2020-06-02 Council PacketCITY OF MENDOTA HEIGHTS
CITY COUNCIL AGENDA
June 2, 2020 – 5:00 pm
Mendota Heights City Hall
MN Stat. 13D.021 - Meeting by telephone or other electronic means: Conditions - MN stat. 13D.021 provides that a
meeting of a public body may be conducted via telephone or other electronic means if meeting in a public location is not
practical or prudent because of a health pandemic or declared emergency.
At its meeting on March 17, 2020, the Mendota Heights City Council declared a local emergency due to the CO VID-19
pandemic. As a part of this action, until further notice all City Council and committee meetings will be held by
telephone, through other electronic means, or with social distancing measures in place. All public meetings will
continue to follow the requirements of the Minnesota Open Meeting Law.
In compliance with the Governor’s Executive Order No. 20-20 and stay-at-home guidelines, the Council Chambers will
not be open to the public during its regular meeting. Interested individuals may access t he meeting in real time or later
by viewing the meeting replay from Town Square Television (www.townsquare.tv\webstreaming) or the City’s website,
or by using the dial-in information below.
If the dial-in option is used, the line will be muted, so no outside comments or noise will be recorded. Note that long -
distance telephone charges may apply. Because of technological limitations, the number of participants using dial -in
cannot exceed 100. As a result, web stream participation is strongly encouraged.
Dial in information: 1-312-535-8110
Access Code: 133 899 2465 #
1. Call to Order
2. Roll Call
3. Pledge of Allegiance
4. Adopt Agenda
5. Consent Agenda
a. Approve May 19, 2020 City Council Minutes
b. Acknowledge the April 28, 2020 Planning Commission Meeting Minutes
c. Adopt Use Policy for Changeable Message Board Sign at Fire Station
d. Authorize the Purchase of a Locker System from GearGrid
e. Approve April 2020 Fire Synopsis Report
f. Approval of Claims List
6. Citizen Comment Period (for items not on the agenda)
*See guidelines below
7. Presentations
a. 2019 Audit
8. Public Hearings - none
9. New and Unfinished Business
a. Resolution 2020-36 Denying a Variance to 791 Emerson Avenue - John & Paula Grosenick
b. Ordinance No. 557 Approve City Code Change Concerning Liquor License Renewals
c. Approve of Liquor License Renewals
10. Community Announcements
11. Council Comments
12. Adjourn
Guidelines for Citizen Comment Period: The Citizen Comments section of the agenda provides an opportunity for the public
to address the Council on items which are not on the agenda. All are welcome to comment. Comments must be placed in
writing, or email, and addressed to the City Clerk at lorris@mendota-heights.com, or sent in writing to City Hall, 1101 Victoria
Curve, Mendota Heights, MN 55118. All comments must be received by 4 PM CDT on the day of the meeting. Comments
must be identified as “To be read at the (insert applicable date)TH City Council Meeting”.
Comments which are received in a timely manner will be read into the record by staff, at the appropriate point in the
meeting, and shall be limited to 5 spoken minutes per person and topic. Presentations which require longer than five minutes
will need to be scheduled with the City Clerk, and will appear on a future City Council agenda. Comments should not be
repetitious.
Citizen comments may not be used to air personal attacks , to air personality grievances, to make political endorsements, or
for political campaign purposes. Council members will not make any decisions regarding comments made under the Citizen
Comments section at that presentation.
Questions from the Council will be for clarification only. Citizen comments will not be used as a time for problem solving or
reacting to the comments made, but rather for receiving the information only. If appropriate, the Mayor may assign staff for
follow up to the issues raised.”
CITY OF MENDOTA HEIGHTS
DAKOTA COUNTY
STATE OF MINNESOTA
Minutes of the Regular Meeting
Held Tuesday, May 19, 2020
Pursuant to due call and notice thereof, the regular meeting of the City Council, City of Mendota Heights,
Minnesota was held at 5:00 p.m. at City Hall, 1101 Victoria Curve, Mendota Heights, Minnesota.
CALL TO ORDER
Mayor Garlock called the meeting to order at 5:00 p.m. Councilors Duggan, Paper, and Petschel were also
present via teleconferencing. Councilor Miller was absent.
PLEDGE OF ALLEGIANCE
Council, the audience, and staff recited the Pledge of Allegiance.
AGENDA ADOPTION
Mayor Garlock presented the agenda for adoption. Councilor Petschel moved adoption of the agenda.
Mayor Garlock seconded the motion.
A roll call vote was performed:
Councilor Duggan aye
Councilor Paper aye
Councilor Petschel aye
Mayor Garlock aye
Motion carried.
PRESENTATION
A) UPDATE ON FIRE STATION EXPANSION/REMODEL BY PAUL OBERHAUS, CPMI
City Administrator Mark McNeill reported the monthly progress report received from Paul Oberhaus on
the Fire Station expansion/remodel. He stated that the schedule still shows an August completion.
B) ISD 197 UPDATE FROM SUPERINTENDENT PETER OLSON SKOG
Mr. Peter Olson Skog, Superintendent ISD 197, provided an update on the activity at the schools. He
thanked the community for its support and collaboration during this trying time. He reviewed background
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information on the requirement from the Governor for schools to convert to distance learning and provided
an update on the distance learning process, including software, curriculum, and the availability of internet
access. He stated that the school district has also provided childcare for emergency workers throughout
this time. He provided an update on food distribution and transportation.
Mr. Olson Skog explained that because of the closures of schools, the construction crews have been able
progress with the construction projects at a faster pace. He highlighted the progress of the different
construction projects.
The Council thanked Mr. Olson Skog for providing an update.
Councilor Duggan stated that he would suspect that the school district is starting to think about how
sanitizing could be completed in the fall.
City Administrator Mark McNeill asked what was being done to recognize the graduating class of 2020.
Mr. Olson Skog stated that the graduates will not be defined by what they lost but how they worked
through this. He stated that the Minnesota Department of Health and Department of Education provided
guidelines for a distance learning type graduation. It would perhaps be a video that could be played with
commencement and student speeches. He stated that the community and families raised funds to create
signs that could be placed in lawns to recognize a graduating student. There is a tentative date set for an
in-person graduation ceremony on August 5th but they are not certain that activity will be allowed. He
thanked the community for its financial support that allowed the construction projects to move forward to
improve the schools.
CONSENT CALENDAR
Mayor Garlock presented the consent calendar and explained the procedure for discussion and approval.
Councilor Petschel moved approval of the consent calendar as presented.
a. Approval of May 5, 2020 City Council Minutes
b. Approval of May 11, 2020 Council Work Session Minutes
c. Approve April 2020 Treasurer’s Report
d. Approval of Claims List
Councilor Duggan seconded the motion.
A roll call vote was performed:
Councilor Paper aye
Councilor Petschel aye
Mayor Garlock aye
Councilor Duggan aye
Motion carried.
PUBLIC COMMENTS
page 4
No one from the public wished to be heard.
PUBLIC HEARING
No items scheduled.
NEW AND UNFINISHED BUSINESS
A) APPROVE PROFESSIONAL SERVICES CONTRACT FOR NATURAL RESOURCES
MANAGEMENT PLAN
Public Works Director Ryan Ruzek explained that the Council was being asked to accept the proposal
submitted by Applied Ecological Services (AES), and begin development of Phase I of the update to the
City’s Natural Resources Management Plan (NRMP).
Councilor Paper stated that when the budget discussions occur, he wants to ensure that funds are included
for Phase 2 because this is an important document that could open a lot of doors for the City throughout
the next ten years.
Councilor Duggan asked for details on the monitoring and implementation mentioned in the scope.
Public Works Director Ryan Ruzek stated that the company would develop a process that the City would
monitor and implement into the future.
Councilor Duggan stated that there is a lot of support in the community for this. He referenced tree
preservation and hoped that the City could establish a tree preservation ordinance.
Councilor Petschel asked if staff is satisfied with the amendment that the consultant developed related to
the template for grant applications. Public Works Director Ryan Ruzek stated that he is comfortable with
that. He stated that there are different grant opportunities and it is not specified as to the agency that the
template would be developed for. He stated that the overall plan would assist the City in requesting
additional State funding.
Mayor Garlock complimented everyone that participated in this process.
Councilor Petschel moved to AUTHORIZE THE PUBLIC WORKS DIRECTOR TO ISSUE A “NOT
TO EXCEED” PURCHASE ORDER IN THE AMOUNT OF $71,276 TO APPLIED ECOLOGICAL
SERVICES.
Councilor Paper seconded the motion.
Further discussion: Councilor Duggan stated that he supports the not to exceed purchase order. He stated
that the budget will have to continue to be monitored during this challenging time.
A roll call vote was performed:
page 5
Councilor Petschel aye
Mayor Garlock aye
Councilor Duggan aye
Councilor Paper aye
Motion carried.
B) APPROVE LETTER TO MAC NOISE OVERSIGHT COMMITTEE
City Administrator Mark McNeill stated that the Council is asked to approve a letter to be sent to the
Metropolitan Airports Commission Noise Oversight Committee (NOC). This is in response to a request
for action requested by a neighboring city which could shift airport traffic over Mendota Heights and other
cities.
Assistant City Administrator Cheryl Jacobson provided background information on the agenda item that
will be considered at the NOC meeting in response to a request from the City of Eagan.
Councilor Petschel referenced a letter from the FAA to MAC, which states that moving the routes could
simply shift the noise from one area to another. She explained that one option would shift the runway
traffic from Eagan to Mendota Heights. She stated that the City should be on record with this letter. She
provided an update on the activity proposed to take place at the NOC meeting the following day which
would result in an alternate request to the FAA.
Councilor Duggan stated that he supports the letter. He stated that Mendota Heights has always worked
with the airport and surrounding cities to develop the best plan. He believed that this guidance would lead
towards the most equitable solution.
Councilor Paper thanked Councilor Petschel for the time and effort she has put in over the years with
airport issues in order to best serve the community and neighboring communities.
Mayor Garlock stated that he would also support the letter and proposed comments to be made the
following day at the NOC meeting.
Councilor Petschel moved to ENDORSE THE CONTENT COMMENTING ON THE CITY OF
EAGAN’S REQUEST TO THE FAA, AND HAVE IT DELIVERED FOR IMMEDIATE
CONSIDERATION BY THE MAC NOISE OVERSIGHT COMMITTEE, AND TO AUTHORIZE THE
ASSISTANT CITY ADMINISTRATOR TO MAKE AN ALTERNATIVE RECOMMENDATION
THAT WHEN POSSIBLE FLIGHTS FROM RUNWAY 17 WOULD BE MOVED TO PARALLELS
TO SPLIT EQUALLY BETWEEN 12LEFT AND 12RIGHT, AND THAT THOSE FLIGHTS MUST
USE THE CROSSING IN THE COORIDOR PROCEURE AND THE FAA FINDINGS WILL
PROVIDE METRICS FOR THEIR DECISION.
Councilor Duggan seconded the motion.
page 6
A roll call vote was performed:
Mayor Garlock aye
Councilor Duggan aye
Councilor Paper aye
Councilor Petschel aye
Motion carried.
C) APPROVAL OF FIBER OPTIC INDEFEASIBLE RIGHT TO USE AGREEMENT
WITH CITY FIBER ASSETS
Assistant City Administrator Cheryl Jacobson stated that the Council is asked to approve a Fiber Optic
Indefeasible Right to Use Agreement between the City of Mendota Heights and Dakota Broadband Board.
Councilor Duggan asked if a Gopher One type call is required for contractors. Assistant City
Administrator Cheryl Jacobson replied that the fiber lines are part of the Gopher One identification that is
done.
Public Works Director Ryan Ruzek stated that the City is responsible for identifying its utilities and
provided details on that process.
Councilor Duggan asked if there is an estimate for the repair costs for a fiber optic line. Public Works
Director Ryan Ruzek replied that he does not have any experience with damaged fiber optic lines. He
noted that most contractors work very carefully near fiber lines because the repairs are costly.
Councilor Petschel asked if large files can be sent through the fiber optic network in a shorter amount of
time. Assistant City Administrator Cheryl Jacobson confirmed that there have been many benefits of the
fiber network, including a faster speed.
Mayor Garlock moved to approve THE FIBER OPTIC INDEFEASIBLE RIGHT TO USE
AGREEMENT FOR THE MANAGEMENT AND MAINTENANCE OF CERTAIN CITY FIBER
ASSETS BY THE DAKOTA BROADBAND BOARD (DBB).
Councilor Duggan seconded the motion.
A roll call vote was performed:
Councilor Duggan aye
Councilor Paper aye
Councilor Petschel aye
Mayor Garlock aye
Motion carried.
page 7
COMMUNITY ANNOUNCEMENTS
City Administrator Mark McNeill stated that Clean-Up Day, originally scheduled for May 2nd, is being
rescheduled to October 3rd. He reported the Marie Avenue construction project will begin in a few weeks,
and that signs will be posted one week in advance. He provided an update on the project phasing and
related closures.
COUNCIL COMMENTS
Councilor Petschel advised of a local business that is now open for takeout service. She reported that a
lost dog was recently found and stated that it was great to see residents working together for that positive
outcome.
Councilor Paper thanked the Public Works Department for the work they have accomplished this spring.
He also expressed thanks to the City staff that has been working from home.
Councilor Duggan stated that two of his brothers are priests and are celebrating their golden jubilees this
year and he salutes them, his parents, and all other priests that continue to do the best they can when
groups cannot be gathered in person.
Mayor Garlock stated that the meetings will continue in virtual format for some time, noting that the public
would be alerted as to when in person meetings will resume.
ADJOURN
Mayor Garlock moved to adjourn.
Councilor Duggan seconded the motion.
A roll call vote was performed:
Councilor Paper aye
Councilor Petschel aye
Mayor Garlock aye
Councilor Duggan aye
Motion carried.
Mayor Garlock adjourned the meeting at 6:16 p.m.
____________________________________
Neil Garlock
Mayor
ATTEST:
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_______________________________
Lorri Smith
City Clerk
page 9
CITY OF MENDOTA HEIGHTS
DAKOTA COUNTY, MINNESOTA
PLANNING COMMISSION MINUTES
April 28, 2020
The regular meeting of the Mendota Heights Planning Commission was held on Tuesday, April
28, 2020 in the Council Chambers at City Hall, 1101 Victoria Curve at 7:00 P.M.
The following Commissioners were present: Acting Chair John Mazzitello, Commissioners Litton
Field, Michael Toth, Brian Petschel, and Andrew Katz. Those absent: Chair Mary Magnuson,
Commissioner Patrick Corbett.
Approval of Agenda
The agenda was approved as submitted.
Approval of March 24, 2020 Minutes
COMMISSIONER PETSCHEL MOVED, SECONDED BY COMMISSIONER FIELD TO
APPROVE THE MINUTES OF MARCH 24, 2020.
A ROLL CALL VOTE WAS PERFORMED:
COMMISSIONER KATZ AYE
COMMISSIONER PETSCHEL AYE
COMMISSIONER TOTH AYE
COMMISSIONER FIELD AYE
COMMISSIONER MAZZITELLO AYE
Hearings
A) PLANNING CASE 2020-06
ANDERSON-JOHNSON ASSOC. INC (ON BEHALF OF ISD #197), 701
MENDOTA HEIGHTS ROAD – VARIANCE
Community Development Director Tim Benetti explained that ISD #197 is seeking to widen its
main entrance driveway access off Mendota Heights Road, from its current width of approximately
28 feet to a proposed 38-foot width.
Hearing notices were published and mailed to all properties within 350-ft. of the site; no comments
or objections to this request were received.
Community Development Director Tim Benetti provided a planning staff report and a presentation
on this planning item to the Commission (which is available for viewing through the City’s
website).
page 10
Staff recommended approval of this application based on the findings and with conditions.
Commissioner Field asked if this change would surcharge or impact the concerns that have been
heard over the years with traffic in the neighborhood.
Public Works Director Ryan Ruzek explained that this separation will help with the flow of traffic
in the school parking lot and will better align with the Lockwood intersection. He noted that the
City will also review possible striping changes on Mendota Heights Road to increase pedestrian
safety.
Commissioner Field stated that it does not then appear that this change would increase the issues
of traffic safety.
Commissioner Toth stated that there are more parents dropping children off and picking them up
on a daily basis. He asked if there has been a study to determine if a traffic light would be needed.
Public Works Director Ryan Ruzek replied that the School District completed multiple studies
during the design of the middle school and a traffic signal, or other intersection improvements,
were not warranted.
Commissioner Toth asked if approval of this variance would exclude the option for another
entrance/exit onto another roadway in the future.
Community Development Director Tim Benetti replied that at this time there are no plans for
another access location onto a different roadway.
Acting Chair Mazzitello asked if the applicant was present, and would they like to add anything to
the presentation or discussion.
ISD #197 Superintendent Peter Olson-Skog spoke on behalf of the applicant, and replied that he
has nothing to add but is present to address any questions.
Acting Chair Mazzitello opened the public hearing.
Community Development Director Tim Benetti read aloud two emails one from the resident at
2530 Wilshire Court in opposition of the request and one from the residents at 2542 Concord Way
in support of the request. Both emails were entered into the record.
COMMISSIONER FIELD MOVED, SECONDED BY COMMISSIONER KATZ, TO CLOSE
THE PUBLIC HEARING.
A ROLL CALL VOTE WAS PERFORMED:
COMMISSIONER PETSCHEL AYE
COMMISSIONER TOTH AYE
page 11
COMMISSIONER FIELD AYE
COMMISSIONER MAZZITELLO AYE
COMMISSIONER KATZ AYE
COMMISSIONER PETSCHEL MOVED, SECONDED BY COMMISSIONER FIELD, TO
RECOMMEND APPROVAL OF THE VARIANCE TO ALLOW THE WIDER 38 FOOT
DRIVEWAY ACCESS ON TO MENDOTA HEIGHTS ROAD, WITH FINDINGS OF FACT TO
SUPPORT THIS RECOMMENDATION, ALONG WITH THE CONDITIONS NOTED
HEREIN IN THE STAFF REPORT.
A ROLL CALL VOTE WAS PERFORMED:
COMMISSIONER TOTH AYE
COMMISSIONER MAZZITELLO AYE
COMMISSIONER KATZ AYE
COMMISSIONER PETSCHEL AYE
COMMISSIONER FIELD AYE
Acting Chair Mazzitello advised the City Council would consider this application at its May 5,
2020 meeting.
B) PLANNING CASE 2020-07
MATT GUSTAFSON, 1865 AND 1883 DODD ROAD – LOT LINE ADJUSTMENT
Community Development Director Tim Benetti explained that Mr. Matt Gustafson is requesting
consideration of a lot line adjustment between two properties located at 1865 and 1883 Dodd Road.
Hearing notices were published and mailed to all properties within 350-ft. of the site; no comments
or objections to this request were received.
Community Development Director Tim Benetti provided a planning staff report and a presentation
on this planning item to the Commission (which is available for viewing through the City’s
website).
Staff recommended approval of this application based on the findings and with conditions.
Commissioner Field asked when the combination of the proposed third lot was completed.
Community Development Director Tim Benetti stated that he was unable to determine that. He
replied that a structure was never built and perhaps the middle lot was split between the two
properties when the homes were constructed in the 1950’s.
Matt Gustafson, applicant, stated that he was present to address any questions.
Acting Chair Mazzitello opened the public hearing.
page 12
Community Development Director Tim Benetti read aloud two emails received in opposition of
the request from to residents living at 1887 Dodd Road.
COMMISSIONER FIELD MOVED, SECONDED BY COMMISSIONER TOTH, TO CLOSE
THE PUBLIC HEARING.
A ROLL CALL VOTE WAS PERFORMED:
COMMISSIONER KATZ AYE
COMMISSIONER PETSCHEL AYE
COMMISSIONER MAZZITELLO AYE
COMMISSIONER FIELD AYE
COMMISSIONER TOTH AYE
COMMISSIONER FIELD MOVED, SECONDED BY COMMISSIONER TOTH, TO
RECOMMEND APPROVAL OF THE LOT LINE ADJUSTMENT BASED ON THE FINDINGS
OF FACT SUPPORTING THE REQUEST WITH THE CONDITIONS NOTED AS FOLLOWS:
1. THE APPLICANT SHALL BE RESPONSIBLE FOR RECORDING WITH DAKOTA
COUNTY ANY CITY RESOLUTION OF APPROVAL AND ANY AND ALL
NECESSARY TRANSFER OR DEED DOCUMENTS WHICH CONVEY THE
PORTION OF LANDS UNDER THE LOT LINE ADJUSTMENT REQUESTED
HEREIN.
2. APPLICANT SHALL EITHER SAW-CUT AND REMOVE THAT PART OF THE
DRIVEWAY/APRON THAT ENCROACHES OVER THE SHARED LOT LINE
BETWEEN LOTS 35 AND 36 TO MEET THE FIVE FOOT SETBACK REQUIRED
FOR DRIVEWAY; OR MUST PREPARE A WRITTEN AGREEMENT THAT
ACKNOWLEDGES AND ACCEPTS THE DRIVEWAY ENCROACHMENT ISSUE
BETWEEN BOTH PROPERTIES, AND SUCH AGREEMENT SHALL BE
RECORDED WITH DAKOTA COUNTY.
3. THE APPLICANT SHALL REMOVE THE PRIVACY FENCE FOR 1883 DODD ROAD
AND RELOCATE/REINSTALL ALONG THE SHARED LOT LINE BOUNDARY
BETWEEN LOTS 35 AND 36.
4. NO DEVELOPMENT ACTIVITIES, INCLUDING GRADING/FILLING WORK,
LANDSCAPING, TREE REMOVALS, RETAINING WALLS, FENCING, STAIRWAY
OR WALKWAYS, OR ANY STRUCTURE REQUIRING A ZONING AND/OR
BUILDING PERMIT WILL BE ALLOWED UNLESS AUTHORIZED UNDER A
SEPARATE CRITICAL AREA PERMIT APPLICATION.
FURTHER DISCUSSION: COMMISSIONER FIELD STATED THAT HE FINDS THE
ORIGINAL PLATTING OF THE LAND TO BE OF INTEREST. HE STATED THAT THIS
ACTION WOULD CREATE THREE LEGAL CONFORMING LOTS AND THEREFORE
SHOULD BE APPROVED. HE ACKNOWLEDGED THE CONCERN FROM THE RESIDENT
ABOUT THE WATER/WETLAND BUT NOTED THAT WOULD BE THE PROBLEM OF
THE APPLICANT TO SOLVE.
page 13
PUBLIC WORKS DIRECTOR RYAN RUZEK STATED THAT THE WATER RETENTION
AREA WAS DISCUSSED IN THE PAST. HE STATED THAT IT WAS HIS
UNDERSTANDING THAT THE WATER STORAGE WAS CREATED BY A PREVIOUS
HOMEOWNER AND MAY HAVE A LINER. HE NOTED THAT IF THE AREA IS
DETERMINED TO NOT BE A WETLAND, IT COULD BE FILLED.
COMMISSIONER FIELD NOTED THAT THE COMMISSION IS SIMPLY APPROVING THE
LOT SPLIT AND NOT GUARANTEEING WHAT WOULD OCCUR ON THAT NEW LOT.
COMMISSIONER PETSCHEL ASKED IF IT IS KNOWN WHAT WILL OCCUR ON THE
NEW LOT.
COMMUNITY DEVELOPMENT DIRECTOR BENETTI REPLIED THAT MR. GUSTAFSON
INTENDS TO BUILD A NEW HOME FOR HE AND HIS WIFE ON THE NEW LOT. HE
PROVIDED ADDITIONAL DETAILS ON THE CONDITION RELATED TO THE
DRIVEWAY.
A ROLL CALL VOTE WAS PERFORMED:
COMMISSIONER TOTH AYE
COMMISSIONER MAZZITELLO AYE
COMMISSIONER KATZ AYE
COMMISSIONER PETSCHEL AYE
COMMISSIONER FIELD AYE
Acting Chair Mazzitello advised the City Council would consider this application at its May 5,
2020 meeting.
C) PLANNING CASE 2020-08
ANDERSON-JOHNSON ASSOC. (ON BEHALF OF ST. THOMAS ACADEMY),
949 MENDOTA HEIGHTS ROAD – VARIANCE
Community Development Director Tim Benetti explained that Anderson-Johnson Associates, Inc.,
acting on behalf of Saint Thomas Academy (STA) is requesting certain variance approvals in order
to construct new baseball field improvements at STA’s campus, located at 949 Mendota Heights
Road. The variances would allow a new multi-purpose press box/covered bleacher structure to
exceed the maximum height standard and have reduced setbacks needed for accessory structures;
and allow for new light towers to exceed maximum height standards for structures in the R-1 One
Family Residential District.
Hearing notices were published and mailed to all properties within 1,200 to 2,250-ft. of the site;
and no comments or objections to this request were received.
Community Development Director Tim Benetti provided a planning staff report and a presentation
on this planning item to the Commission (which is available for viewing through the City’s
website).
page 14
Staff recommended approval of this application based on the findings and with conditions.
Commissioner Petschel asked if there was an issue with malplacement of the field originally.
Community Development Director Tim Benetti confirmed that a lot line adjustment was
completed between the applicant and neighboring property owner to eliminate encroachments that
came about with the installation of the field and fencing. He stated that the lot line adjustment
corrected the issue.
