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2014-06-17 Council PacketCITY OF MENDOTA HEIGHTS CITY COUNCIL AGENDA June 17, 2014-7:00 pm Mendota Heights City Hall 1. Call to Order 2. Roll Call 3. Pledge of Allegiance 4. Adopt Agenda 5. Consent Agenda a. Approval of May 29, 2014 City Council Workshop Minutes b. Approval of June 3, 2014 City Council Minutes c. Acknowledgement of May 13, 2014 Park and Recreation Commission Minutes d. Acknowledgement of June 11, 2014 Airport Relations Commission Minutes e. Approval of Personnel Action Report f. Approval of Massage Therapist License Renewals g. Approval of Resolution 2014-34, Establishment of Absentee Ballot Board h. Approval of Resolution 2014-35, Appointment of Election Judges i. Approval of Resolution 2014-36, Accept Donations for 5K and Parks Celebration j. Approval of Resolution 2014-37, Authorization to Bid Plans and Specifications for I -35E and Marie Avenue Storm Drainage Improvement Project k. Approval of City Sign Retro -Reflectivity Policy I. Receipt of May 2014 Building Activity Report m Approval of Claims List n. Approval of Contractors List 6. Public Comments 7. Presentations a. Review of 2013 Audit, Matt Mayer, Kern, DeWenter, Viere 8. Public Hearings a. Liquor License Renewals 9. New and Unfinished Business a. Time Extension Amendment to Development Contract for LeMay Shores b. Discussion of Park and Recreation Commission Dog Park Recommendations 10. Community Announcements 11. Council Comments 12. Adjourn CITY OF MENDOTA HEIGHTS DAKOTA COUNTY STATE OF MINNESOTA Minutes of the Council Workshop Held Tuesday, May 29, 2014 page 2 5a. Pursuant to due call and notice thereof, a workshop of the City Council, City of Mendota Heights, Minnesota was held at 1:00 p.m. at City Hall, 1101 Victoria Curve, Mendota Heights, Minnesota. CALL TO ORDER Mayor Krebsbach called the meeting to order at 1:00 p.m. The following members were present: Councilmembers Duggan, Norton, Petschel, and Povolny (arrived at 3:20 pm). Also in attendance: City Administrator Justin Miller, Assistant to the Administrator/HR Coordinator Tammy Schutta, Public Works Director John Mazzitello, Finance Director Kristen Schabacker, Planner Nolan Wall, and Recreation Coordinator Sloan Wallgren. Upon consensus of the Council, the items listed in the agenda packet for discussion were reordered to accommodate the schedule of the council. CABLE FRANCHISE RENEWAL UPDATE NDC4 Executive Director Jodie Miller and their legal counsel, Brian Grogan, updated the council on the franchise renewal process and current status. They also provided the council with an update on the proposed Comcast/Time Warner merger and its impact to the Twin Cities and Mendota Heights. The council expressed concern with the prospect of cable operations in Mendota Heights being transferred to an unknown entity and discussed possible lobbying efforts, such as letters to our federal legislators and coordination with Fortune 500 companies in the area who might be negatively impacted. Ms. Miller indicated that she would continue to update the city council as needed through this process. RESIDENTIAL DEVELOPMENT STANDARDS In response to recent complaints about new residential construction activities, staff updated the council on the current code requirements for new residential projects. Council discussed options for protecting existing neighborhoods, solar access, and preserving private property rights. Planner Wall noted that one possibility would be to limit the manner in which new developments could change the existing grade of a lot to diminish the height impacts of new construction. The council directed staff to continue to look at options and present to council at a later date. INSTITUTIONAL USES IN RESIDENTIAL ZONES In response to planning commission concerns, the council discussed how to better handle the significant number of variance requests resulting from applications from non-residential uses in the residential zones. Council discussed how to best address these requests and directed staff to provide an inventory of recent variance requests and to begin researching how to develop a formula, based on parcel size, which would allow larger, non-residential uses to meet their needs without requiring continued variances. page 3 PRAYER AT PUBLIC MEETINGS The council, in response to a recent Supreme Court ruling, discussed the possibility of opening city council meetings with a prayer. Councilmember Duggan noted that the City of South St. Paul does this and suggested that staff contact them to get a history of how they implement this practice. Councilmember Petschel suggested a city-wide, multi -denominational prayer breakfast may be a solution as well. No direction was provided to change the current practice. INDUSTRIAL PARK STATUS UPDATE Administrator Miller provided a brief synopsis of recent activity in the industrial park and noted that as the area begins to age, it may be time to start visioning the next phase of redevelopment. Discussion ensued about vacancy rates, lack of amenities, and potential developments. Council directed staff to continue to look for planning grant opportunities and to start developing a map showing building vacancies in the industrial park. GAS AND ELECTRIC FRANCHISE FEE DISCUSSION Miller presented preliminary 2015 budget considerations and how a franchise fee on gas and electric bills might be implemented. The council discussed the pros and cons of establishing such a fee and agreed that if implemented, it should be transparent and dedicated to a specific use, such as debt service for infrastructure improvements. No decisions were made, but staff was directed to further research the topic in relation to renewing franchise agreements with Xcel Energy for the 2015 budget cycle. DOG PARK SITE REVIEW Recreation Coordinator Wallgren summarized the Parks and Recreation Commission's findings about establishing a dog park in the city. The Parks and Recreation Commission decided not to endorse any site and reaffirmed their recommendation to allow off -leash dogs in the hockey rinks The council briefly discussed proposed sites, including the St. Paul/Lilydale Park site. The council directed staff to present a council action at an upcoming meeting that would direct staff to begin discussions with the City of St. Paul about the status of their proposed dog park and investigate any possible partnership opportunities. WATER SYSTEM UPDATE City Engineer/Public Works Director John Mazzitello summarized options with the city council regarding the water system contract renewal with St. Paul Regional Water Services. The council discussed the various options (status quo agreement or turning the system back to SPRWS) and the conditions that would need to be met in order for the city to be comfortable with turning the system over. Staff was directed to begin discussions with SPRWS about contract negotiations and to propose terms that would need to be met in order to turn the system over to SPRWS. ADJOURN Mayor Krebsbach adjourned the meeting at 4:00 p.m. ATTEST: Sandra Krebsbach, Mayor Lorri Smith, City Clerk May 29, 2014 Mendota Heights Council Workshop Page 2 page 4 5b. CITY OF MENDOTA HEIGHTS DAKOTA COUNTY STATE OF MINNESOTA Minutes of the Regular Meeting Held Tuesday, June 3, 2014 Pursuant to due call and notice thereof, the regular meeting of the City Council, City of Mendota Heights, Minnesota was held at 7:00 p.m. at City Hall, 1101 Victoria Curve, Mendota Heights, Minnesota. CALL TO ORDER Mayor Krebsbach called the meeting to order at 7:00 p.m. The following members were present: Councilmembers Duggan, Povolny, and Petschel. Councilmember Norton arrived at 7:02 p.m. PLEDGE OF ALLEGIANCE Council, the audience, and staff recited the Pledge of Allegiance. AGENDA ADOPTION Mayor Krebsbach presented the agenda for adoption. Councilmember Povolny moved adoption of the agenda. Councilmember Duggan seconded the motion. Ayes: 4 Nays: 0 Absent: 1 (Norton) CONSENT CALENDAR Mayor Krebsbach presented the consent calendar and explained the procedure for discussion and approval. Councilmember Duggan moved approval of the consent calendar as presented and authorization for execution of any necessary documents contained therein, pulling items d.) Approval of Personnel Action Report and e.) Accept Bid and Award Contract, Victoria Road and Rolling Green Neighborhood Street Improvement Project, Resolutions 2014-31, 2014-32, 2014-33. a. Approval of May 20, 2014 City Council Minutes, as amended b. Approval of May 27, 2014 Planning Commission Minutes c. Approval of Fire Department Knox Box Replacement Purchase d. Approval of Personnel Action Report e. Accept Bid and Award Contract, Victoria Road and Rolling Green Neighborhood Street Improvement Project, Resolutions 2014-31, 2014-32, 2014-33 f. Approval of April 2014 Treasurer's Report June 3, 2014 Mendota Heights City Council Page 1 page 5 g. Approval of Claims List h. Approval of Contractors List i. Approve Purchase of Pickup Truck for Public Works Parks Division Councilmember Petschel seconded the motion. Ayes: 5 Nays: 0 PULLED CONSENT AGENDA ITEM D) APPROVAL OF PERSONNEL ACTION REPORT The City Council had previously authorized staff to begin an internal recruitment process to fill the Public Works Superintendent position, which was vacated when Mr. Tom Olund retired. Mr. Terry Blum was interviewed and determined he was qualified to fill the position. Mr. Blum has 36 years of experience with the Mendota Heights Public Works Department, has worked in all three of the divisions within Public Works, and has been the Parks Division Lead. Staff requested Council approve the appointment of Terry Blum as the Public Works Superintendent. Councilmember Duggan moved to approve the appointment of Terry Blum as the Public Works Superintendent effective June 4, 2014. Councilmember Petschel seconded the motion. Ayes: 5 Nays: 0 E) ACCEPT BID AND AWARD CONTRACT, VICTORIA ROAD AND ROLLING GREEN NEIGHBORHOOD STREET IMPROVEMENT PROJECT, RESOLUTIONS 2014-31, 2014-32, 2014-33 City Engineer John Mazzitello explained that on May 28, 2014 there was a bid opening for the 2014 street reconstruction project. Two bids were received with McNamara Contracting, Inc. being the apparent low bidder. McNamara Contracting, Inc. has worked with the City of Mendota Heights on several different projects in the past and staff believes them to be a highly qualified contractor. McNamara's bid was $1,819,014.30. The engineer's estimate was $1,993,050.75. Councilmember Duggan requested a map be shared showing the location of the pedestrian trails as described in Resolution 2014-32 and Resolution 2014-33. Councilmember Petschel made the observation that McNamara Contracting has worked in the city before and she recognized them for the quality of their work and their timeliness. Councilmember Duggan moved to adopt RESOLUTION 2014-31 ACCEPTING BIDS AND AWARDING CONTRACT FOR THE VICTORIA ROAD & ROLLING GREEN NEIGHBORHOOD IMPROVEMENTS (PROJECT #201308), and RESOLUTION 2014-32 AUTHORIZING A LIMITED USE PERMIT WITH THE MINNESOTA DEPARTMENT OF TRANSPORTATION FOR A June 3, 2014 Mendota Heights City Council Page 2 page 6 PEDESTRIAN TRAIL IN THE RIGHT-OF-WAY OF INTERSTATE 494, and RESOLUTION 2014- 33 AUTHORIZING A LIMITED USE PERMIT WITH THE MINNESOTA DEPARTMENT OF TRANSPORTATION FOR A PEDESTRIAN TRAIL IN THE RIGHT-OF-WAY OF TRUNK HIGHWAY 13. Councilmember Norton seconded the motion. Ayes: 5 Nays: 0 PUBLIC COMMENTS There were no public comments. NEW AND UNFINISHED BUSINESS A) RESOLUTION 2014-30, CONDITIONAL USE PERMIT AND VARIANCE REQUEST FOR WIRELESS ANTENNA FACILITY AND ACCESSORY STRUCTURE, 1860 EAGLE RIDGE DRIVE, PLANNING CASE 2014-16 Planner Nolan Wall explained that the applicant, SAC Wireless, applying on behalf of AT&T and the Ridge South Condominium Association, requested a Conditional Use Permit for approval for a wireless antenna facility and a variance for an associated accessory structure. The subject parcel is approximately 2.7 acres, contains a multi -family condominium building, is zoned R-3, and is guided for high density residential use on the comprehensive plan. The applicant proposed to construct a wireless antenna facility on the west side of the roof and an accessory structure south of the east parking lot. T -Mobile currently maintains a wireless antenna facility on the east side of the roof and an accessory structure on the site, which were approved in 2006. The proposed wireless antenna structure would consist of three antennas, six RRH units mounted on a 10 -foot tall tower, which would be on top of a four foot, eight inch elevator penthouse, and would include associated fiber cable trays. Mr. Wall explained the code that would allow wireless antennas, towers, and accessory structures. Staff believed that this proposed project would fulfill the purpose of the code. Mr. Wall also shared the specific applicable evaluation criteria for the conditional use permit and the variance requests. Staff recommended approval of the conditional use permit and variance requests as proposed in Resolution 2014-30, with conditions as stated in the resolution. Councilmembers asked questions regarding the proposed landscaping to screen the accessory structure, the proposed color of the antenna, the concept of a co -location with T -Mobile, and if this installation would improve cell phone service in the City. A representative from SAC Wireless was on hand to answer questions posed by the City Council. June 3, 2014 Mendota Heights City Council Page 3 page 7 Councilmember Duggan requested, in order to solidify the resolution, the Findings of Fact be added to the resolution. Planner Wall replied that the resolution was presented in the same format as others in the past; however, if the Council desires the Findings of Fact could be added. City Attorney Tom Lehmann stated that when a resolution is adopted, the Findings of Fact are as well, even though they are not specifically listed in the resolution itself. After discussion, it was determined that City Administrator Justin Miller would contact the League of Minnesota Cities to ascertain the standards of practice for the Findings of Fact being in or out of the actual resolution and report back to the Council. Councilmember Norton moved to approve RESOLUTION 2014-30 APPROVING A CONDITIONAL USE PERMIT AND VARIANCE FOR A WIRELESS ANTENNA FACILITY AND ACCESSORY STRUCTURE. Councilmember Duggan seconded the motion. Ayes: 5 Nays: 0 B) CONCEPT PLANNED UNIT DEVELOPMENT REVIEW, MIKE AND MICHELLE BADER, DELAWARE AND FOXWOOD LANE, PLANNING CASE 2014-14 Planner Nolan Wall explained that the applicant has submitted a Concept Planned Unit Development Plan. The subject area is approximately 12.5 acres of land east of Delaware Avenue and south of Wentworth Avenue and is comprised of two parcels. The first parcel is 10 acres and contains the existing home of the applicant with access off Delaware Avenue. The second parcel included in the concept PUD is the existing Lot 3 of the Foxwood Plat. Both parcels are zoned R -1A. A Concept Planned Unit Development Review allows the applicant to submit plans for pre -application conference, and Planner Wall explained the specific section of the code that covers this process [Section 12 -1K -6C] Planner Wall noted that the project area does have a long and interesting history, some of which is discussed in the application itself. However, the report and analysis included in the staff report to Council were based on the development options included in the application. The Planning Commission discussed the proposed concept plans and conducted a public hearing at their May 27, 2014 meeting. Planner Wall also stated that although a Concept Planned Unit Development application was submitted and accepted, the proposed project does not appear to meet the code's PUD requirements at this time. He then reviewed the specific definitions of an eligible PUD. Therefore, the appropriate development process would be a standard subdivision plat by the applicant. Further analysis and comment concerning the development options should pertain to the design issues and not a Planned Unit Development. June 3, 2014 Mendota Heights City Council Page 4 page 8 Mayor Krebsbach asked City Attorney Tom Lehmann to speak to the Planned Unit Development that is no longer in affect but was in effect in 1993. Counsel Lehmann replied that he is not familiar with why the code changed. The current code would not allow this to be developed as a PUD. He believes that knowing and understanding the history as to why the code changed is important and suggested that the prior City Attorney's office be contacted to provide that information. Planner Wall continued by explaining that the Concept PUD includes two concepts of design for the proposed development: Option 1: (referred to as the `through street' option) creates a new street off of Delaware Avenue to connect to an extension of Foxwood Lane for a north/south connection out to Wentworth. This plan would also include five new single family residential lots, which meet the lot size and width requirements — six if the modified Bader parcel were included. As noted, this would require a retaining wall or grading easement on the property to the south and would require a retaining wall between the existing wetland in the north/south street connection. It would also reroute the existing Bader driveway off of Delaware Avenue to be off of the new through street. Option 2: (referred to as the 'four lot' option) Foxwood Lane would be extended to the south and create a longer cul-de-sac. The proposed cul-de-sac would be approximately 800 feet long and would create four new single family residential lots which would meet the lot size and width requirements — five total if the modified Bader parcel were included. In meetings with staff and the applicant, Dakota County has discouraged any cul-de-sacs on county roads (Wentworth is a county road). Planner Wall made note of other key site features to be kept in mind: • Foxwood Lane is a private driveway located within a 50 -foot City right-of-way. Currently the City Code requires a 60 -foot right-of-way. • The proposed 800 -foot length of the extended Foxwood Lane cul-de-sac exceeds the 500 -foot standard in the code. • Slopes in certain locations on the site seem to exceed 20% or greater. The impact is that grades for city streets cannot exceed 6% and also may present challenges in locating septic tanks. • Wetlands are present in the project area. New delineations would be required and additional State and City permits may also be required. • The site is heavily wooded so significant vegetation would be have to be removed for the streets and the single family homes that would be located in the area. In order to design a reasonable subdivision of the property, staff recommended the following design principles: • Design of a new road that is compliant with City construction standards; not a long cul-de-sac • Staff would prefer to see a street that would be located further north to avoid any potential impacts to the properties bordering to the south and would also provide increased setbacks from existing homes • Access stub should be provided to the south for any future residential development • Allow for as much setback as possible from the existing homes for any new roads • Limit vegetation removal on the project site June 3, 2014 Mendota Heights City Council Page 5 page 9 The staff report also included a number of comments from the Engineering and Public Works departments that would need to be adhered to if this request were to come forward as a formal application. Staff recommended that the Council acknowledge and accept the staff report's recommendations. Mayor Krebsbach asked if the County would allow two access points onto Delaware if this road were to go south versus north. Engineer Mazzitello replied that the County's statement was essentially was that they do not want to see a cul-de-sac off of the county road and would prefer a through street. Councilmember Duggan stated that Council should wait to comment on any options until an actual proposal is presented. Mr. Mike Bader was available to answer questions from Council. He stated that he and his wife have lived in their home since 1998. Mr. and Mrs. Bader would like to subdivide their back acreage and build a new home on Lot 3. He provided a background and history of the requests that he has brought before the Council in past years in relation to his property and his current request. Mr. Bader implored the City Council to consider the original intent of the platted lots. After discussion, Councilmember Duggan suggested two actions: • As proposed by Planning Commissioner Magnuson, the applicants provide a feasibility study or report on the area, which would include all of the costs, for what they want to do in the area in relation to what might be legal and appropriate • City staff, planners, and the Council meet and discuss the long-range plans for the area Councilmember Duggan moved that Council, staff, planners, and the impacted residents get together and create a study on the long-range plans of this entire area. The motion died for lack of a second. Councilmember Petschel stated she believes it would be heavy-handed on the part of the City to come in and tell the people who own large tracts of property how to develop them. Mayor Krebsbach requested a description of the Council's responsibility at this point. City Attorney Tom Lehmann replied that the zoning code sets forth what the Council's action would be: Section 12.1K.6C reads: "Action Following Preapplication Conferences: The planning commission and the council each in their turn shall make recommendations regarding the concept plan giving reasons for their recommendations, but such action is not and is not intended to be binding on the city in any way, but simply advisory to the applicant on a preliminary basis only." City Administrator Justin Miller stated that staff's recommendation was that Council review the plan as submitted and acknowledge and accept those findings. Mr. Timothy Aune, 554 Foxwood Lane, made himself available for questions from the Council. Councilmember Duggan asked if Mr. Aune has had any challenges with accessibility to his property. Mr. Aune replied in the negative. June 3, 2014 Mendota Heights City Council Page 6 page 10 Ms. Jennifer Lutz, 548 Foxwood Lane, commented that the photo shown earlier of multiple cars being parked on Foxwood Lane was during her son's graduation party. She had solicited and received permission from the other property owners to allow parking on the street for that occasion. She stated if the road were made public, then it would be made wider and closer to her home. She stated they have already been down the road of this request for a subdivision, which was denied in the past. City Administrator Justin Miller replied that as long as someone pays the application fee and goes through the processes, they can apply as many times as they wish. Mr. Bader returned and explained two years ago a survey was drawn that would have moved the road to the east and would not be any closer to Ms. Lutz home. He believes the parking along Foxwood Lane and the safety issues need to be addressed. COMMUNITY ANNOUNCEMENTS Assistant to the City Administrator Tamara Schutta made the following announcements: • "Echoes of Elvis" kicks off the free concert series on June 4; 6:30 p.m. at The Market Square • The Parks Celebration starts on Friday, June 6 with Music in the Park at 6:30 p.m. • The 5K Run is Saturday, June 7 at 9:00 a.m. All proceeds go to Special Olympics. • The Parks Celebration continues from 11:00 — 2:00 in Mendakota Park • Summer programs begin Monday, June 9 • The Truck and Travel Show is Wednesday, June 11, 6:30-7:30 p.m. at Henry Sibley High School parking lot • A Youth Field Trip is Thursday, June 12 for ages 7 and up, going to AirMaxx Trampoline Park and Cinema Cafe • Mayor Krebsbach and Councilmember Duggan attended the ground breaking ceremony for Southview Design on Monday, June 2 • Citizens Police Academy is accepting applications for 2014, and runs September 18 through November 20 on Thursdays from 6:00 — 9:30 p.m. COUNCIL COMMENTS Councilmember Petschel reminded residents that on July 29 the Metropolitan Airport Commission will be at Mendota Heights City Hall at 7:00 p.m. to hear comments and take questions from residents on their issues regarding airplanes. She also noted that there are currently 220 kids registered for the Tennis Program and she believes this is a great life-long sport. She asked if there had been any motorized boats on Rogers Lake and wondered how that was going. City Administrator Miller replied that he was not aware of any feedback at this time but that information would be available later this year. June 3, 2014 Mendota Heights City Council Page 7 page 11 Councilmember Petschel asked City Engineer Mazzitello to share what happened on Highway 13 last Saturday. Engineer Mazzitello explained that on Saturday afternoon or early evening, because of the inundation of rain received over the past couple of days, there was a mud slide on the bluff in Mendota between Highway 13 and the Big Rivers Trail. The trail is currently closed. Councilmember Petschel commented that Highway 13 is due to be repaired but because of the instability of the earth in that location it will require more engineering and planning The project has already been delayed once and is now scheduled to be completed in 2015. Councilmember Duggan mentioned that the St. Peters Church defibrillator was called into use on Monday, Memorial Day, when someone on a bicycle had a heart attack. He believes that person is now doing fine. Mayor Krebsbach mentioned that there is a resident of Mendota Heights, Maurice Foster, who has lived in Park View Plaza for 10 years. Mr. Foster is now at the VA Hospital. He is a decorated WWII veteran with a purple heart. She also asked if an ensemble of, or the entire Henry Sibley Band could perform at one of the City's events or at the Plaza in the summer as she believes this would be a great idea. For another time, she requested the Council discuss sound walls along 35E near Highway 110. The Eagle Ridge Condominiums have requested that the City look into this. ADJOURN Councilmember Duggan moved to adjourn. Councilmember Petschel seconded the motion. Ayes: 5 Nays: 0 Mayor Krebsbach adjourned the meeting at 8:36 p.m. Sandra Krebsbach Mayor ATTEST: Lorri Smith City Clerk June 3, 2014 Mendota Heights City Council Page 8 page 12 5c. CITY OF MENDOTA HEIGHTS DAKOTA COUNTY, MINNESOTA PARKS AND RECREATION MEETING May 13, 2014 The May meeting of the Mendota Heights Parks and Recreation Commission was held on Tuesday, May 13, 2014 at Mendota Heights City Hall, 1101 Victoria Curve. Chair Hinderscheid called to order the parks and recreation commission meeting at 6:30 p.m. The following commissioners were present: Chair Hinderscheid, Commissioners Jack Evans, Ira Kipp, David Miller, Stephanie Levine and Michael Toth. Staff present: Recreation Program Coordinator Sloan Wallgren, City Planner Nolan Wall and Public Works Director John Mazzitello. Commissioner Paper arrived at the meeting at 7:30p.m. Approval of Agenda Chair Hinderscheid add two items for discussion to the agenda. The first item added was funding for future park projects and the second was flowers in the parks. COMMISSIONER LEVINE MADE A MOTION TO APPROVE THE AGENDA; COMMISSIONER TOTH SECONDED THE MOTION. AYES 6: NAYS 0 Approval of Minutes of April 08, 2014 COMMISSIONER MILLER MADE A MOTION TO APPROVE THE MINUTES; COMMISSIONER TOTH SECONDED THE MOTION. AYES 6: NAYS 0 Announcements Mr. Wallgren wanted to thank the Mom's Club for cleaning up Wentworth Park on April 22, 2014. Mr. Wallgren also thanked the Rogers Lake Homeowners Association for cleaning up Roger Lake Park on April 26, 2014. Future Dog Park Locations Mr. Wallgren updated the commission on the five locations that they were considering for a Dog Park. Mr. Wallgren reviewed each of the five locations. Mr. Wallgren informed the commission that they should discuss the options and make a recommendation on how they would like the city council to proceed. Kathy Lindstrom commented that she is a dog owner and would live a Dog Park in the city. She thought that one acre was too small for a Dog Park and would prefer the Friendly Marsh or Pilot Knob site. MH Parks and Recreation Commission 5-13-2014 Page 1 page 13 Kathleen Laudergren commented that she felt all the all of the sites beside Pilot Knob were too small. He felt that a one acre Dog Park would not be worth building. Joann Pasturnack (retired veterinarian) commented that a one acre would not be suitable. She also would like to see parking very close by so that individuals could access the Dog Park easily. Amy Votel commented on her concern with the Friendly Marsh site. She stated that the wildlife in the area would be impacted, there would be increased traffic in the quiet neighborhood and that many people use the trail to commute. Bob Mars commented that he was concerned about the wildlife at the Pilot Knob site and also thought that one acre was too small for a Dog Park. Mary McGrory-Ussett stated that she toured all five of the potential sites and agreed that one acre was too small. Her preference would be the Pilot Knob site because of its size and location. Commissioner Toth asked if the site at Pilot Knob would need to be cleaned up and if the soil would need to be tested. Mr. Mazzitello stated that the soil would need to be tested and that would be an additional expense to the city. Don Machenhopp is not in favor of a Dog Park. He has seen many bad things happen at Dog Parks and would prefer to see a smaller off -leash area. Jean West was in favor of using the hockey rinks as an area for dogs to run. She also commented that the city code use to say that if your dogs were under voice control they could be off -leash. Sherri Mayer liked the idea of partnering with another local city to build a Dog Park. She has a friend that lives near Marie Park and has seen that not all people have their dogs under control. COMMISSIONER MILLER MADE A MOTION TO RECOMMEND TO CITY COUNCIL THAT AT THIS TIME DUE TO PHYSICAL AND ECONOMICAL REASONS THE PARKS AND RECREATION COMMISSION DOES NOT FEEL THAT THERE IS A CITY OWNED PROPERTY WITHIN THE CONFINDS OF THE CITY THAT ARE SUITABLE TO BUILD A DOG PARK. COMMISSIONER LEVINE SECONDED THE MOTION. AYES 7: NAYS 0 COMMISSIONER LEVINE MADE A MOTION THAT CITY COUNCIL CONSIDER ISSULING A THREE MONTH TRIAL PERIOD FOR USING THE HOCKEY PINS AT MARIE PARK AND WENTWORTH PARK AS OFF -LEASH DOG AREAS. EACH PARK WOULD HAVE SIGNAGE FOR OWNER EXPECTATIONS AND RULES, AND THERE WOULD BE AN AREA INSIDE THE BOARDS TO LEASH AND UNLEASH YOUR DOG. ALL DOG OWNERS USING THE AREA MUST REGISTER THEIR DOG WITH THE CITY. MOTION SECONDED BY COMMISSIONER EVANS. AYES 6: NAYS 1 The commission also directed staff to obtain more information about the future Lilydale Regional Park Dog Park. MH Parks and Recreation Commission 5-13-2014 Page 2 page 14 Recreation Programming Report Mr. Wallgren informed the commission that there is still room in all of the summer programs. Mr. Wallgren reminded everyone that he 5k and Parks Celebration are on Saturday June 7, 2014. Staff has many fun activities planned for the day. The city is working with Mendota Elementary and the local Boy Scouts troop to offer a Bike Rodeo at Mendota Elementary on Saturday May 31, 2014 from 9:00a.m. to 11:00a.m. Mr. Wallgren announced that there will be live music every Saturday at Market Square Park from 6:30p.m. to 8:30p.m. starting June 4, 2014 and ending August 20, 2014. Par 3 Report Mr. Wallgren informed the commission that the golf course was open for 8 days in the month of April. Sales for the month of April were $1,300. Year to date the golf course has revenue of $21,000 verses expenses of $24,000. The clubhouse repairs are fmished and the fmal product looks great. Mr. Wallgren informed the commission that the current condition of the golf course is fantastic, and that they are looking forward to a great year. Park Assignments Mr. Wallgren commented that in previous years the commission had assigned parks to commission members to visit during the year and report back to staff with any issues or concerns. The commission assigned the following parks: Commissioner Toth: Friendly Hills Park & Friendly Marsh Commissioner Evans: Hagstrom-King Park & Mendakota Park Commissioner Levine: Marie Park & Valley Park Commissioner Miller: Victoria Highlands Park & Sibley Park Commissioner Paper: Wentworth Park & Kensington Park Commissioner Kipp: Rogers Lake Park & Valley View Heights Park Chair Hinderscheid: Ivy Hills Park Future Funding The commission discussed the need for future funding for park projects. The commission came to the conclusion that their role is not to focus on funding, but rather to focus making recommendations to the council about programs and facilities. Flowers The commission discussed the flower beds that were located in the parks. The commission would like to see the flower beds kept up. Staff will look into what parks have flower beds and how much it would cost to maintain them. MH Parks and Recreation Commission 5-13-2014 Page 3 page 15 Commission Comments Commissioners Kipp appreciated the citizens coming out. Commissioner Evans appreciated the citizens coming out. Commissioner Miller appreciated the respectfulness of everyone tonight. Commissioner Levine echoed everyone's comments. Chair Hinderscheid thanked the public for coming out and appreciated all the comments. COMMISSIONER PAPER MADE A MOTION TO ADJOUN THE MEETING; COMMISSIONER LEVINE SECONDED THE MOTION. Ayes 6: Nays 0 The meeting adjourned at 9:00 p.m. Respectfully Submitted by Sloan Wallgren MH Parks and Recreation Commission 5-13-2014 Page 4 CITY OF MENDOTA HEIGHTS DAKOTA COUNTY, MINNESOTA AIRPORT RELATIONS CONIlVHSSION MINUTES June 11, 2014 page 16 5d. The regular meeting of the Mendota Heights Airport Relations Commission was held on Wednesday, June 11, 2014 at 7:00 p.m. at 1101 Victoria Curve, Mendota Heights, Minnesota. The following commissioners were present: David Sloan, William Dunn, Gina Norling, Jim Neuharth, Paul Portz, and Sally Lorberbaum Absent: Kevin Byrnes Also present: Councilmember Liz Petschel, City Administrator Justin Miller, MAC Staff John Nelson Approval of Minutes Lorberbaum made a motion, seconded by Dunn, to approve the May 7, 2014 minutes as presented. All voted in favor. Introduction of Commissioners and Reports of Interest Due to this meeting being televised, the commission introduced themselves and reported on their specific areas of focus. Chair Sloan reviewed the duties of the commission as well as the 2014 work plan. Dunn explained how he compares remote monitoring towers (RMTs) to similarly located towers in Minneapolis. Lorberbaum displayed her charts about complaint airplane noise activity. Neuharth reviewed departure data for Runways 12L and 12R as well as the flights north of the corridor. Norling reviewed noise sensor data, and Portz detailed the latest MAC meeting. MAC Staff Presentations John Nelson, Manager of Noise, Environment and Planning from the Metropolitan Airports Commission provided updates on several topics of interest: 1) Noise Contour Report 2) Eagan/Mendota Heights Corridor Compliance Report 3) Runway Use System After the presentation, Norling asked how the runway usage compares to the Environmental Impact Statement that was conducted when the new runway was constructed, and what the penalties would be if these percentages differed by a significant amount. Nelson said that they would continue to monitor the runway usage statistics but that he was not aware of any penalties for differences in the projected and actual numbers. Neuharth asked about strategies for keeping flights in the corridor, and Nelson indicated that they consistently work with the FAA when they see anomalies. Dunn noted that the city had done a good job in planning by not putting residential uses in the flight paths. Councilmember Petschel thanked Nelson for his outreach to the community and asked him to explain why some residents may be experiencing more noise than in the past. He indicated that a mid-air near miss at MSP caused the FAA to change their procedures and direct departures to certain runways based on their destinations, and due to the number of flights heading south and west from MSP, that has changed the runway use patterns. Norling noted that the number of 80dB noise events has been trending higher and Nelson said that they will continue to monitor this issue. page 17 Miller reminded the commission about the MAC listening session to be held on July 29th at 7:00 pm at Mendota Heights City Hall. Ad'ourn Dunn made a motion, seconded by Portz, to adjourn the meeting at 8:35 pm. All voted in favor. OCITY OF ryjMENDOTA HEIGHTS page 18 1101 Victoria Curve 1 Mendota H - i5 651.452.1850 phone 1 651.452.8440 fax www.mendota-heights.com DATE: June 17, 2014 TO: Mayor, City Council and City Administrator FROM: Tamara Schutta, Assistant to the City Administrator/HR Coordinator SUBJECT: Personnel Action Items Item 1: Public Works Parks Lead Due to the recent promotion of Terry Blum to Public Works Superintendent position, the Park Lead position is currently vacant. Attached is a copy of an updated position description for your review. The position has been revised to reflect the primary responsibilities of the current position. The Park Lead position acts as a working foreman at job sites in the maintenance and repair work in all City parks and public sites. The Park Lead position wage is $28.75 per hour based on the 2014 — 2015 Teamsters Labor Agreement. Staff is requesting Council approval of the revised position description as well as authorization to begin an internal promotional process for the Park Lead position. Attachment(s): 1. Park Lead Position Description Item 2: 2014 Public Works Summer Seasonal Hire Earlier this year, City Council gave approval for staff to begin the hiring and recruitment process for four seasonal positions for the Public Works Department. Three returning seasonal staff were appointed earlier this spring. Staff advertised for a fourth seasonal position and received seven applications. Two applicants were interviewed for the position. A conditional job offer was made and a successful background check was completed. Staff is recommending David Reyes for the seasonal park maintenance worker position. His hourly rate will be $10.00 per hour. Staff is recommending David Reyes for employment effective June 16, 2014 for the 2014 summer season. BUDGET IMPACT As noted above. RECOMMENDATION Staff recommends that the Mendota Heights City Council approves the actions requested above for these two items. page 19 CITY OF MENDOTA HEIGHTS TITLE: Parks Lead Draft Department: Public Works Accountable To: Public Works Superintendent Class Code: Non-exempt/Union Primary Location: Public Works Normal Hours: 7:00 a.m. to 3:30 p.m.