380,319 979,038 845,000 371,506 1.12 2017 1,445,784 1,041,714 404,070 973,161 855,000 358,731 1.13 2018 1,490,157 1,045,141 445,016 970,085 870,000 341,481 1.17 Special Assessment and Permanent Improvement Revolvin¢ Bonds Fiscal Special Assessment Debt Service Year Revenue Principal Interest Coverage 2008 $ 1,184,928 $ 1,625,000 $ 243,340 0.63 2009 993,703 1,685,000 198,232 0.53 2010 1,210,641 3,005,000 110,822 0.39 2011 552,356 955,000 36,250 0.56 2012 268,116 365,000 18,850 0.70 2013 598,889 375,000 11,450 1.55 2014102,380 385,000 3,850 0.26 2015 126,628 No outstandin debt 2016 78,189 No outstanding debt 2017 228 No outstanding debt 2018 28,848 No outstanding debt Notes: Details regarding the City's outstanding debt can be found in the notes to the financial statements. (1) Operating expenses includes transfers out because the administrative allocation and replacement reserve transfer is built into the user fees. Operating expenses does not include interest and depreciation. (2) The transfer in is included because a portion of the trunk connection charge associated with adding additional users to the water system is designated to compensate prior years capital investment in water utility infrastructure and the treatment plant. (3) Half of the facility financed by these bonds is leased to the Greater Minneapolis YMCA, their lease payments started in 2008. Future YMCA lease payments will significantly reduce the City's obligation on debt service payments. 149 CITY OF ANDOVER, MINNESOTA OUTSTANDING DEBT BY TYPE Last Ten Fiscal Years City of Andover's Outstanding Debt Governmental activities Revenue bonds Abatement bonds Special assessment bands Tax increment bonds Certificates of indebtedness Capital improvement bonds Permanent improvement revolving bonds State aid bonds Referendum bonds Promissory note payable Total governmental activities Business -type activities G.O. revenue bonds Issuance premiums Total business -type activities Total outstanding debt Total outstanding debt as a percentage of personal income Total outstanding debt per capita 2009 2010 2011 2012 $ 35,495,000 $ 35,090,000 $ 34,675,000 $ 17,375,000 - - - 17,315,000 2,450,000 600,000 - - 2,515,000 1,735,000 - - 1,420,000 781,000 561,000 774,000 2,775,000 2,495,000 2,200,000 3,455,000 2,635,000 1,480,000 1,125,000 760,000 2,555,000 955,000 740,000 520,000 - 1,660,000 1,660,000 1,525,000 49,845,000 44,796,000 40,961,000 41,724,000 15,330,000 14,875,000 14,400,000 7,420,000 15,330,000 14,875,000 14,400,000 7,420,000 $ 65,175,000 $ 59,671,000 $ 55,361,000 $ 49,144,000 7.10% 6.65% 6.17% 5.28% $ 2,082 $ 1,950 $ 1,795 $ 1,579 150 Table 15 2013 2014 2015 2016 2017 2018 $ 16,925,000 $ - $ - $ - $ - $ - 16,995,000 16,675,000 15,840,000 14,995,000 14,140,000 13,270,000 680,000 2,140,000 1,915,000 2,125,000 1,330,000 939,000 1,470,000 970,000 - 470,000 - - 10,000,000 385,000 - - - - - 290,000 60,000 - - - - 1,390,000 1,250,000 1,105,000 960,000 810,000 655,000 983,593 786,874 590,155 393,436 196,717 - 39,118,593 21,881,874 19,920,155 18,473,436 16,476,717 24,864,000 6,875,000 6,310,000 5,720,000 9,030,000 4,460,000 3,775,000 - - - 81,006 67,690 54,374 6,875,000 6,310,000 5,720,000 9,111,006 4,527,690 3,829,374 $ 45,993,593 $ 28,191,874 $ 25,640,155 $ 27,584,442 $ 21,004,407 $ 28,693,374 4.84% 2.91% 2.57% 2.68% 1.96% 2.56% $ 1,465 $ 893 $ 809 $ 853 $ 647 $ 880 151 CITY OF ANDOVER, MINNESOTA DEMOGRAPHIC AND ECONOMIC STATISTICS Table 16 Last Ten Years Notes: (1) Estimates from Metropolitan Council (2) The personal income is calculated by taking the per capita income of Anoka County and multiplying it by the population for both the City and County. (3) Information from U.S. Census Bureau 152 City of Andover Anoka County Personal Personal Per Capita Unemployment Year Population (1) Income (2) Population (3) Income (2) Income (3) Percentage 2009 31,298 $ 917,375,678 331,582 $ 9,719,000,002 $ 29,311 8.5% 2010 30,598 897,408,742 335,308 9,834,248,332 29,329 7.1% 2011 30,847 896,999,913 330,844 9,620,612,676 29,079 5.8% 2012 31,125 930,450,750 336,414 10,056,760,116 29,894 5.9% 2013 31,692 960,235,908 339,534 10,287,540,666 30,299 5.0% 2014 31,874 976,842,478 341,864 10,477,106,008 30,647 4.2% 2015 31,704 997,851,696 342,500 10,779,845,000 31,474 3.6% 2016 32,335 1,027,444,625 345,957 10,992,783,675 31,775 3.8% 2017 32,470 1,073,165,970 348,357 11,513,547,207 33,051 3.5% 2018 32,620 1,086,246,000 350,357 11,666,888,100 33,300 2.8% Notes: (1) Estimates from Metropolitan Council (2) The personal income is calculated by taking the per capita income of Anoka County and multiplying it by the population for both the City and County. (3) Information from U.S. Census Bureau 152 CITY OF ANDOVER, MINNESOTA PRINCIPAL EMPLOYERS Current Year and Nine Years Ago Taxmwer Anoka Hennepin I.S.D. No. 1 I Walmart Fairview Andover Clinic Anoka County Sheriffs Office Kottk& Bus Service, Inc. Target GAF Materials Corp Anoka County Highway Department Bunker Hills Regional Park/Activity Center YMCA Columbia Park Medical Group Meadow Creek Christian School Festival Foods Farmstead at Andover City of Andover Total 2018 2,643 100.0% Source: Minnesota Department of Employment and Economic Development (1) Number of district employees that work in school buildings located within the City. 153 Table 17 Percentage of Total City Employees Rank Employment 574 l 31.9% 200 3 Percentage 167 4 of Total City Employees Rank Employment 928 (1) 1 35.0% 335 2 12.7% 300 3 11.4% 250 4 9.5% 225 5 8.4% 150 6 5.7% 150 7 5.7% 105 8 4.0% 100 9 3.8% 100 10 3.8% 2,643 100.0% Source: Minnesota Department of Employment and Economic Development (1) Number of district employees that work in school buildings located within the City. 153 Table 17 Percentage of Total City Employees Rank Employment 574 l 31.9% 200 3 11.1% 167 4 9.3% 0.0% 141 5 7.8% 237 2 13.2% 107 6 5.9% 100 7 5.6% 97 8 5.4% 94 9 5.2% 85 10 4.7% 1,802 100.0% This page intentionally left blank - 154 CITY OF ANDOVER, MINNESOTA FULL TIME EQUIVALENT EMPLOYEES Table 18 CITY GOVERNMENT EMPLOYEES BY FUNCTION/PROGRAM Last Ten Fiscal Years Function/Program 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Governmental: Administration 1.15 1.15 0.91 1.15 1.15 1.05 1.05 1.18 1.13 1.13 Human resources 0.02 0.02 0.02 0.02 0.02 0.03 0.03 0.03 0.03 0.03 City clerk 1.29 1.34 1.34 1.34 1.34 1.84 1.84 1.89 1.89 1.89 Elections 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.15 0.15 Financial administration 1.85 1.85 1.84 1.85 1.85 1.91 1.91 1.97 1.94 1.94 Information systems 0.91 0.91 0.91 0.91 0.91 0.91 0.91 0.91 0.91 0.91 Planning and zoning 3.70 3.70 3.76 3.70 3.70 3.90 3.90 4.00 4.03 4.03 Engineering 4.28 4.33 4.16 4.33 4.33 4.20 4.20 4.40 4.48 4.48 Facility Management 0.33 0.20 0.21 0.07 0.22 0.22 0.22 0.16 1.05 1.05 EDA general 0.90 0.85 0.78 0.85 0.85 0.35 0.35 0.10 0.05 0.05 LRRWMO 0.20 0.20 0.24 0.20 0.20 0.15 0.15 0.07 0.07 0.07 Risk management 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 