Acting Chair Mazzitello stated that the Commission is being asked to consider option one. He
noted that the applicant has stated that if fundraising is not successful, they will proceed with
option two, which would fall within the footprint of option one. He asked if some of the existing
variances would no longer be necessary if the City were to develop institutional standards in the
future.
Community Development Director Tim Benetti confirmed that to be true. He agreed that it would
be beneficial to have an institutional zone for schools, churches and similar uses.
Jay Pomeroy with AJA, Inc., representing the applicant, stated that he is present to address any
questions the Commission may have.
Commissioner Katz asked if there is an indication of the amount of light that would be used and
how that could impact the park or residents along the lake.
Mr. Pomeroy replied that the intent of the high light poles is to focus the light directly down, so
that there is very little spill outside of the perimeter.
Chair Magnuson opened the public hearing.
Community Development Director Tim Benetti noted that staff did not receive any written
comments related to this item.
COMMISSIONER TOTH MOVED, SECONDED BY COMMISSIONER KATZ, TO CLOSE
THE PUBLIC HEARING.
A ROLL CALL VOTE WAS PERFORMED:
COMMISSIONER MAZZITELLO AYE
COMMISSIONER FIELD AYE
COMMISSIONER PETSCHEL AYE
COMMISSIONER KATZ AYE
COMMISSIONER TOTH AYE
COMMISSIONER FIELD MOVED, SECONDED BY COMMISSIONER PETSCHEL, TO
RECOMMEND APPROVAL OF THE VARIANCES, WITH FINDING OF FACT TO
page 15
SUPPORT THIS RECOMMENDATION, ALONG WITH THE CONDITIONS AS NOTED
HEREIN.
FURTHER DISCUSSION: COMMISSIONER FIELD COMMENTED THAT IT COULD BE
WISE TO STATE THAT THE CITY IS ANTICIPATING OPTION ONE, BUT THE SMALLER
OPTION WOULD ALSO BE SUBJECT TO APPROVAL IF THE APPLICANT CANNOT
MOVE FORWARD WITH OPTION ONE.
COMMUNITY DEVELOPMENT DIRECTOR TIM BENETTI NOTED THAT THE
APPLICANT INTENDS TO MOVE FORWARD WITH OPTION ONE, BUT IF OPTION TWO
MOVES FORWARD, THAT WOULD FIT UNDER THE VARIANCES APPROVED. HE
CONFIRMED THAT LANGUAGE COULD BE ADDED THAT THE APPROVAL OF
OPTIO N ONE WOULD INCLUDE THE APPROVAL OF OPTION TWO.
A ROLL CALL VOTE WAS PERFORMED:
COMMISSIONER TOTH AYE
COMMISSIONER KATZ AYE
COMMISSIONER MAZZITELLO AYE
COMMISSIONER FIELD AYE
COMMISSIONER PETSCHEL AYE
Acting Chair Mazzitello advised the City Council would consider this application at its May 5,
2020 meeting.
Staff Announcements / Updates
Community Development Director Tim Benetti had nothing further to report.
Adjournment
COMMISSIONER TOTH MOVED, SECONDED BY COMMISSIONER KATZ, TO
ADJOURN THE MEETING AT 7:58 P.M.
A ROLL CALL VOTE WAS PERFORMED:
COMMISSIONER FIELD AYE
COMMISSIONER PETSCHEL AYE
COMMISSIONER MAZZITELLO AYE
COMMISSIONER TOTH AYE
COMMISSIONER KATZ AYE
page 16
From:Mary & Jim Dietz
To:Tim Benetti
Subject:IDS #197
Date:Thursday, April 23, 2020 1:05:34 PM
Regarding the request for variance to exceed the maximum access width.
We are NOT in favor of allowing that drive to be made bigger as the traffic out of there is
always a problem in the afternoon. By adding a left turn lane it will most likely cause
accidents and then the next thing will be a round about! Please consider making it a right
turn only IN and OUT of that driveway. It would be for the safety of the children.
Jim and Mary Dietz
2530 Wilshire Ct
MH, MN 55120
page 17
From:Mary Kietzmann
To:Tim Benetti
Subject:Friendly Hill Variance
Date:Tuesday, April 28, 2020 4:30:53 PM
I'm in favor of this school widening its access.
Thanks,
Mary Kietzmann
2542 Concord Way
Mendota Hts, MN 55120
page 18
From:maxzweber
To:Tim Benetti
Subject:Dispute Tues April 28, 2020 public hearing
Date:Monday, April 27, 2020 3:58:56 PM
My name is Max Zweber and I own the residence at 1887 Dodd Road, Mendota Heights, MN
55118.
I am disputing the plan to "re-establish" 3 "original" platter lots in the R-1 one family
residential district, located at 1865 and 1883 Dodd Road.
That is already a narrow lot. I would like to keep the house's in one row, not having a house
set back. Right there is a natural water collection, pond, that fills in at different depths every
year. The water has already flooded up to where a wooden fence was installed which is the
same area a house would be built.
Sent via the Samsung Galaxy S7 edge, an AT&T 4G LTE smartphone
page 19
From:Andrea Sonju
To:Tim Benetti
Subject:Tues April 28, 2020 public hearing dispute
Date:Monday, April 27, 2020 3:54:24 PM
My name is Andrea Sonju and I reside at 1887 Dodd Road, Mendota Heights, MN 55118.
I am disputing the plan to "re-establish" 3 "original" platter lots in the R-1 one family
residential district, located at 1865 and 1883 Dodd Road.
That is already a narrow lot. I would like to keep the house's in one row, not having a house
set back. Right there is a natural water collection, pond, that fills in at different depths every
year. The water has already flooded up to where a wooden fence was installed which is the
same area a house would be built.
Sent via the Samsung Galaxy S7, an AT&T 4G LTE smartphone
page 20
DATE: June 2, 2020
TO: Mayor and City Council
FROM: Dave Dreelan, Fire Chief
Mark McNeill, City Administrator
SUBJECT: Fire Station Changeable Message Sign Use
Comment:
Introduction:
The City Council is asked to approve use criteria for the new changeable message board sign located at the
Mendota Heights Fire Station.
This topic was discussed with the City Council at a workshop which was held on May 11th.
Background:
As part of the renovation of the Fire Station, a replacement of the old sign was included. The sign’s location
makes it visible to passersby on Dodd Road.
Because the old sign had a very limited ability to change the message, it was not something for which the
Fire Department received requests to post messages, other than those of itself or the City. However, the
new board is electronic, and has significantly enhanced messaging capabilities. It is a “smart” sign,
meaning that many letters can be put up at the same time. Therefore, the length of the message is limited
only by how large the font is—down to a minimum of 4 inches in height, according to City Code. Messages
will also be able to change (scroll), within the parameters of the City’s sign ordinance.
As such, we feel that parameters should be established before it is activated to make certain that all
understand its use and availability.
According to the existing City Code, the City must adhere to the following operational requirements:
1. The electronic display message shall not change more than once every one hour, except for
emergency safety messages. Time, date, or temperature is considered one electronic display when
displayed alone, however it may be included as a component of any other electronic display but
cannot change more than once every three (3) seconds.
2. The hours of operation shall be limited to six o'clock (6:00) A.M. to ten o'clock (10:00) P.M.
3. The electronic display message shall be limited to static letters and numbers. No portion of a
message may contain animation, video or audio, scroll, flash, twirl, fade, or change color.
4. The electronic display area shall be a black background and messages shall not contain more than
one font color.
5. The electronic display message shall be a minimum of four inches (4") in height or larger as
necessary to ensure readability.
page 21
6. Messages shall be limited to advertisement of products, events, persons, institutions, activities,
businesses, services or subjects which are located on the premises only or which give public
service information.
An informal survey of other fire departments has resulted in a recommendation that the only allowable
messages be those of the Fire Department, the Fire Relief Association, and the City. A common rule of
thumb found during the survey was that if anyone would call either the Fire Department or City Hall, the
person answering the phone should be able to answer questions about the event on the sign, without
having to refer the caller to a third-party. Establishing this early on will eliminate what could otherwise
be numerous requests from private, non-profit, or club groups.
Adopting these policies will bring this sign use into compliance with (6) above. The non-fire messages
would be classified as public service information.
Examples of the types of allowable, and not allowed, messages are attached.
Recommendation:
We recommend that the City Council adopt a policy allowing messages on the new Fire Station changeable
message sign to be limited to those of the Mendota Heights Fire Department, the Mendota Heights Fire
Relief Association, and the City of Mendota Heights.
This policy would take effect upon activation of the sign, which is expected to be later this summer.
Action Required:
If the Council concurs, it should, by motion, adopt a policy which authorizes the use of the changeable
message board sign at the Mendota Heights Fire Station to be limited to those of the Mendota Heights Fire
Department, its Relief Association, or the City of Mendota Heights.
___________________________ _____________________________
Dave Dreelan, Mark McNeill,
Fire Chief City Administrator
page 22
Mendota Heights Fire Station
Changeable Message Board Sign Message Criteria
Permitted Uses:
1. Inform or promote City of MH meetings, hearings, and events at Mendota Heights City Hall,
Fire Station, or other City meetings being held throughout the community
2. Messages to inform or promote MH Fire Department or Fire Relief Association events:
a. Fire Prevention Week
b. Fire Station Open House—Oct XX 9 AM to 3 PM
c. Fire Dept. Dance or other Fire Fundraisers
3. Inform or promote City-sponsored or sanctioned events; examples:
a. Halloween Bonfire
b. Cliff Timm Fishing Derby
c. Annual Parks Celebration
d. Scott Patrick Memorial 5K
e. Mendakota Park Concert or Movie Series
f. 4th of July Fireworks
g. Nite to Unite August 5th Call 651-452-1366 To Register
h. Road Closed at XX—Check City Website
i. Hydrant flushing Begins Monday
4. General Information
a. Check Smoke Detector Batteries g. School is in Session—Drive carefully!
b. Daylight Savings Time Ends h. Watch for Pedestrians
c. Sign Up for Summer Rec Programs i. Happy Holidays
d. Vote Today! J. Support Local Businesses
e. Apply for Summer City Seasonal jobs
f. Watering Restrictions in Place
Examples of Not permitted:
• Holiday Tree Lighting at X Location
• Religious events or observances
• Private Organization Sports registrations open
• Congratulations or acknowledgements to local sports teams
• Group Fundraising Efforts; ex: Pancake Breakfast, or ticket sales
• Private group meeting announcements, ex: HOA Annual Meetings
• For Profit Events; ex: Farmers Market info
Draft: June 2020
page 23
DATE: June 2, 2020
TO: Mayor and City Council
FROM: Dave Dreelan, Fire Chief.
Mark McNeill, City Administrator
SUBJECT: Turn-Out-Gear Lockers Purchase
Comment:
INTRODUCTION
The City Council is asked to approve the purchase of turn-out-gear lockers for installation in the
new addition to the Fire Station.
BACKGROUND
The Fire Station construction budget included the purchase of 40 lockers specifically design for
the storage of the firefighters turn out gear. GearGrid Corporation of Forest Lake worked with the
fire building committee and CNH Architects during the station design phase to determine what
type of system would work best for the space and meet the department’s needs.
The new lockers are located in the new turnout gear storage room. The lockers and the gear room
are specifically designed to properly store all of the firefighter’s personal protective equipment.
The applicable section of state law governing purchasing is MSA 471.345 Subd. 5 (for contracts
of $25,000 or less), which states:
If the amount of the contract is estimated to be $25,000 or less, the contract may be made either
upon quotation or in the open market, in the discretion of the governing body. If the contract is
made upon quotation it shall be based, so far as practicable, on at least two quotations which shall
be kept on file for a period of at least one year after their receipt. Alternatively, municipalities may
award a contract for construction, alteration, repair, or maintenance work to the vendor or
contractor offering the best value under a request for proposals as described in section 16C.28,
subdivision 1, paragraph (a), clause (2), and paragraph (c).
The turn-out-gear room was designed to incorporate the locker system from GearGrid. To use any
other supplier would require structural modifications, which would be at an extra cost. As a result,
no other quotations were solicited, or even possible to obtain.
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BUDGET IMPACT
The quote from GearGrid is $20,495. This expense was planned for in the construction budget,
and is within budget amount.
RECOMMENDATION
We recommend that the City Council approve the purchase of this system described at the cost of
$20,495.
ACTION REQUIRED
If the Council concurs, it should authorize the purchase of a locker system from GearGrid, in the
amount of $20,495.
page 25
Request for City Council Action
MEETING DATE: June 2, 2020 TO: Mayor, City Council, and City Administrator FROM: Scott Goldenstein, Assistant Fire Chief SUBJECT: April 2020 Fire Synopsis
Fire Calls
April had the Mendota Heights Fire Department being paged to 30 calls for service. The calls
reflected the following geographic locations:
Mendota Heights 22 call(s)
Lilydale 1 call(s)
Mendota 0 call(s)
Sunfish Lake 4 call(s)
Other 3 call(s)
Types of calls:
Fires: 3 The Fire Department responded to one residential structure fire in April. The
structure fire was a chimney fire that the department was able to extinguish from the interior.
This call did prompt an auto aid request to South Metro Fire as well. In addition, we responded
to a grass fire off Highway 55 and to a dumpster fire on Northland Drive.
Medical/Extrication: 3 The Fire Department responded to three medicals in April. (Due to
privacy issues, details about medical calls are not released in this document).
Hazardous Situations: 5 In April, we had three calls involving overhead lines. One was for a
smoking line that was in contact with a tree. Two of the calls were amazing in that they both
involved homeowners using the overhead Comcast lines to support their ladders (this is a VERY
BAD idea). You could accidently come into contact with a high voltage line, and others see
what is being done and decide to do it as well, not realizing that they are doing the same thing
but with high voltage lines. In addition, we were paged to a commercial location where they
had a large UPS (uninterruptible power supply) that came with their recently purchased
building and it appeared to have two of its batteries go bad and were overheating.
Good Intent: 1 The Mendota Heights Fire Department responded to a gas odor in the
area with no problem found.
page 26
False Alarms: 10 We dealt with 10 false alarms including four calls for burnt food, five
were due to system malfunctions, and one was an accidental trip of the alarm.
Dispatched and Cancelled En route: 5 The MHFD had five different calls that we were
dispatched to but the calls were cancelled before our arrival.
Mutual/Auto Aid Requests: 3 In April, the Mendota Heights Fire Department responded to 3
auto/mutual aid requests. Two were to South Metro Fire for an actual apartment fire and the
other was for burnt food at an apartment. The third request was to Inver Grove Heights for
assistance at an apartment fire.
April Training
Due to the COVID 19 pandemic, the department continued to operate in a modified mode that
included having the station locked down to outside visitors as well as minimizing the number of
people at the station at any one time. Training was changed to primarily online that firefighters
could do from home, again to minimize social contact.
Consequently, the training events were (in most instances) not associated with specific dates
and times because the content was available to them 24/7.
Online training for April:
BNSF Railroad Hazmat Training course. This was an elective course that firefighters were
encouraged to take.
MHFD PPE (Personnel Protective Equipment) was an in-house produced video to go over PPE
specific to potential COVID 19 scenarios. Mandatory course.
MHFD Report writing in ImageTrend Elite. This is a new program that all state reports must be
done in. Mandatory course.
Video #1 by Dr. John Campbell in regards to SARS COVID-2/COVID-19. Mandatory course.
Video #2 by Dr. John Campbell in regards to SARS COVID-2/COVID-19. Mandatory course.
page 27
Number of Calls 30 Total Calls for Year 102
FIRE ALARMS DISPATCHED:NUMBER STRUCTURE CONTENTS MISC.TOTALS TO DATE
ACTUAL FIRES
Structure - MH Commercial $0
Structure - MH Residential $0
Structure - Contract Areas $0
Cooking Fire - confined $0
Vehicle - MH $0
Vehicle - Contract Areas $0
Grass/Brush/No Value MH 1
Grass/Brush/No Value Contract TOTAL MONTHLY FIRE LOSSES
Other Fire 2
OVERPRESSURE RUPTURE $0 $0 $0
Excessive heat, scorch burns
MEDICAL
Emergency Medical/Assist 3
Vehicle accident w/injuries
Extrication ALL FIRES, ALL AREAS (MONTH)$0
Medical, other
HAZARDOUS SITUATION MEND. HTS. ONLY STRUCT/CONTENTS $0
Spills/Leaks
Carbon Monoxide Incident MEND. HTS. ONLY MISCELLANEOUS $0
Power line down 3
Arcing, shorting 1 MEND. HTS. TOTAL LOSS TO DATE $0
Hazardous, Other 1
SERVICE CALL
Smoke or odor removal CONTRACT AREAS LOSS TO DATE $0
Assist Police or other agency
Service Call, other
GOOD INTENT
Good Intent
Dispatched & Cancelled 5 Current To Date Last Year
Smoke Scare 22 66 94
HazMat release investigation 1 1 6 8
Good Intent, Other 0 4 2
FALSE ALARMS 4 8 2
False Alarm 3 18 10
Malfunction 4 Total:30 102 116
Unintentional 6
False Alarm, other FIRE MARSHAL'S TIME FOR MONTH
MUTUAL AID 3 INSPECTIONS
Total Calls 30 INVESTIGATIONS
RE-INSPECTION
WORK PERFORMED Hours To Date Last Year
MEETINGS
FIRE CALLS 539.5 1718 1962
MEETINGS 78.5 372.5 254 ADMINISTRATION
TRAINING 115 798.5 1306
SPECIAL ACTIVITY 145 303 174 PLAN REVIEW/TRAINING
FIRE MARSHAL 0 48.5
TOTAL:0
TOTALS 878 3192 3744.5 REMARKS:SEE OTHER SIDE FOR SYNOPSIS
Lilydale
Mendota
Sunfish Lake
Other
MENDOTA HEIGHTS FIRE DEPARTMENT
APRIL 2020 MONTHLY REPORT
FIRE LOSS TOTALS
LOCATION OF FIRE ALARMS
Mendota Heights
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page 40
DATE: June 2, 2019
TO: Mayor, City Council and City Administrator
FROM: Kristen Schabacker, Finance Director
SUBJECT: 2019 Audit Presentation
INTRODUCTION
At the June 2nd meeting, the City Council will hear the Annual Audit report.
BACKGROUND
BerganKDV has completed the audit for 2019. The reports for 2019 are the Annual Report &
Basic Financial Statements and the Communications Letter. These reports are included in your
packet. Matt Mayer from KDV will be presenting the Annual Audit Report for 2019.
RECOMMENDATION
The Council should, by motion, accept the audit review..
page 41
City of Mendota Heights
Annual Report and Basic
Financial Statements
December 31, 2019
page 42
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 Financial Statements 29
Required Supplementary Information
Schedule of Changes in Total OPEB Liability and Related Ratios 64
Schedule of City's Proportionate Share of Net Pension Liability General
Employees Retirement Fund 65
Schedule of City's Proportionate Share of Net Pension Liability Public
Employees Police and Fire Retirement Fund 65
Schedule of City Contributions General Employees Retirement Fund 66
Schedule of City Contributions Public Employees Police and Fire
Retirement Fund 66
Notes to Required Supplementary Information 67
Supplementary Information
Combining Balance Sheet – Nonmajor Governmental Funds 72
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances –
Nonmajor Governmental Funds 76
Combining Statement of Net Position – Internal Service Funds 80
Combining Statement of Revenues, Expenses, and Changes in Net Position – Internal
Service Funds 81
page 43
City of Mendota Heights
Table of Contents
Supplementary Information (Continued)
Combining Statement of Cash Flows – Internal Service Funds 82
Detailed Schedule of Revenues, Expenditures, and Changes in Fund Balance –
Budget and Actual – General Fund 83
Minnesota Legal Compliance 87
page 44
1
City of Mendota Heights
Elected Officials and Administration
December 31, 2019
Elected Officials Position Term Expires
Neil Garlock Mayor December 31, 2020
Joel Paper Council Member December 31, 2020
Jay Miller Council Member December 31, 2020
Ultan Duggan Council Member December 31, 2022
Liz Petschel Council Member December 31, 2022
Administration
Mark McNeill City Administrator Appointed
Lorri Smith City Clerk Appointed
Kristen Schabacker Finance Director Appointed
page 45
2
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, 2019, and the related notes to 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.
page 46
3
Opinions
In our opinion, the financial statements referred to in the first paragraph 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, 2019, 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 Required Supplementary Information as
listed in the Table of Contents be presented to supplement the basic financial statements. Such
information, although not a part of the basic financial statements, is required by the Governmental
Accounting Standards Board (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, the
supplementary information is fairly stated, in all material respects, in relation to the basic financial
statements as a whole.
Minneapolis, Minnesota
May 22, 2020
page 47
4
(THIS PAGE LEFT BLANK INTENTIONALLY)
page 48
City of Mendota Heights
Management's Discussion and Analysis
5
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, 2019.
FINANCIAL AND DEVELOPMENT HIGHLIGHTS
The assets and deferred outflows of resources of the City exceeded liabilities and deferred inflows of
resources at the close of the most recent year by $44,903,018 (net position). Of this amount, $7,619,278
(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 $2,033,232. Governmental activities resulted in an increase of
net position of $1,710,719. Business activities had net position increase of $322,513.
As of the close of the current year, the City's governmental funds reported a combined ending fund
balance of $19,816,928, an increase of $5,608,843 from the prior year.
At the end of the year the General Fund had an unassigned fund balance of $9,002,011, or 100.8% 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 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 on page 16 and 17 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, deferred outflows of
resources, liabilities and deferred inflows of resources, with the difference 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 and storm water.
page 49
City of Mendota Heights
Management's Discussion and Analysis
6
OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED)
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
Fire Hall Remodel Fund
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.
Proprietary Funds
The City maintains two enterprise funds and two 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 and storm
water operations.
page 50
City of Mendota Heights
Management's Discussion and Analysis
7
OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED)
Proprietary Funds (Continued)
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
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
and city hall 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 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 financial statements can be found on
29 through 61 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 74 through 82 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 and deferred outflows of resources exceeded liabilities and
deferred inflows of resources by $44,903,018 at the close of the most recent year.
page 51
City of Mendota Heights
Management's Discussion and Analysis
8
GOVERNMENT-WIDE FINANCIAL ANALYSIS (CONTINUED)
The largest portion of the City's net position ($31,225,359 or 69.54%) reflects its investment in capital
assets (e.g. land, buildings, machinery and equipment, sewer main lines and storm sewers and
infrastructure) less any related debt used to acquire those assets that is still outstanding. The City uses
these capital assets to provide services to citizens; consequently, these assets are not available for future
spending. Although the City's investment in its capital assets is reported net of related debt, it should be
noted that the resources needed to repay this debt must be provided from other sources, since the capital
assets themselves cannot be used to liquidate these liabilities.