* Date of Last Revision: June 17, 2014 *Hours may vary based on business need. Job Purpose: Acts as a working foreman at job sites in the maintenance and repair work in all City parks and public sites. Essential Duties A. As a member of the parks crew, directs work of other maintenance employees. B. Performs and directs all park maintenance operations such as, but not limited to: • mowing, planting, and fertilizing. • Maintaining and repairing of outdoor shelters, picnic tables, bbq grills and playground equipment. • Maintain the activity areas such as ball fields, beaches, tennis courts, and skating rinks. C. Coordinates park maintenance work with schedules of organized recreational programs. D. Ensures proper utilization, storage, and maintenance of all equipment and vehicles. E. Prepares and maintains parks records. F. Keep Public Works Superintendent informed of any developments in order to function effectively. G. Attends Park Commission meetings as needed or required. H. Assists other departments of Public Works, as needed including snowplowing. I. Performs other duties and responsibilities as apparent or assigned. Minimum Qualifications A. High School Diploma or equivalent. B. Knowledge of City Park System. C. Valid Minnesota Commercial Class B driver's license page 20 Knowledge/Skills/Abilities Required A. Knowledge of all park and recreation areas, such as landscaping, apparatus installations, etc. B. Knowledge of the equipment, materials, methods and practices used in the maintenance of a park system. C. Knowledge of the operational functions and capabilities of light and heavy construction and maintenance equipment. D. Knowledge of occupational safety precautions necessary to conduct assigned activities safely. E. Knowledge of personnel and supervisory practices. F. Ability to operate all maintenance equipment needed to maintain the park system. G. Ability to establish and maintain effective relationships with city and county officials, other public agencies and the general public. H. Ability to communicate ideas and explanations clearly in English, both orally and in writing. I. Ability to work professionally with other employees and to deal with the public in a friendly and tactful manner. J. Ability to evaluate situations, improvise solutions with available resources and adapt to a changing environment. K. Ability to work with a minimal amount of supervision and complete assigned projects in a timely manner. L. Ability to work well under stress/pressure. Core Competencies by all City Employees: • Knowledge of work rules. Develops and maintains a thorough working knowledge of all city and applicable jurisdictional policies and procedures in order the help facilitate compliance with such policies and procedures by all staff members. • Develops respectful, cooperative and productive work relationships with coworkers, including the demonstrated willingness to help newer staff so their respective job responsibilities can be performed with confidence as quickly as possible. • Commitment to customer service. Demonstrates by personal example the service quality and integrity expected from all staff members. Represents Mendota Heights in a professional manner to the general public, employees and to other outside contact/constituencies in a manner that helps maintain and enhance Mendota Heights' reputation as well managed and citizen oriented. • Communication. Confers regularly with and keep immediate supervisor informed of all page 21 important matters pertaining to those functions and job responsibilities for which the employee is accountable. • Productivity and work organization. Demonstrate ability to plan, organize and accomplish work in a timely and efficient manner. • Problem solving and decision making. Exercise good judgment, analytical thinking, and independent thinking as it relates to departmental and city procedures, problems and policy interpretations. • Safety rules and procedures. Develop knowledge of and observe the safety policies and procedures of the city. Perform tasks in a safe and efficient manner while using appropriate safety equipment, clothing and devices. Safety Policy It is the responsibility of every employee of the City of Mendota Heights to know and observe the safety policies and procedures of the city. Each employee is expected to perform their tasks in a safe and efficient manner while using appropriate safety equipment, clothing and devices. Miscellaneous Information Must satisfactorily pass a criminal background examination. Physical Activities/Requirements Overall Physical Strength Demands Sedentary Exerting up to 10 lbs. occasionally or negligible weights frequently; sitting most of the time. Light Exerting up to 20 lbs. occasionally, 10 lbs. frequently, or negligible amounts constantly; Sitting most of the time. Frequently requires walking or standing. VMedium Exerting 20 — 50 lbs. occasionally, 10 — 25 lbs. frequently, or up to 10 lbs. constantly. Heavy Exerting 50 — 100 lbs. occasionally, 25-50 lbs. frequently, or up to 10-20 lbs. constantly. Very Heavy Exerting over 100 lbs. occasionally, 50 — 100 lbs. frequently, or up to 20-50 lbs. constantly. Physical Demands C = Continuously 2/3 or more of the time. F = Frequently From 1/3 to 2/3 of the time. 0 = Occasionally Up to 1/3 of the time. R = Rarely Less than 1 hour per week. N = Never Never Occurs Physical Demands Frequency Code Example Standing F Observing work site. Communicating with co-workers Sitting F Desk work, meetings, driving page 22 Walking F Around work site Lifting 0 Tools, equipment, files, supplies Carrying 0 Tools, equipment, files, supplies Pushing/Pulling 0 Tools, equipment, supplies Reaching 0 For tools, supplies and files Handling 0 Paperwork, tools, equipment Fine Dexterity 0 Computer keyboard, telephone, calculator Kneeling 0 Retrieving items from lower shelves/ground Crouching R Retrieving items from lower shelves/ground Crawling R Under equipment Bending 0 Retrieving items from lower shelves/ground Twisting F Workstation, getting in and out of public works vehicle Climbing R Stairs, step stools, onto equipment Balancing R Ladders, equipment Vision C Reading reports, Computer screen, driving, observing worksite Hearing C Communicating with co-workers/public Talking C Communicating with the co-workers/public Foot Controls 0 Driving vehicle Other (specify) Machines, Tools, Equipment and Work Aids City vehicles, park equipment, telephone, cell phone, fax machine, copier, calculator, computer, printer. Environmental Factors D = Daily W = Several times per week M = Several times per month R = Rarely S = Seasonally N = Never Health and Safety Environmental Factors Primary Work Location Mechanical Hazards W Dirt and Dust W Office Environment X Chemical Hazards S Extreme Temperatures M Vehicle X Electrical Hazards R Noise and Vibration D Outdoors X Fire Hazards N Fumes and Oder M Other Communicable Diseases S Wetness/Humidity S Physical Danger or abuse N Darkness or poor lighting S Other (specify): Work Schedule Possibilities V Typical 40 hour work week V Work on Weekends V Work on Holidays V On call/call out page 23 Employees performing the duties of this job will frequently work in outside weather conditions. Office environment work is performed in a well -lit, well ventilated and temperature controlled office. Noise level in the work environment is usually moderate. It can be loud at times. Protective Equipment Required Situationally required — vest, safety glasses, boots, hearing protection, gloves, hard hat Non-physical Demands include Continuously 2/3 or more of the time Frequently From 1/3 to 2/3 of the time Occasionally up to 1/3 of the time Rarely Less than 1 hour per week Never Time Pressures — Occasionally Emergency Situations — Rarely Frequent Change of Tasks - Occasionally Irregular Work Schedule — Occasionally Performing Multiple Tasks Simultaneously - Frequently Working Closely with Others as Part of a Team — Continuously Noisy/Distracting Environment - Rarely Other: The above description is intended to describe the general functions, skills and knowledge of the person assigned to this job. These examples are intended only as illustrative of various types of work performed, and are not all inclusive. The employee may be required to perform other related duties as assigned. The job description is subject to change as the needs of the employer and requirements of the job change. 0 n CITY OF CITY OF TA HE#GHTS page 24 1101 Victoria Curve 51x21' ... 5f. .. 1., 551.4527850 phone 1 www.mendota-heigh;s.tu,; . DATE: June 17, 2014 TO: Mayor, City Council, and City Administrator FROM: Lorri Smith, City Clerk SUBJECT: Approval of Massage Licenses BACKGROUND Pursuant to Mendota Heights City Code 3-6-2: No person shall provide massage services or engage in the business of operating a massage enterprise, or in connection with any other city business enterprise without first obtaining a license. The licenses run from July 1 through June 30 of each year. Applications have been received from each of the following: Massage Establishments: • Green Lotus Yoga and Healing Center, #100, 750 Main Street • Massage Elements, LLC located at 770 Highway 110 • Bellacu, Suite 375, 1200 Centre Pointe Curve Massage Therapists working at Bellacu: • Jonelle Christine Prow Massage Therapists working at Green Lotus Yoga and Healing Center: • Delaina Rae Hinrichs • Roger Lee Hinrichs • Julie Ann Olson • Warren Scott Winsness • Tracy Honde (new license) Massage Therapists working at Massage Elements: • Gayle Ann Aspenson • Sheri Ruth Bongaarts • Jane Louise Gilbert • Pamela Jean Latterell • Laura Marie Orme • Georgina Alfrida Potgieter • Kay Louise Reich • Ann Freyberger Short • Michael Scott Taulman All of the required documentation has been received and the fees have been paid. Background investigations have been conducted by the Mendota Heights Police Department resulting in no negative findings on any of the above applicants. RECOMMENDATION Staff recommends the Council approve the issuance of the massage licenses as listed above for the period of July 1, 2014 through June 30, 2015. CITY OF MENEETA HEIEHT`-. page 25 5g. 1101 Victoria Curve 1 Mendota Heights, MN 55118 651.452.1850 phone 1 651.452.8940 fax www.mendota-heights.com DATE: June 17, 2014 TO: Mayor and City Council, City Administrator FROM: Lorri Smith, City Clerk SUBJECT: Resolution 2014-34 Establishment of Absentee Ballot Board BACKGROUND Attached for your consideration is a resolution establishing an Absentee Ballot Board to perform the duties prescribed in Minnesota Statutes 203B.121. Although the City has had an Absentee Ballot Board in the past, this resolution reiterates the establishment of that Board. The resolution also delegates the Dakota County Absentee Ballot Board the duty of duplicating military and overseas absentee ballots when necessary prior to delivery to the city. This follows a similar model of absentee ballot board delegation currently in use in Hennepin County. The majority of military and overseas ballots are returned on paper that cannot be scanned by the ballot tabulators. Therefore, the votes cast must be duplicated to an official ballot that can be scanned with other ballots for that precinct. Allowing the Dakota County Absentee Ballot Board to duplicate these ballots will result in more efficiencies and more accurate processing. RECOMMENDATION Staff recommends the City Council approve Resolution 2014-34 Establishment of an Absentee Ballot Board. This action requires a majority vote of the city council. page 26 City of Mendota Heights Dakota County, Minnesota RESOLUTION 2014 - 34 RESOLUTION ESTABLISHING ABSENTEE BALLOT BOARD WHEREAS, pursuant to Minnesota Statutes 203B.05, Dakota County has designated the City of Mendota Heights to administer absentee ballots on behalf of the County; and WHEREAS, Minnesota Statutes 203B.121 requires the governing body of each municipality with responsibility to accept and reject absentee ballots to establish an absentee ballot board; and WHEREAS, accepted military and overseas absentee ballots that are not able to be scanned by the ballot tabulator must be duplicated; and WHEREAS, the Dakota County Absentee Ballot Board may duplicate accepted military and overseas absentee ballots prior to delivery to the municipality if it is delegated to do so by the municipality. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Mendota Heights, Minnesota, that an Absentee Ballot Board is hereby established to perform the duties prescribed in Minnesota Statutes 203B.121. BE IT FURTHER RESOLVED that the Dakota County Absentee Ballot Board is delegated the duty of duplicating military and overseas absentee ballots when necessary prior to delivery to the city. Adopted by the City Council of the City of Mendota Heights this 17th day of June, 2014. City Council City of Mendota Heights Sandra Krebsbach Mayor ATTEST: Lorri Smith City Clerk CITY OF MENEETA HEIEHT`-. page 27 5h. 1101 Victoria Curve 1 Mendota Heights, MN 55118 651.452.1850 phone 1 651.452.8940 fax www.mendota-heights.com DATE: June 17, 2014 TO: Mayor and City Council, City Administrator FROM: Lorri Smith, City Clerk SUBJECT: Resolution 2014-35 Appointment of Election Judges BACKGROUND Attached for your consideration is a resolution appointing election judges for the upcoming Primary and General elections. The individuals listed have indicated their willingness to serve at the upcoming elections. To serve as an election judge, the law requires regular judges to complete a two hour training session. Head judges and Absentee Ballot Board judges must complete three hours of training This training will be completed during the month of July. The resolution also authorizes the City Clerk to appoint additional judges and designate persons to serve on the absentee ballot board as needed. Staff will continue to recruit and train judges during the weeks leading up to the election. Staff recommends that the judges pay be increased from $9.30/hour to $9.50/hour for regular judges, and from $10.30/hour to $11.00/hour for lead judges and Absentee Ballot Board judges. RECOMMENDATION Staff recommends the City Council approve Resolution 2014- 35 Appointment of Election Judges. This action requires a majority vote of the city council. page 28 City of Mendota Heights Dakota County, Minnesota RESOLUTION 2014 - 35 RESOLUTION APPOINTING ELECTION JUDGES FOR THE 2014 PRIMARY AND GENERAL ELECTIONS WHEREAS, pursuant to Section 204B.21 of the Minnesota Election Laws, election judges shall be appointed by the governing body of the municipality; and WHEREAS, the appointments shall be made at least 25 days before the election at which the election judges will serve; and WHEREAS, election judges shall receive at least the prevailing Minnesota minimum wage for each hour spent carrying out their duties. NOW THEREFORE BE IT RESOLVED by the City Council of the City of Mendota Heights that the individuals listed on the attached Exhibit A are appointed to serve as election judges for the August 12, 2014 State Primary Election and/or the November 4, 2014 General Election at the hourly rate of $9.50 for election judges and $11.00 for head judges and Absentee Ballot Board judges. BE IT FURTHER RESOLVED that the City Clerk is authorized to appoint additional judges as needed for the conduct of these elections. Adopted by the City Council of the City of Mendota Heights this 17th day of June, 2014. City Council City of Mendota Heights Sandra Krebsbach Mayor ATTEST: Lorri Smith City Clerk EXHIBIT A 2014 MENDOTA HEIGHTS ELECTION JUDGES Mary Ann Adrian Robert Albreght Bonnie Anderson Gerald Ba rte Peter Beagan Roland Beihl Alice Beihl Janice Chasman Steven Commers Susan Davis Carole Dietz Jeanne Dill Linda Distad Susan Doffing Robert Doffing Kathryn Doyle Pam Ehrlich Cecilia Exner Harold Fotsch C. Leigh Gerber Marilyn Gonsowski Dorothy Haffely Donna Harrington Jean Haskell Milissa Hickey David Hierseman Sue Holman-Sutich Patricia Huberty Linda Irey James Johnson Susan Kilian Michael Kluznik Alice Kolinski David Korte page 29 Jean Kosowski Thomas Kovarik Helen Lifson Kathryn McKeag Sally McLaughlin Kathy Miller Rosemary Mossberg Nancy Nelson Sharon Nelson Joseph Noeker Jolene Novak-Haverkamp Mary Ann Novotny Kathy Packer Michelle Parker Jeanne Poepl Connie Powell John Price Nancy Price Steve Santos Marsha Skogheim Billie Slater Joseph Slater Ellen Sloane George Sonnen Evelyn Sunness Carol Tunell Ardys Walsh Kathie Woods Michelle Elizabeth Nancy Pam Sharon Zarmbinski Zilen Bauer Deeb 1Hinze • • • !2J CITY OF Or-MENDOTA HEIGHTS page 30 1101 Victoria Curve I Mendota He., 651.452.1850 phone 651.452.8940 fax www.mendota•helghts.com to DATE: June 17, 2014 TO: Mayor, Council and City Administrator FROM: Mike Aschenbrener SUBJECT: Resolution 2014-36: Formally Acknowledging Receipt of Gifts to the City 5K Run and the City Parks Celebration BACKGROUND The city auditor has advised that Minnesota State Statute 465.03 "Gifts to municipalities" requires all donations be acknowledged by resolution. This memo meets Minnesota State Statutory requirements. Sergeant Neil Garlock has coordinated every aspect of the City of Mendota Heights 5k Run\walk component of the Celebrate the Parks Celebration since 2006. Each year he has strived to ensure the success of the race and to ensure the proceeds go to Special Olympics Minnesota. See the spread sheet of the race expenses. This year's total donation to Special Olympics Minnesota will be $8,280.29 plus three additional additional checks that were made out directly to Special Olympics for $2,725.00. This year businesses and residents donated items valued at $11,131.74 to the 5k race. See attached lists of donations to the 5k. Donations and prizes donated to the Parks Celebration totaled $4,150.00. A complete list of donors and prizes is included in Council Resolution 2014-036. I recommend the City Council pass the attached resolution accepting the gifts to the 5k Run/walk and authorize a check made out to Special Olympics Minnesota for $8,280.29 Thank you letters have been sent to the Parks Celebration Donors and will be sent to the 5k Donors after the resolution has been passed. BUDGET IMPACT These donations help offset the costs of running the community celebrations. RECOMMENDATION If Council desires to implement the recommendation, pass a motion adopting Resolution No. 2014-36: "RESOLUTION FORMALLY ACKNOWLEDGING THE RECEIPT OF THE GIFT TO THE CITY 5K AND THE CITY PARKS CELEBRATION," and authorize a check to Special Olympics Minnesota for $8,280.29. page 31 City of Mendota Heights Dakota County, Minnesota RESOLUTION NO. 2014-36 RESOLUTION FORMALLY ACKNOWLEDGING THE RECEIPT OF THE GIFTS TO THE CITY 5K AND THE CITY PARKS CELEBRATION. WHEREAS, the City of Mendota Heights desires to follow Minnesota Statute 465.03 "Gifts to municipalities"; and WHEREAS, the Minnesota State Statute requires a resolution to accept gifts to municipalities; and WHEREAS, the City has previously acknowledged gifts with a resolution; and WHEREAS, the City Council of the City of Mendota Heights have duly considered this matter and wish to acknowledge the civic mindedness of citizens and officially recognize their donations. NOW THEREFORE BE IT HEREBY RESOLVED that the City Council of the City of Mendota Heights is accepting donations from the following people and organizations in support of the 5k run and the Mendota Heights Parks Celebration. 2014 Mendota Heights 5K - Donations 2014 5K Door Prizes Bob Brackey Kaposia Tree Service Larry Nichols/Louie Peltier Neil Garlock Steve Morganson/ Bob B Bob B / Neil G Buon Giorno Italia Sunfish Cellars Holiday-Lilydale BP Mendota Heights Teresa's Mexican Restaurant Lucky's Paradise Car Wash Paradise Car Wash Hampton Inn - Eagan Fairfield Inn- MH Pool & Yacht Larry Nichols/Louie Peltier Cherokee Tavern 42" Sony LCD TV $100 Gift Certificate 46" LED TV 42" LCD TV 42" Sony LCD TV 42" Sony LCD TV $25 Gift Card 2-$50 Gift Cards 2-$25 Gift Cards 2- 4 Oil Change Certificates 3-$15 Gift Cards & 10-$20 Gift Cards 10-$25 Gift Cards The Complete -Vehicle Detail 2-5 Supreme Package Car Wash Books 2 Nights stay -Standard Room 2 Nights stay -Standard Room 2-$100 Gift Cards Block Rocker $25 Gift Card 500 100 500 500 500 500 25 100 50 260 245 250 205 250 250 250 200 130 25 Romero Auto Wild Onion Moose Country Bonfire -Grand Ave Billy's on Grand Perkins-WSP Inver Grove Ford Junior's Cafe -Eagan Mike Butcher Shop Great Moon Buffet Soapy Joe's Car Wash Smith Liquors Fireside Lounge Artitude Chet's Liquor Lost Spur Boca Chica Gallagher's Pam's Hair Design Pam's Hair Design Lilydale Barber's O'Gara's Greg Boyle Zerorez Eagle Street Grille DeGidio'S Mancini's The St Paul Grill Ed Hayes Camelot Cleaners Kraus Anderson Bogey's Bob Franson Rainbow Foods-WSP Southview Country Club Massage Elements The Pizza Shop Wendy Guzman Downtowner Woodfire Grill Cub Foods-WSP Team Parking Mendakota CC Super America page 32 Resolution 2014-36 $25 Oil Change 8-$25 Gift Cards 8-$25 Gift Cards $25 Gift Card 2-$25 Gift Cards $30 Gift Certificate Lube, Oil & Filter $20 Gift Card $25 Gift Certificate 2-$25 Gift Certificates 1 Vehicle Detail & 12 Car Washes $10 Cash $10 Gift Certificate $150 Gift Certifcate 2 Bottles of wine Round of golf for 4 $30 Gift Card 3-$25 Gift Certificates $25 Gift Cards towards Aveda Products $40 Gift Cards towards tanning sessions Men's Haircut 4-$25 Gift Certificates 46" LED TV & $40 Holiday Card $150 Gift Certificate 4-$25 Gift Certificates 3-$50 Gift Cards 2 Sirloin Dinners $50 Gift Certificate 20 pair of Juzo Socks 2-$10 Gift Certificates 4 MN Twins Tickets 2-$50 Gift Certificates 4-$50 Mancini's Gift Cards $25 Gift Card Social Membership 1 Hour Massage 3-$25 Gift Certificates $100 Cash $50 Gift Card $20 Gift Card 7 One Day Pre -Paid Passes Round Of Golf For 4 With 2 Carts $50 Gift Card 2 25 200 200 25 50 30 40 20 25 50 300 10 10 150 30 80 30 75 25 40 21 100 500 150 100 150 25 50 250 20 264 100 200 25 250 80 75 100 50 20 77 400 50 VFW -Mendota American Bank Blue Stone -Eagan Lilydale Garden Center Mona Garlock Summit Brewing Company The Wine Market Mark & Tamara Schutta Mark & Tamara Schutta City of Mendota Heights Gateway Bank Courtyard Marriott Snap Fitness-Lilydale Meisinger Construction Mary Franson Bill Moosbrugger Danette Malerich Danette Malerich Danette Malerich BC Contracting Laurie & Bob Murphy John Sweitzer Klocke Autoworks Mendota Heights PD Accent Sevice Grand 7 Total page 33 Resolution 2014-36 10 Tokens for 10 Rail Drinks 2-$25 Visa Gift Cards 4-$25 Gift Cards Gift Basket Sit N Cool 2 glasses, Shirt & case of Pilsener Beer $25 Gift Card $25 Buffalo Wild Wings Gift Card $25 Chipotle Gift Card 8 Rounds of Golf $100 Mastercard Gift Card 10 Free Nights 2-3 month Membership & 3 Boot Camp Classes $100 Cash $75 Gift Card -Marx Fusion Bistro -Stillwater $75 Cash 9x12 Hand Painted Cat Portrait 9x12 Hand Painted Dog Portrait 2 Hour Hour of Acrylic Tattoos Fall Lawn Core Aeration Samsung Galaxy Tab 4 2-$50 Holiday Cards $100 Cash Streamlight Flashlight Girl's Bike 4 MN Twins Tickets 2014 Parks Celebration Donations Moose Country- $250 Pioneer Engineering- $100 Howry Residential Services $100 Terea's Mexican Restaurant- $250 TAJ Technologies $100 Granite Foundation $500 Valmont Industries $500 Somerset Country Club $100 Bituminous Roadways- $250 Signart Company- $50 LCS Company $100 Acacia Park Cemetery -$100 Lexington Heights Apartments -$250 3 30 50 100 120 40 70 25 25 25 104 100 1000 300 100 75 75 270 270 150 150 200 100 100 100 100 100 $13,091.00 page 34 Resolution 2014-36 St. Thomas Academy -$250 Mendakota Pediatrics -$250 Paterson Companies $500 110 Cycles -$500 Total=$4,150 Grand Total of donations: $17,241.00 Adopted by the City Council of the City of Mendota Heights this 17`h day of June, 2014. ATTEST: Lorri Smith, City Clerk 4 CITY COUNCIL CITY OF MENDOTA HEIGHTS Sandra Krebsbach, Mayor irlow"'"'"" nL.9 CITY OF MENDOTA HEIGHTS DATE: June 17, 2014 TO: Mayor, City Council, and City Administrator FROM: John R. Mazzitello, PE, PMP, MBA Public Works Director/City Engineer 1101 Victoria Curve 1 Mendota H 651.452.1850 phone 1 651.452.8940 fax www.mendota-hei g hts.com page 35 SUBJECT: Authorization to Bid Plans and Specifications for the Storm Water Drainage Improvements Projects: I -35E & Marie Avenue BACKGROUND In July of 1994, the City of Mendota Heights and the Minnesota Department of Transportation (MnDOT) entered into an agreement for storm water drainage improvements in State and City owned right-of-way at the Interstate 35E overpass of Marie Avenue. In 2013, MnDOT and City staff observed additional erosion that has exposed utility conduits and pipes within the right-of- way area. MnDOT and the City entered into a Cooperative Construction Agreement (CCA) this past April to complete the construction of the erosion repair and new storm drainage system for the area. Under the terms of the CCA, MnDOT has prepared the plans and specifications, and will be the ultimate owner of the underground facilities. The City is responsible for bidding, awarding, and administering the construction contract, maintenance of surface vegetation on City property, and collecting funding obligations from the benefitting utility companies. The attached resolution would allow City staff to begin the bidding process. BUDGET IMPACT Under the terms of the CCA, the City would pay 65% of the construction cost; MnDOT would provide the designed plans and specification and would pay the remaining 35%. The estimated construction cost is $62,512. Under the terms of the cost split, the City would pay 65%, or $40,633. MnDOT would pay the remaining 35%, or $21,879. In 1994, the City split its portion of the project costs with the benefitting utility companies. City staff has already begun discussing the project with both utility companies about sharing in the City's portion of the project cost. Actual costs of the project will be split based on the awarded contract amount. Staff recommends that these costs be covered by utilizing a combination of Municipal State Aid (MSA) funds and Storm Water Utility funds. RECOMMENDATION Staff recommends Council approve the attached Resolution 2014-37, A RESOLUTION AUTHORIZING ADVERTISEMENT FOR BIDS FOR THE INTERSTATE HIGHWAY 35E & MARIE AVENUE EROSION REPAIR PORJECT (PROJECT #201311). If Council wishes to enact the staff recommendation, pass a motion adopting the attached resolution by a simple majority vote. page 36 CITY OF MENDOTA HEIGHTS DAKOTA COUNTY, MINNESOTA RESOLUTION 2014-37 A RESOLUTION AUTHORIZING ADVERTISEMENT FOR BIDS FOR THE INTERSTATE HIGHWAY 35E & MARIE AVENUE EROSION REPAIR PORJECT (PROJECT #201311) WHEREAS, the City of Mendota Heights and the Minnesota Department of Transportation have entered into a Cooperative Construction Agreement for the repair of storm water erosion at the Interstate Highway 35E and Marie Avenue Intersection; and WHEREAS, the Minnesota Department of Transportation has completed the preparation of plans and specifications thereof; and WHEREAS, the City of Mendota Heights has agreed, as part of the Cooperative Construction Agreement, to administer the construction of the project. NOW THEREFORE BE IT RESOLVED; by the Mendota Heights City Council as follows: 1. That the plans and specifications for said improvements be and they are hereby in all respects approved by the City. 2. That the Clerk with the aid and assistance of the City Engineer be and is hereby authorized and directed to advertise for bids for said improvements all in accordance with the applicable Minnesota Statutes, such as bids to be received at the City Hall of the City of Mendota Heights by a specific date and time as listed in said advertisement, and at which time they will be publicly opened at City Hall by the City Engineer, will then be tabulated, and will then be considered by the City Council at its next regular Council meeting. Adopted by the City Council of the City of Mendota Heights this 17th day of June 2014. CITY COUNCIL CITY OF MENDOTA HEIGHTS Sandra Krebsbach, Mayor ATTEST Lorri Smith, City Clerk mCITYo MENDDTA HEIGHTS page 37 1101 Victoria Curve 1 Mendota Heights, 651.452.1850 phone 1 651.452.8940 fax www.mendota-heights.com 5k. DATE: June 17, 2014 TO: Mayor, City Council and City Administrator FROM: John R. Mazzitello, PE, PMP, MBA Public Works Director/City Engineer SUBJECT: Sign Retro -Reflectivity Policy BACKGROUND The Minnesota Legislature recently passed a bill that requires all agencies, including municipalities, responsible for maintaining roadways open to the public to adopt a sign maintenance program designed to maintain traffic sign retro -reflectivity at or above specific levels. The bill requires agencies to adopt the program by July 1, 2014. "Retro -Reflectivity" describes how light is reflected from a surface and returned to its original source. Traffic signs are made with retro -reflective sign sheeting material that redirects headlamp illumination back toward the vehicle, thereby making the sign visible at nighttime to the vehicle driver. Improvements to nighttime visibility of traffic signs will help drivers better navigate roads at night and thus promote safety and mobility. The retro -reflective properties of all sign sheeting materials degrade over time making signs progressively less visible at night. As signs degrade and become less retro -reflective, their effectiveness in communicating regulatory, warning, and guidance messages to road users at nighttime diminishes to the point that they cannot be seen or read in time for the driver to react properly. Thus, to maintain nighttime effectiveness, signs should be replaced before they reach the end of their useful retro -reflective life. The attached policy will establish the protocols used by the Public Works Department for the identification, assessment, maintenance, and replacement of traffic control signage in the City of Mendota Heights. The proposed policy would prioritize street signage into a hierarchy of priorities based on guidance from the Federal Highways Administration (FHWA) and the Minnesota Manual of Uniform Traffic Control Devices (MN/MUTCD). These are: • Replacing all signs determined not to meet applicable retro -reflectivity standards in conjunction with established street improvement projects. • Replacing missing or damaged signs determined to be of a priority for safety purposes. • Signs determined to be marginal in their retro -reflectivity evaluation. • All remaining signs as they come to the end of their anticipated service life, become damaged, etc. page 38 BUDGET IMPACT This is an unbudgeted expense in the 2014 budget and future budgets. No funding is provided by the State in conjunction with this requirement. By including the initial replacement of signs in conjunction with street improvement projects, it is anticipated that the sign replacements would be funded with municipal bond sales for street improvement project funding. RECOMMENDATION Staff recommends that the City Council adopt the attached Sign Retro -Reflectivity Policy. This action would require a simple majority vote. page 39 City of Mendota Heights, Minnesota Sign Retro -Reflectivity Policy Article I. Purpose and Goal. The purpose of this policy is to establish how the City of Mendota Heights will implement an assessment and management method to meet the minimum sign retro -reflectivity requirements in the Minnesota Manual on Uniform Traffic Control Devices (MN MUTCD). Substantial conformance with the MN MUTCD is achieved by having a method in place to maintain minimum retro -reflectivity levels. Conformance does not require or guarantee that every individual sign in the city will meet or exceed the minimum retro -reflective levels at every point in time. The goal of this policy is to improve public safety on the city's streets and roads and prioritize the city's limited resources to replace signs. Article II. Applicable Signs. This policy applies to all regulatory, warning, and guide signs as set forth in the MN MUTCD. Pursuant to Section 2A.8 of the MN MUTCD the city excludes the following signs from the retro - reflectivity maintenance guidelines: A. Parking, Standing, and Stopping signs (R7 and R8 series) B. Walking/Hitchhiking/Crossing signs (R9 series, R10-1 through R10 -4b) C. Acknowledgment signs, including Memorial signs D. All signs with blue or brown backgrounds E. Bikeway signs that are intended for exclusive use by bicyclists or pedestrians Article III. Resource Materials The City of Mendota Heights has reviewed and relied on numerous resources in adopting this policy. These resource materials include, but are not limited to the following: • Methods for Maintaining Traffic Sign Retro -reflectivity, Publication No. FHWA-HRT-08- 026, U.S. Department of Transportation, Federal Highway Administration (November 2007). • Sign Retro -reflectivity Guidebook, Publication No. FHWA-CFL/TD-09-005, U.S. Department of Transportation, Federal Highway Administration (September 2009). • Sign Retro -reflectivity: A Minnesota Toolkit, Minnesota Department of Transportation, Local Road Research Board (June 2010). • Traffic Sign Maintenance/Management Handbook, Report No. 2010RIC 10, Version 1.1, Minnesota Department of Transportation (October 2010). • LMCIT Sign Retro -reflectivity Memo and Model Policy, League of Minnesota Cities (Final Edition, March 2014). page 40 Article IV. Sign Inventory To meet the goal of maintaining sign retro -reflectivity above certain levels, the city will maintain a sign inventory of all new or replacement signs installed after the effective date of this policy. The inventory shall indicate the type of sign, the location of the sign, the date of installation or replacement, the type of sheeting material used on the sign face, the expected life of the sign, and any maintenance performed on the sign. As to existing signs, the city will perform an inventory of all signs covered by this policy. The city recognizes this process will occur over time subject to the city's monetary and human resource availability. The city expects to complete its sign inventory by December 31, 2015. The city shall record the above information related to new signs to the extent that such information is known and shall also include a statement on the general condition of the sign. Article V. Removal of Signs In recognition of the fact that excess road signs have been shown to reduce the effectiveness of signage, as well as impose an unnecessary financial burden on road authorities, it is the city's policy to remove signs determined to be unnecessary for safety purposes and which are not required to comply with an applicable state or federal statute or regulation. The removal of signs shall be based on an engineering study and the MN MUTCD. Article VI. Approved Sign Evaluation Method. The City of Mendota Heights adopts the following methods to meet the minimum sign retro - reflectivity requirements in the MN MUTCD: Expected Sign Life. The installation date is labeled or recorded when a sign is installed, so that the age of any given sign is known. The age of the sign is compared to the expected sign life. The expected sign life is based on the experience of sign retro -reflectivity degradation in the City. Signs older than the expected life will be inspected as they near the end of their designed life and replaced and needed. Blanket Replacement. All signs in the City of a given type are replaced at specified intervals, ideally by subdivision in conjunction with our street improvement projects. This eliminates the need to assess retro -reflectivity or track the life of individual signs. The replacement interval is based on the expected sign life for the shortest -life material used in the City or a given sign type. The current replacement interval is estimated at 20 years. Article VII. Sign Replacement. The City hereby establishes the following priority order in which road signs will be replaced: • First priority shall be given to replacing all signs determined not to meet applicable retro - reflectivity standards in conjunction with established street improvement projects. page 41 • Second priority shall also be given to replacing missing or damaged signs determined to be of a priority for safety purposes. • Third priority shall be given to signs determined to be marginal in their retro -reflectivity evaluation. • Fourth priority shall be given to all remaining signs as they come to the end of their anticipated service life, become damaged, etc. In addition, within each category above, further priority shall be given to warning and regulatory signs on roads with higher vehicle usage. After the initial replacement of signs as provided for in this Article or the installation of new signs, the City shall, for the purpose of complying with the requirements of the MN MUTCD, maintain minimum retro -reflectivity standards, as budgetary factors allow, by replacing signs as they reach the end of their warranty period, expected life expectancy for the sheeting material used, or expected life as determined by an authorized engineering study. Damaged, stolen, or missing signs may be replaced as needed. Article VIII. Modification and Deviation from Policy. The City of Mendota Heights reserves the right to modify this Sign Retro -Reflectivity Policy at any time if deemed to be in the best interests of the City based on safety, social, political, and economic considerations. The Director of Public Works, or their designee, may authorize a deviation from the implementation of this policy in regard to a particular sign when deemed to be in the best interests of the City based on safety, social, political, and economic considerations. Such deviation shall be documented including the reason for the deviation and other information supporting the deviation. Adopted by the City Council of the City of Mendota Heights on this 17th day of June, 2014. Sandra Krebsbach, Mayor Attest: Lorri Smith, City Clerk Lf) Mayor, City Council and City Administrator Mike Andrejka- Building Official Report May 2014 F m 0 LU W O • 0 - 0) 31 2012 Fee Collected $6,514.26 O N 0) co co 0) $ 98,763.52 $139,611.04 rnuary 1, 2012 thru May No. 1 Valuation 0 0 v 06, 6, 6, $ 2,851,213.00 $ 14,274,159.00 $17,829,372.00 2013 thru May 31 Valuation I 0 O 0 0 0) O N CO I� CO O N 71 C mOO¢H020U 0 N =0 6, 6, .. Y HD€0000Na January 1, 2012 thru Mav 31, 2012 Fee Collected 0 0 '07) 6v 0 0 O 6v O O O 0) 6v O O 0 co0) 0, 0 (0 6v 6v 6v 6v 0, 0 00 0 z co co 0) (0 co 4 E N- �aa 0 0) wf U _ 0 ac+ O H () January 1, 2013 thru Mav 31, 2013 Fee Collected 0 0 O N 69- 0 v 0 0 O 69- 0 v 0 0 6v 0 0 oo O 0) O co 0, O o (0 6v 6v 6v 0, 0) 0 z N N 0) o) N 6 s v E E �aa 0 wf U _ 0 ac+ 0 m January 1, 2014 thru May 31, 2014 Fee Collected 0 N 0) 69- 0 v 0 0 O 69- 0 v 0 0 O O N CO- (O M 0) 0, 6v 6v 6v 0, 0 LO 0 z N co co N-' E �aa 0 wf U _ 0 ac+ O H () Mav 1, 2014 thru Mav 31, 2014 Fee Collected O N 69- 0 v 0 O 69- 0 v 0 N 6v O cd 69- r— O o (0 69- 69- 69- 69- 0 O z N N 4 v AN 3 � E 0 0) 0 _ 0 S°. 0 m Fee Collected 0 (0 6v 0 z co N N O N c � � U) � J U J Fee Collected 0 0 00 O o (0 69- 0 v 0 N 0 z N O N c � � w ) J U J Fee Collected O N O O > 69- 0 v Z N O N c � � U) N J U J Fee Collected O o (0 0 N N N 0 z N � N v 0 J U J 6771 $ 13,534,335.00 1 $ 155,464.83 F 0 F CO CO I0 J F 0 F E 0 N 0 0 E (0 0) 0 0) (6 Ul U • 0 � E U 0 • o 0 m o ,75 U -6 = O (0 • o •0 Q Q ui 0 z _ (O r 0) m N co r M 74,713.39 6 139,611.04 69 69 6, 69 69 en 2013 thru May 31 Valuation I 0 O 0 0 0) O 2,106, 300.00 10, 369, 035.00 6 17,829,372.00 6, 6, 6, o, o, o, 0) 00 o 0) 0 V N l4 4 D 0-0 0 0 F o a- 2U O F n 0(<H0 $19,278.12 $ 43,113.36 $ 29,838.69 $92,230.17 1, 2014 thru May 3 Valuation $1,940,000.00 $ 2,612,081.21 $ 2,650,311.00 $7,202,392.21 V � N CO C_ . ma0)<H0200 0 33 r 4 L 0 O H €0O000 a Fee Collected 7,854.62 13,620.51 2,087.34 23,562.47 69 69 6, 69 69 en $750,000.00 $ 860,977.00 $ 93,744.00 $1,704,721.00 May 1,201, No. N N V v 10 iii0 .. 0 Y Y O O o F E 0 H a N n 0)a0)<H0S0 U January 1, 2012 thru Mav 31, 2012 Fee Collected 0 0 '07) 6v 0 0 O 6v O O O 0) 6v O O 0 co0) 0, 0 (0 6v 6v 6v 6v 0, 0 00 0 z co co 0) (0 co 4 E N- �aa 0 0) wf U _ 0 ac+ O H () January 1, 2013 thru Mav 31, 2013 Fee Collected 0 0 O N 69- 0 v 0 0 O 69- 0 v 0 0 6v 0 0 oo O 0) O co 0, O o (0 6v 6v 6v 0, 0) 0 z N N 0) o) N 6 s v E E �aa 0 wf U _ 0 ac+ 0 m January 1, 2014 thru May 31, 2014 Fee Collected 0 N 0) 69- 0 v 0 0 O 69- 0 v 0 0 O O N CO- (O M 0) 0, 6v 6v 6v 0, 0 LO 0 z N co co N-' E �aa 0 wf U _ 0 ac+ O H () Mav 1, 2014 thru Mav 31, 2014 Fee Collected O N 69- 0 v 0 O 69- 0 v 0 N 6v O cd 69- r— O o (0 69- 69- 69- 69- 0 O z N N 4 v AN 3 � E 0 0) 0 _ 0 S°. 0 m Fee Collected 0 (0 6v 0 z co N N O N c � � U) � J U J Fee Collected 0 0 00 O o (0 69- 0 v 0 N 0 z N O N c � � w ) J U J Fee Collected O N O O > 69- 0 v Z N O N c � � U) N J U J Fee Collected O o (0 0 N N N 0 z N � N v 0 J U J 6771 $ 13,534,335.00 1 $ 155,464.83 F 0 F CO CO I0 J F 0 F E 0 N 0 0 E (0 0) 0 0) (6 Ul U • 0 � E U 0 • o 0 m o ,75 U -6 = O (0 • o •0 Q Q ui 0 z DATE: TO: FROM: SUBJECT: CITY OF MENDOTA HEIGHTS BACKGROUND 1101 Victoria Curve ( Mendota Hei 651.4521850 phone 1651.452 8940 fax wwwmendota-heights.com page 43 June 17, 2014 Mayor, City Council and City Administrator Kristen Schabacker, Finance Director `: Claims List Summary Significant Claims Metro Council Environmental Services — June Sewer Service Xcel Energy — Utilities Bituminous Roadways — Force Main Repair Lametti & Sons — Sewer Lining Project Pearson Brothers — Spring Street Sweeping $ 86,209.74 $ 10,179.77 $ 3,761.00 $ 5,836.25 $ 11,100.00 Manual Checks Total $ 103,362.68 System Checks Total $ 61,109.69 Total for the List of claims for the June 17, 2014 city council meeting $ 164,472.37 RECOMMENDATION: Approval of the list of claims for June 17, 2014. Account CITY OF MENDOTA HEIGHTS Claims List MANUAL CHECKS 05/31/14 MAN Comments DEPT Descr Amount page 44 06/12/14 10:00 AM Page 1 Search Name EASY PICKER GOLF PRODUCTS G 45-2035 VOID #84525 E 45-4490-045-45 VOID #84525 Search Name EASY PICKER GOLF PRODUCTS Search Name METRO COUNCIL ENVIRONMENT SVC E 15-1149-060-60 JUNE 2014 SEWER SERVICE Search Name METRO COUNCIL ENVIRONMENT SVC Search Name XCEL ENERGY E 15-4211-310-60 E 01-4211-300-50 E 01-4211-310-50 E 01-4211-310-70 E 01-4211-315-30 E 01-4211-320-70 E 08-4211-000-00 E 28-4211-000-00 E 15-4211-400-60 E 01-4212-310-50 E 01-4212-310-70 E 01-4212-315-30 E 01-4212-320-70 E 08-4212-000-00 E 15-4212-310-60 E 15-4212-400-60 E 01-4211-420-50 Search Name XCEL ENERGY APR 2014 EL. UTILITIES APR 2014 EL. UTILITIES APR 2014 EL. UTILITIES APR 2014 EL. UTILITIES APR 2014 EL. UTILITIES APR 2014 EL. UTILITIES APR 2014 EL. UTILITIES APR 2014 GAS UTILITIES APR 2014 EL. UTILITIES APR 2014 GAS UTILITIES APR 2014 GAS UTILITIES APR 2014 GAS UTILITIES APR 2014 GAS UTILITIES APR 2014 GAS UTILITIES APR 2014 GAS UTILITIES APR 2014 GAS UTILITIES APR 2014 EL. UTILITIES Golf Course Utility Enterprise $21.43 -$333.09 -$311.66 $86,209.74 $86,209.74 Utility Enterprise $346.22 Road & Bridges $1,736.03 Road & Bridges $346.22 Parks &Recreation $346.22 Fire $663.26 Parks & Recreation $372.52 Spec Fds $1,568.46 Spec Fds $752.87 Utility Enterprise $930.76 Road & Bridges $431.53 Parks & Recreation $431.53 Fire $560.26 Parks & Recreation $50.00 Spec Fds $920.34 Utility Enterprise $431.54 Utility Enterprise $101.40 Road & Bridges $190.61 $10,179.77 $96,077.85 Account Search Name AFFINITY PLUS G 01-2073 Search Name AFFINITY PLUS Search Name DIGITAL -ALLY E 01-4330-440-20 Search Name DIGITAL -ALLY Search Name FLEET FARM/GE MONEY BANK E 15-4305-060-60 OPERATING SUPPLIES - SEWER Search Name FLEET FARM/GE MONEY BANK Search Name HOME DEPOT CREDIT SERVICES CITY OF MENDOTA HEIGHTS Claims List MANUAL CHECKS 06/11/14 MAN Comments DEPT Descr 06/06/2014 PAYROLL EQUIPMENT REPAIR - POLICE E 45-4480-045-45 E 15-4305-060-60 E 45-4480-045-45 E 15-4305-060-60 E 01-4335-315-30 E 01-4305-070-70 E 08-4335-000-00 E 01-4305-030-30 E 45-4480-045-45 E 45-4480-045-45 E 08-4335-000-00 E 45-4480-045-45 E 45-4480-045-45 E 01-4305-070-70 E 45-4480-045-45 E 45-4480-045-45 BLDG REPAIR MATERIALS - PAR3 OPERATING SUPPLIES - SEWER BLDG REPAIR MATERIALS - PAR3 OPERATING SUPPLIES - SEWER BLDG REPAIR MATERIALS - FIRE HALL OPERATING SUPPLIES - PARKS BLDG REPAIR SUPPLIES - CITY HALL OPERATING SUPPLIES - FIRE DEPT BLDG REPAIR MATERIALS - PAR3 BLDG REPAIR MATERIALS - PAR3 BLDG REPAIR SUPPLIES - CITY HALL BLDG REPAIR MATERIALS - PAR3 BLDG REPAIR MATERIALS - PAR3 OPERATING SUPPLIES - PARKS BLDG REPAIR MATERIALS - PAR3 BLDG REPAIR MATERIALS - PAR3 Search Name HOME DEPOT CREDIT SERVICES Search Name I C M A REI 1REMENT 457 G 01-2073 06/06/2014 PAYROLL G 01-2072 06/06/2014 PAYROLL Search Name I C M A RETIREMENT 457 Search Name NATIONWIDE RE 11REMENT SOLUTION G 01-2072 06/06/2014 PAYROLL Search Name NATIONWIDE RETIREMENT SOLUTION Search Name SELECT ACCOUNT E 01-4131-110-10 G 01-2071 E 05-4131-105-15 E 01-4131-070-70 E 01-4131-020-20 Search Name SELECT ACCOUNT Search Name TRACTOR SUPPLY E 01-4305-070-70 Search Name TRACTOR SUPPLY Police page 45 06/12/14 10:17 AM Page 1 Amount Utility Enterprise Golf Course Utility Enterprise Golf Course Utility Enterprise Fire Parks & Recreation Spec Fds Fire Golf Course Golf Course Spec Fds Golf Course Golf Course Parks & Recreation Golf Course Golf Course JUNE 2014 HSA CONTRIBUTIONS Administration JUNE 2014 HSA CONTRIBUTIONS JUNE 2014 HSA CONTRIBUTIONS Engineering Enterprise JUNE 2014 HSA CONTRIBUTIONS Parks & Recreation JUNE 2014 HSA CONTRIBUTIONS Police OPERATING SUPPLIES - PARKS Search Name UNITED WAY OF ST. PAUL G 01-2070 Search Name UNITED WAY OF ST. PAUL 06/06/2014 PAYROLL Parks & Recreation $1,640.00 $1,640.00 $45.00 $45.00 $36.28 $36.28 $139.38 $81.94 $13.38 $43.71 $63.49 $33.31 $16.44 $159.88 $29.18 $15.77 $9.97 $208.80 $5.87 $67.27 $19.01 $27.85 $935.25 $192.00 $483.99 $675.99 $50.00 $50.00 $330.78 $2,487.74 $253.86 $253.86 $507.72 $3,833.96 $20.46 $20.46 $47.89 $47.89 $7,284.83 CITY OF MENDOTA HEIGHTS Claims List SYSTEM CHECKS 06/17/14 PAY page 46 06/12/14 10:12 AM Page 1 Account Comments DEPT Descr Amount Search Name 4 PAWS ANIMAL CONTROL LLC E 01-4225-800-90 MAY 2014 ANIMAL CONTROL Animal Control $300.00 Search Name 4 PAWS ANIMAL CONTROL LLC $300.00 Search Name ALL CITY ELEVATOR, INC. E 08-4335-000-00 JUNE 2014 ELEVATOR CONTRACT - CITY HALL Spec Fds $153.00 $153.00 Search Name ALL CITY ELEVATOR, INC. Search Name AMERICAN PROMOTIONAL INCENTIVE E 01-4220-085-85 T-SHIRTS - CLEAN-UP DAY Recycling $555.32 E 01-4435-200-70 T-SHIRTS - PLAYGROUNDS Parks & Recreation $796.65 Search Name AMERICAN PROMOTIONAL INCENTIVE $1,351.97 Search Name AMERIPRIDE SERVICES E 45-4335-045-45 MAT SERVICE - PAR3 Golf Course $31.37 E 45-4335-045-45 MAT SERVICE - PAR3 Golf Course $31.37 E 45-4335-045-45 MAT SERVICE - PAR3 Golf Course $31.37 E 08-4335-000-00 MAT SERVICE - CITY HALL Spec Fds $84.20 E 15-4335-310-60 MAT SERVICE - PW GARAGE Utility Enterprise $25.86 E 01-4335-310-70 MAT SERVICE - PW GARAGE Parks & Recreation $25.86 E 01-4335-310-50 MAT SERVICE - PW GARAGE Road & Bridges $25.87 E 08-4335-000-00 MAT SERVICE - CITY HALL Spec Fds -$16.07 $239.83 Search Name AMERIPRIDE SERVICES Search Name ASSURANT EMPLOYEE BENEFITS E 01-4132-031-30 JUNE 2014 LTD PREMIUM Fire $180.20 Search Name ASSURANT EMPLOYEE BENEFITS $180.20 Search Name B & K TRAINING, LLC E 01-4400-030-30 FIRST RESPONDER TRAINING - FIRE DEPT Fire $200.00. E 01-4400-020-20 FIRST RESPONDER TRAINING - PD Police $1,400.00 Search Name B & K TRAINING, LLC $1,600.00 Search Name BERTELSON TOTAL OFFICE SOLUTNS E 01-4300-110-10 OFFICE SUPPLIES - ADMIN Administration $27.51 E 01-4300-110-10 OFFICE SUPPLIES - ADMIN Administration $44.99 E 01-4300-110-10 OFFICE SUPPLIES - ADMIN Administration $104.13 Search Name BERTELSON TOTAL OFFICE SOLUTNS $176.63 Search Name BITUMINOUS ROADWAYS E 15-4330-490-60 FORCEMAIN BREAK REPAIRS Utility Enterprise $3,761.00 Search Name BITUMINOUS ROADWAYS $3,761.00 Search Name BLUE TARP FINANCIAL E 01-4305-070-70 OPERATING SUPPLIES - PARKS Parks & Recreation $34.97 E 01-4305-070-70 OPERATING SUPPLIES - PARKS Parks & Recreation -$29.98 E 01-4305-070-70 OPERATING SUPPLIES - PARKS Parks & Recreation $29.98 Search Name BLUE TARP FINANCIAL $34.97 Search Name C. DARLENE OEHLKE, CAP E 01-4220-110-10 06/03/14 CITY COUNCIL MTG Administration $146.40 E 01-4220-080-80 05/27/14 PLANNING COMM. MEETING Planning $136.00 Search Name C. DARLENE OEHLKE, CAP $282.40 Search Name CAMELOT CLEANERS CITY OF MENDOTA HEIGHTS Claims List SYSTEM CHECKS 06/17/14 PAY page 47 06/12/14 10:12 AM Page 2 Account DEPT CommeDescr n..NMn. Amount �.,...,.......rt. rt ...m R.,, x ;,.,.R:.r.;r:;n M n.,:., :r:....... E 01-4410-020-20 UNIFORMS CLEANING - PD Police $91.60 Search Name CAMELOT CLEANERS $91.60 Search Name CAPITOL CITY REGL FF ASSN E 01-4404-030-30 2014 MEMBERSHIP Search Name CAPITOL CITY REGL FF ASSN Search Name CDW GOVERNMENT, INC E 01-4301-114-14 SECURITY SOFTWARE Search Name CDW GOVERNMENT, INC Search Name COMMERCIAL ASPHALT E 01-4422-050-50 ASPHALT MIX Search Name COMMERCIAL ASPHALT Search Name CONTINENTAL SAFETY EQ E 01-4305-050-50 SAFETY SUPPLIES - STREETS Search Name CONTINENTAL SAFETY EQ Search Name CONTRACTORS & SURVEYORS SUPPLY E 05-4305-105-15 ENGINEERING SUPPLIES Search Name CONTRACTORS & SURVEYORS SUPPLY Search Name COOL AIR MECHANICAL, INC. E 08-4335-000-00 HVAC REPAIRS - CITY HALL Search Name COOL AIR MECHANICAL, INC. Search Name CROSS NURSERIES INC E 15-4305-060-60 OPERATING SUPPLIES - SEWER Search Name CROSS NURSERIES INC Search Name CRYSTEEL E 01-4330-490-70 Search Name CRYSTEEL Search Name ECKBERG LAMMERS E 01-4220-120-80 E 01-4220-120-40 E 01-4220-120-70 E 01-4221-120-10 E 01-4220-120-10 E 01-4481-110-10 Search Name ECKBERG LAMMERS EQUIPMENT REPAIR PARTS - PARKS MAY 2014 LEGAL SERVICES MAY 2014 LEGAL SERVICES MAY 2014 LEGAL SERVICES MAY 2014 LEGAL SERVICES - COUNCIL MTGS MAY 2014 LEGAL SERVICES MAY 2014 LEGAL SERVICES Search Name ELECTRO WATCHMAN E 15-4210-060-60 QUARTERLY SECURITY MONTORING - LIFT STATIO E 08-4335-000-00 QUARTERLY SECURITY MONTORING - CITY HALL E 45-4210-045-45 2014 ANNUAL SECURITY MONTORING - PAR3 G 45-1215 2015 ANNUAL SECURITY MONTORING - PAR3 Search Name ELECTRO WATCHMAN Search Name FIRE EQUIPMENT SPECIALTIES E 01-4305-030-30 SUPPLIES - FIRE DEPT Search Name FIRE EQUIPMENT SPECIALTIES Search Name FIRECOM Fire Info Tech Road & Bridges Road & Bridges Engineering Enterpris Spec Fds Utility Enterprise Parks & Recreation Planning Code Enforcement/Ins Parks & Recreation Administration Administration Administration Utility Enterprise Spec Fds Golf Course Fire $50.00 $50.00 $2,178.00 $2,178.00 $676.80 $676.80 $82.92 $82.92 $441.68 $441.68 $2,351.62 $2,351.62 $24.75 $24.75 $155.51 $155.51 $2,017.50 $225.00 $75.00 $800.00 $300.00 $75.00 $3,492.50 $495.00 $255.00 $48628 $347.35 $1,583.63 $594.58 $594.58 Account.,,...,.,.,,,,...,,.m., E 01-4330-460-30 Search Name FIRECOM Comments CITY OF MENDOTA HEIGHTS Claims List SYSTEM CHECKS 06/17/14 PAY page 48 06/12/14 10:12 AM Page 3 DEPT Descr Amount EQUIPMENT - FIRE DEPT Search Name FLAGSHIP RECREATION E 01-4330-215-70 PLAYGROUND REPAIR PARTS Search Name FLAGSHIP RECREATION Search Name GERTENS GREENHOUSE E 78-4460-787-00 CROWN PT/OVERLOOK REHAB SUPPLIES Search Name GERTENS GREENHOUSE Search Name GLOCK, INC E 01-4400-020-20 E 01-4400-020-20 Search Name GLOCK, INC ARMORER'S COURSE - S. MEYER ADV. ARMORER'S COURSE - S. MEYER Fire $64.13 $64.13 Parks & Recreation $444.80 $444.80 Spec Fds $15.60 $15.60 Police $195.00 Police $300.00 Search Name GOLDCOM E 01-4305-030-30 OPERATING SUPPLIES - FIRE DEPT Fire Search Name GOLDCOM Search Name GOPHER STATE ONE CALL E 01-4210-040-40 MAY 2014 SERVICE Code Enforcement/Ins Search Name GOPHER STATE ONE CALL Search Name GRANNIS & HAUGE, P.A. E 01-4222-120-20 MAY 2014 LEGAL SERVICES Police Search Name GRANNIS & HAUGE, P.A. Search Name HANCO CORPORATION E 01-4330-490-70 EQUIPMENT REPAIR PARTS - PARKS Parks & Recreation G 45-2035 EQUIPMENT REPAIR PARTS - PAR3 E 45-4330-490-45 EQUIPMENT REPAIR PARTS - PAR3 Golf Course E 01-4330-490-50 EQUIPMENT REPAIR PARTS - STREETS Road & Bridges Search Name HANCO CORPORATION Search Name IA FC E 01-4404-030-30 Search Name IAF C 2014 MEMBERSHIP - J. MACZKO Search Name INNOVATIVE OFFICE SOLUTIONS E 05-4300-105-15 OFFICE SUPPLIES - ENGINEERING Search Name INNOVATIVE OFFICE SOLUTIONS Search Name INTERNATIONAL OFFICE TECHNLGY E 01-4300-110-10 TONERS - FINANCE Search Name INTERNATIONAL OFFICE TECHNLGY Search Name IRON MOUNTAIN RECORDS MGMT E 01-4490-110-10 MAY 2014 SHREDDING Administration E 01-4490-020-20 MAY 2014 SHREDDING Police Search Name IRON MOUNTAIN RECORDS MGMT Search Name JANI-KING OF MINNESOTA, INC. Fire Engineering Enterpris Administration E 01-4335-310-70 E 15-4335-310-60 E 01-4335-310-50 JUNE 2014 SERVICE - PW GARAGE JUNE 2014 SERVICE - PW GARAGE JUNE 2014 SERVICE - PW GARAGE Parks & Recreation Utility Enterprise Road & Bridges $495.00 $38.45 $38.45 $509.35 $509.35 $5,356.00 $5,356.00 $39.26 -$5.20 $80.87 $61.62 $176.55 $234.00 $234.00 $37.35 $37.35 $217.98 $217.98 $11.44 $34.34 $45.78 $66.67 $66.66 $66.67 CITY OF MENDOTA HEIGHTS Claims List SYSTEM CHECKS 06/17/14 PAY page 49 06/12/14 10:12 AM Page 4 AccountComments DEPT Descr Amount ....,.,.. ,IMNI,...; mn„� . ,APIA � .,,n,.,....,.m,R,.n„ ,. m.,YM1» ,; ...rm,.:�.r:, ,:. ,.,,.nr ,-rA,.::, , MAYNIM,,,«;.m�-:..,MOVI� ATN.,,,.: TM,,.:.,..r.