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HomeMy WebLinkAboutWK - October 25, 2022• 1685 CROSSTOWN BOULEVARD N.W. • ANDOVER, MINNESOTA 55304 . (763) 755-5100 FAX (763) 755-8923 • WWW.ANDOVERMN.GOV City Council Workshop Tuesday, October 25, 2022 City Hall — Conference Rooms A & B 1. Call to Order— 6:00 p.m. 2. Discuss Crosstown Boulevard NW Trail (Xeon Street NW to 159h Avenue NW)/23-12— Engineering 3. (Continued Discussion) Tobacco Licensing/Sale of Tobacco Related Products — Administration 4. Discuss Municipal Structure—Administration 5. September 2022 Community Center Update —Administration 6. 2023 Budget Discussion—Administration 7. 2023 Special Revenue, Debt Service, Capital Projects, Enterprise & Internal Service Funds Budget Distribution & Discussion — Administration 8. Other Topics 9. Adjournment 1685 CROSSTOWN BOULEVARD N.W. • ANDOVER, MINNESOTA 55304 FAX (763) 755-8923 • WWW.ANDOVERMN.GOV TO: Mayor and Council Members CC: Jim Dickinson, City Admini 0 (763) 755-5100 FROM: David D. Berkowitz, Director of Public Works / City Engineer SUBJECT: Discuss Crosstown Boulevard NW Trail (Bluebird Street NW to North of Fire Station #3) Easement Needs / 23-12— Engineering DATE: October 25, 2022 INTRODUCTION The City Council is requested to discuss Crosstown Boulevard NW Trail (Bluebird Street NW to North of Fire Station #3) easement needs. DISCUSSION There are twelve properties along the proposed trail corridor in which some sort of easement will be required to construct the trail, sanitary sewer and water main. Refer to the attached map that identifies the parcel where easements are needed to construct the proposed improvements. Staff has met with 9 out of the 12 property owners. I will review the easement needs and discuss how the negotiations are going so far and look for direction from the City Council on how to proceed moving forward. ACTION REQUIRED The City Council is requested to discuss Crosstown Boulevard NW Trail (Bluebird Street NW to North of Fire Station #3) easement needs and direct staff on how to proceed. Respectfully submitted, David D. Berkowitz, P.E. Attachments: Project Location Map & Easement Negotiations Parcel Map N CAPITAL IMPROVEMENT PLAN (2023) PROJECT NAME: NEW PEDESTRIAN TRAIL & SIDEWALK LOCATION: CROSSTOWN BLVD TRAIL- BLUEBIRD ST TO NORTH OF 159TH AVE - — e 161ST AVE _ /„r. co BLVD 1 1A� r� W n 1R� A .ti v S 'G da �. r ♦ - 2 n r�'- i'.'r� ���7g u - • �� r K\ � ,!!,t" I� t [�[� fi tP r � ' Pt r14 -.SC--9116 'q', -n, --__ ek..-� � __•. .�\. pr Ewe mnr . t�Fl I' '�:�;�� alsq s. •d ��_R4 R szNow z y • ♦ 1 { r i✓ 4 1 1 i] a Cr 0 0 465 930 Feet I I I Q Project Location ` 17`� Y �J�' ) mn eve nrmaeareramu LOY ER Parcel Boundary m. eaa. m.chuo„eo�eaa ru reae Incorporated 1974 .yen mar mz Nan,B amain rereemtme O City Limits 1axrN kr my mws a wr+sans. n'�crswwmnVre,'�rrteq�w.n,plcrwun.vaulcm_zazz.w. wa r*na+w: ars/mu ro:rnav Andover GIS 1685 CROSSTOWN BOULEVARD N.W. • ANDOVER, MINNESOTA 55304 • (763) 755-5100 FAX (763) 755-8923 • WWW.ANDOVERMN.GOV TO: Mayor and Councilmembers FROM: Jim Dickinson, City Administrator SUBJECT: (Continued Discussion) Tobacco Licensing/Sale of Tobacco Related Products DATE: October 25, 2022 ACTION REQUESTED The Council is asked to review the attached materials, receive a brief presentation, and provide direction to staff on the next steps the City of Andover should undertake related to the "Sale of Tobacco Related Products." BACKGROUND Council discussion at the August 23, 2022, workshop focused on a proposed Cannabinoid Products Regulatory Ordinance, discussion regarding the "Sale of Tobacco Related Products" was deferred. The Council received a letter dated August 23, 2022 (letter attached) from the Twin Cities Medical Society discussing tobacco products and its impact on youth. Council direction from the August 23, 2022, Council workshop meeting (minutes attached) was to continue discussion at a future workshop. At a September 27, 2022, City Council Workshop, guests were invited to provide background on the topic including a cardiologist from HealthPartners, a representative from Advocates for Better Health and representatives from the Association of Non -Smokers Minnesota, Based on direction provide at the September Workshop, staff has prepared draft modification to the "Sale of Tobacco Related Products" code. Attached is a redlined version of changes the City Attorney has incorporated into the Tobacco Ordinance based on Council comments at the September Workshop. There are some yellow high -lighted sections under Administrative Penalties, this is based upon the Council wanting to have more severe penalties associated with the sale to minors. The dollar amounts high -lighted should be discussed by the Council and amended to an amount the Council is comfortable with. There is also yellow high -lighting and a note under Self Service Sales, is this section still applicable. Also needed will be confirmation and/or assistance relative to dividing the City into quadrants relative to the number of licenses available, if that is still the direction. Most cities limiting the number of licenses has just set a particular number city-wide The Council also discussed the criminal penalties associated with selling tobacco to minors, under State Statute, the penalty is a Petty Misdemeanor whereas under our City Code, it is a Misdemeanor. BACKGROUND- Tobacco Sales The City Currently has sixteen (16) tobacco licenses total: - five (5) convenience stores - five (5) vape/tobacco shop - six (6) w/other (grocery, big box, liquor, pharmacy) ANDOVER CITY COUNCIL WORKSHOP MEETING— SEPTEMBER 27, 2022 MINUTES The Workshop Meeting of the Andover City Council was called to order by Mayor Sheri Bukkila, September 27, 2022 at 6:00 p.m., at the Andover City Hall, 1685 Crosstown Boulevard NW, Andover, Minnesota. Councilmembers present: Valerie Holthus, Jamie Barthel, Ted Butler, and Randy Nelson Councilmember absent: None Also present: City Administrator, Jim Dickinson Public Works Director/City Engineer, David Berkowitz Utilities Manager, Steve Weinhold Fire Chief, Dennis Jones Assistant Fire Chief, Ernie Scherger (CONTINUED DISCUSSION) TOBACCO LICENSING/SALE OF TOBACCO RELATED PRODUCTS The Council is requested to receive a presentation and discuss changes to the sale of tobacco related product. Councilmember Butler stated residents brought the number of vape shops in Andover to his attention. He started looking into the City's tobacco ordinance and how to discourage youth from using tobacco products. Dr. Thomas Kottke, Cardiologist with HealthPartners, stated their mission is to limit access to nicotine products for youth. He explained the negative effects of nicotine on the brain of youth. He stated City Council is doing the right thing by limiting access. Councilmember Holthus stated she would like to see a limit on licenses in the City. She works in a secondary school and said there are students that are addicted to nicotine. She feels the City needs more stops in the path of access, especially for middle schoolers. Councilmember Nelson stated the number one cancer death in the U.S. is lung cancer for males and females. He says the key is to limit flavored tobacco and have a steeper fine for selling to minors. Andover City Council Workshop Meeting Minutes —September 27, 2022 Page 2 Councilmember Butler stated many communities have either eliminated flavored tobacco or restricted it to 21+ tobacco shops. Councilmember Barthel would like to see a limited number of licenses. He said there must be stricter punishments for selling to minors. Mayor Bukkila stated limiting licenses is within the City's purview. She believes limiting products is a legislative action at the State level. Mayor Bukkila stated the products need to be secured at the point of sale. Councilmember Butler listed his suggestions for changes to the tobacco ordinance. • Limit number licenses, grandfather existing licenses, if license is revoked then it would go away until the City is at the set number of licenses. • Restrict or ban the sale of flavored tobacco. • If a license is revoked, do not allow a license at the same address for a set time period. • Set a distance restriction from schools and daycares. • Fees and fines are lower than allowable by State Statute and should be increased. Mr. Baumgartner noted selling tobacco to a minor is a petty misdemeanor according to State Statute. The State allows for a city to adopt a stricter ordinance. He explained the City can set the penalty for selling to minors at a misdemeanor. The penalty would be a maximum of 90 days in jail and/or a $1,000 fine. Mr. Baumgartner stated the higher penalty may improve attention to detail and reduce the sale of tobacco to minors. He explained the City can charge the seller criminally and the license holder civilly. Mayor Bukkila asked if the City searches for petty misdemeanors when doing a background check on a license application. Mr. Dickinson stated the background checks catch misdemeanors and higher. Mayor Bukkila stated the Council is brainstorming ideas on limiting tobacco sales and needs homework and feedback from staff. She would like the penalty for tobacco sales to minors be consistent with selling alcohol to minors. Lucy Farber, with Advocates for Better Health, explained what actions other cities have taken to limit the sale of tobacco. The Council discussed effects of changing the ordinance on undeveloped parts of the City. If a gas station wanted to open in a new development area, it would not be able to sell tobacco if the City limited the number of licenses. Mr. Baumgartner suggested dividing the City into quadrants and Andover City Council Workshop Meeting Minutes —September 27, 2022 Page 3 setting a limit on licenses within each quadrant. The City Council had a robust discussion regarding changes to the tobacco ordinance and requested staff to return with a draft ordinance at a future workshop. DISCUSS CORRIDORS OF COMMERCE POTENTIAL PARTICIPATION City Council is requested to discuss participation in the Corridors of Comme (COC) funding requ t for a third lane on Highway 10 called "strategic congest/anda ne between Hanson Boule d and Round Lake Boulevard". The City of Coon RaCounty approached the City apply for funding to add the third lane. Mr. Berkower residents would benefit if thr dditional lane is completed. The Council reached ve forward with the application. UTILITYEMERGENCY The City Council is req u ed to discuss and rei Advisory that was issued on day, August 28, the communication between the stem and the the MN Department of Health an ey rec lifted within 24 hours. Mr. Berkowi ex ained infrastructure detail is not shared with ublic. ielAe Emergency Response for the Water Boil 22. Mr. Berkowitz stated there was a failure in ter tower causing a loss in pressure. Staff contacted ;nded a water boil advisory. The water boil was the water infrastructure is a protected system and He stated Anoka County used Hipli to info the public about the water boil. He stated the media was extremely helpful/dconsistent The City sed info 'he communication methods through signs, message boardsal media, County ommunication, a local media. Staff delivered notes to senior facilitiycares, local bus' esses, and placed signs ' gas stations. Mayoila stated t failure happened at 5:00 a.m. a the notification occurred at 10:00 a.m. She asr an expl tion of the timeline. Mr. Weinhold st d staff were alerted through an alarm arouna.m. H was able to log in and get the pumps rking at 5:25 a.m. Mr. Weinhold reviewsteps aff took to rectify the situation. Mr. Berkowit tated the City needed to identify the pr, fm he solution, and notify the public. He stated the o oing communication needed to be te d consistent to maintain credibility. Staff created a set up phone lines, and called o operate the lines. All staff that were asked to come in, c in. Don explained the City's response and mobilization efforts from his a erience. He stated commion was approved for dissemination by 9:45 a.m. Mr. Dickinson state taff identified CHAPTER SALE OF TOBACCO RELATED PRODUCTS SECTION 3-2-1: Definitions 3-2-2: License Required 3-2-3 Licenses Available 3-2-94: Application For License; Issuance 3-2-45: License Fee; Expiration and Non -transferability Of License 3-2-56: Display of License 3-2-57: Conditions Of License; Prohibited Sales 3-2-i8: Self -Service Sales 3-2-89: Compliance Checks 3-2-910: Suspension Or Revocation Of License 3-24011: Administrative Penalties 3-2-3312: Misdemeanor Violation; Penalty 3-2-1: DEFINITIONS: The following words and terms, when used in this chapter, shall have the following meanings unless the context clearly indicates otherwise: ELECTRONIC DELIVERY DEVICE: Any product containing or delivering nicotine, lobelia, or any other substance intended for human consumption that can be used by a person to simulate smoking in the delivery of nicotine or any other substance through inhalation of vapor from the product. Electronic delivery device includes any component part of a product, whether or not marketed or sold separately. Electronic delivery device does not include any product that has been approved or certified by the United States Food and Drug Administration for sale as a tobacco -cessation product, as a tobacco -dependence product, or for other medical purposes, and is marketed and sold for such an approved purpose. (Amended Ord. 445, 12/16/14) MOVEABLE PLACE OF BUSINESS: A business whose physical location is not permanent or is capable of being moved or changed. PERSON: Shall include natural persons, partnerships, firms, corporations and associations. TOBACCO RELATED PRODUCTS: Cigarettes; cigars; cheroots; stogies; perique, granulated, plug cut, ready, rubbed and other smoking tobacco; snuff, snuff flowers, cavendish, plug and twist tobacco; fine cut and other chewing tobacco; shorts, refuse, scripts, clippings, cuttings, and sweepings of tobacco prepared in such a manner as to be suitable for chewing, sniffing or smoking in a pipe; cigarette papers or pipes for smoking. (Amended Ord. 227, 8-5-1997) 3-2-2: LICENSE REQUIRED: No person shall directly or indirectly keep for retail sale, sell at retail, dispense, or give away in a retail setting any tobacco related product or electronic delivery device at any place in the city without first obtaining a license from the city. (Amended Ord. 227, 8-5-1997; Amended Ord. 445, 12/16/14) 3-2-3: LICENSES AVAILABLE: There shall be no more than seventeen (17) licenses issued in any one (1) year. Establishments renewing a current license shall have priority over new Establishments requesting a new license provided: (1) The renewing establishment complies with the requirements for renewal under this Chapter: and (2) There have been no violations under this Chapter by the renewing establishment. 3-2-34: APPLICATION FOR LICENSE; ISSUANCE: Application for a license shall be made to the City Clerk on a form supplied by the city. The application shall state the full name and address of the applicant, the location of the building and the part to be used by the applicant under license, the kind of business conducted at such location, and other information as shall be required as stated in the application forth or by the City Clerk. The completed application shall be presented to the City Council for its consideration and, if granted, shall be issued by the City Clerk upon payment of the required fee. (Amended Ord. 227, 8-5- 1997) 3-2-45: LICENSE FEE; EXPIRATION AND NONTRANSFERABILITY OF LICENSE: The fee for every such license shall be in the amount as set forth by ordinance'. Licenses shall be valid for one year and shall expire on ' See subsection 1-7-3A of this code. December 31. Licenses shall not be transferable from one person to another. (Amended Ord. 227, 8-5-1997; amd. 2003 Code) 3-2-56: DISPLAY OF LICENSE: Every license shall be kept conspicuously posted at the location for which the license is issued and shall be exhibited to any person upon request. (Amended Ord. 227, 8-5-1997) 3-2-67: CONDITIONS OF LICENSE; PROHIBITED SALES: A. Regulations: The following regulations shall apply to the sale of tobacco related products or electronic delivery device (Amended Ord. 445, 12/16/14): 1. No license shall be issued to a person not of good moral character. 2. No license shall be issued to an applicant for sale of tobacco related products or electronic delivery device at any place other than the licensee's established place of business. (Amended Ord. 445, 12/16/14) 3. No license shall be issued for the sale of tobacco related products or electronic delivery device at a moveable place of business. (Amended Ord. 445, 12/16/14) 4. No person shall sell or give away any tobacco related products or electronic delivery device to any person below the age as required by Minnesota statutes and/or the United States Food and Drug Administration. (Amended Ord. 445, 12/16/14; Amended Ord. 500, 1/21/20) 5. No tobacco related products or electronic delivery device may be sold outside the location or area covered by the license. (Amended Ord. 445, 12/16/14) B. Vending Machines: No person shall sell, dispense, or give away any tobacco related product or electronic delivery device through the use of a vending machine or similar automated dispensing device. This subsection does not apply to vending machines in facilities that cannot be entered at any time by persons younger than eighteer+-twenty-one (4821) years of age. (Amended Ord. 227, 8-5-1997; amd. 2003 Code; Amended Ord. 445, 12/16/14) 3-2-78: SELF-SERVICE SALES: A. 1. Except in adult only facilities, no licensee shall offer for sale single packages of cigarettes or smokeless tobacco in open displays that are accessible to the public without the intervention of a store employee. (Amended Ord. 227, 8-5-1997; amd. 2003 Code) 2. The self-service restriction described in this subsection shall not apply to retail stores that derive at least ninety percent (90%) of their revenue from tobacco and tobacco related products or electronic delivery device and which cannot be entered at any time by persons younger than twenty- one (21) years of age. (Amended Ord. 445, 12/16/14; Amended Ord. 500, 1/21/20) B. No person shall sell, dispense or give away any tobacco related product br commented [SRI ]:Is this=tion:du applicable? electronic delivery device through self-service merchandising, except via (Amended Ord. 445,12/16/14): 1. Display racks which are: a. Equipped with shields that allow removing a single carton or pack of tobacco product or electronic delivery device while activating a clearly audible alarm or chime; and (Amended Ord. 445, 12/16/14) b. In the immediate vicinity and plain view of a responsible employee. 2. Humidors used for individual cigar sales at licensed off -sale liquor establishments and at establishments where at least seventy five percent (75%) of products for sale are tobacco related products or electronic delivery device. (Amended Ord. 227, 8/5/1997; Amended Ord. 445, 12/16/14) 3-2-89: COMPLIANCE CHECKS: The city shall conduct unannounced compliance checks at least once each calendar year at each location where tobacco or electronic delivery device is sold to test compliance with Minnesota Statutes Section 609.685. Compliance checks shall utilize minors over the age of fifteen (15), but under the age of twenty-one (21), who, with the prior written consent of a parent or guardian, attempt to purchase tobacco or electronic delivery device under the direct supervision of a law enforcement officer or an employee of the city. (Amended Ord. 227, 8/5/1997; amd. 2003 Code; Amended Ord. 445, 12/16/14; Amended Ord. 500, 1/21/20) 3-2-910: SUSPENSION OR REVOCATION OF LICENSE: Upon finding that a licensee of any license granted pursuant to this chapter has failed to comply with any applicable statutes, regulation or ordinance relating to the sale or use of tobacco related products or electronic delivery device, the City Council may either revoke or suspend the license. Every such license may be revoked by the City Council for violating any of the provisions stated in this chapter. (Amended Ord. 227, 8/5/1997; Amended Ord. 445, 12/16/14) 3-2-1811: ADMINISTRATIVE PENALTIES: A. If a licensee or employee of a licensee sells tobacco or electronic delivery device to a person under the age of twenty-one (21) years, or violates any other provision of this chapter, the licensee shall be charged an administrative penalty of seventy-five dollars ($75.00). An administrative penalty of two hundred dollars ($200.00) must be imposed for a second violation at the same location within twenty-four (24) months after the initial violation. For a third violation at the same location within twenty-four (24) months after the initial violation, an administrative penalty of two hundred fifty dollars ($250.00) must be imposed, and the licensee's authority to sell tobacco or electronic delivery device at that location must be suspended for not less than seven (7) days. No suspension or penalty may take effect until the licensee has received notice, served personally or by mail, of the alleged violation and an opportunity for a hearing before a person authorized by the city to conduct the hearing. A decision that a violation has occurred must be in writing. (Amended Ord. 445, 12/16/14; Amended Ord. 500,1/21/20) B. An individual who sells tobacco or electronic delivery device to a person under the age of twenty-one (21) years must be charged an administrative penalty of fifty dollars ($50.00). No penalty may be imposed until the individual has received notice, served personally or by mail, of the alleged violation and an opportunity for a hearing before a person authorized by the city to conduct the hearing. A decision that a violation has occurred must be in writing. (Amended Ord. 445, 12/16/14; Amended Ord. 500, 1/21/20) C. It is an affirmative defense to the charge of selling tobacco or electronic delivery device to a person under the age of twenty-one (21) years in violation of this chapter that the licensee or individual making the sale relied in good faith upon proof of age as follows (Amended Ord. 445, 12/16/14; Amended Ord. 500, 1/21/20): 1. A valid driver's license or identification card issued by the state of Minnesota, another state, or a province of Canada, and including the photograph and date of birth of the licensed person; 2. A valid military identification card issued by the United States Department of Defense; 3. A valid passport issued by the United States; or 4. In the case of a foreign national, by a valid passport. (Amended Ord. 227, 8-5-1997; amd. 2003 Code) 3-24412: MISDEMEANOR VIOLATION; PENALTY: Any person who shall violate any provision of this chapter shall be guilty of a misdemeanor and shall be punished as defined by state law. (Amended Ord. 227, 8-51997) LNDOVEk* _t, 1685 CROSSTOWN BOULEVARD N.W. • ANDOVER, MINNESOTA 55304 • (763) 755-5100 FAX (763) 755-8923 • WWW.ANDOVERMN.GOV TO: Mayor and Councilmembers FROM: Jim Dickinson, City Administrator SUBJECT: Discuss Municipal Structure DATE: October 25, 2022 City Administration has been asked to research what it may entail for the City of Andover to institute a ward system in addition to the current precinct for elections. The City of Andover currently operates under an "at -large" system and is a Statutory Plan A city. DISCUSSION Attached for Council review are the following items to assist with the discussion regarding the pursuit of a ward system: 1. Handbook for Minnesota Cities Chapter 5 Election Procedures excerpt - Provides a summary of Wards as related to Election Procedures. 2. Handbook for Minnesota Cities Chapter 3: The Statutory City - Describes the Statutory City form of municipal government 3. Handbook for Minnesota Cities Chapter 3: The Home Rule Charter City - Describes the Home Rule Charter City form of municipal government and the process for creation. Based on Administrations review, it appears that really the only path to establishing a ward system in Andover is through establishing a "charter" and proceeding down that path. The only other option would be if a significant annexation or consolidation took place such as Andover and an adjacent City consolidating, or Andover annexing a sizable portion of an adjacent City. ACTION REQUESTED The City Council is requested to review the attached materials, receive a brief presentation from Administration and provide direction to staff. .y submitted, RELEVANT LINKS: exists for a statutory city to adopt a ward system League of Minnesota Cities Handbook for Minnesota Cities 8/4/2022 Election Procedures Chapter 5 1 Page 32 • At least one set of stairs has a temporary handrail and ramp, if stairs are used to enter or leave the polling place. • No barrier in the polling place impedes the path of persons with disabilities to the voting booth. Minn. Star. § 204B. 16, subd. The restriction against using buildings serving liquor or beer applies only 4. when a person can go from the polling place to the room where alcoholic beverages are served without leaving the building. If no doors exist between the rooms, making it necessary to go outside to get from the polling place to where the alcohol is served, then the restriction does not apply. A.G. op. 469-c-6 (Jan. 8, 1954). A.G. Op. 185-A-5 In keeping with this interpretation of the law, the attorney general has ruled (Apr. 5, 1954). that, where city hall houses a municipal liquor store, but the municipal liquor store shares no common access and has a separate entrance, the remainder of the hall may be used for voting purposes. In another ruling, however, the attorney general advised that the basement of a restaurant did not serve as a proper polling place since access to the basement was through a lobby that also provided access to the room where liquor was sold. B. Wards Minn. Star. § 205.84. subd. 1. Some cities have ward systems in addition to precincts. A ward is not defined by statute, but generally represents an election district within a city for council election. Each ward elects its own councilmember to represent the interests and concerns of that ward. State statute requires the following: Minn. Stat § 351.02. • Population. Each ward must be as equal in population as practicable. • Territory. Each ward must be composed of compact, contiguous territory. • Residency of councilmembers. Each councilmember must be a resident 94G. > p. 63-a-11 (Oct. 24, of the ward for which elected. However, a change in boundaries may not disqualify a councilmember from serving the remainder of their term. Minn. stat. § 205.84, subd. 1. With respect to first class cities where the councilmembers are elected by ward to serve for four-year unstaggered terms, if the population of any ward changes by 5 percent or more, all councilmembers must be elected to new terms at the first municipal general election after redefining ward boundaries. If no municipal general election would otherwise occur in the year ending in 2 or 3, a city general election must be held in one of those years. This provision applies notwithstanding any home rule charter provisions to the contrary. Usually only home rule charter cities have ward systems. The city's charter often defines the size and number of wards. Generallv. no statutory authority exists for a statutory city to adopt a ward system League of Minnesota Cities Handbook for Minnesota Cities 8/4/2022 Election Procedures Chapter 5 1 Page 32 RELEVANT LINKS: owev the following situations could result in statntnry niriPi a i ward cv_c Pms, Minn. Stat. $ 414.031, subd. 4a. • Annexation proceedings. Statutory cities may have to have ward systems when ordered by the Office of Administrative Hearings (Municipal Boundary Adjustments) as part of certain annexation proceedings. • Incorporation proceedings. Municipal Boundary Adjustments may order Minn. stat. g 414.02. subd. 3. that a city use a ward system to ensure proper representation of different areas of the city. Statutory ities ordered to use the ward system upon o ' their incorporation may abandon it only after they have been j\; i incorporated for at least four years. To do this, the council must adopt a resolution by a four-fifths vote abolishing the ward system and providing p4 for the election of councilmembers at large as in other municipalities. Consolidation proceedings. Municipal Boundary Adjustments may order a ward system whenever a new city results from the consolidation of one or more cities. When more than two years have elapsed after the consolidation, the governing body may, by a four-fifths vote, abolish the ward system. • Special incorporation proceedings. Some statutory cities were Minn. Slat. § 414.041, subd. 5. V� incorporated under special laws that established their ward systems. These cities may continue these systems. Minn. Stat, 3 204B. 135, subd. I. See also Kahn v. Gruen, Cities with ward systems may not redistrict those wards before the 701 N.w.2d 815 (Minn. redistricting of the Legislature. Redistricting of wards occurs within 60 days 2005). after the legislative redistricting or at least 19 weeks before the state primary election in a year ending in 2, whichever comes first. Minn. Stat. § 204B.135, subd. 1. In a city of the first class (cities having more than 100,000 inhabitants) Minn. Stat. 3 204B. 14, subd. electing councilmembers by wards in a year ending in 1, the ward 3. Secretary of State: boundaries may be re-established no later than 14 days before the first day to Redistricting Guide. file affidavits of candidacy for city councilmembers. Modification of the ward boundaries may happen after the redistricting of the Legislature for establishing precinct boundaries. Precinct boundaries in a city of the first class electing councilmembers by wards may be re-established within four weeks of the adoption of ward boundaries in a year ending in 1. Minn. Stat. g 205.84, subd. 2. After official certification of the federal decennial or special census, the governing body of a city with wards must do one of the following: • Confirm the existing ward boundaries as conforming to the state redistricting standards. • Redefine ward boundaries to conform to those standards. League of Minnesota Cities Handbook for Minnesota Cities 8/4/2022 Election Procedures Chapter 5 1 Page 33 RELEVANT LINKS: Minn. Stat. § 205.84, subd. 2. I Failure to accomplish the above prohibits the mayor and councilmembers League of Minnesota Cities Handbook for Minnesota Cities 8/4/2022 Election Procedures Chapter 5 1 Page 34 from receiving further compensation until the city complies with above standards. Minn. Slat. § 205.84, subd. 1. An ordinance establishing new ward boundaries becomes effective on the date of the state primary in a year ending in 2, except that the new ward boundaries established by a city in a year ending in 1 take effect on the date of the municipal primary election in the year ending in 1. See section. Precincts. Cities with ward systems should also see the section of this document that discusses election precincts and their boundaries. C. Notices of city elections Minn. Slat. § 205.16, subds. The city clerk must provide a written notice at least 74 days before every 1, 4. Minn. Stat. § 205.16, subd. 4. municipal election to the county auditor, including the date of the election and the offices and questions to be voted on. Minn. slat. § 205.16, subds. i. First Class, Second Class, and Third Class cities must publish notice of city elections two weeks before the election. They also may post notice 10 days before at the discretion of the council, unless a charter provides other notice requirements. Fourth Class cities (under 10,000 population) may choose not to publish, in which case they must give 10 days' posted notice. The notice must report: • Time the polls will be open and the place of voting for each precinct if the city has more than one precinct. • Offices to be filled. • Questions, if any, that will appear on the ballot. Minn. Slat. § 205.16, subds. 2, 3. The clerk must publish a sample ballot at least two weeks before the election Minn. Slat. § 473.121. in the official newspaper; except that, Fourth Class cities (under 10,000 population) not located within a metropolitan county, may dispense with publication. In addition, at least two weeks before the election, the clerk must prepare a sample ballot for the city and make it available for public inspection in the clerk's office and post a sample ballot in each polling place on election day. Minn. slat. § 205. 10, subd. 6. Minn. Stat. § 205.16, subd. 4. A special election ordered by the city council on its own motion may be canceled by motion of the city council as long as written notice is provided to the county auditor at least 74 days before the municipal election. D. Notice of presidential nomination primary Minn. slat. § 207A.14. Minn. Stat. § 207A.I2. At least 15 days before the date of the presidential nomination primary, the clerk must post a public notice stating the date of the presidential nomination primary, the location of each polling place in the municipality, League of Minnesota Cities Handbook for Minnesota Cities 8/4/2022 Election Procedures Chapter 5 1 Page 34 LEAGUE of MINNESOTA CITIES Table of Contents HANDBOOK FOR MINNESOTA CITIES Chapter 3 The Statutory City This material is provided as general information and is not a substitute for legal advice. Consult your attorney for advice concerning specific situations. 145 University Ave. West w Jmc.org 6/27/2022 Saint Paul, MN 55103-2044 (651) 281-1200 or (800) 925-1122 © 2022 All Rights Reserved M LC HANDBOOK FOR MINNESOTA CITIES LEAGUE of MINNESOTA Chapter 3 CITIES The Statutory City Minnesota law provides for two basic types of cities: statutory cities operating under the statutory city code and home rule charter cities operating under a local charter. Learn about the organization and general powers of statutory cities, the most common type of city in the state. RELEVANT LINKS: I. The statutory city code Minn. Stat. ch. 412. Most Minnesota cities are incorporated as statutory cities. They all operate under the statutory city code (city code) found at Chapter 412 of the Minnesota Statutes and a number of other statutes that cover special cases or apply to home rule charter cities as well as to statutory cities. Although all statutory cities have the same basic powers, the city code allows them to select one of several forms of organization. Statutory cities lack the power to change the city code. They are dependent upon the Legislature for all changes. Minn. stat. § 412.891. The great benefit of the city code is that it uniformly applies the laws regarding city government to all statutory cities in the state. Therefore, the city code is the primary source of authority for the actions taken by statutory cities through their city councils. There is, however, one important exception: the city code covers Iron Range statutory cities operating under cash -basis laws only to the extent that it is not in conflict with any of the cash -basis laws. In addition to the powers the city code grants, all cities—including home Minn. stat. ch. 462. Minn. rule charter cities—receive additional authority from other state statutes. Stat. ch. 419. Minn. Stat. § 459.06. For example, authority for land -use planning, creating police civil -service commissions, and municipal -forest maintenance are detailed in laws outside the city code. II. Forms of statutory city government Minn. stat. § 412.541. The Legislature has provided three "plans" or forms of organization for statutory cities: the Standard Plan, Optional Plan A, and Optional Plan B. These plans provide voters with a wide range of choices in determining the structure of their city government. The Standard Plan has the common weak mayor -council form of government consisting of an elected mayor, an elected clerk (or a combined clerk -treasurer) who serves as a voting member of the council, and three or five council members. The treasurer is also an elected official but is not a member of the council. This material is provided as general information and is not a substitute for legal advice. Consult your attorney for advice concerning specific situations. 