Net Position
2019 2018 2019 2018 2019 2018
Assets
Current and other assets 24,465,601$ 18,093,147$ 1,596,455$ 1,274,936$ 26,062,056$ 19,368,083$
Capital assets 36,354,121 28,692,825 14,478,671 16,930,972 50,832,792 45,623,797
Deferred outflows of resources related to pensions and OPEB 2,009,901 2,655,401 11,717 21,117 2,021,618 2,676,518
Total assets and deferred outflows of resources 62,829,623$ 49,441,373$ 16,086,843$ 18,227,025$ 78,916,466$ 67,668,398$
Liabilities
Long-term liabilities outstanding 25,563,089$ 18,063,968$ 128,014$ 139,250$ 25,691,103$ 18,203,218$
Other liabilities 5,051,561 2,717,388 403,116 61,712 5,454,677 2,779,100
Deferred inflows of resources related to pensions 2,843,768 3,778,292 23,900 38,002 2,867,668$ 3,816,294
Total liabilities and deferred inflows of resources 33,458,418$ 24,559,648$ 555,030$ 238,964$ 34,013,448$ 24,798,612$
Net Position
Net investment in capital assets 16,838,188$ 14,756,507$ 14,478,671$ 16,930,972$ 31,225,359$ 31,687,479$
Restricted 6,058,381 5,949,206 - - 6,058,381 5,949,206
Unrestricted 6,474,636 4,176,012 1,053,142 1,057,089 7,619,278 5,233,101
Total net position 29,371,205$ 24,881,725$ 15,531,813$ 17,988,061$ 44,903,018$ 42,869,786$
Governmental Activities Business-Type Activities Totals
A portion of the of the City's net position ($6,058,381) represents resources that are subject to external
restrictions on how they may be used. The remaining balance of unrestricted net position ($7,619,278)
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.
page 52
City of Mendota Heights
Management's Discussion and Analysis
9
GOVERNMENT-WIDE FINANCIAL ANALYSIS (CONTINUED)
Governmental Activities
Governmental activities increased the City's net position by $1,710,719. Key elements of this increase
are as follows:
City's Changes in Net Position
2019 2018 2019 2018 2019 2018
Revenues
Program revenues
Charges for services 2,147,351$ 2,063,762$ 2,570,609$ 2,670,040$ 4,717,960$ 4,733,802$
Operating grants and contributions 714,691 443,789 - - 714,691 443,789
Capital grants and contributions 610,169 590,142 115,955 - 726,124 590,142
General revenues
Taxes 9,430,008 8,586,886 - - 9,430,008 8,586,886
Unrestricted investment earnings 476,412 152,119 26,166 15,403 502,578 167,522
Gain on sale of asset - - 8,778 - 8,778
Total revenues 13,378,631 11,836,698 2,712,730 2,694,221 16,091,361 14,530,919
Expenses
General government 2,050,317 2,027,404 - - 2,050,317 2,027,404
Public safety 4,587,085 3,940,953 - - 4,587,085 3,940,953
Public works 4,457,956 4,092,510 - - 4,457,956 4,092,510
Interest on long-term debt 685,202 373,913 - - 685,202 373,913
Sewer - - 2,001,963 1,954,960 2,001,963 1,954,960
Storm water - - 275,606 285,058 275,606 285,058
Par 3 golf course - - 137,324 - 137,324
Total expenses 11,780,560 10,434,780 2,277,569 2,377,342 14,058,129 12,812,122
Increase (decrease) in net
position before transfers 1,598,071 1,401,918 435,161 316,879 2,033,232 1,718,797
Transfers 112,648 (240,338) (112,648) 240,338 - -
Increase (decrease) in net position 1,710,719 1,161,580 322,513 557,217 2,033,232 1,718,797
Net position - beginning 24,881,725 24,308,523 17,988,061 17,428,020 42,869,786 41,736,543
Change in accounting principle 2,778,761 (588,378) (2,778,761) 2,824 - (585,554)
Net position - beginning restated 27,660,486 23,720,145 15,209,300 17,430,844 42,869,786 41,150,989
Net position - ending 29,371,205$ 24,881,725$ 15,531,813$ 17,988,061$ 44,903,018$ 42,869,786$
Governmental Activities Business-Type Activities Totals
page 53
City of Mendota Heights
Management's Discussion and Analysis
10
GOVERNMENT-WIDE FINANCIAL ANALYSIS (CONTINUED)
Below are specific graphs which provide comparisons of the governmental activities revenues and
expenditures:
General Government
17%
Public Safety
39%
Public Works
38%Interest and Fees on
Long-Term Debt
6%
Governmental Activities - Expenses
General Government
17%
Public Safety
39%
Public Works
38%Interest and Fees on
Long-Term Debt
6%
Governmental Activities - Expenses
page 54
City of Mendota Heights
Management's Discussion and Analysis
11
GOVERNMENT-WIDE FINANCIAL ANALYSIS (CONTINUED)
Business-Type Activities
Business-type activities increased net position by $322,513. Below are graphs showing the business-type
activities revenue and expense comparisons:
Charges for Services
95%
Capital Grants and
Contributions
4%
Unrestricted
Investment Earnings
1%
Business-Type Activities - Revenues
Sewer
88%
Storm Water
12%
Business-Type Activities - Expenses
page 55
City of Mendota Heights
Management's Discussion and Analysis
12
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
$19,816,928. Nonspendable fund balances are already allocated for prepaid items ($277,029) and
inventory ($22,487). Approximately 43.72% ($8,663,950) constitutes restricted fund balance. Restricted
fund balance would include Debt Service, Fire Hall Remodel, 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 $727,377. This represents fund balance that is to be used for the water system, Par 3 Golf
Course and civil defense needs. The City has assigned fund balance of $1,660,361 (8.38%). This number
represents the fund balances for the various reserve accounts and an amount allocated for insurance
reserves. The remaining category of fund balance is the unassigned fund balance. The City has
$8,465,724 of unassigned fund balance which is approximately 42.72% of the combined governmental
fund balance at December 31, 2019.
The General Fund increased by $516,285 in 2019. Revenues were greater than anticipated and
expenditures were lower than budgeted amounts.
The Special Assessments Debt Service Fund increased by $1,366,990 in 2019. This fund accounted for
debt service payments for prior street improvement projects that were financed through the issuance of
bonds. This fund held bond proceeds that will be used to pay off the GO Improvement Bonds of 2011A
on 2/1/2020.
The Street Capital Project Fund increased by $26,663. This fund accounted for the costs and resources
associated with the Wesley Neighborhood street project.
The Fire Hall Remodel Fund increased by $3,420,120 in 2019. This project was started in 2019 and has
an anticipated completion date of late summer 2020.
The nonmajor governmental funds increased by $278,785. These funds received revenues from water
surcharges, Par 3 Golf Course, and park dedication fees. Nonmajor funds account for the Special Park,
Civil Defense, Par 3 Golf Course, and Street Light District activity. The Par 3 Golf Course is now
accounted for as a Special Revenue Fund beginning in 2019. 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 $767,585 and storm water $285,557. The Sewer Utility Fund had an increase in net position in
2019 of $64,306 and the Storm Water Utility Fund had an increase in net position in 2019 of $258,207.
page 56
City of Mendota Heights
Management's Discussion and Analysis
13
BUDGETARY HIGHLIGHTS
General Fund
The General Fund budget was not amended during 2019.
During the year, revenues exceeded budgeted estimates by $526,780, while expenditures were less than
anticipated by $336,698.
The General Fund experienced greater than budgeted revenues in most categories. The City continued to
receive higher than anticipated revenues for licenses and fees, due in large part to an increased level of
building construction activity. The City received greater than budgeted amounts of public safety grants
which increased the amount of intergovernmental revenue. Other revenue exceeded budgeted amounts
due to the increased interest revenue received from the favorable market in 2019.
The General Fund expenditures were lower than budgeted. The General Government function was
slightly over budget, due primarily to technology purchases made from the cable fund. The Public
Safety function experienced expenditures which were less than the budgeted amounts, due to smaller
than expected staffing costs. Finally, the Public Works function also experienced slightly lower than
budgeted expenditures.
Overall, the General Fund balance increased by $516,285, an increase of approximately 5.84%.
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, 2019, amounts to $50,832,792 (net of accumulated depreciation). This investment in
capital assets includes land, buildings, machinery and equipment, sewer main lines and storm sewers
and infrastructure.
Capital Assets
(Net of Depreciation)
2019 2018 2019 2018 2019 2018
Land 8,682,370$ 6,150,895$ -$ 2,531,475$ 8,682,370$ 8,682,370$
Construction in progress 7,024,824 2,420,917 217,421 - 7,242,245 2,420,917
Buildings and structures 996,159 820,703 - 127,599 996,159 948,302
Machinery and equipment 2,359,141 1,951,388 88,397 179,021 2,447,538 2,130,409
Other improvements 658,593 640,052 - - 658,593 640,052
Sewer main lines and
Storm sewers - - 14,172,853 14,092,877 14,172,853 14,092,877
Infrastructure 16,633,034 16,708,870 - - 16,633,034 16,708,870
Total capital assets 36,354,121$ 28,692,825$ 14,478,671$ 16,930,972$ 50,832,792$ 45,623,797$
Governmental Activities Business-Type Activities Totals
Additional information on the City's capital assets can be found in Note 5.
page 57
City of Mendota Heights
Management's Discussion and Analysis
14
CAPITAL ASSET AND DEBT ADMINISTRATION (CONTINUED)
Long-Term Debt
At the end of the current year, the City had total long-term debt outstanding of $23,125,000, an increase
of $8,155,000 from 2018. $23,125,000 for general obligation (G.O.) improvement debt which is
supported in part by special assessments.
Outstanding Debt
G.O. Improvement Bonds, G.O. Bonds and Revenue Bonds:
2019 2018
G.O. Improvement Bonds 15,165,000$ 13,725,000$
G.O. Bonds 7,960,000 1,245,000
Revenue Bonds - -
Total 23,125,000$ 14,970,000$
Governmental Activities
The City maintains a 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 $45,728,886. Of the City's outstanding debt,
$7,960,000 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 2019, the taxable market value for the City was $2,286,444,287. This represents an increase of 8.76%
from 2018. The City is expecting an increase in taxable market value for 2021.
These factors were considered in preparing the City's budget for 2020.
Requests for Information
This financial report is designed to provide a general overview of the City's finances for all those with
an interest in the government's finances. Questions concerning any of the information provided in this
report or requests for additional financial information should be addressed to the Director of Finance,
1101 Victoria Curve, Mendota Heights, Minnesota 55118.
page 58
15
BASIC FINANCIAL STATEMENTS
page 59
City of Mendota Heights
Statement of Net Position
December 31, 2019
Governmental
Activities
Business-Type
Activities Total
Assets
Cash and investments
(including cash equivalents) 21,314,353$ 794,670$ 22,109,023$
Property tax receivable 45,450 - 45,450
Accounts receivable 38,241 642,719 680,960
Interest receivable 41,911 977 42,888
Due from other governments 377,918 - 377,918
Special assessments receivable
Delinquent 4,728 3,833 8,561
Unearned 2,238,965 24,674 2,263,639
Inventories 22,487 - 22,487
Prepaid items 285,448 129,582 415,030
Land held for resale 96,100 - 96,100
Capital assets (net of accumulated depreciation)
Land and improvements 8,682,370 - 8,682,370
Construction in progress 7,024,824 217,421 7,242,245
Capital assets being depreciated
Infrastructure 16,633,034 14,172,853 30,805,887
Buildings and structures 996,159 - 996,159
Other improvements 658,593 - 658,593
Machinery and equipment 2,359,141 88,397 2,447,538
Total assets 60,819,722 16,075,126 76,894,848
Deferred Outflows of Resources
Deferred outflows of resources related to pensions 1,883,784 11,050 1,894,834
Deferred outflows of resources related to OPEB 126,117 667 126,784
2,009,901 11,717 2,021,618
Total assets and deferred outflows of resources 62,829,623$ 16,086,843$ 78,916,466$
Liabilities
Accounts and contracts payable 1,435,947$ 336,435$ 1,772,382$
Deposits payable - 37,500 37,500
Due to other governments 193,773 3,127 196,900
Salaries and benefits payable 141,631 3,898 145,529
Interest payable 300,134 - 300,134
Developers' escrow deposits 18,448 - 18,448
Bond principal payable
Payable within one year 2,555,000 - 2,555,000
Payable after one year 21,311,799 - 21,311,799
Compensated absences payable
Payable within one year 406,628 22,156 428,784
Payable after one year 163,819 11,531 175,350
Other post employment benefits (OPEB) payable 859,516 8,605 868,121
Net pension liability 3,227,955 107,878 3,335,833
Total liabilities 30,614,650 531,130 31,145,780
Deferred Inflows of Resources
Deferred inflows of resources related to pensions 2,843,768 23,900 2,867,668
Net Position
Net investment in capital assets 16,838,188 14,478,671 31,225,359
Restricted for
Capital projects 192,446 - 192,446
Debt service 5,189,480 - 5,189,480
Street light maintenance 27,713 - 27,713
Park dedication 648,742 - 648,742
Unrestricted 6,474,636 1,053,142 7,619,278
Total net position 29,371,205 15,531,813 44,903,018
Total liabilities, deferred inflows of resources, and net position 62,829,623$ 16,086,843$ 78,916,466$
See notes to financial statements.16
page 60
Program RevenuesExpensesCharges for ServicesOperating Grants and ContributionsCapital Grants and ContributionsGovernmental ActivitiesBusiness-Type ActivitiesTotalGovernmental activitiesGeneral government2,050,317$ 282,480$ 13,937$ -$ (1,753,900)$ -$ (1,753,900)$ Public safety4,587,085 742,468 529,040 - (3,315,577) - (3,315,577) Public works4,457,956 1,122,403 171,714 610,169 (2,553,670) - (2,553,670) Interest on long-term debt685,202 - - - (685,202) - (685,202) Total governmental activities11,780,560 2,147,351 714,691 610,169 (8,308,349) - (8,308,349) Business-type activitiesSewer2,001,963 2,062,440 - - - 60,477 60,477 Storm water275,606 508,169 - 115,955 - 348,518 348,518 Total business-type activities2,277,569 2,570,609 - 115,955 - 408,995 408,995 Total governmental and business-type activities14,058,129$ 4,717,960$ 714,691$ 726,124$ (8,308,349) 408,995 (7,899,354) General revenuesProperty taxes9,430,008 - 9,430,008 Unrestricted investment earnings476,412 26,166 502,578 Total general revenues9,906,420 26,166 9,932,586 Transfers112,648 (112,648) - Change in net position1,710,719 322,513 2,033,232 Net position - beginning24,881,725 17,988,061 42,869,786 Change in accounting principle (Note 17)2,778,761 (2,778,761) - Net position - beginning, restated27,660,486 15,209,300 42,869,786 Net position - ending29,371,205$ 15,531,813$ 44,903,018$ See notes to financial statements.Functions/ProgramsNet (Expense) Revenues and Changes in Net PositionCity of Mendota HeightsStatement of Activities Year Ended December 31, 201917page 61
December 31, 2019
Capital Projects
General Fund
Special
Assessments
Debt Service
Street Capital
Projects
Assets
Cash and investments
(including cash equivalents) 9,022,360$ 4,159,319$ 63,545$
Taxes receivable - delinquent 36,493 4,990 -
Special assessments receivable
Delinquent 378 4,350 -
Deferred 3,054 1,941,027 284,555
Accounts receivable 27,153 - -
Interest receivable 11,267 5,303 1,079
Due from other funds - - -
Due from other governments 366,356 - 7,136
Inventories 22,487 - -
Prepaid items 271,577 - -
Land held for resale - - -
Total assets 9,761,125$ 6,114,989$ 356,315$
Liabilities
Accounts and contracts payable 187,746$ -$ 276,992$
Due to other funds - - -
Due to other governments 22,974 - -
Salaries and benefits payable 139,147 - -
Developers' escrow deposits 18,448 - -
Compensated absences - - -
Total liabilities 368,315 - 276,992
Deferred Inflows of Resources
Unavailable revenue - property taxes 36,493 4,990 -
Unavailable revenue - special assessments 3,432 1,945,377 284,555
Total deferred inflows of resources 39,925 1,950,367 284,555
Fund Balances
Nonspendable 294,064 - -
Restricted - 4,164,622 -
Committed - - -
Assigned 56,810 - -
Unassigned 9,002,011 - (205,232)
Total fund balances 9,352,885 4,164,622 (205,232)
Total liabilities, deferred inflows of
resources, and fund balances 9,761,125$ 6,114,989$ 356,315$
See notes to financial statements.18
City of Mendota Heights
Balance Sheet - Governmental Funds
page 62
Capital Projects
Fire Hall
Remodel
Other
Governmental
Funds
Total
Governmental
Funds
4,001,240$ 3,497,790$ 20,744,254$
1,427 2,540 45,450
- - 4,728
- 10,329 2,238,965
- 11,088 38,241
18,982 5,106 41,737
- 173,626 173,626
- 4,426 377,918
- - 22,487
- 5,452 277,029
- 96,100 96,100
4,021,649$ 3,806,457$ 24,060,535$
839,837$ 124,534$ 1,429,109$
- 173,626 173,626
- 170,704 193,678
- 456 139,603
- - 18,448
- - -
839,837 469,320 1,954,464
1,427 2,540 45,450
- 10,329 2,243,693
1,427 12,869 2,289,143
- 5,452 299,516
3,180,385 1,318,943 8,663,950
- 727,377 727,377
- 1,603,551 1,660,361
- (331,055) 8,465,724
3,180,385 3,324,268 19,816,928
4,021,649$ 3,806,457$ 24,060,535$
19
page 63
20
(THIS PAGE LEFT BLANK INTENTIONALLY)
page 64
City of Mendota Heights
Reconciliation of the Balance Sheet to
the Statement of Net Position - Governmental Funds
December 31, 2019
Total fund balances - governmental funds 19,816,928$
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 62,403,456
Less accumulated depreciation (26,708,963)
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 (23,125,000)
Unamortized bond premium (741,799)
OPEB payable (853,448)
Net pension liability (3,177,604)
Deferred outflows of resources and deferred inflows of resources are created as a result of various differences
related to pensions and OPEB that are not recognized in the governmental funds.
Deferred inflows of resources related to pensions (2,832,613)
Deferred outflows of resources related to pensions 1,878,627
Deferred outflows of resources related to OPEB 125,647
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 45,450
Special assessments 4,728
Revenues in the Statement of Activities that do not provide current financial resources are not reported
as revenues in the funds.
Deferred special assessments 2,238,965
Governmental funds do not report a liability for accrued interest until due and payable.(300,134)
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. 596,965
29,371,205$
See notes to financial statements.21
Total net position - governmental activities
Amounts reported for governmental activities in the Statement of Net Position are different because:
page 65
Capital Projects Capital Projects
General Fund
Special
Assessments
Debt Service
Street Capital
Projects
Fire Hall
Remodel
Revenues
Property taxes 7,509,301$ 1,033,652$ -$ 347,585$
Special assessments - 391,055 295,135 -
Licenses and permits 480,249 - - -
Intergovernmental 529,235 - - -
Charges for services 716,877 - - -
Fines and forfeitures 123,848 3,607 - -
Miscellaneous
Investment income 186,336 87,692 17,827 97,222
Other 199,430 - - -
Total revenues 9,745,276 1,516,006 312,962 444,807
Expenditures
Current
General government 1,676,334 - - -
Public safety 4,607,105 - - 6,960
Public works 2,645,909 - - -
Debt service
Principal - 1,630,000 - -
Interest and other charges - 433,477 - 7,093
Capital outlay
General government - - - -
Public safety - - - 4,304,966
Public works - - 1,762,443 -
Total expenditures 8,929,348 2,063,477 1,762,443 4,319,019
Excess of revenues over (under) expenditures 815,928 (547,471) (1,449,481) (3,874,212)
Other Financing Sources (Uses)
Issuance of debt - 3,035,000 - -
Bond premium - 163,894 - -
Transfers in 47,550 - 1,498,233 7,294,332
Transfers out (347,193) (1,284,433) (22,089) -
Total other financing sources (uses) (299,643) 1,914,461 1,476,144 7,294,332
Net change in fund balances 516,285 1,366,990 26,663 3,420,120
Fund Balances
Beginning of year 8,836,600 2,797,632 (231,895) (239,735)
Change in accounting principle (Note 17) - - - -
Beginning of the year, as restated 8,836,600 2,797,632 (231,895) (239,735)
End of year 9,352,885$ 4,164,622$ (205,232)$ 3,180,385$
See notes to financial statements.22
City of Mendota Heights
Statement of Revenues, Expenditures, and
Changes in Fund Balances - Governmental Funds
Year Ended December 31, 2019
page 66
Other
Governmental
Funds
Total
Governmental
Funds
545,099$ 9,435,637$
- 686,190
- 480,249
190,424 719,659
263,106 979,983
5 127,460
84,447 473,524
374,657 574,087
1,457,738 13,476,789
74,776 1,751,110
190,424 4,804,489
265,706 2,911,615
250,000 1,880,000
134,310 574,880
- -
- 4,304,966
702,457 2,464,900
1,617,673 18,691,960
(159,935) (5,215,171)
7,000,000 10,035,000
401,409 565,303
347,193 9,187,308
(7,309,882) (8,963,597)
438,720 10,824,014
278,785 5,608,843
2,992,756 14,155,358
52,727 52,727
3,045,483 14,208,085
3,324,268$ 19,816,928$
23
page 67
5,608,843$
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 6,757,671
Depreciation expense (1,808,020)
Book value of disposed assets (3,000)
Assets contributed to enterprise funds (111,063)
Governmental funds recognized pension contributions as expenditures at the time of payment whereas the
Statement of Activities factors in items related to pensions on a full accrual perspective 97,394
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 106,159
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.1,880,000
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 (565,303)
Premiums are recognized when debt is issued in the governmental funds but amortized over the life of the deb
in the Statement of Activities.45,322
Interest on long-term debt in the Statement of Activities differs from the amount reported in the governmenta
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.(155,644)
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 (10,035,000)
Revenues in the Statement of Activities that do not provide current financial resources are not reported as
revenues in the funds.(101,046)
Activities of the internal service funds are presented separately from the governmental funds. However, the
functions, from a government-wide perspective, are governmental (5,594)
1,710,719$
See notes to financial statements.24
Change in net position - governmental activities
Net change in fund balances - governmental funds
Amounts reported for governmental activities in the Statement of Activities
City of Mendota Heights
are different because:
Reconciliation of the Statement of Revenues,
Expenditures, and Changes in Fund Balances to
the Statement of Activities - Governmental Funds
Year Ended December 31, 2019
page 68
City of Mendota Heights
Statement of Revenues, Expenditures, and
Changes in Fund Balance -
Budget and Actual - General Fund
Year Ended December 31, 2019
Budgeted
Amounts Variance with
Original Actual
and Final Amounts
Revenues
Property taxes 7,449,004$ 7,509,301$ 60,297$
Licenses and permits 374,700 480,249 105,549
Intergovernmental 434,070 529,235 95,165
Charges for services 716,222 716,877 655
Fines and forfeitures 72,500 123,848 51,348
Miscellaneous revenues
Investment income 35,000 186,336 151,336
Other 137,000 199,430 62,430
Total revenues 9,218,496 9,745,276 526,780
Expenditures
Current
General government 1,667,058 1,676,334 9,276
Public safety 4,922,037 4,607,105 (314,932)
Public works 2,676,951 2,645,909 (31,042)
Total expenditures 9,266,046 8,929,348 (336,698)
Excess of revenues over (under) expenditures (47,550) 815,928 863,478
Other Financing Sources (Uses)
Transfers in 47,550 47,550 -
Transfers out - (347,193) (347,193)
Total other financing sources (uses)47,550 (299,643) (347,193)
Net change in fund balance -$ 516,285 516,285$
Fund Balance
Beginning of year 8,836,600
End of year 9,352,885$
See notes to financial statements.25
Final Budget -
Over (Under)
page 69
City of Mendota Heights
Statement of Net Position - Proprietary Funds
December 31, 2019
Sewer Utility
Storm Water
Utility Total
Internal Service
Funds
Assets
Current assets
Cash and investments 359,653$ 435,017$ 794,670$ 570,099$
Special assessment receivable
Delinquent 3,833 - 3,833 -
Deferred 24,674 - 24,674 -
Accounts receivable 515,153 127,566 642,719 -
Interest receivable 301 676 977 174
Prepaid expenses 129,582 - 129,582 8,419
Total current assets 1,033,196 563,259 1,596,455 578,692
Noncurrent assets
Capital assets not being depreciated
Land - - - 25,000
Construction in progress - 217,421 217,421 -
Capital assets being depreciated
Buildings - - - 2,264,567
Sewer main lines and storm sewers 15,247,721 4,696,406 19,944,127 -
Improvements other than buildings - - - 40,781
Machinery and equipment 214,811 - 214,811 66,969
Total capital assets 15,462,532 4,913,827 20,376,359 2,397,317
Less accumulated depreciation (5,352,762) (544,926) (5,897,688) (1,737,689)
Net capital assets 10,109,770 4,368,901 14,478,671 659,628
Total assets 11,142,966 4,932,160 16,075,126 1,238,320
Deferred Outflows of Resources
Deferred outflows of resources related to pensions 9,331 1,719 11,050 5,157
Deferred outflows of resources related to OPEB 568 99 667 470
Total deferred outflows of resources 9,899 1,818 11,717 5,627
Total assets and deferred outflows of resources 11,152,865$ 4,933,978$ 16,086,843$ 1,243,947$
Liabilities and Net Position
Current liabilities
Accounts and contracts payable 116,881$ 219,554$ 336,435$ 6,838$
Developers' escrow deposits - 37,500 37,500 -
Salaries and benefits payable 3,214 684 3,898 2,028
Due to other governments 3,127 - 3,127 95
Noncurrent liabilities due within one year 22,156 - 22,156 406,628
Total current liabilities 145,378 257,738 403,116 415,589
Noncurrent liabilities
Compensated absences 33,687 - 33,687 570,447
OPEB payable 7,323 1,282 8,605 6,068
Net pension liability 91,096 16,782 107,878 50,351
Less amount due within one year (22,156) - (22,156) (406,628)
Total noncurrent liabilities 109,950 18,064 128,014 220,238
Total liabilities 255,328 275,802 531,130 635,827
Deferred Inflows of Resources
Deferred inflows of resources related to pensions 20,182 3,718 23,900 11,155
Net Position
Investment in capital assets 10,109,770 4,368,901 14,478,671 659,628
Unrestricted 767,585 285,557 1,053,142 (62,663)
Total net position 10,877,355 4,654,458 15,531,813 596,965
Total liabilities, deferred inflows of resources,
and net position 11,152,865$ 4,933,978$ 16,086,843$ 1,243,947$
See notes to financial statements.26
page 70
Sewer Utility
Storm Water
Utility
Par 3 Golf
Course Total
Internal Service
Funds
Operating revenues
Charges for services 2,045,839$ 507,769$ -$ 2,553,608$ 216,940$
Operating expenses
Wages and salaries 136,383 22,084 - 158,467 66,934
Employee benefits 50,579 6,406 - 56,985 35,630
Materials and supplies 20,124 26 - 20,150 -
Repairs and maintenance 163,680 40,748 - 204,428 -
Professional services 15,903 129,768 - 145,671 3,923
Insurance 9,026 - - 9,026 6,206
Utilities 29,163 - - 29,163 34,251
Depreciation 187,114 46,964 - 234,078 35,419
Miscellaneous 26,576 29,610 - 56,186 43,059
Sewer charges - MCES 1,363,415 - - 1,363,415 -
Total operating expenses 2,001,963 275,606 - 2,277,569 225,422
Operating income (loss) 43,876 232,163 - 276,039 (8,482)
Nonoperating revenues
(expenses)
Investment income 14,979 11,187 - 26,166 2,888
Fines and forfeitures 252 - - 252 -
Special assessments 2,773 - - 2,773 -
Intergovernmental revenue - 115,955 - 115,955 -
Other income 13,576 400 - 13,976 -
Total nonoperating revenues 31,580 127,542 - 159,122 2,888
Change in net position
before capital contributions
and transfers 75,456 359,705 - 435,161 (5,594)
Capital contributions - 111,063 - 111,063 -
Transfers in - 22,089 - 22,089 -
Transfers out (11,150) (234,650) - (245,800) -
Change in net position 64,306 258,207 - 322,513 (5,594)
Net position
Beginning of year 10,813,049 4,396,251 2,778,761 17,988,061 602,559
Change in accounting
principle (Note 17)- - (2,778,761) (2,778,761) -
Beginning of year, as restated 10,813,049 4,396,251 - 15,209,300 602,559
End of year 10,877,355$ 4,654,458$ -$ 15,531,813$ 596,965$
Net change in the net position reported above 322,513$
Amounts reported for business-type activities in the statement of activities are different because:
Transfers in of capital assets from governmental activities 111,063
Contribution revenue reported above (111,063)
Change in net position of business-type activities 322,513$
See notes to financial statements.27
Year Ended December 31, 2019
City of Mendota Heights
Statement of Revenues, Expenses, and Changes
in Fund Net Position - Proprietary Funds
page 71
Sewer Utility
Storm Water
Utility
Par 3 Golf
Course Total
Internal Service
Funds
Cash Flows - Operating Activities
Receipts from customers and users 2,030,731$ 506,583$ -$ 2,537,314$ 216,940$
Payments to suppliers (1,546,690) 56,297 - (1,490,393) (87,645)
Payments to employees (193,059) (29,333) - (222,392) (44,652)
Miscellaneous revenue 19,345 400 - 19,745 -
Net cash flows - operating activities 310,327 533,947 - 844,274 84,643
Cash Flows - Noncapital
Financing Activities
Transfer from other funds - 22,089 - 22,089 -
Transfer to other funds (11,150) (234,650) - (245,800) -
Intergovernmental revenue - 115,955 - 115,955 -
Net cash flows - noncapital
financing activities (11,150) (96,606) - (107,756) -
Cash Flows - Capital and Related
Financing Activities
Acquisition of capital assets (187,688) (217,422) - (405,110) (126,730)
Cash Flows - Investing Activities
Interest and dividends received 14,966 10,969 - 25,935 2,863
Net change in cash and cash equivalents 126,455 230,888 - 357,343 (39,224)
Cash and Cash Equivalents
Beginning of year 233,198 204,129 48,226 485,553 609,323
Change in accounting principle (Note 17)- - (48,226) (48,226) -
Beginning of year, restated 233,198 204,129 - 437,327 609,323
End of year 359,653$ 435,017$ -$ 794,670$ 570,099$
Reconciliation of Operating Income
(Loss) to Net Cash Flows -
Operating Activities
Operating income (loss)43,876$ 232,163$ -$ 276,039$ (8,482)$
Adjustments to reconcile operating income
(loss) to net cash flows - operating activities
Operating activities
Miscellaneous revenue 19,345 400 - 19,745 -
Depreciation expense 187,114 46,964 - 234,078 35,419
Accounts receivable (15,108) (1,186) - (16,294) -
Prepaid items (4,284) - - (4,284) (540)
Developers' excrow deposits - 37,500 - 37,500 -
Accounts and contracts payable 89,048 218,949 - 307,997 337
Due to other governmental units (3,567) - - (3,567) (3)
Salaries payable (425) 122 - (303) 321
OPEB payable (3,685) (238) - (3,923) 1,039
Pension related items (3,241) (727) - (3,968) (2,651)
Compensated absences payable 1,254 - - 1,254 59,203
Total adjustments 266,451 301,784 - 568,235 93,125
Net cash flows - operating activities 310,327$ 533,947$ -$ 844,274$ 84,643$
Noncash Investing, Capital, and
Financing Activities
Contributions of capital assets -$ 111,063$ -$ 111,063$ -$
See notes to financial statements.28
City of Mendota Heights
Statement of Cash Flows - Proprietary Funds
Year Ended December 31, 2019
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29
City of Mendota Heights
Notes to Financial Statements
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.