�:.,nn.+,NMIVAT,,,,.T, V, -,,,N., v..2,.w,:,.,,ATI.IWr M:.: , ,.00.00. 2 Search Name JANI-KING OF MINNESOTA, INC. Search Name LAME I I 1 & SONS, INC E 15-4330-490-60 2013 SEWER LINING/REHAB Search Name LAME III & SONS, INC Search Name LANGUAGE LINE SERVICES E 01-4223-020-20 INTERPRETER SERVICES - PD Search Name LANGUAGE UNE SERVICES Search Name LEITNER CO E 01-4330-215-70 E 01-4330-215-70 E 01-4330-215-70 Search Name LEITNER CO SOIL - PARKS SOIL - KENSINGTON PARK SOIL - KENSINGTON PARK Utility Enterprise Police Parks & Recreation Parks & Recreation Parks & Recreation Search Name LEXISNEXIS E 01-4223-020-20 MAY 2014 SERVICE Police Search Name LEXISNEXIS Search Name LIBERTY TIRE RECYCLING SVCS E 01-4220-085-85 CLEAN-UP DAY RECYCLING Search Name LIBERTY TIRE RECYCLING SVCS Search Name LOGIS E 01-4220-114-14 E 01-4301-030-30 E 01-4330-440-20 E 01-4220-114-14 E 01-4223-020-20 Search Name LOGIS Search Name MARKS TOWING E 01-4330-490-70 Search Name MARKS TOWING Search Name MAUER CHEVROLET E 01-4330-490-70 Search Name MAUER CHEVROLET Search Name MENARDS E 15-4305-060-60 E 08-4335-000-00 E 01-4305-050-50 E 08-4335-000-00 E 01-4305-050-50 Search Name MENARDS NETWORK SERVICE APPLICATION SUPPORT - FIRE DEPT EQUIPMENT MAINTENANCE - PD NETWORK SERVICE APPLICATION SUPPORT - PD VEHICLE TOWING - PARKS EQUIPMENT REPAIR PARTS - PARKS OPERATING SUPPLIES - SEWER CLEANING SUPPLIES - CITY HALL OPERATING SUPPLIES - STREETS SUPPLIES - CITY HALL OPERATING SUPPLIES - Search Name MIKES SHOE REPAIR INC E 01-4305-155-30 PROTECTIVE GEAR REPAIR - FIRE DEPT Search Name MIKES SHOE REPAIR INC Search Name MILLER, JUS I IN E 01-4300-110-10 Search Name MILLER, JUSTIN PRINTER INK - ADMIN Recycling Info Tech Fire Police Info Tech Police Parks & Recreation Parks & Recreation Utility Enterprise Spec Fds Road & Bridges Spec Fds Road & Bridges Fire Administration $5,836.25 $5,836.25 $22.35 $22.35 $106.00 $132.50 $106.00 $344.50 $50.00 $50.00 $755.62 $755.62 $49.50 $55.00 $345.00 $74.25 $2,272.00 $2,795.75 $94.00 $94.00 $8.83 $8.83 $48.59 $38.76 $95.78 $162.00 $210.76 $555.89 $64.00 $64.00 $61.05 $61.05 Account Comments CITY OF MENDOTA HEIGHTS Claims List SYSTEM CHECKS 06/17/14 PAY DEPT Descr page 50 06/12/14 10:12 AM Page 5 Amount Search Name MITCHELL1 E 01-4301-030-30 JUNE 2014 SERVICE Fire Search Name MITCHELL1 Search Name MN BOARD OF AELSLAGID E 05-4404-105-15 PE LICENSE RENEWAL - A. RAMIC Search Name MN BOARD OF AELSLAGID Search Name MN ST ADMIN ITG TELECOM SRVCE E 01-4220-133-10 MAY 2014 WAN SERVICE E 01-4223-020-20 MAY 2014 WAN SERVICE E 01-4210-030-30 MAR 2014 SERVICE E 01-4220-133-10 APR 2014 WAN SERVICE E 01-4210-030-30 APR 2014 SERVICE E 01-4223-020-20 APR 2014 WAN SERVICE Search Name MN ST ADMIN ITG TELECOM SRVCE Search Name MN TEAMSTERS LOCAL 320 G 01-2075 JUNE 2014 UNION DUES Search Name MN TEAMSTERS LOCAL 320 Search Name MUNICIPAL EMERGENCY SERVICES E 01-4305-030-30 OPERATING SUPPLIES - FIRE DEPT Fire Search Name MUNICIPAL EMERGENCY SERVICES Search Name Ni 1 I f SANITATION INC E 45-4280-045-45 RUBBISH REMOVAL & RECYCLING - PAR3 Search Name NI i 11 SANITATION INC $159.00 $159.00 Engineering Enterpris $132.00 $132.00 Administration Police Fire Administration Fire Police Search Name OFFICE DEPOT E 01-4300-030-30 Search Name OFFICE DEPOT Search Name OLSEN COMPANIES E 01-4330-490-70 Search Name OLSEN COMPANIES OFFICE SUPPLIES - FIRE DEPT EQUIPMENT REPAIR PARTS - PARKS Search Name OREILLY AUTO/FIRST CALL E 01-4330-490-50 E 05-4330-490-15 E 15-4330-490-60 E 15-4330-490-60 E 01-4330-490-70 E 01-4305-070-70 E 01-4330-460-30 E 01-4330-490-50 EQUIPMENT REPAIR PARTS - SHOP EQUIPMENT REPAIR PARTS - ENGINEERING EQUIPMENT REPAIR PARTS - SEWER EQUIPMENT REPAIR PARTS - SHOP EQUIPMENT REPAIR PARTS - SHOP OPERATING SUPPLIES - PARKS EQUIPMENT REPAIR PARTS - FIRE DEPT EQUIPMENT REPAIR PARTS - SHOP Search Name OREILLY AUTO/FIRST CALL Search Name OXYGEN SERVICE CO E 01-4200-610-50 CYLINDER RENT - STREETS Search Name OXYGEN SERVICE CO Search Name PEARSON BROS INC E 01-4424-050-50 SPRING 2014 STREET SWEEPING Golf Course Fire Parks & Recreation Road & Bridges Engineering Enterpris Utility Enterprise Utility Enterprise Parks & Recreation Parks & Recreation Fire Road & Bridges Road & Bridges $111.00 $125.81 $87.91 $111.00 $87.91 $125.81 $649.44 $633.00 $633.00 $73.50 $73.50 $67.35 $67.35 $82.39 $82.39 $193.99 $193.99 $5.54 -$28.64 -$48.84 $13.63 $13.64 $27.97 $13.56 $13.64 $10.50 $80.60 $80.60 Road & Bridges $11,100.00 CITY OF MENDOTA HEIGHTS Claims List SYSTEM CHECKS 06/17/14 PAY page 51 06/12/14 10:12 AM Page 6 AccountComments DEPT Descr Amount ,M.,,n.Y, rlttt ,,, WI,, .. :.IMIIIN /A �.n ,.,. ,,--.,,1,..,7,,.� �.,.,. .,RU,n, . a<;.,. .. ..:::.,. ..:m m -,n : . � mA .v r .n„M n,.,, ::.-.,,.mR,,-rIt....:..: TI,,,:-�.<zMN $11,100.00 Utility Enterprise $14.70 Utility Enterprise $21.59 Parks & Recreation $78.12 Search Name PEARSON BROS INC Search Name PETERBILT NORTH E 15-4330-490-60 E 15-4330-490-60 E 01-4305-070-70 Search Name PETERBILT NORTH EQUIPMENT REPAIR PARTS - SEWER EQUIPMENT REPAIR PARTS - SEWER EQUIPMENT REPAIR PARTS - PARKS Search Name RAMIC, ALMIN E 05-4404-105-15 PE LICENCE REIMB. - A. RAMIC Engineering Enterpris Search Name RAMIC, ALMIN Search Name RUPP, ANDERSON, SQUIRES & WALD E 01-4220-120-20 APR 2014 LEGAL SERVICES Police Search Name RUPP, ANDERSON, SQUIRES & WALD Search Name SAFE -FAST, INC. E 01-4305-050-50 SAFETY SUPPLIES - STREETS Road & Bridges Search Name SAFE -FAST, INC. Search Name SAIDE, IZ & CHERYL E 78-4460-774-00 HUNTER/ORCHARD PROJECT REPAIRS Spec Fds Search Name SAIDE, IZ & CHERYL $114.41 $132.00 $132.00 $572.16 $572.16 $274.95 $274.95 $1,063.00 $1,063.00 Search Name SAM S CLUB E 01-4490-020-20 RE i IREMENT EVENT SUPPLIES - PD Police $191.43 E 45-4300-045-45 OFFICE SUPPLIES - PAR3 Golf Course $7.76 E 01-4435-200-70 BIKE RODEO SUPPLIES Parks & Recreation $75.33 E 01-4435-200-70 PLAYGROUND PROGRAMS SUPPLIES Parks & Recreation $281.21 E 01-4435-200-70 PLAYGROUND PROGRAMS SUPPLIES Parks & Recreation $80.11 E 45-4310-205-45 BEVERAGES - PAR3 Golf Course $41.57 E 45-4310-205-45 BEVERAGES - PAR3 Golf Course $41.57 E 45-4310-210-45 CONCESSIONS - PAR3 Golf Course $39.67 E 45-4300-045-45 OFFICE SUPPLIES - PAR3 Golf Course $100.83 E 45-4310-210-45 CONCESSIONS - PAR3 Golf Course $172.23 E 01-4490-020-20 RE i IREMENT EVENT SUPPLIES - PD Police $145.28 Search Name SAM S CLUB $1,176.99 Search Name SELECT ACCOUNT E 01-4220-020-20 JUNE 2014 HSA PARTICIPANT FEE Police $14.44 E 15-4220-060-60 JUNE 2014 HSA PARTICIPANT FEE Utility Enterprise $2.11 E 05-4220-105-15 JUNE 2014 HSA PARTICIPANT FEE Engineering Enterpris $5.42 E 01-4220-110-10 JUNE 2014 HSA PARTICIPANT FEE Administration $12.04 E 01-4220-070-70 JUNE 2014 HSA PARTICIPANT FEE Parks & Recreation $1.20 E 01-4220-080-80 JUNE 2014 HSA PARTICIPANT FEE Planning $2.11 Search Name SELECT ACCOUNT $37.32 Search Name SOUTH ST. PAUL UMPIRES ASSN E 01-4435-200-70 MAY 2014 UMPIRE SERVICES Parks & Recreation $1,344.00 Search Name SOUTH ST. PAUL UMPIRES ASSN $1,344.00 Search Name SOUTHVIEW GARDEN CENTER E 01-4330-215-70 TREES & SHRUBS - PARKS Parks & Recreation $439.97 E 01-4330-215-70 PLANTS - PARKS Parks & Recreation $198.42 Search Name SOUTHVIEW GARDEN CENTER $63839 CITY OF MENDOTA HEIGHTS Claims List SYSTEM CHECKS 06/17/14 PAY page 52 06/12/14 10:12 AM Page 7 Account Comments DEPT Descr Amount Search Name SUMMIT FIRE PROTECTION E 45-4335-045-45 ANNUAL FIRE SPRINKLER INSP. - PAR3 Golf Course Search Name SUMMIT FIRE PROTEL 1 ION Search Name TESSMAN CO E 01-4330-215-70 CHALK - BALL FIELDS Parks & Recreation Search Name TESSMAN CO Search Name TWIN CITY REFUSE & RECYCLING E 01-4220-085-85 CLEAN-UP DAY DISPOSAL Recycling Search Name TWIN CITY REFUSE & RECYCLING Search Name VERIZON WIRELESS E 01-4210-030-30 MAY -JUNE 2014 CELL SERVICE - FIRE DEPT Fire Search Name VERIZON WIRELESS Search Name VERSATILE VEHICLES E 45-4200-610-45 JUNE 2014 LEASE - GOLF CARTS Golf Course Search Name VERSATILE VEHICLES Search Name WASTE MANAGEMENT E 01-4280-310-50 E 01-4280-310-70 E 15-4280-310-60 E 08-4280-000-00 MAY 2014 SERVICE - PW GARAGE MAY 2014 SERVICE - PW GARAGE MAY 2014 SERVICE - PW GARAGE MAY 2014 SERVICE - CITY HALL Road & Bridges Parks & Recreation Utility Enterprise Spec Fds $325.00 $325.00 $499.75 $499.75 $1,554.00 $1,554.00 $179.78 $179.78 $550.00 $550.00 $221.13 $221.13 $221.13 $183.77 Search Name WASTE MANAGEMENT $847.16 Search Name WIRTZ BEVERAGE MINNESOTA E 45-4310-205-45 BEVERAGES - PAR3 Golf Course $127.80 Search Name WIRTZ BEVERAGE MINNESOTA $127.80 Search Name WYCO INC E 08-4335-000-00 BLDG EQUIPMENT REPAIRS - CITY HALL Spec Fds $264.39 Search Name WYCO INC $264.39 $61,109.69 page 53 5n. 2014 Licensing List for City Council Type Contractor Name Drywall Excavating General HVAC Landscape Masonry Sign Prestige Drywall, Inc Turner Bros. Inc FrameTech, Inc Meyers & Jackson Roofing Co., Inc RJM Construction Affordable Comfort Mechanical dba Apollo Heating Horwitz NS/I Legacy Companies, Inc RTS Mechanical South Mechanical Contractors Miller Trucking & Landscape Supply, Inc Gresser Companies, Inc Nelson Masonry & Concrete, Inc All Cities Sign, Inc dba Quality Sign Solutions Thursday, June 12, 2014 Page 1 of 1 page 54 1101 Victoria Curve 1 Mendota He 651.452.1850 phone 1 651.452.8940 fax www.rnendota-hei ghts.com aCITY OF 11111 MENDOTA HEIGHTS DATE: June 17, 2014 TO: Mayor, City Council and City Administrator FROM: Kristen Schabacker, Finance Director SUBJECT: 2013 Audit Presentation BACKGROUND Kern DeWenter, Viere, Ltd. has completed the audit for 2013. The reports for 2013 are the Annual Report & Basic Financial Statements and the Communications Letter. These reports are included in your packet. Please bring both reports to the meeting for reference during the presentation. Matt Mayer from KDV will be at tonight's meeting to review the Annual Audit Report for 2013. BUDGET IMPACT There is no budget impact. RECOMMENDATION Accept the review and ask any questions you may have. City of Mendota Heights Annual Report and Basic Financial Statements December 31, 2013 CITY OF MENDOTA HEIGHTS TABLE OF CONTENTS ELECTED OFFICIALS AND ADMINISTRATION 1 INDEPENDENT AUDITOR'S REPORT 2 MANAGEMENT'S DISCUSSION AND ANALYSIS 5 BASIC FINANCIAL STATEMENTS Government -Wide Financial Statements: Statement of Net Position 16 Statement of Activities 17 Fund Financial Statements: Balance Sheet — Governmental Funds 18 Reconciliation of the Balance Sheet to the Statement of Net Position — Governmental Funds 21 Statement of Revenues, Expenditures and Changes in Fund Balances — Governmental Funds 22 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances to the Statement of Activities — Governmental Funds 24 Statement of Revenues, Expenditures and Changes in Fund Balance — Budget and Actual — General Fund 25 Statement of Net Position — Proprietary Funds 26 Statement of Revenues, Expenses and Changes in Fund Net Position — Proprietary Funds 27 Statement of Cash Flows — Proprietary Funds 28 Notes to the Financial Statements 29 REQUIRED SUPPLEMENTARY INFORMATION Schedule of Funding Progress — Other Post Employment Benefits 56 SUPPLEMENTARY INFORMATION Combining Balance Sheet — Nonmajor Governmental Funds 58 Combining Statement of Revenues, Expenditures and Changes in Fund Balances — Nonmajor Governmental Funds 62 Combining Statement of Net Position — Internal Service Funds 65 Combining Statement of Revenues, Expenses and Changes in Net Position — Internal Service Funds 66 Combining Statement of Cash Flows — Internal Service Funds 67 Detailed Schedule of Revenues, Expenditures and Changes in Fund Balance — Budget and Actual — General Fund 68 REPORT ON LEGAL COMPLIANCE 71 CITY OF MENDOTA HEIGHTS ELECTED OFFICIALS AND ADMINISTRATION December 31, 2013 Elected Officials Position Term Expires Sandra Krebsbach Mayor December 31, 2014 Steve Norton Council Member December 31, 2016 Michael Povolny Council Member December 31, 2016 Ultan Duggan Council Member December 31, 2014 Liz Petschel Council Member December 31, 2014 Administration Justin Miller City Administrator Appointed Lorri Smith City Clerk Appointed Kristen Schabacker Finance Director Appointed 1 IDV Expert advice. When you need it.57' INDEPENDENT AUDITOR'S REPORT Honorable Mayor and Members of the City Council City of Mendota Heights Mendota Heights, Minnesota Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City of Mendota Heights, Minnesota, as of and for the year ended December 31, 2013, and the related Notes to the Financial Statements, which collectively comprise the City's basic financial statements as listed in the Table of Contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the City's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. 2 KDV Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City of Mendota Heights, Minnesota, as of December 31, 2013, and the respective changes in financial position and, where applicable, cash flows thereof and the budgetary comparison for the General Fund for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Management's Discussion and Analysis, which follows this report letter, and the Schedule of Funding Progress — Other Post Employment Benefits as listed in the Table of Contents be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board (GASB) who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of Mendota Heights' basic financial statements. The accompanying supplementary information identified in the Table of Contents is presented for purposes of additional analysis and is not a required part of the basic financial statements. The accompanying supplementary information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, accompanying supplementary information is fairly stated, in all material respects, in relation to the basic financial statements as a whole. KERN, DEWENTER, VIERE, LTD. Minneapolis, Minnesota June 9, 2014 3 (THIS PAGE LEFT BLANK INTENTIONALLY) 4 CITY OF MENDOTA HEIGHTS MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2013 As management of the City of Mendota Heights, Minnesota (the "City"), we offer readers of the City's financial statements this narrative overview and analysis of the financial activities of the City for the year ended December 31, 2013. FINANCIAL AND DEVELOPMENT HIGHLIGHTS The assets of the City exceeded liabilities at the close of the most recent year by $ 53,392,680 (net position). Of this amount, $ 9,164,110 (unrestricted net position) may be used to meet the City's ongoing obligations to citizens and creditors. The City's total net position increased by $ 134,642. Governmental activities resulted in a decrease of net position of $ 174,518. Business activities had net position increase of $ 309,160. As of the close of the current year, the City's governmental funds reported a combined ending fund balance of $ 11,426,579, an increase of $ 20,554 from the prior year. At the end of the year the General Fund had an unassigned fund balance of $ 5,268,225, or 74.78% of total General Fund expenditures. OVERVIEW OF THE FINANCIAL STATEMENTS The discussion and analysis are intended to serve as an introduction to the City's basic financial statements. The City's basic financial statements comprise three components: 1) government -wide financial statements, 2) fund financial statements, and 3) Notes to the Financial Statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Government -Wide Financial Statements The government -wide financial statements are designed to provide readers with a broad overview of the City's finances, in a manner similar to a private -sector business. The Statement of Net Position presents information on all of the City's assets and liabilities, with the difference between the two reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. The Statement of Activities presents information showing how the City's net position changed during the most recent year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future periods (e.g. uncollected taxes and earned but unused vacation leave). Both of the government -wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) and from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business -type activities). The governmental activities of the City include general government, public safety and public works. The business -type activities of the City include sewer, storm water and the Par 3 golf course. The government -wide financial statements can be found on pages 16 and 17 of this report. 5 CITY OF MENDOTA HEIGHTS MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2013 OVERVIEW OF THE FINANCIAL STATEMENTS Fund Financial Statements A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance -related legal requirements. All of the funds of the City can be divided into two categories: governmental funds and proprietary funds. Governmental Funds Governmental funds are used to account for essentially the same functions reported as governmental activities in the government -wide financial statements. However, unlike the government -wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resource, as well as on balances of spendable resources available at the end of the year. Such information may be useful in evaluating a government's near-term financial requirements. Because the focus of governmental funds is narrower than that of the government -wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government -wide financial statement. By doing so, readers may better understand the long-term impact of the City's near-term financial decisions. Both the Governmental Fund Balance Sheet and Governmental Fund Statement of Revenues, Expenditures and Changes in Fund Balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The City maintains four individual major governmental funds. Information is presented separately in the Governmental Fund Balance Sheet and in the Governmental Fund Statement of Revenues, Expenditures and Changes in Fund Balances for the following major funds: General Fund Special Assessments Debt Service Fund Street Capital Projects Fund Special Assessment Capital Project Data from the other governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements elsewhere in this report. The City adopts an annual appropriated budget for its General Fund. A budgetary comparison statement has been provided for those funds to demonstrate compliance with this budget. The basic governmental fund financial statements can be found on pages 18 through 25 of this report. 6 CITY OF MENDOTA HEIGHTS MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2013 OVERVIEW OF THE FINANCIAL STATEMENTS Proprietary Funds The City maintains three enterprise funds and three internal service funds as a part of its proprietary fund type. Enterprise funds are used to report the same functions presented as business -type activities in the government -wide financial statements. The City uses enterprise funds to account for its sewer, storm water operations and Par 3 golf course. Proprietary funds provide the same type of information as the government -wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for the following funds: Enterprise funds: Sewer Utility Fund Storm Water Utility Fund Par 3 Golf Course Internal service funds are an accounting device used to accumulate and allocate costs internally among the City's various functions. The City uses internal service funds to account for compensated absences, city hall and engineering functions. The internal service funds are combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data for the internal service funds is provided in the form of combining statements elsewhere in this report. The basic proprietary fund financial statements can be found on pages 26 through 28 of this report. Notes to the Financial Statements The Notes provide additional information that is essential to a full understanding of the data provided in the government -wide and fund financial statements. The Notes to the Financial Statements can be found on 29 through 53 of this report. Other Information The combining statements referred to earlier in connection with non -major governmental funds are presented immediately following the required supplementary information on budgetary comparisons. Combining and individual fund statements and schedules can be found on pages 58 through 70 of this report. GOVERNMENT -WIDE FINANCIAL ANALYSIS As noted earlier, net position may serve over time as a useful indicator of a government's financial position. In the case of the City, assets exceeded liabilities by $ 53,392,680 at the close of the most recent year. 7 CITY OF MENDOTA HEIGHTS MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2013 GOVERNMENT -WIDE FINANCIAL ANALYSIS The largest portion of the City's net position ($ 38,866,687 or 72.79 %) reflects its investment in capital assets (e.g. land, buildings, machinery and equipment, sewer main lines and storm sewers and infrastructure) less any related debt used to acquire those assets that is still outstanding. The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City's investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. ASSETS Current and Other Assets Capital Assets Total Assets LIABILITIES Long -Term Liabilities Outstanding Other Liabilities Total Liabilities NET POSITION Net Investment in Capital Assets Restricted Unrestricted Total Net Position Net Position City of Mendota Heights, Minnesota's Net Position Governmental Activities 2013 2012 Business -Type Activities Totals 2013 2012 2013 2012 $15,535,559 $15,507,155 $ 870,137 $ 1,310,760 $16,405,696 $16,817,915 38,314,960 37,461,794 15,522,224 14,656,571 53,837,184 52,118,365 $53,850,519 $52,968,949 $16,392,361 $15,967,331 $70,242,880 $68,936,280 $14,518,762 $13,499,459 $ 16,184 $ 19,723 $14,534,946 $13,519,182 2,091,027 2,054,242 224,227 104,818 2,315,254 2,159,060 $16,609,789 $15,553,701 $ 240,411 $ 124,541 $16,850,200 $15,678,242 $25,880,463 $26,309,852 $15,522,224 $14,656,571 $38,866,687 $38,174,373 5,361,883 5,134,292 5,361,883 5,134,292 5,998,384 5,971,104 629,726 1,186,219 9,164,110 9,949,373 $37,240,730 $37,415,248 $16,151,950 $15,842,790 $53,392,680 $53,258,038 A portion of the of the City's net position ($ 5,361,883) represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net position ($ 9,164,110) may be used to meet the City's ongoing obligations to citizens and creditors. At the end of the current year, the City is able to report positive balances in all three categories of net position, both for the government as a whole, as well as for its separate governmental and business -type activities. 8 CITY OF MENDOTA HEIGHTS MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2013 GOVERNMENT -WIDE FINANCIAL ANALYSIS Governmental Activities Governmental activities decreased the City's net position by $ 174,518. Key elements of this decrease are as follows: City's Changes in Net Position Governmental Activities Business -Type Activities Totals 2013 2012 2013 2012 2013 2012 Revenues Program Revenues: Charges for Services $ 1,490,214 $ 1,524,576 $ 2,112,653 $ 1,948,253 $ 3,602,867 $ 3,472,829 Operating Grants and Contributions 394,472 345,286 394,472 345,286 Capital Grants and Contributions 1,284,666 1,800,106 1,284,666 1,800,106 General Revenues: Taxes 6,294,203 6,126,869 6,294,203 6,126,869 Unrestricted Investment Earnings (161,043) 77,966 (781) 15,584 (161,824) 93,550 Other General Revenue - 5,620 5,620 Total Revenues 9,302,512 9,874,803 2,111,872 1,969,457 11,414,384 11,844,260 Expenses General Government 1,668,256 1,822,388 1,668,256 1,822,388 Public Safety 3,585,401 3,544,198 3,585,401 3,544,198 Public Works 3,711,049 2,966,498 3,711,049 2,966,498 Interest on Long -Term Debt 481,223 466,438 481,223 466,438 Sewer - 1,529,684 1,499,556 1,529,684 1,499,556 Storm Water - 156,860 175,413 156,860 175,413 Par 3 Golf Course - 147,269 161,532 147,269 161,532 Total Expenses 9,445,929 8,799,522 1,833,813 1,836,501 11,279,742 10,636,023 Increase (Decrease) in Net Position before Transfers (143,417) 1,075,281 278,059 132,956 134,642 1,208,237 Transfers (31,101) 183,942 31,101 (183,942) Increase (Decrease) in Net Position (174,518) 1,259,223 309,160 (50,986) 134,642 1,208,237 Net Position - Beginning 37,415,248 36,250,168 15,842,790 15,893,776 53,258,038 52,143,944 Change in Accounting Principle (94,143) (94,143) Net Position - Beginning, Restated 37,415,248 36,156,025 15,842,790 15,893,776 53,258,038 52,049,801 Net Position - Ending $ 37,240,730 $ 37,415,248 $ 16,151,950 $ 15,842,790 $ 53,392,680 $ 53,352,181 9 CITY OF MENDOTA HEIGHTS MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2013 GOVERNMENT -WIDE FINANCIAL ANALYSIS Below are specific graphs which provide comparisons of the governmental activities revenues and expenditures: Taxes_ 68% Public Works 39% Governmental Activities - Revenues Unrestricted Investment Charges for Services Earnings 16% -2% Operating Grants and Contributions 4% Capital Grants and Contributions 14% Governmental Activities - Expenditures Interest and Fees on Long -Term Debt 5% General Government 18% Public Safety 38% 10 CITY OF MENDOTA HEIGHTS MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2013 GOVERNMENT -WIDE FINANCIAL ANALYSIS Business -Type Activities Business -type activities increased net position by $ 309,160. Below are graphs showing the business - type activities revenue and expense comparisons: Business -Type Activities - Revenues Storm Water 9% Other General Revenue Less than 1% Charges for Services 100% Business -Type Activities - Expenses Par 3 Golf Course 8% Sewer 83% 11 CITY OF MENDOTA HEIGHTS MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2013 FINANCIAL ANALYSIS OF THE GOVERNMENT'S FUNDS Governmental Funds The focus of the City's governmental funds is to provide information on near-term inflows, outflows and balances of spendable resources. Such information is useful in assessing the City's financing requirements. In particular, unassigned fund balance may serve as a useful measure of a government's net resources available for spending at the end of the year. At the end of the current year, the City's governmental funds reported combined ending fund balances of $ 11,426,579. Nonspendable fund balances are already allocated for prepaid items ($ 745,016) and inventory ($ 39,836). Approximately 24.70% ($ 2,822,001) constitutes restricted fund balance. Restricted fund balance would include debt service, special park and street light district funds, all of which have specific uses for the funds they receive. The City also has a committed fund balance of $ 519,842. This represents fund balance that is to be used for the water system and civil defense needs. The City has assigned fund balance of $ 2,421,207 (21.19%). This number represents the fund balances for the capital projects that the City has ongoing and an amount allocated for insurance reserves. The remaining category of fund balance is the unassigned fund balance. The City has $ 4,878,677 of unassigned fund balance which is approximately 42.70% of the combined governmental fund balance at December 31, 2013. The General Fund decreased by $ 117,469 in 2013. Revenues were greater than anticipated and expenditures were greater than budgeted amounts. The increased expenditures was due in large part to a capital purchase of a front end loader for the streets department. The Special Assessments Debt Service Fund increased by $ 256,822 in 2013. This fund accounted for debt service payments for prior street improvement projects that were financed through the issuance of bonds. The Street Capital Project Fund decreased by $ 23,031. This fund accounted for the costs and resources with the Hunter/Orchard and Crown Point/Overlook street projects. The Special Assessment Capital Project Fund decreased by $ 330,995. This Fund accounted for the costs associated with the Highway 110 and Dodd Road Safety Improvements project. The nonmajor governmental funds increased by $ 235,227. These funds received revenues from water surcharges and cell tower rent. Nonmajor funds account for the Special Park, Civil Defense, and Street Light District activity. The City also has nonmajor funds for future purchases of equipment, facility needs and minor infrastructure projects. Proprietary Funds The City's proprietary funds provide the same type of information found in the government -wide financial statements, but in more detail. The unrestricted net position in the respective proprietary funds are sewer $ 401,658, storm water $ 200,498 and $ 27,570 for the Par 3 golf course. The Sewer Utility Fund had an decrease in net position in 2013 of $ 87,970, the Storm Water Utility Fund had an increase in net position in 2013 of $ 400,804 and the Par 3 Golf Course Fund had a decrease in net position of $ 3,674. 12 CITY OF MENDOTA HEIGHTS MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2013 BUDGETARY HIGHLIGHTS General Fund The General Fund budget was not amended during 2013. During the year, revenues were more than budgetary estimates by $ 216,046, and expenditures were more than budgetary estimates by $ 308,603. The General Fund had higher than budgeted revenues for most categories. The City received higher than anticipated revenues for licenses and fees due to increased building activity. The City recorded negative investment earnings for 2013. This is due to the adjustment of investments to market value as of December 31, 2013. Other miscellaneous revenue was also greater than budgeted. The net public safety and administration functions both had expenditures under budgeted amounts. The public works function expenditures were greater than budgeted. The administration function was under budget due to staffing turnover that occurred in 2013. The public safety function had labor costs that were slightly greater than budgeted, but had contracted services expenditures that were under budgeted amounts. In total the public safety function was under budget. The public works function was over budgeted amounts. The major factor in this was the purchase of a front end loader for the street department. This purchase was not budgeted and was paid for using fund balance. The street department experienced increased costs for labor, equipment repair and street salt this winter. The parks department budget also saw increased labor costs in 2013. In total, the expenditures for the General Fund were $ 308,603 over budgeted amounts. CAPITAL ASSET AND DEBT ADMINISTRATION Capital Assets The City's investment in capital assets for its governmental and business type activities as of December 31, 2013, amounts to $ 53,837,184 (net of accumulated depreciation). This investment in capital assets includes land, buildings, machinery and equipment, sewer main lines and storm sewers and infrastructure. Land Construction in Progress Buildings and Structures Machinery and Equipment Other Improvements Sewer Main Lines and Storm Sewers Infrastructure Total Capital Assets Capital Assets (Net of Depreciation) Governmental Activities Business -Type Activities Totals 2013 2012 2013 2012 $ 6,150,895 $ 6,123,406 $ 2,531,475 $ 2,531,475 3,217,672 3,335,826 605,634 - 2,672,900 2,833,785 162,784 169,821 2,018,441 1,773,637 102,825 56,941 657,635 738,494 23,597,417 22,656,646 2013 2012 $ 8,682,370 3,823,306 2,835,684 2,121,266 657,635 12,119,506 11, 898,334 12,119,506 23,597,417 $ 8,654,881 3,335,826 3,003,606 1,830,578 738,494 11,898,334 22,656,646 $ 38,314,960 $ 37,461,794 $ 15,522,224 $ 14,656,571 $ 53,837,184 $ 52,118,365 Additional information on the City's capital assets can be found in Note 5. 13 CITY OF MENDOTA HEIGHTS MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2013 CAPITAL ASSET AND DEBT ADMINISTRATION Long -Term Debt At the end of the current year, the City had total long-term debt outstanding of $ 14,895,000, an increase of $ 975,000 from 2012. $ 14,895,000 is for general obligation (G.O.) improvement debt which is supported in part by special assessments. Outstanding Debt G.O. improvement bonds, G.O. bonds and revenue bonds: G.O. Improvement Bonds G.O. Bonds Governmental Activities 2013 2012 $ 12,295,000 2,600,000 $ 11,085,000 2,835,000 Total $ 14,895,000 $ 13,920,000 The City maintains an AAA rating from Standard & Poor's. Minnesota Statutes limit the amount of G.O. debt a Minnesota city may issue to 2% of total estimated market value. The current debt limitation for the City is $ 33,129,159. Of the City's outstanding debt, $ 2,600,000 is counted within the statutory limitation. Additional information on the City's long-term debt can be found in Note 6. Economic Factors and Next Year's Budgets and Rates In 2014, the taxable market value for the City was $ 1,656,457,934. This represents an increase of 2.92 % from 2013. The City is expecting an increase in taxable market value for 2015. These factors were considered in preparing the City's budget for 2014. Requests for Information This financial report is designed to provide a general overview of the City's finances for all those with an interest in the government's finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Director of Finance, 1101 Victoria Curve, Mendota Heights, Minnesota 55118. 14 BASIC FINANCIAL STATEMENTS 15 CITY OF MENDOTA HEIGHTS STATEMENT OF NET POSITION December 31, 2013 Governmental Business -Type Activities Activities Total ASSETS Cash and Investments (Including Cash Equivalents) $ 11,452,760 $ 220,614 $ 11,673,374 Property Tax Receivable 81,657 81,657 Accounts Receivable 22,822 487,414 510,236 Interest Receivable 9,266 585 9,851 Due from Other Governments 358,040 2,500 360,540 Special Assessments Receivable: Delinquent 10,996 8,539 19,535 Unearned 2,744,771 51,664 2,796,435 Inventories 39,836 - 39,836 Prepaid Items 765,411 98,821 864,232 Land Held for Resale 50,000 - 50,000 Capital Assets (Net of Accumulated Depreciation): Land and Improvements 6,150,895 2,531,475 8,682,370 Construction in Progress 3,217,672 605,634 3,823,306 Capital Assets being Depreciated: Infrastructure 23,597,417 12,119,506 35,716,923 Buildings and Structures 2,672,900 162,784 2,835,684 Other Improvements 657,635 657,635 Machinery and Equipment 2,018,441 102,825 2,121,266 Total Assets $ 53,850,519 $ 16,392,361 $ 70,242,880 LIABILITIES AND NET POSITION Liabilities Accounts Payable $ 376,732 $ 159,275 $ 536,007 Due to Other Governments 181,097 38,767 219,864 Salaries and Benefits Payable 186,428 7,720 194,148 Interest Payable 179,227 - 179,227 Developers' Escrow Deposits 7,432 - 7,432 Bond Principal Payable: Payable Within One Year 835,000 - 835,000 Payable After One Year 14,135,497 14,135,497 Compensated Absences Payable: Payable Within One Year 325,111 18,465 343,576 Payable After One Year 191,022 6,712 197,734 Other Post Employment Benefits (OPEB) Payable 192,243 9,472 201,715 Total Liabilities 16,609,789 240,411 16,850,200 Net Position Net Investment in Capital Assets 25,880,463 15,522,224 38,866,687 Restricted for: Debt Service 5,193,100 5,193,100 Street Light Maintenance 36,885 - 36,885 Park Dedication 131,898 - 131,898 Unrestricted 5,998,384 629,726 9,164,110 Total Net Position 37,240,730 16,151,950 53,392,680 Total Liabilities and Net Position $ 53,850,519 $ 16,392,361 $ 70,242,880 The Notes to the Financial Statements are an integral part of this statement. 16 Functions/Programs Governmental Activities General Government Public Safety Public Works Interest on Long -Term Debt Total Governmental Activities Business -Type Activities Sewer Storm Water Par 3 Golf Course Total Business -Type Activities Total Governmental and Business -Type Activities Expenses $ 1,668,256 3,585,401 3,711,049 481,223 CITY OF MENDOTA HEIGHTS STATEMENT OF ACTIVITIES For the Year Ended December 31, 2013 Program Revenues Charges for Services $ 221,571 581,921 686,722 9,445,929 1,490,214 1,529,684 156,860 147,269 1,567,303 401,428 143,922 1,833,813 2,112,653 $ 11,279,742 $ 3,602,867 General Revenues Property Taxes Unrestricted Investment Earnings Total General Revenues Transfers Change in Net Position Net Position - Beginning Net Position - Ending i The Notes to the Financial Statements are an integral part of this statement. Operating Grants and Contributions $ 26,293 236,048 132,131 394,472 $ 394,472 Capital Grants and Contributions $ 37,500 1,247,166 1,284,666 $ 1,284,666 Net (Expense) Revenues and Changes in Net Position Governmental Activities Business -Type Activities $ (1,382,892) $ (2,767,432) (1,645,030) (481,223) (6,276,577) (6,276,577) 6,294,203 (161,043) 6,133,160 (31,101) (174,518) 37,415,248 37,619 244,568 (3,347) 278,840 278,840 (781) (781) 31,101 309,160 15,842,790 $ 37,240,730 $ 16,151,950 Total $ (1,382,892) (2,767,432) (1,645,030) (481,223) (6,276,577) 37,619 244,568 (3,347) 278,840 (5,997,737) 6,294,203 (161,824) 6,132,379 134,642 53,258,038 $ 53,392,680 CITY OF MENDOTA HEIGHTS BALANCE SHEET - GOVERNMENTAL FUNDS December 31, 2013 ASSETS Cash and Investments (Including Cash Equivalents) Taxes Receivable - Delinquent Special Assessments Receivable: Delinquent Deferred Accounts Receivable Interest Receivable Due from Other Funds Due from Other Governments Inventories Prepaid Items Land Held for Resale Total Assets LIABILITIES Liabilities Accounts and Contracts Payable Due to Other Funds Due to Other Governments Salaries and Benefits Payable Developers' Escrow Deposits Total Liabilities DEFERRED INFLOWS OF RESOURCES Unavailable Revenue - Property Taxes Unavailable Revenue - Special Assessments Total Deferred Inflows of Resources FUND BALANCES Nonspendable Restricted Committed Assigned Unassigned Total Fund Balances Total Liabilities, Deferred Inflows of Resources and Fund Blanaces General Fund $ 5,687,566 68,711 109 11,582 4,056 183,983 39,836 744,362 $ 6,740,205 $ 204,220 10,967 167,581 7,432 390,200 68,711 109 68,820 784,198 228,762 5,268,225 6,281,185 $ 6,740,205 Special Assessments Street Capital Debt Service Projects $ 2,240,673 7,141 10,578 2,696,591 2,080 7,965 $ 481,239 29,413 886 109,172 $ 4,965,028 $ 620,710 $ $ 116,241 7,141 2,707,169 2,714,310 2,250,718 2,250,718 116,241 29,413 29,413 475,056 475,056 $ 4,965,028 $ 620,710 The Notes to the Financial Statements are an integral part of this statement. 