145 University Ave. West www.Imc.org 6/27/2022 Saint Paul, MN 55103-2044 (651) 281-1200 or (800) 925-1122 © 2022 All Rights Reserved RELEVANT LINKS: League of Minnesota Cfties Handbook for Minnesota Cities 6/27/2022 The Statutory City Chapter 3 1 Page 3 Plan A is a modification of the Standard Plan. It retains the weak mayor - council characteristics, but provides for an appointed clerk, an appointed treasurer (or a combined clerk -treasurer), a mayor, and four or six council members. Minn. stat. § 412.54 t, subd. 2. Optional Plan B is the council-manager plan. This plan consists of an elected mayor and four or six council members with an appointed city manager. The city manager oversees administrative duties while the mayor and council maintain traditional policy making roles. While the Standard Plan and Plan A are available to all cities, only cities with a population over 1,000 may adopt Plan B. The law does not restrict any Optional Plan to any particular geographic location in the state. All new cities automatically organize under Plan A unless they complete the required legal steps to put one of the other plans into effect. Voters must approve a change of plan. Minn. stat. 412.02, subd. 6. The council of any statutory city may, by ordinance adopted at least 60 days before the next regular city election, submit to the city's voters the question of whether to increase the size of the city council to seven or reduce the size to five members. The ordinance must include a schedule of elections and terms to accomplish the change. Citizens vote on the proposal at the next general city election. If a majority of those voting on the question approve it, the ordinance goes into effect under the specified schedule. Minn. stat. § 414.02, subd. 3. Minn. Stat. § 414.031, subd. 'There is no provision in the city code for the adoption of a system of 4a. Minn. Stat. § 414.041, wards. Only home rule charter cities can have wards, except that in certain subd. 5. incorporation, annexation, and consolidation proceedings, the Office of Strategic and Long -Range Planning (Municipal Boundary Adjustments) may include the establishment of a ward system in its order. Also, a few statutory cities that were originally incorporated by legislative act have ward systems. A. The Standard Plan Minn. stat. § 412.572. In 1967, the Legislature required every city operating under the Standard Plan to assume the Plan A form by January 1, 1970, unless the voters rejected it between May 4, 1967 and January 1, 1970. In Minnesota, 95 out of the 853 cities remain on the Standard Plan, thus the term is somewhat dated and misleading. The Standard Plan of city government was the form used by the majority of smaller Minnesota cities before 1970. As in all plans, the Standard Plan has a council of five or seven members. It is different from other plans because an elected clerk fills one of the council seats. League of Minnesota Cfties Handbook for Minnesota Cities 6/27/2022 The Statutory City Chapter 3 1 Page 3 RELEVANT LINKS: A.G. Op. 471-H (Mar. 29, 1957). See Handbook, Elected Officials and Council Structure and Rale. See Handbook, Elected Officials and Council Structure and Role and Handbook. City Administrative Staff. Minn. Stat. § 412.572. Minn. Stat. § 412.581. Minn. Stet. § 412.591. Minn. Stat. § 412.541, subd. Voters also elect a treasurer if the city has not combined the positions of clerk and treasurer. The treasurer, however, is not a member of the council. By ordinance and a vote of the electorate, the city may increase the council size to seven members. As council members, the mayor and clerk have the same duties and powers as the other council members. In addition, they have their own special duties. The council possesses all legislative and administrative powers; it cannot delegate the power to enact ordinances or to prescribe rules and regulations. All administrative personnel are appointed by and directly accountable to the council. For example, the council is responsible for the direction of the police chief, the liquor -store manager, and the street superintendent. The same is true regarding appointment of members to independent and advisory boards and commissions. The council can delegate certain functions to appointed administrative boards. For example, state statutes authorize the establishment of a utilities commission, a civil -service commission, or a park board (if the city has a population of more than 1,000) with direct responsibility for their specific programs. The council may also establish advisory boards, such as a planning commission, to conduct studies and make recommendations. 1. Distinct features of the Standard Plan • The council has five or seven members consisting of a mayor, a clerk, and three or five council members. • Voters elect a clerk and a treasurer. The city may combine these offices into one elective office of clerk -treasurer. • The council has all administrative authority and responsibility. • The council has the power to appoint independent and advisory boards and commissions, and to delegate certain functions to these bodies. B. Plan A Plan A constitutes a simple change in organization from the Standard Plan. In Minnesota, 634 cities presently operate under the Plan A form of government. One of the distinctive features of this plan is that the clerk is no longer a member of the council and that position is filled with a fourth (or sixth) elected council member. Another feature is that the council appoints the clerk and treasurer for indefinite terms of office. The duties of these two appointed officers are the same under Plan A as they are under the Standard Plan of government except that the clerk is not a member of the council and cannot vote at council meetings. League of Minnesota Cities Handbook for Minnesota Cities 6/27/2022 The Statutory City Chapter 3 1 Page 4 RELEVANT LINKS: See Handbook cin This plan allows cities to hire trained and experienced people who can Administrative StalL perform the complex duties of the clerk and treasurer. Because the council appoints people to these positions, it has more control over how these employees perform their functions than it does in the Standard Plan where voters elect these employees. Minn. Stat. 3 415.16. To help ensure the selection of qualified people for these positions, state law allows the council to appoint people who are not residents of the city and prohibits the council from requiring residence as a condition of employment. In the selection of a clerk, for example, many cities have gone outside the city to hire a person with training and experience in city management. 1. Distinct features of Plan A • A five or seven -member council, consisting of a mayor and four or six council members, runs the government. See Handbook, C/n Administrative Stag, • The council appoints a clerk and a treasurer (or a combined clerk - treasurer) for indefinite terms. The council may remove these employees at any time in accordance with state law and any personnel policy, contract, or ordinance in effect for that city. • The council may appoint independent boards and commissions, such as a utilities commission, and advisory bodies, such as a planning commission. • The council appoints all personnel, including the police chief, attorney, fire chief, and liquor -store manager. • The council has all the administrative and legislative authority and responsibility that councils in Standard Plan cities have. C. Plan B Minn. stat. 34 412.601-.751. Optional Plan B embodies the council-manager plan of government. At See Handbook, The Home Rule charter cqv. present, only 18 statutory cities operate under this plan. About 30 cities in Minnesota have adopted the council-manager form under their home rule charters. Some of these cities previously operated as Plan B statutory cities. Under Plan B, the elected city council consists of a mayor and four or six Minn. stat. s 412.611. council members. All policy and legislative decisions are the responsibility of the council. The council delegates the administrative duties to a city manager. The manager is accountable to the council for the effective administration of city business in accordance with council decisions. League of Minnesota Cities Handbook for Minnesota Cities 6/27/2022 The Statutory City Chapter 3 1 Page 5 RELEVANT LINKS: League of Minnesota Cities Handbook for Minnesota Cities 6/27/2022 The Statutory City Chapter 3 1 Page 6 1. City manager Minn. Star. 3 412.641. Minn. Under Plan B, the council chooses a manager on the basis of training, Stat. § 415.16. See Handbook, City experience, and administrative qualifications. The manager does not need Administrative smff. to be a resident of the city. The council must appoint the first manager as soon as practicable after adopting this plan. The term of office is indefinite so the council may remove the manager at any time. If the manager has been in office for one year or more, however, they may demand that the council make written charges and hold a public hearing prior to discharge. The law does not require specific grounds for dismissal, either before or after the hearing. Pending the hearing, the council may suspend the manager and designate some properly qualified person to perform those duties. Minn. stat. 3 412.651. The manager has responsibility for the administration of all city business and is answerable to the council. The law prohibits the council as a whole or any of the individual council members from interfering with the manager's authority to hire employees. It also prohibits any individual council member from attempting to deal with or control any administrative person who is subordinate to the manager. Instead, the council must exert all its control through the manager. This provision, however, does not prohibit individual council members from obtaining information pertaining to city business from employees other than the manager. 2. Clerk, treasurer Minn. Star. $ 412.651, subd. 3. Plan B provides for a manager, an appointed clerk, an appointed treasurer, Minn. Stat. g 412.681. and any other officers subordinate to the manager as the council may A.G. Op. 469-a-2 (Sept. 20, 1951). create by ordinance. The manager shall appoint the clerk, treasurer, heads of departments, and all subordinate officers and employees. The manager also appoints the attorney, but the council must confirm the appointment. In the performance of their duties, the clerk and treasurer are subject to the Minn. Stat. g 412.691. direction of the manager, but their functions are the same as those of their counterparts in other cities. The only exception to this rule is that the manager, not the clerk, signs written instruments, such as contracts, on behalf of the city. The council may also give additional duties to the clerk and treasurer. Or the council can abolish or combine positions, including these offices, as it deems fit. It may also direct the manager to perform the duties of any of the various offices except that of treasurer. 3. Boards and commissions Minn. stat. 3 412.621. Plan B abolishes all independent administrative boards and commissions except for the civil -service commission, if there is one. League of Minnesota Cities Handbook for Minnesota Cities 6/27/2022 The Statutory City Chapter 3 1 Page 6 RELEVANT LINKS: Minn. Stat. § 412.651 Minn. Stat. § 412.691. The council itself must assume the functions of such boards as the library board, park board, and public -utility commission. The council may continue or create commissions for joint operations with other units of government. For example, the council could create a park board that would administer parks under a cooperative program with two or more cities acting together. The council also could establish advisory boards or commissions to study any municipal function or to investigate any subject of interest to the city. As a result, the city may continue to have a planning commission after the adoption of Plan B. If a city abandons Plan B and adopts the Standard Plan or Plan A, the city may again establish independent boards and commissions as authorized by law. 4. Manager's duties Under Plan B, the manager has the following duties: • Enforcing city ordinances and resolutions. • Appointing and removing, on the basis of merit and fitness, the clerk and all department heads and subordinate employees. Where there are civil -service provisions applicable to the city, they are binding upon the manager. • Exercising administrative control over all city departments and divisions created by law or by the council. • Attending all meetings of the council and participating in the discussion, but not voting. • Recommending to the council measures necessary for the welfare of citizens and the efficient administration of the city. • Making reports on the financial condition and needs of the city. • Preparing, if the council directs, an administrative code for council adoption. • Assuming all duties required under state laws, city ordinances, and council resolutions. • Acting as the chief purchasing agent for the city. As purchasing agents, managers are responsible for all purchasing. Managers may, in conformance with the budget, but without prior council approval, make purchases and let contracts when the amount does not exceed $20,000, unless the city council provides for a lower limit. City councils must audit claims resulting from such transactions. Larger purchases and contracts need council approval. League of Minnesota Cities Handbook for Minnesota Cities 6/27/2022 The Statutory City Chapter 3 1 Page 7 RELEVANT LINKS: Minn. Stat §§ 412.701-.731 Minn. Stat. §§ 412.601-.751. Minn. Stat. § 412.741. See Handbook, Expenditures Purchasing and Contracts. 5. City budget One of the most important provisions of Plan B is that the manager must prepare estimates for an annual budget and submit them to the council. The manager must budget on a "funds" basis and must include all city funds except for the bond, utilities, and special -assessment funds. Inclusion of these is optional, but budgeting and appropriations procedures should include all the moneys the city receives and spends. The manager may use either a cash or an accrual basis for preparing the budget. A cash budget is one that includes only those items for which the city actually receives money (cash) in the case of receipts or pays out in the case of disbursements or expenditures, during the 12 -month period covered by the budget. An accrual basis budget is one that includes only those funds that become due and payable to the city during the budget year, whether the city actually receives payment, and those expenses that the city incurred during the year no matter when the city pays them. The main purpose of a budget is to collect data on the anticipated revenues and expenses of the city for the coming year, and to allow for comprehensive fiscal planning. The budget should include anticipated revenues and expenditures for the next year. Once the council has approved the budget, the manager may not change it without the council's consent. The laws establishing the Plan B form of government detail the procedures for preparing and adopting a budget. These procedures are flexible and could easily apply to all cities regardless of their form of government. 6. Payment of claims and emergency borrowing Two other special features of Plan B relate to the payment of claims against the city and to emergency -borrowing procedures. Plan B cities follow the usual city procedure for the payment of claims: filing of a claim, audit, approval, and issuance of orders. In Plan B cities, however, the manager and mayor, rather than the clerk, must sign the order, and there is no authorization for marking an order "not paid for want of funds." Every council resolution or motion authorizing a disbursement must specify the purpose of the disbursement and the fund the city will use to pay it. The manager must make a notation on each contract showing which fund the city will use to pay it. League of Minnesota Cities Handbook for Minnesota Cities 6/27/2022 The Statutory City Chapter 3 1 Page 8 RELEVANT LINKS: Minn. Stat. § 413.751, Blinn. Stat. § 475.755. Minn. Stat. § 412.551 Although the law prohibits the council from marking an order "not paid for want of funds," Plan B city councils may authorize the treasurer to sell emergency -debt certificates under certain circumstances. The emergency - debt certificates must mature within two years or less and must be repaid by levy. 7. Distinct features of Plan B Plan B cities have the following distinct features: • A council composed of an elected mayor and four (or six) elected council members run the government. The council exercises legislative authority and appoints a city manager to exercise administrative authority. • A city manager, appointed by and responsible to the council, must effectively administer city business in accordance with the decisions of the council. • The manager appoints a clerk and treasurer for indefinite terms. • The manager appoints an attorney subject to the approval of the council. • All independent administrative boards and commissions, except for a civil -service board (if there is one), expire and the council assumes their functions. • Advisory boards and commissions may continue to operate. • The manager has full responsibility, subject to existing civil -service rules and regulations, to appoint and remove all city administrative officials and employees. • The manager must prepare estimates for an annual budget and submit them to the council. • No authorization exists for marking an order "not paid for want of funds." • A council may, in specified circumstances, authorize the treasurer to issue emergency -debt certificates. D. Changing the form of government Changing the form of government in a statutory city requires two procedures. The first procedure involves completing the necessary legal steps, which include the initiation of the proposal, its submission -to the voters, and the certification of the results to the countyauditor and the secretary of state. League of Minnesota Cities Handbook for Minnesota Cities 6/27/2022 The Statutory City Chapter 3 1 Page 9 RELEVANT LINKS: Minn. stat. § 412.571. Minn. The second procedure is the gradual alteratiorLof the government structure Stat. § 412.572. Minn. Stat. § to conform to the. requirements of the new plan. This step takes time 412.541. because the change cannot cut short the term of office for an elected official or change the time of election for any elected person. All cites, i the Plan A form of organization, unless they have voted to re,o S+armor to adopt Plan B. If a city abandons an Optional Plan, its government reverts to the Standard Plan unless the abandonment procedure specifies the adoption of an Optional Plan previously in effect. 1. Changing to an Optional Plan Minn. stat. §§ 412.541-.572. Minn. Stat. § 412.601. Cities must take several s ste to change to an Optional Plan. p g 11 a. Initiating the proposal Minn. stat. § 412.551. A city may initiate the proposal in one of two ways. The council may, upon its own motion, submit an Optional Plan for voter consideration. Alternatively, the voters may require the council to submit the question at an election by presenting a written petition with signatures from a number of voters equal to at least 15 percent of the total number of people voting in the last city election. Once the council has received a petition requesting a referendum on one of the optional forms of government, it is doubtful that the council could submit a different plan at the same election or could call an earlier election for a vote on a different plan. Such actions would circumvent the provision making the petition mandatory. b. Submitting the plan to the voters See Handbook, Election Procedures. See LMC Ordinarily, the council has discretion to determine whether the Optional p information memo, City Plan question should go to the voters at either a regular election or a Special Elections. special election. If the council decides on a special election, it must also set its date. The procedures for calling a special election on the adoption of an Optional Plan are the same as for any other special election. Minn. stat. § 205. 10, subd. 1. A petition requesting the submission of an Optional Plan to the voters may also request a special election on the question. A special -election petition, however, requires a number of signers equal to 20 percent of the number A.G. op. 472-0 (Mar. 20, of voters voting at the last city election, rather than the 15 percent for the 1961). Optional Plan petition. If petitioners present a special -election request that meets the 20 -percent requirement, the council must order a special election and set a date for it. If the council fails to comply within a reasonable time, a court order could presumably force the city to act. League of Minnesota Cities Handbook for Minnesota Cities 6/27/2022 The Statutory City Chapter 3 1 Page 10 RELEVANT LINKS: The attorney general has determined the city must hold an election when voters submit a proper petition. If the council receives a petition asking for the submission of an Optional Minn. stat. y 205.16, subd. 4. Plan before a regular city election and there is enough time to allow for the necessary 74 -day notice to the county auditor, the council probably cannot delay submitting the question until a later time without the consent of the petitioners. Minn. Stat. § 412.551, subd. When submitting an Optional Plan question to the voters, the question on z. the ballot must follow substantially one of the following: For plan A: "Shall Optional Plan A, modifying the Standard Plan of city government by providing for the appointment by the council of the clerk and treasurer (or clerk -treasurer), be adopted for the government of the city?" For plan B: "Shall Optional Plan B, providing for the council-manager form of city government, be adopted for the government of the city?" The question should be followed by the words: "yes" and "no" with an oval or similar target shape to the left of each word so that voters may indicate their choices. Minn. Stat. § 412.551, subs. Passage requires a majorityvote on the. question. Once an 9.ptiQnal_Plan 3. Minn. stat. s 412.551, goes into effect, the city may not change it for three years. If a majority of subd. 4. the votes are negative, the Optional Plan proposal fails, and the city Minn. stat. § 205.10. continues to operate under its existing form of gpvernment..In this case, voters may not petition the council to call a special election on the question of adopting an Optional Plan within the following six months. This restriction does not apply to the council, which may generally call a special election at any time. c. Certifying the plan's adoption Minn. stat 5 205.185, subd. When a majority of the voters approve an Optional Plan, the clerk must 3. Minn. Stat. § 412.551, subd. 5. promptly notify the county auditor and the secretary of state by filing a certificate stating the date of the election, the question submitted, and the vote. If the voters reject a proposed change in the form of government, the clerk must certify the election results to the county auditor. Minn. star. 3 414.02, subd. 3(3). New cities are incorporated directly under Plan A but may adopt an alternate plan by following the procedures outlined above. League of Minnesota Cities Handbook for Minnesota Cities 6/27/2022 The Statutory City Chapter 3 1 Page 11 RELEVANT LINKS: 2. Changing to Plan A See generally Minn. Stat. § 412.571. After the ado tion of Plan A the elected clerk and treasurer serve out the p ' balance of their respective terms. During this period, their relationship to A.G. Op. 470-L (Oct. 8, 1951). the council is the same as before, with the clerk continuing in the dual role A.G. Op. 471-M (Apr. 12, of council member and administrative officer. If a vacancy occurs in any 1956). of these offices before the end of the incumbent's term, the council must fill the vacancy just as it would have done had the city not adopted the Optional Plan. A successor, during the unexpired term, serves in the same manner and with the same duties as the predecessor. The successor to the clerk, for example, would continue to act as a member of the council until the end of the term. Plan A goes into effect upon the expiration of the term of the incumbent clerk. When that term expires, the council appoints a new clerk who performs the duties given by statute and by council action. The differences in the relationship to the council are that the council appoints the clerk for an indefinite term, the clerk is no longer a member of the council, and the council may remove that person at any time as permitted under the city's personnel policy, any relevant city contracts, and state law. When the treasurer's term ends, the council should appoint someone to fill this position. To replace the clerk on the council, voters elect an additional council member at the election that precedes the end of the incumbent clerk's term. The new council member serves a term of four years beginning on the first Monday in January of the next year. This new council member is like any other person serving as a member of the council and receiving a council member's compensation. A.G. Op. 472-c (Sept. 10, When the voters adopt an Optional Plan at the same election at which they 1964). elect the clerk, the elected clerk becomes the fourth or sixth council member upon taking office in January, unless the council wishes to A.G. Op. 484e-4 (Dec. l7, appoint that person to the office of clerk. The council must then declare a 1957). vacancy in the position of the council member and fill the vacancy as it normally would. When voters elect the treasurer in the election at which they adopt an Optional Plan, the election for treasurer is nullified. At the first council meeting in the following year, the council should fill the office of treasurer by appointment for an indefinite term. 3. Changing to Plan B See generally Minn. Stat. § 412.571. When a cite adopts Plan B the status of the incumbent clerk and treasurer `� p is the same as in a city adopting Plan A. Plan B goes into effect as soon as the voters adopt it, but it does not become fully operative until the council appoints and qualifies the first city manager. League of Minnesota Cities Handbook for Minnesota Cities 6/27/2022 The Statutory City Chapter 3 1 Page 12 RELEVANT LINKS: The council must make this appointment as soon as practicable after voters adopt the plan. When the manager has taken office, the independent boards and commissions go out of existence, except for an existing civil - service commission. Minn. stat. $ 412.571, subd. When changing from a Standard Plan to Plan B, the manager cannot 2. Minn. Stat. S 412.681. remove the elected incumbent clerk and treasurer before the expiration of their respective terms, but these positions become subordinate to the manager and are subject to the manager's direction. The statutes, however, specify the duties of the treasurer; therefore, the manager may not curtail the treasurer's duties or assign another officer to perform those duties during the holdover period. If a vacancy in the office of the elective clerk or treasurer occurs before the expiration of the incumbent's tern, it is the council and not the manager who appoints the successor. As in the case of Plan A cities, the appointment is only for the unexpired term. When the terms of the clerk and treasurer expire, the manager appoints the successors. The manager also has the power to remove them. 4. Changes to all optional plans The statutory city code is applicable to all cities operating under the Standard Plan, Plan A, and Plan B, except to the extent that it is Minn. stat. 3 412.561, subd. inconsistent with the statutory provisions relating to the plan under which 2. the city is operating. The same is true of all the ordinances passed by the city prior to the adoption of the new plan. The old ordinances are still in effect until the council repeals or amends them, unless they are inconsistent with the state law governing the newly adopted Optional Plan. Thus, the ordinances for the preservation of the peace would still be valid and effective, but ordinances establishing certain council committees or prescribing duties for certain officers might be inoperative. The change to another plan does not change judicial proceedings that began prior to the city's adoption of another plan, nor does it change rights or liabilities the city acquired before such an adoption. The council and city officers must make organizational, accounting, and other adjustments in accordance with the scheme of their new form of government. 5. Changing from one plan to another Minn. stat g 412.551. Any time more than three years following the adoption of a plan, the voters or the council may request a change to another plan. The three steps of initiation, submission to voters, and certification are the same as for the original adoption proceedings. League of Minnesota Cities Handbook for Minnesota Cities 6/27/2022 The Statutory City Chapter 3 1 Page 13 RELEVANT LINKS: Minn. Stat. § 412.571. When a city changes from one Optional Plan to another, incumbent members of the council continue to serve until the expiration of their respective terms, and the change does not affect the election schedule. The new Optional Plan goes into effect as soon as is practicable after approval. When the council receives a petition requesting a transfer to another A.G. Op. 484-E4 (Nov. 20, Optional Plan, or when the council itself initiates such a proposal, only one 1957). question, that of adopting the suggested Optional Plan, goes on the ballot. An affirmative vote means the adoption of the suggested Optional Plan. A negative vote, however, means only the rejection of the suggested option. hi such a case, the city continues to operate under the Optional Plan that was in effect at the time of the election; it does not revert to the Standard Plan. E. Abandoning Plan A or Plan B Minn. stat. § 412.551, subd. 4. The council may submit a question on the abandonment of a plan to the voters at any time after three years have elapsed since the plan's adoption. A vote in favor of abandoning an Optional Plan means the city will revert to the Standard Plan. Either the voters through petition, or the council through its own motion, may request an abandonment. The question goes to the voters in the same manner as the original adoption question did. The only change in the procedure is the substitution of the word "abandoned" in the proposition statement on the ballot. If the voters favor abandonment, the incumbent council members continue in office until their terms expire. In the election in the year when the terms of two council members expire, voters will elect only one council member. They will also elect a clerk. The clerk does not serve as a member of the council until the first council meeting in the year following the election. The appointed treasurer would continue to hold office until voters elect a successor and they officially begin the term of office. III. General powers of a statutory city Minn. stat. ch. 412. Minn. Stat. § 412.211. Minn. Stat. § The basic listing of powers of statutory cities, whether they are Standard 412.221. Plan, Plan A, or Plan B cities, is in the law called the statutory city code (city code). That list contains most, but not all, of the powers councils can exercise. For example, the city code authorizes cities to do the following: League of Minnesota Cities Handbook for Minnesota Cities 6/27/2022 The Statutory City Chapter 3 1 Page 14 RELEVANT LINKS: Minn. Stat. §§ 462.351-365 Minn. Stat. § 469.001-.047. Minn. Stat. ch. 429. Minn. Stat. ch. 475. Minn. Stat § 462.358. Minn Stat. ch. 505. Minn. Stat. § 459.14. Minn. Stat. § 459.06. Minn. Stat. § 416.01. Minn. Stat § 134.07. Minn. Stat. § 360.032 See Handbook Table of Contents. See Handbook, The Home Rule Charter City. • Create departments and advisory boards, and appoint officers, employees, and agents for the city to conduct city affairs. • Prescribe the duties, compensation, and employment conditions for its employees. • Make the annual tax levy, and exercise full authority over the financial affairs of the city. • Own and operate any waterworks, gas, light, power, or heat plant. • Purchase gas, electricity, water, or heat for wholesale prices and resell it to local consumers. • Provide parks, parkways, recreational facilities, and, in cities of more than 1,000 population, a park board. • Designate a legal newspaper. • Prosecute people who violate ordinances. Scattered throughout the statutes are many powers that statutory cities can exercise. Among these are the following: • Plan for the future development of the city and take steps to implement that plan. • Carry out a program of housing and redevelopment in the city. • Levy special assessments for public improvements. • Borrow money. • Control the subdivision of land. • Provide off-street parking facilities. • Acquire and maintain a municipal forest. • Construct and maintain war memorial buildings. • Operate libraries. • Construct and operate municipal airports. Cities have many powers in addition to these. To determine whether a statutory city has a certain power, begin by checking the table of contents of this Handbook, use the search engine connected to the online version of this Handbook, or contact the League. City officials in statutory cities should refer to statutes when they have questions concerning city authority. Both statutes and the city charter govern home rule charter cities. A common problem that arises in a discussion of city powers is the interpretation of how such powers apply in actual practice. Will the courts allow cities to exercise only those powers that the law strictly spells out, or will they allow a city to exercise any functions or powers reasonably related to a statutory grant of authority? Traditionally, the courts solved this problem by referring to a rule that Judge John F. Dillon put forth in 1872. Dillon's rule held that a strict or literal interpretation of the law should be used in defining municipal powers. League of Minnesota Cities Handbook for Minnesota Cities 6/27/2022 The Statutory City Chapter 3 1 Page 15 RELEVANT LINKS City of Duluth v. Cerveny, 218 Minn. 511,16 N.W. 779 (Minn. 1944). See also Tousley v. Leach, 180 Minn. 293,230 N.W. 788 (Minn. 1930). Sverkerson v. City of Minneapolis, 204 Minn. 388, 283 N.W. 555 (Minn. 1939). City of St. Paul v. Fielding & Shepley, 155 Minn. 471, 194 N.W. 18 (Minn. 1923). Minnesota courts, however, have deviated markedly from Dillon's rule. They have tended toward more liberal interpretations of statutory or charter grants of authority to cities. In commenting upon the interpretation of city authority "to provide for the general welfare," the Minnesota Supreme Court has stated: "The council's estimate of the general welfare should be followed unless it is plainly erroneous." The important point is that cities can generally assume that they can exercise any powers the statutes expressly grant to them or any powers that directly relate to the statutory grant and that are necessary for its fulfillment. League of Minnesota Cities Handbook for Minnesota Cities 6/27/2022 The Statutory City Chapter 3 1 Page 16 LMC LEAGUE MINNESOTA CITIES Chapter 4 The Home Rule Charter City TABLE OF CONTENTS I. Home rule in Minnesota................................................................................................................................3 H. Distinction between home rule charter and statutory cities...........................................................................3 III. The home rule charter....................................................................................................................................4 A. Forms of city organization.............................................................................................................................4 B. Advantages of a home rule charter................................................................................................................5 C. Disadvantages of a home rule charter...........................................................................................................6 D. Essentials of a good home rule charter..........................................................................................................6 IV. The charter commission................................................................................................................................8 A. Creation.........................................................................................................................................................8 B. Commission members...................................................................................................................................9 C. Purpose and functions.................................................................................................................................10 D. Dissolution...................................................................................................................................................11 V. The charter process......................................................................................................................................1 l A. Drafting.......................................................................................................................................................11 B. Election........................................................................................................................................................12 C. Amendments................................................................................................................................................15 D. New or revised charters...............................................................................................................................18 E. Abandoning a home rule charter.................................................................................................................18 VI. General powers............................................................................................................................................19 VII. Charter subjects and provisions...................................................................................................................19 A. Taxes...........................................................................................................................................................20 B. Finance........................................................................................................................................................20 C. Utilities........................................................................................................................................................20 D. Ordinances...................................................................................................................................................21 E. Elections......................................................................................................................................................22 F. Elected officials...........................................................................................................................................22 G. City personnel..............................................................................................................................................23 H. Delegation of powers...................................................................................................................................23 This material is provided as general information and is not a substitute for legal advice. Consult your attorney for advice concerning specific situations. 