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30
City of Mendota Heights
Notes to Financial Statements
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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.
Fire Hall Remodel Fund – This fund is used to account for the proceeds and disbursements
associated with the Fire Hall remodel and expansion project.
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.
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City of Mendota Heights
Notes to Financial Statements
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued)
Description of Funds: (Continued)
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 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, Deferred Outflows/Inflows of Resources, 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.
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.
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32
City of Mendota Heights
Notes to Financial Statements
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position or Equity
(Continued)
1. Deposits and Investments (Continued)
Certain investments for the City are reported at fair value as disclosed in Note 3. The City
categorizes its fair value measurements within the fair value hierarchy established by generally
accepted accounting principles. The Hierarchy is based on the valuation inputs used to measure the
fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2
inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs.
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. Prepaid items are recorded as
an expenditure at the time of consumption.
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City of Mendota Heights
Notes to Financial Statements
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, 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 acquisition 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. The City presents deferred outflows of resources on
the Statements of Net Position for deferred outflows of resources related to pensions and OPEB for
various estimate differences that will be amortized and recognized over future years.
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 has two items
that qualify for reporting in this category. 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. The City presents deferred
inflows of resources on the Statements of Net Position for deferred inflows of resources related to
pensions for various estimate differences that will be amortized and recognized over future years.
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34
City of Mendota Heights
Notes to Financial Statements
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, 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.
9. Pensions
For purposes of measuring the net pension liability, deferred outflows/inflows of resources, and
pension expense, information about the fiduciary net position of the Public Employees Retirement
Association (PERA) and the relief association and additions to/deductions from PERA's and the
relief association's fiduciary net position have been determined on the same basis as they are
reported by PERA and the relief association except that PERA's fiscal year end is June 30. For this
purpose, plan contributions are recognized as of employer payroll paid dates and benefit payments
and refunds are recognized when due and payable in accordance with the benefit terms. Investments
are reported at fair value.
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35
City of Mendota Heights
Notes to Financial Statements
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position or Equity
(Continued)
10. 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 75% of the following
year's budgeted operating expenditures.
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36
City of Mendota Heights
Notes to Financial Statements
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position or Equity
(Continued)
11. Net Position
Net position represents the difference between assets and deferred outflows of resources; and
liabilities and deferred inflows of resources 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 $91,500 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.
12. 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.
E. 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.
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37
City of Mendota Heights
Notes to Financial Statements
NOTE 2 – STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY
A. Deficit Fund Balances
The following funds had deficit fund balances or net position at December 31, 2019:
Street Capital Project 205,232$
Other Nonmajor Capital Projects Fund
Special Assessment Capital Project 322,474
TIF District No. 2 8,581
NOTE 3 – DEPOSITS AND INVESTMENTS
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: 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. As of December 31, 2019, the City's bank balance was not exposed to
custodial credit risk because it was insured through the Federal Deposit Insurance Corporation (FDIC).
As of December 31, 2019, the City had deposits as follows:
Checking 153,638$
Savings 642
Certificates of deposit 14,156
Total deposits 168,436$
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City of Mendota Heights
Notes to Financial Statements
NOTE 3 – DEPOSITS AND INVESTMENTS (CONTINUED)
B. Investments
As of December 31, 2019, the City had the following investments:
Fair
Credit Value Less Than 1 - 5
Investment Type Ratings 12/31/19 1 Year Years
Negotiable CD's NR 8,337,399$ 3,906,292$ 4,431,107$
Mutual Funds AAA-mf 11,578,650 11,578,650 -
US Gov't Securities AAA 1,119,104 599,990 519,114
Money Market Funds NR 904,534 904,534 -
Total 21,939,687$ 16,989,466$ 4,950,221$
Investment Maturities
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. The City's brokers carry SIPC and private insurance to cover the City's
investment holdings; however, given the size of the City's portfolio in relation to the insurance, it is
unlikely the City would receive the full value of their investments upon default of the counterparty.
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.
The City has the following recurring fair value measurements as of December 31, 2019:
$21,939,687 of investments are valued using a matrix pricing model (Level 2 inputs)
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City of Mendota Heights
Notes to Financial Statements
NOTE 3 – DEPOSITS AND INVESTMENTS (CONTINUED)
C. Deposits and Investments
The following is a summary of total deposits and investments:
Deposits (Note 3. A.)168,436$
Investments (Note 3.B.)21,939,687
Petty cash 900
Total cash and investments 22,109,023$
Deposits and investments are presented in the December 31, 2019, basic financial statements as follows:
Statement of Net Position
Cash and investments 22,109,023$
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, 2019:
Fund Due to Due from Reason
Special assessment capital project 165,045$ -$ Cash deficit
TIF District No. 2 8,581 - Cash deficit
Water tower capital project - 165,045 Cash deficit
Pre-1998 non-increment - 8,581 Cash deficit
Total 173,626$ 173,626$
The balances above will be repaid as financing becomes available.
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City of Mendota Heights
Notes to Financial Statements
NOTE 4 – INTERFUND ACTIVITIES (CONTINUED)
B. Interfund Transfers
The composition of interfund transfers as of December 31, 2019, was as follows:
Transfers In
Street Other Storm
Capital Governmental Water
General Projects Funds Utility Total
Transfers out
General -$ -$ -$ 347,193$ -$ 347,193$
Special assessments
debt service 22,250 1,262,183 - - - 1,284,433
Street capital projects - - - 22,089 22,089
Other governmental
funds 4,500 11,050 7,294,332 - - 7,309,882
Sewer utility 11,150 - - - - 11,150
Storm Water Utility 9,650 225,000 - - - 234,650
Total 47,550$ 1,498,233$ 7,294,332$ 347,193$ 22,089$ 9,209,397$
Fire Hall
Remodel
The purpose of the above transfers is to distribute bond proceeds and to provide funding for capital
improvement projects, capital outlay, and operating purposes.
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City of Mendota Heights
Notes to Financial Statements
NOTE 5 – CAPITAL ASSETS
Capital asset activity for the year ended December 31, 2019, was as follows:
Change in Beginning
Beginning Accounting Balance,Ending
Balance Principle Restated Increases Decreases Balance
Governmental activities
Capital assets not being
depreciated
Land and improvements 6,150,895$ 2,531,475$ 8,682,370$ -$ -$ 8,682,370$
Construction in progress 2,420,916 - 2,420,916 6,081,884 1,477,976 7,024,824
Total capital assets
not being depreciated 8,571,811 2,531,475 11,103,286 6,081,884 1,477,976 15,707,194
Capital assets being
depreciated
Buildings and structures 4,428,522 208,490 4,637,012 126,729 - 4,763,741
Machinery and equipment 5,616,905 107,319 5,724,224 653,332 298,800 6,078,756
Other improvements 2,372,183 - 2,372,183 91,228 9,028 2,454,383
Infrastructure 34,498,557 - 34,498,557 1,298,142 - 35,796,699
Total capital assets
being depreciated 46,916,167 315,809 47,231,976 2,169,431 307,828 49,093,579
Less accumulated depreciation for
Buildings and structures 3,607,819 80,891 3,688,710 78,872 - 3,767,582
Machinery and equipment 3,665,516 31,996 3,697,512 317,903 295,800 3,719,615
Other improvements 1,732,132 - 1,732,132 72,686 9,028 1,795,790
Infrastructure 17,789,687 - 17,789,687 1,373,978 - 19,163,665
Total accumulated
depreciation 26,795,154 112,887 26,908,041 1,843,439 304,828 28,446,652
Total capital assets being
depreciated, net 20,121,013 202,922 20,323,935 325,992 3,000 20,646,927
Governmental activities capital
assets, net 28,692,824$ 2,734,397$ 31,427,221$ 6,407,876$ 1,480,976$ 36,354,121$
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City of Mendota Heights
Notes to Financial Statements
NOTE 5 – CAPITAL ASSETS (CONTINUED)
Change in Beginning
Beginning Accounting Balance, Ending
Balance Principle Restated Increases Decreases Balance
Business-type activities
Capital assets not being
depreciated
Land 2,531,475$ (2,531,475)$ -$ -$ -$ -$
Construction in progress - - - 217,421 - 217,421
Total capital assets not
being depreciated 2,531,475 (2,531,475) - 217,421 - 217,421
Capital assets being
depreciated
Buildings and structures 208,490 (208,490) - - - -
Machinery and equipment 322,130 (107,319) 214,811 - - 214,811
Sewer main lines and storm sewers 19,645,376 - 19,645,376 298,751 - 19,944,127
Total capital assets
being depreciated 20,175,996 (315,809) 19,860,187 298,751 - 20,158,938
Less accumulated depreciation for
Buildings and structures 80,891 (80,891) - - - -
Machinery and equipment 143,109 (31,996) 111,113 15,301 - 126,414
Sewer main lines and storm sewers 5,552,497 - 5,552,497 218,777 - 5,771,274
Total accumulated
depreciation 5,776,497 (112,887) 5,663,610 234,078 - 5,897,688
Total capital assets being
depreciated, net 14,399,499 (202,922) 14,196,577 64,673 - 14,261,250
Business-type activities capital
assets, net 16,930,974$ (2,734,397)$ 14,196,577$ 282,094$ -$ 14,478,671$
Depreciation expense was charged to functions/programs of the City as follows:
Governmental activities
General government 151,603$
Public safety 93,612
Public works 1,562,805
Internal service funds 35,419
Total depreciation expense - governmental activities 1,843,439$
Business-type activities
Sewer utility 187,114$
Storm water utility 46,964
Total depreciation expense - business-type activities 234,078$
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City of Mendota Heights
Notes to Financial Statements
NOTE 6 – LONG-TERM DEBT
A. G.O. Bonds
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.
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 2011 0.40%-3.40% 2,970,000 02/01/31 1,525,000$ 1,525,000$
G.O. Improvement Bonds of 2012 2.00%-2.70% 2,630,000 02/01/32 2,165,000 90,000
G.O. Improvement Bonds of 2013 2.00%-4.00% 1,685,000 02/01/34 1,210,000 130,000
G.O. Improvement Bonds, Series 2014A 0.85%-3.40% 1,030,000 02/01/35 785,000 75,000
G.O. Refunding Bond, Series 2014B 1.50%-3.00% 885,000 02/01/27 550,000 65,000
G.O Improvement Bonds 2015A .90%-3.00% 1,200,000 02/01/25 1,040,000 75,000
G.O. Refunding Bond, Series 2015C 2.00%-2.50% 1,995,000 02/01/28 1,490,000 170,000
G.O. Reconstruction Bonds, Series 2016A 1.00%-2.50% 1,020,000 02/01/37 945,000 75,000
G.O. Improvement Bonds of 2017A 2.00%-2.50% 1,340,000 02/01/30 1,340,000 55,000
G.O. Improvement Bonds of 2018A 3.00%-4.00% 1,080,000 02/01/30 1,080,000 -
G.O. Improvement Bonds of 2019A 2.00%-3.00% 3,035,000 02/01/31 3,035,000 -
Total improvement bonds 15,165,000 2,260,000
G.O. Bonds, including refunding bonds
G.O. Bonds of 2009 1.50%-3.50% 745,000 02/01/20 85,000 85,000
G.O. Refunding Bonds 2015B 2.00%-3.00% 1,475,000 02/01/23 875,000 210,000
G.O. Capital Improvement Plan Bonds 3.00%-4.00% 7,000,000 02/01/35 7,000,000 -
Total G.O. Bonds 7,960,000 295,000
Net Premium on Bonds 741,799 -
Compensated absences payable 570,447 406,628
Total governmental activities 24,437,246 2,961,628
Business-type activities
Compensated absences payable 33,687 22,156
Total all long-term liabilities 24,470,933$ 2,983,784$
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.
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City of Mendota Heights
Notes to Financial Statements
NOTE 6 – LONG-TERM DEBT (CONTINUED)
C. Changes in Long-Term Liabilities
Long-term liability activity for the year ended December 31, 2019, was as follows:
Beginning Ending Due Within
Balance Additions Reductions Balance One Year
Governmental activities
Bonds payable
G.O. Improvements Bonds 13,725,000$ 3,035,000$ 1,595,000$ 15,165,000$ 2,260,000$
G.O. Bonds 1,245,000 7,000,000 285,000 7,960,000 295,000
Unamortized premium 221,818 565,303 45,322 741,799 -
Compensated absences payable 511,245 482,463 423,261 570,447 406,628
Total governmental
activities 15,703,063 11,082,766 2,348,583 24,437,246 2,961,628
Business-type activities
Compensated absences payable 32,433 14,620 13,366 33,687 22,156
Total government 15,735,496$ 11,097,386$ 2,361,949$ 24,470,933$ 2,983,784$
D. Long-Term Debt
The annual requirements to amortize all bonded debt outstanding follows:
Year Ending
December 31, Principal Interest Total Principal Interest Total
2020 2,260,000$ 336,140$ 2,596,140$ 295,000$ 309,153$ 604,153$
2021 1,195,000 316,588 1,511,588 575,000 242,300 817,300
2022 1,385,000 285,493 1,670,493 595,000 222,150 817,150
2023 1,350,000 252,051 1,602,051 620,000 200,100 820,100
2024 1,305,000 219,425 1,524,425 405,000 180,750 585,750
2025-2029 5,440,000 631,881 6,071,881 2,260,000 664,275 2,924,275
2030-2034 2,015,000 129,220 2,144,220 2,635,000 288,825 2,923,825
2035-2037 215,000 6,762 221,762 575,000 8,625 583,625
Total 15,165,000$ 2,177,560$ 17,342,560$ 7,960,000$ 2,116,178$ 10,076,178$
Governmental Activities
G.O. BondsImprovement Bonds
In November 2019, the City issued $3,035,000 of General Obligation Refunding Bonds Series 2019B. A
portion of the proceeds of this issue were used to redeem the 2020 through 2030 maturities of the City’s
2010A G.O Bonds on November 20, 2019. Additionally, a portion of the proceeds will refund the 2021
through 2031 maturities of the City’s 2011A G.O. Improvement Bonds on February 1, 2020. These
refunding transactions reduced the City’s total future debt service payments by $101,787 and resulted in
present value savings of $82,557.
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City of Mendota Heights
Notes to Financial Statements
NOTE 7 – OPERATING LEASE
The City leases nine squad cars under a noncancelable operating lease.
The following is a schedule by years of future minimum payments required under the leases as of
December 31, 2019:
Year Ending
December 31,
2020 51,994$
2021 29,354
2022 12,616
2023 329
Total 94,293$
NOTE 8 – 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, 2019, was
$16,451,914.
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City of Mendota Heights
Notes to Financial Statements
NOTE 9 – FUND BALANCE DETAIL
Fund equity balances are classified below to reflect the limitations and restrictions of the respective
Funds.
Special Street Other
General Assessment
Capital Fire Hall Governmental
Fund Debt Service Projects Remodel Funds Total
Nonspendable
Inventories 22,487$ -$ -$ -$ -$ 22,487$
Prepaid items 271,577 - - - 5,452 277,029
Restricted
Park dedication fees - - - - 648,742 648,742
Fire hall remodel - - - 3,180,385 - 3,180,385
Street light maintenance - - - - 27,582 27,582
Debt service - 4,164,622 - - 642,619 4,807,241
Committed
Water system maintenance - - - - 544,358 544,358
Par 3 golf course - - - - 46,347 46,347
Emergency preparedness
and civil defense - - - - 136,672 136,672
Assigned
Capital projects - - - - 1,603,551 1,603,551
Insurance reserve 56,810 - - - - 56,810
Unassigned 9,002,011 - (205,232) - (331,055) 8,465,724
Total 9,352,885$ 4,164,622$ (205,232)$ 3,180,385$ 3,324,268$ 19,816,928$
NOTE 10 – 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.
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 11 – PENSION PLANS
The City participates in various pension plans. Total pension expense for the year ended December 31,
2019, was $391,045. The components of pension expense are noted in the following plan summaries.
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City of Mendota Heights
Notes to Financial Statements
NOTE 11 – PENSION PLANS (CONTINUED)
The General Fund and Sewer and Stormwater Funds typically liquidate the liability related to the
pensions.
Public Employees' Retirement Association
A. Plan Description
The City participates in the following cost-sharing multiple-employer defined benefit pension plans
administered by PERA. PERA's defined benefit pension plans are established and administered in
accordance with Minnesota Statutes, Chapters 353 ad 356. PERA's defined benefit pension plans are tax
qualified plans under Section 401(a) of the Internal Revenue Code.
General Employees Retirement Plan
All full-time and certain part-time employees of the City are covered by the General Employees Plan.
General Employees Plan members belong to the Coordinated Plan. Coordinated Plan members are
covered by Social Security.
Public Employees Police and Fire Plan
The Police and Fire Plan, originally established for police officers and firefighters not covered by a local
relief association, now covers all police officers and firefighters hired since 1980. Effective July 1, 1999,
the Police and Fire Plan also covers police officers and firefighters belonging to a local relief association
that elected to merge with and transfer assets and administration to PERA.
B. Benefits Provided
PERA provides retirement, disability, and death benefits. Benefit provisions are established by state
statute and can only be modified by the state legislature. Vested, terminated employees who are entitled
to benefits but are not receiving them yet, are bound by the provisions in effect at the time they last
terminated their public service.
General Employees Plan Benefits
General Employees Plan benefits are based on a member's highest average salary for any five successive
years of allowable service, age, and years of credit at termination of service. Two methods are used to
compute benefits for PERA's Coordinated Plan members. Members hired prior to July, 1 1989, receive
the higher of Method 1 or Method 2 formulas. Only Method 2 is used for members hired after June 30,
1989. Under Method 1, the accrual rate for a Coordinated members is 1.2% of average salary for each of
the first ten years of service and 1.7% of average salary for each additional year. Under Method 2, the
accrual rate for Coordinated members is 1.7% of average salary for all years of service. For members
hired prior to July 1, 1989, a full annuity is available when age plus years of service equal 90 and normal
retirement age is 65. For members hired on or after July 1, 1989, normal retirement age is the age for
unreduced Social Security benefits capped at 66.
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City of Mendota Heights
Notes to Financial Statements
NOTE 11 – PENSION PLANS (CONTINUED)
Public Employees' Retirement Association (Continued)
B. Benefits Provided (Continued)
General Employees Plan Benefits (Continued)
Annuities, disability benefits, and survivor benefits are increased effective every January 1. Beginning
January 1, 2019, the postretirement increase will be equal to 50% of the cost-of-living adjustment
(COLA) announced by the SSA, with a minimum increase of at least 1% and a maximum of 1.5%.
Recipients that have been receiving the annuity or benefit for at least a full year as of the June 30 before
the effective date of the increase will receive the full increase. For recipients receiving the annuity or
benefit for at least one month but less than a full year as of the June 30 before the effective date of the
increase will receive a reduced prorated increase. For members retiring on January 1, 2024, or later, the
increase will be delayed until normal retirement age (age 65 if hired prior to July 1, 1989, or age 66 for
individuals hired on or after July 1, 1989). Members retiring under Rule of 90 are exempt from the delay
to normal retirement.
Police and Fire Plan Benefits
Benefits for the Police and Fire Plan members first hired after June 30, 2010, but before July 1, 2014,
vest on a prorated basis from 50% after five years up to 100% after ten years of credited service.
Benefits for Police and Fire Plan members first hired after June 30, 2014, vest on a prorated basis from
50% after ten years up to 100% after twenty years of credited service. The annuity accrual rate is 3% of
average salary for each year of service. A full, unreduced pension is earned when members are age 55
and vested, or for members who were first hired prior to July 1, 1989, when age plus years of service
equal at least 90.
Annuities, disability benefits, and survivor benefits are increased effective every January 1. Beginning
January 1, 2019, the postretirement increase will be fixed at 1%. Recipients that have been receiving the
annuity or benefit for at least 36 months as of the June 30 before the effective date of the increase will
receive the full increase. For recipients receiving the annuity or benefit for at least 25 months but less
than 36 months as of the June 30 before the effective date of the increase will receive a reduced prorated
increase.
C. Contributions
Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions. Contribution
rates can only be modified by the state legislature.
General Employees Fund Contributions
Coordinated Plan members were required to contribute 6.5%, of their annual covered salary in calendar
year 2019 and the City was required to contribute 7.5% for Coordinated Plan members. The City's
contributions to the General Employees Fund for the year ended December 31, 2019, were $157,416.
The City's contributions were equal to the required contributions as set by state statute.
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City of Mendota Heights
Notes to Financial Statements
NOTE 11 –PENSION PLANS (CONTINUED)
Public Employees' Retirement Association (Continued)
C. Contributions (Continued)
Police and Fire Fund Contributions
Police and Fire member’s contribution rates increased from 10.8% of pay to 11.3% and employer rates
increased from 16.2% to 16.95% on January 1, 2019. The City's contributions to the Police and Fire
Fund for the year ended December 31, 2019, were $311,718. The City's contributions were equal to the
required contributions as set by state statute.