18 Special Other Total Assessment Governmental Governmental Capital Project Funds Funds $ - $ 2,515,590 $ 10,925,068 5,805 81,657 - 309 10,996 18,767 - 2,744,771 11,240 - 22,822 74 2,023 9,119 - 239,157 239,157 51,391 5,529 358,040 - - 39,836 - 654 745,016 - 50,000 50,000 $ 81,472 $ 2,819,067 $ 15,226,482 $ 43,096 $ 3,785 $ 367,342 239,157 - 239,157 170,000 - 180,967 167,581 7,432 452,253 3,785 962,479 18,767 5,805 81,657 309 2,755,767 18,767 6,114 2,837,424 (389,548) 654 784,852 571,283 2,822,001 519,842 519,842 1,717,389 2,421,207 - 4,878,677 (389,548) 2,809,168 11,426,579 $ 81,472 $ 2,819,067 $ 15,226,482 19 (THIS PAGE LEFT BLANK INTENTIONALLY) 20 CITY OF MENDOTA HEIGHTS RECONCILIATION OF THE BALANCE SHEET TO THE STATEMENT OF NET POSITION - GOVERNMENTAL FUNDS December 31, 2013 Total Fund Balances - Governmental Funds $ 11,426,579 Amounts reported for governmental activities in the Statement of Net Position are different because: Capital assets used in governmental activities are not current financial resources and, therefore, are not reported as assets in governmental funds. Cost of Capital Assets 59,801,516 Less Accumulated Depreciation (21,931,205) Long-term liabilities, including bonds payable, are not due and payable in the current period and, therefore, are not reported as liabilities in the funds. Long-term liabilities at year-end consist of: General Obligation (G.O.) Bond Principal Payable (14,895,000) Unamortized Bond Premium (75,497) OPEB Payable (168,159) Delinquent receivables will be collected in subsequent years, but are not available soon enough to pay for the current period's expenditures and, therefore, are deferred in the funds. Property Taxes Special Assessments 81,657 10,996 Revenues in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds. Deferred Special Assessments 2,744,771 Governmental funds do not report a liability for accrued interest until due and payable. (179,227) Internal service funds are used by management to charge the cost of engineering, compensated absences and City Hall expenses to individual funds. The net position of the funds are considered governmental and included in the government -wide Statement of Net Position. 424,299 Total Net Position - Governmental Activities $ 37,240,730 The Notes to the Financial Statements are an integral part of this statement. 21 CITY OF MENDOTA HEIGHTS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS For the Year Ended December 31, 2013 REVENUES Property Taxes Special Assessments Licenses and Permits Intergovernmental Charges for Services Fines and Forfeitures Miscellaneous: Investment Income Other Total Revenues EXPENDITURES Current General Government Public Safety Public Works Debt Service Principal Interest and Other Charges Capital Outlay General Government Public Safety Public Works Total Expenditures Excess of Revenues Over (Under) Expenditures OTHER FINANCING SOURCES (USES) Issuance of Debt Bond Premium Transfers In Transfers Out Total Other Financing Sources (Uses) Net Change in Fund Balances FUND BALANCES Beginning of Year End of Year General Fund $ 5,400,233 708 388,883 391,052 543,434 70,077 (74,896) 102,698 6,822,189 1,193,983 3,505,480 1,935,189 6,049 30,613 373,844 7,045,158 (222,969) 115,750 (10,250) 105,500 (117,469) 6,398,654 $ 6,281,185 Special Assessments Street Capital Debt Service Projects $ 515,922 $ 552,774 360,300 109,172 27,140 115 (38,365) (16,346) 1,057,471 510,000 378,976 453,241 2,302,026 888,976 2,302,026 168,495 (1,848,785) 1,685,000 52,980 - 2,151,997 (1,649,653) (326,243) 88,327 256,822 1,993,896 1,825,754 (23,031) 498,087 $ 2,250,718 $ 475,056 The Notes to the Financial Statements are an integral part of this statement. 22 Special Other Total Assessment Governmental Governmental Capital Project Funds Funds $ $ 423,169 $ 6,339,324 5,209 2,206 921,197 - 388,883 153,423 37,500 691,147 252,194 795,628 207 97,539 (1,363) (37,364) (168,334) 145,079 247,777 157,269 822,991 9,313,161 336 97,153 1,291,472 3,505,480 43,010 1,978,199 200,000 710,000 97,985 476,961 6,049 30,613 601,831 124,353 3,402,054 602,167 562,501 11,400,828 (444,898) 260,490 (2,087,667) 1,685,000 52,980 113,903 422,590 2,804,240 (447,853) (2,433,999) 113,903 (25,263) 2,108,221 (330,995) 235,227 20,554 (58,553) 2,573,941 11,406,025 $ (389,548) $ 2,809,168 $ 11,426,579 23 CITY OF MENDOTA HEIGHTS RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES - GOVERNMENTAL FUNDS For the Year Ended December 31, 2013 Net Change in Fund Balances - Governmental Funds $ 20,554 Amounts reported for governmental activities in the Statement of Activities are different because: Capital outlays are reported in governmental funds as expenditures. However, in the Statement of Activities, the cost of those assets is allocated over the estimated useful lives as depreciation expense. Capital Outlays 3,070,950 Depreciation Expense (1,764,572) Loss on Sale of Disposed Assets (33,724) Assets Contributed to Enterprise Funds (393,142) OPEB are not reported as expenditures in the governmental funds because they do not require the use of current financial resources; instead, they are expensed in the Statement of Activities. Principal payments on long-term debt are recognized as expenditures in the governmental funds but have no effect on net position in the Statement of Activities. (42,529) 710,000 Premiums on the issuance of long-term debt provide current financial resources to governmental funds and have no effect on net position. These amounts are reported in the governmental funds as an other financing source and constitute long-term liabilities in the Statement of Net Position. (52,980) Premiums are recognized when debt is issued in the governmental funds but amortized over the life of the debt in the Statement of Activities. 1,475 Interest on long-term debt in the Statement of Activities differs from the amount reported in the governmental funds because interest is recognized as an expenditure in the funds when it is due and thus requires use of current financial resources. In the Statement of Activities, however, interest expense is recognized as the interest accrues, regardless of when it is due. Proceeds from long-term debt are recognized as an other financing source in the governmental funds but have no effect on net position in the Statement of Activities. Bonds Payable Revenues in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds. Activities of the internal service funds are presented separately from the governmental funds. However, the functions, from a government -wide perspective, are governmental. (5,737) (1,685,000) (17,940) 18,127 Change in Net Position - Governmental Activities $ (174,518) The Notes to the Financial Statements are an integral part of this statement. 24 CITY OF MENDOTA HEIGHTS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL - GENERAL FUND For the Year Ended December 31, 2013 REVENUES Property Taxes Special Assessments Licenses and Permits Intergovernmental Charges for Services Fines and Forfeitures Miscellaneous Revenues: Investment Income Other Total Revenues EXPENDITURES Current General Government Public Safety Public Works Capital Outlay General Government Public Safety Public Works Total Expenditures Budgeted Amounts Original and Final $ 5,399,402 208,600 345,070 533,791 79,000 35,280 5,000 6,606,143 1,268,426 3,540,956 1,830,123 9,550 17,000 70,500 Actual Amounts $ 5,400,233 708 388,883 391,052 543,434 70,077 (74,896) 102,698 6,822,189 1,193,983 3,505,480 1,935,189 6,049 30,613 373,844 6,736,555 7,045,158 Excess of Revenues Over Expenditures (130,412) (222,969) OTHER FINANCING SOURCES (USES) Transfers In 119,500 115,750 Transfers Out (10,250) Total Other Financing Sources (Uses) 119,500 105,500 Net Change in Fund Balance FUND BALANCE Beginning of Year End of Year $ (10,912) (117,469) 6,398,654 $ 6,281,185 Variance with Final Budget - Over (Under) $ 831 708 180,283 45,982 9,643 (8,923) (110,176) 97,698 216,046 (74,443) (35,476) 105,066 (3,501) 13,613 303,344 308,603 (92,557) (3,750) (10,250) (14,000) $ (106,557) The Notes to the Financial Statements are an integral part of this statement. 25 CITY OF MENDOTA HEIGHTS STATEMENT OF NET POSITION - PROPRIETARY FUNDS December 31, 2013 ASSETS Current Assets Cash and Investments Special Assessment Receivable: Delinquent Deferred Accounts Receivable Interest Receivable Due from Other Funds Due from Other Governments Prepaid Expenses Total Current Assets Noncurrent Assets Capital Assets: Land Construction In Progress Buildings Sewer Main Lines and Storm Sewers Improvements Other than Buildings Machinery and Equipment Total Capital Assets Less Accumulated Depreciation Net Capital Assets Total Noncurrent Assets Total Assets LIABILITIES AND NET POSITION Current Liabilities Accounts and Contracts Payable Salaries and Benefits Payable Due to Other Funds Due to Other Governments Noncurrent Liabilities Due Within One Year Total Current Liabilities Noncurrent Liabilities Compensated Absences OPEB Payable Less Amount Due Within One Year Total Noncurrent Liabilities Total Liabilities Net Position Net Investment in Capital Assets Unrestricted Total Net Position Storm Water Par 3 Golf Internal Sewer Utility Utility Course Total Service Funds $ 82,373 $ 110,061 $ 28,180 $ 220,614 $ 527,692 8,539 51,664 485,728 430 2,500 95,111 726,345 605,634 13,487,705 190,059 14,283,398 (4,357,031) 137 100,488 210,686 3,183,288 3,183,288 (290,526) 8,539 51,664 1,686 487,414 18 585 100,488 2,500 3,710 98,821 33,594 2,531,475 208,490 43,851 2,783,816 (80,721) 9,926,367 2,892,762 2,703,095 9,926,367 2,892,762 2,703,095 970,625 147 52,828 20,395 601,062 2,531,475 25,000 605,634 208,490 1,665,049 16,670,993 27,581 233,910 128,714 20,250,502 1,846,344 (4,728,278) (1,401,695) 15,522,224 444,649 15,522,224 444,649 $ 10,652,712 $ 3,103,448 $ 2,736,689 $ 16,492,849 $ 1,045,711 $ 149,266 5,963 100,488 37,020 18,465 311,202 25,177 6,773 (18,465) 13,485 324,687 $ 6,899 974 1,243 9,116 1,072 1,072 10,188 $ 3,110 $ 159,275 783 7,720 100,488 504 38,767 4,397 1,627 1,627 6,024 18,465 324,715 25,177 9,472 (18,465) 16,184 340,899 $ 9,390 18,847 52,828 130 325,111 406,306 516,133 24,084 (325,111) 215,106 621,412 9,926,367 2,892,762 2,703,095 15,522,224 444,649 401,658 200,498 27,570 629,726 (20,350) 10,328,025 3,093,260 2,730,665 16,151,950 424,299 Total Liabilities and Net Position $ 10,652,712 $ 3,103,448 $ 2,736,689 $ 16,492,849 $ 1,045,711 The Notes to the Financial Statements are an integral part of this statement. 26 OPERATING REVENUES Charges for Services CITY OF MENDOTA HEIGHTS STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION - PROPRIETARY FUNDS For the Year Ended December 31, 2013 Storm Water Par 3 Golf Internal Sewer Utility Utility Course Total Service $ 1,529,056 $ 400,812 $ 143,895 $ 2,073,763 $ 840,241 OPERATING EXPENSES Wages and Salaries 127,008 18,433 62,800 208,241 421,125 Employee Benefits 45,169 6,033 18,096 69,298 174,578 Materials and Supplies 18,029 - 3,597 21,626 7,063 Repairs and Maintenance 93,134 31,645 13,263 138,042 - Professional Services 30,559 47,348 11,049 88,956 7,199 Insurance 6,587 3,249 9,836 14,294 Utilities 30,919 9,406 40,325 43,035 Depreciation 153,406 31,833 12,736 197,975 63,331 Travel 110 125 235 1,195 Bad Debt Expense 13,248 - 13,248 - Equipment - - 233 Miscellaneous 20,308 21,568 12,948 54,824 89,152 Sewer Charges - MCES 991,207 - - 991,207 - Total Operating Expenses 1,529,684 156,860 147,269 1,833,813 821,205 Operating Income (Loss) (628) 243,952 (3,374) 239,950 19,036 NONOPERATING REVENUES (EXPENSES) Investment Income 2,073 (2,527) (327) (781) 7,291 Fines and Forfeitures 377 - 377 Special Assessments 26,031 66 - 26,097 Other Income 11,839 550 27 12,416 Total Nonoperating Revenues Change in Net Position before Capital Contributions and Transfers 40,320 (1,911) (300) 38,109 7,291 39,692 242,041 (3,674) 278,059 26,327 Capital Contributions - 393,142 - 393,142 Transfers In 25,000 - 25,000 Transfers Out (152,662) (234,379) - (387,041) (8,200) Change in Net Position (87,970) 400,804 (3,674) 309,160 18,127 NET POSITION Beginning of Year 10,415,995 2,692,456 2,734,339 15,842,790 406,172 End of Year $ 10,328,025 $ 3,093,260 $ 2,730,665 $ 16,151,950 $ 424,299 Net Changes in the Net Position Reported Above $ 309,160 Amounts Reported for Business -Type Activities in the Statement of Activities are Different because: Transfers In of Capital Assets from Governmental Activities Governmental Activities Contribution Revenue Reported Above 393,142 (393,142) Change in Net Position of Business -Type Activities $ 309,160 The Notes to the Financial Statements are an integral part of this statement. 27 CITY OF MENDOTA HEIGHTS STATEMENT OF CASH FLOWS - PROPRIETARY FUNDS For the Year Ended December 31, 2013 Storm Water Par 3 Golf Internal Sewer Utility Utility Course Total Service Funds CASH FLOWS - OPERATING ACTIVITIES Receipts from Customers and Users $ 1,484,652 $ 400,812 $ 142,265 $ 2,027,729 $ 840,241 Payments to Suppliers (1,092,616) (99,086) (50,813) (1,242,515) (160,668) Payments to Employees (173,403) (24,483) (80,124) (278,010) (559,449) Miscellaneous Revenue 44,316 1,561 27 45,904 Net Cash Flows - Operating Activities 262,949 278,804 11,355 553,108 120,124 CASH FLOWS - NONCAPITAL FINANCING ACTIVITIES Transfer from Other Funds 25,000 25,000 Transfer to Other Funds (152,662) (234,379) (387,041) (8,200) Due to Other Funds 31,793 31,793 (17,733) Due from Other Funds (31,793) (31,793) 17,733 Net Cash Flows - Noncapital Financing Activities (95,869) (266,172) (362,041) (8,200) CASH FLOWS - CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition of Capital Assets (670,487) (670,487) (36,985) CASH FLOWS - INVESTING ACTIVITIES Interest and Dividends Received 2,203 (2,226) (327) (350) 7,266 Net Change in Cash and Cash Equivalents (501,204) 10,406 11,028 (479,770) 82,205 CASH AND CASH EQUIVALENTS Beginning of Year 583,577 99,655 17,152 700,384 445,487 End of Year $ 82,373 $ 110,061 $ 28,180 $ 220,614 $ 527,692 RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH FLOWS - OPERATING ACTIVITIES Operating Income (Loss) $ (628) $ 243,952 $ (3,374) $ 239,950 $ 19,036 Adjustments to Reconcile Operating Income (Loss) to Net Cash Flows - Operating Activities: Miscellaneous Revenue 44,316 1,561 27 45,904 Depreciation Expense 153,406 31,833 12,736 197,975 63,331 Accounts Receivable (41,968) (1,630) (43,598) Due from Other Governments (2,436) (2,436) Prepaid Items (870) 308 5 (557) 1,162 Accounts and Contracts Payable 85,558 674 2,960 89,192 295 Due to Other Governmental Units 26,797 493 (141) 27,149 46 Salaries Payable 165 99 (266) (2) (1,178) OPEB Payable (428) (116) 1,038 494 6,356 Compensated Absences Payable (963) - - (963) 31,076 Total Adjustments 263,577 34,852 14,729 313,158 101,088 Net Cash Flows - Operating Activities $ 262,949 $ 278,804 $ 11,355 $ 553,108 $ 120,124 NONCASH INVESTING, CAPITAL AND FINANCING ACTIVITIES Contributions of Capital Assets 393,142 393,142 The Notes to the Financial Statements are an integral part of this statement. 28 CITY OF MENDOTA HEIGHTS NOTES TO THE FINANCIAL STATEMENTS December 31, 2013 NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Reporting Entity The City of Mendota Heights is a statutory city governed by an elected mayor and four council members. The accompanying financial statements present the government entities for which the government is considered to be financially accountable. The financial statements present the City and its component units. The City includes all funds, organizations, institutions, agencies, departments and offices that are not legally separate from such. Component units are legally separate organizations for which the elected officials of the City are financially accountable and are included within the basic financial statements of the City because of the significance of their operational or financial relationships with the City. The City is considered financially accountable for a component unit if it appoints a voting majority of the organization's governing body and it is able to impose its will on the organization by significantly influencing the programs, projects, activities or level of services performed or provided by the organization or there is a potential for the organization to provide specific financial benefits to or impose specific financial burdens on, the City. As a result of applying the component unit definition criteria above, the City has no component units. B. Government -Wide and Fund Financial Statements The government -wide financial statements (i.e., the Statement of Net Position and the Statement of Activities) report information on all of the nonfiduciary activities of the City. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business -type activities, which rely to a significant extent on fees and charges for support. The Statement of Activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Interest on general long-term debt is considered an indirect expense and is reported separately in the Statement of Activities. Program revenues include 1) charges to customers or applicants who purchase, use or directly benefit from goods, services or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. Internally dedicated revenues are reported as general revenues rather than program revenues. Separate financial statements are provided for governmental funds and proprietary funds. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. The Internal Service Funds are presented in the internal service fund financial statements. Because the principal user of internal services is the City's governmental activities, the financial statements of the Internal Service Fund is consolidated into the governmental column when presented in the government - wide financial statements. The cost of these services is reported in the appropriate functional activity. 29 CITY OF MENDOTA HEIGHTS NOTES TO THE FINANCIAL STATEMENTS December 31, 2013 NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES C. Measurement Focus, Basis of Accounting and Financial Statement Presentation The government -wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the City considers revenues to be available if they are collected within 60 days of the end of the current period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment matures. Property taxes, franchise taxes, licenses and interest associated with the current period are all considered to be susceptible to accrual and so have been recognized as revenues of the current period. Only the portion of special assessments receivable due within the current period is considered to be susceptible to accrual as revenue of the current period. All other revenue items are considered to be measurable and available only when cash is received by the City. Description of Funds: Major Governmental Funds: General Fund — This Fund is the general operating fund of the City. It is used to account for all financial resources except those required to be accounted for in another fund. Special Assessments Debt Service Fund — This Fund receives all special assessment payments and is dedicated for the repayment of debt incurred on a specific project. Street Capital Projects Fund — This Fund is used to account for the proceeds and disbursements of funds for street improvement expenditures. Special Assessment Capital Project Fund — This Fund is used to account for the proceeds and disbursements of funds for projects that are not included in the Street Capital Project Fund. 30 CITY OF MENDOTA HEIGHTS NOTES TO THE FINANCIAL STATEMENTS December 31, 2013 NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES C. Measurement Focus, Basis of Accounting and Financial Statement Presentation (Continued) Description of Funds: (Continued) Proprietary Funds: Sewer Utility Fund — This Fund is used to account for the City's sewer utility. Storm Water Utility Fund — This Fund is used to account for the City's storm water utility. Par 3 Golf Course Fund — This Fund is used to account for the City's operation of the Par 3 Golf Course. Additional Fund Types: Internal Service Funds — These Funds account for the financing of goods or services provided by one department to other departments of the City on a cost -reimbursement basis. The City's Internal Service Funds account for engineering, compensated absences and City Hall expenses. As a general rule, the effect of interfund activity has been eliminated from the government -wide financial statements. Exceptions to this general rule are charges between the City's utility functions and various other functions of the City. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. Proprietary Funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the City's Enterprise Funds and Internal Service Funds are charges to customers for sales and services. Operating expenses for the Enterprise Funds and Internal Service Funds include the cost of sales and services, administrative expenses and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. When both restricted and unrestricted resources are available for use, the City uses restricted resources first, then unrestricted resources as they are needed. Further, the City applies unrestricted funds in this order if various levels of unrestricted fund balances exist: committed, assigned and unassigned. D. Assets, Liabilities and Net Position or Equity 1. Deposits and Investments The City's cash and cash equivalents are considered to be cash on hand, demand deposits and short- term investments with original maturities of three months or less from the date of acquisition. Investments for the City are reported at fair value. 31 CITY OF MENDOTA HEIGHTS NOTES TO THE FINANCIAL STATEMENTS December 31, 2013 NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES D. Assets, Liabilities and Net Position or Equity (Continued) 1. Deposits and Investments (Continued) Minnesota Statutes authorizes the City to invest in obligations of the U.S. Treasury, agencies and instrumentalities, shares of investment companies whose only investments are in the aforementioned securities, obligations of the State of Minnesota or its municipalities, bankers' acceptances, future contracts, repurchase and reverse repurchase agreements and commercial paper of the highest quality with a maturity of no longer than 270 days and in the Minnesota Municipal Investment Pool. Minnesota Statutes requires all deposits made by cities with financial institutions to be collateralized in an amount equal to 110% of deposits in excess of Federal Deposit Insurance Corporation (FDIC) insurance. Custodial Credit Risk — Deposits: For deposits, this is the risk that in the event of bank failure, the City's deposits may not be returned to it. The City addresses custodial credit risk by having the authority from the City Council to maintain deposits with various financial institutions that are members of the Federal Reserve System. The City's policy states all deposits must be collateralized in compliance with Minnesota Statutes 118A. Interest Rate Risk: This is the risk that market values of securities in a portfolio would decrease due to changes in market interest rates. As a means of limiting its exposure to fair value losses arising from rising interest rates, the City's investment policy states the City will hold investments with laddered maturities so that funds become available on a regular schedule. Credit Risk: This is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. State law limits investments in commercial paper and corporate bonds to be in the top two ratings issued by nationally recognized statistical rating organizations. The City's investment policy addresses credit quality by allowing the City to invest only in instruments permitted by Minnesota Statutes 118A.04-05. Concentration of Credit Risk: This is the risk of loss attributed to the magnitude of an investment in a single issuer. The City's policy states the City will attempt to diversify its investments according to type and maturity. The policy states the portfolio will contain both short-term and long-term investments and will attempt to match its investments with anticipated cash flow requirements. Custodial Credit Risk — Investments: For an investment, this is the risk that in the event of the failure of the counterparty, the City will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The City's investment policy states that to ensure safety when considering an investment it is verified to make certain funds in excess of insurance are not made at the same institution. 32 CITY OF MENDOTA HEIGHTS NOTES TO THE FINANCIAL STATEMENTS December 31, 2013 NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES D. Assets, Liabilities and Net Position or Equity (Continued) 2. Receivables and Payables All trade and property tax receivables are shown at a gross amount since both are assessable to the property taxes and are collectible upon the sale of the property. The City levies its property tax for the subsequent year during the month of December. December 28 is the last day the City can certify a tax levy to the County Auditor for collection the following year. Such taxes become a lien on January 1 and are recorded as receivables by the City at that date. The property tax is recorded as revenue when it becomes measurable and available. Dakota County is the collecting agency for the levy and remits the collections to the City three times a year. The tax levy notice is mailed in March with the first half of the payment due on May 15 and the second half due on October 15. Taxes not collected as of December 31 each year are shown as delinquent taxes receivable. The County Auditor prepares the tax list for all taxable property in the City, applying the applicable tax rate to the tax capacity of individual properties, to arrive at the actual tax for each property. The County Auditor also collects all special assessments, except for certain prepayments paid directly to the City. The County Auditor submits the list of taxes and special assessments to be collected on each parcel of property to the County Treasurer in January of each year. 3. Inventories Inventories are valued at cost, which approximates market, using the first -in, first -out (FIFO) method. Inventory consists of expendable supplies held for consumption. Inventories of governmental funds are recorded as expenditures when consumed rather than when purchased. Inventory — land held for resale represents land owned by the City with the intent to sell to developers. This land is recorded at the lesser of historical cost or expected net realizable value. 4. Prepaid Items Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government -wide and fund financial statements. 33 CITY OF MENDOTA HEIGHTS NOTES TO THE FINANCIAL STATEMENTS December 31, 2013 NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES D. Assets, Liabilities and Net Position or Equity (Continued) 5. Capital Assets Capital assets, which include property, plant, equipment, intangible and infrastructure assets (e.g., roads, sidewalks, easements and similar items), are reported in the applicable governmental or business -type activities columns in the government -wide financial statements. Capital assets are defined by the City as assets with an initial, individual cost of more than $ 5,000 and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. Property, plant and equipment of the City are depreciated using the straight-line method over the following estimated useful lives: Assets Years Buildings 15-100 Other Improvements 10-40 Machinery and Equipment 3-25 Infrastructure 30-100 6. Deferred Outflows/Inflows of Resources In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until that time. In addition to liabilities, the statement of financial position and fund financial statements will sometimes report a separate section for deferred inflows of resources. This separate financial statement element represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The City only has one type of item, which arises only under the modified accrual basis of accounting that qualifies for reporting in this category. Accordingly, the item is reported only in the governmental funds balance sheet as unavailable revenue. The governmental funds report unavailable revenues from two sources: property taxes and special assessments. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. 34 CITY OF MENDOTA HEIGHTS NOTES TO THE FINANCIAL STATEMENTS December 31, 2013 NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES D. Assets, Liabilities and Net Position or Equity (Continued) 7. Compensated Absences\Severance The City allows employees to accrue vacation based on years of service to carry over to the next year. Accrued vacation shall be used in the year following the year which said time is earned and any time accrued will be paid out at termination. At the end of the year the vacation balance cannot exceed 200 hours. All permanent full-time employees accrue personal leave at the rate of 4 hours per month, to a maximum of 320 hours. Any balances in excess of 320 hours will be converted to cash compensation or additional vacation time at a ratio of 50%. All compensated absences pay is accrued when incurred in the government -wide and proprietary fund financial statements. A liability for these amounts is reported in governmental funds only if they have matured as a result of employee termination or similar circumstances. These liabilities are paid by the governmental fund the employee provided most of its service to. The unused vacation and sick leave of the proprietary funds is included in accrued liabilities of the respective fund. 8. Long -Term Obligations In the government -wide financial statements, and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business -type activities or proprietary fund type Statement of Net Position. Bond premiums and discounts are deferred and amortized over the life of the bonds using the straight-line method. Bonds payable are reported net of the applicable bond premium or discount. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. 35 CITY OF MENDOTA HEIGHTS NOTES TO THE FINANCIAL STATEMENTS December 31, 2013 NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES D. Assets, Liabilities and Net Position or Equity (Continued) 9. Fund Equity a. Classification In the fund financial statements, governmental funds report fund classifications that comprise a hierarchy based primarily on the extent to which the City is bound to honor constraints on the specific purpose for which amounts in those funds can be spent. Nonspendable Fund Balance — These are amounts that cannot be spent because they are not in spendable form or they are legally or contractually required to be maintained intact. Restricted Fund Balance — These are amounts that are restricted to specific purposes either by a) constraints placed on the use of resources by creditors, grantors, contributors, or laws or regulations of other governments or b) imposed by law through constitutional provisions or enabling legislation. Committed Fund Balance — These are amounts that can only be used for specific purposes pursuant to constraints imposed by the City Council (highest level of decision making authority) through resolution. Assigned Fund Balance — These are amounts that are constrained by the City's intent to be used for specific purposes but are neither restricted nor committed. Assignments are made by the City's Administrator or Finance Director based on the City Council's direction. Unassigned Fund Balance — These are residual amounts in the General Fund not reported in any other classification. The General Fund is the only fund that can report a positive unassigned fund balance. Other funds would report a negative unassigned fund balance should the total of nonspendable, restricted and committed fund balances exceed the total net resources of that fund. b. Minimum Fund Balance The City will strive to maintain a General Fund unassigned fund balance of 65% of the following year's budgeted operating expenditures. 10. Net Position Net position represents the difference between assets and deferred outflows and liabilities and deferred inflows in the government -wide financial statements. Net investment in capital assets consists of capital assets, net of accumulated depreciation reduced by the outstanding balance of any long-term debt used to build or acquire the capital assets. A reclassification of $ 2,536,000 was made between this net position class and unrestricted net position in the total column on the Statement of Net Position to recognize the portion of debt attributable to capital assets donated from governmental activities to business -type activities. Net position is reported as restricted in the government -wide financial statement when there are limitations on their use through external restrictions imposed by creditors, grantors or laws or regulations of other governments. 36 CITY OF MENDOTA HEIGHTS NOTES TO THE FINANCIAL STATEMENTS December 31, 2013 NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES D. Assets, Liabilities and Net Position or Equity (Continued) 11. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Estimates also affect the reported amounts of revenue and expenditures/expense during the reporting period. Actual results could differ from those estimates. NOTE 2 — STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY A. Budgetary Information The City Council adopts an annual budget for the General Fund and certain special revenue and capital project funds. The amounts shown in the financial statements as "budget" represent the original budgeted amount and all revisions made during the year. The City follows these procedures in establishing the budgetary data reflected in the financial statements: 1. The City Administrator prepares and presents to the City Council a proposed operating budget for the year commencing the following January 1. The operating budget included proposed expenditures and means of financing them. 2. Public hearings are conducted to obtain taxpayer comments. 3. The City Council deliberates on and adopts the budget on a basis consistent with accounting principles generally accepted in the United States of America and legally enacts the budget by passage of a resolution. 4. Formal budgetary integration is employed as a management control device during the year. 5. The City Council must approve any budget appropriation transfers between departments and any increases in budget appropriations to the extent actual revenues exceed estimated revenues. 6. Reported budget amounts are as originally adopted or as amended by City Council approved supplemental appropriations and budget transfers. Annual appropriations lapse at year-end. No revisions were made to the budgets during the year. 37 CITY OF MENDOTA HEIGHTS NOTES TO THE FINANCIAL STATEMENTS December 31, 2013 NOTE 2 — STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY B. Excess of Expenditures Over Appropriations Budgetary control for governmental funds is established by each fund's total appropriations. Expenditures exceeded appropriations in the following fund for year ending December 31, 2013. Appropriations Expenditures General Fund $ 6,736,555 $ 7,045,158 Special Park Special Revenue Fund 73,115 85,403 C. Deficit Fund Balances The following Funds had deficit fund balances or net position at December 31, 2013: Special Assessment Capital Project Internal Service Fund: Engineering NOTE 3 — DEPOSITS AND INVESTMENTS $ 389,548 82,166 Cash balances of the City's funds are combined (pooled) and invested to the extent available in various investments authorized by Minnesota Statutes. Each fund's portion of this pool (or pools) is displayed on the financial statements as "cash and cash equivalents" or "investments." For purposes of identifying risk of investing public funds, the balances and related restrictions are summarized below A. Deposits In accordance with applicable Minnesota Statutes, the City maintains deposits at depository banks authorized by the City Council. Custodial Credit Risks — Deposits: As of December 31, 2013, the City's bank balance was not exposed to custodial credit risk because it was insured through the FDIC. As of December 31, 2013, the City had deposits as follows: Checking $ 56,065 Savings 640 Nonbrokered Certificates of Deposit 13,953 Total Deposits $ 70,658 38 CITY OF MENDOTA HEIGHTS NOTES TO THE FINANCIAL STATEMENTS December 31, 2013 NOTE 3 — DEPOSITS AND INVESTMENTS B. Investments As of December 31, 2013, the City had the following investments: Investment Type FHLB FHLMC Mutual Funds Brokered Cash and Money Markets Brokered Certificates of Deposit Total Credit Ratings AA+ AA+ N/A N/A N/A Fair Value 12/31/13 Investment Maturities Less Than 1 - 5 6-10 1 Year Years Years $ 3,724,701 $ 245,368 5,249,788 940,804 1,441,155 $ - $ 3,724,701 245,368 5,249,788 940,804 246,279 1,194,876 $ 11,601,816 $ 6,436,871 $ 1,194,876 $ 3,970,069 Credit Risk: As of December 31, 2013, the City's investments in government securities were rated an average AA+ by Standard and Poor's (S&P). Concentration of Credit Risk: As of December 31, 2013, investments in government securities FHLB (32.1%) was exposed to concentration of credit risk as they exceeded 5% of the City's total investments. The City's investments follow its investment policy in terms of concentration of credit risk. Custodial Credit Risk — Investments: The City's investments held by the broker-dealer were insured by Securities Investor Protection Corporation (SIPC) or other supplemental insurance as of December 31, 2013. However, each investment brokerage firm may have a limit to their supplemental insurance and because of the size of the City's portfolio in relation to the brokerage firm's excess SIPC coverage limits the portion of the supplemental policy applicable to the City's portfolio is unknown. The City accepts the risk due to the controls in place at the broker-dealer. C. Deposits and Investments The following is a summary of total deposits and investments: Deposits (Note 3. A.) Investments (Note 3.B.) Petty Cash $ 70,658 11,601,816 900 Total Cash and Investments $ 11,673,374 Deposits and investments are presented in the December 31, 2013 basic financial statements as follows: Statement of Net Position: Cash and Investments $ 11,673,374 39 CITY OF MENDOTA HEIGHTS NOTES TO THE FINANCIAL STATEMENTS December 31, 2013 NOTE 4 - INTERFUND ACTIVITIES A. Interfund Receivables and Payable The following is a summary of the City's due to/due from other funds at December 31, 2013: Fund Engineering Sewer Utility Special Assessment Capital Project Compensated Absences Storm Water Utility Other Governmental Funds Total Due to Due from $ 52,828 $ 100,488 239,157 52,828 100,488 239,157 $ 392,473 $ 392,473 Reason Cash Deficit Utility Cash Receipt Timing Cash Deficit Cash Deficit Utility Cash Receipt Timing Cash Deficit The balances above will be repaid as financing becomes available. B. Interfund Transfers The composition of interfund transfers as of December 31, 2013 was as follows: Transfers In Transfers Out: General Special Assessments Debt Service Street Capital Projects Water Tower Capital Project Other Governmental Funds Sewer Utility Storm Water Utility Internal Service Funds General 22,250 64,500 11,150 9,650 8,200 Total $ 115,750 Street Capital Projects 1,627,403 158,353 141,512 224,729 Special Assessment Capital Project 113,903 Other Governmental Sewer Funds Utility Total $ 10,250 $ $ 10,250 212,340 1,649,653 326,243 200,000 25,000 447,853 152,662 234,379 8,200 $ 2,151,997 $ 113,903 $ 422,590 $ 25,000 $ 2,829,240 The purpose of the above transfers is to distribute bond proceeds and to provide funding for capital improvement projects, capital outlay and operating purposes. 