Public Safety: Fire 3.10 3.10 3.10 3.10 3.10 3.10 3.10 3.21 3.21 3.21 Protective inspection 3.93 3.93 3.66 3.93 3.93 3.93 3.93 4.05 4.03 4.03 Emergency management 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 Public Works: Streets and highways 5.05 5.10 5.59 5.46 4.97 4.88 5.34 5.68 5.37 5.15 Snow and ice 2.45 2.45 2.57 2.03 3.44 3.95 1.98 2.23 1.83 2.55 Street signs 1.31 1.41 1.46 1.43 1.34 1.30 1.70 1.42 1.57 1.51 Natural Resource Preservation - - - - - - - 0.03 0.01 0.02 ROW managementlutility 0.50 0.20 0.16 0.20 0.20 0.20 0.20 0.08 0.08 0.08 Water 4.63 4.63 4.70 4.74 4.56 4.52 4.39 4.87 4.55 4.57 Sewer 3.38 3.38 3.23 3.17 3.49 3.06 3.36 2.91 2.82 3.33 Stomm sewer 2.55 2.55 2.87 2.54 2.23 2.25 2.50 2.39 2.94 2.40 Central equipment 2.87 2.90 2.91 2.91 2.91 2.81 3.10 3.07 3.31 3.25 Park & Recreation: Park and recreation 6.66 6.71 6.69 6.77 7.14 7.33 8.77 8.58 8.65 8.38 Community center 2.96 3.11 3.04 3.25 3.10 3.10 3.10 3.16 3.22 3.22 Recycling 1.23 1.23 0.96 1.30 0.77 0.76 0.72 0.79 1.03 0.92 55.50 55.50 55.36 55.50 56.00 56.00 57.00 57.43 58.50 58.50 Source: City Finance Departrnent Nate: Employees are allocated to various departments based on the functions that they perform. 155 CITY OF ANDOVER, MINNESOTA OPERATING INDICATORS BY FUNCTION/PROGRAM Last Ten Years Function/Program 2009 2010 2011 2012 2013 General government: Registered voters n/a 18,713 n/a 18,366 n/a Number of precincts n/a 10 n/a 10 n/a Public safety: Police: Number of calls for services 11,075 11,441 11,650 10,963 10,659 Number of traffic citations 2,848 1,926 2,000 2,202 2,480 Number of patrol hours 30,240 30,240 29,200 29,200 29,200 Fire: Fire responses 305 323 265 320 308 Emergency medical responses 754 722 764 816 863 Protective inspections: Inspections 3,716 2,860 3,074 3,872 3,766 Residential permits 42 71 58 81 98 Other permits 1,543 1,773 1,755 1,714 1,716 Public works: Streets and highways: Asphalt streets maintained (miles) 189 190 191 191 192 Gravel roads maintained (miles) 8 8 7 7 7 Cul-de-sacs and dead ends maintained 338 338 338 338 328 Parks and recreation: Number of City parks 66 47 50 49 50 Total acreage mowed 293 293 302 302 318 Ballfields maintained 28 28 28 28 28 Number of playgrounds 37 38 38 38 39 Soccer fields maintained 19 19 21 17 20 Trail maintained (miles) 35 35 35 33 35 Community center bookings (hrs): Fieldhouse 9,718 11,099 11,461 11,426 11,831 Ice arena 2,640 2,583 2,575 2,805 2,543 Water: New connections 145 56 78 38 108 Total customers 6,095 6,151 6,229 6,267 6,375 Annual consumption (thousands of gallons) 1,000,971 905,561 854,672 1,050,378 947,201 Sanitary Sewer: New connections 183 75 77 38 108 Total customers 6,983 7,058 7,135 7,173 7,281 Storm Sewer: Total customers 9,950 10,042 10,126 10,164 10,583 Storm sewer lines maintained (miles) 69 69 69 69 73 Source: Various City Departments 156 Table 19 2014 2015 2016 2017 2018 19,772 n/a 22,051 n/a 20,433 10 n/a 10 n/a 10 10,319 10,400 14,736 15,636 14,840 2,536 2,066 1,614 1,491 1,729 29,200 29,200 29,200 29,200 29,200 257 262 378 350 365 838 336 594 500 740 2,840 3,100 3,562 2,785 2,844 52 74 111 95 58 1,898 2,744 2,536 2,653 2,396 195 200 204 190 194 7 6 6 6 7 332 345 348 350 353 51 52 53 53 53 332 332 332 332 336 28 29 27 27 27 38 38 41 41 42 16 16 18 18 20 33 33 34 34 37 12,182 11,919 12,701 12,900 13,796 2,593 2,643 2,606 2,702 3,288 43 57 97 91 70 6,418 6,475 6,572 6,663 6,733 827,574 885,886 850,307 873,457 975,387 43 57 101 92 58 7,324 7,381 7,482 7,574 7,632 10,626 10,700 10,812 10,948 11,018 75 76 77 78 78 157 CITY OF ANDOVER, MINNESOTA CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM Last Ten Years Funtfion/Progmrn 2009 2010 2011 Public Safety: 2016 2017 Fire: 3 3 Stations 3 3 3 Fire vehicles 21 22 21 Protective inspections: 21 19 Vehicles 3 3 4 Public Works: 4 4 Streets and Highways: 4 4 Table 20 2012 2013 2014 2015 2016 2017 2018 3 3 3 3 3 3 3 21 20 21 19 20 18 19 4 4 4 4 4 4 4 Streets(miles) 189 190 191 191 192 Streetlights 1,215 1,218 1,225 1,231 1,231 Traffic signals 23 24 24 24 24 Parks and Recreation: 53 28 29 27 27 Parks 66 47 50 49 50 Ball fields 28 28 28 28 28 Soccerfields 19 19 21 17 20 Playgrounds 37 38 38 38 39 Trails (miles) 35 35 35 33 35 Community centers 1 l 1 l 1 Water: 6,475 6,635 6,663 6,733 95 Water treatment plants I l 1 l 1 Storage facilities 3 2 2 2 2 Water main (miles) 108 108 109 Ill Ill Connections 6,095 6,151 6,229 6,267 6,375 Sanitary sewer: Sewer main (miles) 91 93 93 93 94 Connections 6,983 7,058 7,135 7,173 7,281 Number of lift stations 9 9 9 9 9 Storm sewer: Sto. sewer lines (miles) 69 69 69 69 73 158 195 200 204 190 194 1,240 1,248 1,260 1,268 1,282 24 25 25 26 26 51 52 53 53 53 28 29 27 27 27 16 16 18 l8 20 38 38 41 41 42 33 33 34 34 37 1 1 1 1 I I 1 1 1 1 2 2 2 2 2 115 116 118 119 120 6,418 6,475 6,635 6,663 6,733 95 96 96 98 99 7,324 7,381 7,482 7,574 7,632 9 9 9 9 9 75 76 77 78 78 IV. OTHER FINANCIAL INFORMATION 159 CITY OF ANDOVER, MINNESOTA COMBINED SCHEDULE OF INDEBTEDNESS December 31, 2018 GOVERNMENTAL ACTIVITIES: Abatement Bonds: 2012C G.O. Abatement Bonds Certificates of Indebtedness: 2014A G.O. Equipment Certificates 2016A G.O. Equipment Certificates Total certificates of indebtedness Capital Improvement Bonds: 2018A G.O. Capital Improvement Plan Bonds Referendum Bonds: 2010A G.O. Open Space Referendum Bonds Total bonded indebtedness Promissory note payable Compensated absences payable Total governmental activities indebtedness BUSINESS -TYPE ACTIVITIES: General Obligation Revenue Bonds: 2009A G.O. Water Revenue Bonds 2016B G.O. Water Revenue Refunding Bonds Total general obligation revenue bonds Compensated absences payable Total business -type activities indebtedness Total City indebtedness 32,033,593 3/26/2009 2/1/2024 2.00-4.25% 1,025,000 12/7/2016 2/1/2023 2.00% 3,925,000 4,950,000 4,950,000 $ 36,983,593 160 Authorized Issue Maturity Interest and Date Date Rate Issue 12/27/2012 2/1/2031 1.00-3.00% $ 17,315,000 5/29/2014 2/1/2020 1.50-2.00% 1,555,000 2/19/2016 2/1/2021 1.90% 520,000 2,075,000 12/27/2018 2/1/2044 3.00-5.00% 10,000,000 2/18/2010 2/1/2022 2.00-3.12% 1,660,000 31,050,000 12/17/2013 11/15/2018 n/a 983,593 32,033,593 3/26/2009 2/1/2024 2.00-4.25% 1,025,000 12/7/2016 2/1/2023 2.00% 3,925,000 4,950,000 4,950,000 $ 36,983,593 160 Exhibit 1 Principal Payments Prior Current Outstanding 2019 Payment Years Year 12/31/18 Principal Interest Total $ 3,175,000 $ 870,000 $ 13,270,000 $ 885,000 $ 323,931 $ 1,208,931 745,000 265,000 545,000 270,000 8,200 278,200 126,000 394,000 129,000 6,261 135,261 745,000 391,000 939,000 399,000 14,461 413,461 10,000,000 - 212,963 212,963 850,000 155,000 655,000 160,000 17,508 177,508 4,770,000 1,416,000 24,864,000 1,444,000 568,863 2,012,863 786,876 196,717 - - - - 692,379 5,556,876 1,612,717 25,556,379 1,444,000 568,863 2,012,863 490,000 70,000 465,000 70,000 17,130 87,130 615,000 3,310,000 635,000 59,850 694,850 490,000 685,000 3,775,000 705,000 76,980 781,980 198,927 490,000 