D. Pension Costs
General Employees Fund Pension Costs
At December 31, 2019, the City reported a liability of $1,608,874 for its proportionate share of the
General Employees Fund's net pension liability. The City's net pension liability reflected a reduction due
to the State of Minnesota's contribution of $16 million to the fund in 2019. The State of Minnesota is
considered a non-employer contributing entity and the State's contribution meets the definition of a
special funding situation. The State of Minnesota's proportionate share of the net pension liability
associated with the City totaled $49,998. The net pension liability was measured as of June 30, 2019,
and the total pension liability used to calculate the net pension liability was determined by an actuarial
valuation as of that date. The City's proportionate share of the net pension liability was based on the
City's contributions received by PERA during the measurement period for employer payroll paid dates
from July 1, 2018, through June 30, 2019, relative to the total employer contributions received from all
of PERA's participating employers. At June 30, 2019, the City's proportionate share was 0.0291%,
which was an increase of 0.0010% from its proportionate share measured as of June 30, 2018.
City's proportionate share of the net pension liability 1,608,874$
State of Minnesota's proportionate share of the net pension
liability associated with the City 49,998
Total 1,658,872$
For the year ended December 31, 2019, the City recognized pension expense of $160,136 for its
proportionate share of General Employees Plan's pension expense. Included in the amount, the City
recognized $3,744 as pension expense (and grant revenue) for its proportionate share of the State of
Minnesota's contribution of $16 million to the General Employees Fund.
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City of Mendota Heights
Notes to Financial Statements
NOTE 11 –PENSION PLANS (CONTINUED)
Public Employees' Retirement Association (Continued)
D. Pension Costs (Continued)
General Employees Fund Pension Costs (Continued)
At December 31, 2019, the City reported its proportionate share of the General Employees Plan's
deferred outflows of resources and deferred inflows of resources, related to pensions from the following
sources:
Differences between expected and actual economic experience 44,475$ -$
Changes in actuarial assumptions - 124,935
Difference between projected and actual investment earnings - 152,024
Changes in proportion 41,607 79,475
Contributions paid to PERA subsequent
to the measurement date 78,708 -
Total 164,790$ 356,434$
Deferred
Outflows of
Resources
Deferred
Inflows of
Resources
$78,708 reported as deferred outflows of resources related to pensions resulting from City contributions
subsequent to the measurement date will be recognized as a reduction of the net pension liability in the
year ended December 31, 2020. Other amounts reported as deferred outflows and deferred inflows of
resources related to pensions will be recognized in pension expense as follows:
Pension
Expense
Amount
(127,827)$
(127,938)
(17,180)
2,593
-
-
Total (270,352)$
2022
2023
2021
Thereafter
Year Ending
December 31,
2020
2021
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City of Mendota Heights
Notes to Financial Statements
NOTE 11 –PENSION PLANS (CONTINUED)
Public Employees' Retirement Association (Continued)
D. Pension Costs (Continued)
Police and Fire Fund Pension Costs
At December 31, 2019, the City reported a liability of $1,726,959 for its proportionate share of the
Police and Fire Fund's net pension liability. The net pension liability was measured as of June 30, 2019,
and the total pension liability used to calculate the net pension liability was determined by an actuarial
valuation as of that date. The City's proportionate share of the net pension liability was based on the
City's contributions received by PERA during the measurement period for employer payroll paid dates
from July 1, 2018, through June 30, 2019, relative to the total employer contributions received from all
of PERA's participating employers. At June 30, 2019, the City's proportionate share was 0.1643%,
which was an increase of 0.0116% from its proportionate share measured as of June 30, 2018. The City
also recognized $22,180 for the year ended December 31, 2019 as revenue and an offsetting reduction of
the net pension liability for its proportionate share of the State of Minnesota's on-behalf contributions to
the Police and Fire Fund. Legislation passed in 2013 required the State of Minnesota to begin
contributing $9 million to the Police and Fire Fund each year until the plan is 90 percent funded or until
the State Patrol Plan (administered by the Minnesota State Retirement System) is 90 percent funded,
whichever occurs later. In addition, the state will pay $4.5 million on October 1, 2018 and October 1,
2019 in direct state aid. Thereafter, by October 1 of each year, the state will pay $9 million until full
funding is reached or July 1, 2048, whichever is earlier.
For the year ended December 31, 2019, the City recognized pension expense of $230,909 for its
proportionate share of the Police and Fire Plan's pension expense.
At December 31, 2019, the City reported its proportionate share of the Police and Fire Plan's deferred
outflows of resources and deferred inflows of resources related to pensions from the following sources.
Differences between expected and actual economic experience 69,924$ 250,430$
Changes in actuarial assumptions 1,369,348 1,795,972
Difference between projected and actual investment earnings - 328,502
Changes in proportion 134,913 136,330
Contributions paid to PERA subsequent
to the measurement date 155,859 -
Total 1,730,044$ 2,511,234$
Deferred
Outflows of
Resources
Deferred
Inflows of
Resources
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City of Mendota Heights
Notes to Financial Statements
NOTE 11 –PENSION PLANS (CONTINUED)
Public Employees' Retirement Association (Continued)
D. Pension Costs (Continued)
Police and Fire Fund Pension Costs (Continued)
The $155,859 reported as deferred outflows of resources related to pensions resulting from City
contributions subsequent to the measurement date will be recognized as a reduction of the net pension
liability in the year ended December 31, 2020. Other amounts reported as deferred outflows and inflows
of resources related to pensions will be recognized in pension expense as follows:
Year Ending Pension Expense
December 31,Amount
2020 (125,402)$
2021 (212,799)
2022 (643,581)
2023 25,607
2024 19,126
Total (937,049)$
E. Actuarial Assumptions
The total pension liability in the June 30, 2019, actuarial valuation was determined using an individual
entry-age normal actuarial cost method and the following actuarial assumptions:
Inflation 2.50 % Per year
Active member payroll growth 3.25 % Per year
Investment rate of return 7.50 %
Salary increases were based on a service-related table. Mortality rates for active members, retirees,
survivors, and disabilitants for all plans were based on RP 2014 tables for males or females, as
appropriate, with slight adjustments to fit PERA’s experience. Cost of living benefit increases after
retirement for retirees are assumed to be 1.25% per year for the General Employees Plan and, 1.0% per
year for the Police and Fire Plan.
Actuarial assumptions used in the June 30, 2019 valuation were based on the results of actuarial
experience studies. The most recent four-year experience study in the General Employees Plan was
completed in 2019. The most recent four-year experience study for Police and Fire Plan was completed
in 2016. Economic assumptions were updated in 2018 based on a review of inflation and investment
return assumptions.
page 96
53
City of Mendota Heights
Notes to Financial Statements
NOTE 11 –PENSION PLANS (CONTINUED)
Public Employees' Retirement Association (Continued)
E. Actuarial Assumptions (Continued)
The following changes in actuarial assumptions occurred in 2019:
General Employees Fund
Changes in Actuarial Assumptions:
The mortality projection scale was changed from MP-2017 to MP-2018.
Changes in Plan Provisions:
The employer supplemental contribution was changed prospectively, decreasing from $31.0
million to $21.0 million per year. The State’s special funding contribution was changed
prospectively, requiring $16.0 million due per year through 2031.
Police and Fire Fund
Changes in Actuarial Assumptions:
The mortality projection scale was changed from MP-2017 to MP-2018.
Changes in Plan Provisions:
There have been no changes since the prior valuation
The State Board of Investment, which manages the investments of PERA, prepares an analysis of the
reasonableness on a regular basis of the long-term expected rate of return using a building-block method
in which best-estimate ranges of expected future rates of return are developed for each major asset class.
These ranges are combined to produce an expected long-term rate of return by weighting the expected
future rates of return by the target asset allocation percentages. The target allocation and best estimates
of geometric real rates of return for each major asset class are summarized in the following table:
Domestic equity 35.5 %5.10 %
Private markets 25.0 5.90
Fixed income 20.0 0.08
International equity 17.5 5.90
Cash equivalents 2.0 0.00
Total 100 %
Asset Class
Long-Term
Expected Real
Rate of ReturnTarget Allocation
page 97
54
City of Mendota Heights
Notes to Financial Statements
NOTE 11 –PENSION PLANS (CONTINUED)
Public Employees' Retirement Association (Continued)
F. Discount Rate
The discount rate used to measure the total pension liability in 2019 was 7.5%. The projection of cash
flows used to determine the discount rate assumed that contributions from Plan members and employers
will be made at rates set in Minnesota Statutes. Based on these assumptions, the fiduciary net positions
of the General Employees Fund and the Police and Fire Fund were projected to be available to make all
projected future benefit payments of current plan members. Therefore, the long-term expected rate of
return on pension plan investments was applied to all periods of projected benefit payments to determine
the total pension liability.
G. Pension Liability Sensitivity
The following presents the City's proportionate share of the net pension liability for all plans it
participates in, calculated using the discount rate disclosed in the preceding paragraph, as well as what
the City's proportionate share of the net pension liability would be if it were calculated using a discount
rate 1 percentage point lower or 1 percentage point higher than the current discount rate:
1% Decrease in 1% Increase in
City's proportionate share of
the General Employees Fund
net pension liability 2,644,902$ 1,608,874$ 753,427$
1% Decrease in 1% Increase in
City's proportionate share of
the Police and Fire Fund
net pension liability 3,801,114$ 1,726,959$ (22,146)$
Discount Rate
(6.5%)
Discount Rate
(7.5%)
Discount Rate
(8.5%)
Discount Rate
(6.5%)
Discount Rate
(7.5%)
Discount Rate
(8.5%)
H. Pension Plan Fiduciary Net Position
Detailed information about each pension plan's fiduciary net position is available in a separately-issued
PERA financial report that includes financial statements and required supplementary information. That
report may be obtained on the Internet at www.mnpera.org.
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55
City of Mendota Heights
Notes to Financial Statements
NOTE 11 –PENSION PLANS (CONTINUED)
Defined Contribution Pension Plan – Volunteer Fire Fighter's Relief Association
The Mendota Heights Firefighter's Relief Association is the administrator of a single employer defined
benefit pension plan established to provide benefits for members of the Mendota Heights Fire
Department per Minnesota State Statutes.
The Association issues a publicly available financial report that includes financial statements and
required supplementary information. That report may be obtained by writing to Mendota Heights
Firefighter's Association, 2121 Dodd Road Mendota Heights, Minnesota 55120 or by calling 651-249-
7640.
The City contributes to the Mendota Heights Volunteer Fire Department Relief Association (the
"Association") that provides pension benefits to its members under a single employer defined
contribution plan. Since fire department members are volunteers, contributions to the Association are
not based on payroll but rather on years of active service. All active firefighters may apply for
membership in the Association and shall become a member immediately upon approval by the Board of
Trustees.
Under an Annual Contribution Agreement, the City's contribution to the Association is determined by
multiplying $4,500 by the number of years of active service completed by members of the Association for
the plan year, prorated by months for members who did not complete a full year of active service. The City
also contributes a portion of the Association's administrative fees each year. For 2019, the total
contribution was $152,640. Required and actual employer contributions to the plan during 2019 were
$152,640. In addition, the City passes through state aid allocated to the plan in accordance with state
statutes. For 2019, the state aid was $104,236. Members of the Association are not allowed to make
voluntary contributions to the plan.
Members are not vested in their accounts until they attain 10 years of active service, at which time they
become 60% vested. Thereafter, the vested portion of their accounts increases by 4% annually until they
achieve 100% vesting after having served for 20 years.
Plan provisions were established and may only be amended by amendments to the Association bylaws
which require a majority vote by the Board of Trustees.
NOTE 12 – POST EMPLOYMENT HEALTH CARE PLAN
A. Plan Description
The City provides a single-employer defined benefit healthcare plan to eligible retirees
(as required by Minnesota Statue 471.61) and police or firefighters disabled in the line of duty (as
required by Minnesota Statute 299A.465). The required contributions are based on projected pay-as-
you-go financing requirements. As of December 31, 2019, there were 11 retirees participating in the
City’s healthcare plan.
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56
City of Mendota Heights
Notes to Financial Statements
NOTE 12 – POST EMPLOYMENT HEALTH CARE PLAN (CONTINUED)
B. Benefits Provided
Retirees and their spouses contribute to the healthcare 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 Blue Cross Blue Shield and Delta Dental.
C. Contributions
The City makes direct subsidy payments towards retiree health insurance premiums. For the year 2019,
the City contributed $126,784.
D. Members
As of December 31, 2019, the following were covered by the benefit terms:
Inactive employees or beneficiaries currently receiving benefits 12
Active employees 46
Total 58
E. Actuarial Assumptions
The total OPEB liability was determined by an actuarial valuation as of January 1, 2018, using the
following actuarial assumptions, applied to all periods included in the measurement, unless otherwise
specified:
Investment rate of return 3.80%, net of investment expense
Inflation 2.50%
Healthcare cost trend increases
Mortality assumption RP-2014 White Collar Mortality Tables with
MP-2017 Generational Improvement Scale
(with Blue Collar adjustment for Police and
Fire Personnel)
Key Methods and Assumptions Used in Valuation of Total OPEB Liability
6.25% initially, grading to 5% over five years
The actuarial assumptions used in the January 1, 2018, valuation were based on the results of an
actuarial experience study for the period January 1, 2017 – January 1, 2018.
The discount rate used to measure the total OPEB liability was 3.80% based on 20 year municipal G.O.
Bonds.
page 100
57
City of Mendota Heights
Notes to Financial Statements
NOTE 12 – POST EMPLOYMENT HEALTH CARE PLAN (CONTINUED)
F. Total OPEB Liability
The City's total OPEB liability of $868,121 was measured as of January 1, 2019, and was determined by
an actuarial valuation as of that date.
Total
OPEB
Liability
Balance at January 1, 2018 950,528$
Changes for the year
Service cost 22,733
Interest 30,230
Changes of assumptions (20,053)
Benefit payments (115,317)
Net changes (82,407)
Balance at January 1, 2019 868,121$
Changes of assumptions and other inputs reflect a change in the discount rate from 3.30% in 2018 to
3.80% in 2019.
G. OPEB Liability Sensitivity
The following presents the City's total OPEB liability calculated using the discount rate of 3.80% as well
as the liability measured using 1% lower and 1% higher than the current discount rate.
1% decrease Current 1% increase
(2.80%)(3.80%)(4.80%)
913,146$ 868,121$ 826,266$
Total OPEB Liability/(Asset)
The following presents the total OPEB liability of the City, as well as what the City's total OPEB
liability would be if it were calculated using healthcare cost trend rates that are 1% lower and 1% higher
than the current healthcare cost trend rates.
page 101
58
City of Mendota Heights
Notes to Financial Statements
NOTE 12 – POST EMPLOYMENT HEALTH CARE PLAN (CONTINUED)
G. OPEB Liability Sensitivity (Continued)
1% decrease Current 1% increase
814,199$ 868,121$ 928,399$
Total OPEB Liability/(Asset)
(5.25% decreasing
to 4.0%)
(6.25% decreasing
to 5.0%)
(7.25% decreasing
to 6.0%)
H. OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources
Related to OPEB
For the year ended December 31, 2019, the City recognized OPEB expense of $50,456. At
December 31, 2019, the Distract reported deferred outflows of resources and deferred inflows of
resources related to OPEB from the following sources:
Deferred Deferred
Outflows of Inflows of
Resources Resources
Assumption Changes -$ 17,546$
Subsequent contributions 126,784 -
Total 126,784$ -$
NOTE 13 – 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 $731,500. 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.
page 102
59
City of Mendota Heights
Notes to Financial Statements
NOTE 14 – 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 $215,076 for 2019. 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.
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 2019, the City paid $263,548 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 15 – 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, 2019, financial statements and determined they
do not have a material effect on financial position or changes in financial position.
NOTE 16 – COMMITED CONTRACTS
At December 31, 2019, the City had commitments of $2,914,474 for uncompleted construction
contracts.
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60
City of Mendota Heights
Notes to Financial Statements
NOTE 17 – CHANGE IN ACCOUNTING PRINCIPLE
On January 1, 2019, the City reclassified the Par 3 Golf Course Fund from an Enterprise Fund to a
Special Revenue Fund. The change in accounting principle for this change is listed below.
Equity balance - December 31, 2018 -$ 2,778,761$ 24,881,725$
Current assets 53,889 (53,889) 53,889
Capital assets - (2,847,284) 2,847,284
Accumulated depreciation - 112,887 (112,887)
Deferred outflows of resources related to pensions - (885) 885
Deferred outflows of resources related to OPEB (125) 125
Salaries and benefits payable (352) 352 (352)
Accounts payable (415) 415 (415)
Due to other goverments (395) 395 (395)
OPEB payable - 2,844 (2,844)
Net pension liability - 4,884 (4,884)
Deferred inflows of resources related to pensions - 1,645 (1,645)
Cumulative Effect of Change
in Accounting Principle 52,727 (2,778,761) 2,778,761
Restated equity balance - January 1, 2019 52,727$ -$ 27,660,486$
Golf Course
Governmental
Fund
Golf Course
Enterprise Fund
and Business
Type Activities
Governmental
Activities
The change in accounting principle for this change between governmental activities and business-type
activities on the Statement of Activities is $2,778,761
NOTE 18 – TAX INCREMENT FINANCING
The City has entered into a Tax Increment Financing agreement which meet the criteria for disclosure
under Governmental Accounting Standards Board Statement No. 77 Tax Abatement Disclosures. The
City's authority to enter into these agreements comes from Minnesota Statute 469. The City entered into
this agreement for the purpose of redevelopment.
Under this agreement, the City and developer agree on an amount of development costs to be
reimbursed to the developer by the City though tax revenues from the additional taxable value of the
property generated by the development (tax increment). A "pay-as-you-go" note is established for this
amount, on which the City makes payments for a fixed period of time with available tax increment
revenue after deducting for certain administrative costs.
During the year ended December 31, 2019, the City generated $0 in tax increment revenue and made $0
in payments to developers.
page 104
61
City of Mendota Heights
Notes to Financial Statements
NOTE 19 – SUBSEQUENT EVENT
On March 13, 2020, a national emergency was declared for the COVID-19 outbreak in the United States
of America. This event affects the economy and financial markets. The extent of the impact on the City
may be both direct and indirect and will vary based on the duration of the outbreak and various other
factors. An estimate of the financial effect on the City’s financial statements at December 31, 2019,
cannot be determined at this time.
NOTE 20 – NEW STANDARDS ISSUED BUT NOT YET IMPLEMENTED
GASB Statement No. 87, Leases establishes a single model for lease accounting based on the
foundational principle that leases are financings of the right to use an underlying asset. Under this
statement, a lessee is required to recognize a lease liability and an intangible right-to-use lease asset, and
a lessor is required to recognize a lease receivable and a deferred inflow of resources, thereby enhancing
the relevance and consistency of information about governments’ leasing activities. This statement will
be effective for the year ending December 31, 2020.
GASB Statement No. 89, Accounting for Interest Cost Incurred Before the End of a Construction Period
enhances the relevance and comparability of information about capital assets and the cost of borrowing
for a reporting period and simplifies accounting for interest cost incurred before the end of a
construction period. This statement will be effective for the year ending December 31, 2020.
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62
(THIS PAGE LEFT BLANK INTENTIONALLY)
page 106
63
REQUIRED SUPPLEMENTARY INFORMATION
page 107
December 31, December 31,
2019 2018
Total OPEB Liability
Service cost 22,733$ 24,002$
Interest 30,230 31,883
Differenced between expected and actual experience - -
Changes of assumptions (20,053) -
Changes of benefit terms - -
Benefit payments (115,317) (94,257)
Other changes - -
Net change in total OPEB liability (82,407) (38,372)
Beginning of year 950,528 988,900
Total OPEB Liability 868,121$ 950,528$
3,460,084$ 3,359,305$
25.09%28.30%
Note: Schedule is intended to show ten year trend. Additional years will be reported as they become available.
64
Covered-employee payroll
Net OPEB liability as a percentage of covered-employee payroll
City of Mendota Heights
Schedule of Changes in Total OPEB Liability
and Related Ratios
page 108
City's Covered
Payroll
2015 0.0322% 1,668,771$ -$ 1,668,771$ 1,859,307$ 89.8% 78.19%
2016 0.0315% 2,557,644 33,392 2,591,036 1,954,600 130.9% 68.91%
2017 0.0290% 1,851,341 23,303 1,874,644 1,870,160 99.0% 75.90%
2018 0.0281% 1,558,873 51,096 1,609,969 1,887,853 82.6% 79.53%
2019 0.0291% 1,608,874 49,998 1,658,872 2,058,880 78.1% 80.23%
Note: Schedule is intended to show ten year trend. Additional years will be reported as they become available.
For Fiscal
Year Ended
June 30,
City's
Proportion of
the Net
Pension
Liability
(Asset)
City's
Proportionate
Share of the
Net Pension
Liability
(Asset)
City's Covered
Payroll
City's
Proportionate
Share of the
Net Pension
Liability
(Asset) as a
Percentage of
its Covered
Payroll
Plan Fiduciary
Net Position
as a
Percentage of
the Total
Pension
Liability
2015 0.1530% 1,738,438$ 1,359,920$ 127.8% 86.61%
2016 0.1550% 6,220,420 1,496,272 415.7% 63.88%
2017 0.1500% 2,011,679 1,543,389 130.3% 85.43%
2018 0.1527% 1,613,882 1,609,556 100.3% 88.84%
2019 0.1643% 1,726,959 1,694,808 101.9% 89.26%
Note: Schedule is intended to show ten year trend. Additional years will be reported as they become available.
See notes to Required supplementary information.65
City of Mendota Heights
Schedule of City's Proportionate Share
of Net Pension Liability
Last Ten Years
Schedule of City's Proportionate Share
General Employees Retirement Fund
City's
Proportionate
Share
(Percentage)
of the Net
Pension
Liability
(Asset)
City's
Proportionate
Share
(Amount) of
the Net
Pension
Liability
(Asset)
City's
Proportionate
Share of the
Net Pension
Liability
(Asset) as a
Percentage of
its Covered
Payroll
Plan Fiduciary
Net Position
as a
Percentage of
the Total
Pension
Liability
Last Ten Years
For Fiscal
Year Ended
June 30,
State's
Proportionate
Share
(Amount) of
the Net
Pension
Liability
Associated
with the City
City's
Proportionate
Share of the
Net Pension
Liablility and
the State's
Proportionate
Share of the
Net Pension
Liablility
Associated
with the City
Public Employees Police and Fire Retirement Fund
of Net Pension Liability
page 109
2015 149,420$ 149,420$ -$ 1,992,267$ 7.5%
2016 139,806 139,806 - 1,864,080 7.5%
2017 137,806 137,806 - 1,837,413 7.5%
2018 146,272 146,272 - 1,950,293 7.5%
2019 157,416 157,416 - 2,098,880 7.5%
Note: Schedule is intended to show ten year trend. Additional years will be reported as they become available.
2015 237,655$ 237,655$ -$ 1,467,006$ 16.20%
2016 245,917 245,917 - 1,518,006 16.20%
2017 251,584 251,584 - 1,552,988 16.20%
2018 266,168 266,168 - 1,643,012 16.20%
2019 311,718 311,718 - 1,839,044 16.95%
Note: Schedule is intended to show ten year trend. Additional years will be reported as they become available.
See notes to required supplementary information.66
City of Mendota Heights
Schedule of City Contributions -
General Employees Retirement Fund
Last Ten Years
Contribution
Deficiency
(Excess)
City's Covered
Payroll
Last Ten Years
Contributions
as a Percentage
of Covered
Payroll
Statutorily
Required
Contribution
Statutorily
Required
Contribution
Contributions
in Relation to
the Statutorily
Required
Contributions
Contribution
Deficiency
(Excess)
Contributions
in Relation to
the Statutorily
Required
Contributions
Fiscal Year
Ending
December 31,
City's Covered
Payroll
Contributions
as a Percentage
of Covered
Payroll
Schedule of City Contributions -
Public Employees Police and Fire Retirement Fund
Fiscal Year
Ending
December 31,
page 110
City of Mendota Heights
Notes to Required Supplementary Information
67
GENERAL EMPLOYEES FUND
2019 Changes
Changes in Actuarial Assumptions
The mortality projection scale was changed from MP-2017 to MP-2018.
Changes in Plan Provisions
The employer supplemental contribution was changed prospectively, decreasing from $31.0
million to $21.0 million per year. The State’s special funding contribution was changed
prospectively, requiring $16.0 million due per year through 2031.
2018 Changes
Changes in Actuarial Assumptions
The mortality projection scale was changed from MP-2015 to MP-2017.
The assumed benefit increase was changed from 1.0% per year through 2044 and 2.5% per
year thereafter to 1.25% per year.
Changes in Plan Provisions
The augmentation adjustment in early retirement factors is eliminated over a five-year period
starting July 1, 2019, resulting in actuarial equivalence after June 30, 2024.
Interest credited on member contributions decreased from 4.00% to 3.00%, beginning July 1,
2018.