40 CITY OF MENDOTA HEIGHTS NOTES TO THE FINANCIAL STATEMENTS December 31, 2013 NOTE 5 — CAPITAL ASSETS Capital asset activity for the year ended December 31, 2013 was as follows: Beginning Ending Balance Increases Decreases Balance Governmental Activities: Capital Assets not being Depreciated: Land and Improvements $ 6,123,406 $ 27,489 $ - $ 6,150,895 Construction in Progress 3,335,826 2,458,815 2,576,969 3,217,672 Total Capital Assets not being Depreciated 9,459,232 2,486,304 2,576,969 9,368,567 Capital Assets being Depreciated: Buildings and Structures 6,395,292 15,483 - 6,410,775 Machinery and Equipment 4,173,993 539,873 81,466 4,632,400 Other Improvements 2,072,370 - - 2,072,370 Infrastructure 37,118,103 2,237,760 192,115 39,163,748 Total Capital Assets being Depreciated 49,759,758 2,793,116 273,581 52,279,293 Less Accumulated Depreciation for: Buildings and Structures 3,561,507 176,368 - 3,737,875 Machinery and Equipment 2,400,356 280,803 67,200 2,613,959 Other Improvements 1,333,876 80,859 - 1,414,735 Infrastructure 14,461,457 1,289,873 184,999 15,566,331 Total Accumulated Depreciation 21,757,196 1,827,903 252,199 23,332,900 Total Capital Assets being Depreciated, Net 28,002,562 965,213 21,382 28,946,393 Governmental Activities Capital Assets, Net $ 37,461,794 $ 3,451,517 $ 2,598,351 $ 38,314,960 41 CITY OF MENDOTA HEIGHTS NOTES TO THE FINANCIAL STATEMENTS December 31, 2013 NOTE 5 — CAPITAL ASSETS Beginning Ending Balance Increases Decreases Balance Business -Type Activities: Capital Assets not being Depreciated: Land $ 2,531,475 $ - $ - $ 2,531,475 Construction in Progress - 605,634 - 605,634 Total Capital Assets not being Depreciated 2,531,475 605,634 - 3,137,109 Capital Assets being Depreciated: Buildings and Structures 208,490 - - 208,490 Machinery and Equipment 169,057 64,853 - 233,910 Sewer Main Lines and Storm Sewers 16,277,851 393,142 - 16,670,993 Total Capital Assets being Depreciated 16,655,398 457,995 - 17,113,393 Less Accumulated Depreciation for: Buildings and Structures 38,669 7,037 - 45,706 Machinery and Equipment 112,117 18,968 - 131,085 Sewer Main Lines and Storm Sewers 4,379,517 171,970 - 4,551,487 Total Accumulated Depreciation 4,530,303 197,975 - 4,728,278 Total Capital Assets being Depreciated, Net Business -Type Activities Capital Assets, Net 12,125,095 260,020 12,385,115 $ 14,656,570 $ 865,654 $ - $ 15,522,224 42 CITY OF MENDOTA HEIGHTS NOTES TO THE FINANCIAL STATEMENTS December 31, 2013 NOTE 5 — CAPITAL ASSETS Depreciation expense was charged to functions/programs of the City as follows: Governmental Activities: General Government $ 213,062 Public Safety 120,442 Public Works 1,431,068 Internal Service Funds 63,331 Total Depreciation Expense - Governmental Activities $ 1,827,903 Business -Type Activities: Sewer Utility $ 153,406 Storm Water Utility 31,833 Par 3 Golf Course 12,736 Total Depreciation Expense - Business -Type Activities NOTE 6 — LONG-TERM DEBT A. G.O. Bonds $ 197,975 The City issues G.O. bonds to provide for financing street improvements, major capital equipment purchases and utility improvements. Debt service is funded through property taxes, special assessments and utility charges. G.O. bonds are direct obligations and pledge the full faith and credit of the City. 43 CITY OF MENDOTA HEIGHTS NOTES TO THE FINANCIAL STATEMENTS December 31, 2013 NOTE 6 — LONG-TERM DEBT B. Components of Long -Term Liabilities Interest Original Final Principal Due Within Rates Issue Maturity Outstanding One Year Long -Term Liabilities: Government Activities: G.O. Improvement Bonds, Including Refunding Bonds: G.O. Improvement Bonds of 2006 3.60%-3.90% 630,000 02/01/17 $ 290,000 $ 70,000 G.O. Improvement Bonds of2007B 4.00%-4.15% 1,595,000 02/01/27 1,195,000 85,000 G.O. Improvement Bonds of 2008 3.25%-4.45% 3,200,000 02/01/28 2,640,000 155,000 G.O. Improvement Bonds of 2010 0.86%-3.75% 1,055,000 02/01/30 995,000 60,000 G.O. Improvement Bonds of 2011 0.40%-3.40% 2,970,000 02/01/31 2,860,000 220,000 G.O. Improvement Bonds of 2012 2.00%-2.70% 2,630,000 02/01/32 2,630,000 - G.O. Improvement Bonds of 2013 2.00%-4.00% 1,685,000 02/01/34 1,685,000 - Total Improvement Bonds 12,295,000 590,000 G.O. Bonds, Including Refunding Bonds: G.O. Bonds of 2007A 4.00%-4.20% 2,790,000 02/01/23 2,045,000 170,000 G.O. Bonds of 2009 1.50%-3.50% 745,000 02/01/20 555,000 75,000 Total G.O. Bonds 2,600,000 245,000 Compensated Absences Payable Total Governmental Activities Business -Type Activities: Compensated Absences Payable 516,133 325,111 15,411,133 1,160,111 25,177 18,465 Total all Long -Tenn Liabilities $ 15,436,310 $ 1,178,576 Long-term bonded indebtedness listed above were issued to finance acquisition and construction of capital facilities or to refinance (refund) previous bond issues. Debt Service Funds will be used to pay general government principal and interest liabilities. The General Fund and Sewer Utility Fund will pay for the corresponding compensated absence liability. 44 CITY OF MENDOTA HEIGHTS NOTES TO THE FINANCIAL STATEMENTS December 31, 2013 NOTE 6 - LONG-TERM DEBT C. Changes in Long -Term Liabilities Long-term liability activity for the year ended December 31, 2013 was as follows: Beginning Ending Due Within Balance Additions Reductions Balance One Year Governmental Activities: Bonds Payable: G.O. Improvements Bonds $ 11,085,000 $ 1,685,000 $ 475,000 $ 12,295,000 $ 590,000 G.O. Bonds 2,835,000 235,000 2,600,000 245,000 Compensated Absences Payable 485,057 349,669 318,593 516,133 325,111 Total Governmental Activities 14,405,057 2,034,669 1,028,593 15,411,133 1,160,111 Business -Type Activities: Compensated Absences Payable 26,140 15,777 16,740 25,177 18,465 Total Government $ 14,431,197 $ 2,050,446 $ 1,045,333 $ 15,436,310 $ 1,178,576 D. Long -Term Debt The annual requirements to amortize all bonded debt outstanding follows: Governmental Activities Year Ending Improvement Bonds G.O. Bonds December 31, Principal Interest Total Principal Interest Total 2014 $ 590,000 $ 340,420 930,420 $ 245,000 $ 96,531 $ 341,531 2015 700,000 337,981 1,037,981 250,000 87,756 337,756 2016 810,000 319,758 1,129,758 265,000 78,425 343,425 2017 825,000 298,914 1,123,914 270,000 68,498 338,498 2018 755,000 278,158 1,033,158 280,000 58,040 338,040 2019-2023 3,900,000 1,069,829 4,969,829 1,290,000 127,869 1,417,869 2024-2028 3,340,000 479,793 3,819,793 - - 2029-2033 1,325,000 89,915 1,414,915 2034 50,000 1,000 51,000 Total $ 12,295,000 $ 3,215,768 $ 15,459,768 $ 2,600,000 $ 517,119 $ 3,117,119 NOTE 7 - JOINT POWERS DEBT COMMITMENT On August 25, 2005, the City entered into a joint powers agreement with the Cities of Apple Valley, Burnsville, Eagan, Farmington, Hastings, Inver Grove Heights, Lakeville, Rosemount, South St. Paul, West St. Paul, Minnesota and Dakota County, Minnesota, to establish the Dakota Communications Center (DCC), a Minnesota nonprofit corporation. The purpose of the DCC is to engage in the operation and maintenance of a county -wide public safety answering point and communications center for law enforcement, fire, emergency medical services and other public safety services for the mutual benefit of residents residing in the above mentioned cities and county (the "Members"). Pursuant to the joint powers agreement, Members are required to provide DCC their pro rata share of cost of operations and maintenance and capital projects. 45 CITY OF MENDOTA HEIGHTS NOTES TO THE FINANCIAL STATEMENTS December 31, 2013 NOTE 7 — JOINT POWERS DEBT COMMITMENT On May 1, 2007, the DCC issued Public Safety Revenue Bonds, Series 2007 in the amount of $ 7,315,000 to provide financing for the acquisition of equipment and reimbursement for conversion costs. The Bonds are special obligations of the DCC, payable from revenues to be received from Members. Pursuant to the joint powers agreement, Members will levy taxes for the payment of their pro rata share of the principal and interest payments due on the Bonds. The Bonds mature February 1, 2014, and bear interest rates ranging from 4.0%-5.0%. The debt will be repaid with member assessments over a seven year amortization. All Members reserve the right to prepay, in whole or in part on any date, its allocated share of principal and interest on the Bonds. Payments from the City are provided from General Fund appropriations. In 2013, the City member payments totaled $ 21,800. Pursuant to Section 9.5 of the joint powers agreement, Member payments are submitted monthly and held in escrow by US Bank National Association (trustee) until the funds are remitted to the bond holders according to the established bond principal and interest due dates. The interest earnings from the escrow account will reduce future Member obligations on the debt. Information regarding the DCC can be obtained at the website www.mn-dcc.org/stats.asp or by contacting the City of Lakeville, 20195 Holyoke Avenue, Lakeville, Minnesota 55044. NOTE 8 — OPERATING LEASE The City leases six squad cars under a noncancelable operating lease. The following is a schedule by years of future minimum payments required under the leases as of December 31, 2013: Year Ending December 31, 2014 $ 40,814 2015 26,663 2016 7,997 Total $ 75,474 46 CITY OF MENDOTA HEIGHTS NOTES TO THE FINANCIAL STATEMENTS December 31, 2013 NOTE 9 — CONDUIT DEBT From time -to -time, the City has issued Industrial Development and Housing Mortgage Revenue Bonds in accordance with the Minnesota Municipal Industrial Development Act. These obligations are issued to provide financial assistance to private -sector entities for the acquisition and construction of industrial and commercial facilities deemed to be in the public interest. The obligations are secured by the property financed and are payable solely from payments received on the underlying mortgage loans. Upon repayment of the obligations, ownership of the acquired facilities transfers to the private -sector entity served by the debt issuance. Neither the City, the State of Minnesota nor any political subdivision thereof, is obligated in any manner for the repayment of the obligations. Accordingly, the Bonds are not reported as liabilities in the accompanying financial statements. The aggregate amount of all conduit debt obligations outstanding as of December 31, 2013 was $ 12,870,000. NOTE 10 — FUND BALANCE DETAIL Fund equity balances are classified below to reflect the limitations and restrictions of the respective Funds. Nonspendable: Inventories Prepaid Items Restricted: Park Dedication Fees Street Light Maintenance Debt Service Committed: Water System Maintenance Emergency Preparedness and Civil Defense Assigned: Capital Projects Land Held For Resale Insurance Reserve Unassigned Total General Fund Special Assessment Debt Service $ 39,836 $ 744,362 228,762 5,268,225 Street Capital Pro i ects - $ 2,250,718 475,056 $ 6,281,185 $ 2,250,718 $ 475,056 NOTE 11— RISK MANAGEMENT Special Assessment Capital Project Other Governmental Funds $ $ (389,548) Total - $ 39,836 654 745,016 131,898 131,898 36,140 36,140 403,245 2,653,963 457,051 457,051 62,791 62,791 1,667,389 50,000 2,142,445 50,000 228,762 - 4,878,677 $ (389,548) $ 2,809,168 $ 11,426,579 The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. 47 CITY OF MENDOTA HEIGHTS NOTES TO THE FINANCIAL STATEMENTS December 31, 2013 NOTE 11— RISK MANAGEMENT The City purchases commercial insurance coverage through the League of Minnesota Cities Insurance Trust (LMCIT) with other cities in the state which is a public entity risk pool currently operating as a common risk management and insurance program. The City pays an annual premium to the LMCIT for its insurance coverage. The LMCIT is self-sustaining through commercial companies for excess claims. The City is covered through the pool for any claims incurred but unreported, however, retains risk for the deductible portion of its insurance policies. The amount of these deductibles is considered immaterial to the financial statements. During the year ended December 31, 2013, there were no significant reductions in insurance or settlements in excess of insurance coverage for any of the past three years. Workers compensation coverage is provided through a pooled self-insurance program through the LMCIT. The City pays an annual premium to LMCIT. For workers compensation, the City is not subject to a deductible. The City's workers compensation coverage is not retrospectively rated. However, the actual premium is adjusted based on audited payroll amounts. NOTE 12 — DEFINED BENEFIT PENSION PLANS — STATE-WIDE Public Employees' Retirement Association A. Plan Description All full-time and certain part-time employees of the City are covered by defined benefit plans administered by the Public Employees' Retirement Association of Minnesota (PERA). PERA administers the General Employees' Retirement Fund (GERF) and the Public Employees' Police and Fire Fund (PEPFF), which are cost-sharing, multiple -employer retirement plans. These Plans are established and administered in accordance with Minnesota Statutes Chapters 353 and 356. GERF members belong to either the Coordinated or Basic Plan. Coordinated Plan members are covered by Social Security and Basic Plan members are not. All new members must participate in the Coordinated Plan. All police officers, firefighters and peace officers who qualify for membership by statute covered by the PEPFF. PERA provides retirement benefits as well as disability benefits to members, and benefits to survivors upon death of eligible members. Benefits are established by state statute and vest after five years of credited service. The defined retirement benefits are based on a member's highest average salary for any five successive years of allowable service, age and years of credit at termination of service. 48 CITY OF MENDOTA HEIGHTS NOTES TO THE FINANCIAL STATEMENTS December 31, 2013 NOTE 12 — DEFINED BENEFIT PENSION PLANS — STATE-WIDE Public Employees' Retirement Association (Continued) A. Plan Description (Continued) Two methods are used to compute benefits for PERA's Coordinated and Basic Plan members. The retiring member receives the higher of a step -rate benefit accrual formula (Method 1) or a level accrual formula (Method 2). Under Method 1, the annuity accrual rate for a Basic Plan member is 2.2% of average salary for each of the first 10 years of service and 2.7% for each remaining year. The annuity accrual rate for a Coordinated Plan member is 1.2% of average salary for each of the first 10 years and 1.7% for each remaining year. Under Method 2, the annuity accrual rate is 2.7% of average salary for Basic Plan members and 1.7% for Coordinated Plan members for each year of service. For PEPFF members, the annuity accrual rate is 3.0% for each year of service. For all GERF and PEPFF members hired prior to July 1, 1989, whose annuity is calculated using Method 1, a full annuity is available when age plus years of service equal 90. Normal retirement age is 55 for PEPFF members and 65 for Basic and Coordinated Plan members hired prior to July 1, 1989. Normal retirement age is the age for unreduced Social Security benefits capped at 66 for Coordinated Plan members hired on or after July 1, 1989. A reduced retirement annuity is also available to eligible members seeking early retirement. There are different types of annuities available to members upon retirement. A single -life annuity is a lifetime annuity that ceases upon the death of the retiree — no survivor annuity is payable. There are also various types of joint and survivor annuity options available which will be payable over joint lives. Members may also leave their contributions in the Fund upon termination of public service in order to qualify for a deferred annuity at retirement age. Refunds of contributions are available at any time to members who leave public service, but before retirement benefits begin. The benefit provisions stated in the previous paragraphs of this section are current provisions and apply to active Plan participants. Vested, terminated employees who are entitled to benefits but are not yet receiving them are bound by the provisions in effect at the time they last terminated their public service. PERA issues a publicly available financial report that includes financial statements and required supplementary information for GERF and PEPFF. That report may be obtained on the Internet at www.mnpera.org, by writing to PERA at 60 Empire Drive, #200, St. Paul, Minnesota 55103-2088 or by calling (651) 296-7460 or (800) 652-9026. 49 CITY OF MENDOTA HEIGHTS NOTES TO THE FINANCIAL STATEMENTS December 31, 2013 NOTE 12 — DEFINED BENEFIT PENSION PLANS — STATE-WIDE Public Employees' Retirement Association (Continued) B. Funding Policy Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions. These Statutes are established and amended by the State Legislature. The City makes annual contributions to the pension plans equal to the amount required by state statutes. GERF Basic Plan members and Coordinated Plan members were required to contribute 9.1% and 6.25%, respectively, of their annual covered salary in 2013. PEPFF members were required to contribute 9.6% of their annual covered salary in 2013. In 2013, the City was required to contribute the following percentages of annual covered payroll: 11.78% for Basic Plan members, 7.25% for Coordinated Plan members and 14.4% for PEPFF members. The City's contributions to the Public Employees' Retirement Fund for the years ending December 31, 2013, 2012 and 2011 were $ 136,258, $ 137,214 and $ 128,778, respectively. The City's contributions to PEPFF for the years ending December 31, 2013, 2012 and 2011 were $ 226,459, $ 224,240 and $ 213,074, respectively. The City's contributions were equal to the contractually required contributions for each year as set by state statute. NOTE 13 — POST EMPLOYMENT HEALTH CARE PLAN A. Plan Description The City provides a single -employer defined benefit health care plan to eligible retirees and their spouses. The plan offers medical coverage and dental coverage. Medical coverage is administered by BlueCross BlueShield and dental coverage is provided by Delta Dental. It is the City's policy to periodically review its medical coverage and to obtain requests for proposals in order to provide the most favorable benefits and premiums for City employees and retirees. B. Funding Policy Retirees and their spouses contribute to the health care plan at the same rate as City employees. This results in the retirees receiving an implicit rate subsidy. Contribution requirements are established by the City, based on the contract terms with BlueCross BlueShield and Delta Dental. The required contributions are based on projected pay-as-you-go financing requirements. For the year 2013, the City contributed $ 19,432 to the plan. As of January 1, 2013, there were two retiree receiving health and dental benefits from the City. C. Annual OPEB Cost and Net OPEB Obligation The City's annual OPEB cost (expense) is calculated based on the annual required contribution (ARC) of the City, an amount actuarially determined in accordance with the parameters of GASB Statement No. 45. The City prospectively implemented this Statement during the 2010 year. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed 30 years. The table on the following page shows the components of the City's annual OPEB cost of the year, the amount actually contributed to the plan and changes in the City's net OPEB obligation to the plan. 50 CITY OF MENDOTA HEIGHTS NOTES TO THE FINANCIAL STATEMENTS December 31, 2013 NOTE 13 — POST EMPLOYMENT HEALTH CARE PLAN C. Annual OPEB Cost and Net OPEB Obligation (Continued) ARC $ 71,316 Interest on Net OPEB Obligation 6,855 Adjustment to ARC (9,360) Annual OPEB Cost (Expense) 68,811 Contributions Made (19,432) Increase in Net OPEB Obligation 49,379 Net OPEB Obligation - Beginning of Year 152,336 Net OPEB Obligation - End of Year $ 201,715 The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan and the net OPEB obligation for 2013 was as follows: Year Ended Percentage of Annual OPEB Employer Annual OPEB Cost Net OPEB Cost Contribution Contributed Obligation 12/31/11 $ 51,966 $ 23,115 44% $ 98,760 12/31/12 69,722 16,146 23% 152,336 12/31/13 68,811 19,432 28% 201,715 D. Funded Status and Funding Progress As of January 1, 2012, the most recent actuarial valuation date, the City had no assets deposited to fund the plan. The actuarial accrued liability for benefits was $ 506,367 and the actuarial value of assets was $ 0, resulting in an unfunded actuarial accrued liability (UAAL) of $ 506,367. The covered payroll (annual payroll of active employees covered by the plan) was $ 3,176,568 and the ratio of the UAAL to the covered payroll was 15.9%. Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality and the health care cost trend. Amounts determined regarding the funded status of the plan and the ARC of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The Schedule of Funding Progress — Other Post Employment Benefits, presented as required supplementary information following the Notes to the Financial Statements, presents multi-year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. 51 CITY OF MENDOTA HEIGHTS NOTES TO THE FINANCIAL STATEMENTS December 31, 2013 NOTE 13 — POST EMPLOYMENT HEALTH CARE PLAN E. Actuarial Methods and Assumptions Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities, consistent with the long-term perspective of the calculations. At the January 1, 2012 actuarial valuation date, the projected unit credit actuarial cost method was used. The actuarial assumptions included a 4.5% discount rate, which is based on the investment yield expected to finance benefits depending on whether the plan is funded in a separate trust (about 7% to 8.5%, long-term, similar to a pension plan) or unfunded (3.5% to 5%, shorter -term, based on City's general assets). The City currently does not plan to prefund for this benefit. At the actuarial valuation date, the annual health care cost trend rate was calculated to be 8% initially, reduced incrementally to an ultimate rate of 5% after 6 years. Both rates included a 2.5% inflation assumption. The UAAL is being amortized as a level dollar amount of payroll on a closed basis. The remaining amortization period at January 1, 2013 was 30 years. NOTE 14 — TOWN CENTER — THE VILLAGE AT MENDOTA HEIGHTS The City temporarily has title to certain real properties in Town Center. The City currently has title to land valued by Dakota County at $ 558,700. Once the project is complete all parcels, except the out lots which are included in the City's capital assets, will be developed and owned privately, and thus the land is not reported in the City's financial statements. NOTE 15 — JOINT VENTURES A. Dakota Communications Center The City is a member of the Dakota Communication Center (DCC). The DCC was created by a joint powers agreement between Dakota County and several cities. Its purposes include the establishment, operation and maintenance of joint law enforcement, fire, EMS and other emergency communications systems. Members are obligated to pay their proportional share of operating and capital expenditures on an annual basis. The City paid $ 191,676 for 2013. Members do not maintain an equity interest other than if the DCC were to terminate. Withdrawing members forfeit any interest in the DCC. Information regarding the DCC can be obtained at the website www.mn-dcc.org. 52 CITY OF MENDOTA HEIGHTS NOTES TO THE FINANCIAL STATEMENTS December 31, 2013 NOTE 15 — JOINT VENTURES B. Local Government Information Systems Association (LOGIS) The consortium of approximately 30 government entities provides computerized data processing and support services to its members. LOGIS is a legally separate entity; the entities appoint a voting majority of its board, and the consortium is fiscally independent of the City. For 2013, the City paid $ 27,624 for computer application support and computer hardware for the City's network. Complete financial statements of the consortium may be obtained at the LOGIS offices located at 5750 Duluth Street, Golden Valley, Minnesota 55422. NOTE 16 — COMMITMENTS At December 31, 2013, the following contract commitments existed: Project Revised Completed Contract to Amount Amount Date Remaining Mendota Heights Road Forcemain Replacement $ 505,048 $ 435,595 $ 69,453 Sibley Memorial Highway Trail 296,793 281,207 15,586 Hunter Orchard Street Improvement Project 1,537,313 1,389,914 147,399 Crown Point and Overlook Street Rehab 583,803 359,104 224,699 NOTE 17 — CONTINGENCIES The City has various claims and litigation that arise in the normal course of business. The City has evaluated the impact of these items for the December 31, 2013 financial statements and determined they do not have a material effect on financial position or changes in financial position. NOTE 18 — NEW STANDARDS ISSUED BUT NOT YET IMPLEMENTED GASB Statement No. 68 replaces the requirements of Statement No. 27, Accounting for Pensions by State and Local Governmental Employers and Statement No. 50, Pension Disclosures, as they relate to governments that provide pensions through pension plans administered as trusts or similar arrangements that meet certain criteria. Statement No. 68 requires governments providing defined benefit pensions to recognize their long-term obligation for pension benefits as a liability for the first time, and to more comprehensively and comparably measure the annual costs of pension benefits. 53 (THIS PAGE LEFT BLANK INTENTIONALLY) 54 REQUIRED SUPPLEMENTARY INFORMATION 55 CITY OF MENDOTA HEIGHTS SCHEDULE OF FUNDING PROGRESS - OTHER POST EMPLOYMENT BENEFITS December 31, 2013 Actuarial UAAL as a Actuarial Accrued Liability Unfunded Percentage of Actuarial Value of (AAL) - Projected AAL Funded Covered Covered Valuation Assets Unit Credit (UAAL) Ratio Payroll Payroll Date (a) (b) (b -a) (a/b) (c) ((b-a)/c) 01/01/09 $ $ 357,126 $ 357,126 0.0% $ 2,905,073 12.3% 01/01/12 506,367 506,367 0.0% 3,176,568 15.9% * This Schedule was implemented in 2009 and was updated once since and, therefore, contains only two years of data. 56 SUPPLEMENTARY INFORMATION 57 CITY OF MENDOTA HEIGHTS COMBINING BALANCE SHEET - NONMAJOR GOVERNMENTAL FUNDS December 31, 2013 Special Revenue Water Revenue Special Park Civil Defense ASSETS Cash and Investments $ 451,231 $ 131,735 $ 62,747 Taxes Receivable - Delinquent - 341 Special Assessments Receivable: Delinquent Interest Receivable 291 163 44 Due from Other Funds - Due from Other Governments 5,529 - Prepaid Items - - 654 Land Held for Resale - Total Assets $ 457,051 $ 131,898 $ 63,786 LIABILITIES Accounts and Contracts Payable DEFERRED INFLOWS OF RESOURCES Unavailable Revenue - Property Taxes - - 341 Unavailable Revenue - Special Assessments Total Deferred Inflows of Resources - - 341 FUND BALANCES Nonspendable - - 654 Restricted - 131,898 - Committed 457,051 - 62,791 Assigned - - Total Fund Balances 457,051 131,898 63,445 Total Liabilities, Deferred Inflows of Resources and Fund Balances $ 457,051 $ 131,898 $ 63,786 58 Special Revenue Debt Service Street Lighting Total Par 3 G.O. Equipment Bonds Certficates Total $ 39,906 $ 685,619 $ 285,209 $ 117,837 $ 403,046 745 1,086 3,406 648 4,054 19 517 119 80 199 5,529 654 $ 40,670 $ 693,405 $ 288,734 $ 118,565 $ 407,299 $ 3,785 $ 3,785 $ $ 745 1,086 3,406 648 4,054 745 1,086 3,406 648 4,054 654 - 36,140 168,038 285,328 117,917 403,245 - 519,842 - 36,140 688,534 285,328 117,917 403,245 $ 40,670 $ 693,405 $ 288,734 $ 118,565 $ 407,299 59 CITY OF MENDOTA HEIGHTS COMBINING BALANCE SHEET - NONMAJOR GOVERNMENTAL FUNDS December 31, 2013 ASSETS Cash and Investments Taxes Receivable - Delinquent Special Assessments Receivable: Delinquent Interest Receivable Due from Other Funds Due from Other Governments Prepaid Items Land Held for Resale Total Assets LIABILITIES Accounts and Contracts Payable DEFERRED INFLOWS OF RESOURCES Unavailable Revenue - Property Taxes Unavailable Revenue - Special Assessments Total Deferred Inflows of Resources FUND BALANCES Nonspendable Restricted Committed Assigned Total Fund Balances Total Liabilities, Deferred Inflows of Resources and Fund Balances Capital Projects Equipment Replacement Reserve $ 123,513 307 94 $ 123,914 307 307 123,607 123,607 Infrastructure Reserve $ 44,546 167 45 Facility Reserve $ 78,552 191 62 $ 44,758 $ 78,805 $ 167 167 44,591 44,591 191 191 78,614 78,614 $ 123,914 $ 44,758 $ 78,805 60 Capital Projects Water Tower Capital Project $ 1,114,931 853 Pilot Knob Pre -1998 Non - Improvement Increment $ 959 $ 1,115,784 $ Total Total Nonmaj or Governmental Funds $ 64,424 $ 1,426,925 $ 2,515,590 665 5,805 309 253 239,157 309 1,307 239,157 50,000 50,000 959 $ 354,143 $ 1,718,363 1,115,784 1,115,784 959 959 309 2,023 239,157 5,529 654 50,000 $ 2,819,067 $ $ $ 3,785 309 309 665 309 974 5,805 309 6,114 654 571,283 519,842 353,834 1,717,389 1,717,389 353,834 1,717,389 2,809,168 $ 1,115,784 $ 959 $ 354,143 $ 1,718,363 $ 2,819,067 61 CITY OF MENDOTA HEIGHTS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - NONMAJOR GOVERNMENTAL FUNDS For the Year Ended December 31, 2013 Special Revenue Water Civil Street Revenue Special Park Defense Lighting Total REVENUES Property Taxes $ $ - $ 24,468 $ 43,218 $ 67,686 Special Assessments - - Intergovernmental - - - Charges for Services 252,194 252,194 Fines and Forfeitures - (8) (175) (183) Miscellaneous: Investment Income (5,382) (3,018) (800) (345) (9,545) Other - - 1,035 - 1,035 Total Revenues 246,812 (3,018) 24,695 42,698 311,187 EXPENDITURES Current General Government 3,868 - 10,467 24,543 38,878 Public Works 30,545 - 30,545 Debt Service Principal - Interest and Other Charges - - - Capital Outlay Public Works 31,961 54,858 - 86,819 Total Expenditures 35,829 85,403 10,467 24,543 156,242 Excess of Revenues Over (Under) Expenditures OTHER FINANCING SOURCES (USES) Transfers In 210,983 (88,421) 14,228 18,155 154,945 Transfers Out (228,000) (1,500) - (229,500) Total Other Financing Sources (Uses) (228,000) (1,500) (229,500) Net Change in Fund Balances (17,017) (89,921) 14,228 18,155 (74,555) FUND BALANCES Beginning of Year 474,068 221,819 49,217 17,985 763,089 End of Year $ 457,051 $ 131,898 $ 63,445 $ 36,140 $ 688,534 62 Debt Service Capital Projects Par 3 G.O. Equipment Bonds Certficates Total Equipment Replacement Infrastructure Facility Reserve Reserve Reserve $ 264,919 $ 51,403 $ 316,322 $ 19,611 $ (57) $ 19,607 (48) (34) (82) 290 82 100 (2,200) (1,473) (3,673) (1,727) (836) (1,146) 262,671 49,896 312,567 18,174 (811) 18,561 160,000 40,000 200,000 87,680 10,305 97,985 247,680 50,305 297,985 12,465 34,548 12,465 34,548 14,991 (409) 14,582 18,174 (13,276) (15,987) 14,991 (409) 14,582 18,174 (13,276) (15,987) 270,337 118,326 388,663 105,433 57,867 94,601 $ 285,328 $ 117,917 $ 403,245 $ 123,607 $ 44,591 $ 78,614 63 CITY OF MENDOTA HEIGHTS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - NONMAJOR GOVERNMENTAL FUNDS For the Year Ended December 31, 2013 REVENUES Property Taxes Special Assessments Intergovernmental Charges for Services Fines and Forfeitures Miscellaneous: Investment Income Other Total Revenues EXPENDITURES Current General Government Public Works Debt Service Principal Interest and Other Charges Capital Outlay Public Works Total Expenditures Excess of Revenues Over (Under) Expenditures OTHER FINANCING SOURCES (USES) Transfers In Transfers Out Total Other Financing Sources (Uses) Net Change in Fund Balances FUND BALANCES Beginning of Year End of Year Capital Projects Water Tower Capital Project (15,746) 111,564 95,818 2,986 2,986 92,832 Pilot Knob Improvement 37,500 37,500 35,249 35,249 2,251 Pre -1998 Non - Increment Total $ 39,161 2,206 2,206 37,500 472 (4,691) (24,146) 32,480 144,044 29,995 23,026 23,026 6,969 199,237 58,275 12,465 37,534 108,274 90,963 Total Other Governmental Funds $ 423,169 2,206 37,500 252,194 207 (37,364) 145,079 822,991 97,153 43,010 200,000 97,985 124,353 562,501 260,490 412,340 10,250 - 422,590 422,590 (158,353) - (60,000) (218,353) (447,853) 253,987 10,250 (60,000) 204,237 (25,263) 346,819 12,501 (53,031) 295,200 235,227 768,965 (11,542) 406,865 1,422,189 2,573,941 $ 1,115,784 $ 959 $ 353,834 $ 1,717,389 $ 2,809,168 64 CITY OF MENDOTA HEIGHTS COMBINING STATEMENT OF NET POSITION - INTERNAL SERVICE FUNDS December 31, 2013 Compensated City Hall Engineering Absences Sinking Fund Total ASSETS Current Assets Cash and Investments (Including Cash Equivalents) $ - $ 415,294 $ 112,398 $ 527,692 Interest Receivable - - 147 147 Due From Other Funds - 52,828 - 52,828 Prepaid Expenses 14,036 - 6,359 20,395 Total Current Assets 14,036 468,122 118,904 601,062 Noncurrent Assets Capital Assets: Land Buildings Improvements Other than Buildings Machinery and Equipment Total Capital Assets Less Accumulated Depreciation Net Capital Assets 67,637 67,637 (30,775) 36,862 25,000 25,000 1,665,049 1,665,049 27,581 27,581 61,077 128,714 1,778,707 1,846,344 (1,370,920) (1,401,695) 407,787 444,649 Total Assets $ 50,898 $ 468,122 $ 526,691 $ 1,045,711 LIABILITIES AND NET POSITION Current Liabilities Accounts and Contracts Payable $ 1,945 $ $ 7,445 $ 9,390 Salaries and Benefits Payable 15,833 3,014 18,847 Due to Other Funds 52,828 - 52,828 Due to Other Governments 70 60 130 Noncurrent Liabilities Due Within One Year 21,804 301,679 1,628 325,111 Total Current Liabilities 92,480 301,679 12,147 406,306 Noncurrent Liabilities Compensated Absences 41,197 468,122 6,814 516,133 OPEB Payable 21,191 2,893 24,084 Less Amount Due Within One Year (21,804) (301,679) (1,628) (325,111) Total Noncurrent Liabilities 40,584 166,443 8,079 215,106 Total Liabilities 133,064 468,122 20,226 621,412 Net Position Net Investment in Capital Assets 36,862 407,787 444,649 Unrestricted (119,028) 98,678 (20,350) Total Net Position (82,166) 506,465 424,299 Total Liabilities and Net Position $ 50,898 $ 468,122 $ 526,691 $ 1,045,711 65 CITY OF MENDOTA HEIGHTS COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION - INTERNAL SERVICE FUNDS For the Year Ended December 31, 2013 Compensated City Hall Engineering Absences Sinking Fund Total OPERATING REVENUES Charges for Services $ 608,428 $ 26,212 $ 205,601 $ 840,241 OPERATING EXPENSES Wages and Salaries 363,584 57,541 421,125 Employee Benefits 128,297 26,212 20,069 174,578 Materials and Supplies 7,063 - - 7,063 Professional Services 3,616 - 3,583 7,199 Insurance 8,663 - 5,631 14,294 Utilities 3,920 - 39,115 43,035 Depreciation 4,559 - 58,772 63,331 Travel 803 - 392 1,195 Equipment 233 - - 233 Miscellaneous 56,086 - 33,066 89,152 Total Operating Expenses 576,824 26,212 218,169 821,205 Operating Income (Loss) 31,604 - (12,568) 19,036 NONOPERATING REVENUES Investment Income 10,000 - (2,709) 7,291 Income before Transfers 41,604 - (15,277) 26,327 Transfers Out (8,200) - - (8,200) Change in Net Position 33,404 - (15,277) 18,127 NET POSITION Beginning of Year (115,570) - 521,742 406,172 End of Year $ (82,166) $ - $ 506,465 $ 424,299 66 CITY OF MENDOTA HEIGHTS COMBINING STATEMENT OF CASH FLOWS - INTERNAL SERVICE FUNDS For the Year Ended December 31, 2013 CASH FLOWS - OPERATING ACTIVITIES Receipts from Customers and Users Payments to Suppliers Payments to Employees Miscellaneous Revenue Net Cash Flows - Operating Activities CASH FLOWS - NONCAPITAL FINANCING ACTIVITIES Transfer to Other Funds Due to Other Funds Due from Other Funds Net Cash Flows - Noncapital Financing Activities CASH FLOWS - CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition of Capital Assets CASH FLOWS - INVESTING ACTIVITIES Interest and Dividends Received Net Change in Cash and Cash Equivalents CASH AND CASH EQUIVALENTS Beginning of Year End of Year RECONCILIATION OF OPERATING LOSS TO NET CASH FLOWS - OPERATING ACTIVITIES Operating Loss Adjustments to Reconcile Operating Loss to Net Cash Flows - Depreciation Expense Prepaid Items Accounts Payable Due to Other Governmental Units Salaries Payable OPEB Payable Compensated Absences Payable Total Adjustments Compensated Engineering Absences $ 608,428 (77,464) (485,326) 45,638 (8,200) (17,733) (25,933) (29,705) 10,000 $ 26,212 26,212 17,733 17,733 City Hall Sinking Fund $ 205,601 (83,204) (74,123) 48,274 Total $ 840,241 (160,668) (559,449) 120,124 (8,200) (17,733) 17,733 (8,200) (7,280) (36,985) (2,734) 7,266 43,945 38,260 82,205 371,349 74,138 445,487 $ 415,294 $ 112,398 $ 527,692 $ 31,604 $ $ (12,568) $ 4,559 58,772 1,006 - 156 1,844 (1,549) 70 - (24) (1,611) 433 5,712 - 644 2,454 26,212 2,410 19,036 63,331 1,162 295 46 (1,178) 6,356 31,076 14,034 26,212 60,842 101,088 Net Cash Flows - Operating Activities $ 45,638 $ 26,212 $ 48,274 $ 120,124 67 CITY OF MENDOTA HEIGHTS DETAILED SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL - GENERAL FUND For the Year Ended December 31, 2013 Budgeted Amounts Variance with Original Actual Final Budget - and Final Amounts Over (Under) REVENUES Property Taxes $ 5,399,402 $ 5,400,233 $ 831 Special Assessments - 708 708 Licenses and Permits 208,600 388,883 180,283 Intergovernmental Revenue Federal Grants and Aids 6,000 22,314 16,314 State Grants and Aids: PERA Aid 9,070 9,073 3 Fire Aid 68,000 89,922 21,922 Police Aid 110,000 123,053 13,053 Other Grants and Aids 152,000 146,690 (5,310) Total Intergovernmental Revenue 345,070 391,052 45,982 Charges for Services 533,791 543,434 9,643 Fines and Forfeitures 79,000 70,077 (8,923) Miscellaneous Revenues Investment Income 35,280 (74,896) (110,176) Other 5,000 102,698 97,698 Total Miscellaneous Revenues 40,280 27,802 (12,478) Total Revenues 6,606,143 6,822,189 216,046 EXPENDITURES General Government Mayor and Council: Salaries and Benefits 24,276 24,370 94 Contracted Services 9,800 8,904 (896) Administration and Finance: Salaries and Benefits 587,987 557,351 (30,636) Materials and Supplies 19,900 12,781 (7,119) Contracted Services 290,885 304,395 13,510 68 CITY OF MENDOTA HEIGHTS DETAILED SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL - GENERAL FUND For the Year Ended December 31, 2013 (Continued) Budgeted Amounts Variance with Original Actual Final Budget - and Final Amounts Over (Under) EXPENDITURES: General Government (Continued) Elections: Salaries and Benefits $ 28,767 $ 26,909 $ (1,858) Materials and Supplies 2,100 1,625 (475) Contracted Services 1,100 157 (943) Information Technology: Salaries and Benefits 114,599 89,290 (25,309) Materials and Supplies 35,728 32,980 (2,748) Contracted Services 3,656 2,896 (760) Capital Outlay 9,550 6,049 (3,501) Planning and Zoning: Salaries and Benefits 31,637 33,390 1,753 Materials and Supplies 1,850 1,299 (551) Contracted Services 74,300 61,631 (12,669) Recycling: Salaries and Benefits 26,366 17,699 (8,667) Materials and Supplies 1,000 - (1,000) Contracted Services 6,275 7,329 1,054 Miscellaneous: Contracted Services 8,200 10,977 2,777 Total General Government 1,277,976 1,200,032 (77,944) Public Safety Police Protection: Salaries and Benefits 2,288,284 2,305,041 16,757 Materials and Supplies 111,090 107,706 (3,384) Contracted Services 586,079 551,454 (34,625) Capital Outlay - 15,606 15,606 Fire Protection: Salaries and Benefits 208,242 213,678 5,436 Materials and Supplies 89,400 86,045 (3,355) Contracted Services 257,861 241,556 (16,305) Capital Outlay 17,000 15,007 (1,993) Total Public Safety 3,557,956 3,536,093 (21,863) 69 CITY OF MENDOTA HEIGHTS DETAILED SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL - GENERAL FUND For the Year Ended December 31, 2013 (Continued) EXPENDITURES Public Works Code Enforcement: Salaries and Benefits Materials and Supplies Contracted Services Street Maintenance: Salaries and Benefits Materials and Supplies Contracted Services Capital Outlay Parks: Salaries and Benefits Materials and Supplies Contracted Services Capital Outlay Total Public Works Total Expenditures Budgeted Amounts Original and Final $ 97,679 5,075 63,850 494,456 77,468 363,750 58,500 400,677 186,468 140,700 12,000 Actual Amounts $ 70,061 3,613 84,858 503,651 100,311 458,182 359,790 425,767 147,939 140,807 14,054 1,900,623 2,309,033 6,736,555 7,045,158 Excess of Revenues Under Expenditures (130,412) (222,969) OTHER FINANCING SOURCES (USES) Transfer In 119,500 115,750 Transfer Out - (10,250) Total Other Financing Sources (Uses) 119,500 105,500 Net Change in Fund Balance FUND BALANCE Beginning of Year End of Year $ (10,912) Variance with Final Budget - Over (Under) $ (27,618) (1,462) 21,008 9,195 22,843 94,432 301,290 25,090 (38,529) 107 2,054 408,410 308,603 (92,557) (3,750) (10,250) (14,000) (117,469) $ (106,557) 6,398,654 $ 6,281,185 70 IDV Expert advice. When you need it.57' REPORT ON LEGAL COMPLIANCE INDEPENDENT AUDITOR'S REPORT Honorable Mayor and Members of the City Council City of Mendota Heights Mendota Heights, Minnesota We have audited, in accordance with auditing standards generally accepted in the United States of America, the financial statements of the governmental activities, the business -type activities, each major fund and the aggregate remaining fund information of the City of Mendota Heights, Minnesota as of and for the year ended December 31, 2013, and the related Notes to the Financial Statements, and have issued our report thereon dated June 9, 2014. The Minnesota Legal Compliance Audit Guide for Political Subdivisions, promulgated by the State Auditor pursuant to Minnesota Statutes § 6.65, contains seven categories of compliance to be tested: contracting and bidding, deposits and investments, conflicts of interest, public indebtedness, claims and disbursements, miscellaneous provisions and tax increment financing. Our audit considered all of the listed categories, except we did not test for compliance in Tax Increment Financing because the City has no Tax Increment Financing. In connection with our audit, nothing came to our attention that caused us to believe that the City of Mendota Heights, Minnesota failed to comply with the provisions of the Minnesota Legal Compliance Audit Guide for Political Subdivisions. However, our audit was not directed primarily toward obtaining knowledge of such noncompliance. Accordingly, had we performed additional procedures, other matters may have come to our attention regarding the City's noncompliance with the above referenced provisions. This report is intended solely for the information and use of those charged with governance and management of the City and the State Auditor and is not intended to be and should not be used by anyone other than these specified parties. KERN, DEWENTER, VIERE, LTD. Minneapolis, Minnesota June 9, 2014 71 CITY OF MENDOTA HEIGHTS Dakota County, Minnesota COMMUNICATIONS LETTER Year Ended December 31, 2013 CITY OF MENDOTA HEIGHTS TABLE OF CONTENTS REPORT ON MATTERS IDENTIFIED AS A RESULT OF THE AUDIT OF THE FINANCIAL STATEMENTS 1 SIGNIFICANT DEFICIENCY 2 REQUIRED COMMUNICATION 3 EMERGING ISSUES 6 FINANCIAL ANALYSIS 9 IDV Expert advice. When you need it.57' REPORT ON MATTERS IDENTIFIED AS A RESULT OF THE AUDIT OF THE FINANCIAL STATEMENTS Honorable Mayor, Members of the City Council and Management City of Mendota Heights Mendota Heights, Minnesota In planning and performing our audit of the financial statements of the City of Mendota Heights, Minnesota, as of and for the year ended December 31, 2013, in accordance with auditing standards generally accepted in the United States of America, we considered the City's internal control over financial reporting (internal control) as a basis for designing our auditing procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, we do not express an opinion on the effectiveness of the City's internal control. Our consideration of internal control was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and, therefore, material weaknesses or significant deficiencies may exist that were not identified. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies in internal control, such that there is a reasonable possibility that a material misstatement of the City's financial statements will not be prevented or detected and corrected, on a timely basis. We did not identify any deficiencies in internal control that we consider to be material weaknesses. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. The significant deficiency identified is stated within this letter. The accompanying memorandum also includes financial analysis provided as a basis for discussion. The matters discussed herein were considered by us during our audit and they do not modify the opinion expressed in our Independent Auditor's Report dated June 9, 2014, on such statements. This communication is intended solely for the information and use of management, the City Council, others within the City and state oversight agencies and is not intended to be and should not be used by anyone other than these specified parties. KERN, DEWENTER, VIERE, LTD. Minneapolis, Minnesota June 9, 2014 1 CITY OF MENDOTA HEIGHTS SIGNIFICANT DEFICIENCY December 31, 2013 LACK OF SEGREGATION OF ACCOUNTING DUTIES During the year ended December 31, 2013, the City had a lack of segregation of accounting duties due to a limited number of office employees. The lack of adequate segregation of accounting duties could adversely affect the City's ability to initiate, record, process and report financial data consistent with the assertions of management in the financial statements. This lack of segregation of accounting duties can be demonstrated in the following areas, which is not intended to be an all-inclusive list: The Finance Director has the ability to receipt City service revenue, prepares the deposit receipts, is responsible for coding, and prepares the Treasurer's report for the City Council. The Utility Billing Clerk enters consumption into the utility billing system, prepares and reviews utility bills, applies payments to customer accounts and has the ability to make adjustments to customer accounts. In addition to having responsibilities in the cycles listed above, the City's Finance Director has full general ledger access and the ability to write and post journal entries. While we believe this access is necessary to efficiently perform the financial duties required, this access allows the ability to override many of the controls and segregation the City has in place. The City has implemented certain controls to mitigate the risk due to the lack of segregation of accounting duties, including but not limited to reviewing adjustments to customer accounts before they are posted, having a non -finance employee prepare bank reconciliations and review of all journal entries. However, due to the small accounting staff needed to handle all of the accounting duties, the cost of obtaining desirable segregation of accounting duties can often exceed benefits which could be derived. Because of this, management has determined a complete segregation of accounting duties is impractical to correct. We recommend management, along with the City Council, remain aware of this situation and continually monitor the accounting system including changes that occur. 