685,000 3,973,927 705,000 76,980 781,980 $ 6,046,876 $ 2,297,717 $ 29,530,306 $ 2,149,000 $ 645,843 $ 2,794,843 f[:il CITY OF ANDOVER, MINNESOTA SCHEDULE OF TAX CAPACITY RATES AND LEVIES Tax capacity values Captured tax increment value Fiscal disparities - contribution Local taxable value Fiscal disparities - distribution Adjusted tax capacity General Revenue Levy: General Fund Capital Equipment/Projects Facility Maintenance Reserve Parks Projects Road and Bridge Pedestrian Trail Maintenance Total General Revenue Levy Debt Service Levy Exhibit 2 Taxes Payable 2019 2018 $ 32,975,265 $ 31,287,043 (101,030) (94,415) (1,269,524) (1,184,724) 275,000 800,000 31,604,711 30,007,904 4,966,404 4,807,372 $ 36,571,115 _L_34,815,276 2019 2018 Certified Tax Capacity Certified Tax Capacity Levy Rate Levy Rate $ 8,945,970 $ 8,643,256 275,000 800,000 355,000 50,000 15,000 15,000 1,254,788 1,169,014 102,000 100,000 10,947,758 29.830% 10,777,270 30.607% 2012C G.O. Abatement Bonds 969,378 40,000 2014A G.O. Equipment Certificate 294,525 34.952% 2016A G.O. Equipment Certificate 142,837 $ 12,416,357 2018A G.O. Capital Improvement Plan Bonds 525,000 Total Debt Service Levy 1,931,740 5.480% Lower Rum River Watershed 40,000 0.311% Total 12,919,498 35.621% Voter -Approved Open Space Referendum - MV 183,989 0.00572% $ 13,103,487 162 972,055 294,945 143,310 1,410,310 4.020% 40,000 0.325% 12,227,580 34.952% 188,777 0.00616% $ 12,416,357 CITY OF ANDOVER, MINNESOTA SCHEDULE OF DEFERRED TAX LEVIES Exhibit 3 GENERAL OBLIGATION BONDS December 31, 2018 163 Capital Open Space Abatement Certificates of Certificates of Improvement Referendum Total Taxes Bonds Indebtedness Indebtedness Plan Bonds Bonds Deferred Tax Payable 2012C 2014A 2016A 2018A 2010A Levies 2019 $ 969,378 $ 294,525 $ 142,837 $ 525,000 $ 183,989 $ 2,115,729 2020 1,282,975 - 143,373 478,903 184,199 2,089,450 2021 1,284,550 - - 501,644 184,078 1,970,272 2022 1,280,455 - - 662,819 - 1,943,274 2023 1,285,285 - - 658,094 - 1,943,379 2024 1,283,015 - - 658,094 - 1,941,109 2025 1,282,883 - - 662,557 - 1,945,440 2026 1,280,744 - - 660,719 - 1,941,463 2027 1,281,781 - - 663,344 - 1,945,125 2028 1,291,027 - - 662,189 - 1,953,216 2029 1,292,340 - - 660,719 - 1,953,059 2030 1,297,800 - - 658,934 - 1,956,734 2031 - - - 662,084 - 662,084 2032 - - - 659,512 - 659,512 2033 - - - 661,874 - 661,874 2034 - - - 658,514 - 658,514 2035 - - - 659,498 - 659,498 2036 - - - 659,380 - 659,380 2037 - - - 658,750 - 658,750 2038 - - - 662,858 - 662,858 2039 - - - 660,358 - 660,358 2040 - - - 662,576 - 662,576 2041 - - - 663,364 - 663,364 2042 - - - 658,166 - 658,166 2043 - - 662,918 - 662,918 $ 15,112,233 $ 294,525 $ 286,210 $ 16,042,868 $ 552,266 $ 32,288,102 163 CITY OF ANDOVER, MINNESOTA SCHEDULE OF FUND TRANSFERS December 31,2018 Exhibit 4 Capital Equipment Reserve CPF Transfer Transfer Reimburse Prior Year Expenditures Total Capital Projects Funds In Out General Fund Water EF $ 90,700 $ - General Fund Admin Allocation Sewer EF 70,012 - General Fund Admin Allocation Storm Sewer EF 17,846 - General Fund Admin Allocation Trail and Transportation CPF - 230,000 Fond Trail Projects Total General Fund 178,558 230,000 Special Revenue Funds (SRF) - 70,012 General Fund Admin Allocation Community Center SRF 400,000 Replacement Reserve 2012C GO Abatement Bonds DSF 300,000 Debt Service Allocation Right of Way Management / Utility SRF Road and Bridge CPF - 5,300 Roadway Degredation Total Special Revenue Funds - 305,300 Debt Service Allocation Debt Service Funds (DSF) 41,346 2012C GO Abatement Bonds DSF 114,850 602,058 Community Center SRF 300,000 - Debt Service Allocation Capital Protects Funds (CPF) Water Trunk CPF - 11,071 Equipment Purchase Water EF $ 1,294,845 114,850 Debt Service Allocation Sewer Trunk CPF Sewer EF 400,000 Replacement Reserve Road and Bridge CPF Right of Way Management / Utility SRF 5,300 Roadway Degredation Trail and Transportation CPF General Fund 230,000 Fund Trail Projects Capital Equipment Reserve CPF 2018A GO Capital Improvement Plan Bonds CPF 31,566 - Reimburse Prior Year Expenditures Storm Sewer EF 23,500 Debt Service Allocation Central Equipment Maintenance ISF 11,071 - Equipment Purchase 6L137 2018A GO Capital Improvement Plan Bonds CPF Capital Equipment Reserve CPF - 31,566 Reimburse Prior Year Expenditures Total Capital Projects Funds 701,437 146,416 Enterprise Funds (EF) Water EF Water Trunk CPF 114,850 - Debt Service Allocation General Fwd 90,700 General Fund Admin Allocation 114,850 90,700 Sewer EF General Fwd - 70,012 General Fund Admin Allocation Sewer Trunk CPF 400,000 Replacement Reserve 470,012 Storm Sewer EF General Food - 17,846 General Fund Admin Allocation Capital Equipment Reserve CPF 23,500 Debt Service Allocation 41,346 Total Enterprise Funds 114,850 602,058 Internal Service Funds (ISF) Central Equipment Maintenance ISF Capital Equipment Reserve CPF - 11,071 Equipment Purchase Total All Funds $ 1,294,845 $ 1,294,845 164 N66WF ,,Y. D1- 1685 CROSSTOWN BOULEVARD N.W. • ANDOVER, MINNESOTA 55304 • (763) 755-5100 FAX (763) 755-8923 • WWW.ANDOVERMN.GOV TO: CC: FROM: SUBJECT: DATE: Honorable Mayor and Councilmembo>g Jim Dickinson, City Administrator Joe Janish, Community Development Stephanie L. Hanson, City Planner Consider Rezoning Ordinance —1049 Andover Blvd NW - Mark Smith - Planning May 21, 2019 INTRODUCTION The City Council is requested to review the proposed request to rezone the parcel located at 1049 Andover Blvd NW from R-1 Single Family Rural to R-4 Single Family Urban as requested by Mark Smith. On May 7, 2019, the Catchers Creek West preliminary plat was approved by City Council with a condition that the property must be rezoned to R-4 Single Family Urban. DISCUSSION As with all rezonings, the City shall find one of the two following findings that are provided by state statute: • The original zoning was in error. • The character of the area or times and conditions have changed to such an extent to warrant the rezoning. The property is located within the Metropolitan Urban Service Area (MUSA) and within the current stage of sewer expansion. Times and conditions have changed with the extension of municipal sewer and water into this area of the city. The Andover Comprehensive Plan has the property guided as URL — Urban Residential Low. This land use is for properties within the MUSA guided for urban development. It has been requested by the property owner to rezone so the land can be developed into urban residential lots for the proposed development known as Catcher's Creek West. Planning and Zoning Commission Recommendation A public hearing was held on May 14, 2019. There were no public comments and there was no discussion among the Commissioners. Commission approved the request on a 6 — 0 vote (I absent). ACTION REQUESTED The City Council is asked to consider the rezoning and the recommendation of the Planning and Zoning Commission since the property is located within the MUSA, water and sewer are