Deferred augmentation was changed to 0.00%, effective January 1, 2019. Augmentation that
has already accrued for deferred members will still apply.
Contribution stabilizer provisions were repealed.
Postretirement benefit increases were changed from 1.00% per year with a provision to
increase to 2.50% upon attainment of 90.00% funding ratio to 50.00% of the Social Security
Cost of Living Adjustment, not less than 1.00% and not more than 1.50%, beginning
January 1, 2019.
For retirements on or after January 1, 2024, the first benefit increase is delayed until the
retiree reaches normal retirement age; does not apply to Rule of 90 retirees, disability benefit
recipients, or survivors.
Actuarial equivalent factors were updated to reflect revised mortality and interest
assumptions.
2017 Changes
Changes in Actuarial Assumptions
The CSA loads were changed from 0.8% for active members and 60% for vested and non-
vested deferred members. The revised CSA loads are now 0.0% for active member liability,
15% for vested deferred member liability and 3% for non-vested deferred member liability.
The assumed post-retirement benefit increase rate was changed from 1.0% per year for all
years to 1.0% per year through 2044 and 2.5% per year thereafter.
Changes in Plan Provisions
The State’s contribution for the Minneapolis Employees Retirement Fund equals
$16,000,000 in 2017 and 2018, and $6,000,000 thereafter.
page 111
City of Mendota Heights
Notes to Required Supplementary Information
68
GENERAL EMPLOYEES FUND (CONTINUED)
2017 Changes (Continued)
Changes in Plan Provisions (Continued)
The Employer Supplemental Contribution for the Minneapolis Employees Retirement Fund
changed from $21,000,000 to $31,000,000 in calendar years 2019 to 2031. The State’s
contribution changed from $16,000,000 to $6,000,000 in calendar years 2019 to 2031.
2016 Changes
Changes in Actuarial Assumptions
The assumed post-retirement benefit increase rate was changed from 1.0% per year through
2035 and 2.5% per year thereafter to 1.0% per year for all future years.
The assumed investment return was changed from 7.9% to 7.5%. The single discount rate
was changed from 7.9% to 7.5%.
Other assumptions were changed pursuant to the experience study dated June 30, 2015. The
assumed future salary increases, payroll growth, the inflation were decreased by 0.25% to
3.25% for payroll growth and 2.50% for inflation.
2015 Changes
Changes in Actuarial Assumptions
The assumed post-retirement benefit increase rate was changed from 1.0% per year through
2030 and 2.5% per year thereafter to 1.0% per year through 2035 and 2.5% per year
thereafter.
Changes in Plan Provisions
On January 1, 2015, the Minneapolis Employees Retirement Fund was merged into the
General Employees Fund, which increased the total pension liability by $1.1 billion and
increased the fiduciary plan net position by $892 million. Upon consolidation, state and
employer contributions were revised; the State’s contribution of $6.0 million, which meets
the special funding situation definition, was due September 2015.
page 112
City of Mendota Heights
Notes to Required Supplementary Information
69
POLICE AND FIRE FUND
2019 Changes
Changes in Actuarial Assumptions
The mortality projection scale was changed from MP-2017 to MP-2018.
2018 Changes
Changes in Actuarial Assumptions
The mortality projection scale was changed from MP-2016 to MP-2017.
Changes in Plan Provisions
Postretirement benefit increases were changed to 1.00% for all years, with no trigger.
An end date of July 1, 2048 was added to the existing $9.0 million state contribution.
New annual state aid will equal $4.5 million in fiscal years 2019 and 2020, and $9.0 million
thereafter until the plan reaches 100% funding, or July 1, 2048, if earlier.
Member contributions were changed from 10.80% to 11.30% of pay, effective January 1,
2019 and 11.80% of pay, effective January 1, 2020.
Employer contributions were changed from 16.20% to 16.95% of pay, effective January 1,
2019 and 17.70% of pay, effective January 1, 2020.
Interest credited on member contributions decreased from 4.00% to 3.00%, beginning July 1,
2018.
Deferred augmentation was changed to 0.00%, effective January 1, 2019. Augmentation that
has already accrued for deferred members will still apply.
Actuarial equivalent factors were updated to reflect revised mortality and interest
assumptions.
2017 Changes
Changes in Actuarial Assumptions
Assumed salary increases were changed as recommended in the June 30, 2016 experience
study. The net effect is proposed rates that average 0.34% lower than the previous rates.
Assumed rates of retirement were changed, resulting in fewer retirements.
The CSA load was 30% for vested and non-vested deferred members. The CSA has been
changed to 33% for vested members and 2% for non-vested members.
The base mortality table for healthy annuitants was changed from the RP-2000 fully
generational table to the RP-2014 fully generational table (with a base year of 2006), with
male rates adjusted by a factor of 0.96. The mortality improvement scale was changed from
Scale AA to Scale MP-2016. The base mortality table for disabled annuitants was changed
from the RP-2000 disabled mortality table to the mortality tables assumed for healthy
retirees.
Assumed termination rates were decreased to 3% for the first three years of service. Rates
beyond the select period of three years were adjusted, resulting in more expected
terminations overall.
Assumed percentage of married female members was decreased from 65% to 60%.
Assumed age difference was changed from separate assumptions for male members (wives
assumed to be three years younger) and female members (husbands assumed to be four years
older) to the assumption that males are two years older than females.
page 113
City of Mendota Heights
Notes to Required Supplementary Information
70
POLICE AND FIRE FUND (CONTINUED)
2017 Changes (Continued)
Changes in Actuarial Assumptions (Continued)
The assumed percentage of female members electing Joint and Survivor annuities was
increased.
The assumed post-retirement benefit increase rate was changed from 1% for all years to 1%
per year through 2064 and 2.5% thereafter.
The single discount rate was changed from 5.6% per annum to 7.5% per annum.
2016 Changes
Changes in Actuarial Assumptions
The assumed post-retirement benefit increase rate was changed from 1.0% per year through
2037 and 2.5% thereafter to 1.0% per year for all future years.
The assumed investment return was changed from 7.9% to 7.5%. The single discount rate
changed from 7.9% to 5.6%.
The single discount rate changed from 7.90% to 5.60%.
The assumed future salary increases, payroll growth, and inflation were decreased by 0.25%
to 3.25% for payroll growth and 2.50% for inflation.
2015 Changes
Changes in Actuarial Assumptions
The assumed post-retirement benefit increase rate was changed from 1.0% per year through
2030 and 2.5% per year thereafter to 1.0% per year through 2037 and 2.5% per year
thereafter.
Changes in Plan Provisions
The post-retirement benefit increase to be paid after attainment of the 90% funding threshold
was changed, from inflation up to 2.5%, to a fixed rate of 2.5%.
OPEB
2019 Changes
The discount rate increased from 3.30% in 2018 to 3.80% in 2019
2018 Changes
The discount rate decreased from 4.00% in 2017 to 3.30% in 2018.
There are no assets accumulated in a trust.
page 114
71
SUPPLEMENTARY INFORMATION
page 115
Water Revenue Special Park Civil Defense
Assets
Cash and investments 540,517$ 678,509$ 136,489$
Taxes receivable - delinquent - - 124
Special assessments receivable
Deferred - - -
Accounts receivable - - -
Interest receivable 789 1,291 183
Due from other funds - - -
Due from other governments 3,052 - -
Prepaid items - - -
Land held for resale - - -
Total assets 544,358$ 679,800$ 136,796$
Liabilities
Accounts and contracts payable -$ 31,058$ -$
Due to other funds - - -
Due to other governments - - -
Salaries and benefits payable - -
Total liabilities - 31,058 -
Deferred Inflows of Resources
Unavailable revenue - property taxes - - 124
Unavailable revenue - special assessments - - -
Total deferred inflows of resources - - 124
Fund Balances
Nonspendable - - -
Restricted - 648,742 -
Committed 544,358 - 136,672
Assigned - - -
Unassigned - - -
Total fund balances 544,358 648,742 136,672
Total liabilities, deferred inflows of
resources, and fund balances 544,358$ 679,800$ 136,796$
72
City of Mendota Heights
Combining Balance Sheet -
Nonmajor Governmental Funds
December 31, 2019
Special Revenue
page 116
Street Lighting
Par 3 Golf
Course
Par 3 G.O.
Bonds
Equipment
Certficates
Fire Station
Bonds
33,592$ 48,163$ 374,539$ 94,154$ 173,246$
131 - 1,263 44 699
- - - - -
- 56 - - -
24 65 341 141 198
- - - - -
- - - - -
- 5,452 - - -
- - - - -
33,747$ 53,736$ 376,143$ 94,339$ 174,143$
6,034$ 777$ -$ -$ -$
- - - - -
- 704 - - -
- 456 - - -
6,034 1,937 - - -
131 - 1,263 44 699
- - - - -
131 - 1,263 44 699
- 5,452 - - -
27,582 - 374,880 94,295 173,444
- 46,347 - - -
- - - - -
- - - - -
27,582 51,799 374,880 94,295 173,444
33,747$ 53,736$ 376,143$ 94,339$ 174,143$
73
Special Revenue Debt Service
page 117
Equipment
Replacement
Reserve
Infrastructure
Reserve
Facility
Reserve
Assets
Cash and investments 541,102$ 77,871$ 366,968$
Taxes receivable - delinquent 180 99 -
Special assessments receivable
Deferred - - -
Accounts receivable - - -
Interest receivable 433 97 547
Due from other funds - - -
Due from other governments - - -
Prepaid items - - -
Land held for resale - - -
Total assets 541,715$ 78,067$ 367,515$
Liabilities
Accounts and contracts payable 85,003$ -$ -$
Due to other funds - - -
Due to other governments - - -
Salaries and benefits payable - - -
Total liabilities 85,003 - -
Deferred Inflows of Resources
Unavailable revenue - property taxes 180 99 -
Unavailable revenue - special assessments - - -
Total deferred inflows of resources 180 99 -
Fund Balances
Nonspendable - - -
Restricted - - -
Committed - - -
Assigned 456,532 77,968 367,515
Unassigned - - -
Total fund balances 456,532 77,968 367,515
Total liabilities, deferred inflows of
resources, and fund balances 541,715$ 78,067$ 367,515$
74
City of Mendota Heights
Combining Balance Sheet -
Nonmajor Governmental Funds
December 31, 2019
Capital Projects
page 118
Water Tower
Capital Project
Pilot Knob
Improvement
Pre-1998 Non-
Increment
Special
Assessment
Capital Project
TIF District
No. 2
Total Nonmajor
Governmental
Funds
405,820$ 959$ 25,861$ -$ -$ 3,497,790$
- - - - - 2,540
- - - 10,329 - 10,329
- - - 11,032 - 11,088
789 - 43 165 - 5,106
165,045 - 8,581 - - 173,626
- - - 1,374 - 4,426
- - - - - 5,452
- - 96,100 - - 96,100
571,654$ 959$ 130,585$ 22,900$ -$ 3,806,457$
-$ -$ 1,662$ -$ -$ 124,534$
- - - 165,045 8,581 173,626
- - - 170,000 - 170,704
- - - - - 456
- - 1,662 335,045 8,581 469,320
- - - - - 2,540
- - - 10,329 - 10,329
- - - 10,329 - 12,869
- - - - - 5,452
- - - - - 1,318,943
- - - - - 727,377
571,654 959 128,923 - - 1,603,551
- - - (322,474) (8,581) (331,055)
571,654 959 128,923 (322,474) (8,581) 3,324,268
571,654$ 959$ 130,585$ 22,900$ -$ 3,806,457$
75
Capital Projects
page 119
Water Revenue Special Park Civil Defense
Revenues
Property taxes -$ -$ 25,124$
Intergovernmental - - -
Charges for services 117,261 - -
Fines and forfeitures - - 1
Miscellaneous
Investment income 13,047 21,348 3,004
Other - 257,000 -
Total revenues 130,308 278,348 28,129
Expenditures
Current
General government 124 - 9,277
Public safety - - -
Public works - 59,818 -
Debt service
Principal - - -
Interest and other charges - - -
Capital outlay
Public works 59,482 328,696 -
Total expenditures 59,606 388,514 9,277
Excess of revenues over (under) expenditures 70,702 (110,166) 18,852
Other Financing Sources (Uses)
Issuance of debt - - -
Bond premium - - -
Transfers in - - -
Transfers out (14,050) (1,500) -
Total other financing sources (uses) (14,050) (1,500) -
Net change in fund balances 56,652 (111,666) 18,852
Fund Balances
Beginning of year 487,706 760,408 117,820
Change in accounting principle (Note 17)- - -
Beginning of the year, as restated 487,706 760,408 117,820
End of year 544,358$ 648,742$ 136,672$
76
City of Mendota Heights
Combining Statement of Revenues, Expenditures,
and Changes in Fund Balances - Nonmajor Governmental Funds
Year Ended December 31, 2019
Special Revenue
page 120
Street Lighting
Par 3 Golf
Course
Toward Zero
Death
Par 3 G.O.
Bonds
Equipment
Certficates
Fire Station
Bonds
50,898$ -$ -$ 243,138$ 286$ 170,163$
- - 190,424 - - -
- 145,845 - - - -
- - - - 2 -
396 1,068 - 5,653 2,334 3,282
- 16,068 - - - -
51,294 162,981 190,424 248,791 2,622 173,445
42,686 - - - - -
- - 190,424 - - -
- 146,210 - - - -
- - - 205,000 45,000 -
- - - 24,525 2,707 107,078
- 71,723 - - - -
42,686 217,933 190,424 229,525 47,707 107,078
8,608 (54,952) - 19,266 (45,085) 66,367
- - - - - 7,000,000
- - - - - 401,409
- 54,024 - - - -
- - - - - (7,294,332)
- 54,024 - - - 107,077
8,608 (928) - 19,266 (45,085) 173,444
18,974 - - 355,614 139,380 -
- 52,727 - - - -
18,974 52,727 - 355,614 139,380 -
27,582$ 51,799$ -$ 374,880$ 94,295$ 173,444$
77
Debt ServiceSpecial Revenue
page 121
Equipment
Replacement
Reserve
Infrastructure
Reserve
Facility
Reserve
Revenues
Property taxes 33,243$ 20,267$ -$
Intergovernmental - - -
Charges for services - - -
Fines and forfeitures 1 1 -
Miscellaneous
Investment income 7,157 1,618 9,054
Other - - -
Total revenues 40,401 21,886 9,054
Expenditures
Current
General government - - 886
Public safety - - -
Public works 55,402 4,276 -
Debt service
Principal - - -
Interest and other charges - - -
Capital outlay
Public works 237,767 - -
Total expenditures 293,169 4,276 886
Excess of revenues over (under) expenditures (252,768) 17,610 8,168
Other Financing Sources (Uses)
Issuance of debt - - -
Bond premium - - -
Transfers in 293,169 - -
Transfers out - - -
Total other financing sources (uses)293,169 - -
Net change in fund balances 40,401 17,610 8,168
Fund Balances
Beginning of year 416,131 60,358 359,347
Change in accounting principle (Note 17)- - -
Beginning of the year, as restated 416,131 60,358 359,347
End of year 456,532$ 77,968$ 367,515$
78
City of Mendota Heights
Combining Statement of Revenues, Expenditures,
and Changes in Fund Balances - Nonmajor Governmental Funds
Year Ended December 31, 2019
Capital Projects
page 122
Water Tower
Capital Project
Pilot Knob
Improvement
Pre-1998 Non-
Increment
Special
Assessment
Capital Project
TIF District
No. 2
Total Other
Governmental
Funds
-$ -$ -$ -$ 1,980$ 545,099$
- - - - - 190,424
- - - - - 263,106
- - - - - 5
13,046 - 712 2,728 - 84,447
65,344 - 36,245 - - 374,657
78,390 - 36,957 2,728 1,980 1,457,738
1,856 - 19,947 - - 74,776
- - - - - 190,424
- - - - - 265,706
- - - - - 250,000
- - - - - 134,310
- - - 3,180 1,609 702,457
1,856 - 19,947 3,180 1,609 1,617,673
76,534 - 17,010 (452) 371 (159,935)
- - - - - 7,000,000
- - - - - 401,409
- - - - - 347,193
- - - - - (7,309,882)
- - - - - 438,720
76,534 - 17,010 (452) 371 278,785
495,120 959 111,913 (322,022) (8,952) 2,992,756
- - - - - 52,727
495,120 959 111,913 (322,022) (8,952) 3,045,483
571,654$ 959$ 128,923$ (322,474)$ (8,581)$ 3,324,268$
79
Capital Projects
page 123
Compensated
Absences
City Hall
Sinking Fund Total
Assets
Current assets
Cash and investments
(including cash equivalents) 555,915$ 14,184$ 570,099$
Interest receivable - 174 174
Prepaid expenses - 8,419 8,419
Total current assets 555,915 22,777 578,692
Noncurrent assets
Capital assets
Land - 25,000 25,000
Buildings - 2,264,567 2,264,567
Improvements other than buildings - 40,781 40,781
Machinery and equipment - 66,969 66,969
Total capital assets - 2,397,317 2,397,317
Less accumulated depreciation - (1,737,689) (1,737,689)
Net capital assets - 659,628 659,628
Total assets 555,915 682,405 1,238,320
Deferred Outflows of Resources
Deferred outflows of resources related to OPEB - 470 470
Deferred outflows of resources related to pensions - 5,157 5,157
Total deferred outflows of resources - 5,627 5,627
Total assets and deferred outflows of resources 555,915$ 688,032$ 1,243,947$
Liabilities
Current liabilities
Accounts and contracts payable -$ 6,838$ 6,838$
Salaries and benefits payable - 2,028 2,028
Due to other governments - 95 95
Noncurrent liabilities due within one year 401,590 5,038 406,628
Total current liabilities 401,590 13,999 415,589
Noncurrent liabilities
Compensated absences 555,915 14,532 570,447
OPEB payable - 6,068 6,068
Net pension liability - 50,351 50,351
Less amount due within one year (401,590) (5,038) (406,628)
Total noncurrent liabilities 154,325 65,913 220,238
Total liabilities 555,915 79,912 635,827
Deferred Inflows of Resources
Deferred inflows of resources related to pensions - 11,155 11,155
Net Position
Investment in capital assets - 659,628 659,628
Unrestricted - (62,663) (62,663)
Total net position - 596,965 596,965
Total liabilities, deferred inflows of resources,
and net position 555,915$ 688,032$ 1,243,947$
80
December 31, 2019
Combining Statement of Net Position - Internal Service Funds
City of Mendota Heights
page 124
City of Mendota Heights
Combining Statement of Revenues, Expenses, and Changes
in Net Position - Internal Service Funds
Year Ended December 31, 2019
City Hall
Sinking Fund Total
Operating revenues
Charges for services 216,940$ 216,940$
Operating expenses
Wages and salaries 66,934 66,934
Employee benefits 35,630 35,630
Professional services 3,923 3,923
Insurance 6,206 6,206
Utilities 34,251 34,251
Depreciation 35,419 35,419
Miscellaneous 43,059 43,059
Total operating expenses 225,422 225,422
Operating loss (8,482) (8,482)
Nonoperating revenues
Investment income 2,888 2,888
Change in net position (5,594) (5,594)
Net position
Beginning of year 602,559 602,559
End of year 596,965$ 596,965$
81
page 125
Compensated
Absences
City Hall
Sinking Fund Total
Cash Flows - Operating Activities
Receipts from customers and users -$ 216,940$ 216,940$
Payments to suppliers - (87,645) (87,645)
Payments to employees 58,229 (102,881) (44,652)
Net cash flows - operating activities 58,229 26,414 84,643
Cash Flows - Capital And Related
Financing Activities
Acquisition of capital assets - (126,730) (126,730)
Cash Flows - Investing Activities
Interest and dividends received - 2,863 2,863
Net change in cash and cash equivalents 58,229 (97,453) (39,224)
Cash and Cash Equivalents
Beginning of year 497,686 111,637 609,323
End of year 555,915$ 14,184$ 570,099$
Reconciliation of Operating
Loss to Net Cash Flows -
Operating Activities
Operating loss -$ (8,482)$ (8,482)$
Adjustments to reconcile operating
Loss to net cash flows -
Operating activities
Depreciation expense - 35,419 35,419
Prepaid items - (540) (540)
Accounts payable - 337 337
Due to other governmental units - (3) (3)
Salaries payable - 321 321
OPEB payable - 1,039 1,039
Pension related items - (2,651) (2,651)
Compensated absences payable 58,229 974 59,203
Total adjustments 58,229 34,896 93,125
Net cash flows - operating activities 58,229$ 26,414$ 84,643$
82
City of Mendota Heights
Combining Statement of Cash Flows - Internal Service Funds
Year Ended December 31, 2019
page 126
Budgeted
Amounts Variance with
Original Actual
and Final Amounts
Revenues
Property taxes 7,449,004$ 7,509,301$ 60,297$
Licenses and permits 374,700 480,249 105,549
Intergovernmental revenue
State grants and aids
PERA aid 9,070 9,073 3
Fire aid 100,000 104,236 4,236
Police aid 130,000 163,345 33,345
Other grants and aids 195,000 252,581 57,581
Total intergovernmental revenue 434,070 529,235 95,165
Charges for services 716,222 716,877 655
Fines and forfeitures 72,500 123,848 51,348
Miscellaneous revenues
Investment income 35,000 186,336 151,336
Other 137,000 199,430 62,430
Total miscellaneous revenues 172,000 385,766 213,766
Total revenues 9,218,496 9,745,276 526,780
Expenditures
General government
Mayor and council
Salaries and benefits 24,346 24,311 (35)
Contracted services 24,000 20,655 (3,345)
Administration and finance
Salaries and benefits 745,960 752,130 6,170
Materials and supplies 14,700 17,904 3,204
Contracted services 407,500 433,206 25,706
83
City of Mendota Heights
Detailed Schedule of Revenues, Expenditures, and
Changes in Fund Balance - Budget and Actual -
Final budget -
over (under)
General Fund
Year Ended December 31, 2019
page 127
Budgeted
Amounts Variance with
Original Actual Final budget -
And final Amounts Over (under)
Expenditures (Continued)
General government (continued)
Elections
Salaries and benefits 38,409$ 36,391$ (2,018)$
Materials and supplies 7,008 3,818 (3,190)
Contracted services 2,300 2,258 (42)
Information technology
Materials and supplies 85,475 18,938 (66,537)
Contracted services 103,310 91,347 (11,963)
Planning and zoning
Salaries and benefits 140,100 139,692 (408)
Materials and supplies 4,500 1,905 (2,595)
Contracted services 36,650 28,331 (8,319)
Recycling
Salaries and benefits 18,200 24,138 5,938
Contracted services 14,600 17,064 2,464
Miscellaneous
Contracted services - 64,246 64,246
Total general government 1,667,058 1,676,334 9,276
Public safety
Police protection
Salaries and benefits 3,198,167 3,022,368 (175,799)
Materials and supplies 222,000 167,695 (54,305)
Contracted services 739,859 661,505 (78,354)
Fire protection
Salaries and benefits 301,711 304,259 2,548
Materials and supplies 97,300 68,203 (29,097)
Contracted services 363,000 383,075 20,075
Total public safety 4,922,037 4,607,105 (314,932)
84
Detailed Schedule of Revenues, Expenditures, and
Changes in Fund Balance - Budget and Actual -
City of Mendota Heights
General Fund
Year Ended December 31, 2019
(Continued)
page 128
Budgeted
Amounts Variance with
Original Actual Final budget -
And final Amounts Over (under)
Expenditures (Continued)
Public works
Code enforcement
Materials and supplies 2,500$ 1,981$ (519)$
Contracted services 115,875 110,309 (5,566)
Street maintenance
Salaries and benefits 1,014,353 1,012,845 (1,508)
Materials and supplies 111,350 153,402 42,052
Contracted services 480,479 462,310 (18,169)
Parks
Salaries and benefits 581,794 570,678 (11,116)
Materials and supplies 206,650 172,778 (33,872)
Contracted services 163,950 161,606 (2,344)
Total public works 2,676,951 2,645,909 (31,042)
Total expenditures 9,266,046 8,929,348 (336,698)
Excess of revenues over
(under) expenditures (47,550) 815,928 863,478
Other Financing Sources (Uses)
Transfer in 47,550 47,550 -
Transfer out - (347,193) (347,193)
Total other financing sources (uses) 47,550 (299,643) (347,193)
Net change in fund balance -$ 516,285 516,285$
Fund Balance
Beginning of year 8,836,600
End of year 9,352,885$
85
Detailed Schedule of Revenues, Expenditures, and
Changes in Fund Balance - Budget and Actual -
General Fund
City of Mendota Heights
Year Ended December 31, 2019
(Continued)
page 129
86
(THIS PAGE LEFT BLANK INTENTIONALLY)
page 130
87
Minnesota 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, 2019, and the related notes to financial statements, which collectively
comprise the City's basic financial statements, and have issued our report thereon dated May 22, 2020.
In connection with our audit, nothing came to our attention that caused us to believe that the City of
Mendota Heights failed to comply with the provisions of the contracting and bidding, deposits and
investments, conflicts of interest, public indebtedness, claims and disbursements, miscellaneous
provisions, and tax increment financing sections of the Minnesota Legal Compliance Audit Guide for
Cities, promulgated by the State Auditor pursuant to Minnesota Statutes § 6.65. 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.