145 University Ave. West w Jmc.org 7!7/2022 Saint Paul, MN 55103-2044 (651) 281-1200 or (800) 925-1122 0 2022 All Rights Reserved I. Contracts......................................................................................................................................................23 J. Accounting..................................................................................................................................................23 K. Licensing and regulation.............................................................................................................................24 L. Special assessments.....................................................................................................................................24 M. Real estate....................................................................................................................................................24 N. Liability.......................................................................................................................................................25 VIII. Conflicts with state law...............................................................................................................................25 A. General rule.................................................................................................................................................25 B. Identifying conflicts....................................................................................................................................25 C. Resolution....................................................................................................................................................26 IX. How charter cities should use the LMC handbook......................................................................................26 League of Minnesota Cities Handbook for Minnesota Cities 7/7/2022 The Home Rule Charter City Chapter 4 1 Page 2 0 LMCHANDBOOK FOR MINNESOTA CITIES LEAGUE Chapter 4 MINNESOTA CITIES The Home Rule Charter City Understand the authority to form a home rule charter city, charter city powers and the ways it may be organized. Contrast charter cities to those operating under the statutory city code. These broad categories are the two basic types of city organization available in Minnesota. RELEVANT LINKS: I. Home rule in Minnesota Min,. cunsL an. UI. 3 4. Minn. Stat. ch. 410. The Minnesota Constitution permits the Legislature to establish home rule charter cities, counties, and other units of local government. State statutes enacted under this constitutional authority authorize cities to adopt home rule charters. Any city may adopt a home rule charter. Of the 854 cities in the state, 107 are currently operating under a voter -approved home rule charter. See PartVln— Conflicts with state law. Home rule charter cities can exercise any powers in their locally adopted charters as long as they do not conflict with state laws. Conversely, charter provisions can specifically restrict the powers of a city. As a result, voters in home rule cities have more control over their city's powers. II. Distinction between home rule charter and statutory cities The major difference between home rule cities and statutory cities in Minn. Star. ch. 412. Minnesota is the kind of enabling legislation from which they gain their authority. Statutory cities derive their powers from Chapter 412 of Minnesota Statutes, commonly known as the statutory city code ("city code"). Home rule cities obtain their powers from a home rule charter. The distinction between home rule cities and statutory cities is one of organization and powers, not differences in population, size, location, or other physical features. See Part IV — The charter Despite this distinction, home rule charter cities are often interested in the commission. statutory city code. For example, a charter commission will often review Minn. stat. 3 410.33. Minn. Stat. ch. 412. Chapter 412 when drafting amendments to the charter. In addition, when a charter is silent on a matter addressed in the statutory city code (or other general law), the home rule charter city can generally use that statutory authority as well. This material is provided as general information and is not a substitute for legal advice. consult your attorney for advice concerning speck situations. 145 University Ave. West w .lmc.org 7/7/2022 Saint Paul, MN 55103-2044 (651) 281-1200 or (800) 925-1122 © 2022 All Rights Reserved RELEVANT LINKS: Statutory cities are sometimes interested in home rule charters themselves. This may occur when problems arise that cannot be solved under the statutory city code. When a statutory city finds itself in such a situation, it can either request that the Legislature change the city code (or adopt a special law for that specific city), or it can become a home rule city with a charter provision that provides the necessary authority. III. The home rule charter Home rule charters are, in effect, local constitutions. State laws give cities a wide range of discretion to draft charters that will meet the specific needs of the community. A. Forms of city organization Minn. stat. § 410. 16. The charter may provide for any form of municipal government that is Handbook, Local Government in Minnesota. consistent with state laws that apply uniformly to all cities in Minnesota. Home rule charter cities in Minnesota have operated under the following four forms of city government. An individual charter may, however, alter some of these features. 1. Weak mayor -council The weak mayor -council plan is the most predominant form of city organization and is used by 74 of the 107 home rule charter cities. Under this plan, administrative and legislative authority is the council's ultimate responsibility. The powers of the mayor are generally no greater (or less) than those of any other member of the council. No individual councilmember holds any specific administrative powers. 2. Strong mayor -council The strong mayor -council plan is not very common in Minnesota. This plan is used by only four home rule charter cities: Minneapolis, St. Paul, Duluth, and St. Cloud. Under this plan, the mayor is responsible to the council for the operation of all administrative agencies. Under the usual strong mayor -council plan, the mayor can generally appoint and remove subordinates, is not a councilmember but can veto council legislation, and prepares and administers a budget that is subject to council approval. The chief functions of the council are to legislate and set policies. League of Minnesota Cities Handbook for Minnesota Cities 7/7/2022 The Home Rule Charter Cay Chapter 4 1 Page 4 RELEVANT LINKS: LMC Charter Assistance Program. See Part V -C —Amendments. See Part VH—Charter subjects and provisions. 3. Council-manager Under the council-manager form of government, the council has policy- making and legislative authority, but the administration is the responsibility of an appointed manager who answers directly to the council. Thirty Minnesota home rule cities use the council-manager plan. 4. Commission Under the commission form of government, each elected councilmember is responsible for a particular administrative department. So, in addition to having duties as a legislative official, the councilmember is also a department head. The commission form has never been very popular. Over the years, it was used by only a few home rule cities. Today, no Minnesota city is operating under a commission. B. Advantages of a home rule charter The home rule charter type of city government has advantages and disadvantages. Some of the advantages of home rule include: • One of the principal virtues of the home rule charter is that it allows each city to tailor its charter to its own individual needs and desires (cities are encouraged to contact the League of Minnesota Cities Charter Assistance Program for model and sample charters, research memos, and advice that will assist in drafting, amending, or adopting a charter). City residents draft, adopt, and amend the city's charter. • A home rule city, unlike a statutory city, has the power to make changes to fit its own needs by amending its charter. These changes can occur locally, rather than waiting (and hoping) for a new law to be passed when the Legislature is in session. • The home rule process educates the voters of the city. Some work on charter commissions, while others will learn about the charter and any amendments when they vote on proposed changes. • A city charter may cover many functions and procedures, or it may be very similar to the statutory form of city government. • If general state laws are silent on a specific subject, local citizens may address them in their city's charter. • A charter may provide for initiative and referendum, recall, and election of councilmembers by wards. • City charters sometimes include limitations that are more stringent than those in the general state laws. For example, a few home rule charters contain tax and debt limitations. • The cost of government under a city charter need not be greater or less than the cost of the statutory city form of government. League of Minnesota Cities Handbook for Minnesota Cities 7/712022 The Home Rule Charter City Chapter 4 1 Page 5 RELEVANT LINKS: National Civic League Model City Charter. Ninth Edition (2021). C. Disadvantages of a home rule charter A home rule charter also has its disadvantages. Some of these can include: • While the cost of preparing a home rule charter should be relatively minor, the smaller the community, the larger the cost in proportion to population. • Poor charter drafting can be a problem. A charter city can minimize these concerns by relying on model charters and consulting competent professional advice. • The process for amending a charter is often time-consuming and cumbersome. • Charter amendments can be difficult to pass (particularly when the subject matter is controversial). Sometimes, city advocates will go directly to the Legislature for a solution, in order to bypass local opposition or to avoid dividing the community. This tends to defeat the original purpose of home rule: local control. • If the city charter provides for special elections, election expenses may be overly burdensome to city budgets. • Anyone looking for the applicable law relating to a home rule charter city must consult not only the state statutes, but the particular home rule charter. Only a few collections of the home rule charters exist. An up-to-date copy of a city charter is of utmost importance to ensure the advice is accurate. • The experiences of other cities may be of little help to a home rule charter city. For example, when the Supreme Court or the attorney general gives a ruling that concerns a statutory city, that opinion will, in most instances, be equally applicable to all other statutory cities in the state. Rulings affecting a home rule charter may, however, only be relevant to those cities that have very similar charter provisions. • The procedure for abandoning the charter form of city government may be similarly complicated. D. Essentials of a good home rule charter Effective charters maximize the advantages while minimizing the potential disadvantages. In addition, a good home rule charter will also address the following: Comprehensive grant of power The most essential element of a good charter is a comprehensive grant of power that allows the city to exercise all powers legally available under state law and the state constitution. League of Minnesota Cities Handbook for Minnesota Cities 7/7/2022 The Home Rule Charter City Chapter 4 1 Page 6 RELEVANT LINKS: Because cities are organized to promote the welfare of the people, and city residents are in control through their elected representatives and charter commission members, citizens should not be afraid of entrusting their city government with a wide range of powers. If the citizens feel it necessary, the charter can include initiative, referendum, and possibly recall provisions as additional checks to prevent the abuse of power. An example of a comprehensive grant of power clause in a home rule charter is as follows: "Powers of the City. The city shall have all powers which it may now or hereafter be possible for a municipal corporation in this state to exercise in harmony with the constitution of this state and of the United States. It is the intention of this charter to confer upon the city every power which it would have if it were specifically mentioned. The charter shall be construed liberally in favor of the city and the specific mention of particular municipal powers in other sections of this charter does not limit the powers of the city to those thus mentioned. Unless granted to some other officer or body, all powers are vested in the city council." 2. Simplicity and brevity Simplicity and brevity are also essential to a good charter. Provisions should be simple and clear, avoiding the possibility of more than one interpretation. A charter should also be brief enough to be read in a reasonable amount of time. 3. Governance fundamentals Because of the difficulty in amending and abandoning a home rule charter, the charter should only deal with governance fundamentals and give the city council the authority to provide more detailed regulations through city ordinances. 4. Responsive organization A good city charter provides for a workable, responsive governmental organization. Its design should eliminate unnecessary "red tape" and makes city government more effective by reducing the number of working parts. 5. Centralize administration Whenever possible, the charter should centralize responsibility for administration in one person: a chief administrative officer. League of Minnesota Cities Handbook for Minnesota Cities 7/7/2022 The Home Rule Charter City Chapter 4 1 Page 7 RELEVANT LINKS: This encourages and rewards expertise and efficiency in the administration League of Minnesota Cities Handbook for Minnesota Cities 7/7/2022 The Home Rule Charter City Chapter 4 1 Page 8 of the city. 6. Representative democracy E� charter �hnuld.P�p11a5i;Le, nresenta iV , dem cra 51. A city should limit the number of elective offices so voters will be able to intelligently cast their ballots. The charter should never ask voters to elect non -policy- making administrative officers. The city should have only a single body elected by voters to legislate and determine policies for the city. This single legislative body, the city council, should be composed of between Minn. stat. g 205.07. five and nine members. Councilmember terms should be long enough (up to four years) to gain experience. State law mandates that most council terms be four years, although a two-year mayoral term is allowed. 7. Advisory boards All advisory boards should report directly to the city council. IV. The charter commission A. Creation Minn. stat. 4 410.05. subd 1. Every home rule charter begins with the appointment of a charter commission by the state district court. There are three ways a city's charter commission may be created: Minnesota District Courts. • First, the chief judge of the district court in which the city lies may appoint a charter commission if it is deemed to be in the best interest of the city. The court will probably not do this without local interest in the matter. • Second, the court must make the appointment if it receives a petition signed by voters who constitute at least 10 percent of the number of voters who voted at the last city election. Smaller cities may find it easier to get the necessary number of signatures. • Third, the city council may, by resolution, request the district court appoint a charter commission. Minn. stat. 3 410.05, sued. s. Once appointed, a charter commission becomes a continuing body. Its See section IV -D - membership will change from time to time, but the commission goes on D1SSel°"e". indefinitely until it is formally dissolved using statutory procedures. Mere failure of the body to meet, to propose a successful charter for election, or to function does not end its existence. League of Minnesota Cities Handbook for Minnesota Cities 7/7/2022 The Home Rule Charter City Chapter 4 1 Page 8 RELEVANT LINKS: Minn. Stat. § 410.05, subd. I Minn. Stat. § 410.05, subd. I Handbook, Election Procedures. Minn. Stat. § 410.05, subd. 3. Minn. Stat. § 410.05, subd. 2. Minn. Stat. § 410.05, subd. 2. Minn. stat. § 410.05, subd. 2. B. Commission members Charter commissions must have between seven and 15 members. The court will determine its size unless a petition of the voters or resolution of the city council specifies the size of the commission. Any city with a home rule charter may amend the charter to fix the size of the commission to be between seven and 15 members. 1. Appointment The district court usually makes charter commission appointments. The only statutory qualification for members of charter commissions is that they be qualified voters of the city. Commission members may hold some other public office or employment except for a judicial office. City councilmembers may serve on charter commissions. However, the city's charter may provide that members of the governing body cannot serve on the charter commission. Charter commission members may serve unlimited successive terms. The court may receive information from interested citizens concerning these appointments. A city council, the petitioners requesting appointment of a commission or, in the case of new appointments to an existing commission, the charter commission itself, may suggest names of eligible nominees to the district court for consideration. The court, acting through the chief judge, makes the charter commission appointments by filing an order with the district court clerk. The district court clerk then notifies the appointees, who have 30 days to file their written acceptances and oaths of office with the district court clerk. Appointments are for staggered (or overlapping) four-year terms. Of the initial appointments, half the members plus one will serve two-year terms, with the remainder serving full four-year terms. Thereafter, the chief judge appoints new members or reappoints existing members every two years. The chief judge must make these appointments within 60 days of the expiration of each term. 2. Vacancies The commission will experience vacancies due to various reasons, such as death, inability to perform duties, resignation (including failure to file the acceptance and oath of office), or based on moving out of the corporate limits of the city. The district court may remove members from the commission at any time by written order. The order must show the reason for removal. League of Minnesota Cities Handbook for Minnesota Cities 7/7/2022 The Home Rule Charter City Chapter 4 1 Page 9 RELEVANT LINKS: If any member fails to perform the prescribed duties and fails to attend four consecutive meetings of the commission without satisfactory explanation, a majority of the members may sign a request for the member's removal and the court must order the removal. Minn. stat. § 410.05. sued. 2. The commission should always contain its full complement of members. When a vacancy occurs, the chief judge must appoint a new member for the unexpired term. C. Purpose and functions Minn. stat.; 410.07. The primary concern of a new charter commission in a statutory city is discussing and drafting a home rule charter document to be voted on by Minn. Stat. § 410.05. subd. 5. the city's residents. Minn. Stat. § 410. 10, subd. 4. If the voters reject the first charter proposed by a commission (absent discharge of the commission by a vote of its members or a referendum by the city's voters), the commission may continue to submit proposals until the voters finally adopt one. Minn. stat. § 410.05, subs, 2. Within 30 days after its appointment, a newly created charter commission must make rules, including quorum requirements, on its operations and procedures. The commission must file an annual report of its activities with the chief judge on or before Dec. 31 of each year and must send a copy of the report to the city clerk. After adoption of the charter, the charter commission continues to Minn. stat. § 410.05. subs. 4. function. The charter commission's statutorily prescribed duty is to study the local charter and government. The commission is required by law to meet at least once each calendar year. In addition, the commission must meet upon presentation of a petition signed by at least 10 percent of registered voters, according to the last annual city election, or by Minn. stat. § 410.12. subd. 1. resolution of a majority of the city council. Further, the commission must specifically convene to propose charter amendments upon presentation of a petition of at least five percent of the number of votes cast at the last state general election in the city. Minn. stat. § 410.12, subd. 1. The charter commission is like a standing constitutional convention. It has the power to propose charter changes at any time. If the city's charter does not work or proves to be faulty in operation, it is the commission's duty to propose improvements. It should, therefore, meet at regular intervals as required and keep its organization intact should any emergency arise. Minn. stat.1so.ot. DPO 04-059.. � Charter commissions are subject to the Minnesota Open MeetingLaw Minn. stat. § 15.17. (OML) and the Minnesota Government Data Practices Act (MGDPA). In LMC information memo, Meetings of City Councils. addition, as government entities, charter commissions are required by law to keep a complete record of their activities and affairs. League of Minnesota Cities Handbook for Minnesota Cities 7/7/2022 The Home Rule Charter City Chapter 4 1 Page 10 RELEVANT LINKS: Handbook, Records Management. Charter commission members should familiarize themselves with the requirements of these laws, specifically those that concern the notice and public posting of meetings under the OML. D. Dissolution Minn. stat § 410.05, soba. 5(a). An appointed charter commission in a statutory city (where a home rule charter has not been adopted) may be discharged in only one of the following ways: LMC information memo,• City Special Elections, By a three-fourths vote of the charter commission if the charter commission determines that a charter is not necessary or desirable. • After a general or special election (called by a petition of registered voters equal to at least 5 percent of the registered voters in the city) where a majority of the votes cast support the discharge of the charter commission. Minn. stat. 3 410.05. subd. 5(b). If dissolved, another commission may not be formed sooner than one year from the date of discharge. See section v -E - Abandoning a home rule In a home rule charter city, the charter commission cannot be dissolved or charter. otherwise cease to exist unless the home rule charter is abandoned through the statutory process for changing the city form of government. V. The charter process A. Drafting Minn. stat. 3410.07. In a statutory city without a home rule charter, the new charter commission must deliver to the city clerk the draft of a proposed charter or a report that states a home rule charter is not necessary or desirable. One of these documents must be provided as soon as practicable, and a majority of the members of the commission must sign it. When a majority of commission members approves a charter draft, the commission should make and authenticate at least three identical, clear copies. All the members who approved the draft should sign each of the copies. One copy should go to the clerk of the city, who will deliver it to the city council. The charter commission should keep the second copy in its files. A third copy might be useful for newspaper publication. 1. Professional assistance Minn. stat. § 410.06. Drafting a city charter is a complex and difficult job that requires special skill. League of Minnesota Cities Handbook for Minnesota Cities 7/7/2022 The Home Rule Charter City Chapter 4 1 Page 11 RELEVANT LINKS: A charter commission may, subject to the dollar limitations contained in the law, employ an attorney and other personnel to assist in drafting a charter. Before getting too far along in the process, a charter commission should seek advice on what should be included in a charter and should also submit a draft to an impartial expert for final review. LMC Charter Assistance Program. The League of Minnesota Cities Charter Assistance Program can be of assistance in furnishing the commission with pertinent charter materials. National Civic League Model City Charter, Ninth The charter commission may also find it helpful to have a member of the Edition (2021). League's staff attend an early meeting of the commission to talk about forms of government, drafting procedures, and major policy problems. The League will also provide general advice. For a nominal fee, League counsel will examine and comment on an existing charter, charter draft, or amendment. Most proposed charters have been sent to the League for this kind of review and comment. 2. Community involvement The commission and its committees should collect the informed and interested opinions from citizens and city officials about the existing form of government and the proposed changes. The charter commission should consider criticism or positive experiences with the existing government when drafting the charter. The commission should bring tentative proposals to the attention of the public and city officials before making final decisions. Often, the mayor, city councilmembers, and other city officials may have special insights into the merits or practicality of particular proposals. B. Election Minn. stat. a 410.10, subd. 1. LMC information memo, After receiving the signed draft charter, the clerk notifies the city council Cin Speccia/F/ectluns. of its receipt and will typically remind the council to submit the charter to an election of the voters. If the council fails to do so, the court may order it. The ordinary rules of the conduct of elections apply and the city covers the expense of a charter election. Minn. stat. § 410.10, subd. 1. The charter commission may recall its proposed charter at any time before the council has fixed a date for the election. The council may authorize the commission to recall the charter at any time prior to its first publication. Minn. Stat. 5 410.10, subd. 1. The council may have options regarding the timing of the election. If no general city election is to occur within six months after the clerk receives the draft, the council must call a special charter election on a date allowable by law. League of Minnesota Cities Handbook for Minnesota Cities 717/2022 The Home Rule Charter City Chapter 4 1 Page 12 RELEVANT LINKS: If a general city election will occur within six months, the council may either postpone the election on the charter until that general election, or it may call for a special election prior to the general election. If the election is held at the same time as the general election, the voting places and election officers shall be the same for both elections. Minn. stet. § 410.10, subd. 2. The notice of election must include the complete charter. The notice must be published once a week for two successive weeks in the official newspaper and may also be published in any other legal newspaper in the city. In first-class cities, the publication must be made in a newspaper having a regular paid circulation of at least 25,000 copies. 1. Charter campaign What is the role of the charter commission in the campaign for adoption of the charter? There are sometimes different views about the role of the charter commission and that of individual commission members. The law does not give the commission any responsibility after the charter has left the commission, nor does it set any restrictions. Some charter commissions have served as the principal sponsoring organization for the charter. Commission members have been responsible for publicity and have made public speeches or written editorials on the commission's (as well as the proposed charter's) behalf. In other cities, the commission as a whole has not been involved in the campaign, but sometimes individual members have participated. Because the statutes do not address the subject, what commission members do will depend on their perception of what is or is not appropriate. Surely, no other group is likely to know more about what is contained in the proposed charter and why or is likely to be more interested in the outcome of the charter election. No outsider can give much advice on how to campaign for adoption of the charter. Local conditions and the kind of opposition that might develop will determine the necessary community response. Overconfidence, however, frequently results in the defeat of a charter. The opposition is usually vocal and well organized. It is no easy task, especially at a general election, to get the necessary majority to vote in favor of the charter. Frankness and honesty about the contents of the charter can help "disarm" the opposition. Throughout its entire proceedings, the commission should inform the public of its actions. LMC information memo, Charter commissions should keep in mind that the use of public funds to Public Purpose Expenditures. promote a particular election outcome may be questionable. League of Minnesota Cities Handbook for Minnesota Cities 7/7/2022 The Home Rule Charter City Chapter 4 1 Page 13 RELEVANT LINKS: A.G. op. 442-a-20 (Jul. 18, While efforts to inform voters about the charter and to encourage voters to 1927). A. G. Op. 442-a-20 (Jul. 10, 1952). A. G. op. cast their ballot seem reasonable, a "vote yes" campaign brochure is more 159-A-3 (May 24.1966). questionable. Additionally, using email or social media to advocate for one A.G. Op. 355-a (Oct. 27, 2020). side of a ballot question may be questionable. Campaign efforts by See "Statement of Position: commission members in their role as private citizens seem acceptable, Expenditure of Public Funds on Ballot issue Advocacy," provided they do not claim to speak for the entire commission. Office of the State Auditor. 2. Ballot Minn. stat. § 410. 10, subd. 3. The ballot shall bear the printed words: "Shall the proposed new charter be LMC information memo, City special electrons. adopted? Yes No _" (with a box after each of the last two words, in which the voter may indicate his or her choice). If alternative charters or charter provisions are submitted, the ballot shall be so printed as to permit the voter to indicate the preferred language. 3. Ratification Minn. stat. § 410.11. The majority needed to adopt a charter is 51 percent of those voting on the Minn. Stat. § 410.04. Minn. Star. § 410.121. question at the election. Bard v. Minneapolis, 256 A three-fourths majority, however, is needed if a proposed charter alters Minn. 581, 99 MW.2d 468 (1959). liquor patrol limits (provisions to remove or amend charter provisions changing the sale of intoxicating liquor require a 55 percent majority). Statutory provisions specifying the percentage of necessary votes to adopt a new or revised charter or to amend a charter supersede conflicting charter provisions. 4. Filing Minn. Stat. § 410.11. If voters adopt the charter, the city clerk must file copies in the office of the secretary of state, the office of the county recorder, and the clerk's office. A certificate attesting to the accuracy of the charter giving the date of the election and the vote by which the charter was adopted, must accompany each copy. Although the Minnesota Constitution and laws do not require it, the charter commission should retain at least one copy of the charter. Printed copies of the charter should be sent to the League of Minnesota Cities, the Minnesota Historical Society, and to state and local libraries. These groups will frequently refer to the charter and it will be available to other Minnesota charter commissions considering new or amended charters. If the city has a website, it may want to consider posting an electronic copy of the charter for increased public access. League of Minnesota Cities Handbook for Minnesota Cities 7/7/2022 The Home Rule Charter City Chapter 4 1 Page 14 RELEVANT LINKS: League of Minnesota Cities Handbook for Minnesota Cities 7/7/2022 The Home Rule Charter City Chapter 4 1 Page 15 5. Effective date Minn. stat. § 410.11. The charter will take effect 30 days after the election or at another time specified by the charter. The charter supersedes any previous charter of the city. The courts must take judicial notice of the charter. Minn. Stat. § 410.11. The officials elected and appointed under the newly adopted charter may then take control of the city's records, money, and property at any time specified by the charter. The charter may provide that until an election of officers occurs, the officers under the old charter will continue to function. When the new charter becomes fully operational, the re -organized city corporation is in all respects the legal successor of the corporation organized under the old charter or state law. Existing, consistent ordinances and contracts continue until the council changes them or they expire by their terms. 6. Rejected charters If less than 51 percent of those voting on the question do not vote in favor of the proposed charter: Minn. Stat §410.10, subd. 4. 0 The charter commission may choose to modify its proposed charter and re -submit the charter for election. Minn. Stat. § 410.05, subd. ♦ The charter commission may choose to disband by a three-fourths vote of its members. Minn. Stat. § 410.05, subd. • The city voters may disband the charter commission through a petition 5(a)(2). and referendum process. Minn. Stat § 410.05, subd. 5(b). When a charter commission disbands itself or is discharged by the city voters, another commission may not be formed sooner than one year from the date of discharge. C. Amendments Minn. stat § 410.12, subd. Charter cities will find it necessary to update or otherwise modify their 1a. charter to reflect current needs and expectations. Amendments must originate through one of the several ways that are provided in statute: 1. Amendment by proposal a. Charter commission Minn. Stat § 410.12, subd. 1. A charter commission may propose amendments to the charter at any time. League of Minnesota Cities Handbook for Minnesota Cities 7/7/2022 The Home Rule Charter City Chapter 4 1 Page 15 RELEVANT LINKS: Minn. Stat. § 410.12, subds. 1-3. A.G. Op. 59a-11 (Dec. 30, 1981). Minn. Stat § 410.12, subd. I. Minn. Stat. § 2046.071. Minnesota Secretary of State - Petitions. Minn. Stat § 410.12, subds. 