available to the property, and the request is in harmony with the Andover Comprehensive Plan. Attachments Ordinance Amendment Location Map Parcel to be Rezoned Map Approved Preliminary Plat Catcher's Creek West Cc: Mark Smith, 2120 Otter Lake Dr, Lino Lakes, MN 55110 CITY OF ANDOVER COUNTY OF ANOKA STATE OF MINNESOTA ORDINANCE XXX AN ORDINANCE AMENDING CITY CODE TITLE 12-3-4, ZONING DISTRICT MAP OF THE CITY OF ANDOVER. THE CITY COUNCIL OF THE CITY OF ANDOVER HEREBY ORDAINS: City Code 12-3-4, The Zoning District Map of the City of Andover is hereby amended as follows: 1. Rezone land from R-1, Single Family Rural Residential to R-4, Single Family Urban Residential on approximately 5 acres, more specifically legally described as: THAT PRT OF SW 1/4 OF NE1/4 OF SEC 26 TWP 32 RGE 24 DESC AS FOL, COM AT SW COR OF SD 1/4 1/4, TH E ALG S LINE THEREOF TO A PT 479 FT W OF C/L OF BN R/R R/W AKA POB, TH CONT E ALG SD S LINE TO A PT 100FT W OF SD R/R C/L, TH N PRLL/W SD R/R C/L 550 FT, TH W PRLL/W SD S LINE TO INTER/W A LINE PRLL/W & 479 FT W OF SD R/R C/L, TH S PRLL/W SD R/R C/L 550 FT TO POB, EX RD, SUBJ TO EASE OF REC, ANOKA COUNTY MINNESOTA PIN 26-32-24-13-0002 The findings for the rezoning are that the property is located within the Metropolitan Urban Service Area and also within the current stage of sewer expansion. Times and conditions have changed with the extension of municipal sewer and water into this area of the City. It is now appropriate to rezone the property to Single Family Urban Residential (R-4) at the request of the property owner to allow the property to utilize the available municipal sewer and water. 3. All other sections of the Zoning Ordinance shall remain as written and adopted by the City Council of the City of Andover. Adopted by the City Council of the City of Andover on this 21st day of May 2019. CITY OF ANDOVER ATTEST: Michelle Harmer, City Clerk Julie Trude, Mayor WOVER Andover General Mapping Map 1380 1295 _ 14820 930 880 ;, \ /1269 14760 147:55 i 14700 14701 1465:5 885 14650 4 ). 1, 950 890 935 a � q _ ei 890 C� 14386 14376 ]1366 11.Si7 I "16 14: h7 1 4:327 113-16 965 11:338 9-05 9:35 i95fi� 915 1-128(1 946 905 112W3 926 12 89-1 x(+1:. (i - reuse of this data. m ct Og J0 0W LL w0 aW a0 N W It - --- - - - - - - - ------ ------ - - -------------—-CATCHERS CREEK : I ------------------_ _ m,w •,. WEST ea :. C R Trf E R R R T .? .0 .. 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CATCHERS CREEK WEST 4CiYYdwn Qul•� w„�� a i RB Gr havenNrry PRELIMINARY PLAT Sof 'J McCain) ""w w ° _u....: ma, u white BearTownship, MN 55137 APPROVED PRELIMINARY PLAT CATCHERS CREEK WEST I 1685 CROSSTOWN BOULEVARD N.W. • ANDOVER, MINNESOTA 55304 • (763) 755-5100 FAX (763) 755-8923 • WWW.ANDOVERMN.GOV TO: Honorable Mayor and Councilme CC: Jim Dickinson, City Administrator Joe Janish, Community Developmen ire FROM: Stephanie L. Hanson, City Planner SUBJECT: Consider Rezoning Ordinance — 14328 & 14329 Butternut St NW — Jan Thomas - planning DATE: May 21, 2019 INTRODUCTION The City Council is requested to review the proposed request to rezone the parcels located at 14328 & 14329 Butternut St NW from R-1 Single Family Rural to R-4 Single Family Urban as requested by Jan Thomas. DISCUSSION As with all rezonings, the City shall find one of the two following findings that are provided by state statute: The original zoning was in error. The character of the area or times and conditions have changed to such an extent to warrant the rezoning. The property is located within the Metropolitan Urban Service Area (MUSA) and also within the current stage of sewer expansion. Times and conditions have changed with the extension of municipal sewer and water into this area of the city. The Andover Comprehensive Plan has the properties guided as URL — Urban Residential Low; which contains properties within the MUSA currently zoned rural but guided for urban development. It has been requested by the property owner to rezone the properties so the land can be developed into urban residential lots for the proposed development known as Shadowbrook North. Planning and Zoning Commission Recommendation A public hearing was held on May 14, 2019. There were no public comments and there was no discussion among the Commissioners. Commission approved the request on a 6 — 0 vote (1 absent). ACTION REQUESTED The City Council is asked to consider the rezoning and the recommendation of the Planning and Zoning Commission since the property is located within the MUSA, water and sewer are available to the property, and the request is in harmony with the Andover Comprehensive Plan. Attachments Ordinance Amendment Location of Parcels to be Rezoned Cc: Jan Thomas, 14329 Butternut St NW, Andover, MN 55304 CITY OF ANDOVER COUNTY OF ANOKA STATE OF MINNESOTA 14:1I►:.► .A.. AN ORDINANCE AMENDING CITY CODE TITLE 12-3-4, ZONING DISTRICT MAP OF THE CITY OF ANDOVER. �LIyY�'LK�I�h[yI1L�]�IYhL _ • : ►1� � :. � : � : 1► City Code 12-3-4, The Zoning District Map of the City of Andover is hereby amended as follows: 1. Rezone land from R-1, Single Family Rural Residential to R-4, Single Family Urban Residential on approximately 6.6 acres, more specifically legally described as: LOT 6 AUD SUB NO 141, EX N 160 FT THEREOF, EX RD, SUBJ TO EASE OF REC, PIN 25-32-24-41-0005 ANOKA COUNTY MINNESOTA; and THAT PRT OF LOT 8 AUD SUB NO 141 LYG SLY OF N 673.01 FT THEREOF, EX PRTS PLATTED AS SHADOWBROOK 3RD ADD & SHADOWBROOK 5TH ADD, EX RD, SUBJ TO EASE OF REC, PIN 26-32-24-13-0002 ANOKA COUNTY MINNESOTA. 2. The findings for the rezoning are that the property is located within the Metropolitan Urban Service Area and also within the current stage of sewer expansion. Times and conditions have changed with the extension of municipal sewer and water into this area of the City. It is now appropriate to rezone the property to Single Family Urban Residential (R-4) at the request of the property owner to allow the properties to utilize the available municipal sewer and water. 3. All other sections of the Zoning Ordinance shall remain as written and adopted by the City Council of the City of Andover. Adopted by the City Council of the City of Andover on this 21 st day of May 2019. CITY OF ANDOVER ATTEST: Michelle Harmer, City Clerk Julie Trude, Mayor C I T Y O NDOVERV Incorporated 1974 Location M a ' `" Map �: L N aio iss o aio Frei Map Date: Jun 2018 X: - p LOCATION OF PARCEL TO BE REZONED FROM R1 TO R4 1685 CROSSTOWN BOULEVARD N.W. • ANDOVER, MINNESOTA 55304 • (763) 755-5100 FAX (763) 755-8923 • WWW.ANDOVERMN.GOV TO: Honorable Mayor and Councilme bers CC: Jim Dickinson, City Administrat Joe Janish, Community Developme Dire r r FROM: Stephanie L. Hanson, City Planner SUBJECT: Consider the Preliminary Plat — Shadowbrook North —14328 & 14329 Butternut St NW — Jan Thomas DATE: May 21, 2019 INTRODUCTION The City Council is asked to consider the Preliminary Plat for Shadowbrook North. The proposed plat contains 14 urban residential lots as proposed by Jan Thomas. It is located south of Catcher's Creek East. DISCUSSION Conformance with Local Plans and Ordinances 1. The property is located in the Metropolitan Urban Service Area (MUSA). 