The purpose of this report is solely to describe the scope of our testing of compliance and the results of
that testing, and not to provide an opinion on compliance. Accordingly, this communication is not
suitable for any other purpose.
Minneapolis, Minnesota
May 22, 2020
page 131
City of Mendota HeightsAudit PresentationJune 2, 2020page 132
Independent Auditor’s Report●Management is responsible for the financial statements●Auditor is responsible to express an opinion on the financial statements●Unmodified Opinion – best opinion an auditor is able to offer●Provides assurance that the financial statements are fairly presented in all material respects2page 133
Independent Auditor’s Report3●Minnesota Legal Compliance Audit – No Findings●Internal Control Findings – Lack of Segregation of Accounting Dutiespage 134
Significant Accounting Changes4●Golf Course operations moved from an enterprise activity to a special revenue fundpage 135
General Fund5Budget and Actual Revenues and ExpendituresVarianceOriginal and Final Budget - Final Budget Amounts Over (Under)RevenuesTaxes and assessments 7,449,004$ 7,509,301$ 60,297$ Licenses and permits 374,700 480,249 105,549 Intergovernmental 434,070 529,235 95,165 Charges for services 716,222 716,877 655 Other 244,500 509,614 265,114 Total revenues 9,218,496 9,745,276 526,780 ExpendituresGeneral government 1,667,058 1,676,334 9,276 Public safety 4,922,037 4,607,105 (314,932) Public works 2,676,951 2,645,909 (31,042) Total expenditures 9,266,046 8,929,348 (336,698) Other financing sources (uses)Transfers in 47,550 47,550 - Transfers out - (347,193) (347,193) Total other financing sources (uses) 47,550 (299,643) (347,193) Net change in fund balances -$ 516,285$ 516,285$ page 136
General Fund6Revenuespage 137
General Fund72019 Revenuespage 138
General Fund82018 Revenuespage 139
General Fund9Expenditurespage 140
General Fund102019 Expenditurespage 141
General Fund112018 Expenditurespage 142
General Fund12Operationspage 143
Tax Capacity, Levy, and Rates*13* Property tax data was obtained from the League of Minnesota Cities Property Tax Data Tables for 2015‐2017 (www.lmc.org). 2018 and 2019 data obtained from Dakota County.page 144
Sewer Fund14page 145
Storm Water Fund15page 146
1616Questions?Matthew Mayer952‐563‐6873Matt.Mayer@berganKDV.compage 147
THANK YOULET’S DO MORE, TOGETHER.17page 148
18bergankdv.com | #starthereBerganKDV is a leading professional services firm with a contagious culture; where growth is fostered and making a difference means something. Our values drive our decisions, and our passion is empowering people and creating a wow experience for our clients.We are powered by people who do business the Midwest way delivering comprehensive business, financial and technology solutions including business planning and consulting, tax, assurance and accounting, technology, wealth management and turnaround management services. From tax reform to technology, we go beyond so you can… DO MORE. 18page 149
Request for City Council Action
MEETING DATE: June 2, 2020
TO: Mayor Garlock and City Council, City Administrator McNeill
FROM: Tim Benetti, Community Development Director
SUBJECT: Resolution No. 2020-36 Denying a Variance for 791 Emerson Avenue
[Planning Case No. 2020-09]
Introduction
The City Council is asked to consider adopting a resolution, which would deny a request for variance to
encroach three-feet (3’) into the thirty-foot (30’) front-yard setback. The subject property is located at 791
Emerson Avenue, and the applicant/owners are John and Paula Grosenick.
Background
The subject property is a triangular shaped lot located along a double-curved road section of Emerson
Avenue. The property contains a split-level single family dwelling with a two-car tuck under garage. The
homeowners are requesting to construct a new 54.5” x 28’ (approx.) addition on the south side of the home,
which would encroach 3-ft. into the required 30-ft. front yard setback.
On May 26, 2020, the Mendota Heights Planning Commission held a [virtual/remote] public hearing on
this item, whereby a planning staff report was presented and received by the commission, and comments
from the Applicant and public were received and read into the record. The 05/26/2020 planning report is
appended to this memo, along with minutes of this meeting.
Discussion
The City can use its quasi-judicial authority when considering action on certain land use or zoning
decisions, such as this variance, and has broad discretion. A determination regarding whether or not the
request meets the applicable code standards is required.
Recommendation
The Planning Commission recommended (by 6-1 vote) to deny the variance for 791 Emerson Avenue, with
specific findings-of-fact to support said action of denial.
Action Requested
If the City Council wishes to affirm this recommendation, make a motion to adopt RESOLUTION NO.
2020-36 DENYING THE VARIANCE FOR PROPERTY LOCATED AT 791 EMERSON AVENUE.
Action on the resolution requires a simple majority vote.
If the Council wishes to over-turn this recommendation, make a motion to table this matter; and direct city
staff to prepare an alternative resolution of approval for follow-up consideration at the June 16, 2020 regular
meeting. The 60-day statutory review period expires July 7, 2020.
page 150
CITY OF MENDOTA HEIGHTS
DAKOTA COUNTY, MINNESOTA
RESOLUTION 2020-36
RESOLUTION DENYING A VARIANCE
OF A REDUCED FRONT-YARD SETBACK
LOCATED AT 791 EMERSON AVENUE
(PLANNING CASE NO. 2020-09)
WHEREAS, John and Paula Grosenick (“Applicant”) applied for a Variance for the
property located at 791 Emerson Avenue (“Subject Property”), which is legally described on
attached Exhibit A; and
WHEREAS, the Subject Property is guided LR-Low Density Residential in the 2030
Comprehensive Plan and is located in the R-1 One Family Residential District; and
WHEREAS, the Applicant is seeking a variance to encroach three feet (3’) into the thirty
foot (30’) front-yard setback required under the R-1 District standards for residential dwellings, as
proposed under Planning Case No. 2020-09; and
WHEREAS, Title 12-1L-5 of the City Code (Variances) allows for the Council to grant
variances or certain modifications from the strict application of the provisions of the City Code,
and impose conditions and safeguards with variances if so needed or granted: and
WHEREAS, on May 26, 2020, the Mendota Heights Planning Commission held a [virtual]
public hearing on this matter, and whereupon closing the hearing and follow-up discussion on this
item with staff and the Applicant, the Planning Commission recommended to deny the variance
request (based on a 6-1 vote), with certain findings of fact to support such denial.
NOW THEREFORE BE IT RESOLVED by the Mendota Heights City Council that the
recommendation from the Planning Commission is hereby affirmed, and the Variance application
proposed under Planning Case No. 2020-09 can be denied, with the following findings of fact:
A. Under Title 12-1L-5A of the City Code, the Council may only grant variances from
the strict application of the provisions of the Code in cases where there are
“practical difficulties” in carrying out the strict letter of the regulations of the Code.
“Practical difficulties” consists of a three-part test: (i) the Applicant proposes to use
page 151
the property in a reasonable manner not otherwise permitted by the Code; (ii) the
plight of the Applicant is due to circumstances unique to the property not created
by the Applicant; and (iii) the variance, if granted, will not alter the essential
character of the neighborhood. Economic considerations alone do not constitute
“practical difficulties.”
B. The Applicant has not met the burden of demonstrating the requisite “practical
difficulties” in order to justify the granting of a Variance for the reduced setback.
The proposed addition is not essential to the overall enjoyment and continued use
of the property; and the fact the addition requires a variance to a normal setback
standard is not considered a reasonable use of the property, especially if the
Applicant were to reduce the addition size or realign the addition to fit on the lot,
thereby eliminating the need for this variance.
C. Because the City finds that the first prong of the three-part test (reasonable use of
the property) is not met by the Applicant, the City need not consider the remaining
two prongs of the test (unique circumstances of the property and essential character
of the neighborhood).
BE IT FURTHER RESOLVED, by the Mendota Heights City Council that the Variance
to encroach three feet (3’) into the thirty foot (30’) front-yard setback located at 791 Emerson
Avenue, as proposed and presented under Planning Case No. 2020-09, is hereby denied.
Adopted by the City Council of the City of Mendota Heights this 2nd day of June, 2020.
CITY COUNCIL
CITY OF MENDOTA HEIGHTS
________________________________
Neil Garlock, Mayor
ATTEST:
________________________________
Lorri Smith, City Clerk
Drafted by: City of Mendota Heights
1101 Victoria Curve
Mendota Heights, MN 55118
page 152
EXHIBIT A
PID No. 27-17150-01-021
ADDRESS: 791 Emerson Avenue, Mendota Heights, MN 55118
LEGAL:
ALL OF LOT 2, BLOCK 1, CHERRY HILL ADDITION, DAKOTA COUNTY, MINNESOTA;
EXCEPT THAT PART OF SAID LOT 2 COMMENCING AT THE NORTHWEST CORNER
OF LOT 2; THENCE SOUTHEAST ON EAST LINE OF LOT 2 A DISTANCE OF 54.4 FEET;
THENCE WESTERLY TO A POINT ON THE WEST LINE OF SAID LOT 2 THAT IS 46.10
FEET SOUTH OF THE NORTHWEST CORNER OF SAID LOT 2; THENCE NORTH TO
POINT OF BEGINNING.
[Torrens Property]
Drafted by: City of Mendota Heights
1101 Victoria Curve
Mendota Heights, MN 55118
page 153
Planning Staff Report
MEETING DATE: May 26, 2020
TO: Planning Commission
FROM: Tim Benetti, Community Development Director
SUBJECT: Planning Case 2020-09
VARIANCE
APPLICANT: John and Paula Grosenick
PROPERTY ADDRESS: 791 Emerson Avenue
ZONING/GUIDED: R-1 One Family Residential/LR Low Density Residential
ACTION DEADLINE: July 7, 2020 (60-Day Review Period)
INTRODUCTION
John and Paula Grosenick, owners of 791 Emerson Avenue, are requesting consideration of a variance of
3-feet from the 30-foot front yard setback requirement, to accommodate an addition to their home.
A public hearing notice for this item was published in the local newspaper and notice letters were mailed
to all surrounding properties within 350-feet of the subject property. The city received one letter of
objection from the immediate neighbor to the east, which is appended on the end of this report. As of the
finalization of this report, no other comments or objections were received.
BACKGROUND / SITE DESCRIPTION
The subject property is located east
of the intersection of Wachtler
Avenue and Emerson Avenue. The
lot is triangular in shape; 22,765-sf.
(0.52 ac.) in size; and is located
along a double curved section of
Emerson Avenue (visible in the GIS
aerial image - right).
This uniquely shaped lot was
created by the original platting of the
Cherry Hill Addition in 1960.
The property contains a 2,164-sf.,
split-level single-family dwelling,
built in 1964, with a two-car tuck-
under garage (see images - below).
page 154
View of Dwelling/Garage – 791 Emerson Ave.
The Applicant are seeking to add a new 54.5’ x 28’ addition on the south side of the home, which will
include an extension of the residential living space above a new 3-car attached garage (see image – below).
The new garage is 1,198-sf. in area, which just meets the 1,200-sf. area for permitted attached garages. Full
site and elevation plans are appended to the end of this report.
According to the Applicant’s site plan, the existing dwelling sits approx. 45-feet from the front line along
Emerson Avenue, and approx. 25-ft. from the side (easterly) lot line. The new addition is proposed to be
set at an angle, which lines up being parallel with the easterly lot line.
page 155
The resulting setbacks for the addition will be 17-feet from the easterly line (min. 12.5-ft. setback required)
and a front yard setback ranging in lengths between 30.2’ / 27.0’ /38.8’ along the curvilinear right-of-way
edge along Emerson Avenue. Minimum front yard setback in the R-1 Zone is 30-feet.
City Code defines SETBACK as: “The minimum horizontal distance between the line of a structure and
the nearest specified property line.” With the corner of the new addition/garage set at 27-feet, a variance
is needed to allow the reduced setback of 3-feet.
ANALYSIS
Variance Process
City Code Section 12-1L-5 governs variance requests. The city must consider a number of variables when
recommending or deciding on a variance, which generally fall into two categories: (i) practical difficulties;
and (ii) impact to the community.
The “practical difficulties” test contains three parts: (i) the property owner proposes to use the property in
a reasonable manner not otherwise permitted by the zoning ordinance; (ii) the plight of the property owner
is due to circumstances unique to the property, not created by the property owner; and (iii) the variance, if
granted, will not alter the essential character of the locality or neighborhood. It is also noted that economic
considerations alone do not constitute practical difficulties.
In addition, variances are only to be permitted when they are in harmony with the general purposes and
intent of the zoning ordinance and consistent with the comprehensive plan.
Section 12-1L-5(E)(1) further provides other issues the city may consider when granting or denying a
variance, noted as follows:
• Effect of variance upon health, safety, and welfare of the community.
• Existing and anticipated traffic conditions.
• Effect on light and air, as well as the danger of fire and the risk to public safety.
• Effect on the value of properties in the surrounding area, and upon the Comprehensive Plan.
• Granting of the variance is not a convenience to the applicant, but necessary to alleviate undue
hardship or difficulty.
When considering a variance request, the Planning Commission must determine if these standards have
been met in granting a variance, and provide findings of facts to support such a recommendation to the City
Council. If the Planning Commission determines the Applicant has failed to meet these standards, or has
not fully demonstrated a reasonableness in the granting of such variance, then findings of fact supporting a
recommendation of denial must be determined.
As with most variances, when homeowners inquire to the city about applying for a variance, staff will make
every attempt to offer suggestions or provide recommendations on how to reduce or eliminate the need of
a variance. In this case, staff asked the Applicant to consider reducing the footprint or pull-back the length
of the addition; or angle the addition a bit more to the east, thereby (and possibly) eliminating the variance.
The Applicants consulted with their architects, and provided the following statements supporting their
request of this variance (per email from John Grosenick, 05/06/2020):
“We spoke with Jeremy, our architect, late this afternoon regarding the conversation the two of
you had about the garage and the set back. Changing the garage design to comply with the 1200
sf. maximum is not a problem, we didn’t realize the limitations and will adjust the plans to comply.
The larger issue is the 30’ set back. We spent a great deal of time discussing design modifications
as we would need to modify the size of the garage at the furthest point by 4’ to comply with the
30’ requirement at the shortest point. “
page 156
Because we have an irregular lot and given the placement of the house when it was built, creates
more complexity then we thought. The garage at the furthest point meets the requirement when
measured at 2 different perpendicular angles but due to the curve, it is not consistent with the
requirement at the shortest point using a 30’ radius (included view).
The original placement of the house on the lot, the irregular lot and the desire to keep a consistent
design of the roof line of the addition to match the 1964 build to meet our desire to add a 3 car
garage has added complexity.
As a result, we would like to request a variance for our current design as the functionality of the
garage would change considerably if we had to reduce the plan by 4’ (reducing clearance between
each garage door) or the design and functionality would change considerably if we had to reduce
to a 2 car garage door and a 1 car garage door.”
As part of any variance requests, Applicants are required to prepare and submit their own responses and
findings to the Three-Part Variance test questions, whereby demonstrating or justifying the need of the
variance. In this report, the applicant’s responses are noted below (in italic text), followed by staff
responses:
1. The property owner proposes to use the property in a reasonable manner not otherwise permitted
by the zoning ordinance.
Applicant’s Response: My wife was raised in Mendota Heights. We moved back to the raise our family.
We bought our home with the goal to add on to meet the needs of our family as our boys grow. The
current location of the home guided us to the only practical plan to add on both loving space and
garage space we are seeking. Our plan is to remain in Mendota Heights as our boys grow, participate
in MHAA baseball, soccer and hockey and eventually graduate from Sibley.”
Staff’s Response: The subject property as it exists today is a typical 1960’s split-level style dwelling
with tuck-under garage. As evident by the Applicant’s plans, they intend to provide a substantial
upgrade and overall remodeling improvements to this somewhat dated and functionally obsolete
dwelling. The new garage will provide added vehicle and storage space, as opposed to the current and
much smaller two-car tuck under space located in the lower level of the home. The addition creates
considerable amounts of new and increased living space for the family, both above the new garage area
and in the old garage space on the lower level.
The city must now give careful consideration of whether or not the use of the property as altered by the
variance, is reasonable or will remain reasonable after requested improvements are made.
The proposed garage space is shown as 1,198-sq. ft. in area, which meets the maximum 1,200 sf.
permitted for attached garages in residential zones. The added footprint or area of new living space
appears reasonable, especially when considering the overall size and area of yard space that will remain
after the addition is completed. The addition or proposed improvement would not appear to be out of
character with other homes in this neighborhood.
The Applicants specifically designed this “angled” look to the addition in order to minimize the impacts
to the easterly neighboring property, including having the new garage doors face directly out towards
Emerson Avenue instead of towards the next-door neighbor’s residence or windows (as they do today).
Staff finds the overall use and enjoyment of the home and property does not change; and the Applicant’s
desire to construct this addition/garage feature to the existing house, even one that requires this
variance, can be considered a reasonable request and use of the property.
page 157
2. The plight of the property owner is due to circumstances unique to the property, not created by
the property owner.
Applicant’s Response: The nature of the curve in the road is such that our plan to expand and the
design created have the closest point of the planned garage/living area to be just inside of the 30’
setback. Measurements to either side of the closest point exceed the 30’ setback. The distant to the
neighboring property is over 16’ (more than the required 12-1/2’).
Staff’s Response: There may be some unique circumstances to this property, particularly with the
curvilinear shape of the front ROW/property line along Emerson Avenue. As noted previously, the
home’s current setback of 45-ft. (measured from the front wall face) is well above the minimum 30-ft.
setback standard for this R-1 zoned property; and the angled design of the addition, resulting in the 17-
ft. setback from the side yard, also meets and exceeds the 12.5-ft. setback required in this zone. As a
result of this addition to the side (or front) edge of the existing home, the closest point results in varying
degrees or measurements caused by this curved property line segment.
The two measurements taken perpendicular to the outer walls of the addition show the addition at
approx. 36-ft. and 30-ft. (+/-) respectively, with the closest direct measurement from the corner to the
lot line equals 27-ft. The city may want to give added weight or consideration to the 36-ft. setback
coming straight off the front face of the new garage, as this is where the driveway is being realigned to
work directly with the garage door openings on this side, and lends support to the arguments for
considering this front face of the garage as the “true” or identifiable front yard setback to be concerned
with under this variance case.
Staff believes that due to the curved roadway/lot line segments along this property, there may be some
unique circumstances that are present on this site, which circumstances were not created by the current
owners, and therefore lend some weight to supporting this setback variance.
3. The variance, if granted will not alter the essential character of the neighborhood.
Applicant’s Response: The plan/design we created would fit well with the current homes in our
neighborhood; makes the addition look like the home was designed that way as opposed to the 1964
built home with a 2020 addition.
Staff’s Response: The neighborhood is all but residential in character. The new addition represents a
considerable investment by the Applicants to bring their existing 1960’s style dwelling into a nicer,
more up-to-date home for their own use. Staff believes the Applicant has demonstrated through their
architectural/construction design plans, that the new addition and attached garage features will not look
out of place or character for the neighborhood, or detract from the overall design and feel of the existing
neighboring properties or overall neighborhood. Staff believes the essential character of the
neighborhood would not be altered by granting the variance.
4. Restrictions on Granting Variances.
The following restrictions should be considered when reviewing a variance:
a) Economic considerations alone do not constitute practical difficulties.
When weighing the economic factor(s) of a variance application, taking economic considerations
into account alone should not be the reason for either denying or approving variances. In this case,
the property owners are requesting to provide a nice and substantial addition to their home, which
will provide added living space, with an added bonus of extra-large space for vehicles and
household equipment. This new addition/garage requires a small corner encroachment (3-ft.),
which does not impact much in the front yard or reduces the remaining “useable” yard space
throughout the property.
page 158
Although one may conclude this new attached garage/addition will provide some economic value
to the owner by increasing the property value of the home and/or marketability (future sale), the
Applicant has demonstrated other practical difficulties in this case, and some reasonable
explanations for requesting this variance. It is not clear how economic considerations alone may
affect the outcome of this variance request, as they do not appear to be the sole reason for rejecting
this variance.
b) Variances are only to be permitted when they are in harmony with the general purposes and
intent of the zoning ordinance and consistent with the comprehensive plan.
Staff finds that the request is in harmony with the purposes and intent of the R-1 One Family
Residence district, as this proposed addition with attached garage are all consistent and allowed as
a permitted use in the underlying zoning. The city is not allowed to permit a variance on any use
not allowed in the district where the property is located (i.e. “use variance”); and this variance is
not requesting such use. The R-1 districts are most predominant throughout the community; and
the zoning standards are intended to maintain proper spacing between structures and roadway, and
sustain the general character of this and other neighborhoods.
The subject property is designated as LR-Low Density Residential in the current 2030
Comprehensive Plan, and the same is called for proposed 2040 Plan. Certain land use goals and
policies are noted below:
• LUG #1: Maintain and enrich the mature, fully developed residential environment and
character of the community.
• LUP #5: Emphasize quality design, innovative solutions, and a high general aesthetic level
in community development and building.
• LUP #2.2.2: Emphasize quality design, innovative solutions, and a high general aesthetic
level in community development and building.
The guiding principles in the comprehensive plan provide for maintaining, preserving, and
enhancing existing single-family neighborhoods. The requested variance would preserve the
residential character of the neighborhood and would provide a substantial investment in a property
to enhance its overall use and enjoyment by the owner.
The proposed garage/addition poses no threat or any effect on light and air, as well as the danger
of fire and the risk to public safety. This new addition and request for variance can be viewed or
considered in harmony with the general purpose of the zoning ordinance and consistent with the
current and proposed land use plans for the community.
ALTERNATIVES
1. Recommend approval of the variance to allow a reduced setback of 27-feet for the property
located at 791 Emerson Avenue, based on the following findings of fact that support the granting
of the variance requested herein, noted as follows:
A. Under Title 12-1L-5A of the City Code, the Council may only grant variances from the strict
application of the provisions of the Code in cases where there are “practical difficulties” in carrying
out the strict letter of the regulations of the Code. “Practical difficulties” consists of a three-part
test: (i) the Applicant proposes to use the property in a reasonable manner not otherwise permitted
by the Code; (ii) the plight of the Applicant is due to circumstances unique to the property not
created by the Applicant; and (iii) the variance, if granted, will not alter the essential character of
the neighborhood. Economic considerations alone do not constitute “practical difficulties.”
page 159
B. The Applicant has met the burden of demonstrating the requisite “practical difficulties” in order to
justify the granting of the Variance for a reduced setback, by:
i.) the proposed dwelling addition and attached garage to the existing home is consistent with
other homes and properties throughout the surrounding neighborhood, and the overall use
and enjoyment of the home and property does not change even with the allowance of the
variance, and therefore the requested variance can be considered a reasonable request.
ii.) the subject property was originally platted in 1960, creating a uniquely shaped lot with a very
curvilinear front lot line configuration, which in turn generates some unique circumstances
or difficulties for the Applicant to properly site the new addition along a front lot line (most
of which are typically flat or parallel with a street edge), except by means of this variance.
iii.) approving the Variance does not change the essential character of the neighborhood, as the
neighboring properties and residential neighborhood area will not be affected by the approval
of this variance; and
iv.) This new addition and request for variance is considered in harmony with the general purpose
of the zoning ordinance and consistent with the current and proposed land use plans for the
community.
C. The City has considered the factors required by Title 12-1L-5E1 of the City Code, including but
not limited to the effect of the Variance upon the health, safety, and welfare of the community,
existing and anticipated traffic conditions, the effect of the Variance on the danger of fire and the
risk to public safety, and upon the value of properties in the surrounding area, and upon the
Comprehensive Plan, and has determined this Variance needed for this addition will not affect or
pose any negative impacts upon the neighborhood or the community in general.
D. Approval of the Variance is for 791 Emerson Avenue only, and does not apply or give precedential
value to any other properties throughout the City. All variance applicants must apply for and
provide a project narrative to the City to justify a variance. All variance requests must be reviewed
independently by city staff and legal counsel under the requirements of the City Code.
E. The factual findings and analysis found in the Planning Staff Report for Planning Case No. 2020-
09, dated and presented May 26, 2020 (on file with the City of Mendota Heights), is hereby fully
incorporated into Resolution No. 2020-____. (final number to be assigned later)
F. The City has the authority to place reasonable conditions upon the property subject to his Variance
request. Conditions must be directly related to and roughly proportional to the impact created by
the variance. Conditions related to this transaction are as follows:
i.) The proposed encroachment for the addition shall not extend further than three feet (3’) into
the required 30-foot front-yard setback, as illustrated on the site plan included in the
application submittal, on file with the City Planning Dept. Planning Case File No. 2020-09.
ii.) The proposed garage addition and all other proposed improvements shall be constructed in
compliance with all applicable City Code and State of Minnesota Building Code standards.
iii.) The applicant shall obtain a building permit prior to any demolition, excavation or
construction of the new garage addition.
iv.) The new driveway must not exceed 25-feet in even width from the curb line of the street to
the front lot line/ROW edge. The Public Works Director shall approve the final design and
location of any new driveway entry.
page 160
v.) The new addition, including the roofline, will match the overall architecture and design of
the existing residential dwelling.
vi.) Full erosion and sedimentation measures will be put in place prior to and during grading and
construction work activities.
vii.) All grading and construction activity will be in compliance with applicable federal, state, and
local regulations and codes, as well as in compliance with the City’s Land Disturbance
Guidance Document.
viii.) Residential construction hours are 7:00 AM to 8:00 PM on weekdays, and 9:00 AM to 5:00
PM on weekends. These work hours shall be strictly adhered to by the Applicant/Owner and
all contractors working on the property.
ix.) Approval of the variance is contingent upon City Council approval of the application and
corresponding site plan. If the variance is approved by the City Council, the Applicant shall
obtain a building permit for construction of the proposed addition within one-year from said
approval date.