2 CITY OF MENDOTA HEIGHTS REQUIRED COMMUNICATION December 31, 2013 We have audited the financial statements of the City for the year ended December 31, 2013, and have issued our report dated June 9, 2014. Professional standards require that we provide you with the following information related to our audit. OUR RESPONSIBILITY UNDER AUDITING STANDARDS GENERALLY ACCEPTED IN THE UNITED STATES OF AMERICA As stated in our engagement letter, our responsibility, as described by professional standards, is to express an opinion about whether the financial statements prepared by management with your oversight are fairly presented, in all material respects, in conformity with accounting principles generally accepted in the United States of America. Our audit of the financial statements does not relieve you or management of your responsibilities. Our responsibility for the supplementary information accompanying the financial statements, as described by professional standards, is to evaluate the presentation of the supplementary information in relation to the financial statements as a whole and to report on whether the supplementary information is fairly stated, in all material respects, in relation to the financial statements taken as a whole. PLANNED SCOPE AND TIMING OF THE AUDIT An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; therefore, our audit involved judgment about the number of transactions to be examined and the areas to be tested. Our audit included obtaining an understanding of the City and its environment, including internal control, sufficient to assess the risks of material misstatement of the financial statements and to design the nature, timing and extent of further audit procedures. Material misstatements may result from (1) errors, (2) fraudulent financial reporting, (3) misappropriation of assets or (4) violations of laws or governmental regulations that are attributable to the City or to acts by management or employees acting on behalf of the City. QUALITATIVE ASPECTS OF ACCOUNTING PRACTICES Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the City are described in Note 1 to the financial statements. No new accounting policies were adopted and the application of existing policies was not changed during the year ended December 31, 2013. We noted no transactions entered into by the City during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the proper period. 3 CITY OF MENDOTA HEIGHTS REQUIRED COMMUNICATION December 31, 2013 QUALITATIVE ASPECTS OF ACCOUNTING PRACTICES Accounting estimates are an integral part of the financial statements prepared by management and are based on management's knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates affecting the financial statements were: Depreciation — The City is currently depreciating its capital assets over their estimated useful lives, as determined by management, using the straight-line method. Expense Allocation — Certain expenses are allocated to functions based on an estimate of the benefit to that particular function. Examples are salaries, benefits, insurance and supplies. Net Other Post Employment Benefits (OPEB) Obligation — This liability is based on an actuarial study using estimates of future obligations of the City for post -employment benefits. The financial statement disclosures are neutral, consistent and clear. DIFFICULTIES ENCOUNTERED IN PERFORMING THE AUDIT We encountered no difficulties in dealing with management in performing and completing our audit. CORRECTED AND UNCORRECTED MISSTATEMENTS Professional standards require us to accumulate all misstatements identified during the audit, other than those that are clearly trivial, and communicate them to the appropriate level of management. Management did not identify and we did not notify them of any uncorrected financial statement misstatements. In addition, none of the misstatements detected as a result of audit procedures and corrected by management were material, either individually or in the aggregate, to the financial statements taken as a whole. DISAGREEMENTS WITH MANAGEMENT For purposes of this letter, a disagreement with management as a financial accounting, reporting or auditing matter, whether or not resolved to our satisfaction that could be significant to the financial statements or the auditor's report. We are pleased to report that no such disagreements arose during the course of our audit. MANAGEMENT REPRESENTATIONS We requested certain representations from management which were provided to us in the management representation letter. 4 CITY OF MENDOTA HEIGHTS REQUIRED COMMUNICATION December 31, 2013 MANAGEMENT CONSULTATIONS WITH OTHER INDEPENDENT ACCOUNTANTS In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a "second opinion" on certain situations. If a consultation involves application of an accounting principle to the City's financial statements or a determination of the type of auditor's opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants. OTHER AUDIT FINDINGS OR ISSUES We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the City's auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. OTHER MATTERS With respect to the supplementary information accompanying the financial statements, we made certain inquiries of management and evaluated the form, content and methods of preparing the information to determine that the information complies with accounting principles generally accepted in United States of America, the method of preparing it has not changed from the prior period, and the information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves. 5 CITY OF MENDOTA HEIGHTS EMERGING ISSUES December 31, 2013 Executive Summary The following is an executive summary of financial and business related updates to assist you in staying current on emerging issues in accounting and finance. This summary will give you a preview of the new standards that have been recently issued and what is on the horizon for the near future. The most recent and significant updates include: Accounting for pensions —This accounting update has been issued and will be applied for 12/31/15 year-end reporting. Internal Control Integrated Framework — COSO has issued an updated integrated framework for internal control. The update is expected to make the integrated internal control framework easier to use and apply. In addition, the update takes into account globalization of businesses today and its interdependence on technology. This update has been issued and will supersede the original framework at the end of 2014. The following are extensive summaries of each of the current updates. As your continued business partner, we are committed to keeping you informed of new and emerging issues. We are happy to discuss these issues with you further and their applicability to your City. ACCOUNTING STANDARD UPDATE — ACCOUNTING FOR PENSIONS GASB Statement No. 68 replaces the requirements of Statement No. 27, Accounting for Pensions by State and Local Governmental Employers and Statement No. 50, Pension Disclosures, as they relate to governments that provide pensions through pension plans administered as trusts or similar arrangements that meet certain criteria. Statement No. 68 requires governments providing defined benefit pensions to recognize their long-term obligation for pension benefits as a liability for the first time, and to more comprehensively and comparably measure the annual costs of pension benefits. COSO PROJECT — INTERNAL CONTROL INTEGRATED FRAMEWORK In 1992, the Committee on Sponsoring Organizations of the Treadway Commission (COSO) developed an internal control framework that has been adopted and used by entities worldwide. In 2013, COSO finalized and released an updated integrated internal control framework. The update is expected to make the integrated framework easier to use and apply. In addition, the update takes into account, the business environment of today and the reliance on and interdependence of technology within business systems. The internal control update is not changing the core definition of internal control, the three categories of objectives or the five components of internal control. 6 CITY OF MENDOTA HEIGHTS EMERGING ISSUES December 31, 2013 COSO PROJECT — INTERNAL CONTROL INTEGRATED FRAMEWORK (CONTINUED) COSO defines internal control as a process, affected by an entity's board of directors, management and other personnel. This process is designed to provide reasonable assurance regarding the achievement of the three objectives, as follows: effectiveness and efficiency of operations; reliability of financial reporting; and compliance with applicable laws and regulations. 1. Internal control is a process. It is a means to an end, not an end in itself. 2. Internal control is not merely documented by policy manuals and forms. Rather, it is put in by people at every level of an organization. 3. Internal control can provide only reasonable assurance, not absolute assurance, to an entity's management and board. 4. Internal control is geared to the achievement of objectives in one or more separate but overlapping categories. The five components of internal control, which are unchanged, are as follows: 1. Control Environment - integrity, ethics, management style, etc. 2. Risk Assessment - identification and analysis of relevant risks 3. Control Activities - policies, procedures and activities, including segregation of duties 4. Information and Communication - ensure information effectively flows up, down and across the organization, both internally and externally 5. Monitoring Activities - assessment of the systems performance over time The updated framework has changed to address the changes in business and operating environments, such as globalization of markets and operations, greater complexities in businesses, reliance on evolving technologies and expectations relating to preventing and detecting fraud. In addition, principles of effective internal controls have been added to each of the components of internal control as follows: Control Environment: 1. Demonstrates a commitment to integrity and ethical values. 2. The board of directors is independent from management and exercises oversight responsibility of the performance of internal controls. 3. Management establishes structure, reporting lines, authority and responsibility. 4. Demonstrates a commitment to attract, develop and retain competent individuals. 5. Enforces accountability for individual's internal control responsibilities. 7 CITY OF MENDOTA HEIGHTS EMERGING ISSUES December 31, 2013 COSO PROJECT — INTERNAL CONTROL INTEGRATED FRAMEWORK (CONTINUED) Risk Assessment: 1. Specifies suitable objectives with sufficient clarity. 2. Identifies and analyzes risk as a basis for how risks should be managed. 3. Assesses the potential for fraud risk. 4. Identifies and analyzes significant changes that could impact the system of internal controls. Control Activities: 5. Selects and develops control activities that contribute to the mitigation of risks. 6. Selects and develops general controls over technology. 7. Deploys control activities through policies that establish what is expected and procedures that put policies into place. Information and Communication: 8. Uses relevant information to support the functioning of other components of internal control. 9. Communicates information internally, including objectives and responsibilities necessary to support the internal controls. 10. Communicates with external parties regarding matters affecting internal control. Monitoring Activities: 11. Conducts ongoing and/or separate evaluations to ascertain whether the components of internal control are present and functioning. 12. Evaluates and communicates deficiencies to those parties responsible for corrective actions. The updated framework also has additional examples relevant to operation, compliance and reporting objectives added. While COSO integrated internal control framework is very extensive, this is only a short summary of some of the changes of the updated framework. The updated framework will supersede the original framework at the end of 2014; however, users of the framework are encouraged to transition to the updated framework as soon as possible. 8 CITY OF MENDOTA HEIGHTS FINANCIAL ANALYSIS December 31, 2013 The following pages provide graphic representation of select data pertaining to the financial position and operations of the City for the past four years. Our analysis of each graph is presented to provide a basis for discussion of past performance and how implementing certain changes may enhance future performance. We suggest you view each graph and document if our analysis is consistent with yours. A subsequent discussion of this information should be useful for planning purposes. GENERAL FUND The General Fund revenues for the past five years are depicted in the following graph. General Fund Revenues I ., , ,vvv,vvv $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $- 2009 2010 2011 2012 2013 ■Other $260,949 $193,438 $175,067 $166,328 $97,879 ■Charges for Services 490,672 504,114 523,117 539,068 543,434 ■Intergovernmental 339,370 332,415 346,158 457,668 391,052 •Licenses and Permits 241,790 261,984 239,767 419,702 388,883 ■ Taxes and Assessments 4,800,429 4,999,556 5,096,265 5,313,266 5,400,941 General Fund revenue decreased $ 73,843, or 1.1%, during the year, from $ 6,896,032 in 2012 to $ 6,822,189 in 2013. The largest fluctuation occurred in taxes and assessments, which was attributable to an increase in the approved tax levy for the fund. Licenses and permits revenue decreased $ 30,819, or 7.3%, due to fewer receipts from building permits. Intergovernmental revenues decreased due to the receipt of Federal Emergency Management Agency (FEMA) public assistance disaster grant funds in 2012 used to reimburse the City for severe storm damage that occurred in the summer of 2012. Other revenues decreased due to change in market value on investments in 2013. Charges for services revenues remained consistent from 2012 to 2013. 9 CITY OF MENDOTA HEIGHTS FINANCIAL ANALYSIS December 31, 2013 GENERAL FUND The graph below presents a comparison of budget and actual General Fund revenues by source. The graph shows the City's actual revenues of $ 6,822,189 were over the budget of $ 6,606,143 by $ 216,046, or 3.3%. For all categories of revenues presented below, actual revenues were over budgeted amounts with the exception of other revenues. The City opted to not amend the budget during the year. As a result, there was a significant variance in one category, licenses and permits. Licenses and permits revenue was over budget $ 180,283 as a result of several large building permits received during the year and the City budgeting conservatively. Property taxes, intergovernmental and charges for services were also over budget, as the City budgets conservatively for these revenue sources. $6 $5 $4 $3 $2 $1 2013 General Fund Revenues Budget and Actual 10 000,000 000,000 000,000 000,000 000,000 1 1 1 1 $ Taxes and Assessments Licenses and Permits Intergovernmental Charges for Services Other ■Budget $5,399,402 $208,600 $345,070 $533,791 $119,280 •Actual 5,400,941 388,883 391,052 543,434 97,879 10 GENERAL FUND CITY OF MENDOTA HEIGHTS Taxes and Assessments 79% FINANCIAL ANALYSIS December 31, 2013 2013 General Fund Revenues Other 1% Charges for Services 8% 2012 General Fund Revenues Taxes and Assessments 77% Licenses and Permits 6% Intergovernmental 6% Other 2% Licenses and Permits 6% Intergovernmental 7% Charges for Services 8% 11 CITY OF MENDOTA HEIGHTS FINANCIAL ANALYSIS December 31, 2013 GENERAL FUND The General Fund expenditures for the past five years are depicted in the following graph. General Fund Expenditures ,o,'J'Ju,uuu $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $- - AlIL 2009 2010 2011 2012 2013 ® Capital Outlay $199,837 $59,611 $153,986 $117,043 $410,506 ■ General Government 1,321,561 1,156,455 1,255,396 1,263,073 1,193,983 ® Public Works 1,698,800 1,568,188 1,684,958 1,712,300 1,935,189 ■Public Safety 2,968,252 3,162,201 3,353,723 3,454,423 3,505,483 General Fund expenditures increased 7.6%, from $ 6,546,839 in 2012 to $ 7,045,158 in 2013. General Government was the only function of the fund that decreased during the year. The function decreased $ 69,090, or 5.5% due to a reduction in contracted services and materials and supplies. The largest increase in expenditures occurred in capital outlay. Capital Outlay expenditures increased $ 293,463, due to the purchase of a front end loader and a new truck in 2013. Public works expenditures increased $ 222,889, or 13.0%, as a result of an increase in contracted services mainly caused by an increase in salt costs. Public safety expenditures increase $ 51,057, or 1.5%, as a result of an increase in salaries and benefits due to there being more fire calls in 2013. 12 CITY OF MENDOTA HEIGHTS FINANCIAL ANALYSIS December 31, 2013 GENERAL FUND The graph below presents a comparison of budget and actual General Fund expenditures by function. In total, the Fund's expenditures were $ 308,603, or 4.6%, over budgeted expenditures of $ 6,736,555. Capital outlay expenditures had the largest variance as expenditures were over budget by $ 313,456, or 323.8%, due to the purchase of the front end loader which was not budgeted for. Public works expenditures were over budget $ 105,066 as salt costs increased significantly in 2013. General government and public safety expenditures were slightly under budget. $4,000,000 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $- 2013 General Fund Expenditures Budget and Actual' General Government Public Safety Public Works Capital Outlay ■ Budget $1,268,426 $3,540,956 $1,830,123 $97,050 • Actual 1,193,983 3,505,483 1,935,189 410,506 13 GENERAL FUND Public Safety 50% CITY OF MENDOTA HEIGHTS FINANCIAL ANALYSIS December 31, 2013 2013 General Fund Expenditures General Government 17% 2012 General Fund Expenditures Public Safety 53% Public Works 27% Capital Outlay 6% General Government 19% Public Works 26% Capital Outlay 2% 14 CITY OF MENDOTA HEIGHTS FINANCIAL ANALYSIS December 31, 2013 GENERAL FUND The bar chart below highlights General Fund results for the last five years. $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 General Fund Operations r 120% 100% 80% 60% 40% 20% 0% 2009 2010 2011 2012 2013 il Revenues $6,133,210 $6,291,507 $6380374 $6,896,032 $6,822,189 Fxpax1eues 6,1884450 5,946,455 6448,063 6,546,839 7,045,161 Fund Balance 5,549,839 6,003,166 6,065,727 6,398,654 6,281,182 t RudBalance asaoflheYeaesFxpede<ues 90% 101% 94% 98% 89% As shown in the chart, the City has been able to increase fund balance from 2009 to 2012 but had a decrease in 2013. Fund balance as a percentage of the current year's expenditures has also remained consistent during that period and decreased in 2013, as the fund has received regular transfers in from other funds that cover any deficits resulting from expenditures exceeding revenues. In 2011, the City implemented a policy in accordance with GASB 54 whereby the General Fund's unassigned fund balance is at least 65% of the subsequent year's budgeted expenditures. As of December 31, 2013, the City's unassigned General Fund balance of $ 5,268,225 was 78.4% of 2014 budgeted expenditures. 15 $5,907,2181 CITY OF MENDOTA HEIGHTS FINANCIAL ANALYSIS December 31, 2013 TAX CAPACITY, LEVY AND RATES The chart below graphs the tax capacity, certified tax levy and City tax rate for 2009 through 2013. The tax capacity is based on total tax capacity, prior to adjustments for captured Tax Increment Financing (TIF) and fiscal disparities. The certified tax levy amount is also prior to fiscal disparity adjustments. With declining market values, the City's tax capacity declined from 2012 to 2013 by $ 625,785, or 3.1%. While the City increased the overall levy, the decline in tax capacity resulted in an increase in the City's tax rate to 34.75%. Tax Capacity and Levy $25,000,000 $22,500,000 $20,000,000 $17,500,000 $15,000,000 $12,500,000 $10,000,000 $7,500,000 Tax Capacity, Levy and Rates* $23,957,900 28.34% '6.17"A $5,000,000 $5,873,313 $2,500,000 $- 2009 $5,990,453 $5,937,627 $6,151,9001 2010 2011 2012 2013 t Total Tax Capacity Certified Tax Levy t Tax Capacity Rate I 40.00% 36.00% 32.00% 28.00% 24.00% 20.00% 16.00% 12.00% 8.00% 4.00% 0.00% * Property tax data was obtained from the League of Minnesota Cities Property Tax Data Tables for 2009-2013 (www.lmc.org) 16 CITY OF MENDOTA HEIGHTS FINANCIAL ANALYSIS December 31, 2013 ENTERPRISE FUNDS Par 3 Golf Course Fund In 2013, expenses exceeded revenues for the fourth consecutive year, producing an operating loss of $ 3,374. As a result, the Fund's unrestricted net position has declined in three of the past four years. Excluding depreciation, the Fund had operating income of $ 9,362 for 2013, increasing unrestricted net position in 2013. $225,000 $200,000 $175,000 $150,000 $125,000 $100,000 $75,000 $50,000 $25,000 $- $(25,000) $(50,000) Par 3 Golf Course Fund I 2009 2010 2011 2012 2013 • Revenues $184,715 $176,780 $148,403 $146,603 $143,895 0 Operating Expenses 180,390 188,839 186,399 161,532 147,264 • Operating Income (Loss) 4,325 (12,059) (37,996) (14,929) (3,374) ❑ Operating Income Excluding Depreciation 16,080 1,896 (24,041) (787) 9,362 • Unrestricted Net Position 50,952 42,591 19,109 18,507 27,570 17 CITY OF MENDOTA HEIGHTS FINANCIAL ANALYSIS December 31, 2013 ENTERPRISE FUNDS Sewer Fund The following graph presents a five year history of the Sewer Fund. Due to the nature and cost of Sewer Fund assets, it is often difficult to establish sewer rates that are sufficient to cover the current year's use of the assets represented by depreciation expense. Ideally, Sewer Fund revenues should cover all operating expenses, including depreciation. The Sewer Fund experienced an operating loss of $ 628 for 2013, which included recognition of $ 153,406 of depreciation expense. Expenses were close to matching revenues in 2013 due to the City increasing its rates again to counter rising costs from Met Council for the City's portion of sewer flow. Net position of the fund decreased $ 87,970 after factoring in nonoperating revenues and net transfers. Sewer Fund I .p',VVV,VVV $1,500,000 $1,000,000 $500,000 I� _ M n _ f 1 $- $(500,000) 2009 2010 2011 2012 2013 ■ Clines for Services $1,112,297 $1,365,001 $1,382,240 $1,481,624 $1,529,056 0 OperatingExpenses 1,429,810 1,368,919 1,442,332 1,499,556 1,529,684 0 OperatingLoss (317,513) (3,918) (60,092) (17,932) (628) ElOpaatn'glncrnne(Los) ExchadingDepieciation (173,191) 140,403 85,217 129,546 152,778 18 CITY OF MENDOTA HEIGHTS FINANCIAL ANALYSIS December 31, 2013 ENTERPRISE FUNDS Storm Water Fund The Storm Water Fund had operating income of $ 243,952, which included recognition of depreciation expense of $ 31,833. Charges for services increased $ 126,225 from 2012 to 2013 due to an increase in rates. Operating expenses decreased $ 18,553, from $ 175,413 in 2012 to $ 156,860 in 2013. This decrease was primarily due to less repairs and maintenance needed in 2013. Net position increased $ 400,804 in 2013. The Fund has shown operating income for all years presented. Storm Water Fund I .p'-tw,vvv $400,000 $350,000 $300,000 $250,000 $200,000 $150,000 $100,000 $50,000 r - 2009 2010 2011 2012 2013 ■ Charges for Services $266,982 $273,364 $274,386 $274,587 $400,812 D Operating Expenses 143,398 115,473 131,640 175,413 156,860 ■ Operating Income 123,584 157,891 142,746 99,174 243,952 ■Operating Income Excluding Depreciation 147,432 182,423 168,575 127,075 275,785 19 CITY OF MENDOTA HEIGHTS page 55 1101 Victoria Curve 1 Mendota 8a . )5118 651.452.1850 phone 1 651..,�.�,.,Yi, 1 x www.mendota-heights.com DATE: June 17, 2014 TO: Mayor, City Council, and City Administrator FROM: Lorri Smith, City Clerk SUBJECT: Public Hearing for Renewal of Liquor Licenses BACKGROUND A public hearing has been scheduled for Tuesday evening, June 17, 2014 for hearing public comments on the renewal of the liquor licenses. These licenses will expire on June 30, 2014. The City Council may conduct one public hearing and act on all of the licenses concurrently at this meeting provided there are no negative public comments or council concerns. Renewal applications have been received from all of the current licensees as follows: Intoxicating Liquor and Sunday Liquor licenses: • Felipe's LLC dba Teresa's Mexican Restaurant, 762 Highway 110 • Haiku Japanese Bistro Inc. dba Haiku Japanese Bistro, 754 Highway 110 • Courtyard Management Corp. dba Courtyard by Marriott, 1352 Northland Drive Club Liquor and Sunday Liquor licenses: • Mendakota Country Club, 2075 Mendakota Drive • Somerset Country Club, 1416 Dodd Road Wine licenses: • Mendo Restaurant Group, Inc., dba Mendoberri located at 730 Main Street, • Windy City Pizza LLC dba Tommy Chicago's Pizzeria located at 730 Main Street, • CEC Food and Beverage LLC, dba LeCordon Bleu, 1315 Mendota Heights Road. Off -Sale Liquor licenses: • MapleTree Mendota Retail LLC dba The Wine Market, Suite 101, 720 Main Street • Poopha Inc. dba Mendota Liquor, 766 Highway 110 On -Sale 3.2 percent Malt Liquor licenses: • Mendota Heights Par 3 located at 1695 Dodd Road, • Mendo Restaurant Group, Inc., dba Mendoberri located at 730 Main Street, • Windy City Pizza LLC dba Tommy Chicago's Pizzeria located at 730 Main Street, • CEC Food and Beverage LLC, dba LeCordon Bleu, 1315 Mendota Heights Road. Off -Sale 3.2 percent Malt Liquor licenses: • Northern Tier Retail LLC dba SuperAmerica located at 1080 Highway 110, • Northern Tier Retail LLC dba SuperAmerica located at 1200 Mendota Heights Road page 56 All of the required documentation has been received. Background investigations have been conducted resulting in no negative fmdings on the above applicants. There have been no liquor law violations within the past year. If approved, these licenses will be effective July 1, 2014 through June 30, 2015. RECOIVIIVIENDATION Staff recommends the Mayor and City Council hold the public hearing, consider comments from the public, and approve the issuance of the license renewals as listed above for the period of July 1, 2014 through June 30, 2015. CITY OF Or -m MENDOTA HEIGHTS DATE: TO: page 57 9a. 1101 Victoria Curve 1 Mendota HF 5118 651.452.1850 phone 1 651.452.8940 fax www.mendota-heights.com June 17, 2014 Mayor, City Council and City Administrator FROM: Nolan Wall, AICP Planner SUBJECT: Amendment to Development Contract for LeMay Shores BACKGROUND In June 2007, the City Council approved a development agreement for LeMay Shores, a 60 -unit townhome development on the east side of Lake LeMay. Since the original approval, the agreement has been extended a number of times, most recently in 2011. The existing agreement expires on June 30, 2014 and the developer is requesting another extension until December 31, 2014 to allow time to finalize a transition to a national builder, as indicated in the attached letter. Staff recently met with the developer and is encouraged by the short extension being requested. Staff does not foresee any issues with the request and anticipates bringing back additional amendments to the agreement once the developer transition is finalized A copy of the proposed amended and restated contract is attached for review. BUDGET IMPACT N/A RECOMMENDATION Discuss the request with the developer. If the City Council wishes to grant the extension, pass a motion APPROVING THE AMENDED AND RESTATED CONTRACT FOR PRIVATE DEVELOPMENT AND AUTHORIZE THE MAYOR AND CITY CLERK TO EXECUTE THE AMENDED CONTRACT. This matter requires a simple majority vote. page 58 H©FFMAN®MEND©TA SHORE, LLC 13795 Frontier Court, Suite 200 Burnsville, MN 55337 Phone 952-997-3333 Fax 952-997-6666 June 11, 2014 Mr. Nolan Wall City Planner City of Mendota Heights 1101 Victoria Curve Mendota Heights, MN 55118 RE: LEMAY SHORES DEVELOPMENT AGREEMENT EXTENSION Dear Mr. Wall; Thank you for your time meeting with us and discussing the positive news and plans for i cit : r_ _ � � have i � the Leiria.y Shores development. We are excited to have the project move ahead and are anticipating breaking ground this summer. As we discussed the marketplace has experienced tremendous changes, not only in the Twin Cities market but nationwide. The housing market has now substantially recovered and this has allowed us to be able to bring this project to market. One of the changes in the marketplace has been the shift to national builder dominance. Much of this is due to the dramatic effect of the recent recession and project financing, particularly in projects of this scale. We have reached an agreement with a national builder and wish to have them proceed with the Lemay Shores development as envisioned. To provide for this we are requesting an extension for the Final Plat and the Planned Unit Development Agreement on the LeMay Shores project. The City of Mendota. Heights staff and City Council have been supportive of the project in the past and its foresight has preserved a great project for the right timing to ensure its success. I am requesting an extension of six months for the Final Plat and Planned Unit Development to December 31, 2014. This extension will allow us to proceed with the development early this summer yet also allow for any short -tenni unplanned contingencies. This extension request reflects the support by The Catholic Cemeteries and their desire to have this property developed as planned. page 59 We have high expectations for the project and look forward to moving ahead in the next several months. Please give me a call if you have any additional questions. Thank you for your consideration. Since ely,„. Patrick C. Hoffman President cc: Mr. Justin Miller, City Administrator Mr. Peter Coyle, Larkin Hoffman page 60 June 17, 2014 (Amended) AMENDED AND RESTATED CONTRACT FOR PRIVATE DEVELOPMENT By and Between THE CITY OF MENDOTA HEIGHTS and HOFFMAN-MENDOTA SHORE, LLC page 61 TABLE OF CONTENTS Paae SECTION I. Definitions 1 Section 1.1. Definitions 1 SECTION II. Representations and Warranties 4 Section 2.1. Section 2.2. SECTION III. Section 3.1. Section 3.2. Section 3.3. Section 3.4. Section 3.5. Section 3.6. Section 3.7. Section 3.8. Section 3.9. Section 3.10. Section 3.11. Section 3.12. Section 3.13. Section 3.14. Section 3.15. Section 3.16. Section 3.17. Section 3.18. Section 3.19. Section 3.20. Representations by the City 4 Representations, Covenants and Warranties by the Developer 4 Land Development 5 Final Plans 5 Developer Requirements 6 Irrevocable Letter of Credit 9 No Warranty 9 City Expenses 10 Warranty 10 Contractors Meeting 11 Quality of Work 11 Engineering and Location Services for Public Infrastructure Improvements11 Staking and Inspection 11 Emergency Access 11 Building Permits 11 Occupancy 12 Final Inspection 12 City's Right to Complete Work 12 Conveyance to the City 12 Maintenance Prior to Conveyance 13 Airport Noise Impacts 13 Formation of Owners Association 13 Approval of Association Documents 14 SECTION IV. Construction 14 Construction of Infrastructure Improvements 14 Commencement and Completion of Infrastructure Improvements 14 Temporary Signage 15 Section 4.1. Section 4.2. Section 4.3. SECTION V. Indemnification, Release and Insurance 15 Indemnity 15 Release and Waiver 15 Insurance 15 Non -Imputation 17 Section 5.1. Section 5.2. Section 5.3. Section 5.4. page 62 SECTION VI. Prohibitions Against Assignment and Transfer 17 Section 6.1. Representation as to Development 17 Section 6.2. Prohibition Against Transfer and Assignment 17 Section 6.3. Construction Lender 18 SECTION VII. Events of Default 19 Section 7.1. Defined 19 Section 7.2. Remedies 19 Section 7.3. No Remedy Exclusive 19 Section 7.4. No Additional Waiver Implied by One Waiver 20 SECTION VIII. Termination of Agreement 20 Section 8.1. Automatic Expiration 20 Section 8.2. Option to Terminate 20 Section 8.3. Effect of Termination 20 Section 8.4. Evidence of Termination 20 SECTION IX. Additional Provisions 21 Section 9.1. Conflicts of Interest; City Representatives Not Individually Liable 21 Section 9.2. Equal Employment Opportunity 21 Section 9.3. Provisions Not Merged with Deed 21 Section 9.4. City Approvals 21 Section 9.5. Titles of Sections and Sections 21 Section 9.6. Notices and Demands 21 Section 9.7. Counterparts 22 Section 9.8. Law Governing 22 Section 9.9. Severability 22 Section 9.10. Complete Agreement 22 Section 9.11. Successors 22 Section 9.12. Authority 22 Section 9.12. Recording 22 EXHIBIT A Legal Description 24 EXHIBIT B Final Plans 25 EXHIBIT C Trail Easement Agreement 26 EXHIBIT D Conservation Easement Description 30 EXHIBIT E Sample Irrevocable Letter of Credit 36 EXHIBIT F Engineer's Estimate 39 page 63 AMENDED AND RESTATED CONTRACT FOR PRIVATE DEVELOPMENT THIS AGREEMENT is made as of June 5, 2007 (the "Effective Date") and subsequently amended as of October 10, 2007, June 16, 2009, June 7, 2011 and June 17, 2014, by and between the City of Mendota Heights, a Minnesota statutory city, having its principal office at 1101 Victoria Curve, Mendota Heights, Minnesota 55118-4167 (the "City") and Hoffman -Mendota Shore L.L.C., a Minnesota limited liability company, its successors and assigns as permitted herein, having its principal office at 13795 Frontier Court, Suite 200, Burnsville, MN 55337 ("Developer"). WITNESSETH: WHEREAS, the City is a Minnesota statutory city formed under Chapter 412 of the Minnesota Statutes, and is authorized to transact business and exercise its powers, including the powers described herein, by a resolution of the city council of the City; and WHEREAS, Developer has or will acquire certain property located east of LeMay Lake in the City, more particularly described on Exhibit A attached hereto, which was formerly Resurrection Cemetery (the "Development Property") to be known as LeMay Shores and has developed a plan, subject to obtaining necessary approvals, for development thereon, in phases, of a 60 unit multi -family residential development in accordance herewith and with the Planned Unit Development Final Plan, as defined herein for Residential Development approved June 5, 2007, by City Council Resolution 07-54 (the "Project"); and WHEREAS, the parties hereto believe that development of the Project pursuant to this Agreement, and fulfillment generally of this Agreement, are in the vital and best interests of the City and the health, safety and welfare of its residents, and in accord with the public purposes, provisions and requirements of the applicable state and local laws under which the Project has been undertaken; and WHEREAS, the parties desire to extend the terms of the Project as reflected by this Agreement to December 31, 2014. NOW, THEREFORE, in consideration of the premises and the mutual obligations of the parties hereto, each of them covenants and agrees with the other as follows: SECTION I Definitions Section 1.1. Definitions. In this Agreement, unless a different meaning clearly appears from the context: "Agreement" means this Agreement, as the same may be from time to time modified, amended, or supplemented. page 64 "City" has the meaning assigned to it in the introductory paragraph of this Agreement. "City Attorney" means Tom Lehmann or such other person as may succeed or replace him as City Attorney. "City Engineer" means John Mazzitello or such other person as may succeed or replace him as City Engineer. "Closing" means the acquisition by the Developer of good and marketable title to the Development Property. "Closing Date" means the date upon which the Closing occurs. "Development Property" has the meaning assigned to it in the Recitals. "Environmental Law(s)" shall mean, but is not limited to, Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C. §§9601 et seq. as now or hereafter amended, the Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. §§6901 et seq. as now or hereafter amended, the Federal Water Pollution Control Act, 33 U.S.C. §§1251 et seq. as now or hereafter amended, the Clean Water Act (33 U.S.C. § 1317 et seq.), as now or hereafter amended, the Clean Air Act, 42 U.S.C. §7401 et seq., the Clean Water Act (33 U.S.C. § 1317 et seq.), as now or hereafter amended; the Clean Air Act (342 U.S.C. § 7412 et seq.), as now or hereafter amended; the Toxic Substances Control Act (15 U.S.C. § 2606 et seq.), as now or hereafter amended; the Hazardous Materials Transportation Act (49 U.S.C. § 1801 et seq.), as now or hereafter amended; the Minnesota Environmental Response and Liability Act (Minn Stat. Section 115B.02 et seq.) ("MERLA"), as now and hereafter amended and the regulations thereunder, and any other local, state and/or Federal laws or regulations, that govern (i) The existence, cleanup and/or remedy of contamination on the Development Property; (ii) The protection of the environment from released, spilled, deposited or otherwise emplaced contamination; (iii) The control of hazardous wastes; or (iv) The use, generation, transport, treatment, removal or recovery of Hazardous Substances, including any and all building materials. "Event of Default" means an action or failure to act by the Developer or the City as identified in Section VIII of this Agreement. "Final Plans" means those certain final plans, specifications, drawings, submittals of the Developer and related documents with respect to the Infrastructure Improvements approved by the City Engineer, all of which were approved by City Council Resolution 05-85 dated September 6, 2005, which are attached hereto as Exhibit B and/or listed on Exhibit B. Hazardous Substance: The term "Hazardous Substance" shall mean any substance which at any time shall be listed as "hazardous" or "toxic" or in the regulations implementing the page 65 Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C. §§ 9601 et seq. as now or hereafter amended, the Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. §§ 6901 et seq. as now or hereafter amended, the Federal Water Pollution Control Act, 33 U.S.C. §§ 1251 et seq., the Clean Water Act (33 U.S.C. § 1317 et seq.), as now or hereafter amended; the Clean Air Act (342 U.S.C. § 7412 et seq.), as now or hereafter amended; the Toxic Substances Control Act (15 U.S.C. § 2606 et seq.), as now or hereafter amended; the Hazardous Materials Transportation Act (49 U.S.C. § 1801 et seq.), as now or hereafter amended; the Minnesota Environmental Response and Liability Act (Minn Stat. § 115B et. seq.) ("MERLA"), as now and hereafter amended, including, without limitation, any pollutant or contaminant as such terms are defined within MERLA or which has been or shall be determined at any time by any agency or court be a hazardous or toxic substance regulated under Environmental Law, as defined herein. The term "Hazardous Substance" shall also include, without limitation, asbestos, asbestos -containing building material, raw materials, building components, the products of any manufacturing or other activities on the subject Property, wastes, petroleum, and source, special nuclear or by-product material as defined by the Atomic Energy Act of 1954, as amended (42 U.S.C. §§ 3011, et seq.) as now or hereafter amended. "Infrastructure Improvements" has the meaning given to it in Section 3.1. "MnDOT" means the Minnesota Department of Transportation. "Mortgage" means any mortgage of record now or hereafter placed against the Project. "MPGA" means the Minnesota Pollution Control Agency. "Plat" means that certain plat of the Development Property. "Public Road" means that certain public street as represented, drawn and described on the Final Plans. "Residential Units" means those 60 twin -home units to be constructed in accordance with the Final Plans. "Sale" means the conveyance of title of a Residential Unit by the Developer to a third party that is not an affiliate of Developer. For purposes hereof an affiliate means an Affiliate as defined in Section 6.2 as well as any other person or entity controlling, controlled by or under common control with Developer. "Title Company" means Dakota County Abstract. "Unavoidable Delays" means unexpected delays which are the direct result of: (i) adverse weather conditions, (ii) shortages of materials, (iii) strikes, other labor troubles, (iv) fire or other casualty to the Infrastructure Improvements, (v) litigation commenced by third parties which, by injunction or other judicial action, directly results in delays, (vi) acts or failure to act of any federal or state governmental unit, including legislative and administrative acts, (vii) approved changes to the Final Plans, that result in delays and (vii) any other cause or force majeure beyond the control of the Developer and/or the City which directly results in delays. page 66 SECTION II Representations and Warranties Section 2.1. Representations by the City. The City represents, warrants, and covenants to the following: (a) The City is a statutory city duly organized and existing under the laws of the State of Minnesota. The City is authorized and has the requisite power to enter into this Agreement and perform its obligations hereunder. (b) The City shall use reasonable efforts to cooperate and work with the Developer in connection with (i) applications, agreements, amendments and approvals relating to, among other things, zoning, site plan, planned developments, subdivision, protective covenants, utility and other development matters to permit the development of the Development Property in accordance with this Agreement and the Final Plans, (ii) any requirements of local, state or federal governments or agencies thereof relating to the development of the Project, (iii) coordinating the sequencing, commencement and completion of the Infrastructure Improvements. (c) The