2. The properties are currently zoned R-1, Single Family Rural Residential. Rezoning to R- 4, Single Family Urban Residential will be required for the plat to move forward. Street Access The Butternut St NW access off Andover Blvd will be eliminated as part of the Catcher's Creek East development. University Ave NW will be extended to the south. Access to the development from Andover Blvd will be through Catchers Creek East plat; via University Ave NW. Lots Each of the 14 lots meet the minimum lot width, depth and area requirements of the R-4 Zoning District. Minimum lot size requirements are as follows: Lot size: Lot width: Corner Lot Width: Lot depth: 11,400 square feet 80 feet 90 feet 130 feet Sewer and Water Access Water and sewer for this development will be obtained from the south. Coon Creek Watershed District (CCWD) The CCWD completed the review of the preliminary plat. Comments have been attached for your review. The applicant will be required to satisfactorily address all CCWD comments. There are floodways and floodplains that will be impacted. The developer submitted a Letter of Map Revision (LOMR) to FEMA. The LOMR is to revise the FEMA floodway boundary based upon more accurate information from LiDAR contour data and Atlas 14 stormwater modeling. Also, the developer is proposing to fill within the floodplain. Filling a portion of the floodplain to create buildable lots and meet City code requirements requires a Letter of Map Amendment (LOMA) from FEMA. The floodplain volume filled will be required to be mitigated elsewhere on the site. This will be addressed as part of the approved grading plan by the City Engineer and CCWD. Staff is recommending that a condition of the final plat is to allow the plat to be recorded but building permits will not be issued on lots impacted with the aforementioned LOMR and LOMA until formally approved by FEMA. In addition, grading will not be allowed within the current FEMA Floodway boundary until the LOMR is approved. Coordination with other Agencies The developer and/or owner are responsible to obtain all necessary permits (Minnesota Department of Natural Resources, U.S. Army Corp of Engineers, Coon Creek Watershed District, Minnesota Pollution Control Agency, LGU and any other agency that may have an interest in the site). Initial contact shall be made with the City Engineering Department regarding this item. Trails The Andover Comprehensive Plan shows regional trails along Coon Creek and along Andover Boulevard. Construction of a trail along the creek may be challenging due to the location of wetland and floodplain. However, trails can be built within floodplains, and any wetland impacts would need to be mitigated. Grading of a bench for the future trail has been completed within the Catcher's Creek plats to the west and is also proposed as a part of this project. It is important to note that the trail along Coon Creek would be a regional trail paid by the City's trail fund and/or potential MNDNR grant funds. A 100 -foot trail easement is required along Coon Creek (which overlaps the 100' ditch easement). In the future, a bridge crossing will be constructed to connect to the existing path in the Shadowbrook development to the south. A trail will then be constructed on the north side of Coon Creek, as shown on the attached proposed regional trail plan. Park and Recreation Commission Recommendation The Park and Recreation Commission reviewed the preliminary plat at their November 15, 2018 meeting. A recommendation of a cash contribution in lieu of land was made. Planning and Zoning Commission Recommendation On May 14, 2019, the Commission held a public hearing. There were no public comments. The Commission had a brief discussion about the existing home that will remain on the property, access to the development, and length of the cul-de-sac. The Commission recommended approval on a 6 — 0 vote (1 absent). 2 ACTION REQUESTED The City Council is asked to consider the preliminary plat and the recommendation of the Planning and Zoning Commission. Attachments Draft Resolution of Approval Location Map Engineering Comments, dated May 8, 2019 Coon Creek Watershed Comments, dated April 9, 2019 Park & Recreation Commission Meeting Minutes, dated November 15, 2018 Preliminary Plat Plan Set Proposed Regional Trails Plan Cc: Jan Thomas, 14329 Butternut St NW, Andover, MN 55304 CITY OF ANDOVER COUNTY OF ANOKA STATE OF MINNESOTA RES. NO XXX A RESOLUTION APPROVING THE PRELIMINARY PLAT OF "SHADOWBROOK NORTH" FOR PROPERTY LEGALLY DESCRIBED AS; LOT 6 AUD SUB NO 141, EX N 160 FT THEREOF, EX RD, SUBJ TO EASE OF REC, PIN 25-32-24-41-0005 ANOKA COUNTY MINNESOTA; and THAT PRT OF LOT 8 AUD SUB NO 141 LYG SLY OF N 673.01 FT THEREOF, EX PRTS PLATTED AS SHADOWBROOK 3RD ADD & SHADOWBROOK 5TH ADD, EX RD, SUBJ TO EASE OF REC, PIN 26-32-24-13-0002 ANOKA COUNTY MINNESOTA. WHEREAS, Jan Thomas requested approval of a preliminary plat for Shadowbrook North; and WHEREAS, the Andover Review Committee has reviewed the preliminary plat; and WHEREAS, pursuant to published and mailed notice thereof, the Planning and Zoning Commission has conducted a public hearing on said plat; and WHEREAS, as a result of such public hearing, the Planning and Zoning Commission recommends approval of the preliminary plat to the City Council. NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of Andover hereby agrees with the recommendation of the Planning and Zoning Commission and approves the Preliminary Plat of Shadowbrook North with the following conditions: 1. Park and trail dedication as recommended by the Park and Recreation Commission at the November 15, 2018 meeting. 2. City of Andover staff comments dated May 8, 2019 and Coon Creek Watershed District comments dated April 9, 2019 shall be satisfactorily addressed prior to any grading of the site. The Andover Engineering Department will determine when all items have been addressed. 3. The applicant shall be responsible for the cost of construction of all improvements proposed as a part of the preliminary plat. 4. Approval is contingent upon the applicant providing public easements of sufficient size to allow construction of public streets, sanitary sewer and water utilities to serve the plat in compliance with the City Code. 5. No building permits will be issued until the final plat has been recorded with Anoka County and the Federal Emergency Management Agency (FEMA) approves the requests for a Letter of Map Amendment (LOMA) and Letter of Map Revision (LOMR) on the lots impacted by the floodplain fill and floodway revisions. 6. Prior to final plat recording at Anoka County, a development agreement acceptable to the City Attorney must be executed by the Developer. 