1, 4. Davies v. City of Minneapolis, 316 N. W.2d 498 (Minn. 1981). Haumant v. Grin. 699 N.W.2d 774 (Minn. Ct. App. 2005). Minn. Stat. § 410.12, subd. 5. b. Citizen petition A charter commission must propose amendments upon receiving a petition signed by a number of registered voters equal to 5 percent of the total votes cast at the previous state general election in the city. This percentage cannot be changed by the charter itself. All petitions circulated must be uniform in character. The petition must state the proposed amendment to the charter in full. However, if the proposed amendment is larger than 1,000 words, a true and correct copy must be filed with the city clerk, and the petition will contain a summary (between 50 and 300 words) setting forth the "substance and nature" of the proposed amendment. When a summary is used, that summary (along with a copy of the prosed amendment) must be first submitted to the charter commission for its approval as to form and substance. The commission has 10 days to return the summary with any modifications necessary to fairly comply with these requirements. The secretary of state is required to develop rules governing the manner in which petitions required for any election in this state are circulated, signed, filed, and inspected. The secretary of state shall provide samples of petition forms for use by election officials. Once received, the commission must submit the petition to popular vote. c. Process and procedure The amendment goes to the city clerk, who notifies the council. The council then provides for the election under the same rules that apply to a new charter. The council may not refuse to submit or change the amendment as long as it is constitutional. A city council does not need to submit an unconstitutional charter amendment or an amendment that violates state or federal law to the voters. When an amendment to a charter is proposed by the charter commission or petitioned for by the voters of the city, the proposed amendment must be submitted at least 17 weeks before the general election. 2. Amendment by ordinance a. City council The city council may propose an amendment by ordinance. The council submits the ordinance proposing an amendment to the commission, which has 60 days for review (which may be extended by the commission an additional 90 days by filing a resolution determining that additional time is necessary with the city clerk). League of Minnesota Cities Handbook for Minnesota Cities 7/7/2022 The Home Rule Charter City Chapter 4 1 Page 16 RELEVANT LINKS: Minn. Stat. § 410.12, subd. 7. Minn. Stat § 410.12, subd. 7. Minn. Stat § 410.12, subd. 7. Minn. Stat. § 410.12, subd. 6. After the review period, the commission returns the amendment or its own substitute amendment to the council. The council then submits to the voters either the amendment it originally proposed or the commission's substitute amendment. b. Charter commission The charter commission may recommend the council amend the charter by ordinance. Within one month of receiving a recommendation to amend the charter by ordinance, the city must publish notice of a public hearing of the proposal (which must also contain the text of the proposed amendment). The city must hold the public hearing on the proposed charter amendment at least two weeks but not more than one month after the notice is published. Within one month of the public hearing, the city council must vote on the proposed charter amendment ordinance. The vote must be unanimous, including approval by the mayor if the mayor has veto power. The ordinance proposing the amendment is subject to the same publication requirements as other ordinances. The ordinance becomes effective 90 days after passage and publication unless a later date is provided in the ordinance. Within 60 days after passage and publication, a petition signed by registered voters equal in number to at least 5 percent of the registered voters in the city or 2,000, whichever is less, may be submitted to force a referendum on the amendment. If voters file a proper petition, the city must handle the amendment like any other charter amendment, except the council may submit the ordinance at a general or special election that occurs within 60 days after filing the petition, or it may reconsider its action in adopting the ordinance. c. Cities of the fourth class In cities with a population of less than 10,000, the council may propose amendments by ordinance without submitting them to the charter commission. Four-fifths of the councilmembers must vote for the ordinance. Two weeks published notice is necessary before the vote. The council must then submit the ordinance to the voters like any other amendment. League of Minnesota Cities Handbook for Minnesota Cities 7/7/2022 The Home Rule Charter City Chapter 4 1 Page 17 1:74RAt/Ak,12RI:CE.YI Minn. Stat. § 410.10. Minn. Stat. § 410.12, subd. 4. Minn. Stat. § 410.121. See Section V -B — Election. Minn. Stat. § 410.12. Minn. Stat. § 410.11. LMC Charter Assistance Program. Minn. Const. art. XII, § 5. Minn. Stat. § 410.30. Minn. Stat. § 410.30. 3. Elections The election concerning proposed amendments and the arrangement of the ballot are substantially the same as in the case of the adoption of a new charter. An amendment needs the favorable vote of 51 percent of those voting on the question. 4. Notice Amendments, like charters, need the clerk's certification. Copies must be filed in the offices of the secretary of state and county recorder, as well as in the clerk's office. Amendments take effect either at the end of 30 days after the election, or at some other time if the amendment so specifies. The law also allows for alternative proposals. The League of Minnesota Cities Charter Assistance Program would appreciate a copy in order to keep the LMC charter collection up to date. State and local libraries and the Minnesota Historical Society are also suggested recipients. A city may also want to consider posting charter amendments to its website to keep the online charter up to date. D. New or revised charters Any city having a home rule charter may adopt a new or revised charter in the same manner as an original charter. If a new or completely revised charter is to go to the voters, the preparation of the ballot and other procedures are substantially the same as for the original charter. E. Abandoning a home rule charter Any home rule city may abandon its charter and become a statutory city. Since the state was formed, only three cities—Jordan, Isanti, and Sauk Centre, all since 1989—have abandoned their charter form of government. These three cities are now Plan A statutory cities. A city may abandon its charter by presenting a proposal, adopting it, and having it become effective in the same manner as a charter amendment. Accordingly, abandonment would require the approval of 51 percent of those voting on the question. The proposal must include a schedule containing necessary provisions for transition to the statutory city form of government in order to place the city on a regular election schedule as soon as practicable. The proposal may provide for continuation of specified provisions of the home rule charter for an interim period and must specify the plan under which the city will operate as a statutory city. League of Minnesota Cities Handbook for Minnesota Cities 7/7/2022 The Home Rule Charter City Chapter 4 1 Page 18 RELEVANT LINKS: VI. General powers Minn. stat. § 410.16. A city charter should deal only with the fundamentals of the governmental organization of the city, leaving the council free to exercise a broad grant National Civic League of authority by ordinance. Modern charters contain provisions that claim Model City Charter, Ninth Edition (2021). for the city all powers that the home rule provision of the constitution permits a city to assume. Older charters contain a long list of specific grants giving various powers to the city. The strong statements of intent found in League and National Civic League model charters should be adequate to ensure that the omnibus grant gives the city all the municipal power it might receive through more specific grants. Park v. City of Duluth, 134 Minnesota Supreme Court decisions generally have given a liberal Minn. 296,159 N.W. 627 (1916). State v. City of construction to all -powers grants in city charters. In addition to powers Duluth, 134 Minn. 355,159 granted by the charter, various state statutes may give additional powers to N.W. 792 (1916). City of Duluth v. Cerveny, 218 a city and regulate certain activities. For example, authority for planning, Minn. 511,16 N.W.2d 779 police civil service commissions, and municipal forest maintenance is (1944). included in laws dealing specifically with these subjects. A home rule charter may provide any municipal powers the Legislature could have delegated to the city, as long as the powers are consistent with state statutes. A number of city charters have attempted to do this. Under such a grant, the charter may authorize the city to provide for medical clinics, public transit, and industrial parks. It may authorize any of a range of public enterprises as long as they do not involve the use of public funds for an unconstitutionally private purpose. The limits depend more on public policy than on the lack of home rule charter power. Minn. Slat. 3 410.33. If a charter is silent on a topic that Chapter 412 or another statute Minn. Stat. ch. 412. In re HUC Pipeline addresses for statutory cities, home rule cities may usually apply the Condemnation Litig., No. general law on the subject. If, however, general law prohibits a charter A03-1125 (Minn. Ct. App. May 4, 2004) (unpublished from addressing the matter or provides that the charter prevails over decision). general law, the home rule city may not apply the general law. Nordmarken v. City of Richfield, 641 Nw.2d 343 No city, however, even one organized under a city charter, has inherent (Minn. Ct. App. 2002). Lilly powers. A city may only exercise such powers that are expressly conferred v. City of Minneapolis, 527 by statute or are implied as necessary in aid of those powers. If a matter N. W.2d 107 (Minn. Ct. App. 1995). presents a statewide problem, the implied necessary powers to regulate are narrowly construed unless the Legislature has provided otherwise. VII. Charter subjects and provisions The following list of powers are addressed within many home rule charters is not complete or all-inclusive. Many provisions contained within a city charter are also discussed in more detail in other chapters of the LMC Handbook for Minnesota Cities. League of Minnesota Cities Handbook for Minnesota Cities 7/7/2022 The Home Rule Charter City Chapter 4 1 Page 19 RELEVANT LINKS: A. Taxes Handbook, Property Tax Presumably, a charter may grant a home rule city power to tax although Leary. the state has largely pre-empted two local non -property taxes: the sales tax and the income tax. State law has historically provided some differences between home rule charter cities and statutory cities in property tax levy authority. Minn. stat. 3 275.75. For example, the Legislature allows charter cities to exceed their charter limits or referendum requirements for levy increases if the increased levy was needed to offset reductions in city local government aid (however, any state -imposed levy limits still apply). B. Finance Handbook, Municipal Budgeting. The charter may, but does not need to, require a budget system (however, Handbook, Property Tax current truth -in -taxation laws require all cities to prepare a budget). Leiy. The charter may regulate the payment of claims and may also limit or broaden the purposes for which the city may spend money beyond the limits set for statutory cities. For example, a charter could allow appropriations to private agencies performing work of a public nature, while statutory cities probably could not. The law limits statutory cities in their issuance of warrants in anticipation of the collection of taxes. A charter may broaden or curtail this authority. Minn. stat. 3 410.325. Both statutory and home rule charter cities may use a system of Handbook, Debt and anticipation certificates. A charter may lower the debt limit applicable to Borrowing. cities, but it may not raise the limit. A charter can also restrict the purposes for which the city may issue bonds, and it can make the procedure easier or more difficult. C. Utilities 1. Municipal utilities Minn. stat. 3 412.321. While statutory cities may establish electric, gas, light, and power utilities only after a vote by the people—regardless of the method of financing—a A.G. op. 624a-3 (June 28, charter may provide for acquisition without a vote or may require a 1999). different majority from the majority necessary in statutory cities. A charter may give the right of condemnation without a time limit. A charter may also allow the city to use surplus utility funds to support general funds. League of Minnesota Cities Handbook for Minnesota Cities 7/7/2022 The Home Rule Charter City Chapter 4 1 Page 20 RELEVANT LINKS: Minn. stat. § 444.075, subd. Charters may not attempt to set utility rates for water, sewer, and 3(b). LMC information memo, stormwater utilities. Charter provisions may not artificially inflate or Securing Payments of Utility Charges. suppress rates. Authority to set rates is vested exclusively in the city council by state statute. 2. Regulation The Minnesota Public Utilities Commission and the Department of Handbook, City Regulatory Commerce regulate the service and rates of private gas, electric, and Functions. telephone utilities. However, charters may acquire gas and electric Minn. Stat. $ 410.09. franchises and may adopt regulations, including requirements for a gross earnings tax or similar fees. Strict limitations on the use of franchises, taxation, and fees for the use of public rights-of-way exist, whether or not a city has a charter. D. Ordinances 1. Procedures Minn. stat. § 412.191, snbd. Statutory cities may pass an ordinance on a single reading at the same 4. meeting that the ordinance first comes before the council. The ordinance must be published in full or in summary form in the local Minn. stat. § 410.20. newspaper. Statutory cities may, but do not need to, require several readings and a lapse of time between readings. Charters may or may not provide for publication, and they may impose other restrictions on the ordinance process. 2. Initiative and referendum Minn. stat. § 410.20. In statutory cities, city voters cannot petition the council to or city voters to adopt ordinances through the initiative process. Similarly, in statutory cities, city voters cannot act on ordinances passed by the council through the referendum process. Only home rule charter cities may provide for initiative and referendum through their charter. Hanson v. City of Granite Falls, 529 N.W.2d 485 Only ordinances that are "legislative in character" may be enacted through (Minn. Ct. App. 1995). the initiative process and passed upon by the voters through the referendum process. Legislative actions are those that are general in nature and lay down a permanent and uniform rule of law. HRA v. City of Minneapolis, Administrative actions, on the other hand, are those of a temporary and 293 Minn. 227,198 N.W.2d 531 (Minn. 1972). A.G. Op. special character. They merely carry out existing laws and relate to the 858 (Oct. 26, 1970). A.G. daily administration of municipal affairs. Op. 858 (August 5, 1970). League of Minnesota Cities Handbook for Minnesota Cities 7/7/2022 The Home Rule Charter City Chapter 4 1 Page 21 RELEVANT LINKS: But see City ofCuvahoga Administrative actions include the settlement of lawsuits, entering of Falls v. Bucheve Cmty. Hope Found, 538 U.S. 188,123 S. contracts, acceptance or rejection of bids, sale of municipal bonds, Ct. 1389 (U.S. 2003). A.G. appointment of city officials, levying of taxes, granting of licenses and Op. 1856-2 (Mar. s, 1962). permits, and the adoption of budgets. E. Elections Minn. stat. a 205.02, subd. 2. State statutes regulate many phases of election procedure, but some may Minn. Stat. 3 205.07, subd. I. be open to city regulation through the charter. State law fixes the date of city elections in both statutory and home rule cities for the first Tuesday Minn. stat. 0 205.10. subd. after the first Monday in November in even or odd years. In charter cities, 3a special elections may only be held on the days allowable by law. F. Elected officials 1. Wards Minn. Stat. a 410.16. The charter may use proportional representation and may set up different nomination procedures from those in statutory cities. The charter may provide for ward representation, which is generally not available to. statutory cities. 2. Removal by the council Minn. stat. 3 351.02. State law establishes the specific situations that create vacancies in A.G. Op. 59a-30 (Jul. 24, 1996). elective office. A charter may not provide for removal of councilmembers by the council for any reason not explicitly stated in statute. 3. Recall Minn. stat. § 410.20. Home rule charter cities have some limited authority to provide for recall Minn. Const. art VIII, § 5. Jacobsen v. Nagel, 255 elections of the city's elected officials. The Minnesota Constitution and Minn. 300,96 N.W. 2d 569 state court decisions have restricted the recall of elected city officials to (1959). cases of serious malfeasance or nonfeasance during the term of office in the performance of the duties of the office. Recall does not exist in statutory cities. 4. Term limits Minneapolis Term Limits A charter may not impose term limits on city elected officials. Coalition v. Keefe, 535 N.W.2d 306 (Minn. 1995). League of Minnesota Cities Handbook for Minnesota Cities 7!7/2022 The Home Rule Charter City Chapter 4 1 Page 22 RELEVANT LINKS: League of Minnesota Cities Handbook for Minnesota Cities 7/7/2022 The Home Rule Charter City Chapter 4 1 Page 23 G. City personnel In home rule cities, the charter may establish procedures for the appointment and removal of non -elective officers and employees at the discretion of the council. The charter may include restrictions, such as a formal civil service system, and it may authorize the council to fix administrative salaries subject to the limitations and procedures provided by the charter. H. Delegation of powers A.G. Op. 624a-3 (June 28, Absent specific statutory or charter authority, the council of a charter city 1999) . A.G. Op. 1001-a (Sept. 15, 1950). Muehring v. may not delegate powers and duties that require the exercise of judgment School District No. 31,224 and discretion to other persons or bodies. Specific language must exist in Minn. 432, 28 Nw.2d 655 (1947). Minneapolis Gas and the charter for any delegation to occur. Light Co. v. City of Minneapolis, 36 Minn. 159, 30 N.W. 450 (1886). I. Contracts Minn. Stat. § 471.345. State law establishes bidding procedures and uniform dollar limits for all city contracts for the purchase, sale, or rental of supplies, materials, or A.G. Op. 59-a-15 (Aug. 22, equipment, or the construction, alteration, repair, or maintenance of real or 1969) personal property. Queen City Constr., Inc. v. While the language leaves some doubt about the application of the law to City of Rochester, 604 N.W.2d 368 (Minn. CL App. home rule charter cities, the attorney general was of the opinion that the 1999). Handbook, fiependitures statute supersedes all charter provisions concerning uniform dollar Purchasing and contracts. limitations. Presumably, the charter may regulate some phases of the contracting procedure, but most charters deal only with subjects not covered by the state law. J. Accounting Minn. Star. § 412.222. Under the law, statutory cities may employ a public accountant or the state auditor to perform an audit. By charter, cities may require an annual audit Minn. stat. § 6.54. Minn. Stat. § 6.55. by the person designated to perform the audit. Charter cities are also subject to the law that requires the state auditor to examine a city's records on the initiative of the council or a petition of citizens. Minn. stat. §3 471.695-.698. All cities are required to publish their annual financial statements. In home rule cities, the charter may require additional reports and publication of the Handbook, Property Tax reports depending on the desires of the community. The number and kinds Levy. of funds, and the authority to transfer between funds, may come under charter regulation with minimum statutory restriction. In statutory cities, the law is more restrictive on this subject. League of Minnesota Cities Handbook for Minnesota Cities 7/7/2022 The Home Rule Charter City Chapter 4 1 Page 23 RELEVANT LINKS: K. Licensing and regulation Handbook, City Licensing. Handbook, City Regulatory While statutory cities must find a specific statute authorizing the licensing Functions. or regulation of an activity before they can regulate that activity, a charter city can often rely on an all -powers provision in its charter to license or regulate activities within its borders. Without such an all -powers or other broad grant of authority, a charter city must find a specific charter provision or state law authorizing the regulation. L. Special assessments Handbook, Financing Public Improvements. Both statutory and home rule cities may finance local improvements by Minn. Const. an. x, § 1. special assessments against benefited property under a uniform Minn. Stat. ch. 429. Minn. Stat. § 429.111. constitutional and statutory procedure. While most home rule cities follow state law, a city charter may provide a different procedure or authorize the Minn. Stat. § 429.021, subd. s. council to adopt a different procedure and may require the city to use that method exclusively. A charter city, however, must conform to certain Minn. Const. an. x, § 1. requirements of state law. The charter can require the city to use general funds or service charges, rather than special assessments, for local improvements. Any special assessments used must comply with the constitutional requirement that the amount of the special assessments cannot exceed the increased market value of the property as a result of the benefit due to the local improvement. Some charters with special assessment provisions authorize the city Curiskis v. City of council to choose between utilizing the charter provisions or state law Minneapolis, 729 N.W.2d 655 (Minn. Ct. App. 2007). when imposing special assessments. A court case has validated such charter provisions. However, when a city elects to use its charter provisions for a special assessment project, the charter provisions must be followed throughout the entire project. The city cannot later elect to use the state law provisions for the same special assessment project. Likewise, the city cannot commence a special assessment project under the procedure in state law and then later elect to utilize the charter procedure. M. Real estate Handbook, Expenditures Purchasing and Contracts. Charter and statutory cities may acquire real estate that is needed for LMC information memo, public purposes, and the council can dispose of it when it is no longer Purchase and Sale of Real Property. needed. State law does not require bids or approval of the voters, but a charter may impose such restrictions. League of Minnesota Cities Handbook for Minnesota Cities 7/7/2022 The Home Rule Charter City Chapter 4 1 Page 24 RELEVANT LINKS: N. Liability Handbook, Liabiliry. Both statutory and home rule cities are subject to the same tort liability imposed by statutes and court decisions. Home rule charter cities may not attempt to extend or curtail the city's liability to any extent. VIII.Conflicts with state law Harmonizing general statutory language and charter provisions that deal with the same subject can be difficult. Cities can resolve potential conflicts between state laws and charter provisions through the following process: A. General rule Nordmarken v. City of Richfield, 641 N.W.2d 343 The general rule is that when a charter provision is in conflict with the (Minn. CL App. 2002). state statutes, the statutory provisions prevail, and the charter provision is ineffective to the extent it conflicts with the state policy. B. Identifying conflicts Mangold Midwest Co. v. Village of Richfield, 274 When state law is silent on an issue covered by charter and the issue is one Minn. 347,143 N.W.2d 813 that the Legislature has the power to delegate to a city, the assumption is (Minn. 1966). State v. Kuldmmn, 729 N.W.2d 577 that there is no conflict with stateolic On the other hand when a p y er ' (Minn. 2006). charter provision and state law deal with the same issue, the possibility for Ricking v. City of conflict or preemption occurs. Charter provisions or charter city Minneapolis, 891 N.W.2d ordinances conflict with state law when they contain express or implied 304 (Minn. 2017); craco, Inc. v. City of Minneapolis, terms that are irreconcilable with each other. State law preempts charter 937 N.W2d 756 (Minn. provisions or charter city ordinances when state law fully occupies a 2020). particular field of legislation. State v. Burns, No. A05-2554 (Minn. Ct. App. Mar. 20, Rather than requesting an attorney general's opinion or having a court 2007) (unpublished resolve the possible conflict, a city council can, by resolution, rely on the decision). opinion of its attorney as to whether a conflict exists. hi making this decision, the attorney should consider the following points: • Is there a court case or attorney general opinion that deals with the same or similar provisions? If so, the city must follow the court ruling. Even though attorney general opinions are only advisory, a city should seriously consider the reasoning behind the opinion. • In the absence of a court decision or attorney general ruling, does the state law clearly outline or imply a policy decision by the Legislature that the law applies to charter cities as well as to statutory cities? League of Minnesota Cities Handbook for Minnesota Cities 7/7/2022 The Home Rule Charter City Chapter 4 1 Page 25 RELEVANT LINKS: Minn. Stat. 3 410.015. Columbia Heights Relief Assn v. City of Columbia Heights, 305 Minn. 399,233 N.W.2d 760 (1975). State v. Kuhlman, 729 N.W.2d 577 (Minn. 2006). State v. Runts, No. A05-2554 (Minn. Ct. App. Mar. 20, 2007) (unpublished decision). For laws passed by the Legislature since 1976, this determination is easy. In any law taking effect after July 1, 1976, the word "city" means statutory city only. After that date, in order for a law to apply to charter cities, the law itself must clearly state it applies to both statutory and home rule charter cities. A mere reference to all cities would not be sufficient to include charter cities. For laws enacted prior to July 1, 1976, cities should look for phrases such as, "all cities shall' or "unless the council determines to proceed under charter provisions" for clues of legislative intent. Generally, laws enacted by the Legislature for the purpose of protecting the public prior to July 1, 1976, probably apply to all cities. C. Resolution Even if a general state law applies to charter cities, it does not necessarily supersede a charter provision. If both the charter and state law direct the city to take certain actions or follow certain procedures, it may be advisable to follow both the charter provision and the state law, in order to resolve any conflicts between the two provisions. State law supersedes charter provisions only to the extent the charter provisions conflict with state policy. IX. How charter cities should use the LMC handbook This handbook is written for both statutory and home rule charter cities. Each chapter includes a section on how the chapter relates to charter cities. Because of the differences in city charters, it is difficult to generalize about how an individual charter city will be impacted by any particular state law. The handbook does, however, address statewide laws and rules, court decisions, and attorney general opinions that apply to charter cities. League of Minnesota Cities Handbook for Minnesota Cities 7/7/2022 The Home Rule Charter City Chapter 4 1 Page 26 9/23/22,11:46 AM Charter Assistance Program - League of Minnesota Cities LMCLEAGUE of MINNESOTA CITIES Charter Assistance Program If you're a home rule charter city, or a statutory city considering adopting the home rule form of government, our Charter Assistance Program provides the guidance you need. This program provides viewpoint -neutral information and analysis, and connects you with other Minnesota charter cities and national organizations for perspectives and advice on charter -related policy issues. Charter Assistance Charter -related materials The League has developed and collected sample and model charters, sample ordinances, and background on charters and surveys. • General advice Guidance is available on the following topics: - General powers of a home rule charter city; - Advantages and disadvantages of a home rule charter; - Essentials of a good home rule charter; - Adopting and amending a home rule charter; and - Functions of a charter commission. . Analysis and input Review and comment on an existing charter, charter draft, or amendment. . Presentations Presentations from League staff on various forms of government, charter drafting procedures, and major policy problems. https://w .Imc.org/resources/charterassistanc"rogram/ 1/2 9/23/22,11:46 AM Charter Assistance Program - League of Minnesota Cities Fees for Charter Assistance • No charge for pre -prepared materials on home rule charters and answers to simple questions. • No charge for consultation meetings on general charter topics, drafting procedures or policy issues. • No charge for presentations. • $100 per hour for examination and commentary on an existing charter, draft charter, or amendments. Your LMC Resource Research & Information Service staff members are ready to help you apply their broad knowledge to the issues you're dealing with today. Access online form to submit a question, or call us: (651) 281 1200 or (800) 925-1122 https://w .Imc.org/resources/charterassistance-program/ 212 1685 CROSSTOWN BOULEVARD N.W. • ANDOVER, MINNESOTA 55304 • (763) 755-5100 FAX (763) 755-8923 • WWW.ANDOVERMN.GOV TO: Mayor and Councilmembers FROM: Jim Dickinson, City Administrato SUBJECT: September 2022 Andover Community Center Update DATE: October 25, 2022 INTRODUCTION: Attached for Council review is the Andover Community Center (ACC) Budget Summary Report for Budget Year 2022. The reports reflect activity through September 2022, comparative data with September 2021 and the entire year of 2021. September 2022 Financials Coming off 2020 imposed COVID restrictions shutting down the entire facility mid-March of 2020, the facility was allowed to reopen in a restricted capacity early January 2021. The ACC operated at near full capacity for close to twelve months in 2021 making current year (2022) activities comparable to the previous year. 2022 Revenues are just slightly ahead in comparison to 2021, this is due to assorted reasons attributed to turf usage vs ice, fieldhouse usage, vending machine use and payment timing. Ice Rental to date is less in 2022 versus 2021 primarily due to the Sports Complex ice was not converted to turf in 2021. The 2022 expenses are ahead of 2021 primarily in salaries and operating costs. 2022 Full capacity reflects additional utility costs and hiring challenges which required the use of more full-time staffing overtime hours rather than the use of part-time staffing for the first three month of 2022. In addition, 2022 has a Capital Outlay line item where 2021 did not. Also provided is an ACC historical perspective of actual costs dating back to 2015. This is the reporting previously provided to the ACC Advisory Commission. This report also provides history on debt service payments and the property tax levy assigned to debt and operations. August/September 2022 FACILITY UPDATE: Please refer to the attached ACC Facility Update for Major Events and monthly Walking Track activity through September. Major events are picking up as the sports seasons transition from summer camps to the fall seasons. PROGRAMS/ACTIVITIES- ACC staff has been busy as we switch gears into the busy fall/winter season, but over the summer ACC hosted several large weekend events on the main rink and the Sports Complex. ACC had three separate Jr Hockey tryout camps and two youth hockey tournaments. The fieldhouse hosted a week-long MN Timberwolves camp Aug 15-18 on all four courts. Fun Fest was held early July and ACC hosted the Andover Fire Open House on Sept 17`n The ACC has been selected to host the U.S. Hockey Hall of Fame Museum Women's Face-Off Classic on November 7, 2022 (University of Minnesota vs. St. Cloud State University). ACC staff are spending a lot of time preparing to help display the ACC and provide for a wonderful experience for the teams and spectators. ACC staff are also spending time preparing the MN Hockey Tier One Girls Invitational on Oct 21-23. Eight teams from MN along with another sixteen teams from all over the US, including Boston, Chicago, Detroit, Philadelphia, Wisconsin, Arizona, North Dakota, California, etc. Pickleball has been slow to return with the warm/dry weather we have had recently but we are sure to see them once that changes. ACC has been offering pickleball lessons and skills and drills sessions since September. Fall ACC programs are very strong. Skating Lessons and Indoor Soccer both have well over one hundred participants each. High School Hockey will start up in early November with the first games later in the month. Mn Premier Volleyball will start up in November as will Andover Athletic Association Girls Basketball. Election Day is hosted at the ACC for two precincts on November 8th After a Request for Proposal (RFP) process in March — May, the Council approved Crooked Lake Concessions as our selected vendor and a lease was approved at the May 17'n Council meeting. Crooked Lake Concessions ordered and installed materials for the space. Concessions opened mid-September and has been well received. ACC shares event schedules monthly to help coordinate staffing and inventory needs. Concessions is ready for the busy season. STAFFING - The ACC is at fall complement of approved fulltime staffing. All around, ACC staffing is currently in decent shape. ACC continues to look for additional part- time staffing as we enter the 2022 -2023 busy season. SCHEDULING- Scheduling CHEDULING Scheduling for the 2022-23 busy season is complete. ACC is in continual contact with all our user groups to better understand how we can better address their needs. ACC also continues to look to fill off season times and fine tune our spring turf season. Also, ACC is in the process of migrating to new scheduling software. ACTION REQUESTED Informational. Council is requested to review the staff report and attached reports. Attachments CITY OF ANDOVER Community Center Budget Summary Totals Budget Year 2022 2021 2022 REVENUES Budget Sep YTD %Bud Audit Budget Sep YTD %Bud Charges for services Ice Rental $ 668,000 $ 500,885 75% $ 823,856 $ 729,000 S 445,400 61% Turf Rental 70,000 3,782 n/a 3,782 50,000 18,553 37% Track - 2,492 n/a 3,950 2,500 3,580 n/a Fieldhouse Rental 270,000 156,819 58% 220,527 240,000 212,308 88% Proshop 15,000 4,970 33% 9,606 13,000 7,724 59% Vending 16,000 4,552 28% 7,763 15,000 15,305 102% Advertising 50,000 74,113 148% 84,700 63,000 82,248 131% Total Charges for services 11089,000 747,613 690/. 