Developer shall be entitled to a credit to off -set its Park Dedication Fees, as defined in the City's ordinances for its actual, out of pocket costs incurred for grading necessary to construct trail beds and trail paving as proposed between the Development Property and Augusta Shores pursuant to the Final Plans, including necessary, import, grading, replacement of fill, and restoration of disturbed areas. The Park Dedication Fee applicable to each Residential Unit within the Project shall be payable at the time of filing the plat. Such credit to the Park Dedication Fee shall not exceed $25,000.00. (d) The City shall use reasonable efforts to cooperate and work with the Developer to encourage MnDOT to issue permits for the construction of Infrastructure Improvements within the right-of-way of LeMay Lake Road and TH 55. Section 2.2. Representations, Covenants and Warranties by the Developer. The Developer represents, warrants, and covenants to the following: (a) The Developer is a duly and legally formed Minnesota limited liability company, and is not in violation of any the laws of the local state or federal government, and has all necessary power and authority to enter into this Agreement and to carry out its obligations hereunder. (b) Upon acquisition of the Development Property, any Infrastructure Improvement constructed by the Developer will be constructed, operated and maintained (to the extent retained by it) in accordance with the terms of this Agreement, the Final Plans and all local, state and federal laws and regulations (including, but not limited to, environmental, zoning, building code, energy conservation, and public health laws and regulations). page 67 (c) The Developer has received no notice or communication from any local, state or federal official that the activities of the Developer in the Development Property may be or will be in violation of any Environmental Law. The Developer has no knowledge of any facts the existence of which would cause it or any of its projects to be in violation of any Environmental Law, or which would give any person a valid claim under any such Environmental Laws. (d) The Developer shall use its reasonable efforts to pursue and obtain, in a diligent and timely manner, all required permits, licenses and approvals, and will seek to meet, in a timely manner, all requirements of all applicable local, state and federal laws and regulations which must be obtained or met before the Infrastructure Improvements may be lawfully constructed. (e) Neither the execution, nor the delivery of this Agreement by the Developer, nor the consummation of the transactions contemplated hereby, nor the fulfillment of or compliance with the terms and conditions of this Agreement is prevented, materially limited by, or materially conflicts with or results in a material breach of the terms, conditions or provisions of any restriction or any evidences of indebtedness, agreement or instrument of whatever nature to which the Developer is now a party or by which it is bound, or constitutes a default under any of the foregoing. (f) The Developer shall cooperate and use its reasonable efforts with the City, in a reasonable, timely and diligent manner, in connection with (i) applications, agreements, amendments and approvals relating to, among other things, zoning, site plan, planned developments, subdivision, protective covenants, utility installation, submittal for approval of Final Plans and other development matters to permit the development of the Development Property in accordance with this Agreement and the Final Plans, (ii) any requirements of local, state or federal governments or agencies thereof relating to the development of the Project, and (iii) coordinating the sequencing, commencement and completion of the Infrastructure Improvements. SECTION III Land Development Section 3.1. Final Plans. The Final Plans shall include or provide for at a minimum, specifications for the following, which collectively upon approval as provided for in Section 3.3 shall be known as the "Infrastructure Improvements": (a) Grading and compacting of the Development Property as necessary for the installation of Infrastructure Improvements set forth herein and as shown on a specific Grading Plan for the Property (the "Grading Plan"); (b) Installation of the Public Road, in compliance with all City requirements; plus all of the following when located within the Public Road and LeMay Lake Road: page 68 curbs, gutters, sidewalks, fire hydrants, and related fire safety items meeting the requirements of a fire marshal named by the City (the "Fire Marshal"), public street signs, non-mechanical traffic controls, street lights, landscaping, trees, ground cover or plantings; (c) Installation of necessary utilities within the Public Road including without limitation: 1) electric, 2) telephone, 3) natural gas, 4) water, 5) sanitary sewer, 6) cable, and 7) storm sewer; drainage culverts at the access points between the Public Road and LeMay Lake Road; (d) Any necessary grading, stormwater management improvements, and/or trail paving for the public trail between the Development Property and Augusta Shores within a dedicated trail easement and for the emergency fire lane on Lots 36 and 37, which easements shall be dedicated pursuant to the Trail Easement Agreement attached hereto as Exhibit C; (collectively, all of these items in this paragraphs (a) - (d) shall be defined as the "Public Infrastructure Improvements"); (e) All Public Infrastructure Improvements shall be shown on the Infrastructure Plans (the "Infrastructure Plans") which shall be made part of the Final Plans; (f) All landscaping and erosion control measures necessary for the Project and as shown on a separate Landscape Plan, a separate Erosion Control Plan (the "Erosion Control Plan") and a Storm Water Pollution Prevention Plan (the "SWPPP"); (g) St. Paul Regional Water Services. Installation of sanitary sewers, municipal storm sewers, and water mains in accordance with the Final Plans, shall conform with City of St. Paul Regional Water Services ("RWS") specifications; and (h) Sanitary Sewer and Water Easements. Easements shall be dedicated to the City and/or right-of-ways, as shown on the Preliminary and Final Plat, for all sanitary sewer and water utilities. Section 3.2. Developer Requirements. The Developer shall be financially responsible for the completion of the Infrastructure Improvements in compliance with the Final Plans. Additionally, the Developer shall be solely responsible for completion of the following: (a) Demolition. Demolition and removal of all existing structures, foundations, un - useable utilities and un -useable roadways; (b) Access during Development. During the period from commencement of construction of any Residential Unit until the final Sale of all of the Residential Units by the Developer, Developer shall install and maintain, an access road serving each Residential Unit under construction that satisfies the following requirements: all-weather gravel base, with gravel or pavement surface that accommodates City inspection vehicles and emergency vehicles; such access road shall constitute a loop, which may utilize a reasonable combination of portions of the Public Road, the Private Streets and the paved drives currently existing on the page 69 Property, and which loop may be reconfigured from time to time as phases advance but shall be accessible to City emergency vehicles at all times; Developer shall provide reasonable and customary snowplowing of such access road; and such road shall be no more than 200 feet from each the Residential Unit under construction; (c) Erosion Control. Prior to initiating any site Infrastructure Improvements or site grading, the erosion control measures depicted on the Final Plans, the Erosion Control Plan, and the SWPPP shall be implemented by the Developer and inspected and approved in writing by the City. The City may, in its sole discretion, impose at no cost to the City, reasonable, additional erosion control requirements on the Developer if the City determines that such additional measures are necessary to meet the erosion control requirements as described in the Final Plans. All areas disturbed by grading shall be reasonable reseeded in a timely fashion to meet the erosion control requirements as described in the Final Plans. All seeded areas shall be mulched, and disc anchored as necessary for seed retention. If the Developer does not comply with the Erosion Control Plan and the SWPPP and schedule or supplementary conditions imposed by the City, the City may take such reasonable action as is necessary to control erosion. The City will notify the Developer in advance of any proposed action. The Developer shall be solely responsible for any costs properly incurred by the City for erosion control measures. If the Developer does not reimburse the City for any cost the City properly incurred for such work within thirty (30) days, the City shall be allowed to recover its cost by execution on the Irrevocable Letter of Credit as described in Section 3.3. No development, Infrastructure Improvement or paving construction will be allowed unless the Project is in compliance with the erosion control requirements; (d) Storm Sewer Maintenance. Developer shall be responsible for maintenance of the storm water ponds shown on the Final Plans during the construction of the Project. Developer shall provide City with an inspection report and as -built grading plan verifying the ponds are constructed and operating in accordance with the Final Plans. Subsequent maintenance, as well as inspection and maintenance reports for the ponds, as required by any federal, state or local governmental entity shall be provided to the City at no cost to the City on a yearly basis by either the Developer or the owners association described in Section 3.19 herein below; (e) Easement Dedications. The Final Plat recorded in Dakota County for the Project shall include, at no cost to the City, any and all required utility, drainage, public and access easements as identified on the Preliminary Plat and within this Agreement; (f) Plantings in Easement Areas. Any plantings or landscaping in the drainage easements shall be as provided in the Final Plans and the Landscape Plan; and (g) page 70 Utility Locations. Delivery of an As -Built survey of all utilities that fall with the right-of-way to the City based on the Dakota County coordinate system and within two (2) feet of the horizontal, including: (i) Top nut of hydrants, catch -basin and manhole rims and inverts, (ii) Sanitary sewers at the wye, property line and where it enters the Residential Unit or other structure, (iii) Water services at the corporation stop, curb box and where it enters the Residential Unit or other structure, (iv) Flared end sections, and (v) Drain tile within the right-of-way. (vi) Any other information or utility work necessary, as determined by the Minnesota Office of Pipeline Safety, necessary for the City to conform to the requirements of Minn Rule 7560. (h) Signs. The costs of installation of street identification sign and non-mechanical and non -electrical traffic control signs ("Signs") shall be the responsibility of the Developer. Streets signs shall be in conformance with the names as indicated on the plat of record. The actual number, style and location of signs to be installed shall be in accordance with the Final Plans. One extra copy of the Signs shall be prepared and delivered to the City by the Developer at Developer's sole cost and expense prior to delivery of the Deed as discussed below. (i) Street Lights. Street light installation shall be in accordance with the City's Street Light Policy and shall be at of the sole cost of the Developer. The maintenance and operating costs of the street lights shall be the responsibility of the Owners Association and shall be addressed in the Association Documents. (j) Conservation Easement. The Developer will file the approved Conservation Easement (Exhibit D) with the plat. (k) Park Dedication. The Developer shall dedicate to the public an amount of cash as determined by the provisions of City Code Section 11-5-1. The fee shall be paid prior to the City signing the final plat. This Development Contract requires the Developer to pay a Park Dedication Fee of $162,000.00 prior to the City signing the final plat. The amount was calculated as follows: 60 units at $2,700.00 per unit. (1) Resurrection Cemetery. The Developer will obtain a commitment from the owner of Resurrection Cemetery to record a conservation easement in form and substance similar to that attached as Exhibit D, against certain property retained for use by Resurrection Cemetery and backing up to Lots 25-28 of the Preliminary Plat for LeMay Shores. Such easement will ensure no alteration or page 71 disturbance of the land area directly east of Lots 25-28, as depicted on Exhibit A. The Developer will also obtain a commitment from the owner of Resurrection Cemetery to establish a vegetative cover on the protected are and post the boundary of such area to ensure permanent conservation within the protected area retained for the cemetery's use. Section 3.3. Irrevocable Letter of Credit. To guarantee compliance with the terms of this Agreement, payment of the construction of the Work, and City Expenses as defined above, the Developer shall furnish the City with an Irrevocable Letter of Credit in the amount equal to 125% of the cost of the Work. The Irrevocable Letter of Credit shall be in the form attached hereto as Exhibit E from a bank. The amount of the Irrevocable Letter of Credit shall be as determined by the Engineers Estimate provided by the Civil Engineer and attached hereto as Exhibit F and may be amended by the City Engineer at the time the project proceeds. The amount of the Irrevocable Letter of Credit is $1,292,750.00. The bank on which the Irrevocable Letter of Credit proposed and subject to review is drawn shall be subject to the approval of the City. The bank shall be authorized to do business in the State of Minnesota with a principal branch located within the seven county Twin City Metropolitan area. The Irrevocable Letter of Credit shall be automatically renewable on an annual basis until completion of all requirements set forth in this Agreement. (a) The Irrevocable Letter of Credit may be reduced when financial obligations to the City have been satisfied. The Developer agrees to reimburse the City for the construction of the Work within thirty (30) days of a request from the City. If such payments are not received by the City within thirty (30) days, the City shall draw down the Irrevocable Letter of Credit in the amount of said payment. The Irrevocable Letter of Credit may be reduced by 75% of the financial obligations that have been satisfied upon written authorization by the Public Works Director. Twenty-five percent (25%) of the Security shall be retained until all financial obligations to the City have been completed. Section 3.4. No Warranty. Approval of the Final Plans, any portion thereof or any changes thereto by the City is not intended, nor shall it be construed to be a warranty or representation by the City as to: (i) the compliance of the Project with any federal, state, or local statutes, regulations, or ordinances; (ii) the structural soundness of the proposed Project; (iii) quality of materials; (iv) workmanship; or (v) the fitness of the Infrastructure Improvements for their proposed use. (a) The Developer shall submit to the City Engineer for approval any changes in the Final Plans. The City shall approve changes in the Final Plans in writing if, in the reasonable judgment of the City the changed Final Plans: (i) conform to the terms and conditions of the Agreement; (ii) conform to the specifications established by the City or City Engineer; (iii) conform to all applicable local law, ordinances, rules and regulations; and (iv) the construction sequencing is such that the City will be able to comply with its obligations set forth herein. No approval by the City of changes to the Final Plans shall relieve the Developer of the obligation to comply with the terms of this Agreement. Any rejection of any change requested shall set forth the reasons therefore. page 72 (b) For any changes in the Infrastructure Improvements, such changes Infrastructure Improvements affected by such change shall not be constructed until the City has issued a written approval of any such requested change to the Final Plans. (c) The City may choose to waive this procedure in the future as to any change, however, no such waiver shall be construed as a waiver of the City's rights pursuant to this Agreement or this section with respect to further changes subsequent to any such waiver. Section 3.5. City Expenses. Developer agrees to reimburse the City for reasonable costs, fees, charges or expenses of the City, related to legal costs, planning, engineering services, including without limitation inspection, surveying, supervision and administration costs and fees, (collectively, "City Expenses") within thirty (30) days of a receipt of a detailed invoice from the City. If such payments are not received by the City within thirty (30) days, all approvals of the City and the City Engineer detailed in the Agreement shall be suspended and have no effect until such time as Developer has paid the City for all City Expenses in full. Such lack of payment shall also constitute an Event of Default as described in Section VII. (a) For purposes of this Agreement and Section 3.14, "City Expenses" shall not mean: fees or charges for services by RWS, and fees or charges for work provided by any other governmental entity for any work, services, or materials provided for any purpose related to the Project or the Development Property; building permit fees; Sewer Access Charges ("SAC"); Water Access Charges ("WAC"); park dedication fees; MnDOT fees and costs; MnDNR fees and costs; Metropolitan Council Fees and costs; and any other fee, costs or expense necessary for completion of the Project (collectively these shall be referred to herein as "Other Expenses"). Developer agrees to promptly pay all Other Expenses to the respective entity requesting payment. Additionally, prior to initiation of any of the Public Infrastructure Improvements, Developer agrees to provide any escrow deposits necessary from any utility provider charged either to the Developer or the City. Section 3.6. Warranty. The Developer warrants all Developer Installed improvements required to be constructed by it pursuant to this Development Contract against poor material and faulty workmanship. The warranty period for streets is one year. The warranty period for underground utilities is two years. The warranty period on Developer Installed Improvements shall commence on the date the City Engineer issues written acceptance of the improvement. The Developer shall post warranty bonds as security. The City shall retain twenty-five (25%) of the Security posted by the Developer until the City Engineer accepts the Developer Installed Improvements and the warranty bonds are furnished to the City. All punch list items must be completed and "as -built" drawings received prior to the commencement of the warranty period. The retained Security may be used by the City to pay for warranty work. The City standard specifications for utilities and street construction identify the procedures for final acceptance of streets and utilities. These standards are set out in the Public Works Design Manual. page 73 Section 3.7. Contractors Meeting. The Developer agrees to hold a pre -construction meeting(s), including the Developer, its engineers and contractors, the City Engineer and other City staff, Dakota County, MnDOT, RWS representatives and representatives from all other private utility providers prior to the initiation of the Infrastructure Improvements. Section 3.8. Quality of Work. The Developer agrees that all the Infrastructure Improvements, including all labor, materials and supplies, shall be done and performed in a good and workmanlike manner and in conformance with the Final Plans as approved by the City, City Engineer and on file with the City Clerk. Section 3.9. Engineering and Location Services for Public Infrastructure Improvements. The Developer shall furnish all engineering services for the Infrastructure Improvements, including: (a) Preparation of complete plans and specifications by a professional engineer; (b) Geotechnical testing for design and during construction; (c) Determination, by a professional excavator or land surveyor, of the precise location of underground utility facilities, without damage, prior to excavating within two feet on either side of the marked location of said facilities; (d) Unless the City Engineer makes a written determination that technology is not currently available, installation of a locating wire that effectively marks the location of each nonconductive underground facility installed after December 31, 2005 within a public right-of-way; Section 3.10. Staking and Inspection. It is further agreed that the Developer shall provide any staking or surveying services as required by the City Engineer. The Developer agrees to reimburse the City, within thirty (30) days of a written request, for the cost for the City to provide full-time resident inspection for the Infrastructure Improvements in order to assure that the completed Infrastructure Improvements conform to the Final Plans (the "City Inspector"). The City and RWS will provide for general and final inspection and shall be notified of all tests to be performed. The Developer shall use reasonable efforts to coordinate its inspector, the City Inspector and RWS inspectors inspections at various times to check the condition of water stop boxes and other utility extensions. (a) Access to Units during Construction. Neither the City, nor RWS shall be required to provide any inspection services to any Residential Unit under construction by the Developer, unless and until, the Developer has provided access in accordance with Section 3.2(b). Section 3.11. Emergency Access. At times prior to Sale of all of the Residential Units, Developer shall provide access in accordance with Section 3.2(b). Section 3.12. Building Permits. No building permits shall be issued by the City, unless and until the requirements of Sections 3.10(a) and 3.11 have been completed by the Developer to the reasonable satisfaction of the City. page 74 Section 3.13. Occupancy. No Certificate of Occupancy (as required by City Ordinance) for any Residential Unit shall be issued by the City, unless and until, all Infrastructure Improvements serving such Residential Unit have been completed to the reasonable satisfaction of the City and so long as no Event of Default, as defined herein, remains uncured by the Developer. Section 3.14. Final Inspection. Upon completion of all Infrastructure Improvements except the Final Paving Lift (defined below) and written notice from the Developer to the City Engineer, the City Engineer or a designated representative, a representative of the Developer, its contractor, and its engineer will make a final inspection of the Infrastructure Improvements. Before final payment is made to any contractor responsible for the Infrastructure Improvements by the Developer, the City Engineer shall give Developer written notice that the City Engineer is satisfied that all Infrastructure Improvements except the Final Paving Lift were satisfactorily completed in accordance with approved Final Plans, as indicated in writing by the City Engineer and the Developer shall submit to the City a written statement attesting to same along with a certificate, attested to by a Registered Land Surveyor, that all property corners and survey control points have been properly installed. Upon completion of the Infrastructure Improvements except the Final Paving Lift, the Developer shall cause to be provided to the City Engineer an electronic copy of the Final Plans and the As Built Survey as described in Section 3.2.g, both in a form acceptable to the City Engineer. Such electronic copies of Final Plans shall include survey control points. These electronic Final Plans shall also include the locations, elevations and ties to all sanitary sewer and water main services. Developer shall remain obligated at its expense to complete the Final Paving Lift by not later than October 31, 2015, or as agreed with the City Engineer. The "Final Paving Lift" means the final paving lift to the Public Road as specified in the Final Plans. Section 3.15. City's Right to Complete Work. Developer is not required by this Agreement to commence any Infrastructure Improvements, and Developer may suspend or terminate its work at any time; provided that all Infrastructure Improvements that have been commenced shall be completed in a manner complying with applicable legal requirements and provided further that upon final inspection Developer shall be required to complete the Final Paving Lift in accordance with Section 3.14. If the Developer fails to diligently prosecute in a timely manner completion of any Public Infrastructure Improvements that have been commenced, in compliance with and pursuant to the Final Plans and fails to resume diligent prosecution within ten (10) days after receipt of notice of failure to diligently prosecute from the City, the City shall be free to exercise its option to complete any of the Public Infrastructure Improvements required of the Developer under a City contract. The Developer agrees to be and shall be financially responsible for payment to the City for correction of the non -conforming work within thirty (30) days of formal billing by the City. If City has not been paid within 30 days of billing for this work, City may obtain reimbursement through execution of the Letter of Credit described in Section 3.16 herein below. Section 3.16. Conveyance to the City. Following acceptance of the Public Infrastructure Improvements by the City and City Engineer as described in Section 3.14, Developer shall convey all Public Infrastructure Improvements to the City by way of a quitclaim deed of conveyance (the "Deed"). Such Deed shall be approved as to form by the City Attorney prior to being executed by the Developer in favor of the City. Upon dedication of sanitary sewer and page 75 water utility easements pursuant to Section 3.1(h), the sanitary sewer and water infrastructure within such easements shall be maintained by the applicable public utility Section 3.17. Maintenance Prior to Conveyance. Until acceptance by the City of the Public Infrastructure Improvements as described in Section 3.14, the Developer shall be solely responsible for all maintenance and repair of the Public Infrastructure Improvements. The City shall be responsible for all maintenance and repair after acceptance of the Public Infrastructure Improvements provided that Developer shall remain obligated to complete the Final Paving Lift. Prior to conveyance of the Public Infrastructure Improvements to the City, the Developer shall cause warning signs to be placed on and around such streets and other improvement whenever any dangerous or hazardous condition exists on the Development Property, as necessary, to prevent public travel on and over such property and shall establish any necessary detour routes. If and when streets become impassable, such streets shall be barricaded and closed. Streets within the Public Infrastructure Improvement may not be closed without the written approval of the City Engineer. The Developer shall be responsible for keeping paved streets within the Development Property swept clean of dirt and debris that may spill or wash onto the street from this operation and shall conduct any additional sweeping as reasonably requested by the City at no cost to the City. The Developer shall keep all the paved streets and access roads within the Development open during the winter months by plowing snow from said streets prior to final acceptance of said streets by the City. Section 3.18. Airport Noise Impacts. Any new structures in this project will not be eligible for future noise mitigation under the Federal Aviation Administration Part 150 noise program for MSP, or any MSP remedial mitigation programs. A statement to that effect must be filed against the deed for each property. The Developer shall comply with the following items: (a) Sales/marketing materials presented to prospective buyers must include notification of aircraft noise impact. (b) An aircraft noise impact notice must be filed against the deed in conjunction with each closing agreement. (c) Residential structures should be evaluated by an independent acoustic expert, to improve upon the acoustic performance experienced with the Augusta Shores project, with the objective of providing outdoor -to -indoor noise attenuation that provides residents the most protection feasible for speech and sleep interference from aircraft noise. (d) That, similar to the August Shores project, the overall project design should limit exterior uses and the proposed "Townhomes" should be marketed to "empty nest" buyers. Section 3.19. Formation of Owners Association. The Developer shall cause to be created on the Development Property a common interest community ("CIC") under Minnesota Statutes Chapter 515B (the "Statute"). The Developer shall cause the documents necessary to create the CIC to be recorded in the appropriate county recording office, subject to prior approval by the City and City Attorney. The declaration creating the CIC shall set forth the respective page 76 rights and obligations of the owners association and the owners of the Residential Units with respect to (i) the use and maintenance of the Development Property, (ii) the allocation of maintenance and operational expenses, including but not limited to the maintenance of the Private Infrastructure Improvements, (iii) the remedies for failure to comply with the maintenance and use requirements, (iv) easements enabling the use, enjoyment and maintenance of the Development Property, and (v) such other terms as the Developer deems appropriate. The declaration shall require that the Development Property be maintained in compliance with City requirements and in a first-class manner. The Residential Units may be constructed and sold in "phases," as authorized by the Statute and otherwise in compliance with the terms of this Agreement. At various stages of Project those parts of the Development Property upon which completed dwellings are located will be part of the CIC, while other parts of the Development Property will be under construction and will not be part of the CIC. The Developer shall be responsible for the maintenance of those parts of the Development Property which are not part of the CIC, and the owners association shall be responsible for the maintenance of those parts of the Development Property which are part of the CIC. Section 3.20. Approval of Association Documents. The declaration creating the CIC shall not be recorded against the Development Property without first obtaining approval of the declaration by the City and the City Attorney. The declaration, in the form delivered to prospective buyers of the Residential Units, shall be delivered to the City Attorney for review and approval on a timetable coordinated with the time of delivery to prospective buyers of Residential Units, and in no event later than thirty (30) days prior to the date of Sale of the first Residential Unit. The City Attorney shall not unreasonably withhold or delay approval. SECTION IV Construction Section 4.1. Construction of Infrastructure Improvements. The Developer shall construct or cause to be constructed the Public Infrastructure Improvements in accordance with the approved Final Plans. Subject to the agreements by the City herein applicable to maintenance of the Public Infrastructure Improvements, at all times during the term of this Agreement, Developer shall maintain, preserve and keep the Public Infrastructure Improvements or cause the Public Infrastructure Improvements to be maintained, preserved and kept with the appurtenances and every part and parcel thereof in good condition and repair. Section 4.2. Commencement and Completion of Infrastructure Improvements. (a) Until construction of the Infrastructure Improvements has been completed, the Developer shall make reports, in such detail and at such times as may reasonably be requested by the City, as to the actual progress of the Developer with respect to such construction. (b) During construction of the Project, no contractor or subcontractor traffic may use any of the municipal streets of the City for any purpose at any time, unless approved in writing by the City Engineer. page 77 Section 4.3. Temporary Signage. The Developer shall be permitted to construct temporary signs within the Development Property for the purpose acknowledging the parties of interest with respect to the Project, identifying the Project and for such other purposes as Developer reasonably determines. In all cases such temporary sign(s) shall comply with City ordinances regarding signage. SECTION V Indemnification, Release and Insurance Section 5.1 Indemnity The Developer, the Developer's contractors or subcontractors, material men, laborers, releases and waives any claims of liability or responsibility in any way against the City, the City of Mendota Heights City Council and its agents or employees, arising out of the performance and completion of the Project provided herein, except for (i) breach by the City of its obligations hereunder and (ii) gross negligence or intentional misconduct of the City. Additionally, the Developer will indemnify and hold the City harmless from all such claims, demands, damages, actions or causes of actions or the cost of disbursement, and expenses of defending the same, specifically including, without intending to limit the categories of said costs, cost and expenses for City administrative time and labor, costs of consulting engineering services and costs of legal services rendered in connection with defending such claims as may be brought against the City. Section 5.2 Release and Waiver. The Developer agrees to rely entirely upon its own property insurance for coverage with respect to any damage, loss or injury to the property interests of the Developer in the Project or interests which may be exposed to damage, loss or injury in connection therewith. The Developer hereby releases the City, its officers, employees, agents, and others acting on its behalf from all liability or responsibility to the Developer, and to anyone claiming through or under the Developer, by way of subrogation or otherwise, for any loss of or damage to the Developer's business or property caused by fire or other peril or event to the extent that such fire or other peril or event was covered by any type of real or personal property insurance, including any indirect property insurance (such as business interruption coverage) in effect on the date of the loss, even if such fire or other peril or event was caused in whole or in part by the negligence or other act or omission of the City or other party who is to be released by the terms hereof; or by anyone for whom such party may be responsible. Section 5.3 Insurance. Except as is specifically provided to the contrary in the following provisions of this Section, the Developer agrees to provide and maintain at all times the insurance coverage set forth in this Section 5.3, and to otherwise comply with the provisions that follow. (a) Builders' Risk. Builders' Risk Insurance, written on a Completed Value coverage form (non -reporting), in an amount equal to one hundred percent (100%) of the insurable value of the Infrastructure Improvements at the date of completion. Such coverage shall become effective concurrent with the beginning of the process of construction, and shall continue until replaced by the permanent all risk Property page 78 Insurance described below. Coverage shall be provided on an "all risk" basis. Workers' Compensation. Workers' Compensation insurance in compliance with all applicable statutes. Such policy shall include Employer's Liability coverage in at least such amount(s) as are customarily provided in workers' compensation policies issued in Minnesota. General Liability. Occurrence -Based Commercial General Liability insurance, providing coverage on an "occurrence", rather than on a "claims made" basis, which policy shall include coverage for the Completed Operations Hazard, and which shall also include a Broad Form General Liability Endorsement GL 0404 (Insurance Services Office form designation), or an equivalent form (or forms), so long as such equivalent form (or forms) affords coverage which is in all material respects at least as broad. The Developer agrees to maintain total liability policy limits of at least $2,000,000, applying to liability for Bodily Injury, Personal Injury, and Property Damage, which total limits may be satisfied by the limits afforded under its Occurrence -Based Commercial General Liability Policy (which Policy is to include the Broad Form Endorsement coverage specified above), or by such Policy in combination with the limits afforded by an Umbrella Liability Policy (or policies); provided, however, that the coverage afforded under any such Umbrella Liability Policy shall be at least as broad as that afforded by the underlying Occurrence -Based Commercial General Liability Policy (including Broad Form coverage). Such Occurrence -Based Commercial General Liability Policy and Umbrella Liability Policy (or policies) may provide aggregate limits for some or all of the coverages afforded thereunder, so long as such aggregate limits have not, as of the date of the Developer's possession of the Development Property, been reduced to less than the total required limits stated above, and further, that the Umbrella Liability Policy provides coverage from the point that such aggregate limits in the underlying Occurrence -Based Commercial General Liability Policy become reduced or exhausted. An Umbrella Policy which "drops down" to respond immediately over reduced underlying limits, or in place of exhausted underlying limits, but subject to a deductible amount, shall be acceptable in this regard so long as such deductible amount does not cause the Developer's total deductible for each occurrence to exceed the amount shown in the provision immediately below. All such policies described in this section shall also name the City as additional insured and permit waiver of claims in favor of the City. page 79 (d) Property Insurance. All risk property insurance in an amount not less than the full insurable replacement value of the Infrastructure Improvements. The term "full insurable replacement value" shall mean the actual replacement cost of the Infrastructure Improvements (excluding foundation and excavation costs and costs of underground flues, pipes, drains, and other items customarily omitted from replacement cost valuation for insurance purposes), without deduction for depreciation. (e) Insurers. All policies of insurance required under this Agreement shall be maintained with financially sound and reputable insurers licensed to do business in the State of Minnesota and as reasonably acceptable to the City. All policies of insurance required under this Agreement shall be in form and content, and in all other respects reasonably satisfactory to the City. Section 5.4. Non -Imputation. All covenants, stipulations, promises, agreements and obligations of the City or the City contained herein shall be deemed to be the covenants, stipulations, promises, agreements and obligations of the City and not of any governing body member, officer, agent, servant or employee of the City or the City in their individual capacity. SECTION VI Prohibitions Against Assignment and Transfer Section 6.1 Representation as to Development. The Developer recognizes that, in light of: (a) the importance of the Project to the general welfare of the community; and (b) the fact that any act or transaction involving or resulting in a change in the identity of the parties in control of the Developer or the degree of their control is for practical purposes a transfer or disposition of the property then owned by the Developer, the qualifications and identity of the Developer are of particular concern to the community and the City. The Developer further recognizes that it is because of such qualifications and identity that the City is entering into the Agreement with the Developer. Section 6.2. Prohibition Against Transfer and Assignment. (a) Developer represents and agrees that, prior to the completion of all Infrastructure Improvements, unless the Developer shall have received the prior written approval of the City, which shall not be unreasonably withheld, there shall be no transfer of or change in the ownership of the Developer, nor shall there be any other change in the identity of the parties in control of the Developer or the degree thereof, by any other method or means. Notwithstanding the foregoing, there shall be no limitation upon any involuntary transfer of an ownership interest resulting from the death or disability of any owner or a transfer to an Affiliate of Developer. "Affiliate" includes Hoffman Homes, Inc., or the parent, subsidiary or page 80 affiliate of any of them, or a partnership, limited liability company, corporation or other entity comprised of all or some of the above. (b) Developer agrees that prior to the Sale of any Residential Unit, and except only by way of security for, and only for the purpose of obtaining financing necessary to enable the Developer to perform its obligations with respect to constructing the Infrastructure Improvements under this Agreement, the Developer has not made or created and will not make or create or suffer to be made or created any total or partial sale, assignment, conveyance, encumbrance, or lease, or any trust or power, or transfer in any other mode or form (collectively referred to as a "transfer") of or with respect to this Agreement or the Development Property or any part thereof or any interest therein, except purchase agreements for Residential Units, without the prior written consent of the City, which shall not be unreasonably withheld . (c) For any transfers the City shall be entitled to require the following conditions in its written consent to transfer: (i) Any proposed transferee shall have the qualifications and financial responsibility, in the reasonable judgment of the City, necessary and adequate to fulfill the obligations undertaken pursuant to this Agreement by the Developer as to the portion of the Development Property to be transferred. (ii) Any proposed transferee, by instrument in writing satisfactory to the City and in a form recordable among the land records, shall, for itself and its successors and assigns, and expressly for the benefit of the City, have expressly agreed to and assumed all of the obligations of the