7. A one hundred (100) foot trail easement along the north side of Coon Creek shall be shown on the preliminary plat; which will be recorded as a separate easement document with the final plat. 8. Separate easement documents will be required for each proposed vehicle maintenance access to be recorded with the final plat. 9. Rezoning of the parcels from RI to R4 shall be approved prior to the approval of the final plat. Adopted by the City Council of the City of Andover this 21st day of May 2019. CITY OF ANDOVER ATTEST: Michelle Harmer, City Clerk Julie Trude, Mayor AN.JA.IA. I ANA✓AI hANN NI, hAAN Date Created: May 08, 2019 Disclaimer: The provider makes no representation or warranties with respect to the reuse of this data. Location Map 1685 CROSSTOWN BOULEVARD N.W. • ANDOVER, MINNESOTA 55304 • (763) 755-5100 42 FAX (763) 755-8923 • WWW.ANDOVERMN.GOV r MEMOXAMDOM E N TO: Stephanie Hanson, City Planner 00 FROM: David Berkowitz, Director of Public Works/City Engineer T Jason Law, Asst. City Engineer DATE: May 8, 2019 •9 16 REFERENCE: Shadowbrook North/Grading, Drainage & Erosion Control Plan/Review #2 C: W The following comments have vet to be completed regarding Review #2: 220. Separate recordable documents will be required for the Vehicle Maintenance Accesses and Trail Easements. Acknowledged. Comment kept for tracking purposes. The following comments are regarding Review #3: 301. In talking to the Coon Creek Watershed District, they are reviewing a revised plan dated April 15, 2019. The plan submitted to the City does not include this revision date. Make sure for future submittals that the City and CCWD are reviewing the most current set of plans. Provide copy of CCWD approval once received. 302. Sheet 3 and all applicable sheets: Revise entire 100' easement along southern edge of plat to be "Ditch, Trail and Drainage and Utility Easement." This will be consistent with the plat east of this project and future project to the west. 303. Sheet 5: Revise pipe grade from CBMH 111 to STMH 110 so flow velocity is less than 10 ft/s. Show the pipe from STHM 110 to FES (it's covered by text block). 304. Sheet 5: Add note to Sanitary MH 1 "Construct Outside Drop." 305. Sheet 6: For Pond 100, tie the 880 contour in with the proposed grading for Catcher's Creek East. 306. Sheet 6: In the lot tabulation, remove "Mottled Soil" from the header description. Correct Lowest Opening Elevation for Lot 11, Block 1 to 886.5. Revise Low Floor Elevations for Lots 6-11 to 883.7, which is 3' above the Highest Anticipated Water Level. 307. Sheet 6: Add spot elevations at 880.7 on maintenance access/future trail west of Basin 200. 308. All applicable sheets: Developer is in the process of revising the FEMA Floodway Boundary. No grading work shall take place within 100' of the existing FEMA Floodway boundary until formal approval is received from FEMA for the revision. Developer shall also complete LOMR to revise the Floodplain boundary through FEMA. Provide a copy of approvals from FEMA to the City. 309. Sheet 10: Add Detail 306A for Sanitary Sewer Outside Drop. 310. Sheet 10: Include information from City Detail 418E for grate information. Revise structure to 60" diameter as there is a weir wall included in the current design. 311. Provide separate Lot Tabulation on 8.5x11 paper with final approved grading plan. 312. Additional comments pending further review. The following comments are regarding the Hydrology Report Review #3: 1. Revise pipe grade between CBMH 111 and STMH 110 so velocity is less 10 ft/s. 2. Proposed discharge rates from the project shall be less than or equal to proposed discharge rates. For existing models, the low areas can be started assuming there is some water in the low areas, similar to proposed conditions pond models are started at the outlet elevations. Adjust models and update Table 2 "Discharge Comparison" accordingly. 3. In Section 2.2, clarify. that discharge going to the northeast is incorporated into rate control calculations from the Catcher's Creek East plat. 4. Section 2.3 of Report: Why not increase depth of water in infiltration shelf (currently only 0.5')? That would likely help reduce proposed runoff rates and meet Qpost < Qpre. 5. For Pond 100, correct the pipe length and slope so it matches the proposed plans. 6. Additional comments pending further review. Note: It is a requirement that the Developer respond to each of these items in writing (—et digital copy from City and type responses below original comment) when re -submitting the revised plat to the City. If you have any questions, feel free to contact Jason Law, Assistant City Engineer at (763) 767-5130 or David Berkowitz, Director of Public Works/City Engineer at (763) 767-5133. 2 C O O N C R E E K W A T E R $ H E D D I 5 T R 1 C WV 12307 Central Avenue Northeast • Suite 700 - Blaine • Minnesota 6645 NOTICE OF PERMIT APPLICATION STATUS Project: Shadowbrook North Date: April 9, 2019 Applicant: Jan Thomas 2115 North 3'd Ave. Anoka, MN 55303 Permit Application #: 18-158 Location: South end of Butternut St. NW, South of Andover Blvd., Andover, MN At their meeting on March 25, 2019, the Board of Managers of the Coon Creek Watershed District tabled the above referenced project with 7 stipulations: Revised plans were received and reviewed as indicated below. 1. Construction Plan set (11 sheets); by Carlson McCain, dated 3/27/19, received 3/27/19. 2. Permit Application Status Response to comments, received 3/27/19 3. DNR NHIS Response, Received 4/1/19. The following 6 stipulations remain: This is NOT a permit. TQQTT4Z1P"1V1 VPT%Tq- ISSUE NEED Escrows: $2,000 + (6.2 ac * $500/ac) = 1. Receipt of escrows. $5,100 Floodplain: The proposed fill may be in 2. Provide the updated floodway line a FEMA floodway as indicated by the on plans once LOMR is complete. effective FIRM 27003CO307E (effective 12/16/15). Noted that LOMR is being 3. Any fill within floodway will need completed. to have an accompanying no rise analysis on the ditch. The no rise analysis will need to be approved by the MnDNR and the City of Andover. Maintenance: A maintenance agreement has not been 4. Provide an O&M Agreement that executed for the privately -owned meets District requirements. filtration basins. C O O N C R E E K W A T E R $ H E D D i 5 T R I C T 12301 Central Avenue Northeast - Suite )00 . Blaine • Mlnnesata 55434 Note: Please respond to each of these items in writing when resubmitting the revised plans to the District. Resubmittals must include two hard copies and an electronic version. Please submit written responses below the original typed comments using extra sheets as necessary, addressing comments from the District. If you have any questions, feel free to contact Matt Danzl at (763) 755-0975. Pursuant to Coon Creek rule 7.3 deficiencies must be addressed and resubmitted within 60 days. Failure to so shall be deemed a withdrawal of the permit application. Regular Andover Park & Recreation Commission Meeting Minutes—November 