1,154,184 1,112,500 785,118 71% Miscellaneous 140,000 72,634 52% 134,072 182,000 149,127 82% Total revenues 1,229,000 820,247 67% 1,288,256 1,294,500 934,245 72 2021 2022 EXPENDITURES Budget Sep YTD % Bud Audit Budget Sep YTD %Bud Current: Salaries & benefits 757,753 445,838 59% 692,742 770,110 585,276 76% Departments] 105,100 52,271 50% 82,655 97,100 66,972 69% Operating 635,197 316,878 50% 515,308 603233 374,098 62% Professional services 154,375 43,892 28% 85,130 248,525 119,169 48% Capital outlay Na 42,000 37,358 89% Current 1,652,425 858,879 52% 1,375,835 1,760,968 1,182,873 67% Revenue over (under) expense (423,425) (38,632) 9% (87,579) (466,468) (248,628) 537% Other financing sources (uses) General Property Tax Levy 155,000 81,219 52% 154,534 155,000 81,815 53% Instw neat income - 118 n/a 2,817 - 213 n/a Rental / Lease Pymt 638,000 634,375 99% 635,026 638,000 635,415 100% Transfers out (300,000) (300,000) 100% (300,000) (300,000) (300,000) 100% Total financing sources (uses) 493,000 415,712 84% 492,377 493,000 417,443 85% let increase(decrease) in fund balance $ 69,575 $ 377,080 542% $ 404,798 $ 26,532 $ 168,815 636° CITY OF ANDOVER, MINNESOTA Andover Community Center / YMCA Historical Comparison 2015 2016 2017 2018 2019 2020 2021 2022 2022 Actual Actual Actual Actual Actual Actual Actual Budget Sep -YTD Revenues: Charges for services Ice Rental $ 400,619 $ 405,990 $ 392,828 $ 435,716 $ 442,995 $ 361,796 $ 823,856 $ 729,000 $ 445,400 Turf Rental - - - - - - 3,782 50,000 18,553 Track - - - - - 301 3,950 2,500 3,580 Fieldhouse Rental 187,007 199,286 215,089 218,667 220,225 133,126 220,527 240,000 212,308 Proshop 9,258 9,412 9,247 8,606 9,680 4,394 9,606 13,000 7,724 Vending 9,279 8,588 9,182 7,470 8,427 6,148 7,763 15,000 15,305 Advertising 31,758 26,450 38,819 34,000 40,850 8,000 84,700 63,000 82,248 Charges for services 637,921 649,726 665,165 704,459 722,177 513,765 1,154,184 1,112,500 785,118 Miscellaneous 174,788 136,552 136,149 142,768 131,386 110,781 134,072 182,000 149,127 Total revenues 812,709 786,278 801,314 847,227 853,563 624,546 1,288,256 1,294,500 934,245 Expenditures: Current: Salaries & benefits 439,304 451,332 481,926 501,108 533,044 503,842 692,742 770,110 585,276 Departmental 74,949 77,945 65,612 76,448 66,570 74,809 82,655 97,100 66,972 Operating 388,492 364,935 364,242 352,067 330,084 345,588 515,308 603,233 374,098 Professional services 142,602 106,381 125,034 104,076 77,818 129,261 85,130 248,525 119,169 Capital outlay 47,859 4,900 11,442 39,888 100,000 42,000 37,358 Current 1,045,347 1,048,452 1,041,714 1,045,141 1,047,404 1,153,500 1,375,835 1,760,968 1,182,873 Revenue over under expenditures (232,638) (262,174) (240,400) (197,914) (193,841) (528,95 (87.579)1 (466,468)1 248 628 Other financing sources (uses) General Property Tax Levy - - - - - - 154,534 155,000 81,815 Investment income (1,078) 2,190 2,779 5,780 16,107 6,793 2,817 - 213 Rental/Lease Pymt 638,220 640,303 641,691 637,150 636,803 635,629 635,026 638,000 635,415 Transfers out (300,000) (300,000) (300,000) (300,000) (300,000) (300,000) (300,000) (300,000) (300,000) Total financing sources (uses) 337,142 342,493 344,470 342,930 352,910 342,422 492,377 493,000 417,443 Net increase (decrease) in fund balance 104,504 80,319 104,070 145,016 159,069 (186,532) 404,798 26,532 168,815 Fund balance (deficit) - January 1 (482364) 56,140 136,459 240,529 385,545 544,614 358,082 762,880 762,880 Fund balance(deficit)- December 31 $ 56,140 $ 136,459 $ 240,529 $ 385,545 $ 544,614 $ 358,082 $ 762,880 $ 789,412 $ 931,695 Fund Balance Detail: FB- Replac Res for Common Space $ 143,702 $ 154,449 $ 179,283 $ 173,560 $ 200,606 $ 190,067 $ 216,790 $ 241,790 $ 241,790 FB - Unassigned (87,562) (17,990) 61,246 211,985 344,008 168,015 546,090 547,622 689,905 $ 56,140 $ 136,459 $ 240 529 $ 385 545 $ 544,614 $ 358,082 $ 762 880 $ 789,412 $ 931,695 Debt Service Payments 2012C GO Abatement Bonds (P+ I) $ 1,214,906 $ 1,216,506 $ 1,213,731 $ 1,211,481 $ 1,208,931 $ 1,215,981 $ 1,212,631 $ 1,213,931 $ 1,213,931 2019A GO Abatement Bonds (P+I) 590,150 819,725 1,109,755 1,109,755 $ 1,214,906 $ 1,216,506 $ 1,213,731 $ 1,211,481 $ 1,208,931 $ 1,806,131 $ 2,032,356 $ 2,323,686 $ 2,323,686 Property Tax Levy 2012C GO Abatement Bonds $ 975,632 $ 977,332 $ 974,418 $ 972,055 $ 969,378 $ 976,780 $ 973,263 $ 974,628 $ 974,628 2019A GO Abatement Bonds - - - - - 1,001,090 976,966 1,014,065 1,014,065 Community Center Operations 155,000 155,000 155,000 $ 975,632 $ 977,332 $ 974,418 $ 972,055 $ 969,378 $ 1,977,870 $ 2,105,229 $ 2,143,693 $ 2,143,693 AN D VE R COMMUNITY CENTER FACILITY UPDATE OCT-NOV 2022 OCT 8 -INDOOR SOCCER PROGRAM BEGINS OCT 20 - 21 - NO SCHOOL DAYS OCT 20 - MN TIMBERWOLVES CAMP OCT 21 -23 -MN HOCKEY NIT GIRLS TOURNAMENT OCT 31 -AHS GIRLS HOCKEY SEASON BEGINS NOV 5 -AAA GIRLS BASKETBALL NOV 7 - US HOCKEY HALL OF FAME GAME -GOPHERS VS HUSKIES NOV 8- ELECTIONS NOV 12 -AHS GIRLS HOCKEY VS. EDINA NOV 13 -MN PREMIERE VOLLEYBALL TRYOUTS NOV 14 -AHS BOYS HOCKEY SEASON BEGINS NOV 19 -AHS GIRLS VS. GENTRY ACADEMY NOV 24 -ACC CLOSED NOV 28 -MN PREMIERE VOLLEYBALL SEASON STARTS TRACK CHECK IN IS REQUIRED, MONDAY -FRIDAY. 6 30AM-4 30PM. NUMBERS BELOW REFLECT THOSE CHECKED IN DURING THESE TIMES. JAN -1846 FEB -1960 MARCH - 2054 APRIL - 1931 MAY -795 JUNE -454 JULY - 405 AUGUST- 389 SEPT- 500 FALL LEARN TO SKATE - SEPT. 18-7 WEEKS (103 KIDS) FALL INDOOR SOCCER - OCT 8 - 6 WEEKS BEGINNER PICKLEBALL LESSONS -OCT & NOV F' VN D6 06 VWE 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 2023 Budget Development Discussion October 25, 2022 The Council has had several reviews of the 2023 Proposed General Fund Budget that will be supported by the 2023 Tax Levy. The Council did adopt at the September 6th regular Council meeting a Preliminary 2023 Property Tax Levy & General Fund Budget. The Preliminary 2023 Budget proposes a total property tax levy of $17,073,084: $10,891,789 (63.80%) operational levy, $3,766,697 (22.06%) debt service levy, and $2,414,598 (14.14%) other levies. (See attached Property Tax Levy worksheet) The 2023 Proposed Property Tax Levy is estimated to decrease the current City tax rate by 14.46%. That rate will be applied to the City's growing tax base and will reflect a 6.00% increase in the gross tax levy. The focus of the 2023 Budget and Levy is an infusion of funds into the mill and overlay program and a commitment to public safety. The Council has the right to reduce or keep constant this levy until the final certification date of December 28, 2022. The following are the 2023 Budget Development guidelines adopted at the April 19th City Council meeting: 1) A commitment to a City Tax Capacity Rate to meet the needs of the organization and positioning the City for long-term competitiveness using sustainable revenue sources and operational efficiencies. Note. The Anoka County Assessor is showing a 23.44% increase in the taxable market value for the preliminary 2023 tax rate calculations. The Preliminary 2023 Property tax rate is anticipated to decrease by close to 14.5 % (from 36.081 to 30.863). (See attached Pay 2023 Valuation Estimates) 2) A fiscal goal that works toward establishing the General Fund balance for working capital at no less than 45% of planned 2023 General Fund expenditures and the preservation of emergency fund balances (snow emergency, public safety, facility management & information technology) through targeting revenue enhancements or expenditure limitations in the 2022 adopted General Fund budget. Note: With property tax revenues making up close to 80% of the total General Fund revenues cash flow designations approaching 50% are appropriate and recommended by the City's auditor. The 2022 budget development exceeded this guideline for cash flow, also Emergency Fund Balances (approximately 3% of planned General Fund expenditures per finance policy) are in place to stabilize a situation, not be a complete solution. Staff did review with the Council the General Fund 2022 Fund Balance Analysis over the (See attached 2022 Fund Balance Analysis and General Fund Revenue & Expense Summa 3) A commitment to limit the 2023 debt levy to no more than 25% of the gross tax levy and a commitment to a detailed city debt analysis to take advantage of alternative financing consistent with the City's adopted Debt Policy. Note: The adopted 2022 debt levy was 23.29% of the gross tax levy, the 25% guideline for the 2023 debt levy will be attained via the structured management of the current long-term debt, the current preliminary 2023 debt levy is at 22.06% 4) A comprehensive review of the condition of capital equipment to ensure that the most cost- effective replacement schedule is followed. Equipment will be replaced based on a cost benefit analysis rather than a year -based replacement schedule. Note: The City Vehicle Purchasing Committee has met and performed this analysis and made recommendations on equipment needs as part of the 2023-2027 Capital Improvement Plan (CIP) development process. The 2023-2027 Capital Improvement Plan was approved 5) The use of long-term financial models that identify anticipated trends in community growth and financial resources that will help designate appropriate capital resources for future City needs. The financial models will be used in the budget planning process to ensure that key short-term fiscal targets are in line with long-term fiscal projections. Note: The City continually maintains various financial models to determine the long-term impacts of present-day expenditures and financing decisions. Fiscal assumptions are based upon a set of financial data including growth factors, tax capacity valuations, per capita spending, fund balance reserve, and debt ratios. 6) Continued commitment to strategic planning targeted toward meeting immediate and long- term operational, staffing, infrastructure and facility needs. Note: The most recent Council Community Vision and Organizational Goals and Values document was adopted by the City Council on December 3, 2019. Administration will assure that direction provided in that document is integrated into department work plans and budgets. 7) A management philosophy that actively supports the funding and implementation of Council policies and goals, and a commitment to being responsive to changing community conditions, concerns, and demands, and to do so in a cost-effective manner. Note: Special attention will be given to fiscal values, commercial & residential development or redevelopment, collaboration opportunities, service delivery, livability, and image of the community. Staffing: Fire Department — New for the 2022 budget was to fill a full-time Assistant Chief position; that position was filled early August The 2022 budget also contained additional funds to help meet acceptable response times with an enhanced Duty Crew model, Administration and Fire are closely monitoring the progress of the Duty Crew model, success is crucial as duty crew alternatives such as fulltime firefighters is very expensive. The Andover Fire Chief and Deputy Fire Chief were present at the September workshop meeting to discuss the challenges associated with implementing the enhanced Duty Crew model (The Fire Department did provide a staffing request as part of the 2023 budget process that outlines what a fulltime firefighting model would look like; an additional $1.5 million per year for the operating budget, plus capital expenses to bring fire stations up to code for fulltime staffing (sleeping quarters). Administration is not recommending the fulltime firefighting model for the 2023 budget but does want the Council to be aware of the cost of a fulltime model.) There are some anticipated retirements and staff vacancies within the coming year and the next few years; in response Administration/Human Resources continues to focus on succession planning, utilization of internship opportunities, continued cross -training of staff, and/or realignment of resources. Some realignments added significant new responsibilities and pay adjustments were made, all accommodated within the current human Resources budget. Personnel Related Implications: To date the following are the other projected issues facing personnel related expenses: L Human Resources will review all position -based salaries and the associated benefit package to determine if the total package is competitive with other government entities. Pay steps for eligible employees will be included in a 2023 budget proposal A cost -of - living adjustment (COLA) for non -bargaining employees is being evaluated The current Public Works Union contract expires December 31, 2023. That contract is provided for in the 2023 budget 2. A midyear review of the employee health plan for the 2022 Budget was conducted with our broker on July 2711, a significant increase in the renewal rates is forecasted. A marketing of the group to various insurance carriers was done and results of the marketing are currently being evaluated by Administration/Finance. Finance is carrying an employee health insurance increase placeholder in the proposed budget to provide for employee health insurance. For the 2022 budget, Administration recommended to stay with the Health Partners Open Access program. The existing HSA plan with higher deductibles ($6,900 single and $13,800 family) and stacked with an HRA (Health Reimbursement Arrangement) was offered for 2022. The HRA was funded utilizing premium savings that were achieved from the proposed renewal to a new higher deductible plan. Employees have $3,500 single and $7,000 family deductibles; but with the stacked HRA, the City will reimburse the remainder of the deductible, if needed, to the provider up to $3,400 for single and $6,800 for family. The plan offered is accompanied with a health spending account (HSA), originally implemented in 2006. The City does contribute annually to an employee's HSA to assist with the high deductible out of pocket costs. That contribution is evaluated annually as part of the marketing of the health insurance plans. Contractual Departments: 1. The City Attorney 2022 contract reflected a 2% increase over the 2021 contract A status quo contract with a 2% increase is anticipated 2. The Anoka County Sheriffs Office presented a proposed 2023 Law Enforcement Contract to the City Council at the August 16`x' Council meeting. The proposal was the outcome of Administrations discussions with the Anoka County Sheriff for a 2023 contract taking into consideration efficiencies brought about by technology investments and a detailed evaluation of reactive/proactive patrolling, and matching staffing with historical incident call times. The Council approve thatproposal and authorized the 2023 Law Enforcement Contract The approved 2023 City of Andover Law Enforcement expenditure is budgeted at $3,347,315 (0.3% increase) which is offset by a Police State Aid revenue budget of $126,192 and School Liaison revenue budget of $106,465 reflecting a net tax levy impact of $3,114,658 (0.68% increase). The proposed 2023 Sheriffs contract provides for: a. 72 hours per day of patrol service b. 6 hours per day of service provided by a Community Service Officer c. School Liaison Officers in the middle school and high school d. 2 Patrol Investigators e. 50% of the Crime Watch Program's coordinator position Per contract, the Sheriff always provides the required number of deputies for all hours contracted by the City. If the Sheriff's Office has a deputy vacancy or a deputy is injured etc., they still provide the City with a deputy at straight time even though they may have to fill those hours with overtime which at times may cost the Sheriff's Department additional but is not billable per the contract. Council Memberships and Donations/Contributions: The following memberships/contributions are in the 2022 proposed budget, updated for 2023: • North Metro Mayors Association • Metro Cities • Mediation Services • YMCA — Water Safety Program • Alexandra House • Youth First (Program Funding) • NW Anoka Co. Community Consortium - JPA • Teen Center Funding (YMCA) • Family of Promise • Lee Carlson Central Center for Family Resources • Senior High Parties • Stepping Stone • Hope for Youth • Andover Senior Center $14,261 (GF) $ 9,569 (GF) $ 6,628 (GF) $ 9,000 (GF) $20,928 ($15,000 GF & $8,600 CG) $15,000 ($12,000 GF & $3,000 CG) $10,000 (GF) $26,000 ($5,600 GF & $20,400 CG) $ 3,000 (CG) $ 1,500 (GF) $ 1,000 (CG) $ 1,000 (CG) $ 1,000 (CG) $ 3,500 (GF) Some are funded via the General Fund (GF), and those that qualify for charitable gambling funding are done through the Charitable Gambling (CG) Special Revenue Fund. Council direction will be sought on the memberships/contributions for 2023. Capital Projects Levy: Capital Projects Levy — The 2022 Capital Projects Levy Budget specifically designates $2,162,822 of the general tax levy to capital projects and equipment needs relating to Capital Project Outlay ($275,000), Road and Bridge ($1,409,579), Pedestrian Trail Maintenance ($108,243), Park Projects ($15,000) and Facility Maintenance Reserve ($355,000). Specific designation of the tax levy to anticipated City needs and priorities for transportation and trail maintenance, park projects and equipment outlays allows the city to strategically allocate its resources and raise the public's awareness of City spending priorities. The Road and Bridge levy is evaluated annually and along with Capital Outlay, Pedestrian Trail Maintenance, Parks Projects, and Facility Maintenance levies increased/decreased according to the City Council budget guidelines. Road and Bridge An adjustment was made to the Road & Bridge funding formula in 2014, primarily to stop the continual decrease in the levy that has been happening over the past few years due to decreases in the Anoka County Assessor taxable market value figures for the City of Andover. Based on Council discussion, consensus was to stop the decline in road funding and evaluate annually through the adopted City Council Budget Development Guidelines. It should be noted that in 2014, Local Government Aid (LGA) in the amount of $74,655 was used to help fund the Road & Bridge Fund. That State of Minnesota funding has gone away, down to $0.00 in 2017, and remain at 0.00 each year since. Future increases in LGA or even the presence of LGA for the City of Andover based on the current State formula are remote. In 2021, as part of the 2022 budget process, Administration has had discussions with the Council regarding the use of debt service levy and the Permanent Improvement Revolving (PIR) Fund fund balance to address immediate street maintenance needs in the community based on Engineering analysis of the street infrastructure. The Council did approve the 2022 Street Reconstruction Bonds infusing $7.33m into the Road & Bridge program to focus on mill and overlays and reclaims of city streets. The 2019 City of Andover Road & Bridge levy was $1,254,788, a 7.34% increase over 2018. The 2020 budget contained a 2.60% increase ($32,681) to $1,287,469, the 2021 budget contained a 4.27% increase ($54,967) to $1,342,456 and 2022 budget contained a S.0 % increase ($67,123) to $1,409,579. The_preftinary 2023 levy is proposing an increase for 2023 to $1,619,190, a 9.48% increase, following previous Council guidelines capturing market value increases to dedicate to roads. • Pedestrian Trail Maintenance The 2020 City of Andover Pedestrian Trail Maintenance levy was $104,040. The 2021 budget and 2022 budgets each included a 2% increase leading to a $108,243 levy for 2022. The preliminary 2023 levy is proposing a 2% increase ($2,165) for 2023 to $110,408. • Park Improvements This levy is an annual appropriation to be used to underwrite park improvement projects as recommended by the Park and Recreation Commission and approved by the City Council. This funding is intended to be a supplemental source of capital funding for park projects that is separately identified in the City's Five -Year Capital Improvement Plan. The 2015 levy was $61,500, but only $15,000 was levied for 2016. $46,500 of the previous levy was re -assigned to the General Fund to focus on Park's maintenance/replacement items. In addition to the re -assigned funds, an additional $43,500 of General Fund levy was assigned to Parks Repair/Replacement items for a total levy of $90,000 in 2016, and that continued for 2017. The 2018 General Fund levy assigned to Parks Repair/Replacement items levy was increased to $100,000 for 2019, to $120,000 for 2020 & 2021 and then to 130,000 for 2022; the Parks Project levy continues to remain at $15,000. Per Council direction at a Joint Meeting with the Park and Recreation Commission, there will be a $15,000 adjustment to these levies for 2023. The Parks Repair/Replacement items 2023 Preliminary levy is proposed at $145,000 and the Parks Project levy at $15,000. • Capital Equipment/Projects Under the Capital Projects Levy, a levy is proposed to be designated to Capital Equipment/Project expenditures identified through the CIP process. Through this designation, the City, over time, will build a fund reserve to avoid cash flow "spikes" and address a wide range of capital improvement needs such as facility maintenance projects under a more controlled spending environment. The 2022 levy was $275,000, the preliminary 2023 levy is proposing no increase to the $275.000 to continue to meet the needs of the CIP. • Facility Maintenance This was a new $50,000 levy proposed for 2018. A facility condition assessment study identified many maintenance repairs for City facilities such as roof repairs, HVAC, electrical panels, fire alarm systems, windows, and air quality related items (the comprehensive listing which is proactive and reactive was shared with the Council at the August 251 workshop meeting). This levy was increased to $355,000 for the 2019 budget to help address the significant deferred maintenance items that have been identified. Most recently for the Public Works and Community Center buildings expansion projects within the City Campus Master Plan materialized. The $355,000 levy is anticipated to continue at that level into the future to address additional facility repairs. The Preliminary 2023 levy does not recommend any adiustment to Facility Maintenance levy for 2022. $355,000 is again Proposed for the 2023 levy. Debt Service Levy: Annually the Finance Department conducts a detailed debt service analysis to monitor outstanding debt and to look for early debt retirement or refinancing opportunities that will yield interest expense savings to the city. (Staffalong with Ehlers & Associates have completed reviews to see if any refinancing opportunities are available at this time, currently there are none; we will then continue to monitor refunding opportunities, as markets move quickly, and calculate potential savings for each issue that may meet parameters which may generate savings.) The preliminary 2023 Debt Service levy is proposed as follows: • 2012C Taxable G.O. Abatement Bonds $ 969,745 Final levy year 2031 • 2018A Capital Improvement Plan Bonds $ 612,794 Final levy year 2043 • 2019A GO Abatement Bonds $1,028,782 Final levy year 2039 • 2020A GO Equipment Certificates $ 376,740 Final levy year 2023 • 2021A GO Equipment Certificates $ 174,773 Final levy year 2025 • 2021A GO Street Reconstruction $ 603,863 Final levy year 2029 Total ACTION REQUESTED The Council is requested to receive a presentation and provide direction to staff. submitted, Jim City of Andover, Minnesota Property Tax Levy Certified Certified Codified CerOBed Certified Regpeeled Change 2018 2019 2020 2021 2022 2023 %of Total $ % General &Other Operational Levies General Operators $ 8,543,258 $ 8.845,970 $ 9,194,032 $ 9,396,493 $ 9,868,370 $ 10,591,789 62.04% $ 723,419 7.33% Community Center Operators - - - 155,000 155,000 155,000 0.91% $ - 0.00% Parks Repair/Replacement Items 10,000 100'00 120,000 120,000 130.000 145,000 0.85% $ 15,000 11.54% Total General & Other Operational Levies ,643,256 8,945,970 9,314,032 9.671,493 10,153.370 10.891,789 63.80% $ 738,419 7.27% Qebt Service Levies 2010A G.O. Open Space Referendum Bonds 18Q7n 183,989 184,199 151,078 - - 2012C Taxable G.O. Abatement Bonds 972.055 969,378 976,780 9]3,263 974,628 969,745 2014A G.O. Equipment Certificate 294,945 294,525 - - - - 2016A G.O. Equipment Certificate 143,310 142,837 143,373 - - - 2018AG.0. Cap Improv Plan Bonds - 525,000 433,603 456,344 617,519 612,794 2019A G.O. Abatement Bonds - - 1,001,090 976,966 1,014,065 1,028,782 2020 G.O. Equipment Certificate - - 350,000 406,224 374,850 376,740 2021 A G.O. Equipment Certificate - - - 170,000 170,000 174,773 2021A G.O. Street Reconstivcton Bands 6001000 603,863 Total Debt Service Levies 1,599,087 2,115,]29 3.089,045 3,133,875 3,751,062 3,766,697 22.06% $ 15,635 0.42% Other Levies Capital Projects Levy Capital Equipment/Project 275,000 275,000 275,000 250,000 275,000 275,000 1.61% $ - 0.00% Capital Equipment Purchases 525,000 - - - - - 0.00% $ - NDIV/01 Facility Maintenance Reserve 5,000 355,000 355,000 35,000 355,000 35,000 2.08% $ - 0.00% Parks Projects 15.00 15,000 15,000 15.000 15,000 15,000 0.09% $ - 0.00% Road &Bridge 1,169,014 1,254,788 1,287,469 1,342,456 1,409,579 1,619,190 9.48% S 209.611 14.87% Pedestrian Trall Maintenance 10,000 102,000 104,040 106,121 108,243 110,408 0.65% S 2,165 2.00% Lower Rum River Watershed 40,000 40,000 40,000 40,000 40,000 40,000 0.23% $ 0.00% Total Other Levies 2,174,014 2,041,788 2,076,509 2,108,5T7 2,202,822 2,414,598 14.14% $ 211,776 9.61% Gross City Levy 12,416,357 1%103A87 14,479,586 14,913,945 16,107,254 17,073,084 100.00% $ 965,829 6.00% Less Fiscal Disparities Distribution 1,802,963 1,725,448 1,896,892 1,957,824 2,153,911 1,984,687 Local Tax Rate Levy $ 10,613,394 S 11,378,039 $ 12,582,694 $ 12,956,121 $ 13,953,343 $ 15,088,397 Less Le Based on Market Value $ 188,777 $ 183,989 $ 184,199 $ 151,078 $ $ Net Local Tax Rate Levy $ 10,424,617 $ 11,194,050 $ 12,398,495 $ 12,805,043 S 13,953,343 $ 15,088,397 Adjusted Tax Capacity Value" (1) 30,007,904 31,604,711 34,675,332 35,898,536 38,672,764 48,868,511 We 5.32% 9.72% 13.59% 11.53% 26.42% Chance %Charm Tax Capacity Rate- 34.740% 35.419% 35.756% 35.670% 36.081% 30.863% 5.218% -14.460% Tax Capacity Rate W/O LRRWSD 34.627% 35.310% 35.656% 35.574% 35.993% Tax Capacity Rate With LRRWSD 34.952% 35.621% 35.942% 35.845% 36.243% 2023 Levy Calculation Options Voter Approved Ref -MV 0.00681% 0.00572% 0.00526% 0.00418% 0.00000% Rate Ch in Rate Levy Ch in Levy 30.045% -16.728% $ 564,000 3.50% "Adjusted Value determvredbyadjustirg In, FlscalDlsparmes and Taxlncremenfeetimales. 30.208% -16.276% $ 644,000 4.00% "Biandadrale due lathe 01yofAndoverlevyinglor Lover Rum River Walershed Disblct 30.372% -15.822% $ 725,000 4.50% 30.536% -15.367% $ 805,829 5.00% (1)Adjusted Tax Capacity Value is subject to change. 30.699% -14.9150/a $ 885,829 5.50% 30.863% -14.461% $ 965,829 6.00% CITY OF ANDOVER Potential Annual Property Tax Increase - 2023 2022 2023 -Proposed Change Market Current Market Current Market Value City Tax Value City Tax Value City Tax Change 36.081% 22.72% 30.863% $ % increase $ 250,000 $ 902.03 $ 306,800 $ 946.88 $ 56,800 $ 44.85 $ 300,000 $ 1,082.43 $ 368,160 $ 1,136.25 $ 68,160 $ 53.82 $ 350,000 $ 1,262.84 $ 429,520 $ 1,325.63 $ 79,520 $ 62.79 $ 400,000 $ 1,443.24 $ 490,880 $ 1,515.00 $ 90,880 $ 71.76 $ 450,000 $ 1,623.65 $ 552,240 $ 1,704.38 $ 102,240 $ 80.73 $ 500,000 $ 1,804.05 $ 613,600 $ 1,893.75 $ 113,600 $ 89.70 $ 550,000 $ 1,984.46 $ 674,960 $ 2,083.13 $ 124,960 $ 98.67 $ 600,000 $ 2,164.86 $ 736,320 $ 2,272.50 $ 136,320 $ 107.64 $ 650,000 $ 2,345.27 $ 797,680 $ 2,461.88 $ 147,680 $ 116.61 $ 700,000 $ 2,525.67 $ 859,040 $ 2,651.26 $ 159,040 $ 125.59 $ 750,000 $ 2,706.08 $ 920,400 $ 2,840.63 $ 170,400 $ 134.56 NOTE: The city tax rate is a blended rate due to the City of Andover levying for Lower Rum River Watershed District. 4.97% 4.97% 4.97% 4.97% 4.97% 4.97% 4.97% 4.97% 4.97% 4.97% 4.97% CITY OF ANDOVER Pay 2023 Valuation Estimates Taxable Market Value % Change Tax Capacity Value % Change Pay 2020 $ 3,561,318,700 Pay 2020 $ 36,099,539 Pay 2021 ESTIMATE 3,615,408,106 1.52% Pay 2021 Pay 2020 37,366,775 3.51% Pay 2021 $ Pay 2022 Pay 2022 Pay 2023 40,210,548 7.61% Pay 2023 Taxable Tax Taxable Tax Taxable Tax Taxable Tax Market Capacity Market Capacity Market Capacity Market Capacity Value Value Value Value Value Value Value Value Andover Valuation Totals $ 3,561,318,700 $ 36,099,539 $ 3,615,408,106 $ 37,366,775 $ 3,885,459,439 $ 40,210,548 $ 4,796,233,379 $ 50,393,394 Captured Tax Increment (114,064) (119,819) (122,976) (136,422) Fiscal Disparity Contribution (1,310,143) (1,348,420) (1,414,808 (1,368,461) Loral Tax Rate Value 34,675,332 35,898,536 38,672,764 48,888,511 Fiscal Disparity Distribution 5,355,244 5,475,223 6,037,850 6,037,850 Total Adjusted Values $ 40,030,576 $ 41,373,759 $ 44,710,614 $ 54,926,361 3.36% 8.07% 22.85% Taxable Market Value % Change Tax Capacity Value % Change Pay 2020 $ 3,561,318,700 Pay 2020 $ 36,099,539 Pay 2021 $ 3,615,408,106 1.52% Pay 2021 $ 37,366,775 3.51% Pay 2022 $ 3,885,459,439 7.47% Pay 2022 $ 40,210,548 7.61% Pay 2023 $ 4,796,233,379 23.44% Pay 2023 $ 50,393,394 25.32% City of Andover Taxable Market Values $6,000,000,000 $5,000,000,000 $4,000,000,000 $3,000,000,000 $2,000,000,000 $1,000,000,000 $0 Pay 2020 Pay 2021 Pay 2022 Pay 2023 City of Andover Tax Capacity Values $60,000,000 $50,000,000 $40,000,000 $30,000,000 $20,000,000 $10,000,000 $0 Pay 2020 Pay 2021 Pay 2022 Pay 2023 City of Andover General Fund 2022 Fund Balance Analysis 10/18/2022 Actual December 31, 2021 $ 9,626,466 2022 Estimated Fund Balance Increase (Decrease) (764,625) Projected December 31, 2022 8,861,841 Less: Snow Emergency (100,000) Public Safety (100,000) Facility Management (100,000) Information Technology (100,000) 2023 Budgeted Use of Fund Balance (341,715) ** Economic Development (150,000) Fiscal Disparities Fluctuation (300,000) Prepaids / Inventories (154,736) Working Cash Flow (6,953,047) Estimated Balance Available for Adjustments $ 562,344 r 2022 Working Cash Flow Designation Calculation: 2023 Requested Expenditure - Preliminary Estimate $13,906,093 % of 2023 General Fund Expenditures 50.000% $ 6,953,047 ** Matches 2023 General Fund Revenue and Expense Summary CITY OF ANDOVER General Fund Revenue & Expense Summary EXPENDITURES Actual Actual Actual Actual Actual Budget Estimate Requested * Budget Change (") General Government 2017 2018 2019 2020 2021 2022 2022 2023 $ 8.80% REVENUES 4,778,336 4,956,352 5,091,793 5,162,234 5,532,429 5,743,417 5,743,417 5,943,867 200,450 3.49% Property Taxes $ 8,332,634 $ 8,634,130 $ 8,864,720 $ 9,303,235 $ 9,527,670 $ 10,076,370 $ 10,076,370 $ 10,814,789 738,419 7.33% License and Permits 546,378 562,525 855,831 892,277 891,762 535,500 692,400 573,000 37,500 7.00% Intergovernmental Revenues 793,932 829,861 822,129 861,178 939,174 817,284 839,347 839,907 22,623 2.77% Charges for Current Services 843,022 888,944 1,133,160 1,070,788 1,036,929 799,110 907,290 839,110 40,000 5.01% Fines and Forfeits 75,287 73,719 62,349 47,630 53,747 50,500 46,000 45,500 (5,000) -9.90% Interest Income 64,751 107,560 208,957 148,974 (15,183) 75,000 75,000 75,000 0 0.00% Miscellaneous Revenue 178,616 176,662 192,058 172,174 167,318 148,300 149,780 148,300 0 0.00% Transfers 196,930 178,558 188,008 190,688 212,031 197,081 197,081 228,772 31,691 16.08% TOTALREVENUES 11,031,550 11,451959 12,327,212 12,686,944 12,813448 12,699,145 12983,268 13,564378 865,233 EXPENDITURES General Government 2,642,223 2,748,464 2,843,957 2,906,325 3,020,260 3,504,589 3,475,939 3,812,860 308,271 8.80% Public Safety 4,778,336 4,956,352 5,091,793 5,162,234 5,532,429 5,743,417 5,743,417 5,943,867 200,450 3.49% Public Works 2,854,540 3,158,490 3,148,743 3,314,542 3,522,626 3,888,159 3,882,609 4,058,766 170,607 4.39% Other 764,875 241,940 15,001 1,012,778 766,109 245,928 645,928 90,600 (155,328) -63.16% TOTAL EXPENDITURES 11,039,974 11,105,246 11,099,494 12,395,879 12,841424 13,382093 13,747,893 13,906,093 524,000 UNDER(OVER)BUDGET $ 8424 $ 346,713 $ 1227,718 $ 291,065 $ 27,976 $ 682,948 $ 764,625 $ 341,715 $ 341,233 CITY OF ANDOVER General Fund - Expenditure Budget Summary Totals - By Department Budget Year 2023 GRAND TOTAL $ 11,039,974 $ 11,105,246 $ 11,099,494 $ 12,395,879 $ 12,841,424 $ 13,382,093 $ 13,747,893 $ 13,906,093 524,000 3.92% Actual Actual Actual Actual Actual Budget* Estimate Requested- I Change (*) 2017 2018 2019 2020 2021 2022 2022 2023 $ % GENERAL GOVERNMENT Mayor and Council $ 84,136 $ 87,813 $ 99,001 $ 95,519 $ 95,658 $ 107,347 $ 102,347 $ 110,104 2,757 2.57% Administration 187,514 198,945 211,898 187,758 229,314 238,442 236,842 297,277 58,835 24.67% Newsletter 25,287 17,770 24,413 22,156 22,945 27,300 29,000 30,000 2,700 9.89% Human Resources 15,520 13,666 15,842 16,181 20,836 34,661 34,661 35,458 797 2.30% Attorney 188,644 188,031 191,782 195,721 199,809 212,041 212,041 219,221 7,180 3.39% City Clerk 147,450 149,769 160,184 166,221 175,177 185,278 185,278 196,235 10,957 5.91% Elections 17,852 50,629 20,452 91,643 20,260 77,188 77,188 85,140 7,952 10.30% Finance 258,883 272,851 280.199 294,501 307,009 337,466 334,716 355,854 18,388 5.45% Assessing 147,915 149,040 149,033 154,482 128,829 161,000 140,000 161,000 0 0.00% Information Services 149,512 171,637 169,827 187,703 185,642 226,601 226,601 242,922 16,321 7.20% Planning & Zoning 398,780 422,983 412,282 453,133 491,395 526,669 526,669 567,673 41,004 7.79% Engineering 511,183 527,688 561,642 566,224 594,720 652,908 652,908 741,037 88,129 13.50% Facility Management 509,547 497,642 547,402 475,083 548,666 717,688 717,688 770,939 53,251 7.42% Total General Gov 2,642,223 2,748,464 2,843,957 2,906,325 3,020,260 3,504,589 3,475,939 3,812,860 308,271 8.80% PUBLICSAFETY Police Protection 2,962,551 3,053,526 3,183,610 3,114,623 3,287,046 3,337,486 3,337,486 3,347,315 9,829 0.29% Fire Protection 1,353209 1,445,167 1,391,252 1,508,854 1,706,876 1,841,166 1,841,166 1,992,865 151,699 8.24% Protective Inspection 443,712 436,790 493,955 519,183 519,787 529,812 529,812 559,182 29,370 5.54% Emergency Management 16,320 18,060 18,608 17,227 15,203 29,003 29,003 33,555 4,552 15.69% Animal Control 2,544 2,809 4,368 2,347 3,517 5,950 5,950 10,950 5,000 84.03% Total Public Safety 4,778,336 4,956,352 5,091,793 5,162,234 5,532,429 5,743,417 5,743,417 5,943,867 200,450 3.49% PUBLIC WORKS Streets and Highways 597,963 656,194 615,450 686,978 804,392 868,864 868,864 915,356 46,492 5.35% Snow and Ice Removal 449,881 599,029 703,647 496,668 540,226 702,923 707,373 774,897 71,974 10.24% Street Signs 214,540 206,890 202,996 257,281 196,782 230,094 230,094 212,254 (17,840) -7.75% Traffic Signals 36,151 33,857 26,422 23,045 33,362 40,000 40,000 44,000 4,000 10.00% Street Lighting 27,735 32,829 32,716 34,211 36,533 40,400 40,400 42,400 2,000 4.95% Street lights - Billed 144,451 142,937 1459604 152,181 156,841 180,500 180,500 180,500 0 0.00% Park & Recreation 1,207,360 1282,414 1,180,502 1,426,233 1,505,145 1,573,086 1,573,086 1,637,954 64,868 4.12% Natural Resource Preservatiot 6,503 5,158 16,831 9,821 9,738 14,311 14,311 13,398 (913) -6.38% Recycling 169,956 199,182 224,575 228,124 239,607 237,981 227,981 238,007 26 0.01% Total Public Works 2,854,540 3,158,490 3,148,743 3,314,542 3,522,626 3,888,159 3,882,609 4,058,766 170,607 4.39% OTHER 764,875 241,940 15,001 1,012,778 766,109 245,928 645,928 90,600 (155,328) -63.16% Total Other 764,875 241,940 15,001 1,012,778 766,109 245,928 645,928 90,600 (155,328) -63.16% GRAND TOTAL $ 11,039,974 $ 11,105,246 $ 11,099,494 $ 12,395,879 $ 12,841,424 $ 13,382,093 $ 13,747,893 $ 13,906,093 524,000 3.92% • • law, ♦, 1685 CROSSTOWN BOULEVARD N.W. • ANDOVER, MINNESOTA 55304 • (763) 755-5100 FAX (763) 755-8923 • WWW.ANDOVERMN.GOV TO: Mayor and Councilmembers FROM: Jim Dickinson, City Administrator SUBJECT: 2023 Special Revenue, Debt Service, Capital Projects, Enterprise & Internal Service Funds Budget Distribution & Discussion DATE October 25, 2022 The Council has had several reviews of the 2023 Proposed General Fund Budget that will be supported by the 2023 Tax Levy. The Council did adopt at the September 6th regular Council meeting a Preliminary 2023 Property Tax Levy & General Fund Budget. The Preliminary 2023 Budget proposes a total property tax levy of $17,073,084: $10,891,789 (63.80%) operational levy, $3,766,697 (22.06%) debt service levy, and $2,414,598 (14.14%) other levies. The 2023 Proposed Property Tax Levy is estimated to decrease the current City tax rate by 14.46%. That rate will be applied to the City's growing tax base and will reflect a 6.00% increase in the gross tax levy. The focus of the 2023 Budget and Levy is an infusion of funds into the mill and overlay program and a commitment to public safety. The Council has the right to reduce or keep constant this levy until the final certification date of December 28, 2022. This agenda item will focus on all the other City fund budgets, the attachments are in "draft" form. DISCUSSION Other Funds: The attachments to this staff report are draft budgets for all the other funds outside of the General Fund within the City. The attachments are grouped by fund types bolded below: These budgets are self-explanatory, except for the Economic Development Authority (EDA) and Entemrise Funds The EDA Fund detail was presented to the EDA at their August and October meeting, and the Enterprise Funds are driven by a rate analysis that is part of the Capital improvement Plan CIP Development process. Administration will provide a briefbresentation of the attached "draft" budrets and answer any questions the Council may have. The Special Revenue Funds (pgs. 1 — 22) are established to justify and account for revenue sources to finance particular functions or projects. Revenues for these funds come from a variety of sources (taxes, fees, gifts, grants or other contributions). Expenditures from these funds are normally restricted by statute, local ordinance or grant agreement. Also, the funds may be used for either operations or capital outlay as legal restrictions mandate. Administration will be discussing with the Council the following funds: 1. Economic Development Authority Fund —funds transfer 2. Community Center— second full year of operation with expansion 3. Charitable Gambling Fund — volume of gambling 4. CARES Act /ARPA Funding Fund — utilization offunds The Debt Service Funds (pgs. 23 — 40) account for the accumulation of resources for, and the payment of general long-term principal and interest. Repayment of the debt through principal and interest payments to bond holders is backed by the full faith and credit of the City of Andover. Administration will briefly be discussing with the Council how the overall debt service spreadsheet impacts the individual Debt Service Funds and the proposed 2023 Debt Service Levy. The