Developer under this Agreement as to all or the portion of the Development Property to be transferred. No transfer of, or change with respect to, the ownership of the Development Property or any part thereof, or any interest therein, however consummated or occurring, whether voluntary or involuntary, shall operate to deprive or limit the City with respect to any rights, remedies, or controls provided in or resulting from this Agreement except as provided in Section 6.3 below. (iii) Any and all instruments and other legal documents involved in effecting the transfer of any interest in this Agreement or the Development Property shall be in a form reasonably satisfactory to the City. Section 6.3 Construction Lender. (a) Subordination. In order to facilitate Developer's obtaining of funds (the "Construction Loan") necessary for construction of the Project, the City page 81 agrees that it will enter into an agreement of subordination, in the form reasonably requested by Developer's construction lender ("Lender") and reasonably protective of the City's interests as contained in this Agreement, of the City's interest in the Development Property, or relevant portion thereof to which the lien or title of such lender relates, under this Agreement to the interests of the Lender. (b) Copy of Notice of Default to Lender. If the City delivers any notice or demand to the Developer with respect to any Event of Default under this Agreement, the City will also deliver a copy of such notice or demand to the Lender at Lender's address provided to the City in a written notice from the Developer or the Lender. (c) Lender's Option to Cure Events of Default. Upon the occurrence of an Event of Default, the Lender will have the right (insofar as the rights of the City are concerned), at its option, to cure or remedy such Event of Default. (d) Collateral Assignment to Lender. Notwithstanding anything to the contrary in Section 6.2, City consents to a collateral assignment of this Agreement to Lender, and such Lender shall not be required to assume the obligations of this Agreement. SECTION VII Events of Default Section 7.1. Defined. The term "Event of Default" shall mean any failure by the Developer or the City to observe or perform any covenant, condition, obligation or agreement on its part to be observed or performed under this Agreement Section 7.2. Remedies. Whenever any party becomes aware of the occurrence of an Event of Default, the non -defaulting party may, after providing twenty (20) days written notice to the defaulting party of the Event of Default, but only if the Event of Default has not been cured within said twenty (20) days or, if the Event of Default is by its nature incurable within twenty days and the defaulting party does not provide assurances reasonably satisfactory to the non -defaulting party that the Event of Default will be cured as soon as reasonably possible, take whatever other action permitted by law, including legal, equitable or administrative action, which may appear necessary or desirable to cure any such Event of Default or to enforce performance and observance of any obligation, agreement, or covenant under this Agreement. Section 7.3. No Remedy Exclusive. No remedy herein conferred upon or reserved to either party is intended to be exclusive of any other available remedy or remedies. Each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any remedy or power accruing upon any Event of Default shall impair any such remedy or power or shall be construed to be a waiver thereof. Any such remedy and power page 82 may be exercised from time to time and as often as may be deemed expedient. In order to entitle either party to exercise any remedy reserved to it, it shall not be necessary to give notice, other than such notice as may be required in this Section IX. Section 7.4. No Additional Waiver Implied by One Waiver. In the event any Event of Default is waived by the non -defaulting party, such waiver shall be limited to the particular Event of Default so waived and shall not be deemed to waive any other concurrent, previous or subsequent Event of Default hereunder. SECTION VIII Expiration on Termination of Agreement Section 8.1 Automatic Expiration. This Agreement shall automatically expire upon (a) Completion of the Infrastructure Improvements in accordance with the Final Plans; and (b) Conveyance of the Public Infrastructure Improvements by the Developer to the City by the Deed; and (c) In the case of any Residential Unit sold to a third party that is not an affiliate of Developer, such Residential Unit shall be automatically released from this Agreement upon such Sale so long as a final Certificate of Occupancy for such Residential Unit has been issued by the City. (d) This agreement is contingent upon Developer acquiring the Development Property and if Developer shall fail to acquire the Development Property by December 31, 2014, this Agreement shall automatically terminate. Section 8.2. Option to Terminate. Except as otherwise provided herein, the City or Developer may terminate this Agreement if there occurs an Event of Default pursuant to Section VII of this Agreement that is not cured within the applicable cure period. Section 8.3. Effect of Termination. Following the termination or expiration of this Agreement, the Agreement shall be null and void and of no effect. Section 8.4. Evidence of Termination. If requested by the Developer, the City will provide the Developer with a certification recordable among the land records certifying that the Agreement has been terminated or has expired and, if true, that the Developer was not in default of its obligations hereunder at the time of such termination or expiration. page 83 SECTION IX Additional Provisions Section 9.1. Conflicts of Interest; City Representatives Not Individually Liable. No member, official, or employee of the City shall have any personal interest, direct or indirect, in the Agreement, nor shall any such member, official, or employee participate in any decision relating to the Agreement which affects his personal interests or the interests of any corporation, partnership, or association in which he is, directly or indirectly, interested. No member, official, or employee of the City or the City shall be personally liable to the Developer, or any successor in interest, in the event of any default or breach by the City or for any amount which may become due to the Developer or successor or on any obligations under the terms of the Agreement. Section 9.2. Equal Employment Opportunity. The Developer, for itself and its successors and assigns, shall agree that during the construction of the Infrastructure Improvements it will comply with all affirmative action and non-discrimination requirements of applicable federal, state or local laws or regulations. Section 9.3. Provisions Not Merged With Deed. None of the provisions of this Agreement are intended to or shall be merged by reason of any deed transferring any interest in the Development Property, all such provisions shall survive any deed transferred in such a closing and any such deed shall not be deemed to affect or impair the provisions and covenants of this Agreement. Section 9.4. City Approvals. The City's roles in connection with zoning, building code, and other governmental processes are independent of this Agreement, without limitation of the consequences thereof, the approvals given by the City pursuant to such governmental processes shall not be limited by any qualifications in this Agreement unless otherwise provided for in this Agreement. Section 9.5. Titles of Sections and Sections. Any titles of the several parts, Sections, and Sections of the Agreement are inserted for convenience of reference only and shall be disregarded in construing or interpreting any of its provisions. Section 9.6. Notices and Demands. Except as otherwise expressly provided in this Agreement, a notice, demand, or other communication under the Agreement by either party to the other shall be sufficiently given or delivered upon receipt if personally delivered or three (3) days after dispatched by U.S. registered or certified mail, postage prepaid, return receipt requested; and (a) in the case of the Developer, is addressed to or delivered personally to the Developer at 13793 Frontier Court, Suite 200, Burnsville, MN 55437 Attention: Pat Hoffman; and (b) in the case of the City, is addressed to or delivered personally to the City at 1101 Victoria Curve, Mendota Heights, MN 55118, fax number 651- 452-8940 with a copy to Mr. Tom Lehmann, Eckberg, Lammers, Briggs, page 84 Wolff and Vierling, PLLP, 1809 Northwestern Avenue Stillwater, MN 55082, Fax number 651-439-2923 or at such other address with respect to either such party as that party may, from time to time, designate in writing and forward to the other as provided in this Section. Section 9.7. Counterparts. This Agreement is executed in any number of counterparts, each of which shall constitute one and the same instrument. Section 9.8. Law Governing. This Agreement will be governed and construed in accordance with the laws of Minnesota. Section 9.9. Severability. If any provision of this Agreement is declared invalid, illegal or otherwise unenforceable, that provision shall be deemed to have been severed from this Agreement and the remainder of this Agreement shall otherwise remain in full force and effect. Section 9.10. Complete Agreement. This Agreement is the complete agreement between the parties hereto with respect to the matters addressed herein and shall, as of the Effective Date supersede all prior agreements related thereto, both oral and written. Section 9.11. Successors. This Agreement shall be binding upon the successors, heirs, and assigns of the Developer and the City. Section 9.12. Authority. Each of the undersigned parties warrants that it has full authority to execute this Agreement, and each individual signing this Agreement on behalf of a company hereby warrants that he or she has full authority to sign on behalf of the company that he or she represents and to bind such company thereby. Section 9.13. Recording. This Agreement shall be recorded against the Development Property. [Remainder of this page deliberately left blank] page 85 IN WITNESS WHEREOF, the City has caused this Agreement to be duly executed in its name and behalf and the Developer has caused this Agreement to be duly executed in its name and behalf on or as of the date first above written. CITY OF MENDOTA HEIGHTS By: Its: Mayor By: Its: City Clerk STATE OF MINNESOTA ) ) ss. COUNTY OF DAKOTA ) The foregoing instrument was acknowledged before me this day of 2014, by Sandra Krebsbach and , the Mayor and City Clerk, respectively, of the City of Mendota Heights, a Minnesota statutory city, on behalf of such city. Notary Public HOFFMAN-MENDOTA SHORE, L.L.C. By: Its: STATE OF MINNESOTA ) ) ss. COUNTY OF DAKOTA ) The foregoing instrument was acknowledged before me this day of , 2014, by , the of Hoffman - Mendota Shore L.L.C., a Minnesota limited liability company, on behalf of such company. Notary Public page 86 EXHIBIT A LEGAL DESCRIPTION All of lots 29, 30, 31 and 35, all in AUDITOR'S SUBDIVISION NO. 34, MENDOTA according to the recorded plat thereof on file and of record in the Office of the Registrar of Titles, Dakota County, Minnesota, And, That part of lots 37 and 38 of said AUDITOR'S SUBDIVISION NO. 34, MENDOTA, which lies southerly, and easterly of MINNESOTA DEPARTMENT OF TRANSPORTATION RIGHT OF WAY PLATS NO. 19-95 AND 19-96, according to the recorded plats thereof on file and of record in the Office of the County Recorder, Dakota County, Minnesota, And: That part of lot 40 of said AUDITOR'S SUBDIVISION NO. 34, MENDOTA, which lies easterly of MINNESOTA DEPARTMENT OF TRANSPORTATION RIGHT OF WAY PLAT No. 19-96, and which lies southwesterly of the following described line: Beginning at the northwest corner of said Lot 32; thence southeasterly to a point on the east line of said lot 40, distant 252.87 feet south from the northeast corner of said lot 40 and said described line there terminating, And, That part of lots 32 and 33 of said AUDITOR'S SUBDIVISION NO. 34, MENDOTA, which lies southwesterly of the following described line: Beginning at the northwest corner of said Lot 32, thence southeasterly to a point on the east line of said lot 40, distant 252.87 feet south from the northeast corner of said lot 40 and said described line there terminating, And; Lot 39 of said AUDITOR'S SUBDIVISION NO. 32, MENDOTA, except one-half acre of said Lot Thirty-nine (39) conveyed to Golde Conoyor, by deed recorded in the Office of the Register of Deeds of Dakota County, Minnesota in Book "Z-2 of Deed, page 92". Except that part of said Lots 33 and 40 described as follows: Commencing at the northwest corner of said Lot 32; thence southeasterly to a point on the east line of said lot 40, distant 252.87 feet south from the northeast corner of said lot 40; thence North 40 degrees 19 minutes 49 seconds West along last course 180.17 feet to the point of beginning of said Exception; thence continuing North 40 degrees 19 minutes 49 seconds West 242.93 feet; thence South 49 degrees 40 minutes 11 seconds West 116.57 feet; thence South 25 degrees 43 minutes 58 seconds West 34.93 feet; thence South 03 degrees 59 minutes 54 South West 26.03 feet; thence South 22 degrees 11 minutes 44 seconds East 102.84 feet; thence South 60 degrees 54 minutes 30 seconds East 35.66 feet; thence South 79 degrees 53 minutes 03 seconds East 96.57 feet to the intersection with a line drawn South 51 degrees 46 minutes 06 seconds West from the point of beginning; thence North 51 degrees 46 minutes 06 seconds East 124.75 feet to the point of beginning page 87 EXHIBIT B Final Plans Sheet Title Date C1.0 Cover Sheet 5/16/07 C2.0 Street Profile (Lake Shore Drive) 4/20/07 C2.1 Street Profile (Lake Shore Court) and (Lake Shore Drive) 4/20/07 C2.2 Street Profile (Lake Shore Drive) 4/20/07 C3.0 Sanitary Sewer , Water Main (Lake Shore Drive) 4/20/07 C3.1 Sanitary Sewer, Water Main (Lake Shore Drive) 4/20/07 C3.2 Sanitary Sewer, Water Main (Highway 55) and (Lake Shore Court) 4/20/07 C4.0 Storm Sewer (Lake Shore Drive) 4/20/07 C4.1 Storm Sewer (Lake Shore Drive) 4/20/07 C4.2 Storm Sewer (Lake Shore Drive) 4/20/07 C5.0 Standard Detail Plates 4/20/07 C-5 Landscape Plan 2/5/07 CG -1 Grading Plan 2/5/07 CG -11 Grading Plan 2/5/07 CG -1.2 Grading Plan 2/5/07 CE -1 Erosion Control Plan 2/5/07 CE -2 Erosion Control Plan 2/5/07 page 88 EXHIBIT C TRAIL EASEMENT AGREEMENT THIS TRAIL EASEMENT AGREEMENT (the "Agreement") made as of the day of , 2014, by and between., Hoffman -Mendota Shore L.L.C., a Minnesota limited liability company ("Grantor"), and the CITY OF MENDOTA HEIGHTS, a municipal corporation under the laws of the State of Minnesota (the "City"), as Grantee. RECITALS A. Grantor is owner in fee simple of land located within the City of Mendota Heights, Minnesota, which land (the "Property") is legally described on Exhibit A attached hereto and made a part hereof; B. Grantor wishes to develop the Property; and C. As a condition of approval of Grantor's development of the Property, the City has required Grantor to grant to the City an easement on a portion of the Property for trail purposes. NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and the covenants and agreements hereinafter set forth, the parties hereto agree as follows: 1. Grant of Easement; Uses and Purposes. Subject to the limitations and restrictions herein set forth, Grantor hereby grants and conveys to the City a nonexclusive perpetual easement (the "Trail Easement") to a portion of the Property, legally described on Exhibit B attached hereto, and depicted on Exhibit C attached hereto and made a part hereof (the "Trail Easement Area") for the purpose of public recreational, non- motorized vehicular travel. Grantor also grants a non-exclusive easement for access across the Property to the extent reasonably necessary for the installation, maintenance and repair of the Trail Easement; provided that in using any portion of the Property outside the Trail Easement Area Grantee shall repair any damage arising out of Grantee's access. Without limitation of the rights remaining to Grantor, Grantor reserves the right to cross the Trail Easement Area with roads and drives. 2. Conditions of Easement Grant. The Trail Easement granted in Section 1 shall be subject to the following conditions and reservations: a. Grantor, its successors and assigns shall not be liable to the City or anyone claiming by, through or under the City for any damage to the City or any other person from interruption, obstruction or damage to the Trail Easement Area so long as any interruption by Grantor does not occur for longer than ten (10) days unless otherwise agreed to by the City and except during any period of construction or maintenance of the trail improvements. page 89 b. Grantor reserves all rights in, to, over, under and across the Trail Easement Area that are not inconsistent with the Trail Easement (including but not limited to access and the right to install utilities and driveway improvements in a manner not inconsistent with the Trail Easement so long as the Trail Easement is returned to substantially same condition as before the installation of such utilities or driveway improvements). c. Grantor shall complete the surfacing of a trail for non -motorized travel on the Trail Easement Area. Upon completion of the surfacing of the trail the City shall maintain and repair, or cause to be maintained and repaired, in a good and safe condition, the Trail Easement Area. The maintenance and repair of said trail shall be at the City's sole cost and expense, and Grantor, its successors and assigns shall not be assessed for the costs of such maintenance or repair nor for costs of construction. d. Grantee has the right of approval of all improvements within the Trail Easement Area, and Grantor shall not construct any such improvements without the prior written consent of Grantee. Grantee has sole authority and responsibility for operation and maintenance of the Trail Easement from and after completion by Grantor of the trail improvements including surfacing. Except for initial construction Grantor has no authority or responsibility for operation and maintenance of the Trail Easement. e. City may, but shall not be obligated to, impose such reasonable rules, regulations and ordinances governing the maintenance, repair and use of the Trail Easement as it deems appropriate and desirable; provided, that the City shall not unreasonably restrict the rights reserved by Grantor hereunder. f. The City shall hold harmless Grantor from and against any and all claims, demands, losses, damages, cost and expenses (including but not limited to court costs, penalties and reasonably attorneys' fees), judgments, liabilities and causes of action of any nature whatsoever resulting from or relating to the use or occupancy of the Trail Easement by the City, its agents, employees, licensees, and invitees (including, without limitation, members of the general public) or arising in any manner out of the acts or omissions of the City or its agents or employees in connection with the Trail Easement The indemnity obligations set forth in this section shall survive any termination of this Agreement or the easement granted hereunder. 3. Right to Use the Trail Easement. City may delegate the right to use the Trail Easement to its employees, contractors, invitees and the general public in accordance with such rules and regulations the City may from time to time adopt. 4. Miscellaneous. The covenants, conditions and restrictions of this Agreement for the Trail Easement shall inure to the benefit of the City, its residents, its successors and assigns. The covenants, conditions and restrictions herein set forth shall run with the land and be binding on all persons claiming ownership thereunder. This Agreement shall be governed by the laws of Minnesota and may be executed in counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. page 90 5. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. HOFFMAN-MENDOTA SHORE, L.L.C. a Minnesota limited liability company By: Name: Its: STATE OF MINNESOTA ) )ss. COUNTY OF DAKOTA ) The foregoing instrument was acknowledge before me this day of 2014, by , the of Hoffman - Mendota Shore, LLC a Minnesota limited liability company, on behalf of the company Notary Public CITY OF MENDOTA HEIGHTS By: Name: Its: By: Name: Its: STATE OF MINNESOTA ) )ss. COUNTY OF DAKOTA ) The foregoing instrument was acknowledged before me this day of 2014, by and , the and , respectively, of the City of Mendota Heights, a municipal corporation under the laws of the State of Minnesota, on behalf of the City. Notary Public page 91 EXHIBIT B TO EXHIBIT C LEGAL DESCRIPTION OF THE PROPERTY TRAIL EASEMENT A 20 foot wide strip over and across Lots 36 and 37, Block 1, LEMAY SHORES, Dakota County, Minnesota, the center line of said strip is described as follows: Beginning at the northwest comer of said Lot 36; thence North 58 degrees 04 minutes 14 seconds East, along the northwesterly line of said Lot 36, a distance of 82.04 feet; thence easterly 106.81 feet along a tangential curve to the right having a radius of 150.00 feet and a central angle of 40 degrees 47 minutes 48 seconds; thence northeasterly 96.61 feet along a tangential curve to the left having a radius of 78.69 feet and a central angle of 70 degrees 20 minutes 43 seconds; thence North 28 degrees 31 minutes 19 seconds East 58.22 feet to the northeasterly line of said Lot 36 and there terminating. page 92 EXHIBIT D CONSERVATION EASEMENT DESCRIPTION THIS CONSERVATION EASEMENT AGREEMENT (the "Agreement") made as of the day of , 2014, by and between Hoffman -Mendota Shores L.L.C., a Minnesota limited liability company ("Grantor"), and the CITY OF MENDOTA HEIGHTS, a municipal corporation under the laws of the State of Minnesota (the "City"), as Grantee. RECITALS A. Grantor is owner in fee simple of land located within the City of Mendota Heights, Minnesota, which land (the "Property") is legally described on Exhibit A attached hereto and made a part hereof; B. Grantor wishes to develop the Property; and C. As a condition of approval of Grantor's development of the Property, the City has required Grantor to grant to the City an easement on a portion of the Property for conservation purposes. NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and the covenants and agreements hereinafter set forth, the parties hereto agree as follows: 1. Grant of Easement; Uses and Purposes. Subject to the limitations and restrictions herein set forth, Grantor hereby grants and conveys to the City a nonexclusive perpetual easement (the "Conservation Easement") to a portion of the Property, legally described on Exhibit B attached hereto, and depicted on Exhibit C attached hereto and made a part hereof (the "Conservation Easement Area") for the purpose of retaining the land and water predominately in their natural, scenic, open or wooded condition or as a suitable habitat for fish and wildlife. 2. Conditions of Easement Grant. The Conservation Easement granted in Section 1 shall be subject to the following restrictions: a. The land shall not be used for public utility purposes, other than is necessary for drainage improvement, which is connect to the pond through the scenic easement. b. Structures permanent and temporary, trailers, fences, advertising signs, road, hard surface improvements are prohibited. page 93 c. Dumping or placing of soil or other substance or material as landfill, or dumping or placing of trash, waste or unsightly or offensive material is prohibited. d. The topography of the land and water line shall be retained in its natural condition, and now grading alterations, excavation or topographic changes shall be made unless authorized in writing by the City of Mendota Heights, Minnesota. e. Vegetation may be planted on the land that is indigenous to the land and appropriate to the natural pond edge environment. Vegetation within the easement may be maintained to prevent disease, maintain scenic views and maintain variety of natural plant species. f. Activities detrimental to drainage, flood control, water conservation, erosion control or soil conservation, or fish and wild life habitat preservation are prohibited. 3. Grantor reserves all rights in, to, over, under and across the Trail Easement area that are not inconsistent with the Trail Easement (including but not limited to access and the right to install utilities and driveway improvements in a manner not inconsistent with the Trail Easement so long as the Trail Easement is returned to substantially same conditions as before the installation of such utilities or driveway improvements). 4. Grantor shall complete the surfacing of a trail for non -motorized travel on the Trail Easement Area. Upon completion of the surfacing of the trail the City shall maintain and repair, or cause to be maintained and repaired, in a good and safe condition, the Trail Easement Area. The maintenance and repair of said trail shall be at the City's sole cost and expense, and Grantor, its successors and assigns shall not be assessed for the costs of such maintenance or repair nor for costs of construction. 5. Grantee has the right of approval of all improvements within the Trail Easement Area, and Grantor shall not construct any such improvements without the prior written consent of Grantee. Grantee has the sole authority and responsibility for operation and maintenance of the Trail Easement from and after completion by Grantor of the trail improvements including surfacing. Except for initial construction Grantor has no authority or responsibility for operation and maintenance of the Trail Easement. 6. The City shall hold harmless Grantor from and against any and all claims, demands, losses, damages, cost and expenses (including but not limited to court costs, penalties and reasonable attorney's fees), judgments, liabilities and causes of action of any nature whatsoever resulting from or relating to the use or page 94 occupancy of the Trail Easement by the City, its agents, employees, licensees, and invitees (including, without limitation, members of the general public or arising in any manner out of the acts or omissions of the City or its agents or employees in connection with the Trail Easement The indemnity obligations set forth in this section shall survive any termination of the Agreement or the easement granted hereunder. 7. Right to Use the Conservation Easement. City may delegate the right to use the Conservation Easement to its employees, contractors, invitees and the general public in accordance with such rules and regulations the City may from time to time adopt. 8. Miscellaneous. The covenants, conditions and restrictions of this Agreement for the Conservation Easement shall inure to the benefit of the City, its residents, its successors and assigns. The covenants, conditions and restrictions herein set forth shall run with the land and be binding on all persons claiming ownership thereunder. This Agreement shall be governed by the laws of Minnesota and may be executed in counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. IN WITNESS WHEREOF, the parties hereto have executed the Agreement as of the day and year first above written. STATE OF MINNESOTA ) COUNTY OF DAKOTA ) ss. HOFFMAN-MENDOTA SHORE, L.L.C. A Minnesota limited liability company By: Name: Its: The foregoing instrument was acknowledged before me this day of , 2014, by the of Hoffman -Mendota Shore, LLC a Minnesota limited liability company, on behalf of the company. Notary Public page 95 CITY OF MENDOTA HEIGHTS By: Name: Its: By: Name: Its: STATE OF MINNESOTA ) ) ss. COUNTY OF DAKOTA ) The foregoing instrument was acknowledged before me this day of , 2014, by and the and , respectively, of the City of Mendota Heights, a municipal corporation under the laws of the State of Minnesota, on behalf of the City. Notary Public page 96 EXHIBIT B TO EXHIBIT D CONSERVATION EASEMENTS The easterly 50 feet of Lots 9 through 22, Block 1, Lemay Shores. The northeasterly 50 feet of Lots 22, 23, and 24, Block 1, Lemay Shores. A 20 foot wide strip over and across Lots 24, 25, 26, 27, 28, and 34, Block 1, Lemay shores, that lies within 20 feet left of a line described as follows: Beginning at the most northerly corner of said Lot 24; thence southwesterly to the most easterly corner of said Lot 25; thence westerly, northwesterly, northerly, and northeasterly along the easterly lines of said Lots 25, 26, 27, and 28 to the most easterly corner of said Lot 28; thence northeasterly to the most easterly corner of said Lot 34 and there terminating. The northeasterly 50 feet of Lots 34, 35, 36, and 37, Block 1, Lemay Shores. That part of Lots 38, 39, 40, 41, and 42, Block 1, Lemay Shores, lying northeasterly of a line drawn from a point on the southeasterly line of said Lot 38 distant 141.34 feet southwesterly of the northeast corner thereof to a point on the westerly line of said Lot 42 distant 70.22 feet southerly of the northwest corner thereof. The northerly 70 feet of Lots 43 and 44, Block 1, Lemay Shores. That part of Lots 1 and 2, Block 2, Lemay Shores, lying southwesterly of a line drawn from a point on the westerly line of said lot 1 distant 50.06 feet north of the southwest corner thereof to a point on the southeasterly line of said Lot 2 distant 77.38 feet northeasterly of the most southerly corner thereof. The southwesterly 70 feet of Lots 3, 4, 5 and 6, Block 2, Lemay Shores. That part of Lot 7, Block 2, Lemay Shores, lying westerly of a line drawn from a point on the northwesterly line of said Lot 7 distant 70.95 feet northeasterly of the northwest corner thereof to a point on the southerly line of said Lot 7 distant 77.02 feet northeasterly of the southwest corner thereof. That part of Lots 8, 9, and 10, Block 2, Lemay Shores, lying westerly of a line drawn from a point on the northerly line of said Lot 8 distant 77.02 feet northeasterly of the northwest corner thereof to a point on the southerly line of said Lot 10 distant 32.76 feet east of the southwest corner thereof. That part of Lot 12, Block 2, Lemay Shores, lying northerly of a line drawn from a point on the northerly line of said Lot 12 distant 32.76 feet east of the northwest corner thereof to a point on the southwesterly line of said Lot 12 distant 13.05 feet south of said northwest corner. The northerly 90 feet of Lots 13 through 16, Block 2, Lemay Shores. page 97 Outlot B, Lemay Shores. All in Dakota County, Minnesota. EXHIBIT E SAMPLE IRREVOCABLE LETTER OF CREDIT IRREVOCABLE LETTER OF CREDIT NO. Dated: June , 20 City of Mendota Heights, Minnesota 1101 Victoria Curve Mendota Heights, Minnesota 55118 Dear Sir or Madam: page 98 For the account of , a Minnesota (the "Borrower"), we hereby open in your favor our Irrevocable Letter of Credit No. (the "Credit") in an amount not to exceed a total of U.S. , subject to reduction in accordance with Section 3 of that certain Development Agreement dated as of , by and between you and the Borrower (the "Development Agreement"), effective immediately and expiring on the earlier of (a) , or (b) completion of all of the requirements as set forth in Section 3 of the Development Agreement. Funds under this Credit are available to you against a sight draft(s) on us completed by you, completed in substantially the form attached hereto as Exhibit 1, for all or any part of this Credit. We will promptly honor all drafts drawn in compliance with the terms of this Credit if received on or before the expiration date at our Letter of Credit Operations Office located at Drafts presented at our office at the address set forth above no later than 10:00 a.m. (central time) on any business day shall be honored on the date of presentation by payment in accordance with your payment instructions that accompany each such draft. If requested by you, payment under this Credit may be made by wire transfer of immediately available funds to your account as specified in the draft, or by deposit of same day funds in your designated account that you maintain with us. As used herein, "business day" shall mean a day on which banks located in the State of Minnesota are not authorized or required by law to close and on which the New York Stock Exchange is not closed. Any day on which our business is interrupted by an act of God, riot, civil commotion, insurrection, war or any other cause beyond our control or by any strikes or lockouts shall not be deemed to be a "business day." This Credit sets forth in full our undertaking, and such undertaking shall not in any way be modified, amended, amplified or limited by reference to any document, instrument or agreement page 99 referred to herein, except the drafts referred to herein; and any such reference shall not be deemed to incorporate herein by reference any document, instrument or agreement except for such drafts. This Credit shall be governed by and subject to the Uniform Customs and Practice for Documentary Credits (1993 revision), International Chamber of Commerce Publication No. 500 ("UCP"), and to the extent not inconsistent with the UCP, laws of the State of Minnesota. Sincerely, BANK By: Name: Title: 8608-25//idmsmp1:527078_1 page 100 EXHIBIT 1 TO LETTER OF CREDIT SIGHT DRAFT Bank 20 Saint Paul, Minnesota 55101 Attn: Letter of Credit Operations Office Pay on demand to the City of Mendota Heights, Minnesota the sum of U.S. $ in immediately available funds to ABA No. Reference This draft is drawn under your Irrevocable Letter of Credit No. CITY OF Mendota Heights By: Name: Title: page 101 EXHIBIT F Engineer's Estimate SANITARY SEWER Depth Unit Quantities Unit Price Amount 8" P.V.C. SDR 35 (OR EQUIVALENT) 0-10 L.F. 560.0 $22.00 $12,320.00 8" P.V.C. SDR 35 (OR EQUIVALENT) 10-12 L.F. 1150.0 $23.00 $26,450.00 8" P.V.C. SDR 35 (OR EQUIVALENT) 12-14 L.F. 393.0 $24.00 $9,432.00 8" P.V.C. SDR 35 (OR EQUIVALENT) 14-16 L.F. 465.0 $25.00 $11,625.00 8" P.V.C. SDR 35 (OR EQUIVALENT) 16-18 L.F. 265.0 $26.00 $6,890.00 8" P.V.C. SDR 35 (OR EQUIVALENT) 18-20 L.F. 159.0 $27.00 $4,293.00 8" P.V.C. SDR 35 (OR EQUIVALENT) 20-22 L.F. 267.0 $28.00 $7,476.00 8" P.V.C. SDR 35 (OR EQUIVALENT) 22-24 L.F. 555.0 $29.00 $16,095.00 8" P.V.C. SDR 35 (OR EQUIVALENT) 24-26 L.F. 144.0 $30.00 $4,320.00 8" P.V.C. SDR 35 (OR EQUIVALENT) 26-28 L.F. 100.0 $31.00 $3,100.00 4" Insulation Dow Hi Brpund 40 4'x4" Sq. Ft. 680.0 $2.00 $1,360.00 *Standard Manholes (8 FT) Each 27.0 $2,250.00 $60,750.00 Extra Depth MH L.F. 229.0 $110.00 $25,190.00 Outside Drop L.F. 11.2 $160.00 $1792.00 4" P.V.C. Services L.F. 2400.0 $12.00 $28,800.00 4" P.V.C. Risers L.F. 250.0 $25.00 $6,250.00 8" x 4" Wyes Each 60.0 $125.00 $7,500.00 Connect to Exist. M.H. Each 1.0 $1,000.00 $1,000.00 Restoration Ac. 0.5 $1,000.00 $500.00 Rock Stabilizer Tons 100.0 $25.00 $2,500.00 *ALL SAN. STRUCTURES INCLUDE CASTING* Total for Sanitary = $237,643.00 WATERMAIN Depth Unit Quantities Unit Price Amount 8" D.I.P. CL 52 L.F. 3370.0 $28.00 $94,360.00 6" D.I.P. CL 52 L.F. 460.0 $27.00 $12,420.00 4" D.I.P. Irrigation Service L.F. 120.0 $26.00 $3,120.00 8" R.W. Gate Valve & Box Each 3.0 $975.00 $2,925.00 6" R.W. Gate Valve & Box Each 1.0 $700.00 $700.00 4" R.W. Gate Valve & Box Each 3.0 $650.00 $1,950.00 Hydrant & Gate Valve Each 10.0 $2,650.00 $26,500.00 8" to 8" Wettap and Valve Each 1.0 $2,750.00 $2,750.00 Fittings Lbs 6520.0 $1.25 $8,150.00 1" Copper Service L.F. 2400.0 $12.00 $28,800.00 1" Corp. & Curb Stop Each 60.0 $200.00 $12,000.00 2" Copper Service L.F. 40.0 $40.00 $1,600.00 Total for Watermain = $195,275.00 page 102 STORM SEWER Depth Unit Quantities Unit Price Amount 18" R.C.P. CL V 0'-10' L.F. 1292.0 $28.00 $36,176.00 15" R.C.P. CL V 0'-10' L.F. 789.0 $25.00 $19,725.00 12" R.C.P. CL V 0'-10' L.F. 725.0 $24.00 $17,400.00 24" x 36" C.B. Type Each 10.0 $1,100.00 $11,000.00 C.B. Manhole Type 4' DIA Each 16.0 $1,700.00 $27,200.00 C.B. Manhole Type 5" DIA Each 5.0 $3,250.00 $16,250.00 C.B. Manhole Type 6' DIA Each 3.0 $4,250.00 $12,750.00 12" F.E.S. w/ Trash Guard Each 4.0 $840.00 $3,360.00 15" F.E.S. w/ Trash Guard Each 2.0 $970.00 $1940.00 18" F.E.S. w/ Trash Guard Each 2.0 $1,080.00 $2,160.00 Rip Rap Cy. Yd. 60.0 $65.00 $3,900.00 * All Storm Structures to include Casting Assembly* *ALL SAN. STRUCTURES INCLUDE CASTING* Total for Storm = $151,861.00 STREET CONSTRUCTION Depth Unit Quantities Unit Price Amount 6" Subgrade Preparation L.F. 3340.0 $1.60 $5,344.00 Raise Structures MH's Each 27.0 $300.00 $8,100.00 Raise Structures FV Each 7.0 $275.00 $1,925.00 Aggregate Base 8" - Class 5 - 100% Crushed Tons 593.0 $13.50 $80,055.00 Bituminous MnDOT 2" 2331 Base Tons 1520.0 $46.00 $69,920.00 Tack Coat (.05 gal/sq. yd.) Gals 695.0 $3.25 $2,258.75 Bituminous MnDOT 1 1/2" 2341 Wear Tons 1140.0 $46.00 $52,440.00 Concrete Curb & Gutter (MnDOT design B6-18) L.F. 7435.0 $9.50 $70,632.50 Select Granular Borrow 2' (if required) Tons 18895.0 $6.81 $121,183.95 Total for Street (w/ sand lift) = $411,859.20 STREET - FIRE LANE 570' LONG X 15' WIDE Depth Unit Quantities Unit Price Amount 8" CL 5 Tons 415.0 $13.50 $5,602.50 2" Bit Base Tons 105.0 $46.00 $4,830.00 1 1/2 Bit Wear Tons 79.0 $46.00 $3,634.00 Tack Oil Gals 48.0 $3.25 $156.00 Total of Street - Fire Lane = $14,222.50 page 103 BIT. PATH to AUGUSTA SHORES 1315' long x 8' side — 305' on plan 1010 to Connect from plan Depth Unit Quantities Unit Price Amount 8" CL 5 Tons 540.0 $20.00 $10,800.00 2" Bit Base Tons 130.0 $52.75 $6,857.50 1 1/2" Bit Wear Tons 98.0 $56.00 $5,488.00 Tack Oil Gals 60.0 $3.25 $195.00 Total of Bit Path to Augusta Shores = $23,340.50 GRAND TOTAL = X 125% $1,034,201.20 Irrevocable Letter of Credit $1,292,750.00 4815-9058-9719, v. 2 mn CITY OF MENDDTA HEIGHTS page 104 9b. 1101 Victoria Curve 1 Mendota Heights, MN 55118 651.452.1850 phone 1 651.452.8940 fax www.mendota-heights.com DATE: June 17, 2014 TO: Mayor and City Council FROM: Sloan Wallgren, Recreation Program Coordinator SUBJECT: Dog Park Update BACKGROUND At the May 13, 2014 Park and Recreation Commission meeting the commission discussed possible locations for a future dog park in Mendota Heights. During their meeting the commission passed a motion recommending that the city council not build a dog park in Mendota Heights at the present time. The commission also passed a motion recommending that the city council reconsider allowing dogs off -leash inside of the hockey boards at Marie Park and Wentworth Park. The commission also directed staff to provide more information about the future dog park that the city of St. Paul is planning on building at Lilydale Regional Park. At the May 29, 2014 city council workshop the council discussed the dog park topic and both motions made by the commission. It appeared that the consensus of the council was to agree that the proposed sites in the city were inadequate but that allowing off -leash dogs in the hockey area was also not a viable option. The council also directed staff to gather more information about the future dog park at Lilydale Regional Park. Staff has attached a map of the location where the dog park is planned to be built at Lilydale Regional Park. At this time the city of St. Paul does not have an exact timeline on when this project will be completed. Staff will continue to communicate with St. Paul and update the council on any new information. Required Action Based on the discussion held at the May 29, 2014 council workshop, staff recommends that the council take no action on establishing a dog park or other off -leash areas and direct staff to further discuss options with the city of St. Paul on their future Lilydale Regional Park plans. PROPOSED GATEWAY (SEE ENLARGED WATER STREET IMPROVEMENTS FOR DETAILS)CREATE PARK ENTRANCE INTO LILYDALE REGIONAL PARK GATEWAY TO REFLECT OV.ALL CHA.CTER OF LILYDA LE REGIONAL PARK USE OF NATURAL STONE AND HISTORIC BRICKS FROM 'MN CB BRICK YARDS VEGETATED ROADWAY MEDIAN PROVIDED TO SLOW TRAFRC AND MARK ENTRANCE INTO PARK PROPOSED WILDLIFE VIEWING AREAS DBELOP VIBMNG AREAS ALONG PIC K.EL LAKE AND THE MSSISSIPPI RIVER PROVIDE OPPORTUNITY -.SAFELY OBSERVE WLDLIFE IN NATURAL ENVIRONMENT • PROVIDE o�/REECORDTRPARK sITORSTORECORDANDDOOUMENTWLDLIFE MISSISSIPPI RIVERBANK RESTORATION RESTORE MSSISSIPPI RIVERBANK TO NATU.LIZED CONDIP ON REMOVE BISTIN BITUMINOUS AND CON CRETE A LONG SHORELINE RESTORE ENTIRE 25 MILB OF Pre REGIONAL TRAIL reaTAREAA/PULLoFFS WTH Rrv.ver.N AS NEEDED \WATER STREET IMPROVEMENTS • BURY 1,15P NG OV.HEAD ELECTRIC LINB ' COLLECT BLUFF SEEPAGE IN CREEK 'STRENGTHEN VISUAL PROVIDE TRAIL OVERLOOKS/RESTING CONNECTION issiPPirervere FOSSIL GROUND ENTRANCE (SEE ENLARGED WATER STREET IMPROVEMENTS FOR DETAILS) "12,LIGN ROAD TO ELIMINATE REGIONAL TRAIL AND ROADWAY CONFLICT DEVELOP TRAIL HEAD AT ENTRANCE'. FOSSIL GROUNDS PARKING LOT REDESIGNED TO ACCOMMODATE SCHOOL BUSES PROVIDE INTERPRETIVE SIGNAGE AN D AMPS AT TRAIL H.D 'SATELLITE REST ROOMS PROVID. RELOCATED REGIONAL TRAIL UNDER RR ELIMINAP NG BUSTING -WIT AND ROADWAY CONFLICT REGIONAL TRAIL RELOCATED UND..ILROAD SWING BRIDGE REGIONAL TRAIL TO FOLLOW MISSISSIPPI RIV. PROPOSED BOARDWALK PROVIDE CONNECTION TO FOSSIL GROUNDS FOLLOW .ILROAD EMBANKMENT MAI N,IN ACCESS TO ALL PARTS OF PIC K.EL .KE LEGEND EXISTING REGIONAL TRAIL PROPOSED REGIONAL TRAIL EXISTING SOFT TRAIL PROPOSED LAKESHORE TRAIL PROPOSED SOFT TRAIL EXISTING CONTOURS PROPOSED CONTOURS PROPOSED WILDLIFE VIEWING PROPOSED GROUP CAMPING PROPOSED LAKESHORE PICNIC/ GATHERING AREA (SEE ENLARGED LAKESHORE PLAN FOR DETAILS) • REALIGN LILYDALE ROAD AND PROVIDE PICNIC SHELT. PARKING 'SHELTER. ACCOMMODATESMALL SANITARY OXMATLY sO PEOPLE) 'SHELTER. REFLECT SUSTAINABLE BUILDING P. CBI, AND ARC HITECRIRALLY INTO NATURAL LANDSCAPE PICKEREL LAKESHORE TRAIL AND SHORELINE RESTORATION TO BE CONSTRUCTED SUMMER 2809 RBTORAP ON OF CANOE LAUNCH CREATE RSHING ACCESS POINTS ALONG PICKEREL LAKBHORE PICNIC ,BLB PROVIDED ALONG SHORELINE 'SPLIT RAIL FENCE PROTECTS NEWLY PLANTED SHORELINE 'SOFT TRAIL PROVIDED ALONG SECTION OF LAKESHORE EXISTING BOAT LAUNCH RESTORE BOAT LAUNCH • 085TING PARKING LOT REBOTTROURED TO MORE APPROPRIATE SIZE • REMOVE INVASIVE P.NT MAT.IAL TO CREATE VIEWS OF BOAT .NDING FROM PARKING AND ROADWAY PROPOSED DOG PARK LOCATED IN OLD LILYDALE MARINA DEMOLITION SITE DBIGNED TO UTILIZE BUSTING BOAT .UNCH PARKING LOT )eoSPACES) DOG PARK TO BE ENTIRELY FENCED RESTRICTING AC CBS TO REST OF PARK AND MISSISSIPPI RIV. PROVIDE eNT nBON PARKI,STING TREE COV. PROTECTED WH.E POSSIBLE,SOFT TRAILS PROVIDED FOR WALKING APPROXIMATELY EXISTING KAMISH DEMOLITION SITE REMOVE BISTIN DEMOLITION SITE �o ORAPONTO WEXAND HALL PROVIDE Cin WTH WETLAND BANK CREDIT WHICH CAN BE• REMOVE UNNATURAL LAN DFORM WTHIN 1,15P NG WETLAND PROPOSED STORM WATER TREATMENT AREA DIVH, STORM WAT. FROM IVY FALLS SIB OFi oFNDSPPIC RIO PRIOR TO PICKEREL LAKE PROTECTWILL RISK OF ...NG DET.IORATING DUE TO LARGE STORM WAT. DRAINAGEAREA SAINT PAUL 1.11011111.1 LILYDALE REGIONAL PARK MASTER SITE PLAN LILYDALE REGIONAL PARK CITY OF SAINT PAUL PARKS AND RECREATION DESIGN SECTION JUNE 29, 2010