15, 2018 Page 2 Tuesdays, and Thursdays from 4-8:30 p.m. at the City Hall Outdoor Hockey Rink Complex, Prairie Knoll Park, and Crooked Lake School rinks. The City will provide a warming house attendant on all other days of the week for these locations. At Hawkridge Park, the City will need to provide a warming house attendant seven days a week throughout the season. Chair Lindahl stated that there are two rinks that are open for general use throughout the evenings for the duration of the season for recreational skating. Motion by Butler, seconded by Widmyer, to approve the 2018-2019 hockey rink schedule as presented. Motion carried on a 6 -ayes, 0 -nays, 1 -absent (Perra) vote. CONSIDER SI-IADO"ROOK NORTH PRELIMINARY PLAT / PARK i DEDICATIONREQUIREMENTS Mr. Haas explained this item is in regard to reviewing and determining the park dedication requirements for the Shadowbrook North preliminary plat of 14 lots. He noted a copy of the preliminary plat had been provided for the Commission's review. This plat is currently under review by staff. Mr. Haas stated it is recommended that no additional park land be required in this case since there is an existing park nearby called Hickory Meadows, which is just to the northwest of the proposed development. Therefore, staff is recommending cash in lieu of land. Mr. Haas stated staff is also recommending that trail easements be dedicated as part of the platting process to allow for the continuation of the trail currently located on the south side of Coon Creek to extend north across Coon Creek, which will then extend to the north to the proposed cul-de-sac and ultimately extend west as part of the regional trail system along the north side of Coon Creek. He referenced the trail comprehensive plan that was provided for the Commission's review and identifies a future trail along Coon Creek. Chair Lindahl asked if there are projections on the bridge. Mr. Haas replied that once the City obtains the necessary trail easements for the property to the west, this would be a good candidate for a MNDNR grant. Commissioner Butler asked if 144th Avenue NW street connection would ultimately be extended to the west from Catchers Creek East to Hickory Meadows development and Mr. Haas responded with a yes. Mr. Haas confirmed that this street connection would provide another option for residents to have access to Hickory Meadows Park. Motion by Widmyer, seconded by Marinello, to recommend the City Council require cash in lieu of land and dedication of trail easements to allow for the continuation of the trail I Regular Andover Park & Recreation Commission Meeting Minutes —November 15, 2018 Page 3 currently located on the south side of Coon Creek to extend north across Coon Creek for the Shadowbrook North plat. Motion carried on a 6 -ayes, 0 -nays, 1 -absent (Perra) vote. CONSIDER REQUEST BY ANDOVER ATHLETIC ASSOCL4TION / 18-42 / SUNSHINE PARK B UILDING MODIFICATIONS/ CONFERENCE ROOM son Strasser, representing the Andover Athletic Association (AAA), stated that they have con ucted the garage at Sunshine Park and it turned out well and is a natural fit. He stated that th e was a change from a cage with garage door to a completely finished garage, which a ed a lot of value to building. He stated that the cost was substantially over budget for a total st of $12,000. He proposed that the City and AAA cost -share the overage amount in the , ount of $2,090. Chair Lindahl statX that the City was not aware of the changes and updates and that was a decision made by . He stated that the intent was to have a storage area for baseball equipment. Commissioner Butler askedt�e reason the project was completed in the first place. Mr. Strasser stated that the City eh c ed a requirement that storage pods by City Code were no longer allowed in parks. Commissioner Butler asked the cost tha\AAA has contributed to the fencing project. Mr. Strasser stated that AAA has contribute $13,000 for the fencing. Commissioner Butler stated that he will be recus g himself as he is a member of AAA but believes that this is a reasonable request for a ership between the City and the organization. Commissioner Marinello asked who made the decision toVake the changes. Mr: Strasser replied that the additional costs were due to ch es recommended by City staff and electric changes that were then required because of the esign changes. Chair Lindahl noted that the building was originally built by volunt r labor at no cost to the City in the early to mid-1990s. He recognized that electric codes ave changed since that time and the building was constructed as cheaply as possible at tha time. He stated that the Commission did not have any idea of the changes or additional cos until this time. Mr. Strasser stated that he did not manage the electrician work and received the final invoices. \ NvnM1 Ilne of the so0theoz! Soun a.t acme. of the S H A D O W B RO C --T.-.hi of 5evtlog 2$ 5wtheoat Ouv[v of 9ectlon----� Town M1IP J2,R 9 24 Y`. 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F.I. _ _ r �aM as Dan SITE DATA (576 (N81 J0'36"W)-(NB99*4]'29")h) ' �_ . -- . - . -3 60.2 { _ 1 NI 4�5 W - _ I TOTAL SITE AREA 17.16 AC. EXISTING ZONING R-1 1 (N86°04'41"W)- - - - - - - - 1 TOTAL ROW AREA�0.93 AD. PROPOSED ZONING R-4 ( l TOTAL LOT AREA +S93 AG SMALLEST LOT ±%eDO S.F. UTILITIES AVAILABLE i r LARGEST LOT 350.250 S.F. SETBACK CRITERIA: J !1 n✓ v n F It? C v I\ wcrr I r I f1 n V v l I I v iv AVERAGE LOT -±j9. IOD S.F. MIN. LOT AREA 11,400 S0. FT. 0n`'m� TOTAL NUMBER OF LOTS 74 MIN. LOT DEPTH 130 FT. 1, ME DENSITY 269 LOTS/AC. MIN. LOT WIDTH AT FRONT SER3ACK-80 FT. aas s Total Lobs/(Total Area less Wetlands, Floodplatns) FRONT 35 FT. GROSS DENSITY 1.95 L07S/AC. S1DE (GARAGE) 6 FT. WE swtheost soma of the East _ RANDS, WATER BOOIES & S1DE (HOUSE) 10 Fr.. half of the west hoof of no southeast mmer of the ___ I NON-STORMWATER PONDS O 01 AC. SIDE CORNER 35 FT. ---_-_-- I -- -- -- Euaf bale of no soutnmz[�-==.e 1 Quad the of me southeoat-- souueort Ou 31. of seauw l PUBLIC PARKS/OPEN SPACE e.A REAR SETBACK '0 FT. Warta of 5ecxon 2 v I I.Lartm of ZSuatlonRung 25, vl 25, iown,hip 32. Range 24 _ ARTERIAL ROAD ROW NA Towvhip 32 lionge 24� I j TownMip J2, Range 24 l N0956'15E l �- --- 649.01 - FLOODPLAIN 1.9 AC. NET RESIDENTIAL AREA 5.2 AC. COUNTY RIGHT OF WAY AREA NA ROAD MILES 0.11 MILES 3990 Pheasant Wd9e Ddos NE, Ip¢re Carlson:.., QuNo1 by a5ydlatthlaPlan,aped6m5an mmesume: MomazRGI1uX.LS. O WNfiY: PX Revl9am: ]AN THOMAS 3 envlronmentel 61aIngMN 55449 orremrttendxaepreparetlbymeorumese, my /y� 1.PddzouMvtyaeekbank-L13p9 SHADOWBROOK NORTH englneedng ph00e: (763)469-JgQU dhea aupervkl0n and Matlamadal9 QI9naNre: /v.W PQ.g�j,// 155uE ORTE: 79rd2/16 2. pvCWDene Clry fnmmenM�2/13/39 2115 North 3rd Avenue PRELIMINARY PLAT Lhenme of. Surveyor ones. Spea IXWD Comments,- L/Ifii McCain urveying Fax: (]63)4899959 Ne State of'ge...ta data, 10/15/le llcenze#: 67 R. NO. 6 7 pyGry m n6-9% U3919 