Capital Project Funds (pgs. 41 — 70) are used to account for the acquisition or construction of major capital facilities or equipment financed by a variety of funding sources, including tax levy, debt, special assessments, grants or other governmental fund resources. Administration will not be discussing these funds in detail but will ask if the Council has questions of any of the funds. These funds are the primary funds that facilitate the annual Capital Improvement Plan (CIP). The Enterprise Funds (pgs. 71— 78) are dependent on multiple factors such as community growth and demand for and usage of the service. The Enterprise funds are in line and step with the rate analysis done for these funds as part of the CIP development and review. Administration will discuss how these funds are impacted by rate analysis that helps facilitate the Enterprise Funds' annual operations and CIP items. Internal Service Funds (pgs. 79 — 84) are used to account for services that are provided to other City Departments, or to other governments, on a cost reimbursement basis. Administration will briefly discuss with the Council the following funds: 1. Central Equipment Fund — maintenance garage 2. Risk Management Fund —insurance management ACTION REQUESTED The Council is requested to review the staff report, attachments, receive a presentation, and provide direction to staff. submitted, CITY OF ANDOVER, MINNESOTA 2023 ANNUAL BUDGET SPECIAL REVENUE FUNDS DEFINITION: Special revenue funds are established to justify revenue sources to finance particular functions or projects. Revenue 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. City of Andover Special Revenue Funds 2023 Budget Summary - All Special Revenue Funds Statement of Revenues, Expenditures and Changes in Fund Balance Fund Balance, January 1 Revenues General Property Taxes Intergovernmental Charges for Services Investment Income Miscellaneous Total Revenues: Other Sources Transfers In Total Revenues and Other Sources: Total Available: Expenditures Personal Services Supplies and Materials Purchased Services Other Services and Charges Capital Outlay Total Expenditures: Other Uses Transfers Out Total Expenditures and Other Uses: $ 1,007,917 $ 1,510,465 $ 1,510,465 $ 1,612,751 194,718 3,166 1,231,389 15,447 910,922 2,355,642 2,355,642 3,363,559 731,616 88,978 188,607 538,893 1,548,094 305,000 1,853,094 195,000 1,790,888 1,170,500 5,200 806,000 3,967,588 150,000 4,117,588 5,628,053 825,896 118,820 1,813,620 658,033 30,000 3,446,369 307,400 3,753,769 Fund Balance. December 31 $ 1,510,465 $ 1,874,284 Change in Fund Balance $ 502,548 $ 363,819 50% 24% 74 195,000 1,955,000 1,184,000 4,320 860,500 4,198,820 150,000 4,348,820 5,859,285 855,896 106,460 2,309,495 640,783 26,500 3,939,134 307,400 4,246,534 $ 1,612,751 $ 102,286 7% 195,000 1,700,948 1,241,000 8,200 990,068 4,135,216 4,135,216 5,747,967 924,676 117,570 629,932 740,227 1,756,000 4,168,405 308,300 4,476,705 $ 1,271,262 $ (341,489) -21% Actual 1 Adopted 1 Estimate 1 Adopted 1 Description 2021 2022 2022 2023 Fund Balance, January 1 Revenues General Property Taxes Intergovernmental Charges for Services Investment Income Miscellaneous Total Revenues: Other Sources Transfers In Total Revenues and Other Sources: Total Available: Expenditures Personal Services Supplies and Materials Purchased Services Other Services and Charges Capital Outlay Total Expenditures: Other Uses Transfers Out Total Expenditures and Other Uses: $ 1,007,917 $ 1,510,465 $ 1,510,465 $ 1,612,751 194,718 3,166 1,231,389 15,447 910,922 2,355,642 2,355,642 3,363,559 731,616 88,978 188,607 538,893 1,548,094 305,000 1,853,094 195,000 1,790,888 1,170,500 5,200 806,000 3,967,588 150,000 4,117,588 5,628,053 825,896 118,820 1,813,620 658,033 30,000 3,446,369 307,400 3,753,769 Fund Balance. December 31 $ 1,510,465 $ 1,874,284 Change in Fund Balance $ 502,548 $ 363,819 50% 24% 74 195,000 1,955,000 1,184,000 4,320 860,500 4,198,820 150,000 4,348,820 5,859,285 855,896 106,460 2,309,495 640,783 26,500 3,939,134 307,400 4,246,534 $ 1,612,751 $ 102,286 7% 195,000 1,700,948 1,241,000 8,200 990,068 4,135,216 4,135,216 5,747,967 924,676 117,570 629,932 740,227 1,756,000 4,168,405 308,300 4,476,705 $ 1,271,262 $ (341,489) -21% City of Andover Special Revenue Funds Economic Development Authority Fund Statement of Revenues, Expenditures and Changes in Fund Balance Fund Balance, January 1 Revenues Charges for Services Investment Income Miscellaneous Total Revenues: Other Sources Transfers In Total Revenues and Other Sources Total Available: Expenditures Personal Services Supplies and Materials Purchased Services Other Services and Charges Total Expenditures: Other Uses Transfers Out $ 153,980 $ 143,524 $ 143,524 $ 206,838 27,527 Actual 1 Adopted Estimate 1 Adopted 1 Description 2021 2022 2022 2023 Fund Balance, January 1 Revenues Charges for Services Investment Income Miscellaneous Total Revenues: Other Sources Transfers In Total Revenues and Other Sources Total Available: Expenditures Personal Services Supplies and Materials Purchased Services Other Services and Charges Total Expenditures: Other Uses Transfers Out $ 153,980 $ 143,524 $ 143,524 $ 206,838 27,527 15,000 15,000 (440) 2,000 2,000 1,308 28,395 17,000 17,000 150,000 150,000 28,395 167,000 167,000 182,375 310,524 310,524 3,787 7,536 7,536 4,097 18,900 18,900 23,883 213,400 63,400 7,084 13,850 13,850 38,851 253,686 10 3, 686 Total Expenditures and Other Uses: 38,851 253,686 Fund Balance, December 31 $ 143,524 $ 56,838 Change in Fund Balance $ (10,456) $ (86,686) -7% -60% 3 103,686 15,000 2,000 17,000 17,000 223,838 7,536 18,900 83,500 14,100 124,036 124,036 $ 206,838 $ 99,802 $ 63,314 $ (107,036) 44% -52% Fund: Economic Development Authority Activity Type/Code: Special Revenue Expenditure Hiehliehts 2023 includes a new Home Improvement Program to assist in exterior home improvements within the City. 2022 included the medians along Bunker Lake Boulevard to be filled in with concrete ($150,000) through a transfer from the General Fund. It also included a monument entrance sign. EDA Budget provides for ongoing maintenance around the Andover Station Development area. Department Head: City Administrator General Activity Description To provide for the quality development of commercial and industrial properties to ensure a strong, viable and diversified tax base. Process Used Promotion and expansion of the commercial and industrial tax base through the development and redevelopment of land. The EDA is the primary authority involved in managing the City's four Tax Increment Financing (TIF) Districts. The EDA monitors and initiates the activities within the TIF Districts to reach the goals of the TIF plans. ADOPTED 2023 BUDGET CITY OF ANDOVER, MINNESOTA City of Andover Special Revenue Funds Community Development Block Grant Fund Statement of Revenues, Expenditures and Changes in Fund Balance Fund Balance, January 1 $ $ - $ $ Revenues Intergovernmental 25, 000 25,000 Other Sources Transfers In Total Revenues and Other Sources: Total Available: Expenditures Other Services and Charges Other Uses Transfers Out Total Expenditures and Other Uses: Fund Balance, December 31 $ Change in Fund Balance $ 25,000 Actual 1 1 Adopted Estimate 1 Adopted 1 Description 2021 2022 2022 2023 Fund Balance, January 1 $ $ - $ $ Revenues Intergovernmental 25, 000 25,000 Other Sources Transfers In Total Revenues and Other Sources: Total Available: Expenditures Other Services and Charges Other Uses Transfers Out Total Expenditures and Other Uses: Fund Balance, December 31 $ Change in Fund Balance $ 25,000 25,000 25,000 25,000 25,000 25,000 25,000 n/a n/a 5 25,000 n/a n/a Fund: Community Development Block Grant Activity Type/Code: Special Revenue Expenditure Hiehliehts This was a new fund created in 2004 to track the Community Development Block Grant (CDBG) Rental Rehab program. In 2023, additional grant monies will be applied for to study areas that have access to city water but are not currently hooked up. Department Head: Community Development Dir. General Activity Description The Rental Rehab program provides low-interest loans for the rehabilitation of rental housing units. This fund accounts for the loans disbursed, as well as the payments received. In 2008, a housing rehab program was started. Due to the lack of interest, the rental rehab program was terminated in 2012. Process Used Rehab Grants are received from CDBG and disbursed to qualified applicants. As payments come in, these funds create a revolving loan program and new loans are given out to qualified applicants. ADOPTED 2023 BUDGET CITY OF ANDOVER, MINNESOTA 3 City of Andover Special Revenue Funds Community Center Fund Statement of Revenues, Expenditures and Changes in Fund Balance Fund Balance, January 1 Revenues General Property Taxes Charges for Services Investment Income Miscellaneous Total Revenues: Other Sources Transfers In Total Revenues and Other Sources Total Available: Expenditures Personal Services Supplies and Materials Purchased Services Other Services and Charges Capital Outlay Total Expenditures: Other Uses Transfers Out Total Expenditures and Other Uses: Fund Balance, December 31 Change in Fund Balance $ 358,082 $ 762,880 $ 762,880 $ 829,137 154,534 Actual Adopted 1 Estimate 1 Adopted Description 2021 2022 2022 2023 Fund Balance, January 1 Revenues General Property Taxes Charges for Services Investment Income Miscellaneous Total Revenues: Other Sources Transfers In Total Revenues and Other Sources Total Available: Expenditures Personal Services Supplies and Materials Purchased Services Other Services and Charges Capital Outlay Total Expenditures: Other Uses Transfers Out Total Expenditures and Other Uses: Fund Balance, December 31 Change in Fund Balance $ 358,082 $ 762,880 $ 762,880 $ 829,137 154,534 155,000 155,000 155,000 1,154,184 1,112, 500 1,124, 000 1,181, 000 2,817 - - 3,000 769,098 776,000 790,500 960,068 2,080,633 2,043,500 2,069,500 2,299,068 2,080,633 2,043,500 2,069,500 2,299,068 2,438,715 2,806,380 2,832,380 3,128,205 692,742 770,110 800,110 875,369 82,655 93,100 81,500 91,850 85,130 214,525 187,900 181,525 515,308 599,233 607,233 679,647 - 30,000 26,500 360,000 1,375,835 1,706,968 1,703,243 2,188,391 300,000 300,000 300,000 300,000 1,675,835 2,006,968 2,003,243 2,488,391 $ 762,880 $ 799,412 $ 829,137 $ 639,814 $ 404,798 $ 36,532 $ 66,257 $ (189,323) 113% 5% 9% -23% 7 Fund: Community Center Activity Type/Code: Special Revenue Expenditure HiQhtiehts 2009 was the first year the YMCA made a full lease payment of $635,000. The transfer out is the difference between the tax levied for the Community Center debt service and the total annual debt service for the Community Center 2021 is the first full year of operations with the multi -sports complex, the additional court added to the field house, senior/teen space and additional parking. No major changes were planned for 2022 as staff tries to optimize efficiencies with the additional space. 2023 includes to the replacement of a large water heater ($160,000) that's shared with the YMCA and the replacement of the dehumidification / heating / cooling unit ($200,000) in the ice arena with additional funding coming from the American Recovery Plan Act Special Revenue Fund ($500,000). Department Head: Recreation Facility Manager General Activity Description This fund accounts 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. Process Used The Community Center construction started in 2004 and was completed in the summer of 2005. The facility will be managed by the Recreational Facility Manager with oversight by a Community Center Advisory Board and the City Council. The YMCA is a long-term tenant and started making lease payments in 2008. In 2020, an expansion of the Community Center was completed. It includes a multi -sports complex, an additional court added to the field house, senior/teen space, and additional parking. ------------------------------------------------------------------------------------- ADOPTED 2023 BUDGET CITY OF ANDOVER, MINNESOTA City of Andover Special Revenue Funds Drainage and Mapping Fund Statement of Revenues, Expenditures and Changes in Fund Balance Fund Balance, January 1 Revenues Charges for Services Investment Income Total Revenues: Other Sources Transfers In Total Revenues and Other Sources: Total Available: Expenditures Personal Services Supplies and Materials Purchased Services Other Services and Charges Total Expenditures: Other Uses Transfers Out Total Expenditures and Other Uses $ 192,283 $ 178,852 $ 178,852 $ 151,901 4,137 (648) 3,489 3,489 195,772 3,715 515 6,845 5,845 16,920 16,920 Fund Balance, December 31 $ 178,852 Change in Fund Balance $ (13,431) -7% 0 9,000 Actual 1 Adopted 1 Estimate Adopted 1 Description 2021 2022 2022 2023 Fund Balance, January 1 Revenues Charges for Services Investment Income Total Revenues: Other Sources Transfers In Total Revenues and Other Sources: Total Available: Expenditures Personal Services Supplies and Materials Purchased Services Other Services and Charges Total Expenditures: Other Uses Transfers Out Total Expenditures and Other Uses $ 192,283 $ 178,852 $ 178,852 $ 151,901 4,137 (648) 3,489 3,489 195,772 3,715 515 6,845 5,845 16,920 16,920 Fund Balance, December 31 $ 178,852 Change in Fund Balance $ (13,431) -7% 0 9,000 9,000 1,200 600 10,200 9,600 10,200 9,600 189,052 188,452 10,551 10,551 3,300 3,300 14,200 14,200 8,500 8,500 36,551 36,551 36,551 $ 152,501 $ (26,351) -15% 9,000 1,200 10,200 10,200 162,101 8,264 3,300 6,500 9,620 27,684 36,551 27,684 $ 151,901 $ (26,951) -15% $ 134,417 $ (17,484) -12% Fund: Drainage and Mapping Activity Type/Code: Special Revenue Expenditure I3ie141liehts Minimal changes are planned for this fund as monies are set aside for future mapping needs. A GIS Coordinator was hired in 2021 with their salary and benefits allocated to numerous departments. Minimal changes planned for 2023. Department Head: Dir of PW / City Engineer General Activity Description The drainage and mapping activity provides the resource to maintain existing and develop new maps and mapping systems for the City. The City GIS is a key component in this mapping and data inventory task. Process Used Existing mapping systems and data are maintained manually in a reproducible format. The existing information is being converted to a digital format as is all new data which is developed for the City. All data will be accessible either manually or through a computerized application. ADOPTED 2023 BUDGET CITY OF ANDOVER, MINNESOTA 10 City of Andover Special Revenue Funds Lower Rum River Watershed Fund Statement of Revenues, Expenditures and Changes in Fund Balance Fund Balance, January 1 Revenues General Property Taxes Investment Income Total Revenues: Other Sources Transfers In Total Revenues and Other Sources: Total Available: Expenditures Personal Services Supplies and Materials Purchased Services Other Services and Charges Total Expenditures: Other Uses $ 74,901 $ 85,784 $ 85,784 $ 96,038 40,184 10 40,194 40,194 115,095 15,541 17 13,327 426 29,311 40,000 200 40,200 40,200 125,984 15,891 520 13,595 200 30,206 40,000 200 40,200 40,200 125,984 15,891 260 13,595 200 40,000 200 40,200 40,200 136,238 10,271 520 16,195 340 27,326 Transfers Out Actual Adopted 1 Estimate Adopted 1 Description 2021 2022 2022 2023 Fund Balance, January 1 Revenues General Property Taxes Investment Income Total Revenues: Other Sources Transfers In Total Revenues and Other Sources: Total Available: Expenditures Personal Services Supplies and Materials Purchased Services Other Services and Charges Total Expenditures: Other Uses $ 74,901 $ 85,784 $ 85,784 $ 96,038 40,184 10 40,194 40,194 115,095 15,541 17 13,327 426 29,311 40,000 200 40,200 40,200 125,984 15,891 520 13,595 200 30,206 40,000 200 40,200 40,200 125,984 15,891 260 13,595 200 40,000 200 40,200 40,200 136,238 10,271 520 16,195 340 27,326 Transfers Out - Total Expenditures and Other Uses: 29,311 30,206 29,946 27,326 Fund Balance, December 31 $ 85,784 $ 95,778 $ 96,038 $ 108,912 Change in Fund Balance $ 10,883 $ 9,994 $ 10,254 $ 12,874 15% 12% 12% 13% 11 Fund: Lower Rum River Watershed Management Organization Activity Type/Code: Special Revenue Expenditure Hiehliahts Minimal changes are planned for this fund. Fund balance is being set aside for the preparation of the fourth generation water management plan and any additional services that may be needed. Department Head: Assistant City Engineer General Activity Description The function of the Lower Rum River Watershed Management Organization (LRRW MO) is to provide for: conservation of water and natural resources; prevention and alleviation of flood damage; and regulation of creeks, lakes, water courses and storm water conveyance systems for domestic, recreational and public use across municipal boundaries. To achieve this purpose, state law gives watershed management organizations several powers, among which are: 1. Responsibility for preserving natural retention areas. 2. Preparation of plans for water management. 3. Review of municipal water management plans and of projects directly affecting the water resources of the watershed. 4. Review of local land use in the absence of an approved municipal surface water management plan. 5. Collection of data. 6. Conducting of studies and investigations. 7. Construction of improvements, either in response to petition or on the initiative of the LRRWMO. 8. Levying of taxes and assessments for the financing of the previously mentioned activities and for general administration of the organization. ADOPTED 2023 BUDGET CITY OF ANDOVER, MINNESOTA 12 City of Andover Special Revenue Funds Forestry Fund Statement of Revenues, Expenditures and Changes in Fund Balance Fund Balance, January 1 Revenues Intergovernmental Investment Income Total Revenues: Other Sources Transfers In Total Revenues and Other Sources: Total Available: Expenditures Supplies and Materials Purchased Services Total Expenditures: Other Uses Transfers Out Total Expenditures and Other Uses Fund Balance, December 31 $ 5,335 $ 5,390 $ 5,390 $ 3,410 Actual 1 Adopted 1 Estimate 1 Adopted 1 Description 2021 2022 2022 2023 Fund Balance, January 1 Revenues Intergovernmental Investment Income Total Revenues: Other Sources Transfers In Total Revenues and Other Sources: Total Available: Expenditures Supplies and Materials Purchased Services Total Expenditures: Other Uses Transfers Out Total Expenditures and Other Uses Fund Balance, December 31 $ 5,335 $ 5,390 $ 5,390 $ 3,410 $ 5,390 Change in Fund Balance $ 55 1% 13 15,000 2,000 15,000 $ 2,940 $ 3,410 $ 960 $ (2,450) $ (1,980) $ (2,450) -45% -37% -72% 12,500 12,500 55 50 20 50 55 12,550 20 12,550 12,550 12,550 20 55 5,390 17,940 5,410 15,960 - 2,500 2,000 2,500 12,500 12,500 15,000 2,000 15,000 $ 5,390 Change in Fund Balance $ 55 1% 13 15,000 2,000 15,000 $ 2,940 $ 3,410 $ 960 $ (2,450) $ (1,980) $ (2,450) -45% -37% -72% Fund: Forestry Activity Type/Code: Special Revenue Expenditure Hiahli¢hts This fund tracks forestry -related grants with state agencies like the Minnesota Department of Natural Resources (DNR) and administers the bare root tree sale. A tree sale is proposed for 2023. Department Head: Dir of PW /City Engineer General Activity Description Forestry shall preserve Andover's forest resources and develop control plans to ensure preservation and/or restoration of these resources. Process Used The City utilizes the Natural Resources Technician to administer the annual bare root tree sale, coordinate various tree plantings with local organizations like the Eagle Scouts, and monitor preservation and disease tree management grants. ------------ ADOPTED 2023 BUDGET CITY OF ANDOVER, MINNESOTA 14 City of Andover Special Revenue Funds Right of Way Management / Utility Fund Statement of Revenues, Expenditures and Changes in Fund Balance Fund Balance, January 1 Revenues Charges for Services Investment Income Total Revenues: Other Sources Transfers In Total Revenues and Other Sources: Total Available: Expenditures Personal Services Supplies and Materials Purchased Services Other Services and Charges Total Expenditures: Other Uses Transfers Out Total Expenditures and Other Uses $ 81,743 $ 85,967 $ 85,967 $ 66,109 36,164 (166) 35,998 35,998 117,741 15,831 317 9,773 853 26,774 5,000 31,774 Fund Balance, December 31 $ 85,967 Change in Fund Balance $ 4,224 5% 24,000 Actual 1 Adopted 1 Estimate Adopted 1 Description 2021 2022 2022 2023 Fund Balance, January 1 Revenues Charges for Services Investment Income Total Revenues: Other Sources Transfers In Total Revenues and Other Sources: Total Available: Expenditures Personal Services Supplies and Materials Purchased Services Other Services and Charges Total Expenditures: Other Uses Transfers Out Total Expenditures and Other Uses $ 81,743 $ 85,967 $ 85,967 $ 66,109 36,164 (166) 35,998 35,998 117,741 15,831 317 9,773 853 26,774 5,000 31,774 Fund Balance, December 31 $ 85,967 Change in Fund Balance $ 4,224 5% 24,000 26,000 26,000 500 250 500 24,500 26,250 26,500 26,250 26,500 24,500 110,467 112,217 92,609 21,808 21,808 23,236 500 500 500 15,400 15,400 10,420 1,250 1,000 1,520 38,958 38,708 35,676 7,400 7,400 8,300 46,358 46,108 43,976 $ 64,109 $ 66,109 $ 48,633 $ (21,858) $ (19,858) $ (17,476) -25% -23% -26% 15 Fund: Right of Way Management/Utility Activity Type/Code: Special Revenue Expenditure Hiehliahts The transfer to the Road & Bridge Capital Projects is for the degredation of roadways associated with right-of-way permits. Department Head: Dir of PW I City Engineer General Activity Description The function of Right -of -Way Management is to provide for: management of the public rights-of-way and to recover the rights-of-way management costs; and to regulate the use of public rights-of-way by providers of telecommunication services, public utility services and the like, in a fair, efficient, competitively neutral and substantial uniform manner. Process Used To achieve this purpose, state law gives the City several powers to include requiring the following: 1. Require permits for work within the right-of-way. 2. Collect fees to recover costs associated with the permit Including damages to the right-of-way. ADOPTED 2023 BUDGET CITY OF ANDOVER, MINNESOTA 16 City of Andover Special Revenue Funds Charitable Gambling Fund Statement of Revenues, Expenditures and Changes in Fund Balance Fund Balance, January 1 Revenues Investment Income Miscellaneous Total Revenues: Other Sources Transfers In Total Revenues and Other Sources: Total Available: $ 136,438 Actual Adopted 1 Estimate 1 Adopted Description 2021 2022 2022 2023 Fund Balance, January 1 Revenues Investment Income Miscellaneous Total Revenues: Other Sources Transfers In Total Revenues and Other Sources: Total Available: $ 136,438 $ 229,067 $ 229,067 $ 239,817 (27) 750 750 750 140,516 30,000 70,000 30,000 140,489 30,750 70,750 30,750 140,489 276,927 30,750 259,817 Expenditures Purchased Services 47,860 30,000 Other Uses Transfers Out - - Total Expenditures and Other Uses: 47,860 Fund Balance, December 31 $ 229,067 Change in Fund Balance $ 92,629 68% 17 70,750 30,750 299,817 270,567 30,000 60,000 $ 229,817 $ 239,817 $ 750 $ 10,750 0% 5% 38,000 $ 232,567 $ (7,250) -3% Fund: Charitable Gambling Activity Type/Code: Special Revenue Expenditure Hiehli¢hts This fund was created to track the donations received from the Andover Hockey Association and Andover Football Association from their charitable gambling activities. Funding is used towards the Alexandra House, Youth First, Family of Promise, teen programing, etc.. Funding for these expenditures are dependent upon donations. Department Head: Finance Director General Activity Description The licensed organizations are required to donate 10% of their net profits to the City. Process Used According to State Statute, all expenditures from this fund must be for police, fire and other emergency or public safety-related services, equipment, and and training, excluding pension obligations, or qualifying public service organizations. ADOPTED 2023 BUDGET CITY OF ANDOVER, MINNESOTA 18 City of Andover Special Revenue Funds Construction Seal Coating Fund Statement of Revenues, Expenditures and Changes in Fund Balance Fund Balance, January 1 Actual 1 Adopted 1 Estimate 1 Adopted 1 Description 2021 2022 2022 2023 Fund Balance, January 1 $ 5,155 $ 5,157 $ 5,157 $ 5,657 Revenues Charges for Services 9,377 10,000 10,000 10,000 Investment Income 2 500 500 500 Total Revenues: 9,379 10,500 10,500 10,500 Other Sources Transfers In - - Total Revenues and Other Sources: 9,379 10,500 10,500 10,500 Total Available: 14,534 15,657 15,657 16,157 Expenditures Other Services and Charges 9,377 10,000 10,000 10,000 Other Uses Transfers Out - Total Expenditures and Other Uses: 9,377 10,000 10,000 10,000 Fund Balance, December 31 $ 5,157 $ 5,657 $ 5,657 $ 6,157 Change in Fund Balance $ 2 $ 500 $ 500 $ 500 0% 10% 10% 9% 19 Fund: Construction Seal Coating Activity Type/Code: Special Revenue Expenditure fflahliehts The Construction Seal Coating Special Revenue Fund was established in 1996 and is utilized for the first application of crack seal and seal coat in new developments. Department Head: Dir of PW / City Engineer General Activity Description The Construction Seal Coating Special Revenue Fund accounts for contributions associated with land development to be used for the respective developments first application of crack seal and seal coat. Process Used The City has an annual crack seal and seal coat program. Currently the City is divided into nine zones and these developments are done within four years of being constructed. Crack sealing is completed one year prior to seal coating. This allows the crack sealing material to cure and minimize bleed through once seal coated. ADOPTED 2023 BUDGET CITY OF ANDOVER, MINNESOTA 20 City of Andover Special Revenue Funds CARES Act / ARPA Funding Statement of Revenues, Expenditures and Changes in Fund Balance 1 Actual Adopted 1 Estimate 1 Adopted 1 Description 2021 2022 2022 2023 Fund Balance, January 1 Revenues Intergovernmental Investment Income Total Revenues: Other Sources Transfers In Total Revenues and Other Sources: Total Available: Expenditures Supplies and Materials Purchased Services Capital Outlay Total Expenditures: Other Uses Transfers Out $ $ 13,844 $ 13,844 $ 13,844 3,166 13,844 17,010 17,010 17,010 1,753,388 1,753,388 1,955,000 1,955,000 1,663,448 1,663,448 1,753,388 1,955,000 1,663,448 1,767,232 1,968,844 1,677,292 1,377 - - - 1,789 1,300,000 1,955,000 281,292 - - - 1,396,000 3,166 1,300,000 1,955,000 1,677,292 Total Expenditures and Other Uses: 3,166 1,300,000 1,955,000 Fund Balance, December 31 $ 13,844 $ 467,232 $ 13,844 Change in Fund Balance $ 13,844 $ 453,388 $ - n/a 3275% 0% 21 1,677,292 $ (13,844) -100% Fund: CARES Act / ARPA Funding Activity Type/Code: Special Revenue Expenditure IHi2hliehts In 2022, the ARPA Funding can be used to: 1. Support public health / safety response 2. Replace public sector revenue loss 3. Water and sewer infrastruction 4. Address negative economic impacts 5. Premium pay for essential workers 6. Broadband infrastructure The current proposal includes: Support public health / safety response Water infrastructure Facility maintenance New pedestrian trail $ 200,000 2,075,738 945,875 400,000 $ 3,621,613 Department Head: Finance Director General Activity Description The CARES Act / ARPA Funding Special Revenue Fund accounts for money distributed to local governments to assist with the financial strain caused by COVID-19. Process Used Federal guidance indicates that the City can have discretion to determine what the funds can be used for based on compliance to the guidelines provided. The CARES Act provides that payments from the fund may only be used to cover costs that (1) are necessary expenditures incurred due to the public health emergency with respect to the Coronavirus Disease 2019; (2) were not accounted for in the budget most recently approved as of March 27, 2020 for the State or government; and (3) were incurred during the period that begins on March 1, 2020 and ends on December 30, 2020. On March 11, 2021, the American Rescue Plan Act (ARPA) was signed into law. ARPA is a $1.9 trillion package that includes direct relief to states, counties, cities, and towns, as well as public utilities, libraries and transit agencies. The City of Andover expects to receive approximately $3.5 million in two distributions - July 2021 and July 2022. ADOPTED 2023 BUDGET CITY OF ANDOVER, MINNESOTA 22 CITY OF ANDOVER, MINNESOTA 2023 ANNUAL BUDGET DEBT SERVICE FUNDS DEFINITION: A debt service fund accounts for the accumulation of resources for, and the payment of general long-term principal and interest. Repayment of the debt through principal and interest payments to bond holders is backed by the full faith and credit of the government unit. 23 City of Andover Debt Service Funds 2023 Budget Summary - All Debt Service Funds Statement of Revenues, Expenditures and Changes in Fund Balance 1 Actual Adopted 1 Estimate 1 Adopted 1 Description 2021 2022 2022 2023 Fund Balance, January 1 Revenues General Property Taxes Investment Income Total Revenues: Other Sources Operating Transfers In Total Revenues and Other Sources: Total Available: Expenditures Debt Service Principal Interest Other Total Expenditures: Other Uses Operating Transfers Out Total Expenditures and Other Uses Fund Balance, December 31 Change in Fund Balance $ 2,099,876 $ 2,556,381 $ 2,556,381 3,133,512 (1,694) 3,131,818 547,904 3,679,722 3,751,062 3,751,062 908,443 4,659,505 5,779,598 7,215,886 1,899,000 1,278,030 5,500 3,182,530 40,687 3,223,217 $ 2,556,381 $ 456,505 22% 24 2,110,000 1,246,741 4,800 3,361,541 255,988 3,617,529 $ 3,598,357 $ 1,041,976 41% 3,751,062 750 3,751,812 908,443 4,660,255 7,216,636 2,110,000 1,291,280 5,325 3,406,605 254,328 3,660,933 $ 3,555,703 $ 999,322 39% $ 3,555,703 3,766,697 3,766,697 895,300 4,661,997 8,217,700 3,125, 000 1,260,998 7,200 4,393,198 4,393,198 $ 3,824,502 $ 268,799 8% City of Andover Debt Service Funds Certificates/Capital Notes - 2016A G.O. Equipment Certificate Statement of Revenues, Expenditures and Changes in Fund Balance 1 Actual Adopted 1 Estimate 1 Adopted 1 Description 2021 2022 2022 2023 Fund Balance, January 1 $ 175,960 $ $ $ Revenues General Property Taxes - Investment Income - Total Revenues: - Other Sources Operating Transfers In - Total Revenues and Other Sources: - Total Available: 175,960 Expenditures Debt Service Principal 134,000 Interest 1,273 Other - Total Expenditures: 135,273 Other Uses Operating Transfers Out 40,687 Total Expenditures and Other Uses: 175,960 Fund Balance, December 31 $ - $ $ $ Change in Fund Balance $ (175,960) $ $ $ -100% n/a n/a n/a 25 Fund: 3213 Cost Center: 2016A G.O. Equipment Certificates Department Head: Finance Director Activity Type/Code: Debt Service Final payment was made in 2021. General Activity Description To account for the payment of principal and interest on long-term debt. Process Used The City issued $520,000 of Capital Notes in 2016 to facilitate the purchase of equipment. ADOPTED 2023 BUDGET CITY OF ANDOVER, MINNESOTA 26 City of Andover Debt Service Funds Certificates/Capital Notes - 2020A G.O. Equipment Certificate Statement of Revenues, Expenditures and Changes in Fund Balance Fund Balance, January 1 Revenues General Property Taxes Investment Income Total Revenues: Other Sources Operating Transfers In Total Revenues and Other Sources: Total Available: Expenditures Debt Service Principal Interest Other Total Expenditures: Other Uses Operating Transfers Out Total Expenditures and Other Uses Fund Balance, December 31 Change in Fund Balance $ 333,615 $ 376,219 $ 376,219 $ 396,469 406,125 (1,321) 404,804 404,804 738,419 315,000 46,100 1,100 362,200 374,850 374,850 374,850 751,069 320,000 33,400 1,200 354,600 374,850 374,850 374,850 751,069 320,000 33,400 1,200 354,600 362,200 354,600 354,600 $ 376,219 $ 42,604 13% 27 $ 396,469 $ 20,250 5% $ 396,469 $ 20,250 5% 376,740 376,740 376,740 773,209 330,000 20,400 1,200 351,600 351,600 $ 421,609 $ 25,140 6% Actual Adopted Estimate 1 Adopted 1 Description 2021 2022 2022 2023 Fund Balance, January 1 Revenues General Property Taxes Investment Income Total Revenues: Other Sources Operating Transfers In Total Revenues and Other Sources: Total Available: Expenditures Debt Service Principal Interest Other Total Expenditures: Other Uses Operating Transfers Out Total Expenditures and Other Uses Fund Balance, December 31 Change in Fund Balance $ 333,615 $ 376,219 $ 376,219 $ 396,469 406,125 (1,321) 404,804 404,804 738,419 315,000 46,100 1,100 362,200 374,850 374,850 374,850 751,069 320,000 33,400 1,200 354,600 374,850 374,850 374,850 751,069 320,000 33,400 1,200 354,600 362,200 354,600 354,600 $ 376,219 $ 42,604 13% 27 $ 396,469 $ 20,250 5% $ 396,469 $ 20,250 5% 376,740 376,740 376,740 773,209 330,000 20,400 1,200 351,600 351,600 $ 421,609 $ 25,140 6% Fund: 3214 Cost Center: 2020A G.O. Equipment Certificates Department Head: Finance Director Activity Type/Code: Debt Service Debt Service is scheduled as listed below: Year Amount Principal Interest 2023 $ 350,400 $ 330,000 $ 20,400 2024 351,900 345,000 6,900 $ 702,300 $ 675,000 $ 27,300 General Activity Description To account for the payment of principal and interest on long-term debt. Process Used The City issued $1,310,000 of Capital Notes in 2020 to facilitate the purchase of equipment. ADOPTED 2023 BUDGET CITY OF ANDOVER, MINNESOTA 28 City of Andover Debt Service Funds Certificates/Capital Notes - 2021A G.O. Equipment Certificate Statement of Revenues, Expenditures and Changes in Fund Balance Fund Balance, January 1 Revenues General Property Taxes Investment Income Total Revenues: Other Sources Operating Transfers In Total Revenues and Other Sources: Total Available: Expenditures Debt Service Principal Interest Other Total Expenditures: Other Uses 169,420 759 170,179 $ 170,179 170,000 170,000 $ 170,179 $ 162,724 170,000 170,000 170,179 170,000 170,000 170,179 340,179 340,179 3,324 3,324 Operating Transfers Out 170,000 Total Expenditures and Other Uses: - 173,324 Fund Balance, December 31 $ 170,179 $ 166,855 Change in Fund Balance $ 170,179 $ (3,324) n/a -2% 29 7,455 7,455 174,773 174,773 174,773 337,497 150,000 11,100 1,200 162,300 170,000 - 177,455 162,300 $ 162,724 $ 175,197 $ (7,455) $ 12,473 -4% 8% Actual Adopted 1 Estimate 1 1 Adopted Description 2021 2022 2022 2023 Fund Balance, January 1 Revenues General Property Taxes Investment Income Total Revenues: Other Sources Operating Transfers In Total Revenues and Other Sources: Total Available: Expenditures Debt Service Principal Interest Other Total Expenditures: Other Uses 169,420 759 170,179 $ 170,179 170,000 170,000 $ 170,179 $ 162,724 170,000 170,000 170,179 170,000 170,000 170,179 340,179 340,179 3,324 3,324 Operating Transfers Out 170,000 Total Expenditures and Other Uses: - 173,324 Fund Balance, December 31 $ 170,179 $ 166,855 Change in Fund Balance $ 170,179 $ (3,324) n/a -2% 29 7,455 7,455 174,773 174,773 174,773 337,497 150,000 11,100 1,200 162,300 170,000 - 177,455 162,300 $ 162,724 $ 175,197 $ (7,455) $ 12,473 -4% 8% Fund: 3215 Cost Center: 2021A G.O. Equipment Certificates Department Head: Finance Director Activity Type/Code: Debt Service Debt Service is scheduled as listed below: Year Amount Principal Interest 2023 $ 161,100 $ 150,000 $ 11,100 2024 163,050 155,000 8,050 2025 164,900 160,000 4,900 2026 166,650 165,000 1,650 $ 655,700 $ 630,000 $ 25,700 General Activity Description To account for the payment of principal and interest on long-term debt. Process Used The City issued $630,000 of Capital Notes in 2021 to facilitate the purchase of equipment. ADOPTED 2023 BUDGET CITY OF ANDOVER, MINNESOTA C City of Andover Debt Service Funds General Obligation Bonds - 2018A G.O. Capital Improvement Plan Bonds Statement of Revenues, Expenditures and Changes in Fund Balance Fund Balance, January 1 Revenues General Property Taxes Investment Income Total Revenues: Other Sources Operating Transfers In Total Revenues and Other Sources: Total Available: Expenditures Debt Service Principal Interest Other Total Expenditures: Other Uses Operating Transfers Out Total Expenditures and Other Uses: Fund Balance, December 31 Change in Fund Balance $ 348,045 $ 372,030 456,233 (567) 455,666 45,300 500,966 849,011 125,000 350,881 1,100 476,981 476,981 $ 372,030 $ 23,985 7% 31 617,519 617,519 45,300 662,819 1,034,849 130,000 344,506 1,200 475,706 $ 372,030 617,519 617,519 45,300 662,819 1,034,849 130,000 344,506 1,200 475,706 $ 559,143 612,794 612,794 45,300 658,094 1,217,237 290,000 334,006 1,200 625,206 475,706 475,706 625,206 $ 559,143 $ 187,113 50% $ 559,143 $ 187,113 50% $ 592,031 $ 32,888 6% Actual 1 Adopted 1 1 Estimate Adopted 1 Description 2021 2022 2022 2023 Fund Balance, January 1 Revenues General Property Taxes Investment Income Total Revenues: Other Sources Operating Transfers In Total Revenues and Other Sources: Total Available: Expenditures Debt Service Principal Interest Other Total Expenditures: Other Uses Operating Transfers Out Total Expenditures and Other Uses: Fund Balance, December 31 Change in Fund