2. Recommend denial of the variance request, based on the findings of fact that confirm the
Applicant failed to meet the burden(s) of proof or standards in granting of the variance requested
herein, noted as follows:
A. Under Title 12-1L-5A of the City Code, the Council may only grant variances from the strict
application of the provisions of the Code in cases where there are “practical difficulties” in carrying
out the strict letter of the regulations of the Code. “Practical difficulties” consists of a three-part
test: (i) the Applicant proposes to use the property in a reasonable manner not otherwise permitted
by the Code; (ii) the plight of the Applicant is due to circumstances unique to the property not
created by the Applicant; and (iii) the variance, if granted, will not alter the essential character of
the neighborhood. Economic considerations alone do not constitute “practical difficulties.”
B. The Applicant has not met the burden of demonstrating the requisite “practical difficulties” in order
to justify the granting of a Variance for the reduced setback. The proposed addition is not essential
to the overall enjoyment and continued use of the property; and the fact the addition requires a
variance to a normal setback standard is not considered a reasonable use of the property, especially
if the Applicant were to reduce the addition size or realign the addition to fit on the lot, thereby
eliminating the need for this variance.
C. Because the City finds that the first prong of the three-part test (reasonable use of the property) is
not met by the Applicant, the City need not consider the remaining two prongs of the test (unique
circumstances of the property and essential character of the neighborhood).
3. Table the request and direct staff to extend the application review period an additional 60 days,
in compliance with MN STAT. 15.99.
STAFF RECOMMENDATION
Staff recommends the Planning Commission give careful consideration to Alternative No. 1, approval of
the variance with findings of facts to support the granting of said variance, with the conditions noted therein.
Attachments
1. Aerial/Site Location Map
2. Planning Application – with Variance Response (Narrative)
3. Site & Elevation Plans
page 161
WACHTLER AVEEMERSON AVE
MEDORA RDSIBLEY MEMORIAL HWY
FARMDALE RDKNOLLWOOD LNCHERRY H
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IVY LN CLEMENT ST3RD AVE
MEDORA
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KNOLLWOOD LN
791 EMERSON AVENUEJohn & Paula Grosenick(General Location Map)
City of
Mendota
Heights0390
SCALE IN FEET
GIS Map Disclaimer:This data is for informational purposes only and should not be substituted for a true title search, property appraisal, plat,survey, or for zoning verification. The City of Mendota Heights assumes no legal responsibility for the information containedin this data. The City of Mendota Heights, or any other entity from which data was obtained, assumes no liability for any errorsor omissions herein. If discrepancies are found, please contact the City of Mendota Heights.
Contact "Gopher State One Call" at 651-454-0002 for utility locations, 48 hours prior to any excavation.
5/22/2020
page 162
781
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1380
1390
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City of
Mendota
Heights060
SCALE IN FEET
GIS Map Disclaimer:This data is for informational purposes only and should not be substituted for a true title search, property appraisal, plat,survey, or for zoning verification. The City of Mendota Heights assumes no legal responsibility for the information containedin this data. The City of Mendota Heights, or any other entity from which data was obtained, assumes no liability for any errorsor omissions herein. If discrepancies are found, please contact the City of Mendota Heights.
Contact "Gopher State One Call" at 651-454-0002 for utility locations, 48 hours prior to any excavation.
5/22/2020
page 163
page 164
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page 166
page 167
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page 169
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26.97 ft30.21 ft35.77 ft44.91 ftExisting DwellingNew Addition/Garage 45'27'24.73 ft 17'page 179
781
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791 EMERSON AVENUEJohn & Paula GrosenickProperty Map)
City of
Mendota
Heights050
SCALE IN FEET
GIS Map Disclaimer:This data is for informational purposes only and should not be substituted for a true title search, property appraisal, plat,survey, or for zoning verification. The City of Mendota Heights assumes no legal responsibility for the information containedin this data. The City of Mendota Heights, or any other entity from which data was obtained, assumes no liability for any errorsor omissions herein. If discrepancies are found, please contact the City of Mendota Heights.
Contact "Gopher State One Call" at 651-454-0002 for utility locations, 48 hours prior to any excavation.
5/27/2020
page 180
CITY OF MENDOTA HEIGHTS
DAKOTA COUNTY, MINNESOTA
PLANNING COMMISSION MINUTES
May 26, 2020
The regular meeting of the Mendota Heights Planning Commission was held on Tuesday, May 26,
2020 in the Council Chambers at City Hall, 1101 Victoria Curve at 7:00 P.M.
The following Commissioners were present: Chair John Mazzitello, Commissioners Mary
Magnuson, Patrick Corbett, Litton Field, Andrew Katz, Michael Toth, Brian Petschel.
Approval of Agenda
The agenda was approved as submitted.
Approval of April 28, 2020 Minutes
COMMISSIONER FIELD MOVED, SECONDED BY COMMISSIONER TOTH TO APPROVE
THE MINUTES OF APRIL 28, 2020
A ROLL CALL VOTE WAS PERFORMED:
COMMISSIONER CORBETT AYE
COMMISSIONER FIELD AYE
COMMISSIONER TOTH AYE
COMMISSIONER MAZZITELLO AYE
COMMISSIONER PETSCHEL AYE
Commissioners Magnuson and Katz joined the meeting.
Chair Mazzitello noted that he will continue in the position of Chair tonight as Commissioner
Magnuson is out of town and is attending remotely.
Hearings
A) PLANNING CASE 2020-09
JOHN AND PAULA GROSENICK, 791 EMERSON AVENUE – VARIANCE
Community Development Director Tim Benetti explained that John and Paula Grosenick, owners
of 791 Emerson Avenue, are requesting consideration of a variance of three feet from the 30-foot
front yard setback requirement to accommodate an addition to their home.
Hearing notices were published and mailed to all properties within 350-ft. of the site; the City
reviewed one letter of objection from the immediate neighbor to the ease, which was included in
the staff report.
page 181
Community Development Director Tim Benetti provided a planning staff report and a presentation
on this planning item to the Commission (which is available for viewing through the City’s
website).
Staff recommended approval of this application based on the findings and with conditions.
Commissioner Magnuson stated that she noticed the different measurements and asked if there is
a standard way in which the front setback is measured.
Community Development Director Tim Benetti stated that page three of the report includes the
definition of how setbacks are defined and measured. He stated that this lot is uniquely shaped
and unusual with the curvilinear roadway segment along the front lot line. He stated that he
provided the other measurements for comparison.
Chair Mazzitello opened the public hearing.
Community Development Director Tim Benetti read aloud the five-page letter received from
adjacent neighbor Mary C. Sweeney of 781 Emerson Avenue, dated May 19, 2020, which
expressed her concerns related to the request; and read a second addendum letter from Mrs.
Sweeney received on May 26, 2020 (letters appended to these minutes).
John Grosenick stated that he is present, as well as his wife and their architect/designer, should
there be any questions.
Commissioner Corbett asked for details on the barrier to making the addition fit within the
setbacks.
Jeremy Young, with Roycroft Design, the applicant’s architect, replied that they felt that this was
the most logical and least impactful approach.
Commissioner Magnuson stated that she understands the aesthetics but asked if there was
consideration to setting back the third stall on the garage. She noted that if the third bay were
setback three feet there would still be sufficient space for any type of vehicle.
Mr. Young replied that by doing that, it would completely change the roof line, which would take
away the symmetry. He stated that the goal was to make this look like everything was created at
once rather than making this look like an addition. He noted that countless hours were spent
modeling different approaches.
Commissioner Field stated that he understands that the reason for this design is architectural,
aesthetics and cost which does not warrant a practical difficulty for a variance.
Mr. Young replied that reducing the size would actually have a lower cost.
page 182
Chair Mazzitello asked the applicant to define the practical difficulty that would warrant the
variance.
Mr. Young replied that the difficulty is the symmetry of the house.
Chair Mazzitello confirmed that is an architectural element.
Commissioner Toth stated that perhaps it would have been nice to see the alternate option with
two garage doors rather than three. He stated that this request is a three-foot variance and noted
that there would be more questions if the request was for a five-foot variance.
Mr. Young stated that had it not been for this unique lot, he would have not even recommended
applying for the variance. He stated that he has not dealt with a lot of this shape in his career.
Commissioner Toth commented on the uniqueness of the lot, noting that if the home were to be
positioned five feet to the west, this would not be an issue. He stated that the Commission has to
consider the uniqueness of the lot and presence of the current structure as well.
Seeing no one else coming forward wishing to speak, Chair Mazzitello asked for a motion to close
the public hearing.
COMMISSIONER FIELD MOVED, SECONDED BY COMMISSIONER MAGNUSON, TO
CLOSE THE PUBLIC HEARING.
A ROLL CALL VOTE WAS PERFORMED:
COMMISSIONER PETSCHEL AYE
COMMISSIONER TOTH AYE
COMMISSIONER FIELD AYE
COMMISSIONER CORBETT AYE
COMMISSIONER MAZZITELLO AYE
COMMISSIONER MAGNUSON AYE
COMMISSIONER KATZ AYE
COMMISSIONER MAGNUSON MOVED, SECONDED BY COMMISSIONER FIELD, TO
RECOMMEND DENIAL OF THE VARIANCE WITH FINDINGS OF FACTS THAT THERE
IS A LACK OF A PRACTICAL DIFFICULTY ARTICULATED IN SUPPORT OF THE
REQUEST AND ALSO ARTICULATED ON PAGE EIGHT OF THE STAFF REPORT.
FURTHER DISCUSSION: Commissioner Field stated that he would like to find a way to get to
the desired outcome but was having a hard time finding practical difficulties.
Commissioner Magnuson agreed and noted that her motion is based on the lack of practical
difficulties and that there are a variety of options available to the property owner to meet the
required setback.
page 183
Commissioner Corbett agreed that the practical difficulty test was not met and there are other
options available to the homeowner.
Paula Grosenick stated that their last resort was coming before the City to request a variance. She
stated that they have been numerous conversations and redesigns, but the symmetry and the
roofline are a significant consideration. She stated that she believed that they were within the
setback and were surprised that they protruded into the setback. She stated that the practical
difficulty would be related to the curve of the road and the placement of the home on the lot.
Commissioner Field stated that although he has empathy for the neighboring property owner that
expressed opposition to the request, his decision is based on the lack of practical difficulty.
Commissioner Toth stated that he feels that the applicant has done their diligence in attempting to
put this together with their architect, but noted that this will not be the last time the Commission
considers a request for a variance of this size. He believed that the applicant has other options that
comply with the setback.
Commissioner Katz stated that while he has heard many similar comments related to the
uniqueness of the lot, there are other options available to the applicant that comply. He hoped that
when the applicant makes the next design plan, the applicant puts more thought into the
encroachment of the neighboring lot.
Chair Mazzitello stated that while he struggles with the true practical difficulty for this lot, the
comments from the neighboring property owner should also be considered. He stated that if it
were not for the three-foot encroachment into the setback, this project could move forward with
just a building permit. He hoped that the neighboring property owner could be considered if the
applicant changes their design.
A ROLL CALL VOTE WAS PERFORMED:
COMMISSIONER PETSCHEL AYE
COMMISSIONER CORBETT AYE
COMMISSIONER KATZ AYE
COMMISSIONER TOTH NAY
COMMISSIONER MAZZITELLO AYE
COMMISSIONER FIELD AYE
COMMISSIONER MAGNUSON AYE
Chair Mazzitello advised the City Council would consider this application at its June 2, 2020
meeting.
Staff Announcements / Updates
Community Development Director Tim Benetti gave the following verbal review:
• There are three applications that could come before the Commission the following month.
page 184
Adjournment
COMMISSIONER FIELD MOVED, SECONDED BY COMMISSIONER MAGNUSON, TO
ADJOURN THE MEETING AT 7:47 P.M.
A ROLL CALL VOTE WAS PERFORMED:
COMMISSIONER CORBETT AYE
COMMISSIONER FIELD AYE
COMMISSIONER TOTH AYE
COMMISSIONER PETSCHEL AYE
COMMISSIONER KATZ AYE
COMMISSIONER MAGNUSON AYE
COMMISSIONER MAZZITELLO AYE
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page 192
Request for City Council Action DATE: June 2, 2020 TO: Mayor, City Council, and City Administrator FROM: Lorri Smith, City Clerk SUBJECT: Ordinance No. 557 Approve Code Change Concerning Liquor License Renewal Fees
COMMENT:
Introduction The Council adopted Ordinance 551 on December 3, 2019, which approved the licensing
fees for alcoholic beverages. In light of the COVID19 pandemic which has caused the
restaurants to be closed to the public, staff is requesting the Council review and adj ust the
current liquor licensing fees for the renewal of on-sale licensed establishments.
Background The liquor licensing period runs from July 1st through June 30th, and the licenses are
renewed annually. The renewal applications and the license fees are due by May 1st each
year.
As discussed at the City Council’s May 11th work session, there is a desire to help local
restaurants that are hampered by to the COVID-19 pandemic. The proposed ordinance
temporarily reduces the renewal of on-sale license fees by allowing a two-month credit
(16.67% reduction) for their fees due, with additional credits to be allowed if the restaurants
are required to remain fully closed into the month of June and later. It also allows, for this
renewal period only, the collection of the on-sale liquor license fees in four equal
installments (June 5, September 1, December 1, 2020, and March 1, 2021).
It was noted in the Council Work Session that all liquor licenses will be issued for one full
year, as required by our City Code and the State of Mn Liquor Control. If a business is
permanently closed during the year, then the owners can request reimbursement for a pro-
rata share of the license fee paid.
The current and proposed liquor licensing fees are below. The reduction in the fees will not
apply to new applicants.
page 193
Intoxicating Liquor On-Sale Tier 1 $ 10,000 $ 8,333.33
Intoxicating Liquor On-Sale Tier 2 $ 7,500 $ 6,250.00
Intoxicating Liquor On-Sale Hotel $ 3,000 $ 2,500.00
Club Liquor On-Sale $ 350 (201-500 club members) $ 291.67
$ 300 (under 200 club members) $ 250.00
Sunday Liquor $ 200 $ 166.67
Wine On-Sale $ 2,000 $ 1,666.67
Malt Liquor On Sale (3.2%) $ 250 $ 208.33
Recommendation Staff recommends that the Council approve Ordinance No. 557, Amending On-Sale Liquor
License Fees for Renewals and Amending the City Code to Allow for Four Installment
Payments for Renewals.
Action Required A motion to approve Ordinance No. 557 Approve Code Change Concerning Liquor License
Renewal Fees and Allow for Four Installment Payments for Renewals.
page 194
ORDINANCE NO. 557
CITY OF MENDOTA HEIGHTS
DAKOTA COUNTY, MINNESOTA
AN ORDINANCE AMENDING FEES FOR
ON SALE ALCOHOLIC BEVERAGE LICENSES AND THE PAYMENT OF
The City Council of the City of Mendota Heights, Minnesota desires to help the currently
licensed local restaurants that are shuttered due to the COVID-19 pandemic. The proposed
ordinance temporarily reduces the on-sale license fees and allows installment payments to be
made.
THE CITY COUNCIL OF THE CITY OF MENDOTA HEIGHTS, MINNESOTA ORDAINS:
SECTION 1. Ordinance No. 551 is hereby amended to read as follows:
Annual Liquor License Fees for the Renewal of On-Sale Licenses for the period of July 1, 2020
through June 30, 2021 shall be as follows. This reduction in fees shall not apply to new applicants.
Type Of License Amount Of Annual License
Intoxicating Liquor On-Sale Tier 1 $ 10,000 $ 8,333.33
Intoxicating Liquor On-Sale Tier 2 $ 7,500 $ 6,250.00
Intoxicating Liquor On-Sale Hotel $ 3,000 $ 2,500.00
Club Liquor On-Sale $ 350 (201-500 club members) $ 291.67
$ 300 (under 200 club members) $ 250.00
Sunday Liquor $ 200 $ 166.67
Wine On-Sale $ 2,000 $ 1,666.67
Malt Liquor On Sale (3.2%) $ 250 $ 208.33
SECTION 2. Section 3-1-10 A. of the Mendota Heights City Code is amended to add a new
subsection to read as follows:
1. Payment of Annual Intoxicating Liquor and Malt Liquor License Fees for Renewal of
On-Sale Licenses for the licensing period of July 1, 2020 through June 30, 2021 shall
be paid as follows:
(i) One-quarter of the annual renewal fee prior to June 5, 2020;
(ii) One-quarter of the annual renewal fee prior to September 1, 2020;
(iii) One-quarter of the annual renewal fee prior to December 1, 2020;
(iv) One-quarter of the annual renewal fee prior to March 1, 2021.
(v) The background investigation fee of $100 will continue to be paid at the
time the application is submitted for the initial or annual renewal.
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(vi) If the Governor’s order requiring the closing of restaurants to the public
continues into the month of June, 2020 and later, then the City will allow an additional month of
proportional credit to the on-sale licensees for each month that the restaurants remain fully closed
to sit-down dining options.
(vii.) If a licensee violates any Minnesota law regarding the selling of alcohol
then they shall be required to pay their license fees in full upon notice from the city.
SECTION 3. This ordinance shall be effective upon its passage and publication.
ADOPTED this 2nd day of June 2020 by the City Council of the City of Mendota Heights,
Minnesota.
CITY OF MENDOTA HEIGHTS
_________________________________
Neil Garlock, Mayor
ATTEST:
__________________________________
Lorri Smith, City Clerk
page 196
Request for City Council Action DATE: May 11, 2020 TO: Mayor, City Council, and City Administrator FROM: Lorri Smith, City Clerk SUBJECT: Ordinance Approving Code Change Concerning Liquor License Fees
COMMENT:
Introduction The Council adopted Ordinance 551 on December 3, 2019, which approved the licensing fees for
alcoholic beverages. In light of the current COVID19 pandemic which has caused the restaurants
to be closed to the public, staff is requesting that the Council review the current liquor licensing
fees for on-sale establishments and considering reducing the fees.
Background The liquor licensing period runs from July 1st through June 30th, and the licenses are renewed
annually. Per our City Code language, the renewal applications and the license fees are due by May
1st each year. Liquor license fees are meant to pay for license issuance, inspection, monitoring
compliance (insurance, training, etc.), enforcement, and compliance checks of the licensee.
The City Clerk has received a few requests from the licensees for the Council to consider a
reduction in the renewal fees due to the fact that the restaurants have been closed to the public
since the middle of March, or to consider that installment payments be allowed.
One licensee is requesting a license for only seven months, instead of the usual full year. They
intend to not renew their property lease after this time and have stated they intend to close their
business. They are asking if their annual licensing fee can be prorated now. Per our City Code
Section 3-1-10 B., licenses shall be issued for one year. City staff has learned that the State of
Minnesota will only issue a license for a full year, and not for a partial year. Per our City Code,
Section 3-1-10 D., the licensee could request to be reimbursed for a pro rata share of the annual
license fee once their business closes.
In regards to a reduction in the license fees, the larger Dakota County cities were surveyed to see if
they are considering a temporary reduction in liquor license fees. Responses received included:
• Farmington –waived one month, possibly will waive one more month.
• Lakeville –reducing fees by 20% and will allow payments in two installments (May 30 & Nov 30)
• Inver Grove Heights – no reduction, already allows fee to be in installments
• Burnsville – no reduction in total fee paid, but will allow 3 installments (May 8, June 30, Sept 30)
• Northfield –giving a fee refund for the period starting April 1st continuing until the executive order
relating to the closure of restaurants ends.
• West St. Paul—no reductions have been considered yet, but it may do so in the future. WSP
currently allows license payments in two installments, on January 1st, and July 1st.
page 197
In Mendota Heights, there may be some limited license use for the on-sale licensees from the
executive order allowing limited off-sale of alcohol that was effective on April 18, 2020.
However, staff considers that use to be insignificant in relation to the overall license fees. In
addition, there is no reporting required on which licensees are using this limited off-sale provision.
Budget Impact
The current liquor licensing fees are attached. The information also shows the reductions if two
months’ credit would be given or refunded, which assumes a closed period for the licensee from
March 15th to mid-May; these amounts could be adjusted, depending on how long the period of
closure is. If granted to all on-sale license holders, each month of refund or credit would cost the
City about $1,966.67.
Another column shows the impact of a 20% reduction, similar to that of Lakeville. Extending that
to all on-sale licenses would cost the City $5740 from the amounts which have been budgeted for
FY 2020.
Discussion
Some options include:
- Allowing the on-sale licensees to pay their renewal fees in 2 or 3 installments
- Giving the on-sale licensees a 20% discount on their renewal fees
- Giving the on-sale licensees a number of months reductions on their renewal fees
- Make no changes--keep as is
Regarding the request for an on-sale license for only 7 months, instead of the usual 12 months, the
Mendota Heights City Code does allow licensees who close their business to request for a pro-rata
reimbursement for the unused portion of their license fees. Following our City Code language,
staff feels the applicant could request for the reimbursement once the restaurant has permanently
closed its doors.
Action Required
The Council should discuss if they feel a reduction for on-sale liquor licensing fees is appropriate.
Staff will then prepare an ordinance for consideration at the June 3, 2020 Council meeting.
page 198
2020 Liquor Licensing Fees
Intoxicating Liquor
Licenses 2 month credit
would equal
20% credit
would equal
Intoxicating Liquor Off Sale $ 150 Mendota Liquor Barrel
Intoxicating Liquor On-Sale
Tier 1 $ 10,000 Teresa’s $ 1,666.67 $ 2,000
Intoxicating Liquor On-Sale
Tier 2 $ 7,500 Haiku $ 1,250 $ 1,500
Intoxicating Liquor On-Sale
Hotel $ 3,000 Courtyard by Marriott $ 500 $ 600
Club Liquor On-Sale $ 350 (201-500 members)
$ 300 (under 200 members)
Mendakota
Somerset
$ 58.33
$ 50
$ 70
$ 60
Sunday Liquor $ 200
Teresa’s
Haiku
Mendakota
Somerset
$ 33.33 $ 40
Wine On-Sale $ 2,000
Mendoberri
Tommy Chicago’s
King and I Thai
$ 333.33 $ 400
Malt Liquor Licenses
Malt Liquor Off Sale (3.2%) $ 50 Both Super Americas
Malt Liquor On Sale (3.2%) $ 250 Mendoberri
Tommy Chicago’s
King and I Thai
$ 41.67 $ 50
page 199
Request for City Council Action
MEETING DATE: June 2, 2020
TO: Mayor, City Council, and City Administrator
FROM: Lorri Smith, City Clerk
SUBJECT: Renewal of Liquor Licenses
COMMENT:
INTRODUCTION
The Council is asked to approve the renewal of the current liquor licenses.
BACKGROUND
The current liquor licenses will expire on June 30, 2020. Renewal applications have been received
from the following:
Intoxicating Liquor and Sunday Liquor:
• Felipe’s LLC dba Teresa’s Mexican Restaurant, 762 North Plaza Drive
• Haiku Japanese Bistro, 754 North Plaza Drive
• Courtyard Management Corp. dba Courtyard by Marriott, 1352 Northland Drive
Club Liquor and Sunday Liquor:
• 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
• King and I Thai, Corporation, dba King and I Thai, 760 North Plaza Drive
Off-Sale Liquor licenses:
• Twin City Beverage Inc. dba Mendota Liquor Barrel, 766 North Plaza Drive
On-Sale 3.2 percent Malt Liquor 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
• King and I Thai Corporation, dba King and I Thai, 760 North Plaza Drive
Off-Sale 3.2 percent Malt Liquor licenses:
• Northern Tier Retail LLC dba Speedway #4521 located at 1080 Highway 62
page 200
Background investigations have been conducted on all of the licensees resulting in no negative findings
on the above applicants.
The application for Northern Tier Retail LLC dba Speedway #4516 located at 1200 Mendota Heights
Road will be heard at the June 16th Council meeting.
At the May 11, 2020 Council Work Session, the Council was in agreement to lower the On-Sale
licensing fees by 16.66% (2 months), and to offer to the licensees the option to pay in four installments.
The first installment would be due June 5, 2020.
The licenses would be issued upon receipt of the required Certificates of Insurance and the fees due
being paid.
If approved, the liquor licenses would be effective July 1, 2020 through June 30, 2021.
RECOMMENDATION
Staff recommends the Council approve the issuance of the license renewals as listed above for the
period of July 1, 2020 through June 30, 2021, contingent upon the Liquor Liability Insurance
Certificates being received and all fees due being paid.
page 201