Anoka, MN 55303 Andover, Minnesota Y,Yrw.taNsanmaaln.cam MtOW h p5P8a'E E Mic m9 I I I I I I I I I M 9Rm OPoVEWAY AIX£55 F----------- ASREPJIRFD _ Y' CCN1gIR --m-- ,izm Y UNE ett M"" ro BE iiiwo W}ABVEB BY I I owms� [�' l�� INry 11`ms RENBV& AB.wooN wat PER REm!5wip3S, SAMNT I I mm B Ova C0.VNEBT G Nm SE Fms11N ro xew sEREx mo M. PIPE R OV& HTBNANT BALE VALVE Emsmlc I � GAAKLAWl- ORIVEWAY� 0yJ i � _100 YR NY& OON CRF^• wAmrsxEo lirjco I I I I I I I I I I L ------ I I I I I MM" M"NB Nww U!3MG NW¢ REMOVALS PLAN LEGEND IXI NO PROPOSED 18' CCNII.YIR — Y' CCN1gIR --m-- ,izm Y UNE ett M"" mwmwws mAVE1 omsN Axo Re11ovE N Emma ssiw stsml. o]XtxiElE [�' l�� INry 11`ms RENBV& AB.wooN wat PER REm!5wip3S, SAMNT mm B Ova C0.VNEBT G Nm SE Fms11N ro xew sEREx mo M. PIPE R OV& HTBNANT BALE VALVE DCN P cmc Box o so T �f B mws 1REE 5fE tREE ftAN (9YET s)a oEamms mEE .SPE mEE Pux (s,iET B). letIIlNE .SE£ 1RfE PLW (9BEt a)a RiF£ SAVE AREA ay¢ TREE pil,N (ylEEf 8)r TrlFE ftEMBYE AREA RECEIVED APR 10 2017 m BENCHMARK Bav FYu: u n Wdi.' .W t ms ¢on C:saN�- U.— B&4N Z N.lB oaeWY of Ne cnN 6SMM of Ma cnMF of Lo. RQ NSF Y o! Bw.� NSB9 f Mmeasantmtl9eotiveNE, Suite lm , mpyttryryNattMsoan.spedon MntHame Benl mMakPE. On : OB t,y13/19p YnAOry mmme ]AN THOMAS 4 / (� Carlson mnmenni Blalne.MN SSM9 m p .,prtp aeeym.n, a my z nnn9prmwB mm n SHADOWBROOK NORTH ;en9meaHn9 PNane: 063)489->9W mreasvp unammati.m aawy sgnatma:2 2/Gz6G. oapn.a: Bix 3. smn9p.. mvo camm.nu 2115 North 3rd Avenue of Fax: 063)4899959 uQ,�. dp,nramnwr9maa. pna.. T'T— /3/t9 pa•ay �mman� Andover, Minnesota REMOVALS PLAN McCain rveYN9 mH nnmaam.rom N.I. of sNx.f MlMg n i./iVi. ..: 2 3 aa: l9nsne Anoka, MN 55303 ] j -' CITY OF ANDOVER ett omsN Axo Re11ovE N Emma ssiw stsml. :'?taA88Yl�Y"2' AB.wooN wat PER REm!5wip3S, C0.VNEBT G Nm SE Fms11N ro xew sEREx mo M. m BENCHMARK Bav FYu: u n Wdi.' .W t ms ¢on C:saN�- U.— B&4N Z N.lB oaeWY of Ne cnN 6SMM of Ma cnMF of Lo. RQ NSF Y o! Bw.� NSB9 f Mmeasantmtl9eotiveNE, Suite lm , mpyttryryNattMsoan.spedon MntHame Benl mMakPE. On : OB t,y13/19p YnAOry mmme ]AN THOMAS 4 / (� Carlson mnmenni Blalne.MN SSM9 m p .,prtp aeeym.n, a my z nnn9prmwB mm n SHADOWBROOK NORTH ;en9meaHn9 PNane: 063)489->9W mreasvp unammati.m aawy sgnatma:2 2/Gz6G. oapn.a: Bix 3. smn9p.. mvo camm.nu 2115 North 3rd Avenue of Fax: 063)4899959 uQ,�. dp,nramnwr9maa. pna.. T'T— /3/t9 pa•ay �mman� Andover, Minnesota REMOVALS PLAN McCain rveYN9 mH nnmaam.rom N.I. of sNx.f MlMg n i./iVi. ..: 2 3 aa: l9nsne Anoka, MN 55303 ] j I ;! I I I 1 I I I I! I I I I! it L---------- I 'I I i i1 I GRAVEL I ' I CONSTRUCTION Y ENTRANCE I. I' BFNBIES D]STNG t`y-y-y-1 1' lllmlllE — ----- --FUTURE 1STREET (BY1 0 o ore6PNwosEo rvw� ..., 7.5 wee METES 696 �15j f\ � "lx;15';\ __ I IF- 4 \ DwNEIa ro c RO Nnre { ' e L�a a III \ orPSITE G A01 20' MAINTE 4ANt,[ VEHICLE A CESS F! 54 PLAIN ; I u I Y (10:1 MAX SLOPE) FILL I : 1.�1 _ Z 1S C.Y. . %8J•...=_ ____ !!!! ........... .. nl F'LOODPI_AIN� j" ____------•• » '•_..�__ �m I'I W I I Ie i `Im K _ _ FILL ,_-----.,i1A�(� / {Ih.� -1 _- • \ d y'BfNO -�'� /I / �/,•� \�� e.tl m 7 .'-�- 7--.- \ / c> I /� 1 ay'c+ a I j\ POND C ]iP P m ea / LO I 12 1 mrp p , m� 3 II NVK = Fd00\\ FI.00DPLAI I� o°a /�� 0\\ t0 I� �a J P JIIT� 'r 00 YR HWL = R85.ti7 . . MITIGATION 1 / z, sn :�- c l 9 I ` Y Q I I lPEF ORO mEr Ens, er L\ 1 0 - \,\" R RECEIV / � G N ID cooaollurE NIJACEIJi Ui.VEI.UPER FOND 100 N WL = 870.0 9.1�R. z <PN S.a�--�a„ � .I..••F�� -�_ ED 100 YR FM'L = 878.7---- n q 0 • N.G r 4_,L----- �~ (ATL W- 100 YR H4VLId) . � 1 e. °;1 I' r�mm/ O ro —« .! �� L'j' p • vcjr� _ , • /, \ . 880.7 =`Pe° ;-� fi84' �+-•-'`-_" «w.✓I .01. . �• (�jil q �jj'] (COON CREEK) a :& °IRB ../Ua_. .,,--."s2..1_ 1�'9 .t .''°i "`• j �.tY'i 2JIsY I6 G Sy /� FLOODPLAIN FILL ,,,{{{ CITY (� a Fl °.�e=� �\t�, \�`�w O �P�•� ��,�\ ' �: t// � �� it I �.e u � WO I�t nR�-I I l Eranno SH SI 76.0 : �oe'?°"°.t •. •® w s v 9to ��— of I see.Ps I I ///qqqnEl / \ 0 eo EX - a'•a`. L. NOOSE N I �®ice- ^—^ " ^ INCIDtI 9L1 KNCE- - • • r 'd' ,G /� tA> rv• A(iEF GRADING S 1_ p ] �r r ,� n!SIi�`E�a)�%�� �• �.w !`-� .•"j • •��-TMJ. •AFifl!^..1A01NG 15 I' Ai '454=••^15555 ob. .. � y�.i�iiN1 \. ��/pe^moo a`°E,�i+Ija _ N6°/�``•' `4`��® � �n�n--n _ 4L�_��_ •5555 v \ ^—�� e•^ ^ -� _-�� ••.l:e{ tt t 9 au °a i :•,t1. / SIGN (it�) 1\ 0 25 50 100 _I` \��_ t1t4459. 4.i15 '^�-nom 16.5' BUFFER' �= T- .. TUP OF RIP Mn TOP OF�-I (IN FEET) Beau r L 4.50 sxuLE�. LWIN, H[—UO )"R £00 €K I \N\ ` ae a es WFTLAND FILL EXIEW GYNE COUNT BSO.J - 1.lOO �__ _ 1 __I -_ caEEc wnrEasN iNAVn 38)-FLOOOPIAIN=..yl�ulWM eesx 9200 x a _ r .,,„6 I__!"e OsrR:cn___ FILL emiou .. an.o \ — — — _ — wv _>- W'I --'>2 _.y_ --I ",IT _ 8%].5 � � � �6: 5' 6UFFER R - -- ,___ 1 100 Y X\n = 877,7 (ARAS 1,) \ \ _ BENCHMARK HOD M HR. 880] (COON CREEK) p 20' MAINTENANCE J i I.,I 220 C.Y. \„ \ 1. Max. county Bmamman: xo. aan. V IRI FLOODPLAIN °\ emu U u. sw .oat find"¢ VEHICLE ACCESS 1�l MITIGATION B.I. eas.60 G'm 6ek II Iml t\ 2 M&a Mnty BmNmaM N.. 2075. I p t 65 fort wataly .f Na cutalNa of p Praha Ran n d 50 feat n.r, .I ! I I Fful \ vwP WR. of ta V Na. 16. I � I I I Re]tl3: JAN THOMAS g C rvn 3890 Pheasant Ntlge Otive NE, SUIte 30 L h ree cemry mann¢ qan, sv r tlon Print Nam Man 1. 1.6ak P E pr n: DB y y13I19 CR p &G Gmm Carlson mental Balne,MN 55 9 regnit aaP Pared 6y mearNndermy „a9F_C_�-man- SHADOWBROOK NORTH • M91n¢eflng Phan¢: (]63)489-]900 dlmtt SuOelxlslon antl Ma[[amaduly BlgmMe: peslgned: H1K 3. 3/]]/19 per CCWD Wmment5 2115 North 3rd Avenue McCam a 63)489-]959 U,anaan,mNRmmHIER,IRRnruntler �� y"-- nn9,ermnO.mmen TREE PRESERVATION PLAN of lv¢yln9 ( Andover, Minnesota 11 .onsonmcraln.<om th.1 ofda.mma.fmm�aom Pam: 1w15I16 Gans. a: Im. pate: THTRAS Anoka, MN 55303 Nowthen Oak Grove D.a,. PaN H1G'cUalaWlamMlnTan11"Iron_Plan 2011 FI.1eII—d 3-38 East Bethel 1XTTlMM ro Ham Lake Blaine cu TRANSPORTATIC 0 PLAN I inin L E G E N D Proposed Regional Trails City County Existing Trails IN-. City �i County �i Existing Roads Proposed Collector Roadway Existing Roadway e—N,i A Minor Arterial �i B Minor Arterial Major Collector IN./ Minor Collector �o Local 0 Water �J Railroad n Parks Schools Proposed Regional Trails Plan Figure 11 Revised February 2018 NDOVE 01q 1685 CROSSTOWN. BOULEVARD N.W. • ANDOVER, MINNESOTA 55304 • (763) 755-5100 FAX (763) 755-8923 • WWW.ANDOVERMN.GOV TO: FROM: SUBJECT: DATE: Mayor and Councilmembers Jim Dickinson, City Administrator Administrator's Report May 21, 2019 The City Administration and the Department Heads present at the meeting will provide a brief verbal update on various items of interest to the City Council and to the residents at the meeting. Listed below are a few areas of interest: 1. Administration & City Department Activities 2. Update on Development/CIP Projects 3. Legislative Items 4. Meeting reminders Upon receipt of the meeting packet, if a member of the Council would like an update on a particular item, please notify me so an adequate update can be made. ted,