Balance $ 348,045 $ 372,030 456,233 (567) 455,666 45,300 500,966 849,011 125,000 350,881 1,100 476,981 476,981 $ 372,030 $ 23,985 7% 31 617,519 617,519 45,300 662,819 1,034,849 130,000 344,506 1,200 475,706 $ 372,030 617,519 617,519 45,300 662,819 1,034,849 130,000 344,506 1,200 475,706 $ 559,143 612,794 612,794 45,300 658,094 1,217,237 290,000 334,006 1,200 625,206 475,706 475,706 625,206 $ 559,143 $ 187,113 50% $ 559,143 $ 187,113 50% $ 592,031 $ 32,888 6% Fund: 3304 Cost Center: 2018A G.O. Capital Improvement Plan Bonds Department Head: Finance Director Activity Type/Code: Debt Service Debt Service is scheduled as listed below: Year Amount Principal Interest 2023 $ 624,006 $ 290,000 $ 334,006 2024 619,256 300,000 319,256 2025 618,881 315,000 303,881 2026 622,631 335,000 287,631 2027 620,506 350,000 270,506 2028 626,206 370,000 256,206 2029 624,956 380,000 244,956 2030 623,406 390,000 233,406 2031 621,556 400,000 221,556 2032 624,331 415,000 209,331 2033 621,731 425,000 196,731 2034 623,756 440,000 183,756 2035 620,125 450,000 170,125 2036 620,538 465,000 155,538 2037 620,182 480,000 140,182 2038 619,338 495,000 124,338 2039 622,603 515,000 107,603 2040 619,969 530,000 89,969 2041 621,400 550,000 71,400 2042 621,800 570,000 51,800 2043 616,588 585,000 31,588 2044 620,675 610,000 10,675 $ 13,674,440 $ 9,660,000 $ 4,014,440 The Water and Sanitary Sewer Enterprise Funds will be paying a portion of the annual debt for the new public works facilities. General Activity Description To account for the payment of principal and interest on long-term debt. Process Used The City issued $10,000,000 of Capital Improvement Plan bonds in 2018 to facilitate the construction of additional public works facilities. ADOPTED 2023 BUDGET CITY OF ANDOVER, MINNESOTA 32 City of Andover Debt Service Funds General Obligation Bonds - 2012C G.O. Taxable Abatement Bonds Statement of Revenues, Expenditures and Changes in Fund Balance Fund Balance, January 1 Revenues General Property Taxes Investment Income Total Revenues: Other Sources Operating Transfers In Total Revenues and Other Sources: Total Available: Expenditures Debt Service Principal Interest Other Total Expenditures: Other Uses Operating Transfers Out $ 374,538 $ 432,369 $ 432,369 $ 491,865 973,566 974,628 (2,004) - 971,562 974,628 M 969,745 969,745 300,000 Actual 1 Adopted 1 Estimate 1 Adopted 1 Description 2021 2022 2022 2023 Fund Balance, January 1 Revenues General Property Taxes Investment Income Total Revenues: Other Sources Operating Transfers In Total Revenues and Other Sources: Total Available: Expenditures Debt Service Principal Interest Other Total Expenditures: Other Uses Operating Transfers Out $ 374,538 $ 432,369 $ 432,369 $ 491,865 973,566 974,628 (2,004) - 971,562 974,628 M 969,745 969,745 300,000 300,000 300,000 300,000 287,631 1,271,562 1,274, 628 1,274,628 1,269,745 1,200 1,200 1,200 1,646,100 1,706,997 1,706,997 1,761,610 925,000 945,000 945,000 960,000 287,631 268,932 268,932 249,282 1,100 1,200 1,200 1,200 1,213,731 1,215,132 1,215,132 1,210,482 Fund Balance, December 31 $ 432,369 $ 491,865 Change in Fund Balance $ 57,831 $ 59,496 15% 14% 33 $ 491,865 $ 551,128 $ 59,496 $ 59,263 14% 12% Fund: 3405 Cost Center: 2012C G.O. Abatement Bonds Department Head: Finance Director Activity Type/Code: Debt Service Debt Service is scheduled as listed below: Year Amount Principal Interest 2023 $ 1,209,282 $ 960,000 $ 249,282 2024 1,213,000 985,000 228,000 2025 1,209,356 1,005,000 204,356 2026 1,208,275 1,030,000 178,275 2027 1,205,250 1,055,000 150,250 2028 1,205,147 1,085,000 120,147 2029 1,212,675 1,125,000 87,675 2030 1,213,400 1,160,000 53,400 2031 1,218,000 1,200,000 18,000 $10,894,385 $ 9,605,000 $ 1,289,385 General Activitv Description To account for the payment of principal and interest on long-term debt. Process Used The City sold $19,580,000 of Lease Revenue Bonds in 2004 to finance the construction of a community center. Approximately 50% of the debt will be paid for by a long-term lease arrangement with the YMCA of Minneapolis. The YMCA will run a full service YMCA out of the Community Center building. This issue will be used to advance refund the refunding issues sold in 2006 and 2007 that refunded the 2004 issue. ADOPTED 2023 BUDGET CITY OF ANDOVER, MINNESOTA 34 City of Andover Debt Service Funds General Obligation Bonds - 2019A G.O. Taxable Abatement Bonds Statement of Revenues, Expenditures and Changes in Fund Balance Fund Balance, January 1 Revenues General Property Taxes Investment Income Total Revenues: Other Sources Operating Transfers In Total Revenues and Other Sources: Total Available: Expenditures Debt Service Principal Interest Other Total Expenditures: Other Uses Operating Transfers Out $ 586,181 $ 948,600 $ 948,600 $ 1,014,833 976,729 3,461 980,190 202,604 1,182,794 1,768,975 235,000 584,275 1,100 820,375 Fund Balance, December 31 $ 948,600 Change in Fund Balance $ 362,419 62% 35 1,014,065 1,014,065 163,143 1,177,208 2,125,808 545,000 564,775 1,200 1,110,975 $ 1,014,833 $ 66,233 7% 1,014,065 1,014,065 163,143 1,177,208 2,125,808 545,000 564,775 1,200 1,110,975 $ 1,014,833 $ 66,233 7% 1,028, 782 1,028,782 150,000 1,178, 782 2,193,615 570,000 536,900 1,200 1,108,100 $ 1,085,515 $ 70,682 7% Actual 1 1 Adopted Estimate 1 Adopted 1 Description 2021 2022 2022 2023 Fund Balance, January 1 Revenues General Property Taxes Investment Income Total Revenues: Other Sources Operating Transfers In Total Revenues and Other Sources: Total Available: Expenditures Debt Service Principal Interest Other Total Expenditures: Other Uses Operating Transfers Out $ 586,181 $ 948,600 $ 948,600 $ 1,014,833 976,729 3,461 980,190 202,604 1,182,794 1,768,975 235,000 584,275 1,100 820,375 Fund Balance, December 31 $ 948,600 Change in Fund Balance $ 362,419 62% 35 1,014,065 1,014,065 163,143 1,177,208 2,125,808 545,000 564,775 1,200 1,110,975 $ 1,014,833 $ 66,233 7% 1,014,065 1,014,065 163,143 1,177,208 2,125,808 545,000 564,775 1,200 1,110,975 $ 1,014,833 $ 66,233 7% 1,028, 782 1,028,782 150,000 1,178, 782 2,193,615 570,000 536,900 1,200 1,108,100 $ 1,085,515 $ 70,682 7% Fund: 3406 Cost Center: 2019A G.O. Taxable Abatement Bonds Department Head: Finance Director Activity Type/Code: Debt Service Debt Service is scheduled as listed below: Year Amount Principal Interest 2023 $ 1,106,900 $ 570,000 $ 536,900 2024 1,107,650 600,000 507,650 2025 1,106,900 630,000 476,900 2026 1,104,650 660,000 444,650 2027 1,105,775 695,000 410,775 2028 1,100,275 725,000 375,275 2029 1,106,850 765,000 341,850 2030 1,105,650 795,000 310,650 2031 1,103,250 825,000 278,250 2032 1,108,850 860,000 248,850 2033 1,107,675 885,000 222,675 2034 1,105,750 910,000 195,750 2035 1,108,000 940,000 168,000 2036 1,104,425 965,000 139,425 2037 1,105,025 995,000 110,025 2038 1,104,725 1,025,000 79,725 2039 1,103,525 1,055,000 48,525 2040 1,106, 350 1, 090, 000 16,350 $19,902,225 $14,990,000 $ 4,912,225 The portion of park dedication fees collected will be used to offset the debt service levy, not to exceed $1,000,000. In 2020, $175,146 was transferred to this fund. General Activity Description To account for the payment of principal and interest on long-term debt. Process Used The City sold $15,770,000 of Taxable Abatement Bonds in 2019 to finance the expansion of the community center. ADOPTED 2023 BUDGET CITY OF ANDOVER, MINNESOTA 36 City of Andover Debt Service Funds General Obligation Bonds - 2021A G.O. Street Reconstruction Statement of Revenues, Expenditures and Changes in Fund Balance Fund Balance, January 1 $ Actual 1 Adopted 1 Estimate 1 Adopted Description 2021 2022 2022 2023 Fund Balance, January 1 $ $ - $ - $ 930,669 Revenues General Property Taxes 600,000 600,000 603,863 Investment Income- 750 - Total Revenues: - 600,000 600,750 603,863 Other Sources Operating Transfers In - 400,000 400,000 400,000 Total Revenues and Other Sources: - 1,000,000 1,000,750 1,003,863 Total Available: - 1,000,000 1,000,750 1,934,532 Expenditures Principal - - - 825,000 Interest 29,147 69,556 109,310 Other - 525 1,200 Total Expenditures: 29,147 70,081 935,510 Other Uses Operating Transfers Out - - Total Expenditures and Other Uses: - 29,147 70,081 935,510 Fund Balance, December 31 $ - $ 970,853 $ 930,669 $ 999,022 Change in Fund Balance $ - $ 970,853 $ 930,669 $ 68,353 n/a n/a n/a 7% 37 Fund: 3703 Cost Center: 2021A G.O. Street Reconstruction Department Head: Finance Director Activity Type/Code: Debt Service Debt Service is scheduled as listed below: Year Amount Principal Interest 2023 $ 934,310 $ 825,000 $ 109,310 2024 947,510 855,000 92,510 2025 945,260 870,000 75,260 2026 942,710 885,000 57,710 2027 944,810 905,000 39,810 2028 951,135 925,000 26,135 2029 946,395 930,000 16,395 2030 945,640 940,000 5,640 $ 7,557,770 $ 7,135,000 $ 422,770 General Activity Description To account for the payment of principal and interest on long-term debt. Process Used The City issued $7,135,000 of Street Reconstruction Bonds in 2021 to facilitate the reconstruction of streets. ADOPTED 2023 BUDGET CITY OF ANDOVER, MINNESOTA City of Andover Debt Service Funds General Obligation Bonds - 2010A G.O. Open Space Referendum Bonds Statement of Revenues, Expenditures and Changes in Fund Balance Fund Balance, January 1 Revenues General Property Taxes Investment Income Total Revenues: Other Sources Operating Transfers In Total Revenues and Other Sources: Total Available: Expenditures Debt Service Principal Interest Other Total Expenditures: Other Uses $ 281,537 $ 256,984 $ 256,984 $ 151,439 - - (2,022) 149,417 149,417 Actual 1 Adopted 1 Estimate 1 1 Adopted Description 2021 2022 2022 2023 Fund Balance, January 1 Revenues General Property Taxes Investment Income Total Revenues: Other Sources Operating Transfers In Total Revenues and Other Sources: Total Available: Expenditures Debt Service Principal Interest Other Total Expenditures: Other Uses $ 281,537 $ 256,984 $ 256,984 $ 151,439 - - (2,022) 149,417 149,417 430,954 256,984 256,984 165,000 170,000 170,000 7,870 2,657 2,656 1,100 - - 173,970 172,657 172,656 Operating Transfers Out - 85,988 84,328 Total Expenditures and Other Uses: 173,970 258,645 256,984 Fund Balance, December 31 $ 256,984 $ (1,661) $ Change in Fund Balance $ (24,553) $ (258,645) $ (256,984) -9% -101% -100% 39 n/a Fund: 3901 Cost Center: 2010A G.O. Open Space Referendum Bonds Activity Type/Code: Debt Service Final payment was made in 2022. Department Head: Finance Director General Activity Description To account for the payment of principal and interest on long-term debt. Process Used The City sold $1,660,000 of Open Space Referendum Bonds in 2010 to finance the purchase of land to remain as open space. ADOPTED 2023 BUDGET CITY OF ANDOVER, MINNESOTA 40 CITY OF ANDOVER, MINNESOTA 2023 ANNUAL BUDGET CAPITAL PROJECTS FUNDS DEFINITION: Capital Projects Funds can be 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. 41 City of Andover Capital Projects Funds 2023 Budget Summary - All Capital Projects Funds Statement of Revenues, Expenditures and Changes in Fund Balance Fund Balance, January 1 Revenues General Property Taxes Tax Increments Special Assessments Intergovernmental Investment Income User Charges Miscellaneous Total Revenues: Other Sources Transfers In Bond Proceeds Bond Premium Proceeds from Sale of Capital Assets Total Other Sources: Total Revenues and Other Sources Total Available: Expenditures Purchased Services Other Services and Charges Capital Outlay Debt Service - Principal Retirement Total Expenditures: Other Uses Operating Transfers Out Total Expenditures and Other Uses: Fund Balance, December 31 $ 29,666,049 $ 38,572,622 2,068,442 103,474 696,591 159,978 (65,622) 1,688,172 266,499 4,917,534 1,519,187 7,765,000 188,834 18,800 9,491,821 14,409,355 44,075,404 185,683 2,813,288 1,969,315 183,187 5,151,473 351,309 5,502,782 2,162,822 100,000 1,503,900 1,329,769 115,000 360,776 502,000 6,074,267 986,888 7,960,000 8,946,888 15,021,155 53,593,777 155,000 9,889,500 2,534,000 12,578,500 716,020 13,294,520 $ 38,572,622 2,162,822 100,000 959,500 1,381,769 141,000 3,575,000 342,361 8,662,452 1,385,228 45,000 1,430,228 10,092,680 48,665,302 30,396 6,405,500 2,175,833 8,611,729 716,020 9,327,749 $ 38,572,622 $ 40,299,257 $ 39,337,553 $ 39,337,553 2,374,598 100,000 1,963,000 8,619,954 107,500 384,911 520,000 14,069,963 708,300 708,300 14,778,263 54,115,816 10,056,000 10,288,500 20,344,500 683,945 21,028,445 $ 33,087,371 Change in Fund Balance $ 8,906,573 $ 1,726,635 $ 764,931 $ (6,250,182) 30% 4% 2% -16% 42 Actual 1 Adopted 1 Estimate 1 Adopted 1 Description 2021 2022 2022 2023 Fund Balance, January 1 Revenues General Property Taxes Tax Increments Special Assessments Intergovernmental Investment Income User Charges Miscellaneous Total Revenues: Other Sources Transfers In Bond Proceeds Bond Premium Proceeds from Sale of Capital Assets Total Other Sources: Total Revenues and Other Sources Total Available: Expenditures Purchased Services Other Services and Charges Capital Outlay Debt Service - Principal Retirement Total Expenditures: Other Uses Operating Transfers Out Total Expenditures and Other Uses: Fund Balance, December 31 $ 29,666,049 $ 38,572,622 2,068,442 103,474 696,591 159,978 (65,622) 1,688,172 266,499 4,917,534 1,519,187 7,765,000 188,834 18,800 9,491,821 14,409,355 44,075,404 185,683 2,813,288 1,969,315 183,187 5,151,473 351,309 5,502,782 2,162,822 100,000 1,503,900 1,329,769 115,000 360,776 502,000 6,074,267 986,888 7,960,000 8,946,888 15,021,155 53,593,777 155,000 9,889,500 2,534,000 12,578,500 716,020 13,294,520 $ 38,572,622 2,162,822 100,000 959,500 1,381,769 141,000 3,575,000 342,361 8,662,452 1,385,228 45,000 1,430,228 10,092,680 48,665,302 30,396 6,405,500 2,175,833 8,611,729 716,020 9,327,749 $ 38,572,622 $ 40,299,257 $ 39,337,553 $ 39,337,553 2,374,598 100,000 1,963,000 8,619,954 107,500 384,911 520,000 14,069,963 708,300 708,300 14,778,263 54,115,816 10,056,000 10,288,500 20,344,500 683,945 21,028,445 $ 33,087,371 Change in Fund Balance $ 8,906,573 $ 1,726,635 $ 764,931 $ (6,250,182) 30% 4% 2% -16% 42 City of Andover Capital Projects Funds Water Trunk Fund Statement of Revenues, Expenditures and Changes in Fund Balance Fund Balance, January 1 Revenues Special Assessments Intergovernmental Investment Income User Charges Total Revenues: Other Sources Transfers In Total Revenues and Other Sources Total Available: Expenditures Other Services and Charges Capital Outlay Total Expenditures: Other Uses Operating Transfers Out Total Expenditures and Other Uses: Fund Balance, December 31 Change in Fund Balance $ 5,902,419 $ 6,631,886 $ 6,631,886 $ 8,162,009 97,642 (8,468) 765,398 854,572 300,000 1,154,572 7,056,991 276,400 276,400 148,705 425,105 $ 6,631,886 $ 729,467 12% 43 25,000 82,478 157,478 300,000 457,478 7,089,364 1,655, 000 260,000 1,915,000 152,877 2,067,877 $ 5,021,487 $ (1,610,399) -24% 5,000 52,000 25,000 1,661,000 1,743,000 300,000 2,043,000 8,674,886 100,000 260,000 360,000 152,877 512,877 $ 8,162,009 $ 1,530,123 23% 5,000 7,000,000 25,000 85,779 7,115, 779 300,000 7,415,779 15,577,788 310,000 7,780,000 8,090,000 133,945 8,223,945 $ 7,353,843 $ (808,166) -10% Actual Adopted 1 Estimate 1 Adopted 1 Description 2021 2022 2022 2023 Fund Balance, January 1 Revenues Special Assessments Intergovernmental Investment Income User Charges Total Revenues: Other Sources Transfers In Total Revenues and Other Sources Total Available: Expenditures Other Services and Charges Capital Outlay Total Expenditures: Other Uses Operating Transfers Out Total Expenditures and Other Uses: Fund Balance, December 31 Change in Fund Balance $ 5,902,419 $ 6,631,886 $ 6,631,886 $ 8,162,009 97,642 (8,468) 765,398 854,572 300,000 1,154,572 7,056,991 276,400 276,400 148,705 425,105 $ 6,631,886 $ 729,467 12% 43 25,000 82,478 157,478 300,000 457,478 7,089,364 1,655, 000 260,000 1,915,000 152,877 2,067,877 $ 5,021,487 $ (1,610,399) -24% 5,000 52,000 25,000 1,661,000 1,743,000 300,000 2,043,000 8,674,886 100,000 260,000 360,000 152,877 512,877 $ 8,162,009 $ 1,530,123 23% 5,000 7,000,000 25,000 85,779 7,115, 779 300,000 7,415,779 15,577,788 310,000 7,780,000 8,090,000 133,945 8,223,945 $ 7,353,843 $ (808,166) -10% Fund: 4110 Cost Center: Water Trunk Activity Type/Code: Capital Projects Exoenditure Hi2hliehts Projects planned for 2023 include: New Development Projects $ 60,000 Water Main Gate Valve Replacement 250,000 Water Main Improvements 780,000 Red Oaks Manor Water Main Replacement 7,000,000 $ 8,090,000 Projects planned for 2022 include: New Development Projects $ 60,000 Water Main Gate Valve Replacement 200,000 Recondition & Paint Water Tower #2 1,655,000 $ 1,915,000 A portion of the connection fee is used to support the Water Treatment Plant and is transferred to the Water Enterprise Fund. Department Head: City Engineer General Activity Description The Water Trunk Capital Projects Fund accounts for water access fees and trunk improvements as part of development. Process Used The water system is continually reviewed by the Engineering and Water Departments through studies of service, water quality, and future system expansion or improvements. ADOPTED 2023 BUDGET CITY OF ANDOVER, MINNESOTA 44 City of Andover Capital Projects Funds Sewer Trunk Fund Statement of Revenues, Expenditures and Changes in Fund Balance 1 Actual Adopted 1 Estimate 1 Adopted 1 Description 2021 2022 2022 2023 Fund Balance, January 1 Revenues Special Assessments Investment Income User Charges Total Revenues: Other Sources Transfers In Total Revenues and Other Sources Total Available: Expenditures Other Services and Charges Capital Outlay Total Expenditures: Other Uses Operating Transfers Out Total Expenditures and Other Uses: Fund Balance, December 31 Change in Fund Balance $ 8,079,582 $ 7,889,281 $ 7,889,281 74,711 (17, 849) 161,584 218,446 400,000 618,446 8,698,028 65,544 743,203 808,747 20,000 50,000 13,298 83,298 400,000 483,298 8,372,579 125,000 125,000 808,747 125,000 $ 7,889,281 $ (190,301) -2% 45 $ 8,247,579 $ 358,298 5% 5,000 50,000 275,000 330,000 400,000 730,000 8,619,281 125,000 125,000 125,000 $ 8,494,281 $ 605,000 8% $ 8,494,281 5,000 50,000 13,832 68,832 400,000 468,832 8,963,113 205,000 205,000 205,000 $ 8,758,113 $ 263,832 3% Fund: 4120 Cost Center: Sewer Trunk Activity Type/Code: Capital Projects Expenditure Hiehli¢hts Projects planned for 2023 include: New Development Projects New - Backup Generator at Lift Station #5 Projects planned for 2022 include: New Development Projects $ 130,000 75,000 $ 205,000 $ 125,000 Department Head: City Engineer General Activity Desciption The Sewer Trunk Capital Projects Fund accounts for access fees and sanitary sewer improvements. City sewage flows through a pipe and lift station system to a large sewer interceptor, which is then carried to a metro treatment plant. Process Used The Sewer and Engineering Departments continually review the system to determine the proper sizing of pipes and lift stations to process sewage. ADOPTED 2023 BUDGET CITY OF ANDOVER, MINNESOTA 46 City of Andover Capital Projects Funds Road and Bridge Fund Statement of Revenues, Expenditures and Changes in Fund Balance Fund Balance, January 1 Revenues General Property Taxes Special Assessments Intergovernmental Investment Income Total Revenues: Other Sources Transfers In Total Revenues and Other Sources Total Available: Expenditures Other Services and Charges Other Uses Operating Transfers Out Total Expenditures and Other Uses: Fund Balance, December 31 Change in Fund Balance $ 8,804,203 $ 9,624,363 $ 9,624,363 $ 11,256,854 1,448,262 520,669 148,754 (6,856) 2,110,829 755,000 2,865,829 11,670,032 2,045,669 2,045,669 $ 9,624,363 $ 820,160 9% 47 1,517,822 1,431,500 1,329,769 4,279,091 7,400 4,286,491 13,910,854 2,194,000 2,194,000 $ 11,716,854 $ 2,092,491 22% 1,517,822 946,500 1,329,769 25,000 3,819,091 7,400 3,826,491 13,450,854 2,194,000 1,729, 598 1,950,000 1,546,204 5,225,802 8,300 5,234,102 16,490,956 5,086,497 - 200,000 2,194,000 5,286,497 $ 11,256,854 $ 1,632,491 17% $ 11,204,459 $ (52,395) 0% Actual 1 Adopted Estimate 1 Adopted 1 Description 2021 1 2022 2022 2023 Fund Balance, January 1 Revenues General Property Taxes Special Assessments Intergovernmental Investment Income Total Revenues: Other Sources Transfers In Total Revenues and Other Sources Total Available: Expenditures Other Services and Charges Other Uses Operating Transfers Out Total Expenditures and Other Uses: Fund Balance, December 31 Change in Fund Balance $ 8,804,203 $ 9,624,363 $ 9,624,363 $ 11,256,854 1,448,262 520,669 148,754 (6,856) 2,110,829 755,000 2,865,829 11,670,032 2,045,669 2,045,669 $ 9,624,363 $ 820,160 9% 47 1,517,822 1,431,500 1,329,769 4,279,091 7,400 4,286,491 13,910,854 2,194,000 2,194,000 $ 11,716,854 $ 2,092,491 22% 1,517,822 946,500 1,329,769 25,000 3,819,091 7,400 3,826,491 13,450,854 2,194,000 1,729, 598 1,950,000 1,546,204 5,225,802 8,300 5,234,102 16,490,956 5,086,497 - 200,000 2,194,000 5,286,497 $ 11,256,854 $ 1,632,491 17% $ 11,204,459 $ (52,395) 0% Fund: 4140 Cost Center: Road and Bridge Activity Type/Code: Capital Projects Expenditure Hightiahts Some of the major 2023 projects are as follows: Annual Street Crack Seal Pedestrian Trail Maintenance Curb, Sidewalk & Ped Ramp Replacement Annual Pavement Markings Gravel Road Improvements New - Unmanned Aerial Vehicle Street Mill & Overlay Street Full Depth Reclamation MSA - New & Reconstruct Routes MSA - Mill & Overlay Some of the major 2022 projects are as follows: Annual Street Crack Seal Pedestrian Trail Maintenance Curb, Sidewalk & Ped Ramp Replacement Annual Pavement Markings Gravel Road Improvements MSA - New & Reconstruct Routes MSA - Mill & Overlay $ 190,000 62,000 110,000 62,000 20,000 6,000 1,798,000 701,497 1,600,000 537,000 $ 5,086,497 $ 180,000 60,000 105,000 60,000 19,000 1,600,000 170,000 $ 2,194,000 Department Head: City Engineer General Activity Description The Road and Bridge Fund accounts for road projects and the Pavement Management Program. Process Used Construction projects are identified by the capital improvement process and contained in the five-year Capital Improvement Plan (CIP). The council approves the CIP annually, thereby initiating a process of feasibility study, preparation of plans and specifications, public hearings, ordering of the project, bidding the project and construction. This fund also accounts for the pavement management program, which includes annual seal coating, crack sealing and overlays for roads. ------------------------------- ADOPTED 2023 BUDGET CITY OF ANDOVER, MINNESOTA EN City of Andover Capital Projects Funds Park Dedication Projects Statement of Revenues, Expenditures and Changes in Fund Balance Fund Balance, January 1 Revenues General Property Taxes Investment Income User Charges Miscellaneous Total Revenues: Other Sources Transfers In Total Revenues and Other Sources Total Available: Expenditures Other Services and Charges Capital Outlay Total Expenditures: Other Uses Operating Transfers Out Total Expenditures and Other Uses: $ 721,300 $ 1,018,691 $ 1,018,691 $ 2,009,548 15,270 546 622,680 26,475 664,971 664,971 1,386,271 25,021 139,955 164,976 15,000 220,000 235,000 235,000 1,253,691 25,000 197,000 222.000 202,604 163,143 367,580 385,143 Fund Balance, December 31 $ 1,018,691 Change in Fund Balance $ 297,391 41% m $ 868,548 $ (150,143) -15% 15,000 2,000 1,347,000 12,000 1,376,000 1,376,000 2,394,691 25,000 197,000 222,000 163,143 385,143 $ 2,009,548 $ 990,857 97% 15,000 240,300 255,300 255,300 2,264,848 25,000 140,000 165,000 150,000 315,000 $ 1,949,848 $ (59,700) -3% Actual Adopted Estimate 1 Adopted 1 Description 1 2021 1 2022 2022 2023 Fund Balance, January 1 Revenues General Property Taxes Investment Income User Charges Miscellaneous Total Revenues: Other Sources Transfers In Total Revenues and Other Sources Total Available: Expenditures Other Services and Charges Capital Outlay Total Expenditures: Other Uses Operating Transfers Out Total Expenditures and Other Uses: $ 721,300 $ 1,018,691 $ 1,018,691 $ 2,009,548 15,270 546 622,680 26,475 664,971 664,971 1,386,271 25,021 139,955 164,976 15,000 220,000 235,000 235,000 1,253,691 25,000 197,000 222.000 202,604 163,143 367,580 385,143 Fund Balance, December 31 $ 1,018,691 Change in Fund Balance $ 297,391 41% m $ 868,548 $ (150,143) -15% 15,000 2,000 1,347,000 12,000 1,376,000 1,376,000 2,394,691 25,000 197,000 222,000 163,143 385,143 $ 2,009,548 $ 990,857 97% 15,000 240,300 255,300 255,300 2,264,848 25,000 140,000 165,000 150,000 315,000 $ 1,949,848 $ (59,700) -3% Fund: 4150 Cost Center: Park Dedication Projects Activity Type/Code: Capital Projects Expenditure Hiahli¢hts 2023 Projects include: Annual Miscellaneous Projects $ 25,000 Hidden Creek North - Shelter 40,000 Lunds North - Playground Equipment 50,000 Pine Hills North - Building / Shelter 50,000 $ $ 165,000 2022 Projects include: Annual Miscellaneous Projects $ 25,000 Pine Hills North - Phase II parking lot 120,000 Pine Hills South - Parking lot 67,000 Oak Bluff - New basketball court 10,000 $ $ 222,000 A portion of park dedication fees collected will be used to offset the debt service levy for the Community Center expansion, not to exceed $1,000,000. 2020 $ 175,146 2021 202,604 2022 163,143 2023 150,000 $ 690,893 Department Head: City Engineer General Activity Desciption The Park Dedication Fund accounts for contributions associated with land development to be used for constructing and upgrading the City's park system. Process Used The Park and Recreation Commission evaluates the needs of the community with regard to park and recreation facilities. Recommendations are made to the City Council and projects are then placed into the annual City Capital Improvement Plan. ADOPTED 2023 BUDGET CITY OF ANDOVER, MINNESOTA 50 City of Andover Capital Projects Funds Building Fund Statement of Revenues, Expenditures and Changes in Fund Balance Fund Balance, January 1 Revenues General Property Taxes Intergovernmental Investment Income Total Revenues: Other Sources Transfers In Total Revenues and Other Sources Total Available: Expenditures Other Services and Charges Debt Service - Principal Retirement Total Expenditures: Other Uses Operating Transfers Out Total Expenditures and Other Uses: Fund Balance, December 31 Change in Fund Balance $ 643,852 354,724 11,224 2,463 368,411 am 409,098 1,052,950 118,709 183,187 301,896 301,896 $ 751,054 $ 107,202 17% 51 $ 751,054 355,000 355,000 355,000 1,106,054 328,000 328,000 328,000 $ 778,054 $ 27,000 4% 751,054 355,000 355,000 355,000 1,106,054 399,000 399,000 399,000 $ 707,054 $ (44,000) -6% $ 707,054 355,000 355,000 355,000 1,062,054 500,000 500,000 500,000 $ 562,054 $ (145,000) -21% Actual 1 Adopted 1 Estimate 1 Adopted 1 Description 2021 2022 2022 2023 Fund Balance, January 1 Revenues General Property Taxes Intergovernmental Investment Income Total Revenues: Other Sources Transfers In Total Revenues and Other Sources Total Available: Expenditures Other Services and Charges Debt Service - Principal Retirement Total Expenditures: Other Uses Operating Transfers Out Total Expenditures and Other Uses: Fund Balance, December 31 Change in Fund Balance $ 643,852 354,724 11,224 2,463 368,411 am 409,098 1,052,950 118,709 183,187 301,896 301,896 $ 751,054 $ 107,202 17% 51 $ 751,054 355,000 355,000 355,000 1,106,054 328,000 328,000 328,000 $ 778,054 $ 27,000 4% 751,054 355,000 355,000 355,000 1,106,054 399,000 399,000 399,000 $ 707,054 $ (44,000) -6% $ 707,054 355,000 355,000 355,000 1,062,054 500,000 500,000 500,000 $ 562,054 $ (145,000) -21% Fund: 4160 Cost Center: Building Fund Activity Type/Code: Capital Projects Expenditure Hithliehts Projects planned for 2023 include: Annual parking lot maintenance City -Wide Facilities Space Study Replacement - Emergency Generator FS #1 Replacement - Tube Heaters FS #1 Replacement - Roof Top Package Units 1 - 8 CH Replacement - Furnace FS #3 Projects planned for 2022 include: Replacement - CH parking lot Replacement - PW roof top unit Replacement - CH furnace $ 170,000 115,000 50,000 35,000 120,000 10,000 $ 500,000 $ 275,000 45,000 8,000 $ 328,000 Department Head: Finance Director General Activity Description The Building Fund accounts for miscellaneous building improvement projects for all facilities, including land acquisitions. Process Used Facilities are reviewed annually for non-recurring repairs or for future facility needs. ADOPTED 2023 BUDGET CITY OF ANDOVER, MINNESOTA 52 City of Andover Capital Projects Funds Trail & Transportation Statement of Revenues, Expenditures and Changes in Fund Balance Fund Balance, January 1 Revenues Investment Income User Charges Miscellaneous Total Revenues: Other Sources Transfers In Total Revenues and Other Sources Total Available: $ 110,647 $ 249,245 $ 249,245 $ 1,054,954 715 138,510 139,225 45,000 115,000 160.000 292,000 113,709 405,709 - - 400,000 139,225 160,000 805,709 249,872 409,245 1,054,954 45,000 45,000 45,000 1,099,954 Expenditures Other Services and Charges 627 - Capital Outlay - 950,000 Total Expenditures: 627 950,000 Other Uses Operating Transfers Out Total Expenditures and Other Uses: 627 - - 950,000 Fund Balance, December 31 $ 249,245 $ 409,245 $ 1,054,954 $ 149,954 Change in Fund Balance $ 138,598 $ 160,000 $ 805,709 $ (905,000) 125% 64% 323% -86% 53 Actual 1 Adopted 1 Estimate Adopted Description 2021 2022 2022 2023 Fund Balance, January 1 Revenues Investment Income User Charges Miscellaneous Total Revenues: Other Sources Transfers In Total Revenues and Other Sources Total Available: $ 110,647 $ 249,245 $ 249,245 $ 1,054,954 715 138,510 139,225 45,000 115,000 160.000 292,000 113,709 405,709 - - 400,000 139,225 160,000 805,709 249,872 409,245 1,054,954 45,000 45,000 45,000 1,099,954 Expenditures Other Services and Charges 627 - Capital Outlay - 950,000 Total Expenditures: 627 950,000 Other Uses Operating Transfers Out Total Expenditures and Other Uses: 627 - - 950,000 Fund Balance, December 31 $ 249,245 $ 409,245 $ 1,054,954 $ 149,954 Change in Fund Balance $ 138,598 $ 160,000 $ 805,709 $ (905,000) 125% 64% 323% -86% 53 Fund: 4170 Cost Center: Trail & Transportation Activity Type/Code: Capital Projects Expenditure Hi¢hliehts Projects planned for 2023 include: 8' Bituminous Trail along Crosstown Blvd - Xeon St to railroad tracks Railroad tracks to 157th Ave 157th Ave to 159th Ave ARPA Special Revenue Fund $ 320,000 575,000 455,000 (400,000) $ 950,000 Department Head: Dir of PW / City Engineer General Activity Description The Trail and Transportation Capital Projects Fund accounts for contributions associated with land development to be used for constructing and upgrading the City's Trail System. Process Used The Park and Recreation Commission evaluates the needs of the community with regard to trail facilities. Recommendations are made to the City Council and projects are then placed into the annual City Capital Improvement Plan. ------------------------------------------------------------ ADOPTED 2023 BUDGET CITY OF ANDOVER, MINNESOTA 54 City of Andover Capital Projects Funds Capital Equipment Reserve Statement of Revenues, Expenditures and Changes in Fund Balance Fund Balance, January 1 Revenues General Property Taxes Intergovernmental Investment Income Miscellaneous Total Revenues: Other Sources Transfers In Proceeds from Sale of Capital Assets Total Revenues and Other Sources: Total Available: Expenditures Other Services and Charges Capital Outlay Total Expenditures: Other Uses Operating Transfers Out Total Expenditures and Other Uses: Fund Balance, December 31 Change in Fund Balance $ 1,772,530 $ 1,928,097 $ 1,928,097 $ 1,950,077 250,186 (3,281) 30,118 277,023 23,500 18,800 319,323 2,091,853 22,541 141,215 163,756 275,000 287,000 562,000 671,488 2,599,585 52,500 717,000 769,500 275,000 76,652 351,652 107,828 45,000 504,480 2,432,577 52,500 430,000 482,500 275,000 73,750 348,750 348,750 2,298,827 50,000 413,500 463,500 163,756 Actual Adopted Estimate Adopted Description 2021 2022 2022 2023 Fund Balance, January 1 Revenues General Property Taxes Intergovernmental Investment Income Miscellaneous Total Revenues: Other Sources Transfers In Proceeds from Sale of Capital Assets Total Revenues and Other Sources: Total Available: Expenditures Other Services and Charges Capital Outlay Total Expenditures: Other Uses Operating Transfers Out Total Expenditures and Other Uses: Fund Balance, December 31 Change in Fund Balance $ 1,772,530 $ 1,928,097 $ 1,928,097 $ 1,950,077 250,186 (3,281) 30,118 277,023 23,500 18,800 319,323 2,091,853 22,541 141,215 163,756 275,000 287,000 562,000 671,488 2,599,585 52,500 717,000 769,500 275,000 76,652 351,652 107,828 45,000 504,480 2,432,577 52,500 430,000 482,500 275,000 73,750 348,750 348,750 2,298,827 50,000 413,500 463,500 163,756 769,500 482,500 463,500 $ 1,928,097 $ 1,830,085 $ 1,950,077 $ 1,835,327 $ 155,567 $ (98,012) $ 21,980 $ (114,750) 9% -5% 1% -6% 55 Fund: 4160 Cost Center: Capital Equipment Reserve Activity Type/Code: Capital Projects Expenditure 1 iahtiehts Projects outlined in the 2023 - 2027 CIP for year 2023 using the Capital Equipment Reserve Capital Projects Fund include: Using 2023 Capital Projects Reserve / levy: Replacement - Data SAN (Storage Area Network) $ 30,000 New - First Response Vehicle 75,000 Replacement - UT -10 #4810 65,000 New - zero turn mower 15,000 Replacement - Bobcat S185 #120 70,000 New -A/C Recycling Machine 11,000 Replacement - 800 MHz Radios 50,000 Dalske Preserve - Boardwalk 147,500 $ 463,500 Using 2022 Capital Projects Reserve / levy New - Mobile CAD Fire $ 12,000 Replacement - 800 MHz Radios 50,000 Replacement - Tractor #515 25,000 Replacement - Toro Workman #565 13,000 Pine Hills North - Pave Parking Lot 280,000 Emergency Operations Center Improvement 15,000 Replacement - Emergency Sirens 50,000 Dog Park - Trail & Parking Lot Paving 37,500 Replacement - Grass / Rescue Vehicle 275,000 New - Digital Fire Extinguisher Training System 12,000 $ 769,500 ' Grant Department Head: Finance Director General Activity Description Resources for this fund come from residual fund transfers, interest earnings, and property tax (capital) levy. Process Used During the budget processes, it was determined that various capital expenditures were necessary. The Andover Management Team and Andover Vehicle Purchasing Committee reviewed departmental needs and prioritized capital needs. -------------------------------------------------------- ADOPTED 2023 BUDGET CITY OP ANDOVER, MINNESOTA 56 City of Andover Capital Projects Funds 2020A G.O. Equipment Certificate Statement of Revenues, Expenditures and Changes in Fund Balance Fund Balance, January 1 Revenues Investment Income Other Sources Transfers In Total Revenues and Other Sources: Total Available: Expenditures Capital Outlay Other Uses $ 829,537 (11,394) (11,394) 818,143 818,143 Operating Transfers Out - - - Total Expenditures and Other Uses: 818,143 - - Fund Balance, December 31 $ - $ - $ - $ Change in Fund Balance $ (829,537) $ - $ - $ -100% n/a n/a n/a 57 Actual 1 Adopted 1 Estimate 1 Adopted 1 Description 2021 2022 2022 2023 Fund Balance, January 1 Revenues Investment Income Other Sources Transfers In Total Revenues and Other Sources: Total Available: Expenditures Capital Outlay Other Uses $ 829,537 (11,394) (11,394) 818,143 818,143 Operating Transfers Out - - - Total Expenditures and Other Uses: 818,143 - - Fund Balance, December 31 $ - $ - $ - $ Change in Fund Balance $ (829,537) $ - $ - $ -100% n/a n/a n/a 57 Fund: 4214 Cost Center: 2020A G.O. Equipment Certificates Activity Type/Code: Capital Projects Expenditure Hi¢hliehts The following is a list of equipment purchased with a 2020 Capital Note. Vehicle / Equipment Replacements Replacement - 3/4 Ton Truck #12 $ 30,000 Replacement - Fire Engine 21 #4884 660,000 Replacement - SCBA Compressor 65,000 Replacement - Front End Loader #124 195,000 Replacement - One Ton Truck w/ Plow #133 75,000 New - Slide In Hotbox 18,000 Replacement - Water Tanker #161 165,000 New- Large Capacity Mower 107,000 $ 1,315,000 Department Head: Finance Director General Activity Description This fund accounts for major capital equipment purchases. Resources for the capital equipment come from the issuance of equipment notes. The notes are typically of a 5 -year duration and debt service is funded via the annual tax levy. Process Used During the 2020 budget process, it was determined that various capital equipment was necessary. ADOPTED 2023 BUDGET CITY OF ANDOVER, MINNESOTA 58 City of Andover Capital Projects Funds 2021A G.O. Equipment Certificate Statement of Revenues, Expenditures and Changes in Fund Balance 1 Actual Adopted Estimate Adopted Description 2021 2022 2022 2023 Fund Balance, January 1 $ $ 642,333 $ 642,333 $ Revenues Investment Income - 1,500 Other Sources Transfers In - 170,000 170,000 Bond Proceeds 630,000 630,000 - Bond Premium 21,663 Total Other Sources: 651,663 800,000 170,000 Total Revenues and Other Sources: 651,663 800,000 171,500 Total Available: 651,663 1,442,333 813,833 Expenditures Purchased Services 9,330 15,000 - Capital Outlay - 785,000 813,833 Total Expenditures: 9,330 800,000 813,833 Other Uses Operating Transfers Out Total Expenditures and Other Uses: 9,330 800,000 813,833 Fund Balance, December 31 $ 642,333 $ 642,333 $ - $ Change in Fund Balance $ 642,333 $ - $ (642,333) $ n/a 0% -100% n/a 59 Fund: 4215 Cost Center: 2021A G.O. Equipment Certificates Activity Type/Code: Capital Projects Expenditure HiehliQhts The following is a list of equipment planned to be purchased with a 2021 G.O Equipment Certificate. Vehicle / Equipment Replacements: New- First Response Vehicle $ 70,000 New - Zero Tum Mower 10,000 Replacement - Large Capacity Mower #585 130,000 New - Dump Truck w/ Snow Removal Equipment 250,000 Replacement - Asphalt Roller 20,000 Replacement - Dump Truck w/ Snow Removal Equipment 255,000 Replacement - Pickup Truck #6 50,000 $ 785,000 Department Head: Finance Director General Activity Description This fund accounts for major capital equipment purchases. Resources for the capital equipment come from the issuance of equipment notes. The notes are typically of a 5 -year duration and debt service is funded via the annual tax levy. Process Used During the 2022 budget process, it was determined that various capital equipment was necessary. ADOPTED 2023 BUDGET CITY OF ANDOVER, MINNESOTA W City of Andover Capital Projects Funds 2018A G.O. Capital Improvement Plan Bonds Statement of Revenues, Expenditures and Changes in Fund Balance Fund Balance, January 1 Actual 1 Adopted 1 Estimate 1 Adopted 1 Description 2021 2022 2022 2023 Fund Balance, January 1 $ 39,943 $ 30,396 $ 30,396 $ Revenues Investment Income 1,038 - Other Sources Transfers In - Total Revenues and Other Sources: 1,038 Total Available: 40,981 30,396 30,396 Expenditures Purchased Services 10,585 - 30,396 Other Uses Operating Transfers Out - Total Expenditures and Other Uses: 10,585 - 30,396 Fund Balance, December 31 $ 30,396 $ 30,396 $ - $ Change in Fund Balance $ (9,547) $ - $ (30,396) $ -24% 0% -100% n/a 61 Fund: 4303 Cost Center: 2018A G.O. Capital Improvement Plan Bonds Activity Type/Code: Capital Projects Expenditure Hielilizhts It is anticipated that architectural fees and construction would cost about $10,300,000. The land was purchased in previous years in anticipation of relocating the Maintenance Garage and Cost Storage Building in this area. Department Head: Finance Director General Activity Description This fund was created to account for the construction of the Maintenance Garage and Cold Storage Building on the west side of the city campus. The City issued 2018A G.O. Capital Improvement Plan Bonds in the amount of $10,000,000 to finance the construction. Process Used During the master campus study / analysis, it was determined that a new maintenance garage was needed with all the additional equipment that has been added, in addition to, the size of the vehicles. Also needed is a structure to house all the seasonal equipment that doesn't currently fit into a building, which would increase the longevity of the equipment. --------------------------------------------------------------------------- ADOPTED 2023 BUDGET CITY OF ANDOVER. MINNESOTA 62 City of Andover Capital Projects Funds 2019A G.O. Taxable Abatement Bonds Statement of Revenues, Expenditures and Changes in Fund Balance Fund Balance, January 1 Actual Adopted 1 Estimate 1 Adopted Description 1 2021 2022 2022 2023 Fund Balance, January 1 $ 176,032 $ $ $ Revenues Investment Income 5,437 Miscellaneous 5,430 Total Revenues: 10,867 Other Sources Transfers In - - Total Revenues and Other Sources: 10,867 - Total Available: 186,899 - Expenditures Purchased Services 60,100 - Capital Outlay 126,799 - Total Expenditures: 186,899 - Other Uses Operating Transfers Out - - Total Expenditures and Other Uses: 186,899 - Fund Balance, December 31 $ - $ - $ $ Change in Fund Balance $ (176,032) $ - $ $ -100% n/a n/a n/a 63 Fund: 4403 Cost Center: 2019 G.O. Abatement Bonds Activity Type/Code: Capital Projects Expenditure Highlights It is anticipated that architectural fees and construction would cost about $17,500,000 and would be an addition to the current facility to include a multi-purpose arena (ice switching to turf), additional senior / youth space and a additional field house court. Department Head: Finance Director General Activity Description This fund was created to account for the construction of the Community Center expansion project. The City issued 2019A G.O. Taxable Abatement Bonds in the amount of $15,770,000 to finance the construction. Process Used As part of the master campus study / analysis, it was determined that an additional multi-purpose facility was needed as well as additional field house and senior/youth space. ADOPTED 2023 BUDGET CITY OF ANDOVER, MINNESOTA 64 City of Andover Capital Projects Funds Tax Increment Projects Statement of Revenues, Expenditures and Changes in Fund Balance Fund Balance, January 1 Revenues Tax Increments Investment Income Miscellaneous Total Revenues: Other Sources Transfers In Total Revenues and Other Sources Total Available: Expenditures Other Services and Charges Capital Outlay Total Expenditures: Other Uses Operating Transfers Out Total Expenditures and Other Uses: $ 1,381,678 103,474 (24,467) 204,476 283,483 283,483 $ 1,406,384 $ 1,406,384 $ 1,076,384 100,000 35,000 100,000 235,000 235,000 100,000 15,000 140,000 255,000 255,000 100,000 20,000 520,000 640,000 640,000 1,665,161 1,641,384 1,661,384 1,716,384 258,777 258,777 258,777 Fund Balance, December 31 $ 1,406,384 Change in Fund Balance $ 24,706 2% 65 235,000 450,000 685,000 685,000 $ 956,384 $ (450,000) -32% 235,000 350,000 585,000 585,000 $ 1,076,384 $ (330,000) -23% 258,000 800,000 1,058,000 1,058,000 $ 658,384 $ (418,000) -39% Actual 1 Adopted 1 1 Estimate Adopted Description 2021 2022 2022 2023 Fund Balance, January 1 Revenues Tax Increments Investment Income Miscellaneous Total Revenues: Other Sources Transfers In Total Revenues and Other Sources Total Available: Expenditures Other Services and Charges Capital Outlay Total Expenditures: Other Uses Operating Transfers Out Total Expenditures and Other Uses: $ 1,381,678 103,474 (24,467) 204,476 283,483 283,483 $ 1,406,384 $ 1,406,384 $ 1,076,384 100,000 35,000 100,000 235,000 235,000 100,000 15,000 140,000 255,000 255,000 100,000 20,000 520,000 640,000 640,000 1,665,161 1,641,384 1,661,384 1,716,384 258,777 258,777 258,777 Fund Balance, December 31 $ 1,406,384 Change in Fund Balance $ 24,706 2% 65 235,000 450,000 685,000 685,000 $ 956,384 $ (450,000) -32% 235,000 350,000 585,000 585,000 $ 1,076,384 $ (330,000) -23% 258,000 800,000 1,058,000 1,058,000 $ 658,384 $ (418,000) -39% Fund: 4501 Cost Center: Tax Increment Projects Activity Type/Code: Capital Projects Expenditure Hiehliehts 2023 Budgeted expenditures include: Redevelopment Site Purchases $ 800,000 Pay -As -You -Go Note 65,000 Rental Property Expenditures 150,000 TIF Administration 43,000 $ 1,058,000 2022 Budgeted expenditures include: Redevelopment Site Purchases $ 450,000 Pay -As -You -Go Note 65,000 Rental Property Expenditures 150,000 TIF Administration 20,000 $ 685,000 TIF District 1-1 was decertified in 2012 and TIF District 1-2 was decertified in 2014. TIF District 1-3 and TIF District 1-4 was decertified in 2016. Department Head: Finance Director General Activity Description The Tax Increment Projects Fund accounts for activities in TIF districts 1-1, 1-2, 1-3, 1-4, 1-5 and 1-6 and all TIF land sales and expenditures to reach the goals of the TIF district plans. Process Used Promotion and expansion of the commercial / industrial tax base through redevelopment of land. ADOPTED 2023 BUDGET CITY OF ANDOVER, MINNESOTA M City of Andover Capital Projects Funds Permanent Improvement Revolving Statement of Revenues, Expenditures and Changes in Fund Balance Fund Balance, January 1 Revenues Special Assessments Investment Income Total Revenues: Other Sources Transfers In Total Revenues and Other Sources: Total Available: Expenditures Other Services and Charges Other Uses Operating Transfers Out Total Expenditures and Other Uses Fund Balance, December 31 Change in Fund Balance $ 1,204,326 $ 1,204,389 $ 1,204,389 $ 809,889 3,569 Actual Adopted 1 Estimate 1 Adopted Description 1 2021 2022 2022 2023 Fund Balance, January 1 Revenues Special Assessments Investment Income Total Revenues: Other Sources Transfers In Total Revenues and Other Sources: Total Available: Expenditures Other Services and Charges Other Uses Operating Transfers Out Total Expenditures and Other Uses Fund Balance, December 31 Change in Fund Balance $ 1,204,326 $ 1,204,389 $ 1,204,389 $ 809,889 3,569 2,400 3,000 3,000 (3,506) 5,000 2,500 2,500 63 7,400 5,500 5,500 63 7,400 5,500 5,500 1,204,389 1,211,789 1,209,889 815,389 $ 1,204,389 $ 63 0% 67 400,000 400,000 200,000 400,000 400,000 200,000 $ 811,789 $ 809,889 $ 615,389 $ (392,600) $ (394,500) $ (194,500) -33% -33% -24% Fund: 4601 Cost Center: Permanent Improvement Revolving Activity Type/Code: Capital Projects Expenditure 1 iehliahts No expenditures are planned for 2023. City Council is proposing to use PIR Funds to help offset the debt service payments related to the 2021A GO Street Reconstruction Bonds. The following transfers are proposed: Department Head: Finance Director General Activity Description The Permanent Improvement Revolving (PIR) Fund serves as a long-term funding source for large improvement expenditures. These funds can be used to finance infrastructure improvements for new developments if requested instead of bonding for them. Process Used The City has issued four bonds totaling $15.4 million thru 2008 in the PIR Fund for large capital projects. This fund has collected over $19 million of special assessments over the past 17 years. The annual cash flow of this fund is intended to eliminate unfunded projects through effective management of debt payments and project expenditures. Use of these funds for a qualifying project require a 4/5th's vote. ADOPTED 2023 BUDGET CITY OF ANDOVER, MINNESOTA M Operating Transfers 2022 $ 400,000 2023 200,000 2024 150,000 2025 150,000 2026 100,000 2027 100,000 2028 50,000 2029 50,000 $1,200,000 Department Head: Finance Director General Activity Description The Permanent Improvement Revolving (PIR) Fund serves as a long-term funding source for large improvement expenditures. These funds can be used to finance infrastructure improvements for new developments if requested instead of bonding for them. Process Used The City has issued four bonds totaling $15.4 million thru 2008 in the PIR Fund for large capital projects. This fund has collected over $19 million of special assessments over the past 17 years. The annual cash flow of this fund is intended to eliminate unfunded projects through effective management of debt payments and project expenditures. Use of these funds for a qualifying project require a 4/5th's vote. ADOPTED 2023 BUDGET CITY OF ANDOVER, MINNESOTA M City of Andover Capital Projects Funds 2021A G.O. Street Reconstruction Bonds Statement of Revenues, Expenditures and Changes in Fund Balance Fund Balance, January 1 Revenues Investment Income Other Sources Bond Proceeds Bond Premium Total Other Sources: Total Revenues and Other Sources: Total Available: Expenditures Purchased Services Other Services and Charges Total Expenditures: Other Uses Operating Transfers Out Total Expenditures and Other Uses Fund Balance, December 31 Change in Fund Balance 7,135,000 167,171 7,302,171 7,302,171 7,302,171 $ 7,196,503 $ 7,196,503 $ 3,816,503 7,330,000 7,330,000 7,330,000 14,526,503 105,668 140,000 - 5,400,000 105,668 5,540,000 20,000 20,000 7,216,503 3,400,000 3,400,000 105,668 5,540,000 3,400,000 $ 7,196,503 $ 7,196,503 n/a i $ 8,986,503 $ 1,790,000 25% $ 3,816,503 $ (3,380,000) -47% 10,000 10,000 3,826,503 3,826,503 3,826,503 3,826,503 $ (3,816,503) -100% Actual 1 Adopted 1 Estimate 1 Adopted 1 Description 2021 2022 2022 2023 Fund Balance, January 1 Revenues Investment Income Other Sources Bond Proceeds Bond Premium Total Other Sources: Total Revenues and Other Sources: Total Available: Expenditures Purchased Services Other Services and Charges Total Expenditures: Other Uses Operating Transfers Out Total Expenditures and Other Uses Fund Balance, December 31 Change in Fund Balance 7,135,000 167,171 7,302,171 7,302,171 7,302,171 $ 7,196,503 $ 7,196,503 $ 3,816,503 7,330,000 7,330,000 7,330,000 14,526,503 105,668 140,000 - 5,400,000 105,668 5,540,000 20,000 20,000 7,216,503 3,400,000 3,400,000 105,668 5,540,000 3,400,000 $ 7,196,503 $ 7,196,503 n/a i $ 8,986,503 $ 1,790,000 25% $ 3,816,503 $ (3,380,000) -47% 10,000 10,000 3,826,503 3,826,503 3,826,503 3,826,503 $ (3,816,503) -100% Fund: 4703 Cost Center: 2021A G.O. Street Reconstruction Bonds Activity Type/Code: Capital Projects Expenditure Hiahtights It is proposed that $7,330,000 in bond proceeds be issued to make improvements to various roads in the City of Andover. Some of the major 2023 projects are as follows: R & B - Annual Street Reconstruction R & B - Street Full Depth Reclamation Some of the major 2022 projects are as follows: R & B - New & Reconstruct Routes R & B - Mill & Overlays $ 990,000 2,836,503 $ 3,826,503 $ 3,400,000 2,000,000 $ 5,400,000 Department Head: Finance Director General Activity Description This fund was created to account for the reconstruction of the roadways in the City of Andover. The City is proposing to issue $7,330,000 G.O. Street Reconstruction Bonds to finance these improvements. Process Used Large projects that require more funding that the annual allocation lead themselves to being financed through a long-term issuance of bonds. Roads are inspected every three years and the road conditions in Andover are deteriorating to the point where an aggressive reconstruction and mill and overlay program is needed to keep the City's roadway infrastructure at a reasonable level. Large areas will have a mill and overlay done to prolong the life of the existing pavement to add another 10 -15 years of life and roads that are to the point of complete failure will be fully reconstructed. ADOPTED 2023 BUDGET CITY OF ANDOVER, MINNESOTA 70 CITY OF ANDOVER, MINNESOTA 2023 ANNUAL BUDGET ENTERPRISE FUNDS DEFINITION: Governments establish enterprise funds to account for activities that consist of rendering services or providing goods to the public for which a fee or charge is collected. 71 City of Andover Enterprise Funds 2023 Budget Summary - All Enterprise Funds Statement of Revenues, Expenditures and Changes in Fund Net Assets Unrestricted Net Assets, January 1 Revenues Charges for Services Interest Meters Miscellaneous Total Revenues: Other Sources Transfers In Total Revenues and Other Sources: Total Available: Expenditures Personal Services Supplies and Materials Other Services and Charges Capital Outlay Debt Service Total Expenditures: Other Uses Transfers Out Total Expenditures and Other Uses: $ 10,921,894 $ 11,365,340 $ 11,365,340 $ 11,311,382 6,740,115 (17,603) 44,946 51,674 6,819,132 148,705 6,967,837 17,889,731 1,176,277 337,097 2,276,842 972,851 780,493 5,543,560 980,831 6,524,391 Unrestricted Net Assets, December 31 $ 11,365,340 Change in Unrestricted Net Assets $ 443,446 4% 72 5,867,738 Actual 1 Adopted Estimate 1 Adopted 1 Description 2021 2022 2022 2023 Unrestricted Net Assets, January 1 Revenues Charges for Services Interest Meters Miscellaneous Total Revenues: Other Sources Transfers In Total Revenues and Other Sources: Total Available: Expenditures Personal Services Supplies and Materials Other Services and Charges Capital Outlay Debt Service Total Expenditures: Other Uses Transfers Out Total Expenditures and Other Uses: $ 10,921,894 $ 11,365,340 $ 11,365,340 $ 11,311,382 6,740,115 (17,603) 44,946 51,674 6,819,132 148,705 6,967,837 17,889,731 1,176,277 337,097 2,276,842 972,851 780,493 5,543,560 980,831 6,524,391 Unrestricted Net Assets, December 31 $ 11,365,340 Change in Unrestricted Net Assets $ 443,446 4% 72 5,867,738 5,916,738 62,500 62,500 13,000 13,000 44,000 65,000 5,987,238 6,057,238 152,877 152,877 6,140,115 6,210,115 17, 505,455 17, 575,455 1,319,670 506,800 2,577,222 110,000 784,500 5,298,192 965,881 6,264,073 $ 11,241,382 $ (123,958) -1% 1,319,670 506,800 2,577,222 110,000 784,500 5,298,192 965,881 6,264,073 $ 11,311,382 $ (53,958) 0% 6,207,829 62,500 13,000 44,000 6,327,329 133,945 6,461,274 17,772,656 1,318,317 510,800 3,165, 818 1,853,500 782,200 7,630,635 974,072 8,604,707 $ 9,167,949 $ (2,143,433) -19% City of Andover Enterprise Funds Water Statement of Revenues, Expenditures and Changes in Fund Net Assets Unrestricted Net Assets, January 1 Revenues Charges for Services Interest Meters Miscellaneous Total Revenues: Other Sources Transfers In Total Revenues and Other Sources: Total Available: Expenditures Personal Services Supplies and Materials Other Services and Charges Capital Outlay Debt Service Total Expenditures: Other Uses Transfers Out Total Expenditures and Other Uses: Unrestricted Net Assets, December 31 $ 5,961,529 $ 6,039,546 $ 6,039,546 $ 6,062,009 3,709,788 (8,668) 44,946 51,674 3,797,740 148,705 3,946,445 9,907,974 604,171 301,237 775,813 968,851 780,493 3,430, 565 437,863 3,868,428 2,760,106 30,000 13,000 44,000 2,847,106 152,877 2,999,983 9,039,529 587,993 432,800 780,486 25,000 784,500 2,610,779 418,741 3,029, 520 2,791,106 30,000 13,000 65,000 2,899,106 152,877 3,051,983 9,091,529 587,993 432,800 780,486 25,000 784,500 2,610,779 418,741 3,029,520 $ 6,039,546 $ 6,010,009 $ 6,062,009 2,969,744 30,000 13,000 44,000 3,056,744 133,945 3,190, 689 9,252,698 611,005 436,300 879,194 1,543,833 782,200 4,252,532 450,159 4,702,691 $ 4,550,007 Change in Unrestricted Net Assets $ 78,017 $ (29,537) $ 22,463 $ (1,512,002) 1 % 0% 0% -25% 73 Actual Adopted Estimate Adopted 1 Description 2021 1 2022 2022 2023 Unrestricted Net Assets, January 1 Revenues Charges for Services Interest Meters Miscellaneous Total Revenues: Other Sources Transfers In Total Revenues and Other Sources: Total Available: Expenditures Personal Services Supplies and Materials Other Services and Charges Capital Outlay Debt Service Total Expenditures: Other Uses Transfers Out Total Expenditures and Other Uses: Unrestricted Net Assets, December 31 $ 5,961,529 $ 6,039,546 $ 6,039,546 $ 6,062,009 3,709,788 (8,668) 44,946 51,674 3,797,740 148,705 3,946,445 9,907,974 604,171 301,237 775,813 968,851 780,493 3,430, 565 437,863 3,868,428 2,760,106 30,000 13,000 44,000 2,847,106 152,877 2,999,983 9,039,529 587,993 432,800 780,486 25,000 784,500 2,610,779 418,741 3,029, 520 2,791,106 30,000 13,000 65,000 2,899,106 152,877 3,051,983 9,091,529 587,993 432,800 780,486 25,000 784,500 2,610,779 418,741 3,029,520 $ 6,039,546 $ 6,010,009 $ 6,062,009 2,969,744 30,000 13,000 44,000 3,056,744 133,945 3,190, 689 9,252,698 611,005 436,300 879,194 1,543,833 782,200 4,252,532 450,159 4,702,691 $ 4,550,007 Change in Unrestricted Net Assets $ 78,017 $ (29,537) $ 22,463 $ (1,512,002) 1 % 0% 0% -25% 73 Fund: 5100 Cost Center: Water Activity Type/Code: Enterprise Fund Expenditure Hi2hli2hts 2023 includes the mitigation of radon in the water treatment plant ($1,345,500), a backup generator at well #5 ($150,000), and additional maintenance costs as the water system and plant continue to age. No major changes planned for 2022. Limited supplies and shortages continue to drive costs up. In 2021, an AMI/AMR meter reading system is proposed to be installed to allow staff to get daily reads on the water system ($1,210,000). Manual meter reading is becoming absolete, in addition, this would allow staff to detect leaks more rapidly to save customers money. The Water Fund will be paying a portion of the annual debt ($22,650) for the new public works facility. Department Head: Utility Supervisor General Activity Description Operate and maintain the City's water system including WTP, wells, towers and water mains. Provide a continuous, potable, bacteria free water supply at proper pressure levels. Maintain customer water meters and respond to other service requests. Maintain water distribution for fire protection system needs. Conform to all State and Federal monitoring rules, provide tours and information to the public. Process Used Operate wells and WTP in a manner that ensures a safe, clean and adequate water supply, that will meet peak daily demands and fire protection demands. Maintain wells, treatment facility, and related infrastructure. Operate and maintain chemical feed equipment. Collect, analyze and record water samples daily. Maintain, test and repair water meters. Respond to emergencies 24 hours a day. Work with contractors to locate watermains, locate and operate gate valves, monitor tests during final inspections. Check WTP, 8 wells, 7 days a week, 365 days per year. Flush all watermains in the spring every other year. Maintain all hydrants. Locate operate and clean gate valves to ensure proper operation. ADOPTED 2023 BUDGET CITY OF ANDOVER, MINNESOTA 74 City of Andover Enterprise Funds Sanitary Sewer Statement of Revenues, Expenditures and Changes in Fund Net Assets Unrestricted Net Assets, January 1 Revenues Charges for Services Interest Miscellaneous Total Revenues: Other Sources Transfers In Total Revenues and Other Sources: Total Available: Expenditures Personal Services Supplies and Materials Other Services and Charges Capital Outlay Total Expenditures: Other Uses Transfers Out Total Expenditures and Other Uses: Unrestricted Net Assets, December 31 $ 4,074,700 $ 4,147,100 $ 4,147,100 1 4,061,559 2,395,512 (9,694) 2,385,818 2,385,818 6,460,518 397,086 25,801 1,389,553 1,500 1,813,940 499,478 2,313,418 $ 4,147,100 Change in Unrestricted Net Assets $ 72,400 2% 75 2,477,810 30,000 2,507,810 2,507,810 6,654,910 443,341 39,300 1,581,231 42,500 2,106,372 501,979 2,608,351 $ 4,046,559 $ (100,541) -2% 2,492,810 30,000 2,522,810 2,522,810 6,669,910 443,341 39,300 1,581,231 42,500 2,106,372 501,979 2,608,351 $ 4,061,559 $ (85,541) -2% 2,570,381 30,000 2,600,381 2,600,381 6,661,940 426,002 39,800 2,055,686 75,333 2,596,821 500,507 3,097,328 $ 3,564,612 $ (496,947) -12% Actual 1 Adopted Estimate 1 Adopted 1 Description 2021 1 2022 2022 2023 Unrestricted Net Assets, January 1 Revenues Charges for Services Interest Miscellaneous Total Revenues: Other Sources Transfers In Total Revenues and Other Sources: Total Available: Expenditures Personal Services Supplies and Materials Other Services and Charges Capital Outlay Total Expenditures: Other Uses Transfers Out Total Expenditures and Other Uses: Unrestricted Net Assets, December 31 $ 4,074,700 $ 4,147,100 $ 4,147,100 1 4,061,559 2,395,512 (9,694) 2,385,818 2,385,818 6,460,518 397,086 25,801 1,389,553 1,500 1,813,940 499,478 2,313,418 $ 4,147,100 Change in Unrestricted Net Assets $ 72,400 2% 75 2,477,810 30,000 2,507,810 2,507,810 6,654,910 443,341 39,300 1,581,231 42,500 2,106,372 501,979 2,608,351 $ 4,046,559 $ (100,541) -2% 2,492,810 30,000 2,522,810 2,522,810 6,669,910 443,341 39,300 1,581,231 42,500 2,106,372 501,979 2,608,351 $ 4,061,559 $ (85,541) -2% 2,570,381 30,000 2,600,381 2,600,381 6,661,940 426,002 39,800 2,055,686 75,333 2,596,821 500,507 3,097,328 $ 3,564,612 $ (496,947) -12% Fund: 5200 Cost Center: Sanitary Sewer Activity Type/Code: Enterprise Fund Expenditure IliehliQhts In 2023, the fee for processing city sewage increased 20% ($274,227) due to an increase in volume and the cost of processing. No major changes planned for 2022. Limited supplies and shortages continue to drive costs up. The Sanitary Sewer Fund will be paying a portion of the annual debt ($22,650) for the new public works facility. Department Head: Utility Supervisor General Activity Desciption City sewage is collected through a pipe and lift station network to large Metro City Sewer interceptor pipes that carry it to the Metro Treatment Plant for processing. The sewer division inspects, cleans, and maintains the City's collection system which includes breaks in pipes, manholes, and lift stations. Sewer backups caused by blockage due to debris or breaks in pipe are cleaned and/or repaired immediately. This department maintains the integrity of the entire sanitary sewer system. Process Used Inspect all lift stations five days per week. Clean one-quarter of the City's sewer collection system via jetting and vacuuming each year. City has implemented a televising program of the collection system that analyzes the entire system over a five year period. A spot check program checks flows in problem areas. Start 1/1 program to monitor inflow and infiltration into sewer system. Clean known problem area once per month. Monitor inspection and testing of all new sewer lines and manholes before accepting from contractor. Respond to and record all requests from customers, respond to emergencies 24 hours a day. Contract out all major system repairs. ADOPTED 2023 BUDGET CITY OF ANDOVER, MINNESOTA 76 City of Andover Enterprise Funds Storm Sewer Statement of Revenues, Expenditures and Changes in Fund Net Assets Unrestricted Net Assets, January 1 Revenues Charges for Services Interest Miscellaneous Total Revenues: Other Sources Transfers In Total Revenues and Other Sources Total Available Expenditures Personal Services Supplies and Materials Other Services and Charges Capital Outlay Total Expenditures: Other Uses Transfers Out Total Expenditures and Other Uses: Unrestricted Net Assets, December 31 Change in Unrestricted Net Assets $ 885,665 634,815 759 635,574 635,574 1,521,239 175,020 10,059 111,476 2,500 299,055 43,490 342,545 $ 1,178,694 $ 293,029 33% 77 $ 1,178,694 629,822 2,500 632,322 632,322 1,811,016 288,336 34,700 215,505 42,500 581,041 45,161 626,202 $ 1,184,814 $ 6,120 1% $ 1,178,694 632,822 2,500 635,322 635,322 1,814,016 288,336 34,700 215,505 42,500 581,041 45,161 626,202 $ 1,187,814 667,704 2,500 670,204 670,204 1,858,018 281,310 34,700 230,938 234,334 781,282 23,406 804,688 $ 1,187,814 $ 1,053,330 $ 9,120 $ (134,484) 1% -11% Actual Adopted Estimate Adopted 1 Description 2021 2022 2022 2023 Unrestricted Net Assets, January 1 Revenues Charges for Services Interest Miscellaneous Total Revenues: Other Sources Transfers In Total Revenues and Other Sources Total Available Expenditures Personal Services Supplies and Materials Other Services and Charges Capital Outlay Total Expenditures: Other Uses Transfers Out Total Expenditures and Other Uses: Unrestricted Net Assets, December 31 Change in Unrestricted Net Assets $ 885,665 634,815 759 635,574 635,574 1,521,239 175,020 10,059 111,476 2,500 299,055 43,490 342,545 $ 1,178,694 $ 293,029 33% 77 $ 1,178,694 629,822 2,500 632,322 632,322 1,811,016 288,336 34,700 215,505 42,500 581,041 45,161 626,202 $ 1,184,814 $ 6,120 1% $ 1,178,694 632,822 2,500 635,322 635,322 1,814,016 288,336 34,700 215,505 42,500 581,041 45,161 626,202 $ 1,187,814 667,704 2,500 670,204 670,204 1,858,018 281,310 34,700 230,938 234,334 781,282 23,406 804,688 $ 1,187,814 $ 1,053,330 $ 9,120 $ (134,484) 1% -11% Fund: 5300 Cost Center: Storm Sewer Activity Type/Code: Enterprise Fund Expenditure Hiehliehts 2023 includes the replacement of a street sweeper ($200,000). No major changes planned for 2022. Limited supplies and shortages continue to drive costs up. Department Head: Utility Supervisor General Activity Description Maintenance of all storm sewers, catch basins, manholes, pipes, ditches, and sediment ponds. Process Used The ditches are cleaned with a backhoe for better drainage and to avoid the ponding of stagnant water. This dirt is hauled away or dumped in low places on ditch banks. When it is dumped on site, it becomes necessary to level and grade the banks to facilitate proper mowing. All catch basins and pipes are cleaned with a vac truck. The material is then hauled away for proper disposal. Occasional use of outside contractors to maintain parts of the system. Televising a portion of the system each year to help comply with new federal regulations. ---------------------------------------------------------- ADOPTED 2023 BUDGET CITY OF ANDOVER, MINNESOTA W-3 CITY OF ANDOVER, MINNESOTA 2023 ANNUAL BUDGET INTERNAL SERVICE FUNDS DEFINITION: Internal Service Funds are used to account for goods and services that are provided to other City departments, or to other governments, on a cost reimbursement basis. 79 City of Andover Internal Service Funds 2023 Budget Summary - All Internal Service Funds Statement of Revenues, Expenditures and Changes in Unrestricted Net Assets Unrestricted Net Assets, January 1 Revenues Charges for Services Interest Income Miscellaneous Total Revenues: Other Sources Transfers In Total Revenues and Other Sources: Total Available: Expenditures and Other Uses Personal Services Supplies and Materials Other Services and Charges Total Expenditures: Other Uses Transfers Out Total Expenditures and Other Uses: Unrestricted Net Assets, December 31 Change in Unrestricted Net Assets $ 1,015,847 $ 963,504 $ 963,504 $ 794,888 1,321,744 (4,658) 80,211 1,397,297 1,397,297 2,413,144 546,835 360,128 542,677 1,449,640 1,449,640 $ 963,504 $ (52,343) -5% 1,433,715 4,000 1,437,715 1,437,715 2,401,219 612,590 415,700 584,141 1,612,431 1,612,431 $ 788,788 $ (174,716) -18% 1,433,715 4,000 21,000 1,458,715 1,458,715 2,422,219 623,690 415,700 587,941 1,627,331 1,627,331 $ 794,888 $ (168,616) -18% 1,612,630 4,000 1,616,630 1,616,630 2,411,518 632,788 480,920 604,383 1,718,091 1,718,091 $ 693,427 $ (101,461) -13% Actual Adopted Estimate 1 Adopted 1 Description 1 2021 1 2022 2022 2023 Unrestricted Net Assets, January 1 Revenues Charges for Services Interest Income Miscellaneous Total Revenues: Other Sources Transfers In Total Revenues and Other Sources: Total Available: Expenditures and Other Uses Personal Services Supplies and Materials Other Services and Charges Total Expenditures: Other Uses Transfers Out Total Expenditures and Other Uses: Unrestricted Net Assets, December 31 Change in Unrestricted Net Assets $ 1,015,847 $ 963,504 $ 963,504 $ 794,888 1,321,744 (4,658) 80,211 1,397,297 1,397,297 2,413,144 546,835 360,128 542,677 1,449,640 1,449,640 $ 963,504 $ (52,343) -5% 1,433,715 4,000 1,437,715 1,437,715 2,401,219 612,590 415,700 584,141 1,612,431 1,612,431 $ 788,788 $ (174,716) -18% 1,433,715 4,000 21,000 1,458,715 1,458,715 2,422,219 623,690 415,700 587,941 1,627,331 1,627,331 $ 794,888 $ (168,616) -18% 1,612,630 4,000 1,616,630 1,616,630 2,411,518 632,788 480,920 604,383 1,718,091 1,718,091 $ 693,427 $ (101,461) -13% City of Andover Internal Service Funds Central Equipment Maintenance Statement of Revenues, Expenditures and Changes in Fund Net Assets Unrestricted Net Assets, January 1 Revenues Charges for Services Interest Income Miscellaneous Total Revenues: Other Sources Transfers In Total Revenues and Other Sources Total Available: Expenditures and Other Uses Personal Services Supplies and Materials Other Services and Charges Total Expenditures: Other Uses Transfers Out Total Expenditures and Other Uses: Unrestricted Net Assets, December 31 Change in Unrestricted Net Assets $ 370,853 $ 323,881 $ 323,881 $ 281,896 812,364 898,000 898,000 992,300 (1,307) 2,000 2,000 2,000 6,385 - - 817,442 900,000 900,000 994,300 817,442 1,188,295 351,736 331,833 180,845 864,414 864,414 $ 323,881 $ (46,972) -13% I 900,000 1,223,881 360,744 385,900 210,291 956,935 956,935 $ 266,946 $ (56,935) -18% 900,000 994,300 1,223,881 1,276,196 360,744 385,900 195,341 941,985 941,985 $ 281,896 $ (41,985) -13% 374,773 451,120 215,533 1,041,426 1,041,426 $ 234,770 $ (47,126) -17% Actual 1 Adopted 1 Estimate 1 Adopted 1 Description 2021 2022 2022 2023 Unrestricted Net Assets, January 1 Revenues Charges for Services Interest Income Miscellaneous Total Revenues: Other Sources Transfers In Total Revenues and Other Sources Total Available: Expenditures and Other Uses Personal Services Supplies and Materials Other Services and Charges Total Expenditures: Other Uses Transfers Out Total Expenditures and Other Uses: Unrestricted Net Assets, December 31 Change in Unrestricted Net Assets $ 370,853 $ 323,881 $ 323,881 $ 281,896 812,364 898,000 898,000 992,300 (1,307) 2,000 2,000 2,000 6,385 - - 817,442 900,000 900,000 994,300 817,442 1,188,295 351,736 331,833 180,845 864,414 864,414 $ 323,881 $ (46,972) -13% I 900,000 1,223,881 360,744 385,900 210,291 956,935 956,935 $ 266,946 $ (56,935) -18% 900,000 994,300 1,223,881 1,276,196 360,744 385,900 195,341 941,985 941,985 $ 281,896 $ (41,985) -13% 374,773 451,120 215,533 1,041,426 1,041,426 $ 234,770 $ (47,126) -17% Fund: 6100 Cost Center: Central Equipment Activity Type/Code: Internal Service Fund Expenditure Highlights In 2023, the cost of fuel, replacement parts and outside repairs continue to drive the increase over last year. In 2022, budgeted savings in utilities were offset by continual increases outside repair services and shortages in parts. In 2021, expenditures are increasing due to the addition of a new Public Works Maintenance facility. The operation of this building will be added to what's charged to the various departments with vehicles and equipment. Department Head: Vehicle Maintenance Supervisor General Activity Description Maintains and repairs all City motorized and non -motorized vehicles and equipment to provide safe operation. Evaluates equipment needs, orders equipment/vehicles and writes specifications. The department maintains nearly 500 pieces of equipment,in addition to normal preventative maintenance procedures of tires, brakes, electrical, fabricating and body work. All work; except automatic transmission overhauls, major engine and major body work are done at the Public Works garage. Staff inspects garbage trucks as part of their licensure process, and performs commercial vehicle inspections required on all applicable City vehicles. Process Used City equipment is scheduled for normal service by miles driven or hours/days of service. Most work is done based on a first -in -first -out with the exception of that emergency repairs are done in the order of importance. Emergency equipment are fire vehicles and snow plow equipment, streets, utilities, and parks. Non -emergency equipment are the Building and Engineering departments, Planning and Zoning department and all other city equipment. --------------------------- ADOPTED 2023 BUDGET CITY OF ANDOVER, MINNESOTA M City of Andover Internal Service Funds Risk Management Statement of Revenues, Expenditures and Changes in Unrestricted Net Assets Unrestricted Net Assets, January 1 Revenues Charges for Services Interest Income Miscellaneous Total Revenues: Other Sources Transfers In Total Revenues and Other Sources Total Available: Expenditures and Other Uses Personal Services Supplies and Materials Other Services and Charges Total Expenditures: Other Uses Transfers Out Total Expenditures and Other Uses: Unrestricted Net Assets, December 31 $ 644,994 $ 639,623 $ 639,623 $ 512,992 509,380 (3,351) 73,826 579,855 535,715 2,000 537,715 579,855 537,715 1,224,849 1,177,338 195,099 28,295 361,832 585,226 585,226 $ 639,623 Change in Unrestricted Net Assets $ 251,846 29,800 373,850 655,496 655,496 $ 521,842 $ (117,781) -18% 535,715 2,000 21,000 558,715 558,715 620,330 2,000 622,330 622,330 1,198,338 1,135,322 262,946 29,800 392,600 685,346 685,346 $ 512,992 $ (126,631) -20% 258,015 29,800 388,850 676,665 676,665 $ 458,657 $ (54,335) -11% Actual Adopted 1 Estimate Adopted 1 Description 2021 2022 2022 2023 Unrestricted Net Assets, January 1 Revenues Charges for Services Interest Income Miscellaneous Total Revenues: Other Sources Transfers In Total Revenues and Other Sources Total Available: Expenditures and Other Uses Personal Services Supplies and Materials Other Services and Charges Total Expenditures: Other Uses Transfers Out Total Expenditures and Other Uses: Unrestricted Net Assets, December 31 $ 644,994 $ 639,623 $ 639,623 $ 512,992 509,380 (3,351) 73,826 579,855 535,715 2,000 537,715 579,855 537,715 1,224,849 1,177,338 195,099 28,295 361,832 585,226 585,226 $ 639,623 Change in Unrestricted Net Assets $ 251,846 29,800 373,850 655,496 655,496 $ 521,842 $ (117,781) -18% 535,715 2,000 21,000 558,715 558,715 620,330 2,000 622,330 622,330 1,198,338 1,135,322 262,946 29,800 392,600 685,346 685,346 $ 512,992 $ (126,631) -20% 258,015 29,800 388,850 676,665 676,665 $ 458,657 $ (54,335) -11% Fund: 6200 Cost Center: Risk Management Activity Type/Code: Internal Service Fund Expenditure Hi2hliehts In 2023, both workers comp and property insurance premiums continue to rise. Department Head: Finance Director General Activity Desciption The Risk Management Fund was established to provide funding for compensated absences, safety, training, loss reduction and insurance premium deductibles. Social security and Medicare tax savings resulting from participation in the "cafeteria plan" are recorded in this fund on an annual basis. This fund also functions to mitigate significant rate increases or decreases. Departmental rates are managed by analyzing claims history. Process Used The City Administrator / Finance Director along with the Human Resources Manager promote various safety and wellness programs with the funding received. One of the most notable products is the wellness fitness room. Safety training is provided both in-house and by contracting for service. The city works through a broker and is provided insurance for general liability, automotive and workers' compensation through the League of MN Cities Insurance Trust. ADOPTED 2023 BUDGET CITY OF ANDOVER, MINNESOTA WE